United States v. Mahmoud Salti ( 2009 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 09a0308p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
X
Plaintiff-Appellee, -
UNITED STATES OF AMERICA,
-
-
-
No. 07-4487
v.
,
>
-
Defendant, -
MAHMOUD F. SALTI,
-
-
-
-
MOHAMMED F. SALTI, aka Mike Salti, Sr.,
-
nka Mohammed Al Ammouri; USRAH MARY
Claimants-Appellants. -
SALTI,
N
Appeal from the United States District Court
for the Northern District of Ohio at Cleveland.
No. 96-00153-001—Peter C. Economus, District Judge.
Argued: December 2, 2008
Decided and Filed: August 25, 2009
*
Before: MOORE and WHITE, Circuit Judges; TARNOW, District Judge.
_________________
COUNSEL
ARGUED: Richard Stoper, Jr., ROTATORI BENDER, L.P.A., Cleveland, Ohio, for
Appellants. James L. Morford, ASSISTANT UNITED STATES ATTORNEY,
Cleveland, Ohio, for Appellee. ON BRIEF: Richard Stoper, Jr., ROTATORI
BENDER, Cleveland, Ohio, for Appellants. James L. Morford, ASSISTANT UNITED
STATES ATTORNEY, Cleveland, Ohio, for Appellee.
*
The Honorable Arthur J. Tarnow, United States District Judge for the Eastern District of
Michigan, sitting by designation.
1
No. 07-4487 United States v. Salti, et al. Page 2
_________________
OPINION
_________________
WHITE, Circuit Judge. Mohammed F. Salti, also known as Mike Salti, Sr., and
now known as Mohammed Al Ammouri (Al Ammouri), and his wife Usrah Mary Salti
(Mary Salti) appeal the district court’s dismissal of their petition asserting an interest in
a Swiss bank account the court had ordered forfeited as a result of the Government’s plea
agreement with Al Ammouri’s nephew, Mahmoud F. Salti, also known as Mike Salti,
Jr. (Mahmoud). On the Government’s motion, the court dismissed Al Ammouri’s claim
pursuant to the fugitive disentitlement statute, 28 U.S.C. § 2466, and dismissed Mary
Salti’s claim finding she lacked standing. We REVERSE and REMAND.
I. BACKGROUND
On May 8, 1996, a grand jury in the Northern District of Ohio returned a nine-
count indictment against Al Ammouri and his nephew Mahmoud (collectively,
defendants). Counts 1 and 2 charged conspiracy to commit food stamp fraud, and counts
3 and 4 charged conspiracy to commit domestic and international money laundering in
violation of 18 U.S.C. §§ 1956(a)(1)(B)(i) and 1956(a)(2)(B)(i) by concealing the nature,
source, ownership, and control of the proceeds of the fraud. Among the money
laundering allegations was that certain food-stamp redemption funds were “co-mingled
with other SALTI monies in order to render them untraceable.” The indictment further
alleged that “[f]or extended periods of time,” Al Ammouri “resided” in Jordan, that
defendants used official bank checks to “transport [Al Ammouri]’s food stamp
trafficking profits to him in Jordan,” including “co-mingled” proceeds, and that multiple
checks were cashed in the Jordan Gulf Bank in Amman, Jordan.
Mahmoud initially pleaded not guilty to Counts 1-5, 8, and 9, but subsequently
changed his plea on those counts to guilty. Mahmoud admitted that he and Al Ammouri
operated a conspiracy from at least April 24, 1985 until April 8, 1994 that generated
illegal profits by purchasing approximately $7,000,000 of food stamps and Women,
No. 07-4487 United States v. Salti, et al. Page 3
Infants, and Children coupons for less than face value. Mahmoud further admitted that
he and Al Ammouri laundered the proceeds of their food-stamp trafficking, including
by transporting cash and official bank checks to Al Ammouri in Jordan, where the
checks were cashed at the Jordan Gulf Bank.
On April 20, 2006, the district court approved an addendum to Mahmoud’s plea
agreement, pursuant to which Mahmoud agreed to forfeit all property, real and personal,
involved in the money laundering counts of the indictment (Counts 3 and 4) and all
property traceable to such property. Mahmoud stated that “from at least as early as 1985
and continu[ing] until in or about 1995,” he was “jointly engaged” with Al Ammouri in
the commission of the money laundering offenses, and the checks, cash, and money
orders they laundered “constituted proceeds of joint criminal activity.” The court
entered an Order of Forfeiture pursuant to 18 U.S.C. § 982(a)(1), which included a
provision stating that “[s]hould the United States identify and locate any of this property,
the Court will enter an Amended Order of Forfeiture under 21 U.S.C. § 853 [as
incorporated by 18 U.S.C. § 982(b)(1)(A)], authorizing the seizure of such property and
its disposition in accordance with law.”
In November 2006, Mahmoud and the Government entered into an agreement
stating that, pursuant to 18 U.S.C. § 982(a)(1), Mahmoud would forfeit “Arab Bank
(Switzerland), Ltd., Zurich – Account Number 10.191146-0 in the name of Mohammed
Al Ammouri . . . , and its contents (approximately $750,000.00)” (the Swiss Account),
and that this property “was involved in Counts 3 and 4 of the indictment, and/or is
traceable to such property.” The Government requested that the district court approve
an amended order of forfeiture, stating that its request was supported by a sealed
affidavit of Special Agent Kevin Ganger of the United States Department of
Agriculture’s Office of Inspector General. Finding that the property was subject to
forfeiture due to its involvement in Counts 3 and 4 and/or its traceability to such
property, the district court entered an amended order, ordering that the Swiss Account
in Al Ammouri’s name and its contents be forfeited to the United States. The court
further ordered that notice be published pursuant to 21 U.S.C. § 853(n)(1), and that, “[t]o
No. 07-4487 United States v. Salti, et al. Page 4
the extent practicable, the United States may also provide direct written notice” to Al
Ammouri, whom the court identified as “a person potentially having an interest in the
property identified.” The court stated that, “[f]ollowing completion of notice, this Court
will enter a final order in accordance with 21 U.S.C. § 853(n).”
On January 17, 2007, Al Ammouri and his wife Mary Salti filed a signed petition
with the court pursuant to 21 U.S.C. § 853(n), in which they claimed an interest in the
Swiss Account. They alleged that Al Ammouri is “the owner” of the Account and that
Mary Salti has “an interest” in the Account. They “assert[ed] right, title and interest in
the entirety of the Account,” alleging that they “acquired their right, title and interest . . .
prior to the offenses alleged in the indictment in this case.” Alleging Al Ammouri “has
suffered from heart disease and other physical conditions” for “several years,” the
petition stated that Al Ammouri “maintained accounts” (including, presumably, the
Swiss Account) as part of “making provisions for his wife . . . after his death.” As to the
funds in the accounts at the Arab Bank, petitioners alleged that
[a]t various times, the numbers and names on the accounts have changed.
In the early 1990s, the funds now in the Account were in an account in
the name of Mary Salti. The monies in the Account, in whatever form,
have at all times been held by Mike Salti, Sr., Mary Salti or others in
trust for the use and support of Mary Salti, due to the debilitating and
serious health conditions of Mike Salti, Sr. The accounts were not all
placed in the name of Mary Salti because at all relevant times Mary Salti
had a power of attorney for Mike Salti, Sr., and therefore, had access to
the accounts.
Petitioners stated that no monies related to the matters alleged in the indictment were
deposited in the Swiss Account “or any predecessor or related account, either directly
or indirectly,” and declared that the funds currently in the Swiss Account “are not the
proceeds of any criminal activity or traceable to any monies used in the course of any
crime.” They requested a hearing to adjudicate their interest in the Account so that their
interest could be excepted from forfeiture.1
1
The petition also alleged that the Government previously initiated a separate civil action seeking
damages related to “identical” matters alleged in the criminal indictment against Al Ammouri and
Mahmoud; that the district court at one point quashed a writ of garnishment, resulting in the Government
returning seized property to Mary Salti; and that Mary Salti thereafter entered into a Consent Judgment
No. 07-4487 United States v. Salti, et al. Page 5
The Government filed a motion to dismiss the petition, arguing that Al
Ammouri’s claim should be dismissed pursuant to the fugitive disentitlement statute and
that Mary Salti’s claim should be dismissed for lack of standing because she has no
“legal interest” in the property. The Government based its fugitive disentitlement
argument in part on an attached Declaration of Special Agent Ganger of the Department
of Agriculture, who was one of the agents who conducted the criminal investigation of
Al Ammouri and Mahmoud. As for Mary Salti’s claim, the Government argued that
even assuming the funds in the Swiss Account were legitimate and not the proceeds of
illegal activity, Mary Salti was not an “owner” of the Swiss Account and had no “legal
interest” in it.
Petitioners opposed the Government’s motion. They argued that Al Ammouri’s
claim should not be dismissed on fugitive disentitlement grounds and that doing so
would violate his due process rights, the Ex Post Facto Clause, and the Eighth
Amendment. They further argued that Mary Salti has standing because she has power
of attorney to act for Al Ammouri, the Swiss Account contains funds transferred from
other accounts in her name, she has a marital property interest, and she should be
considered the beneficiary of a constructive trust in the Swiss Account’s funds.
Petitioners argued that Ganger’s declaration should be stricken and claimed they were
entitled to discovery and a hearing. Along with their opposition memorandum,
petitioners submitted signed declarations of Al Ammouri and Mary Salti, bank records,
reports and documentation regarding Al Ammouri’s medical history, a document in
which Al Ammouri gave his wife power of attorney under Ohio law, and texts of various
laws.
On November 30, 2007, the district court granted the Government’s motion to
dismiss, ruling that Al Ammouri’s claim was barred by the fugitive disentitlement statute
and Settlement Agreement with the Government requiring her to pay $75,000, “resolving all matters
relating to her potential liability for the matters underlying the Civil Action,” and releasing her from all
claims arising from the same conduct as that alleged in the criminal indictment and in “the papers relating
to forfeiture.” The petition stated that because Mary Salti signed the agreement and has complied with it,
the Government is barred from obtaining forfeiture of her interest in the Swiss Account. The district court
did not address this contention when it dismissed the petition.
No. 07-4487 United States v. Salti, et al. Page 6
and that Mary Salti lacked a legal interest in the Swiss Account and thus was without
standing to assert her claim. The court issued its Final Order of Forfeiture on
December 4, 2007. This appeal followed.
II. DISCUSSION
A. Statutory and Procedural Context
The criminal forfeiture statute at issue provides in pertinent part that “[t]he court,
in imposing sentence on a person convicted of an offense in violation of [the money
laundering statute, 18 U.S.C. § 1956], shall order that the person forfeit to the United
States any property, real or personal, involved in such offense, or any property traceable
to such property.” 18 U.S.C. § 982(a)(1). It further provides that “[t]he forfeiture of
property under this section, including any seizure and disposition of the property and any
related judicial or administrative proceeding, shall be governed by” all provisions,
except subsection (d), of 21 U.S.C. § 853. Id. § 982(b)(1).
Under section 853, a third party “asserting a legal interest in property which has
been ordered forfeited to the United States” may petition the court for a hearing to
adjudicate “the validity of his alleged interest in the property.” 21 U.S.C. § 853(n)(2).2
“The hearing on the petition shall, to the extent practicable and consistent with the
interests of justice, be held within thirty days of the filing of the petition.” Id.
§ 853(n)(4). The petitioner and the Government may present evidence and witnesses at
the hearing. Id. § 853(n)(5). The petitioner ultimately bears the burden of establishing
the petitioner’s third-party claim by a preponderance of the evidence:
If, after the hearing, the court determines that the petitioner has
established by a preponderance of the evidence that—
(A) the petitioner has a legal right, title, or interest in the
property, and such right, title, or interest renders the order of
forfeiture invalid in whole or in part because the right, title, or
interest was vested in the petitioner rather than the defendant or
2
“The petition shall be signed by the petitioner under penalty of perjury and shall set forth the
nature and extent of the petitioner’s right, title, or interest in the property, the time and circumstances of
the petitioner’s acquisition of the right, title, or interest in the property, any additional facts supporting the
petitioner’s claim, and the relief sought.” 21 U.S.C. § 853(n)(3).
No. 07-4487 United States v. Salti, et al. Page 7
was superior to any right, title, or interest of the defendant at the
time of the commission of the acts which gave rise to the
forfeiture of the property under this section; or
(B) the petitioner is a bona fide purchaser for value of the
right, title, or interest in the property and was at the time of
purchase reasonably without cause to believe that the property
was subject to forfeiture under this section;
the court shall amend the order of forfeiture in accordance with its
determination.
Id. § 853(n)(6).3 The statute instructs that “[t]he provisions of this section shall be
liberally construed to effectuate its remedial purposes.” Id. § 853(o).
Federal Rule of Criminal Procedure 32.2, which was adopted in 2000, sets out,
inter alia, the “ancillary proceeding” to be used when a third party files a petition in a
criminal forfeiture proceeding.4 Subsection (c)(1) of the rule establishes the following
procedure:
If, as prescribed by statute, a third party files a petition asserting an
interest in the property to be forfeited, the court must conduct an
ancillary proceeding, but no ancillary proceeding is required to the extent
that the forfeiture consists of a money judgment.
(A) In the ancillary proceeding, the court may, on motion, dismiss
the petition for lack of standing, for failure to state a claim, or for any
other lawful reason. For purposes of the motion, the facts set forth in the
petition are assumed to be true.
(B) After disposing of any motion filed under Rule 32.2(c)(1)(A)
and before conducting a hearing on the petition, the court may permit the
parties to conduct discovery in accordance with the Federal Rules of
Civil Procedure if the court determines that discovery is necessary or
desirable to resolve factual issues. When discovery ends, a party may
move for summary judgment under Federal Rule of Civil Procedure 56.
Fed. R. Crim. P. 32.2(c)(1). The Advisory Committee’s notes state that although “it
would not be appropriate to make the Civil Rules applicable in all respects,” there are
3
Petitioners in the instant case are proceeding under subparagraph (A) of this provision.
4
This rule was adopted to supplement the statutory scheme for determining third-party claims,
as “[e]xperience has shown that ancillary hearings can involve issues of enormous complexity that require
years to resolve” and “[i]n such cases, procedures akin to those available under the Federal Rules of Civil
Procedure should be available to the court and the parties to aid in the efficient resolution of the claims.”
Fed. R. Crim. P. 32.2(c) advisory committee’s note.
No. 07-4487 United States v. Salti, et al. Page 8
“several fundamental areas in which procedures analogous to those in the Civil Rules
may be followed,” including “the filing of a motion to dismiss a claim” and “disposing
of a claim on a motion for summary judgment.” Fed. R. Crim. P. 32.2(c) advisory
committee’s note. The rule, “[w]here applicable, . . . follows the prevailing case law on
the issue.” Id.
B. Al Ammouri’s Claim
We first consider Al Ammouri’s arguments regarding the district court’s
application of the fugitive disentitlement statute, 28 U.S.C. § 2466, to dismiss his third-
party claim. “[T]he ultimate decision whether to order disentitlement in a particular case
rests in the sound discretion of the district court” once the statutory prerequisites of the
fugitive disentitlement statute are satisfied. Collazos v. United States, 368 F.3d 190, 198
(2d Cir. 2004). “[T]he legal applicability of § 2466 to [petitioner’s] forfeiture claim” is
reviewed de novo, and “to the extent we conclude that the statute is applicable . . . , we
review the district court’s decision to order disentitlement for abuse of discretion.” Id.
at 195; cf. March v. Levine, 249 F.3d 462, 469 (6th Cir. 2001) (reviewing a district
court’s application of the fugitive disentitlement doctrine and holding that the court did
not abuse its discretion when it declined to order disentitlement). “A district court
abuses its discretion when it relies upon clearly erroneous factual findings, applies the
law improperly, or uses an erroneous legal standard.” Wikol ex rel. Wikol v. Birmingham
Pub. Sch. Bd. of Educ., 360 F.3d 604, 611 (6th Cir. 2004).
The district court dismissed Al Ammouri’s claim pursuant to the fugitive
disentitlement statute, 28 U.S.C. § 2466, which Congress enacted as part of the Civil
Asset Forfeiture Reform Act of 2000 (CAFRA), Pub. L. No. 106-185, 114 Stat. 202.
This section states:
(a) A judicial officer may disallow a person from using the resources of
the courts of the United States in furtherance of a claim in any related
civil forfeiture action or a claim in third party proceedings in any related
criminal forfeiture action upon a finding that such person--
No. 07-4487 United States v. Salti, et al. Page 9
(1) after notice or knowledge of the fact that a warrant or process
has been issued for his apprehension, in order to avoid criminal
prosecution--
(A) purposely leaves the jurisdiction of the United States;
(B) declines to enter or reenter the United States to
submit to its jurisdiction; or
(C) otherwise evades the jurisdiction of the court in
which a criminal case is pending against the person; and
(2) is not confined or held in custody in any other jurisdiction for
commission of criminal conduct in that jurisdiction.
(b) Subsection (a) may be applied to a claim filed by a corporation if any
majority shareholder, or individual filing the claim on behalf of the
corporation is a person to whom subsection (a) applies.
28 U.S.C. § 2466.
The Second Circuit was the first to apply the fugitive disentitlement statute.
Tracking the statutory language, the Second Circuit identified five prerequisites to
disentitlement under § 2466:
(1) a warrant or similar process must have been issued in a criminal case
for the claimant’s apprehension; (2) the claimant must have had notice
or knowledge of the warrant; (3) the criminal case must be related to the
forfeiture action; (4) the claimant must not be confined or otherwise held
in custody in another jurisdiction; and (5) the claimant must have
deliberately avoided prosecution by (A) purposefully leaving the United
States, (B) declining to enter or reenter the United States, or (C)
otherwise evading the jurisdiction of a court in the United States in which
a criminal case is pending against the claimant.
Collazos, 368 F.3d at 198; see also id. (observing that “[e]ven when these requirements
are satisfied . . . , § 2466 does not mandate disentitlement”). The D.C. Circuit recently
adopted this five-element test, United States v. $6,976,934.65, Plus Interest Deposited
into Royal Bank of Scot. Intern., Account No. 2029-5614070, Held in Name of Soulbury
Ltd., 554 F.3d 123, 128 (D.C. Cir. 2009), and we do so as well.
In the instant case, the district court ruled that all elements of the statute had been
satisfied and disallowed Al Ammouri’s claim. Petitioners argue that the district court
erred in deciding this question on a motion to dismiss prior to allowing for discovery and
a hearing. They also contend that “the district court improperly found that Mr. Al
Ammouri declines to enter the United States or is evading the jurisdiction of the
No. 07-4487 United States v. Salti, et al. Page 10
court”—that, “[a]t a minimum, issues of fact exist regarding whether Al Ammouri is
‘deliberately’ and ‘purposely’ evading the jurisdiction of the district court,” as “there are
factual issues regarding whether Mr. Al Ammouri can return to the United States” due
to his allegedly poor health.
We reject petitioners’ first argument. Rule 32.2 makes clear that before any
discovery is taken, a motion to dismiss may be brought to dismiss a third party’s claim
“for lack of standing, for failure to state a claim, or for any other lawful reason.” Fed.
R. Crim. P. 32.2(c)(1)(A).5 It also states that “[a]fter disposing of” a motion to dismiss
and “before conducting a hearing on the petition,” a court may permit discovery to
resolve factual issues if it would be necessary or desirable. Fed. R. Crim. P.
32.2(c)(1)(B) (emphasis added). Thus, discovery and a hearing are not required prior
to a ruling on a motion to dismiss.6
Petitioners also argue that in considering the motion to dismiss Al Ammouri’s
claim, the district court did not assume that the facts set forth in the petition were true,
see Fed. R. Crim. P. 32.2(c)(1)(A), and instead impermissibly resolved disputed issues
of fact to determine that Al Ammouri is a “fugitive” as defined by the fugitive
disentitlement statute. We agree that the district court erred when it decided as a matter
of law that Al Ammouri is a “fugitive” and thus dismissed his claim. We are persuaded
by the D.C. Circuit’s recent reversal of a district court’s application of the fugitive
disentitlement statute, on the Government’s motion for summary judgment, where the
district court had disallowed a claim in a forfeiture proceeding. $6,976,934.65, 554 F.3d
123. Discussing the fifth disentitlement element, the D.C. Circuit found that the district
court erred in holding that the government need not “show ‘that avoiding prosecution
5
We agree with the district court that dismissing a claim on fugitive disentitlement grounds falls
into the category of “any other lawful reason.”
6
Even before the enactment of Rule 32.2, we allowed courts to dismiss claims without first
holding a hearing. See, e.g., United States v. Campos, 859 F.2d 1233, 1240 (6th Cir. 1988) (as amended)
(“We conclude . . . that the district court did not err in its conclusion that the claimants failed to allege or
make a prima facie showing of any legal right, title, or interest in the forfeited property and thus no hearing
or trial was mandated . . . .”); see also United States v. O’Brien, 181 F.3d 105, 1999 WL 357755, at *3 (6th
Cir. 1999) (unpublished disposition) (“[Third-party petitioner] did not and cannot make a prima facie
showing of a legal right, title or interest in the [property]. . . . The district court therefore did not err in
declining to provide her with a hearing on the matter.”).
No. 07-4487 United States v. Salti, et al. Page 11
is the reason [the individual] has failed to enter the United States and has otherwise
evaded its jurisdiction.’” Id. at 132 (quoting United States v. $6,976,934.65, 478 F.
Supp. 2d 30, 41 (D.D.C. 2007) (emphasis in the original)). The D.C. Circuit held that
“[t]he plain language of § 2466 mandates this showing by requiring that, under any of
the three ways in which the government can prove evasion of jurisdiction, that evasion
must have been ‘in order to avoid criminal prosecution.’” Id. (quoting § 2466(a)(1)
(emphasis added by D.C. Circuit)). It ruled that “[i]n light of [a] factual dispute
regarding [the fugitive’s] intent to avoid criminal prosecution, the district court erred in
granting summary judgment on the applicability of the fugitive disentitlement statute.”
$6,976,934.65, 554 F.3d at 133.
The district court in the instant case similarly erred in granting the Government’s
motion to dismiss based on the fugitive disentitlement statute. Petitioners dispute that
Al Ammouri is “deliberately avoid[ing] prosecution.” Collazos, 368 F.3d at 198.7 They
maintain that Al Ammouri has “suffered from poor health for several years,” and that
there are “factual issues regarding whether Mr. Al Ammouri can return to the United
States.” The petition states that “[f]or several years, [Al Ammouri] has suffered from
heart disease and other physical conditions.” In opposing the Government’s motion to
dismiss, Al Ammouri averred in a declaration filed with the district court that “[f]or
many years I have suffered from heart disease and related conditions and have had many
surgeries,” and that he held monies in trust for the use and support of his wife “[d]ue to
7
To the extent petitioners argue that Al Ammouri’s not being a fugitive when he departed the
United States is dispositive, they are mistaken. The fugitive disentitlement statute applies to persons who
“decline[] to enter or reenter the United States to submit to its jurisdiction.” 28 U.S.C. § 2466(a)(1)(B)
(emphasis added); see also Collazos, 368 F.3d at 199 (“fugitives” subject to disentitlement include those
who “learned that their arrests were sought and who then refused to return to the United States in order to
avoid prosecution”). As the Second Circuit concluded, Congress’s use of this statutory language even
“extends disentitlement authority . . . to persons who, although they may have never set foot within the
territorial jurisdiction of the United States, know that warrants are outstanding for them and, as a result,
refuse to enter the country.” Collazos, 368 F.3d at 199-200; see also id. at 198 (“the statutory
disentitlement power conferred by Congress is not limited . . . to common-law fugitives”). But see id. at
206 (Katzmann, J., concurring) (“agree[ing] that we are bound to adhere to the unambiguous meaning of
a statute,” but suggesting that “the supporters of the legislation may not have intended to sweep as broadly
as the statutory text suggests”; reviewing the legislative history of CAFRA and observing that
“[a]dministration sponsors of the ‘[f]ugitive disentitlement’ section and the ‘enter or reenter’ language
opined on several occasions . . . that the provision simply reinstated the common law doctrine of fugitive
disentitlement”). Al Ammouri’s leaving the United States before “a warrant or process [was] issued for
his apprehension,” 28 U.S.C. § 2466(a)(1), does not on its own preclude status as a “fugitive” under the
disentitlement statute.
No. 07-4487 United States v. Salti, et al. Page 12
my poor health.” He also filed multiple medical records and documents with the court
detailing his medical history. The most noteworthy of these is a January 17, 2007 letter
purportedly from a doctor at the Al-Essra Hospital in Jordan stating that Al Ammouri
“recently had open heart surgery,” “is in poor general condition with significant angina
and effort limiting symptoms,” and “is unable to travel because he is too frail and fragile
due to his current health condition.”
In rejecting Al Ammouri’s challenge to the application of the fugitive
disentitlement statute, the district court reasoned that the statute does not contain a
“health exception,” and that petitioners’ argument that “it is impossible for Al Ammouri
to return to the U.S. due to illness[, and that] therefore[] he cannot be found to have
deliberately or purposefully evaded the jurisdiction of the Court,” is “irrelevant as a
matter of law.” While there is no such express exception in the statute, a petitioner’s
alleged ill health is clearly relevant to whether the petitioner is “deliberately avoid[ing]
prosecution by . . . declining to enter or reenter the United States,” Collazos, 368 F.3d
at 198, and such an argument is properly asserted in response to the Government’s
attempt to apply the fugitive disentitlement statute. The district court erred in only
considering Al Ammouri’s claimed ill health as part of its ultimate consideration
whether to disentitle Al Ammouri after it had determined that the five elements were
satisfied. If Al Ammouri is indeed too sick to travel, such that his illness is what
prevents him from returning to the United States, the Government has not shown as a
matter of law that Al Ammouri’s being in Jordan, and not the United States, is “in order
to avoid criminal prosecution.” Cf. id. at 201 (ruling that disentitlement was appropriate
when the individual in question “made a conscious choice not to ‘enter or reenter the
United States’ to face the criminal charges pending against her” and when “nothing in
the record indicates that [she] was ever confined, incarcerated, or otherwise unable to
travel to the United States of her own volition in the months before the district court
ordered disentitlement” (emphasis added)).8
8
We do not consider the video contained in the Joint Appendix that the Government contends
establishes that Al Ammouri “is a healthy man.” This video was not a part of the record that the district
court had before it when deciding the Government’s motion to dismiss. Moreover, the Government’s
contention that forty seconds of video showing “a man”—allegedly Al Ammouri—“carrying a pink
No. 07-4487 United States v. Salti, et al. Page 13
We note that the district court’s failure to recognize that the petitioner’s health
is relevant to whether the petitioner is “deliberately avoid[ing] prosecution” would not
necessarily require reversal, so long as the court properly considered the petitioner’s
alleged ill health in its discretionary analysis after determining that all five elements for
fugitive disentitlement had been satisfied. Here, the district court’s discussion of Al
Ammouri’s health in its discretionary analysis does not convince us that Al Ammouri’s
health-related allegations and supporting evidence were given the consideration they are
due at this early stage of the proceedings. The court considered doctors’ reports and the
allegations of Al Ammouri’s ill health, but said that Al Ammouri’s history of heart
problems before he left the United States in 1995 and alleged plea negotiations between
Al Ammouri’s counsel and the Government in 2005 left it “unconvinced that Al
Ammouri has not been able to return to the U.S. during the last six years.” Yet the
proffered doctor’s note saying Al Ammouri was too ill to travel was dated in
2007—after the apparently unsuccessful plea discussions the Government contends were
to facilitate Al Ammouri’s return to the United States. Even if such negotiations cast
doubt on Al Ammouri’s earlier claims of ill health, and thus on all such claims, that is
all they do—cast doubt. The district court’s discussion of the various facts and its
statement that it was “unconvinced” persuades us that it was improperly and prematurely
weighing evidence to resolve a “factual dispute regarding [Al Ammouri’s] intent to
avoid criminal prosecution.” See $6,976,934.65, 554 F.3d at 133.
We therefore reverse as to the district court’s application of the fugitive
disentitlement statute to dismiss Al Ammouri’s third-party claim.9 In so ruling, we do
not suggest that the district court will necessarily be unable to apply the fugitive
disentitlement statute to Al Ammouri at a subsequent stage on remand.10
umbrella and wearing a black overcoat[] with a white tie” proves that Al Ammouri is “very healthy and
robust” and “directly contradicts” Al Ammouri’s argument of poor health is a stretch.
9
Accordingly, we do not consider Al Ammouri’s arguments that the court’s application of the
disentitlement statute violated various constitutional rights. See $6,976,934.65, 554 F.3d at 133.
10
At an early stage of the $6,976,934.65 case discussed supra, the district court acknowledged
that it was “considering the strong step of disallowing a claim in a forfeiture action” and “desire[d] to
ensure that the claimant [received] a full hearing on the question of disentitlement.” $6,976,934.65, 478
No. 07-4487 United States v. Salti, et al. Page 14
C. Mary Salti’s Claim
Turning to our examination of the district court’s dismissal of Mary Salti’s claim
for lack of standing, we “review the district court’s interpretation of the federal forfeiture
laws de novo. . . . [T]he district court’s findings of fact are reviewed under a clearly
erroneous standard and the question of whether those facts are sufficient to constitute a
proper criminal forfeiture is reviewed de novo.” United States v. O’Dell, 247 F.3d 655,
679 (6th Cir. 2001) (citations omitted). “Whether a claimant has standing to contest a
forfeiture is a determination of law, and therefore this court reviews the district court’s
determination of standing de novo.” United States v. 37.29 Pounds of Semi-Precious
Stones, 7 F.3d 480, 483 (6th Cir. 1993), abrogated on other grounds by United States
v. James Daniel Good Real Prop., 510 U.S. 43 (1993).
In an ancillary proceeding, a court may dismiss a third-party petition for lack of
standing. Fed. R. Crim. P. 32.2(c)(1)(A). Under Rule 32.2, “a motion to dismiss a
third-party petition in a forfeiture proceeding prior to discovery or a hearing should be
treated like a motion to dismiss a civil complaint under Federal Rule of Civil Procedure
12(b).” Pacheco v. Serendensky, 393 F.3d 348, 352 (2d Cir. 2004).11 “A claimant need
F. Supp. 2d at 45. The court declined to dismiss the claim, but instead “convert[ed] the government’s
motion under § 2466 to one for partial summary judgment under Rule 56, and permit[ted] . . . the parties
90 days to conduct limited discovery on the applicability of the fugitive disentitlement statute.” Id. at 45-
46. Discovery was expressly limited to the fugitive disentitlement question, and the petitioner was
reminded that the court could impose sanctions, including deeming certain matters conceded and
dismissing with prejudice, if the petitioner refused to cooperate with the Government’s discovery requests.
See id. at 46 & n.11; cf. Degen v. United States, 517 U.S. 820, 827 (1996) (“A federal court has at its
disposal an array of means to enforce its orders, including dismissal in an appropriate case.”), superseded
in other respects by statute, Civil Asset Forfeiture Reform Act of 2000. To avoid the abuse of the
discovery process by either party, the court said it would “fashion any appropriate protective orders sought
by the parties to minimize undue disruption to the criminal case.” $6,976,934.65, 478 F. Supp. 2d at 46.
Notwithstanding that its subsequent grant of summary judgment was reversed by the D.C. Circuit, see 554
F.3d 123, we find instructive the D.C. district court’s course of action after its rejection of outright
dismissal.
11
Each element of Article III standing “must be supported in the same way as any other matter
on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at
the successive stages of the litigation.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). “At the
pleading stage, general factual allegations of injury . . . may suffice, for on a motion to dismiss we
presum[e] that general allegations embrace those specific facts that are necessary to support the claim.”
Id. (citation and quotation marks omitted). Conclusory allegations are not entitled to be assumed true. See
Ashcroft v. Iqbal, --- U.S. ----, 129 S. Ct. 1937, 1951 (2009). However, at this stage a petition’s factual
allegations are to be taken as true and are to be construed in favor of the petitioner. See Sutton v. St. Jude
Med. S.C., Inc., 419 F.3d 568, 570 (6th Cir. 2005) (citing, inter alia, Warth v. Seldin, 422 U.S. 490, 501
(1975)); Fed. R. Crim. P. 32.2(c)(1)(A) (for purposes of considering a motion to dismiss a third-party
petition for lack of standing in an ancillary proceeding, “the facts set forth in the petition are assumed to
No. 07-4487 United States v. Salti, et al. Page 15
not prove the merits of his underlying claim, but he must claim a facially colorable
interest in the seized property” to satisfy the requirements of standing. United States v.
$515,060.42 in U.S. Currency, 152 F.3d 491, 497-98 (6th Cir. 1998) (citation omitted).
Mary Salti argues that she has sufficiently claimed various interests in the Swiss
Account. She maintains she has had Al Ammouri’s power of attorney over the Swiss
Account at all relevant times. She alleges she has a marital interest in the Swiss
Account. She also contends that funds in the Swiss Account were previously held in
accounts in her name. Finally, she argues she should be considered the beneficiary of
a constructive trust.
1. Power of Attorney
Mary Salti claims that she has standing by virtue of her power of attorney for Al
Ammouri. Petitioners filed a copy of Al Ammouri’s power of attorney with the district
court.12 Additionally, the petition states that “[t]he accounts”—including, it seems, the
Swiss Account—“were not all placed in the name of Mary Salti because at all relevant
times Mary Salti had power of attorney for [Al Ammouri], and, therefore, had access to
the accounts.” Petitioners’ attached declarations support this contention. See Joint
Appendix (J.A.) 163 (Al Ammouri Decl. ¶ 11) (“At all relevant times, Usrah Mary Salti
has had power of attorney to act on my behalf.”); J.A. 231 (Mary Salti Decl. ¶ 7)
(“During all times relevant to this case and prior thereto, I have had a power of attorney
to act on behalf of my husband.”).
“A power of attorney is a written instrument authorizing an agent to perform
specific acts on behalf of his principal.” Testa v. Roberts, 542 N.E.2d 654, 658 (Ohio
Ct. App. 1988). The district court reasoned in part that Mary Salti “cannot bring a
petition on behalf of Al Ammouri, as Al Ammouri is barred from petitioning the Court
due to his status as a fugitive” under the fugitive disentitlement statute. The court was
be true”).
12
The document is subtitled “Ohio Revised Code Section 1337.09” and states that “[q]uestions
pertaining to the validity, construction and powers created under this instrument shall be determined in
accordance with the laws of the State of Ohio.”
No. 07-4487 United States v. Salti, et al. Page 16
correct; if we had upheld Al Ammouri’s disentitlement, Mary Salti would be precluded
from bringing a claim on his behalf based on his power of attorney. However, because
we reverse the district court’s dismissal of Al Ammouri’s claim at this stage on the
grounds of fugitive disentitlement, we also reverse the district court’s dismissal of Mary
Salti’s claim insofar as she is acting on her husband’s behalf in these proceedings
pursuant to the power of attorney.13
2. Marital Interest
Mary Salti also contends she has standing to bring a third-party claim on her own
behalf because she has a marital interest in the account. She disputes the district court’s
conclusion that “Ohio law governs” simply because “[i]t is undisputed that Salti’s
current legal U.S. residence is in Cincinnati, Ohio.” She argues that the applicable law
is Switzerland’s, which she contends provides for a marital interest in the Swiss Account
sufficient to support her standing in this proceeding.14
“[T]he general federal practice in forfeiture matters” is to look to “the law of the
jurisdiction that created the property right to determine the petitioner’s legal interest.”
United States v. Speed Joyeros, S.A., 410 F. Supp. 2d 121, 125 (E.D.N.Y. 2006). We
follow this practice, having previously determined that “because ‘[f]orfeiture
proceedings implicate property rights which have traditionally been measured in terms
of state law,’ and because section 853 contains no rule for determining the scope of
property rights, ‘it is appropriate to refer to state law in determining the nature of the
property interest’ involved in a forfeiture proceeding.” United States v. Smith, 966 F.2d
1045, 1054 n.10 (6th Cir. 1992) (quoting United States v. Certain Real Prop. Located
at 2525 Leroy Lane, 910 F.2d 343, 349 (6th Cir. 1990)); see also United States v. Harris,
246 F.3d 566, 571 (6th Cir. 2001); 2525 Leroy Lane, 910 F.2d at 348 (observing that
13
We do so without prejudice either to the district court’s future disentitlement of Al Ammouri
or to any attempt by the Government to argue that Al Ammouri lacks a facially colorable interest in the
Account.
14
The Government argues that Ohio law applies and, because Ohio is not a community property
state, Mary Salti has no marital interest in the Swiss Account unless and until she commences divorce
proceedings against Al Ammouri. Mary Salti disputes that Ohio law applies and maintains she would have
a marital interest in the Account even if it did.
No. 07-4487 United States v. Salti, et al. Page 17
“[p]roperty interests have long been acquired and defined by state law; it was with those
interests in mind that Congress drafted provisions for the protection of innocent third
parties”). Most other circuits take the same approach. See, e.g., United States v. 5 S 351
Tuthill Road, Naperville, Ill., 233 F.3d 1017, 1021 (7th Cir. 2001) (as amended) (“State
law defines and classifies property interests for purposes of the forfeiture statutes, while
federal law determines the effect of the property interest on the claimant’s standing.”).
We reject the district court’s seemingly bare conclusion that the governing law
is simply the law of the jurisdiction where the person claiming the interest resides. At
issue here are funds in a bank account in Switzerland. Pursuant to the general rule
discussed above, Swiss law governs in determining whether Mary Salti has a colorable
marital interest in the Account. Cf., e.g., United States v. Real Prop. Located at Incline
Vill., 976 F. Supp. 1327, 1340-41 (D. Nev. 1997).
This determination, however, is only part of the required analysis. The
Government has not conceded that Mary Salti has a sufficient interest in the Account
pursuant to Swiss law. Moreover, unlike petitioners, we are not convinced that Swiss
marital property law entirely governs this inquiry. Swiss banking law may also be
relevant regarding the extent of a wife’s legal interest, if any, in a bank account held only
in her husband’s name. To determine the extent of a third party’s interest, if any, in the
property at issue, courts should closely analyze the law of the state (or, in this case,
foreign) jurisdiction. See 2 David B. Smith, Prosecution and Defense of Forfeiture
Cases ¶ 14.08[5] (2009). We remand for such an analysis.
3. Funds Previously in Mary Salti’s Name
Mary Salti also maintains she has standing because “the funds sought to be
forfeited were previously held in accounts in her name.” The petition alleges that “[i]n
the early 1990s, the funds now in the Account were in an account in the name of Mary
Salti.” She argues that “[s]ince this money has previously been held in an account in
[her] name . . . , [she] has standing to challenge the forfeiture of the account.”
No. 07-4487 United States v. Salti, et al. Page 18
On its own, the allegation that funds in the Swiss Account were previously in
Mary Salti’s name does not establish a cognizable interest in the Swiss Account. The
most Mary Salti might be under this theory is a general creditor of Al Ammouri. We
previously observed that “one occupying a position as general creditor may have
standing to assert claims against forfeited property under § 853(n),” but
one must assert something more than being a general creditor; he must
show that his legal interest in the property in question is vested or is
superior to that of the criminal owner under subsection (A). One may
have an “interest” in forfeited property (in the broad sense of being a
general creditor) in order to have standing, but he also must make at least
a prima facie showing of a “vested” or a “superior” interest to come
within the meaning of subsection (A).
Campos, 859 F.2d at 1239; see also DSI Assocs. LLC v. United States, 496 F.3d 175, 184
(2d Cir. 2007) (“As a general creditor . . . , [claimant] does not possess a ‘legal right,
title, or interest in the property’ that was forfeited as required for standing under section
853(n)(6)(A) . . . . Without possessing such an interest ‘in’ a ‘particular, specific asset’
that is, or is part of, the forfeited property, [claimant] does not meet the statutory
requirements for initiating an ancillary proceeding under section 853(n).” (citations
omitted)). The allegation that the funds to be forfeited were previously in Mary Salti’s
name does not, by itself, confer standing. Nevertheless, it is relevant to her contention
that she is the beneficiary of a constructive trust in these funds.
4. Constructive Trust
Mary Salti contends that she has standing as the beneficiary of a constructive
trust in the Swiss Account.15 The district court agreed with Mary Salti that “the
existence of a constructive trust would give [her] standing to bring the instant petition,”
but concluded that she “has offered no evidence, aside from a bare allegation, that such
a trust exists.” Before reviewing the district court’s ruling that Mary Salti did not
sufficiently claim a facially colorable interest, we dispose of the Government’s
15
A general definition of a “constructive trust” can be found in the Restatement: “Where a person
holding title to property is subject to an equitable duty to convey it to another on the ground that he would
be unjustly enriched if he were permitted to retain it, a constructive trust arises.” Restatement (First) of
Restitution § 160 (1937).
No. 07-4487 United States v. Salti, et al. Page 19
arguments that she does not hold a “legal interest” in the account because a constructive
trust is an equitable remedy, and that because a constructive trust is rooted in equity, it
cannot be recognized in the instant case because Mary Salti does not have “clean hands”
due to alleged misrepresentations on several of her U.S. tax returns.
First, we reject the Government’s contention that a constructive trust is not a
cognizable “legal interest” under 21 U.S.C. § 853(n)(2). Only one circuit appears to
subscribe to the theory that cognizable “legal” interests, as that term is used here, cannot
include those arising in equity.16 Though a constructive trust is properly understood as
an equitable remedy, see Gaymar Indus., Inc. v. FirstMerit Bank, N.A., 311 F. App’x
814, 817 (6th Cir. 2009), we previously indicated that a constructive trust would qualify
as a “superior” interest under 21 U.S.C. § 853(n)(6)(A). See Campos, 859 F.2d at 1238-
39 (“Such a superior interest would clearly be one in the nature of a lien, mortgage,
recorded security device, constructive trust, valid assignment, or the like.” (second
emphasis added)). Although other circuits have accurately characterized this statement
in Campos as dicta,17 we see no reason not to join the majority of circuits in holding that
a constructive trust is a cognizable “legal interest” under § 853(n). See Shefton, 548 F.3d
at 1365-66 (reviewing cases and “agree[ing] with the majority of circuits that have held
that a constructive trust can serve as a superior legal interest under § 853(n)(6)(A) and
thus can serve as grounds for invalidating a criminal forfeiture order”).18
16
See United States v. Timley, 507 F.3d 1125, 1129 (8th Cir. 2007) (observing that “the term
‘legal interest’ encompasses only legally protected rights, not equitable rights”).
17
See United States v. Shefton, 548 F.3d 1360, 1365 (11th Cir. 2008); United States v. BCCI
Holdings (Lux.), S.A., 46 F.3d 1185, 1190-91 (D.C. Cir. 1995); United States v. Schwimmer, 968 F.2d
1570, 1582 (2d Cir. 1992).
18
The D.C. Circuit stated that “[a]t the end of the day, we agree with our sister circuits that have
rejected the notion that Congress intended to draw the ancient, but largely ignored, distinction between
technically legal and technically equitable claims in forfeiture challenges.” BCCI Holdings, 46 F.3d at
1190 (citing, inter alia, Campos, 859 F.2d at 1238-39). Nevertheless, it “disagree[d] with those courts that
have determined that a constructive trust can be interposed as superior to the government’s forfeiture
claim. While those courts, in our view, properly rejected the government’s legal/equitable distinction, they
did not consider whether a judicially imposed constructive trust would be inconsistent with the statutory
remedial scheme.” Id. at 1191. This reasoning has been subject to criticism. See Shefton, 548 F.3d at
1366 (explaining that “[a]lthough a constructive trust is a judicially recognized remedy, it arises when the
underlying equities exist, not when it is announced” (citation omitted)); cf. United States v. $4,224,958.57,
392 F.3d 1002, 1004 (9th Cir. 2004) (as amended) (“It is an elementary mistake to suppose that a court
creates the trust.”).
No. 07-4487 United States v. Salti, et al. Page 20
We also reject the Government’s contention that Mary Salti’s “unclean hands”
bar her from asserting an equitable interest in the Swiss Account because she represented
to the IRS on several of her individual tax returns that she did not have an interest in any
foreign bank account and did not attach the requisite Schedule B that would show such
an interest. The district court properly rejected this argument, stating that in viewing
everything in the light most favorable to Mary Salti, “it is possible that Salti may have
negligently, ignorantly, or mistakenly failed to include the Swiss Account on her
returns.”
The district court ultimately ruled that even if the existence of a constructive trust
could suffice for standing, Mary Salti has offered “no evidence, aside from a bare
allegation,” showing that the funds in the Swiss Account originated with her, and that
therefore there was not sufficient support for her position as the beneficiary of a
constructive trust in these funds. However, the petition states that Al Ammouri is “the
owner” of the Account, and that “[i]n the early 1990s, the funds now in the Account
were in an account in the name of Mary Salti.” Petitioners explain that “[t]he monies
in the Account, in whatever form, have at all times been held by” Mary Salti (among
others) “for the use and support of Mary Salti, due to the debilitating and serious heath
conditions of” Al Ammouri. By its terms, the petition states that Mary Salti used to have
title to the funds in the Swiss Account, and explains away the fact that the funds in the
Swiss Account were not in Mary Salti’s name anymore because she could still access
them with Al Ammouri’s power of attorney. Al Ammouri and Mary Salti each filed
declarations with the district court supporting these allegations. They also submitted
copious bank documents charting the history of funds contained in various accounts, Al
Ammouri’s power of attorney, documentation of Al Ammouri’s various bouts of ill
health, and a 1983 letter stating that the Arab Bank had closed an account in Al
Ammouri’s and his brother’s names and transferred the balance to another account “in
favour of” Al Ammouri, Mary Salti, and Al Ammouri’s nephews. Petitioners have
buttressed their allegations with supporting evidence regarding how the funds in the
Swiss Account came to be there and showing that funds were once in Mary Salti’s name.
No. 07-4487 United States v. Salti, et al. Page 21
Petitioners’ explanations for the Swiss Account’s legal form, the history of its
funds, how the Account was used, and for whose benefit the funds were held are
sufficient at this stage to support a claim that although the Swiss Account is in Al
Ammouri’s name, Mary Salti nevertheless has an interest in the Account, an interest that
pre-dated the alleged criminal activity and which was recognized by Al Ammouri as
superior to his own interest. Assuming the facts alleged in the petition to be true and
considering the evidence filed by petitioners supporting these allegations, we conclude
that Mary Salti has presented a facially colorable claim that she should be considered the
beneficiary of a constructive trust in the Swiss Account sufficient to support her standing
in these proceedings.
D. Unconstitutional Delay
Finally, Al Ammouri and Mary Salti contend that their due process rights have
been violated by what they term the Government’s “extensive delay” in bringing the
forfeiture action. The thrust of their argument is that the Government has known about
the Swiss Account since 1996, when it entered into the “Consent Judgment and
Settlement Agreement” with Mary Salti, and that a delay this long is “prima facie
prejudicial.”
Barker v. Wingo, 407 U.S. 514 (1972), “provides the framework that we use to
determine when the government’s delay in bringing a judicial forfeiture action violates
the Fifth Amendment right against deprivation of property without due process.” United
States v. Ninety Three Firearms, 330 F.3d 414, 424 (6th Cir. 2003) (citing United States
v. Eight Thousand Eight Hundred and Fifty Dollars ($8,850) in U.S. Currency, 461 U.S.
555, 564 (1983)). There are four factors to consider: “the length of the delay, the reason
for the delay, the claimant’s assertion of his right, and the prejudice to the claimant.”
Id. at 424-25; see also id. at 425 (observing that “none of these factors is ‘necessary’ or
‘sufficient,’ but rather, they are to be used as guides in balancing the interests of the
claimant against those of the government”). “The length of the delay is to some extent
a triggering mechanism. Until there is some delay which is presumptively prejudicial,
No. 07-4487 United States v. Salti, et al. Page 22
there is no necessity for inquiry into the other factors that go into the balance.” Barker,
407 U.S. at 530.
There has been no delay that is presumptively prejudicial to either Al Ammouri
or Mary Salti. The Government is seeking to forfeit the Swiss Account as part of
Mahmoud’s criminal forfeiture. Mahmoud, who himself was a fugitive for some time,
changed his plea to guilty in February 2006. The Government was only able to
commence forfeiture proceedings against Mahmoud after April 2006, when he amended
his February plea agreement. Shortly thereafter, Mahmoud and the Government entered
into an agreement by which Mahmoud agreed to the forfeiture of the Swiss Account and
its funds, claiming that this property “was involved in Counts 3 and 4 of the indictment,
and/or is traceable to such property.” The Government then promptly requested an
Amended Order of Forfeiture, which the court issued and which triggered the third-party
petition. Accordingly, we reject petitioners’ argument that there was a delay that
violated their constitutional rights.
III. CONCLUSION
We REVERSE the district court’s dismissal of Al Ammouri and Mary Salti’s
third-party petition and REMAND for further proceedings consistent with this opinion.