U.S. v. 8 Gilcrease Lane, Quincy Florida 32351, Civil Action No. 08-1345 (RMC).

• Decision Date: 16 July 2009
• Docket Number: Civil Action No. 08-1345 (RMC).
• Citation: 641 F.Supp.2d 1
• Parties: UNITED STATES of America, Plaintiff, v. 8 GILCREASE LANE, QUINCY FLORIDA 32351, et al., Defendants.
• Court: U.S. District Court — District of Columbia

Page 1

641 F.Supp.2d 1

UNITED STATES of America, Plaintiff, v. 8 GILCREASE LANE, QUINCY FLORIDA 32351, et al., Defendants.

Civil Action No. 08-1345 (RMC).

United States District Court, District of Columbia.

July 16, 2009.

William Rakestraw Cowden, Vasu B. Muthyala, U.S. Attorney's Office, Washington, DC, for Plaintiff.

MEMORANDUM OPINION

ROSEMARY M. COLLYER, District Judge.

In this civil forfeiture case, various would-be intervenors have filed Motions to Intervene seeking dismissal of the case and the return to them of funds seized from bank accounts that were, before their seizure, under the control of operators of Ad Surf Daily ("ASD") and Golden Panda Ad Builder ("GP"). The Government alleges that ASD and GP were, in actuality, Internet Ponzi schemes that defrauded over 100,000 people. It now opposes the Motions to Intervene.

I. BACKGROUND

ASD and GP were two investment programs that operated as auto-surf advertising companies promising to return to the "advertisers" 125% of each "purchase" at a rate of about 1% per day. The Government alleges that Defendants—certain real properties in Florida and South Carolina, and $53 million in funds from ten Bank of America accounts—are the proceeds of wire fraud and subject to seizure and civil forfeiture in rem pursuant to 18 U.S.C. § 981(a)(1)(C). ASD filed a motion for return of the funds, so that the business could continue, and a motion to dismiss the complaint. By decision entered on November 19, 2008, this Court denied the motions, holding that "ASD has failed to demonstrate that its assets are not proceeds derived from unlawful activity" and that the "motion to dismiss is without merit." 587 F.Supp.2d 133, 135 (D.D.C.2008).

The Government filed its Complaint for Forfeiture in Rem under 18 U.S.C. § 981(a)(1), which authorizes the forfeiture of any property that constitutes or is derived from proceeds traceable to "specified unlawful activit[ies]," including wire fraud, 18 U.S.C. § 1342. Compl. ¶ 1. The Government seized the funds in the bank accounts pursuant to warrants issued by a United States Magistrate Judge. Id. ¶ 5. On August 15, 2008, Thomas A. (Andy) Bowdoin, Jr., and Bowdoin/Harris Enterprises Inc., filed verified claims for the Defendant real properties and funds seized by the Government. See Dkt. # 6. ASD separately filed a verified claim for the money from the Bank of America accounts. See Mot. for Return of Seized Funds [Dkt. # 7].

Thereafter, Mr. Bowdoin, Bowdoin/Harris Enterprises, and ASD filed a Motion for Leave to Withdraw Claims, Release of Claims to Seized Property and Consent to Forfeiture. See Dkt. # 39. Filed on January 13, 2009, this Motion stated:

1. Claimants withdraw and release with prejudice the verified claims they filed in this civil forfeiture action.

2. Claimants consent to the forfeiture of the properties for which they have asserted claims (i.e., the real property at 8 Gilcrease Lane and the bank account balances at the Bank of America in the names of Thomas A. Bowdoin Jr., sole proprietor, d/b/a AdSurfDaily) and expressly announce their intention to not contest the government's forfeiture efforts against the properties for which they have asserted claims.

Id. at 2. As a result, the Government moved the Court to allow the Claimants to withdraw their claims and consent to forfeiture and to cancel the Initial Scheduling Conference set of January 30, 2009. See Unopposed Mot. to Cancel Initial Scheduling Hearing [Dkt. # 40]. The Government explained that it was "explor[ing] mechanisms to identify victims and losses attributable to the AdSurfDaily and Golden Panda Ad Building Ponzi operations so that property sued because of its involvement in the fraud schemes . . . may be used to compensate the frauds' victims." Id. at 2. By Order issued on January 22, 2009, the Court granted the Claimants' motion and held that "Claimants' claims [Dkt. # 6] are deemed withdrawn." Order [Dkt. # 41] at 2.

Then the Court began to receive pleadings from various individuals; the pleadings have been entered on the docket as motions to intervene. These individuals appear to allege either that they were victims of one or both of the auto-surf frauds or victims of the Government's interference with their investment program. The first of these, filed on February 3, 2009, is representative and seems to be a "form" complaint inasmuch as the others are duplicates. It asserts:

The Claimant . . . comes to this Court to present [itself]. An Innocent Owner Qualified Under 18 U.S.C. 983(e) For A Motion To Set Aside Forfeiture & Civil Asset Forfeiture Reform Act of 2000 As Facts & Law Will Prove. This Court has a Duty & Obligation To Obey These 2 Federal Statutes that fall under Article VI Supremacy Clause of the U.S. Constitution and where Any Violation Will Be A Civil Rights Violation among other Federal Statute Violations.

. . .

[FOR THE RECORD, UPON THE OATH OF OFFICE AND BOND OF THE COURT (CLERK, JUDGES, AND ALL OTHER OFFICERS OF THE COURT)] I STANDING IN GOD's kingdom, accept for value and honor the Judges and Officers of the Court, particularly Judge Rosemary Collyer, U.S. Attorneys William Crowden and Jeffrey Taylor, their Oaths of Office without the UNITED STATES and each of you and I now have a Binding Private Contract "so help me God", that each of you will Protect and Defend ALL my God given and Constitutionally Declared Rights. Any violation of a Binding Contract Is Subject To Legal Damages.

See Mot. to Intervene by Pacific Ministry Of Giving, Int. at 1-2 [Dkt. # 43]. The gravamen of the motion is that all ASD members had a right to contract with ASD, none of them committed any crime, and the United States Attorney, in whose name the seizures were performed, had a duty to return "all the innocent ownership interest assets to all ASD members if they were going to shut down ASD." Id. at 3 (lower case substituted). See also Dkt. ## 44, 45, 46, 61, 63, and 65.

On February 27, 2009, Mr. Bowdoin, proceeding pro se, filed a "Notice of Rescission and Withdrawal of Release of Claims to Seized Property and Consent to Forfeiture." See Dkt. # 47. Listing a series of alleged examples of "fraud, trickery and deceit," that document asserts: "THEREFORE, this rescission is now legally accomplished as a matter of law." Id. at 4. Of course, it is not that simple to overcome a Court Order, but that issue is for another day. Mr. Bowdoin filed additional motions of one sort or another, his counsel withdrew from the representation, and, informed that corporations cannot be represented by a pro se litigant, he has now retained new counsel for himself and the two corporations. The Court mentions these other activities only because they bear on the Government's ability to "compensate the frauds' victims" as it intends.

II. LEGAL STANDARDS

An applicant may intervene as of right when the applicant (1) makes a timely motion; (2) has an interest relating to the property or transaction which is the subject of the action; (3) is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest; and (4) where the applicant's interests are not adequately represented by the existing parties. See Fed.R.Civ.P. 24(a); see also Sierra Club v. Van Antwerp, 523 F.Supp.2d 5, 6 (D.D.C.2007). A court, in its discretion, also may permit intervention where the applicant (1) makes a timely motion; (2) has a claim or defense; and (3) that claim or defense shares with the main action a common question of law or fact. See Fed.R.Civ.P. 24(b); see also EEOC v. Nat'l Children's Ctr., 146 F.3d 1042, 1046 (D.C.Cir.1998).

"[B]ecause an intervenor participates on equal footing with the original parties to a suit, a movant for leave to intervene under Rule 24(a)(2) must satisfy the same Article III standing requirements as original parties." Building & Constr. Trades Dep't v. Reich, 40 F.3d 1275, 1282 (D.C.Cir.1994). It is less clear that standing is required for permissive intervention under Rule 24(b). In re Vitamins Antitrust Class Actions, 215 F.3d 26, 31 (D.C.Cir.2000). Where standing is required, a plaintiff must establish: "(1) it has suffered an `injury in fact' that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., 528 U.S. 167, 180-81, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)).

III. ANALYSIS

"Civil forfeiture actions are brought against property, not people. The owner of the property may intervene to protect his interest." United States v. All Funds in Accounts (Banco Espanol de Credito), 295 F.3d 23, 25 (D.C.Cir.2002). "Because civil forfeiture is an in rem proceeding, the property subject to forfeiture is the defendant. Thus defenses against the forfeiture can be brought only by third parties, who must intervene." United States v. One-Sixth Share of James J. Bulger in [Lottery Proceeds], 326 F.3d 36, 40 (1st Cir.2003). These Motions represent an effort to accomplish such intervention.

Congress has required a would-be intervener to establish, by filing a timely verified claim to some or all of the defendant property, that the claimant has an interest in some portion of, or all of, the particular defendant property. See Supp. R. Adm. or Mar. Cl. & Asset Forfeiture Actions G(5)¹; 18 U.S.C. § 983(a)(4)(A). Compliance with these requirements gives rise to "statutory standing." See United States v. Property Identified as $88,260.00 in United States Currency, 925 F.Supp. 838, 841 (D.D.C.1996) ("A verified claim in a forfeiture action in rem must be filed by the claimant in order for the claimant to acquire `statutory...