On Monday, June 5, 2017, the US Supreme Court significantly curtailed the government's power to seize assets from co-conspirators in a criminal enterprise. In Honeycutt v. United States, — S.Ct. — (2017), the Supreme Court rejected application of "joint and several liability" to forfeiture among members of a criminal conspiracy. While the Court's decision leaves several unanswered questions for future criminal forfeiture cases, what is clear is that Honeycutt will substantially affect white collar prosecutions moving forward.
BackgroundThe Comprehensive Forfeiture Act of 1984 allows for the forfeiture of "any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as the result of" certain crimes.1 If assets traceable to the crime cannot be located, the government can seize anything else a convicted defendant might have to satisfy the forfeiture order. Prosecutors have increasingly used forfeiture laws to pressure individuals and companies to resolve criminal investigations without a trial. Indeed, the specter of asset forfeiture serves as a powerful bargaining chip for the government in obtaining plea deals.
This practice is especially coercive in the context of a criminal conspiracy. Under the Pinkerton rule, the bedrock principle of conspiracy liability for well over half a century, conspirators are responsible for the foreseeable crimes of their co-conspirators, regardless of the individual's knowledge of such actions.2 Until Honeycutt,a majority of federal circuit courts applied the Pinkerton rule to conclude that asset forfeiture laws mandate "joint and several liability" among co-conspirators for the proceeds of a criminal enterprise. This was true even if the defendant plays a relatively minor role in the conspiracy. Simply put, the majority rule held even ancillary members liable for the profits of the entire conspiracy.
Honeycutt v. United StatesThe defendant in Honeycutt was a salaried clerk working at a hardware store owned by his brother. The store sold more than 15,000 bottles of a water-purifying product, which is also used to manufacture methamphetamine, obtaining roughly $270,000 in profits. In 2010, a grand jury indicted the defendant and the store owner for conspiring to distribute a controlled substance precursor. The store owner entered a plea agreement with the government that included forfeiture of $200,000. The defendant clerk was convicted at trial, and the government sought forfeiture the remaining $70,000 from the defendant.
Although the government did not argue the defendant "obtained" any of the profits from the unlawful sales, the U.S. Court of Appeals for the Sixth Circuit held that the asset...
