## Facts

- John Voigt organized an “advance fee” fraud through the Euro-American Money Fund Trust, soliciting substantial upfront fees from loan applicants and investors for promised financing that never occurred.
- Over approximately three years, the Trust obtained about $18.5 million from victims.
- Fraud proceeds were moved through multiple financial accounts, and Voigt purchased high-value assets, including jewelry.
- The government pursued money-laundering and forfeiture theories focusing on transactions involving proceeds and purchases made from accounts containing commingled tainted and untainted funds.
- After conviction, the district court ordered restitution of $7,040,000 and entered a criminal forfeiture order under 18 U.S.C. § 982(a)(1), including forfeiture of jewelry, based on a finding by a preponderance of the evidence that the jewelry was sufficiently connected to money laundering.

## Issues

1. Whether using an acquitted co-defendant allegedly serving as Voigt’s and the Trust’s counsel as a confidential informant constituted outrageous government conduct violating Fifth Amendment due process.
2. Whether the district court violated the Sixth Amendment right to counsel of choice by disqualifying an additional defense attorney for conflicts without an evidentiary hearing.
3. Whether 18 U.S.C. § 1956(a)(1) and 18 U.S.C. § 982(a)(1) require tracing when tainted funds are commingled with untainted funds in an account used to buy property sought for forfeiture.
4. What burden of proof applies to criminal forfeiture under § 982(a)(1): beyond a reasonable doubt or preponderance of the evidence.
5. Whether the evidence was sufficient to sustain Voigt’s tax evasion convictions under 26 U.S.C. § 7201.
6. Whether the restitution order and denial of severance were erroneous.

## Decision

- The Third Circuit affirmed Voigt’s convictions for conspiracy, money laundering, and tax evasion.
- The court affirmed the $7,040,000 restitution order and affirmed the denial of severance.
- The court rejected the Fifth Amendment due process claim, holding the government’s conduct was not sufficiently extreme to warrant relief.
- The court rejected the Sixth Amendment counsel-of-choice claim, holding the district court did not abuse its discretion in disqualifying conflicted counsel and that the lack of a formal evidentiary hearing did not require reversal.
- The court held that forfeiture under § 982(a)(1) requires proof of a nexus between the property and the money-laundering offense and vacated the forfeiture order insofar as it was based on purchases from a commingled account without adequate tracing to laundered funds.
- The court held that the burden of proof for § 982(a)(1) forfeiture is preponderance of the evidence, even though the forfeiture order was vacated on nexus/tracing grounds.
- The case was remanded for further forfeiture proceedings consistent with the opinion.

## Legal Principles

- Outrageous government conduct is a narrow due process doctrine; relief requires conduct that is fundamentally unfair and “shocking,” not merely questionable tactics.
- The Sixth Amendment right to counsel of choice is subject to trial-court authority to disqualify counsel where actual or potential conflicts threaten the fairness and integrity of proceedings.
- Criminal forfeiture under 18 U.S.C. § 982(a)(1) requires the government to prove a nexus between the specific property sought and the money-laundering offense; reliance on the mere presence of tainted funds in a commingled account may be insufficient where meaningful tracing cannot be shown.
- The burden of persuasion for criminal forfeiture under § 982(a)(1) is preponderance of the evidence because forfeiture is part of sentencing following a conviction proved beyond a reasonable doubt.

## Conclusion

The Third Circuit left intact Voigt’s fraud-related convictions and restitution but required a tighter connection between property and the laundering offense before forfeiture under § 982(a)(1), vacating the jewelry forfeiture where commingling defeated adequate tracing while confirming that forfeitability need only be proved by a preponderance of the evidence.


United States v. Voigt, 89 F.3d 1050 (3d Cir. 1996)