Opinion
2:23-CR-191-APG-NJK
05-09-2024
UNITED STATES OF AMERICA, Plaintiff, v. CAROL KIRBY, Defendant.
UNITED STATES OF AMERICA'S MOTION FOR AN INTERLOCUTORY ORDER SALE OF FORFEITED REAL PROPERTIES AND ORDER
ANDREW P. GORDON UNITED STATES DISTRICT
The United States moves this Court to issue an Order for an Interlocutory Sale of the following real properties forfeited in the Preliminary Order of Forfeiture:
1. 6800 E. Lake Mead Blvd #2076, Las Vegas, Nevada 89156 (6800 Lake Mead);
2. 2284 Mesa Canyon Dr, Laughlin, Nevada 89029 (2284 Mesa Canyon);
3. 781 N. Leslie St., Pahrump, Nevada 89060 (781 Leslie);
4. 1412 West Grove Rd, Decatur, Illinois 62521 (1412 West Grove); and
5. 1414 West Grove Rd, Decatur, Illinois 62521 (1414 West Grove)(all of which constitutes properties).
6800 E. Lake Mead Blvd #2076, Las Vegas, Nevada 89156, more particularly described as:
PARCEL I: TOGETHER WITH AN UNDIVIDED ALLOCATED FRACTIONAL INTEREST IN AND TO THE GENERAL COMMON ELEMENTS, AS SET FORTH IN, AND SUBJECT TO, THE AMENDED PLAT AND THE MOUNTAINSIDE COMMUNITY SUBDIVISION DECLARATION.
PARCEL II: UNIT 2076 IN BUILDING 10, AS SHOWN ON THE FINAL MAP OF AMENDED PLAT OF MOUNTAINSIDE COMMUNITY SUBDIVISION, FILED IN BOOK 50 OF PLATS, PAGE 29, IN THE OFFICIAL RECORDS OF THE COUNTY RECORDER, CLARK COUNTY, NEVADA, AND AS DEFINED AND SET FORTH IN AND SUBJECT TO THAT CERTAIN DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR AMENDED PLAT OF MOUNTAINSIDE COMMUNITY SUBDIVISION, RECORDED SEPTEMBER 24, 1993 AS INSTRUMENT NO. 01167 IN BOOK 930924, OFFICIAL RECORDS, CLARK COUNTY, NEVADA (“MOUNTAINSIDE COMMUNITY SUBDIVISION DECLARATION”).
PARCEL III: TOGETHER WITH AN EXCLUSIVE INTEREST IN AND TO THOSE LIMITED COMMON ELEMENTS, IF ANY, APPURTENANT TO THE UNIT, AS SET FORTH IN, AND SUBJECT TO, THE AMENDED PLAT AND THE MOUNTAINSIDE COMMUNITY SUBDIVISION DECLARATION.
PARCEL IV: TOGETHER WITH A NON-EXCLUSIVE EASEMENT OF REASONABLE INGRESS TO AND EGRESS FROM THE UNIT, AND OF ENJOYMENT OF THE GENERAL COMMON ELEMENTS, AS SET FORTH IN, SUBJECT TO, THE AMENDED PLAT AND THE MOUNTAINSIDE COMMUNITY SUBDIVISION AND ALL IMPROVEMENTS AND APPURTENANCES THEREON. APN: 140-23-217-156.
2284 Mesa Canyon Dr, Laughlin, Nevada 89029, more particularly described as:
LOT 9 IN BLOCK 1 OF TERRACE V UNIT 1, AS SHOWN BY MAP THEREOF ON FILE IN BOOK 41 OF PLATS, PAGE 73, IN THE OFFICE OF THE COUNTY RECORDER OF CLARK COUNTY, NEVADA AND ALL IMPROVEMENTS AND APPURTENANCES THEREON. APN: 264-21-311-009.
781 N. Leslie St., Pahrump, Nevada 89060, more particularly described as:
THE NORTHWEST QUARTER (NW 1/4) OF THE NORTHWEST QUARTER (NW 1/4) OF SECTION 8, TOWNSHIP 20 SOUTH, RANGE 53 EAST, M.D.B. &M.
EXCEPTING THEREFROM THAT CERTAIN PARCEL OF LAND CONVEYED BY DOCUMENT RECORDED MAY 22, 1974 IN BOOK 173 OF OFFICIAL RECORDS, PAGE 36 AS FILE NO. 42259 NYE COUNTY, NEVADA RECORDS. ALSO DESCRIBED AS: T20S R53E S8-S S N.W. NW P#9732 10AC AND ALL IMPROVEMENTS AND APPURTENANCES THEREON. APN: 036-041-06.
1412 West Grove Rd, Decatur, Illinois 62521, more particularly described as:
LOT THREE (3) OF NEW VISION SUBDIVISION, AS PER PLAT RECORDED IN BOOK 5000, PAGE 40 IN THE RECORDS OF THE RECORDER'S OFFICE OF MACON COUNTY, ILLINOIS. SITUATED IN MACON COUNTY, ILLINOIS, AND ALL IMPROVEMENTS AND APPURTENANCES THEREON. APN: 17-12-28-451016.
1414 West Grove Rd, Decatur, Illinois 62521, more particularly described as:
LOT ONE (1) OF CHURCH OF GOD ADDITION, AS PER PLAT RECORDED IN BOOK 5000, PAGE 125 IN THE RECORDS IN THE RECORDER'S OFFICE OF MACON COUNTY, ILLINOIS. SITUATED IN MACON COUNTY, ILLINOIS, AND ALL IMPROVEMENTS AND APPURTENANCES THEREON, APN: 17-12-28-451017.
Preliminary Order of Forfeiture (POOF), ECF No. 18.
The grounds for granting the Order for an Interlocutory Sale of the properties are as follows. First, the properties are 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 the value Second, granting an interlocutory sale will avoid accidents and liability accruing against the properties. 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.
All Exhibits are attached hereto and incorporated as if fully set forth herein.
MEMORANDUM OF POINTS AND AUTHORITIES
I. STATEMENT OF FACTS
The government incorporates the facts of the Criminal Information and the Plea Agreement. From approximately June 2014, through approximately February 2018, Gregory Kirby and Carol Kirby (the Kirbys) conspired with others to commit health care fraud.
LR IA 10-3(a); Criminal Information (CI), ECF No. 14; Plea Agreement (PA), ECF No. 15.
PA, ECF No. 15, p. 8.
On March 19, 2024, Carol Kirby pled guilty to a One-Count Criminal Information, charging her with conspiracy to commit an offense against the United States in violation of 18 U.S.C §§ 1347 and 371. On March 22, 2024, the Court entered a Preliminary Order of Forfeiture under 18 U.S.C. § 981(a)(1)(C) with 28 U.S.C. § 2461(c), 18 U.S.C. § 982(a)(7), and 21 U.S.C. § 853(p), forfeiting the properties to the United States. Sentencing is currently scheduled for June 26, 2024. On May 1, 2024, the United States recorded the Preliminary Order of Forfeiture with the Clark County Recorder's Office, the Nye County Recorder's Office, and the Macon County Recorder's Office.
CI, ECF No. 14; PA, ECF No. 15; Arraignment & Plea (A&P), ECF No. 17.
POOF, ECF No. 18.
A&P, ECF No. 17.
Exhibit 19, Recorded POOFs.
6800 E. Lake Mead Blvd #2076, Las Vegas, Nevada 89156
Around May 16, 2017, the Kirbys purchased 6800 Lake Mead. On February 7, 2018, after the Kirbys became aware of the criminal investigation, they transferred the property to Jeffery McClendon for $500. On July 17, 2018, the United States recorded a Lis Pendens on the property. On August 16, 2018, the United States recorded a Request for Notice for the property. On August 20, 2018, Mountainside Condominiums recorded a lien against the property for unpaid HOA fees. On December 26, 2019, Clark County recorded a Tax Certification against the property for unpaid taxes. On March 4, 2020, Mountainside Unit Owners Association recorded a Notice of Default and Election to Sell against the property for unpaid HOA fees in the amount of $4,453.64.
Exhibit 1, 6800 Lake Mead Recorder's Office printout.
PA, ECF No. 15, p. 8, l. 1; Exhibit 2, 6800 Lake Mead Quitclaim Deed.
All information from this paragraph is from Exhibit 1, 6800 Lake Mead Recorder's Office printout, unless otherwise indicated.
Exhibit 3, 6800 Lake Mead HOA Notice of Default and Election to Sell.
On June 9, 2021, the Clark County Treasurer deeded the property to the County for unpaid taxes. The property was scheduled to be sold by Clark County for past due taxes in May 2024, but the County agreed to remove the property from the sale roll pending the resolution of the interests of the United States through this criminal proceeding. The last tax payment on 6800 Lake Mead was received on October 9, 2018. As of April 15, 2024, the total amount of Taxes due to the County was $4,859.12. The HOA fees and tax fees have continued to accrue against the property.
Exhibit 1, 6800 Lake Mead Recorder's Office printout.
Exhibit 4, 6800 Lake Mead Clark County Notice of Intent to Sell.
Exhibit 5, 6800 Lake Mead Property Account Inquiry printout.
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 30, 2024:
1. Zillow.com for $196,700;
2. Realtor.com for $198,288; and
3. Redfin.com for $190,145.2284 Mesa Canyon Dr, Laughlin, Nevada 89029
Around May 16, 2017, the Kirbys purchased 2284 Mesa Canyon. On February 7, 2018, after the Kirbys became aware of the criminal investigation, they transferred the property to Calisa Pittman for $5,000. On July 17, 2018, the United States recorded a Lis Pendens on the property. On August 16, 2018, the United States recorded a Request for Notice for the property. On October 17, 2018, and October 23, 2019, Republic Silver State Disposal Inc recorded liens on the property for nonpayment. On December 26, 2019, Clark County recorded a Tax Certification against the property for unpaid taxes. On August 26, 2020, Republic Silver State Disposal Inc recorded a lien on the property for nonpayment. On October 28, 2020, Canyon Terrace Homeowners Association recorded a lien on the property for nonpayment. On January 21, 2021, Canyon Terrace Homeowners Association recorded a default against the property for unpaid HOA fees in the amount of $2,349.05.The HOA fees have not been paid because the default has not been released from the property. On March 9, 2021, Republic Silver State Disposal Inc recorded a lien on the property for nonpayment. On June 9, 2021, the County deeded the property to the county for unpaid taxes. On October 13, 2021, May 5, 2021, December 22, 2022, June 28, 2023, and December 26, 2023, Republic Silver State Disposal Inc recorded liens on the property for nonpayment. On December 27, 2023, and March 20, 2024, Las Vegas Valley Water District recorded liens against the property for nonpayment. None of the liens listed have been released.
Exhibit 6, 2284 Mesa Canyon Recorder's Office printout.
PA, ECF No. 15, p. 8, l. 1; Exhibit 7, 2284 Mesa Canyon Quitclaim Deed.
All information from this paragraph is from Exhibit 6, 2284 Mesa Canyon Recorder's Office printout, unless otherwise indicated.
Exhibit 8, 2284 Mesa Canyon HOA Notice of Default and Election to Sell.
The last tax payment on the property was received May 21, 2018. As of April 15, 2024, the total amount of taxes due to the County was $19,773.14. The property was scheduled to be sold by Clark County for past due taxes in May 2024, but the County agreed to remove the property from the sale roll pending the resolution of the interests of th United States through this criminal proceeding. Fees, fines, and expenses are continuing to accrue against the property.
Exhibit 9, 2284 Mesa Canyon Property Account Inquiry printout.
Exhibit 10, 2284 Mesa Canyon Notice and Intent to Sell.
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 30, 2024:
1. Zillow.com for $340,600;
2. Realtor.com for $346,488; and
3. Redfin.com for $341,659.781 N. Leslie St., Pahrump, Nevada 89060
Around October 12, 2017, the Kirbys purchased 781 Leslie. On July 17, 2018, the United States recorded a Lis Pendens on the property. On August 16, 2018, the United States recorded a Request for Notice for the property. On September 29, 2022, Nye County recorded a Treasurer's Certificate against the property for unpaid taxes. As of April 15, 2024, the Kirbys owe $4,290.35 in unpaid taxes. The taxes continue to accrue against the property.
Exhibit 11, 781 Leslie Recorder's Office printout; Exhibit 12, Nye County Property Tax Inquiry printout.
Exhibit 12, Nye County Property Tax Inquiry printout.
Exhibit 12, Nye County Property Tax Inquiry printout.
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 30, 2024:
1. Zillow.com for $349,700;
2. Realtor.com for $352,105; and
3. Redfin.com for $349,517.1412 West Grove Rd, Decatur, Illinois 62521
Around September 11, 2017, the Kirbys purchased the 1412 West Grove property.On April 12, 2018, the Kirbys executed a Quit Claim Deed, conveying the property to God's House International Ministries. On July 17, 2018, the United States recorded a Lis Pendens on the property. On August 16, 2018, the United States recorded a Request for Notice for the property. On January 31, 2022, God's House International Ministries conveyed the property to Church of New Hope and Faith, Inc. Macon County sold the taxes for the property. The taxes are current. The property is in use and is a liability to the United States. / / /
Exhibit 13, 1412 West Grove Warranty Deed.
Exhibit 14, 1412 West Grove April 12, 2018, Quit Claim Deed.
Exhibit 15, 1412 West Grove January 31, 2022, Quit Claim Deed.
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 30, 2024:
1. Zillow.com for $206,600;
2. Realtor.com for $190,000; and
3. homevaluerealestatecenter.bankofamerica.com for $174,124.1414 West Grove Rd, Decatur, Illinois 62521
On June 26, 2017, Gregory Kirby, Carol Kirby, and Billy Kirby purchased 1414 West Grove Rd. On April 12, 2018, Gregory, Carol, and Billy Kirby deeded the property to God's House International Ministries. On July 17, 2018, the United States recorded a Lis Pendens on the property. On August 16, 2018, the United States recorded a Request for Notice for the property. On January 31, 2022, God's House International Ministries conveyed the property to Church of New Hope and Faith Inc. The property is in use and i a liability to the United States.
Exhibit 16, 1414 West Grove June 26, 2017, Warranty Deed.
Exhibit 17, 1414 West Grove April 12, 2018, Quit Claim Deed.
Exhibit 18, 1414 West Grove January 31, 2022, Quit Claim Deed.
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 estimate:
1. November 20, 2023, CWSA appraisal $200,000.
Appraisals for commercial property are more difficult to obtain. The United States is in the process of obtaining additional appraisals through the IRS.
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/Y ISABELLA, 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.” The various liens and liabilities are discussed above and the values of the properties are decreasing rapidly. The Counties have moved against multiple properties for unpaid taxes and fees, and the HOAs have defaulted the properties for nonpayment where applicable.
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 47 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 tax lien 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 properties. Based upon the reasons set forth herein, the United States believes that a prompt sale of the properties 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 the possible restoration to the victim in this case.
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.
IV. CONCLUSION
Based on the foregoing reasons, this Court should order the interlocutory sale of the above-named properties, and to authorize Doug Sawyer to sell the Nevada properties and to authorize the United States Treasury to direct its contractor to designate a real estate broker or agent to sell the Illinois properties through one of the approved sale methods.
IT IS SO ORDERED: