In re Restraint of Bowman Gaskins Financial Group

• Decision Date: 24 November 2004
• Docket Number: No. A03-147.,A03-147.
• Court: U.S. District Court — Eastern District of Virginia
• Parties: In re RESTRAINT OF BOWMAN GASKINS FINANCIAL GROUP Accounts Nos. 09L014520 & 09L014538

345 F.Supp.2d 613

In re RESTRAINT OF BOWMAN GASKINS FINANCIAL GROUP Accounts Nos. 09L014520 & 09L014538

No. A03-147.

United States District Court, E.D. Virginia, Alexandria Division.

November 24, 2004.

James P. Gillis, Assistant United States Attorney, Stephen M. Campbell, Assistant United States Attorney, United States Attorney's Office, Alexandria, VA, for Plaintiffs.

Joseph J. Aronica, Esquire (VA Bar No. 02548), Brian Gallini, Esquire, Washington, DC, for Defendants.

MEMORANDUM OPINION

ELLIS, District Judge.

In this ongoing visa fraud, money laundering, and tax evasion investigation of an individual and the company he controls, the government seeks by preindictment process to restrain funds the targeted company paid to the targeted individual's daughters for the purpose of preserving these funds for future forfeiture. The government claims this money is subject to preindictment restraint, and ultimately to forfeiture, on the grounds (I) that these funds, if not proceeds of visa fraud and money laundering, are subject to preindictment restraint as substitute assets pursuant to 18 U.S.C. § 982(b)(1) (incorporating 21 U.S.C. § 853(p)), or, in the alternative, (ii) that these funds were used to facilitate visa fraud pursuant to 18 U.S.C. § 982(a)(6)(A) and were involved in money laundering pursuant to 18 U.S.C. § 982(a)(1).

After entry and service of a temporary restraining order pursuant to 21 U.S.C. § 853(e)(2) preventing transfer of the funds, the daughters moved to vacate the order on the grounds (I) that the government has failed to demonstrate probable cause to believe the property would, in the event of a conviction, be subject to forfeiture, as required by 21 U.S.C. § 853(e)(2), (ii) that the funds, at best, are substitute assets and, as such, are not subject to restraint under 21 U.S.C. § 853(e)(2), and (iii) that such restraint would deprive the target of his Sixth Amendment right to counsel by restraining funds intended to be used for his defense. That motion was denied and a new order was issued pursuant to 21 U.S.C. § 853(e)(1)(B) further restraining the funds for ninety (90) days pending an indictment. This memorandum opinion records the reasons for these rulings.

I.¹

[Redacted] ("A"), a Virginia resident, is the owner and President of [Redacted] ("Enterprise"), a Virginia corporation headquartered in Falls Church, Virginia. A and Enterprise are currently targets of an ongoing grand jury investigation into visa fraud (18 U.S.C. § 1546), money laundering (18 U.S.C. § 1956), and tax evasion (26 U.S.C. § 7201),² among other crimes, allegedly committed by A and Enterprise. [Redacted] ("B") and [Redacted] ("C") ("movants") are A's daughters.³

Enterprise provides immigration-related services to aliens seeking to obtain permanent residence in the United States including the preparation and submission of applications for employment-based visas and alien registration receipt cards (commonly known as "green cards"). To obtain an employment-based visa, a worker must submit an application for alien labor certification, signed by the alien and the potential U.S. employer, that certifies that there are insufficient U.S. workers qualified to do the work in the job contemplated and that the employer has a specific job the alien can fill.

The record reflects that the government's investigation commenced with an analysis of over 1200 applications for alien labor certification filed by Enterprise with the Virginia Employment Commission ("VEC") and ultimately expanded to encompass a number of other Enterprise immigration filings and numerous interviews with alien beneficiaries and their putative prospective employers. This investigation ultimately disclosed that Enterprise, with A at the helm, submitted to government agencies numerous fraudulent applications for alien labor certifications by certifying falsely (I) that an employer had an existing need for skilled labor that could not be filled by the pool of U.S. workers, (ii) that the employers had tried and failed to recruit U.S. workers for these positions, and (iii) that aliens would be hired by these employers if the aliens' employment-based visas were approved. More specifically, the government's investigation shows that A and Enterprise concocted a scheme to charge aliens seeking work permits and green cards significant sums of money, ranging from $5,000 to as much as $80,000, to process their false applications for labor certification and applications for permanent residence. In essence, this scheme involved submitting false applications indicating that various employers, including for example [Redacted] ("Company 1") and [Redacted] ("Company 2"), required skilled laborers and could not fill their open positions from the available U.S. workforce. Yet, in fact, these companies had no need for additional workers, nor did they have any intention of hiring the aliens named on these applications. Further, to certify that no current U.S. workers were willing to fill the "vacant positions," an essential requirement of the labor certification process, Enterprise and A directed employers to place trumped up advertisements for the positions in their local newspapers. When U.S. workers responded to the ads and sought to apply for the jobs, company employees typically turned the applicants away, telling them that the positions had already been filled. In some instances, the workers were interviewed but, at the direction of A and Enterprise, company employees would attempt to disqualify and reject the workers for the advertised positions. In exchange for signing the false applications, the employers received payments from Enterprise and A amounting to sums in the tens of thousands and, in at least one case, hundreds of thousands of dollars.

Some examples illustrate the scheme's scope and nature. For instance, between April 2001 and November 2002, Enterprise filed approximately 400 applications for labor certification with the VEC identifying Company 1, a cleaning company, as the putative sponsoring employer. Each application stated that Company 1 intended to hire aliens as full-time cleaning supervisors when, in fact, Company 1 needed only a fraction of this number of supervisors and did not intend to hire the aliens listed on the applications. Company 1 employees interviewed during the course of the investigation report that they received calls in response to advertisements for jobs that did not exist and that when Company 1 did have job vacancies, it had little difficulty filling them from the U.S. workforce. Significantly, Paul Mederos, a Company 1 employee who entered a guilty plea as a participant in the conspiracy, admitted that he received more than $211,000 in payments from Enterprise between March 2001 and November 2002 for signing approximately 200 of these false labor certification applications.

Enterprise and A engaged in essentially similar conduct with Company 2, a construction company. Between April 2000 and January 2002, Enterprise filed with the VEC more than 250 applications for carpenters, electricians, cement masons, and other building trades, listing Company 2 as the putative employer. At that time, Company 2 had no job vacancies or positions available for the building trades identified on the applications. In fact, during the same interval, Company 2 was steadily reducing its workforce as it headed toward bankruptcy. When a Company 2 employee asked why so many foreign workers were being sponsored, a Company 2 representative explained that the foreign workers would benefit from the sponsorship so they might obtain a job elsewhere once they were admitted to the United States. Nearly every application for labor certification filed by Enterprise naming Company 2 as the employer was signed on behalf of Company 2 by A's nephew, [Redacted] ("D"), who falsely purported to be Company 2's agent. In fact, Company 2 records reflect that D was never employed at Company 2. Also, bogus newspaper advertisements for nonexistent Company 2 positions listed D's New Jersey telephone number.

In addition to these specific illustrative examples, the record also reflects episodes in the visa fraud scheme involving at least four other putative employers not summarized here. And although the record does not clearly establish the absolute amount of money Enterprise received from the visa fraud scheme, it does make clear that the sum was substantial, totaling well over $1 million.⁴

In the course of the grand jury investigation into this alleged scheme, the government learned on October 7, 2004 from documents received pursuant to a grand jury subpoena that movants, B and C, were attempting to liquidate the funds in two Bowman Gaskin Financial Group ("Bowman") accounts, one in each of their names, with current balances of $44,520.74 and $80,298.94, respectively. The government further learned that movants had attempted to transfer the Bowman account funds to the law firm representing A and Enterprise in connection with the ongoing grand jury investigation. Significantly, documents obtained from Bowman and interviews with Bowman personnel reflect that these accounts were opened in January 2002 with two checks issued by Enterprise, each for $50,000, and that the accounts were thereafter funded almost entirely with money from Enterprise. Also of note, the address listed for both Bowman accounts is Enterprise's address, which is unsurprising given B and C's familial and business connections to Enterprise.⁵ A and Enterprise, and presumably movants as well, now seek to use the money in these accounts to finance their defense in connection with the ongoing grand jury investigation.

Upon learning that movants planned to liquidate the funds, the government sought an ex parte temporary restraining order pursuant to 21 U.S.C. § 853(e)(2) to prevent the liquidation of these two accounts and thus ensure the availability of the funds for forfeiture in the event A and...