United States v. Antonia Campos, Jose Campos, Milk-O-Mat, Inc.

NATHANIEL R. JONES, Circuit Judge,

dissenting.

I would follow the approach taken by the only other federal courts which have addressed the scope of property interests to be recognized under section 853(n). See United States v. Reckmeyer, 836 F.2d 200 (4th Cir.1987); United States v. Mageean, 649 F.Supp. 820 (D.Nev.1986). Because I am not persuaded by the majority’s attempts to distinguish these cases, I respectfully dissent.

In my view, the Reckmeyer and Magee-an courts correctly emphasize the importance of interpreting the language of section 853(n)(6) to effectuate the overall intent of the criminal forfeiture statute. Thus, while Congress certainly intended to *1241 make it easier for the Government to establish a nexus between the illegal activity and the defendant’s property and, accordingly, easier to obtain a forfeiture, it also intended to protect the interests of bona fide purchasers who had no knowledge of the illegal activity. See S.Rep. No. 225, 98th Cong., 1st Sess. 208, reprinted in 1984 U.S.Code Cong. & Admin.News 3182, 3891. Moreover, Congress expressly indicated that the “provisions of [section 853] shall be liberally construed to effectuate its remedial purposes.” 21 U.S.C. § 853 (o). The Reckmeyer and Mageean courts, in construing section 853(n)(6)(B) to allow general creditors who gave value to forfeited corporations in arms-length transactions, to recover as bona-fide purchasers, have, in my view, given proper effect to the expressed congressional intent.

In light of Congress’s goal in enacting the forfeiture provision, coupled with its intent that the provision be liberally construed, I agree with the Fourth Circuit’s conclusion in Reckmeyer that the word “purchaser” in the term “bona fide purchaser for value” was not meant to “operate as a limitation on the class of those who having engaged in arms’-length transactions with the defendant were entitled to protection of their interests.” Reckmeyer, 836 F.2d at 208 . In order to avoid anomo-lous results and to effectuate the legislative intent, “the term ‘bona fide purchaser for value’ must be construed liberally to include all persons who [gave] value to the defendant in an arms’-length transaction with the expectation that they would receive equivalent value in return.” Id. Such persons, if they are without knowledge of the potential forfeitability of the defendant’s assets, are entitled to recover under section 853(n)(6)(B).

Further, and perhaps more importantly, the courts in Reckmeyer and Mageean have settled on a statutory construction that avoids the obvious due process problems which would otherwise plague the forfeiture statute. See, e.g., Reckmeyer, 836 F.2d at 206 . It seems to me that these constitutional concerns are quite serious because, while the statute allows the criminal defendant to present evidence to rebut the presumption of forfeitability created by section 853(d), a general creditor, like these petitioners, who lends money or otherwise provides assets to the defendant may not be heard at the stage of the proceeding in which the forfeiture decision is made. See 21 U.S.C. § 853 (k) (barring third parties from intervening in the criminal trial). Therefore, unless the general creditor is included within the group of persons who can assert cognizable claims under section 853(n)(6), that person’s property interests can be compromised by an in personam judgment resulting from litigation to which he or she was not a party. Such a construction of section 853(n) is not consistent with due process. Indeed, in my view, as a general rule of fundamental fairness, the more relaxed the Government’s burden becomes in obtaining a forfeiture of a criminal defendant’s property, the more crucial it is for courts to recognize and protect the claims of innocent third parties who might have a legitimate interest in that property.

The majority’s reliance on Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663 , 94 S.Ct. 2080 , 40 L.Ed.2d 452 (1974), does not persuade me otherwise. While in that case the forfeiture of a yacht belonging to an innocent lessor may have had “the desirable effect of inducing [the lessor] to exercise greater care in transferring possession of [his] property,” id. at 688 , 94 S.Ct. at 2084 , this policy concern is certainly not applicable with regard to Milk-o-Mat’s sale of milk on account to the forfeited drug store corporation. In my mind, for the reasons discussed above, the instant case is more appropriately viewed as one of those situations, recognized in Calero-Toledo , which give rise to “serious constitutional questions.” 416 U.S. at 689 , 94 S.Ct. at 2094 .

For the foregoing reasons, I would remand the case to the district court for a determination of whether Milk-o-Mat and/or the Camposes were without knowledge of the potential forfeitability of the corporation’s assets. If they were without such knowledge — and it is likely that at least Milk-o-Mat could make such a show *1242 ing — then they are entitled to recover under section 853(n)(6)(B).