Schwartz v. District Attorney of New York County, 8 N.Y.3d 426 (2007)
A criminal defendant lacks standing to enforce CPLR 1349, which governs the distribution of forfeited assets, to compel the application of those assets to satisfy the defendant’s restitution obligations in a separate case.
Summary
Lawrence Schwartz pleaded guilty to federal insider trading charges and state scheme to defraud charges. As part of the state plea, he forfeited $250,000, stipulating it be distributed under CPLR 1349. Schwartz then sought to compel the District Attorney to apply the forfeiture to his outstanding federal restitution. The District Attorney refused, arguing CPLR 1349 was intended to protect victims, not defendants. The New York Court of Appeals held that Schwartz lacked standing to enforce CPLR 1349 because the statute’s zone of interest protects crime victims and encourages forfeiture, not benefiting criminals by directing forfeited funds. The Court noted that a defendant must exhaust resources before relying on forfeited assets and that the plea agreement does not compel the District Attorney to use the forfeiture to satisfy federal restitution.
Facts
Lawrence Schwartz pleaded guilty to federal insider trading. As a condition of his supervised release, he was ordered to pay restitution.
He also pleaded guilty in New York State to a scheme to defraud, admitting to bid-rigging. As part of the state plea, he agreed to a forfeiture of $250,000, to be distributed according to CPLR 220.50(6) and CPLR 1349.
Schwartz requested the District Attorney apply the state forfeiture to his federal restitution obligation, citing CPLR 1349(2)(c).
The District Attorney refused, stating CPLR 1349 was designed to protect victims, not defendants.
Procedural History
Schwartz commenced a CPLR article 78 proceeding to compel the District Attorney to apply the forfeiture to his federal restitution.
The District Attorney moved to dismiss, arguing the petition was untimely and Schwartz lacked standing.
Supreme Court denied the motion and granted the petition, finding Schwartz had standing.
The Appellate Division reversed, granting the District Attorney’s motion and dismissing the proceeding, finding the petition untimely and Schwartz lacked standing.
The Court of Appeals granted permission to appeal.
Issue(s)
Whether a criminal defendant has standing to enforce CPLR 1349 to compel the application of forfeited assets to satisfy the defendant’s restitution obligations in a separate case.
Holding
No, because the defendant’s purported injury does not fall within the zone of interests protected by CPLR 1349.
Court’s Reasoning
The Court of Appeals determined that Schwartz lacked standing because his “purported injury — the windfall he failed to realize when the District Attorney refused to apply the state forfeiture to satisfy petitioner’s federal restitution obligations— does not fall within the zone of interests protected by CPLR 1349.”
The court emphasized the legislative intent behind forfeiture statutes, stating they are designed