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Date: 11-25-2021
Case Style:
Stephen Saccoccia v. United States of America
Case Number: 19-1361
Judge: Norman H. Stahl
Court: United States Court of Appeals
For the First Circuit
On appeal from The UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
Plaintiff's Attorney: Zachary A. Cunha, Assistant United States Attorney, with whom
Aaron L. Weisman, United States Attorney
Defendant's Attorney:
Description:
Boston, MA - Criminal defense lawyer represented defendant with a money-laundering charge. He was ordered to forfeit over $136,000,000 in proceeds from the conspiracy. He appeals the district court's dismissal of his 2018 complaint seeking vacatur of the forfeiture order and return of his forfeited property.
We draw the facts primarily from the complaint,
"accepting as true well-pleaded factual allegations and drawing
all reasonable inferences" in Saccoccia's favor. SBT Holdings,
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LLC v. Town of Westminster, 547 F.3d 28, 30 (1st Cir. 2008). We
may also consider facts from "documents incorporated by reference
into the complaint, matters of public record, and facts susceptible
to judicial notice." Butler v. Balolia, 736 F.3d 609, 611 (1st
Cir. 2013) (quoting Haley v. City of Boston, 657 F.3d 39, 46 (1st
Cir. 2011)). Thus, we rely upon undisputed facts found by the
district court at sentencing, as well as those recited by the
district court in United States v. Saccoccia, 823 F. Supp. 994
(D.R.I. 1993), issuing Saccoccia's forfeiture order, and by this
court in United States v. Saccoccia, 58 F.3d 754 (1st Cir. 1995),
affirming his conviction, sentence and forfeiture judgments.1
Saccoccia formerly controlled a network of precious
metals businesses located in several states, including Rhode
Island. For a period of years from the 1980s to the early 1990s,
Saccoccia used these businesses to launder money on behalf of a
Colombian drug cartel. Between January 1, 1990 and April 2, 1991,
Saccoccia and his wife wired $136,344,231.86 from a bank account
belonging to one of Saccoccia's businesses to various Colombian
and other foreign bank accounts.
1 The complaint explicitly references both the district
court's opinion issuing the forfeiture order and this court's
affirmance of the conviction, sentence and forfeiture. Saccoccia
does not now collaterally attack, nor does his complaint set forth
facts challenging factual determinations essential to his criminal
conviction and sentence.
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In 1991, a federal grand jury returned an indictment
charging Saccoccia, his wife, and eleven associates with
conspiracy under the Racketeer Influenced and Corrupt Organization
("RICO") Act, 18 U.S.C. § 1962(d). In 1993, following a jury trial
in the United States District Court for the District of Rhode
Island,2 Saccoccia was convicted of one count of conspiracy under
the RICO Act, thirty-six counts of engaging in monetary
transactions with criminally derived property in violation of 18
U.S.C. § 1957, thirteen counts of money laundering in violation of
18 U.S.C. § 1956, and four counts of violations of the Travel Act,
18 U.S.C. § 1952. The district court observed at sentencing that
Saccoccia personally wired some two-thirds of the nearly $137
million sent to Colombian and other foreign-based accounts and
that his wife had sent the remainder at his direction. The court
sentenced Saccoccia to twenty years' imprisonment on the RICO count
and sentences of varying lengths on the other counts, to be served
consecutively, resulting in a total sentence of 660 years.
At the forfeiture phase, the district court ordered
Saccoccia to forfeit the sum of $136,344,231.86 pursuant to 18
U.S.C. § 1963(a)(3) and (m), the forfeiture and substitute asset
provisions of the RICO statute. Saccoccia does not dispute on
appeal that he exercised control over and oversaw distribution of
2 The district court bifurcated Saccoccia's trial, separating
the substantive criminal charges from the forfeiture claims.
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these sums, nor does he allege any facts in his complaint that
contradict the district court's finding that all of the money at
issue passed through a bank account he controlled.3
In 1995, Saccoccia appealed his conviction, sentence and
forfeiture to this court, and we affirmed each judgment. From
1995 to 2010, Saccoccia mounted a series of additional challenges
to his conviction, sentence and forfeiture judgments, all of which
were denied.4 In 2018, Saccoccia applied for leave to file a
successive motion under 28 U.S.C. § 2255, contending that
Honeycutt imposed a per se bar on joint and several forfeiture
liability and as such invalidated his forfeiture order. On March
29, 2018, this court denied the § 2255 application on the grounds
that he had not made "a prima facie showing of a tenable Honeycutt
claim."
On May 11, 2018, Saccoccia filed a "Verified Petition
and Complaint" with the district court. In this complaint,
Saccoccia again argued that Honeycutt retroactively applied to his
3 This point was conceded at oral argument by Saccoccia's
counsel.
4 These included a challenge to his conviction under 28 U.S.C.
§ 2255, Saccoccia v. United States, 69 F. Supp. 2d 297 (D.R.I.
1999), certificate of appealability denied, 42 F. App'x 476 (1st
Cir. 2002), cert. denied, 537 U.S. 1031 (2002) and 540 U.S. 974
(2003); a motion for relief from judgment pursuant to Federal Rule
of Civil Procedure 60(b), United States v. Saccoccia, No. 91-cr115, 2004 WL 1764556 (D.R.I. Aug. 2, 2004); and a motion to modify
his sentence under 18 U.S.C. § 3582, United States v. Saccoccia,
No. 91-cr-115 (D.R.I. Nov. 12, 2010).
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case, rendering his forfeiture judgment invalid and depriving the
district court of jurisdiction to impose the forfeiture. The
complaint sought relief under a series of procedural mechanisms,
including requests to vacate the forfeiture under 28 U.S.C. § 1355,
grant writs of error coram nobis, audita querela, and mandamus,
return property pursuant to Federal Rule of Criminal Procedure
41(g), and grant declaratory and injunctive relief pursuant to 28
U.S.C. §§ 2201 and 2202, each of which requests substantively
relied on the retroactive application of Honeycutt.
The government moved to dismiss the complaint pursuant
to Federal Rules of Civil Procedure 12(b)(1), for lack of subjectmatter jurisdiction, and 12(b)(6), for failure to state a claim
upon which relief could be granted. The district court granted
the motion to dismiss, ruling Saccoccia had failed to state a
plausible claim as to each purported procedural avenue of relief,
but in doing so the court declined to rule on Honeycutt's
applicability. Saccoccia v. United States, C.A. No. 18-266, 2019
WL 1382280, at *1-9 (D.R.I. Mar. 27, 2019). This timely appeal
followed.
II. Analysis
A. Standard of Review
We review the district court's dismissal de novo.
O'Brien v. Deutsche Bank Nat'l Tr. Co., 948 F.3d 31, 35 (1st Cir.
2020). In undertaking this review, we "accept[] as true well-
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pleaded factual allegations and draw[] all reasonable inferences"
in Saccoccia's favor. SBT Holdings, LLC, 547 F.3d at 30. We "set
aside legal conclusions and those factual allegations 'too meager,
vague, or conclusory to remove the possibility of relief from the
realm of mere conjecture.'" Starr Surplus Lines Ins. Co. v.
Mountaire Farms Inc., 920 F.3d 111, 114 (1st Cir. 2019) (quoting
In re Curran, 855 F.3d 19, 25 (1st Cir. 2017)). We "may affirm
the decision below on any ground made manifest by the record."
Ruiz, 496 F.3d at 5.
The parties invite us to decide a host of issues in this
appeal, such as whether Saccoccia has successfully asserted a valid
procedural vehicle to challenge his forfeiture judgment, whether
Honeycutt is retroactive on collateral review, and whether
Honeycutt applies to 18 U.S.C. § 1963(a), the RICO statute under
which Saccoccia's forfeiture judgment arose. But we need not now
answer these questions, as we conclude that even if we resolved
them in Saccoccia's favor, Honeycutt does not apply as a matter of
fact to Saccoccia's case given his control over the funds at issue.
B. Honeycutt Does Not Preclude Liability in
Saccoccia's Case
Honeycutt concerned a low-level defendant in a criminal
conspiracy who was responsible for the sale of large quantities of
iodine-based water, which could be used to manufacture
methamphetamines, from the hardware store he managed sales and
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inventory for. 137 S. Ct. at 1630. The defendant, Honeycutt, had
no controlling interest in the criminal organization nor stood to
personally benefit from the enterprise's criminal activity. Id.
at 1631.
After Honeycutt was indicted for various federal crimes
related to the sale of the iodine water, the government sought
forfeiture money judgments under 21 U.S.C. § 853(a)(1)5 against
Honeycutt in the amount of the store's profits from the illegal
sales. Id. at 1630-31. The district court declined to enter a
forfeiture judgment against Honeycutt on the ground that he had
not personally received any profits from the enterprise. Id. at
1631. The Court of Appeals for the Sixth Circuit reversed,
concluding that Honeycutt could be held jointly and severally
liable under § 853(a)(1) for any proceeds from the conspiracy.
Id.
The Supreme Court reversed the Sixth Circuit's decision,
holding that a co-conspirator cannot be ordered to forfeit property
under § 853(a)(1) based on a theory of joint and several liability
where he never "actually acquired [the property] as the result of
the crime." Id. at 1635. The Court interpreted the statute to
limit forfeiture to "property the defendant himself obtained,"
holding that "[s]ection 853(a)'s limitation of forfeiture to
5 Forfeiture under § 853 applies to "[a]ny person" convicted
of certain drug crimes.
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tainted property acquired or used by the defendant, together with
the plain text of § 853(a)(1), foreclose joint and several
liability for co-conspirators." Id. at 1633. Thus, the Court
determined that "[b]ecause Honeycutt never obtained tainted
property as a result of the crime, § 853 does not require any
forfeiture." Id. at 1635.
Saccoccia principally relies on the statement in
Honeycutt that § 853(a) "foreclose[s] joint and several liability
for co-conspirators" to argue that his forfeiture order is "void
ab initio" under these principles and that Honeycutt provides a
valid foundation for his various purported procedural avenues of
relief. Id. at 1633. This argument is unavailing. While this
court has yet to define the parameters of Honeycutt's
applicability, we find it clear that Saccoccia's interpretation in
any event neglects a critical part of Honeycutt's holding: that
any bar against joint and several co-conspirator liability
articulated there applies only to defendants who did not actually
possess or control the funds at issue. See id. at 1630 ("[A]
defendant may [not] be held jointly and severally liable for
property that his co-conspirator derived from the crime but that
the defendant himself did not acquire."); United States v. Tanner,
942 F.3d 60, 67-68 (2d Cir. 2019).
Here, Saccoccia does not offer any facts in his complaint
to contradict the district court's findings that all of the funds
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in question passed through a bank account Saccoccia controlled.
Though we have not yet ruled on this issue, we agree with many of
our sister courts' conclusions that where a defendant controlled
the full proceeds as a result of the crime, Honeycutt does not
preclude him from being held liable for the value of such funds.
See, e.g., Tanner, 942 F.3d at 67-68; United States v. Potts, 765
F. App'x 638, 640 (3d Cir. 2019) (declining to apply Honeycutt
where the defendant did "not rebut[] the record evidence showing
that he, a co-owner of the organization, received . . . proceeds
as a result of his participation in the organization"); United
States v. Bane, 948 F.3d 1290, 1297-98 (11th Cir. 2020)
(distinguishing the case from Honeycutt because of the defendant's
position as "owner and operator" of companies involved in the
enterprise); United States v. Bangiyev, 359 F. Supp. 3d 435, 440
(E.D. Va.) (concluding that a defendant "at the center of" the
conspiracy could be held jointly and severally liable for the
forfeiture because Honeycutt does not apply "where the defendant
held a position of control in the criminal operation"), aff'd, 771
F. App'x 328 (4th Cir. 2019).
Unlike the defendant in Honeycutt, Saccoccia has "failed
to prove that he was not responsible for the entire proceeds of
the fraud." Bane, 948 F.3d at 1297. Further, there is in the
instant case "ample evidence in the record that [Saccoccia]
obtained . . . proceeds from the scheme," United States v.
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Georgiou, Nos. 18-2498, 18-2762, 2020 WL 428766, at *2 (3d Cir.
Jan. 28, 2020), including in particular the undisputed facts that
Saccoccia controlled the bank account from which the funds at issue
flowed and that he oversaw the distribution of those funds. See
United States v. Jergensen, Nos. 18-642, 18-1118, 2019 WL 6587680,
at *3 (2d Cir. Dec. 5, 2019) (rejecting defendants' Honeycutt
argument because defendants had "approved every transfer" of the
relevant monies and "thus each acquired or used the tainted
funds"); SEC v. Metter, 706 F. App'x 699, 702 n.2 (2d Cir. 2017)
(finding Honeycutt did not apply because the defendant "ha[d]
control of [the criminal organization] . . . and thus could control
the distribution of proceeds"). We thus conclude that because
Saccoccia has failed to prove that his conduct falls within
Honeycutt's factual ambit, Honeycutt does not preclude liability
in his case.6
Outcome: For the foregoing reasons, the judgment of the district court is AFFIRMED.
Plaintiff's Experts:
Defendant's Experts:
Comments: