JOINT STATUS REPORT, STIPULATION FOR FURTHER JOINT STATUS REPORT, AND ORDER
Plaintiff United States of America ("Plaintiff") and Flagstar Bank ("Claimant" or "Flagstar") (collectively, the "Parties") submit the following Joint Status Report and Proposed Order in accordance with the Court's Order Requiring Joint Status Report, as filed on February 18, 2009 in this action.
(a) Brief summary of the claims and legal theories under which recovery is sought or liability is denied:
The United States alleges in the Verified Complaint for Forfeiture In Rem ("Verified Complaint") that defendants Approximately $133,803.53 in U.S. Currency seized from Washington Mutual Bank and Approximately $328,495.75 in U.S. Currency seized from Washington Mutual Bank (collectively, the "Defendant Funds") are forfeitable to the United States because they are proceeds traceable to violations of 18 U.S.C. § 1014 (loan and credit fraud), 18 U.S.C. § 1028(a)(7) (identification document fraud), 18 U.S.C. § 1341 (mail fraud), 18 U.S.C. § 1343 (wire fraud), and/or 18 U.S.C. § 1344 (bank fraud), and because they are properties involved in a transaction or attempted transaction in violation of 18 U.S.C. §§ 1956 (money laundering) and 1957(a) (illegal money transaction), or are traceable to such properties.
Flagstar Bank contends it is the beneficiary of a constructive trust in the Defendant Funds as victim of the fraud described in the Declaration of Kathleen Nicolls attached to and incorporated in the Verified Complaint. As a result of the fraud described therein, Flagstar contends that it has an ownership interest in the Defendant Funds which were wrongfully detained, and that the United States acquired the Defendant Funds impressed with a constructive trust.
(b) Status of service upon all defendants and cross-defendants:
The Warrant for Arrest of Article In Rem was issued in this action on February 17, 2009 and was served on defendant funds on February 19, 2009.
In addition, Plaintiff published notice of this forfeiture action on the official government site, www.forfeiture.gov, for at least 30 consecutive days, beginning February 26, 2009.
Lawrence Leland ("Lee") Loomis ("Loomis") was served in this action but has filed no claim. Accordingly, on May 1, 2009, a clerk's entry of default as to Loomis was filed in this action.
Flagstar filed a claim on April 22, 2009. Flagstar requested, and counsel for the United States granted, a 30-day extension of time for Flagstar to file its answer, which is expected to be filed on June 11, 2009. The United States is in the process of evaluating Flagstar's claim.
The United States is in the process of identifying potential claimants to the Defendant Funds. As to those that have been identified recently, the United States believes it may need to serve those potential claimants with notice of the instant action.
Furthermore, there may be individuals affected as victims of the underlying fraud. To the extent that such victims have not been given notice, the United States may move the Court for relief from any notice requirements under Rule G of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions ("Supplemental Rule G") as to those victims.
(c) Possible joinder of additional parties:
The United States may provide notice to additional potential claimants, as explained above. If those entities file claims and answers as to the Defendant Funds, those ...