Overview
In an opinion published on October 8, 2025, the Second Circuit vacated an order of forfeiture, holding that defendant Matt Elias could not be ordered to forfeit property that he never actually acquired. Through this ruling, the Second Circuit joins the majority side of a developing circuit split. Although Elias was convicted of Hobbs Act robbery, one could foresee the Court's holding applying in a variety of scenarios that frequently occur in white-collar cases, including when co-defendants in a fraud or money laundering scheme do not receive or only receive a portion of the proceeds.
Elias was the getaway driver for the robbery of a house in New York City. When convicted, he was ordered to forfeit $10,000, which was a pro rata share of what the co-defendants took during the robbery. But Elias was arrested on the night of the robbery and never received a share of the stolen property.
The question before the Court was whether a defendant needs to personally acquire something before it can be subject to forfeiture under 18 U.S.C. § 981(a)(1)(C). The Court's decision turned on the applicability of the Supreme Court's decision in Honeycutt v. United States, 581 US 443 (2017), to forfeiture under §981(a)(1)(C). Honeycutt held that only "tainted property acquired or used by the defendant" as a result of the underlying crime is forfeitable under 18 U.S.C. § 853(a)(1), so a defendant may not be held jointly and severally liable for "property that his co-conspirator derived from the crime but that the defendant himself did not acquire."
The Second Circuit undertook a textual analysis comparing the forfeiture statute relevant to Elias, § 981(a)(1)(C), and the forfeiture statute in Honeycutt, § 853(a)(1). The Court concluded that the statutes were functionally the same, and "[t]he key lesson from Honeycutt is that a defendant cannot be ordered to forfeit property that the defendant never acquired, where the applicable forfeiture statute describes forfeitable property using words implying personal possession like 'obtain.'" In doing so, the Court adopted a broader interpretation of Honeycutt than other Circuits. As the Court noted itself, with this decision it joins one side of a growing circuit split, joining the Third, Ninth, and Eleventh Circuits, and reaching a conclusion that opposes those of the Sixth and Eighth Circuits.
The Court's holding should extend to forfeitures arising from wire fraud, bank fraud, mail fraud, and money laundering convictions, among others. In other words, a defendant convicted of violating one or more of these statutes likely cannot be ordered to forfeit property or proceeds the defendant did not ever possess in the first place. For example, if a defendant is convicted of bank fraud committed on behalf of a business, but the defendant never received the profits, a court could hold that the defendant cannot be ordered to forfeit the value of the fraud scheme. Similarly, if co-defendants are convicted of fraud or money laundering, the forfeiture amount each defendant is ordered to pay could be limited to the amount of illegally obtained funds each defendant personally pocketed.
Read the opinion here.
