United States v. $506,069.09 Seized From First Merit Bank
664 F. App'x 422
| 6th Cir. | 2016Background
- Dr. Syed Zaidi, operator of a pain clinic (PMNO), was alleged to have prescribed controlled substances outside professional practice to undercover officers; DEA suspended his registration and a grand jury later indicted him on drug, fraud, and money‑laundering counts.
- The government filed an in rem civil forfeiture complaint seeking ~ $4.8 million across 14 financial/investment accounts (in the names of Zaidi, his wife Erum, and PMNO) and 139 pieces of jewelry allegedly bought with illicit proceeds.
- Claimants (Dr. Zaidi, Erum, and PMNO) remained abroad (Pakistan), sought to avoid in‑person court appearances citing hardship and Fifth Amendment concerns, and repeatedly declined depositions and court‑ordered appearances.
- The district court warned that the case would not proceed in absentia, denied repeated requests to excuse appearances, dismissed Erum’s and Zaidi/PMNO’s claims for want of prosecution under Rule 41(b), and granted forfeiture.
- Claimants also moved for partial summary judgment (prematurely, before discovery), sought dismissal of the forfeiture complaint as to Erum, and sought release/transfer of seized funds to pay taxes; the district court denied all those motions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether dismissal for want of prosecution was an abuse of discretion | Zaidi/Erum: medical travel limitations and Fifth Amendment concerns justified absence; dismissal improper | Gov’t: claimants willfully thwarted proceedings, refused discovery/appearances, prejudiced government | Affirmed: dismissal proper under Rule 41(b) given willfulness/reckless disregard, prejudice, prior warnings, and consideration of lesser sanctions |
| Whether denial of partial summary judgment was erroneous | Claimants: complaint insufficient; gov’t bound to administrative record; no evidence tying most accounts/jewelry to illegal activity | Gov’t: premature motion filed before discovery; §983(c)(2) allows use of post‑complaint evidence; claimants prevented discovery by refusing to return | Affirmed: motion was premature and denial appropriate under Rule 56(d); government had potential additional evidence |
| Whether district court erred in denying Erum’s motion to dismiss complaint | Erum: complaint fails to state a forfeiture claim as to her personal jewelry/accounts | Gov’t: complaint states sufficient facts to support reasonable belief it can prove forfeiture at trial (commingling, financial analysis) | Affirmed: complaint met Supplemental Rule G(2)(f) and §983 pleading standards |
| Whether seized funds should be released/transferred to pay taxes/accountants under §983(f) | Claimants: hardship and need to pay taxes/accountants justify release/transfer | Gov’t: claimants lack community ties and are avoiding jurisdiction; seized funds not eligible for release under §983(f)(8) as PMNO not a legitimate business | Affirmed: district court correctly denied transfer/release under §983(f) criteria |
Key Cases Cited
- Schafer v. City of Defiance Police Dep’t, 529 F.3d 731 (6th Cir.) (failure‑to‑prosecute dismissal reviewed for abuse of discretion)
- Prime Finish, LLC v. ITW Deltar IPAC, [citation="608 F. App'x 310"] (6th Cir.) (standard for willfulness/reckless disregard in dismissal analysis)
- United States v. Morganroth, 718 F.2d 161 (6th Cir.) (limits on blanket Fifth Amendment assertions in civil depositions)
- United States v. Salti, 579 F.3d 656 (6th Cir.) (fugitive‑disentitlement doctrine and burden when illness prevents return)
- United States v. Coffman, [citation="574 F. App'x 541"] (6th Cir.) (commingling and forfeiture of legitimately sourced funds when used to conceal proceeds)