Vacated Preliminary Forfeiture Order Preserves Defendant Standing to Appeal Final Forfeiture Orders

I. Introduction

United States v. Davis (5th Cir. Feb. 24, 2026) arises from Jonathan Dean Davis’s fraud and money-laundering scheme involving Retail Ready Career Center (“RRCC”), an HVAC trade school heavily funded through GI-Bill payments administered by the Veterans Administration (“VA”). After a jury convicted Davis of multiple counts of wire fraud (18 U.S.C. § 1343) and money laundering (18 U.S.C. § 1957), the district court imposed imprisonment, restitution, and forfeiture—including a large forfeiture money judgment.

The forfeiture component previously reached the Fifth Circuit in United States v. Davis ("Davis I"), 53 F.4th 833 (5th Cir. 2022), where the court vacated the forfeiture order because the district court used the wrong statutory definition of “proceeds,” remanding only for a limited recalculation concerning “direct costs” offsets under 18 U.S.C. § 981(a)(2)(B).

On the post-remand appeal, the consolidated case presented three recurring forfeiture questions: (1) whether Davis had standing to appeal final forfeiture orders after the preliminary forfeiture order had been vacated in Davis I; (2) whether RRCC could assert a third-party interest in forfeited funds through an ancillary proceeding under Fed. R. Crim. P. 32.2(c) and 21 U.S.C. § 853(n); and (3) whether the revised $19.2 million forfeiture money judgment violated the Eighth Amendment’s Excessive Fines Clause.

II. Summary of the Opinion

The Fifth Circuit affirmed. It held:

  • Standing: Davis had standing to appeal the final forfeiture orders because Davis I vacated the only preliminary forfeiture order and the district court did not enter a replacement preliminary order before issuing final forfeiture orders; without a valid preliminary order, Davis’s property interest was never extinguished.
  • RRCC’s ancillary petition: RRCC failed, as a matter of law, to plead a superior interest under 21 U.S.C. § 853(n)(6)(A), because a business does not acquire a superior interest in criminal proceeds deposited into its accounts after the offense conduct. Dismissal without an evidentiary hearing was proper, and amendment would have been futile.
  • Mandate rule: Davis’s renewed attacks on the “top-line” proceeds figure and on forfeiture of specific property fell outside the limited remand ordered in Davis I and were therefore barred by the mandate rule.
  • Eighth Amendment: The forfeiture money judgment representing criminal proceeds was not “punishment” and thus was not subject to the Excessive Fines Clause.

III. Analysis

A. Precedents Cited

1. Standing to appeal forfeiture: preliminary vs. final orders

The Government relied on the general forfeiture principle that a defendant ordinarily cannot appeal a final forfeiture order because the defendant’s interest ends when the preliminary order is entered. The panel anchored that general rule in United States v. De Los Santos, 260 F.3d 446, 448 (5th Cir. 2001), and United States v. Torres, 450 F. App’x 361, 362 (5th Cir. 2011) (per curiam).

But the court distinguished those cases on a procedural fact created by Davis I: the preliminary forfeiture order had been vacated, and no replacement preliminary order was entered before the final orders. The panel’s standing analysis aligns with out-of-circuit authority cited in footnote 4—United States v. Petlechkov, 72 F.4th 699, 705-06 (6th Cir. 2023), and United States v. De La Mata, 535 F.3d 1267, 1272, 1276-77 (11th Cir. 2008)—recognizing that the absence/vacatur of a preliminary order can preserve a defendant’s interest and thus appellate standing.

The panel also acknowledged procedural error under United States v. Marquez, 685 F.3d 501, 510 (5th Cir. 2012) (final order should not precede preliminary order), but treated it as harmless under McIntosh v. United States, 601 U.S. 330 (2024), which held that failure to enter a preliminary order before sentencing does not strip power to order forfeiture and is subject to harmless-error review. In support, it cited United States v. Lee, 77 F.4th 565, 582 (7th Cir. 2023), and United States v. Farias, 836 F.3d 1315, 1329-30 (11th Cir. 2016). It further applied the Fifth Circuit’s harmlessness framing from United States v. Omigie, 977 F.3d 397, 404 (5th Cir. 2020).

2. Ancillary proceedings and pleading standards

For standards governing ancillary proceedings under 21 U.S.C. § 853(n), the court relied on United States v. Holy Land Found. for Relief & Dev., 722 F.3d 677, 683-85 (5th Cir. 2013), for both the review standard (clear error for facts, de novo for legal conclusions) and the substantive point that a petitioner must satisfy § 853(n)(6) to prevail. Dismissal for failure to state a claim was supported by United States v. Butt, 930 F.3d 410, 412-13 (5th Cir. 2019), which imports the Rule 12(b)(6) plausibility framework into Rule 32.2(c)(1)(A) dismissals, limiting reliance on conclusory allegations. Futility as a basis to deny leave to amend was reviewed under United States v. Lamid, 663 F. App’x 319, 325 (5th Cir. 2016).

On the merits of RRCC’s claim under § 853(n)(6)(A), the panel treated as controlling the timing principle in United States v. Hyunh, 595 F. App’x 336, 340 (5th Cir. 2014): when the “acts which gave rise to the forfeiture” occur before the deposit of proceeds into an account, the account-holder cannot claim a superior interest “at the time of the commission of the acts.” (The opinion later references the same case as Huynh, 595 F. App’x at 340, but the operative cited title appears as United States v. Hyunh.)

3. Mandate rule limits on remand

The court applied the mandate rule as articulated in United States v. Garza, 127 F.4th 954, 957 (5th Cir. 2025), cert. denied, 2026 U.S. LEXIS 356 (U.S. Jan. 12, 2026) (No. 24-7396): remand binds the district court and bars relitigation of issues expressly or implicitly resolved. It underscored its “restrictive” approach by quoting United States v. Lee, 358 F.3d 315, 320 (5th Cir. 2004), and reaffirmed the “no more, no less” remand principle from United States v. Marmolejo, 139 F.3d 528, 531 (5th Cir. 1998).

While acknowledging discretion to bypass mandate questions and reach merits per United States v. Stanford, 883 F.3d 500, 505 (5th Cir. 2018), the panel held that Davis’s renewed challenges were foreclosed because Davis I remanded only to consider “direct costs” offsets under 18 U.S.C. § 981(a)(2)(B), leaving undisturbed the top-line proceeds figure. It also agreed with the Government that proceeds arguments under Honeycutt v. United States, 581 U.S. 443 (2017), were barred by the mandate rule.

4. Excessive fines and proceeds forfeiture

Davis’s Eighth Amendment theory relied on United States v. Bajakajian, 524 U.S. 321, 334 (1998), which applies the “grossly disproportional” test to punitive forfeitures. The panel rejected the analogy by distinguishing punitive forfeiture of personal currency from forfeiture of criminal proceeds and relied on United States v. Betancourt, 422 F.3d 240, 250 n.5 (5th Cir. 2005), which (quoting United States v. Buchanan, 70 F.3d 818, 830 n.12 (5th Cir. 1995)) states that forfeiture of proceeds is not punishment and therefore falls outside the Excessive Fines Clause.

The court reinforced this proceeds/non-punitive line with United States v. Rellan Perez, No. 24-50191, 2025 WL 1157550, at *1 (5th Cir. Apr. 21, 2025) (per curiam) (unpublished), and framed the forfeiture money judgment as recapturing “money that [Davis] had no right to in the first place” per United States v. Loe, 248 F.3d 449, 464 (5th Cir. 2001). Finally, it cited United States v. Haro, 753 F. App’x 250, 259 n.3 (5th Cir. 2018), for the proposition that proceeds forfeiture is not subject to the Excessive Fines Clause.

B. Legal Reasoning

1. A procedural defect that creates standing

The opinion’s most practically important holding is its standing analysis. While Fifth Circuit law generally cuts off a defendant’s property interest (and thus appellate standing as to the final order) upon entry of a preliminary forfeiture order, the panel reasoned that this cutoff presupposes a valid preliminary order. Because Davis I vacated the only preliminary order and the district court did not replace it before entering final orders, Davis’s interest “was never extinguished.” That preserved standing to challenge the final forfeiture orders.

Notably, the court simultaneously treated the district court’s sequencing error (entering final orders without a preliminary order) as harmless for purposes of validity of the forfeiture outcome under McIntosh v. United States, while still allowing Davis to appeal because the missing preliminary order affected whose interest had been legally extinguished. In other words: the forfeiture can stand, but the path taken can reopen the courthouse door for an appeal.

2. Why RRCC could not state a § 853(n)(6)(A) claim

RRCC sought relief only under § 853(n)(6)(A), which requires that the petitioner’s interest be vested in it rather than the defendant, or be superior to the defendant’s, “at the time of the commission of the acts” giving rise to forfeiture. Applying United States v. Hyunh, the panel treated the relevant “acts” as having occurred before any deposits of VA-derived proceeds into RRCC’s accounts. That temporal ordering made it impossible, as a matter of law, for RRCC to have held a “superior” interest at the required time.

Procedurally, the panel stressed that Rule 32.2(c)(1)(A) authorizes dismissal on the pleadings and that the petition’s facts are assumed true only to the extent they are not conclusory, consistent with United States v. Butt. Because the defect was legal (timing and superiority under § 853(n)(6)(A)), the district court properly denied leave to amend as futile under United States v. Lamid.

3. Mandate rule as a strict limiter in forfeiture recalculations

On remand, the district court’s task was narrow: determine whether Davis could prove any offset for “direct costs” under 18 U.S.C. § 981(a)(2)(B), as directed by Davis I. Invoking United States v. Garza, United States v. Lee, and United States v. Marmolejo, the panel refused to entertain broader attacks on the top-line proceeds figure and on the forfeiture’s asset-scope, describing them as outside the “discrete, particular issues” identified for remand.

The opinion thus reinforces that a defendant cannot use a limited-remand recalculation proceeding as a second chance to re-argue proceeds, tracing, or asset-selection theories that were available in the first appeal.

4. Proceeds forfeiture remains outside the Excessive Fines Clause

The court’s Eighth Amendment analysis is straightforwardly categorical: under Fifth Circuit precedent, proceeds forfeiture is not “punishment,” so United States v. Bajakajian does not apply. The panel characterized the $19.2 million judgment as proceeds from the VA payments “less the calculated offset,” i.e., a disgorgement-like recovery of value the defendant never had a lawful entitlement to, consistent with United States v. Loe and United States v. Betancourt.

The panel did, however, treat the Eighth Amendment argument as properly before it notwithstanding the mandate rule, because it challenged a “new” money judgment, citing United States v. Garza for the “could not have been brought in the original appeal” exception.

C. Impact

  • Appellate standing can turn on forfeiture procedure: The decision underscores a tactical and institutional consequence of forfeiture-order sequencing. When a preliminary forfeiture order is vacated and not re-entered before final forfeiture, the defendant may regain standing to appeal the final order even though defendants are usually shut out at that stage. District courts (and prosecutors) therefore have an incentive to ensure correct re-entry of preliminary orders after remand.
  • Corporate account holders face a steep barrier in § 853(n) proceeds cases: By applying United States v. Hyunh to reject RRCC’s claimed interest, the court reinforces that entities receiving deposits of criminal proceeds generally cannot satisfy § 853(n)(6)(A)’s timing/superiority requirement merely by asserting account ownership. This narrows the practical utility of ancillary proceedings for closely held businesses used as conduits for proceeds.
  • Limited remands stay limited: The mandate-rule holding (rooted in United States v. Garza) signals that the Fifth Circuit will police the boundaries of forfeiture remands tightly, especially where the prior opinion specifies a single recalculation variable (here, “direct costs” offsets under 18 U.S.C. § 981(a)(2)(B)).
  • Excessive Fines challenges remain difficult for proceeds forfeiture: By reaffirming that proceeds forfeiture is not punishment, the panel leaves little room—at least in the Fifth Circuit—for defendants to use proportionality review to reduce proceeds-based money judgments.

IV. Complex Concepts Simplified

Preliminary vs. final forfeiture orders
A preliminary forfeiture order typically determines the defendant’s forfeiture liability and cuts off the defendant’s interest in the property. A final forfeiture order usually comes after third-party claims are resolved and is commonly viewed as affecting only third parties—unless, as here, no valid preliminary order extinguished the defendant’s interest.
Ancillary proceeding (Rule 32.2(c) / 21 U.S.C. § 853(n))
This is the mechanism for third parties (not the defendant) to claim an interest in forfeited property. It is not a second criminal trial; it is more like a focused civil proceeding about property rights. The petition can be dismissed at the pleading stage if it does not state a legally viable claim.
§ 853(n)(6)(A) “superior interest” timing
To win under § 853(n)(6)(A), a third party generally must show its interest was already vested or superior when the crime occurred. If the property is criminal proceeds that were deposited into an account only after the crime, the account holder typically cannot show superiority at the required time.
Mandate rule
When an appellate court sends a case back to the district court, the district court may address only what the appellate court authorized. Parties generally cannot raise on remand (or in a later appeal) issues that were decided or could have been raised earlier, unless a recognized exception applies.
Excessive Fines Clause and “punishment”
The Eighth Amendment limits punitive financial sanctions. In the Fifth Circuit, forfeiture of criminal proceeds is treated as non-punitive (a recovery of ill-gotten gains), so proportionality review under United States v. Bajakajian typically does not apply.

V. Conclusion

United States v. Davis affirms a recalculated proceeds forfeiture while clarifying three important points of forfeiture practice in the Fifth Circuit: (1) a defendant may have standing to appeal final forfeiture orders when the preliminary forfeiture order was vacated and not replaced, because the defendant’s property interest is not extinguished; (2) third-party corporate petitioners face a legal bar under § 853(n)(6)(A) to claiming superiority in criminal proceeds deposited after the offense conduct, consistent with United States v. Hyunh; and (3) proceeds forfeiture money judgments remain outside the Excessive Fines Clause under Fifth Circuit precedent, limiting constitutional proportionality attacks. The opinion also exemplifies strict adherence to the mandate rule after a limited remand ordered in Davis I.