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United States v. Brugnara

United States District Court, Ninth Circuit

July 8, 2013



WILLIAM ALSUP, District Judge.

Defendant Luke Brugnara was convicted on May 24, 2010, of three counts of violating 26 U.S.C. 7206(1). He was sentenced to 30 months custody and one year of supervised release. Among the special conditions imposed were that defendant must provide access to all requested financial information, comply and cooperate with the IRS in good faith to pay any outstanding tax liability, provide the U.S. Probation Office with a copy of any written and approved agreement with the IRS for the payment of any outstanding tax liability within 10 days from the execution of such agreement, and pay $300 special assessment, $50, 000 fine, and $1, 904, 625.35 restitution.

Counsel for the government have filed an application for a writ of execution, stating that defendant has not made any payments towards his restitution, fine, or special assessment and that, with accrual of interest, the total balance due as of May 21, 2013, was $1, 975, 688.29. Counsel seek a writ of execution authorizing the United States Marshals to seize nine paintings as well as other, unidentified "valuable artwork."

By order dated May 31, the Court requested further information from the government regarding the estimated cost of seizing and storing the artwork and the estimated length of time before it can be auctioned or sold. The government filed a response to the Court's request for additional information, to which defendant has responded. Having reviewed the parties' filings, the Court issues the following order:

The Marshals are authorized to seize the nine paintings listed below and any documentation relevant to the ownership, authenticity, or provenance of the paintings:

1. "Femme Fatale" painting by Kees Van Dongen;
2. "Four Mona Lisas" painting by Andy Warhol;
3. "Crucifixion of Christ" painting by Pieter Paul Rubens;
4. "Germaine" drawing by Pablo Picasso;
5. "The Blind Fiddler" by Rembrandt;
6. "English Landscape" by F. Williams;
7. "Blonde Waiting" by Roy Lichtenstein;
8. "Opera" by Fried Pal; and
9. "Blue Notation" by Naomi Kremer.

This order does not authorize the seizure of any items other than those listed above. The government has not identified with specificity any other items, such as by providing a detailed description of the artwork or item to be seized.

The Court recognizes that defendant asserts that his wife and/or related entities may have an ownership interest in the paintings and that defendant denies ownership. Notice will be given to all such persons and entities and they will be given an opportunity to establish their ownership before any disposition of the paintings is made by the Marshals. The following schedule for adjudicating ownership of the paintings is hereby set:

1. By JULY 16, defendant must provide notice to the Court and the government that identifies the name, last known address, telephone number, and any other relevant contact information of all individuals or entities that he asserts maintain an ownership interest in the artwork listed above.

2. By JULY 23, the government will give notice of its application for writ of execution, writ of execution, and this order to all persons and entities identified as claiming an ownership interest in the artwork. The government will also notify those persons and entities of the right to assert claims on the property and the applicable deadlines.

3. By AUGUST 20, all persons and entities claiming an ownership interest in the artwork must submit any claims regarding their respective ownership interest(s); such claims should be supported by all relevant documentation demonstrating ownership.

4. By AUGUST 20, defendant must submit any claims for exemption under the law that may protect the property, or a portion thereof, from being taken by the United States.

4. By SEPTEMBER 10, the government shall conclude all discovery and submit any oppositions to claims or motions to quash submitted by defendant or third parties.

5. On SEPTEMBER 18, AT 2:00 P.M., a hearing shall be held on all presented claims. The hearing will be held at 450 Golden Gate Avenue, San Francisco, CA, 19th Floor, Courtroom 8.

In the meantime, the Marshals shall retain the paintings and any documentation and protect the artwork from damage or alienation. The Marshals are authorized to contract with third parties as necessary, such as with an auction house or other specialist in the transport, storage, and/or appraisal of the artwork. Additionally, the United States Attorneys' Office shall communicate with reputable art dealers to ascertain the best way to maximize value from the paintings, but shall not make any commitments until further order of the Court.


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