High court ruling favors local man in forfeiture case

The U.S. Supreme Court ensured Monday that a Chattanooga man convicted in a drug conspiracy won’t have to pay the government about $70,000 prosecutors claimed he owed in proceeds.

Justice Sonia Sotomayor penned the unanimous decision, ending a two-year appeals battle Terry Honeycutt waged from federal prison after a jury found him guilty in 2014 of knowingly selling a product with his brother that could be used to make methamphetamine.

Honeycutt, a former employee of the Brainerd Army Store, is expected to finish his 60-month sentence in June 2018. But in the meantime, some defense attorneys say, Monday’s decision could have lasting implications on the power prosecutors can use to seize money and other assets and property from defendants.

“I think Honeycutt now puts burden on the government to prove each defendant is responsible for illegal proceeds,” said Chattanooga defense attorney Jonathan Turner. “Each defendant to actually ‘obtain’ them. In this case, Tony owned the place, Terry just worked for them. So Terry was guilty of the crime because he was actually selling the paraphernalia, but he wasn’t profiting from the store. He got a fixed salary, no matter what was sold.”

The Department of Justice did not return a request for comment Tuesday when the Times Free Press asked to speak with Acting Solicitor General Jeffrey B. Wall. That’s the attorney who argues Supreme Court cases for the government.

The story began in 2008 when Terry Honeycutt noticed a product called “Polar Pure” flying off of the shelves at his father’s Brainerd Army Store. Because the people buying it looked “edgy,” he called Chattanooga police and asked if the product could be used to make meth. It could and was being used for that end, authorities told him.

In 2007, the store sold only two bottles. Federal prosecutors targeted Honeycutt and his brother, Tony, a co-owner at the store, because they made about $270,000 in profits selling a total of 21,000 bottles between 2008 and 2010. But when the brothers were indicted in 2012, they didn’t just face a slew of drug conspiracy charges. Prosecutors said they were “jointly and severally liable” and wanted them to forfeit the money.

“That’s what they were trying to do,” defense attorney Robin Flores said of the prosecutors. “Make it to where you can tie in anything you supposedly gained as a result of the illegal activity.”

Tony Honeycutt, the co-owner, pleaded guilty and received five months in prison and agreed to pay back $200,000. Terry Honeycutt went to trial and lost on 11 of his 14 counts. But when it came time for sentencing, he successfully convinced U.S. District Judge Harry “Sandy” Mattice he shouldn’t be ordered to pay the remaining $70,000. How? Because the government hadn’t introduced proof he personally benefited from the conspiracy as an employee with a fixed income.

The Sixth Circuit Court of Appeals overturned Mattice’s decision after prosecutors pushed the issue. Monday’s Supreme Court decision reinstates Mattice’s original order.

“All Terry Honeycutt obtained from the sale was a continued source of his job,” defense attorney Chrissy Mincy explained, breaking down the argument in favor of Honeycutt. “He didn’t obtain any profits. And the government was trying to seize about $70,000 because that’s how much the business made … but his brother is really the one that received the $270,000.”

Justice Sotomayor followed a similar road of logic in her opinion. Using a hypothetical, she asked readers to imagine a mastermind who grows and harvests marijuana and then pays a student to distribute it. In one year, she wrote, the mastermind earns $3 million and the student $3,600.

If arrested and charged under the same federal drug statute as Honeycutt, “the student would face a forfeiture judgment for the entire amount of the conspiracy’s proceeds: $3 million,” Sotomayor wrote. “The student would be bound by that judgment even though he never personally acquired any proceeds beyond the $3,600.”

It’s not uncommon for a court to order restitution in a case. Said Turner: “Two co-defendants throw a brick through the window of a restaurant. The court orders $500. This is criminal, not civil, and both are ordered to pay it to make the victim whole.”

Plus, conspiracy law holds defendants responsible for the actions of their co-conspirators.

But the Supreme Court’s decision, which sets a new precedent for lower courts to interpret, could affect a number of cases because it also taps into the question of civil forfeiture. Tennessee legislators have pushed as recently as March to amend the state’s civil asset seizure law, which critics say allows police to seize money and property from suspects even if they’re not convicted or charged.

“I think it’s a potentially important decision because it could signal that these justices are willing to take another look at forfeiture, at least in the context of how broad congress has made it,” said Carrisa Byrne Hessick, a professor with the University of North Carolina School of Law.

She pointed to a different opinion that Supreme Court Justice Clarence Thomas wrote in Leonard v. Texas, which reached the court after Lisa Leonard fought to overturn Texas’ seizure of about $200,000 in cash from a safe in her son’s car in 2013.

Thomas noted that older forfeiture laws were narrower and applied to specific areas, like customs and piracy. These proceedings were justified “because the party responsible for the crime was frequently located overseas and thus beyond the personal jurisdiction of the United States courts,” he wrote.

Those older laws were also narrower in the kind of property authorities could acquire, Thomas wrote. “They typically covered only the instrumentalities of the crime (such as the vessel used to transport the goods), not the derivative proceeds of the crime (such as property purchased with money from the sale of the illegal goods).”

Nowadays, Thomas said, not only are forfeiture laws broader, they also don’t contain the same protections criminal proceedings do, such as a right to a jury trial or a higher standard of proof beyond a reasonable doubt.

“Partially as a result of this distinct legal regime, civil forfeiture has in recent decades become widespread and highly profitable,” he concluded.

Contact staff writer Zack Peterson at zpeter son@timesfreepress.com or 423-757-6347. Follow him on Twitter @zack

“All Terry Honeycutt obtained from the sale was a continued source of his job. He didn’t obtain any profits. And the government was trying to seize about $70,000 because that’s how much the business made … but his brother is really the one that received the $270,000.” – CHRISSY MINCY, ATTORNEY FOR TERRY HONEYCUTT