United States v. Lieberman

1

UNITED STATES OF AMERICA, v. MICHAEL LIEBERMAN, Defendant,

DALANA LIEBERMAN, Interested Party.

No. 3:15-CR-00161-PGS-TJB

United States District Court, D. New Jersey

December 21, 2023

MEMORANDUM AND ORDER

PETER G. SHERIDAN, U.S.D.J.

This matter is before the Court on the Government's Motion for Partial Summary Judgment. (ECF No. 130). Oral argument was held on November 8, 2023. The parties represent that the ancillary hearing scheduled for January 2024 will be simplified by a decision on the following question: whether Petitioner Dalana Lieberman's tenancy status with respect to Huntersville, North Carolina Property (the “Subject Property”) defeats the Government's forfeiture claim as a matter of law.

In support of its motion, the Government presents two arguments first, that Petitioner Dalana Lieberman (“Ms Lieberman”) is not a tenant by the entirety in the Subject Property and that-even if she were-this tenancy status would not defeat the interest of the United States where the Subject Property was purchased with proceeds of a crime within the meaning 21 U.S.C. § 853. (ECF No. 130 at 2). Ms Lieberman, on the other hand, contends that only the culpable spouse's-her husband at the time, Defendant Michael Lieberman's-interest in the Subject Property is subject to forfeiture. Ms. Lieberman argues that the Government is not entitled to forfeit her interest and foreclose and sell her interest in the Subject Property seeing as the property of an “innocent third-party is not subject to forfeiture” and would run “afoul of [Ms Lieberman's] rights as a tenant by the entireties.” (ECF No. 135 at 2, 3).

For the reasons below, the Court cannot grant summary judgment on Ms. Lieberman's tenancy status based upon the facts before it. However, the Court finds that-regardless as to Ms. Lieberman's current tenancy status in the Subject Property-this status does not protect the Subject Property from forfeiture per se where that property may have been acquired with proceeds of a criminal act within the meaning of 21 U.S.C. § 853.

I.

At all times relevant to the pending matter, Petitioner Dalana Lieberman (“Ms. Lieberman” or “Petitioner”) was married to the Defendant, Michael Lieberman (“Defendant”). Ms. Lieberman was not involved in the criminal activity underlying the Defendant's conviction. (ECF No. 113 at ¶ 17). Whether Defendant and Ms. Lieberman are currently married is unclear to the Court on the facts before it.

From in or about 2003 to in or about June or July of 2014, Ms. Lieberman and

Defendant lived at a home in West Orange, New Jersey (the “West Orange Property”). (Id. at ¶¶ 13-14). Defendant purchased the West Orange Property on or about November 4, 2003. (ECF No. 113 at ¶ 14).

As is relevant to this proceeding, Defendant and Ms. Lieberman's reported financial earnings for 2006-2014 are summarized below:

• In February 2009, the Social Security Administration (“SSA”) notified Ms. Lieberman that she was entitled to monthly Social Security disability payments as of January 19, 2006. (Id. at ¶ 4)

• In February 2009, SSA would make a $35,953 lump sum payment to Ms. Lieberman for the period from July 2006 through January 2009. (Id.)

• According to SSA, Ms. Lieberman's monthly payments of $1,334 began in February 2009. (Id.).

• In 2011, Defendant earned $79,574 in wages, salaries, and tips. (Id. at ¶ 5).

• In 2012, Defendant earned $82,513 in wages, salaries, and tips. (Id. at ¶ 6).

• In 2013, Defendant earned $77,245 in wages, salaries, and tips. (Id. at ¶ 7).

• In 2013, Ms. Lieberman received $18,083 in Social Security Benefits. (Id. at ¶ 8).

• In 2014, Defendant earned $64,846 in wages, salaries, and tips. (Id. at ¶ 9).

• In 2014, Ms. Lieberman received $18,359 in Social Security Benefits. (Id. at ¶ 10).

During this time-specifically between June 2012 and May 2014-Defendant unlawfully diverted $1,640,822.69 from his employer, Credit Agricole Securities (“CAS”), which Defendant transferred to bank accounts for his own use and benefit. (ECF No. 113 at ¶ 15).

The purchase of a home in Huntersville, North Carolina (the “Subject Property”) occurred on June 25, 2014. (ECF No. 113 at ¶ 11). The purchase occurred when-by deed dated June 25, 2014-Defendant and Ms. Lieberman acquired title to Subject Property as tenants by the entirety under North Carolina law. (Id.). This occurred after the Defendant had begun unlawfully diverting funds from CAS.

The purchase price of the Subject Property was $438,000. (Id. at ¶ 12). The purchase was made by check or wire transfer and was not financed with a mortgage or loan. (Id.). Where that $438,000 was acquired is under dispute and will be addressed at the ancillary hearing.

On or about August 22, 2014-approximately two months after the purchase of the Subject Property-Defendant and Petitioner sold the West Orange Property at a loss, receiving no proceeds from the sale. (Id. at ¶ 14).

Approximately five months after the purchase of the Subject Property on November 14, 2014, the Government filed a Notice of Lis Pendens against the Subject Property. (ECF No. 135 at 5).

On April 15, 2015, pursuant to a plea agreement with the United States, Defendant pled guilty to a one-count Information charging him with wire fraud in violation of 18 U.S.C. § 1343. (ECF No. 113 at ¶ 14). The charge was based on the Defendant's unlawful diversion of $1,640,822.69 from his employer CAS, which the Defendant transferred to bank accounts for his own use and benefit. (Id.). As part of his plea agreement, Defendant agreed to the forfeiture of the proceeds of his crime in the amount of $1,541,565. (ECF No. 14 at 2). Defendant also agreed to forfeit his interest in the Subject Property. In relevant part, Defendant's plea agreement states that he agreed to forfeit to the United States “all the [D]efendant's right, title and interest in the real property and appurtenances known as [Subject Property] . . . which the [D]efendant admits has the requisite nexus to the offense to which the [D]efendant has agreed to plead guilty.” (ECF No. 14 at 4).

On September 18, 2015, the Court entered judgment sentencing Michael Lieberman to thirty-seven months of imprisonment followed by two years of supervised release. (ECF No. 19).

The following events-notably Defendant's quitclaiming of his interest in the Subject Property-occurred after Defendant's guilty plea. On December 23, 2015, Defendant conveyed to Ms. Lieberman all his interest in the Subject Property. The transfer was made by Quitclaim Deed recorded in the Register of Deeds for Mecklenburg County, North Carolina. (ECF No. 130-1 at Ex. C. ¶ 1; ECF No. 1301 at Att. 1). A notice of forfeiture was filed on April 17, 2017. (ECF No. 23). Ms. Lieberman filed her Petition for Ancillary Relief on April 26, 2017. (ECF No. 27).

Since the Subject Property's acquisition and to the present time, Ms. Lieberman has used her personal, untainted funds to pay for upkeep, maintenance, and upgrades to the Subject Property. However, the Government does not concede that all the expenses formerly mentioned were paid for by Ms. Lieberman's personal untainted assets. (ECF No. 130-1 at ¶ 19). Additionally, Ms. Lieberman contends that she contributed funds from her lump-sum disability benefits that she received from SSA to the purchase of the Subject Property. (ECF No. 135 at 3). At the present time, Ms. Lieberman lives at the Subject Property with her children. (ECF No. 114).

Ms. Lieberman argues she is a tenant by the entirety and therefore the Government cannot forfeit on her interest in the Subject Property, only that of her husband. The Government argues that it has superior rights to the Subject Property because its interest vested at the time the Defendant committed wire fraud and Ms. Lieberman did not have a preexisting interest in the Subject Property when the crime giving rise to the forfeiture took place.

The Government moves for Summary Judgment on the issue of Ms. Lieberman's tenancy status and the effect of this tenancy status on her Petition.

II.

A motion for summary judgment should be granted only if “there is 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). “A factual dispute is ‘genuine' if the ‘evidence is such that a reasonable jury could return a verdict for the nonmoving party.'” Razak v. Uber Techs., Inc., 951 F.3d 137, 144 (3d Cir. 2020), amended by, 979 F.3d 192 (3d Cir. 2020) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). “A factual dispute is ‘material' if it ‘might affect the outcome of the suit under the governing law.'” Id. “The Court must view the facts and evidence presented on the motion in the light most favorable to the nonmoving party.” Id. (quoting Anderson, 477 U.S. at 255). Moreover, summary judgment “is inappropriate when the evidence is susceptible of different interpretations or inferences by the trier of fact.” Hunt v. Cromartie, 526 U.S. 541, 553 (1999).

“When the moving party has the burden of proof at trial, that party must show affirmatively the absence of a genuine issue of material fact: it . . . must show that, on all the essential elements of its case on which it bears the burden of proof at trial no reasonable jury could find for the non-moving party.” Wasserman v. Bressman, 327 F.3d 229, 238 (3d Cir. 2003) (internal marks omitted). Where the moving party bears the burden of proof, the evidence presented in support of summary judgment must be “credible” and “entitled to a directed verdict if not controverted at trial.” Id. at 237. “Once a moving party with the burden of proof makes such an affirmative showing, it is entitled to summary judgment unless the non-moving party comes forward with probative...