Robyn White (White) appeals the district court’s 1 dismissal of her petition seeking half the proceeds of the sale of stock that was ordered forfeited in her ex-husband’s conviction for mail fraud and money laundering in connection with the Thomas Petters Ponzi scheme. We conclude that White does not allege a legal interest in the stock proceeds sufficient to confer standing, and that, even if she did, her petition fails on the merits. Accordingly, we affirm.
Robert Dean White (Defendant) founded ZINK Imaging, LLC (ZINK) 2 in 2005. Between approximately October 24, 2005, and January 19, 2006, Defendant invested $2,550,000 in ZINK. 3 Months later, in September 2006, White was hired as a marketing consultant for ZINK. After beginning a romantic relationship with Defendant in January 2007, White no longer received compensation for her work. She alleges that she continued working for the company because Defendant orally agreed to give her one-half the increase in value of his shares of ZINK stock. White and Defendant were married on February 22, 2008.
The Federal Bureau of Investigation (FBI) conducted a raid of Thomas Petters’ enterprises in September 2008, and White ceased working for ZINK that same month. On October 8, 2008, Defendant pled guilty to one count of mail fraud and one count of money laundering for his role in the Petters scheme. Defendant’s entire investment in ZINK was traced by a FBI forensic accountant to transfers from Petters Company, Inc. (PCI). Defendant admitted in his plea agreement that all funds he received from PCI were proceeds of the Petters fraud. Defendant further admitted that the fraud spanned more than thirteen years, during which time he fabricated documents for the purpose of defrauding third parties into loaning PCI billions of dollars.
Defendant transferred his ZINK stock to his counsel, Joe Friedberg, “at about the time of the search warrant raid on Petters Company.” Robert White Dep. 61:9-64:19. Shortly after taking control of the ZINK stock, Friedberg received an offer of $3 million for the stock. ZINK’s chief executive officer told Friedberg that if he sold the stock within the next four or five days, the purchaser would loan ZINK an additional $5 million needed to keep the company operating. Friedberg then sold the stock for $3 million and transferred the proceeds to the Receiver in the Petters bankruptcy proceeding.
On September 13, 2010, the district court ordered that all of Defendant’s property derived from or traceable to the fraud be forfeited to the United States. On or about September 20, 2010, White filed for divorce from Defendant. In the divorce proceeding, White sought an award of one-half the proceeds of the ZINK stock, 4 alleging that the proceeds were marital property under Minnesota law.
On October 13, 2010, following the entry of a preliminary order of forfeiture, which did not specifically forfeit the ZINK stock, White filed her initial forfeiture petition, in which she claimed a marital interest and “an interest similar to a quantum meruit claim” in the forfeited proceeds of the ZINK stock. The parties agreed to stay the district court’s consideration of White’s initial petition because the ZINK stock had not yet been specifically forfeited.
On January 6, 2011, the district court entered an order forfeiting the $3 million in proceeds from the sale of the ZINK stock. The district court concluded that the government had established the requisite nexus between the fraud and the
On April 5, 2011, the Hennepin County District Court entered a judgment and decree in the Whites’ divorce proceeding. The order adopted a stipulation between White and Defendant that awarded White one-half the proceeds from the sale of the ZINK stock. On April 19, 2011, the federal district court dismissed White’s petition, finding that White could not challenge the forfeiture, that White lacked standing to claim a portion of the ZINK proceeds, and that even if she had standing, White’s petition failed on the merits. Because the divorce decree was entered after both of White’s petitions were filed, the district court did not consider the decree in its order. On appeal, White argues that she has a right to challenge the forfeiture, that she has standing, and that she is a bona fide purchaser for value of the ZINK stock.
II.
We review
de novo
a district court’s grant of a motion to dismiss a forfeiture petition.
See Cent. Platte Natural Res. Dist. v. U.S. Dept, of Agric.,
A.
White contends that she has a right to relitigate the factual basis underlying the government’s forfeiture of Defendant’s ZINK stock. White argues that Defendant “obtained the subject ZINK shares prior to the infusion of said funds from PCI[.]” Appellant’s Br. 13. She further contends that “PCI received in consideration for [the $2.5 million transfer to ZINK], separate shares of ZINK stock.” Id. In essence, White argues the ZINK shares of stock were not necessarily the product of Defendant’s fraud.
White misunderstands the nature of an ancillary hearing. An ancillary proceeding allows White to establish her interest in the forfeited property as it com
B.
White next contends that she has standing to contest the forfeiture of the ZINK stock proceeds. “Standing in forfeiture cases has ‘both constitutional and statutory aspects.’ ”
United States v. Timley,
“Because a legal interest is required to bring a claim under 21 U.S.C. § 853(n)(2), a court must first look to the law of the jurisdiction that created the property right to determine whether the claimant has a valid interest.”
Id.
at 1129-30 (citing
United States v. One Lincoln Navigator 1998,
i.
We turn first to whether White has a legal interest in the stock proceeds under Minnesota contract law.
8
White
Under Minnesota law, “[t]he formation of a contract requires communication of a specific and definite offer, acceptance, and consideration.”
Commercial
Assocs.,
Inc. v. Work Connection, Inc.,
White’s petition alleges nothing more than that Defendant agreed to give her one-half the increase value in his ZINK stock in exchange for her continuing to work for the company without a salary. Importantly, no time frame or term was indicated in Defendant’s alleged promise to Wbiite. One-half the increase in value of the ZINK stock is a figure subject to price fluctuations. Accordingly, the amount Defendant promised cannot be ascertained without an agreed upon end date.
10
Similarly, the agreement between the two did not indicate a length of time or under what conditions White was to continue working for ZINK without a salary.
11
There is no
Even if we assume that White has pled an oral contract with definite enough terms to be enforceable, she must also assert a legal interest in the forfeited property.
See
21 U.S.C. § 858(n)(2). A valid contractual interest in a sum of money equal to one-half the increase in value of the ZINK stock is not the type of legal interest sufficient to confer standing to contest the forfeiture of the ZINK stock proceeds. Accepting the facts alleged in the petition as true, White had an oral contract with Defendant for a sum of money equaling half the increased value of the ZINK shares of stock. Thus, White’s interest in payment is tied to the stock’s value but is not actually
in
the stock or the proceeds thereof.
See
21 U.S.C. § 853(n)(2) (requiring an initial showing of a “legal interest in property which has been ordered forfeited”);
see also United States v. Ribadeneira,
Any breach by Defendant of the oral contract with White does not confer upon White a legal interest in the ZINK stock proceeds. As the district court aptly noted, Defendant did not promise to transfer fifty-percent of his shares of ZINK stock to White. D. Ct. Order of April 19, 2011, at 7. The ZINK stock was owned by Defendant and was held in his name. White also does not allege facts to show that she has a legal interest in the proceeds of the sale of Defendant’s ZINK stock. The sum of money owed to her, if the oral contract is deemed binding, could come from any of Defendant’s assets that were not the proceeds of criminal activity.
In
DSI Associates LLC v. United States,
the Second Circuit held that a purchase of shares without taking a security interest therein renders the purchaser merely a general creditor of the seller.
ii.
We turn next to White’s claim of a marital interest in the ZINK stock proceeds. White first contends that her marital interest is derived from Minnesota Statutes section 518.54 (now Minnesota Statutes section 518.003 subdivision 3(b)), which defines “marital property” and “nonmarital property” for purposes of marital dissolution. White also contends that the divorce decree entered in Hennepin County District Court awarding her one-half the proceeds of the ZINK stock confers standing upon her.
12
White thus uses divorce law to claim a marital interest in the stock proceeds.
13
Assuming, without deciding, that White has standing based on a marital interest in the ZINK stock proceeds, we need not reverse the district court’s order denying the hearing because 'White could not prevail even if one were granted.
See Timley,
"White cannot prevail in the forfeiture proceeding unless she qualifies for relief under one of the two prongs of § 853(n)(6). She must either demonstrate priority of ownership in the forfeited property or establish that she was a bona fide purchaser for value of the property. 21 U.S.C. §§ 853(n)(6)(A) (superior interest), (n)(6)(B) (bona fide purchaser);
Timley,
Assuming she has a legal interest derived from her marriage to and subsequent divorce from Defendant, White was not reasonably without cause to believe that the proceeds were subject to forfeiture at the time she acquired her interest. Under Minnesota divorce law, White’s rights vested, at the earliest, when she commenced the dissolution proceedings on September 20, 2010.
Miller v. Miller,
Because White has not alleged a legal interest in the ZINK stock proceeds, she lacks standing to maintain this action. To the extent that White has alleged a legal interest in the stock proceeds based on a marital interest, her petition fails on the merits. Accordingly, the district court’s judgment dismissing the petition and amended petition is affirmed.
Notes
. The Honorable Richard H. Kyle, United States District Judge for the District of Minnesota.
. In 2007, ZINK Imaging, LLC merged into ZINK Imaging, Inc.
. In August 2007, ZINK underwent a recapitalization. The recapitalization agreement stated that Defendant's investments in ZINK were deemed to be in exchange for his shares of ZINK stock.
. We note that White seeks half the proceeds from the sale of ZINK stock instead of half the increase in value of the stock, as allegedly promised.
. White’s amended petition alleged four interests in the proceeds of the stock: (1) beneficial and
de facto
ownership of one-half of Defendant's ZINK stock; (2) a marital interest; (3) "an interest similar to
quantum meruit; "
and (4) an oral contractual interest. White did not brief her claims of
de facto
ownership and
quantum meruit,
and so we consider only her marital and contractual interest in the proceeds of the ZINK stock.
See Carraher v. Target Corp.,
. We have considered and reject as inapposite,
United States v. Farley,
. Only the proceeds of the sale of the stock were forfeited to the United States government, not the stock itself.
. White also claimed an interest in the stock proceeds based on promissory estoppel. Promissory estoppel is an equitable claim under Minnesota law,
Ruud v. Great Plains Supply, Inc., 526
N.W.2d 369, 372 (Minn. 1995), and thus does not give rise to a legal interest under § 853.
Timley,
. White’s claim that Defendant promised to pay her half the increased value of his ZINK stock was not reflected in her first petition. The district court noted this discrepancy:
The Court must accept as true White’s assertion that Defendant made such a promise to her. Fed.R.Crim.P. 32.2(c)(1)(A). Nevertheless, the Court notes that this promise was nowhere mentioned in White’s initial Petition; only after she amended her Petition did she claim that there existed such an express agreement. Courts typically look askance at belated attempts to add new or additional grounds for relief to third-party petitions. See, e.g., United States v. Soreide,461 F.3d 1351 , 1355 (11th Cir.2006) (per curiam); United States v. Watson,549 F.Supp.2d 961 , 964 (W.D.Mich.2008); United States v. Strube,58 F.Supp.2d 576 , 585 (M.D.Pa.1999). Nevertheless, the Court need not — and does not — rely upon this ground to deny White relief.
D.Ct. Order of April 19, 2011, at 7 n. 5.
. White does not allege that Defendant agreed to give her half the increased value of his ZINK stock between the dates of January 2007 and October 2008 when “she was effectively ousted from her employment by the indictment of [Defendant]!.]” Appellant's Br. 26.
. White alleges that she worked from January 2007 to September 2008 without a salary. We note that if the alleged contract could not be performed in less than one year, it was required to be reduced to a writing to be enforceable under Minnesota's statute of frauds. Minn.Stat. § 513.01;
but see Eklund v. Vincent Brass and Aluminum Co.,
. Both of White's forfeiture petitions predate the divorce decree. Thus, she could not plead that the divorce decree conferred standing upon her in this forfeiture proceeding, and the district court did not consider the effect of that decree.
. As the district court noted, we confronted a nearly identical situation in
United States
v.
Cochenour,