United States v. Thomas Parenteau , 647 F. App'x 601 ( 2016 )

NOT RECOMMENDED FOR PUBLICATION
File Name: 16a0246n.06
No. 14-3047
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA, ) FILED
) May 09, 2016
Plaintiff – Appellee, ) DEBORAH S. HUNT, Clerk
)
v. )
)
THOMAS E. PARENTEAU, et al., ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
Defendants, ) COURT FOR THE SOUTHERN
) DISTRICT OF OHIO
and )
)
JEFFREY S. PARENTEAU, )
)
Interested Party – Appellant. )
BEFORE: ROGERS and WHITE, Circuit Judges; HOOD, District Judge.*
ROGERS, Circuit Judge. In a number of cases in this circuit, courts have been tasked
with sorting through the repercussions of a complex bank fraud and money-laundering scheme
orchestrated by Thomas Parenteau,1 an Ohio homebuilder. This iteration involves a 21 U.S.C.
§ 853(n) petition by Jeffrey Parenteau to amend the forfeiture order in the criminal case against
Thomas, who is Jeffrey’s stepfather. Thomas was convicted in 2010 of multiple charges related
to bank fraud, wire fraud, and money laundering. In the forfeiture portion of Thomas’s
sentencing, he was ordered to forfeit to the Government his interest in four life-insurance
* The Honorable Joseph M. Hood, United States District Judge for the Eastern District of Kentucky, sitting by
designation.
1
Because five of the individuals relevant to this case share the same last name, this opinion uses first names for
those individuals.
No. 14-3047, United States v. Parenteau, et al.
policies (on the life of Thomas’s father). Those policies, which were owned by Thomas’s
company and were integral to his crimes, each provided approximately $5 million in coverage.
After sentencing, Jeffrey petitioned to amend the forfeiture order, arguing that he was entitled to
$957,177 in the insurance policies by virtue of a January 2009 assignment in that amount from
Thomas’s company. Section 853(n), however, requires a petitioner to prove that at the time of
purchase, he was reasonably without cause to believe that the interest he received was subject to
forfeiture. Because Jeffrey did not do so, his petition was properly dismissed.
As an initial matter, some of the facts in Thomas’s criminal case are relevant to this
petition.2 Thomas owned several construction companies involved in the luxury-home business,
including MKP Investments, LLC (MKP). In 2002 and 2003, Thomas purchased four key-man
insurance policies that covered the life of his father, Roger Parenteau, who passed away in 2009.
MKP was the owner and beneficiary of the policies. Thomas’s criminal activity began in the
early 2000s, when he and his co-conspirators began making fraudulent statements on tax returns
in order to receive significant refunds. United States v. Parenteau, 529 F. App’x 532, 533 (6th
Cir. 2013). Over the next few years, the conspirators filed several fraudulent loan applications
with lenders and obtained large loans against the houses that served as collateral. Id. Thomas
sold luxury houses at above-market prices, as well, and gave kickbacks to the buyers in the
process. Id. at 534. On September 16, 2008, Thomas was indicted by a federal grand jury on
obstruction-of-justice and witness-tampering charges. A superseding indictment in April 2009
covered Thomas’s other crimes, including tax conspiracy, money laundering and money-
laundering conspiracy, and bank and wire fraud conspiracy. The indictment also included a
forfeiture count.
2
We have previously affirmed Thomas’s conviction and the sentence of Marsha Parenteau, who is Jeffrey’s mother
and Thomas’s wife. See United States v. Parenteau, 529 F. App’x 532, 536 (6th Cir. 2013) (Thomas’s conviction);
United States v. Parenteau, 506 F. App’x 430, 435 (6th Cir. 2012) (Marsha’s sentence).
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No. 14-3047, United States v. Parenteau, et al.
Thomas was convicted of multiple charges in 2010, and sentenced in 2011.3 As part of
the sentence, the district court held that Thomas had forfeited his interest in the four insurance
policies under 18 U.S.C. § 982(a)(1), a forfeiture statute that covers property with a certain nexus
to a money-laundering violation. The policies were involved in money laundering, the district
court held, because Thomas used the proceeds of the loan fraud to pay the insurance premiums
and because Thomas listed the policies as his largest assets on several of the loan applications.
During the time leading up to Thomas’s 2008 indictment, Jeffrey worked for Thomas’s
construction businesses, first as a laborer and then as a supervisor beginning in 2005. Also in
2005, Jeffrey created his own construction company, Imperial Renovations & Designs
(Imperial).
Jeffrey’s § 853(n) petition is based on two written assignments from MKP that Jeffrey
received in January 2009. Those assignments purported to transfer to Jeffrey a $957,177 interest
in two of the four insurance policies that MKP owned, in repayment of debts that MKP allegedly
owed Jeffrey.4 Those debts arose from three sets of transactions: payments by Jeffrey to MKP
for a building project; payments by Jeffrey to MKP for insurance premiums; and a commission
on a house that Jeffrey had referred to MKP.
The first alleged debt consisted of two checks that Jeffrey wrote to MKP in July 2006 for
the construction of a house. In the summer of 2006, Jeffrey told Thomas that he wanted to make
more money. Thomas suggested that the two build a house on Brigham Court, in the Dublin,
Ohio area. Thomas also told Jeffrey that Jeffrey needed to “bring some money to the table.”
After that conversation, Jeffrey took out two mortgages on his own house to provide financing.
3
Jeffrey also pled guilty in 2011 to a misdemeanor for making a false statement on a loan application that was
involved in Thomas’s scheme. Jeffrey was sentenced to probation.
4
Although Jeffrey obtained an assignment of $957,177 on two policies, he maintains that he sought to recover only
$957,177. Jeffrey testified that he received assignments on more than one policy because he anticipated that the
policies would sell for a low amount.
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No. 14-3047, United States v. Parenteau, et al.
The mortgages yielded $480,969 and $298,590 in cash, and Jeffrey wrote two checks to MKP in
those amounts. Jeffrey expected Thomas to put his own money toward the project, too, but the
Brigham Court house was never built. In this ancillary proceeding, Jeffrey has asserted that
MKP owes him approximately $792,323 due to the unsuccessful Brigham Court project, a figure
that includes the two payments to MKP and the closing costs for the two mortgages. That figure
also represents the bulk of the $957,177 that Jeffrey seeks to remove from the forfeiture order.
In the fall of 2008, more than two years after Jeffrey’s payments to MKP for the Brigham
Court project, several other financial transactions took place involving MKP, Imperial, Thomas,
and Jeffrey. As relevant here, on September 23 and 24—approximately one week after Thomas
was arrested—MKP gave Imperial a $793,800 deposit and Thomas wrote Imperial an $85,000
check, for a total of $878,800. Tressa, Jeffrey’s wife, testified that the $793,800 deposit from
MKP constituted repayment to Jeffrey for the money that he had spent toward the Brigham Court
project, and that the $85,000 check from Thomas constituted a partial repayment of another loan
that Jeffrey had given MKP several days prior. Jeffrey and Tressa, however, soon returned most
of the funds. The couple testified that they came to believe that they should not keep the money
at that time, because doing so would prevent MKP from paying the contractors who were
working on a client’s house. At the end of 2008, MKP’s alleged debt for Jeffrey’s Brigham
Court expenses thus remained unpaid.
Between October 2008 and January 2009, Jeffrey also wrote five checks to MKP—
totaling $107,539—that provide the second asserted basis for the written assignments that Jeffrey
received from MKP. Jeffrey purportedly wrote those checks to pay the premiums on the
insurance policies. He testified that he paid the premiums because the broker handling the
policies, Mike McCloskey, told him that the policies would lapse if the premiums were not paid.
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No. 14-3047, United States v. Parenteau, et al.
Jeffrey also talked with Thomas and Roger in late 2008 about selling the policies so that Jeffrey
could be repaid for his Brigham Court expenses, but the efforts to sell proved fruitless at that
time.
By early December 2008, Thomas had been incarcerated for nearly three months. At that
time, a federal prosecutor contacted Jeffrey for an off-the-record proffer meeting. Before the
proffer meeting, Jeffrey and his criminal defense attorney signed acknowledgement of a letter
apprising them of the ongoing grand-jury investigation of several individuals for “bank fraud,
money laundering, tax evasion, filing false tax returns, obstruction of justice, and conspiracy to
defraud the United States and to commit other federal offenses.” Also in December 2008,
Jeffrey hired another attorney to protect his rights to the money that MKP allegedly owed him.
Jeffrey, Tressa, and the attorney determined that MKP owed Jeffrey $957,177. They reached
this number by adding together the amount that Jeffrey spent toward the Brigham Court project
($792,323), the amount paid for the insurance premiums ($107,539), and a referral commission
of about $66,000 that MKP allegedly owed Jeffrey for referring a client’s house to the company.5
Jeffrey decided to recover the $957,177 by obtaining an interest in the life-insurance policies that
MKP owned. Jeffrey filled out assignment forms that he had received from the companies, and
Thomas signed two of them. The insurance companies then accepted those assignments, which
each transferred to Jeffrey an interest of $957,177.
After the forfeiture proceeding in Thomas’s criminal case—where the district court held
that Thomas had forfeited his interest in the insurance policies—Jeffrey filed two third-party
petitions under 21 U.S.C. § 853(n) to remove his asserted $957,177 interest in the policies.
Section 853(n) provides for an ancillary proceeding in which certain innocent petitioners can
5
These three figures do not add up to $957,177. Assuming that the first two figures are accurate, that leaves only
$57,315 to account for the referral commission.
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No. 14-3047, United States v. Parenteau, et al.
challenge a forfeiture order entered in a criminal case. Jeffrey argued that under § 853(n)(6)(B),
he qualified as a bona fide purchaser of his assignment interest. The district court disagreed,
denying Jeffrey’s petitions after a two-day ancillary hearing that included testimony from Jeffrey
and Tressa. According to the court, the petitions failed for three reasons: Jeffrey (1) “failed
credibly to show that he ever made legitimate loans to MKP”; (2) “failed to demonstrate that
MKP did not repay the loans before the assignments”; and (3) “failed to prove by a
preponderance of the evidence that he was reasonably without cause to believe that the insurance
policies were subject to forfeiture when the assignments were made.” Jeffrey appeals.
Jeffrey’s § 853(n) petitions were properly denied, as he did not prove that he was
reasonably without cause to believe that the policies were subject to forfeiture in early January
2009, when the assignments were made. Section 853 “provides that all right, title, and interest in
property subject to forfeiture ‘vests in the United States upon the commission of the act giving
rise to forfeiture under this section.’” United States v. Huntington Nat’l Bank, 682 F.3d 429, 433
(6th Cir. 2012) (quoting 21 U.S.C. § 853(c)). Two subsections in § 853(n), however, provide a
way for innocent petitioners to avoid the effect of § 853(c)’s relation-back clause and remove
their property from the forfeiture order. Jeffrey has sought relief under one of those provisions,
§ 853(n)(6)(B). That provision requires a petitioner to prove by a preponderance of the evidence
that he “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.” Id. The “bona fide purchaser for value” and “without cause”
aspects of § 853(n)(6)(B) are related but distinct requirements, see United States v. Timley,
507 F.3d 1125, 1130–31 (8th Cir. 2007), and the petitioner bears the burden of proving both.
Indeed, we have previously denied a petition solely on the basis that the petitioner could not
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No. 14-3047, United States v. Parenteau, et al.
satisfy the without-cause requirement. See, e.g., United States v. Coffman, 612 F. App’x 278,
287 (6th Cir. 2015). Because Jeffrey did not prove that requirement, we need not and do not
decide whether he was a bona fide purchaser for value of an interest in the insurance policies.
As a preliminary matter, the clearly erroneous standard applies to the district court’s
finding that in January 2009, Jeffrey had cause to believe that the insurance policies were
forfeitable. A “district court’s findings of fact are reviewed under a clearly erroneous standard.”
United States v. Salti, 579 F.3d 656, 667 (6th Cir. 2009) (quoting United States v. O’Dell,
247 F.3d 655, 679 (6th Cir. 2001)). The question of whether Jeffrey had cause to believe that the
policies were forfeitable is predominantly a factual question in the context of this case. The
parties dispute primarily what the evidence shows, not what “without cause” means.
Accordingly, the clearly erroneous standard applies to the district court’s findings on this issue,
including its conclusion that Jeffrey “failed to prove by a preponderance of the evidence that he
was reasonably without cause to believe that the insurance policies were subject to forfeiture
when the assignments were made.” In addition, although Jeffrey does raise two sub-issues of
law concerning the scope of the without-cause requirement, neither argument requires reversal or
remand.
The evidence presented at the ancillary hearing amply supports the conclusion that
Jeffrey had cause to believe that the policies were forfeitable. Most significantly, Jeffrey became
aware on December 4, 2008 that a grand jury was investigating several people, including
Thomas, for money laundering, bank and wire fraud, and other criminal activities. At that point,
Jeffrey also knew that Thomas had been incarcerated for nearly three months on obstruction-of-
justice and witness-tampering charges. The Government’s proffer letter to Jeffrey’s counsel,
which was signed by Jeffrey on December 4, provides in relevant part:
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No. 14-3047, United States v. Parenteau, et al.
As you know, a grand jury in the Southern District of Ohio is conducting
an investigation of several individuals concerning possible violations of federal
criminal laws, including but not limited to bank fraud, money laundering, tax
evasion, filing false tax returns, obstruction of justice, and conspiracy to defraud
the United States and to commit other federal offenses. As I explained to you,
your client, Jeffrey Parenteau, is a subject of the grand jury investigation due to
his conduct as it relates to involvement in several financial transactions under
investigation.
This letter put Jeffrey on notice that the Government was investigating not only Thomas’s
obstruction of justice and witness tampering, but also “financial transactions” and any fraud and
money-laundering violations arising out of those transactions. Jeffrey’s knowledge of the extent
of the investigation, combined with his testimony at the ancillary hearing, provides a sufficient
basis for denying his petition. At the ancillary hearing, Jeffrey admitted that in December 2008,
he knew that investigators were examining the way that Thomas’s businesses were operated. As
for the insurance policies, even though Jeffrey testified that he “wasn’t in depth with [Thomas]
about how he paid his bills,” Jeffrey knew that the insurance premiums were paid for “through
houses and [the] money [Thomas] made.” This testimony links the insurance policies to the
investigation of Thomas’s businesses. That link would have provided a reasonable person cause
to believe that the policies were forfeitable.
Other factors also support the conclusion that Jeffrey was on notice as to the forfeitability
of the policies. By the time of the assignments, Thomas and two of his co-conspirators had been
investigated by federal investigators for at least two-and-a-half years, since 2005 or 2006. The
length of that investigation would have provided further reason to question the business practices
of Thomas and his associates. So would the fact that within several days of Thomas’s
indictment, Thomas gave Jeffrey $878,800. A transfer of that amount at that particular time
suggests that Thomas may have been attempting to shield assets from the Government. Finally,
Jeffrey obtained the assignments within one month of the proffer meeting, a fact that tends to
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No. 14-3047, United States v. Parenteau, et al.
show that Jeffrey learned information in December 2008 that caused him to act quickly with
regard to the insurance policies. Indeed, Jeffrey obtained the assignments after being advised by
his attorney that doing so would allow Jeffrey “to protect [himself].” One interpretation of that
reason for obtaining the assignments is that Jeffrey sought to protect himself from any future
action that the Government might take concerning the policies.
Section 853(n)(6)(B) speaks of cause to believe, not actual knowledge. See Coffman,
612 F. App’x at 287. A petitioner may be disqualified from relief under that statute even if he
has not subjectively connected every dot between the suspicious circumstances and the
forfeitable property. Even though the hearing testimony suggests that Jeffrey was not aware of
the extent of Thomas’s criminal activities, this is not a case where only a person with a large
imagination in Jeffrey’s position would suspect that mischief was afoot regarding the insurance
policies. Nor does § 853(n)(6)(B) lend special protection to those who were misled or fooled by
family members. A cloud of doubt overshadowed the policies in January 2009, and the district
court did not clearly err in holding to that effect. Clear error is present only “when the reviewing
court is left with the definite and firm conviction that a mistake has been committed.” Max
Trucking, LLC v. Liberty Mut. Ins. Corp., 802 F.3d 793, 808 (6th Cir. 2015) (quoting Anderson
v. City of Bessemer City, N.C., 470 U.S. 564, 573 (1985)). No such error marred the district
court’s analysis in this case.
Jeffrey contests the dismissal of his petition with four additional arguments, two of a
factual nature and two related to scope of the without-cause requirement. None is persuasive.
As for the arguments related to the evidence, Jeffrey first asserts that he would not have
attempted to sell the policies in December 2008 and would not have made five premium
payments in late 2008/early 2009 if he had suspected that the policies might be forfeitable.
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No. 14-3047, United States v. Parenteau, et al.
Again, however, § 853(n)(6)(B) does not require a court to evaluate a petitioner’s actual
knowledge. In addition, neither Jeffrey’s payment of the premiums nor his attempt to sell the
policies necessarily forecloses the possibility that he had cause to believe that the policies were
forfeitable. In Jeffrey’s second argument, he suggests that the district court should have abided
by its findings in its order denying the Government’s motion to dismiss, where the district court
noted that Thomas was not charged with a forfeiture allegation until April 2009. Yet nothing
prevents a court from denying a defendant’s motion to dismiss and then later, after receiving
evidence and briefing, denying the petitioner’s claim on the merits. Jeffrey’s quarrels with the
district court’s take on the evidence are unavailing.
Nor do Jeffrey’s two related legal arguments about the scope of § 853(n)(6)(B)’s without-
cause requirement entitle him to relief. In the first place, Jeffrey argues that the district court
incorrectly analyzed whether Jeffrey had cause to believe that MKP’s assets—as opposed to the
insurance policies in particular—were forfeitable. It is true that the district court stated at the
end of its analysis that Jeffrey had “cause to believe that MKP’s assets were subject to
forfeiture.” But earlier in its opinion, the court made clear that the relevant question was whether
Jeffrey had cause to believe that the insurance policies were forfeitable, and our analysis, too,
tracks that inquiry. In another variation on that argument, Jeffrey asserts that § 853(n)(6)(B) bars
only those petitioners who have cause to believe that the forfeitable property was acquired with
proceeds traceable to a criminal violation. According to this argument, nothing suggests that
Jeffrey knew that the policies had been purchased with tainted funds. This argument fails as
well. The statute under which the policies were forfeited allows for the forfeiture of property
“involved in” money laundering in addition to property that is “traceable to” property involved in
money laundering. See 18 U.S.C. § 982(a)(1). Under § 853(n)(6)(B), then, the question is
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No. 14-3047, United States v. Parenteau, et al.
whether a petitioner had cause to believe that the property was involved in a money-laundering
offense or was traceable to property involved in that offense. In short, there is no merit to
Jeffrey’s arguments about the evidence or to his arguments concerning the without-cause
requirement.
The judgment of the district court is affirmed.
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