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United States v. $6

November 8, 2007

UNITED STATES OF AMERICA PLAINTIFF,
v.
$6,976,934.65 PLUS INTEREST DEPOSITED INTO ROYAL BANK OF SCOTLAND INTERNATIONAL, ACCOUNT NUMBER 2029-56141070, HELD IN THE NAME OF SOULBURY LIMITED, AND PROPERTY TRACEABLE THERETO, DEFENDANT, AND SOULBURY LIMITED, CLAIMANT



The opinion of the court was delivered by: Royce C. Lamberth United States District Judge

MEMORANDUM OPINION

Now before the Court comes plaintiff, the United States' motion [67] for summary judgment. Upon full consideration of the motion, claimant Soulbury Limited's opposition, the reply, the entire record herein, and applicable law, the Court will GRANT summary judgment in favor of the United States.

I. BACKGROUND

In this civil in rem action, the United States seeks forfeiture of nearly $7 million in defendant funds traceable to deposits in the Royal Bank of Scotland International ("RBSI"), located on the island of Guernsey.*fn1 The funds were deposited in an RBSI account held by a British Virgin Islands company named Soulbury Limited. On December 15, 2003, the United States filed its Complaint and the Clerk of the Court issued a Warrant of Arrest In Rem for the defendant property. The funds were seized on December 17, 2003 from an interbank account held by RBSI at Harris International in New York under the authority of 18 U.S.C. § 981(k), which under certain circumstances authorizes the seizure of funds held in an interbank account in the United States if the subject bank has an interbank relationship with an overseas institution in which the defendant funds are held.

Soulbury filed its claim to the funds on March 1, 2004 [4 and 5], an Answer on March 22, 2004 [8], and an Amended Answer on April 7, 2004 [10].

On March 21, 2007, this Court issued an opinion converting the government's Motion [53] to Strike Soulbury's claim and answer as a motion for summary judgment.*fn2 See United States v. $6,976,934.65 Plus Interest, 478 F. Supp. 2d 30 (D.D.C. 2007) (Lamberth, J.). The Court denied that motion without prejudice and ordered that the parties would have ninety days to conduct limited discoveryon the applicability of the fugitive disentitlement statute, 28 U.S.C. § 2466, to Soulbury Limited, including inquiry into the ownership and control of Soulbury. Id. at 46. The parties were instructed that the United States would have thirty days from the close of discovery to renew its motion for summary judgment. Id. at 47.

On August 20, 2007, upon completion of the ninety-day discovery period, the parties stipulated that William Paul Scott was the majority shareholder of Soulbury Limited. (See Ex. A to Mot. [67] for Summ. J.) Based on this stipulation, the government refiled its motion for summary judgment [67]. Soulbury argues against summary judgment by questioning the constitutionality of the fugitive disentitlement statute and claiming-contrary to this Court's March 2007 opinion-that the statute is not a threshold issue that may be decided prior to Soulbury's improper venue and failure to state a claim arguments.

II. APPLICABLE LAW

A. Summary Judgment Standard

Under Federal Rule of Civil Procedure 56(c), a court must grant summary judgment when the evidence in the record demonstrates that there are no disputed issues of material fact and that the moving party is entitled to judgment on the undisputed facts as a matter of law. FED. R. CIV. P. 56(c). A genuine issue of material fact exists if the evidence, when viewed in light most favorable to the non-moving party, "is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). However, a party must provide more than "a scintilla of evidence" in support of its position; the quantum of evidence must be such that a jury could reasonably find for the moving party. Id. at 252. The burden is on the movant to make the initial showing of the absence of a genuine issue of material fact in dispute. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The moving party is then entitled to a judgment as a matter of law if the non-moving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322.

B. Fugitive Disentitlement Statute

The fugitive disentitlement statute is based on a doctrine that developed at common law.*fn3 The statute, 28 U.S.C. § 2466, was enacted in 2000 and sought to deal with the "unseemly spectacle" of "a criminal defendant who, facing both incarceration and forfeiture for his misdeeds, attempts to invoke from a safe distance only so much of a United States court's jurisdiction as might secure him the return of alleged criminal proceeds while carefully shielding himself from the possibility of a penal sanction." Collazos v. United States, 368 F.3d 190, 200 (2d Cir. 2004). The disentitlement statute, titled "Fugitive disentitlement," reads as follows:

(a) A judicial officer may disallow a person from using the resources of the courts of the United States in furtherance of a claim in any related civil forfeiture action or a claim in third party proceedings in any related criminal forfeiture action upon a finding that such person --

(1) after notice or knowledge of the fact that a warrant or process has been issued for his apprehension, in order ...


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