Circuit Split Over Joint and Several Liability for Forfeiture In White-Collar Crimes

But while Honeycutt was significant, the court in its ruling did not address whether it also applied outside the narcotics context, to forfeiture judgments imposed in white-collar cases. Courts have grappled with this uncertainty and now a circuit split has emerged as to whether the logic of Honeycutt should be extended to benefit defendants facing joint and several liability for forfeiture in connection with fraud or other economic crimes, where the amounts in question routinely exceed tens of millions of dollars.

The Honeycutt Case

Prior to Honeycutt, the general rule in multi-defendant federal criminal cases (drug or otherwise) had long been that each convicted defendant could be held jointly and severally liable for the forfeiture of the entire proceeds of the offense conduct. As developed in tort law, under the doctrine of joint and several liability, a plaintiff who obtained a judgment against more than one party conveniently could collect the full amount from any one of the liable defendants. Applying joint and several liability to criminal forfeiture was deemed to be consistent with the well-known concept, first set forth in Pinkerton v. United States, 328 U.S. 640 (1946), that members of a conspiracy were liable for the reasonably foreseeable acts of other members in a coordinated scheme.