IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF NORTH CAROLINA

DOCKET NO. 1:22-CR-00016-MR-WCM

UNITED STATES OF AMERICA )

NOW COMES the United States of America, by and through Dena J. King,

United States Attorney for the Western District of North Carolina, pursuant to Fed.

R. Crim. P. 32.2(b), 18 U.S.C. § 982(a)(2), and 21 U.S.C. § 853(p), and respectfully

requests that the Court enter a $3,500,000.00 forfeiture money judgment against

Defendant. Defendant agreed in his Factual Basis (Doc. 4 at ⁋ 6) that he obtained

$3.5 million from the fraud. Thus, based upon the record, Section 982(a)(2), the

substitute property provisions of 21 U.S.C. § 853(p), and Fed. R. Crim. P. 32.2(b),

this Court should issue a money judgment in the amount of $3,500,000.00.

I. BACKGROUND

Defendant pled guilty via Plea Agreement (Doc. 3) to a Bill of Information

(Doc. 1) charging him with bank fraud. Specifically, as set forth in the Factual

Basis signed by Defendant and elaborated upon in the sentencing materials,

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fraudulently obtained millions of dollars in loans to purchase properties that

Defendant effectively owned, managed, and rented through various nominees and

companies. See Factual Basis (Doc. 4 at ⁋ 4). Through this scheme, Defendant

“and his co-conspirators closed on at least sixteen loans from financial institutions,

totaling over $3.5 million, to purchase real estate.” Id. at ⁋ 6. “Once acquired,

[Defendant] used these properties to generate income as short-term rentals.” Id. In

order to illustrate the scheme, the Factual Basis identifies the specifics of the

transactions to purchase some of the properties. Id. at ⁋⁋ 2, 8-19.

The properties that Defendant purchased via the fraud were, as noted above,

often purchased via nominees and have all been refinanced and/or tied-up in

foreclosure and/or bankruptcy proceedings. Although the Government has

attempted to settle with Defendant on forfeiture of alternative properties and/or an

alternative financial penalty, Defendant has not agreed to the Government’s

settlement offers. Nonetheless, this is precisely the type of case in which

punishment in the form of a financial penalty is imperative. Therefore, the

Government now requests a forfeiture money judgment justified by the Factual Basis

and sentencing record.

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A. Overview of the law authorizing forfeiture

Any person who is convicted of violating the bank fraud statute shall forfeit

to the United States any property which constitutes or is derived from gross proceeds

traceable to such violation. 18 U.S.C. § 982(a)(2)(A); United States v. Holzendorf,

576 Fed. Appx. 932, 937-38 (11th Cir. 2014) (gross bank fraud proceeds subject to

forfeiture); United States v. Peters, 732 F.3d 93, 101-102 (2d Cir. 2013) (proceeds

means receipts and not profits; forfeiture of loan proceeds obtained directly and

indirectly is appropriate); United States v. Newman, 659 F.3d 1235, 1244 (9th Cir.

2011) (“‘[P]roceeds’ of a fraudulently obtained loan equal the amount of the loan.”);

United States v. Boulware, 384 F.3d 794, 813 (9th Cir. 2004) (defendant not entitled

to set-off for loan proceeds that he repaid); United States v. Farkas, 2011 WL

5101752, **4-5 (E.D. Va. Oct. 26, 2011) (same), affirmed, 474 Fed. Appx. 349 (4th

Cir. 2012).

The Government’s burden of proof on forfeiture is preponderance of the

evidence. United States v. Cherry, 330 F.3d 658, 669 (4th Cir. 2003); United States

v. Tanner, 61 F.3d 231, 233 (4th Cir. 1995). The Court’s “determination may be

based on evidence already in the record, including [ . . . ] any additional evidence or

information submitted by the parties and accepted by the court as relevant and

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Appx. 349, 360 (4th Cir. 2013) (court may rely on trial record to determine

forfeiture). The Government may satisfy the preponderance burden by both direct

and circumstantial evidence. United States v. St. Pierre, 484 F.3d 75, 86 (1st Cir.

2007).

As to money judgments specifically, Fed. R. Crim. P. 32.2(b)(1)(A) and 21

U.S.C. § 853 support imposition of a money judgment when the Court finds the

amount of money that a Defendant will be ordered to pay 1 and when directly

forfeitable assets have been rendered unavailable.2 Fed. R. Crim. P. 32.2; see also

21 U.S.C. § 853; United States v. Chamberlain, 868 F.3d 290, 296 (4th Cir. 2017)

1
Since a money judgment is only collectible via the forfeiture laws, and is not a
traditional judgment in the sense that it is not collectible via the Federal Debt
Collection Act, a money judgment is essentially a placeholder as to the maximum
amount of substitute property that the Government may forfeit from a Defendant
who has otherwise rendered forfeitable property out of reach.
2
The substitute property provisions apply if, as a result of any act or omission of
defendant, the otherwise forfeitable property cannot be located upon the exercise of
due diligence; has been transferred or sold to, or deposited with, a third party; has
been placed beyond the jurisdiction of the court; has been substantially diminished
in value; or has been commingled with other property which cannot be divided
without difficulty. 21 U.S.C. § 853(p)(1)-(2). In a case such as this, in which
property was purchased in nominee names, refinanced, and placed in complex
judicial proceedings tied to foreclosure and bankruptcy, these substitute property
provisions are satisfied.
4

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money judgments in Fourth Circuit), citing, United States v. McHan, 345 F.3d 262,

272 (4th Cir. 2003). Rule 32.2 provides in pertinent part as follows: “[i]f the

government seeks a personal money judgment, the court must determine the amount

of money that the defendant will be ordered to pay.” Fed. R. Crim. P.

32.2(b)(1)(A); see also United States v. Butler, 578 Fed. Appx. 178, 182 (4th Cir.

2014) (district court must find nexus between forfeiture calculation and crime).

Although money judgment liability is limited to tainted property that a

defendant acquired and such liability cannot be imposed on a defendant for property

solely acquired by a co-conspirator and not defendant, courts have construed the

liability imposed on an individual defendant to extend to liability for property that

defendant obtained via entities or accounts which he controlled. Saccoccia v.

United States, 955 F.3d 171, 175 (1st Cir. 2020) (collecting some cases on receipt

of proceeds through entities and accounts that defendant owned, operated, or

controlled); see United States v. Carpenter, 941 F.3d 1, 9 n.6 (1st Cir. 2019)

(focusing the post-Honeycutt money judgment analysis of a provision of Section 981

on the word, “acquire”; reasoning that defendant liable for proceeds under his

control at some point); United States v. Jergensen, 797 Fed. Appx. 4, 8 (2d Cir.

2019) (each defendant liable for transfer that he approved); United States v.

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that he controlled); United States v. Chittenden, 896 F.3d 633, 638-39 (4th Cir. 2018)

(forfeiture limited to property that defendant acquired).

As set forth above, the law authorizes forfeiture of gross proceeds of bank

fraud in this case, and Defendant controlled the conspiracy, its entities that acquired

real estate with the proceeds, and the real estate itself. So, gross proceeds are the

“amount of money that the defendant will be ordered to pay.”

B. The money judgment amount in this case

In this case, the Government has limited its request to a conservative

calculation of a money judgment equivalent to only the amount of fraud proceeds to

which Defendant stipulated in the Factual Basis—proceeds which, by virtue of how

Defendant coordinated the scheme and controlled the real estate, he directly or

indirectly received. And, as the sentencing record will reflect and the Government

anticipates that Defendant will agree, all of the properties actually purchased with

the fraud proceeds have been rendered essentially out of reach by additional loans

and refinancing, foreclosure actions, bankruptcy actions, and straw owners created

and/or recruited by Defendant.

Under such circumstances, based on the record, and based on Section

982(a)(2), the substitute property provisions of 21 U.S.C. § 853(p), and Rule

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See United States v. Blackman, 746 F.3d 137, 143-44 (4th Cir. 2014) (discussing

that fact “that defendant is indigent or otherwise lacks adequate assets to satisfy a

judgment does not operate to frustrate entry of a forfeiture order” since forfeiture is

calculated based on total proceeds of crime, not percentage remaining in defendant’s

possession).

III. CONCLUSION

WHEREFORE, the Government respectfully requests that this Court issue, in

the form submitted herewith, a $3,500,000.00 Money Judgment.

Respectfully submitted, this the 19th day of July, 2022.

DENA J. KING
UNITED STATES ATTORNEY

s/ Benjamin Bain-Creed
Florida Bar # 0021436
Assistant United States Attorney
Suite 1650, Carillon Building
227 West Trade Street
Charlotte, North Carolina 28202
Telephone: (704) 344-6222
Fax: (704) 344-6629
Email: benjamin.bain-creed@usdoj.gov

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