US v. Paccione, 948 F. 2d 851 - Court of Appeals, 2nd Circuit 1991

Defendants-appellants Angelo Paccione, August Recycling, Inc., A & A Land Development, National Carting, Inc., Stage Carting, Inc., Anthony Vulpis and Rosedale Carting, Inc. appeal from a Second Order of Forfeiture entered on May 10, 1991 in the United States District Court for the Southern District of New York (Motley, J.), vesting title in the United States (the government ) to certain properties ( Subject Property ) by virtue of appellants\u27 failure to pay $22 million in accordance with a letter agreement entered into between the parties in lieu of a formal forfeiture hearing. The Subject Property specified in the Second Order of Forfeiture consisted primarily of the ownership interests of the defendants Paccione and Vulpis in the defendant corporations and the ownership interests of the defendant corporations in various subsidiaries, as well as the assets of the corporations themselves. On this appeal, appellants contend that the district court erred when it authorized the government to take title to the Subject Property by issuing its Second Order of Forfeiture. Appellants maintain that by signing the letter agreement rather than submitting the forfeiture issue to the jury, the government could not take title to the properties upon appellants\u27 default but, rather, should have executed on the judgment as a judgment creditor pursuant to N.Y.Civ.Prac.L. & R. § 5236 (McKinney 1978). The government contends, and the district court found, that by signing the letter agreement, the government did not waive its forfeiture rights under the statute, including the right to a substitution of assets under 18 U.S.C. § 1963(m). We disagree with the government\u27s contention and therefore reverse