United States v. 249–20 Cambria Avenue
| Decision Date | 27 May 2014 |
| Docket Number | No. 13–cv–6730 ADSGRB.,13–cv–6730 ADSGRB. |
| Citation | 21 F.Supp.3d 247 |
| Parties | UNITED STATES of America, Plaintiffs, v. REAL PROPERTY AND PREMISES LOCATED AT 249–20 CAMBRIA AVENUE, LITTLE NECK, NEW YORK 11362, and All Proceeds Traceable Thereto, et al., Defendants. |
| Court | U.S. District Court — Eastern District of New York |
United States Attorneys' Office, Eastern District of New York, Attorneys for the Plaintiff, Central Islip, NY, By Robert W. Schumacher, II, Assistant United States Attorney.
Fein Such Crane LLP, Attorneys for the Defendant, JPMorgan Chase Bank, National Association Rochester, N.Y. By David P. Case, Esq., Lisa M. McQuade, Esq., Of Counsel.
Law Offices of Steven L. Kessler, Attorneys for the Claimants, Chee Kuen Yim, Chee Kuan Yim, Chee Ching Yim, Yi Rong Liu, Rui Zhu Zheng, Qiao Chen, Regina Ngan, Swee Choo Ngan, and Shu Yu Lin New York, N.Y. By Steven L. Kessler, Esq., Of Counsel.
Hodgson Russ LLP, Attorneys for the Claimant, Manufacturers and Traders
Trust Company, agent of M & T Bank New York, N.Y. By Cathy A. Fleming, Esq., Of Counsel.
The Claimant Ken Tatarow d/b/a Tatarow Family Partners Pro Se, Clearwater, FL.
DECISION AND ORDER
On December 2, 2013, the Plaintiff United States of America (the “United States”) brought this civil in rem action to forfeit and condemn to its use and benefit (1) four New York properties, namely (a) 249–20 Cambria Avenue, Little Neck, New York 11362, (b) 42–34 189th Street, Flushing, New York 11358, (c) 61–12 213th Street, Bayside, New York 11364, and (d) 37–32 10th Street, Long Island City, New York 11101 (the Defendant “New York Properties”); (2) two Florida Properties (a) 100 Live Oaks Blvd., Casselberry, Florida 32707 and (b) West Irlo Bronson Memorial Highway, Kissimmee, Florida 34747 (the “Defendant Florida Properties”), and (3) $70,068.00 and $30,760.00 in United States Currency (the “Defendant Funds”) (collectively the “Defendants In Rem ”). According to the complaint, the Defendants In Rem are subject to forfeiture pursuant to: (a) 18 U.S.C. § 981(a)(1)(C), as property constituting or derived from proceeds traceable to violations of 18 U.S.C. § 545 ; and/or (b) 18 U.S.C. § 2323(a), as property used in any manner or part to commit or facilitate the commission of violations of 18 U.S.C. § 2320, and/or property constituting or derived from proceeds obtained directly or indirectly as a result of violations of 18 U.S.C. § 2320.
On March 26, 2014, claimants Chee Kuen Yim, Chee Kwan Yim, Chee Ching Yim, Yi Rong Liu, Rui Zhu Zheng, Qiao Chen, Regina Ngan, Swee Choo Ngan, and Shu Yu Lin (the “Claimants”) moved pursuant to Federal Rule of Civil Procedure (“Fed. R. Civ.P.”) 12 to dismiss this in rem civil forfeiture action for lack of subject matter jurisdiction on the ground that there is a prior pending civil forfeiture proceeding against the Defendant New York Properties in Supreme Court, Suffolk County, captioned Spota v. Yim, No. 13–7703 (the “State Civil Action”), and pending orders of attachment against the New York Properties in that proceeding. For the reasons set forth, the motion is denied.
In deciding a Fed. R. Civ. P. 12(b)(1) motion, the court “may refer to evidence outside the pleadings.” Id. Notably, “[t]he standard for reviewing a [Fed.R.Civ.P.12(b)(1) ] motion to dismiss is essentially identical to the [Fed.R.Civ.P.] 12(b)(6) standard,” “except that ‘[a] plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists.’ ” Taylor v. New York State Office for People with Developmental Disabilities, 13–cv–740 (NAM/CFH), 2014 WL 1202587, slip op. at *3 (N.D.N.Y. Mar. 14, 2014) (quoting Makarova v. United States, 201 F.3d 110, 113 (2d Cir.2000) ).
In or about December 2010, the Suffolk County District Attorney's Office, Asset Forfeiture Unit (the “SCDA”) initiated an investigation involving the importation, transportation, distribution, and sale of trademark counterfeit goods in the New York Metropolitan area and elsewhere.
The SCDA identified, among others, Chee Kuen Yim (“Janice Yim”), Chee Kwan Yim (“Jimmy Yim”), Chee Ching Yim (“Steve Yim”), and Regina Ngan (“Tina Ngan”) of Queens, New York, as well as Anthony Moresco (“Moresco”) of Rutherford, New Jersey as main targets (collectively the “Targets”). These persons allegedly participated in a scheme to knowingly import and sell counterfeit designer handbags, boots, jackets, pocketbooks, sunglasses, jewelry, and other merchandise (the “Trademark Counterfeit Scheme”). The Targets allegedly conspired to import this counterfeit merchandise from China, store it at facilities in Queens, New York, and then distribute it to “street sellers” throughout the New York metropolitan area, Florida, Pennsylvania, Illinois, Georgia, and California.
Beginning on or about March 15, 2013, the Targets were arraigned in New York State Court in connection with the Trademark Counterfeit Scheme, see The People of the State of New York v. Goodies Enterprise, et al., CR–13–0670, 13–1675 (the “State Criminal Action”). Indictments were returned against the Targets, among others.
On or about May 8, 2013, New York State commenced the State Civil Action pursuant to Article 13–A of the New York Civil Practice Law and Rules (“CPLR”). The named defendants in the State Civil Action are, among others, Jimmy Yim, Janice Yim, Steve Yim, Tina Ngan, Moresco, Swee Choo Ngan, Zhou Yu Lin, Quiao Chen (the “State Civil Defendants”). In the State Civil Action, New York State seeks a judgment in the amount of $6,721,667.00 against the State Civil Defendants, jointly and severally, as the proceeds of the criminal activity.
On March 13 and 14, 2013, in the State Civil Action, New York State obtained two ex parte orders of attachments pursuant to CPLR § 1317 (the “Attachment Orders”) which, among other things, restrained “all property of, or debts owing to the [efendants [there]in for the sum of $6,721,667.00, as the proceeds, substituted proceeds and/or instrumentalities of defendants' criminal conduct.” Included in the properties which could be levied under the order of attachment were the Defendant New York Properties. In other words, the attachment orders prohibited the State Civil Defendants from further encumbering the Defendant New York Properties.
Pursuant to Section 1322 of the CPLR, agents from the SCDA's Office levied upon the Defendant New York Properties by filing a notice of attachment with the local county clerk. At that time, also pursuant to CPLR Section 1322, the county clerk recorded and indexed the notice of attachment in the same manner and with the same effect as a notice of the pendency of an action.
The Claimants opposed the SCDA's motion to confirm the ex parte attachments. On February 11, 2014, Supreme Court, Suffolk County, confirmed the attachments. A motion for reconsideration of that order is currently pending before the Supreme Court.
New York State has not taken any action against the Florida Properties in connection with the State Civil Action. Specifically, no filing has been made in an attempt to encumber or levy any real property in Florida, nor is there a final order in the State Civil Action that can be filed in Florida.
On March 14, 2013, law enforcement executed a search warrant at the Cambria Avenue property and seized approximately seventy thousand sixty-eight dollars and zero cents ($70,068.00) in United States currency believed to be proceeds of the illegal trademark counterfeit scheme. Law enforcement also executed a separate search warrant at the Chase Bank in Flushing, New York on Swee Choo Ngan's safe deposit box and seized approximately thirty thousand seven hundred and sixty dollars and zero cents ($30,760.00) in United States currency believed to be proceeds of the illegal trademark counterfeit scheme.
On April 24, 2013, this approximate $101,000.00 in seized cash was turned over to the United States Department of Homeland Security, and subjected to federal forfeiture, pursuant to a Turnover Order entered by the Supreme Court, Suffolk County. In each Turnover Order, New York State confirmed that “there is no state civil forfeiture action in rem pending against [the Defendant Funds], nor does the District Attorney intend to commence such an action against such property.”
As noted above, on December 2, 2013, the United States commenced this civil in rem action seeking the forfeiture of the Defendants In Rem for the United States' use and benefit. Thereafter, the Claimants separately filed claims pursuant to Rule G of the Supplemental Rules for Certain Admiralty and Maritime Claims.
On March 26, 2014, the Claimants filed this motion to dismiss the complaint for lack of subject matter jurisdiction. Relying on Penn Gen. Cas. Co. v. Commonwealth of Pennsylvania ex rel. Schnader, 294 U.S. 189, 195, 55 S.Ct. 386, 389, 79 L.Ed. 850 (1935), the Claimants argue that the commencement of the State Civil Action pursuant to Article 13–A of the CPLR constitutes a sufficient exercise of in rem jurisdiction over the properties sought to be forfeited so as to bar a subsequent federal in rem civil forfeiture proceeding against the same property. Alternatively, the Claimants argue that by issuing the Attachment Orders, the Supreme Court, Suffolk County secured in rem jurisdiction over the properties sought to be forfeited here. The United States opposes the Claimants' motion to dismiss.
“A common-law rule of long standing prohibits a court, whether state or federal, from assuming in rem jurisdiction over a res that is already under the in rem jurisdiction of another court.' ” Chesley v. Union Carbide Corp., 927 F.2d 60, 66 (2d Cir.1991), quoting United States v. One 1985 Cadillac Seville, 866 F.2d 1142, 1145 (9th Cir.1989) (collecting cases). This common law rule was developed to maintain comity between courts. As...
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