In Re SEIZURE OF APPROXIMATELY $12,116,153.16 AND ACCRUED INTEREST IN U.S. CURRENCY, Et Al.
903 F. Supp. 2d 19
D.D.C.2012Background
- Government renews filing to register and enforce Brazilian restraining orders on eleven US-held accounts totaling about $11.37 million in proceeds/instruments of crime.
- Accounts are offshore British Virgin Islands entities and held at Valley National Bank; Beneficial Owners are being prosecuted in Brazil.
- Brazilian authorities seek to preserve assets during foreign forfeiture proceedings via MLAT request; several restraining orders have been issued in Brazil.
- Prior Tiger Eye decision held §2467(d)(3)(A) did not permit pre-judgment restraint; Congress amended §2467(d)(3)(A) in 2010 to allow pre- and post-judgment restraints.
- Intervenors (account signatories and some corporations) oppose registration/enforcement on due process, dual forfeitability, Ex Post Facto, and validity of Harborside/Safeport restraints; Government seeks registration/enforcement of Brazilian orders.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether due process requires a prerestraint hearing | Intervenors: need prerestraint hearing under 18 U.S.C. § 983(j) as applied to § 2467 proceeding | Government: no prerestraint hearing required because foreign proceedings exist; extraordinary circumstances permit post-deprivation review | No prerestraint hearing required under these extraordinary circumstances |
| Dual forfetability satisfied | Intervenors: insufficient evidence that foreign offenses would be offenses in the US | Government: Brazilian offenses map to US crimes (money laundering, unlicensed money remitting); dual forfetability satisfied | Dual forfetability established; foreign offenses would be forfeitable in the US |
| Ex Post Facto and retroactivity of the 2010 Amendment | Intervenors: amendment retroactive punishes past conduct | Government: amendment is remedial civil jurisdiction expansion; not punitive or retroactive to increase liability for past conduct | Amendment is not retroactive; §2467 remains civil and expands temporal jurisdiction |
| Validity of Harborside and Safeport restraints | Intervenors: underlying conviction voided; restraint should not apply | Government: later venue-venue correction and ratification; restraint remains valid | Harborside/Safeport restraints withstand challenge; enforceable |
| Overall enforceability of Brazilian restraining orders under §2467(d)(3)(A)(ii)(I) and (B) | Government: all six criteria satisfied, including formal MLAT treaty, dual forfeitability, and due-process-compliant Brazilian proceedings | Intervenors: challenge several criteria; procedural and jurisdictional concerns | Renewed Application granted; restraining orders registered and enforced |
Key Cases Cited
- In re Tiger Eye Inv. Ltd., 613 F.3d 1122, 613 F.3d 1122 (D.C. Cir. 2010) (reaffirmed that pre-judgment restraint under § 2467(d)(3)(A) was limited; amended statute expanded authority)
- United States v. Ursery, 518 U.S. 267 (U.S. 1996) (forfeiture proceedings civil, not criminal)
- Landgraf v. USI Film Prods., 511 U.S. 244 (U.S. 1994) (two-step retroactivity analysis; statutory construction for retroactivity)
- Hong Kong & Shanghai Banking Corp. (HSBC) Funds Contained in Accounts Located at HSBC, 96 F.3d 20, 96 F.3d 20 (2d Cir. 1996) (retroactivity of civil forfeiture statutes—apply retroactivity where no rights impaired)
- United States v. Mazza-Alaluf, 621 F.3d 205 (2d Cir. 2010) (foreign money transmitting business; extraterritorial reach)
- Julius Baer & Co. v. Bank for Int’l Settlements (Julius Baer), 571 F. Supp. 2d 1 (D.D.C. 2008) (forfeiture civil nature; extraterritorial application considerations)