United States v. Real Property Located At 760 West Beaver Creek Boulevard, Apt 111, Avon, Colorado, 1:24-cv-00583

The United States filed a civil forfeiture action under 21 U.S.C. § 881 and Supplemental Rule G seeking forfeiture of assets allegedly purchased with nearly $5 million in fraudulently obtained COVID-relief funds tied to Joshua Lybolt.
Two Snowmass Village condominium units (P157 and 17AB) are defendant properties; the complaint traces the allegedly fraudulent funds to those properties.
Lybolt is criminally prosecuted in a related case; the forfeiture proceedings are stayed pending his criminal trial (trial set for December 1, 2025).
The United States moved for interlocutory sale of both properties under Supplemental Rule G(7)(b)(i), citing defaulted mortgages and unpaid condominium assessments.
As of October 2024, the mortgage and condominium arrearages exceed roughly $900,000 on each unit (plus ~ $23,000 in condo assessments per unit); Lybolt does not dispute these defaults.
The magistrate judge recommends granting the interlocutory-sale motions, finding Rule G(7)(b)(i)(C) satisfied because the properties are subject to mortgages in default and that a sale would not violate the stay or § 981(g)(6).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether interlocutory sale is authorized under Supplemental Rule G(7)(b)(i)	Properties are subject to mortgages in default and carry excessive carrying costs, justifying interlocutory sale	Interlocutory sale is unnecessary; no showing property will depreciate; stay bars sale	Granted; Rule G(7)(b)(i)(C) satisfied because mortgages are in default and sale does not violate the stay
Whether a showing of depreciation is required for sale	Not required when a defaulted mortgage exists	Argues Rule requires risk of depreciation or deterioration	Rejected; default alone suffices under Rule G(7)(b)(i)
Whether interlocutory sale would violate the stay or 18 U.S.C. § 981(g)(6)	Sale is permitted to preserve value and protect lienholders; no evidence sale would harm value or lienholders	Sale would conflict with the court’s stay of forfeiture proceedings	Rejected; § 981(g)(6) permits orders to preserve value and protect lienholders during stays; sale comports with that provision
Whether Lybolt’s interest bars sale because he hopes to retain value if acquitted	Lybolt has no right to keep the properties absent resolving obligations; at most a residual claim to proceeds after obligations paid	Argues he should be allowed to keep property to benefit from appreciation	Rejected; failure to pay mortgage/assessments undermines his position and does not prevent interlocutory sale

United States v. Any & All Funds in UBS AG, [citation="628 F. App'x 296"] (5th Cir.) (district court has broad discretion to order interlocutory sale)
United States v. Real Prop. & Residence Located at 4816 Chaffey Lane, 699 F.3d 956 (6th Cir.) (interlocutory sale may be ordered to protect lienholders and preserve property value; sale can proceed despite stay when § 981(g)(6) satisfied)
United States v. Approximately 81,454 Cans of Baby Formula, 560 F.3d 638 (7th Cir.) (trial court has wide latitude in weighing factors for interlocutory relief)