Pacheco v. Serendensky, No. 03-6164.

CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)
Writing for the CourtMeskill
Citation393 F.3d 348
PartiesBarbara PACHECO, Appellant, United States of America, Plaintiff-Appellee, v. John SERENDENSKY, a/k/a John Vitolano, Joseph Foti & Guy Foti, Defendants.
Docket NumberNo. 03-6164.
Decision Date29 December 2004
393 F.3d 348
Barbara PACHECO, Appellant,
United States of America, Plaintiff-Appellee,
v.
John SERENDENSKY, a/k/a John Vitolano, Joseph Foti & Guy Foti, Defendants.
No. 03-6164.
United States Court of Appeals, Second Circuit.
Argued August 24, 2004.
Decided December 29, 2004.

Page 349

Evan Wiederkehr, White Plains, N.Y. (DelBello Donnellan Weingarten Tartaglia Wise & Wiederkehr, White Plains, NY, of counsel), for Appellant.

Daniel S. Ruzumna, Assistant United States Attorney, Southern District of New York, New York City (David N. Kelley, United States Attorney, Gary Stein, Assistant United States Attorney, Southern District of New York, New York City, of counsel), for Appellee.

Before: MESKILL, MINER, and KATZMANN, Circuit Judges.

MESKILL, Circuit Judge.


This appeal requires us to determine the extent of the government's interest in real property forfeited to it by a criminal defendant. In particular, our question is whether, with respect to real property, the use of the term "property" in the criminal forfeiture statute, 21 U.S.C. § 853, refers to a parcel of land or to the defendant's interest in that land, where the two are not the same. Because we conclude that a criminal defendant can only be made to forfeit what was his in the first place, we adopt the latter interpretation.

BACKGROUND

John Serendensky, the defendant in the underlying criminal action, was indicted on October 5, 2000 on charges of conspiracy to commit bank fraud and conspiracy to launder money stemming from activity alleged to have occurred between 1997 and October 2000. The indictment also contained forfeiture counts alleging that several properties were subject to forfeiture, including Serendensky's interest in a house located at 228 Revere Avenue, Bronx, New York.

This appeal concerns the property located at 228 Revere Avenue (the "Premises"). In short, the Premises — having been purchased jointly by Serendensky and his

Page 350

wife, Maria Caporale — are now subject to two claims of ownership. The government acquired an interest in the Premises by virtue of Serendensky's criminal activity, which made it subject to forfeiture. Meanwhile, Barbara Pacheco, the appellant, allegedly acquired an interest when she purchased the Premises at a foreclosure sale. Because the time-line of events is critical in determining whose interests in the Premises are valid and to what extent, we set forth the facts as alleged in somewhat greater detail below.

On November 10, 1998, Serendensky and Caporale purchased the Premises as joint tenants after acquiring a $115,000 mortgage from Parmann Mortgage Associates, LLP. The deed of conveyance was recorded with the Office of the City Register of the City of New York, Bronx County, on March 4, 1999. The Parmann mortgage was recorded with the City Register on the same day.

A year and a half later, on August 31, 2000, Serendensky and Caporale refinanced their mortgage with a $168,000 loan from Wilmington National Finance, Inc. The Wilmington mortgage was recorded on November 30, 2000, and afforded Wilmington a first-priority lien against the Premises; we presume that the Parmann mortgage was released as part of the refinancing.

Meanwhile, on October 5, 2000 — between the time when Serendensky and Caporale refinanced their mortgage and the time the Wilmington mortgage was actually recorded — the government filed an indictment charging Serendensky with conspiracy to commit bank fraud, in violation of 18 U.S.C. § 371, and conspiracy to launder money, in violation of 18 U.S.C. § 1956(h). Each count of the indictment also had a corresponding forfeiture count alleging the forfeiture of "[a]ny right, title, and interest held by JOHN SERENDENSKY, a/k/a `John Vitolano,' in the real property and appurtenances known as 228 Revere Avenue, Bronx, New York." The indictment alleged that Serendensky had acquired the Premises with the proceeds of his criminal activity.

On October 25, 2000 — still before the Wilmington mortgage was recorded — the government filed a notice of pendency with the City Register. Mirroring the forfeiture counts of the indictment, the notice of pendency explained that the government was seeking forfeiture of Serendensky's interest in the Premises. The text of the notice of pendency is set out in the margin.1

Subsequently, on July 19, 2001, the government filed a seven-count superseding information against Serendensky alone charging him with conspiracy to commit bank fraud, see 18 U.S.C. § 371, bank fraud, see id. § 1344, conspiracy to launder money, see id. § 1956(h), conspiracy to

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commit mail fraud, see id. § 371, conspiracy to commit robbery in interstate commerce, see id. § 1951(a), conspiracy to traffic in counterfeit access devices, see id. § 1029(b)(2), and conspiracy to distribute cocaine base, see 21 U.S.C. § 846. Like the indictment, the information contained counts corresponding to the bank fraud and money laundering charges alleging forfeiture of Serendensky's interest in the Premises, pursuant to 18 U.S.C. § 982. The information also alleged the forfeiture of additional property — including a car, $65,000 in men's jewelry, and approximately $2,000,000 in cash — not at issue here. On July 19, 2001, the same day that the information was filed, Serendensky pleaded guilty and consented to the forfeitures alleged in the information.

During the time that Serendensky was under indictment and negotiating his plea, he and Caporale defaulted on their mortgage and Wilmington initiated foreclosure proceedings. Wilmington foreclosed notwithstanding the government's notice of pendency and three other notices published in The New York Times in April and May 2002.

On May 20, 2002, Plaza Homes, LLC, received a referee's deed in foreclosure for the Premises from Jeffrey D. Klein, Esq.; Plaza Homes, in turn, sold the Premises to Pacheco on the same day for $225,000. Pacheco's deed was recorded with the City Register on June 27, 2002. At the time that she closed on the Premises, Pacheco was aware of the notice of pendency and the ongoing forfeiture proceedings; she proceeded with the purchase anyway.

On October 8, 2002, in an attempt to clear her title, Pacheco filed a third-party petition in the forfeiture court claiming an interest in the Premises. The government promptly moved to dismiss, arguing that the foreclosure sale from which Pacheco's title originated was invalid and that, in any case, Pacheco was not a bona fide purchaser of the Premises because she was on notice of the government's interest. In an opinion and order dated July 9, 2003, the court below, Koeltl, J., agreed with the government on both counts and dismissed the petition, holding that Pacheco lacked standing because she had no valid interest in the Premises. See United States v. Serendensky, 2003 WL 21543519 (S.D.N.Y. July 9, 2003). This appeal followed.

DISCUSSION

On appeal, Pacheco challenges the district court's dismissal of her petition asserting an interest in the Premises. We review the district court's decision de novo. See United States v. Ribadeneira, 105 F.3d 833, 834 (2d Cir.1997) (per curiam).

A.

At the outset, we pause to consider what showing Pacheco is required to make to survive the government's motion to dismiss her petition.

Under the criminal forfeiture statute, a third party may petition for a hearing to adjudicate its alleged interest in property to be forfeited. See 21 U.S.C. § 853(n)(2). At that hearing, both the petitioner and the government are entitled to present evidence, see id. § 853(n)(5), with the burden ultimately on the petitioner to prove her claim by a preponderance of the evidence, see id. § 853(n)(6).

Notwithstanding this statutory scheme, courts have determined that a hearing is not always necessary to adjudicate a third party's claims. Where a petitioner is not able to demonstrate a prima facie entitlement to relief, courts have routinely dismissed third-party petitions without a hearing. See, e.g., United States v. Lavin, 942 F.2d 177, 179-80 (3d Cir.1991); United States v. Campos, 859 F.2d 1233, 1240 (6th

Page 352

Cir.1988). The district court, relying on such cases, held that Pacheco failed to make the required prima facie showing. See Serendensky, 2003 WL 21543519, at *2.

In 2000, however, Congress adopted Federal Rule of Criminal Procedure 32.2 governing proceedings relating to criminal forfeiture, including third-party petitions. See Fed.R.Crim.P. 32(k)(2). Prior to the 2000 amendment, forfeiture was governed by Rule 32(d), which made no mention of third-party proceedings. Under the new Rule 32.2, when a third party files a petition asserting an interest in property to be forfeited, the court must conduct an "ancillary proceeding." Fed.R.Crim.P. 32.2(c)(1). That ancillary proceeding, although occurring in the context of criminal forfeiture, closely resembles a civil action:

(A) In the ancillary proceeding, the court may, on motion, dismiss the petition for lack of standing, for failure to state a claim, or for any other lawful reason. For purposes of the motion, the facts set forth in the petition are assumed to be true.

(B) After disposing of any motion [to dismiss] and before conducting a hearing on the petition, the court may permit the parties to conduct discovery in accordance with the Federal Rules of Civil Procedure if the court determines that discovery is necessary or desirable to resolve factual issues. When discovery ends, a party may move for summary judgment under Federal Rule of Civil Procedure 56.

Fed.R.Crim.P. 32.2(c)(1)(A) & (B). The Advisory Committee explained that because ancillary proceedings can be enormously complicated, "procedures akin to those available under the Federal Rules of Civil Procedure," such as motions to dismiss, discovery, and motions for summary judgment, "should be available to the court and the parties to aid in the efficient resolution of the claims." Fed.R.Crim.P. 32.2 advisory committee's note to...

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  • United States v. Kenner, No. 3-CR-607 (JFB) (AYS)
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • March 10, 2020
    ...property and any other party's interest will be decided, if necessary, in an ancillary hearing." Id. ; see also Pacheco v. Serendensky , 393 F.3d 348, 351 (2d Cir. 2004). As discussed at the conferences, the Court intends to move forward with the ancillary hearings in an expeditious manner ......
  • United States v. Bailey, Criminal Case No. 1:11–cr–00010–MR–DLH.
    • United States
    • United States District Courts. 4th Circuit. Western District of North Carolina
    • February 25, 2013
    ...under the same standards as a motion to dismiss a civil complaint under Federal Rule of Civil Procedure 12(b). Pacheco v. Serendensky, 393 F.3d 348, 352 (2d Cir.2004). Thus, in order to survive a motion to dismiss, an ancillary petition “must contain sufficient factual matter, accepted as t......
  • Dreier LLP v. The Patriot Group, LLC, Case No. 09-15051 (SMB)
    • United States
    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Southern District of New York
    • June 16, 2011
    ...the third party can show that it is a bona fide purchaser for value. 21 U.S.C. §§ 853(n)(6)(A), (B); see also Pacheco v. Serendensky, 393 F.3d 348, 353 (2d Cir. 2004). Petitioning the court for an ancillary proceeding is the exclusive means for a thirdPage 24party to claim an interest in fo......
  • Fed. Ins. Co. v. United States, Docket Nos. 16-2967-op
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • February 13, 2018
    ...legal conclusions regarding a third-party petition brought under 21 U.S.C. § 853(n)(2) are reviewed de novo . Pacheco v. Serendensky, 393 F.3d 348, 351 (2d Cir. 2004). As we have previously noted, dismissal of a § 853 petition is subject to the same standards as a civil complaint dismissed ......
  • Request a trial to view additional results
108 cases
  • United States v. Kenner, No. 3-CR-607 (JFB) (AYS)
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • March 10, 2020
    ...property and any other party's interest will be decided, if necessary, in an ancillary hearing." Id. ; see also Pacheco v. Serendensky , 393 F.3d 348, 351 (2d Cir. 2004). As discussed at the conferences, the Court intends to move forward with the ancillary hearings in an expeditious manner ......
  • United States v. Bailey, Criminal Case No. 1:11–cr–00010–MR–DLH.
    • United States
    • United States District Courts. 4th Circuit. Western District of North Carolina
    • February 25, 2013
    ...under the same standards as a motion to dismiss a civil complaint under Federal Rule of Civil Procedure 12(b). Pacheco v. Serendensky, 393 F.3d 348, 352 (2d Cir.2004). Thus, in order to survive a motion to dismiss, an ancillary petition “must contain sufficient factual matter, accepted as t......
  • Dreier LLP v. The Patriot Group, LLC, Case No. 09-15051 (SMB)
    • United States
    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Southern District of New York
    • June 16, 2011
    ...the third party can show that it is a bona fide purchaser for value. 21 U.S.C. §§ 853(n)(6)(A), (B); see also Pacheco v. Serendensky, 393 F.3d 348, 353 (2d Cir. 2004). Petitioning the court for an ancillary proceeding is the exclusive means for a thirdPage 24party to claim an interest in fo......
  • Fed. Ins. Co. v. United States, Docket Nos. 16-2967-op
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • February 13, 2018
    ...legal conclusions regarding a third-party petition brought under 21 U.S.C. § 853(n)(2) are reviewed de novo . Pacheco v. Serendensky, 393 F.3d 348, 351 (2d Cir. 2004). As we have previously noted, dismissal of a § 853 petition is subject to the same standards as a civil complaint dismissed ......
  • Request a trial to view additional results

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