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United States v. Minton

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

October 17, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
JOYCE MINTON, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          Joseph M. Hood Senior U.S. District Judge

         This matter is before the Court on the United States' Motion for Preliminary Order of Forfeiture and Forfeiture Money Judgment. [DE 102]. The defendants responded [DE 105, 108, and 109] and the United States replied. Around this same time, the Court received sentencing memoranda from all three defendants and the government. [DE 106, 107, 110, and 112]. The defendants objected to the government's loss amount for the purposes of sentencing, the amount of restitution, and the amount the government seeks in its forfeiture motion. While loss, restitution, and forfeiture are distinct determinations, the testimony and evidence supporting the government's arguments overlapped significantly. Consequently, the Court held a hearing on October 2, 2017, at which it received testimony and evidence on these issues. The defendants had the opportunity to cross-examine the government's witness and put on their own evidence at the hearing.

         BACKGROUND

         On June 12, 2017, the jury in this case returned a verdict of guilty against Joyce Minton, Aaron Brooke Warren, and James Minton on numerous charges relating to their scheme to defraud their employer, Clark Machine Tool & Die (“Clark Machine”); however, they were also acquitted of a number of counts in the Indictment. [DE 90-92] The Indictment contains a forfeiture allegation seeking a money judgment in the amount of the proceeds of the scheme as well as property alleged as directly forfeitable proceeds or property involved in/facilitating the criminal offenses. [DE 1]. The parties agreed to waive the jury determination and agreed to let the Court determine the forfeiture issues. See Libretti v. United States, 516 U.S. 29, 49 (1995) (“the nature of criminal forfeiture as an aspect of sentencing compels the conclusion that the right to a jury verdict on forfeitability does not fall within the Sixth Amendment's constitutional protection.”); United States v. O'Dell, 247 F.3d 655, 679 (6th Cir. 2001) (if jury is waived, court must determine if defendant is owner of property before entering order of forfeiture).

         In the forfeiture phase of a criminal case, the United States has the burden of establishing the forfeitability of the property by a preponderance of the evidence. United States v. Smith, 966 F.2d 1045, 1050-53 (6th Cir. 1992); United States v. Jones, 502 F.3d 388, 391 (6th Cir. 2007). Property is directly forfeitable if the Court determines that the United States has established the requisite nexus between the property and the crime for which the defendants have been convicted. See 21 U.S.C. 853(a); Rule 32.2(b)(1) and (2). In determining the nexus issue, the Court may rely on evidence from the guilt phase of the trial. United States v. Capoccia, 503 F.3d 103, 109 (2d Cir. 2007). The requisite nexus exists if the property in question is in fact the proceeds of the offense, constitutes facilitating property or property involved in the offense, or has another relationship to the offense that the applicable forfeiture statutes require. The government seeks forfeiture pursuant to 18 U.S.C. § 982(a)(1)and (2) and 18 U.S.C. § 981(a)(1)(C). Forfeiture is mandatory, and is not excused by the fact that the defendant dissipated the actual money derived from the offense. Fed. R. Crim. P. 32.2(b) and (c).

         Pursuant to Honeycutt v. United States, 137 S.Ct. 1626 (2017), the United States does not seek joint and several money judgments for the proceeds of the overall conspiracy. The government requests the Court enter a money judgment against each defendant in the amount each individual personally obtained from the offenses for which he or she was convicted. In calculating restitution and loss amount, however, the Court will impose the “joint and severally liable” formula, in which one dollar of loss may be allocated to more than one defendant, if more than one defendant was involved in the commission of that crime.

         ANALYSIS

         After thoroughly reviewing and considering the evidence and testimony presented at the hearing on October 2, 2017, the trial exhibits and testimony, and the affidavits in the record, the Court finds the forfeiture, restitution, and loss amounts for each defendant as set forth below.

         AARON BROOKE WARREN

         Forfeiture

         The jury convicted Aaron Brooke Warren of 30 counts of mail fraud, conspiracy to commit mail fraud, and 3 counts of money laundering. Mr. Warren was acquitted of two counts of mail fraud and one money laundering charge. The government seeks a forfeiture money judgment in the amount of $492, 275 against Mr. Warren.[1] This includes over $94, 000 in charges to Mr. Warren's company credit card for items that were sent through the mail. There was significant, conflicting trial testimony on which credit card charges were authorized; and, ultimately Mr. Warren was acquitted of one count of mail fraud related to the credit card purchases. The evidence presented at the forfeiture hearing includes illegible copies and notes from Sue Clark, one of the principals at Clark Machine, who was not present at the hearing. The jury convicted Mr. Warren of $32, 531 in mail fraud. The Court finds there is insufficient proof on the remaining amount the government claims should be included in the money judgment related to the Visa and Lowe's company credit cards and agrees with the defendant that the government has not proven by a preponderance of the evidence that these were all unauthorized expenditures. Furthermore, many of the receipts entered into evidence are illegible.

         The Court will include the checks sent by mail to Estes Motorsports, written by Joyce Minton and drawn on Clark Machine's bank account, as well as the checks written to Mr. Warren or BW Motorsports by Total Performance Solutions. There was ample testimony at trial that supports that these were unauthorized expenditures and part of a larger mail fraud conspiracy, and Mr. Warren was found guilty of all related counts in the Indictment. Also included in the forfeiture amount is $8, 650.00 for the HVAC equipment in Count 17. The United States claims another $43, 081 in unauthorized checks that were part of the mail fraud scheme. The Court finds there was lack of testimony and evidence on these checks to conclude by a preponderance of the evidence that these charges not included in the Indictment were part of the scheme.

         For the reasons stated above, the Court will enter a preliminary money judgment against Aaron Brooke Warren in the amount of $387, 611.

         Loss

         For the same reasons as set forth above, the Court finds the loss amount to be $387, 611 plus $19, 126. The additional $19, 126 represents the work done at Clark Machine for Gary Stanton for which Clark Machine was never paid, because Mr. Warren negotiated a deal with Mr. Stanton whereby Mr. Stanton would “pay” for the work with racecar parts shipped to Mr. Warren. The $4, 504 check from April 10, 2007, written to Gary Stanton and signed by Joyce Minton is excluded from Mr. Warren's loss amount because there is insufficient evidence in the record to connect Mr. Warren to that transaction. The $812.00 charged to Bruce Bennett's account and paid in $500 cash directly to Mr. Warren is ...


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