Vacatur or Absence of a Preliminary Forfeiture Order Preserves Defendant Standing to Appeal Final Forfeiture

Case: United States v. Davis (5th Cir. Feb. 24, 2026) (per curiam) (unpublished)

1. Introduction

This consolidated appeal arises from a large-scale fraud against the Veterans Administration (VA) involving GI-Bill tuition payments to a for-profit HVAC trade school, Retail Ready Career Center (“RRCC”). Jonathan Dean Davis, RRCC’s founder and sole shareholder, was convicted by a jury of multiple counts of wire fraud and money laundering (18 U.S.C. §§ 1343, 1957) connected to false statements and misrepresentations that secured VA approval and induced student-veterans to enroll. RRCC received approximately $72 million in VA funds over six years.

The forfeiture issues in this appeal sit on the procedural and remedial edge of criminal forfeiture: (i) whether Davis could appeal “final” forfeiture orders when the original preliminary forfeiture order had been vacated and not replaced; (ii) whether RRCC could assert an ownership interest in deposited criminal proceeds through an ancillary proceeding under 21 U.S.C. § 853(n); (iii) whether defendants could relitigate the proceeds calculation and property scope on a limited remand; and (iv) whether a forfeiture money judgment of “proceeds” can be attacked as an excessive fine under the Eighth Amendment.

2. Summary of the Opinion

The Fifth Circuit affirmed the district court’s post-remand forfeiture dispositions. Key holdings:

  • 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; without a valid preliminary order, Davis’s property interest was never extinguished (distinguishing the usual rule that defendants cannot appeal final forfeiture orders).
  • Ancillary petition: RRCC’s § 853(n) petition was properly dismissed without an evidentiary hearing and without leave to amend because RRCC could not, as a matter of law, satisfy § 853(n)(6)(A) (no superior interest at the time of the offense; deposits occurred after the offense conduct).
  • Mandate rule: Challenges to the “top-line” proceeds figure and to the scope of forfeitable property were barred because Davis I remanded only to determine offsets for “direct costs” under 18 U.S.C. § 981(a)(2)(B).
  • Eighth Amendment: The $19.2 million forfeiture money judgment—representing criminal proceeds after offsets—was not “punishment” for Excessive Fines purposes; therefore, the Excessive Fines Clause did not apply.

3. Analysis

3.1. Precedents Cited

A. The case’s procedural posture: United States v. Davis ("Davis I"), 53 F.4th 833 (5th Cir. 2022)

Davis I is the backbone of the present decision. In Davis I, the Fifth Circuit vacated the original forfeiture order because the district court applied the wrong statutory definition of “proceeds,” and remanded “for the limited purpose of determining whether Davis could show any offset for ‘direct costs’ under 18 U.S.C. § 981(a)(2)(B).” The current panel treats that instruction as a strict constraint, using it both to apply the mandate rule and to frame what issues were (and were not) open on remand.

B. Standing to appeal final forfeiture orders: United States v. De Los Santos, 260 F.3d 446 (5th Cir. 2001) and United States v. Torres, 450 F. App'x 361 (5th Cir. 2011)

The government relied on the standard Fifth Circuit rule that a defendant typically cannot appeal a final forfeiture order because “his interest in the property ends when the preliminary order is entered” (De Los Santos), leaving the final order to resolve only third-party claims (Torres). The panel accepted that general framework—but carved out its application on the case’s unusual record: the preliminary order had been vacated in Davis I and never replaced.

C. Preliminary order timing and harmless error: United States v. Marquez, 685 F.3d 501 (5th Cir. 2012) and McIntosh v. United States, 601 U.S. 330 (2024)

In a footnote, the panel acknowledged that the district court “erred by entering the final orders of forfeiture without first issuing preliminary orders” (citing Marquez). But it then invoked McIntosh v. United States, which held that failure to enter a preliminary forfeiture order before sentencing does not deprive the court of the power to order forfeiture, and that harmless-error review applies. The panel further supported this approach with out-of-circuit authority: United States v. Lee, 77 F.4th 565 (7th Cir. 2023) and United States v. Farias, 836 F.3d 1315 (11th Cir. 2016).

Applying Fifth Circuit harmless-error framing from United States v. Omigie, 977 F.3d 397 (5th Cir. 2020), the court found no effect on substantial rights because Davis did not show a reasonable probability that a properly sequenced preliminary order would have reduced the forfeiture imposed.

D. Defendant standing preserved when the preliminary order is absent or vacated: United States v. Petlechkov, 72 F.4th 699 (6th Cir. 2023) and United States v. De La Mata, 535 F.3d 1267 (11th Cir. 2008)

For the core standing point, the panel cited Sixth and Eleventh Circuit cases recognizing that when no preliminary order is entered—or the preliminary order is vacated—property interests may not be extinguished, allowing a defendant to appeal later forfeiture dispositions.

E. Ancillary proceedings pleading and dismissal: United States v. Holy Land Found. for Relief & Dev., 722 F.3d 677 (5th Cir. 2013) and United States v. Butt, 930 F.3d 410 (5th Cir. 2019)

The panel relied on Holy Land for the statutory structure of § 853(n) and the proposition that if a petitioner cannot satisfy § 853(n)(6)(A) (or (B)), it cannot prevail in the ancillary proceeding. It relied on Butt for applying a Rule 12(b)(6)-type standard to ancillary petition dismissals under Fed. R. Crim. P. 32.2(c)(1)(A) and rejecting conclusory allegations.

F. “Superior interest” timing and deposited proceeds: United States v. Hyunh, 595 F. App'x 336 (5th Cir. 2014)

The court treated Hyunh as controlling for RRCC’s theory: businesses do not acquire a superior interest in criminal proceeds merely because the proceeds are later deposited into business accounts after the offense conduct. This defeats § 853(n)(6)(A), which asks whether the petitioner’s interest was vested in (or superior to) the defendant’s “at the time of the commission of the acts which gave rise to the forfeiture.”

G. Mandate rule scope on limited remand: United States v. Garza, 127 F.4th 954 (5th Cir. 2025), United States v. Lee, 358 F.3d 315 (5th Cir. 2004), United States v. Marmolejo, 139 F.3d 528 (5th Cir. 1998), and United States v. Stanford, 883 F.3d 500 (5th Cir. 2018)

The panel used these cases to enforce a “restrictive” mandate rule: on remand, the district court (and, effectively, the parties) are limited to the “discrete, particular issues” identified by the appellate court (Garza, quoting Lee; Marmolejo). It acknowledged that the rule is discretionary and sometimes bypassed (Stanford), and that issues that could not have been brought in the original appeal may be excepted (Garza, quoting Lee).

H. Excessive Fines and proceeds forfeiture: United States v. Bajakajian, 524 U.S. 321 (1998), United States v. Betancourt, 422 F.3d 240 (5th Cir. 2005), United States v. Buchanan, 70 F.3d 818 (5th Cir. 1995), United States v. Rellan Perez, No. 24-50191, 2025 WL 1157550 (5th Cir. Apr. 21, 2025), United States v. Loe, 248 F.3d 449 (5th Cir. 2001), and United States v. Haro, 753 F. App'x 250 (5th Cir. 2018)

Davis invoked Bajakajian for the general proposition that forfeitures can be “fines” subject to gross-disproportionality review. The panel rejected the analogy because the forfeiture here was of “proceeds,” which Fifth Circuit precedent treats as non-punitive: Betancourt (quoting Buchanan), reinforced by Rellan Perez. The panel framed proceeds forfeiture as the recovery of “money that [the defendant] had no right to in the first place” (Loe), and therefore outside the Excessive Fines Clause (Haro).

I. Other cited authority: Honeycutt v. United States, 581 U.S. 443 (2017)

The government argued, and the panel agreed, that Davis’s attempts to revisit the top-line proceeds figure “under Honeycutt” were also barred by the mandate rule. The opinion does not reach Honeycutt on the merits; it functions as a reminder that new legal theories do not necessarily reopen issues outside a limited remand.

3.2. Legal Reasoning

A. Standing: when the “final order” is not merely third-party housekeeping

The opinion’s most practically important move is its standing analysis. It starts with the ordinary structure of criminal forfeiture:

  • A preliminary order of forfeiture typically adjudicates the defendant’s interest.
  • A later final order of forfeiture typically resolves only third-party claims; hence, defendants usually cannot appeal it.

But because Davis I “vacated the sole preliminary order of forfeiture” and the district court did not enter a replacement before issuing the final orders, there was no valid order extinguishing Davis’s interest. The court therefore treated the “final” orders as affecting Davis’s still-extant property interest, creating standing to appeal.

Practical rule distilled: In the Fifth Circuit, when the only preliminary forfeiture order is vacated (and no replacement issues), the defendant may retain a cognizable interest sufficient to appeal later “final” forfeiture orders, notwithstanding the typical De Los Santos bar.

B. RRCC’s ancillary petition: “superior interest” must predate the offense conduct

RRCC pursued § 853(n)(6)(A) only, which requires the petitioner to show that its “legal right, title, or interest” was vested in it rather than the defendant, or was superior to the defendant’s, “at the time of the commission of the acts which gave rise to the forfeiture.”

The panel’s reasoning is straightforward and formal:

  • The “acts which gave rise to the forfeiture” necessarily occurred before the deposit of the fraud proceeds into RRCC accounts.
  • A later deposit cannot retroactively create a superior interest at the time of the offense.
  • Therefore, RRCC cannot satisfy § 853(n)(6)(A) as a matter of law, making dismissal appropriate and amendment futile.

The opinion also clarifies procedure: although § 853(n)(2) refers to petitioning “for a hearing,” Rule 32.2(c)(1)(A) expressly permits dismissal at the pleading stage, and Butt imports Rule 12(b)(6) discipline into ancillary petitions. Thus, “no evidentiary hearing” is required where the petition cannot state a viable § 853(n)(6) theory.

C. Mandate rule: limited remand means limited litigation

The panel treated Davis I as having conclusively set (or at least left undisturbed) the “top-line” proceeds figure ($72 million in VA tuition payments), and remanded only to determine offsets for “direct costs” under § 981(a)(2)(B). Post-remand attempts to (i) relitigate the top-line number, (ii) contest the forfeiture of specific property beyond the remand’s scope, or (iii) argue that only RRCC accounts could constitute proceeds, were held barred.

Notably, the panel emphasized a “restrictive” mandate approach from Garza/Lee/Marmolejo: the remand is a narrow jurisdictional and argumentative corridor—“no more, no less.”

D. Excessive Fines: proceeds forfeiture as non-punitive in the Fifth Circuit

The court rejected Davis’s Eighth Amendment attack by characterizing the forfeiture money judgment as a proceeds-based remedy rather than a punitive fine. While acknowledging Bajakajian’s general Excessive Fines framework, the panel emphasized that Fifth Circuit doctrine treats forfeiture of proceeds as non-punitive because it strips away illicit gain.

The key doctrinal bridge is Betancourt (and its quotation of Buchanan): “the forfeiture of . . . proceeds does not constitute punishment.” The court therefore held that the Excessive Fines Clause simply does not apply to this proceeds judgment (reinforced by Loe and Haro).

3.3. Impact

  • Appellate access in forfeiture sequencing errors: Even after McIntosh makes many preliminary-order timing defects harmless, this opinion highlights a separate consequence: a vacated (and unreplaced) preliminary order can preserve a defendant’s appellate standing to challenge subsequent “final” forfeiture orders.
  • Ancillary proceedings limited to truly superior pre-offense interests: The decision reinforces that entities closely tied to the defendant (even the operating business receiving deposits) face a steep, often categorical barrier under § 853(n)(6)(A) when their claimed interest arises only after criminal proceeds are generated.
  • Mandate discipline in forfeiture remands: Litigants should expect strict confinement to the remanded issue (here, § 981(a)(2)(B) offsets). The opinion signals that alternative theories (including new Supreme Court framings such as Honeycutt) may be procedurally foreclosed if not within the remand or otherwise preserved.
  • Eighth Amendment challenges to proceeds judgments remain difficult in the Fifth Circuit: By reiterating that proceeds forfeiture is not punishment, the opinion reduces the practical availability of Excessive Fines review for proceeds-based money judgments, channeling challenges instead toward statutory interpretation (e.g., what counts as “proceeds,” and what “direct costs” may be offset).

4. Complex Concepts Simplified

  • Criminal forfeiture: A court order requiring a defendant to give up property connected to a crime (often the “proceeds” or property traceable to them).
  • Preliminary vs. final forfeiture orders: The preliminary order typically determines what the defendant must forfeit; the final order usually comes later and resolves third-party claims in an “ancillary” process.
  • Ancillary proceeding (21 U.S.C. § 853(n)): A process allowing third parties (not the defendant) to assert legal interests in property the government seeks to forfeit.
  • “Superior interest” under § 853(n)(6)(A): The third party must show it owned (or had a superior legal interest in) the property at the time the crime occurred. An interest that arises only after proceeds are generated—such as by later deposit—generally fails.
  • Mandate rule: After an appellate remand, the lower court (and the parties) are limited to the specific issues the appellate court sent back. Attempts to reopen other issues are typically barred.
  • Excessive Fines Clause: Prohibits “grossly disproportional” punitive forfeitures/fines. The Fifth Circuit treats forfeiture of criminal “proceeds” as non-punitive (disgorgement), so the clause does not apply in that setting.

5. Conclusion

United States v. Davis (2026) is a procedure-forward forfeiture decision with a clear operational takeaway: when a preliminary forfeiture order is vacated and not replaced, the defendant’s property interest may remain intact, preserving standing to appeal later forfeiture orders that would otherwise be insulated as “final” third-party adjudications. The opinion also tightens the boundaries of § 853(n)(6)(A) for business entities claiming deposited proceeds, enforces a restrictive mandate rule after a limited remand, and reiterates that proceeds forfeiture money judgments are not subject to Eighth Amendment excessive-fines scrutiny in the Fifth Circuit.