595 F. App'x 336
5th Cir.2014Background
- Dong Dang-Huynh ran U.S. Tours as a remittance business and used it to launder customer cash by structuring deposits below CTR thresholds; over $24 million was deposited through U.S. Tours.
- Texas seized roughly $1+ million from two U.S. Tours bank accounts (the Funds) in 2004; after Texas non-suited in 2012 the FBI seized the Funds pursuant to a federal conditional seizure order.
- A federal jury convicted Dong of money-laundering and related offenses; the district court entered a $24 million money judgment and a preliminary criminal forfeiture order (initial order did not expressly list the Funds).
- The government later amended the forfeiture order to include the Funds; U.S. Tours and its counsel Nowak & Stauch filed an ancillary petition under 21 U.S.C. § 853 seeking return of the Funds.
- The district court dismissed the § 853 petition for failure to plead an interest superior to Dong’s interest at the time of the acts giving rise to forfeiture; the appellate court affirms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether petitioners can obtain relief by showing the Funds belonged to U.S. Tours (§ 853(n)(6)(A)) | Funds became U.S. Tours’ property when deposited; thus not Dong’s property | § 853(n)(6)(A) requires superior interest at time of acts giving rise to forfeiture, which predate the deposits | Petitioners failed to allege an interest in the Funds that existed before the acts giving rise to forfeiture; dismissal affirmed |
| Whether Rule 32.2 amendment adding the Funds was improper | Amendment was procedurally improper under Fed. R. Crim. P. 32.2 | Government contends amendment was appropriate due to Texas’s prior action and comity | Court declined to reach merits because § 853 provides the exclusive ancillary remedies; procedural challenge barred in ancillary proceeding |
| Whether Nowak & Stauch can recover fees under the common-fund doctrine | Counsel asserts entitlement to attorney’s fees from the Fund as a common-fund claim | Government argues ancillary remedies are governed solely by § 853(n)(6) | Court held such equitable arguments cannot supplant the statutory § 853(n)(6) requirements and therefore are not available absent satisfying that statute |
| Whether § 853(n)(6) violates Fifth Amendment due process | Petitioners contend § 853 forecloses adequate challenge to initial forfeiture, violating due process | Government relies on Supreme Court precedent upholding § 853 procedures | Libretti forecloses this due-process challenge; § 853(n)(6) is constitutional |
Key Cases Cited
- Libretti v. United States, 516 U.S. 29 (Sup. Ct. 1995) (rejects argument that Rule 11(f) inquiry is required to protect third-party rights in forfeiture cases)
- United States v. Holy Land Found. for Relief & Dev., 722 F.3d 677 (5th Cir. 2013) (§ 853(n)(6) is the exclusive avenue for third-party claims)
- United States v. Alvarez, 710 F.3d 565 (5th Cir. 2013) (standard of review for § 853(n) dismissal; pleadings accepted as true)
- United States v. McHan, 345 F.3d 262 (4th Cir. 2003) (rejects due-process challenge to § 853 scheme)