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UNITED STATES v. BCCI HOLDINGS

February 22, 1993

UNITED STATES OF AMERICA
v.
BCCI HOLDINGS (LUXEMBOURG), S.A., BANK OF CREDIT AND COMMERCE INTERNATIONAL, S.A., BANK OF CREDIT AND COMMERCE INTERNATIONAL (OVERSEAS) LIMITED, INTERNATIONAL CREDIT AND INVESTMENT COMPANY (OVERSEAS) LIMITED, Defendants.



The opinion of the court was delivered by: JOYCE HENS GREEN

 Presently pending are the Petitions for Relief Pursuant to 18 U.S.C. § 1963(l) filed by Banco Central de Reserva del Peru ("Peru") on April 24, 1992 and September 2, 1992. Upon consideration of all filings relating thereto, including the government's motions to dismiss, and having considered arguments made at the hearing held February 11, 1993, Peru's petitions are dismissed.

 BACKGROUND

 On January 24, 1992, this Court, following findings of fact and conclusions of law with supporting reasons made in open court, accepted the pleas of guilty of the four corporate defendants (collectively "BCCI") and the plea agreement between them and the United States of America. Thereupon, and in accordance with 18 U.S.C. § 1963, an Order of Forfeiture was entered. Paragraph 1(e) of that Order provides that the four corporate defendants named in this action shall forfeit to the United States ownership interests in all property located in the United States, including, without limitation, real property and all tangible and intangible personal property, however held, whether subsequently identified, determined or discovered in the course of the ongoing liquidation proceedings described there in or otherwise identified, determined, or discovered in any manner at any time, but not property that may be brought into the United States by or on behalf of court-appointed fiduciaries of BCCI in the course of the management or disbursement of the liquidation estates as described in the plea agreement. Attached to the January 24, 1992 Order as Exhibit A was a list of specific BCCI accounts, with corresponding numbers, names, and approximate balances, which the United States Marshals Service was directed to seize forthwith. Because the government was unable to verify certain information concerning additional forfeitable accounts at the time the Order of Forfeiture was entered, the Court issued a supplemental Order on January 31, 1992 which directed immediate seizure of the specific assets listed therein.

 In satisfaction of 18 U.S.C. § 1963(l)(1), and to inform third parties of potential rights to seek recovery of assets declared forfeited, the United States published notice of the Order of Forfeiture, as amended, during the period between February 13, 1992 and March 27, 1992 in eleven major United States newspapers including the Wall Street Journal, the New York Times, the Chicago Tribune, and the Los Angeles Daily Journal. See Government's Compliance with Order of May 8, 1992, filed May 12, 1992. In addition, personal notice was sent to over 340 persons and entities as late as April 3, 1992. Id.

 On April 24, 1992, Peru filed a petition to amend the January 24, 1992 Order of Forfeiture. The petition alleges that BCCI and agents thereof authorized or caused to be authorized the payment of $ 3 million in bribes to Peru's principal officers in a successful effort to influence the officers to deposit $ 300 million of the petitioner's funds with BCCI. The legal interests which Peru seeks to recover are:

 
(i) $ 3,000,000 plus interest from the date of each bribe or kickback and in addition, or in the alternative, such actual damages (including injury to reputation and the difference between the amount of interest paid on Petitioner's deposits with [BCCI] and the amount of interest that should have been paid under normal banking relationship) attributable to [BCCI's] unlawful actions; (ii) damages for very serious injury to Petitioner's reputation; and (iii) such other damages recoverable pursuant to the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et. seq.

 April 24, 1992 Petition at 4. Peru claims that because BCCI was willing to expend at least $ 3 million in bribes and kickbacks to obtain a loan agreement with Peru, BCCI must have obtained some economic gain from Peru beyond the benefits which would normally arise from a regular commercial transaction. Although Peru alleges that the "extra economic benefit" accruing to BCCI for which Peru was never compensated "appears to be part of the assets forfeited to the United States Government in these proceedings," Memorandum of Law in Opposition to the United States' Motion to Dismiss the Petition of Banco Central de Reserva Del Peru ("Opposition") at 2, Peru fails to name any specific account listed in the Order of Forfeiture which contains the funds to which it lays claim. Peru concedes that it fully recovered the $ 300 million which it deposited with BCCI and, consequently, its petition does not seek the return of those funds. Opposition at 2, 14.

 In accordance with a briefing schedule issued by the Court, the government filed a Motion to Dismiss Petitions of BCCI Tort Petitioners, which addresses Peru's petition as well as petitions filed by Shrichand Chawla, Leo D. Curran, Willy Hermans and Red Circle Investment, Ltd., Jaleh Khorassanchy, Amit Pandya, Soha, Inc., Idriss Devco, Inc., and S&L Gentrade, Inc.; the Republic of Panama; and Lee Scarfone, Patricia Scarfone, ALSA International, Inc., and Banditball, Inc. The court-appointed fiduciaries for the four corporate defendants subsequently filed a memorandum of law addressing the same petitions. Peru filed an opposition to the government's motion, and the government filed a reply thereto.

 On June 24, 1992, the government filed a Motion to Amend Order of Forfeiture to Include Additional Property, seeking forfeiture of assets in newly discovered bank accounts held in the names of the corporate defendants, proceeds from the sale of a condominium purchased with resources provided by a corporate defendant, money remaining in a "BCCI Legal Fund" established by one of the corporate defendants for the defense of its employees' legal interests, a bankruptcy distribution to one of the corporate defendants, and assets held at various New York financial institutions in the name of ICIC Investments Ltd., a sibling corporation of defendant ICIC (Overseas) Ltd. The Court granted the government's motion and issued an Order of Forfeiture on July 29, 1992. The United States subsequently provided notice of the Order to potential claimants.

 Peru filed its second petition on September 4, 1992, and though the petition sought funds forfeited in the more recent Order, it merely incorporated by reference the earlier petition. On December 28, 1992, the government filed a Motion to Dismiss Round Two Petitions of BCCI Tort Petitioners, which addressed Peru's second petition as well as the second petitions filed by Shrichand Chawla, Leo D. Curran, Willy Hermans and Red Circle Investment, Ltd., Jaleh Khorassanchy, Amit Pandya, Soha, Inc., Idriss Devco, Inc., and S&L Gentrade, Inc. and Lee Scarfone, Patricia Scarfone, ALSA International, Inc., and Banditball, Inc. Because all of three of the second petitions were identical to the corresponding first petitions, the government's round two motion did not present any new arguments and incorporated by reference its earlier motion to dismiss. On December 31, 1992, Peru filed an opposition to the government's round two motion which reiterated the arguments made in its earlier opposition. The government subsequently filed a reply thereto.

 Following the entry of an order of forfeiture pursuant to 18 U.S.C. § 1963(a), a third party may petition the issuing court for a hearing to amend the order to exclude certain property in which the third party claims a legal right, title, or interest. See 18 U.S.C. § 1963(l)(2). Subsection 1963(l)(6) sets forth the elements which the petitioner must prove in order to recover assets previously declared forfeited and states in full:

 
If, after [a] hearing, the court determines that the petitioner has established by a ...

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