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United States v. Sum of $70

United States District Court, D. Columbia.

November 5, 2013

UNITED STATES OF AMERICA, Plaintiff,
v.
SUM OF $70,990,605, et al., Defendants

Page 145

For UNITED STATES OF AMERICA, Plaintiff: Elizabeth Ann Aloi, LEAD ATTORNEY, U.S. DEPARTMENT OF JUSTICE, Washington, DC.

For HIKMATULLAH SHADMAN, NAJIBULLAH, FAIZY ELHAM BROTHERS, LTD., ROHULLAH, EVEREST FAIZY LOGISTICS SERVICES, HIKMAT SHADMAN LOGISTICS SERVICES COMPANY, HEKMAT SHADMAN GENERAL TRADING, LLC, Claimants: Bryant S. Banes, LEAD ATTORNEY, NEEL, HOOPER & BANES P.C., Houston, TX; James Wallace Porter, III, BRADLEY ARANT BOULT CUMMINGS LLP, Washington, DC.

For AFGHANISTAN INTERNATIONAL BANK, Claimant: Andrew C. Bernasconi, LEAD ATTORNEY, REED SMITH LLP, Washington, DC.

OPINION

Page 146

MEMORANDUM OPINION AND ORDER

RICHARD W. ROBERTS, Chief United States District Judge.

Plaintiff United States brings this civil forfeiture in rem action alleging that the defendant funds -- approximately $61.3 million in three different banks -- are the proceeds of a wire fraud and subject to seizure under 18 U.S.C. § § 983 and 984. Claimants Hikmat Shadman Logistics Services Co., Hikmat Shadman General Trading, LLC, Faizy Elham Brothers, Ltd., Everest Faizy Logistics Services, Hikmatullah Shadman, Najibullah, and Rohullah move under § 983(f) for immediate release of the seized funds and additional properties. The United States also moves for leave to file a surreply. Because the claimants have failed to demonstrate that they are entitled in this action to release of their seized funds or additional properties, their motion will be denied. Because a surreply is unjustified, the United States' motion also will be denied.

BACKGROUND

The following facts are alleged by the government in its Second Amended Verified Complaint (" Second Amended Complaint" ), unless otherwise noted.

The United States filed this civil forfeiture action and secured seizure warrants upon a finding of probable cause that the defendant funds were the proceeds of a fraud. The United States alleges that Hikmatullah Shadman, as a subcontractor and owner of Hikmat Shadman Logistics Services Company, " conspired to obtain payments from the United States for the transportation of military supplies in Afghanistan through the illegal and fraudulent use of the wires . . . [by making] bribe payments, fraudulently inflat[ing] prices, and caus[ing] the United States to be invoiced for and to make payments of $77,920,605 to two bank accounts in Afghanistan." 2d Am. Compl. at 6. After the proceeds of the contracts were deposited into an account at Afghanistan International Bank held by Hikmat Shadman Logistics

Page 147

Services Company, the funds were transferred in and out of various accounts in the names of Shadman's brothers -- Najibullah (also known as Yaser Elham) and Rohullah, see Claimants' Mem. for Immediate Release of Seized Property Pursuant to 18 U.S.C. § 983(f) (" Claimants' Mem." ) at 5 -- as well as accounts in the name of their companies, Hikmat Shadman Logistics Services, Hekmat Shadman General Trading LLC, Faizy Elham Brothers, Ltd., Everest Faizy Logistics Services, and Yaser Elham at Afghanistan International Bank, Bank Alfalah, and Emirates NBD Bank. In total, the United States has restrained $63,049,141, with $52,949,141 coming from accounts in Bank Alfalah and Emirates NBD Bank, and $10.1 million coming from Afghanistan International Bank under the seizure warrants.

On August 27, 2013, Shadman, Najibullah, and Rohullah filed a verified claim and statement of interest in the seized property, asserting that they are the owners of the seized funds. Verified Claim and Statement of Interest or Right in Property Subject to Forfeiture In Rem (" Verified Claim" ) at 8. They made these claims both individually and on behalf of their companies. Id. at 14-16. It appears that all the accounts are held in the name of the companies, rather than the individuals, except for one of the Emirates NBD Bank accounts. Id. at 8-12.

The claimants now move under 18 U.S.C. § 983(f) to have the funds released. They argue that the funds should be released because the " improper seizure" has caused " extreme and substantial hardships" which " outweigh any risk to the Government of the dissipation of the seized property." [1] Claimants' Mem. at 24. The United States argues that the claimants are not entitled have the seized currency released under § 983(f)(1)(E) and § 983(f)(8), provisions governing assets of a business which has been seized, since this action did not seize a business. United States' Opp'n to Claimants' Mot. for Immediate Release of Seized Property Pursuant to 18 U.S.C. § 983(f) (" Opp'n" ) at 1. Additionally, the United States argues that the claimants have not established the conditions outlined in § 983(f)(1)(A)-(E) entitling claimants to release, such as " sufficient contacts with the community to ensure that the property will be available at trial as required for release of seized assets," and " hardship by the continued restraint of the funds." Id. at 2. Finally, the United States argues that the claimants failed to show " that such purported hardship outweighs the risk to the United States during the pendency of the forfeiture proceedings." Id. Claimants filed a reply, Reply to the U.S.'s Opp'n to Claimants' Mot. for Immediate Release of Seized Property Pursuant to 18 U.S.C. § 983(f) (" Claimants' Reply" ) to which the United

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States seeks leave to file a surreply to " respond[] to two of the material omissions and misstatements" made by the claimants. United States' Motion for Leave to File Surreply (" United States' Mot." ) at 1. The claimants contend that leave should not be granted because they raised the issues to which the United States wants to reply in their original petition. Claimants Opposition to United States' Motion for Leave to File Surreply (" Claimants' Opp'n" ) at 7.

DISCUSSION

Under § 983(f), a claimant may request release of the seized property by filing a petition that sets forth " the basis on which the requirements" for release are met. 18 U.S.C. § 983(f)(3)(B)(i). " [I]f a claimant fails to establish any one of the five criteria, its motion for the release of property must be denied." United States v. Value of Certain E-Metal Accounts at E-Gold Ltd., No. ELH-11-01530, 2013 WL 5664678, at *2 (D. Md. Oct. 17, 2013) (citing United States v. Undetermined Amount of U.S. Currency,37 ...


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