United States of America v. Ten Parcels of Real Property (Vacant Lots) Located in San Bernardino County, CaliforniaNOTICE OF MOTION AND MOTION for Summary Judgment as to 10 Parcels of Real Property in San Bernardino County NOTICE FOR SUMMARY JUDGMENTC.D. Cal.December 16, 2016 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 EILEEN M. DECKER United States Attorney LAWRENCE S. MIDDLETON Assistant United States Attorney Chief, Criminal Division STEVEN R. WELK Assistant United States Attorney Chief, Asset Forfeiture Section FRANK D. KORTUM (Cal. Bar No. 110984) Assistant United States Attorney 1400 United States Courthouse 312 North Spring Street Los Angeles, California 90012 Telephone: (213) 894-5710 Facsimile: (213) 894-7177 E-mail: Frank.Kortum@usdoj.gov Attorneys for Plaintiff UNITED STATES OF AMERICA UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION UNITED STATES OF AMERICA, Plaintiff, v. TEN PARCELS OF REAL PROPERTY (VACANT LOTS) LOCATED IN SAN BERNARDINO, CALIFORNIA, Defendant. No. CV 07-00397-AG(ANx) NOTICE OF MOTION AND MOTION FOR SUMMARY JUDGMENT; MEMORANDUM OF POINTS AND AUTHORITIES; DECLARATION OF FRANK D. KORTUM DATE: January 23, 2017 TIME: 10:00 a.m. COURTROOM: 10D Ex Parte Application to Continue Pretrial Conference and Trial Dates Filed Concurrently Herewith [Proposed] Statement of Uncontroverted Facts and Conclusions of Law Lodged Concurrently Herewith Rand Notice to Claimant Thomas Filed Concurrently Herewith1 AHMAD KIKALAYE AND KEITH THOMAS, Claimants. 1 See Rand v. Rowland, 154 F.3d 952, 957 (9th Cir. 1998). (Claimant Kikalaye has also been served with a copy of the Rand Notice.) Case 8:07-cv-00397-AG-AN Document 96 Filed 12/16/16 Page 1 of 20 Page ID #:600 2 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 TO ALL PARTIES AND THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE that on January 23, 2017, the United States of America (the “government”) will and does renew its motion for Summary Judgment. The motion will be heard at 10:00 a.m. in Courtroom 10D of the United States Courthouse, 411 West Fourth Street in Santa Ana, California, before the Hon. Andrew J. Guilford, United States District Judge. The government, by and through its undersigned counsel, respectfully moves this Court to grant summary judgment in its favor pursuant to Rule 56 of the Federal Rules of Civil Procedure on the ground that the undisputed facts establish as a matter of law that the property is the proceeds of a fraud scheme and is therefore subject to forfeiture pursuant to 18 U.S.C. § 981(a)(1)(C). This motion is based on the attached Memorandum of Points and Authorities, the Verified Complaint on file in this case, the Proposed Statement of Uncontroverted Facts and Conclusions of Law lodged concurrently herewith, and upon such other and further arguments, documents and grounds as the Court may wish to consider at the hearing on this motion. The government filed an earlier version of this motion on September 1, 2016. Dkt. 87. The government’s renewed motion addresses issues raised by the Court at the hearing on October 3, 2016. “[Local Rule 7-3’s] meet and confer requirement . . . does not apply when one of the parties in question is proceeding pro se.” Johnson v. Winn Properties, No. EDCV 08-00091 SGL (OPx), 2009 WL Case 8:07-cv-00397-AG-AN Document 96 Filed 12/16/16 Page 2 of 20 Page ID #:601 3 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 223836 at *2 (C.D. Cal. Jan. 28, 2009)(emphasis omitted).2 The government nevertheless attempted to contact claimants in writing before filing its renewed motion. Specifically, as set forth more fully in the government’s ex parte application, filed concurrently herewith, to continue the pretrial conference and trial dates, claimant Kikalaye received the government’s written request for a pre-motion meeting, but did not respond to it. After receiving a communication received from Claimant Thomas in response to the pre- motion meeting request, the undersigned counsel (A) advised Thomas that because he was incarcerated it would not be possible to meet /// /// /// /// 2 Local Rule 7-3 requires counsel contemplating the filing of a motion to meet with “opposing counsel,” which by definition excludes parties not represented by counsel. Case 8:07-cv-00397-AG-AN Document 96 Filed 12/16/16 Page 3 of 20 Page ID #:602 4 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 with either in person or telephonically; and (B) suggested that he submit a written statement describing the basis for his claim. Nothing further has been heard from claimant Thomas.3 Dated: December 16, 2016 Respectfully submitted, EILEEN M. DECKER United States Attorney LAWRENCE S. MIDDLETON Assistant United States Attorney Chief, Criminal Division Assistant United States Attorney STEVEN R. WELK Assistant United States Attorney Chief, Asset Forfeiture Section /s/ FRANK D. KORTUM Assistant United States Attorney Asset Forfeiture Section Attorneys for Plaintiff United States of America 3 The government takes this opportunity to point out that in order to contact claimants for the purpose of conducting a pre-motion meeting, the government made both certified and first class mailings to several possible addresses where there was reason to believe that the claimants might receive mail. Such multiple mailings are inherently wasteful and could have been avoided had claimants complied with their obligation to provide the Court with current contact information. “A party proceeding pro se shall keep the Court and opposing parties apprised of such party’s current [contact information].” C.D. Cal.R. 41-6. The government reserves the right to request that claimants be ordered to show cause why the Court should not strike their claims for failure to comply with Rule 41-6. See generally Thompson v. Housing Authority, 782 F.2d 829, 831 (9th Cir. 1986)(dismissal is an appropriate sanction for “failure to comply with pretrial procedures mandated by local rules and court orders.”); Burtscher v. Moore, No. CV 11-02309 DMG (JEMx), 2013 WL 11316941 at *3 (C.D. Cal. Feb. 7, 2013)(pro se defendant who failed to provide the court with current contact information violated Rule 41-6). Case 8:07-cv-00397-AG-AN Document 96 Filed 12/16/16 Page 4 of 20 Page ID #:603 i 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 TABLE OF CONTENTS PAGES TABLE OF AUTHORITIES ............................................. ii MEMORANDUM OF POINTS AND AUTHORITIES .............................. 5 I. STATEMENT OF FACTS ........................ .................. 5 II. ARGUMENT .....................................................11 A. The Summary Judgment Standard ...........................11 B. The Burden of Proof .....................................13 C. This Court Should Order the Forfeiture of the Defendant Properties...............................................13 III. CONCLUSION ...................................................17 Case 8:07-cv-00397-AG-AN Document 96 Filed 12/16/16 Page 5 of 20 Page ID #:604 ii 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 TABLES OF AUTHORITIES CASES PAGE Atlas Copco AB v. Atlascopcoiran.com, 533 F.Supp.2d 610 (E.D. Va. 2008).............................12 Burtscher v. Moore, No. CV 11-02309 DMG (JEMx), 2013 WL 11316941 (C.D. Cal. Feb. 7, 2013)..................................................4 Celotex Corp. v. Catrett, 477 U.S. 317 (1986)...........................................11 Echo Drain v. Newsted, 307 F.Supp.2d 1116 (C.D. Cal. 2003)...........................12 F.T.C. v. Medicor, LLC, 217 F.Supp.2d 1048 (C.D. Cal. 2002).........................7,12 In re Homestore.com, Inc. Sec. Litig., 347 F.Supp.2d 769 (C.D. Cal. 2004)............................12 In re Rail Freight Fuel Surcharge Antitrust Litig., 281 F.R.D. 1 (D. D.C. 2011)...................................12 Johnson v. Winn Properties, No. EDCV 08-00091 SGL (OPx), 2009 WL 223836 (C.D. Cal. Jan. 28, 2009)......................................................2 LSR Consulting, LLC v. Wells Fargo Bank, N.A., 835 F.3d 530 (5th Cir. 2016)..................................12 Marchand v. Mercy Medical Center, 22 F.3d 933 (9th Cir .1994)...................................12 Matsushita Electric Industries Co. v. Zenith Radio Corp., 475 U.S. 574 (1986)...........................................13 Mercier v. Boilermakers Apprenticeship and Training Fund, No. 07-cv-11307-DPW, 2009 WL 458556 n.23 (D. Mass. Feb. 10, 2009).........................................................12 Nissan Fire and Marine Insurance Company, Ltd. v. Fritz Cos., 210 F.3d 1099 (9th Cir. 2000).................................11 Rand v. Rowland, 154 F.3d 952 (9th Cir. 1998)...................................1 Slusarski v. Life Ins. Co., 632 F.Supp.2d 166 & (D. R.I. 2009)...........................13 Thompson v. Housing Authority, 782 F.2d 829 (9th Cir. 1986)...................................4 Case 8:07-cv-00397-AG-AN Document 96 Filed 12/16/16 Page 6 of 20 Page ID #:605 iii 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 U.S. Currency v. $90,000 in U.S. Currency, 56 F.Supp.3d 744 (D. Md. 2014)................................12 U.S. Currency v. $76,921.47 Seized from Wells Faro Bank, No. CV 12-02258-PHX-DGC, 2013 WL 5587829 (D.AZ. Oct. 10, 2013).........................................12 United States v. 2204 Barbara Lane, 960 F.2d 126 (11th Cir. 1992).................................12 United States v. Bowdoin, 770 F.Supp.2d 133 (D.D.C. 2011)...............................13 United States v. Fard, 597 Fed. Appx. 438 (9th Cir. 2015)...........4 United States v. Funds in the Amount of $574,840, 719 F.3d 648 (7th Cir. 2013)..................................14 United States v. Haleamau, 887 F.Supp.2d. 1051 (D. Haw. 2010).........................14,16 United States v. Glen-Mady Way, 590 F.Supp.2d 1295 (E.D. Cal 2008).........................13,16 STATUTES 18 U.S.C. § 981(a)(1)(C)......................................2,13,16 18 U.S.C. § 983(c)(1)..............................................13 18 U.S.C. § 983(c)(2)..............................................13 31 U.S.C. § 5317(c).............................................14,16 RULES Federal Rule of Civil Procedure 56(a)..............................11 Local Rule 7-3....................................................2,3 Case 8:07-cv-00397-AG-AN Document 96 Filed 12/16/16 Page 7 of 20 Page ID #:606 5 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 MEMORANDUM OF POINTS AND AUTHORITIES I. STATEMENT OF FACTS In March of 2007, a federal grand jury in this District indicted Safiah Fard (“Fard”) and Ahmad Kikalaye (“Ahmad”) in this district on several counts of bank fraud. United States v. Fard, No. SA CR 07- 52-CJC (C.D. Cal.). See Exh. “A” (copy of indictment). In April of 2007, the government filed a civil forfeiture complaint alleging that Ahmad acquired the defendant properties with a portion of the proceeds of the fraud scheme. Verified Complaint ¶ 10.4 Both Ahmad and Keith Thomas have filed claims in the civil forfeiture action. Dkts. 7 & 11.5 In 2010, Ahmad agreed to plead guilty to defrauding Washington Mutual in connection with loan applications submitted in 2002 and 2004. See Exhs. “B” (copy of superseding information; “C” (Plea Agreement) & “D” (judgment).6 In 2013, Fard was convicted of related criminal case. Following the resolution of the criminal 4 The fraud scheme alleged in the civil forfeiture complaint is in several respects identical to the scheme alleged in the indictment. For example, Paragraph 13 of the Indictment alleges that on April 30, 2004, Ahmad made false statements when he “applied for a mortgage loan with [Washington Mutual Bank (“WaMu”)], in the sum of approximately $1,500,000.00, to purchase the 2312 Oceanfront property . . . .” Paragraph 19 of the civil forfeiture complaint alleges that on April 30, 2004, Ahmad made false statements when he “submitted an application to WaMu for a loan of $1,500,000” in connection with Ahmad’s attempted purchase of the 2312 Oceanfront property. 5 The government’s civil forfeiture complaint does not allege that claimant Thomas was involved in the fraud scheme, and the basis for his assertion of an interest in the defendant properties is not known at this time. 6 Ahmad admitted that in 2002 he made false statements when applying for a “loan in the amount of $1,540,000 from Washington Mutual Bank.” Exh. “C” at p. 4:5-21. Paragraph 36 of the civil FOOTNOTE CONT’D ON NEXT PAGE Case 8:07-cv-00397-AG-AN Document 96 Filed 12/16/16 Page 8 of 20 Page ID #:607 6 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 case, the government served claimants Ahmad and Thomas with Requests for Admission (“RFAs”), as follows: REQUEST FOR ADMISSION NO. 1: Beginning in 1997, Fard purchased multiple rental properties in Newport Beach, California, including the Oceanfront Properties. REQUEST FOR ADMISSION NO. 2: After Fard purchased the Oceanfront Properties, she transferred them back and forth between Ahmad, Mohsen and Bahramian. REQUEST FOR ADMISSION NO. 3: Fard, Ahmad, Mohsen, and Bahramian purchased the Oceanfront Properties from each other at inflated prices by obtaining fraudulent mortgage loans from Washington Mutual. To qualify for the loans, they provided false information to the bank about their income and assets. Their income as stated in the loan applications far exceeded their income as reported in their tax returns. REQUEST FOR ADMISSION NO. 4: After depositing proceeds of the fraudulent loans into his Bank of America account, Ahmad made multiple structured cash withdrawals, which totaled over $250,000. REQUEST FOR ADMISSION NO. 5: Fard, Ahmad, Mohsen, and Bahramian did not report the sale of the Oceanfront Properties in their tax returns. REQUEST FOR ADMISSION NO. 6: By transferring the Oceanfront Properties multiple times among[] themselves, Fard, Ahmad, Mohsen, and Bahramian acted together to interfere with the ability of the Internal Revenue Service to determine liability for taxes on the capital gains resulting from the sales. REQUEST FOR ADMISSION NO. 7: By transferring the Oceanfront Properties multiple times among[] themselves, Fard, Ahmad, Mohsen, and Bahramian acted together to conceal their bank fraud. forfeiture complaint alleges that Ahmad made false statements when applying for a mortgage loan from Washington Mutual “in the sum of approximately $1,540,00.” Ahmad also admitted that in 2004 he made false statements to Washington Mutual in connection with the $1.5 million loan referenced in Note 4, supra. Exh. “C” at p. 5:6-19. Case 8:07-cv-00397-AG-AN Document 96 Filed 12/16/16 Page 9 of 20 Page ID #:608 7 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 REQUEST FOR ADMISSION NO. 8: Ahmad used proceeds from the sales of the Oceanfront Properties to purchase the defendant properties. See Exhs. “F” (RFAs served on Ahmad) & “G” (RFAs served on Thomas). The government served the RFAs in part because of (A) Ahmad admitted to only two incidents of bank fraud in his guilty plea; and (B) while Fard’s conviction established that the scope of the fraud was similar to that described in the civil forfeiture complaint, it was not clear as a matter of law that the government could use Fard’s conviction to defeat Ahmad’s claims to the defendant properties. As of August 1, 2016, neither claimant had responded to the RFAs (Declaration of Frank D. Kortum ¶ 3), “result[ing] in automatic admission of the matters requested.” F.T.C. v. Medicor, LLC, 217 F.Supp.2d 1048, 1053 (C.D. Cal. 2002)(citing Fed.R.Civ.P. 36(a)). As a result, the following facts are deemed established. Admitted Fact No. 1: Beginning in 1997, Fard purchased multiple rental properties in Newport Beach, California, including the Oceanfront Properties. RFA No. 1; see also Verified Complaint ¶¶ 6, 11 & 21 (describing initial purchase of properties that eventually yielded proceeds used to acquire the defendant properties).7 Admitted Fact No. 2: After Fard purchased the Oceanfront Properties, she transferred them back and forth between 7 Paragraph 6 of the Verified Complaint states in part that “[b]eginning in 1997, Safieh Fard (“Fard”) purchased 18 multiple rental properties in Newport Beach, California, including properties located at 2312 Oceanfront and 2400 Oceanfront.” Specifically, “Fard purchased the 2312 Oceanfront property from a third party for approximately $400,000” (Verified Complaint ¶ 11), and she “purchased the 2400 Oceanfront property from a third party for approximately $750,000.” Id. ¶ 31. Case 8:07-cv-00397-AG-AN Document 96 Filed 12/16/16 Page 10 of 20 Page ID #:609 8 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 Ahmad, Mohsen and Bahramian. RFA No. 2; see also Verified Complaint ¶ 6, 12, 13, 16-18, & 32-38 (summarizing transfers).8 Admitted Fact No. 3: Fard, Ahmad, Mohsen, and Bahramian purchased the Oceanfront Properties from each other at inflated prices by obtaining fraudulent mortgage loans from Washington Mutual. To qualify for the loans, they provided false information to the bank about their income and assets. Their income as stated in the loan applications far exceeded their income as reported in their tax returns. RFA No. 3; see also Verified Complaint ¶ 7, 12-14, 19, 31, 32 & 36 (describing false statements made to obtain bank 8 Paragraph 6 of the Verified Complaint states in part: After Fard purchased the[][Oceanfront] properties, she transferred them back and forth between her sons, Ahmad Kikalaye (“Ahmad”) and Mohsen Kikalaye (“Mohsen”), and her sister, Sedigheh Bahramian (“Bahramian”). Paragraphs 12, 13, 16-18, and 32-38 of the complaint describe the transfers in detail. Specifically, “Fard sold the 2312 Oceanfront property to Bahramian . . . for approximately $2,200,000” (Verified Complaint ¶ 12); “Bahramian sold the 2312 Oceanfront property back to Fard for approximately $2,275,000” (id. ¶13); “Fard and Ahmad transferred title to the 2312 Oceanfront property to Mohsen for no consideration”)(id. ¶ 16); “Fard and Ahmad transferred title to the 2312 Oceanfront property to Mohsen for no consideration” (id. ¶ 17); “Fard transferred title to the 2312 Oceanfront property back to Mohsen for no consideration” (id. ¶ 18); “Fard sold the 2400 Oceanfront property to Bahramian for approximately $2,475,000” (id. ¶ 32); “Bahramian transferred title to the 2400 Oceanfront property to Fard for no consideration” (id. ¶ 33); “Fard transferred title to the 2400 Oceanfront property back to Bahramian for no consideration” (id. ¶ 34); “Bahramian transferred title to the 2400 Oceanfront property back to Fard for no consideration” (id. ¶ 35); “Fard sold the 2400 Oceanfront property to Ahmad for approximately $2,200,000” (id. ¶ 36); “Ahmad added Fard on title to the 2400 Oceanfront property” (id. ¶ 37); and “Fard transferred title to the 2400 Oceanfront property back to Ahmad for no consideration.” Id. ¶ 38. Case 8:07-cv-00397-AG-AN Document 96 Filed 12/16/16 Page 11 of 20 Page ID #:610 9 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 loans).9 Admitted Fact No. 4: After depositing proceeds of the fraudulent loans into his Bank of America account, Ahmad made multiple . . . structured cash withdrawals, which totaled over $250,000.” RFA No. 4; see also Verified Complaint ¶¶ 7 & 44 (describing structured withdrawals).10 Admitted Fact No. 5: Fard, Ahmad, Mohsen, and Bahramian did not report the sale of the Oceanfront Properties in their tax returns. RFA No. 5; see also Verified Complaint ¶¶ 8, 12.1, 13.1, 32.1 & 39.1 (describing failure of Ahmad and Fard to report sales).11 9 Paragraph 7 of the Verified Complaint states in part: Fard, Ahmad, Mohsen, and Bahrarnian purchased the properties from each other at inflated prices by obtaining fraudulent mortgage loans from Washington Mutual (“WaMu”). To qualify for the loans, the subjects provided false information to the bank about their income and assets. Their income as stated in the loan applications far exceeded their income as reported in their tax returns. Paragraphs 12-14, 19, 31, 32 and 36 of the Verified Complaint describe the bank fraud in detail. For example, Bahramian overstated income to obtain a loan (Verified Complaint ¶ 12); Fard overstated income to obtain a loan (id. ¶ 13); Fard overstated income and assets to obtain a loan (id. ¶ 14); Ahmad overstated income to obtain a loan (id. ¶ 19); Fard overstated income to obtain a loan (id. ¶ 31); Bahramian overstated income to obtain a loan (id. ¶ 32); and Ahmad overstated income to obtain a loan. Id. ¶ 36. 10 Paragraph 7 of the Verified Complaint states in part that “[a]fter depositing proceeds of the fraudulent loans into his Bank of America account, Ahmad made multiple structured cash withdrawals, which totaled over $250,000.” Paragraph 44 of the Verified Complaint states in part that “Ahmad structured 29 cash withdrawals . . . totaling $254,142, from his Bank of America Account . . . .” Specifically, “Fard’s 1999 tax return . . . did not report the sale of the 2312 Oceanfront property” (Verified Complaint ¶ 12.1); “Bahramian’s 2001 tax return . . . did not report the sale of the 2312 Oceanfront property” (id. ¶ 13.1); “Fard’s 2001 tax return . . . did not report the sale of the 2400 Oceanfront property” (id. ¶ 32.1); Fard’s 2002 tax return failed to report capital gain on sale FOOTNOTE CONT’D ON NEXT PAGE Case 8:07-cv-00397-AG-AN Document 96 Filed 12/16/16 Page 12 of 20 Page ID #:611 10 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 Admitted Fact No. 6: By transferring the Oceanfront Properties multiple times among themselves, Fard, Ahmad, Mohsen, and Bahramian acted together to interfere with the ability of the Internal Revenue Service to determine liability for taxes on the capital gains resulting from the sales. RFA No. 6; see also Verified Complaint ¶ 9, 12, 12.1, 13, 13.1, 16-18, 32, 32.1, 33-38 & 39.1 (describing transfers and failures to report sales).12 Admitted Fact No. 7: By transferring the Oceanfront Properties multiple times among themselves, Fard, Ahmad, Mohsen, and Bahramian acted together to conceal their bank fraud. RFA No. 7; see also Verified Complaint ¶ 9, 12-14, 16-18, 31-38 (describing transfers and false statements) & Exhs. “A” – “E” (indictments and judgments in related criminal case).13 Admitted Fact No. 8: Ahmad used proceeds from the sales of the Oceanfront Properties to purchase the defendant properties. RFA No. 8; see also Verified Complaint ¶¶ 10, of the 2400 Oceanfront property (id. ¶ 36.1); and “Ahmad’s 2004 tax return . . . did not report the sale of the 2400 Oceanfront property.” Id. ¶ 39.1. 12 Paragraph 9 of the Verified Complaint states in part: By transferring the Oceanfront Properties multiple times among[] themselves, Fard, Ahmad, Mohsen, and Bahramian acted together to interfere with the Internal Revenue Service’s ability to determine liability for taxes on the capital gains resulting from the sales. See also Note 6, supra (summarizing transfers) & Note 9, supra (describing failure of Fard, Bahramian and Ahmad to report sales). 13 Paragraph 9 of the Verified Complaint states in part that the multiple property transfers “concealed the [] bank fraud.” See also Note 6, supra (summarizing transfers) & Note 7, supra (describing false statements made to obtain bank loans). Case 8:07-cv-00397-AG-AN Document 96 Filed 12/16/16 Page 13 of 20 Page ID #:612 11 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 39, & 43-45 (describing transactions).14 II. ARGUMENT A. The Summary Judgment Standard Federal Rule of Civil Procedure 56(a) authorizes the granting of summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” The movant bears the initial burden of establishing “the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any,’ which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (quoting former Fed. R. Civ. P. 56(c)). To meet its burden of production, the moving party must either produce evidence negating an essential element of the nonmoving party’s claim or defense or show that the nonmoving party does not have enough evidence of an essential element to carry its ultimate burden of persuasion at trial. Nissan Fire and Marine Insurance Company, Ltd. v. Fritz Cos., 210 F.3d 1099, 1102 (9th Cir. 2000). The facts set forth in a verified complaint will support a summary judgment motion when the allegations therein are based on personal 14 Paragraph 10 of the Verified Complaint states that “Ahmad and Mohsen eventually sold both Oceanfront properties to third parties, and Ahmad used proceeds from the sales to purchase the defendant properties.” Specifically, in 2004, “Ahmad sold the 2400 Oceanfront property to a third party for approximately $2,499,000.” Verified Complaint ¶ 39. He then “wired $797,318 of the [sales] proceeds to [a] Bank of America account . . .” (id. ¶ 43), withdrew $254,142 from the account (id. ¶ 44), and used $61,779.40 of those funds to purchase the defendant properties. Id. ¶ 45. Case 8:07-cv-00397-AG-AN Document 96 Filed 12/16/16 Page 14 of 20 Page ID #:613 12 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 knowledge. See Atlas Copco AB v. Atlascopcoiran.com, 533 F.Supp.2d 610, 612 (E.D. Va. 2008).15 Admissions made as a result of failure to respond to RFAs will also support a summary judgment motion. Echo Drain v. Newsted, 307 F.Supp.2d 1116, 1122 (C.D. Cal. 2003); Medicor, supra, 217 F.Supp.2d at 1053.16 15 Proof of personal knowledge may be established through specificity included in the affidavit. See LSR Consulting, LLC v. Wells Fargo Bank, N.A., 835 F.3d 530, 534 (5th Cir. 2016) (affidavit “contained sufficiently specific statements for the district court to infer that the affiant[] had personal knowledge of the facts attested therein”); accord Mercier v. Boilermakers Apprenticeship and Training Fund, No. 07-cv-11307-DPW, 2009 WL 458556 at *19 n.23 (D. Mass. Feb. 10, 2009); see also In re Homestore.com, Inc. Sec. Litig., 347 F.Supp.2d 769, 781 (C.D. Cal. 2004)(auditor had sufficient personal knowledge to testify about audit report that fellow auditor prepared). Here, the verified complaint contains highly specific allegations about the financial transactions that are the subject of the RFAs as well as Ahmad’s guilty plea (and/or Fard’s conviction). Under these circumstances, personal knowledge of the contents of the complaint may be inferred, without requiring evidence that the investigator verifying the complaint have participated in or observed the actual transactions described therein. 16 The government may serve Requests for Admission in a forfeiture case for the purpose of seeking admissions establishing forfeitability. For example, in United States v. 2204 Barbara Lane, 960 F.2d 126 (11th Cir. 1992), the government asked the claimant “to admit that he used the defendant property to facilitate illegal drug transactions . . . .” Id. at 128. On appeal, the Barbara Lane court held that the claimant’s “failure to respond to the government’s requests for admissions conclusively established the government’s case.” Id.; accord United States v. $90,000 in U.S. Currency, 56 F.Supp.3d 744, 749-50 (D. Md. 2014); United States v. $76,921.47 Seized from Wells Fargo Bank, No. CV-12-02258-PHX-DGC, 2013 WL 5587829 at *3 (D. Az. Oct. 10, 2013); see generally Marchand v. Mercy Medical Center, 22 F.3d 933, 937 & n.4 (9th Cir. 1994)(imposing sanctions for improper denial of request to admit that party “failed to comply with the applicable standard of care”); see also In re Rail Freight Fuel Surcharge Antitrust Litig., 281 F.R.D. 1, 11 (D. D.C. 2011)(under Rule 36 of the Federal Rules of Civil Procedure, party “may seek admission of ultimate facts even if dispositive of the entire case . . . .”). Here, the facts that the government sought to have claimant admit were consistent with the results of Ahmad’s guilty plea and Fard’s conviction in the related criminal case. Although the results of the criminal case cannot reasonably be disputed—-particularly after the Ninth Circuit affirmed Fard’s conviction—-the government determined that serving the RFAs FOOTNOTE CONT’D ON NEXT PAGE Case 8:07-cv-00397-AG-AN Document 96 Filed 12/16/16 Page 15 of 20 Page ID #:614 13 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 Once the moving party meets its initial burden of showing there is no genuine issue of material fact, the opposing party has the burden of producing competent evidence and cannot rely on mere allegations or denials in the pleadings. Matsushita Electric Industries Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). There is no genuine issue for trial where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party. B. The Burden of Proof In a suit or action brought under “any civil forfeiture statute” for the civil forfeiture of any property, “the burden of proof is on the Government to establish, by a preponderance of the evidence that the property is subject to forfeiture . . . .” 18 U.S.C. § 983(c)(1). To satisfy its burden, the government may use evidence “gathered after the filing of the complaint for forfeiture to establish, by a preponderance of the evidence that property is subject to forfeiture . . . .” 18 U.S.C. § 983(c)(2). C. This Court Should Order the Forfeiture of the Defendant Properties Fraud proceeds are subject to forfeiture pursuant to 18 U.S.C. § 981(a)(1)(C). See United States v. Bowdoin, 770 F.Supp.2d 133, 134 (D.D.C. 2011); accord United States v. Real Property Located at Glen- would be appropriate here to complete the evidentiary record. See generally Slusarski v. Life Ins. Co., 632 F.Supp.2d 166 & n.10, 171 (D. R.I. 2009). In Slusarski, the plaintiff served RFAs that he asserted were tailored to complete the evidentiary record. Id. at 166 & n.10. The court agreed that the requests would “serve to increase judicial efficiency.” Id. at 171. Similarly, the government here seeks to use the admitted facts to prove what was previously established as a result of Ahmad’s guilty plea and Fard’s conviction. No useful purpose would be served in requiring the government to prove these facts again in the context of a trial. Case 8:07-cv-00397-AG-AN Document 96 Filed 12/16/16 Page 16 of 20 Page ID #:615 14 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 Mady Way, 590 F.Supp.2d 1295, 1300 (E.D. Cal 2008) In addition, property acquired with the proceeds of a structuring offense is subject to forfeiture. 31 U.S.C. § 5317(c); United States v. Haleamau, 887 F.Supp.2d. 1051, 1052-53 (D. Haw. 2010). In this case, as explained below, the failure of Ahmad and Thomas to respond to the government’s RFAs establish the facts necessary to prove that the defendant properties are subject to forfeiture.17 Specifically, • Beginning in 1997, Fard purchased multiple rental properties in Newport Beach, California, including the Oceanfront Properties. Admitted Fact No. 1 (based on claimant’s failure to respond to RFA No. 1); see also Verified Complaint ¶¶ 6 & 11 (summarized in Note 7, supra). • After Fard purchased the Oceanfront Properties, she transferred them back and forth between Ahmad, Mohsen and Bahramian. Admitted Fact No. 2 (based on claimant’s failure to respond to RFA No. 2); see also Verified Complaint ¶¶ 6, 12, 13, 16-18, & 32-38 (summarized in Note 8, supra). • Fard, Ahmad, Mohsen, and Bahramian purchased the 17 Thomas failed to respond to requests that identify the basis for his claim. See, e.g., Dkt. 67 (motion to strike based on failure to respond to Special Interrogatories); Kortum Decl. ¶ 4 & Exh. “H”. The courts recognize that for someone such as Thomas, who has “no colorable claim” to the defendant property, “it’s all too easy . . . to file a claim in the forfeiture proceeding.” United States v. Funds in the Amount of $574,840, 719 F.3d 648, 652-53 (7th Cir. 2013). Here, the Court need not reach the issue of whether Thomas “troll[ed]” the Internet or newspapers for published forfeiture notices (719 F.3d at 653), because the failure of Thomas to respond to the RFAs establishes the forfeitability of the defendant property as to him. Case 8:07-cv-00397-AG-AN Document 96 Filed 12/16/16 Page 17 of 20 Page ID #:616 15 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 Oceanfront Properties from each other at inflated prices by obtaining fraudulent mortgage loans from Washington Mutual. To qualify for the loans, they provided false information to the bank about their income and assets. Their income as stated in the loan applications far exceeded their income as reported in their tax returns. Admitted Fact No. 3 (based on claimant’s failure to respond to RFA No. 3); see also Verified Complaint ¶¶ 7, 12-14, 19, 31, 32, 36 & 39 (summarized in Note 9, supra). • After depositing proceeds of the fraudulent loans into his Bank of America account, Ahmad made multiple structured cash withdrawals, which totaled over $250,000. Admitted Fact No. 4 (based on claimant’s failure to respond to RFA No. 4); see also Verified Complaint ¶¶ 7 & 44 (summarized in Note 10, supra). • Fard, Ahmad, Mohsen, and Bahramian did not report the sale of the Oceanfront Properties in their tax returns. Admitted Fact No. 5 (based on claimant’s failure to respond to RFA No. 5); see also Verified Complaint ¶¶ 7, 12.1, 13.1, 32.1 & 39.1 (summarized in Note 11, supra). • By transferring the Oceanfront Properties multiple times among themselves, Fard, Ahmad, Mohsen, and Bahramian acted together to interfere with the ability of the Internal Revenue Service to determine liability for taxes on the capital gains resulting from the sales. Admitted Fact No. 6 (based on claimant’s Case 8:07-cv-00397-AG-AN Document 96 Filed 12/16/16 Page 18 of 20 Page ID #:617 16 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 failure to respond to RFA No. 6); see also Verified Complaint ¶¶ 6, 8, 12, 12.1, 13, 13.1, 16-18, 32, 32.1, 33-38 & 39.1 (summarized in Note 12, supra). • By transferring the Oceanfront Properties multiple times among themselves, Fard, Ahmad, Mohsen, and Bahramian acted together to conceal their bank fraud. Admitted Fact No. 7 (based on claimant’s failure to respond to RFA No. 7); see also Verified Complaint ¶ 7, 9, 12-14, 16-18, 31-38 & Exhs. “A” – “E” (summarized in Note 13, supra). • Ahmad used proceeds from the sales of the Oceanfront Properties to purchase the defendant properties. Admitted Fact No. 8 (based on claimant’s failure to respond to RFA No. 8); see also Verified Complaint ¶¶ 10, 39, & 43-45 (summarized in Note 14, supra). The facts established above demonstrate that Kikalaye acquired the defendant properties with the proceeds of a fraud scheme (see Glen-Mady Way, supra, 590 F.Supp. 2d at 1300) and a structuring offense. Haleamau, supra, 887 F.Supp. 2d at 1056. The defendant properties are therefore subject to forfeiture pursuant to 18 U.S.C. § 981(a)(1)(C) and 31 U.S.C. § 5317(c). This Court should therefore grant the government’s motion for summary judgment. /// /// Case 8:07-cv-00397-AG-AN Document 96 Filed 12/16/16 Page 19 of 20 Page ID #:618 17 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. CONCLUSION For the foregoing reasons, this Court should grant the government’s motion for summary judgment. Dated: December 16, 2016 Respectfully submitted, EILEEN M. DECKER United States Attorney LAWRENCE S. MIDDLETON Assistant United States Attorney Chief, Criminal Division STEVEN R. WELK Assistant United States Attorney Chief, Asset Forfeiture Section /s/ FRANK D. KORTUM Assistant United States Attorney Attorneys for Plaintiff UNITED STATES OF AMERICA Case 8:07-cv-00397-AG-AN Document 96 Filed 12/16/16 Page 20 of 20 Page ID #:619 18 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 DECLARATION OF FRANK D. KORTUM I, Frank D. Kortum hereby declare and state as follows: 1. I am an Assistant United States Attorney to the civil forfeiture case entitled U.S. v. Ten Parcels of Real Property (Vacant Lots) Located in San Bernardino, California, SACV 07-00397-AG(ANx). I have personal knowledge of the facts set forth in this Declaration and if necessary could competently testify thereto under oath. 2. Attached hereto as Exhibit “F” is a copy of a set of requests for admissions served on claimant Kikalaye on March 14, 2016. Attached hereto as Exhibit “G” is a copy of a set of requests for admissions served on claimant Thomas on March 14, 2016. 3. As of August 1, 2016, I have received no responses to the Requests for Admission referenced in Paragraph 3 herein. 4. Attached hereto as Exhibit “H” is a copy of a letter that I sent to claimant Thomas on October 20, 2016, after receiving a communication from him in response to the pre-motion meeting request letter. Since sending the October 20 letter to claimant Thomas, I have received no further communication from him. I declare under penalty of perjury, under the laws of the United States of America, that to the best of my knowledge, the foregoing is true and correct. Executed on this 15 day of December, 2016. /s/ Frank D. Kortum Case 8:07-cv-00397-AG-AN Document 96-1 Filed 12/16/16 Page 1 of 1 Page ID #:620 EXHIBIT ''A'' Case 8:07-cv-00397-AG-AN Document 96-2 Filed 12/16/16 Page 1 of 20 Page ID #:621 1 2 3 4 5 6 7 8 9 10 , · Case·8:07-cr-00052-· Document 1 File~ 03/28/Q? .1 of 19 Page ID #:1 CENTIW, DISTRICT OF CALtf0R!11A BY /' j\ DEPUTY '--' \ UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION October 2006 Grand Jury li UNITED STATES OF AMERICA, ) ) ) ) ) ) ) ) ) ) ) ) ) SA CR O 7- s A C R O 7 - 0 0 5 2 12 Plaintiff, 13 V, 14 SAFIEH FARO, MOHSEN KIKALAYE, 15 AHMAD KIKALAYE, and SEDIGHEH BAHRAMIAN, 16 Defendants. I N D I C T M E N T (18 U.S.C. § 371: Conspiracy; 18 u.s.c. § 1956(h): Money Laundering Conspiracy; 18 U.S.C. § 1956(a) (1); Laundering of Monetary Instruments; 18 u.s.c. § 1957: Monetary Transactions with SUA] 17 18 19 ______________ ) 20 21 22 A. 23 The Grand Jury charges: COUNT ONE (18 u.s.c. § 371] OBJECT OF THE CONSPIRACY Beginning on a date unknown to the Grand Jury and continuing 24 to on or about August 30, 2005, in Orange County, within the 25 Central District of California, and elsewhere, defendants SAFIEH 26 FARO ("FARO") 1 MOHSEN KIKALAYE, AHMAD KIKALAYE, and SEDIGHEH 27 BAHRAMIAN ("BAHRAMIAN"), and others known and unknown to the 28 CRL:crl 11 Case 8:07-cv-00397-AG-AN Document 96-2 Filed 12/16/16 Page 2 of 20 Page ID #:622 . , Case·S:07-cr-00052. Document 1 .Filed 03/28/07 -2 of 19 Page ID #:2 Grand Jury, knowingly conspired and agreed with each other to 2 defraud the United States for the purpose of impeding, impairing, 3 obstructing, and defeating the lawful government functions of the 4 Internal Revenue Service ("IRS") in the ascertainment, 5 computation, assessment, and collection of income taxes. 6 B. 7 MEANS BY WHICH THE OBJECT OF THE CONSPIRACY WAS TO BE ACCOMPLISHED 8 The object of the conspiracy was to be accomplished in 9 substance as follows: 10 1. Defendant FARO purchased real properties in Newport 11 Beach, California and sold the properties to her sons, defendants 12 MOHSEN KIKALAYE and AHMAD KIKALAYE, and her sister, defendant 13 BAHRAMIAN. 14 2. Defendants FARO, MOHSEN KIKALAYE, AHMAD KIKALAYEi and 15 BAHRAMIAN transferred title to the properties back and forth 16 multiple times between each other. 17 3. Defendants FARD, MOHSEN KIKALAYE, and AHMAD KIKALAYE 18 eventually sold the properties to unrelated third parties and did 19 not report the long term capital gains resulting from the sale of 20 the properties. 21 C. OVERT ACTS 22 In furtherance of the conspiracy and to accomplish the 23 object of the conspiracy, on or about the following dates,· 24 defendants FARD, MOHSEN KIKALAYE, AHMAD KIKALAYE, and BAHRAMIAN 25 and other co-conspirators known and unknown to the Grand Jury, 26 committed various overt acts within the Central District of 27 California and elsewhere, including but not limited to the 28 - 2 - Case 8:07-cv-00397-AG-AN Document 96-2 Filed 12/16/16 Page 3 of 20 Page ID #:623 , , Case,8:07-cr-00052. Document 1 Filed 03/28/07 • 3 of 19 Page ID #:3 1 following: 2 The 2312 Oceanfront Property 3 4. On or about December 1, 1997, defendant FARO purchased 4 from a third party a property located at 2312 West Oceanfront, 5 Newport Beach, California (the "2312 Oceanfront property"), for 6 approximately $400,000.00. 7 5. On or about December 2, 1999, defendant FARO sold to 8 defendant BAHRAMIAN the 2312 Oceanfront property for 9 approximately $2,200,000.00. 10 6, On.or about April 15, 2000, defendant FARO submitted 11 her 1999 tax return to the IRS which did not report the sale of 12 the 2312 Oceanfront property. 13 7. On or about May 3, 2001, defendant BAHRAMIAN sold to 14 defendant FARO the 2312 Oceanfront property for approximately 15 $2,275,000.00. 16 8. On or about April 20, 2003, defendant BAHRAMIAN 17 submitted her 2001 tax return to the IRS and did not report the 18 sale of the 2312 Oceanfront property. 19 9. On or about May 28, 2003, defendant FARO added 20 defendant AHMAD KIKALAYE to the title to the 2312 Oceanfront 21 property. 22 10. On or about June 5, 2003, defendants FARO and AHMAD 23 KIKALAYE transferred title to the 2312 Oceanfront property to 24 defendant MOHSEN KIKALAYE for no consideration. 25 11. On or about November 3, 2003, defendant MOHSEN KIKALAYE 26 transferred title to the 2312 Oceanfront property to defendant 27 FARO for no consideration. 28 - 3 - Case 8:07-cv-00397-AG-AN Document 96-2 Filed 12/16/16 Page 4 of 20 Page ID #:624 , , Case-8:07-cr-00052. Document 1 Filed 03/28/07 • 4 of 19 Page ID #:4 1 12. On or about December 22, 2003, defendant FARD 2 transferred title to the 2312 Oceanfront property back to MOHSEN 3 KIKALAYE for no consideration. 4 13. On or about April 30, 2004, defendant AHMAD KIKALAYE 5 attempted to buy the 2312 Oceanfront property from defendant 6 MOHSEN KIKALAYE for approximately $2,150,000.00. 7 14. On or about August 31, 2004, defendant MOHSEN KIKALAYE 8 sold the 2312 Oceanfront property to a third party for 9 appro~imately $2,565,000.00. 10 15. On or about April 26, 2006, defendant MOHSEN KIKALAYE 11 submitted to the IRS his 2004 tax return reporting a net loss of 12 $96,733.00 on the sale of the 2312 Oceanfront property, when the 13 actual long term capital net gain from the sale of said property 14 was approximately $1,900,000.00. 15 The 2400 Oceanfront Property 16 16. On or about November 22, 1999, defendant FARD purchased 17 from a third party a property located at 2400 West Oceanfront, 18 Newport Beach,. California (the "2400 Oceanfront property"), for 19 approximately $1,000,000.00. 20 17. On or about May 3, 2001, defendant FARD sold the 2400 21 Oceanfront property to defendant BAHRAMIAN for approximately 22 $2,475,000.00. 23 18. On or about October 26, 2002, defendant FARD submitted 24 her 2001 tax return to the IRS and did not report the sale of the 25 2400 oceanfront property. 26 19. On or about August 22, 2001, defendant BAHRAMIAN 27 transferred title to the 2400 Oceanfront property to defendant 28 - 4 - Case 8:07-cv-00397-AG-AN Document 96-2 Filed 12/16/16 Page 5 of 20 Page ID #:625 .. Case,-8:07-cr-00052. Document 1 Filed 03/28/07 • 5 of 19 Page ID #:5 1 FARO for no consideration. 2 20. On or about April 24, 2002, defendant FARO transferred 3 title to the 2400 Oceanfront property to defendant BAHRAMIAN for 4 no consideration. 5 21. On or about July 18, 2002, defendant BAHRAMIAN 6 transferred title to the 2400 Oceanfront property to defendant 7 FARO for no consideration. 8 22. On or about July 18, 2002, defendant FARO sold the 2400 9 Oceanfront property to defendant AHMAD KIKALAYE for approximately 10 $2,200,000.00. 11 23. On or about October 24, 2003, defendant FARO submitted 12 her 2002 tax return to the IRS reporting zero capital gain on the 13 sale of the 2400 Oceanfront property, when the actual long term 14 net capital gain from the sale of said property was approximately 15 $900,000.00. 16 24. On or about May 28, 2003, defendant AHMAD KIKALAYE 17 added defendant FARO to the title to the 2400 Oceanfront 18 property. 19 25. On or about June 5, 2003, defendant FARO transferred 20 title to the 2400 Oceanfront property to AHMAD KIKALAYE for no 21 consideration. 22 26. On or about March 1, 2004, defendant AHMAD KIKALAYE 23 sold the 2400 Oceanfront property to a third party for 24 approximately $2,499,000.00. 25 I I 26 I I 27 .11 28 - 5 - Case 8:07-cv-00397-AG-AN Document 96-2 Filed 12/16/16 Page 6 of 20 Page ID #:626 , . Case,8:07-cr-00052. Document 1 Filed 03/28/07 6 of 19 Page ID #:6 27. On or about February 14, 2006, defendant AHMAD KIKALAYE 2 submitted to the IRS his 2004 income tax return and did not 3 report the sale of the 2400 Oceanfront property at all, thereby 4 avoiding tax liability on the long term capital ·gain, 5 approximately· $1,179,041.00, from the sale of said property. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 6 - Case 8:07-cv-00397-AG-AN Document 96-2 Filed 12/16/16 Page 7 of 20 Page ID #:627 Case,8:07-cr-0005- Document 1 Filed 03/28/07 • 7 of 19 Page ID #:7 1 COUNT TWO 2 [18 u.s.c. § 1956(h)] 3 A. OBJECTS OF THE CONSPIRACY 4 Beginning on a date unknown and continuing until on or about 5 August 30, 2005, in Orange County, within the Central District of 6 California and elsewhere, defendants FARO, MOHSEN KIKALAYE, 7 AHMAD KIKALAYE, and BAHRAMIAN, and others known and unknown to 8 the Grand Jury, knowingly and intentionally conspired and agreed 9 with each other to conduct and attempt to conduct financial 10 transactions affecting interstate commerce, which transactions 11 involved the proceeds of specified unlawful activity, that is, 12 violations of 18 U.S.C. § 1344, defrauding a financial 13 institution and obtaining moneys from a financial institution by 14 means of false or fraudulent pretenses, representations, or 15 promises, (a) with the intent to promote the carrying on of said 16 specified unlawful activity; (b) knowing the transactions were 17 designed in whole or in part to conceal and disguise the nature, 18 location, source, ownership and control of said proceeds; and 19 (c) to avoid the transaction reporting requirements under state 20 and federal law, and while conducting and attem~ting to conduct 21 such financial transactions, defendants knew that the property 22 involved ih the financial transacti9ns represented the proceeds 23 of some form of unlawful activity, all in violation of Title 18, 24 United States Code, Section 1956 (a) (1). 25 B. MEANS BY WHICH THE OBJECT OF THE CONSPIRACY WAS TO BE 26 ACCOMPLISHED 27 The object of the conspiracy was to be accomplished in 28 - 7 - Case 8:07-cv-00397-AG-AN Document 96-2 Filed 12/16/16 Page 8 of 20 Page ID #:628 1 2 3 4 5 6 Case,8:07-cr-0005. Document 1 Filed 03/28/07 - 8 of 19 Page ID #:8 substance as follows: 1. Defendants FARO, MOHSEN KIKALAYE, AHMAD KIKALAYE, and BAHRAMIAN applied for and obtained mortgage loans from financial institutions to purchase real properties. 2. Defendants FARO, MOHSEN KIKALAYE, AHMAD KIKALAYE, and BAHRAMIAN prepared and caused others to prepare fraudulent loan 7 packages significantly overstating defendants' personal income 8 and assets to qualify for the mortgage loans. 9 3. Defendants FARO, MOHSEN KIKALAYE, AHMAD KIKALAYE, and 10 11 12 13 14 15 16 17 18 19 20 21 BAHRAMIAN engaged and caused others to engage in financial transactions with the proceeds of the fraudulent mortgage loans to promote the carrying on of additional mortgage fraud, to conceal and disguise the nature, location, source, ownership and control of the fraudulently obtained proceeds, and to avoid the transaction reporting requirements under state or federal law. C. OVERT ACTS In furtherance of the conspiracy, and to accomplish the objects of conspiracy, defendants FARO, MOHSEN KIKALAYE, AHMAD KIKALAYE, and BAHRAMIAN, and other co-conspirators known and unknown to the Grand Jury, committed the following ov,ert acts, among others, within the Central District of California and 22 elsewhere: 23 5. The allegations in paragraphs four through twenty-seven 24 above are realleged as if set forth in £ull here. 25 Mortgage Loans Relating To The 2312 Oceanfront Property 26 6. On or about December 2, 1999, defendant BAHRAMIAN 27 applied for and obtained a loan from Washington Mutual Bank 28 - 8 - Case 8:07-cv-00397-AG-AN Document 96-2 Filed 12/16/16 Page 9 of 20 Page ID #:629 Case.8:07-cr-00052-C. Document :J_. Filec;l 03/28/07 P.9 of 19 Page ID #:9 ("WAMU"), in the sum of approximately $1,400,000.00, to purchase 2 the 2312 Oceanfront property from defendant FARD. 3 7. On or about December 2, 1999, defendant BAHRAMIAN 4 falsely stated in the 1999 WAMU loan application that defendant 5 earned $40,000.00 per month, when as defendant BAHRAMIAN well 6 knew, defendant BAHRAMIAN's 1999 individual tax return reported 7 an adjusted gross income for tax year 1999 in the sum of 8 $59,588.00. 9 8. On or about May 3, 2001, defendant FARD applied for and JO obtained a loan from WAMU, in the sum of approximately II $1,251,250.00, to purchase the 2312 Oceanfront property from 12 defendant BAHRAMIAN. 13 9. On or about May 3, 2001, defendant FARO falsely stated 14 in the 2001 WAMU loan application that defendant FARD earned 15 $44,011.00 per month, when as defendant FARD well knew, defendant 16 FARD's 2001 individual tax return reported a negative adjusted 17 gross income of -$13,287.00. 18 10. On or about February 20, 2002, defendant FARD applied 19 for and obtained a mortgage loan from WAMU, in the sum of 20 approximately $1,500,000.00, to refinance the mortgage loan on 21 the 2312 Oceanfront property. 22 11. On or about February 20, 2002, defendant FARD falsely 23 stated in the 2002 WAMU loan application that defendant FARD 24 earned $45,000.00 per month, when as defendant FARD well knew, 25 defendant FARD's 2002 individual tax return reported an adjusted 26 gross income for 2002 tax year of $9,097.00. 27 12. On or about February 20, 2002, defendant FARD falsely 28 - 9 - Case 8:07-cv-00397-AG-AN Document 96-2 Filed 12/16/16 Page 10 of 20 Page ID #:630 Case 8:07-cr-00052-lf,Document 1. Filed 93/28/07 .0 of 19 Page ID #:10 1 stated in the 2002 WAMU loan application that defendant FARO 2 owned real estate at 22 Rockrose, Irvine, California, valued at 3 approximately $375,000.00, when as defendant FARO well knew, on 4 or about July 21, 2001, defendant FARO sold the 22 Rockrose 5 property to a third party. 6 13. On or about April 30, 2004, defendant AHMAD KIKALAYE 7 applied for a mortgage loan with WAMU, in the sum of 8 approximately $1,500,000.00, to purchase the 2312 Oceanfront 9 property from defendant MOHSEN KIKALAYE. 10 14. On-or about April 30, 2004, defendant AHMAD KIKALAYE 11 falsely stated in the 2004 WAMU loan application that defendant 12 AHMAD KIKALAYE earned $43,000.00 per month, when as defendant 13 AHMAD KIKALAYE well knew, defendant AHMAD KIKALAYE's 2004 14 individual tax return reported an adjusted gross income for tax 15 year 2004 in the sum of $6,276.00. 16 15. On or about August 31, 2004, defendant MOHSEN KIKALAYE 17 sold the 2312 Oceanfront property to a third party for 18 approximately $2,565,000.00. 19 16. On or about August 31, 2004, defendant MOHSEN KIKALAYE 20 received, from Alliance Escrow, a wire transfer deposited into 21 defendant MOHSEN KIKALAYE' s Wells Fargo Bank ("WFB") account 22 number xxxxx-x7516, in the sum of approximately $981,076.00, 23 which represented proceeds from the sale of the 2312 Oceanfront 24 Property. 25 17. On or about September 10, 2004, defendant MOHSEN 26 KIKALAYE withdrew from his WFB account approximately $954,270.00, 27 and deposited the funds into defendant AHMAD KIKALAYE's WFB 28 - 10 - Case 8:07-cv-00397-AG-AN Document 96-2 Filed 12/16/16 Page 11 of 20 Page ID #:631 , Case 8:07-cr-00052-wocument 1. Filed fJ3/28/0:-/ 'lllijl of 19 Page ID #:11 account number xxxxx-x9859. 2 18. On or about September 14, 2004, defendant AHMAD 3 KIKALAYE transferred approximately $976,347.00 from his WFB 4 account number xxxxx-x9859 to his WFB account number xxxxx-x9776. 5 19. On or about September 17, 2004, defendant AHMAD 6 KIKALAYE withdrew $980,000.00 from his WFB account number xxxxx- 7 x9776, and purchased three cashier's checks, all payable to 8 defendant AHMAD KIKALAYE, in the amount of $280,000.00, 9 $300,000.00, and $400,000.00. 10 20. On or about February 25, 2005, defendant AHMAD KIKALAYE 11 presented the $300,000.00 cashier's check he purchased on or 12 about September 17, 2004, at WFB in Newport Beach, California, 13 and purchased a cashier's check in the sum of $60,000.00 made 14 payable to defendant BAHRAMIAN, and purchased a cashier's check 15 for $240,000.00 payable to AHMAD KIKALAYE. 16 21. On or about February 28, 2005, defendant AHMAD KIKALAYE 17 presented the $240,000.00 cashier's check, at WFB in Newport 18 Beach, California, received $9,000.00 cash and purchased a 19 cashier's check in the sum of $231,000.00 made payable to AHMAD 20 KIKALAYE. 21 22. Ori or about March 1, 2005, defendant AHMAD KIKALAYE 22 presented the $231,000.00 cashier check, at WFB in Newport Beach, 23 California and purchased a cashier's check in the sum of 24 $50,000.00 made payable to defendant BAHRAMIAN and a cashier's 25 check in the sum of $181,000.00 made payable to AHMAD KIKALAYE. 26 23. On or about March 3, 2005, defendant AHMAD KIKALAYE 27 presented the $181,000.00 cashier's check, at WFB in Newport 28 - 11 - Case 8:07-cv-00397-AG-AN Document 96-2 Filed 12/16/16 Page 12 of 20 Page ID #:632 , Case 8:07-cr-00052-~Document 1. Filed fJ3/28/07 .. 2 of 19 Page ID #:12 1 Beach, California, received $9,000.00 cash and purchased a 2 cashier's check in the sum of $172,000.00 made payable to AHMAD 3 KIKALAYE. 4 24. On or about March 4, 2005, defendant AHMAD KIKALAYE. 5 presented the $172,000.00 cashier's check, at WFB in Newport 6 Beach, California, received $9,000.00 cash and purchased a 7 cashier's check in the sum of $163,000.00 made payable to AHMAD 8 KIKALAYE. 9 25. On or about March 7, 2005, defendant AHMAD KIKALAYE 10 presented the $163,000.00 cashier's check, at WFB in Newport 11 Beach, California, received $9,000.00 cash and purchased a 12 cashier's check in the sum of $154,000.00 made payable to AHMAD 13 KIKALAYE. 14 26. On or about March 8, 2005, defendant AHMAD KIKALAYE 15 presented the $154,000.00 cashier's check, at WFB in Newport 16 Beach, California, received $9,000.00 cash and purchased a 17 cashier's check in the sum of $145,000.00 made payable to AHMAD 18 KIKALAYE. 19 Mortgage Loans Relating To The 2400 Oceanfront Property 20 27. On or about November 22, 1999, defendant FARO applied 21 for and obtained a loan from WAMU, in the sum of approximately 22 $750,000.00, to purchase from a third party the 2400 Oceanfront 23 property. 24 28. On or about November 22, 1999, defendant FARO falsely 25 stated in her 1999 WAMU loan application that defendant FARO 26 earned approximately $17,000.00 per month, when as defendant well 27 knew, defendant FARD's 1999 individual tax return reported an 28 - 12 - Case 8:07-cv-00397-AG-AN Document 96-2 Filed 12/16/16 Page 13 of 20 Page ID #:633 , Case @:07-cr-00052-- Document 1, Filecl,03/28/Q? .3 of 19 Page ID #:13 1 adjusted gross income for tax year 1999 in the sum of $1,474.00. 2 29. On or about May 3, 2001, defendant BAHRAMIAN applied 3 for and obtained a loan from WAMU, in the sum of approximately 4 $1,361,250.00, to purchase the 2400 Oceanfront property from 5 defendant FARO for approximately $2,400,000.00. 6 30. On or about May 3, 2001, defendant BAHRAMIAN falsely 7 stated in her 2001 WAMU loan application that defendant BAHRAMIAN 8 earned $45,000.00 per month, when as defendant BAHRAMIAN well 9 knew, defendant BAHRAMIAN's 2001 individual tax return reported 10 an adjusted gross income for tax year 2001 in the sum of 11 $25,378.00. 12 31. On or about July 10, 2002, defendant AHMAD KIKALAYE 13 applied for and obtained a mortgage loan from WAMU, in the sum of 14 approximately $1,540,000.00, to purchase the 2400 Oceanfront 15 property. 16 32, On or about July 10, 2002, defendant AHMAD KIKALAYE 17 falsely stated in his 2002 WAMU loan application that defendant 18 AHMAD KIKALAYE earned $37,000.00 per month, when as defendant 19 AHMAD KIKALAYE well knew, defendant AHMAD KIKALAYE's 2002 20 individual tax return reported an adjusted gross income for tax 21 year 2002 in the sum of $12,072.00. 22 33. On or about July 10, 2002, defendant AHMAD KIKALAYE 23 falsely stated in his 2002 WAMU loan application that he had a .24 stock market account at Charles Schwab (account no. xxxx-3746), 25 with a balance of $925,000.00, when as defendant well knew, ai 26 the time, the balance on Charles Schwab account no. xxxx-3746 was 27 approximately $1,187.00 and said account was not in defendant 28 - 13 - Case 8:07-cv-00397-AG-AN Document 96-2 Filed 12/16/16 Page 14 of 20 Page ID #:634 J Case 8:07-cr-00052- Document 1 . Filed P3/28/07 11\,4 of 19 Page ID #:14 Al-WAD KIKALAYE' s name. 2 34. On or about July 18, 2002, defendant BAHRAMIAN 3 transferred title to the 2400 Oceanfront property to defendant 4 FARD for no consideration. 5 :;:.5. On '.)r about July 18, 2002, defendant FARD sold to 6 defendant AHMAD KIKALAYE the 2400 Oceanfront property for 7 approximately $2;200,000.00. 8 36. On or about May 28, 2003r defendant AHMAD KIKALAYE 9 adde1 defendant FARD to the title to the 2400 Oceanfront IO property. II 37. On or about June 5, 2003, defendant FARD transferred 12 title to defendant AHMAD KIKALAYE. 13 :8. On '.)r about March 1, 2004, defendant AHMAD KIKALAYE 14 sold the 2400 Oceanfront property to a third party for 15 approximately $2,499,000. 16 39. On or about March 4, 2004, defendant AHMAD KIKALAYE 17 caused Charter Escrow to wire into defendant AHMAD KIKALAYE's WFB 18 account number xxxxx-x9859 approximately $904,501.00, which 19 represented proceeds from the sale of the 2400 Oceanfront 20 Property. 21 40. On or about April 30, 2004, defendant AHMAD KIKALAYE 22 caused $797,318.00 to be wired from his \tJFB acccunt nurnber xxxxx- 23 x9859 to his Bank of America account number xxxxx-x7858. 24 // 25 I/ 26 / / 27 // 28 - 14 - Case 8:07-cv-00397-AG-AN Document 96-2 Filed 12/16/16 Page 15 of 20 Page ID #:635 Case 8:07-cr-00052--. Document 1. Filecl .03/28/07 .5 of 19 Page ID #:15 41. Between on or about ,June 7, 2004, and August 4, 2004, 2 defencant AHMAD KIKALAYE made or caused to be nade approximately 3 29 cash withdrawals from Bank of America account number xxxxx- 4 x7858, all of which cash withdrawals were just below $9,000.00 5 and totaled approximately $254,142.00. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 15 - Case 8:07-cv-00397-AG-AN Document 96-2 Filed 12/16/16 Page 16 of 20 Page ID #:636 ,Case 3:07-cr-00052-- Document 1. Filed.03/28/G7 -6 of 19 Page ID #:16 COUNTS THREE THROUGH NINE 2 [18 U.S.C. §§ 1956(a) (1), 2J 3 On or about the following dates, in Orange County, within 4 the Central District of California, and elsewhere, defendant 5 AHMAD KIKALAYE knowingly conducted, attempted to conduct, and 6 aided, abetted, counseled, commanded, induced and procured the 7 following financial transactions affecting interstate and foreign 8 commerce, knowing that the property involved in each of the 9 financial transactions represented the proceeds of some form of 10 unlawful activity, and which property was, in fact, the proceeds 11 of specified unlawful activity, that is, bank fraud, with the 12 intent to avoid a transaction reporting requirement under State 13 or Federal law: 14 COUNT 15 Three 16 17 Four 18 19 20 Five 21 22 Six 23 24 25 Seven 26 27 28 DATE 06/10/04 06/15/04 06/17/04 06/21/04 06/21/04 AMOUNT $8,600 $8,750 $8,650 $8,536 $8,500 - 16 - TRANSACTION Cash withdrawal, Bank of America, Acct. No. xxxxx- x7858 Cash withdrawal, Bank of America, Acct. No. xxxxx- x7858 Cash withdrawal, Bank of America, Acct. No. xxxxx- x7858 Cash withdrawal, Bank of America, Acct. No. xxxxx- x7858 Cash withdrawal, Bank of America, Acct. No. xxxxx- x7858 Case 8:07-cv-00397-AG-AN Document 96-2 Filed 12/16/16 Page 17 of 20 Page ID #:637 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 . Case 8:07-cr-00052--Document 1. Filecl ,03/28/07 Jfl>f-7 of 19 Page ID #:17 COUNT Eight 06/23/04 Nine 07/30/04 AMOUNT $8,900 $8,600 - 17 - TRANSACTION Cash withdrawal, Bank of America, Acct. No. xxxxx- x7858 Cash withdrawal, Bank of America, Acct. No. xxxxx- x7858 Case 8:07-cv-00397-AG-AN Document 96-2 Filed 12/16/16 Page 18 of 20 Page ID #:638 ,Case 8:07-cr-00052-Document 1. Filed.03/28/07 .8 of 19 Page ID'#:18 COUNTS TEN THROUGH FOURTEEN 2 [18 u.s.c. §§ 1957 (a), 2) 3 On or about the following dates, in Los Angeles and Orange 4 Counties, within the Central District of California, and 5 elsewhere, defendant AHMAD KIKALAYE knowingly engaged, attempted 6 to engage, and aided, abetted, counseled, commanded, induced and 7 procured the following monetary transactions, by and through a 8 financial institution affecting interstate and foreign commerce, 9 in criminally derived property of a value greater than $10,000, 10 such property having been derived from specified unlawful 11 activity: 12 .COUNT 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Ten Eleven Twelve Thirteen DATE 3/19/04 4/30/04 2/25/05 ·3/1/05 AMOUNT $140,913.56 $797,318.00 $60,000.00 $50,000.00 - 18 - FINANCIAL TRANSACTION Wired proceeds from the sale of the 2400 Oceanfront property from Wells Fargo Bank (WFB) account no. xxxxx-x9859 to Advanced Escrow Corporation to purchase real state property in Escondido, California Deposited proceeds from the sale of the 2400 Oceanfront property i,nto Bank of America account no. xxxxx-x7858 Purchased cashier's check, at WFB, with proceeds from the sale of the 2312 Oceanfront property Purchased cashier's check, at WFB, with proceeds from the sale of the 2312 Oceanfront property Case 8:07-cv-00397-AG-AN Document 96-2 Filed 12/16/16 Page 19 of 20 Page ID #:639 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 Case 8:07-cr-00052---Document 1. File~ p3/28/07 'ltrte9 of 19 Page ID #:19 Fourteen 8/15/05 $500,000.00 Purchased cashier's check, at WFB, with proceeds from the sale of the 2312 Oceanfront property to purchase a property at 915 S. Casino, Las Vegas, Nevada A TRUE BILL Fore~ GEORGES. CARDONA Acting United States Attorney O'BRIEN United States Attorney iminal Division States Attorney Branch Office · - 19 - ?7 Case 8:07-cv-00397-AG-AN Document 96-2 Filed 12/16/16 Page 20 of 20 Page ID #:640 EXHIBIT ''B'' Case 8:07-cv-00397-AG-AN Document 96-3 Filed 12/16/16 Page 1 of 5 Page ID #:641 case 8:07-cr-00052-CJC Document 98 Filed 03/03/10 Page 1 of 4 PagJID #:292 1 2 3 4 5 l~~ 6 17 l: 10 UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRIC.T OF CALIFORNIA SOUTHERN DIVISION 11 UNITED STATES OF AMERICA, 12 Piaintiff, SA CR No. 07-52(A)-CJC E l. R g T 13 v. S U P E R S E D I N G I N F O R M A T I O N 14 MOHSEN KIKALAYE, and AHMAD KIKALAYE, [18 U.S.C. § 1344 (2): Bank . Fraud; 18 U.S.C. § 2: Causing an Act to be Done] 15 16 17 18 19 20 21 A. 22 23 Defendants. The United States Attorney alleges: COUNTS ONE THROUGH TWO [18 u.s.c. §§ 2, 1344(2)] INTRODUCTION At all times relevant to this information: Washington Mutual Bank {"WAMU"), located at 4040 24 Barranca Parkway, Suite 260, Irvine, California 92604, was a 25 federally insured financial institution. ! 26 B. 27 THE SCHEME TO DEFRAUD 2. Beginning on or about July 26, 2000, and continuing 28 through on or about April 26, 2005, in orange County, within the Case 8:07-cv-00397-AG-AN Document 96-3 Filed 12/16/16 Page 2 of 5 Page ID #:642 J case 8:07-cr-00052-CJC Document 98 · Filed 03/03/10 Page 2 of 4 Page ID #:293 1 Central District of California, defendant MOHSEN KIKALAYE 2 knowingly, and with intent to defraud, executed a scheme to 3 obtain money owned by and in the custody and control of WAMU by 4 means of material false and fraudulent pretenses, 5 representations, and promises, and the concealment of material 6 facts. 7 C. 8 MEANS TO ACCOMPLICE THE FRAUDULENT SCHEME 3. In carrying out the fraudulent scheme, acting with 9 intent to defraud and deceive, defendant MOHSEN KIKALAYE caused 10 false information and false statements to be communicated, and . 11 material information to be concealed and omitted, in loan 12 applications submitted to WAMU, including, without limitation, 13 grossly inflating his income. 14 4. Such concealed and omitted facts were material in that, 15 had WAMU known the true facts, it would not have approved the 16 loans. 17 D. 18 EXECUTION OF THE FRAUDULENT SCHEME 5. On or about the following dates, within the Central 19 District of California, defendant MOHSEN KIKALAYE submitted and 20 willfully caused others.to submit the following loan 21 applications, each of which constituted an execution of the 22 fraudulent scheme: 23 COUNT 24 ONE 25 TWO 26 27 28 DATE 7/26/00 5/13/02 ACT Loan application for property located at 2314 Oceanfront, Newport Beach, California Loan application to re-finance property located at 2314 Oceanfront, Newport Beach, California 2 Case 8:07-cv-00397-AG-AN Document 96-3 Filed 12/16/16 Page 3 of 5 Page ID #:643 J Case 8:07-cr-00052-CJC Document 98 Filed 03/03/10 Page 3 of 4 Page ID #:294 1 2 3 A. 4 INTRODUCTION COUNTS THREE THROUGH FOUR [18 u.s.c. §§ 2, 1344(2)] 6. Paragraph one of this first superseding information is 5 incorporated herein by this reference. 6 B. THE SCHEME TO DEFRAUD 7 7. Beginning oh or about July 10, 2002, and continuing 8 through on or about April 30, 2004, in Orange County, within the 9 Central District of California, defendant AHMAD KIKALAYE 10 knowingly, and with intent to defraud, executed a scheme to 11 obtain money owned by and in the custody and control of WAMU by 12 means of material false and fraudulent pretenses, 13 representations, and promises, and the concealment of material 14 facts. 15 C. 16 MEANS TO ACCOMPLICE THE FRAUDULENT SCHEME 8. In carrying out the fraudulent scheme, acting with 17 intent to defraud and deceive, defendant AHMAD KIKALAYE caused 18 false information and false statements to be communicated, and 19 material information to be concealed and omitted, in loan 20 applications submitted to WAMU, including, without limitation, 21 grossly inflating his income and assets, and falsely stating his 22 date of birth. 23 9. Such concealed and omitted facts were material in that, 24 had WAMU known the true facts, it would not have approved the 25 loans. 26 D. 27 EXECUTION OF THE FRAUDULENT SCHEME 10. On or about the following dates, within the Central 28 District of California, defendant AHMAD KIKALAYE submitted and 3 Case 8:07-cv-00397-AG-AN Document 96-3 Filed 12/16/16 Page 4 of 5 Page ID #:644 J Case 8:07-cr-00052-CJC Document 98 Filed 03/03/10 Page 4 of 4 Pag~ ID #:295 1 caused others to submit the follqwing loan applications, each of 2 which constituted an execution of the fraudulent scheme: 3 COUNT DATE ACT 4 THREE 7 /10/02 Loan application for property located at 2400 w. Oceanfront, Newport Beach, California 5 FOUR 3/17/04 Loan application for property located at 6 3075 N. Broadway, 7 8 GEORGES. CARDONA Acting United States Attorney 9 CHRISTINE C. EWELL 10 Ass'stant United States Attorney lh. ef' Crirt Di visD 11 12 DOUGLAS . McCORMICK 13 Assistant United States Attorney Acting Chief, Santa Ana Branch Office 14 JEANNIE M. JOSEPH 15 Assistant United States Attorney 16 17 18 19 20 21 22 23 24 25 26 27 28 4 Escondido, California Case 8:07-cv-00397-AG-AN Document 96-3 Filed 12/16/16 Page 5 of 5 Page ID #:645 EXHIBIT ''C'' Case 8:07-cv-00397-AG-AN Document 96-4 Filed 12/16/16 Page 1 of 19 Page ID #:646 1 2 3 4 5 6 7 8 Case 8:07-cr-00052-CJF Document 95 Filed 02/25/10 P~ge 1 of 18 Page ID #:273 GEORGES. CARDONA Acting United States Attorney ROBB C. ADKINS Assistant United States Attorney Chiefr Santa Ana Branch Office JEANNIE M, JOSEPH Assistant .United States Attorney (Cal. State Bar No.: 180399) Ronald Reagan Federal Bldg. & U.S. Dist; Courthouse 411 W. 4~ St.r Suite 8000 Santa Ana, California 92701 Telephone: (714) 338-3576 Facsimile: (714) 338-3708 E-mail: jeannie.joseph@usdoj.gov Attorneys for Plaintiff 9 UNITED STATES OF AMERICA 10 UNITED STATES DISTRICT COURT 11 FOR THE CENTRAL DISTRICT OF CALIFORNIA 12 SOUTHERN DIVISION UNIT.ED'. STATES OF AMERICA, Plaintiff, v .. SAFIER FARD, MOHSEN KIKALAYE, AHMAD KIKALAYE, and SEDIGHEH BAHRAMIAN, Defendants. ) SA CR Nb, 07-52-CJC ) } PLEA AGREEMENT FOR DEFENDANT } AHMAD KIKALAYE ) ) } ) ) ) ) ) ) 13 14 15 16 17 18 19 20 21 1. This constitutes the plea agreement between AHMAD 22 KIKALAYE ("defendant") and the United State:;: Attorney's Office 23 for the Central District of California ("the USAO'') in the above- 24 captioned case, This agreement is limited to the USAO and cannot 25 bind any other federal, stater or local prosecuting, 26 administrative, or regulatory authorities. 27 / / / 28 I I I Case 8:07-cv-00397-AG-AN Document 96-4 Filed 12/16/16 Page 2 of 19 Page ID #:647 Case 8:07-cr-00052-CJF Document 95 Filed 02/25/10 Pctge 2 of 18 Page ID #:274 1 PLEA 2 2. Defendant gives up the right to indictment by a grand_ 3 jury and agrees to plead guilty to counts three and four of a 4 first superseding information in the form attached to this 5 agreement or a substantially similar form. 6 NATURE OF THE OFFENSE 7 3. In order for defendant to be guilty of counts three and 8 four of the first superseding information, each of which charges 9 bank fraud, in violation of Title 18, United States Code, Section 10 1344, the following must be true: (1) defendant knowingly 11 devised, participated in, or aided and abetted a scheme to 12 defraud a financial institution; (2) the statements made or facts 13 omitted as part of the scheme were material; (3) defendant acted 14 with the intent to defraud; and (4) the financial institution was 15 federally insured. Defendant admits -that defendant is; in fact, 16 guilty of this offense as described in counts three and four of 17 the first superseding information. 18 PENALTIES 19 4. The statutory maximum sentence that the Court can impose 20 for a violation of Title 18, United States Code, Section 1344, 21 is: 30 years imprisonment; a five-year period of supervised 22 release; a fine of $1,000,000 or twice the gross gain or gross 23 loss resulting from the offense, whichever is greatest; and a 24 mandatory special assessment of $100. 25 5. Therefore, the total maximum sentence for all offenses 26 to which defendant is pleading guilty is: 60 years imprisonment; ?7 a five-year period of supervised release; a fine of $2,000,000 or 28 2 Case 8:07-cv-00397-AG-AN Document 96-4 Filed 12/16/16 Page 3 of 19 Page ID #:648 Case 8:07-cr-00052-CJF Document 95 Filed 02/25/10 P 22 PROPOUNDING PARTY: PLAINTIFF UNITED STATES OF AMERICA 23 RESPONDING PARTY: CLAIMANT KEITH THOMAS 24 SET NUMBER: ONE 25 The plaintiff, United States of America, pursuant to Rule 36 of 26 the Federal Rules of Civil Procedure, by its attorneys, hereby 27 requests that claimant Keith Thomas answer the following Requests 28 for Admissions separately, in writing and under oath, and that such Case 8:07-cv-00397-AG-AN Document 96-8 Filed 12/16/16 Page 2 of 8 Page ID #:685 1 answers be signed by the person making them and served upon plaintiff 2 within thirty days after the service hereof. 3 Pursuant to Rule 36 of the Federal Rules of civil Procedure, the 4 matters set forth below shall be deemed admitted unless you respond 5 to said request (or a response is made on your behalf) within thirty 6 {30) days after service of the request or within such shorter or 7 longer time as the Court may allow. 8 PLEASE TAKE FURTHER NOTICE that, pursuant to Local Rule 36-2 of 9 the Local Rules of the United States District Court for the Central 10 District of California, the person answering these Requests for 11 Admissions shall quote each Request for Admission in full immediately 12 preceding the statement of any answer thereto. 13 DEFINITIONS 14 a. 11 Complaint 11 shall mean and refer to the plaintiff's 15 Complaint for Forfeiture filed in this action. 16 b. "Verified claim of forfeiture 11 and "Answer" shall mean and 17 refer to the verified statement identifying interest and 'answer filed 18 by claimant in the above-entitled action on file herein. 19 20 21 22 23 24 25 26 27 28 c. 11 You 11 and "your 11 shall mean, refer to and be directed at Keith Thomas. d. "Defendant" means the above captioned defendant properties in which you claim an interest. e. "Ahmad" means and refers to Ahmand Kikalaye. f. g. "Bahramian" means and refers to Sedigheh Bahramian. "Fard" means and refers to Safieh Fard. h. 11Mohsen11 means and refers to Mohsen Kikalaye. i. "Defendant Properties" mean the properties identified in Paragraphs in the Amended Complaint. 2 Case 8:07-cv-00397-AG-AN Document 96-8 Filed 12/16/16 Page 3 of 8 Page ID #:686 1 j. "Oceanfront Properties" means and refers to the properties 2 located at 2312 Oceanfront and 2400 Oceanfront in Newport Beach, 3 California. 4 REQUEST FOR ADMISSIONS 5 REQUEST FOR ADMISSION NO. 1: 6 Beginning in 1997, Fard purchased multiple rental properties in 7 Newport Beach, California, including the Oceanfront Properties. 8 9 REQUEST FOR ADMISSION NO. 2: 10 After Fard purchased the Oceanfront Properties, she transferred 11 them back and forth between Ahmad, Mohsen and Bahramian. 12 13 REQUEST FOR ADMISSION NO. 3: 14 Fard, Ahmad, Mohsen, and Bahramian purchased the Oceanfront 15 Properties from each other at inflated prices by obtaining fraudulent 16 mortgage loans from Washington Mutual. To qualify for the loans, 17 they provided false information to the bank about their income and 18 assets. Their income as stated in the loan applications far exceeded 19 their income as reported in their tax returns. 20 21 REQUEST FOR ADMISSION NO. 4: 22 After depositing proceeds of the fraudulent loans into his Bank 23 of America account, Ahmad made multiple a structured cash 24 withdrawals, which totaled over $250,000. 25 26 REQUEST FOR ADMISSION NO. 5: 27 Fard, Ahmad, Mohsen, and Bahramian did not report the sale of 28 the Oceanfront Properties in their tax returns. 3 Case 8:07-cv-00397-AG-AN Document 96-8 Filed 12/16/16 Page 4 of 8 Page ID #:687 1 REQUEST FOR ADMISSION NO. 6: 2 By transferring the Oceanfront Properties multiple times amongst 3 themselves, Fard, Ahmad, Mohsen, and Bahramian acted together to 4 interfere with the ability of the Internal Revenue Service to 5 determine liability for taxes on the capital gains resulting from the 6 sales. 7 8 REQUEST FOR ADMISSION NO. 7: 9 By transferring the Oceanfront Properties multiple times amongst 10 themselves, Fard, Ahmad, Mohsen, and Bahrarnian acted together to 11 conceal their bank fraud. 12 13 REQUEST FOR ADMISSION NO. 8: 14 Ahmad used proceeds from the sales of the Oceanfront Properties 15 to purchase the defendant properties. 16 17 18 19 20 21 22 23 24 25 26 27 28 Dated: March 1r I 2016 7{ Respectfully submitted, EILEEN M. DECKER United States Attorney LAWRENCE S. MIDDLETON Assistant United States Attorney Chief, Criminal Division STEVEN R. WELK Assistant United States Attorney Chief, Asset Forfeiture Section FRANK D. KORTUM Assistant United States Attorney Attorneys for Plaintiff UNITED STATES OF AMERICA 4 Case 8:07-cv-00397-AG-AN Document 96-8 Filed 12/16/16 Page 5 of 8 Page ID #:688 PROOF OF SERVICE BY MAILING 2 I am over the age of 18 and not a party to the within 3 action. I am employed by the Office of the United States 4 Attorney, Central District of California. My business address 5 is 312 North Spring Street, 14th Floor, Los Angeles, California 6 90012. 7 On March 14, 2016, I served a PLAINTIFF'S FIRST SET OF 8 ADMISSIONS TO CLAIMANT KEITH THOMAS, on each person or entity 9 named below by enclosing a copy in an envelope addressed as 10 shown below and placing the envelope for collection and mailing 11 on the date and at the place shown below following our ordinary 12 office practices. 13 TO: KEITH THOMAS 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 X PRISONER ID CDC T-67081 HIGH DESERT STATE PRISON P.O. BOX 33 SUSANVILLE, CALIFORNIA 96127 I am readily familiar with the practice of this office for collection and processing correspondence for mailing. On the same day that correspondence is placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service in a sealed envelope with postage fully prepaid. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. I declare that I am employed in the office of a member of the bar of this court at whose direction the service was made. Executed on: March 14, 2016 at Los Angeles, California. ~~/ 1 AnnM. Ebe~ Case 8:07-cv-00397-AG-AN Document 96-8 Filed 12/16/16 Page 6 of 8 Page ID #:689 PROOF OF SERVICE BY MAIL 1 2 I am over the age of 18 and not a party to the within 3 action. I am employed by the Office of the United States 4 Attorney, Central District of California. My business address 5 is 411 West Fourth Street, Suite 8000, Santa Ana, California 6 92701. 7 On December 16, 2016, I served a copy of Notice of Motion 8 9 10 11 12 13 14 15 and Motion for Summary Judgment; [Proposed] Statement of Uncontroverted Facts and Conclusions of Law on each person or entity named below by enclosing a copy in an envelope addressed as shown below and placing the envelope for collection and mailing on the date and at the place shown below following our ordinary office practices. TO: SEE SERVICE LIST X I am readily familiar with the practice of this office for collection and processing correspondence for mailing. On the 16 same day that correspondence is placed for collection and 17 mailing, it is deposited in the ordinary course of business with the United States Postal Service in a sealed envelope with 18 19 20 21 22 23 24 25 26 27 28 postage fully prepaid. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. I declare that I am employed in the office of a member of the bar of this court at whose direction the service was made. Executed on: December 16, 2016 at Santa Ana, California. /s/ ANN M. EBERHARDY Case 8:07-cv-00397-AG-AN Document 96-8 Filed 12/16/16 Page 7 of 8 Page ID #:690 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 AHMAD KIKALAYE DELANO, CALIFORNIA - SERVICE LIST - Case 8:07-cv-00397-AG-AN Document 96-8 Filed 12/16/16 Page 8 of 8 Page ID #:691 EXHIBIT ''H'' Case 8:07-cv-00397-AG-AN Document 96-9 Filed 12/16/16 Page 1 of 5 Page ID #:692 FrankD. Kortum:aa Frank D. Kortum Assistant United States Attorney Email: Frank.Kortum@usdoj.gov Telephone: {213) 894-5710 . ( U. S. Department of Justice United States Attorney . Central1Jistrict of California Federal Courthouse 312 N. Spring Street, 141h Floor Los Angeles, California 90012 Fax: {213) 894-7177 October 20, 2016 · BY CERTIFIED MAIL AND FIRST CLASS MAIL Keith Thomas, T-67081 Kern Valley State Prison Facility C-8, Building B, Cell 120 P.O. Box 5103 D.elario, CA 93216 Re: United States v. Ten Parcels Of Real Property (Vacant Lots) CV 07-00397-AG(ANx) Dear Mr. Thomas: . . In your letter of October 6, 2016, you acknowledge receiving a courtesy copy of a l~tter from me addressed to Mr. IGkalaye. The letter to Mr. IGkalaye discusses a motion for summary · judgment that the government plans to file in the above-referenced civil forfeiture action. You · expressed an interest in discussing the subject matter of the letter. . . For the reasons set forth in your letter I'm not sure that we 6an arrange either a telephonic or in-person meeting at this time, but I remain interested in receiving any information you may have as to the reason why you filed a claim to the Ten Parcels of Real Property ("Real Property") that are the subject of above-referenced action. If you want to provide this information you may as a :first step consider sending me a written statement by mail, setting forth the factual and/or legal reasons why you believe you have an ownership interest ( or some other type of interest) in the Real Property that would justify 'the Court in ruling in your favor in this case. After I've reviewed your statement a decision will be made as to whether further discussion would be appropriate.* Very truly yours, EILEEN M. DECKER United States Attorney . .f.i..ssistant United States Attorney Asset Forfeiture Section * Your letter indicated that you can "talk ... over the phone," but it's my understanding that inmates may only mal<:e collect calls and i'm ·not prese~tly authorized to accept a collect call in this case. /s). Case 8:07-cv-00397-AG-AN Document 96-9 Filed 12/16/16 Page 2 of 5 Page ID #:693 U.S. Postal Service CERTIFIED MAIL RECEIPT (Domestic Mail Only; No Insurance Coverage Provided) <:O fT1 IJ1 ;;;t- '----------------,----------' t'- Postage $ c:l 1-----------1 c:l Certified Fee Lt) Return Receipt Fee fT1 (Endorsement Required) Postmark Here c:l 1--------l D Restrloted Delivery Fee CJ (Endorsement Required) c:J Tota rl U1 Sent1 CJ ·sr,eei :::g or PO CJ "Cli.ii,"il ['- Keith Thomas, T-67081 Kern Valley State Prison Facility C-8, Building B, Cell 120 P.O. Box 5103 Delano, CA 93216 tvfav{~ ····------- PS Form 3800, January 2001 See Reverse for lnslruolions • Complete. ltern\1111~1°~~d 3. • Print yotJr aame'·atid.address on the reverse so that we can return the card to you. • Attach this card to the back of the mallpiece, or on the front If space permits. · .. 1. Article Addressed to: D. Is delivery address different from Jtem 1? . Keith Thomas, T-670-81 ·.:t Kem Valley State Prison :F~~ility C-8, Building B, Cell 120 P.O. Box 5103 D~lano, CA 93216 1111111111111111111111111111111111111111111111 9590 9402 1631 6053 1616 43 If YES, enter delivery address below: · 3. service "fype D Adull Signature , D Adull Slgnature'.llestrlcted Delivery l,J..e'ertlfled Mall® D Certified Mall Restricted Delivery D Priority Mall Express® D Registered Mall™ tJ Registered Mall Restricted Delivery -------------------'· D Collect on Delivery D Collect on Delivery Restricted Delivery tJ Return Reoelptfor Merchandise O Signature Confirmation™ D Signature Confirmation Restricted Dellveiy 9 Aitl"I" l\l111nh<>r m,-n.ofRrfmm .oAtv/n.,. Jabe/l 7002 0510 0003 5007 4538 PS Form 3811, July 2016 PSN 7530-02-000-9053 :I Mall d Mall Restricted Delivery . -=· =_1500) Case 8:07-cv-00397-AG-AN Document 96-9 Filed 12/16/16 Page 3 of 5 Page ID #:694 FrankD. Kortum:aa Frank D. Kortum Assistant United States Attorney Email: Frank.Korh1m@usdoj.gov Telephone: (213) 894-5710 U. S. Department of Justice United States Attomey Central District of California Federal Courthouse 312 N. Spring Street, 14111 Floor Los Angeles, California 90012 Fax: (213) 894-7177 October 20, 2016. BY CERTIFIED MAIL AND FIRST CLASS MAIL Keith Thomas, CDC T-67081 High Desert State Prison P.O. Box33 Susanville, CA 96127 Re: United States v. Ten Parcels Of Real Property: (Vacant Lots) CV 07-00397~AG(ANx) Dear Mr. Thomas: In your letter of October .6, 2016, you aclmowledge receiving a cout'tesy copy of a letter from me addressed to Mr. Kikalaye. The letter to Mt·, Kikalaye discusses a motion for summary judgment that the government plans to file in the .above-referenced civil forfeiture action. You expressed an interest in discussing the ,subject matter of the letter . . For the reasons set forth in your letter I'm not sure that we can arrange either a telephonic or in-person meeting at this time, but I remam interested in receiving any information you may have as to the reason why you filed a claim to the Ten Parcels of Real Prope1'ty ("Real Property'') that are the subject of above-referenced action. If you want to provide this information you may as a first step consider sending me a written statement by mail, setting forth the factual and/or legal reasons why you believe you have an ownership interest ( or some other type of interest) in the Real Property that ~ould justify the Court in 1·uling in your favor in this case. After I'vv reviewed your statement a decision will be made as to whether further discussion would be appropriate.* Very truly yours, EILEEN M. DECKER United States Attorney CD.KORTUM Assistant United States Attorney Asset Forfeiture Section * Your letter indicated that you can "talk . . . over the phone," but it's my understanding that inmates may only malrn collect calls and rm.not presently authorized to accept a collect call in this case. Case 8:07-cv-00397-AG-AN Document 96-9 Filed 12/16/16 Page 4 of 5 Page ID #:695 ..II ..I] IT' IU IU Cl a:o r-'I r-'I CJ Cl c::J CJ IT' I U.S. Postal ServicerM CERTIFIED MAILrM RECEIPT {Domestic Mail Only; No Insurance Coverage Provided) ·l-· ~ ~,••111ou11t:iu, . . . . ' '"~'" ... ~ ~)· F i~';".i9 ! 1T'4> [j JI~ a tJ[l «,:1'. f"'" f'!fi:, \C.1 ~,D E,Jo, fl Tc"" ~) Postage $ ® Certified Fee Return Receipt Fee Postm,uk (Endorsement Required) Here Restricted Del/veiy Fee (Endorsement Required) ~ TotalP Keith.Thomas, CDC T-67081 sent To High Desert State Prison rr, El srr;,;,7,-; P.O. Box 33 , r- orPoB Susanville, CA 96127 City, Slt1 _~ ___ IJ2/_f)1} l/1-· ---'···.---- PS l'orm 3000, August 2006 See Reverse for Instructions -- - - I • Complete Items 1, 2, and 3. A. . Signature • Print your name and address on the reverse so that we can return the card to you. • Attach this card to the back of the mallpiece, or on the front if space permits. X 8. . tJ Agent D Addressee o. Date of Dellvery l/Jkc.{/,. 1. Article Addressed to: D. Is dellv address differentfrom Item 1? Keith Thomas, CDC T-67081 High Desert State Prison P.O. Box33 Susanville, CA ·96127 If YES, ent~~ del!ve~dress b?low: " ~ '9' ~ %& II IIIIIIIIIII IIIIIIII II llllllllll 1111111111111 ,h • ~~f ;lf i~ Restricted Dellveiy 9590 9402 1631 6053 1616 50 O Certified Mall Restricted Dellveiy ------------------10 Colleoton Dellveiy · 2. Article Number (rransfer from service /abeQ D Collect on Dellveiy Restricted Del/veiy ~ '-···-JMaJI 7013 1090 DOOJii' ~flJ;E 29'66 · MallRestrlotedDellveiy 00 C· :·· '"" 0 Regis, 0 Register&. Dellveiy O Return Receipt. Merchandise D Signature Conf/rm·atlon™ 0 Signature Confirmation Restricted Dellveiy Case 8:07-cv-00397-AG-AN Document 96-9 Filed 12/16/16 Page 5 of 5 Page ID #:696 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 EILEEN M. DECKER United States Attorney LAWRENCE S. MIDDLETON Assistant United States Attorney Chief, Criminal Division STEVEN R. WELK Assistant United States Attorney Chief, Asset Forfeiture Section FRANK D. KORTUM (Cal. Bar No. 110984) Assistant United States Attorney 1400 United States Courthouse 312 North Spring Street Los Angeles, California 90012 Telephone: (213) 894-5710 Facsimile: (213) 894-7177 E-mail: Frank.Kortum@usdoj.gov Attorneys for Plaintiff UNITED STATES OF AMERICA UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION UNITED STATES OF AMERICA, Plaintiff, v. TEN PARCELS OF REAL PROPERTY (VACANT LOTS) LOCATED IN SAN BERNARDINO, CALIFORNIA, Defendant. No. CV 07-00397-AG(ANx) [PROPOSED] STATEMENT OF UNCONTROVERTED FACTS AND CONCLUSIONS OF LAW DATE: January 23, 2017 TIME: 10:00 a.m. COURTROOM: 10D AHMAD KIKALAYE AND KEITH THOMAS, Claimants. // // // // // // Case 8:07-cv-00397-AG-AN Document 96-10 Filed 12/16/16 Page 1 of 10 Page ID #:697 2 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 Pursuant to Rule 56 of the Federal Rules of Civil Procedure and Rule 56-1 of the Local Rules of the Central District of California, the Court issues its Statement of Uncontroverted Facts and Conclusions of Law. I. UNCONTROVERTED FACTS 1. In March of 2007, a federal grand jury in this District indicted Safiah Fard (“Fard”) and Ahmad Kikalaye (“Ahmad”) on several counts of bank fraud. United States v. Fard, No. SA CR 07-52-CJC (C.D. Cal.). See Exh. “A” (copy of indictment). 2. In April of 2007, the government filed a civil forfeiture complaint alleging that Ahmad acquired the defendant properties with a portion of the proceeds of the fraud scheme. Verified Complaint ¶ 10. Ahmad filed a claim in the civil forfeiture action on May 9, 2007. Dkt. 7. Claimant Keith Thomas (“Thomas”) filed a claim in the civil forfeiture action on July 11, 2007. Dkt. 11. 3. In 2010, Ahmad agreed to plead guilty to defrauding Washington Mutual in connection with loan applications submitted in 2002 and 2004. See Exhs. “B” (copy of superseding indictment; “C” (Plea Agreement) & “D” (judgment). In 2013, Fard was convicted of conspiracy to commit fraud and money laundering following a jury trial (See Exh. “E”) and the Ninth Circuit affirmed her convictions. United States v. Fard, 597 Fed.Appx. 438, 439 (9th Cir. 2015). 4. The civil forfeiture case was stayed during the pendency of the related criminal case. Following the resolution of the criminal case, the government served claimants Ahmad and Thomas with Requests for Admission (“RFAs”), as follows: Case 8:07-cv-00397-AG-AN Document 96-10 Filed 12/16/16 Page 2 of 10 Page ID #:698 3 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 REQUEST FOR ADMISSION NO. 1: Beginning in 1997, Fard purchased multiple rental properties in Newport Beach, California, including the Oceanfront Properties. REQUEST FOR ADMISSION NO. 2: After Fard purchased the Oceanfront Properties, she transferred them back and forth between Ahmad, Mohsen and Bahramian. REQUEST FOR ADMISSION NO. 3: Fard, Ahmad, Mohsen, and Bahramian purchased the Oceanfront Properties from each other at inflated prices by obtaining fraudulent mortgage loans from Washington Mutual. To qualify for the loans, they provided false information to the bank about their income and assets. Their income as stated in the loan applications far exceeded their income as reported in their tax returns. REQUEST FOR ADMISSION NO. 4: After depositing proceeds of the fraudulent loans into his Bank of America account, Ahmad made multiple structured cash withdrawals, which totaled over $250,000. REQUEST FOR ADMISSION NO. 5: Fard, Ahmad, Mohsen, and Bahramian did not report the sale of the Oceanfront Properties in their tax returns. REQUEST FOR ADMISSION NO. 6: By transferring the Oceanfront Properties multiple times among[] themselves, Fard, Ahmad, Mohsen, and Bahramian acted together to interfere with the ability of the Internal Revenue Service to determine liability for taxes on the capital gains resulting from the sales. REQUEST FOR ADMISSION NO. 7: By transferring the Oceanfront Properties multiple times among[] themselves, Fard, Ahmad, Mohsen, and Bahramian acted together to conceal their bank fraud. REQUEST FOR ADMISSION NO. 8: Ahmad used proceeds from the sales of the Oceanfront Properties to purchase the defendant properties. See Exhs. “F” (RFAs served on Ahmad) & “G” (RFAs served on Thomas). 5. As of August 1, 2016, neither claimant had responded to the RFAs (Declaration of Frank D. Kortum ¶ 3), “result[ing] in automatic admission of the matters requested.” F.T.C. v. Medicor, LLC, 217 Case 8:07-cv-00397-AG-AN Document 96-10 Filed 12/16/16 Page 3 of 10 Page ID #:699 4 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 F.Supp.2d 1048, 1053 (C.D. Cal. 2002)(citing Fed.R.Civ.P. 36(a)). As a result, the following facts are deemed established. Admitted Fact No. 1: Beginning in 1997, Fard purchased multiple rental properties in Newport Beach, California, including the Oceanfront Properties. RFA No. 1; see also Verified Complaint ¶¶ 6, 11 & 21 (describing initial purchase of properties that eventually yielded proceeds used to acquire the defendant properties). Admitted Fact No. 2: After Fard purchased the Oceanfront Properties, she transferred them back and forth between Ahmad, Mohsen and Bahramian. RFA No. 2; see also Verified Complaint ¶ 6, 12, 13, 16-18, & 32-38 (summarizing transfers). Admitted Fact No. 3: Fard, Ahmad, Mohsen, and Bahramian purchased the Oceanfront Properties from each other at inflated prices by obtaining fraudulent mortgage loans from Washington Mutual. To qualify for the loans, they provided false information to the bank about their income and assets. Their income as stated in the loan applications far exceeded their income as reported in their tax returns. RFA No. 3; see also Verified Complaint ¶ 7, 12-14, 19, 31, 32 & 36 (describing false statements made to obtain bank loans). Admitted Fact No. 4: After depositing proceeds of the fraudulent loans into his Bank of America account, Ahmad made multiple structured cash withdrawals, which totaled over $250,000. RFA No. 4; see also Verified Complaint ¶¶ 7 & 44 (describing structured withdrawals). Case 8:07-cv-00397-AG-AN Document 96-10 Filed 12/16/16 Page 4 of 10 Page ID #:700 5 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 Admitted Fact No. 5: Fard, Ahmad, Mohsen, and Bahramian did not report the sale of the Oceanfront Properties in their tax returns. RFA No. 5; see also Verified Complaint ¶¶ 8, 12.1, 13.1, 32.1 & 39.1 (describing failures to report sales). Admitted Fact No. 6: By transferring the Oceanfront Properties multiple times among themselves, Fard, Ahmad, Mohsen, and Bahramian acted together to interfere with the ability of the Internal Revenue Service to determine liability for taxes on the capital gains resulting from the sales. RFA No. 6; see also Verified Complaint ¶ 9, 12, 12.1, 13, 13.1, 16-18, 32, 32.1, 33-38 & 39.1 (describing transfers and failures to report sales). Admitted Fact No. 7: By transferring the Oceanfront Properties multiple times among themselves, Fard, Ahmad, Mohsen, and Bahramian acted together to conceal their bank fraud. RFA No. 7; see also Verified Complaint ¶ 9, 12-14, 16-18, 31-38 (describing transfers and false statements) & MSJ Exhs. “A” – “E” (indictment and judgments in criminal case). Admitted Fact No. 8: Ahmad used proceeds from the sales of the Oceanfront Properties to purchase the defendant properties. RFA No. 8; see also Verified Complaint ¶¶ 10, 39, & 43-45 (describing transactions). 5. To the extent that any findings of fact contained herein can be considered to be or are deemed to be conclusions of law, they are incorporated by reference into the Conclusions of Law. Case 8:07-cv-00397-AG-AN Document 96-10 Filed 12/16/16 Page 5 of 10 Page ID #:701 6 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. CONCLUSIONS OF LAW 1. This is a civil forfeiture action brought pursuant to 18 U.S.C. § 981 (a)(1)(A) and (C) and 31 U.S.C. § 5317(c)(2). 2. This court has subject-matter jurisdiction under 28 U.S.C. §§ 1345 and 1355. 3. Venue lies in this district pursuant to 28 U.S.C. § 1395(b). A. Standard for Resolution of Summary Judgment Motions 4. Federal Rule of Civil Procedure 56(a) authorizes the granting of summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” The movant bears the initial burden of establishing “the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any,’ which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (quoting former Fed. R. Civ. P. 56(c)). 5. To meet its burden of production, the moving party must either produce evidence negating an essential element of the nonmoving party’s claim or defense or show that the nonmoving party does not have enough evidence of an essential element to carry its ultimate burden of persuasion at trial. Nissan Fire and Marine Insurance Company, Ltd. v. Fritz Cos., 210 F.3d 1099, 1102 (9th Cir. 2000). The facts set forth in a verified complaint will support a summary judgment motion. See Atlas Copco AB v. Atlascopcoiran.com, 533 F.Supp.2d 610, 612 (E.D. Va. 2008). Admissions made as a result Case 8:07-cv-00397-AG-AN Document 96-10 Filed 12/16/16 Page 6 of 10 Page ID #:702 7 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 of failure to respond to RFAs will also support a summary judgment motion. Echo Drain v. Newsted, 307 F.Supp.2d 1116, 1122 (C.D. Cal. 2003); Medicor, supra, 217 F.Supp.2d at 1053. 6. Once the moving party meets its initial burden of showing there is no genuine issue of material fact, the opposing party has the burden of producing competent evidence and cannot rely on mere allegations or denials in the pleadings. Matsushita Electric Industries Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party there is no genuine issue for trial. 7. Fraud proceeds are subject to forfeiture pursuant to 18 U.S.C. § 981(a)(1)(C). See United States v. Bowdoin, 770 F. Supp. 2d 133, 134 (D.D.C. 2011); accord United States v. Real Property Located at Glen-Mady Way, 590 F. Supp. 2d 1295, 1300 (E.D. Cal 2008). In addition, property acquired with the proceeds of a structuring offense is subject to forfeiture. 31 U.S.C. § 5317(c); United States v. Haleamau, 887 F. Supp. 2d. 1051, 1052-53 (D. Haw. 2010). 8. In this case, the failure of Ahmad and Thomas to respond to the government’s RFAs establish the facts necessary to prove that the defendant properties are subject to forfeiture. Specifically, • Beginning in 1997, Fard purchased multiple rental properties in Newport Beach, California, including the Oceanfront Properties. Admitted Fact No. 1 (based on claimant’s failure to respond to RFA No. 1); see also Verified Complaint ¶¶ 6 & 11. • After Fard purchased the Oceanfront Properties, she transferred them back and forth between Ahmad, Mohsen Case 8:07-cv-00397-AG-AN Document 96-10 Filed 12/16/16 Page 7 of 10 Page ID #:703 8 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 and Bahramian. Admitted Fact No. 2 (based on claimant’s failure to respond to RFA No. 2); see also Verified Complaint ¶¶ 6, 12, 13, 16-18, & 32-38 summarizing transfers) (describing initial purchase of properties that eventually yielded proceeds used to acquire the defendant properties). • Fard, Ahmad, Mohsen, and Bahramian purchased the Oceanfront Properties from each other at inflated prices by obtaining fraudulent mortgage loans from Washington Mutual. To qualify for the loans, they provided false information to the bank about their income and assets. Their income as stated in the loan applications far exceeded their income as reported in their tax returns. Admitted Fact No. 3 (based on claimant’s failure to respond to RFA No. 3); see also Verified Complaint ¶¶ 7, 12-14, 19, 31, 32, 36 & 39 (describing false statements made to obtain bank loans). • After depositing proceeds of the fraudulent loans into his Bank of America account, Ahmad made multiple structured cash withdrawals, which totaled over $250,000. Admitted Fact No. 4 (based on claimant’s failure to respond to RFA No. 4); see also Verified Complaint ¶¶ 7 & 44 (describing structured withdrawals). • Fard, Ahmad, Mohsen, and Bahramian did not report the sale of the Oceanfront Properties in their tax returns. Admitted Fact No. 5 (based on claimant’s Case 8:07-cv-00397-AG-AN Document 96-10 Filed 12/16/16 Page 8 of 10 Page ID #:704 9 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 failure to respond to RFA No. 5); see also Verified Complaint ¶¶ 8, 12.1, 13.1, 32.1 & 39.1 (describing failure of Ahmad and Fard to report sales). • By transferring the Oceanfront Properties multiple times among themselves, Fard, Ahmad, Mohsen, and Bahramian acted together to interfere with the ability of the Internal Revenue Service to determine liability for taxes on the capital gains resulting from the sales. Admitted Fact No. 6 (based on claimant’s failure to respond to RFA No. 6); see also Verified Complaint ¶¶ 9, 12.1, 13, 13.1, 16-18, 32, 32.1, 33-38 & 39.1 (describing transfers and failures to report sales). • By transferring the Oceanfront Properties multiple times among themselves, Fard, Ahmad, Mohsen, and Bahramian acted together to conceal their bank fraud. Admitted Fact No. 7 (based on claimant’s failure to respond to RFA No. 7); see also Verified Complaint ¶ 9, 12-14, 16-18, 31-38, & MSJ Exhs. “A” – “E” (indictment and in criminal case). • Ahmad used proceeds from the sales of the Oceanfront Properties to purchase the defendant properties. Admitted Fact No. 8 (based on claimant’s failure to respond to RFA No. 8); see also Verified Complaint ¶¶ 10, 39, & 43-45 (describing transactions). 9. The facts established above demonstrate that Ahmad acquired the defendant properties with a portion of the proceeds of a fraud scheme (see Glen-Mady Way, supra, 590 F.Supp. 2d at 1300) and a Case 8:07-cv-00397-AG-AN Document 96-10 Filed 12/16/16 Page 9 of 10 Page ID #:705 10 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 structuring offense. Haleamau, supra 887 F.Supp. 2d at 1056. The defendant properties are therefore subject to forfeiture pursuant to 18 U.S.C. § 981(a)(1)(C) and 31 U.S.C. § 5317(c). 10. To the extent that any Conclusions of Law contained herein can be considered to be or are deemed to be findings of fact, they are incorporated by reference into the findings of fact. DATED: UNITED STATES DISTRICT JUDGE Respectfully submitted, EILEEN M. DECKER United States Attorney ROBERT E. DUGDALE Assistant United States Attorney Chief, Criminal Division Assistant United States Attorney STEVEN R. WELK Assistant United States Attorney Chief, Asset Forfeiture Section /s/ FRANK D. KORTUM Assistant United States Attorney Asset Forfeiture Section Attorneys for Plaintiff United States of America Case 8:07-cv-00397-AG-AN Document 96-10 Filed 12/16/16 Page 10 of 10 Page ID #:706 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 PROOF OF SERVICE BY MAIL I am over the age of 18 and not a party to the within action. I am employed by the Office of the United States Attorney, Central District of California. My business address is 411 West Fourth Street, Suite 8000, Santa Ana, California 92701. On December 16, 2016, I served a copy of Notice of Motion and Motion for Summary Judgment; [Proposed] Statement of Uncontroverted Facts and Conclusions of Law on each person or entity named below by enclosing a copy in an envelope addressed as shown below and placing the envelope for collection and mailing on the date and at the place shown below following our ordinary office practices. TO: SEE SERVICE LIST X I am readily familiar with the practice of this office for collection and processing correspondence for mailing. On the same day that correspondence is placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service in a sealed envelope with postage fully prepaid. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. I declare that I am employed in the office of a member of the bar of this court at whose direction the service was made. Executed on: December 16, 2016 at Santa Ana, California. /s/ ANN M. EBERHARDY Case 8:07-cv-00397-AG-AN Document 96-11 Filed 12/16/16 Page 1 of 2 Page ID #:707 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 SERVICE LIST AHMAD KIKALAYE 537 SOUTH COAST HIGHWAY LAGUNA BEACH, CALIFORNIA 92651 AHMAD KIKALAYE 3431 VIA OPORTO NEWPORT BEACH, CA 92663 KEITH THOMAS PRISONER ID CDC T-67081 HIGH DESERT STATE PRISON P.O. BOX 33 SUSANVILLE, CALIFORNIA 96127 KEITH PERZELL THOMAS PRISONER ID CDC T-67081 KERN VALLEY STATE PRISON 3000 WEST CECIL AVENUE P.O. BOX 6000 DELANO, CALIFORNIA 96130 Case 8:07-cv-00397-AG-AN Document 96-11 Filed 12/16/16 Page 2 of 2 Page ID #:708
