7.09.2008

Sixth Circuit Reports Split Re Relation Back of Government's Interest in Substitute Assets in Forfeiture Context

Per U.S. v. Parrett, --- F.3d ----, 2008 WL 2619886 (6th Cir. Jul 03, 2008):

This statutory provision regarding substitute assets does not explicitly provide for relation back; currently the circuits are split as to whether the government's interest in substitute property relates back to the date of the act giving rise to the forfeiture in the same way as the government's interest vests regarding property directly tainted by the illegal activity. Although the Tenth Circuit has held that the relation-back provision of § 853(c) is "silent as to § 853(p) substitute property," Jarvis, 499 F.3d at 1204-05, the Fourth Circuit has held that the forfeiture of substitute property "relates back to the date of the acts giving rise to the forfeiture ." United States v. McHan, 345 F.3d 262, 272 (4th Cir.2003). The different conclusions illustrate different conceptions of proper statutory interpretation. The Tenth Circuit focused on the plain language of § 853, holding that the federal government has only a "potential and speculative future interest" in substitute assets prior to conviction and the fulfillment of certain statutory conditions found in § 853(p)(1)(A)-(E) (aimed at assessing when substitute property may be used to satisfy a judgment). Jarvis, 499 F.3d at 1204-05. In contrast, the Fourth Circuit read § 853 in light of what it considered to be the statute's broader purpose; it held that, because the purpose of relation back was to " 'prevent defendants from escaping the impact of forfeiture by transferring assets to third parties,' and the purpose of § 853(p) was similarly to address this very 'impediment[ ] to significant criminal forfeitures,' " the forfeiture of substitute property "relates back to the date of the acts giving rise to the forfeiture." McHan, 345 F.3d at 272 (quotations omitted).

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