Contents of Account No. 03001288 v. United States , 344 F.3d 399 ( 2003 )

Opinions of the United
2003 Decisions States Court of Appeals
for the Third Circuit
9-25-2003
Jalal v. USA
Precedential or Non-Precedential: Precedential
Docket No. 02-1839
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PRECEDENTIAL
Filed September 25, 2003
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 02-1839
CONTENTS OF ACCOUNT NUMBER 03001288, HELD IN
THE NAME OF TASNEEM JALAL LOCATED AT UNION
NATIONAL BANK, RASHIDIYA BRANCH, DEIRA-DUBAI,
UNITED ARAB EMIRATES; CONTENTS OF ACCOUNT
NUMBER 01123121673 HELD IN THE NAME OF
TASNEEM JALAL LOCATED AT HABIB BANK AG ZURICH
SHARJAH BRANCH, UNITED ARAB EMIRATES;
CONTENTS OF ACCOUNT NUMBER 01120121673, HELD
IN THE NAME OF TASNEEM JALAL LOCATED AT HABIB
BANK AG ZURICH, SHARJAH BRANCH, UNITED ARAB
EMIRATES; TASNEEM JALAL
v.
UNITED STATES OF AMERICA
Tasneem Jalal,
Appellant
On Appeal from the United States District Court
for the District of New Jersey
District Court Judge: The Honorable William G. Bassler
(D.C. Civ. No. 00-cv-02630)
Argued on December 12, 2002
Before: FUENTES, STAPLETON and O’KELLEY,*
Circuit Judges
* Honorable William C. O’Kelley, Senior District Judge for the Northern
District of Georgia, sitting by designation.
2
(Opinion Filed: September 25, 2003)
Martin L. Schmukler (Argued)
41 Madison Avenue
5th Floor
New York, NY 10010
Counsel for Appellant
Peter W. Gaeta (Argued)
Office of the United States Attorney
970 Broad Street
Room 700
Newark, NJ 07102
Counsel for Appellees
OPINION OF THE COURT
FUENTES, Circuit Judge:
Appellant Tasneem Jalal (“Jalal”) appeals an order of the
United States District Court for the District of New Jersey
denying his motion to dismiss, or in the alternative, for
summary judgment on this civil action brought by the
United States for the forfeiture of funds located in three
bank accounts in the United Arab Emirates (“U.A.E.”). The
United States seeks forfeiture of the funds because they are
the proceeds of illegal heroin trafficking. Jalal contends that
the action should be dismissed because it was not filed
within the five-year statute of limitations period under 19
U.S.C. § 1621. Because the statute of limitations was tolled
during the time the funds were absent from the United
States, we conclude the statute did not run against the
Government’s forfeiture claims against Jalal’s accounts.
Accordingly, we affirm the judgment of the District Court.
I. Background
On or about August 19, 1992, Special Agents of the New
Jersey Field Division of the Drug Enforcement
Administration (“DEA”) arrested Jalal for his participation
in the delivery of 250 grams of heroin into New Jersey.
3
During the execution of a search warrant at Jalal’s home,
DEA Agents found three passports in the name of “Tasnin
[sic] Jalal,” various forms of identification, and the records
of bank accounts in the United States, Pakistan, and the
U.A.E. Specifically, the search yielded deposit slips for the
three Defendant Accounts in the U.A.E., which altogether
contain approximately $1.8 million Dirhams.1 The bank
records indicate that the Defendant Accounts were funded
between November 24, 1991 and April 1, 1992.
Jalal was subsequently indicted for Conspiracy to
Distribute and Possess Heroin in violation of 21 U.S.C.
§ 846, and Possession with Intent to Distribute Heroin in
violation of 21 U.S.C. § 841. He pleaded guilty to both
counts on October 15, 1992. In the course of his
cooperation with the Government, Jalal admitted that he
had been engaged in the trafficking of heroin from Pakistan
for the last sixteen years. Although all deposits to the
Defendant bank accounts had been made during the time
period in which Jalal was engaged in heroin trafficking and
although he had no other legitimate source of income
during that period, Jalal claimed that the funds derived
from the sale of real estate in Pakistan and gold trading in
Dubai.2
In October 1992, agents of the DEA contacted law
enforcement officials in the U.A.E. to provide information
concerning Jalal and to inquire whether the Defendant
Accounts could be frozen under U.A.E. law. The Dubai
Police obtained a court order freezing the accounts while
the investigation continued.
Meanwhile, on June 29, 1993, Jalal was sentenced to
108 months imprisonment. Upon completion of his
sentence, Jalal, a national of Pakistan, was committed to
the custody of the Immigration and Naturalization Service.
The INS deported Jalal to Pakistan on September 26, 2000.
1. The Dirham is the monetary unit of the U.A.E. The contents of the
accounts equaled approximately $500,000.
2. Dubai and Sharjah, where the Defendant Accounts are located, are
two of the seven sheikdoms comprising the United Arab Emirates. Abu
Dhabi is the capital of the Emirates.
4
On August 2, 1994, DEA representatives met with
officials of the Dubai Police. The officials advised the DEA
that they were optimistic that the Dubai court would
entertain a motion to allow the Dubai Police to seize the
accounts if probable cause could be established that the
funds in the account were generated by narcotics
trafficking. DEA representatives held a similar meeting in
Sharjah regarding the accounts located there.
During the same general time frame, Abu Dhabi, Dubai
and Sharjah had submitted a collective report regarding
money laundering in the U.A.E. to the Ministry of the
Interior, the first step for passage of a federal law. The DEA
believed that officials in the U.A.E. were going to use the
Defendant Accounts to establish a precedent. However, in
November 1994, DEA representatives learned that no
further unilateral action would be taken by U.A.E. law
enforcement officials. The only alternatives would be to
pursue forfeiture through diplomatic channels or await
passage of asset seizure/forfeiture legislation in the U.A.E.
At a meeting on December 12, 1994, the Deputy Attorney
General of the U.A.E. informed an attorney of the United
States Department of Justice (“DOJ”), as well as other
United States officials present, that the U.A.E. was not in
full compliance with the Vienna Convention of 1998
concerning money laundering, but that he expected
passage of a U.A.E. forfeiture law within six months. Based
on this conversation, the DOJ attorney believed that the
U.A.E. would not act on the Jalal matter until passage of
this legislation. On June 30, 1995, the DOJ Attorney wrote
to the U.S. Embassy in the U.A.E. inquiring whether the
U.A.E. had enacted the forfeiture legislation.
On November 21, 1995, the Office of International Affairs
of the DOJ made a formal treaty request to the U.A.E.
pursuant to the United Nations Convention Against Illicit
Traffic in Narcotic Drugs and Psychotropic Substances.
Almost four years later, on September 27, 1999, the Senior
Legal Advisor at the U.A.E. Ministry of Foreign Affairs
informed U.S. officials that, before the U.A.E. government
could comply with the DOJ’s request to seize and forfeit the
Defendant Accounts, the U.A.E. would need a United States
court order specifically requesting this action. He also
5
informed U.S. authorities that the accounts had been
frozen by the U.A.E. since May 1997 as a result of the
November 1995 treaty request.
On May 21, 2000, the United States filed a forfeiture
complaint in the United States District Court for the
District of New Jersey. The DOJ forwarded certified copies
of the complaint and warrants for arrest in rem to the U.S.
Embassy in Abu Dhabi on June 28, 2000, for service upon
the appropriate U.A.E. officials. Officials from the U.S.
Embassy delivered the complaint and warrants for arrest to
the Ministry of Foreign Affairs of the U.A.E. on July 1,
2000. On October 11, 2001, the District Court denied
Jalal’s Motion to Dismiss, or, in the alternative, for
Summary Judgment. Thereafter, the District Court entered
a consent judgment forfeiting the contents of Jalal’s three
accounts in the U.A.E. and directing that the funds be
deposited into the Department of Justice Asset Forfeiture
Fund. As part of the judgment, Jalal reserved the right to
challenge, on appeal, the District Court’s determination
that the Government’s forfeiture action was not barred by
the statute of limitations. This appeal followed.
II. Discussion
A. Jurisdiction
We exercise appellate jurisdiction over a final order of a
district court pursuant to 28 U.S.C. § 1291. Because
resolution of the issues on this appeal involves the
interpretation and application of legal precepts, our
standard of review is plenary. See Pryer v. C.O. 3 Slavic,
251 F.3d 448, 453 (3d Cir. 2001).
The District Court concluded that it had subject matter
jurisdiction over this forfeiture action pursuant to 28 U.S.C.
§ 1355(a) and that venue was proper in the District of New
Jersey based on 28 U.S.C. §§ 1355(b)(1) & (2). However, the
District Court reasoned that, despite having subject matter
jurisdiction over the forfeiture action and being the proper
venue for the commencement of the action, it could not
reach the merits of the case absent in rem jurisdiction over
the Defendant property. After reviewing the relevant facts,
the Court found that it had constructive control over the
6
Defendant Accounts as of September 27, 1999, the date
authorities in the U.A.E. indicated that they would enforce
a forfeiture order of a United States court. As a result, the
Court concluded that it had in rem jurisdiction over the
Defendant Accounts when the Government commenced the
forfeiture proceedings.
We find that the District Court had jurisdiction over the
Defendant Accounts solely based on § 1355(b)(2). In its past
form, § 1355 provided that “[t]he district courts shall have
original jurisdiction, . . . of any action or proceeding for the
recovery or enforcement of any fine, penalty, or forfeiture,
pecuniary or otherwise, incurred under any Act of Congress
. . . .” See Pub. L. No. 102-550, 106 Stat. 4062, Title XV,
§ 1521 (codified as amended at 28 U.S.C. § 1355). In 1992,
Congress amended § 1355 and the above quoted provision
became § 1355(a). In addition to other language, Congress
added § 1355(b), which states as follows:
(b)(1) A forfeiture action or proceeding may be brought
in —
(A) the district court for the district in which any of
the acts or omissions giving rise to the forfeiture
occurred, or
(B) any other district where venue for the forfeiture
action or proceeding is specifically provided for in
section 1395 of this title or any other statute.
(2) Whenever property subject to forfeiture under the
laws of the United States is located in a foreign
country, or has been detained or seized pursuant to
legal process or competent authority of a foreign
government, an action or proceeding for forfeiture may
be brought as provided in paragraph (1), or in the
United States District court for the District of
Columbia.
Though the District Court concluded that § 1355(b)
merely provides for venue, we find that it also grants
district courts jurisdiction over the property at issue in
forfeiture actions based on the plain language of the
statute. Another subpart of § 1355 specifically refers to
§ 1355(b) as granting the appropriate court jurisdiction over
7
a forfeiture action. In particular, § 1355(d) contains the
language “[a]ny court with jurisdiction over a forfeiture
action pursuant to subsection (b) . . . .” We doubt that
Congress would make such a reference if, in fact, it did not
intend for subsection (b) to provide for jurisdiction.
While we are satisfied that the § 1355(b) provides for
jurisdiction over property in a forfeiture action based on the
language of the statute, we recognize that one of our sister
circuits has reached the opposite conclusion. See United
States v. All Funds On Deposit in Any Accounts Maintained
in the Names of Meza, 63 F.3d 148, 152-53 (2d Cir. 1995).
Nonetheless, we note that our conclusion is also supported
by the explanatory language accompanying the 1992
amendment to the statute. The explanatory language of the
Money Laundering Improvements Act, containing the
language eventually enacted as 28 U.S.C. § 1355(b) and
introduced by Senator D’Amato, indicates that “Title 28,
Section 1355, gives the district courts subject matter
jurisdiction over civil forfeiture cases.” 137 Cong. Rec.
S16640, S16642 (1991). The statement further explains
that “venue statutes for forfeiture actions provide for venue
in the district in which the subject property is located, 28
U.S.C. § 1395, or in the district where a related criminal
action is pending, 18 U.S.C. § 981(h),” but that “no statute
defines when a court has jurisdiction over the property that
is the subject of the suit.” Id. (emphasis added). After
recognizing that this state of affairs had resulted in
confusion and constant litigation of jurisdictional issues,
the explanatory language states that the “amendment to 28
U.S.C. § 1355, resolves these issues for all forfeiture actions
brought by the government.” Id. In its discussion of
subsection (b)(1) and prior venue-for-forfeiture statutes, the
explanatory language further states that “it would make no
sense for Congress to provide for venue in a district without
intending to give the court in that district jurisdiction as
well.” Id. at S16643. Thus, the language added to § 1355 as
subsection (b) was intended to solve the problem of defining
when a court has jurisdiction over the property that is the
subject of the forfeiture proceeding.
The District Court reached its conclusion on jurisdiction
based in part on a Second Circuit opinion, which held that
8
Congress did not intend “to fundamentally alter well-settled
law regarding in rem jurisdiction” by amending § 1355.
Meza, 63 F.3d at 152-53 (2d Cir. 1995) (concluding that the
district court obtained constructive control, and, as a result
in rem jurisdiction, over property located in the United
Kingdom based on the demonstrated cooperation of British
law enforcement officials).3 The Second Circuit expressed
concern about whether an order issued by a district court
would be enforceable in the absence of control over
property located in a foreign country. Id. In discussing the
meaning of § 1355(b), the Second Circuit set forth the
following language from the explanatory statement of the
amendment:
[I]t is probably no longer necessary to base in rem
jurisdiction on the location of property if there have
been sufficient contacts with the district in which the
suit is filed. No statute, however, says this and the
issue has to be repeatedly litigated whenever a foreign
government is willing to give effect to a forfeiture order
issued by a United States court and turn over seized
property to the United States if only the United States
is able to obtain such an order.
Id. (quoting 137 Cong. Rec. S16640, S16643 (1991)).
However, the next sentence from the explanatory statement,
which is possibly the most telling sentence regarding
subsection (b)(2), states that “[s]ubsection (b)(2) resolves
this problem by providing for jurisdiction over such property
in the United States District Court for the District of
Columbia, [or] in the district court for the district in which
any of the acts giving rise to the forfeiture occurred . . . .”
137 Cong. Rec. S16640, S16643 (1991) (emphasis added).
Based on the language of the statute and statements such
as this one, we conclude that Congress intended to grant
3. A later Second Circuit opinion, United States v. Certain Funds Located
at the Hong Kong & Shanghai Banking Corp., 96 F.3d 20, 22 (2d Cir.
1996), stated that “the statute conferring jurisdiction on federal courts
over civil forfeiture proceedings was amended to provide district courts
with in rem jurisdiction over a res located in a foreign country.” However,
in making this statement, the Second Circuit did not reference its
previous opinion in Meza or acknowledge that it was disagreeing with or,
at least calling into question, a previous ruling of that court.
9
specified district courts jurisdiction over property subject to
forfeiture that is located in a foreign country.
The D.C. Circuit has also concluded that, in amending
§ 1355, “Congress intended the District Court for the
District of Columbia, among others, to have jurisdiction to
order the forfeiture of property located in foreign countries.”
United States v. All Funds in Account in Banco Espanol de
Credito, Spain, 295 F.3d 23, 27 (D.C. Cir. 2002). Banco
Espanol involved bank accounts located in Spain that
contained the proceeds of a cocaine smuggling operation.
Id. at 24-25. In its opinion, the D.C. Circuit noted the
traditional requirement, as developed under admiralty law,
of the res needing to be within the reach of a court for that
court to exercise in rem jurisdiction. Id. at 25. The Court
further recognized that “[t]he forfeiture provisions for drug
proceeds adopt the traditional requirements ‘for violations
of the customs laws’ but only ‘insofar as applicable and not
inconsistent’ with the drug forfeiture laws.” Id. (quoting 21
U.S.C. § 881(d)). In citing the general statute governing
forfeiture actions, 28 U.S.C. § 2461(b), which provides that
“[u]nless otherwise provided by Act of Congress” they
should “conform as near as may be to proceedings in
admiralty,” the Court conceded that it would have little
doubt that the traditional rules of in rem jurisdiction would
apply had Congress not amended § 1355. Id. at 26.
In determining that § 1355 must be enforced, the D.C.
Circuit reasoned that perhaps “a forfeiture order of a United
States court will not have its full effect until the res — the
money — is brought within the territory of the United
States,” however, “Spain’s compliance and cooperation
determines only the effectiveness of the forfeiture orders of
the district courts, not their jurisdiction to issue those
orders.” Id. at 27. We agree with this analysis and hold that
the United States District Court for the District of New
Jersey had jurisdiction to order the forfeiture of the
Defendant Account located in the U.A.E. based on
§ 1355(b)(2). The U.A.E.’s compliance and cooperation with
this forfeiture determines only the effectiveness of the
District Court’s order, not its jurisdiction to issue that
order.
10
B. Statute of Limitations
The essence of Jalal’s argument on appeal is that the
District Court erred in denying his motion to dismiss the
Government’s forfeiture action because the five-year statute
of limitations under 19 U.S.C. § 1621 had elapsed by the
time the Government filed its complaint. At the time the
action was commenced, § 1621 provided, in relevant part,
that:
No suit or action . . . [for] forfeiture of property
accruing under the customs laws shall be instituted
unless such suit or action is commenced within five
years after the time when the alleged offense was
discovered; . . . except that . . .
(2) the time of the absence from the United States of
the person subject to the penalty of forfeiture, or of
any concealment or absence of the property, shall
not be reckoned within the 5-year limitations period.
19 U.S.C. § 1621. The result of this case will be determined
by whether or not the statute of limitations was tolled.
Specifically, because the five-year period is tolled during the
time the property is absent from the United States, we
must determine the meaning of the word “absence” within
the statute.
Jalal contends that the United States could have
established “constructive control” of the Defendant
Accounts as early as October 28, 1992, because on that
date 28 U.S.C. § 1355 was amended to allow a district court
to assert in rem jurisdiction over property located in a
foreign country. Based on the fact that the U.A.E. and the
United States were both parties to the U.N. Convention
against Illicit Traffic In Narcotic Drugs and Psychotropic
Substances at that point in time — which, according to
Jalal, would require U.A.E. to freeze, seize and forfeit the
Defendant Accounts based on a request from the United
States — Jalal reasons that the United States could have
exercised control over the accounts as of that date, and,
thus, the Defendant Accounts were no longer absent from
the United States.
We reject Jalal’s argument. As outlined above, we
disagree with the contention that “constructive control”
11
determines whether the District Court had jurisdiction over
the Defendant Accounts. In any event, based on the
language of the statute we discern no connection between
a district court’s ability to exercise jurisdiction and the
tolling of the statute. The statute clearly instructs that the
five-year statute of limitations shall be tolled during “any
concealment or absence of the property.” Id. The Supreme
Court has repeatedly emphasized that Congress “says in a
statute what it means and means in a statute what it says
there.” Connecticut Nat. Bank v. Germain, 503 U.S. 249,
254 (1992). “[W]hen the statute’s language is plain, the sole
function of the courts — at least where the disposition
required by the text is not absurd — is to enforce it
according to its terms.” Hartford Underwriters Insurance Co.
v. Union Planters Bank, N.A., 530 U.S. 1, 6 (2000) (internal
citations and quotations omitted). The plain and ordinary
meaning of the term absent is “not present,” or “not
existing in a place.” WEBSTER’S THIRD NEW INTERNATIONAL
DICTIONARY 6 (1993). In other words, if the property is “not
present” in the United States, it is absent. See Banco
Espanol, 295 F.3d at 27 (“There is no particular reason . . .
for stretching the word ‘absence’ to mean something other
than not present . . . . [I]n short, when property is not here
it is absent.”).
As of August 21, 1992, the date of Jalal’s arrest, the
$500,000 in the Defendant Accounts was located in the
U.A.E., not in the United States. Because the statute of
limitations is tolled during the “absence of the property,” we
conclude that the statute of limitations had not run on any
of Jalal’s accounts.4
4. The Parties disagree about the meaning of the phrase “when the
alleged offense was discovered” in § 1621, and thus when the statute of
limitations should have begun to run. Jalal argues that the statute refers
to the discovery of the underlying criminal offense, which in this case is
no later than August 19, 1992 - the date of Jalal’s arrest for heroin
trafficking. The Government argues that, within the context of § 1621,
the discovery of the offense occurs when probable cause is developed to
show the connection between an asset and the illegal activity. In this
case, the District Court made a factual finding that the Government
developed probable cause by late 1994. Because we hold that the statute
of limitations does not run on property absent from the United States,
we find that this determination is irrelevant to the Court’s analysis.
12
Jalal argues that any property subject to forfeiture that is
located in a foreign country is by definition absent from the
United States. Consequently, he reasons that if the
exception to the period of limitations for forfeiture actions
established by § 1621 were read literally, no period of
limitations would be applicable to forfeiture actions under
§ 1355(b)(2) involving property located abroad. According to
Jalal, the legislative history indicates that Congress did not
consider the potential effects of § 1621 and did not intend
such a result.
We disagree. As noted above, when a “statute’s language
is plain,” as is the case here, this Court’s sole function “is
to enforce it according to its terms.” Hartford Underwriters,
530 U.S. at 6. Under the plain language of § 1621, the
forfeiture proceedings against the accounts in the U.A.E.
commenced during the “absence of the property” from the
United States. However, even if we found it necessary to
consider the legislative history of this provision, we do not
believe that Congress’ silence signifies that it did not intend
for the statute of limitations period to be tolled indefinitely
for bringing forfeiture actions against the proceeds of drug
sales located in foreign countries. The Government faces a
huge task in securing foreign assistance to stem the
international drug trade and deal with its effects. Congress
very well may have considered the effects of the tolling
provision contained in § 1621 and simply intended to give
law enforcement some leeway. See Banco Espanol, 295 F.3d
at 27 (“[G]iven the uncertainties of foreign cooperation,
Congress may not have wanted to force the government to
bring forfeiture proceedings within five years to recover
such property.”).
III. Conclusion
Accordingly, for the reasons stated above, we affirm the
judgment of the District Court.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit