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UNITED STATES v. BCCI HOLDINGS

August 19, 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 is the United States' motion to dismiss the petition for a hearing to adjudicate interests in forfeited property filed by The Republic of Panama ("Panama"). Upon consideration of the motion, all filings relating thereto, and oral argument presented at the June 1, 1993 hearing, the motion is granted and the petition is 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 the Order provides that the 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 therein 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.

 Panama filed its petition on March 13, 1992, seeking to recover approximately $ 4.1 million forfeited from a specific account at Security Pacific International Bank ("SPIB") in New York. The petition also requests that more than $ 19 million forfeited from capital equivalency accounts formerly maintained by BCCI (Overseas) Limited at Capital Bank in Miami and First Florida Bank in Tampa be returned to the State of Florida for disbursement to victims of BCCI. Panama's asserted interests are based on allegations that its former leader, Manuel Antonio Noriega, embezzled more than $ 23 million worth of funds which were the property of the Panama National Guard and secretly deposited them with BCCI. The petitioner has attempted to trace portions of the $ 23 million through a complex series of numerous transactions and alleges that $ 4.1 million of the stolen money was eventually deposited into the SPIB account.

 In accordance with a briefing schedule set by the Court, the government filed its Motion to Dismiss Petitions of BCCI Tort Petitioners, which also addressed claims filed by Banco Central de Reserva del Peru ("Peru") *fn1" ; Shrichand Chawla, Leo D. Curran, Willy Hermans and Red Circle Investment, Ltd., Jaleh Knorassanchy, Amit Pandya, Soha, Inc., Idriss Devco, Inc., and S&L Gentrade, Inc. *fn2" ; and Lee Scarfone, Patricia Scarfone, ALSA International, Inc., and Banditball, Inc. ("the Scarfones") *fn3" The court-appointed fiduciaries for the four corporate defendants subsequently filed a memorandum of law addressing the same claims. The petitioners filed an opposition to the government's motion and the fiduciaries' memorandum, and the government filed a reply. Oral argument was heard on June 1, 1993, at which time Panama conceded that its request relating to the capital equivalency accounts became moot upon this Court's approval of the settlement between the United States and the State of Florida. *fn4" Transcript of June 1, 1993 Motion Hearing ("Tr.") at 12. Accordingly, only Panama's claim to the SPIB funds is presently at issue.

 DISCUSSION

 
Any 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..., whichever is earlier, petition the court for a hearing to adjudicate the validity of his alleged interest in the property.

 18 U.S.C. § 1963(l)(2). Section 1963(l)(6) sets forth the substantive elements which a third party must establish to successfully obtain amendment of an order of forfeiture and provides in full:

 
If, after the hearing, the court determines that the petitioner has established by a preponderance of the evidence that--
 
(A) the petitioner has a legal right, title, or interest in the property, and such right, title, or interest renders the order of forfeiture invalid in whole or in part because the right, title, or interest was vested in the petitioner rather than the defendant or was 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 of the property under this section; or
 
(B) the petitioner is a bona fide purchaser for value of the right, title, or interest in the property and was at the time of purchase reasonably without cause to believe that the ...

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