Restraint of All Assets Contained or Formerly Contained in Investment Account Numbers at Ubs Financial Services, Inc., Held in the Names of Ponsford Overseas Limited, Caribbean Investment Group Ltd.

• Court: District Court, District of Columbia
• Decided: May 17, 2012
• Docket: Misc. No. 2011-0452
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

IN RE RESTRAINT OF ALL ASSETS CONTAINED OR FORMERLY CONTAINED IN CERTAIN INVESTMENT ACCOUNTS AT UBS FINANCIAL SERVICES, INC. HELD IN Misc. Action No. 11-00452 (CKK) THE NAMES OF CARIBBEAN INVESTMENT GROUP, LTD., PONSFORD OVERSEAS LTD., AND TULA FINANCE LTD.

MEMORANDUM OPINION AND ORDER (May 17, 2012)

Upon receiving a request for legal assistance from Curaçao, 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 Curaçao 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 Curaçao (the “Curaçao Court”) essentially

1 The three UBS accounts are: Account # R2 66631, held in the name of CIG; Account # R2 67045 37, held in the name of Ponsford; and Account # R2 67187 37, held in the name of Tula.

1 vacated the order that supports this Court’s restraining order, insofar as it applies to the three

UBS accounts. But the Curaçao Court also issued another order authorizing a restraint on the

three UBS accounts on different grounds. The Curaçao 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)(1)(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

Curaçao 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, Curaçao may seek the United States’ assistance in

2 Curaçao is now a constituent country within the Kingdom of the Netherlands and has adopted both of the cited accords.

2 enforcing a “forfeiture or confiscation judgment”—a “final order” compelling the forfeiture of

property or proceeds traceable to “any violation of [Curaçao] law that would constitute a

violation or an offense for which property could be forfeited under 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 [Curaçao]” in order “[t]o

preserve the availability of property subject to civil or criminal forfeiture under [Curaçao]

law.” Id. § 2467(d)(3)(A)(i).

A. The Investigation

In 2008, Curaçao began an investigation into large cash deposits allegedly made by a

Curaçao national, Robertico Alejandro dos Santos (“dos Santos”), into a bank account held by

CIG in Sint Maarten.3 (See Decl. of Curaçao 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, Curaçao authorities came to believe that dos Santos was

engaged in, among other things, money laundering.

Under Curaçao 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

3 To be precise, the investigation began in Sint Maarten, which like Curaçao was then part of the former Netherlands Antilles. Curaçao authorities took over the investigation in 2010.

4 Where appropriate, the Court cites to declarations describing the nature of the investigation and proceedings in Curaçao. See 28 U.S.C. § 2467(d)(3)(B) (“The court, in issuing a restraining order . . . may rely on information set forth in an affidavit describing the nature of the proceeding or investigation underway . . . .”).

3 investigation, it may ask the Curaçao 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 Curaçao Court’s authorization to conduct an

SFO into dos Santos and CIG.5 (See Decl. of Curaçao Attorney Eldon Sulvaran in Supp. of

Emergency Mot., ECF No. [9-2] (“Sulvaran Decl.”), Ex. 1; see also Mul Decl. ¶ 22.) The Curaçao

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 Curaçao 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 Curaçao 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 parties, the PPO typically seeks a separate court order authorizing

their seizure. (See Mul Decl. ¶¶ 26, 28.) On July 14, 2011, the PPO sought the Curaçao Court’s

5 A Sint Maarten entity known as Jamaroma Lotteries N.V. was also named.

4 authorization to seize the assets in the three UBS accounts, which are domiciled in Miami,

Florida and held in the Companies’ names. (See Supplemental Decl. of Curaçao Public

Prosecutor Jasper Marc Mul, ECF No. [20-5] (“Suppl. Mul Decl.”), 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; Mul Decl.

¶¶ 32-35.) On July 14, 2011, the Curaçao Court authorized the seizure up to $50 million in

assets in the three UBS accounts “on the grounds as reported” (the “July 2011 Order”). (Suppl.

Mul Decl. Attach. 1; see also Mul Decl. ¶¶ 32, 36; Sulvaran Decl. ¶ 19.) That is, the Curaçao

Court accepted that: (1) there is reason to believe that dos Santos “played an active role” in,

among other things, money laundering; and (2) dos Santos “apparently can dispose” of the

assets in the three UBS accounts. (Suppl. Mul Decl. Attach. 1.)

C. This Court’s Restraining Order

On July 29, 2011, Curaçao requested the United States’ assistance in the enforcement

of the July 2011 Order. (See Mul Decl. ¶ 36.) On August 8, 2011, the Attorney General of the

United States, through his delegee, determined that certifying Curaçao’s request was in the

interest of justice pursuant to 28 U.S.C. § 2467(b)(2), (d)(3)(B)(ii). (See United States’ Ex Parte

Appl. to Enforce & Register a Foreign Restraining Order Pursuant to § 2467(d)(3) & Stmt. of

P. & A. in Supp. Thereof, ECF No. [1] (“United States’ Appl.”), Exs. B-C.) On August 12, 2011, the

United States applied to this Court for an order restraining the assets in the three UBS accounts

pursuant to 28 U.S.C. § 2467(d)(3). (See United States’ Appl.) On August 22, 2011, upon the

6 Although CIG had been a suspect in the SFO from the outset, it was not identified as a relevant suspect in the PPO’s July 14, 2011 application. (See Suppl. Mul Decl. Attach. 1; Sulvaran Decl. Ex. 1.)

5 Court’s request, the United States provided additional briefing as to how the relief requested

was consistent with case law interpreting the reach of § 2467(d)(3). (See United States’

Supplemental Mem. in Resp. to the Court’s Aug. 17, 2011 Minute Order Regarding the Proper

Appl. of 28 U.S.C. § 2467(d)(3), ECF No. [2]; United States’ Supplemental Mem. in Resp. to the

Court’s Aug. 22, 2011 Minute Order Regarding the Legislative History of 28 U.S.C. § 2467(d)(3)

as Am., ECF No. [3].)7

After carefully reviewing the United States’ submissions and the relevant authorities,

the Court granted the application. (See Restraining Order pursuant to 28 U.S.C. § 2467(d)(3)

& 18 U.S.C. § 983(j)(1)(A), ECF No. [4].) Subsequently, upon the United States’ application, the

Court amended its order to cover two additional UBS accounts on November 2, 2011.8 (See

United States’ Ex Parte Mot. to Amend Restraining Order Pursuant to 28 U.S.C. § 2467(d)(3)

& 18 U.S.C. 983(j)(1)(A), ECF No. [5]; Am. Restraining Order Pursuant to 28 U.S.C. §

2467(d)(3)(A) & 18 U.S.C. § 983(j)(1)(A), ECF No. [6-1] (“Am. Restraining Order”).) In its

current form, the Court’s restraining order, insofar as it applies to the three UBS accounts,

rests on the validity of the July 2011 Order of the Curaçao Court. (See Am. Restraining Order

¶ 1.)

7 On December 22, 2010, through the Preserving Foreign Criminal Assets for Forfeiture Act of 2010, Pub. L. No. 111-342, 124 Stat. 3607 (2010), Congress amended 28 U.S.C. § 2467(d)(3) partly in response to case law interpreting the prior iteration of the statute as limiting courts’ authority to freezing assets only after a foreign court enters a final forfeiture judgment. See, e.g., In re Any & All Funds or Other Assets, in Brown Bros. Harriman & Co. Account # 8870792 in the Name of Tiger Eye Invs. Ltd., 613 F.3d 1122 (D.C. Cir. 2010). As amended, the statute now clearly authorizes courts to issue a restraining order “at any time before or after the initiation of forfeiture proceedings by a foreign nation.” 28 U.S.C. § 2467(d)(3)(A)(i).

8 The two additional UBS accounts are: Account # R2 66409, held in the name of dos Santos; and Account # R2 66410.37, held in the name of dos Santos’ spouse. Because these two accounts are not presently at issue, the Court omits further discussion of them herein.

6 D. The Article 150 Proceedings in Curaçao

Article 150 Sv of Curaçao’s Code of Criminal Procedure (“Article 150”) provides a

vehicle for parties to challenge an authorization of seizure. (See Suppl. Mul Decl. ¶ 4; Expert

Op. of Jan Reijntjes, ECF No. [15-1] (“Reijntjes Decl.”), ¶ 21.) On December 15, 2011, dos

Santos commenced an Article 150 proceeding in the Curaçao Court challenging the July 2011

Order. (See Mul Decl. ¶ 40; Sulvaran Decl. ¶ 34.) On February 22, 2012, Ponsford and Tula

commenced a separate Article 150 proceeding after the PPO took the position that dos Santos

was without standing to pursue his challenge because the assets in the UBS accounts are the

sole property of the Companies. (See Mul Decl. ¶¶ 41-42; Sulvaran Decl. ¶ 34.)

E. The Curaçao Court’s January 2012 Order

On January 12, 2012, while the Article 150 proceedings were ongoing, the PPO returned

to the Curaçao Court, again seeking authorization to seize the assets in the three UBS accounts.

(See Suppl. Mul Decl. Attach. 2.) As before, the PPO proffered that dos Santos was the

animating force behind the underlying criminal activity, but this time the PPO also named the

Companies themselves as suspects in the money laundering scheme. (See id.; Mul Decl. ¶ 38;

Sulvaran Decl. ¶ 35.) On January 19, 2012, the Curaçao Court authorized the seizure of up to

$60 million in assets in the three UBS accounts “on the grounds as reported” (the “January

2012 Order”). (Suppl. Mul Decl. Attach. 2.)9 That is, the Curaçao Court accepted that: (1) the

Companies “can (now) also be regarded as suspects and the balances in the . . . investment

accounts with UBS can also be seized under them as holder and/or beneficiary of . . . those

accounts”; and (2) there is reason to believe that the Companies “have played an active role”

9 The English translation was signed on January 26, 2012. (See Suppl. Mul Decl. Attach. 2.)

7 in money laundering. (Id.)

On February 15, 2012, Curaçao requested the United States’ assistance in the

enforcement of the January 2012 Order. (See Mul Decl. ¶ 39). However, Curaçao and the

United States were apparently content with this Court’s restraining order in the form that it

then existed, resting as it did on the July 2011 Order, because neither Curaçao nor the United

States pressed the matter until subsequent events called into question the validity of the July

2011 Order. (See id.)

F. The Article 43 Proceedings in Curaçao

Article 43 Sv of Curaçao’s Code of Criminal Procedure (“Article 43”) provides a vehicle

for parties to seek interim relief in criminal proceedings. (See Mul Decl. ¶ 49.) On March 14,

2012, while the Article 150 proceedings concerning the July 2011 Order were still ongoing, the

Companies commenced separate Article 43 proceedings challenging the January 2012 Order.

(Id.) In those proceedings, the Companies petitioned the Curaçao Court to enjoin the PPO from

using the January 2012 Order to restrain the three UBS accounts. (See Sulvaran Decl. Ex. 4.)

G. The Curaçao Court’s April 2012 Orders

On April 4, 2012, the Curaçao Court issued two orders altering the landscape of this

case.

First, in one order, the Curaçao Court sustained Ponsford and Tula’s Article 150

challenge and, in effect, vacated the July 2011 Order as it applied to them (the “First April 2012

Order”).10 (See Sulvaran Decl. Ex. 3.) As aforementioned, in the application that ultimately led

to the July 2011 Order, the PPO identified only dos Santos as the relevant suspect, claiming that

10 Meanwhile, the Curaçao Court agreed that dos Santos lacked standing to challenge the July 2011 Order because that order involved a “third-party seizure.” (Sulvaran Decl. Ex. 3.)

8 he was the actual owner of the accounts and had the ability to dispose of the assets. (See

Suppl. Mul Decl. Attach. 1.) In its First April 2012 Order, the Curaçao Court concluded that the

July 2011 Order was invalid because Ponsford and Tula were not encompassed “within the

framework of [the] criminal financial investigation” and because the PPO had failed to show

“beyond a reasonable doubt that the respective claims do not belong to Ponsford and Tula.”11

(Sulvaran Decl. Ex. 3.) On that basis, the Curaçao Court directed that the seizure, as authorized

by the July 2011 Order, “be lifted.” (Id.)

Second, in a separate order, the Curaçao Court dismissed the Companies’ Article 43

challenge to the January 2012 Order (the “Second April 2012 Order”). (See Sulvaran Decl. Ex.

4.) The Curaçao Court found that the Companies could not bring their challenge under Article

43 because “Article 43 of the Code of Criminal Procedure does not allow for the requested

provision, since Article 150 of the Code of Criminal Procedure includes a stipulation with

regard to complaints about a seizure.” (Id.) The parties disagree as to the Curaçao Court’s

reasoning. On the one hand, the Ponsford and Tula suggest, without any support in the Second

April 2012 Order, that the Curaçao Court found that their challenge was unripe because no

assets had actually been restrained under the January 2012 Order. (See Reijntjes Decl. ¶ 26.)

Meanwhile, the United States, citing the language of the order itself, takes the position that the

Curaçao Court simply found that Article 43 was not the proper procedural vehicle for the

Companies’ challenge, and that the Companies should instead resort to Article 150. (See Mul.

11 Under Curaçao law, there is a presumption that assets held in the name of a legal entity in fact belong to the entity, and that presumption can only be overcome by showing beyond a reasonable doubt that the assets are in fact the property of the suspect. (See Sulvaran Decl. Ex. 3; Suppl. Mul Decl. ¶ 6; but see Reijntjes Decl. ¶ 23.) The PPO admits that it did not present evidence that the UBS accounts actually belong to dos Santos, claiming that it did so for strategic reasons. (See Mul Decl. ¶¶ 39, 53; Suppl. Mul Decl. ¶ 6.)

9 Decl. ¶¶ 56-57.) Regardless, this much is clear: the Curaçao Court’s Second April 2012 Order

dismissed the Companies’ challenge, leaving the January 2012 Order untouched and in force.12

H. The Instant Motions

The vacatur of the July 2011 Order—the foundation for this Court’s restraining

order—prompted Curaçao to ask the United States to seek the enforcement of the January

2012 Order. Curaçao renewed its request on April 5, 2012, and the Attorney General, through

his delegee, determined that certifying Curaçao’s request was in the interest of justice. (See

Mul Decl. ¶ 39; United States’ Second Mot. to Amend the Restraining Order Pursuant to 28

U.S.C. § 2467(d)(3) & 18 U.S.C. § 983(j)(1)(A), ECF No. [8] (“United States’ Mot. to Amend

Mem.”), Ex. 2.) On April 9, 2012, the United States filed the pending Motion to Amend, seeking

an order restraining the assets in the three UBS accounts pursuant to 28 U.S.C. § 2467(d)(3)

based upon the Curaçao Court’s January 2012 Order. (See United States’ Mot. to Amend Mem.)

Ponsford and Tula filed their opposition on April 24, 2012. (See Ponsford Overseas Ltd.’s &

Tula Finance Ltd.’s Opp’n to the United States’ Second Mot. to Amend the Restraining Order

Pursuant to 28 U.S.C. § 2467(d)(3) & 18 U.S.C. § 983(j)(1)(A), ECF No. [15] (“Ponsford & Tula’s

Mot. to Amend Opp’n”).) The United States filed its reply on May 9, 2012. (See United States’

Reply Mem. in Supp. of its Second Mot. to Amend the Restraining Order Pursuant to 28 U.S.C.

§ 2467(d)(3) & 18 U.S.C. § 983(j)(1)(A), ECF No. [20] (“United States’ Mot. to Amend Reply”).)

Similarly, the vacatur of the July 2011 Order prompted Ponsford and Tula to seek the

12 Ponsford and Tula interpret the “be lifted” language in the First April 2012 Order as requiring that the assets in the three UBS accounts to be released irrespective of what the Curaçao Court set forth in the January 2012 Order. The Court cannot agree. The Curaçao Court issued its April 2012 Orders on the same day, evidencing that it then understood that the January 2012 Order, which authorizes the seizure of the assets in the three UBS accounts, would remain in effect going forward. Under these circumstances, absent an unequivocal statem ent from the Curaçao Court that it no longer intends its January 2012 Order to permit the seizure of the assets in the three UBS accounts, the Court will honor the terms of the January 2012 Order as a matter of comity.

10 dissolution of this Court’s restraining order, which in its current form rests on the validity of

the July 2011 Order. Shortly after the United States filed its Motion to Amend, Ponsford and

Tula filed their pending Motion to Dissolve. (See Mem. in Supp. of Ponsford Overseas Ltd.’s &

Tula Finance Ltd.’s Emergency Mot. to Dissolve Restraining Order & for a Hr’g on the

Government’s Second Mot. to Amend the Restraining Order, ECF No. [9-1] (“Ponsford & Tula’s

Mot. to Dissolve Mem.”).) The United States filed its opposition on April 24, 2012. (See United

States’ Mem. in Opp’n to Ponsford Overseas Ltd.’s & Tula Finance Ltd.’s Emergency Mot. to

Dissolve Restraining Order & for a Hr’g on the Government’s Second Mot. to Amend the

Restraining Order, ECF No. [14] (“United States’ Mot. to Dissolve Opp’n”).) Ponsford and Tula

filed their reply on May 8, 2012. (See Ponsford Overseas Ltd.’s & Tula Finance Ltd.’s Reply

Mem. in Supp. of the Emergency Mot. to Dissolve Restraining Order & for a Hr’g on the

Government’s Second Mot. to Amend the Restraining Order, ECF No. [17] (“Ponsford & Tula’s

Mot. to Dissolve Reply”).)

II. PRELIMINARY MATTERS

Ponsford and Tula contend that they are entitled to a hearing on the United States’

Motion to Amend. (See Ponsford & Tula’s Mot. to Dissolve Mem. at 9-11.) The contention rests

on the assumption that 18 U.S.C. § 983(j)(1)(B), which affords interested persons a right to

“notice . . . and opportunity for a hearing,” applies here. 18 U.S.C. § 983(j)(1)(B). It does not.

The parties are in agreement that § 983(j)(1)(B) only applies at the pre-filing stage of

foreign criminal or forfeiture proceedings and when there is no proceeding in which to

challenge the restraint in the foreign country. (See Ponsford & Tula’s Mot. to Dissolve Mem.

11 at 10; United States’ Mot. to Dissolve Opp’n at 12.)13 In this case, the Curaçao Court has

approved the PPO’s criminal financial investigation, the SFO; the purpose of the SFO is to

identify and preserve assets for potential forfeiture; the SFO remains ongoing; the Companies

are now regarded as suspects; and the Curaçao Court has authorized the restraint of the very

assets at issue in this action. (See Mul Decl. ¶¶ 15-18; Suppl. Mul Decl. Attach. 2; Sulvaran Decl.

Ex. 1.) Moreover, the Curaçao Court’s Second April 2012 Order strongly suggests that the

Companies can commence Article 150 proceedings to challenge the January 2012 Order in

Curaçao right now and, absent a contrary statement from the Curaçao Court, this Court will

defer to that judgment.14 (See Sulvaran Decl. Ex. 4; see also Mul Decl. ¶¶ 56-57.)15 Under these

circumstances, § 983(j)(1)(B) does not apply.

In any event, Ponsford and Tula have not even attempted to explain why certain

matters could only be elucidated in the context of a hearing and they have not identified any

evidence that has not already been presented to the Court on the papers. They have, in short,

failed to articulate any reason for a hearing.

For the foregoing reasons, the Court declines to hold a hearing on the pending motions.

13 In light of the parties’ agreement on this point, the Court need not address whether this interpretation is the correct one here. But see Mem. Order at 3, In re Enforcement of a Retraining Order by the High Court, Misc. Action 11-00208 (GK) (D.D.C. Apr. 4, 2012) (“[Section] 983(j)(1)(B) applies at the pre-filing stage of ‘foreign criminal or forfeiture proceedings’ where there is no proceeding of any type yet pending in the foreign country in which to challenge the restraint or forfeitable assets.”), ECF No. [14].

14 On this record, the Court cannot accept Ponsford and Tula’s alternative reading of the Second April 2012 Order, which lacks textual support.

15 Ponsford and Tula concede that they can bring a challenge to the January 2012 Order in Curaçao as soon as this Court issues a restraining order enforcing the January 2012 Order. (See Ponsford & Tula’s Mot. to Dissolve Mem. at 10; Ponsford & Tula’s Mot. to Amend Opp’n at 4; Reijntjes Decl. ¶ 26.)

12 III. DISCUSSION

There are two motions pending before the Court: the United States’ [8] Motion to

Amend; and Ponsford and Tula’s [9] Motion to Dissolve. The Court addresses each in turn.

A. The United States’ Motion to Amend

Through its Motion to Amend, the United States asks the Court to issue a new

restraining order that would effectively substitute the January 2012 Order for the July 2011

Order as the basis for the restraint. Ponsford and Tula tender a litany of reasons as to why the

requested relief should be denied. The Court addresses those reasons here seriatim.

First, Ponsford and Tula argue that the United States may not invoke 28 U.S.C. §

2467(d)(3) because it has not shown that the proper Curaçao authority made the underlying

request for legal assistance. (See Ponsford & Tula’s Mot. to Amend Opp’n at 5-6; Ponsford &

Tula’s Mot. to Dissolve Reply at 3-5.) However, nothing in § 2467(d)(3) authorizes or requires

this Court to pierce the veil of authority behind a request for legal assistance. Instead,

consistent with the general preference to leave matters of foreign affairs in the hands of the

Executive, Congress left it to the Attorney General to determine whether a request should be

certified and presented to the district court, and that determination is not subject to judicial

review. See 28 U.S.C. § 2467(b)(2), (d)(3)(B)(ii). In this case, because the Attorney General

has certified Curaçao’s request for enforcement of the January 2012 Order (see United States’

Mot. to Amend Mem. Ex. 2), the Court’s inquiry is at an end. Even assuming, arguendo, that the

Court were inclined to probe further, the United States has introduced ample evidence

showing that, at the time it received the request, the PPO was authorized to make requests

under the applicable treaties. (See United States’ Mot. to Amend Reply Exs. A, C-D; see also id.

13 at 4-8.) The Court defers to the Executive’s reasonable conclusion that the treaties have been

properly invoked in this instance.16 See Hwang Geum Joo v. Japan, 413 F.3d 45, 52 (D.C. Cir.

2005) (“[T]he Executive’s interpretation of a treaty is ordinarily entitled to ‘great weight.’”)

(quoting Sumitomo Shoji Am., Inc. v. Avagliano, 457 U.S. 176, 184-85 (1982)), cert. denied, 546

U.S. 1208 (2006); Zivotofsky ex rel. Zivotofsky v. Clinton, __ U.S. __, 132 S. Ct. 1421, 1437 (2012)

(Breyer, J., dissenting) (“The Constitution primarily delegates the foreign affairs powers to the

political departments of the government, Executive and Legislative, not to the Judiciary.”)

(internal quotation marks omitted). Therefore, the origins of Curaçao’s request for assistance

do not present an obstacle to the Court granting the United States’ Motion to Amend.

Second, Ponsford and Tula argue that the United States has failed to show that the

alleged conduct underlying the January 2012 Order can support forfeiture under both Curaçao

and federal law—a reference to the concept of “dual forfeiture.” (See Ponsford & Tula’s Mot.

to Amend Opp’n at 6-9; Ponsford & Tula’s Mot. to Dissolve Reply at 5-9.) The argument

proceeds from an uncertain premise—namely, that the dual forfeiture requirement actually

applies where, as here, the United States is seeking the enforcement of a foreign restraining

order pending final forfeiture proceedings, and not a final order of forfeiture.17 In this context,

the district court “may register and enforce a restraining order that has been issued by a court

of competent jurisdiction in the foreign country and certified by the Attorney General.” 28

U.S.C. § 2467(d)(3)(A)(ii)(bb). Although the statute speaks here of “property subject to civil

16 That includes the Executive’s determination that an April 25, 2012 letter from the Curaçao Minister of Justice did not retroactively repudiate the authority of the PPO to make requests for legal assistance under the applicable treaties. (See United States Mot. to Amend Reply at 6-8.)

17 Despite Ponsford and Tula’s assertion to the contrary (see Ponsford & Tula’s Mot. to Dissolve Reply at 5), the United does not concede that the dual forfeiture requirement applies here (see United States’ Mot. to Amend Reply at 8-10).

14 or criminal forfeiture under foreign law,” id. § 2467(d)(3)(A)(i), it does not expressly

incorporate the dual forfeiture requirement that applies to final orders of forfeiture, see id. §

2467(a)(2)(A), (c). Ultimately, however, the Court need not resolve the question of whether

the dual forfeiture requirement applies here because, even assuming its applicability, it is

satisfied in this case. With respect to Curaçao law, the Curaçao Court granted the PPO’s

application “on the grounds as reported,” thereby accepting that the Companies are suspects

in money laundering punishable under Article 435 of the Criminal Code of Curaçao and that

the seizure of the assets in the three UBS accounts is necessary for the purpose of “maintaining

the right of recovery” in future forfeiture proceedings. (Suppl. Mul Decl. Attach. 2.) Unless and

until the Curaçao Court vacates the January 2012 Order, the Court will defer to the terms of the

January 2012 Order. With respect to federal law, the Court is satisfied at this stage of the

Curaçao proceedings that the Companies’ alleged criminal conduct could support forfeiture

under 18 U.S.C. §§ 981(a)(1), 1956, and 1957; whether or not the United States will ultimately

be able to make this showing must await further development of the record in Curaçao.

Third, Ponsford and Tula argue that the January 2012 Order was not issued consistently

with the requirements of due process. (See Ponsford & Tula’s Mot. to Amend Opp’n at 9-16.)

In this regard, the district court must enter a restraining order unless it finds that the foreign

proceedings or procedures are “incompatible with the requirements of due process of law.”

28 U.S.C. § 2467(d)(1)(A), (d)(3)(A)(ii)(I). The district court should not lightly sit in judgment

of the legal system of a foreign sovereign; to do so would run the risk of entangling the federal

courts in matters of foreign affairs, the province of the political branches of our government,

and would ask courts to opine on legal questions that they would generally be ill-equipped to

15 handle. Therefore, the showing required is not strenuous, cf. Piper Aircraft Co. v. Reyno, 454

U.S. 235, 254 n.22 (1981), and the district court should begin with the premise that the foreign

proceedings or procedures are in fact compatible with due process. In this case, the

procedures employed to obtain the January 2012 Order—which required the PPO to present

an application and investigative reports setting forth the grounds for the requested restraint

to a neutral judicial decision-maker—are analogous to procedures used in the United States.

See 18 U.S.C. §§ 981(b)(2), (b)(3), 983(a); 21 U.S.C. § 853(f); FED. R. CRIM . P. 41(d). The

procedures are not incompatible with due process merely because the PPO’s request was

made ex parte and supported by evidence that has not been made public; such features are

unremarkable and, indeed, have analogs in our own legal system. See, e.g., United States v.

$129,727.00 U.S. Currency, 129 F.3d 486, 493 (9th Cir. 1997) (“Forfeitable personal property

was appropriate to seize without a prior hearing because the res could be moved or hidden,

thwarting the Government’s interest in it.”), cert. denied sub nom. Trujillo v. United States, 523

U.S. 1065 (1998). Nor are those procedures incompatible with due process because the

Companies could not directly “appeal” the January 2012 Order; the Companies can challenge

the validity of the January 2012 Order by commencing Article 150 proceedings in the Curaçao

Court.18 (See Mul Decl. ¶¶ 56-57; Sulvaran Decl. Ex. 4.)

Fourth, Ponsford and Tula argue that 18 U.S.C. § 983(j)(1)(B), and not § 983(j)(1)(A),

applies to this case. (See Ponsford & Tula’s Mot. to Amend Opp’n at 16-24; Ponsford & Tula’s

Mot. to Dissolve Reply at 9-11.) For the reasons set forth above (see supra. Part II), the Court

18 Even Ponsford and Tula concede that they will be able to invoke the process provided by the Curaçao legal system by commencing Article 150 proceedings as soon as this Court issues a restraining order enforcing the January 2012 Order. (See Ponsford & Tula’s Mot. to Dissolve Mem. at 10; Ponsford & Tula’s Mot. to Amend Opp’n at 4; Reijntjes Decl. ¶ 26.)

16 rejects the argument on the record before it. The Curaçao Court has approved the PPO’s

criminal financial investigation, the SFO, to identify and preserve assets for potential

forfeiture; the SFO remains ongoing and the Companies are now regarded as suspects; the

Curaçao Court authorized the restraint of the very assets at issue after accepting that there is

reason to believe that the Companies have played an active role in money laundering; and the

Curaçao Court has strongly suggested that the Companies have the ability to challenge the

restraint in Curaçao right now. (See Mul Decl. ¶¶ 15-18, 56-67; Suppl. Mul Decl. Attach. 2;

Sulvaran Decl. Exs. 1, 4.) Under these circumstances, § 983(j)(1)(B) does not apply, and §

983(j)(1)(A) has been satisfied. Cf. Mem. Order at 3-4, In re Enforcement of a Retraining Order

by the High Court, Misc. Action 11-00208 (GK) (D.D.C. Apr. 4, 2012), ECF No. [14].

Fifth, Ponsford and Tula argue that, even if the United States has made the showing

required to support the issuance of a restraining order under28 U.S.C. § 2467(d)(3), the Court

should nonetheless exercise its discretion not to grant the motion based on the history of the

proceedings in Curaçao. (See Ponsford & Tula’s Mot. to Amend Opp’n at 24-26.) The United

States concedes that “[e]nforcement of a foreign restraining order . . . is discretionary,” but

contends that the Court should exercise its discretion in favor of enforcement. (United States’

Mot. to Amend Reply at 22.) Considering the record as a whole, the Court shall exercise its

discretion to honor the January 2012 Order. Because the Curaçao Court’s Second April 2012

Order rejected the Companies’ Article 43 challenge, the January 2012 Order remains in effect,

and this Court will defer to its directives unless and until it is vacated or reconsidered by the

Curaçao Court or the Attorney General determines that it is no longer in the interest of justice

to honor Curaçao’s request for legal assistance. See 28 U.S.C. § 2467(b)(2), (d)(3)(B)(ii).

17 The Court has considered the remaining arguments tendered by Ponsford and Tula, and

has concluded that they are without merit. The Court finds that the United States has met its

burden of showing an entitlement to the issuance of a restraining order under 28 U.S.C. §

2467(d)(3). Accordingly, the Court shall GRANT the United States’ Motion to Amend.

B. Ponsford and Tula’s Motion to Dissolve

Through their Motion to Dissolve, Ponsford and Tula claim that this Court’s restraining

order must be dissolved because the July 2011 Order “is no longer in effect.” (Ponsford &

Tula’s Mot. to Dissolve Mem. at 7.) However, because the Court shall grant the United States’

Motion to Amend, which will effectively substitute the January 2012 Order for the July 2011

Order as the basis for the Court’s restraining order, Ponsford and Tula’s Motion to Dissolve

shall be DENIED as moot.

IV. CONCLUSION

For the reasons set forth above, it is, this 17th day of May, 2012, hereby

ORDERED that the United States’ [8] Motion to Amend is GRANTED and Ponsford and

Tula’s [9] Motion to Dissolve is DENIED. An appropriate restraining order accompanies this

Memorandum Opinion and Order.

It is FURTHER ORDERED that the parties shall file a Joint Status Report within ten (10)

calendar days of the conclusion of any Article 150 proceedings concerning the three UBS

accounts in the Curaçao Court.

SO ORDERED. /s/ COLLEEN KOLLAR-KOTELLY United States District Judge