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United States v. Sum of $70

United States District Court, District of Columbia

February 13, 2017

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

          MEMORANDUM OPINION AND ORDER

          RANDOLPH D. MOSS United States District Judge.

         This is an in rem action seeking forfeiture of assets held at three U.S. banks by or for the benefit of the Afghanistan International Bank (“AIB”), the Emirates NBD Bank (“Emirates Bank”), and Bank Alfalah. Those assets, which the United States has seized, correspond to amounts previously deposited in overseas accounts at those banks in the names of three Afghan companies. The United States alleges that the funds deposited in the overseas accounts were fraudulently obtained as payment for transportation of U.S. military supplies in Afghanistan by Hikmatullah Shadman (“Shadman”), his associates, and companies he controls. Shadman, his two brothers, and four companies that they control (collectively, the “Shadman Claimants”) have filed claims asserting their interest in or rights to the defendant assets.[1] Dkt. 24. AIB has also filed a claim asserting its interest in some of these assets. Dkt. 41. Neither Emirates Bank nor Bank Alfalah has filed a claim.

         Four motions are currently before the Court. First, the United States moves to strike the Shadman Claimants' claims to the defendant assets that correspond to the funds previously deposited at AIB and Bank Alfalah. Dkt. 234. Second, it also moves to strike the claims of Shadman's brothers and two companies that they control on the ground that each of these claimants is allegedly a “straw owner” for Shadman and thus lacks any cognizable interest in the funds. Dkt. 182. Third, the Shadman Claimants move to dismiss the action and for release of the seized assets, arguing that a bilateral agreement between the United Sates and the Islamic Republic of Afghanistan commits resolution of the present dispute exclusively to diplomatic channels. Dkt. 274. Finally, the Shadman Claimants move for summary judgment on grounds of international comity and the act of state doctrine. Dkt. 138.

         For the reasons explained below, the Court will GRANT the motion of the United States to strike the Shadman Claimants' claims with respect to the defendant funds that correspond to the funds previously deposited at AIB and Bank Alfalah; will DENY without prejudice the motion of the United States to strike the remaining claims of Shadman's brothers and their companies; and will DENY both of the Shadman Claimants' motions.

         I. BACKGROUND

         A. Commencement of the Action and Seizure of Funds in Afghanistan

         The United States commenced this in rem civil forfeiture action on November 20, 2012, by filing a verified complaint for forfeiture against $77, 920, 605 located in two accounts (___7810 and ___8613) at AIB in Afghanistan. Dkt. 3 at 3, ¶ 7. The '7810 account was held in the name of Hikmat Shadman Logistics Services Company, and the '8613 account was held in the name of Faizy Elham Brothers, Ltd. Id. According to the United States, the funds held in those accounts were the unlawful proceeds of a scheme to defraud the United States. In particular, the United States alleges that it “paid contractors and subcontractors through the North Atlantic Treaty Organization (NATO) to resupply U.S. military forces operating in Afghanistan, ” Dkt. 193-2 at 5, ¶ 12; that one of these subcontractors was Hikmat Shadman Logistics Services Company, id. at 6, ¶ 20, which Shadman owns, id. at 8, ¶ 24; and that Shadman and others enriched themselves and Hikmat Shadman Logistics Services Company by “falsif[ying] contracting documents, st[ealing] fuel from the United States, mak[ing] bribe and gratuity payments, fraudulently inflat[ing] prices, and caus[ing] the United States to be invoiced and to make payments of at least $77, 920, 605 to” the '7810 and '8613 AIB bank accounts for “fraudulent” work requests, id. at 6-7, ¶ 20.

         On December 10, 2012, this Court issued arrest warrants in rem for the assets deposited with AIB in the '7810 and '8613 accounts, see Dkt. Entry of Dec. 10, 2012, and those warrants were transmitted to the government of Afghanistan pursuant to a mutual legal assistance request under the United Nations Convention Against Corruption, Dkt. 225 at 18, ¶ 51. The requests for assistance were received by the government of Afghanistan in late December 2012, and, in mid-January 2013, AIB froze the '7810 and '8613 accounts at the direction of the Office of the Attorney General of Afghanistan. Id. at 18, ¶¶ 52-53; Dkt. 41 at 2, ¶ 3. By the middle of March 2013, however, the Office of the Attorney General of Afghanistan changed course and instructed AIB to release the frozen funds, Dkt. 138-5 at 2; Dkt. 41 at 2, ¶ 4, and, in April 2013, the Central Bank of Afghanistan “advised AIB that it could not block any corporate or individual account related to Shadman, ” Dkt. 41 at 2, ¶ 5. The Afghan Attorney General subsequently informed the United States “that Afghanistan would not comply with the United States' mutual legal assistance request for enforcement of the restraint against the defendant AIB bank accounts.” Dkt. 225 at 19, ¶ 55. In a letter sent to the U.S. Attorney General months later, the Afghan Attorney General recounted that, at the request of the United States, he

arrested Mr. Shadman, froze his bank accounts and submitted the case to senior prosecutors. The assigned delegation [of Afghan prosecutors then] asked for supportive evidence to the accusations from the U.S. legal and judicial bodies, but the legal and judicial bodies remained unanswered due to lack of binding reasons and evidence. As a result of broad and extensive investigation and review of the . . . allegations [against Shadman] and other information related to the case, [the Attorney General of Afghanistan] considered the accusations illegal and baseless based on the judicial findings of the prosecutors with respect to Mr. Shadman's [i]nnocence. [The prosecutors'] determination was approved by . . . the Attorney General Office of the Islamic Republic of Afghanistan.

Dkt. 138-3 at 3. Based on this “determination, ” the Afghan Attorney General concluded that the seizure of Shadman's bank accounts was illegal and ordered that the “accounts” be released. Id. That determination was, in his view, “final in accordance with the applicable laws of” Afghanistan and not subject to appeal. Id.

         B. Seizure of Funds in the United States

         Shortly after Afghanistan released the previously frozen accounts, Shadman began to transfer money out of AIB, including to accounts at Bank Alfalah and Emirates Bank held in the names of Hikmat Shadman Logistics Services Company, Hekmat Shadman General Trading LLC, Everest Faizy Logistics Services, and Yaser Elham. Dkt. 225 at 19-26, ¶¶ 54-87. In light of these developments, on May 3, 2013, the United States filed an amended, verified complaint under seal against certain assets held in U.S. “interbank accounts” on behalf of AIB and the other foreign banks to which Shadman had transferred the funds previously deposited in the AIB accounts, and it obtained seizure warrants for the funds held in these U.S. accounts. Id. at 19, ¶ 57. Then, after the United States learned of additional funds transferred from AIB to Emirates Bank and Bank Alfalah, it filed a second amended, verified complaint, and obtained warrants for the seizure of funds held in U.S. interbank accounts on behalf of Emirates Bank and Bank Alfalah. Id. at 19-20, ¶ 58.

         In order to seize the funds, the United States invoked 18 U.S.C. § 981(k), which provides in relevant part:

If funds are deposited into an account at a foreign financial institution . . . and that foreign financial institution . . . has an interbank account in the United States with a covered financial institution . . ., the funds shall be deemed to have been deposited into the interbank account in the United States, and any restraining order, seizure warrant, or arrest warrant in rem regarding the funds may be served on the covered financial institution, and funds in the interbank account, up to the value of the funds deposited into the account at the foreign financial institution . . ., may be restrained, seized, or arrested.

         In general, to take advantage of this procedure, the United States need not “establish that the funds are directly traceable to the funds that were deposited into the foreign financial institution.” 18 U.S.C. § 981(k)(2). But, because the funds held in the U.S. interbank account are deemed to be the same funds deposited in the foreign account, the owner of the foreign funds may contest the forfeiture. Id. § 981(k)(3). If the foreign financial institution demonstrates that it had discharged its obligation to the foreign depositor before the funds were seized, however, the nexus to the foreign depositor dissolves, and the foreign financial institution is instead “deemed” to be the owner of the funds held in the interbank account. Id. § 981(k)(4)(B)(ii)(II).

         The currently operative third amended complaint[2] names five defendant U.S. interbank accounts:

(a) All funds held by or for the benefit of Afghanistan International Bank at Standard Chartered Bank, New York, of an amount up to but not to exceed $4, 330, 287.03 of the total sum of any funds held in any account at Afghanistan International Bank controlled by or for the benefit of Hikmatullah Shadman, including, but not limited to, account number ___7810, in the name of Hikmat Shadman Logistics Services Company, account number ___8613, in the name of Faizy Elham Brothers, Ltd., and account number ___5115 in the name of Everest Faizy Logistics Services;
(b) All funds held by or for the benefit of Emirates NBD Bank at Deutsche Bank Trust Company Americas, of an amount up to, but not to exceed, $45 million of the total sum of any funds transferred on or after November 20, 2012, from Afghanistan International Bank account number___7810, in the name of Hikmat Shadman Logistics Services Company to any account at Emirates NBD Bank controlled by or for the benefit of Hikmatullah Shadman, including but not limited to, account number ___2002 in the name of Hekmat Shadman General Trading LLC;
(c) All funds held by or for the benefit of Emirates NBD Bank at Deutsche Bank Trust Company Americas of [an] amount up to, but not to exceed, $4 million of the total sum of any funds transferred on or after November 20, 2012, from Afghanistan International Bank account number ___7810, in the name of Hikmat Shadman Logistics Services Company to any account at Emirates NBD Bank in the name of Yaser Elham;
(d) All funds held by or for the benefit of Bank Alfalah at Habib American Bank, of an amount up to, but not to exceed, $2, 999, 977 of the total sum of any funds transferred on or after November 20, 2012, to Bank Alfalah account number ___0241 in the name of Everest Faizy Logistics Services from Afghanistan International Bank account number ___5115 in the name of Everest Faizy Logistics Services; and
(e) All funds held by or for the benefit of Bank Alfalah at Habib American Bank, of an amount up to, but not to exceed, $949, 164 of the total sum of any funds transferred on or after November 20, 2012, from Afghanistan International Bank account number___7810, in the name of Hikmat Shadman Logistics Services Company to any account at Bank Alfalah controlled by or for the benefit of Hikmatullah Shadman, including but not limited to Bank Alfalah account number ___0238 in the name of Hikmat Shadman Logistics Services.

Dkt. 225 at 3-4, ¶¶ 8(a)-(e). Pursuant to arrest warrants issued by this Court, the United States seized all of these funds. Dkt. 23.

         C. Responses From the Islamic Republic of Afghanistan

         The seizure of the funds held in the U.S. interbank accounts did not, however, end proceedings in Afghanistan. Sometime before mid-June 2013, Shadman contacted the President of Afghanistan, Hamid Karzai, to complain about a host of alleged abuses by the United States. Dkt. 138-6 at 5. Of relevance here, Shadman complained that, despite the prior “declar[ation]” of his “innocen[ce]” by the Afghan Attorney General, the United States had blocked “his bank accounts inside and outside the country.” Id. at 10. In response, President Karzai convened a meeting in his capacity as “Chairman of the Legal and Judicial Committee of the Islamic Republic of Afghanistan” to consider Shadman's claims. Dkt. 84-1 at 19. As explained by the Afghan Attorney General, the Legal and Judicial Committee is “the highest legal and judicial decision-making body in the country.” Id. at 6. As constituted to consider Shadman's complaints, the Committee included, among others, President Karzai and Afghanistan's Chief Justice, Minister of Justice, Attorney General, Acting General Director of the National Directorate of Security, and Director of the Central Bank. Id. at 19.

         On January 8, 2014, “[a]fter every member of the [C]ommittee shared [his] comments, ” the Committee “decided that the bank accounts of Hekmatullah Shadman should be released inside the country” and that Shadman's case “should be assessed by the Supreme Court of the” Islamic Republic of Afghanistan. Id. at 20 (emphasis added). In addition, the Committee concluded that, “in cooperation with the Attorney General['s] Office and the Ministry of Foreign Affairs, necessary and lawful measures should be adopted and return of the case should be requested for assessment from the court in Washington, DC, ” id.-that is, from this Court. And, finally, the Committee directed that “similar cases”-that is, “legal disputes” between citizens of Afghanistan and “foreign forces”-“should be submitted to the Supreme Court [of Afghanistan] and[, ] after assessment and conclusion, the Supreme Court and the” Attorney General and the Minister of Foreign Affairs “should take practical action in light of the applicable laws in the country to resolve such cases.” Id.

         Consistent with the Committee's directive, the Afghan Attorney General wrote to the U.S. Attorney General on February 11, 2014, to request that the United States dismiss the action pending before this Court “because of conflict amongst laws” and that it “releas[e]” the seized funds held in the interbank accounts in the United States. Dkt. 138-3 at 3-5. In response, the U.S. Department of Justice declined to comment on a pending lawsuit. Dkt. 274-1 at 79. And, as contemplated by the Afghan Legal and Judicial Committee, the Supreme Court of Afghanistan subsequently issued a decision addressing aspects of Shadman's case. In particular, Bank Alfalah had brought suit against Shadman and one of his brothers, seeking compensation for the losses incurred by the bank due to the U.S. seizure of the $3, 939, 141 from Bank Alfalah's interbank account in the United States. Dkt. 212-3 at 4. Shadman and his brother counterclaimed, apparently seeking a “tax” for “lack of proof, ” id., and “damages caused” to Shadman and his brother by the previous “act of blocking . . . their accounts by [Bank] Alfalah.” Id. at 21. All agreed that, by this time, Bank Alfalah had released any funds deposited by the Shadman Claimants. The primary commercial court of Kabul ruled in favor of Shadman and his brother on both Bank Alfalah's claim and their counterclaims, id., and the appellate court and then the Supreme Court of Afghanistan affirmed, id.; Dkt. 212-5 at 9-10. As a result, the Afghan courts have conclusively held that Bank Alfalah is not entitled to recover from Shadman or his brother for any losses it has sustained due to the seizure of the funds held in Bank Alfalah's U.S. interbank account, notwithstanding Bank Alfalah's release of the $3, 939, 141 deposited by the Shadman Claimants, Dkt. 212-1 at 4, and notwithstanding that the sole basis asserted by the United States for seizing the interbank account funds is the alleged wrongdoing by Shadman and his associates.

         Finally, the government of Afghanistan has recently informed the United States that, in its view, an agreement between the two nations bars this Court-and any other court-from resolving the pending dispute. The question of jurisdiction over civilian contractors working in support of the U.S. mission in Afghanistan has long been a bone of contention. In 2002, the Interim Administration of Afghanistan and the International Security Assistance Force (“ISAF”) entered into a Military Technical Agreement (“MTA”). Dkt. 274-1 at 8-21. Under Annex A of the MTA, “[t]he ISAF and supporting personnel” were “subject to the exclusive jurisdiction of their respective national elements in respect of any criminal or disciplinary offenses . . . committed by them on the territory of Afghanistan.” Id. at 16. According to the Shadman Claimants' expert, this was understood to mean that U.S. contractors and their employees were subject to the jurisdiction of their country of citizenship. Dkt. 274-1 at 5, ¶ 8 (Anar Aff.). When it came time to negotiate a new agreement, according to this expert, “jurisdiction was a sticking point for Afghanistan, ” which “perceived” that U.S. forces and their security contractors engaged in “abuses . . . against the population” of Afghanistan “without Afghanistan's consent or involvement.” Id. at 3, ¶¶ 5-6 (Anar Aff.). The United States, on the other hand, was not prepared to subject its military and civilian employees to Afghan jurisdiction. Id. at 3, ¶ 5 (Anar Aff.). As a result, a compromise was struck in the new agreement, which took effect on January 1, 2015. Under that agreement-the “Security and Defense Cooperation Agreement Between the Islamic Republic of Afghanistan and the United States of America” or the “Bilateral Security Agreement” (“BSA”)-the United States retained “the exclusive right to exercise jurisdiction” over “members of the [U.S.] force and [members] of the civilian component.” Id. at 108 (BSA Article 13.1). But the parties agreed that Afghanistan would “maintain[] the right to exercise jurisdiction over United States contractors and United States contractor employees.” Id. at 109 (BSA Article 13.6).

         Several months after the BSA took effect, the Afghan Minister of Foreign Affairs wrote to the U.S. Secretary of State once again to raise concerns about “the legal case of Afghan national businessman, Mr. Hikmatullah Shadman.” Dkt. 274-1 at 33. The letter recounted the “all-inclusive investigations” conducted by Afghanistan's Prosecutor General, the requests that were made to the United States for “evidence and documents in support of” the U.S. allegations against Shadman, the Prosecutor General's decision “to enter a judgment of acquittal and [to] declare [Shadman's] innocence through diplomatic channels, ” and the various Afghan judicial decisions. Id. It then asserted that the “actions taken by the U.S. judicial organizations against Mr. Shadman . . . are in clear violation of the” MTA, the BSA, and the Constitution of Afghanistan. Id.

         Although the letter itself contained no analysis of the relevant issues, it attached a four-page memorandum arguing that “Shadman and his family's property are currently being pursued in United States [c]ourts in matters over which Afghanistan possesses exclusive jurisdiction” and demanding “immediate dismissal” of the case pending before this Court (as well as of a criminal case pending against Shadman in the Eastern District of North Carolina). Id. at 35-38. In support of the contention that the present dispute is subject to the “exclusive jurisdiction” of Afghanistan, the memorandum points to Article 13.6 of the BSA, which, as noted above, affords Afghanistan “the right to exercise jurisdiction over United States contractors and United States contractor employees.” Id. at 109. And, in support its contention that any dispute over the scope of that jurisdiction is nonjusticiable, it points to Article 24 of the BSA, which provides that “[a]ny divergence in views or dispute regarding the interpretation or application of [the BSA] shall be resolved through consultations between the Parties and shall not be referred to any national or international court, tribunal, or other similar body, or any third party for settlement.” Id. at 117. Based on this reading of the BSA, the memorandum asserts that the United States is precluded from: (1) “[c]ontinuing to hold and failing to release to their respective legal representatives any of the assets or property claimed by . . . Shadman or his family and AIB, ” including assets previously held by any Afghan bank; (2) “[c]ontinuing to assert U.S. . . . jurisdiction over . . . Shadman or any of the assets or property claimed by him and his family or AIB in U.S. Courts;” (3) “[c]ontinuing to oppose the Shadman Claimants['] Motion for Summary Judgment on grounds of Comity and Act of State filed and pending in the Civil Forfeiture Case;” or (4) “[o]pposing . . . Shadman's and his family's and AIB's claims to the assets or property seized by the U.S. Government and pursued in the civil forfeiture case or otherwise, and attempting to strike their claims.” Id. at 36-37.

         II. STANDARDS OF REVIEW

         A party must have standing throughout the litigation, see U.S. Parole Comm'n v. Geraghty, 445 U.S. 388, 411 (1980), and must prove standing “with the manner and degree of evidence required at the successive stages of the litigation, ” Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). Under Rule G of the Supplemental Rules for Admiralty or Maritime Claims, a motion to strike a claim for lack of standing “may be presented as a motion for judgment on the pleadings or as a motion to determine after a hearing or by summary judgment whether the claimant can carry the burden of establishing standing by a preponderance of the evidence.” Supp. R. G(8)(c)(ii)(B). As the issues have been framed by the parties, the summary judgment standard applies to the United States' motion to strike the Shadman Claimants' claims to the funds held in the AIB and Bank Alfalah U.S. interbank accounts, and the motion for judgment on the pleadings standard applies to the United States' motion to strike the claims of the alleged “straw owners.”

         Summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A dispute is “genuine” is the evidence is such that a reasonable fact-finder could return a verdict for the non-moving party, see Scott v. Harris, 550 U.S. 372, 380 (2007), and a fact is “material” if it could affect the substantive outcome of the litigation, see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). To survive a motion for summary judgment, the nonmoving party must designate specific facts showing that there is a genuine issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). The nonmoving party's opposition must consist of more than unsupported allegations or denials, and must instead be supported by affidavits, declarations, or other competent evidence setting forth specific facts showing that there is a genuine issue for trial. See Fed. R. Civ. P. 56(c); Celotex, 477 U.S. at 324. A verified complaint is treated as an affidavit for purposes of deciding a summary judgment motion. See Neal v. Kelly, 963 F.2d 453, 457 (D.C. Cir. 1992). Thus, to prevail on the motions to strike, the Shadman Claimants must present “specific facts, . . . which for purposes of the summary judgment motion will be taken to be true, ” Lujan, 504 U.S. at 561, and which show by a preponderance of the evidence that they have standing to claim the assets at issue.

         The standard for resolving a motion for judgment on the pleadings is “virtually identical” to the standard applicable to motions to dismiss for failure to state a claim under Rule 12(b)(6). Haynesworth v. Miller, 820 F.2d 1245, 1254 (D.C. Cir. 1987), abrogated on other grounds by Hartman v. Moore, 547 U.S. 250 (2006). The Court will thus “accept as true all of the factual allegations contained in the [claim], ” United States v. All Assets Held at Bank Julius Baer & Co., Ltd., 772 F.Supp.2d 205, 208 (D.D.C. 2011) (alteration in original) (quoting Erickson v. Pardus, 551 U.S. 89, 94 (2007)), construe the claim “liberally in the [claimants'] favor, ” and “grant [the claimants] the benefit of all inferences that can be derived from the facts alleged, ” id. (alterations in original) (quoting Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994)). But the Court need not accept the claimants' legal conclusions, or draw inferences that are not supported by the facts alleged in the claim. Id.

         Different standards also apply to the Shadman Claimants' two motions. Their motion to dismiss for lack of jurisdiction based on the bilateral security agreement arises under Federal Rule of Civil Procedure 12(b)(1). “In appropriate cases, ” the Court may “dispose of a motion to dismiss for lack of subject matter jurisdiction under Fed.R.Civ.P. 12(b)(1) on the complaint standing alone.” Herbert v. Nat'l Acad. of Scis., 974 F.2d 192, 197 (D.C. Cir. 1992). The Court may also, “where necessary, . . . consider the complaint supplemented by undisputed facts evidenced in the record, or the complaint supplemented by undisputed facts plus the court's resolution of disputed facts.” Id. The Shadman Claimants' motion for summary judgment based on the act of state doctrine and international comity, in contrast, must be evaluated under the summary judgment standard, described above.

         III. ANALYSIS

         Four motions are currently pending before the Court. The United States has filed two motions to strike pursuant to Rule G(8)(c) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions. The first of these motions (Dkt. 234) seeks to strike all of the Shadman Claimants' claims to the defendant assets seized in the United States from the interbank accounts of AIB and Bank Alfalah for lack of Article III standing. According to that motion, the Shadman Claimants' lack any cognizable stake in these funds because the government of Afghanistan has compelled AIB and Bank Alfalah to release the corresponding funds held at those banks, and thus the Shadman Claimants already have unfettered access to the funds that they deposited. The United States' second motion (Dkt. 182) is more limited and merely seeks to strike the claims of Shadman's brothers and two companies-Faizy Elham Brothers, Ltd. and Everest Faizy Logistics Services-on the ground that these claimants are “straw owners” for Shadman such that they, too, lack Article III standing.

         The Shadman Claimants, in turn, have filed two motions. Their first motion (Dkt. 274) asserts that the Court lacks jurisdiction because Afghanistan has asserted exclusive jurisdiction over this matter, thereby giving rise to a dispute with the United States under Article 13.6 of the BSA (addressing Afghan jurisdiction over U.S. contractors) and, more importantly, requiring that the United States and Afghanistan resolve any dispute regarding the scope of their respective jurisdiction through the exclusive mechanism of diplomatic “consultations, ” as required by Article 24 of the BSA (addressing disputes regarding the interpretation of the BSA). Their second motion (Dkt. 138) sounds similar themes, but, rather than invoking the BSA or any other international agreement, it asserts that the act of state doctrine and principles of international comity require this Court to defer to the orders and decisions of the Attorney General of Afghanistan and the Afghan courts.

         The Court will consider each of the four pending motions in turn.

         A. Motion to Strike Claims Relating to AIB and Bank Alfalah

         The United States first moves to strike the claims of Shadman Claimants to the funds seized from the U.S. interbank accounts held by AIB and Bank Alfalah. Those funds correspond to amounts that had been deposited in accounts held by three of the Shadman Claimants at AIB and Bank Alfalah. According to the United States, the Shadman Claimants lack Article III standing to seek release of the funds seized in these U.S. interbank accounts because they already have unfettered access to and control over the corresponding funds held at AIB and Bank Alfalah. Dkt. 234 at 7-8. As a result, even if the Court were to order the release of these defendant funds, the Shadman Claimants would gain nothing; the money would go to AIB and Bank Alfalah, and the order would have no effect, direct or indirect, on any account maintained by or for the benefit of the Shadman Claimants. For this reason, the United States asserts, the Shadman Claimants have suffered no redressable injury through the seizure of the U.S. interbank funds.

         “[T]he requirement that a litigant have standing to invoke the authority of a federal court is, ” of course, “an essential and unchanging part of the case-or-controversy requirement of Article III.” DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 (2006) (internal quotation mark omitted). The requirement applies as much to intervenors or claimants in civil forfeiture actions as to any other party in federal court. See, e.g., United States v. Emor, 785 F.3d 671, 676 (D.C. Cir. 2015). This means that, as an “irreducible constitutional minimum, ” the claimant asserting standing must be able to show (1) “an injury in fact” that is both “concrete and particularized” and “actual or imminent, not conjectural or hypothetical;” (2) “a causal connection between the injury and the conduct complained of;” and (3) that it is “likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Lujan, 504 U.S. at 560-61 (internal citations and quotation marks omitted).

         At this stage of the proceeding, the claimants have the burden of identifying “specific facts” sufficient to establish Article III standing. The problem for the Shadman Claimants is that the “specific facts” that they posit-and that their evidence supports-are at odds with the requirements of Article III. They candidly acknowledge that “[b]oth AIB and Bank Alfalah [have] discharged their obligations to the Shadman Claimants . . . at the direction of Afghanistan.” Dkt. 237 at 4; see also Dkt. 181 at 16; Dkt. 212-1 at 3-4. The evidence, moreover, confirms that the Afghan Attorney General ordered AIB and Bank Alfalah to release the funds that they held on behalf of the Shadman Claimants. Dkt. 138-5 at 2, 4; Dkt. 212-1 at 2-3 (Zian Aff. ¶ 2). And it shows that Bank Alfalah has, in fact, “returned” the $3, 939, 141 at issue to Shadman and his brothers, id. at 4 (Zian Aff. ¶ 5), and that, to the extent any funds remain deposited at AIB, those funds are, as a matter of Afghan law, fully available to the Shadman Claimants, see Dkt. 41 at 4 (AIB Verified Claim, ¶ 13).

         It is also undisputed that, as a matter of Afghan law, neither Bank Afalah nor AIB has any recourse against the Shadman Claimants to recover the amounts seized in the U.S. interbank accounts. That, in fact, is precisely what Bank Alfalah attempted to do before the Afghan courts, and it lost before the trial court, the appellate court, and the Supreme Court of Afghanistan. Dkt. 212-3 at 21; Dkt. 212-5 at 9-10. Similarly, AIB asserts in its verified claim that, under Afghan law, it “does not have the right to ‘set-off' or debit Shadman's accounts based on the seizure of the” funds in the U.S. interbank accounts. Dkt. 41 at 4 (AIB Verified Claim, ¶ 13(d)). Accordingly, far from carrying their burden of demonstrating that the seizure of the funds held in the U.S. interbank accounts on behalf of AIB and Bank Alfalah has caused them a concrete injury in fact that would “likely” be redressed by a favorable judgment, the Shadman Claimants embrace the conclusion that they already have access to and control over all of the funds that they deposited in the corresponding accounts at AIB and Bank Alfalah. In short, although a favorable verdict might benefit AIB and Bank Alfalah, it would not redress any actual, concrete injury the Shadman Claimants suffered.

         The Shadman Claimants do not dispute any of this, but nonetheless argue that they have a “colorable claim” to the funds seized from these U.S. interbank accounts, Dkt. 237 at 5; that if the Court strikes their claims for lack of standing, “there will be no claimant with standing to ensure the integrity of the forfeiture proceedings, ” id. at 9; that they were injured by the seizure of their funds “prior to the foreign banks' discharges, ” id. at 7; that they are seeking a “set off for the government's unlawful withholding and destruction of company property and failure to pay fully for the contract services performed, ” id. at 7-8; and that they have an interest in “clearing their name, ” id. at 9. None of this, however, is sufficient to show that the Shadman Claimants have Article III standing to challenge the seizure of the funds held in the U.S. interbank accounts on behalf of AIB and Bank Alfalah.

         1. Se ...


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