United States v. $ 822

          RULING ON MOTION FOR SUMMARY JUDGMENT

          DONNA F. MARTINEZ UNITED STATES MAGISTRATE JUDGE.

         The United States of America commenced this civil forfeiture action seeking forfeiture of $822, 694.81 in a Bank of America account in the names of Godwin and Winifred Ezeemo (the "Ezeemos").^[1] The government alleges that the $822, 694.81 (the "defendant currency") is subject to forfeiture pursuant to 18 U.S.C. § 981(a)(1)(A), because it is the product of money laundering in violation of 18 U.S.C. § 1956(a)(1)(A)(i), or pursuant to 18 U.S.C. § 981(a)(1)(C), because it is the product of wire fraud or conspiracy to commit wire fraud in violation of 18 U.S.C. § 1343. (ECF #1, Verified Compl. ¶6.) The Ezeemos contest the government's forfeiture action. They do not dispute that certain deposits to the BOA account were obtained by fraud but maintain that they were not aware of the fraud. Pursuant to Fed.R.Civ.P. 56, the Ezeemos move for summary judgment as to the government's forfeiture action. (ECF #119.) For the reasons that follow, the motion is denied.

         I. Legal Standard

         "A moving party is entitled to summary judgment where the record reveals 'no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.' Fed.R.Civ.P. 56(a)." Natofsky v. City of New York, 921 F.3d 337, 344 (2d Cir. 2019). A fact is "material" if it "might affect the outcome of the suit under the governing law," and a dispute is "genuine" if "a reasonable jury could return a verdict for the nonmoving party" based on it. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "The evidentiary standard that must be met by the moving party is a high one, since a court is obliged 'to draw all inferences in favor of the party against whom summary judgment is sought,' Ramseur v. Chase Manhattan Bank, 865 F.2d 460, 465 (2d Cir. 1989), and to 'construe the evidence in the light most favorable to the nonmoving party,' United States v. All Funds Distributed to Weiss, 345 F.3d 49 (2d Cir. 2003)." United States v. Collado, 348 F.3d 323, 327 (2d Cir. 2003).

         The government did not file a memorandum in opposition in response to the Ezeemos' summary judgment motion. The Second Circuit has made clear, however, that a district court may not grant a motion for summary judgment "without first examining the moving party's submission to determine if it has met its burden of demonstrating that no material issue of fact remains for trial." Vermont Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 244 (2d Cir. 2004). "If the evidence submitted in support of the summary judgment motion does not meet the movant's burden of production, then summary judgment must be denied even if no opposing evidentiary matter is presented." Id. (internal quotation marks omitted). See Giannullo v. City of New York, 322 F.3d 139, 141 (2d Cir. 2003)(noting that the "non-movant is not required to rebut an insufficient showing"). "Moreover, in determining whether the moving party has met this burden of showing the absence of a genuine issue for trial, the district court may not rely solely on the statement of undisputed facts contained in the moving party's Rule 56.1 statement. It must be satisfied that the citation to evidence in the record supports the assertion." Vermont Teddy Bear Co., 373 F.3d at 244; Giannullo, 322 F.3d at 143 n. 5 (stating that not verifying in the record the assertions in the motion for summary judgment "would derogate the truth-finding functions of the judicial process by substituting convenience for facts").

         II. Background

         The following facts, taken from the Ezeemos' Local Rule 56(a)1 statement (ECF #119-2) and supporting exhibits (ECF #119-4 - #119-43), are undisputed unless otherwise indicated.

         The Ezeemos are Nigerian citizens who operate businesses in Nigeria. (ECF #119-2^[2], Local Rule 56(a)1 ¶6; ECF #119-42 at 5.) As part of their business, they purchase goods from Blount International, a U.S. company in Oregon, for resale in Western Africa. (ECF #119-2, Local Rule 56(a)1 ¶16.) They maintain bank accounts in Nigeria. (ECF #119-4, Ezeemo Dep. at 40.) They also have a joint checking account at Bank of America ("BOA"). (ECF #119-2, Local Rule 56(a)1 ¶37.) The BOA account initially was a personal checking account. (ECF #119-5, Ezeemo Dep. at 17.) The Ezeemos subsequently used the account to purchase U.S. currency. (ECF #119-5, Ezeemo Dep. at 19.) They wanted U.S. dollars to pay their U.S suppliers. (ECF #119-4, Ezeemo Dep. at 14-15, #119-5, Ezeemo Dep. at 19.)

         To procure U.S. currency, Godwin Ezeemo contacted an individual named Abubaker Lade ("Lade") in Lagos, Nigeria. (ECF #119-4, Ezeemo Dep. at 15.) Lade worked in Lagos as a "marketer" for a local Nigerian Bureau de Change that handles private foreign currency transactions. (ECF. #119-7, Lade Dep. at 66.) Lade testified that he was unlicensed, although Ezeemo testified to the contrary. (ECF #119-7, Lade Dep. at 65-66.) Lade's job was to obtain customers for the Bureau de Change. (ECF #119-7, Lade Dep. at 66.) To do so, he went "outside" to the local "market" and "warehouse." (ECF #119-7, Lade Dep. at 68.) Godwin Ezeemo used a Bureau de Change to obtain U.S. dollars because he was able to move more money more quickly than he would if he used a bank. (ECF #119-4, Ezeemo Dep. at 16; ECF #119-5, Ezeemo Dep. at 14.)

         Ezeemo ordered "bulk" purchases of U.S. dollars - such as $500, 000 - from Lade. (Doc. #119-5, Ezeemo Dep. at 54.) They negotiated the exchange rate. (ECF #119-7, Lade Dep. at 110-11.) Ezeemo gave Lade the BOA account information so Lade could make deposits/wire the U.S. dollars into the account. (ECF #119-2, Local Rule 56(a)1 ¶48.) Lade gave the Ezeemos' BOA account information to others. (ECF #119-7, Lade Dep. at 13.) Over time Lade caused deposits in varying amounts to be made into the Ezeemos' BOA account. (ECF #119-5, Ezeemo Dep. at 21-22.) Lade gave Godwin Ezeemo the wire confirmation receipt and/or deposit slip for every wire transfer or deposit into the BOA account. (ECF #119-2, Local Rule 56(a)1 ¶51.) After Godwin Ezeemo saw the online confirmation of payment into his BOA account, he paid Lade in naira (Nigerian currency) for each transaction. (ECF #119-2, Local Rule 56(a)1 ¶53.) The Ezeemos used the U.S. currency that was deposited in the BOA account to pay for their purchases from Blount. (ECF #119-41, Ezeemo Aff. ¶18.)

         Godwin Ezeemo did not know how Lade obtained the funds that were deposited into the BOA account. (ECF #119-5, Ezeemo Dep. at 22.) When Ezeemo reviewed his account, it showed wire transfers from various individuals, none of whom Ezeemo knew. (ECF #119-5, Ezeemo Dep. at 26.) Ezeemo did not know where the money came, nor did he know the identity of those depositing it. Indeed, he stated that he could not "be bothered with who pays this money into my account" and "d[id] not query Lade on how he does his business." (ECF #119-5, Ezeemo Dep. at 26, 28, 31.) He knew that Lade caused the transfers because the "confirmation slip that comes from him tells the proof." (ECF #119-5, Ezeemo Dep. 27.)

         Some of the money deposited into the BOA account was obtained fraudulently.^[3] The victims were subject to different types of scams but all were tricked into putting money into the BOA account.^[4](ECF. #119-1 at 16.) U.S. Secret Service Agent Michael Shove investigated the deposits made into the BOA account. (ECF #119-2, Local Rule 56(a)1 at ¶58.)^[5]

         One victim was a law firm. On February 9, 2012, the law firm of Weycer, Kaplan, Pilaski and Zuber (the "Weycer law firm") wired $194, 340 into the BOA account. (ECF #119-5, Ezeemo Dep. at 41.) After the transfer, Ezeemo could not access his account. (ECF #119-5, Ezeemo Dep. at 41.) He called BOA and was told his account was frozen because the $194, 340 transfer was fraudulent. (ECF #119-5, Ezeemo Dep. at 42, 65, 75, 78.) Ezeemo stopped using Lade to obtain foreign currency and authorized his attorney to make a complaint against Lade with the Nigerian Police. (ECF #119-5, Ezeemo Dep. at 47.) The March 1, 2012 police report stated that the basis for the complaint was "fraudulent deceitful transfer of $194, 340 to the account of Mr. Ezeemo." (ECF #119-5, Ezeemo Dep. at 92; ECF #119-17 at 3.) Lade was arrested but not charged with a crime and released. (ECF #119-7, Lade Dep. at 101.)

         Notwithstanding that the account was "frozen" after the $194, 340 wire transfer by the Weycer law firm, the Ezeemos continued to use the account. Transfers into the account continued, including one for $154, 210.86 and another for $40, 000, both by persons and entities the Ezeemos did not know.^[6] (ECF #119-5, Ezeemo Dep. at 59-60, ECF #119-6, W. Ezeemo Dep. at 29.)

         On March 23, 2012, the government seized the defendant currency and thereafter filed this civil forfeiture action. The Ezeemos concede that "several people were defrauded by a scam" but maintain that they had no knowledge of any fraud and that they legally purchased the U.S. currency. (ECF #119-1 at 16.)

         III. Discussion

         A. Criminal Liability

         The Ezeemos first argue that they are entitled to summary judgment on the government's forfeiture action because they did not violate the underlying criminal statutes prohibiting wire fraud or money laundering. (Doc. #119-1 at 7-12.) Their argument fails.

         Civil forfeiture proceedings are governed by 18 U.S.C. § 983. Section 983(c) provides that "[i]n a suit or action brought under any civil forfeiture statute for the civil forfeiture of any property . . . the burden of proof is on the Government to establish, by a preponderance of the evidence, that the property is subject to forfeiture." "In civil forfeiture, the United States brings a civil action against the property itself as an in rem proceeding - '[i]t is the property which is proceeded against, and . . . held guilty and condemned as though it were conscious instead of inanimate and insentient.' . . ." United States v. Contorinis,692 F.3d 136, 146 (2d Cir. 2012)(citations omitted). The "claimant's culpability in the underlying criminal conduct is irrelevant." United States v. $6, 207, 757 F.Supp.2d 1155, 1163 (M.D. Ala. 2010). See United States v. Cherry,330 F.3d 658, 666 n.16 (4th Cir. 2003) ("The most notable distinction between civil and criminal forfeiture is that civil forfeiture proceedings are brought against property, not against the property owner; the owner's culpability is irrelevant in deciding whether property should be forfeited."); Vereda, Ltda. v. United States,271 F.3d 1367, 1376 (Fed. Cir. 2001)("in an in rem forfeiture . . . the guilt or innocence of the property owner is irrelevant in view of the fact that the action resulting in forfeiture is 'directed against [the] guilty property, rather than against the offender himself'"); United States v. $90, 000.00 in U.S. Funds, No. 5:12-CV-169(CAR), 2012 WL 5287888, at *3 (M.D. Ga. Oct. 23, 2012)("A civil forfeiture action is a proceeding in rem and operates under the legal fiction that objects and property can be guilty of wrongdoing, making any actual guilt related to the owner irrelevant."); United States v. A Parcel of Land Located at 5185 S. Westwood Drive Republic, Mo., No. 09-03357-CV-S-DGK, 2012 WL 1113197, at *4 (W.D. Mo. Apr. 2, 2012) ("Civil forfeiture is an in rem action ...