Campuzano v. Alavi Foundation
2016 U.S. App. LEXIS 13225
| 2d Cir. | 2016Background
- The United States sought civil forfeiture of properties and bank accounts tied to Alavi Foundation (a NY non-profit) and the 650 Fifth Avenue Company (a partnership in which Alavi owns 60%), alleging violations of IEEPA/OFAC Iranian Transactions Regulations (ITRs) and money-laundering statutes.
- In 1989 Assa (Assa Limited/Assa Corp.) acquired 35% (later 40%) of 650 Fifth Ave. Co.; pre-1995 record and documentary evidence show Bank Melli (Iranian government bank) controlled Assa and benefited from the Building’s income.
- In 1995 U.S. executive orders and OFAC rules designated Bank Melli as owned/controlled by Iran and imposed sanctions; contemporaneous corporate records show nominal 1995 divestment of Assa to purported third parties for nominal consideration.
- In December 2008 the FBI executed a search warrant at Alavi and 650 Fifth Ave. offices and seized computers and extensive documents; the Government then amended its forfeiture complaint to add Alavi and the Partnership.
- The district court denied Claimants’ suppression motion and granted summary judgment forfeiting Claimants’ interests; on appeal the Second Circuit vacated and remanded as to Alavi and 650 Fifth Ave. Co. on multiple grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bank Melli continued to own/control Assa after 1995 | Gov: Bank Melli continued to control Assa despite nominal transfers; documentary/email evidence shows post-1995 control | Alavi: Corporate records and witness testimony show bona fide 1995 divestiture | Court: No genuine dispute — record shows Bank Melli continued control after 1995; no triable issue for Claimants on ownership/control |
| Whether Alavi knew Assa remained controlled by Bank Melli (mens rea for ITR/IEEPA liability) | Gov: Knowledge can be inferred; Claimants participated in transactions benefitting Bank Melli | Alavi: Post-1995 inquiries and lack of information create a triable issue as to knowledge | Court: Genuine dispute of material fact exists as to Alavi’s knowledge; summary judgment improper on IEEPA and money-laundering theories |
| Whether the district court could decide statute of limitations sua sponte on summary judgment | Gov: District court correctly rejected defense after record review | Alavi: Court raised and decided defense without notice or opportunity to respond | Held: Procedural error — court erred by deciding the defense sua sponte without notice; vacate that portion for reconsideration with proper notice |
| Whether seized evidence must be suppressed given warrant defects and discovery obligations (inevitable discovery / good faith) | Gov: Protective order, subpoenas, and later document productions make suppression unnecessary; alternatively, good-faith reliance on warrant | Alavi: Warrant lacked particularity and seizure violated Fourth Amendment; discovery obligations don’t eliminate exclusionary analysis | Held: Fourth Amendment applies; warrant lacked requisite particularity; District Court failed to make particularized inevitable-discovery findings; remand for item-by-item inevitable-discovery analysis and opportunity to raise good-faith Leon defense |
Key Cases Cited
- Lombard v. Booz-Allen & Hamilton, Inc., 280 F.3d 209 (2d Cir.) (rule that summary judgment record viewed in favor of nonmoving party)
- United States v. Eng, 971 F.2d 854 (2d Cir. 1992) (two-step inevitable discovery framework and requirement for particularized findings)
- United States v. Eng, 997 F.2d 987 (2d Cir. 1993) (reiterating Eng I standards on inevitable discovery)
- United States v. Leon, 468 U.S. 897 (1984) (good-faith exception to exclusionary rule)
- Groh v. Ramirez, 540 U.S. 551 (2004) (warrant particularity; supporting affidavit cannot cure defective warrant unless deliberately incorporated)
- Maryland v. Garrison, 480 U.S. 79 (1987) (particularity limit prevents exploratory searches)
- Nix v. Williams, 467 U.S. 431 (1984) (origin of inevitable discovery doctrine)
- United States v. Heath, 455 F.3d 52 (2d Cir. 2006) (demand for detailed showings to prevent post-hoc validation under inevitable discovery)
- United States v. Vilar, 729 F.3d 62 (2d Cir. 2013) (burden to prove inevitable discovery by preponderance)
- United States v. Premises and Real Property..., 113 F.3d 310 (2d Cir. 1997) (forfeiture context and exclusionary rule applicability)