United States v. Aaron A. Rutledge Anthony Rutledge, AKA "Tony" Rutledge, Star-Beachboys, Inc.

Anthony Rutledge, Sr., was indicted for mail and wire fraud, among other crimes. The district court, on motion of the gov ernment, issued a preliminary injunction seizing the assets of, and imposing a receivership on a nonprofit corporation Rutledge allegedly controlled, on the ground that the corporation’s assets would be subject to criminal forfeiture if Rutledge were convicted. Rutledge appeals the preliminary injunction.

We conclude that the corporation’s assets would not be subject to criminal forfeiture if Rutledge were convicted, because those assets do not qualify as “proceeds” that were “obtained” by Rutledge as a result of his crimes, within the meaning of 18 U.S.C. § 981 (a)(2)(A). We accordingly vacate the district court’s injunction.

BACKGROUND

Rutledge was the president and chairman of the board of a large non-profit corporation, Unity House, Inc., incorporated under the laws of Hawaii. Unity House was originally funded by members of two labor unions. Over the years, the corporation made various investments that permitted it to continue to offer support services to its members. At the time of the district court’s injunction, Unity House had listed assets of…