Cactil, LLC v. United States

CourtDistrict Court, S.D. California
DecidedJanuary 15, 2025
Docket3:24-cv-01270
StatusUnknown

This text of Cactil, LLC v. United States (Cactil, LLC v. United States) is published on Counsel Stack Legal Research, covering District Court, S.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cactil, LLC v. United States, (S.D. Cal. 2025).

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 CACTIL, LLC d/b/a MyChargeBack.com, Case No.: 24cv1270-LL-AHG

12 Petitioner, INTERIM ORDER FOR 13 v. SUPPLEMENTAL BRIEFING RE PETITION 14 UNITED STATES OF AMERICA,

15 Respondent. 16 17 18 Before the Court is Petitioner Cactil, LLC’s (“Cactil”) Petition for Return of 19 Property Pursuant to Federal Rule of Criminal Procedure 41(g). ECF No. 30 (“Petition” or 20 “Pet.”).1 Respondent the United States of America (“the Government”) filed an opposition 21 [ECF No. 20 (“Opposition” or “Oppo.”)], and Petitioner filed a Reply [ECF No. 28 22 (“Reply”)].2 For the reasons set forth below, the Court finds it has jurisdiction to decide 23 the merits of Cactil’s Petition and orders supplemental briefing. 24 25 1 Citations to docketed materials refer to the CM/ECF information printed at the top of 26 each page. 27 2 Cactil filed a Notice of Supplemental Information in Support of its Rule 41(g) Petition [ECF No. 31], and the Government filed a Motion to Strike Cactil, LLC’s Unauthorized 28 1 I. BACKGROUND 2 The following factual allegations are contained in the Petition. 3 On June 26, 2024, the Federal Bureau of Investigation (FBI) executed a seizure 4 warrant for the website domain MyChargeBack.com, which is owned and operated by 5 Cactil. Pet. at 5. The application provided in support of obtaining the seizure warrant is 6 under seal and has not been disclosed to Cactil. Id.at 7. 7 Cactil is “a financial consulting company founded in 2016 that assists customers 8 who are the victims of financial fraud by providing those individuals information and 9 advice that can help them dispute unauthorized charges with their banks and/or trace and 10 locate stolen cryptocurrency in an effort to recover it.” Id. at 6. Approximately one-third 11 of Cactil’s business provided banking and credit card dispute services, and two-thirds 12 provided cryptocurrency investigative services. Id. 13 Cactil’s website had a portal on a sub-domain that provided “real-time access to 14 client case status and updates” and hosted a client center that provided secured messaging 15 capabilities for active clients. Id. Cactil’s “email domain is linked to the 16 MyChargeBack.com website through a third-party security tool” and “when the domain 17 was seized, access to the company’s email server was blocked, severing email 18 communications.” Id. at 6–7. 19 The seizure warrant included the following: 20 21

22 23 Sur-Reply [ECF No. 32]. Cactil then filed an alternative Motion for Leave to File Notice of Supplemental Information [ECF No. 33], which the Government opposed [ECF No. 34]. 24 Cactil filed an additional Motion to File Supplemental Notice in Support of its Rule 41(g) 25 Petition [ECF No. 35], which the Government moved to strike [ECF No. 36]. The Court DENIES AS MOOT the motions for leave to file notice of supplemental information 26 [ECF Nos. 33, 35] and the motions to strike [ECF Nos. 32, 36] because the supplemental 27 information was not needed for the Court to make its determination. If appropriate, Cactil may incorporate its proffered supplemental information in the supplemental briefing 28 1 The Government will display a notice on the website to which the Subject Domain will resolve. That notice will consist of law enforcement emblems and the following text (or substantially similar text): 3 A “This domain has been seized by the Federal Bureau of Investigation in accordance with a seizure warrant issued pursuant to 18 U.S.C. §§ 981, 5 982, by the United States District Court for the Southern District of 6 California as part of a joint law enforcement action by: 7 The U.S. Attorney’s Office for the Southern District of California g Federal Bureau of Investigation. 9 For additional information, see https://www.justice.gov” 10 || ECF No. 30-1 at 4—5. The statutes referenced in the notice authorized by the warrant are 11 || provisions for civil and criminal forfeiture. /d. at 8; 18 U.S.C. §§ 981, 982. 12 After the website was seized, the following notice was posted on it: 13 ™ a , cv Viet ole po 1 =, [ell ual PASO AR) i) 74D 14 1 5 Ueee(oluit eee cite ae (tel Miele ciel 4) clea e-leselgel- lite il din) trate lac-lil Meese (teh e) elit aces ec Oe Ones ee Os bc Oe Bel] 16 ResO rete MegleM Oli iccte Mele] Pl ig(ma ellie iclmiucmtsl ile Pag (ame) □□ celgil ts] el-lame) □□ ellie ge-luel-lii eles) della le-lae (elem alte 1 7 OP itmOlaliecteMpe- \ece) eel. eo Ol eile elm tgl-Plel lantern eg(m as) mer-| li celaa □□□ etel-te-]B sitll elm e141 18 19 A elms Rel mn lsdi Meae)*)celelige-lile Bele Rir-lleRen ui i-lileR Canes) elie [amit at) iil] he) OM □□ eco) 20 teCeliete iMate Metered PAU ACA ite B10) 21 99 YSIORN EN a ie 23 atta 24 =

25 || Pet. at 8. The statutes in the actual notice refer to criminal wire fraud and conspiracy to 26 ||commit fraud. /d.; 18 U.S.C. §§ 1343, 1349. 27 When Cactil’s counsel called and spoke with Assistant United States Attorney 28 || Joshua Mellor on two different occasions regarding the website’s seizure, Mr. Mellor

YQ

1 stated, inter alia, that several companies which offer “cryptocurrency refund” services 2 were being investigated, including MyChargeBack.com; that “sometimes, they do manage 3 to get money back” but “most” of the business “is a scam to revictimize [customers]”; that 4 the seizure was a “first step in preventing further fraud from occurring”; that the notice was 5 a “public service” and “a reporting mechanism for victims”; and that the investigation was 6 “only focusing on the crypto recovery side” of MyChargeBack.com’s business and not the 7 credit card chargeback services. Pet. at 8–9; ECF No. 30-2, Declaration of John Ghose 8 (“Ghose Decl.”), ¶¶ 4–9. 9 Cactil filed its Petition on July 22, 2024 under seal. ECF Nos. 1, 5. When its motion 10 to unseal the Petition was granted, Cactil refiled the Petition on the docket. ECF 11 Nos. 29, 30. 12 II. LEGAL STANDARD 13 Under Rule 41(g) of the Federal Rules of Criminal Procedure, “[a] person aggrieved 14 by an unlawful search and seizure of property or by the deprivation of property may move 15 for the property's return” and if granted, “the court must return the property to the movant, 16 but may impose reasonable conditions to protect access to the property and its use in later 17 proceedings.” Fed. R. Crim. P. 41(g). Rule 41(g) is ordinarily used to seek return of 18 property after an indictment is issued, but when there are no criminal proceedings pending 19 against the movant, a district court has discretion to hear the motion as a civil equitable 20 proceeding. United States v. Kama, 394 F.3d 1236, 1237–38 (9th Cir. 2005) (quoting 21 Ramsden v. United States, 2 F.3d 322, 324 (9th Cir.1993)).

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Cactil, LLC v. United States, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cactil-llc-v-united-states-casd-2025.