United States v. Liquidators of European Federal Credit Bank
630 F.3d 1139
| 9th Cir. | 2011Background
- Lazarenko laundered funds through Eurofed and other banks; Eurofed was liquidated by Antigua and Barbuda under local authority.
- Some of Lazarenko's assets (about $2.5 million and Ukrainian bonds) were held in two Eurofed accounts at Bank of America SF and seized by the U.S. government.
- The government sought criminal forfeiture under 18 U.S.C. § 982; civil forfeiture action was filed and later deemed untimely, resulting in a final civil judgment for Liquidators.
- A preliminary criminal forfeiture order was entered, and Liquidators pursued an ancillary proceeding under 21 U.S.C. § 853(n) to contest third-party interests.
- Liquidators argued three independent bar theories—statute of limitations, res judicata, and act of state doctrine—but the district court entered final forfeiture in favor of the government.
- The Ninth Circuit reversed and remanded, holding that the district court must vacate the forfeiture order and return the assets to Liquidators.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether judicial estoppel bars the government's position on ancillary proceedings | Liquidators assert government position inconsistent with earlier representations. | Government contends third parties can raise claims only in ancillary proceeding; earlier statements are consistent with later position. | Judicial estoppel bars government's inconsistent position. |
| Whether res judicata bars criminal forfeiture after civil forfeiture dismissal | Liquidators contend civil judgment precludes criminal forfeiture. | Government argues separate actions may proceed; forfeitability challenges can be raised anew in ancillary proceeding. | Res judicata bars the criminal forfeiture action. |
Key Cases Cited
- United States v. Nava, 404 F.3d 1119 (9th Cir. 2005) (third-party interests and § 853(n) framework for claims)
- United States v. Huntington Nat'l Bank, 574 F.3d 329 (6th Cir. 2009) (statutory grounds for relief under § 853(n)(6))
- United States v. Crozier, 777 F.2d 1376 (9th Cir. 1985) (due process and the right to be heard in forfeiture contexts)
- United States v. Ibrahim, 522 F.3d 1003 (9th Cir. 2008) (judicial estoppel elements and application)
- Adams v. Cal. Dep't of Health Servs., 487 F.3d 684 (9th Cir. 2007) (res judicata principles and related final judgments)
- Tahoe-Sierra Preservation Council, Inc. v. Tahoe Reg'l Planning Agency, 322 F.3d 1064 (9th Cir. 2003) (four-factor test for identity of claims in res judicata)
- United States v. Cunan, 156 F.3d 110 (1st Cir. 1998) (res judicata bars criminal forfeiture following civil forfeiture loss)