Federal Forfeiture and the Excessive Fines Clause: What a New Supreme Court Petition Means for Florida Fraud Defendants

If you are under federal investigation for fraud, the number that will hurt you most is probably not the guideline range. It is the forfeiture money judgment. Prosecutors calculate it from gross proceeds, not profit, and they enter it against you whether or not you still have the money. On September 10, 2026, a certiorari petition landed at the Supreme Court asking the Justices to decide whether an eleven-figure criminal forfeiture order can be so large that it stops being a forfeiture and becomes an unconstitutionally excessive fine. The Court may never take the case. The question is one every federal fraud defendant in Florida should be asking their lawyer right now.

A criminal forfeiture money judgment is entered whether or not the money still exists. A pending certiorari petition asks whether there is a constitutional ceiling.

Key Takeaways

• Criminal forfeiture in federal fraud cases runs on gross proceeds under 18 U.S.C. § 981 and § 982, not on what a defendant kept.
• The Eighth Amendment Excessive Fines Clause limits punitive forfeiture, but courts apply a demanding grossly disproportional standard from Bajakajian.
• A money judgment survives an empty bank account. The government reaches substitute assets under 21 U.S.C. § 853(p), including untainted property.
• The Southern and Middle Districts of Florida are among the most active forfeiture jurisdictions in the country for health care and wire fraud.

What the Petition Actually Asks

The petition comes out of a Second Circuit fraud prosecution. A jury convicted on multiple counts, the district court entered a criminal forfeiture money judgment in the billions, and the court of appeals affirmed. The petition raises two questions.

The first is evidentiary. The defense argues the trial court let the government prove that customers lost money while excluding defense proof that assets existed which could have repaid them. That asymmetry matters far beyond the case it comes from. In fraud prosecutions the government routinely uses loss to color intent, then objects when the defense tries to show the money was recoverable.

The second question is the forfeiture itself. The petition argues the money judgment violates the Excessive Fines Clause of the Eighth Amendment because it bears no relationship to any amount the defendant personally retained, and because the defendant could never satisfy it. The court of appeals rejected that, reasoning that forfeiture keys to criminal proceeds rather than net victim loss, and that inability to pay does not by itself make an order unconstitutional.

Petitions like this are denied far more often than granted. That is the realistic expectation, and it is also why the argument has to be preserved in your own record rather than borrowed from someone else's certiorari grant.

Why the Forfeiture Number Is Almost Always Bigger Than People Expect

Most people facing a federal fraud investigation assume forfeiture means the government takes back what they made. That is not how the statutes work. In a wire fraud case charged under 18 U.S.C. § 1343, forfeiture flows through 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c), and it reaches property constituting or derived from proceeds traceable to the offense. In a health care fraud case under 18 U.S.C. § 1347, forfeiture runs through 18 U.S.C. § 982(a)(7) and reaches gross proceeds. Money laundering counts under 18 U.S.C. § 1956 pull in property involved in the transaction, which can sweep in clean funds commingled with tainted ones.

The forfeiture number is built from bank records long before anyone is charged. Which deposits are charged conduct and which are legitimate revenue is an accounting question, and the government answers it alone unless somebody answers it for you.

Gross proceeds is the phrase that does the damage. A clinic that billed six million dollars and netted four hundred thousand after payroll, rent, and supplies gets no credit for what it spent running the business. The forfeiture figure starts at six million. Overhead is not a deduction.

There is a real limit. In Honeycutt v. United States the Supreme Court held that forfeiture under the drug statute reaches only property the defendant actually acquired, cutting off joint and several liability among co-conspirators. Courts have extended that reasoning to other forfeiture statutes with varying enthusiasm. If you were a salaried employee in a scheme that moved forty million dollars, Honeycutt is the first argument your lawyer should be making.

What the Excessive Fines Clause Actually Requires

The governing case is United States v. Bajakajian, decided in 1998. A traveler failed to report roughly three hundred fifty seven thousand dollars he was carrying out of the country, and the government sought forfeiture of all of it. The Supreme Court held the forfeiture was punitive, that the Excessive Fines Clause applied, and that taking the full amount was grossly disproportional to a reporting violation.

Grossly disproportional is a high bar and courts know it. The factors applied include the seriousness of the offense compared to the value forfeited, the maximum statutory fine Congress authorized, the harm caused, and the defendant's culpability and record. Forfeiture that tracks the proceeds of a serious fraud almost always survives. Forfeiture that dwarfs the offense sometimes does not. Timbs v. Indiana confirmed in 2019 that the clause binds the states, but on the federal side the doctrine has stayed narrow, and that is the gap the new petition is aimed at.

"Grossly disproportional is a high bar and courts know it. Forfeiture that tracks the proceeds of a serious fraud almost always survives. Forfeiture that dwarfs the offense sometimes does not."— Aaron M. Cohen, AMC Defense Law

Mistakes That Make the Forfeiture Worse

The first is treating forfeiture as a sentencing problem. It is not. Forfeiture allegations appear in the indictment, they are litigated under Federal Rule of Criminal Procedure 32.2, and the preliminary order is often entered before sentencing on a preponderance standard. By the time most people start paying attention, the record driving the number is built.

The second is signing a plea agreement with an agreed forfeiture figure nobody independently audited. Negotiated money judgments are frequently the government's arithmetic adopted wholesale, and that arithmetic is often wrong.

Agents working a federal fraud investigation are also building the forfeiture record. The questions about what you bought and whose name is on the title are not small talk.

The third is moving or spending assets after learning of an investigation. Under 21 U.S.C. § 853(p) the government substitutes other property when the original proceeds cannot be located because of an act or omission of the defendant. Transferring a house to a spouse or closing a business account after a grand jury subpoena arrives does not defeat forfeiture. It expands it, and it hands the government an obstruction theory. That is the same trap that turned one Florida defendant's forfeiture problem into a second federal prosecution.

The fourth is talking to agents without counsel. Agents working a federal fraud investigation are also building the forfeiture record. Questions about what you bought and whose name is on the title are asset tracing questions.

How a Federal Forfeiture Defense Is Actually Built

Pre-indictment defense is where this work pays. If you have received a target letter or a federal grand jury subpoena, the forfeiture exposure is already being calculated from bank records inside the United States Attorney's Office, with nobody on your side explaining what the deposits represent. Early federal investigation defense means putting a competing accounting in front of the prosecutor before the indictment fixes a number in writing.

The core work is tracing. Which deposits are attributable to the charged conduct and which are legitimate revenue from the same business. Which funds the defendant personally acquired, which passed through to others, and which never left a corporate account. Whether the government's proceeds theory double counts the same dollar across counts.

Then the constitutional layer. A Bajakajian proportionality challenge is not a throwaway objection. It requires a developed record on the maximum authorized fine, the actual harm, and the defendant's role. Courts reject these when asserted in a sentence and take them seriously when supported.

Why the Timing Is Not Neutral

Two things are moving at once. The petition is pending, and the amended federal sentencing guidelines take effect on November 1, 2026, including a restructured loss table under section 2B1.1 that compresses the economic tiers and adjusts the monetary thresholds for inflation for the first time in over a decade. Loss drives the guideline range. Proceeds drive forfeiture. They are different numbers, and the amendments change one of them.

For anyone whose sentencing date is negotiable, that calendar is worth a conversation. For anyone still pre-indictment, the window to shape the proceeds figure closes when the indictment is returned. The Southern District of Florida has led the country in white collar prosecutions this year, and health care fraud forfeiture judgments out of Miami, Fort Lauderdale, and Boca Raton routinely run into eight figures.

Common Questions

Facing a Federal Fraud Investigation or Forfeiture Exposure in Florida?

AMC Defense Law represents individuals and businesses in federal investigations and prosecutions involving wire fraud, health care fraud, money laundering, and asset forfeiture, in Florida and nationwide. If you have received a target letter, a grand jury subpoena, or notice that assets have been seized, the accounting behind the government's number can still be contested. Consultations are confidential.

Pre-indictment work is where a competing accounting can still change the forfeiture number before the indictment fixes it in writing.

If you or your loved ones have been arrested or are under federal investigation involving asset forfeiture in Florida, call Aaron M. Cohen for a confidential consultation, 24 hours a day to get help.

This article is provided for general informational purposes only and does not constitute legal advice. Reading it does not create an attorney-client relationship. Outcomes depend on the specific facts and procedural posture of each matter. If you are under investigation or facing charges, consult qualified counsel about your own situation.

About the author: Aaron M. Cohen is the founder of AMC Defense Law, a federal and state criminal defense firm based in Boca Raton, Florida. The firm represents clients in federal investigations and prosecutions involving health care fraud, white collar crime, financial crimes, asset forfeiture, and complex federal litigation, in Florida and nationwide.