Second Circuit Orders Abatement of Criminal Conviction on Appeal but (i) Denies Abatement of Tax Conviction Not Appealed and (ii) Affirms $48 Million Bail Bond Revocation (9/24/17)

In United States v. Brooks, ___ F.3d ___, 2017 U.S. App. LEXIS 18170 (2d Cir. 2017), here, the defendant was convicted (i) by jury verdict for offenses related to fraud and securities laws violations and (ii) by guilty plea for tax evasion.  The defendant appealed the jury verdict convictions but did not appeal his guilty plea conviction.  He died while his case was on appeal.  The principal issue resolved was whether the death while pending appeal abated the convictions and collateral consequences.  The Court summarizes its holdings as:

Appeal from the United States District Court for the Eastern District of New York. No. 6-cr-550 — Joanna Seybert, Judge. Appeal from a judgment of the United States District Court for the Eastern District of New York (Seybert, J.) entered following a jury verdict finding defendant David Brooks guilty of offenses related to fraud and securities laws violations, and Brooks's guilty plea to tax evasion. After Brooks filed his appeal, he died while incarcerated and his estate and members of his family moved to abate his convictions. We conclude that Brooks's counts of conviction resulting from the verdict abated with his death, but not the counts resulting from his guilty plea; the bail bond subscribed by Brooks and his family remains forfeited; and the order of restitution related to the fraud and securities laws counts is abated but not the order of restitution related to the tax counts. Accordingly, the estate-appellant's motion for abatement is GRANTED in part and DENIED in part, Brooks's judgment of conviction for the non-tax counts is VACATED, the motion by Brooks's family members for abatement of the bail bond forfeiture is DENIED, the order denying the motion to set aside bond forfeiture is AFFIRMED, the Government's cross-appeal is DISMISSED, and the case is REMANDED for the dismissal of the non-tax counts of the indictment.

The Court's resolution of the abatement issue is important although relatively straight-forward.  It is black-letter that death while on appeal does abate the conviction.  The nuance addressed -- or at least implied -- is that the appeal has to question the conviction.  There was no appeal of the tax conviction pursuant to the guilty plea (likely because many pleas require waiver of the right to appeal and even when an appeal is permitted under the plea usually is not permitted for guilt of the crime or counts for the plea).

The takeaway is that a defendant convicted by jury verdict or judge decision should always appeal the conviction if the defendant appeals anything.  For example, an appeal of only the sentence likely would not require abatement of the guilty conviction (verdict or judge decision).  Of course, in almost all cases, the appeal does attack the conviction in some way, so that this precaution would usually be covered anyway.

Another interesting aspect of the holding is the forfeiture of the bond.  The district court had set a $400 million recognizance bond, with $28 million in cash as security.  The Court of Appeals noted:

The amount of the entire bond was $400 million, apparently the largest ever imposed on an individual defendant, and the cash security posted was originally $48 million, also an extraordinary cash security.  These amounts were required by the district court because of the nature of the crime, the amounts allegedly involved in the crimes, and Brooks's wealth. They arose out of a concern that Brooks would be able to flee and access those accounts to aid his flight. 

In setting the bond, the district court addressed the Government's concern that the defendant might be hiding assets while free on bond.  In the bond conditions, the district court specifically provided that "[a]ny knowing violation of this agreement, including . . . an attempt . . . to conceal assets . . . will be grounds for revocation of his bail release and for forfeiture of the $[48] million in bond security."  Finding that the defendant had attempted to secrete assets, the district court revoked bail and forfeited the $48 million cash.  That finding was made only upon consideration of the Government's submissions.

The Court of Appeals held that the bond forfeiture was not subject to abatement because of the defendant's death.  While except for defendant's prosecution which is wiped out ab initio because of his death the bond would not have been imposed or forfeited, the bond really addresses different judicial concerns other than prosecution ab initio.  The Court of Appeals said:

While it is true that "but-for" the prosecution of the case against him, Brooks would not have been subject to the bail bond and the resulting forfeiture, this argument fails. When the district court in this case imposed the terms of pre-trial release on Brooks, it did so for reasons independent of the determination of his guilt or innocence. These terms and conditions were not determined by the outcome of the offenses prosecuted, and therefore the principles of abatement do not apply.

As to the justification for the bail revocation and bond forfeiture, the Court essentially applied a contract type analysis.  The conditions of the bond were set.  The defendant and the family members accepted the conditions.  The defendant violated the conditions, presumably knowing the contractual terms and the resulting forfeiture of the cash.  End of discussion.

Note that that Eighth Amendment's excessive fines prohibition is not implicated because the bond forfeiture, although functioning something like a fine, was simply a contractual condition to which all agreed.