United States of America v. Real Property Located at 9144 Burnett Road SE, Yelm, Washington et al, No. 3:2014cv05231 - Document 81 (W.D. Wash. 2015)
Court Description: ORDER denying 69 Claimant Nemes' Motion to Dismiss; signed by Judge Ronald B. Leighton.(DN)
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United States of America v. Real Property Located at 9144 Burnett Road SE, Yelm, Washington et al 1 Doc. 81 HONORABLE RONALD B. LEIGHTON 2 3 4 5 6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA 7 8 UNITED STATES OF AMERICA, CASE NO. C14-5231 RBL 9 Plaintiff, ORDER DENYING MOTION TO DISMISS 10 v. 11 REAL PROPERTY LOCATED AT 9144 BURNETT ROAD, SE, YELM, WASHINGTON, et al. 12 13 Defendants. 14 15 I. 16 INTRODUCTION THIS MATTER is before the Court on Claimant Diana Nemes’ Motion to Dismiss 17 Amended Verified Complaint for Forfeiture In Rem. Claimant Diana Nemes and her husband1 18 were extradited to their home country of Romania for alleged tax evasion and setting up an 19 organized criminal group. The United States filed a civil forfeiture complaint against Nemes’ 20 real property located in Yelm, Washington. The United States filed an amended complaint 21 adding more defendant properties. Nemes sought dismissal, arguing that the government was 22 23 1 While Mr. and Mrs. Nemes were both charged, this Motion to dismiss the forfeiture is brought only by Mrs. 24 Nemes. This Order will use “Nemes” in the singular for clarity, unless the context requires otherwise. ORDER DENYING MOTION TO DISMISS - 1 Dockets.Justia.com 1 erroneously relying on a bilateral treaty, not the required multilateral treaty, known as UNTOC2. 2 After Oral argument, this Court granted the government leave to amend to rely on the correct 3 treaty, which it did. 4 Nemes again seeks dismissal under Fed. R. Civ. P. 12(b)(6). She argues that the 5 government’s reliance on UNTOC to justify forfeiture is still insufficient. She claims that 6 UNTOC was not intended to apply to garden variety domestic criminal offenses such as tax 7 evasion, or the uncharged crime of money laundering. She also argues that even if UNTOC is a 8 potentially viable forfeiture vehicle, the government’s amended complaint still fails to allege 9 sufficient facts, and that it should be dismissed. 10 The United States argues that the crime of setting up an organized criminal group for the 11 purpose of tax evasion is, by itself, a “transnational” offense extraditable under UNTOC. It 12 claims that the money from Nemes’ specified unlawful activity was laundered to the United 13 States, and therefore, the Yelm properties purchased with those illegal funds are forfeitable. 14 Because the United States’ complaint alleges facts that state a claim for relief that is plausible on 15 its face, Claimant’s Motion to Dismiss the Amended Verified Complaint for Forfeiture In Rem is 16 DENIED. 17 II. 18 BACKGROUND The FBI’s Seattle Division conducted a joint investigation with the FBI Legal Attaché 19 office in Bucharest, Romania and the Romanian Directiei Nationale Anticoruptie (DNA) 20 involving the Nemes and their associates. The United States claims the Nemes were involved in 21 a tax fraud scheme to avoid paying Romania 53 million Euro in excise taxes on imported diesel 22 fuel. Their complaint alleges that the Nemes laundered the proceeds out of Romania, through 23 2 24 United Nations Convention against Transnational Organized Crime, G.A. Res. 55/25, U.N. GAOR, 55th Session., U.N. Doc. A/55/383 (2000). ORDER DENYING MOTION TO DISMISS - 2 1 multiple foreign accounts, and into the United States, where they ultimately purchased the 2 properties at issue. When the scheme was discovered, the Nemes were extradited to Romania, 3 where they were indicted for tax evasion and setting up an organized criminal group. The 4 offenses are punishable up to eight and five years, respectively, not counting aggravating 5 circumstances. 6 The United States commenced this action to forfeit the real property the Nemes left 7 behind, claiming it was used to conceal money laundering, international money laundering, and 8 conspiracy to commit money laundering. These activities support forfeiture under this country’s 9 criminal code. See 18 U.S.C. § 981(a)(1)(A). 10 The United States initially relied on a different, bilateral treaty to justify this action. The 11 Nemes filed a motion to dismiss, arguing that the complaint was improperly based on the 12 allegation that she had committed an offense extraditable under a bilateral treaty between the 13 United States and Romania. She argued that only multilateral treaty offenses give rise to 14 forfeiture. This Court agreed, but, because the defect was curable, granted the United States 15 leave to amend. The United States filed an amended forfeiture complaint relying instead on 16 UNTOC—a multilateral treaty. 17 Nemes argues that forfeiture statutes must be strictly construed against the government, 18 and that the money laundering statute upon which the United States relies does not apply to 19 foreign tax evasion offenses. She claims that UNTOC applies only to “transnational” offenses— 20 crimes committed in or affecting more than one State—and that none of the crimes Romania 21 charged her with are transnational in nature. Nemes also claims that even if the amended 22 complaint asserted a cognizable legal theory, it consists largely of conclusory legal allegations 23 that are insufficient to show a “specified unlawful activity,” her involvement in the scheme, and 24 ORDER DENYING MOTION TO DISMISS - 3 1 a variety of other elements. She argues that the United States has not pled sufficient facts to state 2 a claim for forfeiture. 3 The United States argues that the crime of setting up an organized criminal group is a 4 transnational offense, extraditable under UNTOC. And, it claims, it has amply supported its legal 5 theory with factual allegations that, if proven, would support forfeiture. 6 III. DISCUSSION 7 A. Fed. R. Civ. P. § 12(b)(6) Standard 8 Dismissal under Rule 12(b)(6) may be based on either the lack of a cognizable legal 9 theory or the absence of sufficient facts alleged under a cognizable legal theory. Balistreri v. 10 Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). A plaintiff’s complaint must allege 11 facts to state a claim for relief that is plausible on its face. See Aschcroft v. Iqbal, 129 S. Ct. 12 1937, 1949 (2009). A claim has “facial plausibility” when the party seeking relief “pleads 13 factual content that allows the court to draw the reasonable inference that the defendant is liable 14 for the misconduct alleged.” Id. Although the Court must accept as true the Complaint’s well15 pled facts, conclusory allegations of law and unwarranted inferences will not defeat a Rule 12(c) 16 motion. Vazquez v. L. A. County, 487 F.3d 1246, 1249 (9th Cir. 2007); Sprewell v. Golden State 17 Warriors, 266 F.3d 979, 988 (9th Cir. 2001). “[A] plaintiff’s obligation to provide the ‘grounds’ 18 of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic 19 recitation of the elements of a cause of action will not do. Factual allegations must be enough to 20 raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 21 (2007) (citations and footnotes omitted). This requires a plaintiff to plead “more than an 22 unadorned, the-defendant-unlawfully-harmed-me-accusation.” Iqbal, 129 S. Ct. at 1949 (citing 23 Twombly). 24 ORDER DENYING MOTION TO DISMISS - 4 1 On a 12(b)(6) motion, “a district court should grant leave to amend even if no request to 2 amend the pleading was made, unless it determines that the pleading could not possibly be cured 3 by the allegation of other facts.” Cook, Perkiss & Liehe v. N. Cal. Collection Serv., 911 F.2d 242, 4 247 (9th Cir. 1990). However, where the facts are not in dispute, and the sole issue is whether 5 there is liability as a matter of substantive law, the court may deny leave to amend. Albrecht v. 6 Lund, 845 F.2d 193, 195–96 (9th Cir. 1988). The purpose of the rule is to encourage decisions 7 on the merits rather than on the precision (or imprecision, as the case may be) of the pleadings. 8 See Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000). 9 B. Extradition under UNTOC is a cognizable legal theory and sufficient facts have been pled to support forfeiture 10 The United States can forfeit real property that is involved in money laundering. 18 11 U.S.C. § 981(a)(1)(A). The money laundering statute prohibits financial transactions that involve 12 the proceeds of a “specified unlawful activity,” given that a variety of other factors are met. See 13 18 U.S.C. § 1956(a)(1). The money laundering statute defines “specified unlawful activity” as an 14 “offense with respect to which the United States would be obligated by a multilateral treaty…to 15 extradite the alleged offender.” 18 U.S.C. § 1956(c)(7)(B)(vi). It is important to highlight the use 16 of the language “would be.” Even if an individual was initially extradited for criminal activity 17 under another statute or treaty, the relevant provisions of an extraditable multilateral treaty are 18 still applicable. 19 The United States argues that it would be obligated to extradite Nemes under UNTOC. 20 Under UNTOC, any violation of a listed offense is extraditable, if it is transnational in nature and 21 involves an organized criminal group. Art. 3 §1. The United States argues that the offense of 22 setting up an organized criminal group with the purpose of engaging in a massive tax evasion 23 conspiracy is a crime worthy of extradition under UNTOC. This Court agrees. UNTOC Article 5 24 ORDER DENYING MOTION TO DISMISS - 5 1 specifically criminalizes participation in an organized criminal group. Article 2 defines an 2 “organized criminal group” as a structured group of three or more persons that acts in concert to 3 commit one or more serious crimes in order to obtain a financial or other material benefit. Art. 2 4 § (a). A “serious crime” is one punishable by a maximum of at least four years of imprisonment. 5 Art. 2 § (b). 6 The United States has pled facts sufficiently alleging that tax evasion is a serious crime in 7 Romania as violators can be subject to 8 years of imprisonment. The U.S. has also alleged facts 8 making it plausible that the Nemes were part of an organized criminal group. Accordingly, if the 9 alleged crime of participating in an organized criminal group is “transnational,” UNTOC applies. 10 Art. 3 § 1. 11 Nemes argues that the charged crimes of tax evasion and the setting up of an organized 12 criminal group occurred solely within the borders of Romania, and therefore, are not 13 transnational in nature. The United States, however, does present a cognizable theory that the 14 crime of “setting up an organized criminal group” is, by itself, a transnational offense. An 15 offense is transnational if “it is committed in one State but involves an organized criminal group 16 that engages in criminal activities in more than one State.” As plausibly alleged in the United 17 States’ complaint, Nemes and her criminal organization illegally laundered the proceeds of the 18 tax evasion scheme across national borders and into the United States. The fact that Nemes was 19 not actually charged with money laundering in Romania is not the end of the inquiry. A criminal 20 conviction is not required to proceed with a statutory in rem forfeiture. United States v. 21 Liquidators of European Fed. Credit Bank, 630 F.3d 1139, 1150 (9th Cir. 2011) (quoting United 22 States v. One Assortment of 89 Firearms, 465 U.S. 354, 362 (1984)). 23 24 ORDER DENYING MOTION TO DISMISS - 6 1 Furthermore, the allegation of money laundering is, by itself, an extraditable offense 2 under UNTOC. Under UNTOC, it is plausible for the United States to extradite Nemes for the 3 alleged crime of money laundering if the predicate offense is a serious crime, and the relevant 4 conduct is a criminal offense in both States involved. Art. 6 § 2. Based on the facts alleged by the 5 United States, the predicate offense of setting up an organized criminal group with the purpose of 6 engaging in tax evasion would be considered a serious crime, and that same offense is considered 7 criminal under the domestic laws of both the United States and Romania. Thus, extradition under 8 Article 6 is also plausible. 9 The alleged crimes of setting up an organized criminal group and money laundering are 10 both extraditable under UNTOC. Forfeiture of the defendant properties is plausibly pled. The 11 United States has pled sufficient facts in its second amended complaint to raise a right to relief 12 above the speculative level. Diana Nemes’ Fed. R. Civ. P. 12(b)(6) Motion to Dismiss is 13 DENIED. 14 IT IS SO ORDERED. 15 Dated this 13th day of May, 2015. 17 A 18 RONALD B. LEIGHTON UNITED STATES DISTRICT JUDGE 16 19 20 21 22 23 24 ORDER DENYING MOTION TO DISMISS - 7
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