U.S. v. $6,190.00 in U.S. Currency

• Decision Date: 08 September 2009
• Docket Number: No. 08-35221.,08-35221.
• Citation: 581 F.3d 881
• Parties: UNITED STATES OF AMERICA, Plaintiff-Appellee, v. $6,190.00 IN U.S. CURRENCY; $67,690.80 in U.S. Currency; $18,336.59 in U.S. Currency; $26,478 in U.S. Currency; $20,000 in U.S. Currency; $6,255 in U.S. Currency, Defendants, and Maxim Lam, Claimant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

581 F.3d 881

UNITED STATES OF AMERICA, Plaintiff-Appellee, v. $6,190.00 IN U.S. CURRENCY; $67,690.80 in U.S. Currency; $18,336.59 in U.S. Currency; $26,478 in U.S. Currency; $20,000 in U.S. Currency; $6,255 in U.S. Currency, Defendants, and Maxim Lam, Claimant-Appellant.

No. 08-35221.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 8, 2009.

Filed September 8, 2009.

Amy Potter, Leslie Jauanna Westphal, Robert David Nesler, Office of the United States Attorney, Portland, OR, for the appellee.

Stephen R. Sady, Office of the Federal Public Defender, Portland, OR, for the appellant.

Appeal from the United States District Court for the District of Oregon, Malcolm F. Marsh, District Judge, Presiding. D.C. No. 04-CV-00245-MA.

Before: W. FLETCHER, CARLOS T. BEA and SANDRA S. IKUTA, Circuit Judges.

WILLIAM A. FLETCHER, Circuit Judge:

Maxim Lam is a fugitive from an Oregon state criminal proceeding. Before the state proceeding began, the federal government filed a civil forfeiture complaint under 28 U.S.C. § 1355 against assets allegedly traceable to the criminal activity charged in the state court proceeding. After it became apparent that Lam had become a fugitive, the federal district court, acting under 28 U.S.C. § 2466, struck Lam's claim to his assets in the civil forfeiture proceeding. Through an attorney, Lam appeals. He argues, first, that the district court lacked jurisdiction over the civil forfeiture action under § 1355 and, second, that § 2466 does not apply to fugitives from state criminal proceedings.

We affirm the district court.

I. Background

The federal government contends that Lam participated in a scheme, in violation of 8 U.S.C. § 1324(a), that helped illegal aliens procure Oregon driver's licenses. Section 1324(a) criminalizes harboring or bringing illegal aliens into the United States. On February 20, 2004, the government filed a civil forfeiture complaint in federal district court under 28 U.S.C. § 1355 against assets allegedly traceable to Lam's scheme. The district court issued a warrant for arrest in rem and seizure.

A month later, the federal government obtained an indictment against Lam. It charged him with ten counts of encouraging aliens to reside in the United States unlawfully, in violation of 8 U.S.C. § 1324(a)(1)(A)(iv), by facilitating their unlawful acquisition of Oregon driver's licenses. The government then filed an amended civil forfeiture complaint specifying additional assets seized from Lam's home and his safe deposit box. The amended complaint was supported by an affidavit from Glenn Watson, a Special Agent with the United States Immigration and Customs Enforcement Service, who investigated the driver's license scheme. The court issued an amended warrant for arrest in rem and seizure. It held that there was probable cause to believe that the assets were traceable to violations of 8 U.S.C. § 1324(a) and were therefore subject to forfeiture under 18 U.S.C. § 981(a)(1)(C).

On May 4, 2004, Lam filed a claim for the assets specified in the amended complaint. On June 9, 2004, the district court stayed the forfeiture proceeding pending the outcome of the federal criminal case against Lam. On September 27, 2004, an Oregon grand jury handed up an indictment against Lam, charging him with 101 counts of violating Oregon law. The indictment was based on the same scheme that gave rise to the federal indictment and the federal civil forfeiture action. On May 31, 2005, the district court dismissed the federal indictment without prejudice pending resolution of the Oregon criminal proceeding.

Lam entered a plea of not guilty in the Oregon criminal proceeding. The Oregon court released him on his own recognizance. Lam appeared at two conferences on June 27 and June 30, 2005, but on February 3, 2006, three days before his trial was scheduled to begin, he failed to appear for a pre-trial call. The state court issued a warrant for his arrest. That warrant is still outstanding.

On September 7, 2007, based on Lam's fugitive status, the federal government moved to lift the stay in its civil forfeiture action. The district court lifted the stay on November 20, 2007. The next day, the government moved to strike Lam's claim for his assets under the fugitive disentitlement doctrine, codified at 28 U.S.C. § 2466. The district court granted the government's motion.

The district court held that it had subject matter jurisdiction over the civil forfeiture action under 28 U.S.C. § 1355. The court held that Lam need not have been convicted of the charges in the federal indictment for the court to have jurisdiction. Instead, it wrote that its jurisdiction was "rooted in the probable cause determination that the acts or omissions that gave rise to this action violated federal law, and occurred within the District of Oregon."

The court further held that 28 U.S.C. § 2466 applied to Lam's claim to his seized assets. The court held that Lam met the requirements for fugitive disentitlement under § 2466, as articulated in Collazos v. United States, 368 F.3d 190, 200 (2d Cir. 2004). The court held further that Lam's claim was subject to § 2466 even though he was a fugitive from a state, rather than a federal, criminal proceeding. Pursuant to § 2466, the court granted the government's motion to strike Lam's claim to the seized assets.

Lam timely appealed.

II. Standard of Review

We review de novo a district court's determination of subject matter jurisdiction. Moe v. United States, 326 F.3d 1065, 1067 (9th Cir.2003). We also review de novo legal questions arising under § 2466, including a district court's determination of probable cause. United States v. $493,850.00 in U.S. Currency, 518 F.3d 1159, 1164 (9th Cir.2008). We review for abuse of discretion a district court's decision to order disentitlement under § 2466. Collazos v. United States, 368 F.3d 190, 195 (2d Cir.2004).

III. Discussion

Lam argues that the district court did not have subject matter jurisdiction over the civil forfeiture action under § 1355. He also argues that § 2466 does not apply to a fugitive from a state court criminal proceeding. For the reasons that follow, we reject both arguments and affirm the district court.

A. Subject Matter Jurisdiction

Lam argues that the district court lacked subject matter jurisdiction over the forfeiture action for two reasons. First, he argues that Congress limited jurisdiction under 28 U.S.C. § 1355 to matters involving specified violations of federal law, and that 8 U.S.C. § 1324 is not one of these specified violations. Second, he argues that even if the district court had jurisdiction over forfeitures involving violations of § 1324, the federal indictment failed to allege a violation of this statute. In particular, Lam argues that the indictment did not allege mens rea or a nexus to immigration, which, Lam contends, are elements of the crime. We address these arguments in turn.

First, the district court's subject matter jurisdiction is based on 28 U.S.C. § 1355(a), which provides, "The district courts shall have original jurisdiction, exclusive of the courts of the States, of any action or proceeding for the recovery or enforcement of any fine, penalty, or forfeiture, pecuniary or otherwise, incurred under any Act of Congress...." The forfeiture statute upon which the government relies is 18 U.S.C. § 981, which authorizes civil forfeiture of the proceeds of activities that violate certain federal laws. Section 981(a)(1)(C) provides, "The following property is subject to forfeiture to the United States.... Any property, real or personal, which constitutes or is derived from proceeds traceable to ... any offense constituting `specified unlawful activity' (as defined in section 1956(c)(7) of this title), or a conspiracy to commit such offense."

"Specified unlawful activity" is defined in 18 U.S.C. § 1956(c)(7) as "any act or activity constituting an offense listed in section 1961(1) of this title except an act which is indictable under subchapter II of chapter 53 of title 31."¹ Section 1961(1)(F) includes in its list of offenses "any act which is indictable under the Immigration and Nationality Act, section 274 (relating to bringing in and harboring certain aliens) ... if the act indictable under such section of such Act was committed for the purpose of financial gain." Section 274 of the Immigration and Nationality Act is codified at 8 U.S.C. § 1324. Therefore, contrary to Lam's argument, Congress authorized federal jurisdiction over forfeiture actions for proceeds of a violation of § 1324, if that violation was for financial gain. Lam does not contest that he was accused of violating § 1324 for financial gain. Therefore, the district court properly exercised subject matter jurisdiction over this action.

Second, Lam claims that the indictment in his federal proceeding does not allege a crime under § 1324 and therefore cannot serve as a basis for subject matter jurisdiction in his civil forfeiture proceeding. We do not need to decide whether the indictment is deficient. Jurisdiction over civil forfeiture actions brought under 28 U.S.C. § 1355 is not premised on a federal indictment, but rather on a violation of an Act of Congress. See 28 U.S.C. § 1355(a); see also United States v. One Assortment of 89 Firearms, 465 U.S. 354, 361-63, 104 S.Ct. 1099, 79 L.Ed.2d 361 (1984) (holding that a claimant's assets were subject to forfeiture even though claimant was acquitted on federal criminal charges). To bring a civil forfeiture proceeding under § 1355, the government is required only to show probable cause that the assets in question are traceable to a violation of an Act of Congress. See $493,850.00 in U.S. Currency, 518 F.3d at 1167-69 (holding that the Civil Asset Forfeiture Reform Act of 2000 did not alter the probable cause requirement). The district court properly held that the government's complaint, accompanied by the affidavit of Special Agent Watson, met this...