United States v. All Assets Held at Bank Julius Baer & Co.
2011 U.S. Dist. LEXIS 31165
| D.D.C. | 2011Background
- The United States filed a civil forfeiture action seeking forfeiture of over $250 million held in multiple foreign accounts related to Lazarenko's conduct.
- Gazprom asserts an ownership or secured interest in the assets based on Russian law, arguing it is a victim of Lazarenko's scheme and alleging a pledge or constructive trust in its favor.
- Gazprom moves for judgment on the pleadings; the United States moves to strike Gazprom's claim for standing.
- The court analyzes whether Gazprom has standing to challenge the forfeiture and whether foreign law or comity affects the court's jurisdiction or the outcome.
- The court determines the governing law is United States law for questions of forfeiture interest and rejects Gazprom's arguments under Russian law and certain Russian judgments.
- The court grants the United States' motion for judgment on the pleadings, concluding Gazprom lacks a cognizable interest in the defendant property.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Gazprom have standing to challenge forfeiture? | Gazprom has a colorable interest under Russian law. | Gazprom has an ownership/secured interest in specific assets. | Gazprom lacks standing |
| Should U.S. forfeiture law yield to MLAT/comity or foreign law on the merits? | U.S. law governs whether assets are forfeitable. | Foreign law governs property interests due to MLATs and comity. | U.S. law governs merit; comity does not bar forfeiture |
| Do Gazprom's asserted Russian-law interests based on kickbacks create a property interest in the funds? | Russian law may create an undetermined interest if Gazprom is a fraud victim. | Gazprom has an ownership interest from kickbacks. | No cognizable Russian-law interest established |
| Does Gazprom have a pledge right under Russian law that extends to the defendant funds? | Pledge rights could secure an interest in proceeds. | Pledge extends to income from pledged property. | No pledge right to the funds; Russian law does not extend to income here |
| Does the Arbitrazh Court Moscow judgment create a secured interest in the defendant assets? | Judgment is against UESU, not specific assets; cannot create a security interest. | Execution may create a secured interest in assets under Russian law. | No secured interest; judgment does not attach to specific assets |
Key Cases Cited
- United States v. All Funds in Account Nos. 747.034/278, 295 F.3d 23 (D.C. Cir. 2002) (use of federal law to determine statute of limitations in forfeiture of foreign assets)
- United States v. Approx. $1.67 Million (US), 513 F.3d 991 (9th Cir. 2008) (apply U.S. law to determine whether property is subject to forfeiture)
- United States v. One Lincoln Navigator, 328 F.3d 1011 (8th Cir. 2003) (standing in forfeiture requires an interest in specific property)
- United States v. One-Sixth Share, 326 F.3d 36 (1st Cir. 2003) (unsecured creditors lack standing in forfeiture actions)
- United States v. Funds from Prudential Securities, 300 F. Supp. 2d 99 (D.D.C. 2004) (standing requirements for forfeiture actions)