United States of America v. Real Property Located in New York, New York

NOTICE OF MOTION AND MOTION to Dismiss for Lack of Jurisdiction

C.D. Cal.May 15, 2017

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE Ekwan E. Rhow - State Bar No. 174604 erhow@birdmarella.com Jeremy D. Matz - State Bar No. 199401 jmatz@birdmarella.com Naeun Rim - State Bar No. 263558 nrim@birdmarella.com Patricia H. Jun - State Bar No. 277461 pjun@birdmarella.com BIRD, MARELLA, BOXER, WOLPERT, NESSIM, DROOKS, LINCENBERG & RHOW, P.C. 1875 Century Park East, 23rd Floor Los Angeles, California 90067-2561 Telephone: (310) 201-2100 Facsimile: (310) 201-2110 Attorneys for Claimant 118 Greene Street (NYC) LLC UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION UNITED STATES OF AMERICA, Plaintiff, vs. REAL PROPERTY LOCATED IN NEW YORK, NEW YORK, Defendant. CASE NO. 16-CV-5375-DSF (PLAx) CLAIMANT 118 GREENE STREET (NYC) LLC’S NOTICE OF MOTION AND MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Date: August 21, 2017 Time: 1:30 P.M. Crtrm.: 7D Assigned to Hon. Dale S. Fischer 118 GREENE STREET (NYC) LLC, Titleholder. Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 1 of 31 Page ID #:1141 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE NOTICE OF MOTION AND MOTION TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on August 21, 2017, before the Honorable Dale S. Fischer, in Courtroom 7D, or as soon thereafter as the matter may be heard in the above-entitled Court located at the First Street Courthouse, 350 West 1st St., Los Angeles, CA 90012, Claimant 118 Greene Street (NYC) LLC (“Claimant”) will and hereby does respectfully move this Court for an order dismissing this action against Defendant Real Property Located in New York, New York. Claimant moves to dismiss the Complaint for lack of in rem jurisdiction and improper venue under 28 U.S.C. § 1355(b)(1), pursuant to Rule G(8)(b)(i) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions (“Supplemental Rules” or “Supp. R.”), and Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3). This motion is based on this Notice of Motion, Motion to Dismiss and the Memorandum of Points and Authorities attached hereto, and such other papers and arguments as the Court may entertain. This motion is made following the L.R. 7-3 counsel conference, which took place telephonically on April 5, 2017, and over email on May 8, 2017. DATED: May 15, 2017 Ekwan E. Rhow Jeremy D. Matz Naeun Rim Patricia H. Jun Bird, Marella, Boxer, Wolpert, Nessim, Drooks, Lincenberg & Rhow, P.C. By: /s/ Naeun Rim Naeun Rim Attorneys for Claimant 118 Greene Street (NYC) LLC Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 2 of 31 Page ID #:1142 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 i MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE TABLE OF CONTENTS Page I. INTRODUCTION ............................................................................................. 1 II. BACKGROUND ............................................................................................... 3 A. Procedural History .................................................................................. 3 B. Allegations In The Complaint ................................................................. 3 1. The Good Star Phase .................................................................... 4 2. The Tanore Phase ......................................................................... 6 3. The Purchase of the Out-of-State Assets ...................................... 8 4. The Claims for Forfeiture ........................................................... 12 III. LEGAL STANDARD ..................................................................................... 13 IV. ARGUMENT .................................................................................................. 14 A. Jurisdiction and Venue Do Not Exist under § 1355(b)(1)(B) Because the Out-of-State Assets Are Not Located in This District ...... 15 B. Jurisdiction and Venue Do Not Exist under § 1355(b)(1)(A) Because No Acts or Omissions “Giving Rise” to Forfeiture of Out-of-State Assets Occurred in This District ...................................... 15 1. None Of the Alleged SUAs Occurred in This District ............... 17 2. None Of the Alleged Subsequent Money Laundering Transactions Occurred in this District ........................................ 19 C. A Conspiracy Label Does Not Establish The Requisite Nexus Between the Out-of-State Assets And This District ............................. 20 D. The Exercise of Jurisdiction Over the Out-of-State Assets Would Violate Due Process .............................................................................. 22 V. CONCLUSION ............................................................................................... 25 Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 3 of 31 Page ID #:1143 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ii MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE TABLE OF AUTHORITIES Page(s) Cases All for Multilingual Multicultural Educ. v. Garcia, No. CV 11-0215 PJH, 2011 WL 2532478 (N.D. Cal. June 24, 2011) ................. 16 Allstar Mktg. Grp., LLC v. Your Store Online, LLC, 666 F. Supp. 2d 1109 (C.D. Cal. 2009) ................................................................ 13 Contents of Account No. 03001288 v. United States, 344 F.3d 399 (3d Cir. 2003) ................................................................................. 13 Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984) ............................................................................................. 24 Int’l Shoe Co. v. State of Wash., Office of Unemployment Comp. & Placement, 326 U.S. 310 (1945) ............................................................................................. 23 Int’l Shoe Co. Co. v. Kemper Cas. Ins. Co., 585 F.3d 382 (7th Cir. 2009) ................................................................................ 20 Jenkins Brick Co. v. Bremer, 321 F.3d 1366 (11th Cir. 2003) ............................................................................ 20 Menken v. Emm, 503 F.3d 1050 (9th Cir. 2007) .............................................................................. 14 Newhard Cook & Co. v. Inspired Life Ctrs., Inc., 895 F.2d 1226 (8th Cir. 1990) .............................................................................. 24 Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491 (9th Cir. 1979) ................................................................................ 14 Shaffer v. Heitner, 433 U.S. 186 (1977) ....................................................................................... 23, 24 United States v. $198,573.85 in U.S. Currency, No. 5:13-CV-1180, 2014 WL 859137 (N.D.N.Y. Mar. 5, 2014) ........................ 14 United States v. $50,040 in U.S. Currency, No. 06-04552 WHA, 2007 WL 1176631 (N.D. Cal. Apr. 20, 2007) ................... 22 Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 4 of 31 Page ID #:1144 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iii MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE United States v. $50,900, No. CV 15-14125, 2016 WL 4257328 (D. Mass. Aug. 11, 2016) ................. 15, 20 United States v. 3 Parcels in La Plata County, Colo., 919 F. Supp. 1449 (D. Nev. 1995) ................................................................. 14, 17 United States v. 51 Pieces of Real Prop. Roswell, N.M., 17 F.3d 1306 (10th Cir. 1994) .............................................................................. 21 United States v. Account of Prop. Futures, Inc., No. CV 08-81244, 2010 WL 11447277 (S.D. Fla. Feb. 18, 2010) ...................... 15 United States v. Approximately $1.67 Million, 513 F.3d 991 (9th Cir. 2008) .................................................................... 13, 15, 16 United States v. Batato, 833 F.3d 413 (4th Cir. 2016) .......................................................................... 23, 24 United States v. Eleven (11) New Util. Vehicles, 2014 WL 4385734 (D.P.R. Sept. 4, 2014) ........................................................... 13 United States v. Funds Held in the Name or for the Benefit of Wetterer, 210 F.3d 96 (2d Cir. 2000) ............................................................................... 2, 21 United States v. Funds Representing Proceeds of Drug Trafficking of $75,868.62, 52 F. Supp.2d 1160 (C.D. Cal. 1999) ............................................................. 15, 17 United States v. Jinian, 725 F.3d 954 (9th Cir. 2013) ................................................................................ 19 United States v. Kennedy, 201 F.3d 1324 (11th Cir. 2000) ............................................................................ 16 United States v. One 2006 Lamborghini Murcielago, No. SACV 13-0907-DOC, 2015 WL 3752338 (C.D. Cal. June 16, 2015) ..................................................................................................................... 16 United States v. Prevezon Holdings, LTD., 122 F. Supp. 3d 57 (S.D.N.Y. 2015) .................................................................... 18 United States v. Ten Thousand Dollars ($10,000.00) in U.S. Currency, 860 F.2d 1511 (9th Cir. 1988) .............................................................................. 23 Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 5 of 31 Page ID #:1145 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iv MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE Statutes U.S. CONST. V. ..................................................................................................... 14, 23 Fed. R. Civ. P. 12 ............................................................................................... 2, 3, 13 Fed. R. Civ. P. Supp. Rule G ................................................................................. 2, 13 18 U.S.C. § 1343 ........................................................................................................ 12 18 U.S.C. § 1956 ................................................................................................... 12-13 18 U.S.C. § 1957 ........................................................................................................ 12 18 U.S.C. § 2314 ........................................................................................................ 12 18 U.S.C. § 2315 ........................................................................................................ 12 28 U.S.C § 1355 .................................................................................................. passim 28 U.S.C. § 1391 ........................................................................................................ 20 28 U.S.C. § 1395 .................................................................................................. 14, 15 Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 6 of 31 Page ID #:1146 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION Plaintiff United States of America (“Government”) has brought before this Court civil forfeiture actions against five defendant assets that have zero connection to the Central District of California. These five assets (collectively the “Out-of-State Assets”) and their respective Claimants are:1 Asset and Case Number Claimant(s) EMI Rights 16-CV-5364 JW Nile (BVI) Ltd. Bombardier Jet 16-CV-5367 Global One Aviation (Global 5000) Ltd. Symphony Park Lane Assets 16-CV-5370 36 CPS Condos (NYC) LLC; 36 CPS Luxury Hotel (NYC) Limited; 36 CPS Parking (NYC) Limited; 36 CPS Residential Sales (NYC) Limited Time Warner Penthouse and Storage 16-CV-5374 80 Columbus Circle (NYC) LLC Greene Condominium 16-CV-5375 118 Greene Street (NYC) LLC Clearly delineating – and distinguishing – the Out-of-State Assets is critical here because the Government’s strategy is transparent but legally improper. In an attempt to circumvent clear statutory limitations on in rem jurisdiction and venue, the Government has combined in a single omnibus Complaint the allegations against these Out-of-State Assets with allegations against eleven entirely separate assets (purchased by different parties through a distinct chain of transactions) some of which happen to have some connection to this District. But the mere fact that the Out-of-State Assets are described in the same Complaint as assets connected to this District is not enough. There must be an independent basis for jurisdiction and venue as to each named asset, namely that the conduct occurring in this District 1 Each of the motions to dismiss with regard to the Out-of-State Assets is based upon an identical memorandum of points and authorities. Claimants have also described each Out-of-State Asset using shorthand. The full description of each Out-of-State Asset is contained in ¶ 2 and Attachment A of the Government’s Complaint in each respective case. Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 7 of 31 Page ID #:1147 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE must be directly and closely causally connected to the forfeiture of the specific Defendant Asset in this case. See United States v. Funds Held in the Name or for the Benefit of Wetterer, 210 F.3d 96, 104-05 (2d Cir. 2000) (rejecting Government’s argument that independent assets “form a single ball of wax” for purposes of forfeiture, and instead evaluating separately each asset for jurisdiction and venue); 28 U.S.C. § 1355(b)(1)(A) (providing for jurisdiction and venue only in a district “in which any of the acts or omissions giving rise to the forfeiture occurred” (emphasis added)). The five Out-of-State Assets have no connection to this District – they are neither located in this District nor traceable to any transaction that occurred in this District. They are therefore not properly before this Court. Claimants ask this Court to dismiss these actions for lack of in rem jurisdiction and improper venue. Because none of the Out-of-State Assets is located in this District, jurisdiction and venue may only be founded upon 28 U.S.C. § 1355(b)(1)(A). But § 1355(b)(1)(A) requires that some act or omission “giving rise” to the forfeiture occurred in this District, and the Government’s sprawling Complaint lacks any allegation that fulfills this critical nexus requirement. In fact, only about 20 of the Complaint’s 136 pages concern the five Out-of-State Assets,2 and none of those allegations assert that any act or omission occurred in this District. Remarkably, the Government does not claim that any of the Complaint’s California-related allegations has any direct causal relationship with the forfeiture of the Out-of-State Assets. Instead, the Government claims that it can avoid the statutory limitations on the Court’s jurisdiction by affixing a vague “conspiracy” label to all of the allegations in the Complaint. As set forth below, the statutory text cannot be manipulated to support the Government’s argument. The Government cannot cure 2 See, e.g., CV 16-5364, Dkt. 1, “Compl.” at pp. 100-107 (EMI Rights), pp. 93-95 (Bombardier Jet), pp. 90-93 (Symphony CP (Park Lane) Assets), pp. 95-98 (Time Warner Penthouse and Storage), and pp. 99-100 (Greene Condominium). Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 8 of 31 Page ID #:1148 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE the glaring jurisdictional defects in these cases by lumping together, in a single bloated Complaint, allegations against assets that do not have any connection to this District with allegations against assets that do. Finally, even if the Government’s statutory argument had merit (it does not), the exercise of jurisdiction over a property that is not located in this District, has no connection to this District, and which is owned by a company that has no connection to this District would offend traditional notions of fair play and substantial justice. Accordingly, in the alternative, the Court should grant the motion to dismiss pursuant to the Fifth Amendment’s Due Process Clause. II. BACKGROUND A. Procedural History The Government filed its Complaint for civil forfeiture in this Court on July 20, 2016. (See, e.g., CV 16-5364, Dkt 1.) On February 13, 2017, Claimants to the Out-of-State Assets moved for leave to file late claims (see, e.g., id., Dkt. 100), partly on the basis that they had a meritorious defense – that the Complaint failed to plead a proper basis for in rem jurisdiction or venue. The Court granted the motion, noting that Claimants’ “jurisdictional defenses are at least plausible.” (See, e.g., id. Dkt. 122, “Ct. Order, Mar. 21, 2017.”) On March 24, 2017, Claimants filed Verified Claims to the Out-of-State Assets. (See, e.g., id., Dkt. 126.) The Court granted the parties’ stipulation to extend Claimants’ deadline to file a motion to dismiss under Fed. R. Civ. P. 12(b) to May 15, 2017. (See, e.g., id., Dkt. 128.) B. Allegations In The Complaint3 The Government seeks forfeiture of the Out-of-State Assets on the basis that they are “involved in and traceable to an international conspiracy to launder money misappropriated from” 1MDB, a strategic investment and development company 3 For the purpose of this motion, Claimant must accept the Government’s allegations as true. Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 9 of 31 Page ID #:1149 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE wholly owned by the Malaysian Government. (Compl. ¶ 5.)4 The Complaint alleges that between 2009 and 2013, millions of dollars were siphoned from 1MDB, in three “phases”: the Good Star Phase, the Aabar-BVI Phase, and the Tanore Phase. (Compl. ¶¶ 6–12.) Four of the five Out-of-State Assets that are the subject of this motion are alleged to be traceable to the Good Star Phase, and the fifth is alleged to be traceable to the Tanore Phase. 1. The Good Star Phase During the “Good Star Phase,” millions of dollars were allegedly diverted from 1MDB to a Seychelles company called Good Star Limited (“Good Star”). The Complaint describes the following transactions: GOOD STAR PHASE TRANSACTIONS DATE AMT FROM TO COMPL. 09/30/09 $700 million 1MDB (Deutsche Bank/Bank Negara) MALAYSIA Good Star (RBS Coutts) SWITZERLAND ¶¶ 60, 65 05/20/11 - 10/25/11 $330 million 1MDB (AmBank/Deutsche Bank) MALAYSIA Good Star (RBS Coutts) SWITZERLAND ¶¶ 93-94 The Complaint alleges that 1MDB formed a joint venture with a Saudi oil extraction company call PetroSaudi International (“PetroSaudi”), and that 1MDB initiated multiple funds transfers to the joint venture in relation to energy investments in Turkmenistan and Argentina. (Compl. ¶¶ 8, 40, 41, 52.) The Complaint alleges that the funds for this investment were improperly diverted to a bank account in Switzerland, held in the name of Good Star Limited (the “Good Star Account”). (Compl. ¶ 60.) The Government claims that 1MDB officials in Malaysia made multiple misrepresentations, including to banks in Malaysia, in order to effectuate the misappropriation. (Compl. ¶¶ 8, 93-94, 95.) The Complaint also 4 All citations to “Compl.” will refer to the Complaint filed as Dkt. 1 in CV 16- 5364 (EMI Rights). The Complaints filed in the other cases are substantially identical, except for the paragraphs describing the named Out-of-State Asset. Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 10 of 31 Page ID #:1150 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE alleges that between February and June of 2011, approximately $45 million was transferred from the Good Star Account to the bank account of MALAYSIAN OFFICIAL 1 (either directly or through the bank account of a Saudi Arabian Prince). (Compl. ¶¶ 99-101.) None of the events set forth above are alleged to have occurred in this District, nor are any of the relevant people or entities alleged to be located in this District. To the contrary, all of the allegations relating to the Good Star Phase happened outside of the United States. The following chart summarizes the location of the events, people, and entities involved in the Good Star Phase, as pled in the Complaint. GOOD STAR PHASE LOCATIONS EVENT/PERSON/ENTITY LOCATION COMPL. Good Star SEYCHELLES ¶ 44, n.6 Low Taek Jho MALAYSIA, SINGAPORE ¶¶ 24, 46 Good Star bank account (RBS Coutts Bank) Opened in SINGAPORE; Funds transferred to SWITZERLAND ¶¶ 24, 46 1MDB MALAYSIA ¶ 5 PetroSaudi SAUDI ARABIA ¶ 8 Joint Venture bank account (JP Morgan Bank) SWITZERLAND ¶ 61 1MDB Board Meetings MALAYSIA ¶¶ 47-51, 82-90 Bank Negara (Malaysia’s Central Bank) MALAYSIA ¶ 65 1MDB Officials’ Misrepresentations to Bank Negara MALAYSIA ¶¶ 65, 95 Deutsche Bank (Malaysia) Marhad MALAYSIA ¶¶ 43, 51 1MDB Officials’ Misrepresentations to Deutsche Bank MALAYSIA ¶¶ 60, 66 AmBank MALAYSIA ¶ 94 1MDB Officials’ Misrepresentations to AmBank MALAYSIA ¶ 94 MALAYSIAN OFFICIAL 1 MALAYSIA ¶ 28 MALAYSIAN OFFICIAL 1 bank account (AmBank) MALAYSIA ¶¶ 94, 101-02 Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 11 of 31 Page ID #:1151 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE EVENT/PERSON/ENTITY LOCATION COMPL. Saudi Arabian Prince SAUDI ARABIA ¶ 99 Saudi Arabian Prince bank account (Riyad Bank) SAUDI ARABIA ¶ 100 Four of the five Out-of-State Assets that are the subject of this motion were allegedly acquired using funds traceable to the Good Star Phase: EMI Rights (CV 16- 5364), the Bombardier Jet (CV 16-5367), the Time Warner Penthouse and Storage (CV 16-5374), and the Greene Condominium (CV 16-5375). All of these Assets are located outside of California. The transfers leading to the acquisition of these Out- of-State Assets are described in further detail in Section II(B)(3) below. 2. The Tanore Phase During the “Tanore Phase,” 1MDB Global Investments Limited (a subsidiary of 1MDB) allegedly sent more than $1.26 billion, through a series of transactions, to two entities, Tanore Finance Corporate (“Tanore”) and Granton Property Holdings (“Granton”). (Compl. ¶ 243.) According to the Government, 1MDB Officials and MALAYSIAN OFFICIAL 1 represented to the public that the above funds were being sent to support a joint venture between 1MDB and Aabar Investments PJS (“Aabar”). (Compl. ¶¶ 231-32, 240.) To raise money for 1MDB’s contribution to the joint venture, 1MDB Global allegedly issued approximately $3 million in bonds through a private placement offering with the Singapore office of Goldman Sachs. (Compl. ¶ 237.) The Complaint claims the proceeds from the bond sale were supposed to be sent to an account belonging to the joint venture. (Compl. ¶¶ 232, 244.) Instead, more than $1.26 million of the funds were allegedly diverted to the Tanore and Granton bank accounts in Singapore. (Compl. ¶ 243.) The Tanore and Granton bank accounts were allegedly owned by Eric Tan, an associate of Jho Low, and had nothing to do with Aabar or the joint venture. (Compl. ¶ 10.) The following chart reflects how the proceeds from the 1MDB Global bond sale ended up in the Tanore and Granton bank accounts, as pled in the Complaint. / / / Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 12 of 31 Page ID #:1152 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE TANORE PHASE TRANSACTIONS DATE AMT FROM TO COMPL. 03/19/13 $2.7 billion Goldman Bond Proceeds (Bank of NY Mellon) UNKNOWN 1MDB Global (BSI Bank) SINGAPORE ¶ 244 03/21/13 – 03/27/13 $1.59 billion 1MDB Global (BSI Bank) SINGAPORE Overseas Investment Funds BRITISH VIRGIN ISLANDS, CURACAO ¶¶ 245-46 03/21/13 – 03/22/13 $835 million* Overseas Investment Funds BRITISH VIRGIN ISLANDS, CURACAO Tanore Account (Falcon Bank) SINGAPORE ¶¶ 11, 247 03/21/13 $430 million Overseas Investment Fund BRITISH VIRGIN ISLANDS Granton Account (Falcon Bank) SINGAPORE ¶¶ 245, 251 03/21/13 $430 million* Granton Account (Falcon Bank) SINGAPORE Tanore Account (Falcon Bank) SINGAPORE ¶ 252 03/25/13 $378 million Tanore Account (Falcon Bank) SINGAPORE Granton Account (Falcon Bank) SINGAPORE ¶ 253 * The sum of $835 million and $430 million make up the $1.26 billion alleged in the Complaint. The Complaint also alleges that in March of 2013, approximately $681 million was transferred from the Tanore account to the bank account of MALAYSIAN OFFICIAL 1. (Compl. ¶260.) MALAYSIAN OFFICIAL 1 is claimed to have later returned $620 million to the Tanore account in August of 2013. (Compl. ¶ 262.) As was the case with the Good Star Phase, none of the events described in the Tanore Phase is alleged to have occurred in this District, nor are any of the relevant people or entities alleged to be located in this District. The following chart summarizes the locations of the events, people, and entities involved in the Tanore Phase, as pled in the Complaint. TANORE PHASE LOCATIONS EVENT/PERSON/ENTITY LOCATION COMPL. 1MDB Global BRITISH VIRGIN ISLANDS ¶ 237 1MDB Global bank account (BSI Bank) SINGAPORE ¶ 244 Tanore bank account (Falcon Bank) SINGAPORE ¶ 241 Granton bank account (Falcon Bank) SINGAPORE ¶ 241 Eric Tan MALAYSIA ¶ 30 Goldman Sachs Singapore Office SINGAPORE ¶¶ 123, 237 Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 13 of 31 Page ID #:1153 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE EVENT/PERSON/ENTITY LOCATION COMPL. Goldman Bond Sale bank account (Bank of New York Mellon) UNKNOWN ¶ 244 Aabar Investments PJS (“Aabar”) ABU DHABI ¶ 10 Overseas Investment Funds BRITISH VIRGIN ISLANDS CURACAO ¶¶ 245-46 MALAYSIAN OFFICIAL 1 MALAYSIA ¶ 28 MALAYSIAN OFFICIAL 1 bank accounts (AmBank) MALAYSIA ¶¶ 94, 101- 02, 260-62 1MDB issues press release stating proceeds of the bond sale will go to the joint venture MALAYSIA ¶ 240 Malaysian Government writes Letter of Support for the bond sale MALAYSIA ¶ 238 Of the five Out-of-State Assets that are the subject of this motion, the Symphony Park Lane Assets (CV 16-5370) were allegedly acquired using funds traceable to the Tanore Phase. The transfers leading to the acquisition of the Out-of- State Assets are described in further detail in the next section. 3. The Purchase of the Out-of-State Assets Starting from page 82, the Complaint traces the money from the Good Star and Tanore Phases to the purchase of the Out-of-State Assets. The following charts summarize the locations of the transactions leading up to the purchase of each asset. None of the transactions is alleged to have occurred in this District, nor are any of the Out-of-State Assets below alleged to be located in this District. On occasion, the Complaint fails to allege the location of some of the bank accounts. For example, the Complaint alleges that certain funds flowed through the Shearman IOLA Account, an account held by Shearman & Sterling LLP,5 but does not specify where the account was located. For these accounts, the charts below list the location as “UNKNOWN.” EMI Assets (CV 16-5364) [Traced to GOODSTAR] Claimant for EMI Assets is JW Nile (BVI) Ltd., an entity located in the 5 The website for Shearman & Sterling LLP indicates it is a law firm with no office in this District. See http://www.shearman.com/en/offices (accessed May 13, 2017). Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 14 of 31 Page ID #:1154 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE British Virgin Islands. The Complaint alleges Low acquired an interest in the EMI Rights using money from the Good Star Phase, as reflected in the following chart. DATE AMT FROM TO COMPL. 06/08/12 $120 million Good Star (RBS Coutts) SWITZERLAND ADKMIC BSI (BSI Bank) SINGAPORE ¶¶ 378-79 06/11/12 $120 millions ADKMIC BSI (BSI Bank) SINGAPORE Low Hock Peng (BSI Bank) SINGAPORE ¶ 379 06/11/12 $118 million Low Hock Peng (BSI Bank) SINGAPORE Low Taek Jho (BSI Bank) SINGAPORE ¶ 379 06/11/12 $115 million Low Taek Jho (BSI Bank) SINGAPORE Jynnwel Account A (BSI Bank) SINGAPORE ¶ 379 06/11/12 $115 million Jynnwel Account A (BSI Bank) SINGAPORE Jynnwel Account B (BSI Bank) SINGAPORE ¶ 379 06/11/12 $110 million Jynnwel Account B (BSI Bank) SINGAPORE JW Nile Account aka LOW EMI Partner (CLAIMANT) (BSI Bank) SINGAPORE ¶ 379, 384 06/26/12 $107 million JW Nile Account aka LOW EMI Partner (CLAIMANT) (BSI Bank) SINGAPORE EMI Escrow Account (Bank of NY Mellon) UNITED STATES (UNKNOWN) ¶¶ 380, 382 Bombardier Jet (CV 16-5367) [Traced to GOODSTAR] Claimant for Bombardier Jet is Global One Aviation (Global 5000) Ltd., an entity located in the British Virgin Islands. The Complaint alleges Low acquired an interest in the jet using money from the Good Star Phase, as reflected in the following chart. DATE AMT FROM TO COMPL. 10/21/09 $148 million Good Star (RBS Coutts) SWITZERLAND Shearman IOLA Account UNKNOWN ¶¶ 338, 105 12/31/09 $7 million Shearman IOLA Account UNKNOWN Crowe Escrow Account (Bank of Oklahoma) OKLAHOMA ¶ 339 01/26/10 $117 million Good Star (RBS Coutts) SWITZERLAND Shearman IOLA Account UNKNOWN ¶ 338 03/26/10 $28 million Shearman IOLA Account UNKNOWN Crowe Aircraft Escrow Account (Bank of Oklahoma) OKLAHOMA ¶ 341 03/31/10 $35 million Crowe Aircraft Escrow Account (Bank of Oklahoma) OKLAHOMA J.T. Aviation Corp. (Citibank) UNKNOWN ¶¶ 333, 342 Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 15 of 31 Page ID #:1155 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE Symphony Park Lane Assets (CV 16-5370) [Traced to TANORE] Claimants for Symphony Park Lane Assets are 36 CPS Condos (NYC) LLC, 36 CPS Luxury Hotel (NYC) Limited, 36 CPS Parking (NYC) Limited, and 36 CPS Residential Sales (NYC) Limited, entities located in Delaware and the British Virgin Islands. The Complaint alleges Low acquired an interest in the Symphony Park Lane Assets using money from the Tanore Phase, as reflected in the following chart. DATE AMT FROM TO COMPL. 03/25/13 $378 million Tanore Account (Falcon Bank) SINGAPORE Granton Account (Falcon Bank) SINGAPORE ¶ 404 03/25/13 $378 million Granton Account (Falcon Bank) SINGAPORE Dragon Market (RBS Coutts) SWITZERLAND ¶ 405 11/05/13 $93 million Granton Account (Falcon Bank) SINGAPORE Dragon Market (RBS Coutts) SWITZERLAND ¶ 405 11/06/13 $47 million Granton Account (Falcon Bank) SINGAPORE Dragon Market (RBS Coutts) SWITZERLAND ¶ 405 04/25/13 $98 million Dragon Market (RBS Coutts) SWITZERLAND Dragon Dynasty (BSI Bank) SINGAPORE ¶ 406 07/05/13 $120 million Dragon Market (RBS Coutts) SWITZERLAND Dragon Dynasty (BSI Bank) SINGAPORE ¶ 406 09/10/13 $9.8 million Dragon Market (RBS Coutts) SWITZERLAND Dragon Dynasty (BSI Bank) SINGAPORE ¶ 406 11/08/13 $248.5 million Dragon Market (RBS Coutts) SWITZERLAND Dragon Dynasty (BSI Bank) SINGAPORE ¶ 406 11/12/13 $248.5 million Dragon Dynasty (BSI Bank) SINGAPORE Low Hock Peng (BSI Bank) SINGAPORE ¶ 408 11/12/13 $235.5 million Low Hock Peng (BSI Bank) SINGAPORE Low Taek Jho (BSI Bank) SINGAPORE ¶ 408 11/12/13 $12.5 million Low Hock Peng (BSI Bank) SINGAPORE Low Taek Szen (BSI Bank) SINGAPORE ¶ 409 11/12/13 $206 million Low Taek Jho (BSI Bank) SINGAPORE DLA Piper IOLA (Citibank) NEW YORK ¶ 410 11/12/13 $12.2 million Low Taek Szen (BSI Bank) SINGAPORE DLA Piper IOLA (Citibank) NEW YORK ¶ 411 11/23/13 $202 million DLA Piper IOLA (Citibank) NEW YORK Commonwealth Title Ins. (JP Morgan) UNKNOWN ¶ 422 Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 16 of 31 Page ID #:1156 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE Time Warner Penthouse and Storage (CV 16-5374) [Traced to GOODSTAR] Claimant for the Time Warner Penthouse and Storage Unit is 80 Columbus Circle (NYC) LLC, an entity located in Delaware. The Complaint alleges Low acquired an interest in the Time Warner assets using money from the Good Star Phase, as reflected in the following chart. DATE AMT FROM TO COMPL. 06/28/11 $55 million Good Star (RBS Coutts) SWITZERLAND ADKMIC BSI (BSI Bank) SINGAPORE ¶¶ 109, 346 06/28/11 $54.8 million ADKMIC BSI (BSI Bank) SINGAPORE Low Hock Peng (BSI Bank) SINGAPORE ¶ 346 06/28/11 $30 million Low Hock Peng (BSI Bank) SINGAPORE Selune Ltd. (Rothschild Bank AG) SWITZERLAND ¶ 346 Unknown $27 million Selune Ltd. (Rothschild Bank AG) SWITZERLAND 1/80 Columbus (Rothschild Bank AG) SWITZERLAND ¶ 347 07/05/11 $27 million 1/80 Columbus (Rothschild Bank AG) SWITZERLAND Shearman IOLA Account UNKNOWN ¶ 347 07/05/11 $27 million Shearman IOLA Account UNKNOWN Checks written to: Prudential Douglass Elliman NY State Sales Tax Former owner of asset (JP Morgan Chase) Chicago Title Insurance Company UNKNOWN ¶ 348 CV 16-5375 - Greene Condominium [TRACED TO GOODSTAR] Claimant for the Greene Condominium is 118 Greene Street (NYC) LLC, an entity located in New York. The Complaint alleges Low acquired an interest in the Greene Condominium using money from the Good Star Phase, as reflected in the following chart. DATE AMT FROM TO COMPL. 11/02/12 $153 million Good Star – RBS Coutts SWITZERLAND ADKMIC BSI (BSI Bank) SINGAPORE ¶ 360 11/05/12 $153 million ADKMIC BSI (BSI Bank) SINGAPORE Low Hock Peng (BSI Bank) SINGAPORE ¶ 360 11/07/12 $150 million Low Hock Peng (BSI Bank) SINGAPORE Low Taek Jho (BSI Bank) SINGAPORE ¶ 360 Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 17 of 31 Page ID #:1157 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE DATE AMT FROM TO COMPL. 02/05/14 $13.8 million Low Taek Jho (BSI Bank) SINGAPORE DLA Piper (Citibank) UNKNOWN ¶ 361 02/12/14 $13.7 millions DLA Piper (Citibank) UNKNOWN Chicago Title Insurance Company UNKNOWN ¶ 361 4. The Claims for Forfeiture Based on the above allegations, the Government seeks forfeiture against the Out-of-State Assets under four claims for relief:  First Claim (Assets traceable to SUAs – Compl. ¶¶ 502-04) The Complaint alleges the Out-of-State Assets are forfeitable because they constitute and are derived from proceeds traceable to the following specified unlawful activities (“SUAs”) – as defined in 18 U.S.C. § 1956(c)(7) – or a conspiracy to commit such SUAs: (1) a foreign offense involving the misappropriation of public funds by or for the benefit of a public official (18 U.S.C. § 1956(c)(7)(B)(iv)) (2) fraud by or against a foreign bank (18 U.S.C. § 1956(c)(7)(B)(iii)) (3) wire fraud (18 U.S.C. § 1343) (4) international transportation/receipt of stolen property (18 U.S.C. § 2314) and receipt of stolen money (18 U.S.C. § 2315).  Second Claim (Assets traceable to § 1957 transaction – Compl. ¶¶ 505-07) The Complaint alleges the Out-of-State Assets are forfeitable because they were involved in or are traceable to a violation of (or a conspiracy to violate) 18 U.S.C. § 1957, which prohibits knowingly conducting a financial transaction with proceeds of the above SUAs in an amount greater than $10,000.  Third Claim (Assets traceable to § 1956 transaction – Compl. ¶¶ 508-10) The Complaint alleges the Out-of-State Assets are forfeitable because they were involved in or are traceable to a violation of (or a conspiracy to violate) 18 U.S.C. § 1956(a)(1)(B)(i), which prohibits conducting a transaction with Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 18 of 31 Page ID #:1158 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE proceeds of the above SUAs with the intent to conceal the criminal nature of the proceeds.  Fourth Claim (Assets traceable to § 1956 transaction – Compl. ¶¶ 511-13) The Complaint alleges the Out-of-State Assets are forfeitable because they were involved in or are traceable to a violation of (or a conspiracy to violate) 18 U.S.C. § 1956(a)(2)(B), which prohibits transporting proceeds of the above SUAs from overseas into the United States with the intent to conceal the criminal nature of the proceeds. For the Out-of-State Assets that are the subject of this motion, none of the SUAs or the subsequent acts of laundering the proceeds are alleged to have occurred in this District. III. LEGAL STANDARD This in rem civil forfeiture action is governed by the Supplemental Rules. See Fed. R. Civ. P. Supp. R. (“Supp. R.”) A(1)(B). A civil forfeiture complaint must state the grounds for in rem jurisdiction and for venue, Supp. R. G(2)(b), and “state sufficiently detailed facts to support a reasonable belief that the government will be able to meet its burden of proof at trial,” Supp. R. G(2)(f). The Supplemental Rules thus impose a particularity requirement on civil in rem complaints, in addition to the requirements under the Federal Rules of Civil Procedure. United States v. Eleven (11) New Util. Vehicles, 2014 WL 4385734, at *1 (D.P.R. Sept. 4, 2014). Supplemental Rule G(8)(b)(i) allows a claimant to move to dismiss a civil forfeiture complaint under Rule 12(b). Here, Claimant moves to dismiss under Rule 12(b)(2) and 12(b)(3) because the Complaint fails to set forth a viable basis for in rem jurisdiction or venue in this District over the Out-of-State Assets. In an in rem forfeiture action, 28 U.S.C § 1355 establishes the statutory requirements for both jurisdiction and venue. See United States v. Approximately $1.67 Million, 513 F.3d 991, 998 (9th Cir. 2008) (section 1355 provides for jurisdiction in forfeiture cases). Contents of Account No. 03001288 v. United States, 344 F.3d 399, 403 (3d Cir. 2003) Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 19 of 31 Page ID #:1159 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE (“Though the District Court concluded that § 1355(b) merely provides for venue, we find that it also grants district courts jurisdiction over the property at issue in forfeiture actions based on the plain language of the statute.”). The Government, as plaintiff, bears the burden of establishing proper venue and jurisdiction. See, e.g., Menken v. Emm, 503 F.3d 1050, 1056 (9th Cir. 2007); Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 496 (9th Cir. 1979). In deciding a motion to dismiss for lack of jurisdiction or improper venue, the Court must accept the Complaint’s well- pled factual allegations as true. See Allstar Mktg. Grp., LLC v. Your Store Online, LLC, 666 F. Supp. 2d 1109, 1129 (C.D. Cal. 2009) (collecting cases); United States v. $198,573.85 in U.S. Currency, No. 5:13-CV-1180, 2014 WL 859137, at *2 (N.D.N.Y. Mar. 5, 2014). The Government bears the burden of alleging sufficient jurisdictional facts to make a prima facie showing that “must be more than bare allegations of jurisdiction; plaintiff must establish the existence of the requisite jurisdictional facts.” See United States v. 3 Parcels in La Plata County, Colo., 919 F. Supp. 1449, 1452 (D. Nev. 1995). IV. ARGUMENT The actions against the Out-of-State Assets should be dismissed for lack of jurisdiction and improper venue. Under § 1355, jurisdiction and venue in a civil asset forfeiture action are proper (i) in any district where the property to be forfeited is located (28 U.S.C. § 1355(b)(1)(B); 28 U.S.C. § 1395(b)); or (ii) in “the district court for the district in which any of the acts or omissions giving rise to the forfeiture occurred” (28 U.S.C. § 1355(b)(1)(A)). The Government cannot establish statutory jurisdiction or venue over the Out-of-State Assets under either theory. Even if the Government could satisfy the statute, exercising jurisdiction over the Out-of-State Assets in this District would not comport with the Due Process clause of the Fifth Amendment. Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 20 of 31 Page ID #:1160 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE A. Jurisdiction and Venue Do Not Exist under § 1355(b)(1)(B) Because the Out-of-State Assets Are Not Located in This District A civil asset forfeiture proceeding can be prosecuted in any district where the property subject to forfeiture “is found” or “into which the property is brought.” 28 U.S.C. § 1395; see also 28 U.S.C. § 1355. It is undisputed that the Out-of-State Assets are not located in California. Accordingly, the Government cannot establish jurisdiction or venue under § 1355(b)(1)(B). B. Jurisdiction and Venue Do Not Exist under § 1355(b)(1)(A) Because No Acts or Omissions “Giving Rise” to Forfeiture of Out-of-State Assets Occurred in This District District courts “asserting jurisdiction on the basis of § 1355(b)” are instructed to “make clear findings of acts or omissions occurring in the district upon which the court bases its jurisdiction.” Approximately $1.67 Million, 513 F.3d at 998 n.4. The Supplemental Rules further “require that the Government describe with reasonable particularity . . . the circumstances from which the claim arises, such that the claimant is able to investigate and challenge the forfeiture without requiring additional information about the property or the alleged wrongdoing.” United States v. Funds Representing Proceeds of Drug Trafficking of $75,868.62, 52 F. Supp.2d 1160, 1163 (C.D. Cal. 1999) (citations and quotes omitted) (emphasis added). Under the plain language of § 1355(b)(1)(A), jurisdiction and venue lie only if there is a direct causal nexus between the conduct – that is, an act or omission – “giving rise” to the civil forfeiture and the district in which the case is brought. See, e.g., United States v. $50,900, No. CV 15-14125, 2016 WL 4257328, at *2 (D. Mass. Aug. 11, 2016) (“At a minimum, the government must plausibly allege some connection between the forum district and the res that is the subject of the forfeiture action.”); United States v. Account of Prop. Futures, Inc., No. CV 08-81244, 2010 WL 11447277, at *5 (S.D. Fla. Feb. 18, 2010) (finding court had jurisdiction “[e]ven though the property at issue is in Pennsylvania, [because] Mr. Horton, ADT’s representative engaged in Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 21 of 31 Page ID #:1161 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 16 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE proscribed acts directly related to said property within the Southern District of Florida” (emphasis added)); United States v. One Oil Painting Entitled Femme en Blanc, 362 F.Supp.2d 1175, 1185 (C.D.Cal. 2005) (“Because the painting was transported from this district to Illinois, and this transportation in interstate commerce is the basis for the forfeiture action, at least one of the acts or omissions giving rise to the action occurred in this district”). In the context of forfeiture cases, courts have recognized that the acts or omissions “giving rise” to the forfeiture are the acts or omissions constituting the predicate criminal offenses. See, e.g., United States v. One 2006 Lamborghini Murcielago, No. SACV 13-0907-DOC, 2015 WL 3752338, at *6 (C.D. Cal. June 16, 2015) (finding the predicate offense of an unlawful structured transaction as the event “giving rise to” the forfeiture) aff’d 2017 WL 663488 (9th Cir. Feb. 16, 2017); United States v. Kennedy, 201 F.3d 1324, 1331 (11th Cir. 2000) (finding predicate offense of mail fraud was the act giving rise to the forfeiture); Approximately $1.67 Million, 513 F.3d at 998 (finding allegations that the claimant attended meetings, stored cash and narcotics, and mailed a false identification in the Northern District of California in furtherance of a narcotics smuggling scheme constituted “acts” giving rise to forfeiture in the district); see also All for Multilingual Multicultural Educ. v. Garcia, No. CV 11-0215 PJH, 2011 WL 2532478, at *7 (N.D. Cal. June 24, 2011) (explaining that the “alleged wrongful acts” are the acts or omissions giving rise to a claim). Here, the Complaint contains no allegation that the acts or omissions giving rise to the forfeiture of any of the five Out-of-State Assets occurred in this District. As a preliminary matter, the Government’s statement of venue contains only the following conclusory allegation: Venue lies in this district pursuant to 28 U.S.C. §§ 1355(b)(1)(A) and 1355(b)(2) because acts and omissions giving rise to the forfeiture took Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 22 of 31 Page ID #:1162 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE place in the Central District of California . . . .6 (Compl. ¶ 16.) This “bare allegation[ ] of jurisdiction” does not establish the “existence of the requisite jurisdictional facts.” 3 Parcels, 919 F. Supp. at 1452. Nor does it describe “with reasonable particularity . . . the circumstances from which the claim arises” so that the Court can determine whether jurisdiction is proper. See Proceeds of Drug Trafficking of $75,868.62, 52 F.Supp.2d 1160, 1163. The Complaint’s remaining allegations do not cure this defect because not one alleges that any of the relevant acts or omissions occurred in this District. The Government claims the Out-of-State Assets are forfeitable because they are traceable to the proceeds of an SUA (First Claim) or a subsequent money laundering transaction in violation of 18 U.S.C. §§ 1956-57 (Second, Third, and Fourth Claims). Thus, the Government could establish jurisdiction in this District if (i) any of the SUAs giving rise to the forfeiture occurred in this District, or (ii) the subsequent laundering of the proceeds from those SUAs occurred in this District. The Complaint fails to plead either. 1. None Of the Alleged SUAs Occurred in This District The Complaint alleges the Out-of-State Assets are traceable to proceeds from four SUAs: (1) misappropriation of funds by a foreign official, (2) foreign bank fraud, (3) wire fraud, and (4) transportation of stolen property. None of the acts or omissions constituting these SUAs occurred in this District. The first SUA – misappropriation by a foreign official – is foreign, both by definition and according to the allegations in the Complaint. The misappropriation by a foreign official refers to the diversion of 1MDB funds to MALAYSIAN OFFICIAL 1. As the charts on pages 4-8 of this motion (“Mot.”) illustrate, none of 6 Section 1355(b)(2), referenced by the Government, clarifies that § 1355(b)(1) also establishes jurisdiction for forfeiture proceedings against assets located in a foreign country. Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 23 of 31 Page ID #:1163 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE the people or entities involved were located in the United States, nor did any of the relevant transactions occur in the United States.7 For example, the Complaint alleges that funds from both the Good Star and Tanore phases were sent to MALAYSIAN OFFICIAL 1 for payment. But all of the acts and omissions related to the Good Star Phase occurred in Malaysia, Saudi Arabia, Seychelles, Singapore, and Switzerland. (Mot. at 4-6.) And all of the acts and omissions related to the Tanore Phase occurred in Abu Dhabi, British Virgin Islands, Curacao, Malaysia, and Singapore. (Mot. at 7- 8.) MALAYSIAN OFFICIAL 1 is not alleged to have had any contact with this District. The bank accounts in which he allegedly received money were located in Singapore. (Compl. ¶¶ 94, 101, 260-62.) The second SUA – foreign bank fraud – refers to misrepresentations that resulted in the fraudulent transfer of 1MDB funds by foreign banks. Again, none of the acts or omissions occurred in this country. For example, Good Star was formed in Seychelles, and the 1MBD-PetroSaudi joint venture was formed in Malaysia. (Compl. ¶¶ 44 n.6, 47–58.) The alleged misrepresentations involved communications between foreign parties and took place on foreign soil. (Mot. at 4-6). For instance, the Government alleges that misstatements were made to the 1MDB Board at board meetings held in Malaysia, or were communicated between 1MDB officials and representatives of Deutsche Bank (Malaysia) Berhad, the Malaysian branch of a German bank, or Bank Negara in Malaysia. (Compl. ¶¶ 41, 43, 60, 65.) Likewise, 7 On occasion, the Complaint notes that transfers between the foreign banks were routed through a U.S. correspondent bank account at J.P. Morgan. (See, e.g., Compl. ¶ 79.) Although the Complaint does not specify the location of the J.P. Morgan account, it is immaterial because that alone is insufficient to create a connection to the United States. See United States v. Prevezon Holdings, LTD., 122 F. Supp. 3d 57, 71 (S.D.N.Y. 2015) (“In an otherwise wholly foreign wire fraud scheme, the only domestic contact is a single wire transfer directed from [one offshore bank account to another], with the transfer routed through New York . . . . [T]he court cannot conclude that this single transfer is sufficient to overcome the presumption against” extraterritoriality). Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 24 of 31 Page ID #:1164 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 19 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE the alleged concealment of the misappropriated funds all occurred overseas (Compl. ¶¶ 81–90.) As to the last two SUAs – wire fraud and transportation of stolen property – although the Complaint contains allegations that certain acts or omissions occurred in the United States, not one is alleged to have occurred in this District. Wire fraud occurs upon the use of a United States wire in furtherance of a scheme or artifice to defraud with the specific intent to defraud. See United States v. Jinian, 725 F.3d 954, 960 (9th Cir. 2013). And transportation of stolen property and receipt of stolen money under §§ 2314 and 2315 occur when stolen property or money is transferred between states, i.e., in interstate commerce, or between a foreign country and any state, i.e., in foreign commerce. Here, no wire fraud transactions or transportation of stolen property took place in California. Rather, as illustrated in the charts on pages 4-12 of this motion, all of the transactions related to the Out-of-State Assets are alleged to have occurred overseas or in unspecified locations in the United States. (Compl. ¶ 42 (alleging that “$700 million [was] sent to an account at RBS Coutts Bank in Zurich”); ¶ 94 (each of the four wire transfers totaling $330 million “was a foreign exchange transaction completed through financial institutions in Malaysia”); ¶ 99 ($24,500,000 was transferred to an account at Riyad Bank, in Saudi Arabia); ¶ 104 (eleven wire transfers totaling $368 million were sent from the Good Star Account to an account held by Shearman & Sterling LLP (location unknown)); ¶ 109 (five wire transfers totaling $389 million was transferred from the Good Star Account to an account at BSI Bank in Singapore).) Accordingly, the alleged SUAs cannot form the basis for in rem jurisdiction over the Out-of-State Assets in this District. 2. None Of the Alleged Subsequent Money Laundering Transactions Occurred in this District The Complaint similarly fails to allege that any subsequent laundering of proceeds from the SUAs occurred in this District. The proceeds from the SUAs were allegedly laundered, in part, through the purchase of the Out-of-State Assets in the Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 25 of 31 Page ID #:1165 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 20 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE United States. But as demonstrated in pages 8-12 of this motion, none of the transactions leading up to the purchase of the Out-of-State Assets occurred in this District. Instead, the transactions are alleged to have flowed through Switzerland, Singapore, New York, Oklahoma, and other unspecified locations in the United States. (Mot. 8-12.) Finally, none of the parties involved in the purchase of the Out- of-State Assets are alleged to be located in this District. In sum, none of the acts or omissions constituting the SUAs or the subsequent money laundering of the SUA proceeds occurred in this District. Accordingly, there is no jurisdiction over the Out-of-State Assets. For the same reasons, venue in this District is also improper. See $50,900, 2016 WL 4257328, at *3 (finding venue improper where “there are no . . . facts alleged connecting any acts or omissions of claimants to this district”). C. A Conspiracy Label Does Not Establish The Requisite Nexus Between the Out-of-State Assets And This District The Government has suggested that it can cure these jurisdictional defects by attaching a “conspiracy” label to the Complaint’s allegations. The mere reference to an ill-defined “conspiracy” to commit the alleged SUAs or acts of money laundering, however, is not enough to establish the requisite connection between these Out-of-State Assets and the assets located in this District. First, the plain language of §1355(b)(1)(A) does not provide any explicit or implicit conspiracy exception. Instead, it requires identification of an act or omission in this District giving rise to the forfeiture. This phrasing requires a close and direct causal connection between the particular act or omission in this District (here, the alleged “conspiracy”) and the forfeiture of the specific Out-of-State Asset. See, e.g., Jenkins Brick Co. v. Bremer, 321 F.3d 1366, 1371 (11th Cir. 2003) (holding with regard to 28 U.S.C. § 1391(b)(2), which provides for venue where “events or omissions giving rise to the claim occurred,” that “[o]nly the events that directly give rise to a claim are relevant”); James River Ins. Co. v. Kemper Cas. Ins. Co., Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 26 of 31 Page ID #:1166 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 21 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE 585 F.3d 382, 386 (7th Cir. 2009) (Posner, J.) (explaining that “‘arising from’ implies a tighter connection than a mere ‘but for’ cause”). But the Government has failed to identify any causal link at all between the purported acts in furtherance of the alleged conspiracy and the Out-of-State Assets. Nor does the clumping of all sixteen assets – including assets that are completely distinct from the Out-of-State Assets – in one complaint create a nexus between the Out-of-State Assets and this District. The Government seems to take the position that a mere connection between this District and some of the assets named in the Complaint is sufficient to establish jurisdiction for all of the sixteen assets, including the Out-of-State Assets. This position has been soundly rejected. See, e.g., United States v. Funds Held in the Name or for the Benefit of Wetterer, 210 F.3d 96, 104-05 (2d Cir. 2000) (rejecting Government’s argument that independent assets “form a single ball of wax” for purposes of forfeiture, and instead evaluating separately each asset for jurisdiction and venue); United States v. 51 Pieces of Real Prop. Roswell, N.M., 17 F.3d 1306, 1310 (10th Cir. 1994) (“Even if a district is the proper venue for a civil forfeiture action, the court cannot proceed unless it has jurisdiction over the defendant property.”). The Government’s reliance on “conspiracy” as the basis for jurisdiction and venue is further problematic where, as here, the allegations in the Complaint fail to clearly delineate what the conspiracy is. The Government is required to make a prima facie case of conspiracy going well beyond the bare, conclusory allegations of conspiracy set forth in the Complaint. See, e.g., First Chicago Int’l v. United Exch. Co, 836 F.2d 1375, 1377-78 (D.C. Cir. 1988) (rejecting claim for jurisdiction based on conspiracy where plaintiff made conclusory allegations of conspiracy and there was “no concrete evidence in the record indicating that there was a common plan”). The Government’s entire 136-page Complaint contains only two factual allegations concerning a purported “conspiracy”: (1) that this is a civil action in rem to forfeit assets “traceable to an international conspiracy to launder money misappropriated” Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 27 of 31 Page ID #:1167 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 22 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE from 1MDB; and (2) that “multiple individuals, including public officials and their associates, conspired to fraudulently divert billions of dollars from 1MDB through various means.” (Compl. ¶¶ 5, 6.) The Government fails to identify with any clarity the members of the conspiracy, the overt acts taken in furtherance of the conspiracy, or the locations of the acts and omissions constituting the conspiracy. Instead, the Government merely repeats the phrase “conspiracy to commit such offenses” when alleging each of its “claims for relief” without alleging any more specific facts that supposedly constitute that alleged conspiracy. (Compl. ¶¶ 503, 506, 509, 512.) These vague, generalized, and conclusory statements fall far short of allegations made “with reasonable particularity” that establish a prima facie case of conspiracy. See, e.g.; United States v. $50,040 in U.S. Currency, No. C 06-04552 WHA, 2007 WL 1176631, at *3 (N.D. Cal. Apr. 20, 2007); First Chicago, 836 F.2d at 1377-78. The Complaint makes it impossible for the Court to determine the locations of the acts or omissions constituting the alleged conspiracy for the purpose of assessing jurisdiction or venue. In short, having failed to allege that a single wrongful act giving rise to forfeiture of the Out-of-State Assets occurred in the Central District, the Government has also failed to allege the existence of any “conspiracy” that could potentially subject the Out-of-State Assets to jurisdiction or venue in this District. It cannot overcome this deficiency by simply repeating the boilerplate label of “conspiracy” and claiming that this label brings assets with no connection to this District within this Court’s in rem jurisdiction. D. The Exercise of Jurisdiction Over the Out-of-State Assets Would Violate Due Process Even if the Court were to conclude that statutory in rem jurisdiction and venue lie under 28 U.S.C. § 1355, jurisdiction would still be barred by the Due Process Clause of the Fifth Amendment. “While Congress has substantial power to set the jurisdiction of the federal courts, the Due Process Clause limits that power.” United Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 28 of 31 Page ID #:1168 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 23 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE States v. Batato, 833 F.3d 413, 423 (4th Cir. 2016). In this case, the Government contends that it can, through the simple expedient of a conspiracy allegation, cause a court to exercise jurisdiction over property located anywhere in the world even though neither the property nor the owner of the property has any direct connection to this District. Such potentially unbounded authority offends traditional notions of fair play and substantial justice and cannot withstand scrutiny under the Fifth Amendment. “[I]n order to justify exercising jurisdiction in rem, the basis for jurisdiction must be sufficient to justify an exercise of jurisdiction over the interests of persons in a thing.” Shaffer v. Heitner, 433 U.S. 186, 207 (1977); see also Int’l Shoe Co. v. State of Wash., Office of Unemployment Comp. & Placement, 326 U.S. 310, 315 (1945).”8 . Accordingly, “[t]he standard for determining whether an exercise of jurisdiction over the interest of persons is consistent with the Due Process Clause is the minimum- contacts standard elucidated in International Shoe.” Id. Here, the Government has not established minimum contacts over the property owner, and therefore a finding of jurisdiction would be unconstitutional. Under International Shoe, a court may not exercise jurisdiction over a nonresident defendant unless the defendant has certain minimum contacts with the state, “such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Newhard Cook & Co. v. Inspired Life Ctrs., Inc., 895 F.2d 1226, 1228 (8th Cir. 1990). The application of the “fair play and substantial justice” test to in rem jurisdiction is “premised on recognition that the phrase, ‘judicial 8 Traditionally, in rem jurisdiction could only be asserted if the res was located in the state or if it had been removed by accident or fraud. United States v. Ten Thousand Dollars ($10,000.00) in U.S. Currency, 860 F.2d 1511, 1513 (9th Cir. 1988). The Ninth Circuit has declined to decide whether such jurisdiction can be expanded by the minimum contacts test of International Shoe. Id.; accord Batato, 833 F.3d at 423-24. Claimant here asserts that the exercise of in rem jurisdiction on the facts here violates Due Process, regardless of whether the International Shoe test applies. Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 29 of 31 Page ID #:1169 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 24 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE jurisdiction over a thing,’ is a customary elliptical way of referring to jurisdiction over the interests of persons in a thing.” Shaffer, 433 U.S. 186, 207 (1977); Batato, 833 F.3d at 423. In evaluating the sufficiency of the nonresident defendant’s contacts with the forum state, the court focuses on the relationship between the defendant, the forum, and the pending action. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984). In forfeiture cases, courts have looked to the following factors to determine whether the exercise of in rem jurisdiction would violate Due Process: “(1) the extent to which the defendant has purposefully availed itself of the privilege of conducting activities in the state; (2) whether the plaintiff’s claims arise out of those activities directed at the state; and (3) whether the exercise of personal jurisdiction would be constitutionally ‘reasonable.’” Batato, 833 F.3d at 424. Neither the Out-of-State Assets nor Claimants are residents of California, and neither have any substantial link to California. The Complaint does not allege any contacts between the res and California. There has been no showing that Claimants (the direct interest-holders of the res) have engaged in any contact with the forum state. Likewise, the Complaint fails to allege that Claimants engaged in any conduct in this forum or purposefully availed themselves of any of the privileges of this forum state. None of the claims for forfeiture arises out of or results from the forum-related activities of the Out-of-State Assets or the Claimants. Instead, as discussed above, all of the claims for forfeiture of these Out-of-State Assets arise from conduct that occurred outside of this District. An exercise of jurisdiction by this Court over the Out-of-State Assets would thus contravene traditional notions of fair play and substantial justice under the Due Process Clause. Absent any tangible connection to California, these cases must be dismissed. / / / / / / / / / / / / Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 30 of 31 Page ID #:1170 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 25 MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE V. CONCLUSION For the foregoing reasons, the Complaint should be dismissed with prejudice. DATED: May 15, 2017 Respectfully submitted, Ekwan E. Rhow Jeremy D. Matz Naeun Rim Patricia H. Jun Bird, Marella, Boxer, Wolpert, Nessim, Drooks, Lincenberg & Rhow, P.C. By: /s/ Naeun Rim Naeun Rim Attorneys for Claimant 118 Greene Street (NYC) LLC Case 2:16-cv-05375-DSF-PLA Document 96 Filed 05/15/17 Page 31 of 31 Page ID #:1171