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18 U.S.C. § 982(a)(1):
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provides that:
. . .
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States.2
1
The citation to Rule 32.2 is to the amended version of the
rule that went into effect on December 1, 2009.
2
This motion seeks a personal money judgment forfeiture, and
forfeiture of the assets enumerated in paragraph 2e through 2p
above. The government will be seeking the forfeiture of the
additional assets listed in paragraph 2, and listed in the
Superseding Indictment, against defendant Petters Company Inc.
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ARGUMENT
Superseding Indictment.
Mail and wire fraud, in turn, are included within the definition of
of section 1956, 1957, or 1960 of this title, shall order that the
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Section 981(a)(1)(C) is a civil forfeiture provision.
However, under 28 U.S.C. § 2461(c), the government may seek the
criminal forfeiture of property in any instance where civil
forfeiture is authorized. United States v. Loren Jennings, 487
F.3d 564, 585 (8th Cir. 2007).
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United States v. Hawkey, 148 F.3d 920, 927 (8th Cir. 1998), citing
United States v. Bornfield, 145 F.3d 1123, 1135 (10th Cir. 1998);
United States v. Huber, 404 F.3d 1047, 1056 (8th Cir. 2005).
applies. United States v. Huber, 462 F.3d 945, 949 (8th Cir. 2006)
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the requisite nexus between the property and the offense.” Fed. R.
Crim. P. 32.2(b)(1)(A).
Crim. P. 32.2(b)(2)(A).
Case Background
fraud scheme was PCI’s Marshall & Ilsley Bank (“M&I Bank”) checking
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between January 2003 through August 2008. See Govt. Ex. 7A.
purchased almost entirely with funds derived from PCI M&I Bank
assets.
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the existing house torn down and a new home built. Paragon
the funding used to purchase the property and construct the new
home. Id.
proceeds was used to purchase the land and construct the home.
Lamb Aff. ¶7. Since the fraud proceeds that were invested in the
scheme. Lamb Aff. ¶8. On August 6, 2002 and August 28, 2002,
$1,201,000 and $750,000 was wire transferred from PCI’s M&I Bank
cashier’s check for $1,277,000 which was given to Edina Realty for
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traced to the PCI fraud scheme. Lamb Aff. ¶9 and Ex. A. There
the property.
Company. Lamb Aff. ¶13. Both of these transfers were used for the
Colorado. The funds used to make these payments were derived from
the PCI’s M&I Bank account, which account was funded with the
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The 320 Elk Circle property has been sold by the court-
the sale of the property which are currently being held by the
receiver.
three payments were traced to the PCI fraud scheme. The three
the fraud scheme. Larry Reynolds has pleaded guilty in this case
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Both of these payments were derived from funds transferred from the
NIR account at First Regional Bank, which account was funded with
transfer was used for the purchase of the real property at 1840
to funds received from the PCI fraud scheme account at M&I Bank.
seeking an order forfeiting the net proceeds from the sale of the
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advance on a line of credit, which was later paid off with fraud
proceeds.
xxx1089. Lamb Aff. ¶19. The Northern Trust Bank of Florida line
above, this real property was purchased with the proceeds of fraud.
used to fund the purchase of the Plymouth property was paid off
Lamb Aff. ¶20. The line of credit had a zero balance after these
December 30, 2005, was paid with funds traced to PCI’s M&I Bank
account number xxx9018 (Ex. D #5, 6 and 7). Id. ¶20. The
$1,250,000 wire transfer on December 16, 2005 (Ex. D #4) was funded
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Aff. ¶24. The property was purchased with a mortgage loan, and a
Id. ¶25. On or about May, 25, 2004, check number 113 was written
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the funding used to purchase the property. Lamb Aff. ¶26. The
The wire transfer for $377,600 was made from a line of credit
of credit was later paid off with funds which constituted fraud
proceeds.
number xxx6561 was subsequently paid off with fraud proceeds. The
Plymouth property and the 89435 Jack Pine Drive property were both
credit account was later paid off with the proceeds of fraud, as
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funded with a mortgage from Private Bank. Lamb Aff. ¶30 and Ex. G,
page 2, items 11 and 12. The cashier’s check for $265,135.02 was
traced to the PCI fraud scheme. In April 2005, the Private Bank
mortgage was paid off with funds traced to the fraud scheme account
at M&I Bank.
fund the purchase of Tam O’Shanter Lodge. On August 28, 2005, this
page two, items 13 through 15, on April 27, 2005, a wire transfer
in the amount of $625,000 was made from PCI’s M&I account number
$625,000 wire transfer was made from PCI’s Crown Bank account
same date, a wire transfer was made from Thomas J. Petters’ Crown
Bank account xxx1089 to pay off the Private Bank Mortgage. Lamb
Aff. ¶31.
The cashier’s check for $265,135.02 that was used for the down
payment on Tam O’Shanter Lodge was also funded with fraud proceeds.
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J. Petters’ Crown Bank account number xxx1089. Lamb Aff. ¶32 and
Ex. G item 10. These funds were used on the same date to fund the
Dillon, Colorado. See Lamb Aff. Ex. G, page one, items 9 and 10.
(Ex. G #8). The money used to fund these payments traces back to
seeking an order forfeiting the net proceeds from the sale of the
Morgan Trust Company, N.A. (“JP Morgan”). Lamb Aff. ¶34. This
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funds was transferred for investment with JP Morgan from the Thomas
J. Petters Crown Bank account number xxx1089, and account which was
105.
Id.
were funded directly with transfers from PCI’s M&I Bank account
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may involve the forfeiture of specific assets, and may also take
the form of a money judgment forfeiture. See e.g. Huber, 404 F.3d
forth the outstanding amount owed when the defendants’ fraud scheme
collapsed. The government believes that the law would support the
sought for the money judgment forfeiture, the government will limit
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set forth in this motion and at trial establishes that the specific
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45.
assets, with the goal of using the assets or the proceeds from the
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such assets.
Respectfully submitted,
s/ James S. Alexander