United States v. Approx. $6,567,897.50 ( 2021 )

11 McGREGOR W. SCOTT United States Attorney 22 ANDRE M. ESPINOZA KEVIN C. KHASIGIAN 33 Assistant U.S. Attorney 501 I Street, Suite 10-100 44 Sacramento, CA 95814 Telephone: (916) 554-2700 55 Attorneys for the United States 66 77 88 IN THE UNITED STATES DISTRICT COURT 99 EASTERN DISTRICT OF CALIFORNIA 1100 1111 UNITED STATES OF AMERICA, 2:19-CV-00485-JAM-DB 1122 Plaintiff, UNITED STATES’ REQUEST TO 1133 v. EXTEND THE DEADLINE TO SUBMIT A JOINT STATUS REPORT 1144 APPROXIMATELY $6,567,897.50 SEIZED FROM JANUARY 25, 2021 TO APRIL FROM CTBC BANK, ACCOUNT NUMBER 7, 2021 1155 3800191916, et al., 1166 Defendants. 1177 The United States submits the following Request to Extend the Deadline to file a Joint Status 1188 Report from January 25, 2021 to April 7, 2021. Of the eighty-seven In Rem Defendants identified in the 1199 Complaint, the Court has entered final judgment of forfeiture or dismissal orders as to all but one of the 2200 In Rem Defendants. Accordingly, this request is limited to the single In Rem Defendant remaining in the 2211 case, and the United States anticipates closing out the last assets in relatively short order. 2222 Introduction 2233 On March 18, 2019, the United States filed a civil forfeiture complaint in rem against more than 2244 sixty bank accounts, over $1.8 million in U.S. currency, prepaid flight hours with a private jet company, 2255 a luxury box with a professional sports team, and various items of jewelry (“defendant assets” or “In 2266 Rem Defendants”) connected to fraud and money laundering crimes in the Eastern District of California 2277 and other areas. As described below, the bank accounts are associated with DC Solar and its related 11 scheme orchestrated through a tax equity investment fraud. All known potential claimants to the 22 defendant assets were served in a manner consistent with Dusenbery v. United States, 534 U.S. 161, 168 33 (2002) and the applicable statutory authority. Furthermore, public notice on the official internet 44 government forfeiture site, www.forfeiture.gov, began on May 4, 2019, and ran for thirty consecutive 55 days, as required by Rule G(4)(a)(iv)(C) of Supplemental Rules for Admiralty or Maritime Claims and 66 Asset Forfeiture Actions. Dkt. 4. A Declaration of Publication was filed on June 6, 2019, which set 77 forth that publication on the government’s forfeiture website was complete on June 2, 2019. Dkt. 9. 88 This case is related to several cases filed in the Eastern District of California: two now closed 99 civil cases, United States v. 725 Main Street, Martinez, California, et al., Case 2:19−CV−00247-JAM- 1100 DB and United States v. 5383 Stonehurst Drive, Martinez, California, et al., Case 2:19-cv-00636-JAM- 1111 DB; and at least five active criminal cases, including United States v. Jeff Carpoff, 2:20-cr-00017-JAM. 1122 Good Cause 1133 The United States has provided notice to all potential claimants pursuant to law. The United 1144 States served copies of the complaint documents on all interested parties, including financial institutions, 1155 a professional sports franchise, a private jet operator, investors in the tax equity funds, and the LLCs and 1166 individuals listed as signors on the seized accounts. The United States specifically served copies of the 1177 complaint documents on the LLCs through their registered agent for service of process. Further, the 1188 government served copies of the complaint on the principals of DC Solar, Jeff and Paulette Carpoff. 1199 A few parties have so far appeared in the case. First, the principals of DC Solar and the LLCs 2200 associated with many of the In Rem Defendants, Jeff and Paulette Carpoff, filed claims as to each of the 2211 eighty-seven In Rem Defendants. See Dkt. 6-7. The Carpoffs have since agreed to forfeit their interests 2222 in each of the In Rem Defendants. Dkt. 46. Second, NetJets, through their wholly-owned subsidiaries, 2233 filed claims concerning the prepaid flight shares purchased by the Carpoffs with alleged fraud proceeds. 2244 Dkt. 12-14. Netjets and the United States have since agreed to a settlement that forfeits the Carpoff’s 2255 airplane shares and resolves Netjets’ claim in this case. See Dkt. 52. Third, East West Bank and Solar 2266 Eclipse Investment Fund XXXV, LLC filed claims to In Rem Defendant Approximately $9,004,531.62, 2277 which was seized from the Investment Fund’s bank account during the government’s law enforcement 11 stipulation that would dismiss this asset from this case. 22 On March 24, 2020, the Court entered a final order of forfeiture as to eighty-three In Rem 33 Defendants. Dkt. 52. The assets forfeited pursuant to that order included cash seized from DC Solar, 44 related investment and bank accounts, and jewelry purchased by the Carpoffs, among other fraud-tainted 55 items. Id. On April 13, 2020, the Court ordered the Carpoff’s airplane shares, valued at $3,900,000, 66 forfeited to the United States and Netjets’ claim was withdrawn. Dkt. 52. 77 The remaining asset in the case is a luxury box at the Las Vegas Raiders new football stadium, 88 and the United States has agreed to an extension of time to file a claim with respect to the asset given the 99 complexity of the case, ongoing NFL football season, COVID-19, potential privilege issues, and other 1100 defenses and overlapping issues with the DC Solar bankruptcy in the District of Nevada. Any claim to 1111 be filed is currently due on March 15, 2021. 1122 Accordingly, there is good cause to extend the deadline to file a joint status report in this case 1133 from January 25, 2021 to April 7, 2021, or to a date the Court deems appropriate. 1144 Dated: 1/25/2021 McGREGOR W. SCOTT United States Attorney 1155 /s/ Kevin C. Khasigian 1166 ANDRE M. ESPINOZA KEVIN C. KHASIGIAN 1177 Assistant U.S. Attorney 1188 ORDER 1199 Pursuant to the United States’ request and good cause appearing, the Court makes the following 2200 order: 2211 The deadline to file a Joint Status Report currently due on January 25, 2021, is extended to April 2222 7, 2021. 2233 IT IS SO ORDERED. 2244 2255 DATED: January 25, 2021 /s/ John A. Mendez 2266 THE HONORABLE JOHN A. MENDEZ UNITED STATES DISTRICT COURT JUDGE 2277