Opinion
Case No. 02-40140-01-JAR
September 17, 2003
ORDER DENYING MOTION TO AMEND PRELIMINARY FORFEITURE ORDER
This matter is before the Court on Defendant Weidner's Motion to Amend the Preliminary Order of Forfeiture (Doc. 122). The motion seeks an amendment of the Court's August 29, 2003 Preliminary Order of Forfeiture (Doc. 121). The Preliminary Order of Forfeiture provides that the real property identified in Exhibit A to the Superseding Indictment (the "subject real property) is subject to forfeiture. Defendant Weidner alleges that he has no direct interest in the subject real property. His indirect interest in the property is derived from his fifty percent (50%) ownership of Scottsdale Sierra Ridge, L.L.C., which in turn owns the subject real property. Thus, he argues that his interest in Scottsdale Sierra Eagle Ridge, L.L.C., should be the only interest that is subject to forfeiture, and that the Preliminary Order of Forfeiture "causes a forfeiture that is grossly disproportionate considering the circumstances in this case."
The Court finds that Defendant Weidner's motion must be denied, because the Preliminary Order of Forfeiture correctly sets forth the property that is subject to forfeiture. Where the government is seeking forfeiture of a particular asset, such as a parcel of land that is traceable to the offense, the court must find that the government has established the requisite nexus between the property and the offense. In this case, the Court allowed the parties to conduct a separate evidentiary hearing on the forfeiture issue after the jury returned its guilty verdicts. The forfeiture hearing in this case focused on the subject real property. The parties stipulated that the legal description in Exhibit A to the Indictment was the legal description of the subject real property and that it was the property obtained by virtue of the $1,500,000 down payment. The legal description was likewise attached to the First Superseding Indictment, Supplemental Forfeiture Instruction No. 53, and the Special Verdict Form. The jury was not asked to find that the requisite nexus existed between the offense and Defendant Weidner's share of the L.L.C. The jury found that Defendant Weidner's interest in the subject real property is subject to forfeiture. The jury in this case completed the Special Verdict Form, returning a verdict "as to Defendant Weidner's interest in each of the properties alleged in Count 7 to be subject to forfeiture." As to the "Real Property listed in Exhibit A, attached hereto and incorporated herein by reference," the jury unanimously found that the property is subject to forfeiture. Therefore, the Preliminary Order of Forfeiture correctly sets forth the property that is subject to forfeiture.
See United States v. Born field, 145 F.3d 1123, 1135 (10th Cir. 1998) (stating that proof that the proceeds of the money laundering transaction enabled the defendant to acquire the property is sufficient to warrant forfeiture as property "traceable to" the offense); Fed.R.Crim.P. 32.2, Advisory Committee Notes, 2000 Adoption (at this point, the Court has merely determined that the property is subject to forfeiture by virtue of "representing the proceeds of the offense, [being] used to facilitate the offense, or [being] involved in the offense in some other way.").
See Fed.R.Crim.P. 32.2(b)(4) (the jury must determine whether the government has established the requisite nexus between the property and the offense committed by the defendant).
Count 7 of the First Superseding Indictment sought forfeiture of:
A) any property, real and personal, involved in violation of Title 18, United States Code, Section 1957, as alleged in Count 6, and all property traceable to such property; and
B) any property, real or personal, constituting and derived from proceeds the defendants obtained directly and indirectly as the result of the violations of Title 18, United States Code, Sections 371 and 1005, as alleged in Counts 1 through 5, including, but not limited to:
. . . .
2) Real Property listed in Exhibit A, attached hereto and incorporated herein by reference.
Defendant Weidner's real concern seems to be with the extent of his current interest in the subject real property. However, that argument is premature and is not his to make. The Preliminary Order of Forfeiture does not determine Defendant's interest in the property. It merely sets forth the property that is subject to forfeiture so as to enable third parties to allege their interest in the property. Fed.R.Crim.P. 32.2 provides that if the court finds that property is subject to forfeiture, "it must promptly enter a preliminary order of forfeiture . . . directing the forfeiture of specific property without regard to any third party's interest in all or part of it." The rule then provides for ancillary proceedings to determine third party claims. "If no third party files a timely petition, the preliminary order becomes the final order of forfeiture if the court finds that the defendant . . . had an interest in the property that is forfeitable under the applicable statute." "Under this scheme, the court orders the forfeiture of the defendant's interest in the property — whatever that interest may be — in the criminal case." Thus, the rule postpones the determination of the extent of the defendant's interest until the ancillary proceeding. IT IS THEREFORE ORDERED that the Motion to Amend the Preliminary Order of Forfeiture (Doc. 122) is DENIED.
See 21 U.S.C. § 853(n)(2) (providing that "[a]ny person, other than the defendant, asserting a legal interest in property which has been ordered forfeited to the United States pursuant to this section may, within thirty days of the final publication of notice or his receipt of notice under paragraph (1), whichever is earlier, petition the court for a hearing to adjudicate the validity of his alleged interest in the property); Fed.R.Crim.P. 32.2, Advisory Committee Notes, 2000 Adoption (stating that the defendant would have no standing to object to the forfeiture on the ground that the property belonged to someone else).
See United States v. Hooper, 229 F.3d 818, 822 (9th Cir. 2000) (noting that the criminal forfeiture statute protects only two types of transferees of forfeitable property: bona fide purchasers and those whose interest in the property antedated the crime).
Id. at (c)(2).
Id. at Advisory Committee Notes, 2000 Adoption (emphasis added).
Id.
IT IS SO ORDERED.