United States v. Joseph Cammarata
U.S. Court of Appeals for the Third Circuit
United States v. Joseph Cammarata, 129 F.4th 193 (3d Cir. 2025)
United States v. Joseph Cammarata
Opinion
PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_______________
No. 23-2110
_______________
UNITED STATES OF AMERICA
v.
JOSEPH CAMMARATA,
Appellant
_______________________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
District Court No. 2:21-cr-00427-001
District Judge: Honorable Chad F. Kenney
__________________________
Argued September 19, 2024
Before: RESTREPO, McKEE, and SMITH, Circuit Judges
(Filed: February 24, 2025)
Peter Goldberger [Argued]
Law Office of Peter Goldberger
P.O. Box 645
Ardmore, PA 19003
Counsel for Appellant
David J. Ignall
Paul G. Shapiro [Argued]
Office of United States Attorney
615 Chestnut Street
Suite 1250
Philadelphia, PA 19106
Counsel for Appellee
__________________________
OPINION OF THE COURT
__________________________
SMITH, Circuit Judge.
“The class action is an ingenious procedural
innovation[,]” wrote Judge Richard Posner in Eubank v. Pella
Corp., 753 F.3d 718, 719(7th Cir. 2014). As he explained, it “enables persons who have suffered a wrongful injury, but are too numerous for joinder of their claims alleging the same wrong committed by the same defendant or defendants to be feasible, to obtain relief as a group, a class as it is called.”Id.
Yet no matter how inspired a concept the class action
device may be, it is not entirely resistant to the designs of
fraudsters bent on abusing it—in this case, by imposters
2
claiming settlement proceeds to which they had no lawful
right.
This appeal presents us with issues arising out of a
unique intersection of federal sentencing principles and class
action settlement practice. Joseph Cammarata and two
confederates developed an elaborate scheme by which they
submitted fraudulent claims to administrators of securities
class action settlement funds. None of the three were class
members, yet their efforts yielded them over $40 million. Two
of the men entered guilty pleas pursuant to agreements.
Cammarata, though, proceeded to trial and was found guilty by
a jury of all charges filed against him.
In addressing the issues raised by Cammarata’s appeal,
we uphold all but two of the District Court’s rulings,
remanding for the District Court to reconsider its restitution
award and to allow the Government to move to amend the
District Court’s forfeiture order.
I. BACKGROUND
Joseph Cammarata and his business partners, Eric
Cohen and David Punturieri (collectively “Defendants”),
joined forces to create Alpha Plus Recovery, LLC (“Alpha
Plus”) in 2014. Alpha Plus was a claims aggregator,1 with a
1
An extensive search for a formal definition of a class action
“claims aggregator” yielded only a definition from a treatise
which cites the complaint filed against Cammarata by the
Securities and Exchange Commission in a parallel civil case. It
explains that claims aggregators “are companies that solicit
absent class members to provide services, including (i) filing
3
business model that revolved around securities class action
settlements. Class actions generally involve hundreds, if not
thousands, of class members. When a class action settles, some
class members may conclude that the time and effort required
to submit a small or modest claim outweigh any potential for
obtaining a meaningful award from the settlement fund. Claims
aggregators seek to remedy that dilemma. In exchange for a
percentage of a client’s monetary recovery, claims aggregators
complete necessary paperwork and then submit aggregated
claims to a settlement administrator on behalf of numerous
class-member clients.
An administrator of a settlement reviews each claim—
whether filed by an individual class member or by an
aggregator—to ensure that the claimant fits within the
definition of a class as set forth in the court order certifying the
settlement claims on their behalf, (ii) compiling, where
necessary, documentation or information to support those
claims, and (iii) communicating with the claims administrator
to perfect, cure, supplement, or otherwise oversee the claims
filing process through inception to distribution of funds.” Class
Actions and Other Complex Litig.: Ethics § 4.01 (2024) (citing
Compl. ¶¶ 37–38, SEC v. Cammarata, et al., No. 21-cv-4845,
ECF No. 1 (E.D. Pa. Nov. 11, 2021)). While the term “claims
aggregator” may not be generally known in legal practice, a
class action claims administrator who testified at trial in this
case confirmed that claims aggregators are “part of the
industry[.]” App. 547.
4
class.2 Those who qualify as class members thereby become
entitled to payment from the settlement fund. In a securities
class action, a qualified member is typically a person or entity
who purchased or owned shares of a security issued by an
entity which has been sued under federal securities laws at a
time, or during a period, specified in the class definition. When
aggregators submit claims on behalf of their clients, it becomes
the administrator’s responsibility to investigate whether the
clients satisfy the definitional criteria.
From 2014 to 2021, Alpha Plus submitted hundreds of
claims to administrators who were overseeing nearly 400
securities class action settlements filed in both federal and state
2
Federal Rule of Civil Procedure 23, which governs class
actions filed in the federal court system, requires the presiding
district judge to “define the class[.]” Fed. R. Civ. P.
23(c)(1)(B). Accordingly, a court’s order certifying a class
must include “a readily discernible, clear, and precise
statement of the parameters defining the class[.]” Wachtel ex
rel. Jesse v. Guardian Life Ins. Co. of Am., 453 F.3d 179, 187
(3d Cir. 2006). Class definitions in securities class actions
ordinarily resemble the following: All persons who purchased
or owned shares of the defendant entity’s stock during a
particular timeframe and who suffered damages as a result of
that purchase or ownership. See, e.g., App. 1979 (defining the
class as “[a]ll Persons who purchased shares of EndoChoice
common stock pursuant or traceable to EndoChoice’s [IPO]
Offering Materials on or before August 3, 2016, and who were
damaged thereby”).
5
courts. The company did so primarily on behalf of three clients:
Nimello Holding LLC (“Nimello”), Quartis Trade and
Investment LLC (“Quartis”), and Inversiones Invergasa SAS
(“Invergasa”). In its submissions to claims administrators,
Alpha Plus represented that Nimello was a hedge fund located
in Gibraltar, that Quartis was a hedge fund located in the
Bahamas, and that Invergasa was an entity located in
Colombia. Those submissions contained a number of
misrepresentations.
Nimello, Quartis, and Invergasa were not hedge
funds—they were defunct foreign shell companies acquired by
the Defendants. The directors of Nimello and Quartis, along
with Invergasa’s president, were associated with Joseph
Cammarata.3 David Punturieri had incorporated a separate
“Nimello” entity in New Jersey in 2015, named Nimello
Holding LLC (“NJ Nimello”); incorporation documents listed
Erik Cohen and Joseph Cammarata as officers and directors.
And a separate Quartis Trade and Investment LLC (“NJ
Quartis”) had been incorporated by Cohen in New Jersey in
2014. Cohen listed himself and Punturieri as members4 and
added Cammarata as an owner in 2017.5 The Defendants
3
The directors of Nimello and Quartis were not charged in the
indictment, nor was Invergasa’s president.
4
The superseding indictment stated that Cohen and Punturieri
were listed as “members/managers” of NJ Quartis. App. 98.
5
As the Presentence Investigation Report recommended, PSR
¶ 67, Cammarata received a sentencing enhancement because
6
subsequently opened bank accounts in the names of NJ
Nimello and NJ Quartis.
In support of the claims that Alpha Plus submitted to
claims administrators, it included falsified spreadsheets
purporting to show that Nimello, Quartis, and Invergasa had
traded in securities of certain companies named as defendants
in actual securities class actions that had been settled. In fact,
the three entities never actually traded in those or any other
securities. When claims administrators sought additional
documentation that might confirm some suspect trades, the
Defendants created and submitted further fabricated reports
which listed fictitious transactions.
Some of those fabricated reports purported to have been
authored by SpeedRoute, a broker dealer Cammarata founded
in 2010, and which he sold in 2015.6 For example, the
Defendants altered real trade data from SpeedRoute and
submitted it to claims administrators representing falsely that
Nimello, Quartis, or Invergasa had made the trades. In other
instances, when Alpha Plus submitted claims on behalf of the
three entities, it identified SpeedRoute as the entities’
brokerage firm and listed Cammarata as SpeedRoute’s point of
contact. When claims administrators pressed for further proof
of trading, Cohen and Cammarata worked together to create
fictitious SpeedRoute reports and submit them to the claims
his offense involved “sophisticated means[,]” such as
“acquir[ing] foreign shell companies” and “portray[ing] these
companies as hedge funds.” App. 2068.
6
Cammarata remained SpeedRoute’s CEO until 2018.
7
administrators. SpeedRoute itself was a legitimate entity and
had no role in creating those reports. Most importantly, it never
executed a trade on behalf of Nimello, Quartis, or Invergasa.
As scrutiny of the claims submitted by Alpha Plus grew
more intense, the Defendants resorted to other tactics in an
effort to deceive administrators. In 2015, for example, a claims
administrator asked several follow-up questions about
supporting documents for trades ostensibly made by Quartis.
The Defendants responded by falsely suggesting that
SpeedRoute was Quartis’s broker dealer. Cohen created an
email account which he used to pose as the principal of Quartis,
then sent an email to Cammarata purporting to ask for
information that he could provide to the inquiring claims
administrator. Cammarata drafted an email from his
SpeedRoute account which offered a contrived explanation.
Punturieri forwarded that email to the claims administrator,
touting it as a justification for the claim from Quartis’s broker
dealer.
In 2020, the Defendants’ scheme hit a snag. One claims
administrator, KCC, asked to be provided with data that
supported the trades allegedly underlying claims by Nimello
and Quartis. Punturieri, pretending to be an Alpha Plus
employee named “Paul Delfino,” sent KCC two reports
ostensibly authored by SpeedRoute. But Dan Dearden, a
financial crimes investigator employed by the parent company
of KCC, had begun to work with government investigators. He
referred the reports on to SpeedRoute, asking for verification
of their authenticity. SpeedRoute’s Chief Compliance Officer
responded that the company had not produced the reports and
did not recognize Nimello or Quartis as clients. Around this
8
same time, Dearden made a similar request for further
information about trades supposedly made by Invergasa.
The Defendants’ scheme had begun to unravel.
Because SpeedRoute could not verify the trades,
Dearden insisted that he speak with someone at Nimello,
Quartis, and Invergasa. Without such an assurance, Dearden
told Punturieri that he would reject the claims. Desperate to
give the phony claims an appearance of legitimacy, Cohen
impersonated Nimello’s principal in a conversation he had
with Dearden. And the Defendants instructed Cammarata’s
business partner in Colombia as to what he should say on
Invergasa’s behalf in a separate phone call he was to have with
Dearden. When the Invergasa call went poorly, Cammarata
went so far as to suggest to his co-defendants that he personally
go to Dearden’s home and offer him a $1 million bribe. He
elected, though, to abandon such an overture.
The conspirators’ desperation could hardly have been
assuaged when KCC rejected the Alpha Plus claims, and when
other claims administrators did likewise.
All told, claims administrators paid Alpha Plus
approximately $40 million for claims made on behalf of
Nimello, Quartis, and Invergasa from 2014 to 2021. The
Defendants transferred that money to bank accounts they held,
including the NJ Nimello and NJ Quartis accounts,7 for their
personal benefit.
7
The Defendants incorporated NJ Nimello and NJ Quartis so
they could deposit settlement funds into those entities’ bank
9
On October 28, 2021, a grand jury sitting in the Eastern
District of Pennsylvania returned a single-count indictment
charging the Defendants with conspiracy to commit mail and
wire fraud, in violation of 18 U.S.C. §§ 1341 and 1343.
Authorities arrested Cammarata six days later.8 A grand jury
returned a twelve-count superseding indictment in September
of 2022, charging the Defendants as follows:
• Conspiracy to commit mail and wire fraud, in
violation of 18 U.S.C. § 1349, at count one
against all Defendants;
• Wire fraud, in violation of 18 U.S.C. § 1343, at
counts two through five against all Defendants;
accounts. Claims administrators would sometimes send
settlement funds directly to Alpha Plus. In other instances,
claims administrators wrote checks to Nimello Holding LLC
and/or Quartis Trade and Investment LLC, thinking those
entities were foreign hedge funds and Alpha Plus clients. But
the Defendants would deposit those checks into the bank
accounts of the New Jersey LLCs they had incorporated under
either the Nimello or Quartis names.
8
Cammarata was initially released on bail, with conditions
including requirements that he live with his parents in New
York, abide by a curfew, and wear a location monitoring
device. But the District Court revoked his bail in March 2022
after concluding there was probable cause to believe
Cammarata had committed a federal offense while on release,
and that Cammarata was unlikely to abide by any conditions of
release.
10
• Conspiracy to commit money laundering, in
violation of 18 U.S.C. § 1956(h), at count six
against all Defendants;
• Money laundering and aiding and abetting, in
violation of 18 U.S.C. §§ 1956(a)(1)(B)(i) and 2,
at counts seven through ten against all
Defendants; and
• Money laundering and aiding and abetting, in
violation of 18 U.S.C. §§ 1957 and 2, at counts
eleven and twelve against Cammarata only.
Cammarata’s co-Defendants, Punturieri and Cohen,
pled guilty to counts one and six on October 13 and 14, 2022,
respectively. The day after Cohen entered his guilty plea, the
District Court granted the Government’s motion to dismiss the
money laundering charges at counts seven through ten as to all
three Defendants. Only Cammarata proceeded to trial on the
remaining counts a week later.
Both Punturieri and Cohen cooperated with the
Government and testified at the trial. Punturieri described
Cammarata as the “overseer” of the fraudulent scheme. App.
1326. And both Punturieri and Cohen detailed the false
submissions the Defendants had made to claims administrators
on behalf of Quartis, Nimello, and Invergasa. Several claims
administrators, as well as Dearden, also testified at trial.
Cammarata testified on his own behalf. He conceded
that he had lied to claims administrators by falsely representing
that Quartis, Nimello, and Invergasa had traded the securities
involved in the class action settlements. But by Cammarata’s
telling, the scheme was lawful because he had personally
11
traded the subject securities and then assigned those trades to
Quartis, Nimello, and Invergasa. The trades were all real, he
claimed, and his assignments rendered the three entities the
“beneficial owners” of the trades, entitling them to settlement
funds. App. 1594. Still, Cammarata admitted on cross-
examination that he never informed the claims administrators
that he had made any assignments.
After a six-day trial, the jury found Cammarata guilty
on all counts. The District Court sentenced him on June 6,
2023. The Court calculated Cammarata’s guideline
imprisonment range to be 168 months to 210 months. Despite
Cammarata’s being unrepentant throughout the sentencing
proceeding, the District Court granted him a downward
variance. He was sentenced to 120 months’ imprisonment and
ordered to pay restitution and to forfeit certain property.
This appeal followed.9
II. DISCUSSION
Cammarata raises five issues in this appeal. First, he
claims that the trial evidence and the Government’s closing
argument constructively amended the superseding indictment.
Second, he argues that the District Court violated the Federal
Rules of Evidence by permitting the Government to cross-
9
The District Court had jurisdiction under 18 U.S.C. § 3231. Cammarata timely filed a notice of appeal. We have jurisdiction pursuant to28 U.S.C. § 1291
and18 U.S.C. § 3742
(a).
12
examine him about his purchase of a private island and
portions of his tax returns. Third, he contends that the District
Court, in applying the Sentencing Guidelines, erroneously
calculated the amount of loss caused by his offenses. Fourth,
he avers that the District Court’s restitution order ran afoul of
the Mandatory Victims Restitution Act. And fifth, he claims
the District Court improperly ordered the forfeiture of his
vacation home.
We address each issue in turn.
A. Constructive Amendment
Cammarata argues that a constructive amendment of the
superseding indictment occurred during trial and that his
conviction should therefore be set aside. We are not persuaded.
Our review of a properly preserved constructive
amendment claim is plenary. United States v. Fallon, 61 F.4th
95, 111 (3d Cir. 2023). Yet Cammarata failed to raise his constructive amendment claim until he filed a post-trial motion. We therefore review Cammarata’s claim for plain error. United States v. Vosburgh,602 F.3d 512, 531
(3d Cir. 2010) (explaining that constructive amendment claims raised for the first time after trial—e.g., in a post-trial motion—are reviewed for plain error) (citing United States v. Tiller,302 F.3d 98, 105
(3d Cir. 2002)). Plain error review hinges on
whether the error prejudiced the defendant.10 United States v.
10
More specifically, to prevail under the plain-error
framework, an appellant must “show (1) a legal error (2) that
is plain and (3) that has affected his substantial rights.” United
States v. Dorsey, 105 F.4th 526, 528 (3d Cir. 2024) (citing
13
Greenspan, 923 F.3d 138, 149(3d Cir. 2019). Because a constructive amendment is a “per se violation of the fifth amendment’s grand jury clause[,]” United States v. Castro,776 F.2d 1118
, 1121–22 (3d Cir. 1985), we presume prejudice when a constructive amendment has occurred, United States v. Syme,276 F.3d 131, 154
(3d Cir. 2002).11
A constructive amendment occurs where trial evidence
or arguments “modify essential terms of the charged offense in
such a way that there is a substantial likelihood that the jury
may have convicted the defendant for an offense differing from
the offense” charged in the indictment. United States v.
Daraio, 445 F.3d 253, 259–60 (3d Cir. 2006). This may take place if the trial evidence or arguments “‘broaden[] the possible bases for conviction from that which appeared in the indictment[.]’” United States v. Lee,359 F.3d 194, 208
(3d Cir. 2004) (emphasis omitted) (quoting United States v. Asher,854 F.2d 1483, 1497
(3d Cir. 1988)). So our “key inquiry” is whether “the defendant was convicted of the same conduct for United States v. Olano,507 U.S. 725
, 732–33 (1993)). If those three prongs are satisfied, we have “discretion to correct the error if (4) it seriously affects the fairness, integrity, or reputation of judicial proceedings.”Id.
(citing Olano,507 U.S. at 732
).
11
We also held in Syme that the government can rebut the
presumption that a constructive amendment was prejudicial.
276 F.3d at 154–55. We need not reach that inquiry because
we conclude no constructive amendment took place.
14
which he was indicted.” Daraio, 445 F.3d at 260 (internal
quotation marks and citation omitted).
Cammarata advances two constructive amendment
arguments. First, he argues that the trial evidence failed to
prove the superseding indictment’s assertion that all class-
member claimants to those settlements targeted by the scheme
had to show that they purchased shares of the subject security
during the relevant time period, and that they were damaged
thereby.12 Second, he contends that the Government broadened
its theory of fraud when it countered his assignment defense
during closing argument.
Cammarata’s first argument seizes on the factual
complexities of his wire fraud offenses, given the intricacies of
the claims administration process and the numerous securities
class action settlements that were affected. He cherry picks
some testimony from two claims administrator employees,
James Facciolla and Tina Chiango, and contends that that
testimony undermined the need for a class action settlement
12
Cammarata’s argument focuses on paragraph 11 of the
superseding indictment. That paragraph provides that all
claimants to security class action settlements, “including those
represented by claims aggregators such as Alpha Plus,” were
required to show two “essential facts” to qualify for an award
of settlement funds: (1) “that they had bought shares of the
subject security during the time period set forth in the court-
approved settlement agreement[,]” and (2) that “they had
suffered damages as a result of their purchase of securities.”
App. 97.
15
claimant to prove that it actually purchased a subject security
and suffered damages from that purchase.
Our reading of Facciolla and Chiango’s testimony does
not substantiate Cammarata’s argument.
Cammarata claims Facciolla’s testimony disproved the
superseding indictment’s assertion that claimants were
required to demonstrate that they purchased shares of the
subject security to qualify for payment. Facciolla explained
that when submitting claims, aggregators like Alpha Plus must
provide their clients’ trade data and identify “the underlying
beneficial owner[,]” defining a “beneficial owner” as “the
person who has [the] rights to
. . . the underlying shares.” App. 504. In Cammarata’s view,
that seems to suggest that a claims aggregator’s clients may not
need to be the persons or entities to actually purchase the
subject securities to qualify for payment of their claims. Yet
when the prosecutor focused on the claims that Alpha Plus had
submitted to Facciolla’s employer, asking Facciolla if
“Nimello itself ha[d] to make a purchase” of the subject
security “to make a claim,” Facciolla responded in the
affirmative. App. 510. So Cammarata is simply wrong, and the
testimony is consistent with the superseding indictment’s
allegation that claimants “represented by claims aggregators
such as Alpha Plus” were required to “demonstrate that they
had bought shares of the subject security during the [relevant]
time period[.]” App. 97; see also App. 1251–52 (another
claims administrator testifying that to qualify for payment, a
claimant had “to have bought the stock during the class
period”).
16
So too with respect to Chiango’s testimony. Cammarata
claims her testimony was contrary to the superseding
indictment’s averment that claimants were required to
demonstrate that they had suffered damages to qualify for
payment. In his view, her testimony demonstrated that
claimants need only show a “recognized loss”—not
damages—to qualify. Opening Br. at 22. Chiango explained
that the portion of the settlement fund to which a claimant is
entitled is “based on the recognized loss that was calculated for
the plan of allocation[,]”13 a plan that was approved by a judge
pursuant to the class action settlement. App. 1483. Yet
Chiango went on to explain that if claimants “don’t have
damages, per the plan of allocation that we have to follow, then
they are not entitled to any distribution.” App. 1484. The court-
approved plan of allocation establishes the amount to which all
claimants are entitled based on their recognized losses, but that
does not negate the fact that claimants must still show they
suffered damages if they are to qualify to receive payment.
13
“A plan of allocation is a stated methodology by which a
class action recovery is allocated among eligible claimants;
literally, it is a plan for allocating the settlement fund.” Stevie
Thurin, A Guide to Settlement Plans of Allocation in Securities
Class Actions, AM. BAR ASS’N (Nov. 15, 2018),
https://www.americanbar.org/groups/litigation/resources/new
sletters/securities/a-guide-to-settlement-plans-allocation-
securities-class-actions/. Ordinarily, the plan of allocation
provides a formula by which to calculate claimants’ recognized
losses. See App. 1983–86. The ultimate allocation of
settlement funds is based on each claimant’s recognized losses,
as calculated by the plan of allocation.
17
Chiango’s testimony is entirely consistent with the superseding
indictment’s allegation that claimants “needed to show they
had suffered damages as a result of their purchase of
securities.” App. 97; see also App. 1979 (defining a class as
persons “who purchased shares of” the subject security and
“who were damaged thereby”).
Accordingly, Cammarata’s overly-selective references
to the trial testimony of Facciolla and Chiango fall short of
contradicting averments in the indictment. The testimony of
the two witnesses was consistent with the Government’s theory
of guilt and the means by which class action settlements were
to be administered.
We likewise reject Cammarata’s argument that the
Government constructively amended the superseding
indictment during its summation. Our constructive amendment
analysis hinges on whether “an element of the offense for
which [Cammarata] was convicted was different from an
element of the offense for which it appears from the face of the
indictment he was charged.” United States v. Bryan, 483 F.2d
88, 96–97 (3d Cir. 1973). And Fallon reminds us that “[t]rial
evidence, arguments, or the district court’s own instructions
can all form the basis of constructive amendments.” 61 F.4th
at 111.
Cammarata’s theory boils down to his contention that
the Government, during its closing argument, broadened its
claim of fraud in the course of countering his assignment
18
defense.14 Yet none of the prosecutor’s comments during
summation on Cammarata’s theory of assignment
“‘broaden[ed] the possible bases for conviction’” from those
which appeared on the face of the superseding indictment. Lee,
359 F.3d at 208(quoting Asher,854 F.2d at 1497
). The
Government simply rebutted the defense theory, pointing out
why Cammarata’s testimony was implausible.
The Government argued, quite understandably, that
Cammarata’s theory that he assigned his personal trades to
Nimello, Quartis, and Invergasa made no sense. If Cammarata
had personally bought securities and was thereby entitled to a
share of settlement proceeds, why, the Government asked the
jury, would he have made up three clients and have pretended
that it was they who had purchased and sold those securities?
The Government acknowledged that if Cammarata was, in fact,
the beneficial owner of a security issued by a company that had
settled any of the relevant class action cases, he was entitled to
submit a claim in his own name. But, as the Government
pointed out, no evidence was presented to show that Nimello,
Quartis, and Invergasa were ever the beneficial owners of
subject securities. And, even if Cammarata had assigned his
personal trades to Nimello, Quartis, and Invergasa, he never
advised the claims administrators of those assignments. To
14
Wire fraud requires the Government to prove beyond a
reasonable doubt that the defendant used interstate wire
communication to engage in a scheme or artifice to defraud for
the purpose of obtaining money or property with a specific
intent to defraud. Nat’l Sec. Sys., Inc. v. Iola, 700 F.3d 65, 105
(3d Cir. 2012).
19
properly administer the settlement, they were entitled to that
information.
It is always permissible for the Government to
“comment on the weakness of the defense case in closing
arguments.” United States v. Jackson, 540 F.3d 578, 596(7th Cir. 2008) (citation omitted). That is simply how the adversary system works in criminal trials. And as the Seventh Circuit has explained, rebutting a defense theory does not constructively amend an indictment. United States v. McAnderson,914 F.2d 934, 945
(7th Cir. 1990). Countering a weak defense theory
was all the Government did here. Its rebuttal cannot reasonably
lead one to believe that Cammarata was convicted for anything
other than the crimes charged.
Cammarata has failed to direct our attention to any
constructive amendment of the superseding indictment during
trial.
B. Evidentiary Challenges
Cammarata claims that two areas of inquiry during his
cross-examination violated Federal Rules of Evidence 403 and
404(b) by unfairly portraying him as a “hugely wealthy
cheat[,]” and by improperly suggesting commission of an
uncharged crime. Opening Br. at 37. We disagree.
1. Cammarata’s Private Island Purchase
Cammarata filed a motion in limine shortly before trial
in which he sought, inter alia, to preclude the Government
from introducing evidence that he owned a private island. The
District Court denied Cammarata’s motion without prejudice,
deferring its ruling until the time of trial.
20
On the fifth day of trial, the Government informed the
District Court, at sidebar, that it planned to cross-examine
Cammarata about his $5 million purchase of a private island in
2015. The prosecutor explained to the District Court that
Cammarata had sent an email to Cohen stating that he would
have a “decent monthly [financial] burn” if he purchased the
island. App. 1734. Defense counsel objected, citing Federal
Rule of Evidence 403 and arguing that Cammarata had already
testified he had a “burn rate” and that the evidence was unfairly
prejudicial. App. 1648. The District Court overruled the
objection. On the witness stand, Cammarata acknowledged
purchasing the island but claimed that the email to Cohen about
a potential financial burn had been falsified.
Cammarata challenges the District Court’s ruling by
arguing that the judge failed to conduct a proper Rule 403
analysis and, at all events, the probative value of the evidence
was outweighed by its tendency to generate class-based
prejudice in portraying him as wealthy.
We review the District Court’s decision to admit
evidence over a Rule 403 challenge for abuse of discretion and
construe such discretion “especially broadly.” United States v.
Scarfo, 41 F.4th 136, 178 n.35 (3d Cir. 2022). Rule 403 permits courts to exclude otherwise relevant evidence “if its probative value is substantially outweighed by a danger of . . . unfair prejudice[.]” Fed. R. Evid. 403. In reaching a Rule 403 determination, a district court is required to balance those two competing considerations. United States v. Heatherly,985 F.3d 254
, 265 (3d Cir. 2021).
21
We “strongly prefer” that a district court detail its Rule
403 balancing on the record. Egan v. Del. River Port Auth., 851
F.3d 263, 277(3d Cir. 2017). But in the absence of a detailed balancing statement, we may undertake the analysis ourselves.Id.
We have declined to balance the Rule 403 factors “de novo only where a district court [has] said nothing about particular evidence’s probative value or prejudicial effect.” Greenspan,923 F.3d at 151
.
The District Court overruled defense counsel’s
objection, pointing out that “there [had been] a suggestion to
the jury, as part of the defense, that [Cammarata] did not need
this money, so he did not have to involve himself in this
[criminal] activity.” App. 1649. The Court was correct in
noting that the defendant had “opened the door” to the inquiry,
and that his denial that he needed money clearly spoke to the
probative value of the evidence. But the District Court said
nothing about any risk of unfair prejudice. Because the District
Court failed to conduct the necessary balancing analysis, we
undertake that analysis ourselves. See Egan, 851 F.3d at 277.15
The evidence showed Cammarata had suggested to
Cohen that the $5 million island purchase could cause him
monthly financial strain. He had purchased the island in 2015,
and the superseding indictment alleged he committed wire
15
We have repeatedly “renew[ed] our admonition that district
courts articulate their Rule 403 reasoning on the record.”
United States v. Heinrich, 971 F.3d 160, 165(3d Cir. 2020). “A basic part of the balancing process requires making a record. It is simple to do and essential to effective appellate review.”Id.
22
fraud in wrongfully obtaining millions of dollars from class
action settlement funds between the years 2014 and 2021. So
the evidence not only rebutted Cammarata’s defense that he
“did not need money[,]” App. 491; it also suggested a financial
motive for his fraud, see United States v. Saada, 212 F.3d 210,
224(3d Cir. 2000) (explaining that evidence was “highly probative because it rebutted the defense’s contention”); United States v. Foster,891 F.3d 93, 110
(3d Cir. 2018)
(reasoning that the government was “entitled to rebut” the
defendant’s argument “by presenting evidence of his motive”).
The probative value of the evidence was, therefore, significant.
But, as noted above, that does not end our inquiry. We must
ask the question the District Court failed to address: was the
probative value of the evidence substantially outweighed by
any risk of unfairly portraying Cammarata as wealthy?
“Not all prejudice is unfair prejudice, and Rule 403 bars
only the latter.” United States v. Long, 92 F.4th 481, 488(3d Cir. 2024). To meet this threshold, admission of the evidence must unfairly advantage one of the parties. Coleman v. Home Depot, Inc.,306 F.3d 1333
, 1343 n.6 (3d Cir. 2002). Importantly, we evaluate any prejudicial effect “in the context of the totality of the evidence produced.” United States v. Williams,974 F.3d 320, 357
(3d Cir. 2020).
Cammarata concedes that by the time the evidence was
introduced, it “was undisputed, and otherwise established, that
[he] was wealthy and controlled many businesses.” Opening
Br. at 31. Defense counsel explained in his opening statement
that he had previously asked the jury “if anybody had any
problems with somebody who is wealthy.” App. 495–96. And
23
counsel went on to state that Cammarata “had money[,]” “nice
things[,]” and “a lot of bank accounts[.]” App. 495–96.
Cammarata himself testified that he had sold businesses
for $31 million, $20 million, and over $3 million. He explained
that at the time of his arrest, he “was literally at the pinnacle of
[his] career”—he “was active in approximately 30 businesses,”
“was the CEO of a public company[,]” and “had just been
named CEO of a two billion dollar social media company.”
App. 1587. When cross-examining Punturieri, it was defense
counsel who elicited testimony that Cammarata owned a house
in the Bahamas.
To put it mildly, Cammarata was not shy about
presenting himself to the jury as someone who had enjoyed
considerable financial success.
In summary, the jury was made aware of Cammarata’s
wealth by the defendant’s own testimony and before it heard
that he had purchased a private island. No prejudice could
reasonably have resulted from admission of the private island
evidence, let alone unfair prejudice that could have
substantially outweighed the probative value of that evidence.
See GN Netcom, Inc. v. Plantronics, Inc., 930 F.3d 76, 88(3d Cir. 2019) (reasoning that there was no unfair prejudice where the jury was “already alerted” to the subject matter the evidence supported); United States v. Johnson,302 F.3d 139, 152
(3d Cir. 2002).
The District Court did not abuse its discretion in
overruling defense counsel’s Rule 403 objection.
24
2. Cammarata’s Tax Returns
One of the Government’s trial witnesses was Stacey
Esimai, an auditor who worked in the U.S. Attorney’s Office
for the Eastern District of Pennsylvania. She testified that she
had reviewed financial records covering the period from 2015
to 2020, and that they showed that Cammarata had transferred
some of the money he had improperly obtained from class
action settlement funds to a bank account in the name of PB
Trade, a company he had started around 2007.
When Cammarata testified in his own defense, the
prosecutor asked him whether he had reported the settlement
money Alpha Plus sent to PB Trade on his tax returns.
Cammarata responded that he had realized offsetting losses,
leading the prosecutor to show Cammarata his 2017, 2018, and
2019 tax returns.16 Focusing his questions on Cammarata’s
Schedule C submissions for PB Trade in the tax returns, the
prosecutor noted that there was no income attributed to the
company. And when he pressed Cammarata as to whether he
had ever informed the accountant who prepared the tax returns
about the money Alpha Plus sent to PB Trade, Cammarata had
several answers. He responded that he “may have[.]” App.
1740. And also that the company “may have” had offsetting
losses. App. 1739. And also that he did not recall. Id. At one
16
The Government introduced Cammarata’s tax returns as
marked exhibits, but used them only for cross-examination. It
never sought to admit them into evidence, and so the jury had
no access to them.
25
point during this exchange, defense counsel objected, but only
to the relevancy of the inquiry. That objection was overruled.
Cammarata now claims on appeal that the Government
sought testimony that violated Federal Rules of Evidence
404(b) and 403. According to him, the Government was
improperly suggesting he committed the uncharged crime of
tax fraud without first having complied with Rule 404(b)’s
notice requirement.17 Also, according to Cammarata, the
District Court erred by failing to provide the jury with a proper
limiting instruction. Finally, he argues that any slight probative
value of questioning him about his tax returns was outweighed
by the risk of unfair prejudice, confusing the issues, and
misleading the jury.
Before reaching the merits of Cammarata’s arguments
that use of the tax returns by the Government was improper,
we must determine whether he properly preserved them for
appeal. See United States v. Sandini, 803 F.2d 123, 126 (3d Cir.
1986). Federal Rule of Evidence 103(a)(1) restricts our review
of evidentiary errors to those in which the complaining party
“state[d] the specific ground” for objection, “unless it was
apparent from the context[.]” Fed. R. Evid. 103(a)(1)(B).
Defense counsel objected to questions regarding Cammarata’s
tax returns solely on relevancy grounds. Counsel mentioned
neither Rule 403 nor Rule 404(b), so any supposed reliance on
17
Rule 404(b) requires that a prosecutor in a criminal case
“provide reasonable notice of any such evidence that the
prosecutor intends to offer at trial, so that the defendant has a
fair opportunity to meet it[.]” Fed. R. Evid. 404(b)(3)(A).
26
those Rules was not apparent from the context of the objection.
See Sandini, 803 F.2d at 126.
Because Cammarata failed to preserve his arguments
for appeal, id.,we review for plain error. See United States v. Mitchell,365 F.3d 215, 257
(3d Cir. 2004).18
a. Rule 404(b)
Rule 404(b) prohibits the introduction of evidence of
“any other crime, wrong, or act” to “prove a person’s character
in order to show that on a particular occasion the person acted
in accordance with the character.” Fed. R. Evid. 404(b)(1). Its
purpose is to keep from a jury evidence that suggests a person
has a propensity to commit crimes “‘or is otherwise a bad
person[.]’” United States v. Green, 617 F.3d 233, 249(3d Cir. 2010) (quoting United States v. Taylor,522 F.3d 731
, 735–36
(7th Cir. 2008)).
Rule 404(b) applies only to extrinsic evidence. United
States v. Bailey, 840 F.3d 99, 128(3d Cir. 2016). It does not apply to intrinsic evidence, which “does not constitute a prior bad act at all[.]”Id.
As we explained in Green:
[W]e will reserve the “intrinsic” label for two
narrow categories of evidence. First, evidence is
intrinsic if it “directly proves” the charged
offense. This gives effect to Rule 404(b)’s
applicability only to evidence of “other crimes,
wrongs, or acts.” If uncharged misconduct
directly proves the charged offense, it is not
18
See supra note 10.
27
evidence of some “other” crime. Second,
“uncharged acts performed contemporaneously
with the charged crime may be termed intrinsic
if they facilitate the commission of the charged
crime.” But all else must be analyzed under Rule
404(b).
617 F.3d at 248–49 (internal citations omitted).
Because the Government’s use of Cammarata’s tax
returns fits neatly into the first category of intrinsic evidence,
such use was not governed by Rule 404(b). To prove wire
fraud, the Government had to show that the defendant
“‘willful[ly] participat[ed] in a scheme or artifice to defraud,’
with intent to defraud[.]” United States v. James, 955 F.3d 336,
342(3d Cir. 2020) (quoting United States v. Andrews,681 F.3d 509, 518
(3d Cir. 2012)). Juries may infer a defendant’s intent to defraud from circumstantial evidence. United States v. Riley,621 F.3d 312, 333
(3d Cir. 2010).
The failure by Cammarata to report the transfers of
settlement funds from Alpha Plus to PB Trade as income on
his tax returns supported a reasonable inference that he knew
the funds were unlawfully obtained and that he was attempting
to conceal income derived from his fraudulent scheme. Such
an inference would bear on his intent to defraud and thereby
constitute circumstantial evidence offered to prove an element
of wire fraud.19 Because the testimony admitted here was
19
Indeed, Cammarata concedes that “the failure to declare
income on a return may conceivably indicate consciousness of
28
intrinsic to a charged offense, Cammarata’s Rule 404(b)
challenge must fail. See United States v. Ryan, 213 F.3d 347,
350–51 (7th Cir. 2000) (explaining that evidence of a
defendant’s effort to conceal his participation in a fraudulent
scheme by failing to report fraudulent transactions as income
on his tax returns “constituted circumstantial evidence of intent
to defraud” and was therefore not governed by Rule 404(b))
(internal quotation marks and citation omitted).
b. Rule 403
We likewise reject Cammarata’s Rule 403 challenge.20
The probative value of Cammarata’s failure to report the
income he obtained from class action settlement funds on his
tax returns was twofold. First, as discussed above, the evidence
tended to prove Cammarata’s fraudulent intent and knowledge
by giving rise to a reasonable inference of his knowledge that
receipt of the income was illegal. See Williams, 974 F.3d at 357
(“The fact that the evidence is intrinsic establishes its probative
nature[.]”). Second, the evidence rebutted Cammarata’s
assertion that the settlement money derived from Nimello and
Quartis’s claims was rightfully obtained. Just before the
prosecutor turned to Cammarata’s tax returns, Cammarata
stated he had received millions of dollars “for trade data that
guilt with respect to the manner in which the income was
earned[.]” Opening Br. at 33.
20
Because Cammarata never objected to the discussion of his
tax returns on Rule 403 grounds before the District Court, it
(understandably) did not conduct a Rule 403 balancing
analysis. We undertake that analysis here.
29
[he] owned and supported through claims.” App. 1737.
Pointing out that Cammarata had failed to report allegedly
legitimate income on his tax returns tended to discredit his
defense. See, e.g., United States v. Valenti, 60 F.3d 941, 946(2d Cir. 1995) (reasoning that the defendant’s tax returns listing no income “were obviously probative to refute” the “defense that the contested funds were legitimate”); see also Ryan,213 F.3d at 351
.
Further, any risk of unfair prejudice posed by cross-
examining Cammarata on his tax returns was minimal, at best.
Cammarata argues that the Government unfairly portrayed him
as a tax “cheat.”21 Opening Br. at 37. That, he now claims,
biased the jury against him and tainted its verdict. Intrinsic
evidence “that reveals a defendant’s legal guilt can be highly
prejudicial, but that alone does not make it unfairly so.” Long,
92 F.4th at 488. What is proscribed is unfair prejudice, because it “speaks to the capacity of some concededly relevant evidence to lure the factfinder into declaring guilt on a ground different from proof specific to the offense charged.” Old Chief v. United States,519 U.S. 172, 180
(1997) (emphasis added).
The tax return evidence supported an element of the charged
offense of wire fraud, so it was highly probative. Viewing the
trial record as a whole, it was not outweighed by any risk of
unfair prejudice.
21
To be clear, prosecutors at no point during trial referred to
Cammarata as a “tax cheat[,]” nor did they make reference to
any of his tax returns during the Government’s closing
argument.
30
Nor are we persuaded by Cammarata’s contention that
the probative value of the Government’s cross-examination as
to his tax returns was substantially outweighed by the risk of
confusing the issues or misleading the jury. He argues that the
propriety of omitting income on a Schedule C is a complex
question the jury could not have properly evaluated without
accompanying explanatory or expert evidence.
Our review satisfies us that the Government’s cross-
examination relative to the Schedule C submissions was
limited and its purpose clear. The Government proffered
Cammarata’s tax returns only after he claimed he had
offsetting losses that justified his failure to report income
transferred from Alpha Plus to PB Trade. The prosecutor
elicited responses from Cammarata which showed that
Cammarata knew the purpose of a Schedule C submission
before highlighting that the tax returns listed no income for PB
Trade but did list expenses. And the prosecutor repeatedly
asked Cammarata whether he had informed the accountant
who prepared his tax returns about the money he transferred
from Alpha Plus, i.e., the money he fraudulently obtained from
settlement funds.
The Government’s purpose in pursuing this line of
questioning was plain: the relevancy of the omissions on
Cammarata’s tax returns was their tendency to prove efforts to
conceal his fraudulent scheme, not that he was trying to avoid
paying taxes. See Fed. R. Evid. 401(a) (providing that evidence
is relevant if “it has any tendency to make a fact” of
consequence in determining the action “more or less probable
31
than it would be without the evidence”).22 Even if some risk of
confusing the issues or misleading the jury existed, that risk did
not substantially outweigh the probative value of the intrinsic
evidence. See Blancha v. Raymark Indus., 972 F.2d 507, 516
(3d Cir. 1992) (reasoning that excluding evidence under Rule
403 based on confusing the issues or misleading the jury would
not have been justified where the testimony “tended to prove”
a fact “directly at issue” in the case).
C. Loss Calculation
Cammarata challenges the District Court’s loss
calculation under the Sentencing Guidelines.23 Again, his
challenge is meritless.
The Government bears the burden of establishing the
amount of loss by a preponderance of the evidence. Free, 839
F.3d at 319. Although the Guidelines themselves define loss
broadly as “the greater of actual loss or intended loss[,]”
22
As noted, the only ground specifically raised by trial counsel
for exclusion of testimony concerning the tax returns was
relevancy. Cammarata argues before us that the District Court
should have sustained that objection. Our conclusions reached
during plain error review amply foreclose that argument.
23
We review a district court’s factual findings supporting its
loss calculation for clear error. United States v. Free, 839 F.3d
308, 319(3d Cir. 2016). We exercise plenary review over a district court’s interpretation of the Guidelines, including what constitutes loss. United States v. Shulick,994 F.3d 123, 145
(3d
Cir. 2021).
32
U.S.S.G. § 2B1.1, app. n.3(A), this Court has held that loss
under the Guidelines is limited to “the loss the victim[s]
actually suffered[,]” United States v. Banks, 55 F.4th 246, 258 (3d Cir. 2022). “Actual loss” is defined as “the reasonably foreseeable pecuniary harm that resulted from the offense.” U.S.S.G. § 2B1.1, app. n.3(A)(i). “Reasonably foreseeable” means “pecuniary harm that the defendant knew, or . . . reasonably should have known, was a potential result of the offense.” Id. § 2B1.1, app. n.3(A)(iv). In arriving at “a reasonable estimate of the loss,” a district court looks to all “available information in the record[.]” United States v. Shah,43 F.4th 356
, 366 n.12 (3d Cir. 2022) (citation omitted).
At sentencing, the District Court found that the
Government had proven $40,862,748.30 in actual loss to class
members. That dollar figure represented the total amount of
settlement funds that claims administrators had paid the
Defendants for the fraudulent claims they had submitted.
Importantly, the District Court found that the trial evidence
proved “the claims administrator[s] had less money to pay
actual legitimate claims because of the Defendant[s’]
fraudulent submissions.” App. 2090. Because the loss was
between $25 and $65 million, Cammarata’s offense level was
increased by 22 levels pursuant to U.S.S.G. § 2B1.1(b)(1)(L).
Cammarata argues that the District Court’s finding
lacks evidentiary support. In his view, the Government failed
to present evidence at trial that any particular class member
was underpaid due to the Defendants’ fraud. And he claims the
District Court misapplied the Guidelines when it concluded
that the over-$40 million fraudulent gain it found resulted in an
equivalent “actual loss” to class members.
33
The District Court’s factual finding informing its loss
calculation was firmly rooted in the trial testimony. See Shore
Reg’l High Sch. Bd. of Educ. v. P.S., 381 F.3d 194, 199 (3d Cir.
2004) (“A finding of fact is clearly erroneous when, after
reviewing the evidence, the court of appeals is left with a
definite and firm conviction that a mistake has been
committed.”) (internal quotation marks and citation omitted).
Four claims administrators testified to the role they play, post-
settlement, and also explained how the distribution process is
supposed to unfold. In the ordinary course, a class member
who submits a claim that is approved receives a pro rata share
of the settlement fund based on a court-approved plan of
allocation. As one administrator put it, the “settlement fund is
divided” among all class members based on a “prorated
percentage” of their “loss[es.]” App. 1483.24 And, as
24
At trial, the Government introduced the Settlement Notice
for In re EndoChoice Holdings Securities Litigation, a class
action litigated in Georgia state court that ultimately settled and
to which Alpha Plus submitted claims. The Government used
the EndoChoice Settlement Notice as an exhibit during its
examination of a claims administrator who was describing the
settlement process. That Notice further illustrates how the
settlement process works. Once notified of a proposed
settlement, class members are required to submit a valid claim
form within a specific time period. If they fail to do so, they
are “forever barred from receiving any distribution” from the
settlement fund. App. 1980. Class members may also choose
to opt out of the class, if it is a Rule 23(b)(3) class, or they may
object to the settlement. States oftentimes have state-law
analogues to Rule 23(b)(3), such as Georgia’s O.C.G.A. § 9-
34
Cammarata concedes, it “can be readily seen” from the trial
testimony that the amount a class member receives from a
settlement fund “depend[s] on the number of claims submitted
to the administrator[.]” Reply Br. at 9.
The mathematical principle underlying the calculation
of settlement claims is eminently straightforward. So is the
impact that fraudulent claims will have on the amount available
for payment to legitimate class members. As one claims
administrator-witness stated, “if there are more claimants,”
everyone “get[s] less money.” App. 1253. And as another
claims administrator who testified put it, the payout of a
fraudulent claim “lowers the amount of money that is
available” to other, legitimate class members. App. 546; see
also App. 659, 1253. The effect of fraudulent claims on the
class as a whole could hardly be simpler.
Against this backdrop, the District Court appropriately
concluded that the legitimate class members “actually
suffered” a loss under the Guidelines. Banks, 55 F.4th at 258.
11-23(b)(3). From there, the court overseeing settlement holds
a hearing and decides whether to approve the settlement. If the
settlement is approved, the claims administrator determines
how much each qualified clamant is entitled to receive.
Payments are “calculated on a pro rata basis, meaning” the
settlement fund is “divided among” class members who
submitted valid claims. App. 1979. Afterwards, Class Counsel
seeks permission from the court to distribute the settlement
fund. If the court approves distribution, the settlement funds
are then distributed according to the claims administrator’s
calculations.
35
As a result of Defendants’ $40,862,748.30 in fraudulent
claims, each legitimate class member’s pro rata share of the
settlement fund was proportionally reduced. And the
fraudulent claims created administrative headaches. As one
claims administrator explained, because fraudulent claims
create “issues with the amount that was paid” to class
members, once a fraudulent claim is discovered, claims
administrators must “recalculate” the payment amounts to
“provide losses . . . back to the original claimants who were
wronged.” App. 661.
We hold that under these circumstances, where the trial
testimony showed that the Defendants’ fraudulent scheme
directly reduced the balance available from every settlement
fund for payment to legitimate class claimants, the District
Court properly concluded that a “reasonably foreseeable
pecuniary harm . . . resulted from the offense.” U.S.S.G. §
2B1.1, app. n.3(A)(i) (defining “actual loss”). The District
Court’s $40,862,748.30 actual loss determination was
consistent with the Guidelines.
D. Restitution
The Mandatory Victims Restitution Act of 1996
(“MVRA”) provides that restitution must be awarded to the
victims of certain offenses, including offenses “against
property” and “offenses committed by fraud or deceit[.]” 18
U.S.C. § 3663A(c)(1)(A)(ii). Cammarata does not dispute that
the MVRA is applicable to his wire fraud and money
laundering convictions.
At sentencing, the District Court adopted the
Government’s proposed restitution plan, invoking the MVRA
36
and ordering that restitution be paid jointly and severally by the
Defendants. The restitution order included an attachment,
which identified: (1) over one hundred settlement funds as the
payees; (2) the amounts the Defendants fraudulently obtained
from each fund; and (3) the names of the claims administrators
overseeing those funds that were to be distributed to the
members of the defrauded classes.
Although the District Court attributed a $40 million-
plus loss to the class members defrauded by the Defendants’
scheme, the amount of restitution it ultimately ordered was
only $31,275,832.92. In doing so, the District Court acceded to
the Government’s requested amount. The Government’s
rationale for seeking restitution in an amount less than the total
loss was that “it may not be economically feasible for some of
the [settlement] funds to distribute restitution payments to their
ultimate beneficiaries.” App. 375; see also App. 2148 (District
Court adopting the Government’s rationale at sentencing).
Cammarata attacks the District Court’s restitution order
on three grounds.25 First, he claims restitution was not directed
to the “victims” of his offenses as that term is defined by the
MVRA. Second, he argues that the District Court improperly
relied upon claims administrators to distribute restitution
funds. And third, he contends the District Court’s “adjustment”
from the $40 million-plus loss found pursuant to the
Sentencing Guidelines demonstrates the restitution order’s
deficiency. Opening Br. at 45. We reject Cammarata’s first two
25
“We review the legality of a restitution order de novo and
review specific awards for abuse of discretion.” United States
v. Turner, 718 F.3d 226, 235 (3d Cir. 2013).
37
arguments. But because we conclude that the District Court
abused its discretion by ordering restitution in an amount that
does not appear to fully compensate each victim’s actual loss,
we will vacate the District Court’s restitution order and remand
for further proceedings consistent with this opinion.
1. The Defrauded Classes as Victims Under
the MVRA
At various times throughout Cammarata’s sentencing,
the District Court characterized not only the class members as
“victims” of the Defendants’ fraud but also the settlement
funds—and the claims administrators, as well. See, e.g., App.
2067, 2073, 2078. 2148. Ultimately, in its restitution order, the
District Court directed that restitution be paid to the settlement
funds. Cammarata claims that none of these groups, and in
particular the settlement funds, qualify as a “victim” under the
MVRA.
This presents us with a legal question that our Court has
not previously been called upon to resolve. Who qualifies as a
victim under the MVRA when a defendant has defrauded
hundreds of certified classes, resulting ultimately in individual
harm to an even greater multitude of class members?
A crucial component of our analysis rests upon what
seems a basic question: “just what a class is in a class action.”
ROBERT H. KLONOFF, CLASS ACTIONS AND OTHER MULTI-
PARTY LITIGATION: CASES & MATERIALS 4 (4th ed. 2017)
(emphasis in original). As Professor Klonoff queried: is “a
class simply a convenient way to refer to a collection of
individuals? Or is a class an entity unto itself—analogous
38
perhaps to a corporation or unincorporated association—that
has legal status apart from its individual members?” Id.
The Supreme Court and our Court have made clear that
the latter is true. When a class is certified by the presiding
district court judge, the “class of unnamed persons described
in the certification acquire[s]” its own “legal status[.]” Franks
v. Bowman Transp. Co., 424 U.S. 747, 753(1976) (internal quotation marks and citation omitted). In other words, the “relevant entity for purposes of the litigation after certification is the class, not the individuals who make up the class.” Fisher v. Fed. Express Corp.,42 F.4th 366, 374
(3d Cir. 2022).
Indeed, members are not “plaintiffs,” nor are they
denominated as such. See In re Prudential Ins. Co. Am. Sales
Practice Litig. Agent Actions, 148 F.3d 283, 307 (3d Cir. 1998)
(distinguishing between “the named plaintiffs” and “absentee
class members”). A quick glance at the caption of a putative
class action complaint immediately notifies a reader that the
pleading is not initiating a simple A vs. B lawsuit.26
Class actions are representative actions, Neale v. Volvo
Cars of N. Am., LLC, 794 F.3d 353, 364(3d Cir. 2015), and that term has profound implications for how this “ingenious procedural innovation” is litigated, Eubank,753 F.3d at 719
.
26
For example, the caption of the EndoChoice Holdings
securities class action, to which Alpha Plus submitted claims
after settlement was reached, was In re EndoChoice Holdings,
Inc. Securities Litig.
39
Once a class has been certified,27 its members effectively lose
nearly all of their litigative individuality. Counsel for the class
takes over (as do the class representative or representatives).
And their roles vis-à-vis the class and its members impose
upon them fiduciary duties. See In re Fine Paper Litig., 632
F.2d 1081, 1086(3d Cir. 1980); Greenfield v. Villager Indus.,483 F.2d 824
, 832 (3d Cir. 1973).28
These bedrock principles of class action jurisprudence
inform the inquiry we now undertake. Because a class assumes
an “independent legal status” once it has been certified, we
must consider here whether the classes entitled to the
settlement funds qualify as MVRA victims and are thereby
27
“As a practical matter, the certification decision is typically
a game-changer, often the whole ballgame[.]” Marcus v. BMW
of N. Am., LLC, 687 F.3d 583, 591 n.2 (3d Cir. 2012); see also Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,259 F.3d 154, 162
(3d Cir. 2001) (“[D]enying or granting class certification is often the defining moment in class actions (for it may sound the ‘death knell’ of the litigation on the part of plaintiffs, or create unwarranted pressure to settle nonmeritorious claims on the part of defendants)[.]”). 28 Courts have imposed—even on the district court judge who approves a settlement—a fiduciary duty to the class. See Ehrheart v. Verizon Wireless,609 F.3d 590, 594
(3d Cir. 2010) (“[T]he District Court evaluates the [settlement] agreement as a fiduciary for absent class members.”); Grant v. Bethlehem Steel Corp.,823 F.2d 20, 22
(2d Cir. 1987); Reynolds v. Beneficial Nat’l Bank,288 F.3d 277, 280
(7th Cir. 2002).
40
initially affected by the Defendants’ fraud. Genesis Healthcare
Corp. v. Symczyk, 569 U.S. 66, 75 (2013). We turn, then, to
whether the classes, settlement funds, or claims administrators
satisfy the MVRA’s definition of victim.
The MVRA defines “victim” as “a person directly and
proximately harmed as a result of the commission of an offense
for which restitution may be ordered[.]” 18 U.S.C. §
3663A(a)(2). For scheme-based crimes such as wire fraud, that
definition is broadened to include “any person directly harmed
by the defendant’s criminal conduct in the course of the
scheme[.]” Id. Though the MVRA’s definition of victim uses
the word “person[,]” our Court and other circuits have held that
entities may qualify as victims under the MVRA. See United
States v. Bryant, 655 F.3d 232, 253(3d Cir. 2011) (hospital receiving federal funding); United States v. Richardson,67 F.4th 268
, 271 (5th Cir. 2023) (corporation); United States v. Donaby,349 F.3d 1046, 1054
(7th Cir. 2003) (police
department).
We agree with Cammarata’s contention that the District
Court incorrectly characterized both the settlement funds
themselves and the claims administrators as “victims” under
the MVRA. That both the “settlement funds” and the “claims
administrators,” in a cause-and-effect sense, were affected by
the Defendants’ fraud—albeit, in profoundly different ways—
is indisputable. But the effects experienced by each hardly
rendered them “victims” as that statutory term of art is intended
under the MVRA. A “fund” is merely “a sum of money[,]”
Fund, MERRIAM-WEBSTER’S COLLEGIATE DICTIONARY (11th
ed. 2003), which is what we understand each of the settlement
41
funds proffered here to be.29 By itself, such a fund bears none
of the incidents of the corporal or the corporate; it is neither a
person nor a business entity. And the claims administrators
retained in the underlying class actions are the antithesis of
“victims.” Their job was “the process of processing, reviewing
and verifying the validity of all Claim Forms received.” App.
1980. While the Defendants’ fraudulent actions surely caused
them inconvenience, they have made no claim for monetary
loss. And, importantly, they were compensated for the tasks
they performed.
By contrast, the defrauded classes easily meet the
MVRA’s definition of “victim.” The losses that were suffered
as a result of the Defendants’ fraudulent scheme were
experienced directly by the classes as they were defined in the
nearly four hundred class actions that were targets of
29
The Fifth Circuit, in United States v. Arledge, 553 F.3d 881,
899(5th Cir. 2008), categorized a settlement fund to which the defendant submitted fraudulent claims as a victim under the MVRA. In that case, however, the defendant did “not dispute that a restitution order was permitted by law;” he only contested the amount of restitution ordered and the schedule of repayment.Id. at 897
. So the Fifth Circuit was not presented
with a disputed issue as to whether the district court’s
conclusion that the settlement fund qualified as a victim under
the MVRA was correct. Here, by contrast, Cammarata directly
challenges the District Court’s determination of the MVRA
victim. Nothing in the Arledge opinion changes our conclusion
that the settlement funds in this case do not qualify as victims
under the MVRA.
42
illegitimate claims. Accordingly, under the unique facts of this
case as the Government developed them at trial, the victims of
the Defendants’ fraud were the classes entitled to settlement
funds. See Fischer, 42 F.4th at 374. But for the Defendants’
fraudulent claims, the class settlement funds would have
maintained larger balances which would then have been
distributed to members with valid claims. Accordingly, the
Defendants “directly and proximately harmed” the classes by
reducing the amount of settlement funds that class members
would ultimately receive. 18 U.S.C. § 3663A(a)(2).
Because we conclude that the defrauded classes were
the victims, Cammarata is wrong when he contends that the
District Court ran afoul of the MVRA by declining to identify
each class member in its restitution order. See United States v.
Ben Zvi, 242 F.3d 89, 100 (2d Cir. 2001) (holding that a district
court did not abuse its discretion by declining to identify the
individual members comprising the “unified entity” to which
restitution was ordered).
The District Court did not list the defrauded classes as
the entities to which restitution was to be paid in its restitution
order; it instead listed the settlement funds. But considering the
District Court’s restitution plan, we disagree with
Cammarata’s contention that this lack of precision means that
restitution “was not directed” to the victims of his crimes such
that the restitution order must be reversed. Opening Br. at 46.
The District Court viewed the defrauded class members
as the “true victims” under the MVRA. Reply Br. at 11
(internal quotation marks omitted). And the District Court’s
restitution plan made clear that the class members, not the
43
settlement funds or claims administrators, were the ultimate
recipients of restitution. While restitution would be initially
paid to the settlement funds, the District Court expected the
claims administrators associated with those funds to “distribute
restitution . . . payments to their ultimate beneficiar[ies]”—the
members of the defrauded classes. App. 2148. Thus, in
ordering restitution, the District Court effectively directed
restitution in a manner that assured it would ultimately be paid
out to the members of the victim classes.
And given the appropriate focus of the District Court’s
restitution plan, we decline to reverse the District Court’s
restitution order simply because it listed the settlement funds
as the payees. Nonetheless, because we must vacate and
remand to allow the District Court to fully compensate the
victim classes, for reasons we set out infra, we direct the
District Court to explicitly identify in its restitution order the
victim classes to which restitution is owed. In so doing, the
District Court should also outline its plan for distributing
restitution funds to the victims. We turn next to the propriety
of that plan.
2. The District Court Did Not Err by Relying
On Claims Administrators to Distribute
Restitution Funds
Cammarata further argues that the District Court
improperly “delegate[d]” the task of distributing restitution.
Opening Br. at 45. Cammarata essentially complains that the
District Court relied upon the claims administrators initially
responsible for distributing settlement funds to class members
to also distribute monies recovered pursuant to the MVRA to
44
those same class members. Given the unusual circumstances of
this case, we conclude this approach complied with the
MVRA.
As discussed, the District Court’s restitution plan
sought to effectuate the MVRA’s purpose of “compensat[ing]
the victim[s] for [their] losses and, to the extent possible, . . .
mak[ing] the victim[s] whole.” United States v. Diaz, 245 F.3d
294, 312 (3d Cir. 2001). The District Court directed the
Defendants to return the money they fraudulently obtained
from settlement funds so the claims administrators overseeing
those funds could distribute individualized payments to
affected class members. Courts have affirmed more attenuated
approaches to providing restitution to victims under the
MVRA.
In United States v. Gee, 432 F.3d 713(7th Cir. 2005), the defendant pleaded guilty to conspiring to defraud the United States, in violation of18 U.S.C. § 371
.Id. at 714
. Although the Seventh Circuit recognized that the MVRA “victim” in an18 U.S.C. § 371
prosecution was actually the United States, it nonetheless affirmed the terms of the district court’s restitution order directing that a nonprofit organization was ultimately entitled to receive $200,000.Id. at 715
. It reasoned that the organization was “a proxy for the federal interest because it was a recipient of federal funds[.]”Id.
We endorsed a similar approach in Bryant, 655 F.3d at
253–54. In that case, the defendants were convicted of honest
45
services fraud30 and mail fraud pursuant to 18 U.S.C. §§
666(a), 1341, 1343, and 1346.Id. at 236
. The defendants’ fraudulent scheme involved a quid pro quo exchange that financially harmed a university.Id. at 237, 253
.31 We affirmed the district court’s restitution order directing payment to the university.Id. at 253
. Unlike the settlement funds in the case before us, we held that the university itself qualified as a victim under the MVRA.Id.
Still, we recognized the “intangible losses” to the public caused by the defendants’ honest services fraud.Id. at 254
. We explained that the university being awarded restitution was “a proxy for the State’s interests, including its citizens’ interest in the honest services of its public servants[,]” because it was a recipient of taxpayer funds.Id.
Providing restitution to the university, we reasoned, “indirectly compensate[d] the public for its loss[es.]”Id.
Here, the settlement funds and the claims administrators
listed in the District Court’s restitution order did not serve as
30
As we explained in Bryant, honest services fraud “is fraud
that results in a loss to the public of its right to the honest
services of its public servants[.]” 655 F.3d at 254. 31 More specifically, one defendant gave the other a “low- show” job—“meaning he provided only minimal or nominal services”—at the university’s school of osteopathic medicine. Bryant,655 F.3d at 237
. In exchange, the defendant who obtained the job leveraged his position as a New Jersey State Senator to funnel state funding to the school.Id.
The scheme diverted over $2 million from the university’s budget for direct allocation to the school of osteopathic medicine.Id. at 253
.
46
did the “proxies” in either Gee or Bryant. Neither the funds nor
the administrators were paid restitution for their own benefit
with the understanding that such payments would “indirectly
compensate[]” victims of the Defendants’ fraud. Id. Instead,
the funds were the repositories for monies to which the classes
were entitled, and the claims administrators were tasked with
simply fulfilling the roles they had been given to administer the
class action settlements pursuant to a process envisioned by
Federal Rule of Civil Procedure 23 and as directed by the
settlement agreements that had received court approval.
Relying upon an entity with the means and expertise
required to distribute restitution under circumstances similar to
those presented in this case is not only appropriate but well-
advised. Consider Herzfeld v. United States District Court, 699
F.2d 503, 507(10th Cir. 1983), in which the Tenth Circuit upheld the creation of a receivership to distribute restitution. The defendant in that case had engaged in a widespread fraudulent scheme that had harmed numerous investors.Id. at 504
. The Tenth Circuit explained that “[i]n a scheme like this one, where substantial sums of money are involved, the appointment of a receiver to . . . distribute the money is both necessary and beneficial to accomplish restitution.”Id. at 506
. It reasoned that the “usual practice of directing a probation officer to accomplish restitution is desirable where there are few claimants and where the amount of money is not great.”Id.
But where “the number of claimants is large and a pro rata distribution of a large fund is necessary,” the court concluded that “a person with more specialized training is required.”Id.
Like the receivership in Herzfeld, the “functions to be
performed” in distributing restitution to the victim classes in
47
the case before us “are typically those of a” claims
administrator. Id. at 506. The Presentence Investigation Report
explained that restitution funds would be distributed to the
victim classes by the claims administrators, “given their
familiarity and expertise in making distributions.” PSR ¶ 54.
The District Court’s restitution order went only so far as listing
the amounts the Defendants owed to the victim classes.
Determining the amount of restitution to which each class
member is entitled to receive the entirety of their pro rata share
of the settlement fund, and then distributing those funds,
should be within the province of claims administrators. Indeed,
as one claims administrator testified at trial: when a fraudulent
claim is discovered, the claims administrator must
“recalculate” the amount distributed to class members to
“provide losses . . . to the original claimants who were
wronged.” App. 661. To achieve the MVRA’s purpose of
making victims whole, the District Court correctly relied upon
claims administrators to perform their core function—
distributing settlement funds to class members on a pro rata
basis.
Given both the facts and complexity of this case, as well
as the procedural posture of the numerous class actions, it was
not up to the District Court to fashion a restitution order and
also assume the function of a settlement administrator.
3. The District Court Abused Its Discretion
by Failing to Award Full Restitution to
Each Victim Class
Finally, Cammarata argues that the District Court’s
decision to order only $31,275,832.92 in restitution after
48
finding a more than $40 million loss had “no bearing on the
amounts the funds had actually paid to the [D]efendants.”
Opening Br. at 45. He claims this shows the District Court’s
restitution award lacked a credible evidentiary basis and bore
no relationship to its articulated rationale. Although
Cammarata’s argument is not entirely clear to us, he seems to
be pointing to a disconnect between the amount of loss found
and the amount of restitution awarded as a reason why the
District Court’s restitution award ran afoul of the MVRA. To
the extent that is his argument, we agree.
The MVRA contemplates that ordering restitution is an
all-or-nothing approach. A district court must “order restitution
to each victim in the full amount of each victim’s losses[.]” 18
U.S.C. § 3664(f)(1)(A) (emphasis added). “Thus, there is no restitution range under . . . § 3664(f)(1)(A) that starts at zero and ends at the full amount of each victim’s losses; rather, the single restitution amount triggered by the conviction under the MVRA . . . is the full amount of loss.” United States v. Leahy,438 F.3d 328
, 337–38 (3d Cir. 2006) (internal quotation marks omitted); see alsoid. at 337
(“[W]hen the court determines the
amount of loss, it is merely giving definite shape to the
restitution penalty born out of the conviction.”).
Here, the District Court ordered restitution to only 115
of the 397 classes victimized by the Defendants’ fraudulent
scheme.32 And the amount awarded to those 115 classes fell
32
The list of 115 settlement funds was provided by the
Government and incorporated into the District Court’s
restitution order. The Government apparently determined “for
each fund a threshold amount of recovery below which it
49
well below the over-$40 million loss suffered by all the victim
classes. Because the District Court lacked the discretion to do
so, we will vacate the District Court’s restitution order and
remand for it to recalculate the restitution award consistent
with the requirements of the MVRA. See United States v.
Alalade, 204 F.3d 536, 540–41 (4th Cir. 2000) (holding that
the MVRA does not vest district courts with discretion to
reduce the amount of restitution below the full amount of each
victim’s losses).
On remand, the District Court should consider whether
18 U.S.C. § 3663A(c)(3) precludes awarding restitution under
the MVRA. That provision provides that mandatory restitution
“shall not apply” where: (1) “the number of identifiable victims
is so large as to make restitution impracticable; or” (2)
“determining complex issues of fact related to the cause or
amount of the victim’s losses would complicate or prolong the
sentencing process to a degree that the need to provide
restitution to any victim is outweighed by the burden on the
sentencing process.” Id. § 3663A(c)(3)(A)–(B). Though
Cammarata argues that the District Court circumvented this
provision by not foregoing the award of restitution at
sentencing, we do not reach this argument because we are
vacating the District Court’s restitution order and remanding
for consideration of § 3663A(c)(3)’s application anew.
would not be feasible to make further distribution.” App. 2148.
The list of funds in the restitution order excluded the settlement
funds from which the Defendants fraudulently obtained
amounts less than the Government’s unidentified threshold.
50
The decision as to whether to forego restitution under §
3663A(c)(3) is within “the exercise of” the District Court’s
“sound discretion[.]” United States v. Zangari, 677 F.3d 86, 93
(2d Cir. 2012). At sentencing, the District Court announced on
the record the need to provide restitution, invoked its ability to
forego restitution under § 3663A(c)(3), yet ordered less than
full restitution. In doing so, it considered that provision’s
application to a restitution award that did not fully compensate
each victim of the Defendants’ fraud. And it acknowledged at
least some semblance of impracticability when it noted that
distributing restitution to some victims may not be
economically feasible.
We express no view as to whether the challenges
identified by the District Court in distributing restitution to
every victim class renders restitution impracticable or that
ruling on certain issues related to cause or amount would be an
inordinate burden on the sentencing process. That is for the
District Court to determine on remand, in the exercise of its
discretion. But it must make that determination as applied to a
restitution order that accords with the MVRA by fully
compensating each victim’s losses.
E. Forfeiture
Finally, Cammarata claims the forfeiture of his vacation
home (the “Poconos property”) violated Federal Rule of
Criminal Procedure 32.2. Whether forfeiture of the Poconos
property complied with Rule 32.2 is a question of law over
which we exercise plenary review. See United States v. 6109
Grubb Rd., 886 F.2d 618, 621 (3d Cir. 1989).
51
The superseding indictment included a forfeiture
allegation pursuant to 28 U.S.C. § 2461(c)33 and18 U.S.C. § 981
(a)(1)(C),34 directing the Defendants to forfeit “any property, real or personal, that constitutes or is derived from proceeds traceable to the commission” of the charged wire fraud offenses, “including, but not limited to the sum of $40,000,000[.]” App. 116. The forfeiture allegation also stated that the Government intended to “seek forfeiture of any other property of the [D]efendants up to the value of the property subject to forfeiture” pursuant to21 U.S.C. § 853
(p).Id.
At the charge conference on the final day of trial, the
District Court asked the Government whether the jury needed
to consider any forfeiture issues, inquiring: “it’s not a notice of
forfeiture as to specific property, right?” App. 1802. In posing
that query, the District Court complied with Rule
33
Section 2461(c) provides that if a defendant is convicted of
an offense for which criminal forfeiture is authorized, the
district court “shall order the forfeiture of the property as part
of the sentence in the criminal case pursuant to the Federal
Rules of Criminal Procedure[.]” 28 U.S.C. § 2461(c). “The federal rule referenced in § 2461(c) is Rule 32.2[.]” United States v. Lo,839 F.3d 777, 790
(9th Cir. 2016). 34 Section 981(a)(1)(C) provides that “[a]ny property, real or personal, which constitutes or is derived from proceeds traceable to a violation of” certain offenses, including mail and wire fraud, “is subject to forfeiture to the United States[.]”18 U.S.C. § 981
(a)(1)(C) (incorporating18 U.S.C. §§ 1956
(c)(7)
and 1961(1)).
52
32.2(b)(5)(A), which requires a court to “determine before the
jury begins deliberating whether either party requests that the
jury be retained to determine the forfeitability of specific
property if it returns a guilty verdict.” Fed. R. Crim. P.
32.2(b)(5)(A). Cammarata essentially concedes that the Court
complied with the Rule. Because the Government advised that
it was seeking a “money judgment only[,]” neither party
requested that the jury address forfeiture. App. 1802.
Months after trial and a week before Cammarata’s
sentencing was to occur, the Government filed a motion for
forfeiture, seeking both a money judgment and forfeiture of the
Poconos property. The Government averred that the Poconos
property was traceable to fraudulent proceeds and thus subject
to forfeiture under § 981(a)(1)(C). To that end, it attached a
declaration executed by a government investigator which
traced Cammarata’s purchase of the Poconos property to three
payments Alpha Plus had fraudulently received from class
action settlement funds.
At sentencing, Cammarata objected to forfeiture of the
Poconos property, arguing that the Government failed to
provide him with sufficient notice. Such failure, he claimed,
deprived him of his right to have a jury determine the
property’s forfeitability. Rather than ruling on Cammarata’s
objections, the District Court determined that the Government
had proved by a preponderance of the evidence that the
Poconos property was traceable to fraudulent proceeds. And by
an order issued on June 6, 2023, the Court directed Cammarata
to forfeit both $16,493,939.73, the amount he personally
gained through the fraudulent scheme, and the Poconos
property itself.
53
Cammarata claims the District Court erred by ordering
the Poconos property’s forfeiture. He re-asserts his notice
argument and contends that the Government waived its ability
to seek the property’s forfeiture when it represented at trial that
it would seek only a money judgment. And he argues that he
was deprived of the jury trial right afforded to him by Rule
32.2(b)(5)(A).
We reject Cammarata’s notice and waiver arguments.
We conclude, however, that ordering forfeiture of the Poconos
property as traceable to fraudulent proceeds without affording
Cammarata a right to the jury trial afforded by Rule
32.2(b)(5)(A) was error subject to harmless error review.
While reversal is not warranted under that standard, remand is.
On remand, the Government should move to amend the
forfeiture order to reflect that the Poconos property is
forfeitable as “other property” under 21 U.S.C. § 853(p), not as property derived from criminal proceeds under18 U.S.C. § 981
(a)(1)(C).
1. The Government Provided Adequate
Notice
The general notice provided by the Government in the
superseding indictment was sufficient under 28 U.S.C. §
2461(c) and Rule 32.2(a). Section 2461(c) states only that “the Government may include notice of forfeiture in the indictment . . . pursuant to the Federal Rules of Criminal Procedure.” And Rule 32.2(a) requires the Government to provide notice in an indictment that it “will seek the forfeiture of property as part of any sentence[.]” Fed. R. Crim. P. 32.2(a); Lo,839 F.3d at 790
.
Such notice “need not identify” the specific property or the
54
amount of money subject to forfeiture. Fed. R. Crim. P.
32.2(a).
The superseding indictment made plain the
Government’s intention to seek the forfeiture of “any property,
real or personal,” as part of Cammarata’s sentence. App. 116.
Neither Rule 32.2(a) nor § 2461(c) required more. See United
States v. Lacerda, 958 F.3d 196, 217 (3d Cir. 2020) (holding
that nearly identical language in an indictment was sufficient
under Rule 32.2).
2. The Government Did Not Waive Its Right
to Seek Forfeiture of the Poconos Property
Cammarata further argues that the Government waived
its right to seek forfeiture of the Poconos property when it
represented during the charge conference that it was seeking
only a money judgment. He claims the District Court
committed reversible error when it nonetheless disregarded his
objection at sentencing and ordered the property’s forfeiture.
The basic flaw in Cammarata’s argument is that he did not
object on the ground that the Government had waived its right
to seek forfeiture of specific property. App. 2071–73, 2089.
Accordingly, we review Cammarata’s waiver argument
for plain error. See United States v. Watson, 482 F.3d 269, 274(3d Cir. 2007). We again recite that the plain error doctrine requires that “an appellant . . . show (1) a legal error (2) that is plain and (3) that has affected his substantial rights.” Dorsey,105 F.4th at 528
(citing Olano,507 U.S. at 732
). Only if these
requirements are met, may we exercise our discretion to correct
the error, and then only if allowing the error to stand would
“seriously affect[] the fairness, integrity or public reputation of
55
judicial proceedings.” Olano, 507 U.S. at 732 (internal
quotation marks and citations omitted).
Cammarata fails to cite a single case supporting his
waiver argument. Though “lack of precedent alone” does not
categorically “prevent us from finding plain error[,]” we will
do so only if “absolutely clear legal norm[s]” compel that
conclusion. United States v. Jabateh, 974 F.3d 281, 299 (3d
Cir. 2020) (internal quotation marks and citations omitted).
Cammarata cannot show that any error here meets such a
demanding test.
Notably, the Government claims that it was not aware,
even by the time trial concluded, that the Poconos property was
forfeitable as traceable to fraudulent proceeds. While the
Government suggests that its “forfeiture submissions should
have clarified that its tracing had only occurred post-trial[,]”
Response Br. at 60 n.8, that fact is apparent in the declaration
underpinning the Government’s forfeiture motion. The
declaration, executed months after trial, explained that the
investigator-declarant concluded that the Poconos property
was traceable to fraudulent proceeds only after reviewing trial
testimony and exhibits.
Waiver requires the “‘intentional relinquishment or
abandonment of a known right.’” Hamer v. Neighborhood
Hous. Servs., 583 U.S. 17, 20 n.1 (2017) (quoting Olano,507 U.S. at 733
). We fail to see, then, how the Government could have waived any right to seek forfeiture of property the forfeitability of which it was unaware when it represented to the District Court that it would seek only a money judgment. See Magouirk v. Warden,237 F.3d 549, 553
(5th Cir. 2001)
56
(agreeing in a habeas proceeding that state prosecution did not
waive its ability to later advance an argument it “did not know
of” at the time of trial).
Moreover, forfeiture of property traceable to criminal
proceeds is mandatory upon conviction, so long as the
Government provides sufficient notice in the indictment. See
18 U.S.C. § 981(a)(1)(C);28 U.S.C. § 2461
(c); United States v. Hernandez,803 F.3d 1341, 1343
(11th Cir. 2015) (explaining that because forfeiture was authorized under18 U.S.C. § 981
(a)(1)(C) and28 U.S.C. § 2461
(c), and “the
government included notice of the forfeiture in [the
defendant’s] indictment, the district court was required by §
2461(c) to order forfeiture as part of his sentence”).
As explained, the Government provided sufficient
notice here. To conclude that it later waived its ability to seek
the Poconos property’s forfeiture during the charge conference
would be contrary to the mandatory nature of criminal
forfeiture and the facts of this case.
3. Deprivation of the Jury Right Afforded by
Rule 32.2(b)(5)(A) Constituted Procedural
Error That Merits Remand
Finally, Cammarata claims his inability to submit the
issue of the Poconos property’s forfeitability to the jury
constituted a fundamental violation of Rule 32.2(b)(5)(A). In
his view, this error requires us to reverse the District Court’s
forfeiture order as to the Poconos property.
Rule 32.2(b)(5)(A) is plainly directed at district courts,
not litigants. It provides that “the court must determine”
57
whether either party requests that the jury be retained to
determine the forfeitability of specific property. Fed. R. Crim.
P. 32.2(b)(5)(A). As Cammarata concedes, the District Court
heeded the Rule’s mandate when it inquired of the Government
at the charge conference whether it was seeking forfeiture of
specific property. So the District Court did not violate Rule
32.2(b)(5)(A). See United States v. Fisher, 943 F.3d 809, 814
(7th Cir. 2019) (explaining that Rule 32.2(b)(5)(A) “is violated
when a judge does not determine if a party wants the jury to
decide whether certain property is forfeitable”). Nor can we
ascribe any intentional error to the Government when it
provided sufficient notice in the superseding indictment. Rule
32.2(b)(5)(A) does not govern the Government’s conduct. And
even if it did, the record indicates that it was not aware until
after the jury had rendered its verdict that it had a basis to seek
forfeiture of the Poconos property.
That said, we cannot ignore that Cammarata was
deprived of the jury right afforded to him by Rule
32.2(b)(5)(A). That deprivation of process constituted
procedural error.
As both parties recognize, that procedural error is
subject to harmless error review on appeal.35 See Fed. R. Crim.
35
The Supreme Court’s recent decision in McIntosh v. United
States, 601 U.S. 330(2024), bolsters this conclusion. There, the Court held that Rule 32.2(b)(2)(B)—mandating the entry of a preliminary order of forfeiture prior to sentencing—is a “time-related directive that, if missed, does not deprive the judge of her power to order forfeiture against the defendant.”Id. at 342
. McIntosh’s reasoning compels the same conclusion
58
P. 52(a). And it is the Government’s burden to demonstrate that the error was harmless. United States v. Titchell,261 F.3d 348, 354
(3d Cir. 2001). Because a violation of Rule 32.2(b)(5)(A) is not of constitutional dimension,36 reversal is “not warranted if it is ‘highly probable that the error did not contribute to the judgment.’” United States v. Browne,834 F.3d 403, 416
(3d Cir. 2016) (quoting United States v. Brown,765 F.3d 278, 295
(3d Cir. 2014)). here with respect to Rule 32.2(b)(5)(A). Seeid.
at 341–44; United States v. Williams,720 F.3d 674
, 700–01 (8th Cir. 2013) (holding that Rule 32.2(b)(5)(A) is “merely a time- related directive deadline” that is “legally enforceable but does not deprive a judge . . . of the power to take the action to which the deadline applies if the deadline is missed”) (internal quotation marks and citation omitted). Still, failure to abide by a time-related directive is “subject to harmless-error principles on appellate review[.]” McIntosh,601 U.S. at 338
.
36
Cammarata’s contention that a deprivation of Rule
32.2(b)(5)(A)’s jury right is “structural error” requiring
automatic reversal lacks merit. As he appears to concede,
Supreme Court precedent forecloses his argument. See Libretti
v. United States, 516 U.S. 29, 49 (1995) (“[T]he right to a jury
verdict on forfeitability does not fall within the Sixth
Amendment’s constitutional protection.”); Opening Br. at 49
& n.16 (acknowledging that “the ‘structural error’ rubric does
not apply to a jury right conferred by statute rather than by the
Constitution itself” and “[r]ecognizing that this Cou[r]t is
bound by the precedent set in Libretti”).
59
The Government’s harmlessness argument is that even
if the jury had found that the Poconos property was not
forfeitable, Cammarata would nonetheless have had to forfeit
it as substitute property under 21 U.S.C. § 853(p). That provision allows the Government to seek forfeiture of “property untainted by the crime[,]” i.e. substitute property, so long as it can prove one of five conditions listed in § 853(p)(1). Honeycutt v. United States,581 U.S. 443, 451
(2017). These conditions include when, “as a result of any act or omission of the defendant”, forfeitable property has been “transferred or sold to, or deposited with, a third party”; “placed beyond the jurisdiction of the court”; or “commingled with other property which cannot be divided without difficulty.”21 U.S.C. § 853
(p)(1)(B), (C), (E).
We are mindful that the superseding indictment put
Cammarata on notice of the Government’s intention to seek
forfeiture of substitute property under § 853(p). In the
declaration supporting the Government’s forfeiture motion, its
investigator concluded that “much of the” nearly $16.5 million
in fraudulent proceeds Cammarata obtained had been
transferred to a third party, used to pay for real property outside
the United States, and/or commingled with other property.
App. 330. In its forfeiture order, the District Court concluded
that “one or more conditions in 21 U.S.C. § 853(p) have been
met” and authorized the Government to seek forfeiture of
substitute property. App. 16–17. And under Rule 32.2(e), upon
the Government’s motion, a district court “may at any time
enter an order of forfeiture or amend an existing order of
forfeiture to include” substitute property without the
involvement of a jury. Fed. R. Crim. P. 32.2(e)(1), (3).
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We acknowledge the practicality of the Government’s
harmlessness argument. Insofar as Cammarata would have
forfeited the Poconos property as substitute property in any
event, it is highly probable that the procedural error did not
contribute to the judgment. So reversal is not warranted. See
Browne, 834 F.3d at 416. But we decline the Government’s
invitation to affirm, without amendment to the forfeiture order,
simply because Cammarata would have forfeited the Poconos
property under a process distinct from the one it pursued before
the District Court.
As we explained in United States v. Voigt, where “all
that is at issue is the process by which the government may
seize property in satisfaction of the” forfeiture amount to which
it is legally entitled, the solution “is to give effect to the
substitute asset provision.” 89 F.3d 1050, 1088(3d Cir. 1996). Accordingly, we will vacate the District Court’s forfeiture order to the extent it reaches the Poconos property. And we will remand for the limited purpose of allowing the Government to move to amend the forfeiture order under Rule 32.2(e) to reflect that the Poconos property is forfeitable as a substitute asset. Seeid.
(remanding for a similar amendment of a
forfeiture order where the district court erroneously concluded
that specific property was forfeitable as traceable to criminal
proceeds).
III. CONCLUSION
In sum, we will affirm Cammarata’s conspiracy, wire
fraud, and money laundering convictions. We will vacate the
restitution order, vacate the forfeiture order in part, and remand
for further proceedings consistent with this opinion.
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