Opinion
Case No. 11-CR-230
04-28-2014
UNITED STATES OF AMERICA, Plaintiff, v. JEROME RABINOWITZ, Defendant.
Judge Gregory L. Frost
ORDER
This matter came on for consideration upon the Motion for Stay of Forfeiture Proceedings (ECF No. 128) filed o March 21, 2014 by Defendant and Defendant's wife, Wendy Kaye Rabinowitz, and upon the Response (ECF No. 130) filed on April 8, 2014 by the Government.
For the reasons that follow, the Motion is found to be not well taken and the Court DENIES the same.
Pursuant to Rule 32.2(e) of the Federal Rules of Criminal Procedure, Defendant requests that this Court amend the Final Order of Forfeiture based upon the purported claim of Wendy Kaye Rabinowitz in the yellow diamond ring. Pursuant to Rule 32.2(c), Wendy Kaye Rabinowitz claims a bona fide ownership in the ring that was given to her by Defendant years before the Indictment and conviction of Defendant.
By way of background, Defendant was indicted in a 46 count Superseding Indictment charging Mail Fraud, Money Laundering, Wire Fraud, and Making False Claims. The Superseding Indictment also requested the forfeiture of certain property including the Cartier diamond ring and a personal money judgment. Following a lengthy jury trial, Defendant was found guilty of twenty-five (25) counts of Mail Fraud, three (3) counts of Money Laundering, nine (9) counts of Wire Fraud, and two (2) counts of Making a False Statement. The jury also returned a Special Verdict finding that the total amount of proceeds derived from or traceable to the mail and wire fraud violations was $492,024.53. The jury also found that the Cartier 5.29 carat diamond ring was subject to forfeiture to the Untied States as property involved in the offense of conviction. The Court accepted the jury's findings. The Government filed a Motion for an Order of Preliminary Forfeiture (ECF No. 75) and this Court granted preliminary forfeiture (ECF No. 76). An appeal was taken from the jury verdict and sentence on December 10, 2012 and on January 14, 2013 the Government filed a Motion for Final Forfeiture (ECF No. 92). This Court granted the motion by Order dated January 4, 2013 (ECF No. 93) but that Order was stayed pending appeal (ECF No. 105). The conviction was affirmed by the Sixth Circuit Court of Appeals (ECF No. 125) on February 12, 2014 and the Mandate (ECF No. 126) issued on March 6, 2014. On that same date, the Government filed a Satisfaction of Criminal Judgment (ECF No. 127) notice indicating that the monetary penalties had been satisfied but excepted out from the notice any asset forfeiture judgments that had been imposed.
The purported claim filed by Wendy Kaye Rabinowitz is time barred. The Government gave preliminary notice of forfeiture to Wendy Kaye Rabinowitz, the only known person who may have had an interest in the ring. Ms. Rabinowitz received the notice on September 13, 2012. Pursuant to 21 U.S.C. § 853 (n)(2), a potential claimant has thirty days from the notice or the final publication of notice to petition the Court for an adjudication of the claimed interest in the property. The final publication date was September 21, 2012. Because Ms. Rabinowitz received direct notice, the last day for her to file a claim was October 13, 2012. And, even if she did not get direct notice, which she did as evidenced by the receipt, the last day for filing after the publication was October 22, 2012. The purported claim in this case was not filed until March 21, 2014. It was filed nearly sixteen (16) months beyond the statutory deadline.
Furthermore, Ms. Rabinowitz failed to comply with the requirements of 21 U.S.C. § 853 (n)(3). The notice sent to Ms. Rabinowitz provided her with the requirements but she failed to follow those instructions. Courts have found that "strict compliance" with the statutory requirements are necessary. United States v. Burge, 829 F. Supp. 2d 664, 667 (C.D. Ill. Dec. 19 2011), United States v. Owens, 2010 WL 583910 at *3 (S.D. Ind. February 12, 2010), United States v. Speed Joyeros, S.A., 410 F. Supp. 2d 121, 124 (E.D. N.Y. 2006).
In this case, the purported petition was not signed by Ms. Rabinowitz under penalty of perjury. Although she alleges that the ring was given to her by Defendant "...years before the Indictment," she does not set forth with any particularities the time and circumstances regarding the acquisition of her right, title, and interest. The purported claim is statutorily inadequate.
Finally, and most importantly, Ms. Rabinowitz cannot claim interest in property that is subject to forfeiture when she received it as a "gift." She was not a bona fide purchaser for value. The ring was found to be purchased with a portion of criminal proceeds, an element of the money laundering offense of which Defendant was found guilty. Because of that fact, title passed immediately to the United States. Therefore, Defendant had no interest in the ring upon his acquisition of the property with ill-gotten gains and he could not thereafter make a gift of property he did not own. Ms. Rabinowitz's claim fails as a matter of law. United States v. Hailey, 924 F. Supp. 2d 648, 656 (Md. Feb. 26, 2013) and United States v. Klemme, 894 F. Supp. 2d 1113, 1117 (E.D. Wis. Oct. 1, 2012).
As stated by the Government, forfeiture and restitution are decidedly different. The Government may pursue both. There is no obligation to apply the forfeited assets to an order of restitution.
The Court therefore finds the claim of Ms. Rabinowitz to be without merit and the Court lifts the previously entered stay. The Government may dispose of the Cartier diamond ring in accordance with law.
IT IS SO ORDERED.
__________
Gregory L. Frost
United States District Judge