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UNITED STATES v. BCCI HOLDINGS

March 6, 1996

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, AND INTERNATIONAL CREDIT AND INVESTMENT COMPANY (OVERSEAS) LIMITED, Defendants.


JOYCE HENS GREEN, United States District Judge


The opinion of the court was delivered by: GREEN

ORDER GRANTING MOTIONS TO DISMISS

 Presently pending are the United States' Motions to Dismiss ("Motion to Dismiss") the following petitions: (1) Petition for Hearing to Adjudicate Right, Title or Interest in Forfeited Property of Lee Scarfone and Patricia Scarfone, Individually, ALSA International, Inc., a Florida Corporation, and Banditball, Inc., a Florida Corporation ("Scarfones' L-Claim"); (2) Supplemental Claim and Petition of White Consolidated Industries, Inc., Pursuant to 18 U.S.C. § 1963(l) for Hearing to Adjudicate its Interest in Forfeited Property ("WCI's L-Claim"); (3) Syed Chiragh Ali Shah's Petitions (sic) Filed in Response to August 19, 1993 Order of Forfeiture ("Shah's L-Claim"); (4) Affidavit on Oath by Aqeel Ahmed Siddiqui in Compliance with the Notice of Third Party Claimant Dated September 16, 1993 ("Siddiqui's L-Claim"); (5) Petition to Adjudicate Validity of Claim of Mahfooz H. Rizvi and Hina M. Rizvi ("Rizvis' L-Claim"); and (6) Petition to Adjudicate Validity of Claim of Vasudeva M. Iyer and Rajalakshmi V. Iyer ("Iyers' L-Claim").

 The government has moved to dismiss each of the petitioners' claims on the grounds that each is a general creditor who lacks standing under 18 U.S.C. § 1963(l)(2). For the reasons expressed below, the Motions to Dismiss will be granted.

 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 the Court-Appointed Fiduciaries of BCCI in the course of the management or disbursement of the liquidation estates as described in the plea agreement.

 In compliance with 18 U.S.C. § 1963(l)(1) and to inform third parties of their potential rights to seek recovery of assets declared forfeited in the Third Order of Forfeiture, the United States published notice of the Order of Forfeiture, as amended, during the period September 3, 1993, and September 27, 1993 in eleven major newspapers including the Wall Street Journal, the New York Times, the Chicago Tribune, the Los Angeles Daily Journal, the Washington Post, and the International Herald Tribune. See United States' Notice to the Court of the government's compliance with Order of August 19, 1993 (filed Sept. 21, 1993). In addition, personal notice was sent to over 523 persons and entities. Id. at Exhibit 2, at 11.

 Subsequently, this Court held hearings on the petitions arising from the Third Round of Forfeiture.

 1. Scarfones' L-Claim

 On October 4, 1993, the Scarfones' timely filed their L-Claim. These petitioners, whose L-Claims in Rounds One and Two were dismissed by this Court on the ground that the Scarfones were unsecured general creditors of BCCI, United States v. BCCI Holdings (Luxembourg), et al., 841 F. Supp. 1, 4-5 (D.D.C. 1993), have asserted a similar L-Claim in Round Three. The Scarfones' petition stems from a pending lawsuit in which they have asserted claims against, inter alia, BCCI. According to the amended complaint in Scarfone, et al., v. REGENCY BANK, et al., 89-912-C-T-13C (M.D. FL.), a copy of which is attached to their L-Claim, the Scarfones allege that BCCI breached its fiduciary duty and, along with others, violated the Racketeer Influenced and Corrupt Organization Act ("RICO"), 18 U.S.C. § 1962(c). *fn1"

 In general, the Scarfones aver that BCCI loaned them $ 1,950,000.00, which was secured by an interest in the property of ALSA International. See Scarfones' L-Claim, supra, at P 7. BCCI later assigned this interest to REGENCY BANK who purchased the ALSA International property at a foreclosure sale. The Scarfones contend that as a result of BCCI's breaches and REGENCY BANK's foreclosure, they lost significant assets and their ability to develop other financial interests. The Scarfones also allege that BCCI's breaches forced them into bankruptcy.

 Nevertheless, the Scarfones have failed to identify an interest in any specific asset, but seek to recover interest paid to BCCI, other monies and damages. Id. Specifically, they claim a "right, title and interest in the funds ordered forfeited by this court to the extent that the Petitioners' funds either paid directly to BCCI by the Petitioners or by REGENCY BANK pursuant to the assignment of the first mortgage on the Petitioners' property by BCCI to REGENCY BANK have been commingled with such forfeited funds, and/or to the extent that such funds being the property of BCCI are property subject to claims for compensatory and punitive damages in an amount exceeding $ 5 million for the wrongful acts of BCCI and its officers directed against the Petitioners." Id. at P 10.


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