United States v. Peck

139 F.4th 1158

• Court: Court of Appeals for the Tenth Circuit
• Decided: June 10, 2025
• Docket: 23-4000
• Status: Published

Opinion

Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 1 FILED United States Court of Appeals Tenth Circuit PUBLISH June 10, 2025 UNITED STATES COURT OF APPEALS Christopher M. Wolpert FOR THE TENTH CIRCUIT Clerk of Court _________________________________

UNITED STATES OF AMERICA,

Plaintiff - Appellant,

v. No. 23-4000

JUSTIN PECK,

Defendant.

------------------------------

JESSE DUNN,

Claimant - Appellee.

–––––––––––––––––––––––––––––––

v. No. 23-4038

Third-Party Petitioner - Appellee. Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 2

_________________________________

Appeals from the United States District Court for the District of Utah (D.C. No. 2:20-CR-00185-HCN-1) _________________________________

Tyler L. Murray, Assistant United States Attorney (Trina A. Higgins, United States Attorney, with him on the briefs), Salt Lake City, Utah, for Plaintiff-Appellant.

James C. Bradshaw (Ann Marie Taliaferro with him on the brief) of Brown Bradshaw & Moffat, Salt Lake City, Utah for Claimant-Appellee and Third- Party Petitioner-Appellee. _________________________________

Before PHILLIPS, KELLY, and ROSSMAN, Circuit Judges. _________________________________

ROSSMAN, Circuit Judge. _________________________________

This appeal concerns an ancillary proceeding under Federal Rule of

Criminal Procedure 32.2(c) and 21 U.S.C. § 853(n). Ancillary proceedings

address third-party interests in property deemed forfeitable to the United

States in criminal cases. Claimant-Appellee Mr. Jesse Dunn filed a third-

party petition claiming he owned a parcel of land in West Jordan, Utah

(West Jordan Lot or Lot) that the government sought to forfeit in Mr. Justin

Peck’s criminal case. The government sought the West Jordan Lot because

Mr. Peck—who was convicted after pleading guilty to operating an

unlicensed money transmitting business in violation of 18 U.S.C. § 1960,

2 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 3

and who is not a party to this appeal—allegedly held an ownership interest

in the Lot. The district court agreed with Mr. Dunn and blocked the

forfeiture. The government now challenges that ruling. Exercising

jurisdiction under 28 U.S.C. § 1291, we affirm.

I1

We first discuss the factual and procedural background relevant to

this appeal. We then consider and reject Mr. Dunn’s contention we lack

appellate jurisdiction. Finally, we address the merits, explaining why we

discern no error in the district court’s decision to grant Mr. Dunn’s third-

party petition.

A

From 2012 to 2019, Mr. Peck operated unlicensed money transmitting

businesses. Mr. Dunn was one of Mr. Peck’s employees. On March 14, 2018,

Mr. Dunn purchased the West Jordan Lot for $475,000. He paid for the Lot

with a variety of funds, including a hard-money loan from a Utah-based title

company for $280,500, approximately 59% of the price. On March 15, 2018, Mr.

1 The facts recited here derive mostly from Mr. Peck’s criminal proceedings and the ancillary proceedings. We accept the district court’s findings of fact unless clearly erroneous. See United States v. Holy Land Found. for Relief & Dev., 722 F.3d 677, 683 (5th Cir. 2013); United States v. Furando, 40 F.4th 567, 575 (7th Cir. 2022); see also United States v. Gordon, 710 F.3d 1124, 1165 (10th Cir. 2013) (applying this standard to final orders of forfeiture). 3 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 4

Dunn secured that loan with a deed of trust. Neither Mr. Peck nor his funds

were involved in this initial purchase or in the hard-money loan. But on

October 2, 2018, Mr. Peck authorized a $304,795 wire transfer from an account

including tainted funds to pay off Mr. Dunn’s loan. This payment satisfied the

loan and returned unencumbered title to Mr. Dunn.

In July 2020, the government prosecuted Mr. Peck for violating 18

U.S.C. § 1960. Section 1960 applies to “whoever knowingly conducts,

controls, manages, supervises, directs, or owns all or part of an unlicensed

money transmitting business.” The government also notified Mr. Peck of its

intent to seek forfeiture of the West Jordan Lot under 18 U.S.C. § 982(a)(1).

Mr. Peck pled guilty under a plea agreement in August 2020. Mr. Peck

promised to “forfeit all property acquired from or traceable to my offense.” App.

I at 25. The plea agreement further specified Mr. Peck agreed to forfeit the

West Jordan Lot, “[a] money judgment equal to the value of all property not

available for forfeiture,” and “[s]ubstitute property as allowed” by law. App. I

at 25. At Mr. Peck’s subsequent change-of-plea hearing, the government

confirmed Mr. Peck agreed to forfeit the Lot. When the magistrate judge2 asked

if Mr. Peck had anything to add, defense counsel said Mr. Peck “does not have

any interest in that property,” meaning the West Jordan Lot. App. II at 297.

2 Mr. Peck consented to allow a magistrate judge to accept his guilty plea.

4 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 5

The magistrate judge acknowledged the disclaimer about Mr. Peck’s ownership

interest in the Lot. Still, the magistrate judge accepted Mr. Peck’s guilty plea

and set a date for sentencing before the district court.

In October 2020, the government moved to forfeit only the West Jordan

Lot—no other property—under Federal Rule of Criminal Procedure 32.2 and

18 U.S.C. § 982(a)(1). The Lot was forfeitable, the government maintained,

because the government had “established the requisite nexus between the

specific real property it seeks to forfeit and Defendant’s offense of conviction.”

App. I at 32. In support, the government pointed to the facts in Mr. Peck’s plea

agreement. See App. I at 25 (plea agreement stating the Lot is “property . . .

traceable to [Mr. Peck’s] offense”); Fed. R. Crim. P. 32.2(b)(1)(B) (confirming

plea agreements may provide evidence to establish nexus for preliminary

orders of forfeiture). The government made no mention of defense counsel’s

representation at the change-of-plea hearing that Mr. Peck did not have “any

interest” in the Lot. App. II at 297. Days later, the district court entered a

preliminary order of forfeiture. The order stated “defendant Justin Peck must

forfeit to the United States any property . . . including and limited to: [the West

Jordan Lot].” App. I at 38 (emphasis added). The district court then set a

30-day period for third parties to assert their interests in the Lot—the only

property deemed forfeitable in Mr. Peck’s criminal case. See 21 U.S.C. §

853(n)(2).

5 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 6

B

In December 2020,3 Mr. Dunn filed a third-party petition asserting his

interest in the Lot. Mr. Dunn sought to show “the purported order of forfeiture

[was] invalid” and the Lot should not be forfeited, notwithstanding the district

court’s preliminary findings. App. I at 49. According to Mr. Dunn, the order

was invalid because his interest in the Lot was superior to Mr. Peck’s and the

government’s. Mr. Dunn was not a party to Mr. Peck’s criminal case, so he

could obtain relief only by filing a third-party petition at this stage. See United

States v. Andrews, 530 F.3d 1232, 1236 (10th Cir. 2008) (“[A] third party has

no right to challenge the preliminary order’s finding of forfeitability; rather,

the third party is given an opportunity during the ancillary proceeding to

assert any ownership interest . . . .”); see generally 21 U.S.C. § 853(n); Fed. R.

Crim. P. 32.2(b)(2)(A), (c).

In April 2021, while Mr. Dunn’s petition was pending, the district court

sentenced Mr. Peck to two years’ probation. Neither the government nor Mr.

Peck asked the district court to amend the forfeiture order at sentencing. The

3 The district court permitted third-party petitions “within thirty days of

the final publication of notice or receipt of notice, whichever is earlier.” App. I at 40. The government posted notice of the preliminary order of forfeiture from October 14 to November 12, 2020. Thus, Mr. Dunn’s December 3, 2020 petition was presumptively timely. Nobody argues otherwise. 6 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 7

government confirmed it sought to forfeit the West Jordan Lot and that it had

no “intent on trying to collect [a] money judgment” from Mr. Peck. Supp. App.

at 27. The district court ordered Mr. Peck to forfeit his interest in the Lot.

In December 2021, the district court held an evidentiary hearing on Mr.

Dunn’s third-party petition. The government agreed Mr. Dunn’s down

payment for the Lot in March 2018 “did not come from [Mr. Peck’s] tainted

funds.” App. II at 313. It also stipulated the Lot was never “used to facilitate

any unlawful activity [and] that it was not an instrumentality of any unlawful

activity.” App. II at 355.

Internal Revenue Service (IRS) Special Agent Cameron Maxfield

testified. He explained an IRS investigation revealed Mr. Dunn was a

signatory on Mr. Peck’s tainted bank accounts. According to Agent Maxfield,

the wire transfer that paid off Mr. Dunn’s loan included tainted funds. Agent

Maxfield acknowledged title to the West Jordan Lot “was not encumbered by

Mr. Peck in any way.” App. I at 375.

Mr. Dunn also testified. According to Mr. Dunn, Mr. Peck authorized him

to wire the $304,795 to pay off the hard-money loan in October 2018. Mr. Dunn

claimed he then paid Mr. Peck $205,000 in cash, but Mr. Peck did not ask him

to repay the remaining approximately $100,000. Mr. Dunn said he never

understood Mr. Peck to hold any ownership interest in the Lot. In a post-

hearing brief, the government clarified it did not seek to forfeit the entire Lot,

7 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 8

but only “that portion of the West Jordan Property” attributable to tainted

funds. App. I at 165.

The district court issued a written order granting Mr. Dunn’s third-party

petition. The court first found Mr. Dunn paid the down payment on the Lot

without using Mr. Peck’s tainted funds, the Lot “was not an instrumentality

of, or used to facilitate, Mr. Peck’s offense,” but “[p]roceeds of Mr. Peck’s offense

were used to pay off the hard money loan.” App. I at 200–01.

The district court next set out the applicable legal framework, which it

described as the “two-step process for criminal forfeitures” required by 21

U.S.C. § 853 and Fed. R. Crim. P. 32.2.4 App. I at 201. The first step requires

a court to “determine whether the government has established the requisite

nexus between the property and the offense.” App. I at 201 (quoting Fed. R.

Crim. P. 32.2(b)(1)(A)). “If this nexus is established,” the district court

explained, a “court must enter a preliminary order of forfeiture ‘without regard

to any third party’s interest in the property.’” App. I at 201 (quoting Fed. R.

Crim. P. 32.2(b)(2)(A)). “At the second step,” the district court continued, a

third party may “petition the court for a hearing to adjudicate the validity of

4 Although the government sought forfeiture under 18 U.S.C. § 982(a)(1),

“[t]he forfeiture of property under [that] section . . . shall be governed [in part] by the provisions of section 413 . . . of the Comprehensive Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. [§] 853).” 18 U.S.C. § 982(b)(1). 8 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 9

his alleged interest in the property.” App. I at 202 (quoting 21

U.S.C. § 853(n)(2)). And after such an “ancillary proceeding, the court must

amend the forfeiture [order] to account for the third-party petitioner’s interest

if the petitioner establishes by a preponderance of the evidence” that his

interest prevails over the government’s. App. I at 202 (citing 21 U.S.C.

§ 853(n)(6)). The district court explained a third party will have such a

prevailing interest if he

has a legal right, title, or interest in the property, and such right, title, or interest renders the order of forfeiture invalid in whole or in part because the right, title, or interest was vested in the petitioner rather than the defendant or was superior to any right, title, or interest of the defendant at the time of the commission of the acts which gave rise to the forfeiture of the property under this section . . . .

App. I at 202 (quoting 21 U.S.C. § 853(n)(6)(A)).

Turning to the merits of Mr. Dunn’s third-party petition, the district

court held, under § 853(n)(6)(A), “Mr. Dunn had a legal right, title, or interest

in the disputed property that renders the order of forfeiture invalid.” App. I at

202. “[A]t the time Mr. Peck committed his crime,” the district court reasoned,

“title to the property was vested in Mr. Dunn rather than Mr. Peck or at least

Mr. Dunn’s interest in the property was superior to that of Mr. Peck.” App. I

at 202.

The district court recognized “[s]tate law defines ownership interests” in

ancillary proceedings. App. I at 203 (citing Andrews, 530 F.3d at 1238).

9 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 10

Applying Utah law, the district court determined that, since March 2018, Mr.

Dunn held a superior interest in the West Jordan Lot as compared to Mr. Peck.

Even if Mr. Dunn incurred a debt to Mr. Peck after he helped pay off the hard-

money loan, that new debt did not grant Mr. Peck an ownership interest in the

Lot. App. I at 204 (“[A] subsequent lender does not somehow obtain a legal

interest in collateral securing a previous loan from a different lender simply

because the borrower obtains an unsecured loan from the second lender and

then uses the proceeds of that loan to pay off the first loan.”). The district court

then vacated the preliminary forfeiture order, concluding vacatur was the

“only amendment that can account for Mr. Dunn’s interest.”5 App. I at 205. The

government timely appealed.6

5 Federal Rule of Criminal Procedure 32.2(c)(2) requires a district court

to “amend” its preliminary order. As explained above, the district court considered vacatur to be “the only amendment that can account for Mr. Dunn’s interest” under the circumstances. App. I at 205. Because neither party contests this nor articulates why vacatur has different consequences than amendment, we assume without deciding that vacatur served as a valid amendment under Rule 32.2(c)(2). See Crowson v. Wash. Cnty., 983 F.3d 1166, 1181 n.9 (10th Cir. 2020) (declining to reach an issue “without the benefit of adequate adversarial briefing”).

6 After the district court granted his petition, Mr. Dunn moved to release

a notice of lis pendens the government had placed on the Lot in July 2020. “The purpose of recording a notice of lis pendens on a piece of real property is to provide constructive notice to subsequent purchasers and encumbrancers of litigation affecting the title to [the] real property.” United States v. Jarvis, 499 F.3d 1196, 1202–03 (10th Cir. 2007) (internal quotation marks omitted). The district court granted Mr. Dunn’s motion. The government moved to stay that ruling pending appeal, but the court denied the government’s motion to stay. 10 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 11

II

Mr. Dunn has filed a motion urging us to dismiss the government’s

appeal for lack of appellate jurisdiction. Our court has not previously

considered when the government may appeal an order granting a third-party

petition in an ancillary proceeding under 21 U.S.C § 853(n) and Federal Rule

of Criminal Procedure 32.2(c). But the first principles we invoke are common

to all questions of appellate jurisdiction. “Without jurisdiction the court cannot

proceed at all in any cause.” Ex parte McCardle, 74 U.S. 506, 514 (1868). “Thus,

‘the question of this Court’s jurisdiction (i.e., our appellate jurisdiction) is

antecedent to all other questions . . . .’” In re Lang, 414 F.3d 1191, 1195 (10th

Cir. 2005) (quoting Petroleos Mexicanos Refinacion v. M/T KING A (Ex–

TBILISI), 377 F.3d 329, 333 n.4 (3d Cir. 2004)).

Mr. Dunn makes two arguments supporting a jurisdictional dismissal,

but neither is availing.

Mr. Dunn first contends the order on appeal is not a final decision under

28 U.S.C. § 1291 “because the Government may seek another order of

forfeiture.” Aplee. Mot. to Dismiss at 4. “[W]e may usually hear appeals only

from ‘final decisions of the district courts of the United States.’” McClendon v.

The government then timely appealed the district court’s orders concerning the notice of lis pendens and the stay. The government also asked us to stay the district court’s rulings on appeal, and we granted the government’s motion. 11 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 12

City of Albuquerque, 630 F.3d 1288, 1292 (10th Cir. 2011) (quoting 28 U.S.C.

§ 1291). “Determining finality . . . is a functional inquiry.” In re Syngenta AG

MIR 162 Corn Litig., 61 F.4th 1126, 1171 (10th Cir. 2023). We ask whether the

district court “signal[ed] the litigation is over” or “disassociate[d]” itself “from

the case.” McClendon, 630 F.3d at 1295; see also id. at 1292 (“A final decision

is, put differently, one by which the district court ‘disassociates itself from a

case.’” (quoting Swint v. Chambers Cnty. Comm’n, 514 U.S. 35, 42 (1995)).

Here, the order on review is a final decision for purposes of § 1291. See

id. at 1292–95. As the government persuasively argues, the order definitively

resolved the ancillary proceeding and “left nothing more to be decided.” Gov’t

Resp. to Mot. to Dismiss at 8. The district court concluded Mr. Dunn alone held

legal title to the Lot, and as a result, “the United States cannot obtain criminal

forfeiture of that property.” App. I at 211. It accordingly granted Mr. Dunn’s

motion and vacated the preliminary forfeiture order. These actions left the

court with nothing else to decide. McClendon, 630 F.3d at 1292; see United

States v. Holy Land Found. for Relief & Dev., 722 F.3d 677, 684 (5th Cir. 2013)

(treating decision for petitioners in ancillary proceeding as final appealable

judgment); see also United States v. Furando, 40 F.4th 567, 575 (7th Cir. 2022)

(“An appeal after a district court’s decision regarding ancillary proceedings

under 21 U.S.C. § 853(n), is sound as a final judgment under 28

U.S.C. § 1291.”).

12 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 13

Mr. Dunn next insists the government lacks the requisite statutory

authority to appeal. “In the absence of express statutory authority,” Mr. Dunn

explains, “no appeal may be taken on behalf of the United States in any federal

criminal case.” Aplee. Mot. to Dismiss at 4. And, he goes on, “[t]he order at

issue here . . . is not [within] any . . . enumerated grant[] of authority to appeal.”

Aplee. Mot. to Dismiss at 5.

This argument is misplaced. To be sure, “[i]n criminal cases, the

government is denied the right of appeal absent express statutory authority to

do so.” United States v. Kemp & Assocs., Inc., 907 F.3d 1264, 1273–74 (10th

Cir. 2018) (emphasis added) (citing United States v. Hines, 419 F.2d 173, 174

(10th Cir. 1969)). But ancillary proceedings are not treated like criminal cases.

The Federal Rules of Criminal Procedure treat ancillary proceedings according

to the rules applicable in civil cases. See, e.g., Fed. R. Crim. P. 32.2(c)(1)(B)

(“[T]he court may permit the parties to conduct discovery in accordance with

the Federal Rules of Civil Procedure . . . . When discovery ends, a party may

move for summary judgment under Federal Rule of Civil Procedure 56.”

(emphasis added)). The text of § 853(n) also indicates Congress understood an

ancillary proceeding—which concerns third-party interests in property deemed

forfeitable—to be distinct from the underlying criminal case. See 21 U.S.C.

§ 853(n)(5) (requiring the district court to “consider the relevant portions of the

record of the criminal case which resulted in the order of forfeiture” (emphasis

13 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 14

added)). And in a variety of other circumstances, our sister circuits have

considered ancillary proceedings to be civil in nature. See, e.g., United States

v. Daugerdas, 892 F.3d 545, 552 (2d Cir. 2018) (noting ancillary proceedings

are “adjudicated in a manner similar to a civil case”); United States v. Lavin,

942 F.2d 177, 182 (3d Cir. 1991) (“Given that our decision in this appeal will

have absolutely no effect on Lavin, the criminal defendant, we think that the

[appellee] strains reason in attempting to characterize a proceeding under

section 853(n) as a ‘criminal case.’”); United States v. Moser, 586 F.3d 1089,

1093 (8th Cir. 2009) (“Several courts have . . . compar[ed] the proceedings to

quiet title actions, or view[ed] the procedural framework, the parties involved,

the burdens of proof, or the issues involved as establishing that § 853(n)

proceedings are civil in nature.”); United States v. Segal, 938 F.3d 898, 903 n.1

(7th Cir. 2019) (collecting “decisions from other circuits applying the civil

deadline of Rule 4(a) to similar, essentially civil, proceedings within criminal

cases”). Finally, we find instructive that the Fifth Circuit has considered the

government’s appeal of an adverse ruling in an ancillary proceeding without

ever questioning whether the government had the right to appeal. Holy Land

Found. for Relief & Dev., 722 F.3d at 684 (“[T]he government’s notice of appeal

was proper and timely, and we may exercise jurisdiction over the appeal.”). Mr.

Dunn points to no contrary authority or any case that counsels against our

reasoning.

14 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 15

We thus conclude appellate jurisdiction exists and proceed to the merits.

III

In evaluating the disposition of an ancillary proceeding, we review the

district court’s findings of fact for clear error and its legal conclusions de novo.

See Holy Land Found. for Relief & Dev., 722 F.3d at 683; Furando, 40 F.4th at

575; see also United States v. Gordon, 710 F.3d 1124, 1165 (10th Cir. 2013)

(applying this standard to final orders of forfeiture). The government seeks

reversal because once “Peck’s criminal proceeds were used to pay off the hard

money loan [in October 2018], the United States had a corresponding

forfeitable interest in the West Jordan [Lot].” Op. Br. at 16. Mr. Dunn contends

affirmance is required because “Peck . . . has never held[] any interest in the

[Lot].” Resp. Br. at 1. We agree with Mr. Dunn. As the district court correctly

determined, the record shows Mr. Dunn has always held a “superior” interest

in the Lot, as compared to the government or Mr. Peck, under the relevant

forfeiture statute. 21 U.S.C. § 853(n)(6)(A).

We start by describing the applicable law, beginning with the threshold

question of whether property is forfeitable in a criminal proceeding and then

turning to the third-party petition process. We next explain why the district

court correctly vacated the forfeiture order after concluding neither Mr. Peck’s

nor the government’s interest in the Lot—the only property at issue—was

15 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 16

superior under state law to Mr. Dunn’s interest. Finally, we show why the

government’s contrary arguments are unavailing.

“Criminal forfeiture is an in personam action . . . imposed as a

punishment against the defendant.” United States v. Jarvis, 499 F.3d 1196,

1203 (10th Cir. 2007); United States v. $39,000 In Canadian Currency, 801

F.2d 1210, 1218 (10th Cir. 1986) (similar). “Forfeitures are not favored; they

should be enforced only when within both letter and spirit of the law.” United

States v. One 1936 Model Ford V-8 De Luxe Coach, 307 U.S. 219, 226 (1939).

As the district court correctly recognized—and the parties do not dispute—18

U.S.C. § 982, 21 U.S.C. § 853, and Federal Rule of Criminal Procedure 32.2

together “provide a two-step process for criminal forfeitures.” App. I. at 201;

see also 18 U.S.C. § 982(b)(1) (explaining subsections of § 853 play a role in

forfeiture proceedings for convictions under § 1960, such as Mr. Peck’s); United

States v. Bornfield, 145 F.3d 1123, 1136 (10th Cir. 1998) (discussing

relationship between § 982 and § 853 in this context); see also Daugerdas, 892

F.3d at 549 (discussing “two-step procedure for completing a [criminal]

forfeiture”); Andrews, 530 F.3d at 1236 (discussing first and second “stage” of

criminal forfeiture). Section 853(o) instructs “the provisions of [§ 853] shall be

liberally construed to effectuate its remedial purposes.” See also United States

16 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 17

v. Nichols, 841 F.2d 1485, 1495 (10th Cir. 1988) (recognizing “the express

command . . . that the act should be liberally construed”).7

Step one—which is not at issue in this appeal—concerns a threshold

determination of forfeitability made in the criminal case. At step one, a district

court must decide whether the sought-after property is “subject to forfeiture

7 According to the dissent, “[n]othing indicates that the district court or

the majority opinion have liberally construed § 853 to effectuate its remedial purposes.” Dissent at 4; see Dissent at 8, 10. We respectfully disagree. The dissent largely proceeds from the incorrect premise that § 853 has one “obvious” remedial purpose: “to penalize and to deter criminal activity.” Dissent at 4 (quoting United States v. Nichols, 841 F.2d 1485, 1487 (10th Cir. 1988)). But the statute’s plain text refers to plural “purposes.” See United States v. Cano-Flores, 796 F.3d 83, 93 (D.C. Cir. 2015) (“[T]here is nothing to suggest that Congress intended to rank forfeiture maximization above all normal principles.”); Honeycutt v. United States, 581 U.S. 443, 454 n.2 (2017) (confirming § 853(o) does not permit us to “construe [the] statute in a way that negates its plain text”). One aim of the forfeiture scheme—as this case demonstrates—is to protect third parties with “superior” interests in property deemed forfeitable to the government in a criminal case. 21 U.S.C. § 853(n)(6)(A); see also Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 629 (1989) (“[T]he statute permits ‘rightful owners’ of forfeited assets to make claims for forfeited assets before they are retained by the Government.”). Contrary to the dissent’s suggestion, therefore, a liberal construction of § 853 is not necessarily the one that favors the government. See United States v. Certain Real Prop. Located at 2525 Leroy Lane, W. Bloomfield, Mich., 910 F.2d 343, 349 (6th Cir. 1990) (“The protection of innocent owners is no less remedial than official efforts to curb the cascading nationwide drug trade.” (internal quotation marks omitted)); United States v. Lavin, 942 F.2d 177, 184 (3d Cir. 1991) (acknowledging a “liberal[]” construction of forfeiture statutes may be one favoring a third party); United States v. Reckmeyer, 836 F.2d 200, 208 (4th Cir. 1987) (similar). The dissent also cites Nichols to support its view of § 853’s remedial purpose. See Dissent at 4 & n.1. Nichols, however, simply does not address whether § 853(n) aims to protect certain third-party rights.

17 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 18

under the applicable statute.” Fed. R. Crim. P. 32.2(b)(1)(A). The applicable

forfeiture statute here is 18 U.S.C. § 982(a)(1). Section 982(a)(1) instructs the

district court to “order that the [defendant] forfeit to the United States any

property, real or personal, involved in such offense, or any property traceable

to such property.” 18 U.S.C. § 982(a)(1) (emphasis added). We have held

property satisfies this “traceable to” standard when “proceeds of the [offense]

enabled the defendant to acquire the property.”8 Bornfield, 145 F.3d at 1135

(also stating “traceable to” means “attributable to”). As here, the district court

may make this “nexus” determination by relying on a “written plea

agreement.” Fed. R. Crim. P. 32.2(b)(1)(A)–(B).

Once the district court finds property is subject to forfeiture under

federal law, “it must promptly enter a preliminary order of forfeiture setting

forth” specified information.9 Fed. R. Crim. P. 32.2(b)(2)(A). Importantly, the

8 To be precise, the statute does not address forfeiture of property “traceable to” an offense, but only property “traceable to” other property that itself was “involved in” an offense. 18 U.S.C. § 982(a)(1) (emphasis added). Section 982(a)(1) covers property purchased with proceeds of an offense, then, because those proceeds are property “involved in” the offense. United States v. Bornfield, 145 F.3d 1123, 1135 (10th Cir. 1998) (“[I]f a defendant receives $500,000 in cash in a money laundering scheme . . . the government may seize that money as property ‘involved in’ the money laundering offense. If, on the other hand, the defendant purchases a $500,000 item with that money, the government may seek the item purchased as property ‘traceable to’ property involved in the money laundering offense.”).

9 Specifically, “[i]f the court finds that property is subject to forfeiture, it

must promptly enter a preliminary order of forfeiture setting forth the amount 18 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 19

“court must enter the order without regard to any third party’s interest in the

property.” Id. That consideration is deferred “until any third party files a claim

in an ancillary proceeding”—i.e., until step two. Id.; see Andrews, 530 F.3d at

1236 (explaining “[i]f the property really belongs to the third party,” then “he

will prevail and recover his property whether there were defects in the . . . [step

one] forfeiture process or not” (citation omitted)).

This case involves step two—the ancillary proceeding—which addresses

third-party interests in property deemed forfeitable. See Daugerdas, 892 F.3d

at 549; 21 U.S.C. § 853(n); Fed. R. Crim. P. 32.2(c); see also 18 U.S.C.

§ 982(b)(1) (cross-referencing § 853). Section 853(n) permits a third party to

assert his interest in subject property by filing a petition. See Andrews, 530

F.3d at 1236. We have acknowledged the significance of this ancillary

proceeding process. “Third parties” must have “an opportunity to assert their

rights to the property,” because they have “no right to challenge the

preliminary order’s finding of forfeitability” in the criminal case. Id.

The task for a third party under § 853(n), therefore, is to establish an

interest in property deemed forfeitable that is superior to the government’s

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.” Fed. R. Crim. P. 32.2(b)(2)(A). 19 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 20

and the defendant’s. To do this, a third party must show, by a preponderance

of the evidence, that he:

(A) . . . has a legal right, title, or interest in the property, and such right, title, or interest renders the order of forfeiture invalid in whole or in part because the right, title, or interest was vested in the petitioner rather than the defendant or was superior to any right, title, or interest of the defendant at the time of the commission of the acts which gave rise to the forfeiture of the property under this section; or

(B) . . . is a bona fide purchaser for value of the right, title, or interest in the property and was at the time of purchase reasonably without cause to believe that the property was subject to forfeiture under this section . . . .

21 U.S.C. § 853(n)(6). This case does not involve a bona fide purchaser for

value, so we focus on § 853(n)(6)(A).10

10 The dissent says § 853(c)—and not § 853(n)(6)(A)—is “[t]he first key

statute in this appeal.” Dissent at 5. Section 853(c) provides “right, title, and interest in [forfeitable] property . . . vests in the United States upon the commission of the act giving rise to forfeiture under this section.” According to the dissent, § 853(c) “means that the government’s interest vests no later than when the criminal defendant obtains [criminal] proceeds. That moment necessarily precedes the criminal defendant’s transfer to [a] third party.” Dissent at 6. The dissent’s reading of § 853(c) is not incorrect as a general matter, but it has no bearing on the facts of this case. As Mr. Dunn persuasively points out, “the government never sought . . . a judgment for proceeds.” Resp. Br. at 15 (heading capitalization omitted). Rather, the order of forfeiture in Mr. Peck’s criminal case—uncontested by the government— said the forfeitable property was expressly “limited to” the Lot. App. I at 29– 37, 38; Supp. App. at 27. “[F]orfeiture applies only to specific assets,” the Supreme Court instructs, and “in the likely event that [a] third party has spent [forfeitable] money, the Government must resort to a State’s equitable remedies—which may or may not . . . be available.” Kaley v. United States, 571 U.S. 320, 335 n.11 (2014).

20 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 21

We have “recognize[d] that in federal forfeiture proceedings, ownership

interests . . . are defined by state law.” Andrews, 530 F.3d at 1238; see also

United States v. Nava, 404 F.3d 1119, 1128–29 (9th Cir. 2005) (“Federal

forfeiture statutes govern the disposition of property, but state law determines

what rights, title or interests the various claimants possess in that property.”);

United States v. Watts, 786 F.3d 152, 161 (2d Cir. 2015) (“The extent of a

petitioner’s interest in the forfeited property is determined in accordance with

state law.”); United States v. Certain Real Prop. Located at 2525 Leroy Lane,

W. Bloomfield, Mich., 910 F.2d 343, 348 (6th Cir. 1990) (similar). Our

precedent and this persuasive authority make sense. “Property interests have

long been acquired and defined by state law.” Certain Real Prop. Located at

2525 Leroy Lane, W. Bloomfield, Mich., 910 F.2d at 348. That means the

Still, the dissent claims the government has a “vested forfeiture right” under § 853(c) without regard to specific assets. Dissent at 6, 8, 9, 10, 13, 15, 16. But there is no such thing. See Kaley, 571 U.S. at 335 n.11. And granting the government a free-floating right to forfeit any property, as the dissent proposes, would plainly ignore § 853(n)(6)(A). See TRW Inc. v. Andrews, 534 U.S. 19, 31 (2001) (“[A] statute ought . . . to be so construed that, if it can be prevented, no clause . . . shall be superfluous, void, or insignificant.” (quoting Duncan v. Walker, 533 U.S. 167, 174 (2001))); see also Luis v. United States, 578 U.S. 5, 15–16 (2016) (“[W]hether property is ‘forfeitable’ . . . very much depends on who has the superior interest in the property at issue. . . . [W]e see this in § 853(n)(6)(A) . . . .”); United States v. Wilson, 659 F.3d 947, 952 (9th Cir. 2011) (explaining “[t]he language of § 853(n)(6)(A) is clear: If the petitioner can show by the preponderance of the evidence that his interest is greater than that of the defendant, the district court is to amend the order of forfeiture”).

21 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 22

natural way to compare property interests, as required by § 853(n)(6)(A),

begins with state law. Id. It also means “a federal common law of property

ownership in forfeitures . . . would risk upsetting settled expectations.” Nava,

404 F.3d at 1128.11 Explaining the inquiry under § 853(n)(6)(A), the Third

Circuit has set forth a helpful rule of thumb: “if the third party had an interest

and the defendant did not—then the third party’s right outweighs the interest

that the government acquires when it steps into the defendant’s shoes.” United

States v. Lucas, 986 F.3d 224, 227 (3d Cir. 2021) (internal quotation marks

omitted).

After determining the parties’ relative interests under state law, the

district court “must enter a final order of forfeiture by amending the

preliminary order as necessary to account for any third-party rights.” Fed. R.

Crim. P. 32.2(c)(2).

11 The dissent never mentions Andrews. This omission may explain why

the dissent mistakenly concludes reversal is required. For example, the dissent repeatedly asserts the government can recover funds Mr. Peck “embedded” in the Lot. Dissent at 1, 5, 7, 10, 13, 14, 15, 16, 17. This idea might have intuitive appeal, but the dissent references its potential relation to state law only once, as an aside. See Dissent at 7 n.4. The dissent also contends § 853(n)(6)(A) “apportions” property, relying on the statutory language that says forfeiture may be “invalid in whole or in part.” Dissent at 9 (quoting § 853(n)(6)(A)). But this language provides a mechanism for partial forfeitures when state law declares a third party has a superior interest in only part of a forfeitable property. Because the dissent’s reasoning proceeds without sufficient regard to state law—which unquestionably defines property interests in federal forfeiture proceedings—it cannot guide our inquiry. 22 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 23

Recall, the only property the government sought to forfeit in Mr. Peck’s

criminal case was the West Jordan Lot. At step one, the district court found

the Lot was forfeitable. That preliminary forfeiture finding is not on review.

Cf. United States v. Fabian, 764 F.3d 636, 638 (6th Cir. 2014) (Ҥ 853(n) does

not permit ‘relitigation’ of the district court’s antecedent determination that an

item of property is subject to forfeiture.” (citing Fed. R. Crim. P. 32.2 advisory

committee’s note)). At issue here is only the district court’s decision at step

two—granting Mr. Dunn’s third-party petition and vacating the preliminary

forfeiture order under § 853(n)(6)(A). Based on the evidence at the ancillary

proceeding, the district court concluded “Mr. Dunn had a legal right, title, or

interest in the [Lot] that renders the order of forfeiture invalid because at the

time Mr. Peck committed his crime, title to the property was vested in Mr.

Dunn rather than Mr. Peck or at least Mr. Dunn’s interest in the property was

superior to that of Mr. Peck.” App. I at 202. As we explain, we discern no error

in the district court’s reasoning or conclusion.

Because the government sought to forfeit only the Lot, our inquiry under

§ 853(n)(6)(A) is straightforward.12 Like the district court, we use Utah law to

12 The dissent says the government “‘limit[ed] its request for forfeiture to

the West Jordan Wire proceeds,’ that is, the forfeitable criminal proceeds transferred to secure Dunn’s ownership of the lot.” Dissent at 11 (quoting App. I. at 161)); see also Dissent at 10 (“The government wants . . . the embedded 23 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 24

determine whether Mr. Dunn’s interest in the Lot was “superior to” Mr. Peck’s

and therefore the government’s. App. I at 203–04 (citing Andrews, 530 F.3d at

1238).

Section 853(n)(6)(A) asks whether Mr. Dunn’s interest in the Lot was

superior to Mr. Peck’s “at the time of the commission of the acts which gave

rise to the forfeiture.” We can resolve this appeal without deciding the precise

“time of the commission of the acts which gave rise to the forfeiture” here,

because Mr. Dunn’s interest in the Lot was superior to Mr. Peck’s at all times

the government suggests may be relevant.13

criminal proceeds that Peck transferred to Dunn.”). But, as we have explained, the record confirms the government only ever sought to forfeit the Lot or a portion thereof, not the proceeds that paid off the hard money loan.

13 Courts appear to disagree whether “the commission of the acts which

gave rise to the forfeiture” means (a) the commission of the acts leading to forfeiture of the property at issue, or (b) the commission of the offense—which could be different times here. 21 U.S.C. § 853(n)(6)(A); compare United States v. Kennedy, 201 F.3d 1324, 1331 (11th Cir. 2000) (“The acts which gave rise to the forfeiture took place in June 1989, when Kennedy used $50,000 of [stolen] money . . . as an earnest money deposit for the property . . . .”), with United States v. Daugerdas, 892 F.3d 545, 555 (2d Cir. 2018) (“Although the statute does not define the relevant ‘acts,’ we have interpreted that language in the context of offense proceeds to refer to the defendant’s offense conduct . . . .”). Nichols may have directed us to look at the time of the offense. 841 F.2d at 1489 (“[T]he government’s interest in the property to be forfeited vests at the time the crime is committed, rather than upon conviction.”). The parties do not discuss this issue, so we explore it no further.

24 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 25

As an initial matter, the district court began its analysis in March 2018—

when Mr. Dunn purchased the Lot—and the government has never suggested

that is the wrong place to start.14 Between March 2018 and October 2020—

when the government moved to forfeit the Lot—there are three periods when

either Mr. Dunn’s or Mr. Peck’s interests in the Lot may have changed:

14 The government presumably could have argued we should begin our

analysis under § 853(n)(6)(A) in 2012, when Mr. Peck’s criminal conduct began. See Nichols, 841 F.2d at 1489. Indeed, one passage of the district court’s order refers to relative interests “at the time Mr. Peck committed his crime.” App. I at 202 (emphasis added). Even if such an argument was available, the government never made it. Nixon v. City & Cnty. of Denver, 784 F.3d 1364, 1366 (10th Cir. 2015) (“The first task of an appellant is to explain to us why the district court’s decision was wrong.”); Bronson v. Swensen, 500 F.3d 1099, 1104 (10th Cir. 2007) (“[W]e routinely have declined to consider arguments that are not raised, or are inadequately presented, in an appellant’s opening brief.”).

There is reason to think the government intentionally did not make this argument. The government observes “the relation-back doctrine . . . vests title in the United States in traceable property as soon as criminal proceeds are used to purchase such property.” See Op. Br. at 29 (emphasis added). The relation-back doctrine comes from § 853(c). Recall, § 853(c) declares title is vested in the United States “upon the commission of the act giving rise to forfeiture.” Section 853(n)(6)(A) includes near-identical language—focusing on “the time of the commission of the acts which gave rise to the forfeiture.” The government’s position, therefore, seems to treat as significant the acts leading to the forfeiture of the property at issue. Here, the act giving rise to forfeiture of the Lot could not have plausibly occurred before Mr. Dunn purchased it in 2018. 25 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 26

 March 14 – 15, 2018 – when Mr. Dunn purchased the Lot to when he executed the deed of trust.

 March 15 – October 2, 2018 – when Mr. Dunn executed the deed of trust to when Mr. Dunn paid off the hard money loan with tainted funds.

 October 2, 2018 – October 9, 2020 – when Mr. Dunn paid off the hard money loan to when the government sought forfeiture.

As we explain, we have no trouble concluding—like the district court—Mr.

Dunn’s interest in the Lot has been consistently superior to Mr. Peck’s since

March 2018. See App. I at 204 (district court finding Mr. Dunn would succeed

“at all potentially relevant times”).

We begin with Mr. Dunn’s interests during each period. The government

concedes Mr. Dunn purchased the Lot with untainted funds on March 14, 2018.

According to Mr. Dunn’s undisputed deed of trust, he held title to the lot upon

this purchase. Cf. First Sec. Bank of Utah, N.A. v. Banberry Crossing, 780 P.2d

1253, 1256 (Utah 1989) (explaining a “trust deed is a conveyance by which title

to the trust property passes to the trustee”). But when Mr. Dunn executed the

deed of trust on March 15, 2018, title passed from Mr. Dunn to a trustee. Id.;

Utah Code Ann. § 57-1-19(3) (West 1988). At this time, Mr. Dunn retained

certain rights over the Lot, such as the right to collect rents and to retake title

upon paying the remainder of his debt. See Stenquist v. Jmg Holdings LLC,

379 P.3d 941, 944 (Utah Ct. App. 2016). Finally, when Mr. Dunn paid off the

hard money loan, that “payment of the secured debt extinguishe[d] the . . . deed

26 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 27

of trust by itself and instantaneously.” Stenquist, 379 P.3d at 944 (quoting 55

Am. Jur. 2d Mortgages § 318 (2016)). Mr. Dunn then again held title to the Lot.

The government has not shown Mr. Peck ever held any interest in the

Lot under Utah property law. Indeed, the government does not even attempt

to challenge the district court’s findings under Utah law. It has therefore

waived any argument based on state law, which, recall, governs the relevant

inquiry in this case. See Andrews, 530 F.3d at 1238 (“We recognize that in

federal forfeiture proceedings, ownership interests . . . are defined by state

law.”); Reedy v. Werholtz, 660 F.3d 1270, 1275 (10th Cir. 2011) (concluding

“[w]e . . . do not address the matter” when the “argument section of [appellant’s]

opening brief does not challenge the court’s reasoning on this point”).15

Under the circumstances, and on the record before us, we agree with

the district court that “at all potentially relevant times,” Mr. Dunn

possessed a superior interest in the Lot as compared to Mr. Peck and the

government. App. I at 204; 21 U.S.C. § 853(n)(6)(A).16

15 The dissent suggests some arguments the government might have

made under Utah law. See Dissent at 7 n.4. But the government never made these arguments, so we do not address them. Reedy v. Werholtz, 660 F.3d 1270, 1275 (10th Cir. 2011); Nixon, 784 F.3d at 1366 (explaining “an appellant” must “explain to us why the district court’s decision was wrong”); see O’Neal v. Ferguson Constr. Co., 237 F.3d 1248, 1257 n.1 (10th Cir. 2001) (“We will not make arguments for [a party] that it did not make in its briefs.”).

16 The dissent argues Nichols “undermines the majority’s holding.” Dissent at 12. Not so. In Nichols, the attorney third parties did not claim to 27 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 28

C

The government’s contrary arguments are not convincing.

The government argues real property can be forfeitable “[w]hen

criminal proceeds are used to pay off a mortgage.” Op. Br. at 17 (citing, e.g.,

United States v. Miller, 911 F.3d 229, 235 (4th Cir. 2018); United States v.

Pole No. 3172, Hopkinton, 852 F.2d 636, 639 (1st Cir. 1988)). Likewise, the

government tells us, “criminal forfeiture is not a measure restricted to

property owned by the criminal defendant.” Op. Br. at 22 (quoting De

Almeida v. United States, 459 F.3d 377, 381 (2d Cir. 2006)); see also Op. Br.

at 25 (citing United States v. Molina-Sanchez, 298 F.R.D. 311, 313–14

(W.D.N.C. 2014)). These arguments do not advance the government’s cause.

This appeal does not concern whether the Lot was forfeitable under §

982(a)(1), a question of forfeiture’s first step. Rather, the issue is whether

Mr. Peck’s interest in at least a portion of the Lot was superior to Mr.

Dunn’s under § 853(n)(6)(A), a question of forfeiture’s second step. Because

the government’s cited authorities relate to first-step determinations of

have a superior interest under § 853(n)(6)(A). 841 F.2d at 1490 (describing the issue as whether “Congress intended to exempt attorneys’ fees from the criminal forfeiture provisions”); cf. United States v. Monsanto, 491 U.S. 600, 604 n.3 (1989) (“An attorney seeking a payment of fees from forfeited assets under § 853(n)(6) would presumably rest his petition on subsection (B),” not (A).). 28 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 29

forfeitability, they are not relevant or even instructive. See, e.g., Miller, 911

F.3d at 235 (considering effect of mortgage payments on whether criminal

defendant must forfeit property—i.e., on step one); Molina-Sanchez, 298

F.R.D. at 313–14 (directly after recognizing “[c]riminal forfeiture is not

limited to property owned by the defendant” at step one, explaining “[t]he

ancillary proceeding ensures that property belonging to third parties is not

inadvertently forfeited” at step two).

The government also cites a few cases addressing relative interests at

forfeiture’s second step—the issue before us—but those cases do not compel

reversal. In some of those cases, a defendant’s spouse filed a third-party

petition, and the defendant co-owned the subject property. United States v.

Caspersen, 275 F. Supp. 3d 502, 505 (S.D.N.Y. 2017) (“As a tenant by the

entirety, Ms. Caspersen did not possess an interest in the Apartment that

was superior to that of her husband.”); United States v. Wolf, 375 F. Supp.

3d 428, 433, 436 (S.D.N.Y. 2019). That third parties may not have superior

interests in property co-owned by defendants is unsurprising but irrelevant

here, where nothing suggests Mr. Peck ever co-owned the Lot under Utah

law.

29 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 30

We then arrive at the government’s most analogous case, United

States v. Totaro, 345 F.3d 989 (8th Cir. 2003).17 In Totaro, the defendant’s

wife held title to a property, but the defendant’s tainted funds contributed

to mortgage payments. See id. at 992–96. The wife filed a third-party

petition under 18 U.S.C. § 1963(l)(6)(A)—identical to § 853(n)(6)(A)—

asserting her ownership interest in the property. Totaro, 345 F.3d at 992.

The Eighth Circuit disagreed that title was vested in the wife rather than

the defendant, or that the wife’s interest in the entire property was superior

to the defendant’s. Id. at 995–98. The court stated “we look to state law to

evaluate a claim to a legal right, title or interest in the subject property, so

long as doing so does not frustrate a federal interest.” Id. at 994 (emphasis

added). And “[i]t would do a severe disservice to the intent and purpose of

the [criminal] forfeiture statute if a criminal were able to protect and enjoy

[criminal] proceeds by investing them in property titled to a spouse.” Id. at

996. The Seventh Circuit appears to have reasoned similarly in United

States v. Grossman. 501 F.3d 846, 849 (7th Cir. 2007) (allowing forfeiture of

house titled to defendant’s wife, over third party’s claim, because defendant

“admitted that funds from his illegal activity funded the construction of the

house” (citation omitted)).

17 At oral argument, the government agreed Totaro was its best case.

Oral Arg. at 09:03–51. 30 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 31

Whether state law should ever yield to special federal interests in

forfeiture proceedings is not a question we must answer to resolve this

appeal. To be sure, permitting a defendant to channel tainted funds into a

spouse’s property might create unique risks to the forfeiture regime. For

example, a defendant or his children may have inheritance rights in a spouse’s

property. And a defendant may convey property to his spouse without

diminishing his daily enjoyment of it. Totaro seemed to recognize these unique

risks, reasoning it would frustrate the forfeiture statute if defendants could

“protect” and “enjoy” criminal proceeds by investing them “in property titled

to a spouse.” Totaro, 345 F.3d at 996 (emphasis added); see also Grossman,

501 F.3d at 847 (explaining title holder was defendant’s wife). Similar

concerns are not implicated in the case before us.18

The Ninth Circuit’s decision in United States v. Nava is more instructive.

404 F.3d 1119. In Nava, the government sought to forfeit houses titled to the

defendant’s daughter, which the defendant had improved with tainted funds.

18 To the dissent, “[t]he main takeaway from Totaro is that the Eighth

Circuit did not subscribe to the majority’s view that § 853(n)(6)(A) divests the government of its vested forfeiture right under § 853(c).” Dissent at 14–15. But Totaro neither recognized anything like a “vested forfeiture right,” nor suggested § 853(c) overrides § 853(n)(6)(A). See United States v. Totaro, 345 F.3d 989, 994–97 (8th Cir. 2003). Notably too, even after Totaro recognized federal interests, it relied on state law. The Eighth Circuit instructed the district court on remand to determine the relative interests of the defendant and his wife with reference to state divorce law. Id. at 999. 31 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 32

Id. at 1126–27, 1134. In her third-party petition, the daughter claimed “two of

the . . . properties . . . were hers,” and she introduced evidence that “[e]xcept

for transfers to a bonding company, [she] ha[d] retained title to both properties

since 1996.” Id. at 1126. The district court denied relief. The Ninth Circuit

reversed after examining the asserted property interests under state law: “This

has been addressed in Montana law. Occasional payments on behalf of

another—without some additional evidence of the intent of the parties—do not

create a resulting or constructive trust.” Id. at 1134. Distinguishing cases like

Totaro because of their exceptional circumstances, the Ninth Circuit explained

“[t]he dissent can cite no case in which a court awarded ownership to someone

who never held title and did not live on the property, in preference to the titled

owner who occupied the property.” Id. at 1135.

So too here: the government has attempted to forfeit property when state

law establishes the property has always belonged to a third party, and we do

not face the exceptional circumstances present in cases like Totaro. And Nava

was an even closer case than the one before us. In Nava, multiple witnesses

associated the properties with the defendant rather than his daughter, and

some evidence suggested the defendant “might actually control the properties.”

Id. at 1132–33. Nothing like that exists on the record here. See also Lucas, 986

F.3d at 228 (recognizing third party’s superior property interest over

government’s equitable complaints).

32 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 33

The government advances a number of concerns about the potential

consequences of affirmance. See, e.g., Op. Br. at 24 (“[A] defendant could thwart

forfeiture simply by investing proceeds to pay off loans on properties titled to

third parties.”); Op. Br. at 28 (“Congress . . . created a statutory framework

that ensured a criminal defendant could not defeat forfeiture through such

transfers and that prevented third parties from obtaining windfalls of property

purchased with criminal proceed.”). The dissent shares some of these concerns.

Dissent at 1 (“With the majority’s affirmance, convicted criminals in our circuit

can treat their ‘friends’ to financial windfalls of criminal proceeds once the jig

is up and law-enforcement officers begin to close in . . . .”); Dissent at 8 (“This

case involves a property lot, but imaginative defendants can surely find a

‘friend’ with long-held property in which to embed criminal proceeds. Only

ignorance can stop this, and word travels fast.”). But there is no cause for

alarm.

Our decision today in no way suggests defendants may evade

responsibility in criminal proceedings by freely transferring tainted funds

to third parties. Recall, here, the government sought only to forfeit the Lot,

and it did not challenge the district court’s order that forfeiture would be

“limited to” the Lot. App. I at 29–37, 38; Supp. App. at 27. The government also

raised no argument asserting its interest in the Lot under state law.

33 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 34

The government could have pursued other potentially forfeitable

property or paths to relief—and it can in future cases. The government can

often pursue the actual money proceeds of an offense, 18 U.S.C. § 982(a)(1), or

“substitute property,” which § 853(p) allows when a defendant’s forfeitable

property “has been transferred . . . to . . . a third party.” See Bornfield, 145 F.3d

at 1136.19 The government can also sometimes pursue state law relief. See

Kaley v. United States, 571 U.S. 320, 335 n.11 (2014) (noting government may

“resort to a State’s equitable remedies” if a “third party has spent the money”).

The district court here specifically acknowledged as much, observing “[i]t is

possible that Utah law would afford the government some sort of equitable

remedy against Mr. Dunn or his real property based on the facts of this case.”

App. I at 208. Finally, when the government seeks specific property under the

federal forfeiture regime—as here—it can attempt to articulate the superiority

of its interest under applicable state law.

We do not opine on whether these efforts would have succeeded here. We

merely point out the law permits forfeiture through a variety of means, but the

government exercised its discretion in Mr. Peck’s case to pursue only one. In

any event, given the liberties at stake, we would be reluctant to credit the

19 The dissent worries that “[l]eaving the government to chase ‘substitute

property’ under § 853(p) will often be leaving the government with nothing.” Dissent at 16. We fail to see how that concern should meaningfully inform the legal analysis. 34 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 35

government’s policy concerns absent direction from Congress. See Lucas, 986

F.3d at 229 (“The Government must turn square corners when it exercises

its power to confiscate private property.”).20

IV

We AFFIRM the district court’s orders granting Mr. Dunn’s third-

party petition and releasing the lis pendens. We VACATE this court’s order

granting a stay of the district court’s orders pending appeal.

20 We briefly address the government’s two remaining arguments. First,

the government contends the district court “erred to the extent it withdrew its nexus finding as part of the ancillary proceeding.” Op. Br. at 40. The district court did not withdraw its preliminary nexus finding. The court wrote it would withdraw that finding only to the extent it “somehow pose[d] an impediment” to recognizing Mr. Dunn’s interest in the Lot. App. I at 210. Nobody contends the nexus finding posed such an impediment, so we can move on. See Op. Br. at 41 (admitting the court may “modify[] the preliminary order of forfeiture to address third-party ownership issues—such as a superior interest”); see also Andrews, 530 F.3d at 1237 (“If the property really belongs to the third party, he will prevail and recover his property whether there were defects in the criminal trial or the forfeiture process or not; and if the property does not belong to the third party, such defects in the finding of forfeitability are no concern of his.” (internal quotation marks and alterations omitted)).

Second, the government argues the district court erred by releasing the notice of lis pendens. Op. Br. at 44. To prevent such release, the government needed to “establish[] by a preponderance of the evidence the validity of the real property claim that is the subject of the notice.” Utah Code Ann. § 78B-6- 1304(2) (West 2017). Because we affirm, we necessarily agree the government did not carry this burden. 35 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 36

23-4000 & 23-4038, United States v. Peck PHILLIPS, J., concurring and dissenting.

I join the portion of the majority opinion concluding that we have

appellate jurisdiction. Maj. Op. at 11–15. But I dissent from its affirmance of

the district court’s ruling that deprives the government of its vested criminal-

forfeiture right against Peck’s criminal proceeds. The statutes anticipate these

sorts of third-party transfers of criminal proceeds and enable the government to

recover them by criminal forfeiture, here by prying them from Dunn’s lot where

Peck and Dunn embedded them. By my reading, the district court

misinterpreted the criminal-forfeiture statutes and left a gaping gash in the

criminal-forfeiture law. With the majority’s affirmance, convicted criminals in

our circuit can treat their “friends” to financial windfalls of criminal proceeds

once the jig is up and law-enforcement officers begin to close in (all the while

professing, of course, that one hand won’t later wash the other).

This appeal arises from Justin Peck’s conviction for owning and

operating an unlicensed money-transmitting business from 2012–2019, in

violation of 18 U.S.C. § 1960. In this business, Peck would obtain checks from

general contractors for drywall work, cash the checks, and then pay the

subcontractors to pay the drywall laborers. As his share, Peck kept a 6%–10%

fee from the general contractors’ checks, which he deposited into his Shared

Investment account at Mountain America Credit Union. Peck wasn’t running a

middling operation either—all told, he transmitted more than $58 million. Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 37

Jesse Dunn was Peck’s friend and employee, who was involved in

collecting and distributing Peck’s business money. In spring 2018, six years

into Peck’s illegal activity and nearing its end, Dunn bought a real-estate lot in

West Jordan, Utah for $475,000. He borrowed $280,500 from a hard-money

lender. The loan was secured by a deed of trust. When the loan came due, Peck

authorized Dunn to wire $304,795.66 from Peck’s Source Investment account

(which held his criminal proceeds) to pay off this loan, which Dunn did on

October 2, 2018.

As the majority notes, the criminal-forfeiture process has two steps. At

the first step, “the court must determine whether the government has

established the requisite nexus between the property and the offense.” Fed. R.

Crim. P. 32.2(b)(1)(A). If the court finds the nexus met, “it must promptly enter

a preliminary order of forfeiture setting forth the amount of any money

judgment [and] directing the forfeiture of specific property . . . .” Id. at

32.2(b)(2)(A). Here, the district court found the nexus met and issued a

preliminary forfeiture order. For § 1960 offenses like Peck’s, the requirements

of the nexus are spelled out at 18 U.S.C. § 982(a)(1)—that subsection requires

that the property sought to be forfeited have been “involved in such offense, or

[be] any property traceable to such property.”

At the second step, on a third party’s filing a petition asserting an interest

in the property to be forfeited, “the court must conduct an ancillary

proceeding,” unless the forfeiture is of a money judgment. Fed. R. Crim. P.

2 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 38

32.2(c)(1). After the hearing, “the court must enter a final order of forfeiture by

amending the preliminary order as necessary to account for any third-party

rights.” Id. at 32.2(c)(2).

The outcome of this appeal depends on statutory interpretation. Before

interpreting 21 U.S.C. § 853(c) and § 853(n)(6)(A), we must determine the

applicable rule of construction. Here, the majority opinion generally declares

that “[f]orfeitures are not favored; they should be enforced only when within

both letter and spirit of the law.” Maj. Op. at 16 (quoting United States v. One

1936 Model Ford V-8 De Luxe Coach, 307 U.S. 219, 226 (1939)). But the

majority also acknowledges that a different rule applies under § 853, as here

incorporated by 18 U.S.C. § 982(b), which covers Peck’s conviction under 18

U.S.C. § 1960.

Specifically, in 21 U.S.C. § 853(o), headed “Construction,” Congress

imposed this as § 853’s rule of statutory construction: “The provisions of this

section shall be liberally construed to effectuate its remedial purposes.” See,

e.g., United States v. Nichols, 841 F.2d 1485, 1492 (10th Cir. 1988) (declaring

that “[t]his is the only such instruction in a substantive federal criminal law”

and then applying that rule in a drug prosecution).

In Nichols, our court reviewed the history of criminal forfeiture that

preceded its 1988 decision. 841 F.2d at 1487–89. We noted that Congress had

reintroduced criminal forfeiture in enacting “[t]he Comprehensive Drug Abuse

Prevention and Control Act of 1970, 21 U.S.C. § 853, and the Organized Crime

3 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 39

Control Act of 1970, 18 U.S.C. § 1963,” which “was designed both to penalize

and to deter criminal activity.” Id. at 1487. That’s an obvious remedial purpose

referenced in § 853(o). 1 But that pre-1984 version of criminal forfeiture had a

weakness that frustrated this remedial purpose—“[o]nce notified, a potential

defendant was able to transfer or conceal his or her assets.” Id. at 1488. So in

1984 Congress enacted the Comprehensive Crime Control Act, in part to bolster

criminal forfeiture by adding a “relation back” provision to § 853(c). Id. With

that, Congress succeeded in ensuring that “the government’s interest in the

property to be forfeited vests at the time the crime is committed, rather than

upon conviction, as had previously been the case with the CCE and RICO

criminal forfeiture provisions.” Id. at 1489. As we review the present appeal,

we must be mindful that Congress has commanded that we liberally construe

§ 853 to effectuate its remedial purposes.

Nothing indicates that the district court or the majority opinion have

liberally construed § 853 to effectuate its remedial purposes of recovering

1 Addressing the remedial purpose of criminal forfeiture, Nichols noted that “Congress was concerned with all of the methods by which a defendant could shield illegally obtained property from forfeiture.” 841 F.2d at 1494. The court referenced “[t]he broad congressional concern with the depletion of any property subject to forfeiture” and said that “[t]his is especially significant in light of the express command in section 853 . . . that the act should be liberally construed so as to serve its remedial purposes.” Id. at 1494–95. Further, declining the defendant’s request to exempt criminal proceeds so he could use those funds to pay his attorneys’ fees, the court highlighted “the congressional goal of increasing the forfeiture of criminally obtained assets” and the need to abide “the congressional directive that crime should not pay.” Id. at 1495. These pronouncements should matter. 4 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 40

criminal proceeds. 2 Had the majority done so, it would not have interpreted

§ 853(n)(6)(A) as divesting the government of its § 853(c) vested right to

recover Peck’s criminal proceeds that he embedded into the lot (with Dunn

keeping the remaining value of the lot).

The first key statute in this appeal is § 853(c), which reads as follows:

(c) Third party transfers

All right, title, and interest in property described in subsection (a) vests in the United States upon the commission of the act giving rise to forfeiture under this section. Any such property that is subsequently transferred to a person other than the defendant may be the subject of a special verdict of forfeiture and thereafter shall be ordered forfeited to the United States, unless the transferee establishes in a hearing pursuant to subsection (n) that he is a bona fide purchaser for value of such property who at the time of purchase was reasonably without cause to believe that the property was subject to forfeiture under this section.

As seen, subsection (c) applies when a criminal defendant like Peck has

transferred criminal proceeds to a third party like Dunn. As mentioned, this

subsection contains a relation-back provision—one vesting the government’s

forfeiture right to the property “upon the commission of the act giving rise to

forfeiture under this section.” § 853(c). Notably, for criminal proceeds

2 I agree that § 853(o) references “remedial purposes.” I also agree that § 853(n)(6)’s provisions protecting a third-party’s legitimate rights to disputed property might qualify as a remedial purpose. But I note that none of the majority’s cited cases on this plural-remedial-purposes point involve a third party like Dunn, one concededly not a bona fide purchaser or a person who owned his interest in the criminal proceeds before the government’s interest in those criminal proceeds vested. See Maj. Op. at 17 n.7. Thus, I see no way that either a statutory remedial purpose or a liberal construction would apply to Dunn or help him. 5 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 41

transferred to a third party, this means that the government’s interest vests no

later than when the criminal defendant obtains the proceeds. That moment

necessarily precedes the criminal defendant’s transfer to the third party (no one

contends that Dunn is a bona fide purchaser for value). This means that the

government had a vested forfeiture right before Peck transferred criminal

proceeds to Dunn. And this was by Congress’s design—it sought to solve a

recurring problem, criminal defendants bypassing criminal forfeiture by

transferring proceeds to third parties.

Our second key statute in this appeal is § 853(n)(6), which reads as

follows:

(n) Third party interests

(6) If, after the [ancillary] hearing, the court determines that the petitioner has established by a preponderance of the evidence that—

(A) the petitioner has a legal right, title, or interest in the property, and such right, title, or interest renders the order of forfeiture invalid in whole or in part because the right, title, or interest was vested in the petitioner rather than the defendant or was superior to any right, title, or interest of the defendant at the time of the commission of the acts which gave rise to the forfeiture of the property under this section; or

(B) the petitioner is a bona fide purchaser for value of the right, title, or interest in the property and was at the time of purchase reasonably without cause to believe that the property was subject to forfeiture under this section;

the court shall amend the order of forfeiture in accordance with its determination.

6 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 42

As seen, subsection (n)(6)(A) addresses the third party’s rights to the property

versus the defendant’s. No one says that Peck ever had a legal right, title, or

interest in Dunn’s lot. So I see nothing by which the majority can divest the

government of its vested right of forfeiture provided by subsection (c). As with

that subsection, the only way I can see the government losing its vested right

would be if Dunn qualified as a bona fide purchaser under subsection (n)(6)(B).

And no one contends that he was one.

The majority opinion applies subsection (n)(6)(A), as it understands it,

without sufficiently heeding subsection (c). Relying on subsection (n)(6)(A), 3

the majority holds that because Dunn’s right in the lot preceded any interest of

Peck or the government in the lot (neither ever had an interest in the lot), Dunn

owns the lot including Peck’s embedded criminal-proceeds money. 4 That divests

3 Dunn does not contend that he qualifies as a bona fide purchaser for value (of the criminal proceeds Peck transferred to him with his assistance) either under subsection (c) or (n)(6)(B). 4 Utah’s fraudulent-transfer statutes undo commonplace fraudulent transfers like those from Peck to Dunn. Section 25-6-202 voids a debtor’s transfer if he made the transfer with actual intent to hinder the creditor, and without receiving a reasonably equivalent value in exchange for the transfer. Utah Code Ann. § 25-6-202 (West 2025). If the transferee is like Dunn, and did not take in good faith and for reasonably equivalent value, judgment may be entered against him or “the person for whose benefit the transfer was made.” Utah Code Ann. § 25-6-304(2)(b) (West 2025). The creditor’s remedies include attachment against the asset transferred or “execution on the asset transferred or its proceeds.” Utah Code Ann. § 25-6-303(2) (West 2025). In other words, when a debtor avoids a debt by stashing his money in someone else’s hands, Utah law doesn’t leave the creditor empty handed. And that’s true even if the money is embedded into real property. The creditor can (footnote continued) 7 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 43

the government of its § 853(c) vested forfeiture right to Peck’s transferred

criminal proceeds. For numerous reasons, I disagree with the majority’s

statutory interpretation and its conclusion.

First, as noted, the majority applies a statutory-construction rule that

disfavors forfeiture rather than promotes it as commanded by § 853(o). In short,

the majority does not “liberally construe” § 853—including its subsection

(n)(6)(A)—“to effectuate [§ 853’s] remedial purposes.” § 853(o). Nothing in

subsection (n)(6)(A)’s text purports to undo subsection (c). But the majority

interprets subsection (n)(6)(A) as undoing subsection (c), and without a good

basis for doing so.

Second, the majority’s ruling permits what subsection (c) prevents—

criminal defendants transferring criminal proceeds to third parties to shield the

proceeds from the government’s reach. This case involves a property lot, but

imaginative defendants can surely find a “friend” with long-held property in

which to embed criminal proceeds. Only ignorance can stop this, and word

travels fast. Even a “friend” with a bank account might qualify. By elevating

Dunn’s right to Peck’s criminal proceeds above the government’s § 853(c)

obtain a judgment for the amount of the fraudulently transferred funds and execute that judgment against the asset transferred or its proceeds. See, e.g., Hafen v. Howell, 121 F.4th 1191, 1205–06, 1208 (10th Cir. 2024) (affirming summary judgment under Utah law against a debtor’s spouse who received a joint tenancy in a property that was paid for, in part, through her debtor- husband’s fraudulently transferred funds). That’s the essence of the government’s forfeiture position in this case—it has sought recovery of only the criminal proceeds that Peck embedded into Dunn’s lot. See infra, 9–12. 8 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 44

vested forfeiture right, the majority frustrates Congress’s intent to enforce

criminal forfeiture. It does so without any statutory plain language directing it

be so done and contrary to § 853(o)’s command that § 853 be liberally

construed to effectuate that section’s remedial purposes. Its statutory

interpretation renders § 853(c) a nullity in many cases, this one included.

Third, the majority doesn’t parse § 853(c) or § 853(n)(6)(A) as one

might expect with statutory interpretation. It does not explain how subsection

(n)(6)(A)’s text relates to subsection (c), let alone that claims to divest the

government of its forfeiture right against Peck’s transferred criminal proceeds.

And it takes no account of subsection (n)(6)(A)’s comparing Dunn’s interest to

Peck’s and leaving him to show himself a bona fide purchaser to prevail over

the government toting a vested forfeiture right under subsection (c). Subsection

(n)(6)(A)’s language about the petitioner’s interest possibly “render[ing] the

order of forfeiture invalid in whole or in part . . . .” § 853(n)(6)(A) (emphasis

added), is in harmony with the government’s aim here—to obtain Peck’s

criminal proceeds from Dunn’s lot and leave him the rest.

Nothing in subsection (n)(6)(A) dissolves the government’s vested

forfeiture right provided by subsection (c). By my reading, subsection

(n)(6)(a)’s plain language apportions his lot, with the government recovering its

vested criminal proceeds and Dunn keeping the rest. And even if the majority

disagrees with my reading of the plain language, it still must explain how that

9 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 45

result doesn’t comport with a liberal construction effectuating § 853’s remedial

purposes.

Fourth, in my view, the majority opinion goes awry about “property” by

divorcing the lot from the criminal proceeds. But that leaves the government’s

vested forfeiture right under subsection (c) at the curbside. Under the

majority’s approach, all a criminal and third-party “friend” need do is sink the

criminal proceeds into property over which the third party has a better

ownership than the government, and goodbye vested forfeiture right. I can’t see

how that interpretation abides subsection (c) or how it liberally construes § 853

to effectuate that section’s remedial purposes.

I think it worth mentioning that the government isn’t seeking to forfeit

the entire lot and leave Dunn nothing. The government wants what it’s entitled

to—the embedded criminal proceeds that Peck transferred to Dunn. The

government has maintained this approach from the start. In its briefing for the

ancillary proceeding, the government stated that “[t]he United States does not

dispute that Dunn purchased the real property at issue. Nor does it dispute that

Peck is not on [the] title . . . . The question is whether Dunn has a superior

interest in any of the funds used to purchase the property.” App. vol. I, at 111.

(emphasis added). It continued that “the facts are clear that the United States

had a superior interest in these funds prior to them being used to payoff [sic]

the hard money loan.” Id. at 112. It alleged that Peck had used his Source

Investment account “exclusively for the purpose of facilitating the unlawful

10 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 46

conduct, and any proceeds that came from this account are directly traceable to

the admitted criminal conduct.” Id. The government concluded, “The funds

provided to Dunn for satisfaction of the hard money loan by Peck were

proceeds, and they do not lose their character as such just because they were

used to purchase real property.” Id. at 113.

In its post-ancillary-hearing brief, the government maintained this

position. It noted that its “interest in the West Jordan Wire funds vested at the

time of the criminal conduct, which predates the wire transfer.” Id. at 162. And

it asserted that “proceeds are not purged of their taint when they are transferred

to a third party in exchange for untainted property.” Id. Except for cases

involving bona fide purchasers, as provided for under § 853(n)(6)(B), the

government asserted that this fact “does not alter the fact that the money or

property remains subject to forfeiture as the proceeds of crime even after

transfer.” Id. at 163. The government “limit[ed] its request for forfeiture to the

West Jordan Wire proceeds,” that is, the forfeitable criminal proceeds

transferred to secure Dunn’s ownership of the lot. Id. at 161.

On appeal, the government has remained consistent, beginning its brief

by noting that “[u]nder 18 U.S.C. § 982(a)(1), the equity in the real property

resulting from the payoff of the loan is traceable to Peck’s criminal proceeds

and is therefore forfeitable to the United States, even though Peck did not

otherwise have a legal interest in the real property.” Op. Br. at 1 (emphasis

added). It seeks reversal of the district court’s ruling and modification of the

11 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 47

order of forfeiture “to allow forfeiture of the portion of the property

attributable to Peck’s criminal proceeds.” Id. at 2 (emphasis added).

Fifth, in my view, Nichols undermines the majority’s holding. In that

case, a criminal defendant sought to reclaim seized criminal proceeds so he

could retain defense counsel to defend him against drug charges. Nichols, 841

F.2d at 1489–90. The issue was whether “Congress intended to exempt

attorneys’ fees from the criminal forfeiture provisions in 1984.” Id. at 1490.

Our court ruled that “[p]roperty is not exempted because a defendant wants to

use it to pay an attorney any more than property is exempted because a

defendant wants to purchase a house or employ a financial advisor.” Id. at

1492. And the court turned to § 853(c) to evaluate whether criminal proceeds

transferred to an attorney would be different. The court noted that a transferee

could “defeat the claim of the government” only by establishing “that he is a

bona fide purchaser for value of such property who at the time of purchase was

reasonably without cause to believe that the property was subject to forfeiture.”

Id. at 1493 (quoting § 853(c)). The court concluded “that the plain language of

section 853(c) imposes the same conditions on attorneys as it does on any other

third party who seeks to defeat a forfeiture claim.” Id. I can’t see how Dunn is

in a better position than Nichols’s attorneys were. I note that the court fully

enforced subsection (c) and did not interpret subsection (n)(6)(A) as overriding

it.

12 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 48

Sixth, I don’t think that the majority meaningfully distinguishes the

government’s marquee case, United States v. Totaro, 345 F.3d 989 (8th Cir.

2003). There, the court approved the government’s vested forfeiture right even

though the defendant’s criminal proceeds were embedded in property owned by

a third party and not the defendant.

The more detailed facts are these: A wife owned property before her

husband turned to fraud for which he was convicted and sentenced to a 30-year

prison term. As with Dunn, the third party (the wife), owned the property, not

the convicted criminal (the husband). Id. at 992, 995. But the husband had long

lived in the house with his wife and during that time had “funneled some of the

proceeds from his RICO crimes” into his wife’s checking account, from which

she made mortgage payments and funded substantial improvements to the

properties. Id. at 992–93.

The court held that the wife’s bare title was “insufficient to prevent

forfeiture under the first clause of [18 U.S.C.] § 1963(l)(6)(A)” 5 because the

husband’s criminal proceeds “paid the mortgage, real estate taxes and

upkeep[.]” Id. at 996. Despite the wife’s sole ownership of the properties, the

court concluded that “[i]t would do a severe disservice to the intent and

purpose of the RICO forfeiture statute if a criminal were able to protect and

5 Totaro noted that “§ 1963(l) is identical to the drug crimes forfeiture statute, 21 U.S.C. § 853(n),” meaning that “case law implementing § 853(n) is persuasive in our task of applying § 1963(l).” 345 F.3d at 994. 13 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 49

enjoy RICO proceeds by investing them in property titled to a spouse.” Id. The

same is true with Peck and Dunn.

The majority opinion tries to distinguish Totaro by noting that “[t]o be

sure, permitting a defendant to channel tainted funds into a spouse’s property

might create unique risks to the forfeiture regime.” Maj. Op. at 31. I see no

reason why transfers to “friends” like Dunn don’t present at least an equal risk.

In both cases, third-party owners had proceeds embedded in the properties. The

court approved the government’s position in the present appeal—it enabled the

government to obtain the embedded criminal proceeds but left the wife’s share

of the property to her, reversing the district court ruling forfeiting “the entire

country estate[.]” Totaro, 345 F.3d at 997. Fairness, and a sensible reading of

the criminal-forfeiture statutes, prevailed.

If anything, the wife in Totaro is more sympathetic than Dunn is. She was

not an active participant in transferring the criminal proceeds as Dunn was. And

though the majority sees special dangers in transfers to spouses instead of

“friends,” I don’t see why. I suspect that the universe of “friends” who will

help transfer criminal proceeds to themselves in one fell swoop is more

populated than the universe of spouses. And oftentimes a spouse may be

unaware of the criminal conduct, but a friend like Dunn was intimately familiar

with Peck’s business.

The main takeaway from Totaro is that the Eighth Circuit did not

subscribe to the majority’s view that § 853(n)(6)(A) divests the government of

14 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 50

its vested forfeiture right under § 853(c). To avoid frustrating the federal

interest in criminal forfeiture, the court permitted the government to obtain the

criminal proceeds embedded in the wife’s solely owned properties. Id. at 998–

99.

Seventh, I disagree with the majority that its sole-cited case—United

States v. Nava, 404 F.3d 1119 (9th Cir. 2005)—is “more instructive” than

Totaro. Maj. Op. at 31–32. I don’t see how it is even on point. In Nava, the

Ninth Circuit reversed a district court’s determination that two residential

properties belonged to a convicted-criminal father rather than his daughter, in

circumstances where the daughter had record title of the properties, the father

had never had record title, and the daughter had acquired the titles before the

father’s charged criminal activity began. Nava, 404 F.3d at 1126–27, 1129. The

entire dispute was over ownership of the properties.

The majority evidently thinks that Nava is instructive because the

daughter’s claim to ownership of the properties was less certain than Dunn’s

ownership of the property lot. Though I agree that Dunn’s ownership was more

certain, I don’t see why that would matter. As detailed above, the government

has always agreed that Dunn owned the lot (though he needed Peck’s criminal

proceeds to pay off the loan). This appeal does not turn on ownership of the lot.

Instead, it turns on whether § 853(n)(6)(A) divests the government of its

§ 853(c) forfeiture right to Peck’s transferred criminal proceeds. Nava never

got that far.

15 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 51

The majority contends that Nava renders Totaro unhelpful to the

government because, it says, Nava “[d]istinguish[es] cases like Totaro because

of their exceptional circumstances.” Maj. Op. at 32. Though Nava does not use

this language, and though I see nothing exceptional about the ownership

situation in Totaro, I note that whatever was exceptional does not mean that the

daughter’s ownership under § 853(n)(6)(A) defeats the government’s § 853(c)

vested forfeiture right to any criminal proceeds embedded in the properties. I

see nothing in Nava to that effect.

Eighth, in my view, the majority minimizes the far-reaching effect of its

ruling. In its briefing, the government properly sounds an alarm about the harm

to the criminal-forfeiture system from the district court’s ruling. I can’t agree

with the majority that “there is no cause for alarm.” Maj. Op. at 33. After

today’s ruling, criminals have free rein to transfer their criminal proceeds to

“friends” who can embed the proceeds in some property or another. For that

reason, I must disagree with the majority’s words that its “decision today in no

way suggests defendants may evade responsibility in criminal proceedings by

freely transferring tainted funds to third parties.” Id. Peck and Dunn know

otherwise.

And the majority’s stated bases for rejecting the government’s “concerns

about the potential consequences of affirmance” hardly make up for it. Id.

Leaving the government to chase “substitute property” under § 853(p) will

often be leaving the government with nothing, as it appears will happen now.

16 Appellate Case: 23-4000 Document: 126-1 Date Filed: 06/10/2025 Page: 52

Absent the court’s ruling today, the government would enforce Congress’s

desired remedial purpose and regain Peck’s hijacked and now safely embedded

criminal proceeds resting in Dunn’s lot, not be left to search in vain for

substitute property.

I respectfully dissent.