799 F. Supp. 2d 1319
M.D. Fla.2011Background
- This is a civil forfeiture action in the M.D. Florida (Orlando) seeking forfeiture of assets described in Attachment A believed to derive from wire fraud in an international Ponzi scheme led by Benevides.
- The Government filed a Verified Complaint in rem on Oct 30, 2009 and later amended it; Kinetic Leasing, via First Bank & Trust Leasing Services, filed a Fourth Amended Claim asserting interests as a judgment creditor of Benevides and related entities (SIIC and Skyview).
- The Government moved to strike/dismiss the Fourth Amended Claim (Doc. 199); the magistrate recommended denial; the Government objected; Kinetic responded.
- The court addresses standing (Article III and statutory) for untitled assets, whether Kinetic can state a claim (innocent owner defense) at this stage, and the effect of the relation-back doctrine; the motion to strike/dismiss is denied and the case remains stayed pending further proceedings.
- The case remains stayed; within 21 days after lift of stay, Kinetic must file an answer under Rule G(5)(b) or a motion to dismiss under Rule G(8)(b).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Kinetic has Article III standing to contest untitled assets | Kinetic asserts colorable ownership/priority in untitled assets | Government contends lack of colorable interest in untitled assets | Yes; Kinetic has facially colorable standing |
| Whether Kinetic has statutory standing to contest untitled assets | Kinetic complied with 18 U.S.C. § 983(a)(2) and Rule G(5) | Ownership definition in § 983(d) is irrelevant to standing | Yes; statutory standing established |
| Whether Kinetic's claim fails to state a claim because of innocent owner defense | Kinetic asserts innocent owner defense and/or relation-back arguments | Innocent owner defense premature and should be raised in an answer | Not yet; defense is premature at pleading stage; claim not subject to dismissal at this stage |
| Whether the relation-back doctrine defeats Kinetic's claims before judgment | Relation-back could vest Government title retroactively | Relation-back does not defeat potential innocent owner claims without final forfeiture judgment | Relation-back cannot defeat innocent owner claims before final judgment; deny motion on that basis |
| Overall disposition of the Government’s motion to strike/dismiss | Motion should be granted for lack of standing/defect in claims | Claims are properly pled and standing established; innocent owner issues not ripe | Motion denied in all respects; stay continues with scheduling for answer/dismissal |
Key Cases Cited
- Via Mat Int'l South America Ltd. v. United States, 446 F.3d 1258 (11th Cir.2006) (standing can be ownership or lesser possessory interest for Article III standing)
- United States v. $38,000.00 in United States Currency, 816 F.2d 1538 (11th Cir.1987) (standing requirements and interpleader-like intervention relevant to forfeiture)
- United States v. One 1990 Beechcraft, 1900 C Twin Engine Turbo-Prop Aircraft, 619 F.3d 1275 (11th Cir.2010) (distinction between standing and ownership in forfeiture context)
- United States v. Bailey, 419 F.3d 1208 (11th Cir.2005) (relation-back doctrine and timing of vesting title)
- United States v. One Lincoln Navigator, 328 F.3d 1011 (8th Cir.2003) (ownership/standing distinctions in innocent owner analysis)