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United States of America v. 2005 Mercedes Benz E500

March 6, 2012

UNITED STATES OF AMERICA,
PLAINTIFF,
v.
2005 MERCEDES BENZ E500, LICENSE: 5KRF178, VIN: WDBU70J85A664340, DEFENDANT.



The opinion of the court was delivered by: Barbara A. McAuliffe United States Magistrate Judge

ORDER DENYING CLAIMANT'S MOTION TO RELEASE VEHICLE

I. INTRODUCTION

Pending before the Court is Claimant Judy Ee's ("Claimant") petition for an Order directing Plaintiff United States of America to release Claimant's seized vehicle pursuant to 18 U.S.C. § 983(f)(3)(A). (Doc. 21.) The seized vehicle is a 2005 Mercedes Benz E500, License No.: 5KRK178, VIN: WDBU70J85A664340 (hereinafter referred to as the "Subject Vehicle"). The Subject Vehicle was seized by the United States on March 2, 2011, and is currently in the custody of the Department of Homeland Security, Customs and Border Protection, Eastern District of California. (Pl.'s Compl. ¶ 2, Doc. 1.)

The United States filed its Opposition on February 24, 2012. (Doc. 30.) Claimant filed her Reply Brief on March 2, 2012. (Doc. 33.) The Court examined the motion and determined that this matter was suitable for decision without oral argument pursuant to Local Rule 230(g). (Doc. 35.) The hearing scheduled for March 9, 2012 was vacated. Id. The parties have consented to the jurisdiction of the United States Magistrate Judge for all purposes. (Doc. 23, 24.) Having considered the moving, opposition and reply papers, the declarations and exhibits attached thereto, as well as the Court's file, the Court DENIES Claimant's Motion to Release Vehicle.

II. BACKGROUND

The United States of America filed this action in rem to enforce provisions of 18 U.S.C. § 981(a)(1)(A), providing for the forfeiture of any property involved in or traceable to a violation of the anti-money laundering provisions of 18 U.S.C. §§ 1956 and 1957. The United States also seeks to enforce the provisions of 18 U.S.C. § 981(a)(1)(D), which allows for the forfeiture of proceeds traceable to mail fraud, in violation 18 U.S.C. § 1341; wire fraud, in violation of 18 U.S.C. § 1343; and 18 U.S.C. 981(A)(1 )(c), which otherwise provides for forfeiture of any property traceable to a violation of any offense constituting "specified unlawful activity," or a conspiracy to commit such an offense. (Pl.'s Compl., ¶ 1, Doc. 1.)

The United States Department of Homeland Security Immigration and Customs Enforcement ("ICE") conducted an investigation of Kwan Yong Choi, also known as Daniel Choi (hereinafter referred to as "Choi") and his wife, Bok Hee Ee, regarding involvement in multiple fraud schemes. (Pl.'s Compl., ¶ 5, Doc. 1.) ) Specifically, the United States alleges Choi misrepresented himself under various false pretenses to multiple Korean nationals as part of a fraudulent investment scheme. (Pl.'s Compl., ¶ 11, Doc. 1.) The United States alleges Choi defrauded multiple victims of approximately $2,638,542.00. (Pl.'s Compl., ¶ 12, Doc. 1.)

The alleged fraud schemes involved several bank accounts used by Choi and Bok Hee Ee for laundering victim funds. (Pl.'s Compl., ¶¶ 6-9, 12-15, Doc. 1.) Two bank accounts controlled by Choi were used to deposit victim funds (the "Deposit Accounts"). (Pl.'s Compl., ¶¶ 11-12, Doc. 1.) In an effort to conceal the source of the funds, the funds were transferred from the Deposit Accounts to several accounts controlled by both Choi and Bok Hee Ee (the "Transfer Accounts"). (Pl.'s Compl., ¶ 13, Doc. 1.)

The United States alleges Bok Hee Ee opened a home-equity line of credit for $70,000.00 (the "HELOC") using a residential piece of property as the underlying collateral (the "Real Property"). (Pl.'s Compl., ¶ 6, Doc. 1.) The Real Property is currently held in joint tenancy by Bok Hee Ee and Claimant. (Pl.'s Compl., ¶ 6, Doc. 1.); (Claimant's Ans., ¶ 6, Doc. 7.) The United States alleges that Choi and Bok Hee Ee used the Transfer Accounts to pay down the balance on the HELOC. (Pl.'s Compl., ¶ 13, Doc. 1.) The United States further alleges that Choi and Bok Hee Ee used the HELOC to transfer funds back to the Transfer Accounts. Id. The United States alleges that at least $184,823.05 in Transfer Account funds were deposited in the HELOC. Id.

The United States alleges that $11,000.00 was withdrawn against the HELOC as a down payment on the Subject Vehicle. (Pl.'s Compl., ¶ 8, Doc. 1.) The United States further alleges that an additional $9,000.00 down payment on the Subject Vehicle was made from a Deposit Account. (Pl.'s Compl., ¶ 15, Doc. 1.) The remaining balance on the Subject Vehicle ($34,517.49) was subsequently paid off through the Deposit Accounts. Id. On May 19, 2010, Bok Hee Ee transferred registration and title of the Subject Vehicle to Claimant, as a gift. (Declaration of Heather Jones ("Jones Decl."), Attach. 1, Doc. 31.); (Claimant's Mot. For Release of Vehicle, 1: 25-27, Doc. 21.) Claimant is Bok Hee Ee's daughter. (Pl.'s Compl., ¶ 6, Doc. 1.)

III. DISCUSSION

Claimant seeks release of the Subject Vehicle under the Civil Asset Forfeiture Reform Act of 2000, 18 U.S.C. § 983(f) ("CAFRA"). CAFRA sets forth four factors that the Court should weigh in considering a petition for the release of seized property:

(A) [whether] the claimant has a possessory interest in the property;

(B) [whether] the claimant has sufficient ties to the community to provide assurance that the property will be ...


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