United States v. Joseph Furando ( 2022 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 20-1526
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
JOSEPH FURANDO,
Defendant,
APPEAL OF: CHRISTINE M. FURANDO, et al.,
Claimants.
____________________
Appeal from the United States District Court for the
Southern District of Indiana, Indianapolis Division.
No. 13-cr-00189 — Sarah Evans Barker, Judge.
____________________
ARGUED JUNE 3, 2022 — DECIDED JULY 8, 2022
____________________
Before SYKES, Chief Judge, and FLAUM and BRENNAN, Circuit
Judges.
FLAUM, Circuit Judge. This case arrives on appeal with an
unconventional procedural history for ancillary proceedings
connected to a criminal case. After guilty pleas in the under-
lying fraud case, the district court entered initial orders of
2 No. 20-1526
forfeiture, third-party claimants petitioned for adjudication of
their property interests, and the district court eventually de-
nied that petition nearly three years later—on the same day it
granted the government’s motion for interlocutory sale of real
property at issue. On appeal, the third-party claimants chal-
lenge the district court’s disposition of both the petition and
the government’s motion. For the following reasons, we va-
cate the district court’s denial of claimants’ § 853(n) petition,
remand that issue for further proceedings, and affirm the dis-
trict court’s grant of the government’s motion for interlocu-
tory sale of real property.
I. Background
A. Past Procedural History
This case stems from a 66-count, multi-defendant criminal
indictment charging offenses under 18 U.S.C. §§ 2, 287, 371,
1001, 1343, 1519, 1957, and 42 U.S.C. § 7413. The indictment
notified the criminal defendants that the government would
seek criminal forfeiture under 18 U.S.C. § 982(a)(1), (a)(2)(A),
(b) and 28 U.S.C. § 2461(c) as part of any sentence imposed
and (in addition to or in the alternative) would seek civil for-
feiture under 18 U.S.C. § 981(a)(1)(A), (a)(1)(C), (a)(1)(D), and
28 U.S.C. § 2461(c). As can be inferred from the indictment,
the criminal proceedings were complex. Relevant to this ap-
peal now before us, Joseph Furando and two of his compa-
nies, Caravan Trading, LLC and Cima Green, LLC, pleaded
guilty to multiple counts in the indictment. Joseph Furando’s
plea included agreed-upon forfeiture of personal property,
assets, and vehicles. He agreed to abandon his rights, title,
and interest in personal property, vehicles, motorcycles,
funds, and other identified assets. He also agreed to abandon
No. 20-1526 3
his right, title, and interest to real property at 23 Burning Hol-
low Road located in Saddle River, New Jersey and to proceeds
from sale of commercial real estate at 37 South Kinderkamack
Road located in Montvale, New Jersey. Joseph Furando
acknowledged in his plea agreement “that all of the property
and funds to be forfeited constituted proceeds of the offense
to which he [pleaded] guilty and was used or intended to be
used in the criminal offense.”
Details of his post-indictment conduct aside, Joseph Fu-
rando appealed his conviction, arguing that he was entitled to
a two-level reduction in his offense level for acceptance of re-
sponsibility pursuant to the Sentencing Guidelines. The Sev-
enth Circuit characterized the appeal as “frivolous” and en-
tered an opinion affirming his sentence. See United States v.
Furando, 655 Fed. App’x 507 (7th Cir. 2016). On May 30, 2017,
the district court entered preliminary orders of forfeiture
against these three criminal defendants. The preliminary for-
feiture orders directed the government to give notice to po-
tential third-party interest holders pursuant to 21 U.S.C.
§ 853(n), which the government did.
B. Present Appeal
On June 30, 2017, Christine Furando (Joseph Furando’s
wife), Green Grease, LLC, Jungle Habitat Properties, LLC,
and Summit Performance Solutions, LLC (hereinafter the
“claimants”) filed a claim under 21 U.S.C. § 853 to make their
claim as innocent owners of property. The motion stated:
Claimant CHRISTINE M. FURANDO, is em-
ployed as a speech and language pathologist …
in New Jersey.
4 No. 20-1526
Claimant GREEN GREASE, LLC is a limited li-
ability company registered in the State of New
Jersey. Christine M. Furando has a membership
interest in the LLC.
Claimant JUNGLE HABITAT PROPERTIES,
LLC is a limited liability company registered in
the State of New Jersey. Christine M. Furando
on information and belief has a 51% member-
ship interest in the LLC.
Claimant SUMMIT PERFORMANCE SOLU-
TIONS, LLC is a limited liability company reg-
istered in the State of New Jersey.
The motion outlined Christine Furando’s alleged ownership
of disputed real property. The motion stated that all rights,
title, and interest in the real property located at 23 Burning
Hollow Road, Saddle River, New Jersey were transferred to
grantees Joseph Furando and Christine M. Furando on June
14, 2011. The motion attached a certified copy of the State of
the property deed. The motion also claimed an interest in a
2011 Harley-Davidson, 2011 Ferrari California, 2011 BMW,
funds up to $10,000 in the TD Bank Account, funds up to
$175,000 in the PNC Bank account (via Green Grease, LLC),
funds up to $303,490.06 in the JP Morgan Chase Bank account
(via Summit Performance Solutions, LLC which was not an
indicted company subject to the district court’s forfeiture or-
der), $2,300 in funds seized from Christine Furando’s family
residence, $839,340.50 in proceeds resulting from a sale of real
property located as Kinderkamack Road (via Jungle Habitat
Properties, LLC), as well as gifts and artwork.
No. 20-1526 5
On October 1, 2018, the district court granted the govern-
ment’s motion for partial final order of forfeiture of property
as to Joseph Furando. The residence at Burning Hollow Road,
although included in the preliminary order of forfeiture, was
not included in this partial final order of forfeiture.
On February 25, 2020, the government filed a motion for
interlocutory sale of the real property located at 23 Burning
Hollow Drive in Saddle River, New Jersey. In its motion, the
United States did not request a Final Order of Forfeiture and
did not request any district court ruling on the merits of
claimants’ § 853(n) petition. The motion sought an order from
the district court allowing the United States Marshal’s Service
to conduct an interlocutory sale of the real property, with the
proceeds to be held in escrow pending the entry of a final or-
der of forfeiture.
It was not until nearly three years later, on March 17, 2020,
that the district court denied the claimants’ petition to adjudi-
cate validity of their interest. In the same order, the district
court granted the government’s motion for interlocutory sale
of the “[t]he real property located at 23 Burning Hollow Road,
Saddle River, New Jersey.” In granting the government’s mo-
tion, the district court ruled, “Upon careful review of the re-
quests advanced by the government in each of these refer-
enced motions along with the response and reply briefs, the
Court hereby finds that the facts and law are with the Gov-
ernment in each instance, which facts the Court hereby adopts
and incorporates by reference.” The district court then denied
the claimants’ § 853(n) petition without further explanation.
On March 31, 2020, the claimants appealed these two en-
tries. On June 12, 2020, this appeal was scheduled for manda-
tory Rule 33 Mediation.
6 No. 20-1526
On July 28, 2021, the government filed a motion to re-
mand, requesting the Court of Appeals vacate the district
court’s entry denying the claimants’ petition to adjudicate the
validity of their interest in property and remand this matter
to the district court for further proceedings. The government
argued that at no point did the government move to dismiss
the claimants’ petition, move for summary judgment as to the
claimants’ petition, or otherwise request a ruling on the valid-
ity of the claimants’ petition—leaving the government with-
out “the opportunity to brief or present a factual record re-
lated to the Claimants-Appellants’ Petition prior to the district
court sua sponte denying it.” The government argued that
“[b]ecause there is no legal or factual record before this Court
related to the Claimants-Appellants’ Petition, the United
States has determined that it would be in the best interest of
judicial economy and efficiency for this Court to vacate the
district court’s ruling denying the Claimants-Appellants’ Pe-
tition and remand the matter to [the] district court for further
proceedings”—including conducting discovery and present-
ing relevant arguments and facts before ruling on the peti-
tion’s merits.
On August 3, 2021, the Court of Appeals set the response
briefing deadlines and noted the parties “should provide an
update on the status of the interlocutory sale of the property
and address whether the challenged order is a final, appeala-
ble decision under 28 U.S.C. § 1291.”
Through an order, this Court denied the motion to re-
mand. The order stated that, “[i]f necessary, a briefing sched-
ule will be set after the conclusion of the settlement process
under Federal Rule of Appellate Procedure 33. If this appeal
proceeds to briefing, the parties should address in their briefs
No. 20-1526 7
appellate jurisdiction and the significance of HSBC Bank USA,
N.A. v. Townsend, 793 F.3d 771 (7th Cir. 2015), United States v.
Williams, 796 F.3d 815 (7th Cir. 2015), and similar decisions.”
II. Discussion
Claimants challenge the district court’s disposal of their 21
U.S.C. § 853(n) petition and grant of the government’s motion
for interlocutory home sale. We address each issue in turn.
A. 21 U.S.C. § 853(n) Petition
Claimants’ first issue on appeal is whether the district
court erred in sua sponte denying 1 their joint § 853(n) petition
without a hearing or opportunity to amend. We hold this dis-
position was not appropriate, as any jurisdictional deficiency
may have been curable through amendment. Given this con-
clusion, we remand to the district court for the opportunity to
amend or hold a hearing.
1 The district court stated that claimants’ petition to adjudicate the va-
lidity of their interest was denied “[u]pon careful review of the requests
advanced by the government in each of these referenced motions along
with the response and reply briefs.” The district court found “that the facts
and law are with the Government in each instance” and “adopt[ed] and
incorporate[d]” those facts by reference. Although a different party’s mo-
tion to adjudicate (see district court Docket No. 433) did receive a response
from the government, the present claimants’ joint motion to adjudicate (see
district court Docket No. 432) did not. Claimants point out the confusion
created by framing the decision as a “denial” based on the merits rather
than a “dismissal” on procedural grounds. Given the lack of briefing and
absence of a hearing, a dismissal is a more apt characterization. When “as-
sess[ing] de novo a suit’s dismissal for … want of subject-matter jurisdic-
tion[,] … we may affirm a dismissal on any ground supported by the rec-
ord.” See Kowalski v. Boliker, 893 F.3d 987, 994 (7th Cir. 2018) (internal cita-
tions omitted).
8 No. 20-1526
“Under the criminal forfeiture statute, a third party may
petition for a hearing to adjudicate its interest in a property to
be forfeited.” United States v. Grossman, 501 F.3d 846, 848 (7th
Cir. 2007) (citing 21 U.S.C. § 853(n)(2)). The relevant proceed-
ings are governed by Federal Rule of Criminal Procedure 32.2.
“Under this rule, when a third party files a petition asserting
an interest in property to be forfeited, the court must conduct
an ‘ancillary proceeding,’ Fed. R. Crim. P. 32.2(c)(1), which
closely resembles a civil action.” Grossman, 501 F.3d at 848.
Although any motion to dismiss made during the ancillary
proceeding is reviewed at the appellate level de novo, id.,when no such proceeding has commenced, no such motion
was made and proceedings have progressed no further than
the petition filing stage, we instead review factual findings for
clear error and legal conclusions de novo, United States v. Holy
Land. Found. for Relief & Dev., 722 F.3d 677, 683 (5th Cir. 2013).
“The interpretation of a statute is a question of law, which we
review de novo.” United States v. Rosenbohm, 564 F.3d 820, 822
(7th Cir. 2009).
1. Appellate Jurisdiction
Because claimants appeal two separate district court or-
ders, we first look to whether appellate jurisdiction is sound
for the appeal from the district court’s denial of claimants’ pe-
tition to adjudicate the validity of claimants’ interests. An ap-
peal after a district court’s decision regarding ancillary pro-
ceedings under 21 U.S.C. § 853(n), is sound as a final judg-
ment under 28 U.S.C. § 1291. See United States v. Bregantini, 53
F.3d 333 (Table) (7th Cir. 1995) (citing no final decision of the
district court for criminal appeal claims not filed in the district
court but permitting an appeal of challenge to district court’s
No. 20-1526 9
ruling on standing to challenge ancillary forfeiture proceed-
ings).
Because third parties may not challenge the preliminary
or final order of forfeiture and are limited to § 853(n) as their
sole path to protecting their interest, a denial of such a petition
meets the standard definition of “final” under § 1291—noth-
ing is left but for the court to turn the preliminary order into
a final one.
2. Intertwined Standing and Merits Question
Finding no deficiency in appellate jurisdiction, we next ex-
amine standing separately for each claim, which—for the
§ 853(n) petition issue—ends up being intertwined with the
merits question. The threshold inquiry for this, and every,
federal suit is whether the claimants have Article III standing
to bring their claims. “If the plaintiff lacks standing, the fed-
eral court lacks subject matter jurisdiction and the suit must
be dismissed ….” Int’l Union of Operating Eng’rs, Local 139 v.
Daley, 983 F.3d 287, 294 (7th Cir. 2020) (internal quotation
marks omitted) (quoting Taylor v. McCament, 875 F.3d 849, 853
(7th Cir. 2017)). Standing must be demonstrated “for each
claim [the claimants] seek[] to press and for each form of relief
that is sought.” Town of Chester, N.Y. v. Laroe Ests., Inc., 137 S.
Ct. 1645, 1647 (2017).
Because claimants here are not parties to the underlying
criminal case, they do not have standing to address the court
absent their § 853(n) petition. Tracing the logic from the be-
ginning, if the petition was deficient, the district court did not
err in denying the § 853(n) petition. If the § 853(n) petition
was properly dismissed as facially deficient, the claimants
have no standing—as § 853(n) provides the exclusive avenue
10 No. 20-1526
for third-party asset recourse. Therefore, if the petition, as
filed, was lacking, the case was appropriately dismissed for
lack of subject matter jurisdiction. Thus we look to one dis-
positive question: Did the claimants’ petition conform to all
relevant requirements of 21 U.S.C. § 853? If yes, Rule 32.2 of
the Rules of Criminal Procedure supports holding that the
district court must conduct an ancillary proceeding. If no, the
petition is deficient, a jurisdictional deficiency exists, and the
district court may dismiss the petition without a hearing. Alt-
hough the district court may dismiss a deficient petition on
jurisdictional grounds, this Circuit’s case law cautions against
sua sponte dismissal, unless the jurisdictional deficiency is in-
curable.
Because “[i]t is well established that third parties may not
intervene during criminal forfeiture proceedings to assert
their interests in the property being forfeited,” § 853(n) pro-
vides the exclusive avenue for third-party asset recourse and
ultimately the sole grounds for standing. DSI Assocs., LLC v.
United States, 496 F.3d 175, 183 (2d. Cir. 2007); see also § 853(k)
(barring intervention by any party claiming an interest in
property subject to forfeiture except as provided in § 853(n)).
Standing determinations regarding ancillary proceedings
outlined in § 853(n) involve questions of both state and fed-
eral law. “State law—or more accurately, the law of the juris-
diction that created the property interest being asserted—de-
termines what interest the claimant has in the forfeited prop-
erty; federal law—in particular, 21 U.S.C. § 853(n)(2), deter-
mines whether that interest is sufficient to establish stand-
ing.” Stephen D. Cassella, Criminal Forfeiture Procedure in 2013:
An Annual Survey of Developments in the Case Law, CRIM. L.
BULL., Winter 2013. “Legal ownership in the property is
No. 20-1526 11
determined by reference to state law, but whether that legal
interest qualifies for an exemption is evaluated by the terms
of the federal statute.” Dee R. Edgeworth, Asset Forfeiture:
Practice & Procedure in State & Federal Courts 216 (3d ed. 2014)
(citations omitted); United States v. 5 S 351 Tuthill Rd., Naper-
ville, Ill., 233 F.3d 1017, 1021 (7th Cir. 2000) (“State law defines
and classifies property interests for purposes of the forfeiture
statutes, while federal law determines the effect of the prop-
erty interest on the claimant’s standing.”).
Beginning with the statutory language, under 21 U.S.C.
§ 853(n)(1), the government “shall publish notice of the [for-
feiture] order and of its intent to dispose of the property” fol-
lowing the entry of a forfeiture order. With respect to third
parties, “[a]ny person, other than the defendant, asserting a
legal interest in property which has been ordered forfeited to
the United States pursuant to this section may, within thirty
days …, petition the court for a hearing to adjudicate the va-
lidity of his alleged interest in the property.” Id. at § 853(n)(2).
Such a hearing “shall be held before the court alone, without
a jury.” Id. at § 853(n)(3). “The hearing on the petition shall, to
the extent practicable and consistent with the interests of jus-
tice, be held within thirty days of the filing of the petition.” Id.
at § 853(n)(4). “The provisions of this section shall be liberally
construed to effectuate its remedial purposes.” Id. at § 853(o).
Turning to the Rules of Criminal Procedure, Rule 32.2 gov-
erns criminal forfeiture and related ancillary proceedings. As
a general rule, “[i]f, as prescribed by statute, a third party files
a petition asserting an interest in the property to be forfeited,
the court must conduct an ancillary proceeding, but no ancil-
lary proceeding is required to the extent that the forfeiture
consists of a money judgment.” Fed. R. Crim. Proc. 32.2(c)(1)
12 No. 20-1526
(emphasis added). “No hearing is necessary on the merits of
the third party’s claim where the court can dismiss the claim
on the pleadings.” Cassella, supra. “If no third party files a
timely petition, the preliminary order becomes the final order
of forfeiture ….” Fed. R. Crim. Proc. 32.2(c)(2).
The third-party petitioner bears the burden of establishing
by a preponderance of evidence that (1) they have a legal
right, title, or interest in the property, and that such right, title,
or interest was superior to that of the defendant at the time of
the commission of the acts which gave rise to the forfeiture of
the property; or (2) they are “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. at
§ 853(n)(6).
Whether a petition is “deficient” is outcome-determina-
tive on the standing question. “If a third party fails to allege
in its [§ 853(n)] petition all elements necessary for recovery,
including those relating to standing, the court may dismiss
the petition without providing a hearing.” United States v.
BCCI Holdings (Luxembourg), S.A., 919 F. Supp. 31, 36 (D.D.C.
1996); see also United States v. Sigillito, 938 F. Supp. 2d 877, 884
(E.D. Mo. 2013) (“The court need not hold a hearing on a pe-
tition if it is clear that the petitioner could not prevail even if
[a hearing] were granted.” (alteration in original) (citation and
internal quotation marks omitted)). Notably, “[i]n the absence
of facts or evidence showing the time and circumstances of [a
petitioner’s] acquisition of the right, title, or interest in the
[property], the Petition is deficient.” See United States v. Mor-
gan, No. 18-cr-00132, 2022 WL 1443743 at *3 (W.D. Wash. May
6, 2022) (citing United States v. Fabian, 764 F.3d 636, 638 (6th
No. 20-1526 13
Cir. 2014) (holding a “conclusory legal interest” falls short of
meeting the requirements of § 853(n)(3)).
To review the district court’s sua sponte denial (the func-
tional equivalent of a dismissal under these specific facts) of
claimants’ § 853(n) petition, we must look at each claimed
property interest. The chart below summarizes claimants’ al-
leged property interests:
Motion Claimant Property Description
¶ 6–9 C. Furando House/ Real property. Deed attached
Residence conveying 23 Burning Hollow
Road to Joseph and Christine
Furando on June 14, 2011.
¶ 11 C. Furando Vehicle 2011 Harley-Davidson. At-
tached certificate of title and
vehicle registration in C. Fu-
rando’s name.
¶ 14 C. Furando Vehicle 2011 Ferrari. Unable to locate
titles and unsure whether title
is in her name.
¶ 14 C. Furando Vehicle 2011 BMW. Unable to locate ti-
tles and unsure whether title is
in her name.
¶ 17 C. Furando Cash Up to $10,000 in TD Bank Ac-
count #8406. Used to deposit
her paychecks.
¶ 19 Green Cash Up to $175,000 in PNC Bank
Grease, Account #2184. Claimant re-
LLC tained the services of a Certi-
fied Public Accountant who ex-
amined the books and con-
cluded $300,000 to $400,000 or
more of the funds seized from
Green Grease, LLC were not
part of any fraud.
14 No. 20-1526
¶ 21 Summit Cash Up to $303,490.06 in JP Morgan
Perfor- Chase Bank Account #4962. C.
mance Furando claims she “is a mem-
Solutions, ber of Summit Performance So-
LLC lutions, LLC.”
¶ 23 C. Furando Cash $2,300 seized during search of
Montvale, New Jersey resi-
dence.
¶ 25–26 Jungle Cash $839,340.50 in sale proceeds
Habitat from real property located at 37
Properties S. Kinderkamack Rd,
LLC Montvale, New Jersey.
¶ 29 C. Furando Jewelry Nineteen pieces of jewelry la-
beled as “gifts.”
¶ 30 C. Furando Artwork Seventeen pieces of artwork
bought by Joseph Furando as
“gifts” for C. Furando during
2012.
¶ 31 C. Furando Rugs Two oriental Kashmir rugs
purchased by Joseph Furando
as “gifts” for C. Furando dur-
ing 2012.
¶ 32 C. Furando Piano Black grand piano purchased
by Joseph Furando as a “gift”
for his son.
We agree with the government’s position that this petition
is facially deficient. An adverse petition:
shall set forth the nature and extent of the peti-
tioner’s right, title, or interest in the property,
the time and circumstances of the petitioner’s
acquisition of the right, title, or interest in the
property, any additional facts supporting the
petitioner’s claim, and the relief sought.
21 U.S.C. § 853(n)(3). The parameters of these property inter-
ests are defined by state law. See 5 S 351 Tuthill Rd., 233 F.3d
No. 20-1526 15
at 1021. Conclusory claims of property interests are not suffi-
cient. See Fabian, 764 F.3d at 638. “By its plain terms, …
§ 853(n) does not permit ‘relitigation’ of the district court’s an-
tecedent determination that an item of property is subject to
forfeiture.” Id. (citing Fed R. Crim. Proc. 32.2 advisory com-
mittee’s notes). Section 853, however, does allow third parties
to claim interest in the identified properties subject to the pre-
liminary order of forfeiture. Borrowing from the reasoning of
the Sixth Circuit, if a claimant fails to set forth information to
satisfy the statutory requirements outlined in § 853(n)(3), “it
asserts only a conclusory legal interest in the property,” and
the district court will not have erred in dismissing any such
petition. Id.
Just as in Fabian, the petition here was conclusory. Repeat-
ing claimants have a “valid third party interest” and citing
§ 853 is not sufficient. For the cash claims, no dates of transfer
or account statements are attached. Cf. United States v. Preston,
123 F. Supp. 3d 108, 114 (D.D.C. 2015) (finding a petition’s al-
legations sufficient to satisfy the requirements of § 853(n)(3)
when the petition noted date of transfer and attached an ac-
count statement listing the relevant transfers). Furthermore,
the house, vehicle, and gift claims fail to adequately explain
how state law supports Furando’s legal interest in the prop-
erty.
Although district courts have framed the § 853 pleading
requirements as more than “simply technical requirements,”
and have stated that they should be “construed strictly to dis-
courage false or frivolous claims,” United States v. Soultanali,
No. 14-CR-00229, 2018 WL 4008333, at *5 (N.D. Ill. Aug. 20,
2018) (quoting Preston, 123 F. Supp. 3d at 112), statutory lan-
guage casts at least some doubt on this sentiment, see 21 U.S.C.
16 No. 20-1526
§ 853(o) (“The provisions of this section shall be liberally con-
strued to effectuate its remedial purposes.”); Rosenbohm, 564
F.3d at 823 (“A cardinal canon of statutory construction is that
we must presume that a legislature says in a statute what it
means and means in a statute what it says there.” (citation and
internal quotation marks omitted)). Acknowledging that this
conclusory petition triggers a jurisdictional deficiency—treat-
ment of which is at odds with the express congressional aim
of “liberal construction”—our Circuit’s reasoning in other sua
sponte dismissal contexts proves informative:
A court must address potential jurisdictional
problems sua sponte at whatever point they arise
in the proceedings. But we generally discourage
district courts from sua sponte dismissing a com-
plaint for lack of subject matter jurisdiction
without first providing the plaintiff notice and a
hearing or an opportunity to amend. Such a dis-
missal is improper unless the jurisdictional de-
fect is incurable.
George v. Islamic Rep. of Iran, 63 Fed. App’x 917, 918 (7th Cir.
2003) (citations omitted). With the goal of harmonizing the in-
tended “liberal[]” construction of § 853 with the need for
workability at the district court level, we now remand for the
district court to provide either a hearing or an opportunity to
amend the petition, as this jurisdictional defect is not incura-
ble. The government points to Joseph Furando’s plea agree-
ment as admission that the property in question was acquired
with fraudulent proceeds. This may well be what the district
court ultimately concludes, but it is sensible to give claimants
the opportunity to amend their petition to provide infor-
mation to satisfy § 853(n)(3) (if they have it) and the
No. 20-1526 17
opportunity for a hearing (if it is warranted). The district court
is better suited for this task as the trier of fact. As discussed in
the next section, § 853(n) is the only appropriate route for re-
lief, and Congress correspondingly signaled its intent for lib-
eral construction to effectuate this lone remedial route. See
§ 853(o).
Before concluding this analysis, we briefly touch on harm-
less error. Because these ancillary proceedings are closely
analogous to civil proceedings, see Grossman, 501 F.3d at 848,
“the normal rules of harmless error apply,” Kowalski v. Boliker,
893 F.3d 987, 997 (7th Cir. 2018). We decline to offer a harmless
error analysis in this case, because the fact-finding at the dis-
trict court level was limited—the preliminary order of forfei-
ture was based on a plea agreement, and there is no trial rec-
ord for us to rely upon. A conclusion that any error was harm-
less might be more appropriate if we knew what the claim-
ants’ amended arguments would have been, see, e.g., id. (“Alt-
hough [plaintiff] did not have another opportunity to present
his position to the district court, we do know precisely what
[plaintiff] intended to argue because he timely filed his brief
after the district court had ruled.”), or if we could point to a
jury finding that the property in question was involved in an
unlawful transaction, see, e.g., United States v. Lee, 232 F.3d 556,
560 (7th Cir. 2000) (emphasizing the relevance of a jury find-
ing “that the property [in question] was involved in the un-
lawful transaction or was traceable to property that was so
involved”). Neither of these factors are present in this case.
Furthermore, the district court did not mitigate the impact of
any error by “carefully consider[ing]” the arguments at a dif-
ferent point, such as a prior or subsequent motion or in a de-
cision on a detailed motion seeking leave to amend. See Kow-
alski, 893 F.3d at 997.
18 No. 20-1526
The government’s arguments that the claimants cannot
prevail under § 853(n)(6) and the arguments about prior
vested interest are misplaced, because those statutory consid-
erations are only relevant “after the hearing”—which never
took place in this case.
For these reasons, we vacate the denial of claimants’
§ 853(n) petition and remand for further proceedings.
B. Interlocutory Home Sale
The second issue on appeal is whether the district court
erred in granting the government’s motion for interlocutory
sale of real property located at Burning Hollow Road. We re-
view the district court’s decision for abuse of discretion. See
United States v. Approximately 81,454 Cans of Baby Formula, 560
F.3d 638, 641 (7th Cir. 2009). Resting a district court decision
on an erroneous conclusion of law or failing to explain its de-
cision are grounds for finding an abuse of discretion, even un-
der this deferential standard. See In re Stericycle Sec. Litig., 35
F.4th 555, 559 (7th Cir. 2022) (in the fee award context); Ahmed
v. Garland, 854 Fed. App’x 753, 755 (7th Cir. 2021) (in the im-
migration context); United States v. Turner, 594 F.3d 946, 955
(7th Cir. 2010) (noting that because a district court “order was
… premised on a mistake regarding the applicable legal
standards,” there was “necessarily an abuse of discretion”).
Here, claimants agreed to this interlocutory sale. As dis-
cussed above, the dismissal of the § 853(n) petition is a final
order, and the claimants’ appeal of that order brings up this
stipulated interlocutory-sale order along with it.
“Motions for interlocutory sales in criminal forfeiture pro-
ceedings are governed by Federal Rule of Criminal Procedure
32.2(b)(7), which in turn directs courts to act ‘in accordance
No. 20-1526 19
with Supplemental Rule G(7) of the Federal Rules of Civil Pro-
cedure.’” United States v. Hall, 877 F.3d 676, 685 (6th Cir. 2017)
(quoting Fed. R. Crim. P. 32.2(b)(7)). Per the advisory commit-
tee notes, “[t]he court must carefully weigh the competing in-
terests in each case” when deciding whether to order the in-
terlocutory sale of property. Fed. R. Civ. Proc. Supp. G(7) ad-
visory committee’s note. The directive to carefully weigh is a
general one affording “considerable discretion” to the district
court; seeing as Rule G(7) “does not state any criteria to guide
the judge[,] … the judge can range widely in deciding what
factors to consider, and what weight to give them, in making
his ruling.” Approximately 81,454 Cans of Baby Formula, 560
F.3d at 641.
In granting the government’s motion for interlocutory sale
of property, the district court “careful[ly] review[ed] … the
requests advanced by the government in each of these refer-
enced motions along with the response and reply briefs” and
explicitly “adopt[ed] and incorporate[d]” the government’s
position by reference.
The government’s appellate brief advocated for affir-
mance on the grounds that claimants lacked the necessary le-
gal interest to bring a petition in the ancillary proceeding,
and, as a result, “Christine Furando and the other claimants
cannot reasonably challenge the sale order in this case.” But,
this was not the argument adopted and incorporated by the
district court. At the trial level, the government argued:
A court-ordered interlocutory sale of the real
Property, pursuant to the provisions cited
above and agreed to in this motion, is necessary
and justified because the Property is subject to
deterioration and non-payment of real estate
20 No. 20-1526
taxes. The Marshals Service also has notified the
undersigned that maintaining the Property has
become burdensome. These factors demon-
strate the need for an interlocutory sale to pre-
serve the remaining value of the property pend-
ing a determination of the Government’s forfei-
ture.
These arguments are responsive to Supplemental Rule
G(7) of the Federal Rules of Civil Procedure. What is more,
despite contesting the procedures at play, Christine Furando
agreed to the government’s suggestion to sell the property.
Because the district court’s adopted position was not explic-
itly predicated on the outcome of the § 853(n) proceedings, we
need not reach the import of our remand on the § 853(n) issue
discussed above.
The record indicates the district court undertook the rele-
vant analysis and sufficiently explained its decision, at least
by incorporation. We review the decision from a deferential
posture. Thus, we affirm the district court’s grant of the gov-
ernment’s motion for interlocutory sale of real property.
III. Conclusion
For the foregoing reasons, we VACATE the denial of claim-
ants’ § 853(n) petition and REMAND that issue back to the dis-
trict court for further proceedings. We further AFFIRM the
grant of the government’s motion for interlocutory sale of real
property.