UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA, :
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v. : Civil Action No.: 20-2227 (RC)
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: Re Document Nos.: 76, 85, 87 FIFTY-THREE VIRTUAL CURRENCY : ACCOUNTS, et al., :
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Defendants. :
MEMORANDUM OPINION
GRANTING THE UNITED STATES’ MOTION TO STRIKE; GRANTING CLAIMANT KARATAS’S MOTION TO STRIKE; DENYING THE WEINSTOCK CLAIMANTS’ MOTION FOR SUMMARY JUDGMENT
I. INTRODUCTION
In this in rem forfeiture action, the United States of America (“United States” or the “Government”) filed suit against Defendant Properties1—fifty-two virtual accounts, one hundred and twenty-seven virtual currency properties, five accounts held at a bank, and three internet domains. After the Internal Revenue Service—Criminal Investigation’s Cyber Crimes Unit (“IRS-CI”), Homeland Security Investigations (“HSI”), and Federal Bureau of Investigation (“FBI”) (collectively, the “Government Agencies”) investigated online fundraising activities conducted by the Hamas-Islamic Republic Movement’s (“Hamas”) military wing, the United States alleged that individuals associated with the Defendant Properties laundered monetary instruments, operated unlicensed money transmitting businesses, and provided material support or resources to Hamas. Because they allege specific property or ownership interest in the
1 This opinion will assume the definition of Defendant Properties included in the Amended Complaint. See Am. Compl., Attach. A, ECF No. 62-1.
Defendant Properties, the family members of Yitzchak Weinstock (the “Weinstock Claimants”) now move for summary judgment dismissing the Government’s Amended Complaint for lack of personal jurisdiction. The Weinstock Claimants argue that they have no burden to prove in the motion that the Government does not possess personal jurisdiction over the Defendant Properties, and the Government contends that the Weinstock Claimants’ motion for summary judgement fails because the Weinstock Claimants lack standing to participate in this action. Additionally, the Government and dismissed Claimant Husamettin Karatas (“Claimant Karatas”) move to strike the answer filed by the Weinstock Claimants and dismiss the claims made against them by the Weinstock Claimants. In the motions to strike, both the Government’s and Claimant Karatas’s main argument is that the Weinstock Claimants lack standing. For the foregoing reasons, the Court grants the United States’ motion to strike, grants Claimant Karatas’s motion to strike, and denies the Weinstock Claimants’ motion for summary judgment.
II. FACTUAL BACKGROUND
The Court assumes knowledge of the factual and legal background, as detailed in its previous memorandum opinion. See Mem. Op. Den. as Moot Claimant Karatas’s Mot. to Stay Disc., granting Gov’t’s Mot. to Am./Correct Compl., granting Weinstock Claimants’ Mot. for Leave to File Surreply (“Mem. Op.”), ECF No. 74. A brief overview is provided below.
In December 1993, Yitzchak Weinstock, a United States citizen, was killed in a terrorist shooting near Jerusalem by Hamas’s military wing, the Al-Qassam Brigades. Weinstock Claimants’ Answer, Cross-cl. Against Claimant Karatas, and Countercl. Against Gov’t Am. Compl. (“Weinstock Claimants’ Operative Answer”) ¶ 114, ECF No. 75. On May 17, 2019, a federal court in Florida issued a final judgment of $78,873,000 in favor of the Weinstock Claimants—including the estates and family members of Weinstock—and against Hamas. Id.
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¶¶ 115–116; Weinstock v. Islamic Republic of Iran, No. 17-23272-CIV, 2019 WL 1993778 (S.D. Fla. May 6, 2019) (“2019 Florida Judgment”). Hamas neither appeared in nor defended that civil action, and the judgment remains unpaid. Weinstock Claimants’ Verified Claim (“Weinstock Claimants’ Claim”) at 2, ECF No. 11.
On August 13, 2020, the Government initiated the instant forfeiture action against the Defendant Properties. Am. Compl. at 1, ECF No. 62-1. Following investigations into the al- Qassam Brigades’ online fundraising, the Government alleged that individuals associated with these Defendant Properties conspired to launder money (18 U.S.C. § 1956(a)(2)) and provide material support to Hamas (18 U.S.C. § 2339B). Id. ¶ 2. On October 7, 2020, Claimant Karatas asserted ownership of Defendant Property 180, one of the virtual accounts included in the original suit, denying any knowledge of unlawful activity. See Claimant Karatas’s Claim, ECF No. 5. He later filed an answer to the original Complaint, maintaining that he did not support Hamas or use the account unlawfully and is an “innocent owner.” See Claimant Karatas’s Answer ¶¶ 1–3, 119, ECF No. 9. On February 16, 2021, the Weinstock Claimants filed a verified claim, asserting an interest in the Defendant Properties to satisfy their 2019 Florida Judgment against Hamas. Weinstock Claimants’ Claim at 2; see 2019 Florida Judgment.
In its November 19, 2024 Opinion in this action, this Court found that the Weinstock Claimants’ counterclaim and crossclaim against Claimant Karatas and the Government, see Weinstock Claimants’ Answer to Original Compl. ¶¶ 128–151, ECF No. 53, do not create any lien on the Defendant Properties, as an in personam creditor’s bill does not, on its own, establish a lien. See Mem. Op. at 12. Additionally, after granting the Government leave to file its Amended Complaint so that it could drop Defendant Property 180 as a defendant, the Court held that because neither the Government nor the Weinstock Claimants has a valid interest in
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Defendant Property 180, ownership of the property reverts to the individual or entity that held title prior to the initiation of this forfeiture action.2 Id. at 14. Lastly, the Court ruled that neither the Weinstock Claimants nor Claimant Karatas has standing because they do not maintain any interest in the Defendant Properties. Id. at 14–20.
After the issuance of that opinion, the Weinstock Claimants filed an answer to the Amended Complaint,3 crossclaims against Claimant Karatas, and a counterclaim against the Government. See generally Weinstock Claimants’ Operative Answer. The Weinstock Claimants also moved for summary judgment, arguing that they “have no burden on this motion” and that “[t]he Government cannot prove personal jurisdiction.” See Weinstock Claimants’ Mot. Summ. J. (“Weinstock Claimants’ Mot.”) at 3–5, ECF No. 76. In response, the Government opposes the Weinstock Claimants’ motion and files a renewed motion to strike the Weinstock Claimants’ claim and answer and to dismiss their counterclaim against it, arguing that the Weinstock Claimants lack standing in this suit. See Gov’t Renewed Mot. to Strike Weinstock Claimants’ Claim & Answer & to Dismiss Their Countercl. Against the U.S. & Opp’n to Weinstock Claimants’ Mot. for Summ. J. (“Gov’t Mot.”), ECF No. 85. Claimant Karatas also opposes the Weinstock Claimants’ motion and files a renewed motion to strike their claim and answer and to dismiss their crossclaims against him, also arguing that the Weinstock Claimants
2 Although the Court ruled that Claimant Karatas does not have standing in this action because Defendant Property 180 will no longer be a party in this suit, it declined to decide whether Claimant Karatas is the rightful owner of Defendant Property 180. See Mem. Op. at 14 n.2.
3 From the original Complaint to the Amended Complaint, the Government revised its pleadings to (1) include only those defendant properties it still believes are subject to forfeiture, and (2) assert only the charges it deems applicable to this action. See ECF No. 62-2 (redline reflecting the removal of Defendant Property 180 as a defendant and the omission of 18 U.S.C. § 1960 as a specified unlawful activity). Accordingly, the Court finds that the Government’s amendments to the Complaint do not affect the Court’s standing analysis in its prior Opinion.
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lack standing. See H. Karatas’s Renewed Mot. to Strike the Weinstock Claimants’ Answer & to Dismiss Their Crosscls. Against H. Karatas & Opp’n to the Weinstock Claimants’ Mot. for Summ. J. (“Claimant Karatas’s Mot.”), ECF No. 87. All three of the motions are ripe for the Court’s review.
III. LEGAL STANDARD
Civil forfeiture actions are in rem proceedings brought against property, not individuals.
However, individuals may intervene to protect their interests in the property. See United States v. All Funds in Account Nos. 747.034/278, 747.009/278, & 747.714/278 in Banco Espanol de Credito, Spain, 295 F.3d 23, 25 (D.C. Cir. 2002). These actions are governed by 18 U.S.C. § 983 and the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions (“Supplemental Rules”), a subset of the Federal Rules of Civil Procedure. See United States v. All Assets Held at Bank Julius, 480 F. Supp. 3d 1, 11–12 (D.D.C. 2020); see also Fed. R. Civ. P. Supp. R. A(1)(B).
To contest forfeiture, a claimant must file a verified claim and an answer pursuant to Supplemental Rule G(5). See Stefan D. Cassella, Asset Forfeiture Law in the United States § 7–13(a), at 371 (3d ed. 2022); United States v. 8 Gilcrease Lane, 641 F. Supp. 2d 1, 4–6 (D.D.C. 2009). Courts strictly enforce these requirements, which are referred to as “statutory standing.” See United States v. All Assets Held at Bank Julius Baer & Co., No. 04-cv-0798, 2023 WL 5000213, at *7–8 (D.D.C. Aug. 4, 2023).
Statutory standing requires a claimant to assert an interest in the specific property named as a defendant. See Supp. R. G(5)(a)(i)(A); 18 U.S.C. § 983(a)(4)(A) (“[A]ny person claiming an interest in the seized property may file a claim asserting such person’s interest in the property[.]”). A claimant who fails to assert such an interest lacks standing. See Supp.
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R. G(8)(c)(i)(B); United States v. Funds from Prudential Secs., 300 F. Supp. 2d 99, 103 (D.D.C. 2004). “The extent of the interest in the defendant property sufficient to meet this standing requirement is left to case law.” United States v. All Assets Held at Bank Julius Baer & Co., 772 F. Supp. 2d 191, 198 (D.D.C. 2011) (citation omitted); see also Funds from Prudential Secs., 300 F. Supp. 2d at 103 (stating that a claimant must “demonstrat[e] an interest . . . sufficient to satisfy the court of his standing”).
In addition to statutory standing, a claimant must also demonstrate Article III standing.
See United States v. $487,825.00 in U.S. Currency, 484 F.3d 662, 664 (3d Cir. 2007). This requires a “colorable claim” to the property, typically through an ownership or possessory interest, as such an interest creates an injury-in-fact redressable by return of the property. See United States v. $17,900.00 in U.S. Currency, 859 F.3d 1085, 1090 (D.C. Cir. 2017) (quoting United States v. Emor, 785 F.3d 671, 676 (D.C. Cir. 2015)); United States v. $515,060.42 in U.S. Currency, 152 F.3d 491, 497 (6th Cir. 1998)).
To establish standing, a claimant must show a facially colorable interest in the defendant property—such as actual possession, control, title, or a financial stake. See United States v. Real Property Located at 475 Martin Lane, 545 F.3d 1134, 1140 (9th Cir. 2008); United States v. One Lincoln Navigator, 328 F.3d 1011, 1013 (8th Cir. 2003). At the summary judgment stage, the claimant bears the burden of establishing such an interest by a preponderance of the evidence. See United States v. $148,840 in U.S. Currency, 521 F.3d 1268, 1273 (10th Cir. 2008); Supp. R. G(8)(c)(ii)(B). However, the claimant need not definitively prove ownership; it must only demonstrate a sufficiently colorable claim to establish standing. See $148,840, 521 F.3d at 1273; United States v. $557,933.89, More or Less, in U.S. Funds, 287 F.3d 66, 79 (2d Cir. 2002); United States v. 116 Emerson St., 942 F.2d 74, 78 (1st Cir. 1991).
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Ultimately, the purpose of standing in forfeiture cases is to ensure that the government is required to prove the forfeitability of property only when someone with a legitimate interest contests the action. See $557,933.89, 287 F.3d at 79. The nature of a claimant’s property interest is defined by the law of the jurisdiction, state or nation, where the interest arose. At any time before trial, the United States “may move to strike a claim or answer . . . because the claimant lacks standing.” Supp. R. G(8)(c)(i)(B). If appropriate, such a challenge may be resolved “after a hearing or by summary judgment.” Supp. R. G(8)(c)(ii)(B).
IV. ANALYSIS
At the core of the pending motions is the question of whether the Weinstock Claimants have standing in this action. This determination affects not only their ability to file an answer to the Amended Complaint, but also whether they may assert a counterclaim against the United States or crossclaim against dismissed Claimant Karatas, and whether the Weinstock Claimants’ motion for summary judgment is properly before the Court (or if they are even entitled to file such a motion in this proceeding). For the reasons stated below, the Court again holds that the Weinstock Claimants do not have standing in this action because they do not have any interest in the Defendant Properties. Accordingly, the Court grants the Government’s and Claimant Karatas’s motions to strike the Weinstock Claimants’ answer, counterclaim, and crossclaims, and it denies the Weinstock Claimants’ motion for summary judgment.
A. The Weinstock Claimants’ Standing First, the Court reaffirms its holding from its prior Opinion, see Mem. Op. at 14–20, that the Weinstock Claimants lack both constitutional and statutory standing to participate in this civil forfeiture action. The Weinstock Claimants assert a right to the Defendant Properties based solely on its unsatisfied 2019 Florida judgment against Hamas. See Weinstock Claimants’
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Opp’n to Mots. to Strike Their Claim & Answer & to Dismiss Their Claims (“Weinstock Claimants’ Opp’n to Mots. to Strike”) at 1–2, ECF No. 92. However, this claim amounts only to a general unsecured interest, not a specific ownership or lien against the Defendant Properties. See 8 Gilcrease Lane, 641 F. Supp. 2d at 5 (“The generalized legal interest movants may have in the assets of [the Defendant Properties] does not equate to the necessary particularized interest in any specific asset of [the Defendant Properties] required for standing.”). No lien was perfected against the Defendant Properties prior to their seizure, and federal sovereign immunity prevents any post-seizure attachment. See Greenbaum v. Islamic Republic of Iran, 67 F.4th 428, 435 (D.C. Cir. 2023) (holding that “federal sovereign immunity prevents the attachment and garnishment of” assets obtained through civil forfeiture). Accordingly, the Weinstock Claimants’ failure to establish a concrete, particularized injury related to the forfeiture of the Defendant Properties means that they lack constitutional standing. Their property interest, an unsecured interest resulting from the 2019 Florida judgment, has no direct connection to the seized assets in this action, nor would a ruling in their favor redress their harm. As this Court ruled in its prior Opinion, “the Weinstock Claimants have not demonstrated how they suffered a redressable injury in this action because they have not established any ownership rights of property interest on the Defendant Properties.” See Mem. Op. at 19.
The Weinstock Claimants likewise fail to meet the statutory standing requirements. They have not filed a verified claim asserting a specific property interest, nor do they qualify as “owners” under § 983(d)(6). As numerous courts have held, unsecured creditors “cannot claim an interest in any particular asset that makes up the debtor’s estate,” and thus lack standing in forfeiture proceedings. See, e.g., United States v. BCCI Holdings (Luxembourg), S.A., 46 F.3d 1185, 1191–92 (D.C. Cir. 1995); United States v. $20,193.39 in U.S. Currency, 16 F.3d 344, 346
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(9th Cir. 1994); United States v. Ribadeneira, 105 F.3d 833, 836–37 (2d Cir. 1997). “[U]nsecured creditors do not have standing to challenge the civil forfeiture of their debtors’ property.” All Assets Held at Bank Julius Baer & Co., 772 F. Supp. 2d at 198 (quoting United States v. One–Sixth Share, 326 F.3d 36, 44 (1st Cir. 2003)). The Weinstock Claimants have not shown any perfected lien, nor have they demonstrated a legally recognized interest in the Defendant Properties. Thus, they lack both constitutional and statutory standing in this action.
The Weinstock Claimants argue that other courts have ruled that judgment creditors who file a timely claim have constitutional and statutory standing to contest the Government’s forfeiture action under § 201 of the Terrorism Risk Insurance Act (“TRIA”). See Weinstock Claimants’ Opp’n to Mots. to Strike at 1–2. However, the Weinstock Claimants’ reliance on Levin v. Miller, No. 21-cv-1116, 2022 WL 17574574 (2d Cir. Dec. 12, 2022) does not support their standing in this case. In Levin, the Second Circuit rejected a similar argument from terrorist-victim creditors, finding that the TRIA did not confer standing on creditors without a perfected interest in the property. 2022 WL 17574574, at *2 (rejecting the argument by creditors that “TRIA was superior to the Government’s forfeiture judgment”). The ruling in Levin reinforces the notion that the Weinstock Claimants, who lack a perfected interest in the Defendant Properties, similarly do not have standing to contest the forfeiture in this action. Id. (holding that TRIA does not confer statutory standing on its own, and that creditors lacked standing to contest forfeiture without a perfected interest in the property, such as a TRIA turnover order). Thus, and as the Court has concluded here and in its prior Opinion, the Weinstock Claimants have no standing in this action.
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B. The Weinstock Claimants’ Counterclaim and Crossclaims Because the Court finds that the Weinstock Claimants lack standing in this action, it also holds that their counterclaim against the United States and crossclaim against dismissed Claimant Karatas are dismissed because the Weinstock Claimants have no right to pursue them. A court must strike a claimant’s claim and answer if standing is not properly established. See Supp. R. G(8)(c)(i)(B). Without a valid claim and answer, a party has no procedural or substantive basis to participate in the action at all, let alone to assert affirmative claims against other parties.
Once a claimant’s claim and answer are stricken for lack of standing, as is warranted here, the claimant is effectively no longer a party to the litigation. United States v. PokerStars, No. 11 Civ. 2564, 2012 WL 1659177, at *4 (S.D.N.Y. May 9, 2012). Consequently, “someone . . . who is not a claimant in a civil forfeiture action and not otherwise a party to the litigation, has no right to assert a counterclaim.” Id. The logic is straightforward: without standing, the Weinstock Claimants do not have a stake in the litigation and thus cannot pursue a counterclaim or a crossclaim within it. This position aligns with the structure of civil forfeiture proceedings under Supplemental Rule G, which provides a narrow procedural pathway for third parties to intervene: by filing a verified claim and an answer under Rule G(5). Once those documents are invalidated (due to lack of standing or otherwise), the claimants cease to have any role in the action. Thus, lacking a stake in the Defendant Properties, the Weinstock Claimants lack a path to assert further claims.
Even if the Weinstock Claimants could establish standing (which they cannot), their counterclaim against the United States would still be subject to dismissal because claimants in a forfeiture proceeding are not defendants for purposes of Rule 13 and thus cannot bring
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counterclaims. “A counterclaim is an action brought by a defendant against the plaintiff.” United States v. $10,000.00 in U.S. Funds, 863 F. Supp. 812, 816 (S.D. Ill. 1994). However, in civil forfeiture proceedings, the defendant is the property, not the person laying claim to it. Accordingly, the Weinstock Claimants are not defendants, and the Government has not asserted any claim against them personally. In the Weinstock Claimants’ case in this action, “there was no ‘claim’ to ‘counter.’” United States v. One Lot of U.S. Currency, 927 F.2d 30, 34 (1st Cir. 1991); see also United States v. 8 Luxury Vehicles, 88 F. Supp. 3d 1332, 1336 (M.D. Fla. 2015); United States v. Assorted Computer Equip., No. 03-2356V, 2004 WL 784493, at *2 (W.D. Tenn. Jan. 9, 2004); United States v. $43,725.00 in U.S. Currency, No. CIV.A. 4:08-1373, 2009 WL 347475, at *1 (D.S.C. Feb. 3, 2009). Therefore, under the majority rule in other circuits, counterclaims are generally impermissible in civil forfeiture actions because the structure of in rem litigation precludes the procedural reciprocity required for a counterclaim.
Assuming that the Weinstock Claimants could validly assert a counterclaim in this context, such a claim against the United States would nonetheless be barred by sovereign immunity. The United States, as sovereign, may be sued only where Congress has expressly waived immunity. See Mullen v. Bureau of Prisons, 843 F. Supp. 2d 112, 115 (D.D.C. 2012) (“Under the doctrine of sovereign immunity, the United States is immune from suit unless Congress has expressly waived the defense of sovereign immunity by statute.”); United States v. Mitchell, 463 U.S. 206, 212 (1983) (“It is axiomatic that the United States may not be sued without its consent and that the existence of consent is a prerequisite for jurisdiction.”). No such waiver exists here. Although the Weinstock Claimants appear to rely on TRIA, see Weinstock Claimants’ Opp’n to Mots. to Strike at 1–2, the D.C. Circuit has held that TRIA does not waive the United States’ sovereign immunity for claims seeking attachment or execution of assets
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seized through forfeiture. Greenbaum, 67 F.4th at 430–35 (“TRIA does not, ‘standing alone,’ . . . clearly waive federal sovereign immunity.”). Thus, any counterclaim premised on TRIA is barred by the United States’ sovereign immunity.
The Weinstock Claimants’ crossclaim against Claimant Karatas also fails because neither of them are “parties” or “coparties” in this action within the meaning of Federal Rule of Civil Procedure 13(g). The crossclaim rule permits such claims only “by one party against a coparty.” See Fed. R. Civ. P. 13(g). But the Weinstock Claimants are not parties to the litigation once their claim and answer are stricken for lack of standing, and Claimant Karatas is no longer a named defendant or claimant either once Defendant Property 180 was dropped from the case. The plain text of Rule 13(g) must be enforced according to its terms. Courts have interpreted “party” and “coparty” narrowly in this context. See, e.g., In re Oil Spill by Amoco Cadiz, 699 F.2d 909, 913 (7th Cir. 1983) (“A Rule 13(g) cross-claim will lie only against an existing defendant.”); see also Seiffer v. Topsy’s Int’l, Inc., 487 F. Supp. 653, 709 (D. Kan. 1980); Footlick v. Topstep LLC, No. 22 CV 6152, 2025 WL 744069, at *2 (N.D. Ill. Mar. 7, 2025). Claimant Karatas is not a defendant in this forfeiture case because the Government’s Amended Complaint does not name him as a party and he has not made a claim against any of the properties remaining in this case. See generally Am. Compl. And without standing, the Weinstock Claimants are similarly outside the litigation. Rule 13(g) does not permit “outsiders” to assert crossclaims, and therefore, the Weinstock Claimants’ crossclaim must be dismissed as procedurally defective.
Because the Weinstock Claimants lack standing, they have no right to participate in this forfeiture action under Supplemental Rule G. That deficiency alone mandates dismissal of both their counterclaim against the United States and their crossclaim against Claimant Karatas. Moreover, the counterclaim also fails due to the absence of a waiver of the United States’
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sovereign immunity, and the crossclaim is improper under Rule 13(g) because neither the Weinstock Claimants nor Claimant Karatas are proper parties. Accordingly, the Weinstock Claimants’ claims must be dismissed as a matter of law.
C. The Weinstock Claimants’ Motion for Summary Judgment Lastly, the Court concludes that the Weinstock Claimants are not entitled to seek summary judgment in this action, as again, they lack standing. “[Rule G(8)(c)(ii)] directs that a motion to strike a claim or answer be decided before any motion by the claimant to dismiss the action. A claimant who lacks standing is not entitled to challenge the forfeiture on the merits.” All Assets Held at Bank Julius Baer & Co., 2023 WL 5000213, at *18 (quoting Supp. R. G Advisory Committee’s Notes (2006)). In this case, because the Weinstock Claimants have failed to demonstrate the requisite standing required to be a party in this forfeiture action, their motion for summary judgment is improper and must be denied.
V. CONCLUSION
For the foregoing reasons, the United States’ Motion to Strike (ECF No. 85) is GRANTED, Claimant Karatas’s Motion to Strike (ECF No. 87) is GRANTED, and the Weinstock Claimants’ Motion for Summary Judgment (ECF No. 76) is DENIED. An order consistent with this Memorandum Opinion is separately and contemporaneously issued.
Dated: September 25, 2025 RUDOLPH CONTRERAS United States District Judge