United States District Court, E.D. California
Meyers, wife of defendant Glen Edward Meyers, moves this
court for disbursement of funds. In her motion, Lila Meyers
argues that the court should order non-forfeited funds
transferred to her because defendant Meyers had an
extramarital affair and “cannot be trusted to provide
[Mrs.] Meyers her portion of the funds.” Mot., ECF No.
370. The United States opposes the motion. Opp'n, ECF No.
372. For the reasons discussed below, the court DENIES Lila
October 2013, defendant Glen Meyers and three co-defendants
were indicted on charges for their involvement in an
interstate marijuana ring. ECF No. 7. In November 2013, the
United States filed a Bill of Particulars indicating it
sought to forfeit $6, 500 in money orders and two brokerage
accounts maintained by defendant Meyers, as constituting drug
proceeds. ECF No. 36. The account balances in these two
brokerage accounts exceeded $300, 000 in stock value. The
accounts were maintained at Scottrade Brokerage and E*Trade
Securities, and were previously seized by the government
based on the involvement of the funds in the accounts in
commission of a crime. Id.
December 5, 2014, defendant Meyers pled guilty to one count
of conspiracy to distribute and to possess with intent to
distribute at least 100 kilograms of marijuana in violation
of 21 U.S.C. §§ 846 and 841(a)(1), and one count of
conspiracy to launder monetary instruments in violation of 18
U.S.C. § 1956(h). ECF No. 110. Defendant Meyers's
plea agreement included his agreement to forfeit the money
orders, as well as the funds in the two brokerage accounts,
except for $111, 834.00 held in the E*Trade account that
predated the commission of defendant Meyers's crimes.
Id. at § E, Forfeiture. The plea
agreement specified the $111, 834.00 in the E*Trade account
would be returned to defendant Meyers as the sole owner of
the account. Id.
December 30, 2014, the court entered a preliminary order of
forfeiture of the money orders and “all funds” in
the brokerage accounts except for the $111, 834.00 held in
the E*Trade account. ECF No. 113. The United States provided
potential claimants with notice of this preliminary order in
accordance with 21 U.S.C. § 853(n), 18 U.S.C. §
1963(1) and Local Rule 171. See Decl. of
Publication, ECF No. 120 at 1 (Noting “the forfeiture
was posted on the official government internet site
www.forfeiture.gov for at least 30 consecutive days beginning
on January 8, 2015, and ending on February 6, 2015.”).
6, 2015, Lila Meyers filed a petition contesting the
forfeiture of funds in defendant Meyers's bank accounts,
asserting she has a community property interest in the
forfeited bank accounts based on her marriage to defendant
Meyers, and requesting an ancillary hearing on the matter.
ECF No. 173. In her petition, Lila Meyers acknowledged
“[she] is not a named title holder of the account[s] in
question.” Id. at 2-3. On January 20, 2016,
Lila Meyers withdrew her petition, ECF No. 325, and six days
later the court entered a final order of forfeiture as to the
assets forfeited by defendant Meyers, not including $111,
834.00, ECF No. 327. It was not until October 3, 2016, that
Lila Meyers filed her pending motion to disburse funds. ECF
noted, Lila Meyers asks the court to disburse defendant
Meyers's non-forfeited funds to her because he had an
extramarital affair and “cannot be trusted to provide
[Lila] Meyers her portion of the funds.” ECF No. 370.
The United States opposes the motion. Opp'n. Lila Meyers
has not replied.
United States argues the court should deny Lila Meyers's
motion for lack of standing. It also says even if she had
standing, the funds she demands are not within the purview of
this criminal case. Opp'n at 3.
impose criminal forfeiture as punishment following conviction
for a substantive criminal offense. United States v.
Lazarenko, 476 F.3d F.3d 648, 642 (9th Cir. 2007).
Criminal forfeiture operates in personam against a
defendant to divest him of proceeds derived from his unlawful
activity, as a consequence of his criminal conviction.
Id. If assets are criminally derived, the court will
enter a preliminary order of forfeiture that begins the
ancillary proceeding in which third parties may litigate any
alleged interest in forfeited property. See Fed. R.
Crim. P. Rule 32.2(b)(3) (“The entry of a preliminary
order of forfeiture authorizes the Attorney General . . . to
commence proceedings that comply with any statutes governing
third-party rights.”). Property or proceeds excluded
from preliminary forfeiture are not subject to any ancillary
proceeding. Cf. United States v. Andrews, 530 F.3d
1232, 1236 (10th Cir. 2008) (court's initial finding of
forfeitability is prerequisite to property's inclusion in
preliminary forfeiture order). Only “property involved
in the offense or any property traceable as proceeds to
it” can be forfeited; the forfeiture laws do not extend
to innocent property a defendant owned. United States v.
Capoccia, 503 F.3d 103, 109 (2d Cir. 2007).
threshold matter, Lila Meyers has not established standing to
advance her motion. Lila Meyers's appearance in this
action prior to entry of the final order of forfeiture was
temporary and limited to filing a claim for the assets
proposed for forfeiture from defendant Meyers in the
preliminary forfeiture order. But her motion seeks the $111,
834.00 held in the E*Trade account, which was expressly
excluded from the forfeiture order. Lila Meyers lacks
standing to bring her motion.
Lila Meyers had standing, she has provided no other basis for
the court's exercise of jurisdiction over the funds in
which she claims to have an interest. The funds were excluded
from every facet of this prosecution once a plea deal was
reached, from the plea agreement to the preliminary
forfeiture order to the ancillary proceeding. See
ECF Nos. 110, 113, 197, 326. Because defendant Meyers did not
forfeit the funds Lila Meyers seeks, the court has no power
to order their transfer to her. Rather, after bank records
established the funds predated defendants Meyers's
criminal scheme, the United States excluded those funds from
forfeiture and agreed to release them to Mr. Meyers as the
account holder. ECF No. 110.
Meyers claims 28 U.S.C. § 2465(b)(1)(C) entitles her to
the “funds seized in the forfeiture action of the
above-captioned case, as well as any interest gained since
its seizure.” Mot. at 2. That provision of law applies
only to “civil proceedings … in which the
claimant substantially prevails” against the United
States. 28 U.S.C. § 2465(b)(1)(C). This is a criminal
proceeding and Lila Meyers has not “substantially
prevailed.” Lila Meyers further claims “the
government stipulated she was entitled to $111,
834.00.” Mot. at 1 (citing ECF No. 325). The filing she
references, however, is her withdrawal of her ancillary
petition, which she signed as did her attorney; although it
appears the government drafted the document, it is not styled
as an agreement and no representative of the government
signed it. See ECF No. 325. While the withdrawal
language could have been more clearly drafted to clarify that
Lila Meyers was sacrificing any ability to pursue the $111,
834.00 in this court, the lack of clarity does not alter any
of the court's conclusions above.
Lila Meyers lacks standing to bring her motion, and this
court lacks jurisdiction over the specific funds Lila ...