United States v. Da Ying Sze

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UNITED STATES OF AMERICA, Plaintiff, v. DA YING SZE, Defendant.

CRIMINAL ACTION No. 22-0141 (ES)

United States District Court, D. New Jersey

January 18, 2024

Not for Publication

OPINION

Esther Salas, U.S.D.J.

In this criminal action, Defendant Da Ying Sze pleaded guilty to federal offenses based upon his role in operating an unlicensed money transmitting business. (See D.E Nos. 77 & 80). As part of his plea agreement, Defendant agreed to forfeit all of his right, title, and interest, in any and all property involved in, or traceable to the federal offenses. (See D.E. No. 80 at 4). As a result, the Court entered a Consent and Preliminary Order of Forfeiture providing for the forfeiture of specific property, which Defendant admitted had the requisite nexus to the offenses to which Defendant pleaded guilty, including funds held in various bank accounts. (D.E. No. 82 at 2-4). Petitioners Chi T. Cheung; Shi Chun Lin and Qiu Fang Chen; Yongning Wang; Hui Jiang; Wei Guang Wang; Zhi Hong Chen; Xiu Yu Jiang; Na Na Wang; Jing Ping Lin; and Mao Qing Chen have filed petitions for an ancillary hearing pursuant to 21 U.S.C. § 853(n) to assert their interest in funds that have been ordered forfeited to the United States in the Consent and Preliminary Order of Forfeiture. (See D.E. Nos. 86-88 &amp 91-97). Before the Court is the Government's motion to dismiss the third-party Petitions pursuant to Federal Rule of Criminal Procedure 32.2(c)(1)(A). (D.E. No. 104 (“Mov. Br.”)). Having considered the parties' submissions the Court decides this matter without oral argument. See L. Civ. R. 78.1(b); L. Crim. R. 1.1. For the following reasons, the Government's motion is GRANTED, and the Petitions are dismissed with prejudice.

I. BACKGROUND

A. Factual Background

On May 10, 2021, Defendant Da Ying Sze was arrested and charged in a criminal complaint with conducting an unlicensed money transmitting business, in violation of 18 U.S.C. §§ 1960(a), (b)(1)(A), and (b)(1)(B). (D.E. No. 1). As alleged in the Criminal Complaint, from in or around 2016 through in or around 2021, Sze and his co-conspirators conducted, controlled, managed, supervised, directed, and owned a large-scale unlicensed money transmitting business operating in New Jersey, New York, Pennsylvania, and elsewhere. (Id.; D.E. No. 80).

On or about February 22, 2022, Defendant pleaded guilty to an Information that charged him with (i) conspiracy to engage in monetary transactions in property derived from specified unlawful activity, contrary to 18 U.S.C. § 1957(a), in violation of 18 U.S.C. § 1956(h) (Count One); (ii) operation and aiding and abetting the operation of an unlicensed money transmitting business, in violation of 18 U.S.C. §§ 1960(a), (b)(1)(A), (b)(1)(B), and (b)(1)(C) (Count Two); and (iii) bribery of bank employees, in violation of 18 U.S.C. § 215(a)(1) (Count Three). (See D.E. Nos. 77 & 80). As part of his plea agreement, Defendant consented to the forfeiture, pursuant to 18 U.S.C. § 982(a)(1), of any and all property involved in, or traceable to, the violations of 18 U.S.C. §§ 1956(h) and 1960 charged in Counts One and Two of the Information. (See D.E. No. 80 at 4). Defendant further agreed to forfeit all of his right, title, and interest in the sums of money and property seized by law enforcement during the investigation of the Defendant, which he admitted had the requisite nexus to the offenses charged in the Information and were therefore forfeitable to the United States pursuant to 18 U.S.C. § 982(a)(1). (Id. at 4-5)

Also on or about February 22, 2022, pursuant to Rule 32.2(b)(1) and (b)(2) of the Federal Rules of Criminal Procedure and 18 U.S.C. § 982(a)(1), the Court entered a Consent and Preliminary Order of Forfeiture, providing for the forfeiture of specific property including funds seized from the following accounts:

• $325,029.45 seized from Bank of America account number ending in 2798, held in the name of Mei Sewing Corporation;

• $160,348.96 seized from Royal Business Bank account number ending in 2321, held in the name of Asia Sewing Corporation;

• $416,889 seized from Royal Business Bank account number ending in 7326, held in the name of Fai Trading NYC Corporation;

• $41,246.60 seized from Amerasia Bank account number ending in 0782, held in the name of Yufeng Gao;

• $69,608.36 seized from Amerasia Bank account number ending in 5384, held in the name of Broadway Fashion USA Corporation;

• $136,103.90 seized from Amerasia Bank account number ending in 2253, Mei Sewing Corporation and Xiumei Lin;

• $220,997.10 seized from Citibank account number ending in 8007, held in the name of Yufeng Gao;

• $235,428.80 seized from Citibank account number ending in 3816, held in the name of Yunqin Liu;

• $1,022.35 seized from Citibank account number ending in 3824, held in the name of Yunqin Lin;

• $53,780 seized from Citibank account number ending in 8424, held in the name of Fai Ngai;

• $3,200.24 seized from Citibank account number ending in 8432, held in the name of Fai Ngai;

• $105,164.41 seized from JP Morgan Chase account number ending in 0106, held in the name of Mei GoGo Trading Corporation; • $164,957.02 seized from Capital One Bank account number ending in 3333, held in the name of Broadway Fashion USA Corporation; and

• $191,110.94 seized from Capital One Bank account number ending in 5528, held in the name of Fair Trading NYC Corporation

(D.E. No. 82 at 2-4). After the Court entered the Consent and Preliminary Order of Forfeiture, ten sets of third parties filed petitions (together “Petitions”) for an ancillary hearing pursuant to 21 U.S.C. § 853(n), asserting their interest in funds that have been ordered forfeited to the United States in the Consent and Preliminary Order of Forfeiture. (See D.E. Nos. 86-88 & 91-97).

First, on September 13, 2022, two sets of petitioners, including Chi T. Cheung, as well as Shi Chun Lin, and Qiu Fang Chen, filed petitions for an ancillary hearing, asserting an interest in the disposition of funds represented by checks (together, “Check Payee Petitioners”). Petitioner Chi T. Cheung filed a petition for an ancillary hearing, asserting an interest in the disposition of funds represented by two checks, drafted in May 2021, from Citibank account numbers ending in 3816 and 8007, which were frozen pursuant to the Consent and Preliminary Order of Forfeiture. (D.E. No. 86 (“Cheung Petition”); D.E. No. 86-1, Ex. A to Cheung Petition). He bases his purported ownership interest in the funds on his status as the “Named Payee” on the checks. (Cheung Petition at 1-2). Petitioners Shi Chun Lin and Qiu Fang Chen filed a joint petition for an ancillary hearing, asserting an interest in the disposition of funds represented by three checks, drafted in May 2021, from Amerasia Bank account number ending in 0782, which was frozen pursuant to the Consent and Preliminary Order of Forfeiture. (D.E. No. 87 (“Lin & Chen Petition”); D.E. No. 87-1, Ex. A to Lin & Chen Petition). Like Chi T. Cheung, Shi Chun Lin and Qiu Fang Chen base their purported ownership interest in the funds on their status as the “Named Payee[s]” on various checks. (Lin & Chen Petition at 1-2).

Second, on September 13, 2022, Petitioner Yongning Wang filed a petition for an ancillary hearing, asserting an interest in the disposition of funds represented by forty-six checks. (D.E. No. 88 (“Wang Petition”); D.E. No. 88-1, Ex. A to Wang Petition). The basis for Wang's purported ownership interest in the funds is common law subrogation. (Wang Petition at 1-2). More specifically, in his petition, Wang states that “[w]hile the Subject Checks were drafted as payable to various individuals (the ‘Payees'), they were provided to Petitioner to distribute to the Payees in satisfaction of Petitioner's obligations to the Payees.” (Id. at 3). Wang then states that, “upon accepting the subject checks he was entitled to instruct the payees to withdraw those funds to satisfy his liability to them.” (Id.) None of the checks in which Wang claims an interest list Wang as the payee for the check. (Id. at 1-2; D.E. No. 88-1, Ex. A to Wang Petition).

Third on October 18, 2022, seven additional petitioners including Hui Jiang; Wei Guang Wang; Zhi Hong Chen; Xiu Yu Jiang; Na Na Wang; Jing Ping Lin; and Mao Qing Chen filed petitions for an ancillary hearing, asserting an interest in the disposition of funds represented by checks (together the “October Petitioners”). (D.E. Nos. 91-97). Hui Jiang claims an interest in funds represented by two checks, drafted in May 2021, from Amerasia Bank account number ending in 0782, which was frozen pursuant to the Consent and Preliminary Order of Forfeiture. (D.E. No. 91 (“Jiang Petition”); D.E. No. 91-1, Ex. A to Jiang Petition). She bases her purported ownership interest in the funds on her status as the “Named Payee” on the checks. (Jiang Petition at 1-2). Wei Guang Wang claims an interest in funds represented by one check, drafted in May 2021, from Amerasia Bank account number ending in 0782, which was frozen pursuant to the Consent and Preliminary Order of Forfeiture. (D.E. No. 92 (“Guang Petition”); D.E. No. 92-1, Ex. A to Guang Petition). He bases his purported ownership interest in the funds on his status as the “Named Payee” on the check. (Guang Petition at 1-2). Zhi Hong Chen claims an interest in funds represented by two checks, drafted in May 2021, from Amerasia Bank account number ending in 0782, which was frozen pursuant to the Consent and Preliminary Order of Forfeiture. (D.E. No. 93 (“Chen Petition”); D.E. No. 93-1, Ex. A to Chen Petition). She bases her purported ownership interest in the funds on her status as the “Named Payee” on the checks. (Chen Petition at 1-2). Xiu Yu Jiang claims an interest in funds represented by one check,...