“Superior-Interest Rule” in Criminal Forfeiture:
Tenth Circuit Affirms Priority of State-Law Ownership over Federal Relation-Back
Commentary on United States v. Peck, 89 F.4th ___ (10th Cir. 2025)

I. Introduction

United States v. Peck presented the Tenth Circuit with an increasingly common post-conviction quandary: what happens when tainted proceeds are poured into property that belongs—on paper—to someone other than the criminal defendant? The Government argued that the “relation-back” clause in 21 U.S.C. § 853(c) gave it an automatic, superior right to recover any traceable proceeds, regardless of the record title holder. Claimant Jesse Dunn responded that under Utah property law he alone owned the real-estate lot that the Government sought to forfeit, and that § 853(n)(6)(A) therefore required the order of forfeiture to be set aside.

The panel (Judges Phillips, Kelly, and Rossman; opinion by Judge Rossman; concurrence/dissent by Judge Phillips) sided with Dunn, holding that:

• appellate jurisdiction lies under 28 U.S.C. § 1291 because an ancillary forfeiture order is a final, civil decision, and
• state-law ownership interests control in ancillary proceedings, so that where the defendant never held record title the Government cannot rely solely on the relation-back doctrine to defeat a third party’s superior interest.

The decision cements what this commentary calls the “Superior-Interest Rule”: in an ancillary proceeding the Government steps into the defendant’s shoes and may forfeit only the interest the defendant actually possessed under state law; a third party with a superior or prior interest prevails—even if tainted money enhanced the property’s value.

II. Summary of the Judgment

Justin Peck pleaded guilty to operating an unlicensed money-transmitting business (18 U.S.C. § 1960) that moved more than $58 million. A preliminary order of forfeiture identified one piece of property—the “West Jordan Lot”—as forfeitable. The lot, however, had been purchased and titled solely in the name of Jesse Dunn, an employee of Peck, albeit with the help of a hard-money loan. Months after the purchase Peck wired roughly $305,000 of tainted funds to pay off Dunn’s loan, freeing the lot of its lien.

Dunn filed a third-party petition under § 853(n) and Fed. R. Crim. P. 32.2(c), asserting exclusive ownership. The district court (D. Utah) agreed and vacated the preliminary forfeiture order. The United States appealed.

The Tenth Circuit:

1. Rejected Dunn’s motion to dismiss, holding that ancillary decisions are final, civil judgments appealable by the Government.
2. Affirmed the district court on the merits:
   • Under Utah law Dunn held fee title from the moment he bought the lot; Peck never acquired a cognizable property right.
   • Because Dunn’s interest was “vested … or … superior” to Peck’s “at the time of the commission of the acts which gave rise to forfeiture,” § 853(n)(6)(A) compelled the court to invalidate the forfeiture “in whole.”
   • Relation-back under § 853(c) does not displace § 853(n)(6); the Government can forfeit only what the defendant actually owned.
3. Ordered the notice of lis pendens dissolved and its own stay vacated.

III. Analysis

A. Precedents Cited and their Influence

• United States v. Andrews, 530 F.3d 1232 (10th Cir. 2008) – bedrock Tenth Circuit authority that third-party ownership questions are deferred to the ancillary stage and are governed by state property law. Peck relies heavily on Andrews to frame the two-step forfeiture process.
• United States v. Bornfield, 145 F.3d 1123 (10th Cir. 1998) – defines “traceable” property under § 982(a)(1), but the panel stresses that step-one traceability does not answer step-two superiority.
• United States v. Nichols, 841 F.2d 1485 (10th Cir. 1988) – long-standing relation-back precedent. Judge Phillips’ dissent leans on Nichols; the majority distinguishes it as involving attorneys’-fee funds and not a third party’s superior title.
• United States v. Totaro, 345 F.3d 989 (8th Cir. 2003) – Government’s star citation; held that a spouse’s equitable interest could not defeat forfeiture where tainted funds built the marital home. Majority cabins Totaro to its “spousal” context and emphasizes contrary Ninth Circuit reasoning in United States v. Nava, 404 F.3d 1119 (9th Cir. 2005).
• Nava – confirms that where the defendant never had title, a relative’s property cannot be forfeited merely because the defendant improved it with tainted money.
• Kaley v. United States, 571 U.S. 320 (2014) – cited to show that criminal forfeiture attaches to specific assets, and if those assets lie with a third party the Government must pursue state-law or equitable remedies.

B. The Court’s Legal Reasoning

1. Jurisdictional Holding – Ancillary proceedings are treated as civil; thus the Government does not need special statutory authority under 18 U.S.C. § 3731 to appeal. Finality exists once the district court resolves the last third-party petition.
2. Two-Step Framework Reaffirmed
   Step 1 – Criminal Case: determine nexus, enter preliminary order “without regard to any third party’s interest.”
   Step 2 – Ancillary Case: adjudicate petitions under § 853(n). The Government “steps into the defendant’s shoes.” Ownership issues are answered solely by reference to state substantive law.
3. State-Law Ownership – Applying Utah deed-of-trust rules the panel finds:
   • Dunn held legal title immediately on purchase (March 2018).
   • The hard-money lender held only a secured interest; payoff extinguished that lien and returned full title to Dunn.
   • Peck’s wire created, at most, an unsecured debt—not a lien or co-ownership—because no Utah doctrine automatically gives a payor an equitable or resulting trust without evidence of intent.
4. Interaction of §§ 853(c) and 853(n)(6) – The relation-back clause vests in the Government whatever interest the defendant possesses, but does not manufacture a federal property right where none existed under state law. Section 853(n)(6)(A) explicitly contemplates that a third party may have a pre-existing “superior” interest that renders forfeiture “invalid in whole.”
5. Scope of Relief – Vacatur of the preliminary order is a permissible “amendment” under Rule 32.2(c)(2) when the only property listed is wholly beyond the defendant’s ownership.

C. Practical & Doctrinal Impact

• Narrows Relation-Back in the 10th Circuit – Prosecutors can no longer assume that proof of traceability plus § 853(c) defeats a third-party claim. They must also prove that the defendant obtained a state-law interest in the specific asset.
• Elevates State Property Law – The decision underscores that state doctrines of trusts, equitable liens, community property, or marital interests will often control the outcome of federal forfeiture disputes.
• Guidance on Appeals – Confirms that the Government may appeal an adverse ancillary order under § 1291, while defendants may not cross-appeal nexus findings via § 853(n).
• Strategic Signals to the Government
  • Seek money judgments or substitute-property orders when title complications loom.
  • Plead alternative theories (constructive trust, unjust enrichment) under applicable state law early in the ancillary phase.
  • Consider civil-forfeiture or in-personam restitution actions where criminal forfeiture hits doctrinal barriers.
• For Defense Counsel – Encourages third-party claimants to gather robust evidence of their state-law interests (deeds, trust instruments, loan documents) and to challenge the Government’s failure to plead a cognizable ownership share.

D. Complex Concepts Simplified

• Criminal vs. Civil Forfeiture – Criminal forfeiture (18 U.S.C. § 982, 21 U.S.C. § 853) is punishment attached to conviction; civil forfeiture (e.g., 18 U.S.C. § 981) proceeds against the property itself. Ancillary proceedings, though inside a criminal docket, operate like a mini civil case.
• Relation-Back Doctrine (§ 853(c)) – Concept that the United States acquires the defendant’s forfeitable interest as of the moment of the crime, preventing dissipation. It does not create new property interests.
• § 853(n)(6) “Superior Interest” – A third party wins if, on the crime date, he had a legally cognizable interest that was better (earlier in time, or otherwise higher in priority) than the defendant’s.
• Substitute Property (§ 853(p)) – If the defendant’s own interest in tainted property is unreachable—e.g., because he spent or transferred it—the court may order forfeiture of other assets up to the value of the unreachable proceeds.
• Lis Pendens – A recorded notice that property is subject to litigation; here dissolved because forfeiture claim failed.

IV. Conclusion

United States v. Peck stakes out an important limitation on federal forfeiture power: title and priority are dictated first by state law, and only then do federal forfeiture doctrines apply. The ruling compels prosecutors to analyze state property rights with the same rigor as traceability, and signals that appellate courts will scrutinize attempts to forfeit assets that the defendant never truly owned. While the decision may spur creativity in shielding tainted funds, it equally invites the Government to diversify its forfeiture toolkit—utilizing money judgments, substitute-property provisions, and state equitable remedies. Above all, Peck re-balances the statutory scheme, ensuring that criminal punishment does not trample legitimate, pre-existing property rights.