Opinion
2:22-cr-00142-CDS-DJA
09-10-2024
UNITED STATES OF AMERICA, Plaintiff v. MEELAD DEZFOOLI, Defendant
JASON M. FRIERSON DANIEL D. HOLLINGSWORTH
JASON M. FRIERSON
DANIEL D. HOLLINGSWORTH
ORDER GRANTING UNITED STATES OF AMERICA'S MOTION FOR AN INTERLOCUTORY ORDER SALE OF 890 HARBOR AVENUE, HENDERSON, NEVADA, 89002
[ECF NO. 133]
CRISTINA D. SILVA, UNITED STATES DISTRICT JUDGE
The United States moves this Court to issue an Order for an Interlocutory Sale of the real property held in the name of Sanam Limited, located at 890 Harbor Avenue, Henderson, Nevada, 89002 (890 Harbor), which is subject to criminal forfeiture. Meelad Dezfooli identified himself as the sole owner of Sanam Limited.
LOT 374 OF PEARL CREEK - UNIT NO. 2, AS SHOWN BY MAP THEREOF ON FILE IN BOOK 149 OF PLATS, PAGE 4, IN THE OFFICE OF THE COUNTY RECORDER OF CLARK COUNTY, NEVADA; TOGETHER WITH ALL IMPROVEMENTS AND APPURTENANCES THEREON, APN: 179-28-814-060.
Superseding Criminal Indictment (SCI), ECF No. 97.
SCI, ECF No. 97, p. 2.
The grounds for granting the Order for an Interlocutory Sale of 890 Harbor are as follows. First, 890 Harbor is subject to taxes, its fees, and HOA fees, and the granting of an interlocutory sale will stop the accruing of taxes, its fees, and HOA fees against its value. Second, granting an interlocutory sale will avoid accidents and liability accruing against 890 Harbor. Third, this Court is authorized to approve interlocutory sales.
This Motion is made and is based on the papers and pleadings on file herein, the attached Memorandum of Points and Authorities, and the attached Exhibits.
MEMORANDUM OF POINTS AND AUTHORITIES
I. STATEMENT OF FACTS
The government incorporates the facts of the Superseding Criminal Indictment and the Motion to Prevent Foreclosure of 890 Harbor.
LR IA 10-3(a); SCI, ECF No. 97; Motion to Prevent Pearl Creek Homeowners Association's Default Foreclosure Sale of 890 Harbor Avenue, Henderson, Nevada, 89002 (Motion), ECF No. 93, pgs. 1-7; Exs. 1-1, 1-2, 2-1, 2-2, 3-1, 4-1, 7-1 books 1, 2, 6, 7, and property tracing, and 13-1.
On or around May 22, 2020, Dezfooli, on behalf of Sanam Limited, purchased 890 Harbor. The United States alleges the property was purchased with illegally obtained proceeds from his PPP scheme.
Motion, ECF No. 93, p. 6 and Exs. 3-1, 4-1, 4-2, 7-1 books 1-5 and property tracing, 11-1, 11-2, and 11-3.
SCI, ECF No. 97, p. 16-19; see footnotes 4 and 5.
On July 12, 2022, the United States filed Notices of Lis Pendens with this Court for all five real properties subject to forfeiture as identified in the Criminal Indictment: 6116 Chinook Way; 6033 Watermelon Street, Las Vegas, Nevada, 89081; 1829 La Calera Avenue, North Las Vegas, Nevada, 89084; 890 Harbor Avenue, Henderson, Nevada 89002; and 176 Glen Falls Avenue, Henderson, Nevada 89002.
Lis Pendens, ECF No. 8.
Lis Pendens, ECF No. 9.
Lis Pendens, ECF No. 10.
Lis Pendens, ECF No. 11.
Lis Pendens, ECF No. 12.
On December 12, 2023, a Ten-Count Superseding Criminal Indictment was returned charging Dezfooli with three counts of bank fraud in violation of 18 U.S.C. § 1344(2), three counts of concealment money laundering in violation of 18 U.S.C. § 1956(a)(1)(B)(i), and four counts of monetary transactions in criminally derived property in violation of 18 U.S.C. § 1957.
SCI, ECF No. 97.
In the Superseding Criminal Indictment, forfeiture is alleged under 18 U.S.C. § 981(a)(1)(C) with 28 U.S.C. § 2461(c) and 18 U.S.C. § 982(a)(2)(A) for Counts One through Three and identified 890 Harbor, four other real properties, a 2021 Tesla, and a 2021 Bentley as forfeitable property, and a criminal forfeiture money judgment of at least $11.2 million. At his arraignment, Dezfooli plead not guilty to all ten Counts; a jury trial is currently set for August 26, 2024.
Id., p. 16-19.
Initial Appearance/Arraignment & Plea, ECF No. 104.
Order to Continue, ECF No. 131.
As of June 22, 2023, Dezfooli owed $4,282.83 in past due HOA fees. As of April 2, 2024, Dezfooli owes $8,723.01, in past due property taxes. Republic Silver State Disposal Inc also filed liens against the property for unpaid fees. The fees are continuing to accumulate against the property and are decreasing its value.
Motion, ECF No. 93, Ex. C.
Ex. D, Property Account Inquiry, Clark County Treasurer, attached hereto and incorporated as if fully set forth herein.
Ex. E, Recorder's Office printout, attached hereto and incorporated as if fully set forth herein.
On June 23, 2023, the HOA recorded a notice of default and election to sell under notice of delinquent assessment lien. On December 8, 2023, the United States filed a motion to prevent the HOA from foreclosing. On January 24, 2024, the Court entered an order granting the motion to prevent the foreclosure.
Motion, ECF No. 93, Ex. C.
Motion, ECF No. 93.
Order, ECF No. 116.
II. ARGUMENT
This Court has authority to issue the Interlocutory Order of Sale. “At any time before entry of a final forfeiture order, the court, in accordance with Supplemental Rule G(7) of the Federal Rules of Civil Procedure, may order the interlocutory sale of property alleged to be forfeitable.”
On motion by a party or a person having custody of the property, the court may order all or part of the property sold if: (A) the property is perishable or at risk of deterioration, decay, or injury by being detained in custody pending the action; (B) the expense of keeping the property is excessive or is disproportionate to its fair market value; (C) the property is subject to a mortgage or to taxes on which the owner is in default; or (D) the court finds other good cause.
Supp. R. G(7)(b) (paragraphs omitted).
Only one of the grounds for interlocutory sale is required since Supplemental Rule G(7)(b) is disjunctive.
See Shelter Cove Marina, Ltd. v. M/YISABELLA, No. 3:17-CV-01578-GPC-BLM, 2017 WL 5906673, 2 (S.D. Cal. Nov. 30, 2017) (explaining that another Supplemental Rule for interlocutory sale with similar language is disjunctive); Cal. Yacht Marina-Chula Vista, LLC v. S/V OPILY, No. 14-cv-1215-BAS-BGS, 2015 WL 1197540, 2 (S.D. Cal. Mar. 16, 2015) (explaining the same).
Two reasons for the interlocutory sale apply in this case regarding the property: (1) the property is subject to HOA fees, taxes, assessments, special assessment, late fees, interest, penalties, and their continual accrual against the real property's value and (2) the court finds other good cause, (a) stopping the accruing of all the HOA fees, taxes, assessments, late fees, interest, penalties, and the continual accrual of the fees against the real property's value and (b) avoiding accidents and liability accruing against the real property. In 479 Tamarind Drive, the court granted the interlocutory sale because the property had “[m]ore than $40,437.55 in taxes... currently due... raising the risk that the County may move to impose a lien and thereby diminish the property's value to the Government should this forfeiture action succeed.” 890 Harbor's property value is decreasing rapidly. The HOA has already moved to foreclose due to unpaid fees.
Supplemental Rule G(7)(b); Fed. R. Crim. P. 32.2(b)(7); See United States v. One Parcel of Real Prop. Described as Lot 41, Berryhill Farm Estates, 128 F.3d 1386, 1389-90 (10th Cir. 1997).
United States v. All Right, Title & Interest in Prop., Appurtenances, & Improvements Known as 479 Tamarind Drive, Hallendale, Fla., 98 CIV. 2279 DLC, 2012 WL 3886698, 2 (S.D.N.Y. Sept. 7, 2012).
Id. at 2.
The accruing HOA fees, taxes, assessments, special assessment, late fees, interest, and penalties are decreasing the property's equity. In United States v. Fisch, the Interlocutory Sale was granted due to the accumulation of past due taxes. In Fisch, the property was substitute property and was divisible with the defendant's wife. Here the property was purchased with illegal proceeds and the whole amount is subject to forfeiture after the taxes and fees are paid.
United States v. Fisch, No. H-11-722, 2016 WL 4702588 (S.D. Tex. Sep. 8, 2016).
Id. at 2.
Id.
If an accident occurred on the property, that would rapidly decrease the property's equity. The government seeks to preserve as much of the equity as possible for the forfeiture proceedings. The sale proceeds of the real property will be the “substitute res subject to forfeiture in place of the property that was sold[, and] the United States must maintain them in an interest-bearing account.”
United States v. Haley, No. 11-CR-0540-WDQ, 2011 WL 6202787, 1 (D. Md. Dec. 8, 2011) (granting the interlocutory sale to avoid liability for accidents and to “avoid falling in arrears on the payment of applicable property taxes.”).
Supplemental Rule G(7)(b)(iv) (brackets added); United States v. King, No. 10 CR. 122 (JGK), 2010 WL 4739791, 4 (S.D.N.Y. Nov. 12, 2010).
“A sale must be made by a United States agency that has authority to sell the property, by the agency's contractor, or by any person the court designates.” The government recommends this Court authorize Doug Sawyer to sell the property under “28 U.S.C. §§ 2001, 2002, and 2004.”
Supp. R. G(7)(b)(ii).
Supp. R. G(7)(b)(iii).
III. JUDICIAL SALES PROCEDURE
If a court orders an interlocutory sale of property over the objection of any interested party, the sale must comply with the provisions of 28 U.S.C. §§ 2001 and 2002. These statutes provide procedural safeguards to ensure that court-ordered sales are made on terms that best preserve the parties' interests. Section 2001(a) authorizes public sales of property and sales by court-appointed receivers. Section 2001(b) permits private sales of property for cash or other consideration after a hearing of which notice to all interested parties shall be given by publication, or as otherwise directed by the court, and after the court finds that the best interests of the estate will be conserved thereby.
By this Motion, the United States requests authorization to proceed with a private sale of the above-listed property. Based upon the reasons set forth herein, the United States believes that a prompt sale of the property by the United States, followed promptly by releasing the proceeds to the United States affords the best protection to all concerned. The United States believes that a private sale versus a public sale will allow the United States the discretion to sell the property in the most commercially feasible manner and maintain the most value for Dezfooli.
As required by 28 U.S.C. § 2001(b), notice of the Government's Motion must be given by publication or otherwise as this Court directs. The sale of the property through the multiple listing service and other major internet websites for real property meets the requirements of 18 U.S.C. §§ 2001, 2002, and 2004.
Under 28 U.S.C. § 2001(b), three disinterested persons must appraise the properties. To meet that requirement, the United States has obtained the following neutral appraisal estimates as of April 2, 2024:
1. Zillow.com for $444,200;
2. Realtor.com for $464,304; and
3. Redfin.com for $477,756.
IV. CONCLUSION
Based on the foregoing reasons, this Court should order the interlocutory sale of 890 Harbor Avenue, Henderson, Nevada, 89002, and to authorize the United States Treasury to direct its contractor to designate a real estate broker or agent to sell it through one of the approved sale methods.
IT IS SO ORDERED:
Index of Exhibits
Exhibit D ............................................ Property Account Inquiry, Clark County Treasurer
Exhibit E................................................................................. Recorder's Office printout
Exhibit D - Property Account Inquiry, Clark County Treasurer
(Exhibit Omitted)
(Exhibit Omitted)
Exhibit E - Recorder's Office printout
(Exhibit Omitted)
(Exhibit Omitted)
(Exhibit Omitted)
(Exhibit Omitted)
(Exhibit Omitted)