In United States v. Real Property Located At 475 Martin Lane, Beverly Hills, California, (— F.3d —, 2008 WL 4445304, C.A.9 (Cal.), Oct. 3, 2008), the United States Court of Appeals for the Ninth Circuit considered the issue of “whether the Civil Asset Forfeiture Reform Act of 2000 (“CAFRA”) permits district courts to authorize ex parte extensions of the deadline to file civil forfeiture complaints.” The Court of Appeal held that CAFRA does allow for such ex parte extensions.
Christopher Kim, a United States citizen who worked in South Korea, allegedly masterminded a scheme that resulted in him embezzling millions of dollars from a South Korean corporation. Kim allegedly transferred the money into bank accounts in the U.S. and bought various assets in the U.S. Korea asked the U.S. to extradite Kim. The U.S. began an investigation and then seized more than one million dollars in three bank accounts and six vehicles. The FBI sent Kim notice of the seizure and its intent to forfeit the property. Kim and his family members (collectively, “Kim”) contested the forfeiture. Because the U.S. government was still investigating Kim, the government filed an ex parte application seeking an extension of time to file a civil forfeiture complaint. A federal judge granted the application and extended the filing deadline for ninety days. The judge later granted two more ninety day extensions after the government again sought extensions through ex parte applications. The government claimed that the extensions were needed because its investigation was still ongoing. The investigation resulted in a seizure of more of Kim’s assets.
Kim contested the forfeiture of assets and filed a motion to dismiss the government’s complaint on the ground that the government had not timely filed the complaint. The federal district court granted Kim’s motion to dismiss. Because the district court dismissed the forfeiture complaint, it concluded that it did not have jurisdiction to adjudicate the competing claims to the property at issue.
The Court of Appeal held that CAFRA authorizes district court to grant ex parte extensions of the deadline to file civil forfeiture complaints. CAFRA provides that the government must give notice to interested parties within 60 days after seizing property. After the government gives written notice, the interested party has a limited time to file a claim and state its interest in the property. “If a claim is filed, the government then has ninety days from the date the claim was received by the seizing agency to file a civil complaint, obtain a criminal indictment that includes an allegation that the property is subject to forfeiture, or both.” If the government does not meet this deadline, “the civil forfeiture of the property in connection with the particular underlying offense is forever barred.” However, 18 U.S.C. § 983(a)(3)(A) provides that the ninety-day period may be extended for good cause.
Section 983(a)(3)(A), however, “neither expressly permits nor prohibits ex parte extensions of time.” The Court of Appeals examined the statute as a whole and concluded that one could reasonably infer that Congress intended to authorize ex parte applications for extension of the deadline to send notices of civil forfeitures and to file civil forfeiture complaints. If the government could not obtain an ex parte extension of time, it would be required to publicly disclose the reason it was seeking a delay in filing. “If the reason for delay is to allow the government to complete an ongoing covert investigation, forcing disclosure would require the government to reveal information about who else is being investigated or what other property is being targeted for seizure.” The court opined that “requiring the government to openly seek an extension would force it to reveal sensitive information that would put some ongoing investigations in jeopardy.”
The court concluded that a district court may issue an ex parte extension of time to file a complaint. There is nothing in CAFRA that prohibits an ex parte extension of time “and to hold otherwise would thwart one of the objects of the statute by forcing the government to reveal when an investigation that led to an initial seizure of property is ongoing and has a broader scope than might be apparent from the initial seizure.”
The court also held that “in the event of a dismissal of a civil forfeiture complaint by the court, a district court retains jurisdiction to adjudicate competing claims of ownership over the defendant property.”
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