United States District Court, E.D. Virginia, Alexandria Division
ELLIS, III UNITED STATES DISTRICT JUDGE.
October 4, 2019, after hearing testimony from 29 government
witnesses and from defendant, a jury convicted Defendant
David Harris Miller often counts of a twelve-count
indictment, including: (i) conspiracy to commit mail or wire
fraud (Count 1); (ii) conspiracy to launder monetary
instruments (Count 2); (iii) mail fraud (Counts 3-6); and
(iv) wire fraud (Counts 7-10). The jury also returned a
special forfeiture verdict finding: (i) that fraud proceeds
in the amount of $315, 317.10 from the sale of real property
at 4551 Forest Drive, Fairfax, Virginia (the "Fairfax
Property") were proceeds traceable to Counts 1 and/or
3-10; (ii) that fraud proceeds in the amount of $58, 818.35
from real property at 28961 Indian Harbor Drive, Unit 3,
Bethany Beach, Delaware (the "Bethany Beach
Property") were proceeds traceable to Counts 1 and/or
3-10; and (iii) that the Fairfax and Bethany Beach Properties
were involved in the money laundering offense charged in
issue now is the government's motion for a preliminary
order of forfeiture entering a money judgment in the amount
of $1, 640, 665 against defendant to be offset by the
proceeds from the sale of the Fairfax and Bethany Beach
Properties. Defendant opposed the government's
motion. After oral argument was heard, and a
careful review of the record, this Memorandum Opinion grants
the government's motion for the reasons from the bench
and for the reasons stated below.
September 20, 2017, a grand jury returned an indictment
charging defendant with twelve counts: (i) conspiracy to
commit mail or wire fraud (Count 1); (ii) conspiracy to
launder monetary instruments (Count 2); (iii) mail fraud
(Counts 3-6); (iv) wire fraud (Counts 7-10); and (v)
aggravated identity theft (Counts 11-12).
January 3, 2018, defendant moved for an order releasing the
proceeds of the Fairfax Property and removing the notice
of lis pendens from the Bethany Beach Property.
After an evidentiary hearing, a memorandum opinion issued
denying defendant's motion. See United States v.
Miller, 295 F.Supp.3d 690 (E.D. Va. 2018). The March 8,
2018 memorandum opinion held that there was probable cause to
believe that the Fairfax and Bethany Beach Properties were
"involved in" the money laundering conspiracy and,
in part, "traceable to" the money laundering
conspiracy and the fraud charged in the indictment. Defendant
appealed that decision and the Fourth Circuit affirmed,
holding that probable cause supported a finding that
defendant "involved the properties in money laundering
transactions by spending laundered funds to improve and
retain them." United States v. Miller, 911 F.3d
229, 234 (4th Cir. 2018). The Fourth Circuit also held that
the Fairfax and Bethany Beach Properties were
"forfeitable because they are 'traceable to'
laundered funds and funds obtained through fraud under §
September 24, 2019, a jury trial began on the twelve-count
indictment against defendant. The government presented 29
witnesses in its case-in-chief, including forensic accountant
Stacy Young, who performed an accounting analysis tracing the
proceeds of defendant's frauds into improvements and
payments made with respect to two properties owned by
defendant. On October 2, 2019, the government rested, and
defendant moved for a judgment of acquittal pursuant to Rule
29, Fed. R. Crim. P., solely with respect to the two counts
of aggravated identity theft. The Court denied the motion,
finding that, taking all of the evidence in favor of the
government, the evidence was sufficient to sustain a
conviction on the two aggravated identity theft counts.
beginning of defendant's case-in-chief on October 2,
2019, defendant called his wife, Linda Wallis Miller, as a
witness. Mrs. Miller's counsel appeared and
invoked Mrs. Miller's spousal testimonial privilege and
her Fifth Amendment privilege against self-incrimination.
After hearing argument from the parties and from Mrs.
Miller's counsel, the Court found that Mrs. Miller had
validly invoked her spousal testimonial privilege and Fifth
Amendment privilege against self-incrimination and therefore
she could not be compelled to testify. Thereafter, defense
counsel called defendant to testify and the trial proceeded.
October 3, 2019, the jury began its deliberations. The next
day, the jury returned a verdict finding defendant guilty
often of the twelve counts charged in the indictment.
Specifically, the jury found defendant guilty of: (i)
conspiracy to commit mail or wire fraud (Count 1); (ii)
conspiracy to launder monetary instruments (Count 2); (iii)
mail fraud (Counts 3-6); and (iv) wire fraud (Counts 7-10).
In its verdict form, the jury found defendant guilty of both
concealment money laundering, in violation of 18 U.S.C.
§ 1956(a)(1)(B)(i), and transactional money laundering,
in violation of 18 U.S.C. § 1957. The jury deadlocked on
the remaining two counts of aggravated identity theft,
following which a mistrial was declared on the ground that
there was a manifest necessity to do so. Following this, the
government moved to dismiss the aggravated identity theft
counts and its motion was granted.
defendant was found guilty of Counts 1-10, the question of
forfeiture was required to be presented to the jury.
Following the parties' arguments on forfeiture, the jury
found, in a special forfeiture verdict form:
i. that the net proceeds from the sale of the Fairfax
Property constitute proceeds or are derived from
proceeds traceable to Count 1 or Counts 3-10;
ii. that the amount of traceable proceeds from the Fairfax
Property is $315, 317.10;
iii. that the property and improvements at the Bethany Beach
Property constitute proceeds or are derived from proceeds
traceable to Count 1 or Counts 3-10;
iv. that the amount of traceable proceeds to the Bethany
Beach Property is $58, 818.35;
v. that the Fairfax Property was involved in the money
laundering offense charged in Count 2; and
vi. that the Bethany Beach Property was involved in the money
laundering offense charged in Count 2.
October 9, 2019, the government moved for a preliminary order
of forfeiture requiring a forfeiture money judgment of $1,
640, 665 to be offset by the sale of the Fairfax and Bethany
Beach Properties. Defendant opposed the government's
motion and the parties argued orally on November 21, 2019.
forfeiture for wire and mail fraud offenses is governed by 18
U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c). More
specifically, § 981(a)(1)C) provides for forfeiture of
property "which constitutes or is derived from proceeds
traceable to" mail or wire fraud under §§ 1341
or 1343 or a conspiracy to commit the same. Section 982
provides for the criminal forfeiture of property
"involved in" money laundering transactions under
either 18 U.S.C. § 1956 or § 1957. It also provides
for the forfeiture of property "traceable to" any
such property. See 18 U.S.C. § 982.
Importantly, the Fourth Circuit has held, in this case, that,
"[p]roperty involved in a money laundering offense is
forfeitable in its entirety, even if legitimate funds ...