United States of America v. Ten Parcels of Real Property (Vacant Lots) Located in San Bernardino County, California

NOTICE OF MOTION AND MOTION for Summary Judgment as to Ten Parcels of Real Property

C.D. Cal.September 1, 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: October 3, 2016 TIME: 10:00 a.m. COURTROOM: 10D PRETRIAL CONFERENCE: October 31, 2016 TRIAL: November 15, 2016 [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). Case 8:07-cv-00397-AG-AN Document 87 Filed 09/01/16 Page 1 of 17 Page ID #:483 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 October 3, 2016, the United States of America (the “government”) will and does move 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. Because claimants are not represented by counsel the pre-motion meeting requirement of Local Rule 7-3 does not apply to this motion.2 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. In any event, scheduling a pre- motion meeting would have been impossible as a practical matter because the PACER docket sheet for this case does not reflect either e-mail addresses or phone numbers for either claimant, and mail addressed to them at the addresses reflected in the docket sheet has been returned as undeliverable. The government respectfully suggests that claimants are responsible for creating a situation whereby they effectively cannot be reached. “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. As matters now stand, no FOOTNOTE CONT’D ON NEXT PAGE Case 8:07-cv-00397-AG-AN Document 87 Filed 09/01/16 Page 2 of 17 Page ID #:484 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 Dated: August 31, 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 immediate remedy is available for claimants’ violation of Local Rule 41-6, because although the Rule specifically authorizes the dismissal of an action if a “pro se plaintiff” fails to provide current contact information, no corresponding provision is applicable where a pro se party other than a plaintiff fails to provide such information. Although an action should of course be resolved on the merits if possible (which is why the government has filed this summary judgment motion), 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 87 Filed 09/01/16 Page 3 of 17 Page ID #:485 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 MEMORANDUM OF POINTS AND AUTHORITIES. . . . . . . . . . . . . . 4 I. STATEMENT OF FACTS. . . . . . . . . . . . . . . . . . . .. 4 II. AUGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . 9 A. The Summary Judgment Standard. . . . . . . . . . . . 9 B. The Burden of Proof. . . . . . . . . . . . . . . . . 10 C. The Defendant Properties Should be Forfeited. . . . . 11 III. CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . 14 Case 8:07-cv-00397-AG-AN Document 87 Filed 09/01/16 Page 4 of 17 Page ID #:486 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 TABLE OF AUTHORITIES CASES PAGES Atlas Copco AB v. Atlascopcoiran.com, 533 F.Supp.2d 610 (E.D. Va. 2008)..........................4, 10 Burtscher v. Moore, No. CV 11-02309 DMG (JEMx), 2013 WL 11316941 (C.D. Cal. Feb. 7, 2013)..................................................3 Celotex Corp. v. Catrett, 477 U.S. 317 (1986)............................................9 Echo Drain v. Newsted, 307 F.Supp.2d 1116 (C.D. Cal. 2003)...........................10 F.T.C. v. Medicor, LLC, 217 F.Supp.2d 1048 (C.D. Cal. 2002).........................5,10 Glen-Mady Way, 590 F.Supp.2d 1295 (E.D. Cal 2008)........................11, 13 Matsushita Electric Industries Co. v. Zenith Radio Corp., 475 U.S. 574 (1986)...........................................10 Nissan Fire and Marine Insurance Company, Ltd. v. Fritz Cos., 210 F.3d 1099 (9th Cir. 2000).................................10 Rand v. Rowland, 154 F.3d 952 (9th Cir. 1998)...................................1 Thompson v. Housing Authority, 782 F.2d 829 (9th Cir. 1986)...................................3 United States v. Bowdoin, 770 F.Supp.2d 133 (D.D.C. 2011)...............................11 United States v. Fard, 597 Fed.Appx. 438 (9th Cir. 2015)..............................4 United States v. Haleamau, 887 F.Supp.2d. 1051 (D. Haw. 2010)........................11, 13 STATUTES 18 U.S.C. § 981(a)(1)(C)......................................2,12,13 18 U.S.C. § 983(c)(1)..............................................10 18 U.S.C. § 983(c)(2)..............................................10 31 U.S.C. § 5317(c)................................................13 Case 8:07-cv-00397-AG-AN Document 87 Filed 09/01/16 Page 5 of 17 Page ID #:487 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 RULES Federal Rule of Civil Procedure 56(a)..............................10 Local Rule 7-3......................................................2 Case 8:07-cv-00397-AG-AN Document 87 Filed 09/01/16 Page 6 of 17 Page ID #:488 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 MEMORANDUM OF POINTS AND AUTHORITIES I. STATEMENT OF FACTS The government filed a civil forfeiture complaint against the defendant properties in 2007. The complaint alleges that claimant Ahmad Kikalaye (“Ahmad”) acquired the defendant properties with proceeds of a fraud scheme orchestrated by Safiah Fard (“Fard”). The scheme involved involving multiple rental properties in Newport Beach, California, including properties known as the “Oceanfront Properties.” Verified Complaint ¶ 10.3 A federal grand jury in this District indicted Fard and Kikalaye in this district based on evidence developed during the investigation of the fraud scheme. United States v. Fard, No. SA CR 07-52-CJC (C.D. Cal.). Ahmad pleaded guilty to bank fraud charges. See Exhs. “A” (Plea Agreement) & “B” (judgment). Fard was convicted of conspiracy to commit fraud and money laundering following a jury trial (See Exh. “C”) and the Ninth Circuit affirmed her convictions. United States v. Fard, 597 Fed.Appx. 438, 439 (9th Cir. 2015). Both Ahmad and Keith Thomas have filed claims in this action. Dkts. 7 & 11.4. On March 14, 2016, 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. 3 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). 4 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. Case 8:07-cv-00397-AG-AN Document 87 Filed 09/01/16 Page 7 of 17 Page ID #:489 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 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. “D” (RFAs served on Ahmad) & “E” (RFAs served on Thomas). 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. Case 8:07-cv-00397-AG-AN Document 87 Filed 09/01/16 Page 8 of 17 Page ID #:490 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 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).5 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).6 5 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. 6 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. ¶ Case 8:07-cv-00397-AG-AN Document 87 Filed 09/01/16 Page 9 of 17 Page ID #:491 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 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).7 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).8 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. 7 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. 8 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, Case 8:07-cv-00397-AG-AN Document 87 Filed 09/01/16 Page 10 of 17 Page ID #:492 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 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).9 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).10 Admitted Fact No. 7: By transferring the Oceanfront Properties multiple times among themselves, Fard, Ahmad, Mohsen, and Bahramian acted together to conceal their bank 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 . . . .” 9 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 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. 10 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). Case 8:07-cv-00397-AG-AN Document 87 Filed 09/01/16 Page 11 of 17 Page ID #:493 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 fraud. RFA No. 7; see also Verified Complaint ¶ 9, 12-14, 16-18, 31-38 (describing transfers and false statements) & Exhs. “A” – “C” (fraud judgments against Ahmad and Fard).11 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).12 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 11 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). 12 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 87 Filed 09/01/16 Page 12 of 17 Page ID #:494 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 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 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. 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). Case 8:07-cv-00397-AG-AN Document 87 Filed 09/01/16 Page 13 of 17 Page ID #:495 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 C. The Defendant Properties Should be Forfeited Fraud proceeds 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). 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. 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 5, 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 6, supra). • 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 Case 8:07-cv-00397-AG-AN Document 87 Filed 09/01/16 Page 14 of 17 Page ID #:496 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 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 7, 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 8, 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 9, 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 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 10, supra). • By transferring the Oceanfront Properties multiple Case 8:07-cv-00397-AG-AN Document 87 Filed 09/01/16 Page 15 of 17 Page ID #:497 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 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” – “C” (summarized in Note 11, 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 12, 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 87 Filed 09/01/16 Page 16 of 17 Page ID #:498 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 III. CONCLUSION For the foregoing reasons, this Court should grant the government’s motion for summary judgment. Dated: August 31, 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 87 Filed 09/01/16 Page 17 of 17 Page ID #:499 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 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 “D” is a copy of a set of requests for admissions served on claimant Kikalaye on March 14, 2016. Attached hereto as Exhibit “E” 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. 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 31 day of August, 2016. /s/ Frank D. Kortum Case 8:07-cv-00397-AG-AN Document 87-1 Filed 09/01/16 Page 1 of 1 Page ID #:500 Case 8:07-cv-00397-AG-AN Document 87-2 Filed 09/01/16 Page 1 of 19 Page ID #:501 Case 8:07-cv-00397-AG-AN Document 87-2 Filed 09/01/16 Page 2 of 19 Page ID #:502 Case 8:07-cv-00397-AG-AN Document 87-2 Filed 09/01/16 Page 3 of 19 Page ID #:503 Case 8:07-cv-00397-AG-AN Document 87-2 Filed 09/01/16 Page 4 of 19 Page ID #:504 Case 8:07-cv-00397-AG-AN Document 87-2 Filed 09/01/16 Page 5 of 19 Page ID #:505 Case 8:07-cv-00397-AG-AN Document 87-2 Filed 09/01/16 Page 6 of 19 Page ID #:506 Case 8:07-cv-00397-AG-AN Document 87-2 Filed 09/01/16 Page 7 of 19 Page ID #:507 Case 8:07-cv-00397-AG-AN Document 87-2 Filed 09/01/16 Page 8 of 19 Page ID #:508 Case 8:07-cv-00397-AG-AN Document 87-2 Filed 09/01/16 Page 9 of 19 Page ID #:509 Case 8:07-cv-00397-AG-AN Document 87-2 Filed 09/01/16 Page 10 of 19 Page ID #:510 Case 8:07-cv-00397-AG-AN Document 87-2 Filed 09/01/16 Page 11 of 19 Page ID #:511 Case 8:07-cv-00397-AG-AN Document 87-2 Filed 09/01/16 Page 12 of 19 Page ID #:512 Case 8:07-cv-00397-AG-AN Document 87-2 Filed 09/01/16 Page 13 of 19 Page ID #:513 Case 8:07-cv-00397-AG-AN Document 87-2 Filed 09/01/16 Page 14 of 19 Page ID #:514 Case 8:07-cv-00397-AG-AN Document 87-2 Filed 09/01/16 Page 15 of 19 Page ID #:515 Case 8:07-cv-00397-AG-AN Document 87-2 Filed 09/01/16 Page 16 of 19 Page ID #:516 Case 8:07-cv-00397-AG-AN Document 87-2 Filed 09/01/16 Page 17 of 19 Page ID #:517 Case 8:07-cv-00397-AG-AN Document 87-2 Filed 09/01/16 Page 18 of 19 Page ID #:518 Case 8:07-cv-00397-AG-AN Document 87-2 Filed 09/01/16 Page 19 of 19 Page ID #:519 Case 8:07-cv-00397-AG-AN Document 87-3 Filed 09/01/16 Page 1 of 6 Page ID #:520 Case 8:07-cv-00397-AG-AN Document 87-3 Filed 09/01/16 Page 2 of 6 Page ID #:521 Case 8:07-cv-00397-AG-AN Document 87-3 Filed 09/01/16 Page 3 of 6 Page ID #:522 Case 8:07-cv-00397-AG-AN Document 87-3 Filed 09/01/16 Page 4 of 6 Page ID #:523 Case 8:07-cv-00397-AG-AN Document 87-3 Filed 09/01/16 Page 5 of 6 Page ID #:524 Case 8:07-cv-00397-AG-AN Document 87-3 Filed 09/01/16 Page 6 of 6 Page ID #:525 Case 8:07-cv-00397-AG-AN Document 87-4 Filed 09/01/16 Page 1 of 7 Page ID #:526 Case 8:07-cv-00397-AG-AN Document 87-4 Filed 09/01/16 Page 2 of 7 Page ID #:527 Case 8:07-cv-00397-AG-AN Document 87-4 Filed 09/01/16 Page 3 of 7 Page ID #:528 Case 8:07-cv-00397-AG-AN Document 87-4 Filed 09/01/16 Page 4 of 7 Page ID #:529 Case 8:07-cv-00397-AG-AN Document 87-4 Filed 09/01/16 Page 5 of 7 Page ID #:530 Case 8:07-cv-00397-AG-AN Document 87-4 Filed 09/01/16 Page 6 of 7 Page ID #:531 Case 8:07-cv-00397-AG-AN Document 87-4 Filed 09/01/16 Page 7 of 7 Page ID #:532 Case 8:07-cv-00397-AG-AN Document 87-5 Filed 09/01/16 Page 1 of 6 Page ID #:533 Case 8:07-cv-00397-AG-AN Document 87-5 Filed 09/01/16 Page 2 of 6 Page ID #:534 Case 8:07-cv-00397-AG-AN Document 87-5 Filed 09/01/16 Page 3 of 6 Page ID #:535 Case 8:07-cv-00397-AG-AN Document 87-5 Filed 09/01/16 Page 4 of 6 Page ID #:536 Case 8:07-cv-00397-AG-AN Document 87-5 Filed 09/01/16 Page 5 of 6 Page ID #:537 Case 8:07-cv-00397-AG-AN Document 87-5 Filed 09/01/16 Page 6 of 6 Page ID #:538 EXHIBIT ''E'' Case 8:07-cv-00397-AG-AN Document 87-6 Filed 09/01/16 Page 1 of 6 Page ID #:539 l EILEEN M. DECKER United States Attorney 2 LAWRENCE S. MIDDLETON Assistant United States Attorney 3 Chief, Criminal Division STEVEN R. WELK 4 Assistant United States Attorney Chief, Asset Forfeiture Section 5 FRANK D. KORTUM Assistant United States Attorney 6 California State Bar No. 110984 1400 United States Courthouse 7 312 North Spring Street Los Angeles, California 90012 B Telephone: (213) 894-5710 Facsimile: (213) 894-7177 9 E-mail: Frank.Kortum@usdoj.gov 10 Attorneys for Plaintiff UNITED STATES OF AMERICA 11 12 13 14 15 16 17 UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION UNITED STATES OF AMERICA, Plaintiff, v. TEN PARCELS OF REAL PROPERTY 18 (Vacant Lots) LOCATED IN SAN BERNARDINO COUNTY, CALIFORNIA, 19 Defendant. ) No. CV 07-00397-AG(ANx) ) ) ) PLAINTIFF'S FIRST SET OF ) ADMISSIONS TO CLAIMANT ) KEITH THOMAS ) ) ) ) ) 20 21 11-------------------> 22 PROPOUNDING PARTY: PLAINTIFF UNITED STATES OF AMERICA 23 RESPONDING PARTY: CLAIMANT KEITH THOMAS 2 4 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 separatelyt in writing and under oath, and that such Case 8:07-cv-00397-AG-AN Document 87-6 Filed 09/01/16 Page 2 of 6 Page ID #:540 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 s 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 lO 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 1 s 15 Complaint for Forfeiture filed in this action. 16 b. "Verified claim of forfeiture" 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 c . "You" and "your" shall mean, refer to and be directed 20 at Keith Thomas. 21 22 23 24 25 26 27 28 d. "Defendant" means the above captioned defendant properties in which you claim an interest. e. "Ahmad" means and refers to Ahmand l/ Case 8:07-cv-00397-AG-AN Document 87-6 Filed 09/01/16 Page 3 of 6 Page ID #:541 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. l: 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. S: 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 87-6 Filed 09/01/16 Page 4 of 6 Page ID #:542 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 Bahramian 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 /r , 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 FRANK D. KORTUM Assistant United States Attorney Attorneys for Plaintiff UNITED STATES OF AMERICA 4 Case 8:07-cv-00397-AG-AN Document 87-6 Filed 09/01/16 Page 5 of 6 Page ID #:543 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 II on the date and at the place shown below following our ordinary 12 office practices. 13 TO: 14 KEITH THOMAS 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SUSANVILLE, CALIFORNIA 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: March 14, 2016 at Los Angeles, California. ~ Case 8:07-cv-00397-AG-AN Document 87-6 Filed 09/01/16 Page 6 of 6 Page ID #:544 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: October 3, 2016 TIME: 10:00 a.m. COURTROOM: 10D AHMAD KIKALAYE AND KEITH THOMAS, Claimants. // // // // // // Case 8:07-cv-00397-AG-AN Document 87-7 Filed 09/01/16 Page 1 of 10 Page ID #:545 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. The government filed a civil forfeiture complaint against the defendant properties in 2007. The complaint alleges that claimant Ahmad Kikalaye (“Ahmad”) acquired the defendant properties with proceeds of a fraud scheme orchestrated by Safiah Fard (“Fard”). The scheme involved involving multiple rental properties in Newport Beach, California, including properties known as the “Oceanfront Properties.” Verified Complaint for Forfeiture ¶ 10. 2. A federal grand jury in this District indicted Fard and Ahmad based on evidence developed during the investigation of the fraud scheme. United States v. Fard, No. SA CR 07-52-CJC (C.D. Cal.). Ahmad pleaded guilty to bank fraud charges. Motion for Summary Judgment (“MSJ”) Exhs. “A” & “B”. 3. Fard was convicted of conspiracy to commit fraud and money laundering following a jury trial (MSJ Exh. “C”) and the Ninth Circuit affirmed her convictions. United States v. Fard, 597 Fed.Appx. 438, 439 (9th Cir. 2015). 4. Ahmad filed a claim for the defendant property on May 9, 2007. Dkt. 7. 5. Claimant Keith Thomas (“Thomas”) filed a claim for the defendant property on July 11, 2007. Dkt. 11. 6. On March 14, 2016, the government served Ahmad and Thomas Case 8:07-cv-00397-AG-AN Document 87-7 Filed 09/01/16 Page 2 of 10 Page ID #:546 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 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. REQUEST FOR ADMISSION NO. 8: Ahmad used proceeds from the sales of the Oceanfront Properties to purchase the defendant properties. MSJ Exhs. “D” (RFAs served on Kikalaye); & “E” (RFAs served on Thomas). 7. As of August 1, 2016, neither claimant had responded to Case 8:07-cv-00397-AG-AN Document 87-7 Filed 09/01/16 Page 3 of 10 Page ID #:547 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 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). 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 Case 8:07-cv-00397-AG-AN Document 87-7 Filed 09/01/16 Page 4 of 10 Page ID #:548 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 made multiple structured cash withdrawals, which totaled over $250,000. RFA No. 4; see also Verified Complaint ¶¶ 7 & 44 (describing structured withdrawals). 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” – “C” (fraud judgments against Ahmad and Fard). 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). Case 8:07-cv-00397-AG-AN Document 87-7 Filed 09/01/16 Page 5 of 10 Page ID #:549 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 8. 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. 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 Case 8:07-cv-00397-AG-AN Document 87-7 Filed 09/01/16 Page 6 of 10 Page ID #:550 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 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 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 Case 8:07-cv-00397-AG-AN Document 87-7 Filed 09/01/16 Page 7 of 10 Page ID #:551 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 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 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 Case 8:07-cv-00397-AG-AN Document 87-7 Filed 09/01/16 Page 8 of 10 Page ID #:552 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. 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 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” – “C” (fraud judgments against Ahmad and Fard). • Ahmad used proceeds from the sales of the Oceanfront Case 8:07-cv-00397-AG-AN Document 87-7 Filed 09/01/16 Page 9 of 10 Page ID #:553 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 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 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). 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 87-7 Filed 09/01/16 Page 10 of 10 Page ID #:554 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 September 1, 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: September 1, 2016 at Santa Ana, California. /s/ ANN M. EBERHARDY Case 8:07-cv-00397-AG-AN Document 87-8 Filed 09/01/16 Page 1 of 2 Page ID #:555 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 87-8 Filed 09/01/16 Page 2 of 2 Page ID #:556