United States v. Romeo: No Sixth Amendment Right to Counsel in Post-Judgment Substitute-Asset Forfeiture and CCPA Garnishment Exclusion for Lump-Sum Proceeds

Introduction

United States v. Romeo, 23-6297-cr (2d Cir. May 5, 2025), addresses three interrelated questions in the context of a defendant’s post-conviction forfeiture proceedings:

Whether the Sixth Amendment guarantees appointed counsel in a post-judgment, substitute-asset forfeiture hearing;
Whether lump-sum proceeds from the sale of a membership interest qualify as “earnings” under the Consumer Credit Protection Act (CCPA) and thus are subject to a 25% garnishment cap; and
Whether a remand is required to allow either the Department of Justice or the district court to prioritize restitution over forfeiture.

Defendant-Appellant Rocco Romeo, convicted of wire fraud (18 U.S.C. § 1343) and money laundering (18 U.S.C. § 1956), was ordered to forfeit $855,629.76 and pay an equal amount in restitution. When the government could not identify traceable assets, it sought forfeiture of $524,657.49—the proceeds Romeo received from selling his membership interest in Atlas Certified, LLC—as a substitute asset. Romeo, proceeding pro se, challenged the forfeiture order on multiple grounds. The Second Circuit affirmed, establishing that (1) no Sixth Amendment right to counsel attaches in post-judgment substitute-asset forfeiture proceedings; (2) the sale proceeds are not “earnings” under the CCPA; and (3) no plain error or statutory requirement compelled the government or the court to prioritize restitution over forfeiture.

Summary of the Judgment

The Second Circuit’s per curiam opinion reached these key holdings:

Right to Counsel: The Sixth Amendment does not guarantee a right to counsel in a post-judgment, substitute-asset forfeiture hearing because such proceedings do not impose additional punishment or affect a defendant’s substantial rights in a manner akin to a critical stage of prosecution.
CCPA Garnishment Limitation: The lump-sum proceeds of $524,657.49 from the sale of Romeo’s membership interest in Atlas do not constitute “earnings” under 15 U.S.C. § 1672(a) and therefore are not subject to the 25% garnishment cap of 15 U.S.C. § 1673.
Restitution vs. Forfeiture Prioritization: Neither statute nor binding precedent obligates the Department of Justice to apply substituted assets toward restitution, nor does the district court plainly err in declining to direct such prioritization in a post-conviction context.

Accordingly, the Court affirmed the district court’s order denying Romeo’s motion to enjoin forfeiture of the substitute asset.

Analysis

1. Precedents Cited

The opinion relies on several Supreme Court and Second Circuit precedents to define the contours of Sixth Amendment rights, substitute-asset forfeiture, and the scope of the CCPA:

United States v. Wade, 388 U.S. 218 (1967): Defined “critical stages” requiring counsel—stages at which absence of counsel “might derogate from the accused’s right to a fair trial.”
Mempa v. Rhay, 389 U.S. 128 (1967): Confirmed the right to counsel during certain post-conviction proceedings affecting substantial rights, e.g., sentencing.
Schneckloth v. Bustamonte, 412 U.S. 218 (1973): Emphasized that the Sixth Amendment right to counsel protects the fairness of trial itself.
United States v. Nichols, 511 U.S. 738 (1994): Held that re-punishing for a prior unauthorized representation does not necessarily implicate additional Sixth Amendment rights.
United States v. Kon Yu-Leung, 910 F.2d 33 (2d Cir. 1990): Reinforced that consent to searches with counsel waiver does not create a right to counsel at a stage where counsel would confer no tangible benefit.
Kokoszka v. Belford, 417 U.S. 642 (1974): Clarified that not all assets traceable to wages qualify as “earnings” under the CCPA—periodic, routine payments alone qualify.
21 U.S.C. § 853(p) (substitute-asset forfeiture procedures) and 28 U.S.C. § 2461(c) (making civil forfeiture provisions applicable to criminal forfeiture).

2. Legal Reasoning

The Court’s reasoning unfolds in three main steps:

a. No Sixth Amendment Right to Counsel

• Sixth Amendment jurisprudence protects assistance of counsel at all “critical stages” of prosecution, where counsel’s presence safeguards fairness.
• A substitute-asset forfeiture hearing is a post-judgment enforcement measure, not an additional penal stage or critical adversarial confrontation.
• Because Romeo had counsel through plea, sentencing, and entry of the preliminary forfeiture order, and because forfeiting the substitute asset did not increase his prison term or monetary punishment beyond what the court had already imposed, no constitutional right to counsel attached at that stage.
• The First Circuit’s decision in United States v. Saccoccia, 564 F.3d 502 (1st Cir. 2009), reached a similar result.

b. CCPA “Earnings” Exclusion

• The CCPA limits garnishment to 25% of a debtor’s “disposable earnings,” defined by statute as compensation for personal services (“wages, salary, commissions, bonus, or otherwise”).
• Under Kokoszka, routine periodic payments intended to support ongoing living expenses qualify as “earnings,” but lump-sum capital distributions—even where traceable to past service—do not.
• The $524,657.49 Romeo received was a one-time capital gain distribution for his equity interest in Atlas, taxed as capital gain, not periodic wages. Thus it falls outside the CCPA’s protective cap.

c. Discretion to Prioritize Restitution

• Statutes (18 U.S.C. § 981(e)(6); 21 U.S.C. § 853(i)) grant the Attorney General discretion to apply forfeited assets to victim restitution, but do not mandate it.
• United States v. Pescatore, 637 F.3d 128 (2d Cir. 2011), held that neither plea agreements nor DOJ policy create a judicially enforceable obligation for the government to use forfeited property to satisfy restitution.
• No binding authority establishes that a district court, post-judgment, may compel the government to credit forfeited assets toward restitution. Many circuits have held that no such authority exists.

3. Impact

The Romeo decision clarifies and reinforces several important principles:

Post-Judgment Forfeiture Proceedings: These proceedings are generally non-critical stages under the Sixth Amendment, so defendants have no constitutional right to counsel. This limits collateral challenges and streamlines enforcement of forfeiture orders.
Scope of CCPA Protections: One-time capital distributions and equity sale proceeds are not “earnings” subject to garnishment caps. Future defendants cannot shield lump-sum asset forfeitures behind the CCPA.
Restitution vs. Forfeiture Discretion: The Attorney General’s statutory discretion to apply forfeited assets to restitution remains unfettered by judicial commands. District courts lack clear authority to order such prioritization absent new legislation or binding precedent.

Practitioners should advise clients that consenting to preliminary forfeiture orders—especially those containing substitute-asset clauses—may foreclose future Sixth Amendment challenges. They should also carefully distinguish between periodic earnings and one-time capital distributions when invoking garnishment protections.

Complex Concepts Simplified

Substitute Asset Forfeiture: A legal mechanism under 21 U.S.C. § 853(p) allowing the government to seize other property of a defendant when the original illicit proceeds cannot be located, have been dissipated, or are commingled.
Critical Stage (Sixth Amendment): A phase of criminal proceedings—trial, plea, sentencing—where a defendant’s rights and substantial interests are at stake, making legal representation indispensable for a fair process.
Consumer Credit Protection Act (CCPA) Garnishment Limit: A statutory limit (max 25%) on how much of a debtor’s “disposable earnings” (regular wages or periodic compensation) can be garnished to satisfy debts, preventing undue economic hardship.
Discretionary Restoration to Victims: Under 18 U.S.C. § 981(e)(6) and 21 U.S.C. § 853(i), the Attorney General may decide whether to keep forfeited assets for the government or use all or part of them to compensate crime victims—but is not bound to do so.

Conclusion

United States v. Romeo affirms the government’s authority to enforce criminal forfeiture orders through substitute assets without triggering a Sixth Amendment right to counsel, and confirms that lump-sum sale proceeds are outside the CCPA’s 25% garnishment cap. It also underscores that neither statute nor binding case law compels the government or the courts to prioritize restitution over forfeiture in post-judgment proceedings. This ruling streamlines enforcement of forfeiture judgments and clarifies the narrow scope of procedural and garnishment protections available to defendants after sentencing.