In re Restraint of all Assets Contained

860 F. Supp. 2d 32, 2012 WL 1744463, 2012 U.S. Dist. LEXIS 70878
CourtDistrict Court, District of Columbia
DecidedMay 17, 2012
DocketMisc. Action No. 11-00452 (CKK)
StatusPublished
Cited by4 cases

This text of 860 F. Supp. 2d 32 (In re Restraint of all Assets Contained) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Restraint of all Assets Contained, 860 F. Supp. 2d 32, 2012 WL 1744463, 2012 U.S. Dist. LEXIS 70878 (D.D.C. 2012).

Opinion

[34]*34MEMORANDUM OPINION AND ORDER

COLLEEN KOLLAR-KOTELLY, District Judge.

Upon receiving a request for legal assistance from Curagao, the United States brought this action seeking to restrain assets contained in three investment accounts at UBS Financial Services, Inc. (“UBS”) held in the names of Caribbean Investment Group, Ltd. (“CIG”), Ponsford Overseas, Ltd. (“Ponsford”), and Tula Finance Ltd. (“Tula”) (collectively, the “Companies”).1 On August 12, 2011, the United States applied to this Court for a restraining order under 28 U.S.C. § 2467(d)(3), claiming that a restraint on the three UBS accounts is necessary to preserve the assets for potential forfeiture in connection with an ongoing criminal investigation by Curagao authorities. The Court entered an appropriate restraining order on August 23, 2011, and, upon the United States’ application, amended that order to cover two additional UBS accounts on November 2, 2011.

Since then, there have been a number of developments. Most notably, upon a challenge by Ponsford and Tula, the Court of First Instance of Curagao (the “Curagao Court”) essentially vacated the order that supports this Court’s restraining order, insofar as it applies to the three UBS accounts. But the Curagao Court also issued another order authorizing a restraint on the three UBS accounts on different grounds. The Curagao Court has, furthermore, rejected the Companies’ challenge to that separate order, leaving it untouched and in force. Accordingly, the matter returns to this Court in the following posture: the original foundation for the Court’s restraining order has disappeared, but a new one has been put in place.

Two pending motions address this new state of affairs: the United States’ [8] Second Motion to Amend the Retraining Order Pursuant to 28 U.S.C. § 2467(d)(3) and 18 U.S.C. § 983(j)(l)(A) (“Motion to Amend”); and Ponsford and Tula’s [9] Emergency Motion to Dissolve Restraining Order (“Motion to Dissolve”). Upon careful consideration of the parties’ submissions, the relevant authorities, and the record as a whole, the Court shall GRANT the United States’ [8] Motion to Amend and DENY Ponsford and Tula’s [9] Motion to Dissolve.

I. BACKGROUND

Curagao and the United States have agreed to provide one another mutual legal assistance in their criminal investigations and proceedings. See Treaty Between the United States of America and the Kingdom of the Netherlands on Mutual Assistance in Criminal Matters, U.S.-Neth., June 12, 1981, 35 U.S.T. 1361; Agreement Between the Government of the United States and the Government of the Kingdom of the Netherlands Regarding Mutual Cooperation in the Tracing, Freezing, Seizure, and Forfeiture of Proceeds and Instrumentalities of Crime and the Sharing of Forfeited Assets, U.S.-Neth., Nov. 20, 1992, T.I.A.S. No. 12,482.2 Among other things, Curagao may seek the United States’ assistance in enforcing a “forfeiture or confiscation judgment” — a “final order” compelling the forfeiture of property or proceeds traceable to “any violation of [Curagao] law that would constitute a violation or an offense for which property could be forfeited un[35]*35der Federal law if the offense were committed in the United States” — and district courts may register and enforce such judgments. 28 U.S.C. § 2467(a)(2), (c)(1), (d)(1). In addition, and more germane to the pending motions, Congress has authorized district courts to issue “restraining order[s] at any time before or after the initiation of forfeiture proceedings by [Curagao]” in order “[t]o preserve the availability of property subject to civil or criminal forfeiture under [Curagao] law.” Id. § 2467(d)(3)(A)(i).

A. The Investigation

In 2008, Curagao began an investigation into large cash deposits allegedly made by a Curagao national, Robertico Alejandro dos Santos (“dos Santos”), into a bank account held by CIG in Sint Maarten.3 (See Decl. of Curagao Public Prosecutor Jasper Marc Mul in Supp. of United States’ Opp’n to Mot. to Dissolve Restraining Order, ECF No. [14-1] (“Mul Decl.”), ¶ 8.)4 As the investigation developed, Curagao authorities came to believe that dos Santos was engaged in, among other things, money laundering.

Under Curagao law, a final order of forfeiture can only be issued once a criminal defendant has been convicted. (See id. ¶¶ 18, 20.) However, when the Public Prosecutor’s Office (the “PPO”) believes that significant assets will need to be restrained during a criminal investigation, it may ask the Curagao Court to authorize a parallel criminal financial investigation known as a Strafechtelijk Financieel Onderzoek (“SFO”), the principal purpose of which is to identify and preserve assets for post-conviction forfeiture proceedings. (See id. ¶¶ 15,18.)

To secure authorization for an SFO, the PPO must show that there is redelijk vermoeden, or reasonable suspicion, that a felony has been committed that is punishable by four or more years imprisonment and/or that has generated substantial ill-gotten gains. (See id. ¶¶ 16-17.) In this case, on June 15, 2011, the PPO sought the Curagao Court’s authorization to conduct an SFO into dos Santos and CIG.5 (See Decl. of Curagao Attorney Eldon Sulvaran in Supp. of Emergency Mot., ECF No. [9-2] (“Sulvaran Decl.”), Ex. 1; see also Mul Decl. ¶ 22.) The Curagao Court authorized the SFO on June 16, 2011, basing its order on “the reasons” identified in the PPO’s underlying application. (Sulvaran Decl. Ex. 1.) That is, the Curagao Court accepted that: (1) there was reasonable suspicion that dos Santos and CIG were involved in, among other things, money laundering; and (2) the launch of a criminal financial investigation for the “detection, tracing, and establishment of the scope of the benefit unlawfully obtained by the suspect[s] and the confiscation thereof ... must be deemed necessary.” (Id.)

B. The Curagao Court’s July 2011 Order

Generally speaking, the authorization of an SFO vests the PPO with broad authority to seize assets without further judicial intervention. But where, as here, assets are located abroad or are held by third [36]*36parties, the PPO typically seeks a separate court order authorizing their seizure. (See Mul Deck ¶¶ 26, 28.) On July 14, 2011, the PPO sought the Curagao Court’s authorization to seize the assets in the three UBS accounts, which are domiciled in Miami, Florida and held in the Companies’ names. (See Supplemental Deck of Curagao Public Prosecutor Jasper Marc Mul, ECF No. [20-5] (“Suppl. Mul Deck”), Attach. 1.) In so doing, the PPO only named dos Santos as the relevant suspect; it did not identify the Companies themselves as suspects at the time.6 (See id.) Instead, the PPO claimed that dos Santos was the true owner of the accounts and had the ability to dispose of the assets. (See id.;

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860 F. Supp. 2d 32, 2012 WL 1744463, 2012 U.S. Dist. LEXIS 70878, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-restraint-of-all-assets-contained-dcd-2012.