United States District Court, District of Columbia
B. WALTON UNITED STATES DISTRICT JUDGE
government brings this civil forfeiture action in rem against
the defendant property, $396, 589 in U.S. funds (the
“defendant funds”), arising out of an
investigation of Royal Pearls General Trading (“Royal
Pearls”) and several other entities. See
Verified Complaint for Forfeiture In Rem
(“Compl.”) at 1. Currently pending before the
Court is the Plaintiff's Motion for Entry of Default
Judgment and Order of Forfeiture (“Gov't's
Mot.”). Upon careful consideration of the relevant
submissions,  the Court concludes that it must grant the
government's motion and order the forfeiture of the
defendant funds to the government.
following allegations are taken from the government's
Complaint, which “arises out of an investigation by the
Federal Bureau of Investigation (‘FBI') into a
scheme operated by Premium Technology Petroleum Services
(‘PT Petro'), Royal Pearls . . ., MKS International
Group (‘MKS'), Kambiz Rostamian [ ], and [other]
co-conspirators to obtain specialized petroleum parts from a
U.S. manufacturer and illegally export those parts . . . to
end users in the Republic of Iran.” Compl. ¶ 1.
“PT Petro claims to be a petroleum service company
based in Egypt, ” id. ¶ 25; “Royal
Pearls claims to be a laboratory equipment trading company
based in Dubai, UAE, ” id. ¶ 39;
“MKS claims to be a trading company based in Tehran,
Iran, ” id. ¶ 47; and Rostamian claims to
be the owner and CEO of both Royal Pearls and MKS,
id. ¶¶ 42, 45, 52-53.
March 6, 2014, PT Petro issued Purchase Order 40008 to U.S.
Company 1 to purchase . . . [certain] coiled tubing products,
” which “are highly specialized pieces of
equipment used by large scale petroleum operations.”
Id. ¶ 27. “The total purchase price of
these parts was $1, 112, 885.00 in U.S. funds.”
Id. “According to the payment terms of
Purchase Order 40008, PT Petro was required to pay [thirty
percent] of the total purchase price in advance and the full
amount of each item prior to shipment.” Id.
¶ 28. “On July 15, 2014, PT Petro wired $333,
662.50 in U.S. dollars from a bank in Egypt, to U.S. Company
1's bank account in the United States as advance payment
for Purchase Order 40008.” Id. ¶ 29.
Then, “[o]n or about April 1, 2015, U.S. Company 1 and
PT Petro coordinated a partial shipment of some of the items
from Purchase Order 40008, ” and, “[o]n April 7,
2015, PT Petro wired an additional $62, 926.50 in U.S. funds
from a bank in Qatar to U.S. Company 1's bank account in
the United States.” Id. ¶ 30. The funds
wired by PT Petro to U.S. Company 1 on July 15, 2014, and
April 7, 2015, “which were subsequently seized by law
enforcement pursuant to a seizure warrant, represent the . .
. [d]efendant [f]unds.” Id.; see also
id. ¶ 29.
early 2015, PT Petro submitted a U.S. Export Control Law
Compliance form in preparation to receive the shipment of the
above identified parts, ” which “stated that the
destination country for the items was Egypt.”
Id. ¶ 32. “However, PT Petro subsequently
requested that U.S. Company 1 ship [certain parts] . . . to
Royal Pearls at a P.O. Box in Dubai, UAE.” Id.
¶ 33. The government alleges that, ultimately,
“MKS [wa]s the [e]nd [u]ser for the [p]etroleum [p]arts
[o]rder, ” id. at 10, and that “PT Petro
and Royal Pearls falsified shipper export documents when
stating the end user of the petroleum parts, ”
id. ¶ 52.
February 3, 2017, the Department of Treasury Office of
Foreign Assets Control [(‘OFAC')] designated Royal
Pearls, MKS [ ], and Rostamian as ‘Specially Designated
Nationals' . . . of Iran.” Id. ¶ 46.
OFAC reported that “MKS . . . is . . . involved in
procuring controlled and other technology and materials to
support Iran's ballistic missile programs” and has
“utilized multiple front companies in order to
circumvent export laws and sanctions.” Id. It
further reported that “Royal Pearl[s] . . . is a front
company for MKS [ ] that has worked . . . to procure
components for Iran's ballistic missile program, ”
and “Rostamian . . . act[ed] for or on behalf of MKS [
] and Royal Pearl[s], ” including by “act[ing] as
a direct intermediary to purchase parts through MKS.”
March 31, 2017, the government filed this civil forfeiture
action against the defendant funds. See Compl. at 1.
On April 3, 2017, the Clerk of the Court issued a warrant for
arrest in rem of the defendant funds. See Warrant
for Arrest In Rem (Apr. 3, 2017), ECF No. 2. Then,
beginning on April 20, 2017, the government published notice
of this action on its public forfeiture website,
www.forfeiture.com, for thirty consecutive days.
See Publication Decl., Attachment
(“Att.”) 1 (Notice of Forfeiture Action).
Additionally, “[o]n or about April 20, 2017, the
government served notice [of this action] via email and
package delivery to Royal Pearls . . ., PT Petro, and
National Oilwell Varco[, ]” Default Aff. ¶ 5, and
via email to MKS, see Gov't's Mem. at 5.
“On June 30, 2017, the government again served notice
on . . . Royal Pearls via international package
delivery.” Id. Thereafter, on September 7,
2017, the government moved for “ent[ry] [of a]
[d]efault against the defendant property and all parties that
might have an interest in it, ” Default Aff. ¶ 9,
which the Clerk of the Court granted on September 8, 2017,
see Default at 1 (Sept. 8, 2017), ECF No. 11. The
government then filed its motion for a default judgment on
September 22, 2017. See Gov't's Mot. at 1.
STANDARD OF REVIEW
sets forth a two-step process for a party seeking a default
judgment. Fed.R.Civ.P. 55. First, “[w]hen a party
against whom a judgment for affirmative relief is sought has
failed to plead or otherwise defend, and that failure is
shown by affidavit or otherwise, the clerk must enter the
party's default.” Fed.R.Civ.P. 55(a). Second,
“the party must apply to the court for a default
judgment.” Fed.R.Civ.P. 55(b)(2). Despite a
plaintiff's ability to acquire a judgment by default,
there are “strong policies favoring the resolution of
genuine disputes on their merits.” Jackson v.
Beech, 636 F.2d 831, 835 (D.C. Cir. 1980); see Peak
v. District of Columbia, 236 F.R.D. 13, 15 (D.D.C. 2006)
(acknowledging the inherent unfairness of awarding a judgment
against a party for mere filing delays). Therefore, a
“default judgment must normally be viewed as available
only when the adversary process has been halted because of an
essentially unresponsive party.” Jackson, 636
F.2d at 836 (quoting H. F. Livermore Corp. v.
Aktiengesellschaft Gebruder Loepfe, 432 F.2d 689, 691
(D.C. Cir. 1970)); see Teamsters Local 639-Emp'rs
Health Tr. v. Boiler & Furnace Cleaners, Inc., 571
F.Supp.2d 101, 107 (D.D.C. 2008) (Walton, J.) (“[W]hen
the adversary process has been halted because of an
essentially unresponsive party[, ] the diligent party must be
protected lest he be faced with interminable delay and
continued uncertainty as to his rights.” (second
alteration in original) (quoting Peak, 236 F.R.D. at
determination of whether [a] default judgment is appropriate
is committed to the discretion of the trial court.”
Int'l Painters & Allied Trades Indus. Pension
Fund v. Auxier Drywall, LLC, 531 F.Supp.2d 56, 57
(D.D.C. 2008). “Default establishes the defaulting
party's liability for the well-pleaded allegations of the
complaint.” Boland v. Elite Terrazzo Flooring,
Inc., 763 F.Supp.2d 64, 67 (D.D.C. 2011); see Adkins
v. Teseo, 180 F.Supp.2d 15, 17 (D.D.C. 2001) (“A
defaulting defendant is deemed to admit every well-pleaded
allegation in the complaint.”). However, “the
Court must ‘make an independent determination of the
sum to be awarded' pursuant to the judgment ‘unless
the amount of damages is certain.'” Boland v.
Yoccabel Constr. Co., 293 F.R.D. 13, 17 (D.D.C. 2013)
(Walton, J.) (quoting Adkins, 180 F.Supp.2d at 17).
“‘[P]laintiff[s] must prove [their] entitlement
to the amount of monetary damages requested' using
‘detailed affidavits or documentary evidence' on
which the court may rely.” Boland v. Providence
Constr. Corp., 304 F.R.D. 31, 36 (D.D.C. 2014) (quoting
Fanning v. Permanent Sol. Indus., Inc., 257 F.R.D.
4, 7 (D.D.C. 2009)).
government argues that it is entitled to a default judgment
against the defendant funds because “[a]ll process that
was due was fully issued in this action and [ ] returned
according to law, ” as “notice by publication and
notice to all known potential claimants was properly given,
as required by . . . Supplemental Rule” for Admiralty
or Maritime Claims and Asset Forfeiture Actions G
(“Rule G”), Gov't's Mem. at 8;
“[n]o individual or entity . . . has filed a [verified]
claim or pleading to challenge the forfeiture of the
defendant [funds], ” id. at 9; and “the
time for filing a claim has expired, ” id. The
government further argues that it is entitled to civil
forfeiture in rem of the defendant funds “pursuant to
18 U.S.C. § 981(a)(1)(C) [(2012)], as property that
constitutes or is derived from proceeds traceable to
violations of the International Emergency Economic Powers Act
(‘IEEPA'), ” and “18 U.S.C. §
981(a)(1)(A)[, ] as property involved in money laundering
transactions and attempted money laundering
transactions.” Id. at 1. For the following
reasons, the Court agrees that the government is entitled to
a default judgment against the defendant funds and that the
defendant funds are subject to forfeiture to the government
under § 981.
Procedural Prerequisites ...