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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowA woman claiming interest in property subject to forfeiture due to her husband’s fraud conviction will get the chance to make her case after the 7th Circuit Court of Appeals reversed and remanded the denial of her petition to adjudicate property interest. But at least one piece of the property at issue can be sold, the appellate court affirmed.
The case involves a 66-count, multidefendant fraud indictment that included Joseph Furando.
Furando and two of his companies, Caravan Trading LLC and Cima Green LLC, pleaded guilty to multiple counts, and he agreed to forfeiture of personal property, assets and vehicles. Additionally, he agreed to abandon his rights, title and interest in personal property, vehicles, motorcycles, funds and other assets, including real property on Burning Hollow Drive in Saddle, New Jersey.
Furando appealed his conviction and sentence, but the 7th Circuit in 2016 rejected the appeal as “frivolous.” Then in 2017, the U.S. District Court for the Southern District of Indiana entered forfeiture orders against Furando and his companies and directed the government to notify potential third-party interest holders.
In June 2017, Furando’s wife Christine and three companies — Green Grease LLC, Jungle Habitat Properties LLC and Summit Performance Solutions LLC — filed a claim under 21 U.S.C. § 853 as innocent property owners. Christine claimed an interest in the Burning Hollow Drive property as well as in other assets and cash.
The district court granted the government’s motion for partial final order of forfeiture as to Joseph, but the Burning Hollow Drive property was not included. Then in February 2020, the government moved for interlocutory sale of the New Jersey property.
In March 2020, the district court sua sponte denied the third-party plaintiffs’ petition to adjudicate the validity of their interest. But the court granted the government’s motion for interlocutory sale of the Burning Hollow Drive property.
The claimants appealed and the case was sent to mediation.
In July 2021, the government asked the 7th Circuit to vacate the denial of the claimants’ petition and to remand the case to the district court, arguing it had never actually moved to dismiss the petition, so it hadn’t briefed the issue or conducted discovery. But the appellate court denied that request, and the instant appeal ensued.
On appeal, the claimants challenged the dismissal of their petition and the grant of the government’s motion for interlocutory sale of the New Jersey property. They secured a partial victory when the 7th Circuit vacated the order denying their § 853(n) petition, which was entered without a hearing or opportunity to amend.
“We hold this disposition was not appropriate, as any jurisdictional deficiency may have been curable through amendment,” Senior Judge Joel Flaum wrote Friday for the 7th Circuit. “Given this conclusion, we remand to the district court for the opportunity to amend or hold a hearing.”
The appellate court determined it had jurisdiction but that the claimants’ petition was facially deficient because it asserted only a “conclusory” legal interest in the property, adopting the rationale in United States v. Fabian, 764 F.3d 636 (6th Cir. 2014).
“Acknowledging that this conclusory petition triggers a jurisdictional deficiency — treatment of which is at odds with the express congressional aim of ‘liberal construction’ — our Circuit’s reasoning in other sua sponte dismissal contexts proves information … ,” Flaum wrote, citing George v. Islamic Rep. of Iran, 63 Fed. App’x 917, 918 (7th Cir. 2003). “With the goal of harmonizing the intended ‘liberal[]’ construction of § 853 with the need for workability at the district court level, we now remand for the district court to provide either a hearing or an opportunity to amend the petition, as this jurisdictional defect is not incurable.
“The government points to Joseph Furando’s plea agreement as admission that the property in question was acquired with fraudulent proceeds,” he continued. “This may well be what the district court ultimately concludes, but it is sensible to give claimants the opportunity to amend their petition to provide information to satisfy § 853(n)(3) (if they have it) and the opportunity for a hearing (if it is warranted).”
But the government prevailed as to the interlocutory sale of the New Jersey property, with the 7th Circuit determining the district court “undertook the relevant analysis and sufficiently explained its decisions, at least by incorporation.”
Further, Flaum added, “Because the district court’s adopted position was not explicitly predicated on the outcome of the § 853(n) proceedings, we need not reach the import of our remand on the § 853(n) issue … .”
The case is United States of America v. Joseph Furando, Appeal of: Christine M. Furando, et al., 20-1526.
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