Court filing
Motion for Preliminary Order of Forfeiture - United States v. Derek James Acree
Record facts
| Court | U.S. District Court, Southern District of Florida |
|---|---|
| Filed | 2022-12-20 |
U.S. District Court, Southern District of Florida · No. 9:22-cr-80157-AHS · Doc. 19 · 2022-12-20 · Docket on CourtListener
Summary
The United States' unopposed motion for a preliminary order of forfeiture in United States v. Derek James Acree, Case No. 22-80157-AHS, in the U.S. District Court for the Southern District of Florida, entered on the docket December 20, 2022 as Document 19. The motion seeks a forfeiture money judgment of $869,682.83 under 18 U.S.C. § 982(a)(2)(A), the procedures of 21 U.S.C. § 853, and Rule 32.2 of the Federal Rules of Criminal Procedure. It recounts that an information filed September 27, 2022 charged one count of conspiracy to commit wire fraud under 18 U.S.C. § 1349 with forfeiture allegations, and that the court accepted a guilty plea to that count on October 11, 2022. A memorandum of law addresses directly forfeitable property, forfeiture money judgments, and the distinction the Eleventh Circuit draws between forfeiture and restitution. The document is 10 pages.
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 22-80157-AHS
UNITED STATES OF AMERICA
vs.
DEREK JAMES ACREE,
Defendant.
_____________________________________/
UNITED STATES’ UNOPPOSED MOTION FOR
PRELIMINARY ORDER OF FORFEITURE
Pursuant to 18 U.S.C. § 982(a)(2)(A), and the procedures set forth in 21 U.S.C. § 853 and
Rule 32.2 of the Federal Rules of Criminal Procedure, the United States of America, by and
through the undersigned Assistant United States Attorney, hereby moves for the entry of a
Preliminary Order of Forfeiture against Defendant Derek James Acree (the “Defendant”) in the
above-captioned matter. The United States seeks a forfeiture money judgment in the amount of
$869,682.83. In support of this motion, the United States provides the following factual and legal
bases.
I.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
On September 27, 2022, the United States filed an Information charging the Defendant in
Count 1 with conspiracy to commit wire fraud in violation of 18 U.S.C. § 1349. Information, ECF
No. 1. The Information also contained forfeiture allegations, which alleged that upon conviction
of a violation of 18 U.S.C. § 1349, the Defendant shall forfeit his proceeds, in the amount of
approximately $869,682.83. See id. at 6.
On October 11, 2022, the Court accepted the Defendant’s guilty plea to Count 1 of the
Information. See Minute Entry, ECF No. 10; Plea Agreement ¶ 1, ECF No. 11. As part of the
Case 9:22-cr-80157-AHS Document 19 Entered on FLSD Docket 12/20/2022 Page 1 of 10
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guilty plea, the Defendant agreed to a forfeiture money judgment in the amount of $869,682.83.
Specifically, among other provisions in the Plea Agreement, the Defendant agreed to the
following:
11.
The defendant agrees, in an individual and any other capacity, to
forfeit to the United States, voluntarily and immediately, any right, title, and interest
to any property, real or personal, which constitutes or is derived from proceeds
traceable to the commission of the offense, in violation of 18 U.S.C. § 1349,
pursuant to 18 U.S.C. § 981(a)(1)(C),[1] as incorporated by 28 U.S.C. § 2461(c),
and the provisions of 21 U.S.C. § 853. In addition, the defendant agrees to
forfeiture of substitute property pursuant to 21 U.S.C. § 853(p). The property
subject to forfeiture includes, but is not limited to:
a.
a forfeiture money judgment in the sum of approximately
$869,682.83 in U.S. currency, which sum represents the value of
any property that constitutes or is derived from proceeds traceable
to the defendant’s commission of the offense(s)
Plea Agreement ¶ 11.
In support of the guilty plea, the Defendant executed a Factual Proffer, and the Court found
that there was a factual basis to support the Defendant’s conviction. See Factual Proffer, ECF No.
12. The Factual Proffer also provided a basis for the forfeiture of property. See id.
1 The Information and Plea Agreement cite to 18 U.S.C. § 981(a)(1)(C) as the basis for forfeiture
of proceeds. Section 981(a)(1)(C) does provide for forfeiture of proceeds traceable to wire-fraud
offenses under 18 U.S.C. § 1343 (and conspiracies). See 18 U.S.C. § 981(a)(1)(C) (“(1)The
following property is subject to forfeiture to the United States: … (C) Any property, real or
personal, which constitutes or is derived from proceeds traceable to a violation of section … any
offense constituting ‘specified unlawful activity’ (as defined in section 1956(c)(7) of this title)…,
or a conspiracy to commit such offense.”); 18 U.S.C. § 1956(c)(7) (defining “specified unlawful
activity” to include “any act or activity constituting an offense listed in section 1961(1) of this
title”); 18 U.S.C. § 1961(1) (listing inter alia “section 1343 (relating to wire fraud)”). In this case,
because the wire fraud affected a financial institution, 18 U.S.C. § 982(a)(2)(A) is the proper basis
for Defendant to forfeit his proceeds. See 18 U.S.C. § 982(a)(2)(A) (“(2)The court, in imposing
sentence on a person convicted of a violation of, or a conspiracy to violate—(A) section … 1344
of this title, affecting a financial institution, … shall order that the person forfeit to the United
States any property constituting, or derived from, proceeds the person obtained directly or
indirectly, as the result of such violation.”). Under either section, Defendant must forfeit proceeds.
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II.
MEMORANDUM OF LAW
A. Directly Forfeitable Property
Any property, real or personal, that constitutes or is derived, directly or indirectly, from
gross proceeds traceable to the commission of a wire-fraud offense affecting a financial institution
is subject to forfeiture. 18 U.S.C. § 982(a)(2)(A). If a defendant is convicted of such violation, the
Court “shall order” the forfeiture of property as part of the sentence. See 18 U.S.C. § 982(a)(2).
Criminal forfeiture is governed by the preponderance standard. See United States v. Hasson, 333
F.3d 1264, 1277 (11th Cir. 2003). Upon finding that property is subject to forfeiture by a
preponderance, the Court:
. . . must promptly enter a preliminary order of forfeiture setting forth the amount
of any money judgment, directing the forfeiture of specific property, and directing
the forfeiture of any substitute property if the government has met the statutory
criteria. The court must enter the order without regard to any third party’s interest
in the property. Determining whether a third party has such an interest must be
deferred until any third party files a claim in an ancillary proceeding under Rule
32.2(c).
Fed. R. Crim. P. 32.2(b)(2)(A).
B. Forfeiture Money Judgments
A forfeiture order may be sought as a money judgment. See Fed. R. Crim. P. 32.2(b)(1)(A),
(2)(A); see also United States v. Padron, 527 F.3d 1156, 1162 (11th Cir. 2008) (holding that
Federal Rules of Criminal Procedure “explicitly contemplate the entry of money judgments in
criminal forfeiture cases”). The forfeiture money judgment is final as to the defendant “[a]t
sentencing—or at any time before sentencing if the defendant consents.” See Fed. R. Crim. P.
32.2(b)(4)(A). No ancillary proceeding is required when forfeiture consists solely of a money
judgment. See Fed. R. Crim. P. 32.2(c)(1). As additional property is identified to satisfy the
forfeiture money judgment, the Court must order the forfeiture of such property. See Fed. R. Crim.
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P. 32.2(e)(1) (“[T]he court may at any time enter an order of forfeiture or amend an existing order
of forfeiture to include property that . . . is subject to forfeiture under an existing order of forfeiture
but was located and identified after that order was entered; or . . . is substitute property . . . .”); see
also Fed. R. Crim. P. 32.2(b)(2)(C).
The amount of the money judgment should represent the full sum of directly forfeitable
property, regardless of the defendant’s ability to satisfy the judgment at the time of sentencing.
See United States v. McKay, 506 F. Supp. 2d 1206, 1211 (S.D. Fla. 2007) (adopting the majority
rule); see also United States v. Blackman, 746 F.3d 137, 143-44 (4th Cir. 2014) (“The fact that a
defendant is indigent or otherwise lacks adequate assets to satisfy a judgment does not operate to
frustrate entry of a forfeiture order.”). The Court determines the amount of the money judgment
“based on evidence already in the record, including any written plea agreement, and any additional
evidence or information submitted by the parties and accepted by the court as relevant and
reliable.” Fed. R. Crim. P. 32.2(b)(1)(B). The Court in imposing a forfeiture money judgment
may rely on an agent’s reliable hearsay. See United States v. Stathakis, 2008 WL 413782, at *14
n.2 (E.D.N.Y. Feb. 13, 2008). The defendant’s money judgment amount can be based on a
reasonable estimate on the amount of property subject to forfeiture. See, e.g., United States v.
Roberts, 660 F.3d 149, 166 (2d Cir. 2011); United States v. Peithman, 917 F.3d 635, 651 (8th Cir.
2019); United States v. Vico, 2016 WL 233407, at *7 (S.D. Fla. Jan. 20, 2016) (calculation of
money judgment does not require mathematical exactitude; district court may make a reasonable
extrapolation supported by a preponderance of the evidence).
C. Difference Between Forfeiture and Restitution
Both forfeiture and restitution are mandatory in criminal cases. See United States v.
Brummer, 598 F.3d 1248, 1250-51 (11th Cir. 2010) (the word “shall” does not convey discretion
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and the district court was required to order forfeiture of the property in accordance with Fed. R.
Crim. P. 32.2); 18 U.S.C. § 3664(f)(1)(A) (requiring district courts to order restitution in the full
amount of each victim’s losses). Although sometimes conflated, forfeiture and restitution serve
different purposes. “While restitution seeks to make victims whole by reimbursing them for their
losses, forfeiture is meant to punish the defendant by transferring his ill-gotten gains to the United
States Department of Justice.” United States v. Joseph, 743 F.3d 1350, 1354 (11th Cir. 2014)
(citing United States v. Browne, 505 F.3d 1229, 1281 (11th Cir. 2007), United States v. Venturella,
585 F.3d 1013, 1019-20 (7th Cir. 2009), and Libretti v. United States, 516 U.S. 29, 39 (1995)).
Because of this distinction, the Eleventh Circuit has repeatedly held that district courts cannot use
restitution to offset the forfeiture amount ordered, or vice versa. See United States v. Hernandez,
803 F.3d 1341, 1343-44 (11th Cir. 2015); Joseph, 743 F.3d at 1354 (“In light of the statutory
framework governing restitution and forfeiture, we hold that a district court generally has no
authority to offset a defendant’s restitution obligation by the value of forfeited property held by
the government, which is consistent with the approach taken by the Fourth, Seventh, Eighth, Ninth,
and Tenth Circuits.”); United States v. Bane, 720 F.3d 818, 827 n.8 (11th Cir. 2013); United States
v. Hoffman-Vaile, 568 F.3d 1335, 1344-45 (11th Cir. 2009); Browne, 505 F.3d at 1281 (finding
defendant’s disgorgement of illicit profits did not divest the United States of its forfeiture interest
in the full amount of offense).
D. Property Subject to Forfeiture in Instant Criminal Case
National Financial Holdings, Inc., formerly National Financial Holdings LLC, was a
Delaware corporation with a registered address in Wilmington, Delaware and a principal address
in Palm Beach Gardens, Florida. Defendant was the Chief Operating Officer of National Financial
Holdings, Inc. NFH Florida LLC was a Delaware limited liability company with a registered
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address in Wilmington, Delaware. Defendant was the Managing Member of NFH Florida LLC.
National Financial Holdings Technology LLC, was a Delaware limited liability company with a
registered address in Wilmington, Delaware. Defendant was the Chief Operating Officer of
National Financial Holdings Technology LLC.
During the period of March 2020 and continuing through in or around August 2020,
Defendant and co-conspirator 1 submitted and caused to be submitted several loan applications
under the Economic Injury Disaster Loan (EIDL) Program and the Paycheck Protection Program
which were developed under the CARES Act. EIDL program was a U.S. Small Business
Administration (SBA) program that existed before the COVID-19 pandemic to provide low-
interest financing to eligible small business, renters, and homeowners in regions affected by
declared disasters. The CARES Act authorized forgivable loans to qualified businesses and other
organizations for job retention and certain other expenses, through the Paycheck Protection
Program (PPP). Such businesses were required to use PPP loan proceeds on payroll costs, interest
on mortgages, rent, and utilities.
On March 31, 2020, Defendant and co-conspirator 1 submitted and caused to be submitted
via wire an EIDL application on behalf of National Financial Holdings, Inc., with a listed address
of 4521 PGA Blvd., Suite 226, Palm Beach Gardens, FL, and sought approximately $509,900 in
EIDL funds. The initial application was submitted from an IP address which originated in Palm
Beach Gardens. Defendant and co-conspirator 1 executed the loan agreement as guarantors and
falsely represented the gross revenues and number of employees of National Financial Holding
Inc., during the 12-month period prior to the dated of the COVID disaster. The application was
approved and funded by SBA.
Further, the approved EIDL funds were deposited into a BB&T (now Truist) account
Case 9:22-cr-80157-AHS Document 19 Entered on FLSD Docket 12/20/2022 Page 6 of 10
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ending in 5893, which was held in the name of an entity other than National Financial Holding,
Inc. The account holder for the BB&T (now Truist) account ending in 5893 was NFH Florida
LLC, dba Finova Financial LLC. After the EIDL proceeds were deposited into the BB&T (now
Truist) account ending in 5893, between April 22, 2020, and August 5, 2020, funds were
distributed and transferred in nine separate wires totaling $396,000 to personal and unrelated
business accounts belonging to Defendant and co-conspirator 1. EIDL application submitted
through August 8, 2020, were serviced through Virginia. BB&T’s (now Truist) servers located in
North Carolina.
On April 3, 2020, Defendant submitted and caused to be submitted via wire a PPP loan
application on behalf of National Financial Holding, Inc., with a listed address of 4521 PGA Blvd.,
Suite 226, Palm Beach Gardens, FL. This application sought approximately $376,356.03 in PPP
funds based on purported average month payroll of $150,542.41 and represented that the entity
employed 20 employees. The certificate of completion of the application was submitted from an
IP address which originated in Palm Beach Gardens. Defendant executed the loan agreement as
guarantor. The application was approved and funded by First Home Bank. Among the documents
provided by Defendant in support of the PPP loan were BB&T (now Truist) bank statements for
account ending in 5368, which were falsified, in that, the provided bank statements listed National
Financial Holdings, Inc, as the account holder, when in truth and in fact, the account holder was
NFH Florida LLC dba Finova LLC. Further, the bank provided statements reflect different payroll
line amounts and totals significantly less than the inflated payroll line amounts and totals reflected
the bank statements provided by Defendant. BB&T’s (now Truist) servers are located in North
Carolina. First Home Bank is Headquartered in St. Petersburg, Florida, however, its deposits to
customer FHB DDA are serviced through Honolulu, Hawaii. Further, the loan documents were
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docusigned (with an IP Address originating in Palm Beach Gardens and Docusign is headquartered
in San Francisco, California, with data centers outside of Florida.
The approved PPP funds of $376,300 were deposited into a Silicon Valley Bank account
ending in 0470 and held by National Financial Holdings Inc. for which Defendant is a signatory.
After the PPP proceeds were deposited into SVB account ending in 0470, between May 1, 2020
and December 7, 2020, funds, which included a wire transfer of $195,000 of EIDL proceeds from
BB&T account ending in 5893, funds were distributed and transferred in a number of wires to
various unrelated entities’ accounts, including wires in an aggregate amount of approximately
$223,600 to co-conspirator 1’s unrelated business account; approximately $54,795 an unrelated
business account, controlled by Defendant and co-conspirator 1; approximately $114,000 to
Defendant’s unrelated business accounts; and to Salles Jewelers for the purchase of jewelry.
On April 17, 2020, Defendant submitted and caused to be submitted via wire a PPP loan
application on behalf of NFH Florida LLC, with a listed address of 4521 PGA Blvd., Suite 226,
Palm Beach Gardens, FL. This application sought approximately $376,400 in PPP funds based on
purported average monthly income of $150,560 and claim of 20 active employees. Among the
documents provided by Defendant in support of the application were a borrower’s worksheet
which reported a total payroll cost of $1,806,508 for the 12-month period prior to the disaster and
an IRS Form 940 (Schedule R) purportedly prepared by Insperity PEO Services, LP for Tax Year
2019. The application was approved and funded by Truist Bank, formerly BB&T, whose servers
are located in North Carolina. Documentation from Insperity revealed that they did not prepare
payroll for TY 2018 or TY 2019; however, Insperity was paid $80,983 during the period of April
2020-June 2020.
After the PPP funds were deposited, approximately $374,000 was moved through nine
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separate wires and 21 bank account transfers. Eight of the wires were traced to unrelated business
accounts in which Defendant and the co-conspirator 1 were authorized signatories.
On April 20, 2020, Defendant submitted and caused to be submitted via wire a PPP loan
application on behalf of National Financial Holdings Technology LLC, with a listed address of
1400 Centrepark Blvd., Suite 800, West Palm Beach, FL. This application sought approximately
$349,955 in PPP funds based on a purported monthly payroll of $139,982 and listed 18 active
employees. Defendant submitted the PPP application as General Counsel. The application was
approved and funded by Flagler Bank. Among the documents provided in support of the
application was a PPP checklist signed by Defendant, as Officer, attesting to the company’s payroll
payment for TY 2019 as $257,374.21 and IRS Forms 940 and 941 (Schedule R) purportedly
prepared by Insperity. Insperity found no record for Forms 940 or 941 had ever been prepared for
National Financial Holdings Technology LLC. Or any of the related entities.
On April 24, 2020, a Flagler Bank account was opened with $100 and the bank account
agreements listed Defendant and co-conspirator 1 as signatories. The account was funded on July
27, 2020, however, the proceeds were pulled back on July 29, 2020. Flagler Bank is Headquartered
in West Palm Beach, FL. All PPP applications submitted through August 8, 2020, were received
through SBA E-Tran with servers located in Virginia.
As indicated above, Defendant and co-conspirator 1 received approximately $1,612,555 in
EIDL and PPP loan funds as a result of the false claims and representations in their EIDL and PPP
loan applications. Of the EIDL and PPP proceeds received, Defendant retained approximately
$869,682.83 for his personal use, to include American Express credit card payments, USSA credit
card payments for maintenance of an Audi, $11,000 payment to Trump National Golf Club,
monthly payments of child school tuition, marine services for a vessel, Salles Jewelers in the
Case 9:22-cr-80157-AHS Document 19 Entered on FLSD Docket 12/20/2022 Page 9 of 10
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amount of $67,900, XO Global in the amount of $54,795 for private jet services, and $46,000
down payment for a home located at 13058 Flamingo Terr., Palm Beach Gardens, FL.
Based on the record in this case, the total value of the proceeds traceable to the offense of
conviction is $869,682.83, which sum may be sought as a forfeiture money judgment pursuant to
Rule 32.2 of the Federal Rules of Criminal Procedure.
Accordingly, the Court should issue the attached proposed order, which provides for the
entry of a forfeiture money judgment against the Defendant; the inclusion of the forfeiture as part
of the Defendant’s sentence and judgment in this case; and permission to conduct discovery to
locate assets ordered forfeited.
WHEREFORE, pursuant to 18 U.S.C. § 982(a)(2)(A), and the procedures set forth in 21
U.S.C. § 853 and Rule 32.2 of the Federal Rules of Criminal Procedure, the United States
respectfully requests the entry of the attached order.
LOCAL RULE 88.9 CERTIFICATION
Pursuant to Local Rule 88.9, I hereby certify that the undersigned counsel has conferred
with defense counsel via e-mail on December 20, 2022, and there is no opposition to the relief
sought.
Respectfully submitted,
JUAN ANTONIO GONZALEZ
UNITED STATES ATTORNEY
By:
/s/
Joshua Paster
Court ID No. A5502616
Assistant United States Attorneys
99 N.E. 4th Street, 7th Floor
Miami, Florida 33132-2111
Telephone: (305) 961-9342
joshua.paster@usdoj.gov
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