On June 5th, the United States Supreme Court held in Honeycutt v. United States that a criminal defendant is not jointly and severally liable for property his co-conspirator derived from the crime, and that he only can be ordered to forfeit property he actually obtained from the crime. Although the decision was unanimous (with Justice Gorsuch abstaining), the outcome was far from preordained.
Until 2015, courts applying the forfeiture statute, 21 U.S.C. § 853, had uniformly held that co-conspirators are jointly and severally liable for amounts received pursuant to the conspiracy. That rule was adopted by nine circuits. However, in 2015, the D.C. Circuit split with its sister circuits in United States v. Cano Flores, rejecting joint and several liability for co-conspirators. The district court in Honeycutt sided with the D.C. Circuit, but the Sixth Circuit reversed, following the overwhelming majority view of the other Courts of Appeal.
The result in Honeycutt, and the underlying analysis and related policy arguments, may have implications in other government enforcement contexts, including in securities cases. Further, the result appears to obligate the government to perform some degree of a tracing analysis to tie individual defendants to specific tainted funds – an analysis which might be difficult in complex fact patterns involving multiple defendants and the use of multiple entities or financial accounts. Continue Reading A Criminal Defendant Cannot Forfeit Property He Never Received