Second Circuit Extends Honeycutt to § 981(a)(1)(C): Criminal Forfeiture Requires Personal Acquisition of Proceeds

Introduction

In United States v. Elias, the U.S. Court of Appeals for the Second Circuit vacated a $10,000 criminal forfeiture money judgment imposed on a defendant convicted of Hobbs Act robbery, holding that forfeiture under 18 U.S.C. § 981(a)(1)(C) (invoked in a criminal case via 28 U.S.C. § 2461(c)) is limited to “tainted property acquired or used by the defendant.” The court applied the Supreme Court’s reasoning in Honeycutt v. United States, 581 U.S. 443 (2017), which construed similar language in 21 U.S.C. § 853(a)(1), and concluded that the government may not use pro rata or joint-and-several theories to forfeit proceeds the defendant never actually received.

The decision places the Second Circuit alongside the Third, Ninth, and Eleventh Circuits and in direct conflict with the Sixth and Eighth Circuits, thereby deepening an acknowledged circuit split on whether Honeycutt’s personal-acquisition requirement applies to § 981(a)(1)(C) forfeiture in criminal cases.

Parties and posture: Matthew Elias (aka “Heddis”) appealed a forfeiture order entered by the Eastern District of New York (Garaufis, J.) following his Hobbs Act robbery conviction. The government relied on § 981(a)(1)(C), as incorporated for criminal forfeiture by § 2461(c), and the substitute-assets mechanism in 21 U.S.C. § 853(p), to obtain a $10,000 money judgment representing a “pro rata” share of the robbery proceeds. Elias argued that Honeycutt foreclosed forfeiture absent proof he personally obtained proceeds. The Second Circuit agreed and vacated the forfeiture.

Summary of the Opinion

• Holding: Honeycutt’s limitation—that criminal forfeiture reaches only tainted property actually acquired or used by the defendant—applies to forfeiture orders entered under 18 U.S.C. § 981(a)(1)(C) in criminal cases via 28 U.S.C. § 2461(c). Joint-and-several or pro rata forfeiture theories are impermissible when the defendant did not acquire any proceeds.
• Reasoning: The Second Circuit found the operative “obtain/obtained” language in § 981(a)(2)(A) functionally indistinguishable from § 853(a)(1). It emphasized Honeycutt’s textual and structural analysis, including the limitation to tainted property and the design of § 853(p), which authorizes substitute assets only from a defendant who initially acquired and dissipated tainted property. The absence of the words “the person” in § 981 does not alter the requirement of personal acquisition in criminal forfeiture.
• Application to Elias: The record showed Elias did not receive any share of the robbery proceeds; a co-perpetrator kept everything except a small amount shared with another person. Ordering Elias to forfeit $10,000 as a notional share of proceeds he never obtained was both legally impermissible under Honeycutt and factually unsupported.
• Disposition: The forfeiture order against Elias is vacated. All other aspects of the judgments against the defendants were affirmed in part and vacated in part pursuant to a separate summary order.

Analysis

Precedents and Authorities Cited

• Honeycutt v. United States, 581 U.S. 443 (2017): The Supreme Court held that § 853(a)(1) allows forfeiture only of “tainted property acquired or used by the defendant.” “Obtain” means to “come into possession of” or “get or acquire,” and does not include property obtained by someone else. The Court rejected joint-and-several forfeiture and emphasized § 853(p) as the exclusive path to substitute assets, available only against the defendant who acquired and dissipated forfeitable property.
• United States v. Contorinis, 692 F.3d 136 (2d Cir. 2012): Before Honeycutt, the Second Circuit suggested forfeiture could include proceeds foreseeably acquired by co-conspirators (a Pinkerton-like theory), but vacated forfeiture where proceeds went to an innocent third party (the fund employer). Elias reads Honeycutt as undermining any Pinkerton-based expansion in criminal forfeiture, returning the focus to the defendant’s actual gains.
• United States v. Capoccia, 503 F.3d 103 (2d Cir. 2007): Reinforces that § 981(a)(1)(C) requires a “nexus” between the property forfeited and the conduct supporting the conviction, and that § 2461(c) ties forfeiture to the specific offense of conviction in criminal proceedings.
• Circuit split authorities:
  • Applying Honeycutt to § 981(a)(1)(C): United States v. Thompson, 990 F.3d 680 (9th Cir. 2021); United States v. Gjeli, 867 F.3d 418 (3d Cir. 2017); United States v. Carlyle, 712 F. App’x 862 (11th Cir. 2017) (unpublished).
  • Declining to apply Honeycutt to § 981(a)(1)(C): United States v. Sexton, 894 F.3d 787 (6th Cir. 2018); Peithman v. United States, 917 F.3d 635 (8th Cir. 2019) (cert. denied, 140 S. Ct. 340; Sotomayor, J., dissenting from denial).
• Statutory and procedural framework:
  • 18 U.S.C. § 981(a)(1)(C), (a)(2)(A): Civil forfeiture of property constituting or derived from proceeds “obtained directly or indirectly” as a result of specified unlawful activity; for inherently unlawful activity (like robbery), “proceeds” are “property of any kind obtained directly or indirectly” as a result of the offense.
  • 28 U.S.C. § 2461(c): Authorizes criminal forfeiture wherever civil forfeiture is authorized and imports 21 U.S.C. § 853 procedures.
  • 21 U.S.C. § 853, including § 853(p): Criminal forfeiture procedures and substitute-assets provision; substitute assets available only against the defendant whose acts or omissions caused the tainted property’s unavailability.
  • Fed. R. Crim. P. 32.2: Forfeiture procedures and standards, including use of trial record and preponderance standard at sentencing.
• Foundational cases on forfeiture’s nature: Libretti v. United States, 516 U.S. 29 (1995) (criminal forfeiture as punishment); United States v. Bajakajian, 524 U.S. 321 (1998) (criminal forfeiture is part of punishment and subject to Excessive Fines Clause); United States v. Kaley, 571 U.S. 320 (2014) (purposes of criminal forfeiture).

Legal Reasoning

1. Textual parity between § 853(a)(1) and § 981(a)(2)(A):

   Honeycutt turned on the meaning of “obtained” in § 853(a)(1). Section 981(a)(2)(A)—the definition of “proceeds” dispositive for inherently unlawful activity—uses the same operative term: “property of any kind obtained directly or indirectly, as the result of the commission of the offense.” The Second Circuit invoked the canon that the same language in related statutes should carry a consistent meaning. Thus, “obtain” in § 981(a)(2)(A) bears the Honeycutt meaning: the defendant must have actually acquired the property.

   The Sixth and Eighth Circuits had emphasized § 853’s phrase “the person obtained,” which § 981 lacks. The Second Circuit rejected that distinction as immaterial in context: § 981 is drafted for civil, in rem proceedings (hence no “the person” language), but when used in a criminal case via § 2461(c), it functions identically for purposes of defining the universe of “proceeds” that may be criminally forfeited. The anchor is the common verb “obtain,” not the presence or absence of “the person.”

2. Structural limitation to tainted property:

   Honeycutt emphasized that the forfeiture statutes limit punishment to tainted property, i.e., assets with a direct nexus to the offense. Pro rata or joint-and-several theories risk sweeping in untainted assets to satisfy a gross judgment—precisely what Honeycutt condemned. Section 981(a)(1)(C) contains the same taint limitation (“proceeds traceable to”), and the Second Circuit reinforced its own nexus jurisprudence (Capoccia), requiring a tight link between the assets forfeited and the conduct of conviction.

3. Substitute assets under § 853(p):

   The Supreme Court described § 853(p) as the sole authorization to reach untainted assets, and only from the defendant who initially acquired the tainted property and is responsible for its unavailability. By force of § 2461(c), § 853(p) governs substitute-asset forfeiture in criminal cases invoking § 981. Accordingly, a defendant who never obtained any proceeds cannot be subjected to a substitute-assets money judgment to “stand in” for proceeds someone else acquired and kept.

4. Rejection of Pinkerton-style foreseeability in forfeiture:

   Honeycutt expressly disclaimed importing Pinkerton conspiracy principles to forfeiture under § 853. Elias extends that logic to § 981(a)(1)(C). Thus, a defendant’s foreseeability of co-conspirators’ acquisition, intended share, or “affirmative steps” to obtain proceeds do not substitute for actual acquisition by that defendant.

5. Application to the facts:

   The government’s proof showed Elias drove a getaway car but was arrested before any distribution; the orchestrator (Hytmiah) kept all the cash and marijuana except a small amount given to another participant. Recorded calls confirmed Elias would receive “no cut.” On this record, Elias “obtained” nothing. The district court’s $10,000 pro rata forfeiture rested on a clearly erroneous factual premise (that Elias obtained proceeds) and a legal theory incompatible with Honeycutt.

Impact

United States v. Elias marks a consequential development in federal forfeiture law within the Second Circuit. Its practical and doctrinal implications include:

• Prosecutorial proof realignment:
  • In criminal cases seeking forfeiture under § 981(a)(1)(C), the government must prove by a preponderance that the particular defendant personally acquired tainted proceeds (directly or indirectly) or tainted property “derived from” such proceeds.
  • Pro rata, joint-and-several, or purely foreseeability-based theories are unavailable. The government cannot cure a failure of personal acquisition by invoking § 853(p) unless it proves the defendant first obtained the tainted property and rendered it unavailable through qualifying acts or omissions.
• Strategic shifts:
  • Expect greater reliance on civil in rem forfeiture for property connected to an offense irrespective of a particular defendant’s gains, especially where low-level participants never touched the proceeds.
  • Expect more granular recordmaking in plea agreements and at sentencing to establish whether and how a defendant “obtained” proceeds (e.g., actual or beneficial possession, control through nominees, receipt of in-kind contraband or cash).
• Distinguishing restitution and forfeiture:
  • Restitution (victim-focused) remains available even when the defendant gained nothing, but criminal forfeiture (gain-focused) does not. Prosecutors may turn to restitution statutes to address victim losses where personal acquisition cannot be shown.
• Exposure of lower-tier actors:
  • Drivers, lookouts, and couriers who never personally received any proceeds are less likely to face criminal forfeiture money judgments in the Second Circuit, though they remain fully exposed to underlying criminal penalties and, where applicable, restitution.
• Inter-circuit uncertainty:
  • The decision entrenches a live circuit split. In the Second, Third, Ninth, and Eleventh Circuits, Honeycutt governs § 981(a)(1)(C) criminal forfeiture; in the Sixth and Eighth Circuits, the government may still seek broader liability. This divergence increases the likelihood of eventual Supreme Court review.

Complex Concepts Simplified

• Civil vs. criminal forfeiture:
  • Civil forfeiture is in rem (against the property), focused on the property’s connection to crime; the owner’s culpability can be irrelevant. Example: the government seizes a car used to traffic drugs.
  • Criminal forfeiture is in personam (against the convicted person), focused on disgorging the defendant’s ill-gotten gains as punishment. It is part of the sentence and must tie property to the defendant’s offense of conviction.
• “Proceeds” for inherently unlawful activity:
  • For crimes like robbery, proceeds are “property of any kind obtained directly or indirectly” as the result of the offense. “Obtained” requires actual acquisition by the defendant to support criminal forfeiture.
• Tainted vs. untainted assets:
  • Tainted: Assets derived from or constituting proceeds of the crime (e.g., stolen cash, contraband, items purchased with those proceeds).
  • Untainted: Assets unconnected to the crime (e.g., the defendant’s legitimate wages). Criminal forfeiture cannot take untainted assets, except in the narrow § 853(p) scenario when the defendant first obtained and then dissipated tainted property.
• Joint-and-several liability (and why it is barred here):
  • A tort concept where each wrongdoer can be liable for the full harm. Honeycutt held this concept does not apply to criminal forfeiture under § 853(a)(1), and Elias extends that logic to § 981(a)(1)(C) in criminal cases.
• Substitute assets under § 853(p):
  • If the defendant obtained tainted property but it’s now unreachable due to the defendant’s acts/omissions (e.g., dissipated, transferred), the court may order a money judgment or forfeiture of the defendant’s other (untainted) property up to the value of the tainted property. This tool is not available against a defendant who never obtained the tainted property in the first place.
• Pinkerton liability and forfeiture:
  • Pinkerton makes conspirators liable for foreseeable substantive crimes of co-conspirators. Honeycutt and Elias make clear that these conspiracy principles do not expand criminal forfeiture beyond a defendant’s own acquisitions.
• Standard of proof and review:
  • At sentencing, the government must prove the forfeiture nexus by a preponderance of the evidence. On appeal, legal conclusions are reviewed de novo; factual findings are reviewed for clear error.

Practical Guidance

For the Government

• Charge and prove that the defendant personally “obtained” or exercised control over specific proceeds or property derived from them. Documentary traces (cash, bank flows, messages, in-kind transfers) matter.
• Do not rely on pro rata allocations or joint-and-several requests under § 981(a)(1)(C) in the Second Circuit. Tailor forfeiture to what the defendant actually acquired.
• If proceeds are dissipated, develop § 853(p) evidence that the defendant obtained and then made the tainted property unavailable through qualifying acts or omissions.
• Consider civil in rem forfeiture where appropriate, and deploy restitution statutes to address victim losses when no personal acquisition can be shown.

For the Defense

• Scrutinize whether the record shows the client personally obtained any proceeds or derived property. Absence of acquisition is dispositive under Elias.
• Challenge attempts to convert intentions, expectations, or mere foreseeability into “proceeds obtained.” Honeycutt/Elias require actual acquisition.
• Where the government invokes § 853(p), contest whether the client ever obtained tainted property and whether any qualifying act or omission caused unavailability.
• Differentiate restitution from forfeiture; a lack of personal gain defeats forfeiture but not necessarily restitution.

Open Questions and Boundaries

• What counts as “obtained indirectly”? Elias did not need to specify the line, but future cases may explore whether fleeting possession, constructive possession, or beneficial control suffices. The safer reading post-Honeycutt/Elias is that the government must show actual acquisition or use by the defendant, which can include indirect means (e.g., via intermediaries or nominees) if tied to the defendant.
• How to treat mixed scenarios? If a defendant handled contraband in transit but never retained it, courts will need to assess whether such “use” constitutes “proceeds obtained” for § 981 purposes when applied criminally via § 2461(c). Elias does not foreclose that theory but requires proof tied to the defendant’s conduct and acquisition.
• Potential Supreme Court review: The deepened circuit split increases the likelihood of eventual resolution on whether Honeycutt applies to § 981(a)(1)(C) in criminal cases.

Conclusion

United States v. Elias establishes a clear rule in the Second Circuit: when the government seeks criminal forfeiture under § 981(a)(1)(C) via § 2461(c), it must prove that the defendant personally obtained tainted proceeds or property derived therefrom. Honeycutt’s personal-acquisition requirement, its prohibition on joint-and-several forfeiture, and the narrow scope of § 853(p) substitute-assets relief apply with full force.

As a result, pro rata or foreseeability-based forfeiture theories are off the table for defendants who never received any portion of the proceeds. The decision realigns criminal forfeiture with its core purpose—disgorging a defendant’s ill-gotten gains—while preserving other remedial tools (civil forfeiture, restitution) for different objectives. By joining one side of a maturing circuit split, the Second Circuit sets the stage for potential Supreme Court clarification, but in the meantime provides concrete guidance to trial courts, prosecutors, and defense counsel operating within the Circuit.