United States v. $271,087.88 in U.S. Currency Seized from Bank of Saipan Account No. Ending in Last Four Digits 0157, Held in the Name of "MCS"
1:22-cv-00020
N. Mar. I.Mar 12, 2025Background
- The United States filed a civil asset forfeiture action against $271,087.88 and $39,188.38 seized from two Bank of Saipan accounts held by Marianas Consultancy Services, LLC (MCS), alleging the funds were associated with wire fraud, honest services fraud, and money laundering.
- Claimants MCS and Alfred Yue challenged the forfeiture, moving to dismiss the complaint for failure to state a claim.
- The government alleged three schemes: (1) defrauding the Commonwealth Casino Commission (CCC) by avoiding licensing/fees; (2) honest services fraud/bribery of CNMI officials in exchange for favorable government treatment; (3) tax fraud by concealing reimbursement of business expenses to evade taxes.
- The Court evaluated whether the government’s complaint alleged sufficient facts and nexus under the Civil Asset Forfeiture Reform Act (CAFRA) and applicable federal statutes.
- The motion to dismiss was granted in part and denied in part: the court found only the honest services bribery scheme plausibly supported forfeiture under international promotional money laundering, but not as proceeds or tainted funds forfeiture.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Scheme 1 (CCC defrauding) is wire fraud | Avoiding regulatory fees constituted depriving CCC of property | Only regulatory interests at stake; not money/property theft | Not wire fraud; regulatory interest does not count as property loss |
| Whether Scheme 2 (Honest services fraud) supports forfeiture | Sufficient quid pro quo alleged for honest services fraud | No explicit quid pro quo/bribery agreement pled | Sufficiently pled under international promo. money laundering |
| Whether Scheme 2 supports proceeds/tainted funds forfeiture | Funds used in bribe scheme count as proceeds/tainted | Funds are not proceeds but instruments of the scheme | Not sufficiently alleged as proceeds/tainted funds |
| Whether Scheme 3 (tax fraud) supports forfeiture | Tax evasion via international wires constitutes wire fraud | No U.S. nexus for wire fraud statute; no proceeds to seized funds | Not wire fraud; lacks U.S. wire nexus, and funds not traceable |
Key Cases Cited
- Cleveland v. United States, 531 U.S. 12 (2000) (state's regulatory interests in licenses are not property for federal fraud statutes)
- Pasquantino v. United States, 544 U.S. 349 (2005) (government's right to collect taxes qualifies as property for fraud statutes)
- Kelly v. United States, 140 S. Ct. 1565 (2020) (object of fraud must be deprivation of money or property, not regulatory power)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (sets plausibility pleading standard necessary to survive a motion to dismiss)