Under paragraph 9 of the Plea Agreement and pursuant to the Order of Forfeiture, BCCI forfeited all of its property interests in the United States. Pursuant to paragraph 1(e) of the Forfeiture Order, the corporate defendants forfeited to the United States their 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 (excluding property 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).
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 later amended the Order of Forfeiture to include additional assets, including property set forth in a Second Supplemental Lists of Forfeited Property. See Order of Forfeiture of July 29, 1992 (Second Order of Forfeiture). The property Awan seeks was seized pursuant to the Second Order.
The Plea Agreement also established the Worldwide Victims Fund and the U.S. Fund. Under the terms of the Plea Agreement, forfeited assets were to be disbursed in equal amounts to the Worldwide Victims Fund and the U.S. Fund. See Plea Agreement P11(c). The broad purpose of the Worldwide Victims Fund, operated by the Court-Appointed Fiduciaries, is to distribute funds "only to innocent depositors, creditors and other victims of BCCI whose claims are not derived directly or indirectly through violations of United States or other laws concerning narcotics, terrorism, money laundering, crimes of violence, or other acts generally recognized as felonies or similar crimes under the law of countries subscribing to recognized norms of international justice." Id. P14.
The purpose of the U.S. Fund is more specific, but no less compensatory. In addition to allowing for reimbursement of the costs of investigation and prosecution of BCCI, bank insurance and other matters, the U.S. Fund is also available to provide "restitution to victims of BCCI, which may include remission to the Court Appointed Fiduciaries in accordance with 18 U.S.C. § 1963(g) for the purpose of facilitating an increase in assets available for distribution by the Court-Appointed Fiduciaries to innocent worldwide victims of BCCI, and which may include claims related to the failure of CenTrust, if any." Id. P12(f). Resulting from BCCI's guilty plea and the subsequent criminal forfeiture proceedings, by July 1996 the United States had "recovered nearly $ 800 million, virtually all of which has been, or will be, distributed to the victims of the fraud." Testimony of Stefan Cassella before the Judiciary Committee of the House of Representatives (July 22, 1996), 1996 WL 410099, *5 (F.D.C.H.).
In 1992, Awan attempted to sell the condominium, but the government learned of the sale and moved to amend the Order of Forfeiture to include the proceeds of that sale.
This Court granted the motion, and the government later provided Awan with notice of the seizure. Awan's timely L-Claim followed.
Awan contends that BCCI has no interest in the condominium purchased in 1986, because he relied upon a "bridge loan" from Noriega that he later repaid. Awan argues that forfeiture under 18 U.S.C. § 1963(l)(6)(A) "is not appropriate because [he] has exclusive title to the property and the proceeds of its sale," L-Claim at 1 (as amended), and that he "qualifies as a bona fide purchaser for value under 18 U.S.C. § 1963(l)(6)(B) because he purchased the condominium for fair value without knowledge that his property would be subject to forfeiture." Id. at 2. Alternatively, Awan asks the Court to vacate the Order of Forfeiture (as applied to such proceeds) unless and until the United States can prove it did not rely on his immunized testimony to seek forfeiture of the condominium's proceeds. Id.
The United States subsequently moved to dismiss Awan's L-Claim on the grounds that 18 U.S.C. § 1963(l)(6)(A) is inapplicable to Awan's case, and that Awan cannot, as a matter of law, be considered a bona fide purchaser for value pursuant to 18 U.S.C. § 1963(l)(6)(B).
The threshold question presented is whether Kastigar applies to L-Claim proceedings and, if so, whether Awan is entitled to a Kastigar hearing. While it is undisputed that Awan was granted use immunity under 18 U.S.C. § 6002, the parties dispute whether Kastigar applies to third-party petitions under 18 U.S.C. § 1963(l). Awan argues that because he was granted use immunity for his testimony in connection with United States v. Noriega and BCCI-related investigations, the government must first demonstrate under Kastigar that it did not rely on that testimony in seeking forfeiture of the proceeds of the condominium sale. The government opposes, stating that Kastigar is inapplicable to L-Claim proceedings.
Whether Awan's grant of use immunity extends to these proceedings turns upon whether a criminal forfeiture proceeding is a criminal case within the meaning of 18 U.S.C. § 6002. The underlying case is, of course, criminal even if Awan is not the defendant. Forfeiture proceedings, whether civil or criminal, have often been held or assumed to be criminal in nature. See, e.g., One 1958 Plymouth Sedan v. Pennsylvania, 380 U.S. 693, 700, 14 L. Ed. 2d 170, 85 S. Ct. 1246 (1965); Boyd v. United States, 116 U.S. 616, 634, 29 L. Ed. 746, 6 S. Ct. 524 (1886); United States v. Buena Vista Ave., Rumson, N.J., 937 F.2d 98, 103 n.3 (3rd Cir. 1991), aff'd on other grounds, 507 U.S. 111, 122 L. Ed. 2d 469, 113 S. Ct. 1126 (1993); In re Heimerle, 788 F. Supp. 700, 702-03 (E.D.N.Y. 1992). Cf. United States v. Ursery, 518 U.S. 267, 135 L. Ed. 2d 549, 116 S. Ct. 2135, 2147 (1996) (in rem civil forfeiture proceedings not punitive for the purposes of the double jeopardy clause); Department of Revenue of Montana v. Kurth Ranch, 511 U.S. 767, 114 S. Ct. 1937, 1944-45, 128 L. Ed. 2d 767 (1994) (sanction labeled as civil could have punitive character). While no authority is directly on point regarding RICO criminal forfeiture in the context of third-party petitions, the case law relative to the criminal nature of forfeiture proceedings is persuasive. Also persuasive is the Supreme Court's dicta in Kastigar stating that use immunity "leaves the witness and the Federal Government in substantially the same position as if the witness had claimed his privilege." 406 U.S. at 458-59 (quoting Murphy v. Waterfront Comm'n, 378 U.S. 52, 79, 12 L. Ed. 2d 678, 84 S. Ct. 1594 (1264)). With respect to 18 U.S.C. § 6002, the Supreme Court explained in Kastigar that this statute assures that the compelled testimony "can in no way lead to the infliction of criminal penalties." 406 U.S. at 461 (emphasis added).
The statute here plainly proscribes the "indirect" use of testimony or information compelled under the grant of immunity, and while the intent of criminal forfeiture is to forfeit the property of the defendant, where it potentially deprives a third party of property, it is no less punitive. Whether or not an individual is the actual defendant, where he or she is faced with the potential to lose property in which that person claims an interest, the third-party petitioner is the real party in interest, making the result potentially punitive.
The government has cited no authority to support the contrary proposition, and this Court's independent research reveals none on point. Consequently, this Court determines that RICO third-party criminal forfeiture proceedings under 18 U.S.C. § 1963(l) are "criminal cases" within the meaning of 18 U.S.C. § 6002.
To be entitled to a hearing under Kastigar, Awan "need only show that he testified under a grant of immunity in order to shift to the government the heavy burden of proving that all of the evidence it proposes to use was derived from legitimate independent sources." 406 U.S. at 461-62. Accepting Awan's alleged facts as true for the purposes of this motion, Awan has carried his threshold burden. The burden now shifts to the government to prove at a hearing that it derived its information regarding the condominium from untainted sources. The government contends that there was "no connection between the forfeiture and Awan's testimony." Motion to Dismiss at 10. While the government may, in fact, be able to prove this, Awan is entitled to a hearing at which the United States will carry the burden of proof. See United States v. Kilroy, 307 U.S. App. D.C. 229, 27 F.3d 679, 683 (D.C.Cir. 1994), aff'g, 769 F. Supp. 6 (D.D.C. 1991); United States v. North, 285 U.S. App. D.C. 343, 910 F.2d 843, 855, reh'g granted in part, 287 U.S. App. D.C. 146, 920 F.2d 940 (D.C.Cir. 1990), cert denied, 500 U.S. 941 (1991).
For the reasons stated above, it is hereby
ORDERED that the United States' motion to dismiss the petition of Amjad Awan will be held in abeyance. Within thirty (30) days of the date of this Memorandum Opinion and Order, the parties shall meet and confer to discuss this matter, and, on or before October 15, 1997, they shall file a joint memorandum identifying their joint or, as appropriate, separate positions regarding (1) the need for limited discovery, if any; (2) the number of witnesses each party will call; (3) a summary of expected testimony, if any; (4) the length of time each witness will require for direct examination; and (5) a list of exhibits that will be offered into evidence. An evidentiary hearing will be set upon reviewing the joint memorandum.
IT IS SO ORDERED.
August 26, 1997.
JOYCE HENS GREEN
United States District Judge