United States District Court, E.D. North Carolina, Western Division
C. DEVER III UNITED STATES DISTRICT JUDGE.
5, 2016, the United States of America filed this civil action
in rem seeking the forfeiture of miscellaneous
personal property and U.S. currency under 18 U.S.C.
§§ 981(a)(1)(A), 981(a)(1)(C), and 1955(d) [D.E.
1]. On July 26, 2016, Kiet Tuan Vo ("Kiet Vo") and
his wife Phuong Truong ("Truong"; collectively,
"claimants") filed claims [D.E. 9, 10]. On
September 15, 2016, claimants answered the complaint [D.E.
15]. On September 16, 2016, the court granted claimants'
motion to stay [D.E. 16]. On July 19, 2018, the court
permitted claimants' counsel to withdraw, lifted the
stay, and opened discovery [D.E. 18-21].
December 17, 2018, the United States moved to strike the
claims and answer and for summary judgment [D.E. 23, 24], and
filed a memorandum in support [D.E. 25], a statement of
material facts [D.E. 26], and an appendix [D.E. 27]. The
court notified claimants about the motion for summary
judgment, the consequences of failing to respond, and the
response deadline [D.E. 28]. See Roseboro v.
Garrison, 528 F.2d 309, 310 (4th Cir. 1975) (per
curiam). On February 22, 2019, Kiet Vo filed several exhibits
[D.E.31]. On March 8, 2019, the United States replied [D.E.
32]. On March 25, 2019, Truong filed a declaration [D.E. 33].
On March 27, 2019, Kiet Vo responded in opposition [D.E. 34].
As explained below, the court grants the United States'
motions to strike and for summary judgment, strikes the
claims, and forfeits the property to the United States.
2013, federal and state authorities began investigating an
illegal gambling operation in Fayetteville and Cumberland
County, North Carolina. See [D.E. 26] ¶ 1;
Moultis Decl. [D.E. 2] ¶ 8; Pl.'s App'x [D.E.
27-1] 1. During interviews with investigators, members of the
operation "provided information regarding [Kiet Tuan
Vo]'s leadership involvement, supplying illegal gambling
machines, coordination of money pickups, and other criminal
conduct." Moultis Decl. ¶ 9; see Pl.'s
App'x [D.E. 27-1] 1. Investigators discovered that
claimants "maintained over twenty bank accounts"
with "multiple accounts for Limited Liability
Corporations that were set up for the businesses."
Moultis Decl. ¶ 15; see Pl.'s App'x [D.E. 27-1]
5-6. "Analysis of the banking records showed a pattern
of deposits of large bulk currency into the accounts"
that was "largely structured to stay below reporting
thresholds." Moultis Decl. ¶ 15; see
Pl.'s App'x [D.E. 27-1] 5-6.
December 3, 2015, investigators executed search warrants at
five illegal gambling locations and seized 67 video poker
machines. See [D.E. 26] ¶ 2; Moultis Decl.
¶ 18. Investigators also searched claimants'
residence and discovered "[e]vidence of video poker
machines around the house," ledgers and tally sheets for
gambling activities, fine jewelry and gold coins, and $46,
106.00 in U.S. currency. Moultis Decl. ¶ 19;
see [D.E. 26] ¶ 4; Pl.'s App'x [D.E.
27-1] 2-6. Investigators also searched "Bank of America
and Wells Fargo Bank for bank accounts and two safety deposit
boxes" and "seized $123, 900.00 in bulk currency
from a safety deposit box along with $101, 517.00 in funds
from accounts." Moultis Decl. ¶ 20; see
[D.E. 26] ¶ 5.
5, 2016, the United States filed this civil forfeiture
action. Publication has been made, and no other claims have
been filed. See [D.E. 26] ¶ 6; Pl.'s
App'x [D.E. 27-2]. On October 18, 2017, a federal grand
jury in the Eastern District of North Carolina indicted
claimants for conspiracy to conduct an illegal gambling
business in violation of 18 U.S.C. § 371 (count one) and
conducting an illegal gambling business and aiding and
abetting in violation of 18 U.S.C. §§ 19SS and 2
(count two). See Indictment, United States v.
Truong, No. 5:17-CR-321-FL, [D.E. 12] (E.D. N.C. Oct.
18, 2017). The indictment contained a forfeiture notice
relating to the currency at issue in this forfeiture action.
January 16, 2018, Kiet Vo pleaded guilty to count one.
See Vo Plea Agmt., United States v. Truong,
No. 5.-17-CR-321-FL, [D.E.48](E.D. N.C. Jan. 16, 2018). On
February 20, 2018, Truong pleaded guilty to count one.
See Truong Plea Agmt., United States v.
Truong, No. 5:17-CR-321-FL, [D.E. 60] (E.D. N.C. Feb.
20, 2018). Claimants agreed "to voluntarily forfeit and
relinquish to the United States the property specified in the
Criminal Indictment" and "all items seized during
the investigation of the acts alleged in the Criminal
Indictment." id., [D.E. 48] ¶ 2(e); [D.E.
60] ¶ 2(f). On May 24 and November 8, 2018, the court
entered preliminary orders of forfeiture against Vo and
Truong. See Orders, United States v.
Truong, No. 5:17-CR-321-FL, [D.E. 84, 102] (E.D. N.C. ).
United States argues that claimants lack Article HI standing
to assert claims concerning the property. See [D.E.
25] 5-7. Under the Supplemental Rules for Admiralty or
Maritime Claims and Asset Forfeiture Actions of the Federal
Rules of Civil Procedure, the United States may file a motion
to strike a claim or answer on the grounds that the claimant
lacks standing at any time before trial. See
Fed.R.Civ.P. Supp. R. G(8)(c)(i)(B). A motion to strike
"may be presented as... a motion to determine... by
summary judgment whether claimant can carry the burden of
establishing standing by a preponderance of the
judgment is appropriate when, after reviewing the record as a
whole, the court determines that no genuine issue of material
fact exists and the moving party is entitled to judgment as a
matter of law. See Fed.R.Civ.P. 56(a); Anderson
v. Liberty Lobby. Inc., 477 U.S. 242, 247-48 (1986). The
party seeking summary judgment must initially
demonstrate the absence of a genuine issue of material fact
or the absence of evidence to support the nonmoving
party's case. See Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986), Once the moving party
has met its burden, the nonmoving party may not rest on the
allegations or denials in its pleading, see
Anderson. 477 U.S. at 248-49, but "must come
forward with specific facts showing that there is a genuine
issue for trial." Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986) (emphasis
and quotation omitted). A trial court reviewing a motion for
summary judgment should determine whether a genuine issue of
material fact exists for trial. See
Anderson. 477 U.S. at 249. In making this
determination, the court must view the evidence and the
inferences drawn therefrom in the light most favorable to the
nonmoving party. See Scott v. Harris, 550
U.S. 372, 378 (2007).
genuine issue of material fact exists if there is sufficient
evidence favoring the nonmoving party for a jury to return a
verdict for that party. See Anderson. 477
U.S. at 249. "The mere existence of a scintilla of
evidence in support of plaintiffs position [is]
insufficient" Id. at 252.; see
Beale v. Hardy, 769 F.2d 213.214 (4th Cir. 1985).
Only factual disputes that affect the outcome under
substantive law properly preclude summary judgment. See
Anderson. 477 U.S. at 248.
civil forfeiture case, a claimant must show "a colorable
interest in the property [at issue] to have standing."
United States v. Phillips, 883 F.3d 399, 402 (4th
Cir.), cert denied, 139 S.Ct. 347(2018). Merely
asserting "an ownership interest in the property"
does not suffice. M. at 403; see United States
v. $17.900.00 in U.S. Currency, 859 F.3d 1085, 1089-90
(4th Cir. 2017). A claimant must prove both statutory
standing and Article III standing by a preponderance of the
evidence. See $17.900.00 in U.S. Currency.
859 F.3d at 1089. "[S]tatutory standing relates to a
claimant's ability to show that he has satisfied whatever
statutory requirements Congress has imposed for contesting a
civil forfeiture action in federal court." United
States v. 8 Gilcrease Lane, Ouincy FL 32351.641F.Supp.2d
1, 5-6 (D.D.C. 2009) (quotations omitted). "Article m
standing ... relates to the claimant's ability to show
that he has a sufficient interest in the property to satisfy
the case-or-controversy requirement of Article III."
Id. (quotations omitted); see United
States v. Real Prop, Located at 229 Potter R., N. Kingstown.
R.I., 91F.Supp.3d 303, 306 (D. Conn. 2015).
and Truong lack Article m standing because their plea
agreements included a provision forfeiting the property at
issue in this action. SeeUnited States v.
Twenty Miljam-350 IED Jammers,669 F.3d 78, 91 (2d Cir.
2011); United States v. Real Prop. Described in
Deeds,962 F.Supp. 734, 737 (W.D. N.C. 1997) (collecting
cases). Given Kiet Vo and Truong's plea agreements and
the preliminary orders of forfeiture, they cannot show a
colorable interest in any of the property at issue by a
preponderance of the evidence. Thus, Kiet Vo and Truong lack
Article m standing to challenge the forfeitability of the
property in this civil forfeiture action. Finally, the court