United States v. Kasali
In United States v. Kasali, —- F.4th —-, No. 21-20681 (5th Cir. Aug. 2, 2024), the Fifth Circuit affirmed the defendant’s fraud convictions, her 70-month prison sentence, and the district court’s $2,027,686.64 restitution order.
Issue 1: “During the course of the prosecution, Kasali was represented by five separate attorneys,” and most of the Fifth Circuit’s opinion addresses disputes and frustrations Kasali had with those attorneys. On the morning of trial, those disputes were so bad that Kasali “refused to change out of her jail clothes into street clothes and participate because she did not accept [her appointed attorneys] as her counsel.”
The district court gave Kasali several opportunities to choose between changing or remaining in a holding cell during trial, but she refused to decide and continued objecting to her attorneys. As a result, she remained outside the courtroom (but able to hear an audio feed of the trial) during the first day. On the second day, she agreed to change into street clothes and “participated in the remainder of the trial.”
The Fifth Circuit held that the district court did not err in denying Kasali’s motions for substitute counsel, and it did not err by conducting the first day of trial in her absence. Kasali failed to prove “either a conflict of interest or a complete breakdown in communication,” because the latter cannot be based on “the defendant’s intransigence” alone. And regarding Kasali’s voluntary absence, her “actions and continued misconduct were sufficient for the district court to imply a voluntary waiver of Kasali’s presence”
Issue 2: Was it improper for the court to order “double recovery” in the form of both restitution and forfeiture? No. The Fifth Circuit has previously “held that district courts can order both restitution and forfeiture without it constituting double recovery.” See United States v. Taylor, 582 F.3d 558, 565–66 (5th Cir. 2009).
Here, Kasali never received any money from her fraud. The only transfer was “frozen and recovered” before she received it, so the PSR deemed that “an offset of the restitution” obligation because the money was “ultimately recovered in full.” The Government objected because forfeiture of money is not the same as restitution — although Kasali had, in effect, forfeited the proceeds of her crime, that money had not been returned to the victim agency.
The Fifth Circuit relied heavily on the Department of Justice’s Asset Forfeiture Policy Manual to resolve this issue. The Manual has separate chapters for “seizure and restraint of property” and “victim compensation.” And when the victim is a federal government agency, as here, the act of forfeiting the money “does not mean that the seizing agency has received victim compensation,” because the money is instead deposited into the Assets Forfeiture Fund (“AFF”). A victim agency can later file a petition for remission of those forfeited funds to cover its losses, but only if it did not separately receive the money through restitution.
As a result, the Fifth Circuit concluded that “the forfeited $1,937,500 given to the DOJ to deposit into the AFF did not provide restitution to the [victim agency] or make it whole in this instance, the district court properly included the [agency] in the restitution order.” Again, it relied on the DOJ’s Manual, which indicates a policy that if the agency “does not receive the required restitution amount from Kasali,” the DOJ will “transfer funds to the [agency] upon petition to the court.”