Case 2:08-cr-00224-PSG

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THOMAS P. O’BRIEN United States Attorney CHRISTINE C. EWELL Assistant United States Attorney Chief, Criminal Division MARK AVEIS (Cal. Bar No. 107881) EDWARD E. ALON (Cal. Bar No. 207287) Assistant United States Attorneys 1200 United States Courthouse 312 North Spring Street Los Angeles, California 90012 Telephone: (213) 894-4477/3825 Facsimile: (213) 894-8601 Email: mark.aveis@usdoj.gov edward.alon@usdoj.gov Attorneys for Plaintiff UNITED STATES OF AMERICA UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA UNITED STATES OF AMERICA, ) ) Plaintiff, ) ) v. ) ) GOLDFINGER COIN & BULLION, ) INC., ) ) Defendant. ) ) ) ) No. CR 08-224-PSG GOVERNMENT’S REPLY TO DEFENDANT’S OPPOSITION TO MOTIONS: 1) TO DISMISS INDICTMENT AGAINST DEFENDANT GOLDFINGER COIN & BULLION, INC., WITHOUT PREJUDICE, AND 2) TO DISMISS AS MOOT DEFENDANT’S MOTION FOR RETURN OF PROPERTY Hearing date: May 4, 2009 Time: 10:00 a.m.

I. INTRODUCTION The opposition of defendant Goldfinger Coin & Bullion, Inc. (“Goldfinger” or “defendant”) to the government’s motion to dismiss (1) the indictment and (2) defendant’s motion for return of property, seeks to convince the Court that it would be better to allow an essentially defunct corporation to continue litigating an equitable motion for its sole benefit to recover assets than to allow that same corporation to simply file a claim

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in a legal proceeding in which the Court will address and adjudicate the claims of all parties with a potential interest in the assets. defendant. The government respectfully disagrees with Based on the entirety of the record in this matter,

the government submits that the pending civil forfeiture action is the best forum in which to address the disposition of the seized property. Defendant’s arguments concerning the legality

of the seizures are properly and should be determined as part of that action, particularly in light of the government’s motion to dismiss the indictment. To continue to litigate the motion for

return of property in the absence of pending criminal proceedings would be a waste of the Court’s time and resources, particularly where determination of that motion would exclude consideration of other parties with potential claims to the assets. For all of

the reasons set out in the government’s moving papers, the indictment should be dismissed without prejudice and defendant’s motion dismissed as moot. II. ARGUMENT A. The Motion for Return Should Be Dismissed in Favor of the Civil Forfeiture Action

Defendant has characterized the government’s position as attempting to “destroy” the Court’s jurisdiction. To the

contrary, by filing the civil forfeiture action against the seized property, the government has expanded the Court’s jurisdiction over the assets. As defendant points out several

times in its papers, the assets in the civil forfeiture case were

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not included in the criminal indictment.1

Defendant’s motion for

return of property seeks to put the seized assets back into its own hands, based on the statements of the person who stands most to gain to the exclusion of Goldfinger’s depositors, namely, James Fayed. However, as explained in the moving papers and the

forfeiture complaint, there is substantial evidence that (1) Goldfinger is not the true owner of those assets, and (2) the assets consist, at least in part, of money obtained by false pretenses or outright fraud. Defendant does not contend, nor

could defendant reasonably contend, that the granting of its motion for return of property would resolve those issues. In filing the civil forfeiture action, the government brought the seized property before the Court in a proceeding governed by a detailed statutory scheme that will allow the Court to address and adjudicate the claims of all potential owners of the seized property in one proceeding. The forfeiture action is

therefore far more likely to “secure complete justice” than the defendant’s motion for return. United States v. Martinson, 809 Defendant has been given notice

F.2d 1364, 1367 (9th Cir. 1987).

of the forfeiture action, but has yet to file a claim in that action. Defendant’s reliance on Martinson for the proposition that the government’s filing of the forfeiture action here was an attempt to destroy this Court’s jurisdiction is not correct. In

Martinson, the government destroyed the object of the defendant’s motion for return of property while the appeal of the denial of The reasons for that exclusion were fully explained in the government’s moving papers and will not be repeated here. 3
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the motion was pending before the appellate court, and then argued that the appeal was moot because the property no longer existed. The court found that the government could not divest

the appellate court of jurisdiction by destroying the property at issue. Martinson is, therefore, inapposite. Here, the

government has brought the seized property to the Court in a formal judicial proceeding that, unlike either the criminal case or the defendant’s motion, will result in adjudication of the rights of all potential claimants to the property. B. Defendant’s Remaining Authorities Do Not Apply

Defendant also argues that the authorities relied upon by the government are not supportive of its argument because those authorities did not arise from facts identical to the instant case. For example, it attempts to distinguish $8,050.00 in U.S.

Currency v. United States, 307 F. Supp. 2d 922, 926-27 (N.D. Ohio 2004), United States v. Elias, 9211 F.2d 870, 873 (9th Cir. 1990) and Haltiwanger v. United States, 494 F. Supp. 2d 927 (N.D. Ill. 2007) on the ground that the government initiated administrative forfeiture proceedings in those cases, but could not do so here. To the contrary, none of those cases turned on the type of civil forfeiture proceedings commenced by the government. Rather, the

focus was on the indisputable proposition that equitable relief under Rule 41 is not available where the movant has a legal remedy available to it, whether that legal remedy is in the form of administrative forfeiture proceedings (which, if contested, will result in the filing of a civil judicial forfeiture action) or a judicial action in the first instance.

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Defendant’s argument that the government’s authorities do not apply because its motion was filed in the context of a criminal case is also unavailing. Defendant argues, for example,

that the government’s reliance on Diaz v. United States, 517 F.3d 608 (2008) is misplaced because Diaz involved a motion for return of property filed after the criminal case had concluded. Diaz offers defendant no support here. But

In addition to confirming

the well-established rule that civil forfeiture actions divest the district court of jurisdiction to determine motions for return of property arising out of the same facts, Diaz held that a court, when faced with a motion for return filed after the completion of forfeiture proceedings, was restricted to determining “whether proper procedural safeguards were observed.” Id. at 611. No such determination is appropriate here because

the civil forfeiture action has just been commenced.2 The parties are in agreement that defendant can raise its claims alleging illegal search and seizure in the civil forfeiture action, so defendant cannot claim that the dismissal of its Rule 41 motion will deny it the opportunity to present a claim or defense. Nor, as noted above, can defendant claim that

it serves the interests of justice to adjudicate its claim to the detriment of the other potential claimants whose interests will be determined in the course of the civil forfeiture action. Once

the indictment is dismissed (and defendant does not suggest that it should not be), defendant’s motion for return of property, should it be allowed to survive, would be a motion involving In Diaz, the forfeiture of defendant’s property was completed administratively after his conviction. 5
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property against which a civil forfeiture complaint has been filed but as to which there are no criminal proceedings pending. As defendant points out at page 10 of its brief, those are precisely the circumstances under which a motion for return of property must be dismissed in favor of the civil forfeiture action. IV. CONCLUSION Defendant’s attacks against the government are not welltaken. The government has filed the civil forfeiture action as

the best means to ensure that the subject property is fairly returned to its rightful owners based on a claims evaluation procedure that is supervised by the Court and such other persons as the Court believes would be necessary to accomplish that end. It is especially unreasonable for defendant to object to the government’s filing a civil forfeiture action to sort out competing claims. The government’s motivation in so doing was

based in part on James Fayed’s own conflicting statements about true ownership of the subject property. Given his station in

life and the material inconsistencies in the record which he created, the government believes it is the best interest of all concerned to grant the relief requested by the government. For

all of the reasons set out above and in the government’s moving papers, the government respectfully requests that the court dismiss the indictment without prejudice /// /// /// 6

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and dismiss defendant’s motion for return of property as moot. DATED: April 24, 2009 THOMAS P. O’BRIEN United States Attorney CHRISTINE C. EWELL Assistant United States Attorney Chief, Criminal Division ______/s/____________________ MARK AVEIS EDWARD E. ALON Assistant United States Attorneys Attorneys for Plaintiff UNITED STATES OF AMERICA

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