United States v. 939 Salem St.

• Decision Date: 22 January 2013
• Docket Number: Civil Action No. 10–11845–RGS.
• Citation: 917 F.Supp.2d 151
• Parties: UNITED STATES of America v. 939 SALEM STREET, LYNNFIELD, MASSACHUSETTS, and 2900 NW 25th Terrace, Boca Raton, Florida.
• Court: U.S. District Court — District of Massachusetts

917 F.Supp.2d 151

UNITED STATES of America

v.939 SALEM STREET, LYNNFIELD, MASSACHUSETTS, and 2900 NW 25th Terrace, Boca Raton, Florida.

Civil Action No. 10–11845–RGS.

United States District Court,

D. Massachusetts.

Jan. 22, 2013.

Kristina E. Barclay, Mary B. Murrane, U.S. Attorney's Office, Boston, MA, for United States of America.

Cristofer A. Bennardo, Bennardo & Bennardo, Boca Raton, FL, Juan Chardiet, Juan Chardiet, Attorney at Law, McLean, VA, Michelle A. Mannix, Law Office of Michelle A. Mannix, Boston, MA, for 939 Salem Street, Lynnfield, Massachusetts, and 2900 NW 25th Terrace, Boca Raton, Florida.

MEMORANDUM AND ORDER ON GOVERNMENT'S MOTION FOR SUMMARY JUDGMENT OF FORFEITURE

STEARNS, District Judge.

In this in rem civil forfeiture action, the government seeks to take title to real property, a residence located at 2900 NW 25th Terrace, Boca Raton, Florida.¹See18 U.S.C. § 981(a)(1)(A) and (C). The government maintains that the Boca Raton property was purchased by Robert Eremian with proceeds traceable to Sports Offshore (SOS), an illegal gaming business based on the island of Antigua where Robert Eremian has lived and worked since 1996. Discovery now complete, the government moves to terminate the action by way of summary judgment.

In a “Verified Statement of Interest,” Lauren Eremian, the estranged (but legally married) wife of Robert Eremian, claims an equal and undivided ownership interest in the Boca Raton property (which she uses as her primary residence). Lauren Eremian maintains that the property was purchased with legitimate earnings from Robert Eremian's business operations. More plausibly, Lauren Eremian raises an innocent owner defense. See18 U.S.C. § 983(d). A hearing on the motion for summary judgment was held on October 26, 2012.

BACKGROUND ²

Robert Eremian made his living as a bookmaker in the Boston area for eleven years before moving to the island of Antigua in the West Indies. While living in Massachusetts, Eremian owned a home in Lynnfield with his wife Lauren. The Eremians relocated to Antigua with their children in 1996, where Robert established himself as a “software consultant” in the “interactive gaming and interactive wagering” industry. He founded SOS, a sports betting enterprise offering telephone and internet facilities primarily to U.S. citizens interested in wagering on sporting events.

In 1998, Lauren Eremian and the children returned to the United States. The Eremians have since lived apart. Robert Eremian cohabitates with an Antiguan woman with whom he has a child, but continues to provide Lauren Eremian with financial support. In the summer of 2000, Robert Eremian was indicted in the District of Massachusetts for various federal gaming offenses. He eventually agreed to plead guilty, and was sentenced to a term of probation by Judge Tauro on October 8, 2002. As part of his plea agreement, Eremian was required to satisfy his federal tax arrears from 1996 to 2000 (which he did). Two months after the sentence was imposed, Robert Eremian returned to Antigua (with the permission of the court) where he resumed his employment with SOS. Eremian has since regularly filed a U.S. tax return. On December 10, 2003, he became a dual citizen of the United States and Antigua.

On May 26, 2006, Robert and Lauren Eremian purchased the Boca Raton property for $800,000. See Gov't SOF ¶ 38. A down payment of $100,000 was tendered through the realtor, Coldwell Banker, by means of a check dated April 18, 2006, drawn on a Robert Eremian account at Antigua Overseas Bank Ltd. Coldwell Banker, in turn, issued a check on May 22, 2006, in the same amount to Sunbelt Title. See id. ¶ 39, ¶ 53.

At the closing, the Eremians tendered $696,025.01 in purchase money in the form of a Bank of America cashier's check. See id. ¶¶ 40–41. The cashier's check was purchased on May 25, 2006, with funds drawn from Bank of America account number xxx-xx-xxxx, held in the name of Lauren A. Eremian. See id. ¶ 42; Murrane Decl.—Ex. 26 (Bank of America records) and Ex. 25 (Lauren Eremian Dep. at 45–46). Two days prior, on May 23, 2006, Bank of America account number xxx-xx-xxxx received an Antigua Overseas Bank wire transfer in the amount of $749,936.60. See Gov't SOF ¶ 43; Bank of America records; and Lauren Eremian Dep. at 51. The wire transfer was initiated by an entity known as Benevolence Funding to Antigua Overseas Bank.³See Gov't SOF ¶ 44; Bank of America records; and Lauren Eremian Dep. at 51. The Eremians took title to the property as tenants by the entirety. Eremian Resp. at 3 n. 1.

On August 5, 2010, a federal grand jury in Massachusetts returned a 442–count Superseding Indictment against Robert Eremian and three co-defendants ⁴ alleging, among other crimes, racketeering in violation of 18 U.S.C. § 1962; illegal gambling in violation of 18 U.S.C. § 1955; and money laundering in violation of 18 U.S.C. §§ 1956 and 1957. As described in Count One of the indictment:

[f]rom in or before 1997 and continuing through April 2010, within the District of Massachusetts and elsewhere, the defendants Robert Eremian, Daniel Eremian, Richard Sullivan, Todd Lyons, and others known and unknown to the Grand Jury, were members and associates of a criminal organization whose members and associates associated together and with others for the purpose of, among other things: (1) earning money through illegal gambling activities via a business known as “Sports Offshore”; (2) illegally laundering the proceeds of illegal gambling activities; and (3) committing various crimes related to the operation of an illegal gambling business.

Murrane Decl.—Ex. 8 (Superseding Indictment at ¶¶ 1–2). The indictment also sought the forfeiture of any personal interest that Robert Eremian held in, among other properties, the Boca Raton residence.

Robert Eremian retained counsel to represent him with respect to the new criminal charges, but ultimately refused to return to the United States from Antigua to face trial.⁵ In his absence, the trial proceededagainst Eremian's co-defendants, including his brother, Daniel Eremian. From the testimony at trial, a fulsome portrait of SOS's financial dealings emerged. According to insider witnesses, funds collected by SOS agents from bettors in the United States were hand-carried in cash or converted into checks or wire transfers and deposited into an account at Antigua Overseas Bank owned by Benevolence Funding, a shell corporation controlled by Robert Eremian. On December 5, 2011, at the conclusion of the twenty-day trial, the jury found Todd Lyons and Daniel Eremian guilty on Counts One through Five. See id.—Ex. 9 (Jury Verdict Form). The court (Judge Saris) then held a three-day bench trial on the forfeiture count. On June 29, 2012, Judge Saris issued findings of fact and rulings of law determining that Daniel Eremian was chargeable with $7,366,095 of the total SOS gambling proceeds, while Todd Lyons was responsible for $24,504,126. See U.S. v. Lyons, 870 F.Supp.2d 281, 296 (D.Mass.2012). Judge Saris further held that the sums charged to Daniel Eremian and Todd Lyons did not reflect the full amount of the forfeitable gaming proceeds amassed by SOS. The ensuing forfeiture order issued against these defendants personally, and not against SOS as an entity.

On September 30, 2011, this court allowed Robert Eremian's motion to withdraw his personal claim to the Boca Raton property. The only issue that remains is whether Lauren Eremian's undivided half-interest in the property is forfeitable.⁶

DISCUSSION

Summary judgment may be entered in an in rem civil forfeiture action where the moving party satisfies the familiar Rule 56 standard. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (the party seeking summary judgment bears the initial burden of establishing “the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any,’ which it believes demonstrate the absence of a genuine issue of material fact.”); see, e.g., United States v. 6 Fox St., 480 F.3d 38, 42–43 (1st Cir.2007) (summary judgment properly entered where the United States “provided ample ... evidence of a substantial connection between [defendant's] drug trafficking and his properties”). A showing sufficient to satisfy Rule 56 may also overcome an innocent owner defense. See, e.g., United States v. Parcel of Land and Residence at 18 Oakwood St., Dorchester, Mass., 958 F.2d 1, 4 (1st Cir.1992); United States v. 198 Training Field Rd., 2004 WL 1305875, at *3 (D.Mass. June 14, 2004); see also United States v. Premises Known as 717 S. Woodward St., 2 F.3d 529, 533 (3d Cir.1993) (“It is clear that a claimant's bare denial of knowledge or consent may be insufficient to withstand summary judgment in a forfeiture case.”).

The Civil Asset Forfeiture Reform Act of 2000 (CAFRA) establishes a procedural pavane which somewhat modifies the usual thrust and parry of summary judgment. At the first step, the government must show by a preponderance of the evidence that the property at stake is subject to civil forfeiture. See18 U.S.C. § 983(c)(1). If the government so demonstrates, the burden shifts to the claimant to step forward with a showing, again by a preponderance of the evidence, that the property is free of any criminal taint, or that she is its “innocent owner.” See United States v. One Parcel of Real Prop. Known as 45 Claremont St., 395 F.3d 1, 4 (1st Cir.2004); United States v. Cleckler, 270 F.3d 1331, 1334 (11th Cir.2001). An “innocent owner” is a person who at the time the property was acquired was a bona fide purchaser for value who did not know (and had no reasonable grounds to know) that the property in question was forfeitable. 18 U.S.C. § 983(d)(3)(A).

In making its case for forfeiture, the government asserts that the Boca Raton residence was purchased by Robert Eremian with the proceeds of...