15‐1852‐cr United States v. Larry Seabrook

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 22nd day of September, two thousand sixteen.

PRESENT: CHESTER J. STRAUB, DENNY CHIN, SUSAN L. CARNEY, Circuit Judges.

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UNITED STATES OF AMERICA, Appellee,

v. 15‐1852‐cr

LARRY SEABROOK, Defendant‐Appellant.

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FOR APPELLEE: Niketh V. Velamoor, Paul M. Monteleoni, Anna M. Skotko, Assistant United States Attorneys, for Preet Bharara, United States Attorney, Southern District of New York, New York, New York.

FOR DEFENDANT‐APPELLANT: Margaret M. Shalley, Margaret M. Shalley & Assocs., LLC, New York, New York, and Grainne E. OʹNeill, New York, New York.

Appeal from the United States District Court for the Southern District of

New York (Castel, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the order of the district court is AFFIRMED.

Defendant‐appellant Larry Seabrook appeals the district courtʹs order

entered May 26, 2015 (the ʺOrderʺ) directing him to forfeit his New York City Employee

Retirement Pension as a substitute asset for a money judgment imposed pursuant to his

fraud convictions. Following a jury trial, Seabrook, a former New York City

councilman, was convicted of three counts of conspiracy to commit fraud, three counts

of mail fraud, and three counts of wire fraud in violation of

, 1343, and

1349. In a judgment entered January 17, 2013, Seabrook was ordered to forfeit, pursuant

to

(a)(1)(C) and

(c), $418,252.53 representing property

constituting or derived from proceeds traceable to the commission of those offenses.1

Thereafter, the government moved to require Seabrook to forfeit his interest in his

pension, as a substitute asset for the city funds transferred to his co‐conspirators, Gloria

Jones‐Grant and Tyrone Duren. By memorandum and order entered May 26, 2015, the

district court granted the motion. It entered the Order the same day.

1 Other aspects of Seabrookʹs conviction and sentence were the subject of earlier appeals before this Court. United States v. Seabrook, 613 F. Appʹx 20 (2d Cir. 2015); United States v. Seabrook, 571 F. Appʹx 27 (2d Cir. 2014). Only the forfeiture order is before us now. ‐ 2 ‐

Seabrook argues that applicable forfeiture statutes do not authorize the

district court to require the forfeiture of substitute assets and that his pension is not

subject to forfeiture. We assume the partiesʹ familiarity with the facts and the issues on

appeal.

I. Whether Forfeiture Was Authorized

Seabrook first argues that the forfeiture order was improper because

(a) only permits forfeiture of property that Seabrook personally obtained,

directly or indirectly, see

(a)(1), (2), and he contends that he never

received any of the funds that formed the basis of the forfeiture. Seabrook arranged for

city funds to be transferred to Jones‐Grand and Duren and thus they never passed

through his hands.

The argument fails. The forfeiture judgment was entered pursuant to

(a)(1)(C) and

(c). Although § 981 is entitled ʺCivil

forfeiture,ʺ it is made applicable to criminal cases by § 2461(c). See United States v.

Contorinis,

, 145 n.2 (2d Cir. 2012) (ʺThis roundabout statutory mechanism

allows a court to order forfeiture in criminal securities fraud proceedings.ʺ). In

addition, § 2461(c) provides that the ʺproceduresʺ in

apply to ʺall stages

of a criminal forfeiture proceeding,ʺ and thus § 853(p)ʹs substitute asset provisions

apply as well.

(c).

Section 981(a)(1)(C) does not contain the language in § 853(a) relied on by

Seabrook, i.e., the forfeiting of ʺany proceeds the person obtainedʺ or ʺany of the ‐ 3 ‐

personʹs property.ʺ

(a)(1), (2). The language in § 981 is much broader,

providing that ʺ[a]ny property, real or personal, which constitutes or is derived from

proceeds traceable to a violation of [certain specified statutes]ʺ is subject to forfeiture.

(a)(1)(C). See United States v. Bermudez,

(2d Cir. 2005)

(per curiam) (in money laundering case under 18 U.S.C § 982, rejecting argument that

substitute assets provision of § 853(p) applies only to property as defined by § 853(a)).

The funds that Seabrook directed to be transferred to the third parties fall

under § 981ʹs broad definition of ʺproceedsʺ as ʺproperty of any kind obtained directly or

indirectly, as the result of the commission of the offense giving rise to forfeiture, and

any property traceable thereto.ʺ § 981(a)(2)(A) (emphasis added). Therefore, those

monies may be forfeited. This reading comports with

(o)ʹs directive to

construe the statuteʹs provisions liberally.

Seabrookʹs second argument is that the district court erred by forfeiting his

property rather than the funds transferred to the co‐conspirators. There was no error,

for that is the point of substituting assets ‐‐ because the funds directed to the co‐

conspirators are no longer available, Seabrookʹs personal assets have been substituted

instead. Indeed, § 853(p) broadly provides that where property subject to forfeiture has

been, inter alia, transferred to a third party, ʺthe court shall order the forfeiture of any

other property of the defendant.ʺ

(p)(1)(B), (2). The district court found

that § 853(p)ʹs provisions apply to any property transferred as a result of any act or

omission of the defendant, and do not require that the transfer of property be separate ‐ 4 ‐

and distinct from the underlying criminal conduct. We agree. Where a defendantʹs

crime is the transfer of money to a third party, the transfer itself may be a basis for

substituting assets even if that money is never received by the defendant. Once again,

this comports with the statuteʹs mandate that it ʺbe liberally construed to effectuate its

remedial purposes.ʺ

(o).

Accordingly, we find that the district courtʹs substitute forfeiture order

was authorized.

II. The Pension Plan

Seabrook argues that Section 7 of Article V of the New York State

Constitution protects his New York City pensions and, therefore, those cannot be

claimed as substitute assets. This issue was recently decided by this Court in United

States v. Stevenson, where we held that ʺArticle V, Section 7 of the New York State

Constitution is preempted [by federal law] to the extent that it would prevent forfeiture

of [a defendantʹs] contributions to or benefits from a state pension or retirement

system.ʺ United States v. Stevenson, No. 14‐1862‐cr,

(2d Cir. Aug.

17, 2016). Stevenson controls, and thus, Seabrookʹs pension contributions are subject to

forfeiture.

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We have considered Seabrookʹs remaining arguments and find them to be

without merit. For the foregoing reasons, the order of the district court is hereby

AFFIRMED.

FOR THE COURT: Catherine OʹHagan Wolfe, Clerk

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