United States v. Sum of $70,990,605

Decision Date04 March 2014
Docket NumberCivil Action No. 12–1905 (RWR)
Citation4 F.Supp.3d 189
PartiesUnited States of America, Plaintiff, v. Sum of $70,990,605, et al., Defendants.
CourtU.S. District Court — District of Columbia

OPINION TEXT STARTS HERE

Elizabeth Ann Aloi, U.S. Department of Justice, Washington, DC, for Plaintiff.

MEMORANDUM OPINION AND ORDER

RICHARD W. ROBERTS, Chief Judge

Plaintiff United States filed this civil in rem forfeiture action, alleging that the defendant funds—approximately $61.3 million in three different banks—are the proceeds of a wire fraud conspiracy and subject to seizure under 18 U.S.C. §§ 981, 983 and 984. Claimants Hikmat Shadman Logistics Services Co., Hekmat Shadman General Trading, LLC, Faizy Elham Brothers, Ltd., Everest Faizy Logistics Services, Hikmatullah Shadman, Najibullah, and Rohullah move under Federal Rule of Civil Procedure 12(b) to dismiss the forfeiture action. Because the complaint states a claim upon which relief could be granted and because international comity and the act of state doctrine do not bar jurisdiction at this point, the claimants' motion to dismiss will be denied.

BACKGROUND

The United States “pays contractors and subcontractors through the North Atlantic Treaty Organization (‘NATO’) to resupply military forces operating in [Afghanistan,] and NATO's Maintenance and Supply Agency (“NAMSA”) administers the resupply program. 2d Am. Compl. ¶¶ 22–25. The transport mission “is awarded by means of a document formally referred to as a Transportation Movement Request [‘TMR’],” which requires NAMSA to engage “prime contractors, who, in turn, award individual TMRs to local Afghan subcontractors.” Id. Under NATO Contract No. 4600001510 (colloquially known as the “Jingle Truck” contract), the sole prime contractor is TOIFOR Global Life Support Services (“TOIFOR”), a Hungarianfirm. Id. ¶ 24. Hikmat Shadman Logistics Services Company is one of the TOIFOR subcontractors for the Jingle Truck contract. Id. ¶ 34.

Hikmat Shadman Logistics Services Company (“HSLSC”) is a transportation and logistics company, owned by Hikmatullah Shadman. Claimants' Mot. for Expedited Review and Mot. to Dismiss Complaint (Mot. to Dismiss) at 1. Claimants Najibullah (also known as Yaser Elham) and Rohullah are Shadman's brothers. Id. at 2. Najibullah is the president of Faizy Elham Brothers, Ltd., while Rohullah is the president of Everest Faizy Logistics Services. Id. Shadman is also the vice president of Faizy Elham Brothers. Id.

The United States alleges that Shadman, as a subcontractor and owner of HSLSC, “conspired to obtain payments from the United States for the transportation of military supplies in Afghanistan through the illegal and fraudulent use of the wires ... [by making] bribe payments, fraudulently inflat [ing] prices, and caus[ing] the United States to be invoiced for and to make payments of $77,920,605 to two bank accounts in Afghanistan.” 2d Am. Compl. ¶ 10. The United States alleges that Shadman paid bribes to TOIFOR operations managers Henry Omonobi–Newton and Paul Hele, id. ¶ 38, and that Shadman conspired with Hele to “inflate[ ] and manipulate[ ] subcontractors' bids, id. ¶ 39, to allow Hele “to award TMRs to [HSLSC] at an inflated rate,” id. ¶ 39g. Allegedly because of the bribery and fraud, HSLSC was awarded 5,421 TMRs, which cost the United States $77,920,605. See id. ¶¶ 35, 43.

The United States filed this civil forfeiture action and seized the defendant funds as the proceeds of a wire fraud conspiracy. The second amended complaint alleges that the proceeds of the contracts were deposited into an account at Afghanistan International Bank. Id. ¶ 44. The funds were then transferred in and out of accounts in the name of HSLSC, Hekmat Shadman General Trading LLC, Faizy Elham Brothers, Ltd., and Everest Faizy Logistics Services at Afghanistan International Bank, Bank Alfalah, and Emirates NBD Bank. Id. ¶ 44–76. Some of the funds at Afghanistan International Bank were also wired into an account in the name of Yaser Elham at Emirates NBD Bank. Id. ¶ 67–69. The United States has restrained a total of $63,049,141, with $52,949,141 from the accounts in Bank Alfalah and Emirates NBD Bank, and $10.1 million in Afghanistan International Bank under various seizure warrants issued by the court upon a probable cause finding.

On August 27, 2013, Shadman, Najibullah, and Rohullah filed a verified claim and statement of interest in the seized property, asserting that they are the owners of the seized funds. Verified Claim and Statement of Interest or Right in Property Subject to Forfeiture In Rem at 8. They made these claims both individually, and on behalf of their companies. Id. at 14–16. It appears that all the accounts are held in the name of the companies, rather than the individuals, except for one account at Emirate National Bank. Id. at 8–12. Claimants then filed a motion under 18 U.S.C. § 983(f) for immediate release of funds, which has been denied. The claimants also filed a motion for preliminary injunctive relief under Federal Rule of Civil Procedure 65, which has also been denied.

The claimants now move under Federal Rule of Civil Procedure 12(b) to dismiss the complaint asserting that the doctrine of international comity and the act of state doctrine bar forfeiture, the complaint fails to state a claim upon which relief can be granted, and the forfeiture violates the Eighth Amendment and the civil forfeiture statute. Mot. to Dismiss at 1, 34, 43. The United States opposes. United States' Opp'n to the Claimants' Mot. for Expedited Review and Mot. to Dismiss Compl. (“U.S.Opp'n”).

DISCUSSION
I. FAILURE TO STATE A CLAIM

The claimants contend that the government's second amended complaint should be dismissed with prejudice 1 because it fails to state a claim against the claimants.

A complaint may be dismissed under Federal Rule of Civil Procedure 12(b)(6) when a plaintiff fails to state a claim for which relief can be granted. SeeFed.R.Civ.P. 12(b)(6). When considering a Rule 12(b)(6) motion, a court construes the complaint “in the light most favorable to the plaintiff and ‘the court must assume the truth of all well-pleaded allegations.’ Bonaccorsy v. District of Columbia, 685 F.Supp.2d 18, 22 (D.D.C.2010) (quoting Warren v. District of Columbia, 353 F.3d 36, 39 (D.C.Cir.2004)). A court may consider “only the facts alleged in the complaint, any documents either attached to or incorporated in the complaint and matters of which [it] may take judicial notice.” EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C.Cir.1997).2The moving party's “factual allegations, if in agreement with plaintiff['s], only reinforce plaintiff['s] case; if in disagreement, they must be ignored. Thus, at this stage of the proceedings, the only relevant factual allegations are the plaintiff['s].” Ramirez de Arellano v. Weinberger, 745 F.2d 1500, 1506 (D.C.Cir.1984) (en banc), judgment vacated on other grounds,471 U.S. 1113, 105 S.Ct. 2353, 86 L.Ed.2d 255 (1985).

To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.

Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citations omitted) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)); see also Rollins v. Wackenhut Servs., Inc., 703 F.3d 122, 129–30 (D.C.Cir.2012). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 556, 127 S.Ct. 1955). Thus, [w]here a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.” Id. at 678, 129 S.Ct. 1937 (internal quotation marks omitted) (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955). “A court must assess the legal feasibility of the complaint, but may not weigh the evidence that might be offered to support it.” Howard v. Office of Chief Admin. Officer of U.S. House of Representatives, 720 F.3d 939, 950 (D.C.Cir.2013) (internal quotation marks omitted) (citing Global Network Communic'ns, Inc. v. City of N.Y., 458 F.3d 150, 155 (2d Cir.2006)).

A civil forfeiture complaint is subject to the heightened pleading requirements of Rule G of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeitures (Rule G): the government must “state sufficiently detailed facts to support a reasonable belief that the government will be able to meet its burden of proof at trial.” Rule G(2)(f). The government's burden at trial is to prove that the assets are subject to forfeiture by a preponderance of the evidence. 18 U.S.C. § 983(c)(1). However, a complaint cannot be dismissed “on the ground that the Government did not have adequate evidence at the time the complaint was filed to establish the forfeitability of the property.” Rule G(8)(b)(ii); 18 U.S.C. § 983(a)(3)(D). Essentially, [a]t the pleading stage, it suffices for the government to simply allege enough facts so that the claimant may understand the theory of forfeiture, file a responsive pleading, and undertake an adequate investigation.” United States v. One Gulfstream G–V Jet Aircraft, 941 F.Supp.2d 1, 14 (D.D.C.2013) (citing United States v. Mondragon, 313 F.3d 862, 864 (4th Cir.2002)); see alsoUnited States v. Funds in the Amount of $40,000, No. 03 C 8220, 2004 WL 2191576, at *2 (N.D.Ill. Sept. 28, 2004) (“Most courts have agreed that the particularity requirement of Rule E(2)(a) 3 is satisfied by providing specific information about the date and location of the seizure, the amount of money seized, and the claimant...

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