United States v. $525,695.24 Seized from JPMorgan Chase Bank Inv. Acct #XXXXXXXX

418 F.Supp.3d 207

UNITED STATES of America, Plaintiff,

v.$525,695.24 SEIZED FROM JPMORGAN CHASE BANK INVESTMENT ACCT #XXXXXXXX, et al., Defendants.

Case No. 1:13 CV 1455

United States District Court, N.D. Ohio, Eastern Division.

Signed October 30, 2019

Henry F. DeBaggis, II, Michael L. Collyer, Office of the U.S. Attorney, Herbert J. Villa, Linda H. Barr, Phillip J. Tripi, Cleveland, OH, for Plaintiff.

Michael C. Hennenberg, Dinn Hochman & Potter, Terry M. Brennan, Baker & Hostetler, Edmund W. Searby, John D. Sammon, Cleveland, OH, Kathleen L. Midian, Silver Lake, OH, for Defendants.

MEMORANDUM OPINION

DONALD C. NUGENT, Senior United States District Judge This matter is before the Court following the August 23, 2017 decision of the Sixth Circuit Court of Appeals vacating this Court's Order (Docket #145) granting the Government's Motion to Strike Claims Pursuant to the Fugitive Disentitlement Statute as to Sbeih Sbeih ("Mr. Sbeih") (Docket #130) and remanding this action for further proceedings.

I. Factual and Procedural Background.

As set forth by the Sixth Circuit, the background of this case is as follows:

On June 3, 2013, the government filed a civil in rem forfeiture complaint against twenty bank accounts, two real properties, three vehicles, and $91,500 in United States currency. This civil forfeiture action is related to the government's investigation of Sbeih and Osama Salouha, a claimant in a related case. Salouha is alleged to have illegally sold prescription drugs, including oxycodone, oxymorphone, and hydrocodone, through the two pharmacies he owns in Ohio, in violation of 21 U.S.C. § 841. Sbeih was a joint owner in one of Salouha's pharmacies, and together Sbeih and Salouha are alleged to have laundered the receipts from Salouha's illegal drug sales through their personal and business accounts, in violation of 18 U.S.C. § 1956.

The government sought forfeiture pursuant to 21 U.S.C. § 881(a)(4), (a)(6), and (a)(7), as well as 18 U.S.C. § 981, as the bank accounts contained proceeds from drug trafficking activities, were used to facilitate drug trafficking, or were involved in money laundering. On August 7, 2013, Sbeih and his wife, Nimeh Ahmad-Sbeih, filed verified claims to seven of the personal bank accounts held in one or both of their names. The case was then stayed for a year because of the related criminal investigation. Sbeih was indicted on June 3, 2014, on one count of conspiracy to commit money laundering, one count of conspiracy to defraud the Internal Revenue Service, and three counts of making and subscribing false income tax returns. When Sbeih failed to appear for his arraignment on his criminal charges, the district court issued a warrant for his arrest.

Meanwhile, the district court lifted the stay on the civil forfeiture case and scheduled a status conference for June 24, 2014. Sbeih's counsel sought the district court's permission for Sbeih not to attend the conference in person, as he was in Israel. Sbeih alleged that he was in danger of losing his Jerusalem permanent residency permit if he left Israel. The district court granted the motion, excusing Sbeih.

On September 18, 2014, the government filed a motion to strike Sbeih's claim pursuant to the fugitive disentitlement statute. Sbeih opposed that motion. The district court did not immediately rule on the issue and instead waited to see whether the Salouhas, Sbeih's codefendants in the criminal case, were able to reenter the country, as they were reportedly stuck in Gaza. On April 10, 2015, the government refiled its motion to strike Sbeih's claims pursuant to the fugitive disentitlement statute. After receiving a response from Sbeih, the district court granted the government's motion to strike Sbeih's claim on May 12, 2015.

The Memorandum Opinion issued by this Court on May 12, 2015, reads, in part, as follows:

Based on the totality of the circumstances, as related by Counsel during the numerous Status Conferences held in this case and briefed repeatedly by the Parties, the Court finds that Mr. Sbeih has made a conscious choice not to reenter the United States for the purpose of avoiding prosecution. Mr. Sbeih is not prohibited from leaving Israel; is not detained in Israel; and, has presented no evidence that he is somehow incapacitated or otherwise unable to travel. Mr. Sbeih's wife has returned to the United States and, although Mr. Sbeih argues he must stay in Jerusalem to care for his parents, Mr. Sbeih has indicated he has siblings who remain in Jerusalem. Prior to 2008, Mr. Sbeih traveled to Jerusalem only every two or three years and, in 2011, during the pendency of legal proceedings regarding his residency, Mr. Sbeih did in fact seek (through his attorney) and receive (from the Ministry of the Interior with the assistance of the United States Consulate) permission to travel to the United States for four months. However, he now chooses not to return to the United States in the face of the pending criminal case. Mr. Sbeih shall not [be] permitted to pursue a claim in this civil forfeiture action, while at the same time purposefully avoiding the criminal case pending against him.

II. Applicable Statutory and Case Law; Decision on Appeal.

The fugitive disentitlement statute, codified at 28 U.S.C. § 2466, states as follows:

(a) A judicial officer may disallow a person from using the resources of the courts of the United States in furtherance of a claim in any related civil forfeiture action or a claim in third party proceedings in any related criminal forfeiture action upon a finding that such person—

(1) after notice or knowledge of the fact that a warrant or process has been issued for his apprehension, in order to avoid criminal prosecution—

(A) purposely leaves the jurisdiction of the United States;

(B) declines to enter or reenter the United States to submit to its jurisdiction; or

(C) otherwise evades the jurisdiction of the court in which a criminal case is pending against the person; and

(2) is not confined or held in custody in any other jurisdiction for commission of criminal conduct in that jurisdiction.

The Sixth Circuit has adopted the following five part test to determine whether disentitlement is appropriate:

(1) a warrant or similar process must have been issued in a criminal case for the claimant's apprehension; (2) the claimant must have had notice or knowledge of the warrant; (3) the criminal case must be related to the forfeiture action; (4) the claimant must not be confined or otherwise held in custody in another jurisdiction; and (5) the claimant must have deliberately avoided prosecution by (A) purposefully leaving the United States, (B) declining to enter or reenter the United States, or (C) otherwise evading the jurisdiction of a court in the United States in which a criminal case is pending against the claimant.

United States v. Salti , 579 F.3d 656, 663 (quoting Collazos v. United States , 368 F.3d 190, 198 (6th Cir. 2004) ).

On appeal, Mr. Sbeih challenged the applicability of the fifth factor – whether he deliberately avoided prosecution by declining to reenter the United States – arguing that he remained in Israel not to evade criminal prosecution, but to avoid losing permanent resident status in Jerusalem. Mr. Sbeih argued on appeal that this Court incorrectly concluded that evading criminal prosecution did not have to be the sole purpose of remaining outside the United States and that this Court erred in concluding that the Government had met its burden of demonstrating that Mr. Sbeih declined to reenter the United States to avoid criminal prosecution.

On August 24, 2017, the Sixth Circuit Court of Appeals issued an Opinion vacating this Court's decision and remanding the case for further proceedings. (Docket #174.) The Sixth Circuit held that disentitlement is appropriate under Section 2466 whenever a claimant fails to enter or reenter the United States with the intention of avoiding prosecution, regardless of any additional purposes the claimant may have for remaining outside the United States. However, the Sixth Circuit found that in Mr. Sbeih's case, the record was insufficient to allow it to conclude that the Government met its burden of proving that Mr. Sbeih was not returning to the United States in order to avoid prosecution. The Sixth Circuit stated:

Because of the sparsity of the district court's record, it is not clear that the government has satisfied its burden of showing that Sbeih was staying outside the United States in order to avoid prosecution. As noted previously, many of the relevant conversations between the attorneys and the district court were conducted off the record, and thus we have no way of knowing to what extent Sbeih refuted the government's allegations regarding his intent to evade criminal proceedings. Furthermore, we have no way to determine whether Sbeih has a justifiable reason for returning to the United States, and would therefore be entitled to pursue his legal rights in this civil forfeiture matter while remaining in Israel, given that it is unclear what efforts the government made to counter Sbeih's allegations or even if such evidence would be available. We therefore conclude that, based on the record as it has been presented to the Court, the district court committed clear error in finding that the evidence was sufficient to establish that Sbeih had the specific intent of staying in Israel to avoid prosecution.

(Docket #174 at p. 14.)

III. Proceedings Following Remand.

On January 9, 2018, this Court held a status conference to address the decision of the Court of Appeals. An evidentiary hearing was set for January 31, 2018. (Docket #184.) The evidentiary hearing was ultimately continued until August 30, 2019, after numerous requests for continuance were made by the Parties. (Docket #s 186, 189, 193, 194, 197, 199, and 200.)

On June 27, 2019, the Government filed a "Notice of Certified Record with Certified Translation" with this Court, attaching an official Extract from...