Accordingly, a petitioner may recover forfeited assets under subsection 1963(1) in two ways. First, the petitioner may succeed by establishing all of the following:
(a) a "legal right, title, or interest"
(b) in property ordered forfeited, and
(c) that such "legal right, title, or interest" was either
(1) vested in the petitioner rather than the defendant at the time of the commission of the acts which gave rise to the forfeiture, or
(2) superior to any right, title, or interest of the defendant at the time of the commission of the acts which gave rise to the forfeiture.
In the alternative, a petitioner may succeed by establishing all of the following:
(a) that it is a "bona fide purchaser for value" of
(b) a legal "right, title, or interest"
(c) in property ordered forfeited, and
(d) was at the time of purchase reasonably without cause to believe that the property was subject to forfeiture.
Only by establishing all elements of one of the two avenues may a third party obtain court-ordered relief from an order of forfeiture. See United States v. Lavin, 942 F.2d 177, 187 (3d Cir. 1991) ("Those third parties who fall outside of both [avenues], regardless of how sympathetic they are, must petition the Attorney General for relief."). If a third party fails to allege in its petition all requisite elements, the court may dismiss the petition without providing a hearing. See United States v. Campos, 859 F.2d 1233, 1240 (6th Cir. 1988); United States v. Mageean, 649 F. Supp. 820, 825 (D. Nev. 1986), aff'd, 822 F.2d 62 (9th Cir. 1987); S. Rep. No. 225, 98th Cong., 2d Sess., reprinted in 1984 U.S.Code Cong. & Ad. News 3374, 3391.
The United States contends that none of the petitioners which it deems "depositors" or "additional depositors" can establish all elements necessary to recover under § 1963(1). More specifically, the government argues, inter alia, that the depositors must be considered general creditors of BCCI and that under relevant caselaw interpreting § 1963(1) and similar provisions, general creditors cannot assert a cognizable "legal right, title or interest" in any forfeited funds.
Courts have recognized two basic types of bank deposits, namely general and special. See Peoples Westchester Sav. Bank v. F.D.I.C., 961 F.2d 327, 330 (2d Cir. 1992), citing Marine Bank v. Fulton Bank, 69 U.S. 252, 256, 17 L. Ed. 785 (1864). When a general deposit is made, title to the deposited funds passes immediately to the bank in exchange for a promise by the bank to refund the same amount, or a portion thereof, on demand, and the bank may use the money for its own profit. Id. Accordingly, one who makes a general deposit is considered a general creditor of the bank. See e.g., Peoples Westchester at 332 ("an owner of a general deposit is a general creditor of a bank"); Matter of Texas Mortgage Servs. Corp., 761 F.2d 1068, 1075 n.11 (5th Cir. 1985) ("Normally, funds deposited with a bank are general deposits which create a debtor-creditor relationship between the bank and its depositor."); Crocker-Citizens Nat'l Bank v. Control Metals Corp., 566 F.2d 631, 637 (9th Cir. 1977) ("It is a well-settled principle of California law that the relationship between a bank and its depositor is one of debtor and creditor.") See also 3 MITCHIE ON BANKS AND BANKING Ch. 6, § 181 (perm. ed. rev. vol. 1974) and cases cited therein ("A general depositor is merely a general creditor of a bank"). When a special deposit is made, the depositor retains title to the money and the bank acts as a bailee. See Peoples Westchester at 330. A bank almost always must segregate specially deposited funds from other assets and may only use the funds for a specifically designated purpose. See 3 MITCHIE ON BANKS AND BANKING Ch. 6, § 184 (perm. ed. rev. vol. 1974) and cases cited therein.
Whether a deposit is considered general or special depends upon the intent of the parties. Deposits are presumed to be general, however, and the depositor bears the burden of overcoming that presumption. See Peoples Westchester at 330; Matter of Texas Mortgage Services Corp. at 1075 n. 11; 3 MITCHIE ON BANKS AND BANKING Ch. 6, § 184 (perm. ed. rev. vol. 1974) and cases cited therein. A bank's failure to maintain the segregation of deposited funds and its payment of interest on deposited money are "'very strong evidence'" that a deposit is general rather than special. Peoples Westchester at 331 (quoting Swan v. Children's Home Soc'y, 67 F.2d 84, 87 (4th Cir. 1933)).
The government contends that all six claimants whose petitions are the subject of this Order must be considered general, rather than special, depositors. Although all of them have been given ample opportunity to challenge the government's characterizations, none have done so. Even had Bolton, Cox, Hanson, Hoque, Seravaseiyar, and White claimed to be special depositors, however, filings submitted by them make clear that they intended to make only general deposits with BCCI. See, e.g., first attachment to petition of Gerald Bolton, filed April 27, 1992 (standard deposit confirmation stating, "This deposit will be automatically renewed with interest at the rate ruling at the time of renewal for a like period unless we receive notice in writing to the contrary . . ."); Cox petition, filed February 18, 1992 (asserting interest arising from a foreign currency account); Hanson petition, filed March 9, 1992 (seeking to recover funds deposited in an interest-bearing checking account); Hoque petition, filed March 26, 1992 (seeking recovery of deposits in a personal savings account); first attachment to Seravaseiyar petition, filed April 27, 1992 (letter from O.J. Fernando to Anton Seravaseyar [sic], dated August 25, 1989, informing him that his account "remains operative, and any future remittances may be sent for the credit of this account"); first attachment to White petition, filed May 29, 1993 (letter from M. I. Haq to Ms. M. White, dated July 9, 1990, explaining the nature of accounts which BCC Gibraltar offered to her, including the amount and type of interest paid on such accounts). Therefore, the interests asserted in the petitions of the six depositors to amend the Order of Forfeiture must be considered to have arisen from a general creditor-debtor relationship.
As recognized by courts addressing the issue of whether general creditors can successfully petition to amend orders of forfeiture, a general creditor does not possess an interest in any specific asset of a debtor. Rather, such a creditor merely has a general interest in the debtor's entire estate. See United States v. Schwimmer, 968 F.2d 1570, 1581 (2d Cir. 1992) ("A general creditor has no interest in a particular asset or particular funds that is either vested or superior to a defendant's. He may have a right to receive payment, but he does not have a property interest superior to defendant's in any particular asset or funds . . . ."); United States v. Reckmeyer, 836 F.2d 200, 206 & n. 3 (4th Cir. 1987) ("Unlike secured creditors, general creditors cannot point to any one specific asset and claim that they are entitled to payment of the value of that specific asset. General creditors instead enjoy a legal interest in the entire estate of the debtor."); United States v. Mageean, 649 F. Supp. 820, 828 (D. Nev. 1986), aff'd, 822 F.2d 62 (9th Cir. 1987). Because general creditors are unable to assert interests in specific assets, they cannot assert legal rights, titles, or interests in property ordered forfeited, at least in situations where a defendant's entire estate is not subject to forfeiture. See Reckmeyer at 206 n. 3 ("It is the dilemma of linking their interest to a specific asset rather than the problem of asserting a legal interest in the debtors' estate that frustrates general creditors who attempt to contest civil forfeitures."); United States v. Campos, 859 F.2d 1233, 1239 (6th Cir. 1988) ("'The court agrees that only legal interests are recognized and concedes the trade creditors do not, in a technical sense, have legal interest in the forfeited property.'") (quoting Mageean at 828). Accordingly, given that the Court's Order of Forfeiture reaches only property located in the United States and not the entire estates of the four corporate defendants, and given that Bolton, Cox, Hanson, Hoque, Seravaseiyar, and White must be considered general creditors of BCCI, they cannot assert the appropriate interests in assets which the Court has ordered forfeited. The petitions of those claimants, therefore, must be dismissed.
The worldwide collapse of BCCI has brought enormous and continuing tragedy to innocent victims, and all losses, whatever the amount, suffered by the depositors are lamentable. Regardless of those losses and of the conclusion of this Order, however, the petitioners have been given an opportunity to file claims in liquidation proceedings in the appropriate jurisdictions, and the court-appointed fiduciaries for the four corporate defendants have undertaken to provide relevant information concerning those proceedings at least to most, and probably to all, of the petitioners. See Exhibit 1 to Court Appointed Fiduciaries' Memorandum Addressing Foreign Branch Depositors' Claims.
For the reasons stated above, it is hereby
ORDERED that the petitions filed by the following claimants on the following dates are dismissed:
Gerald Bolton, filed April 27, 1992;
Arthur W.R. Cox, filed February 18, 1992;
Harold Ephram Hanson, filed March 9, 1992;
M. Zahidul Hoque, filed March 26, 1992;
Anton Seravaseiyar, filed April 27, 1992; and
Margaret Mary White, filed April 29, 1992.
IT IS SO ORDERED.
January 7, 1993
JOYCE HENS GREEN
United States District Judge