United States District Court, D. Nevada
J. DAWSON UNITED STATES DISTRICT JUDGE.
before the Court is the Government's Motion to Substitute
and to Forfeit Property of Henri Wetselaar, M.D. (#563).
Defendant Wetselaar filed a response in opposition (#573) to
which the Government replied (#650).
Superseding Criminal Indictment (“the
Indictment”) (#179) was entered on October 28, 2015
charging Defendant Henri Wetselaar, M.D.
(“Wetselaar”) in Count One with Conspiracy to
Distribute Oxycodone in violation of 21 U.S.C. §§
846 and 841(a)(1); in Counts Two through Nine with
Distribution of Controlled Substances in violation of 21
U.S.C. § 841(a)(1); in Count Thirteen with Money
Laundering in violation of 18 U.S.C. § 1957; in Count
Fourteen with Structuring Transactions to Evade Reporting
Requirements in violation of 31 U.S.C. § 5324(a)(3) and
with forfeiture allegations for criminal forfeiture money
judgments of $3, 600, 000.00 and $271, 500.00. Wetselaar was
given notice and actually received notice of the forfeitures
in Forfeiture Allegations One, Three and Four of the
Indictment. Additionally, the Government timely filed its
proposed forfeiture jury instructions and special verdict
forms (#366) prior to trial. On March 23, 2017, Wetselaar was
found guilty of Counts One through Nine and Counts Thirteen
18, 2017, Wetselaar filed a motion (#485) requesting that the
Court hear and determine what property is subject to
forfeiture and/or the amount of a personal money judgment if
sought by the government pursuant to Federal Rule of Criminal
Procedure (“Rule”) 32.2(b). After sentencing, a
forfeiture hearing was held on October 26, 2017. The Court
found at the hearing (#582, Transcript p.39) that the
Government had met its burden of proof for issuance of a
criminal forfeiture personal money judgment against Wetselaar
in the amount of $2, 257, 395.00 as the illegal proceeds of
his drug conspiracy and distribution convictions. Further,
the Court found that the Government had met its burden of
proof for issuance of a separate criminal forfeiture personal
money judgment against Wetselaar in the amount of $271,
500.00 arising from the illegal proceeds of his money
laundering and structuring convictions. The Court signed the
preliminary order of forfeiture and ordered that it be
attached to and become part of the judgment and conviction.
same day, the Government filed the present motion for
substitution and forfeiture.
32.2(c)(1)(B) allows the Court to “at any time enter an
order of forfeiture or [to] amend an existing order of
forfeiture to include property that . . . is substitute
property that qualifies for forfeiture under an applicable
statute.” “Rule 32.2(e) allows the government . .
. to seek substitute property.” United States v.
Newman, 659 F.3d 1235, 1242 (9th Cir. 2011) (citing 21
U.S.C. § 853(p)), abrogated on other grounds,
Honeycutt v. United States, 137 S.Ct. 1626, 1632
(2017). “If the government shows that the property is
subject to forfeiture under Rule32.2(e)(1), the court must .
. . enter an order forfeiting that property, or amend an
existing preliminary or final order to include it[.]”
Rule32.2(e)(2)(A). “[T]he law provides that if, upon
conviction, forfeitable assets are unreachable by the
government, the court shall order the forfeiture of
substitute assets: property of the defendant that is not
connected to the underlying crime.” United States
v. Ripinsky, 20 F.3d 359, 362 (9th Cir. 1994) (also
finding that § 853 and RICO, 18 U.S.C. § 1963, are
so closely parallel that cases and legislative history may be
referred to interchangeably). “Subdivision (e) makes
clear, as courts have found, that the court retains
jurisdiction to amend the order of forfeiture at any time to
include . . . any substitute property.” Rule 32.2
advisory committee note.
the defendant's illegal proceeds are unavailable, the
United States can substitute any of defendant's assets
for the criminal forfeiture money judgment. “[A]ny
other property of the defendant” can be substituted and
forfeited to the United States. United States v.
Hooper, 229 F.3d 18, 823 (9th Cir. 2000); United
States v. Bollin, 264 F.3d 391, 423 (4th Cir. 2001)
(explaining that the court substitutes “any other
property up to the value of the initially forfeited property,
in the event the original property is unavailable”).
The defendant's property need not be traceable to the
criminal proceeds of the crime. Ripinsky, 20 F.3d at
362 (explaining that property being substituted is not
necessarily connected to the underlying crime); United
States v. Lester, 85 F.3d 1409, 1410 n.3 (9th Cir.
U.S.C. § 853(p) “carries its own set of procedural
and substantive requirements before the court may order the
forfeiture of substitute property.” Newman,
659 F.3d at 1242; United States v. Candelaria-Silva,
166 F.3d 19, 42 (1st Cir. 1999) (“To obtain an order
forfeiting property as a substitute asset, the government
need only comply with the requirements of §
853(p)”). “In any case described in any of
subparagraphs (A) through (E) of paragraph (1), the court
shall order the forfeiture of any other property of the
defendant, up to the value of any property described in
subparagraphs (A) through (E) of paragraph (1), as
applicable.” 21 U.S.C. § 853(p)(2).
Paragraph (2) of this subsection shall apply, if any property
described in subsection (a), as a result of any act or
omission of defendant - (A) cannot be located upon the
exercise of due diligence; (B) has been transferred or sold
to, or deposited with, a third party; (C) has been placed
beyond the jurisdiction of the court; (D) has been
substantially diminished in value; or (E) has been commingled
with other property which cannot be divided without
21 U.S.C. § 853(p)(1). “[A] court …
order[s] forfeiture of any other property of the defendant
when the defendant's property subject to forfeiture as
proceeds or instrumentalities has been transferred, placed
out of reach of the court or has declined in value.”
Hooper, 229 F.3d at 823.
United States must show that just one of the requirements of
section 853(p) is satisfied in order to substitute and
forfeit. Lester, 85 F.3d at 1410 (explaining
“if any of a defendant's forfeitable assets are
unavailable due to an enumerated act or omission of the
defendant, the court … order[s] the forfeiture of any
other property of the defendant”); United States v.
Gordon, 710 F.3d 1124, 1137 n.14 (10th Cir. 2013)
(explaining “in order for the government to forfeit
substitute property, it must establish that through any act
or omission of the defendant one of five things has
occurred”); United States v. Van Nguyen, 602
F.3d 886, 903 (8th Cir. 2010) (explaining that 21 U.S.C.
§ 853(p)(1) requires “proof of one of five
categories of unavailability” of defendant's
In particular, substitute assets may be forfeited if the
government shows that, as a result of any act or omission of
the defendant, the forfeitable property (1) cannot be located
upon the exercise of due diligence; or (2) has been
transferred or sold to, or deposited with, a third party.
Here, the government complied with § 853(p) by
submitting a motion and affidavit that recited the efforts
the government had made to locate the proceeds of the drug
conspiracy that would have been directly forfeitable under
§ 853(a). The affidavit concluded that Reyes-Padilla had
dissipated or otherwise disposed of the proceeds of her drug
trafficking so that the proceeds could not, despite the
exercise of due diligence, be located. Based on this record,
it was not error for the district court to order the
forfeiture of other property of the defendant up to the
amount described in the money judgment.
Candelaria-Silva, 166 F.3d at 42-43.
United States makes this showing, substitution is mandatory.
See 21 U.S.C. § 853(p) (“the court
shall order the forfeiture of any other property of
the defendant”) (emphasis added); Ripinsky, 20
F.3d at 362 (stating “the court shall order
the forfeiture of substitute assets”) (emphasis added);
Newman, 659 F.3d at 1249, abrogated on other
grounds, Honeycutt, 137 S.Ct. at 1632 (holding
that “shall order” is mandatory for the district
court); United States v. Alamoudi, 452 F.3d 310, 314
(4th Cir. 2006) (holding “the underlying statutory
scheme … mandated the district court to order
forfeiture of substitute assets”).
Court finds that the Government has met its burden by showing
that four of the five listed conditions under section 853(p)
are satisfied. The record clearly shows that: (1) the
substitute property is owned by Wetselaar; and (2) the
illegal proceeds of his crimes for which he was convicted.
Further, the property (the illegal cash proceeds of his
crimes) cannot be located upon the exercise of due diligence;
has been transferred, sold to, or deposited with a third
party; has substantially diminished in value; and has been
commingled with other property which cannot be divided
without difficulty. See 21 U.S.C. § 853(p).
Defendant's arguments, it is Defendant's own illegal
conduct which has made it difficult if not impossible to
trace the cash proceeds from his conspiracy to distribute
drugs and his actual drug distribution. While some of the
forfeited property listed below may be the actual illegal
cash proceeds, most of it is likely not, because of the
fungible nature of cash. The trial evidence, PSR, exhibits
and declarations clearly show that Wetselaar constantly moved
cash through numerous bank accounts, purchased assets with
cash, and structured banking transactions with cash. The only
specific cash assets that could be tracked by law enforcement
were the $44, 000.00 cash payment towards the down payment on
the 6102 Falconer Avenue property and the illegal structuring
of $271, 500.00.
the Court ordered forfeiture, it found that evidence had
shown by a preponderance of the evidence that Wetselaar had
received illegal proceeds of at least $2, 257, 395.00 in cash
by illegally prescribing drugs. The evidence also showed that
Litwin received cash from persons seeking the illegal
prescriptions and handed it to Wetselaar. Wetselaar purchased
coins and other assets with that cash. The cash was also
structured into bank deposits designed to avoid mandatory
reporting of the transactions to regulatory authorities by
the banks. On many occasions, Wetselaar would write a check
from the accounts to pay Litwin as an independent contractor.
Litwin would then endorse the check and Wetselaar would
deposit it into a separate bank account or cash the check.
Cash withdrawals from the bank accounts could rarely, if
ever, be tracked further.
bank accounts were often in the name of Wetselaar and his
wife, Bing Wetselaar. Payments were then made from the
accounts to other entities for services such as landscaping,
utilities, charitable donations, credit cards, living
expenses or other consumer spending. Wetselaar also deposited
cash and coins into private vaults or boxes, claiming at
various times that two of the boxes belonged to Litwin and
attempting to transfer some of the coin purchases or other
assets to Litwin, or to create the appearance that the
property belonged to Litwin and not to himself. These
transactions meet the requirements of section 853(p): the
property (the illegal cash proceeds of his crimes) cannot be
located upon the exercise of due diligence; has been
transferred, sold to, or deposited with a third party; has
substantially diminished in value; and has been commingled
with other property which cannot be divided without
difficulty. See 21 U.S.C. § 853(p). Therefore,
the motion to substitute and forfeit the property of
Defendant Henri Wetselaar is granted.
Findings and Order
Court, having granted the United States' Motion to
Substitute and to Forfeit Property of Henri Wetselaar, MD,
and good cause appearing, finds the assets described below
are owned by Henri Wetselaar, MD.
HEREBY ORDERED, ADJUDGED, AND DECREED that the following
assets are substituted and are forfeited to the United States
pursuant to Fed. R. Crim. P. 32.2(e) and 21 U.S.C. §
1. $14, 991.18;
2. $4, 899.47;
3. $667, 133;
4. $15, 416.33;
5. $9, 950.39;
6. $531, 409.95;
7. Twenty-nine (29) 1 oz South Africa Gold ...