United States District Court, S.D. New York
For Jocelyn A. Keil, Interested Party: David J. Sutton, The Law Offices of David J. Sutton, P.C, Garden City, NY.
For USA, Plaintiff: Joan M. Loughnane, LEAD ATTORNEY, U.S. Attorney's Office, SDNY (86 Chambers St.), New York, NY; Jeffrey Ehrlich Alberts, U.S. Attorney's Office, Sdny (White Plains), White Plains, NY.
LAURA TAYLOR SWAIN, United States District Judge.
On October 19, 2009, Matthew Weitzman (" Defendant" or " Weitzman" ) pleaded guilty to an Information charging him with several counts of investment advisor fraud, securities fraud, and wire fraud. On June 30, 2010, this Court sentenced Weitzman to 97 months in prison. At the sentencing hearing, the Court also entered a Consent Preliminary Order of Forfeiture and, on June 24, 2011, the Court entered a Final Order of Forfeiture, granting the Government title to the property listed in the forfeiture order pursuant to 21 U.S.C. § 853(n)(7). Now before the Court is the Government's motion, pursuant to Federal Rule of Criminal Procedure 32.2(e) and 21 U.S.C. § 853(p), for the entry of a Preliminary Order of Forfeiture as to Substitute Assets. The Court has reviewed carefully all of the parties' submissions and, for the following reasons, the Government's application is granted.
On or about June 30, 2010, the Court entered a Consent Preliminary Order of Forfeiture pertaining to Weitzman's right, title, and interest in property ranging from proceeds of the sale of real property to jewelry purchased at J. Brown Jewelry. The Consent Order of Forfeiture included the entry of a money judgment against Weitzman in the amount of $7,082,032.
On February 15, 2013, the Government moved for a Preliminary Order of Forfeiture as to Substitute Assets, contending
that it has received less than $2 million in payments from the forfeited property towards the money judgment, leaving more than $5 million unpaid. While the Government has not been able to locate, obtain, or collect any proceeds of Defendant's offenses beyond those included in the forfeited property, it has located the following substitute assets: (1) funds on deposit in a Charles Schwab account with a listed beneficiary of " Matthew D. Weitzman" (" Weitzman Schwab Account" ); (2) funds on deposit in a Charles Schwab account with a listed beneficiary of " Weitzman Family Trust IRA" (" Weitzman Family Schwab Account" );  (3) Defendant's partnership interest in AFW Environmental Fund-I, LP (" Weitzman Environmental Fund Investment" ); (4) funds on deposit in the account " Matthew D. Weitzman-Trust" at TIAA CREF (" Weitzman TIAA CREF Trust" ); (5) funds on deposit in the account " Ellen B. Weitzman-Trust" at TIAA CREF (" Ellen Weitzman TIAA CREF Trust" );  (6) a check in the amount of $1,620 with a listed payor of Matthew D. Weitzman and a listed payee of the United States Marshals Service (" Weitzman Check" );  and (7) a check in the amount of $96.29 with a listed payor of the Comptroller State of New York Refund Account and a listed payee of Matthew D. Weitzman (" Comptroller Check" ).
Where, as a result of the defendant's actions or omissions, initially forfeited property that is subject to money judgment is unavailable, the Court may issue an order forfeiting substitute assets up to the value of that property. 21 U.S.C. § 853(p); Fed. R. Crim. P. 32.2(e)(1). Defendant Weitzman does not dispute the unavailability of the initially forfeited property. He also does not object to the Government's request to forfeit the Weitzman Check and the Comptroller Check as substitute assets.
Weitzman does, however, object to the forfeiture of all other substitute assets identified by the Government, contending that: (1) assets unrelated to any of his illegal activities cannot be forfeited, (2) assets in Individual Retirement Accounts (IRAs) cannot be forfeited, and (3) third parties may have interests in these assets. If the Court nevertheless finds that these additional assets may be forfeited as substitute assets, Weitzman requests that funds be reserved to cover any tax liabilities or early withdrawal penalties that may be incurred as a result of such forfeiture.
The Court finds that none of Defendant's arguments warrants denial of the Government's application.
Assets Unrelated to Criminal Activity
Whether an asset is linked to a defendant's illegal activity is not relevant to determining whether 21 U.S.C. § 853(p) permits its forfeiture as a substitute asset. See, e.g., United States v. Rosario,111 F.3d 293, 1996 WL 868385, at *4 (2d Cir. 1997) (" [W]e find that there is no requirement under 21 U.S.C. § 853(p) that the government demonstrate that substitute assets are traceable to criminal activity. . . . The purpose of § 853(p) is to substitute non-tainted assets for tainted assets that are not able to be located for forfeiture." ); United States v. Smith, 656 F.3d 821, 828 (8th Cir. 2011) (there is no " constitutional nexus requirement" mandating that forfeited property be connected to the defendant's offense; any property of the defendant, including that which the ...