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UNITED STATES v. BCCI HOLDINGS

September 23, 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.



The opinion of the court was delivered by: GREEN

 FOURTH ROUND PETITIONS OF GENERAL CREDITORS

 ORDER GRANTING MOTIONS TO DISMISS

 Presently pending are the United States' Motions to Dismiss ("Motion to Dismiss") the petitions ("L-Claims") of (1) Lee Scarfone and Patricia Scarfone, Individually, ALSA International, Inc., a Florida Corporation, and Banditball, Inc., a Florida Corporation; (2) Syed Chiragh Ali Shah; (3) Aqeel Ahmed Siddiqui; (4) Dr. W. Schaubel; (5) Owen Silvious; and (6) E.H. Rinaca, Jr.; (7) Allen A. Evans; and (8) Mustafa A. Qureshi. The government has moved to dismiss each of the petitioners' claims on the grounds that each is either a general creditor who lacks standing under 18 U.S.C. § 1963(l)(2) or has otherwise failed to state a claim. For the reasons expressed below, the Motions to Dismiss will be granted.

 Background

 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.

 Attached to the First Order of Forfeiture was a listing of 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 First Supplemental Order on January 31, 1992, which directed immediate seizure of the specific assets listed therein. The Court has since amended the Order of Forfeiture to include additional assets, including property set forth in Second and Third Supplemental Lists of Forfeited Property. See Order of Forfeiture of July 29, 1992 (Second Order of Forfeiture); Order of Forfeiture of August 19, 1993 (Third Order of Forfeiture); Fourth Order of Forfeiture (December 21, 1994). Attached to the Fourth Order of Forfeiture, which is relevant to the petitioners' L-Claims presently before the Court, was the Fourth Supplemental List of Forfeited Property.

 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 Fourth Order of Forfeiture, the United States published notice of the Order of Forfeiture, as amended, during the period from January 24, 1995 until April 14, 1995 in eleven major newspapers of general circulation including the Wall Street Journal, the New York Times, the International Herald Tribune, the Los Angeles Daily Journal, the Washington Post, and USA Today. See United States' Notice to the Court, at 1 & Exhibit A (filed Apr. 3, 1995). In addition, personal notice was sent to 267 persons and entities. See United States' Notice to the Court, at Exhibit A (filed Mar. 20, 1995).

 On April 23, 1996, this Court held hearings on the Fourth Round Petitions, making the United States' motion to dismiss ripe. *fn1"

 1. Scarfones' L-Claim

 The Scarfones, whose L-Claims in Rounds One, Two and Three 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) (Rounds One and Two); United States v. BCCI Holdings (Luxembourg), et al., 919 F. Supp. 31, 33-34 (D.D.C. 1996) (Round Three), have asserted the same L-Claim in Round Four. The Scarfones' petition stems from a lawsuit, presently stayed, 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-Civ-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).

 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. 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.

 The Scarfones have not identified an interest in a specific asset. Instead, they seek to recover interest paid to BCCI, other monies and damages. 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.

 The government has moved to dismiss the Scarfones' L-Claim, since it is "substantially identical to the claim filed by the same parties in response to earlier orders of Forfeiture in this case." Motion to Dismiss Miscellaneous Round 4 L-Claims, at 2 (citing United States v. BCCI Holdings (Luxembourg), S.A., 841 F. Supp. 1 (D.D.C. 1993)). In reply, while admitting that they are general creditors, ...


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