UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT ______________

August Term 2021

(Argued: April 28, 2022 | Decided: August 24, 2022)

Docket No. 21-993

UNITED STATES OF AMERICA,

Appellee,

v.

MARTIN SHKRELI,

Defendant,

EVAN GREEBEL,

Defendant-Appellant. ______________ Before: WESLEY, BIANCO, and PÉREZ, Circuit Judges.

Defendant was convicted of conspiracy to commit wire fraud and conspiracy to commit securities fraud and ordered to pay restitution. The United States District Court for the Eastern District of New York (Matsumoto, J.) granted the Government’s application for writs of garnishment seeking access to defendant’s 401(k) retirement accounts. Defendant appealed. We hold that the Mandatory Victims Restitution Act authorizes garnishment of defendant’s 401(k) retirement funds. We remand to the district court, however, to determine whether the ten-percent early withdrawal tax will be imposed upon garnishment, limiting the Government’s access to defendant’s retirement funds. We also hold that the Consumer Credit Protection Act’s 25-percent cap on garnishments does not apply to limit the Government’s garnishment. We VACATE and REMAND for further proceedings consistent with this opinion. _________________

THOMAS R. PRICE, Assistant United States Attorney (Varuni Nelson, Rachel G. Balaban, Beth P. Schwartz, on the brief), for Breon Peace, United States Attorney for the Eastern District of New York, Brooklyn, New York, for Appellee.

REED BRODSKY, Gibson, Dunn & Crutcher LLP, New York, NY, for Defendant-Appellant.

_________________ WESLEY, Circuit Judge:

Evan Greebel was ordered to pay $10,447,979 in restitution to his victims following his convictions for conspiracy to commit wire fraud and conspiracy to commit securities fraud. The United States Government sought to enforce Greebel’s restitution order under the Mandatory Victims Restitution Act (“MVRA”) by garnishing approximately $921,000 contained in Greebel’s retirement accounts. The United States District Court for the Eastern District of

2 New York (Matsumoto, J.) granted the Government’s application for writs of garnishment seeking access to defendant’s 401(k) retirement accounts.

This appeal requires us to decide whether the district court properly granted the Government’s application for garnishment. Like the district court, we hold that the MVRA permits the Government to garnish Greebel’s retirement funds to compensate the victims of his crimes, notwithstanding the Employee Retirement Income Security Act of 1974 (“ERISA”)’s anti-alienation provision.

We further agree with the district court that the plan documents provide Greebel the right to withdraw the funds in his retirement accounts. At the same time, we reiterate that the Government, in seeking garnishment to enforce restitution under the MVRA, steps into the defendant’s shoes, acquiring whatever rights the defendant himself possesses to the balance of the 401(k) accounts. Thus, here, the Government’s right to Greebel’s retirement funds may be limited by the ten-percent early withdrawal tax to which Greebel would be subject. The district court did not consider whether Greebel would be subject to the early withdrawal tax upon seizure of funds by the Government or determine what property interest remains in Greebel’s retirement accounts. Accor