Priority of State-Law Ownership over Federal Forfeiture: A Commentary on United States v. Peck (10th Cir. 2025)

1. Introduction

In United States v. Peck, the United States Court of Appeals for the Tenth Circuit delivered a precedential ruling clarifying two recurring questions in criminal-forfeiture practice:

When, and under what authority, may the Government appeal an order entered in an ancillary forfeiture proceeding?
How should courts resolve a clash between the Government’s interest in forfeiting property tainted by criminal funds and a third party’s pre-existing ownership interest grounded in state property law?

The dispute grew out of Justin Peck’s guilty plea for operating an unlicensed money-transmitting business (18 U.S.C. § 1960). The Government sought forfeiture of a parcel of land (the “West Jordan Lot”) after tainted funds were used to pay off a hard-money loan on the property. Jesse Dunn—Peck’s employee, friend, and the record owner of the land—filed a third-party petition under 21 U.S.C. § 853(n) claiming superior title. The district court sided with Dunn and vacated the preliminary order of forfeiture. The United States appealed.

The Tenth Circuit affirmed, holding that (i) it possessed appellate jurisdiction to review an order entered at the conclusion of an ancillary proceeding, and (ii) under § 853(n)(6)(A) a third party who holds state-law title that predates any interest of the criminal defendant prevails over the Government, even though tainted funds were later injected into the property.

2. Summary of the Judgment

Appellate Jurisdiction: Orders resolving ancillary petitions are “final decisions” under 28 U.S.C. § 1291, and the Government’s notice of appeal was timely. Ancillary proceedings are treated as civil in nature; no special criminal-appeal statute is required.
Merits:
- Criminal forfeiture is a two-step process: (1) determination of forfeitability in the criminal case (Fed. R. Crim. P. 32.2(b)); (2) adjudication of third-party claims in an ancillary proceeding (§ 853(n)).
- At step 2, ownership interests are determined by state property law. Utah law vested full title in Dunn from the moment he purchased the lot; Peck never held any legal or equitable interest.
- The fact that tainted funds later paid off Dunn’s mortgage did not give Peck (or the Government) a superior interest in the realty.
- Because Dunn’s interest was “superior to any right, title, or interest of the defendant at the time of the commission of the acts,” § 853(n)(6)(A) required that the forfeiture order be vacated.
Result: District court’s orders granting Dunn’s petition and releasing a lis pendens were affirmed; the appellate stay was vacated.

3. Analysis

3.1 Precedents Cited and Their Influence

United States v. Andrews, 530 F.3d 1232 (10th Cir. 2008) – Established that third parties cannot contest forfeitability at step 1 but may assert ownership at step 2; reinforced the use of state law to define property interests.
United States v. Holy Land Foundation, 722 F.3d 677 (5th Cir. 2013); United States v. Furando, 40 F.4th 567 (7th Cir. 2022) – Both treat ancillary orders as final and appealable under § 1291.
United States v. Nichols, 841 F.2d 1485 (10th Cir. 1988) – Discussed relation-back doctrine and liberal-construction command of § 853(o). The majority distinguished Nichols to underline that ownership, not merely taint, controls step 2 outcomes.
United States v. Totaro, 345 F.3d 989 (8th Cir. 2003) & United States v. Nava, 404 F.3d 1119 (9th Cir. 2005) – Presented contrasting approaches to spouse/child ownership. The Tenth Circuit sided with Nava’s emphasis on state-law title when defendant never held an interest.

3.2 Legal Reasoning of the Court

Civil Character of Ancillary Proceedings. The panel reasoned that Rule 32.2(c)(1)(B) (allowing discovery under the Federal Rules of Civil Procedure) and § 853(n)(5) (directing courts to consult the “record of the criminal case”) both signal that ancillary proceedings are civil for purposes of appeal.
State Law Governs Ownership. Relying on Andrews, the court reiterated that federal forfeiture statutes borrow state property law to determine “right, title, or interest.”
No Defendant Interest ⇒ No Government Interest. Forfeiture under § 853 is in personam; the Government “steps into the defendant’s shoes.” If the defendant never had shoes (i.e., never owned the property), there is nothing to step into.
Waiver of State-Law Claims. The Government did not advance any Utah-law theory (constructive trust, equitable lien, etc.) that might have given Peck an interest in the lot. Consequently, those arguments were deemed waived.
Scope of Relief. Vacatur of the preliminary order was the only amendment that fully protected Dunn’s superior ownership; partial forfeiture was impossible because the Government sought the lot in rem, not a money judgment or substitute assets.

3.3 Likely Impact on Future Litigation

Government Litigation Strategy. Prosecutors may more frequently include (i) money judgments, (ii) substitute-property counts (§ 853(p)), or (iii) state-law equitable theories in forfeiture pleadings to avoid Peck-style defeats.
Third-Party Petition Practice. Defense counsel and property owners now have a roadmap: focus on state-law title, document chronology, and highlight any Government waiver of equitable arguments.
Appellate Jurisdiction Clarified. Within the Tenth Circuit, the Government (and private claimants) can confidently appeal ancillary rulings without fear of jurisdictional dismissal, streamlining review of forfeiture disputes.
Relation-Back Doctrine Limited. Peck underscores that the relation-back vesting of title in the United States under § 853(c) does not trump § 853(n)(6)(A) when the defendant lacked any cognizable property interest.
State–Federal Balance. The opinion re-emphasises federal deference to state property law—a theme likely to influence multi-state forfeiture fights, especially where real estate is involved.

4. Complex Concepts Simplified

Criminal Forfeiture vs. Civil Forfeiture: Criminal forfeiture is part of the defendant’s sentence and targets property connected to the crime; civil forfeiture is a separate in rem action against the property itself.
Ancillary Proceeding: A post-conviction mini-trial where third parties can claim the property belongs to them, not the defendant.
Relation-Back Doctrine: Under § 853(c) the Government’s interest in forfeitable property “relates back” to the date of the offense, preventing defendants from shielding assets by post-crime transfers.
Tainted Funds: Money derived from or involved in illegal activity; here, proceeds of an unlicensed money-transmitting business.
Bona Fide Purchaser (BFP): Someone who buys property for value, in good faith, without notice of its tainted nature—protected under § 853(n)(6)(B).
Substitute Property: If the original asset is unavailable (e.g., already transferred), § 853(p) permits forfeiture of other defendant assets of equivalent value.
Lis Pendens: A recorded notice that property is subject to pending litigation, warning would-be buyers or lenders.

5. Conclusion

United States v. Peck cements two important propositions in Tenth Circuit law. First, ancillary-proceeding orders are appealable final judgments, granting the Government the same right to appellate review as private claimants. Second—and more substantively—the opinion draws a bright line: where the criminal defendant never possessed a state-law ownership interest in the property, the Government cannot forfeit the asset simply because criminal money later flowed into it. Prosecutors must therefore plan forfeiture strategy with precision, pursuing money judgments, substitute assets, or state-law equitable remedies when title is not in the defendant’s name.

For practitioners, Peck is a cautionary tale. The Government’s failure to plead or prove a state-law basis for tracing tainted funds into real property doomed its forfeiture bid. Conversely, third-party owners should scrutinize the timeline of title transfers and be prepared to invoke § 853(n)(6)(A). Going forward, the decision will likely spawn more nuanced ancillary-proceeding litigation and sharpen the focus on state-property concepts within federal criminal cases.