Opinion
2:21-CR-045-JCM-DJA
01-19-2023
UNITED STATES OF AMERICA, Plaintiff, v. WHITNEY ANN BARNES, Defendant.
DANIEL J. ALBREGTS UNITED STATES MAGISTRATE JUDGE MISTY L. DANTE Assistant United States Attorney
DANIEL J. ALBREGTS UNITED STATES MAGISTRATE JUDGE
MISTY L. DANTE Assistant United States Attorney
GOVERNMENT'S MOTION TO PREVENT FORECLOSURE UNDER 21 U.S.C. § 853(K)
DANIEL J. ALBREGTS UNITED STATES MAGISTRATE JUDGE
The government moves this Court to issue an order to prevent Prestige Default Services, LLC, from proceeding with a mortgage foreclosure sale on 4872 Long Acres Lane, Caliente, NV 89008 (property) scheduled for January 27, 2023. The government is filing this motion contemporaneously with its Motion to Substitute and to Forfeit Property of Whitney Ann Barnes. 21 U.S.C. § 853(k) prohibits Prestige from foreclosing on the property because the government has alleged the property is subject to forfeiture in its Motion to Substitute and Forfeit the property. Pending this Court's decision on the government's Motion to Substitute and Forfeit, this Court should grant this motion and issue the order.
THAT PORTION OF GOVERNMENT LOT 4 COMMONLY DESCRIBED AS THE NORTHWEST QUARTER (NW1/4) OF THE NORTHWEST QUARTER (NW1/4) OF SECTION 2, TOWNSHIP 3 SOUTH, RANGE 67 EAST, M.D.B. & M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: PARCEL 3 OF THAT CERTAIN PARCEL MAP RECORDED OCTOBER 2, 1998 IN THE OFFICE OF THE COUNTY RECORDER OF LINCOLN COUNTY NEVADA IN BOOK B OF PLATS PAGE 154 AS FILE NO. 111670 LINCOLN COUNTY, NEVADA RECORDS, APN: 13-030-32 (property).
This motion is made and is based on the attached Memorandum of Points and Authorities, the pleadings and papers on file herein, and the attached Exhibit.
MEMORANDUM OF POINTS AND AUTHORITIES
I. STATEMENT OF FACTS
From at least July 1, 2019, through February 19, 2020, Barnes stole currency and property from the Caliente Post Office when she issued, and later cashed, Post Office money orders that she did not purchase. Barnes and her husband later cashed those money orders. Barnes also stole directly from the Post Office's deposit bag, from her own cash drawer, and from the stamp unit reserve. USPS suffered a loss of $19,859.39 in currency and property. Although Barnes has paid back some of the money, the outstanding loss to USPS is $13,108.10.
Criminal Information (CI), ECF No. 4; Plea Agreement (PA), ECF No. 6; Arraignment and Change of Plea (AP), ECF No. 8; Preliminary Order of Forfeiture (POOF), ECF No. 11; Final Order of Forfeiture (FOOF), ECF No. 21; Criminal Judgment (CJ), ECF No. 22.
Barnes pled guilty to Count One of a One-Count Criminal Information charging her with theft of government property. Barnes agreed to the imposition of the in personam criminal forfeiture money judgment of $18,400 and this Court entered the Final Order of Forfeiture.
Id.; for violation of 18 U.S.C. § 641 with forfeiture under 18 U.S.C. § 981(a)(1)(C) with 28 U.S.C. § 2461(c) and 21 U.S.C. § 853(p).
The government is filling this motion contemporaneously with its Motion to Substitute and Forfeit Property of Whitney Barnes. The government recently received the Notice of Trustee Sale from Prestige stating a sale date of January 27, 2023, listing the property as being subject to a foreclosure.
Notice of Trustee's Sale, Exhibit 1, attached hereto and incorporated herein by reference as if fully set forth herein.
II. ARGUMENT
This Court Has Authority to Prevent Prestige from executing a Mortgage Foreclosure Sale of the property Under 21 U.S.C. § 853(k).
When Barnes pleaded guilty to the One-Count Criminal Information charging her with theft of government property, this Court found that, “on the government's motion, the Court may at any time enter an order of forfeiture or amend an existing order of forfeiture to include subsequently located property or substitute property pursuant to Fed. R. Crim. P. 32.2(e) and 32.2(b)(2)(C).” To prevent third parties claiming an interest in forfeitable property from interfering with the orderly conduct of criminal cases, Congress prohibits third parties from commencing actions against the interest of the United States in forfeitable property after an indictment has been filed. If this Court grants the government's contemporaneous Motion to Substitute and Forfeit the subsequently located property, the property would then be forfeitable.
Fed. R. Crim. P. 32.2(e) and 32.2(b)(2)(C); FOOF, ECF No. 21; CJ, ECF No. 22.
In MacInnes, the Ninth Circuit expressly held a foreclosure sale is “an action at law or equity against the United States in contravention of § 853(k).” The mortgage foreclosure sale is statutorily barred. If this Court grants the government's contemporaneous Motion to Substitute and Forfeit the subsequently located property, the foreclosure sale by Prestige would be an action against the United States under 21 U.S.C. § 853(k).
United States v. MacInnes, 223 Fed.Appx. 549, 550, 553-54 (9th Cir. 2007) (per curiam) (citing United States v. Phillips, 185 F.3d 183,187-88 (4th Cir. 1999) (holding “the foreclosure action constituted ‘an action at law or equity against the United States' and was statutorily barred under § 853(k)” quoting 21 U.S.C. § 853(k)); United States v. Lazarenko, 476 F.3d 642, 648 (9th Cir. 2007) (explaining third party cannot bring an action at law or equity) (citing 21 U.S.C. § 853(k)).
See United States v. Phillips, 185 F.3d 183,187-88 (4th Cir. 1999) (ellipsis added) (holding “the foreclosure action ... was statutorily barred under § 853(k)”); In re America Basketball League, Inc., 317 B.R. 121, 129 (Bankr. N.D. Cal. 2004) (“Consistent with the plain language of the statute, the case law has uniformly found that § 853(k) imposes an absolute bar to actions that assert an interest in forfeitable property if they are commenced outside of the ancillary proceedings.”).
If the foreclosure sale is stayed by this Court, the government will serve Prestige and other interested parties with the Order. The interested parties can then request an ancillary hearing under 21 U.S.C. § 853(n). “Section 853(n) provides the process for vindicating a third party's interests in forfeited property. The law appears settled that an ancillary proceeding constitutes the only avenue for a third party claiming an interest in seized property.” Under 21 U.S.C. § 853(c), (k), and (n), a mortgage foreclosure sale against the government's interest in the property is an action against the United States, outside the confines of the exclusive ancillary procedure of § 853(n), and is therefore barred.Accordingly, when a property is identified as forfeitable by this Court, third parties are prohibited from foreclosing on that property. A third party's only recourse is to petition the Court in the process identified in Section § 853(n).
Lazarenko, 476 F.3d at 648 (explaining “a court adjudicates a third party's interest in the forfeited property in an ancillary proceeding after concluding the criminal case and entering a preliminary order of forfeiture.”); Fed. R. Crim. P. 32.2(b) advisory committee's note (bracket added) (“[T]hird party interests in a criminally forfeited property are litigated by the court in the ancillary proceeding following the conclusion of the criminal case and the entry of a preliminary order of forfeiture.”); 21 U.S.C. § 853(n); 18 U.S.C. § 1963( l).
Lazarenko, 476 F.3d at 646-48, 650, 652; Phillips, 185 F.3d at 187-88; footnotes 9-11.
MacInnes, 223 Fed.Appx. at 550, 553-54.
Id.; see footnote 11-12.
III. CONCLUSION
The United States identified 4872 Long Acres Lane, Caliente, NV 89008 as a forfeitable property when it filed its Motion for Substitution and Forfeiture contemporaneously with this Motion. This possible mortgage foreclosure sale violates 21 U.S.C. § 853(k) if this Court grants the government's Motion to Substitute and Forfeit. Accordingly, the Court should enter an order prohibiting the foreclosure sale.
IT IS SO ORDERED
Index of Exhibit
Exhibit 1 ..................................................................................... Notice of Trustee's Sale
Exhibit 1 - Notice of Trustee's Sale
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