Opinion
ORDER OF FORFEITURE
EDWARD M. CHEN, District Judge.
On April 9, 2014, the Court sentenced Defendant pursuant to his conviction for conspiracy and securities fraud. Dkt. No. 291. Under 18 U.S.C. § 981(a)91)(C), the Court may order forfeiture of property which "constitutes or is derived from proceeds traceable to" securities fraud. See, e.g., United States v. Contorinis, 692 F.3d 136, 145 (2d Cir. 2012). In its sentencing memorandum, the government requested forfeiture of $446, 829.49 - an amount representing the total illegal gain to Defendant from his securities fraud scheme ($1, 185, 368.91) less the amount ordered in restitution ($738, 539.42). Dkt. No. 279, at 8-9. Defendant has neither objected to the forfeiture order nor raised any objection to the amount sought by the government.
At the sentencing hearing, however, the Court inquired whether apportionment of the amount sought to be forfeited needed to be apportioned to represent the fact that, according to the evidence, Mr. Karim Bayyouk received a substantial portion of the illegal gain from Defendant's activity.
The parties have submitted supplemental sentencing memoranda on this question. Where a defendant has been convicted of conspiracy, a forfeiture order may reach the proceeds "obtained by the conspiracy as a whole." United States v. Newman, 659 F.3d 1235, 1244 (9th Cir. 2011). The Second Circuit has described the reasoning for this rule by stating:
[A] court may order a defendant to forfeit proceeds received by others who participated jointly in the crime, provided the actions generating those proceeds were reasonably foreseeable to the defendant. This extends to forfeiture proceedings, where the general principle is that a defendant is liable for the reasonably foreseeable acts of his co-conspirators. The extension of forfeiture to proceeds received by actors in concert with a defendant may be deemed to be based on the view that the proceeds of a crime jointly committed are within the possessory rights of each concerted actor, i.e. are "acquired" jointly by them and distributed according to a joint decision.
Id. at 147. Defendant was convicted of conspiracy to commit securities fraud. The evidence at trial established that he led the conspiracy and initiated the tainted trades made by Mr. Bayyouk for their account. Accordingly, the Court need not apportion the forfeiture award to account for Defendant's and Mr. Bayyouk's respective share of the proceeds from the securities fraud conspiracy.
Accordingly, it is ORDERED that a money judgment in the amount of $446, 829.49 be entered against defendant Bassam Yacoub Salman. This amount represents the amount of illegal proceeds defendant earned from the insider trading scheme and thus forfeitable to the United States pursuant to 28 U.S.C. § 2461(c) and 18 U.S.C. § 981(a)(1)(C). This amount represents a total illegal gain of $1, 185, 368.91 (an amount Defendant has not disputed) less the $738, 539.42 this Court has ordered Defendant to pay his victims in restitution.
In his supplemental memorandum on forfeiture, Defendant has raised three issues regarding the restitution award.
IT IS SO ORDERED.
First, Defendant has requested that his restitution payments be capped at 7% of his monthly income following his release from custody. This request is DENIED.
Second, Defendant has requested that his payments be directed first to compensating his victim and that the payments only be applied to the forfeiture order once full restitution is paid. This request is GRANTED. See United States v. Cohan, ___ F.Supp.2d ___, 2013 WL 6767873, at *4 (E.D.N.Y. Dec. 23, 2013); see also 18 U.S.C. § 3612(c).
Finally, Defendant requests that the Court modify the restitution award so that Defendant is not jointly and severally liable for the entire amount of his victim's losses. Rather, Defendant requests that the Court apportion the restitution award between himself, Maher Kara, and Mounir Kara. This request is DENIED. See 18 U.S.C. § 3664(h) ("If the court finds that more than 1 defendant has contributed to the loss of a victim, the court may make each defendant liable for payment of the full amount of restitution....").