United States v. Hogan

1

UNITED STATES OF AMERICA, Plaintiff, v. MICHAEL T. HOGAN, et al., Defendants.

CRIMINAL No. 3:21-cr-00011-GFVT-MAS

United States District Court, E.D. Kentucky, Central Division, Lexington

January 24, 2023

MEMORANDUM OPINION & ORDER

Gregory F. Van Tatenhove, United States District Judge

This matter is before the Court on the United States' Motion for Restitution Order and Forfeiture Money Judgment. [R. 85.] After sentencing, the Court entered Judgment upon guilty pleas as to Michael T. Hogan and Joy M. Hogan. [R. 82; R 83.] For the reasons stated herein, the motion [R. 85] is GRANTED.

I

In June 2021, a grand jury indicted Michael Hogan on fifteen criminal charges and Joy Hogan on one count. [R. 1-1 at 5-16.] The indictment contained a forfeiture allegation as to the amount of gross proceeds obtained through their criminal activity. Id. at 17. Mr. Hogan pled guilty to wire fraud conspiracy and federal program fraud in violation of 18 U.S.C. §§ 1349, 666. [R. 62.] Ms. Hogan pled guilty to wire fraud conspiracy in violation of 18 U.S.C. § 1349. [R. 64.]

At sentencing, the Court indicated that it would order restitution and forfeiture as part of the defendants' sentences but that the amounts were to be determined. As to the forfeiture allegation, the Court asked the Government whether a preliminary order of forfeiture had been entered. After the prosecutor confirmed that no such order had been filed, the Court stated that forfeiture would be included in the final judgment. Specifically, the Court stated that a money judgment in the sum representing the gross proceeds in aggregate obtained by the defendants as a result of the wire fraud and theft from federal programs violations alleged in the indictment would be in the final judgment. Counsel for the defendants stated that they had no objection to this procedure.

In the judgments, the Court indicated that it would order restitution but deferred ruling on the amount, declaring it “TBD.” [R. 82 at 6; R. 83 at 6.] Likewise, the judgments required the Defendants to forfeit “[a]ll items listed in the Forfeiture Allegation of the Indictment to include a Money Judgment of a sum representing the gross proceeds in aggregate obtained as a result of the wire fraud and theft from federal programs violations in the Indictment.” [R. 82 at 7; R. 83 at 7.]

Now, the United States moves the Court to enter an order imposing restitution and forfeiture and to amend the judgments to reflect the same. [R. 85 at 6.] The Defendants, through counsel, consent to the United States' proposals regarding restitution and forfeiture. [R. 85 at 1.]

II

Because the Court has already imposed a sentence and entered judgments in this matter, it first considers its power to amend the restitution and forfeiture items respectively. Generally, 18 U.S.C. § 3664(d)(5) requires a sentencing court “to resolve the restitution issue within 90 days of the sentencing hearing.” United States v. Vandeberg, 201 F.3d 805, 813 (6th Cir. 2000); Dolan v. United States, 560 U.S. 605, 608 (2010). However, a sentencing court that misses this 90-day deadline retains the power to order restitution where it has “made clear prior to the deadline's expiration that it would order restitution, leaving open (for more than 90 days) only the amount.” Dolan, 560 U.S. at 608. Precedent in this circuit has permitted “the imposition of a restitution order almost two years after the original sentence was imposed.” See United States v. Bogart, 576 F.3d 565, 570 (6th Cir. 2009)).

In this case, the Court is slightly beyond the general 90-day deadline but well under the two-year figure validated in Bogart.^[1] Because the Court left the amount of restitution to be determined, the Court retains the power to order restitution.

The Court can also amend the forfeiture order, although its discretion to do so is more limited. Forfeiture orders, including money judgments, are “part of the [defendant's] sentence in the criminal case.” United States v. Maddux, 37 F.4th 1170, 1174 (6th Cir. 2022) (quoting 28 U.S.C. § 2461(c)). “And, once a court imposes a sentence, generally it may not ‘change or modify that sentence unless such authority is expressly granted by statute.'” Id. at 1175 (quoting United States v. Hammond, 712 F.3d 333, 335 (6th Cir. 2013)).

The Government is entitled to civil forfeiture under 18 U.S.C. § 981(a)(1)(C). Because the Government included notice of the forfeiture in the indictment, the Court must order forfeiture of the property as part of the sentence pursuant to the Federal Rules of Criminal Procedure. 28 U.S.C. § 2461(c). Those rules provide only two procedures by which a court can order forfeiture.

Generally, a preliminary order of forfeiture must be issued in advance of sentencing, with enough time for the defendant to suggest modification, unless doing so is impractical. Fed. R. Crim. P. 32.2(b)(2)(B). However, if the court cannot calculate the total money judgment before sentencing, the court may enter a general forfeiture order that defers “calculating ‘the total amount of the money judgment until a later date.'” Id. 32.2(b)(2)(C); Maddux, 37 F.4th at 1177.

The Sixth Circuit interprets Rule 32.2(b) as a mandatory claims-processing rule. Maddux, 37 F.4th at 1180. Statutes create three types of deadlines. Id. at 1175. Jurisdictional deadlines cannot be forfeited and, if missed, prevent the court from permitting or taking a given action. Id. (quoting Dolan, 560 U.S. at 610-11) (cleaned up). Ordinary claims-processing rules can be forfeited but regulate the timing of motions or claims brought before the court. Id. Last, there are deadlines that seek speed by creating a time-related directive that is legally enforceable but does not deprive a judge of the power to take the action to which the deadline applies. Id.

As a mandatory claims-processing rule, Rule 32.2(b) “may be forfeited.” Id. at 1176. But, “it may not be ignored when properly invoked ....” Id. “[L]ike jurisdictional deadlines, mandatory claims-processing rules bind counts and may not be equitably tolled.” Id.

In this case, the Court followed the method of entering forfeiture proscribed by Rule 32.2(b)(2)(C). The best practice under this rule would be to enter a general order, before sentencing, that defers calculating the total money judgment. Maddux, 37 F.4th at 1177, 1179. But the Sixth Circuit has acknowledged that ordering forfeiture during sentencing while leaving the amount to be determined could comply with the rule “because that necessarily ensure[s] that the defendant knows of the forfeiture at sentencing.” Id. at 1180 (internal quotations removed).

The Court can amend the initial judgments for two reasons. First, the Court advised both defendants that it would certainly impose forfeiture and that the amount would be based on the money derived from their criminal activity. Second, the Defendants consented to a later determination of the amount of forfeiture at sentencing and again when they agreed to the United States' motion for forfeiture. Because Rule 32.2(b) is a claims processing rule, the Defendants could and did waive its protections.

III

Having heard witness testimony at sentencing, having reviewed the United States' subsequent briefing, and the Court being otherwise sufficiently advised, it is hereby ORDERED ADJUDGED, and DECREED as follows:

1. The United States Motion for Restitution Order and Forfeiture Money Judgment [R. 85] is GRANTED;

2. The United States is entitled, pursuant to 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461, to a forfeiture money judgment against the Defendants jointly and severally in the amount of $366,550.00, which represents the amount of proceeds that they jointly obtained as a result of the violations of 18 U.S.C. § 1349 to which they pled guilty for the scheme of diverting delinquent tax funds, and against Defendant Michael T. Hogan only in the additional amount of $232,127.00, which represents the amount of proceeds that he obtained as a result of the violation of 18 U.S.C. § 666 to which he pled guilty for the scheme of improper billing for child support enforcement;

3. The United States is entitled, pursuant to 18 U.S.C. § 3663A, to a...