United States v. Gilowski

In United States v. Gilowski, No. 23-10873 (5th Cir. Sept. 23, 2024) (unpublished), the Fifth Circuit affirmed the district court’s denial of a wife’s petition for adjudication of her legal interest in property that her husband had forfeited as part of his federal sentence on fraud and theft convictions. In short, the Fifth Circuit agreed that the wife had failed to show an interest in the property superior to her husband’s interest “at the time he committed the offenses.” See 21 U.S.C. § 853(n)(6)(A).

When a court evaluates whether property is subject to forfeiture to the Government, “federal forfeiture law governs.” See United States v. Martinez, 228 F.3d 587, 590 (5th Cir. 2000). Here, the property was purchased during the husband’s crimes using proceeds from his crimes, and under federal law, the proceeds of the crimes (and property purchased with the proceeds) “vested in the Government at the time [the husband] committed his offenses.” See 21 U.S.C. § 853(c); 18 U.S.C. § 981(f); see also Martinez, 228 F.3d at 590.

Even if the wife had contributed her legitimate earnings, “her contributions were commingled with [her husband’s] criminal proceeds and could not be separated.” And because his proceeds vested in the Government at the time of the offense, “the property did not become [marital] property under state law.” See Martinez, 228 F.3d at 590; see also United States v. Hooper, 229 F.3d 818, 820-22 (9th Cir. 2000).