United States v. All Assets Held in Account Number 80020796, in the Name of Doraville Properties Corporation, at Deutsche Bank International, Limited in Jersey, Channel Islands, and All Interest, Benefits or Assets Tr ( 2018 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
Plaintiff,
v. Civil Action No. 13-1832 (JDB)
ALL ASSETS HELD IN ACCOUNT
NUMBER 80020796, IN THE NAME OF
DORAVILLE PROPERTIES CORP.,
AT DEUTSCHE BANK INTERNATIONAL,
LTD. IN JERSEY, CHANNEL ISLANDS,
AND ALL INTEREST, BENEFITS OR
ASSETS TRACEABLE THERETO, et al.,
Defendants.
MEMORANDUM OPINION
The United States brings this in rem action pursuant to 18 U.S.C. § 981(a)(1)(A) seeking
forfeiture of sixteen defendant properties alleged to have been part of “an international conspiracy
to launder proceeds of corruption in Nigeria during the military regime of General Sani Abacha.”
Compl. [ECF No. 1] ¶¶ 1, 4. Eight claimants—all relatives of an individual alleged to have been
involved in the conspiracy—filed verified claims of interest in four defendant investment
portfolios, asserting that they are the beneficiaries of a trust structure that owns these portfolios.
The government has moved to strike the verified claims, on the ground that claimants lack Article
III standing to contest the forfeiture. For the reasons explained below, the Court will grant the
government’s motion to strike as to seven of the eight claimants, and grant in part and deny in part
the government’s motion to strike as to the remaining claimant, Ibrahim Bagudu.
1
BACKGROUND
I. PROCEDURAL HIS TORY
The United States commenced this action on November 18, 2013, by filing a verified
complaint for forfeiture in rem against five corporations, seven bank accounts, and four investment
portfolios. The government alleges that Nigeria’s former de facto President General Sani Abacha,
his sons Mohammed Sani Abacha and Ibrahim Sani Abacha, their associate Abubakar Atiku
Bagudu, Nigeria’s former National Security Advisor Ismaila Gwarzo, Nigeria’s former Minister
of Finance Chief Anthony Ani, and others “embezzled, misappropriated, defrauded, and extorted
hundreds of millions of dollars from the government of Nigeria” and then “transported and
laundered the proceeds . . . through conduct in and affecting the United States.” Id. ¶¶ 1, 8–15.
The defendant properties are alleged to contain proceeds from these illegal activities.
On May 1, 2014, eight claimants—all relatives of Abubakar Atiku Bagudu—filed verified
claims of interest in the four defendant investment portfolios (the “claimed assets”). 1 See Verified
Claims and Statements of Interest [ECF Nos. 17–19, 21–25]. The claimed assets are described in
paragraphs 4(h) through 4(k) of the Complaint as follows:
h) All assets held in the name of Blue Holding[s] (1) Pte. Ltd., on behalf of or
traceable to Ridley Group Limited and/or the Ridley Trust, at J.O. Hambro
Investment Management Limited 2 in the United Kingdom, and all interest,
benefits, or assets traceable thereto [“Asset 4(h)”];
i) All assets held in the name of Blue Holding[s] (2) Pte. Ltd., on behalf of or
traceable to Ridley Group Limited and/or the Ridley Trust, at J.O. Hambro
Investment Management Limited in the United Kingdom, and all interest,
benefits, or assets traceable thereto [“Asset 4(i)”];
j) All assets held in the name of Blue Holding[s] (1) Pte. Ltd., on behalf of or
traceable to Ridley Group Limited and/or the Ridley Trust, at James Hambro &
1
Initially, there were ten claimants, but two withdrew their claims. See Unopposed Mot. to Withdraw
Verified Claims of Zainab Shinkafi Bagudu and R.A.B. [ECF No. 66]; Aug. 19, 2014 Minute Order Granting Mot. to
Withdraw Verified Claims of Zainab Shinkafi Bagudu and R.A.B.
2
J.O. Hambro Investment Management Limited has changed its name to Waverton Investment Management.
2
Partners LLP, in the United Kingdom, and all interest, benefits, or assets
traceable thereto [“Asset 4(j)”]; and
k) All assets held in the name of Blue Holding[s] (2) Pte. Ltd., on behalf of or
traceable to Ridley Group Limited and/or the Ridley Trust, at James Hambro &
Partners LLP, in the United Kingdom and all interest, benefits, or assets
traceable thereto [“Asset 4(k)”].
Compl. ¶¶ 4(h)–(k).
Five claimants are adults: Ibrahim Bagudu (Abubakar Atiku Bagudu’s brother), Aisha
Atiku Bagudu (one of Bagudu’s wives), and Ibrahim Atiku Bagudu, Mohammed Atiku Bagudu,
and Maryam Atiku Bagudu (Bagudu’s adult children). The remaining three claimants are minor
children of Abubakar Atiku Bagudu and Aisha Atiku Bagudu: I.A.B., F.A.B., and H.A.B.
Claimants uniformly assert that they have a “beneficial ownership interest and/or financial stake”
in the claimed assets as beneficiaries of two trusts: Blue Family Trust I and Blue Family Trust II
(collectively, the “Blue Family Trusts”). See, e.g., Ibrahim Bagudu Verified Claim [ECF No. 19]
¶¶ 2(a)–(h), 3. Claimant Ibrahim Bagudu asserts an additional interest in the claimed assets
because he is “entitled to receive—and [has] receive[d]—a $100,000 annual annuity from Blue
Family Trust II.” Id. ¶ 2(i).
On March 3, 2017, the government filed a motion to strike claimants’ verified claims on
the ground that claimants lack Article III standing to contest this forfeiture action. Pl.’s Mot. to
Strike [ECF No. 165] at 1. The motion has now been fully briefed, and a hearing was held on
October 26, 2017, followed by supplemental briefing. Because the trust structure is at the heart of
the standing inquiry, the Court will first describe the Blue Family Trusts.
II. THE B LUE FAMILY TRUS TS
The Blue Family Trusts were established in July 2010 as a successor trust structure to the
Ridley Trust. Stmt. of A. Mullins (“Mullins Stmt.”) [ECF No. 187-24] ¶ 3. Blue PTC Pte. Ltd.
3
(“Blue PTC”), a company registered in Singapore, serves as the trustee for the Blue Family Trusts.
Id. ¶ 4; see Ibrahim Bagudu Interrog. Resp. [ECF No. 163-4] at 10–11. The Blue Family Trusts’
assets consist entirely of shares of stock in two other Singapore Companies: Blue Holdings (1) Pte.
Ltd. and Blue Holdings (2) Pte. Ltd. (collectively, the “Blue Holdings Companies”). Blue PTC
holds 100% of the ordinary and redeemable preference shares of the Blue Holdings Companies.
See Bus. Profiles of Blue Holdings (1) Pte. Ltd., Blue Holdings (2) Pte. Ltd. [ECF Nos. 165-10 &
165-11]; Mullins Stmt. ¶ 5. Blue PTC holds no other assets. Mullins Stmt. ¶ 5.
The terms governing the Blue Family Trusts are set forth in two deeds of settlement. See
Deed of Settlement of Blue Family Trust I (“Deed I”) [ECF No. 165-3]; Deed of Settlement of
Blue Family Trust II (“Deed II”) [ECF No. 165-4]. The Blue Family Trusts are irrevocable trusts
that are to be “construed according to the laws of Singapore.” Deed I ¶¶ 3, 20; Deed II ¶¶ 3, 20.
They are discretionary, as opposed to fixed, trusts. See Decl. of Prof. Tang Hang Wu (“Tang
Decl.”) [ECF No. 165-19] ¶ 13; Decl. of Prof. Hans Tjio (“Tjio Decl.”) [ECF No. 187-23] ¶ 1. In
a fixed trust, the shares of the beneficiaries are explicitly fixed from the outset. Tang Decl. ¶ 4.
In contrast, in a discretionary trust the shares of beneficiaries are not fixed from the outset; instead,
the trustee is typically given the authority in the trust deed to determine whether to apply trust
assets for the benefit of beneficiaries. 3 Id.Claimants are among the currently named beneficiaries of the Blue Family Trusts. The
beneficiaries listed in the Third Schedule for Blue Family Trust I include all of the claimants, as
3
Discretionary trusts are commonly used in jurisdictions based on English common law (including
Singapore) because, inter alia, they accommodate the need to react to changes in circumstances of the beneficiaries
and they provide protection from the beneficiaries’ creditors. Tang Decl. ¶ 5; see Glister & Lee, Hanbury & Martin:
Modern Equity ¶ 9-015, at 192–93 (20th ed. 2015).
4
well as one non-claimant. 4 Deed I at 16–17. The beneficiaries listed in the Third Schedule for
Blue Family Trust II include all the claimants, as well as two non-claimants. Deed II at 16–17.
The discretionary nature of the Blue Family Trusts is evident from the terms of the deeds
of settlement, which state that the trustee “may”:
pay or apply the income of the Trust Fund to or for the benefit of all or such one
or more of the Beneficiaries exclusive of the other or others of them as shall for
the time being be in existence and in such shares if more than one and in such
manner generally as the Trustees shall in their absolute discretion from time to
time think fit.
Deed I ¶ 5(c) (emphasis added); Deed II ¶ 5(c) (same). The trustee also has discretion to decline
to distribute income to any of the beneficiaries and, instead, may apply all of the trusts’ income to
pay maintenance costs, liabilities, or to add to the trust capital. Deed I ¶¶ 5(a), (b), (d); Deed II
¶¶ 5(a), (b), (d). The trustee’s discretion is similar with respect to capital—it may apply the trusts’
capital “to or for the benefit of all or such one or more of the Beneficiaries exclusive of the other
or others of them.” Deed I ¶ 6(b); Deed II ¶ 6(b). Hence, if the trustee decides to distribute income
or capital, it has absolute discretion to restrict such payouts to a subset of beneficiaries. In other
words, the trustee could distribute all income and capital to some combination of the non-claimant
beneficiaries, leaving nothing for the claimants. Furthermore, the trustee has discretion to
determine the beneficiaries of the Blue Family Trusts. Specifically, the trustee may, at any time
during the trust period, irrevocably remove any beneficiary (including any claimant) from the list
of beneficiaries, or elect to add additional beneficiaries. Deed I ¶ 9(a)–(b); Deed II ¶ 9(a)–(b).
4
The identities of the non-claimant beneficiaries have been removed from the memorandum opinion at
claimants’ request. Claimants’ other redaction requests are denied because, after inquiry by the Court, claimants were
unable to explain any harm that will actually result from publication, and the information subject to the requests is
important to the disposition of the claims as explained in the memorandum opinion.
5
Six of the claimants are members of the Final Repository of the Blue Family Trusts. 5 Deed
I at 17; Deed II at 17. Accordingly, to the extent that any part of the trust fund remains undisposed
at the conclusion of the trust period, the trustee will hold any remaining assets in trust for the Final
Repository. Deed I ¶ 7; Deed II ¶ 7. However, in exercising its powers throughout the trust period,
the trustee “shall not take into account any interest which the Final Repository as Final Repository
may at any time have in the Trust Fund.” Deed I ¶ 7(c); Deed II ¶ 7(c). Nor is the trustee obliged
to disclose to any member of the Final Repository that he or she “may become entitled to an interest
in the Trust Fund . . . except after . . . the Final Repository has become entitled to an absolute
vested indefeasible interest in the Trust Fund.” Deed I ¶ 7(d); Deed II ¶ 7(d).
To date, two claimants have received distributions from Blue Family Trust II, while six
claimants have not received any distributions. 6 Claimant Ibrahim Atiku Bagudu received a
distribution from Blue Family Trust II in the amount of €117,865 around May 21, 2013. Ibrahim
Atiku Bagudu Interrog. Resp. [ECF No. 163-11] at 20–21. Claimant Ibrahim Bagudu has received
eleven distributions from Blue Family Trust II between January 2011 and August 2014, totaling
€5,139,672. Ibrahim Bagudu Interrog. Resp. at 22–23. The trustee has never denied any
claimant’s request for a distribution, see Mullins Stmt. ¶ 22, and no claimant has received a
distribution from Blue Family Trust I.
III. THE B LUE HOLDING COMPANIES
As described above, the trustee, Blue PTC, holds shares of stock in two companies—the
Blue Holdings Companies—that themselves hold the claimed assets. The same two individua ls
serve as the directors of Blue PTC and the Blue Holdings Companies. Id. ¶¶ 7, 10. The Blue
5
Claimants Ibrahim Bagudu and Aisha Atiku Bagudu are not included in the Final Repository.
6
At least one non-claimant has received a distribution from Blue Family Trust II. See Dirs.’ Resolution of
Blue PTC Pte. Ltd., Sept. 18, 2013 & Sept. 20, 2013 [ECF No. 165-5].
6
Holdings Companies are family-owned investment holding companies that were incorporated in
Singapore solely to hold assets as part of the Blue Family Trusts structure. Id. ¶ 6. Two of the
claimed assets—Assets 4(h) and 4(j)—are held in the name of Blue Holdings (1) Pte. Ltd. at two
investment management companies in the United Kingdom—Waverton Investment Management
and James Hambro & Partners LLP. The other two claimed assets—Assets 4(i) and 4(k)—are
held in the name of Blue Holdings (2) Pte. Ltd. at the same U.K. firms. Compl. ¶¶ 4(h)–(k).
LEGAL STANDARDS
In a civil forfeiture action, the government is the plaintiff, the properties subject to
forfeiture are the defendants in rem, and “defenses against the forfeiture can be brought only by
third parties, who must intervene.” United States v. 8 Gilcrease Lane, 641 F. Supp. 2d 1, 4 (D.D.C.
2009) (citation omitted). To intervene, a claimant must establish Article III standing. 7 Id. at 5.
Under Rule G(8)(c)(i) of the Supplemental Rules for Admiralty or Maritime Claims and Asset
Forfeiture Actions (“Suppl. Rule”), the government may move to strike a claim at any time before
trial because the claimant lacks standing. The government may frame the motion as one for
summary judgment, as it has done here. See Suppl. Rule G(8)(c)(ii)(B).
I. SUMMARY J UDGMENT
Summary judgment shall be granted “if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986); Holcomb v. Powell, 433
F.3d 889, 895 (D.C. Cir. 2006). “A fact is ‘material’ if a dispute over it might affect the outcome
of a suit under the governing law; factual disputes that are ‘irrelevant or unnecessary’ do not affect
the summary judgment determination.” Holcomb, 433 F.3d at 895 (quoting Anderson, 477 U.S.
7A claimant must also establish statutory standing by complying with the procedural requirements set forth
in the relevant forfeiture statutes and rules. The government does not challenge claimants’ statutory standing.
7
at 248). “An issue is ‘genuine’ if ‘the evidence is such that a reasonable jury could return a verdict
for the nonmoving party.’” Id. (quoting Anderson, 477 U.S. at 248). “If there are no genuine
issues of material fact, the moving party is entitled to judgment as a matter of law if the nonmoving
party ‘fails to make a showing sufficient to establish the existence of an element essential to that
party’s case . . . .’” 8 Id. (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)).
In deciding a motion for summary judgment, “the evidence of the non-movant is to be
believed, and all justifiable inferences are to be drawn in [her] favor.” Anderson, 477 U.S. at 255;
see Mastro v. Potomac Elec. Power Co., 447 F.3d 843, 850 (D.C. Cir. 2006). The nonmoving
party’s opposition, however, must consist of more than mere unsupported allegations or denials
and must be supported by affidavits, declarations, or other competent evidence. See Fed. R. Civ.
P. 56(e); Celotex, 477 U.S. at 324. If the non-movant’s evidence is “merely colorable” or “not
significantly probative,” summary judgment may be granted. Anderson, 477 U.S. at 249–50.
II. ARTICLE III STANDING
“When the government moves to strike a claim for lack of standing, a claimant has the
burden to establish standing by a preponderance of the evidence.” United States v. Seventeen
Thousand Nine Hundred Dollars ($17,900.00) in U.S. Currency, 859 F.3d 1085, 1089 (D.C. Cir.
2017). To establish standing, a claimant must demonstrate “a colorable interest in the property,
for example, by showing actual possession, control, title, or financial stake.” United States v. All
Assets Held at Bank Julius Baer & Co., Ltd., 959 F. Supp. 2d 81, 95 (D.D.C. 2013) [hereinafter
“Bank Julius Baer II”] (citation omitted). “In general, any colorable claim on the property
suffices—typically, an ownership or possessory interest.” ($17,900.00) in U.S. Currency, 859
F.3d at 1090 (internal citation and quotation marks omitted). A claimant need not “definitive ly
8
The parties do not believe that there are any genuine disputes as to any material facts. See Tr. of Oct. 26,
2017 Hr’g [ECF No. 200] at 7:3–12.
8
prove the existence of that interest,” Bank Julius Baer II, 959 F. Supp. 2d at 95 (citation omitted),
and the requirements for a claimant to establish standing to contest a forfeiture are “very
forgiving,” United States v. Emor, 785 F.3d 671, 676 (D.C. Cir. 2015) (citation omitted); see also
United States v. $557,933.89, More or Less, in U.S. Funds, 287 F.3d 66, 79 (2d Cir. 2002) (“The
function of standing in a forfeiture action is therefore truly threshold only—to ensure that the
government is put to its proof only where someone with a legitimate interest contests the
forfeiture.”). “While ownership or possession of property may provide evidence of standing, and
in some circumstances act as, in effect, a surrogate for an inquiry into whether there is injury direct
enough and sufficient enough to sustain standing, it is injury that is at the heart of the standing
question.” United States v. Cambio Exacto, 166 F.3d 522, 527 (2d Cir. 1999); see 8 Gilcrease
Lane, 641 F. Supp. 2d at 6 (“Showing a real or imminent injury is essential to establish
constitutional standing.”). An “interest” in the property is determined under the law of the state
or foreign nation in which the interest arose—here, Singapore—and the constitutional effect of
that interest is determined under federal law. Bank Julius Baer II, 959 F. Supp. 2d at 96.
DISCUSSION
I. IBRAHIM B AGUDU’S STANDING B AS ED ON HIS ANNUITY
An initial issue is whether claimant Ibrahim Bagudu’s annuity provides him, or any other
claimants, with standing to contest the forfeiture. By a deed of appointment dated September 3,
2010, the trustee established an annuity of $100,000 from Blue Family Trust II for the benefit of
Ibrahim Bagudu. Mullins Stmt. ¶ 23. Ibrahim Bagudu received four annuity payments (totaling
$400,000) between January 2011 and July 2013. Id. Thereafter, when the assets of the Blue
Holdings Companies were frozen pursuant to English court orders in connection with this
litigation, Ibrahim Bagudu’s annuity payments ceased. Id. ¶ 24. The government has conceded
9
that the annuity provides Ibrahim Bagudu with a vested proprietary interest in the trust assets. See,
e.g., Tr. of Oct. 26, 2017 Hr’g at 31:19–32:15; Pl.’s Mot. to Strike at 2 n.1, 25; Tang Decl. ¶ 27.
The loss of a $100,000 annuity clearly is a sufficient injury to establish Article III standing. See
Cambio Exacto, 166 F.3d at 528 (“Substantial economic harm is plainly the type of injury for
which parties may seek redress in federal court.”). Indeed, Ibrahim Bagudu has already been
injured because he has not received annuity payments for the last three years. Forfeiture of the
claimed assets will cause that injury to continue, while return of the assets will allow the annuity
payments to resume. Thus, Bagudu has also satisfied the causation and redressability elements
required for standing. The government nonetheless contends that there are impediments to, or
limitations on, Bagudu’s standing.
To begin with, the government argues that Bagudu lacks standing because his annuity
merely gives him an interest in the trust assets which “consist of shares of stock in the Blue
Holdings Companies . . . [and] it is well established that a corporate shareholder does not have
standing to challenge the forfeiture of the corporation’s property.” Pl.’s Mot. to Strike at 25. It is
true that courts generally have held that a corporate shareholder lacks standing to contest the
forfeiture of a corporation’s assets. See, e.g., United States v. Young, 77 F. Supp. 3d 1191, 1192
(D. Utah 2014); United States v. 479 Tamarind Drive, No. 98 Civ. 2279 DLC, 2011 WL 1045095,
at *2 (S.D.N.Y. Mar. 11, 2011). This is so because a shareholder has no ownership interest in any
specific assets of a corporation. United States v. Real Prop. Associated with First Beneficial
Mortg. Corp., No. 3:08CV285, 2009 WL 1035233, at *3 (W.D.N.C. Apr. 16, 2009). But Ibrahim
Bagudu does not assert standing as a mere shareholder. He instead asserts his claim as an
annuitant—and, in that capacity, it is clear that he has a proprietary right to a specific portion of
10
the claimed assets, and will be directly harmed by forfeiture of those assets. 9 See Pl.’s Mot. to
Strike at 24–25 (“[T]he Claimants have no present, vested interest in any specific property, other
than Ibrahim Bagudu’s interest in the Annuity.” (emphasis added)). In fact, the government’s
expert, Professor Tang, did not characterize the annuity as a proprietary right to shares of stock—
he instead stated that Bagudu has a present right to $100,000. Tang Dep. Tr. [ECF 187-21] at
253:4–14. “Courts generally do not deny standing to a claimant who is either the colorable owner
of the res or who has any colorable possessory interest in it.” United States v. Contents of Accounts
Numbers 3034504504 & 144-07143 at Merrill Lynch, Pierce, Fenner & Smith, Inc., 971 F.2d 974,
985 (3d Cir. 1992); see United States v. $191,910.00 in U.S. Currency, 16 F.3d 1051, 1057 (9th
Cir. 1994) (“In order to contest a forfeiture, a claimant need only have some type of property
interest in the forfeited items.”). Hence, Ibrahim Bagudu’s standing is not defeated by the doctrine
of corporate separateness.
The government next contends that even if Ibrahim Bagudu has standing, it should be
limited to the present value of his annuity. See Pl.’s Mot. to Strike at 2 n.1; Pl.’s Suppl. Br. [ECF
No. 202] at 1. But a claimant need only show a colorable interest in “at least a portion of the
defendant property” to establish Article III standing. 10 United States v. $31,000.00 in U.S.
Currency, 872 F.3d 342, 349 (6th Cir. 2017) (citing United States v. $515,060.42 in U.S. Currency,
9
Outside of the forfeiture context, courts have recognized that standing may lie for a shareholder who has
suffered a particular injury or who has an interest beyond a mere right as a shareholder. See Franchise Tax Bd. of
Cal. v. Alcan Aluminium Ltd., 493 U.S. 331, 336 (1990) (recognizing an exception to the shareholder-standing rule
when a shareholder has a “direct, personal interest in a cause of action . . . even if the corporation’s rights are also
implicated”); Harpole Architects, P.C. v. Barlow, 668 F. Supp. 2d 68, 76 (D.D.C. 2009) (recognizing the same and
noting that, in this circumstance, “shareholders are suing to enforce their own rights, not the corporation’s”).
10
The standing inquiry is, of course, a threshold determination that is distinct from the merits determination
that comes later. Bank Julius Baer II, 959 F. Supp. 2d at 95; see United States v. Funds in the Amount of $239,400,
795 F.3d 639, 647 (7th Cir. 2015) (“Standing must be clearly separated from the merits in civil forfeiture cases so that
the government is not relieved of its burden to prove that property is subject to forfeiture.” (citation omitted)); cf.
FMC Corp. v. Boesky, 852 F.2d 981, 991 n.21 (7th Cir. 1998) (“In any event, whether [plaintiff] is entitled to recover
a specific amount of damages . . . is not the question here, which is whether [plaintiff] was injured for purposes of
Article III’s case or controversy requirement.”).
11
152 F.3d 491, 497 (6th Cir. 1998)); United States v. All Assets Listed in Attachment A, No. 1:14-
CV-969, 2015 WL 1221392, at *3 (E.D. Va. Mar. 13, 2015) (same); see also United States v.
$421,090.00 in U.S. Currency, No. 11-CV-00341 JG, 2011 WL 3235632, at *5 (E.D.N.Y. July 27,
2011) (“[Claimant’s] colorable ownership interest in even a portion of the funds is sufficient to
establish a concrete interest in the proceedings as a whole. Accordingly, because he has
established a facially colorable interest in these forfeiture proceedings, [claimant] has established
his standing to contest the government’s proposed forfeiture of the entire amount.”). The
government has provided no authority to support its partial standing argument. The sole case that
the government identified, United States v. Sum of $70,990,605, 128 F. Supp. 3d 350 (D.D.C.
2015), is irrelevant. There, the government moved to strike the claim of a foreign bank on statutory
standing grounds. The court analyzed whether the foreign bank was an “owner” of the seized
funds within the meaning of 18 U.S.C. § 981(k), which provided that “a ‘foreign financial
institution’ is considered the ‘owner,’ and is thus able to bring a claim, ‘to the extent’ it ‘had
discharged all or part of its obligation to the prior owner of the funds’ prior to the date of the
seizure.” Id. at 355 (quoting 18 U.S.C. § 981(k)(4)(B)(ii)(II)). But Article III standing was not at
issue there, see id. at 356 n.2, and neither statutory standing nor § 981(k) are at issue here. That
case is therefore of no aid to the government, and the Court will not limit Ibrahim Bagudu’s
standing to the present value of his annuity. 11
The government’s stronger argument is that Ibrahim Bagudu’s standing should be limited
to certain defendant properties. The government claims that because the annuity has been paid
exclusively from one of the four defendant investment portfolios (the “Waverton account”), his
11
The other cases cited by the government in support of this argument, see Pl.’s Suppl. Br. at 4, merely stand
for the proposition that a claimant must establish standing as to each of the defendants in rem—an altogether different
concept—or are otherwise inapposite. None of the cases limited standing to a specific dollar amount.
12
standing is limited to that property. Pl.’s Suppl. Br. at 3. A claimant “must establish standing as
to each of the . . . in rem defendants named in the plaintiff’s complaint in which it asserts an
interest.” Bank Julius Baer II, 959 F. Supp. 2d at 96; see United States v. $8,440,190.00 in U.S.
Currency, 719 F.3d 49, 57 (1st Cir. 2013); United States v. $70,670.00 in U.S. Currency, No. 15-
CV-23616, 2016 WL 8314622, at *2 (S.D. Fla. Dec. 21, 2016), R. & R. adopted, No. 15-CV-
23616, 2017 WL 714231 (S.D. Fla. Feb. 23, 2017) (“A claimant in a civil forfeiture proceeding
bears the threshold burden of establishing both Article III standing and statutory standing with
respect to each claimed defendant property.”); United States v. Real Prop. Located at 8 Drift St.,
No. CIV. 14-3587 (MAS), 2015 WL 5007830, at *4 (D.N.J. Aug. 20, 2015). It is undisputed that
Ibrahim Bagudu’s four annuity payments have been made from the Waverton account. See Cls.’
Resp. Stmt. of Genuine Issues and Material Facts [ECF No. 187-25] ¶¶ 96(a)–(d). But the deed of
appointment granting the annuity simply indicates that the payments are to be made from the
income of Blue Family Trust II, without specifying a particular investment portfolio. Id. ¶ 95; see
Deed of Appointment of an Annuity, Blue PTC Pte. Ltd., Sep. 3, 2010 [ECF 187-3] ¶ 2. Hence,
any future annuity payments could be made from the other investment portfolio associated with
Blue Family Trust II (the James Hambro account). See Anderson, 477 U.S. at 255 (“[A]ll
justifiable inferences are to be drawn in [the non-movant’s] favor.”). Accordingly because the
annuity was appointed specifically from Blue Family Trust II, it does not provide Bagudu with
any interest in the assets of Blue Family Trust I. In sum, Ibrahim Bagudu’s annuity provides him
with standing only to contest the forfeiture of the claimed assets held in the investment accounts
associated with Blue Family Trust II (Assets 4(i) and 4(k)).
13
II. WHETHER B AGUDU’S STANDING CONFERS STANDING ON THE OTHER CLAIMANTS
Claimants contend that if Ibrahim Bagudu has standing to contest the forfeiture, then the
other claimants do not need to establish Article III standing and they may proceed to the merits as
if they had standing. Cls.’ Suppl. Br. [ECF No. 201] at 6–7. The Court disagrees.
In civil litigation, plaintiffs bear the burden of establishing standing for each claim asserted.
DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006). It is true, as claimants point out, that
as long as one plaintiff has standing to raise a claim, the Court generally need not address whether
other plaintiffs have standing to raise the same claim. See Forest Carpenters Indus. Council v.
Zinke, 854 F.3d 1, 9 (D.C. Cir. 2017) (“If constitutional standing ‘can be shown for at least one
plaintiff, we need not consider the standing of the other plaintiffs to raise that claim.’” (quoting
Mountain States Legal Found. v. Glickman, 92 F.3d 1228, 1232 (D.C. Cir. 1996))). But civil
forfeiture actions are unique in the sense that the government is the plaintiff, the properties and
assets are the defendants in rem, and each prospective claimant seeking to intervene to contest the
forfeiture is required to file his or her own “verified claim” stating the claimant’s asserted interest
in the defendant properties. 8 Gilcrease Lane, 641 F. Supp. 2d at 4–5; Suppl. Rule G(5). Thus,
courts have widely recognized that “[e]ach claimant in a civil forfeiture action must have . . .
Article III standing with respect to each asset in which he or she asserts an interest,” Sum of
$70,990,605, 234 F. Supp. 3d at 229 (emphasis added); United States v. Bank Julius Baer & Co.,
664 F. Supp. 2d 97, 104–105 (D.D.C. 2009) [hereinafter “Bank Julius Baer I”] (“At the summary
judgment stage, each claimant must” establish “a cognizable interest in the assets potentially
subject to forfeiture.” (emphasis added)),12 and it is not uncommon for courts to strike certain
12
See also United States v. $148,840.00 in U.S. Currency, 521 F.3d 1268, 1273 (10th Cir. 2008) (“As the
party seeking to intervene in an in rem forfeiture action, a claimant bears the burden of establishing his own
constitutional standing at all stages in the litigation.” (emphasis added)); $515,060.42 in U.S. Currency, 152 F.3d at
498 (“To contest a forfeiture action, an individual customarily bears the burden of demonstrating an interest in the
14
claimants for lack of standing while allowing others to proceed, see, e.g., United States v. 12636
Sunset Ave., Unit E-2, W. Ocean City, Md., 991 F. Supp. 2d 709, 712–13 (D. Md. 2014); United
States v. $7,599,358.09, 953 F. Supp. 2d 549, 552 (D.N.J. 2013); Bank Julius Baer II, 959 F. Supp.
2d at 84; United States v. 105,800 Shares of Common Stock of FirstRock Bancorp, Inc., 830 F.
Supp. 1101, 1123 (N.D. Ill. 1993).
Claimants have not identified a single civil forfeiture case where a court has allowed some
claimants to piggyback on another claimant’s standing, without demonstrating their own colorable
interest in the defendants in rem. Nor is the Court persuaded by claimants’ argument that “in
substance, all of the Claimants have the same ‘claim.’” Cls.’ Suppl. Br. at 7. 13 Claimants have
filed eight separate “verified claims,” and only Ibrahim Bagudu’s is based on his annuity interest;
thus, he alone is injured by the loss of the annuity. See In re 650 Fifth Ave. & Related Properties,
No. 08 Civ. 10934 (KBF), 2013 WL 4572527, at *2–3 (S.D.N.Y. Aug. 27, 2013) (“[E]ach claimant
must have suffered an injury in fact of a legally protected interest.”). Hence, each of the remaining
claimants must demonstrate their own standing to contest the forfeiture.
seized item sufficient to satisfy the court of his standing as a claimant.”); United States v. $38,570 U.S. Currency, 950
F.2d 1108, 1111 (5th Cir. 1992) (“To contest a forfeiture action, an individual bears the burden of demonstrat[ing] an
interest in the seized item sufficient to satisfy the court of his standing as a claimant.” (citation omitted)); United States
v. $263,327.95, 936 F. Supp. 2d 468, 471 (D.N.J. 2013) (“Any individual or entity that wishes to assert a claim to the
property can do so only by intervening in the action as a claimant [and establishing Article III standing].”); 8 Gilcrease
Lane, 641 F. Supp. 2d at 6 (Article III standing requirement “relates to the claimant’s ability to show that he has a
sufficient interest in the property to satisfy the case-or-controversy requirement” (citation omitted)); United States v.
$271,070.00 in U.S. Currency, No. 96 C 239, 1997 WL 94722, at *3 (N.D. Ill. Mar. 3, 1997) (“To establish Article
III standing, each Claimant bears the burden of establishing a legally cognizable interest in the property that will be
injured if the property is forfeited to the government.” (citation omitted)); United States v. $319,603.42 in U.S.
Currency, 829 F. Supp. 1223, 1225 (D. Or. 1992) (“[E]ach claimant has a threshold burden to establish standing as a
claimant.”).
13
And it is of no moment that claimants have “all raised the same defenses to the Government’s claims for
forfeiture.” Cls.’ Suppl. Br. at 7; see United States v. Real Prop. Located at 5208 Los Franciscos Way, Los Angeles,
Cal., 385 F.3d 1187, 1193–94 (9th Cir. 2004) (holding that “when a claimant fails to establish the threshold
requirement of standing, the claimant’s challenges to the merits of the forfeiture cannot be reached”).
15
III. CLAIMANTS ’ STANDING AS B ENEFICIARIES OF THE B LUE FAMILY TRUS TS
Having found that Ibrahim Bagudu’s standing based on his annuity does not extend to the
other claimants, the question then is whether claimants, as beneficiaries of the Blue Family Trusts,
have standing to contest the forfeiture. The government contends that there are two independent
defects in claimants’ standing: (1) they only have a future, contingent interest in the trusts’ assets
such that their injury is hypothetical or conjectural, rather than actual; and (2) even if they had a
legally cognizable interest in the trusts’ assets, it is undisputed that the trusts’ assets are not the
claimed assets. The Court will address these arguments in turn—but first, it must identify
claimants’ interest in the trusts’ assets.
A. Claimants’ Interest in the Trusts’ Assets
Claimants assert that they have standing as the present named beneficiaries of the Blue
Family Trusts. Cls.’ Opp’n [ECF No. 187] at 10, 19–25. The Court looks to Singapore law to
determine claimants’ interest in the property. 14 Bank Julius Baer II, 959 F. Supp. 2d at 96. Having
reviewed the parties’ briefs, the expert declarations, the discovery materials, the pleadings and
claims, and the supporting authorities, the Court makes the following determinations as to
claimants’ interest in the trusts’ assets.
Claimants are among the beneficiaries of two discretionary trusts. 15 Tang Decl. ¶ 13; Tjio
Decl. ¶ 1. The parties agree that the trustee, Blue PTC, holds legal title to the trusts’ assets, but
does not have any beneficial interest in the trusts’ assets. Tang Decl. ¶ 11; Tjio Decl. ¶ 11. Because
the Blue Family Trusts are discretionary trusts, claimants have no vested beneficial interest in the
14
The Court has also considered authorities from England, Australia, and other Commonwealth jurisdictions
because, as the parties agree, those authorities are considered persuasive by Singapore courts. See Tang Decl. ¶ 3;
Tjio Decl. at 3; see also Tjio Dep. Tr. at 17:8–20.
15
Beneficiaries of a discretionary trust are alternatively referred to as “objects,” or “potential beneficiaries.”
See Kennon v. Spry, [2008] HCA 56, ¶¶ 76, 125 (Austl.), Ex. 1 to Pl.’s Reply [ECF No. 192-2]; Alastair Hudson,
Equity and Trusts 187 (8th ed. 2014), Ex. 3 to Pl.’s Reply [ECF No. 192-4].
16
assets of the trusts. 16 Nor do claimants have any proprietary interest in any specific assets of the
trusts. Tang. Decl. ¶ 8. Indeed, claimants’ expert, Professor Tjio, conceded as much at his
deposition:
Q: What is your opinion concerning the interest that these beneficiaries [i.e., the
claimants] have in the, in the trust assets?
A: They don’t have a right to any specific part of the assets, but they have a right
to see that the trust assets are protected . . . . [T]hey have a right to ensure that the
trustees administer the trust properly . . . .
Tjio Dep. Tr. at 161:20–162:3; see also id. at 84:19–85:2 (agreeing that the trustee must exercise
discretion in favor of claimants before they have “a right to any part of the trust property”). And
it appears that he so conceded for good reason—this point is widely acknowledged in the scholarly
treatises on discretionary trusts. See, e.g., Graham Virgo, The Principles of Equity and Trusts 381
(2d ed. 2016), Ex. 4 to Pl.’s Reply [ECF No. 192-5] (“A discretionary trust is a trust for distribution
subject to a power of selection which is exercisable by the trustees amongst the objects of the trust.
It follows that the objects have no proprietary interest in the trust fund itself . . . .”); see also Pl.’s
Reply at 5, 8–9 (collecting sources).
Claimants nevertheless contend that they have six “present interests and rights under the
applicable Trust Deeds and Singapore law that the Government did not consider . . . in moving to
16
The parties differ on this point. See Cls.’ Opp’n at 13 (asserting that claimants have “valuable proprietary
and beneficial interests in the Trusts’ assets . . . because . . . under Singapore law, there must be a beneficial owner of
the assets of a trust”); Pl.’s Reply at 7–8 (asserting that “the beneficial interests in the assets of [discretionary] trusts
are . . . ‘in suspense’” pending the exercise of the trustee’s discretion). Claimants’ argument is founded on Professor
Tjio’s opinion that “[t]he beneficial interest cannot be in suspense as there must be someone to enforce the trust.” Tjio
Decl. ¶ 2(i). But, to support this opinion, Professor Tjio admittedly relied on a case, Lee Chuen Li v. Singapore Island
Country Club, [1992] S.G.H.C. 165, that did not involve a discretionary trust and has not been cited by any
discretionary trust cases. See Tjio Dep. Tr. [ECF No 194-1] at 33:8–35:8. In contrast, Professor Tang’s opinion that
“the beneficial interest of the trust assets has not crystalized,” Tang. Decl. ¶ 11, is supported by numerous persuasive
authorities addressing discretionary trusts, see, e.g., Kennon, [2008] HCA 56, ¶ 49; Lynton Tucker et al., Lewin on
Trusts ¶ 1-061, at 30 (19th ed. 2014), Ex. 8 to Pl.’s Reply [ECF No. 192-9] (“In general, a discretionary trust has no
one in whom the beneficial interest in the trust property can be said to be vested because vesting is contingent upon
the selection of an object from a nominated class.”).
17
strike their [c]laims.” Cls.’ Opp’n at 21–22. The Court will analyze these asserted rights in turn.
Ultimately, they are of little aid to claimants.
The first two rights involve claimants’ ability to sell for value their interests as (1)
beneficiaries entitled to an equal share of the trust assets upon termination and (2) members of the
Final Repository. But “the ability to assign or sell a thing for value does not say anything about
the nature of the [interest] assigned or sold.” Pl.’s Reply at 12. It is plain that claimants lack any
proprietary interest in any specific trust assets, and they cannot create such an interest through
assignment or sale. In any event, it is clear from the language of the trust deeds that the underlying
rights claimants intend to sell for value are unvested, and contingent on the favorable exercise of
the trustee’s discretion. Per the deeds, the trustee has absolute discretion to exclude any
beneficiaries—including claimants—from any end-of-trust-period trust. Deed I ¶ 6(c) (when the
trust period concludes, the trustee shall hold the assets in trust “for such Beneficiaries and in such
proportions or for one to the exclusion of the other or others and if more than one in such shares
absolutely as the Trustees may . . . appoint”); Deed II ¶ 6(c) (same). Because the trustee has the
power to eliminate beneficiaries at its discretion, see Deed I ¶ 9; Deed II ¶ 9, it is also uncertain
whether claimants will even be among the named beneficiaries at the end of the trust period.
Hence, it is inconsistent with the terms of the trust deeds to characterize claimants’ interest at
termination as a “present” interest to which claimants are “entitled.” Claimants’ interest in the
Final Repository is no more certain—rather, it is contingent on the trustee not exhausting all of the
assets during the trust period. And, as previously noted, the trustee “shall not take into account”
any interest that members of the Final Repository might have during the life of the trusts. Deed I
¶ 7(c); Deed II ¶ 7(c).
18
The third and fourth rights can be addressed more quickly. With respect to the third right—
to band together and terminate the trusts—claimants have acknowledged that, at the time their
claims were filed and even now, this right is unavailable to them. See Tr. of Oct. 26, 2017 Hr’g
at 80:3–14; Tjio Dep. Tr. at 85:3–21. Thus, it cannot serve as the basis for standing. Wheaton
College v. Sebelius, 703 F.3d 551, 552 (D.C. Cir. 2012) (“[S]tanding is assessed at the time of
filing . . . .”). And the fourth right—claimants’ ability to demand information and an accounting
from the trustee—says nothing about whether claimants have any colorable interest in specific
assets of the trust. After all, shareholders have the right to demand information about the
corporations in which they invest, yet it is widely accepted, in Singapore and the United States,
that they lack any interest in specific corporate property.
Turning to the fifth asserted right, under the trust deeds claimants clearly have a right to be
considered, in the exercise of the trustee’s discretion, for distributions. The trustee has a fiduciary
duty to act properly and reasonably in this regard. Tjio Decl. ¶ 6. But the “right to be considered
as a potential recipient of benefit by the trustee[]” “is not a proprietary interest in the assets held
by the trustee[] . . . .” JSC Mezhdunarodniy Promyshlenniy Bank v. Pugachev, [2015] EWCA
(Civ.) 139, [13] (Eng.), Ex. 10 to Pl.’s Reply [ECF No. 192-11]. It has instead been considered an
expectancy interest that the trustee will one day favor the claimants. See Gartside v. Inland
Revenue Comm’rs., [1968] AC 553 (HL) 617, Ex. 13 to Pl.’s Reply [ECF No. 192-14] (beneficiary
under a discretionary trust has “an ‘interest,’” but this interest consists only of the “right to be
considered as a potential recipient of a benefit by the trustees and a right to have his interest
protected by a court of equity”); Kennon, [2008] HCA 56, ¶ 160 (reading Gartside to create “a
mere expectancy”).
19
Claimants’ sixth and final asserted right—standing to take the trustee to court in Singapore
to compel proper administration of the trust, including for improper denial of a distribution— is
essentially a right to sue, or a chose in action. Kennon, [2008] HCA 56, ¶ 75 (“The rights to
consideration and to due administration are in the nature of equitable choses in action.”). Although
Professor Tjio characterized this right as a proprietary interest, he readily acknowledged that it
does not provide claimants with the right to enjoy, control, or possess the trust property, and that
it does not constitute a vested interest in any specific trust assets. See Tjio Dep. Tr. at 93:14–
94:12; see also id. 175:20–176:5.
In sum, the undisputed record establishes that under Singapore law, claimants, as presently
named beneficiaries of these discretionary trusts, do not own, have any beneficial or proprietary
interest in, or exercise dominion and control over the specific assets of the trusts. Claimants have
the right to be considered for distributions, subject to the exercise of the trustee’s discretion and in
conformance with the trustee’s fiduciary duties. But this is not a proprietary right to specific assets;
rather, it is an expectancy interest in the favorable exercise of discretion by the trustee. Claimants
also have the right to bring suit against the trustee in Singapore to enforce the proper administration
of the trusts. The remaining question, then, is whether claimants’ interest is sufficient to support
Article III standing.
B. Effect of Claimants’ Interest for Standing
1. Whether Claimants Have a Sufficient Interest in the Trusts’ Assets
Having determined claimants’ interest in the trusts’ assets under Singapore law, the Court
now examines the constitutional effect of that interest under federal law. Bank Julius Baer II, 959
F. Supp. 2d at 96. To support standing, claimants’ interest must give them a “colorable claim” on
the res, “typically, an ownership or possessory interest.” ($17,900.00) in U.S. Currency, 859 F.3d
20at 1089. In short, the question is whether the elimination of claimants’ interest amounts to an
injury that is actual and concrete, rather than conjectural or hypothetical. 8 Gilcrease Lane, 641
F. Supp. 2d at 4, 6.
The parties are unaware of any forfeiture case involving a discretionary trust, see Pl.’s
Reply at 18; Tr. of Oct. 26, 2017 Hr’g at 37:7–12, nor has the Court found one. Thus, the parties
have provided the Court with cases that they perceive to be analogous. The government compares
claimants’ interest in the trust assets to potential heirs “who may, one day, take from a deceased’s
estate, subject, of course, to the deceased not dissipating his estate in advance of death or devising
it to another party.” Pl.’s Reply at 19. Courts have held that heirs—even actual heirs—who have
a future, contingent interest in property lack standing to contest a forfeiture of that property. See,
e.g., United States v. $90,000 in U.S. Currency, 56 F. Supp. 3d 744, 747 (D. Md. 2014) (holding ,
under Maryland law, that the daughter of deceased owner of seized money who stood ready to
inherit the funds as soon as the estate could be administered in probate lacked standing because
she held only “a contingent future interest in the defendant property”); United States v. 477
Firearms, 698 F. Supp. 2d 894, 900 (D. Mich. 2010) (holding, under Michigan law, that “potential
heirs and legatees have a mere expectancy interest” which is not a “legally cognizable interest”). 17
Another line of cases relied on by the government involves marital interests of spouses contingent
upon the dissolution of marriage, which courts have deemed insufficient to confer standing to
17
See also United States v. Church & Dwight Co., 510 Fed. App’x. 55, 58 (2d Cir. 2013) (holding petitioner
with a contingent interest lacked standing to assert claim where condition precedent was not satisfied); United States
v. $7,206,157,717 on Deposit at JP Morgan Chase Bank, N.A., 274 F.R.D. 125, 127 (S.D.N.Y. 2011) (“To allow those
with, at most, contingent interests in a res to intervene would open the floodgates of intervention in forfeiture
actions . . . .”); United States v. 148 Maunalanikai Pl., No. 1:07-cv-00049, 2008 WL 3166799, at *7–8 (D. Haw. Aug.
6, 2008) (future right to equitable distribution of marital property upon divorce does not confer present ownership
interest sufficient to support standing); United States v. Murphy, 850 F. Supp. 981, 983 (M.D. Fla. 1994) (“Future
expectation of ownership by a child is insufficient to give a child standing to contest forfeiture.”); United States v.
One Rural Lot, 739 F. Supp. 74, 78 (D.P.R. 1990) (potential heirs with a “mere expectancy of inheritance” lacked
sufficient interest to contest forfeiture).
21
contest a forfeiture. 18 Pl.’s Mot. to Strike at 18–19. Claimants contend that these analogies fail
because “the Government’s central premise—that Claimants’ interests are inchoate—is wrong.”
Cls.’ Opp’n at 28 (“In contrast, Claimants have present property interests sufficient for Article III
standing that already exist.”). But claimants are wrong to dismiss these cases so casually. While
they have an expectancy interest in receiving distributions of the trust assets, their own expert
acknowledged that they lack a vested interest in any “specific” trust assets. See Tjio Dep. Tr. at
161:20–162:4.
Claimants, for their part, rely on fixed trust cases. Cls.’ Opp’n at 25–27. But several of
these cases are of limited value when compared to the facts present here. For example, in United
States v. Any And All Funds on Deposit In Account No. 12671905, Held In The Name of
Landlocked Shipping Co. At Wells Fargo Brokerage Servs., LLC, All Interest And other Proceeds
Traceable Thereto, No. Civ. 09-3481 HB, 2010 WL 3185688, at *2 (S.D.N.Y. Aug. 10, 2010), the
claimant was the beneficiary of a fixed trust that was “obligated to pay her any income Landlocked
receives.” The claimants here are owed no such obligation; nor are the Blue Family Trusts fixed
trusts, which provide beneficiaries with entirely different interests. See Hanbury & Martin:
Modern Equity ¶ 9-015, at 199 (“In the case of a fixed trust, . . . the beneficiary’s interest is
regarded as proprietary. She is the owner of an equitable interest under the trust. This is not so in
the case of a beneficiary under a discretionary trust.”). And United States v. Preston, 123 F. Supp.
3d 24 (D.D.C. 2015), is similarly inapposite. That case was decided at the motion to dismiss stage
18
One of those cases, United States v. Batato, 833 F.3d 413 (4th Cir. 2016), is particularly instructive here.
There, an estranged wife asserted a claim to fifty percent of the marital property subject to a forfeiture action. Id. at
434. She argued that under New Zealand law she had a right to assert a claim to marital property and a presumption
that she was entitled to half. Id. at 435. The court determined that the wife lacked standing because “a right to state
a claim does not rise to the level of a legal or equitable interest sufficient to satisfy Article III.” Id. (internal quotation
marks omitted). Until her claim to marital property was adjudicated in her favor, the wife had no actual interest in the
marital property. Id. Similarly here, claimants’ right to sue the trustee in Singapore courts for proper administration—
which is a right to a claim—does not create a legally cognizable interest for Article III purposes, until that claim is
resolved in claimants’ favor.
22
where claimant’s bare assertion that she was the sole beneficiary of a trust was sufficient to give
her standing. Id. at 26, 29. Claimants are not sole beneficiaries of the Blue Family Trusts and,
more importantly, this case stands in a different procedural posture, where bare assertions will not
suffice. ($17,900.00) in U.S. Currency, 859 F.3d at 1090 (“[S]tanding must be supported . . . with
the manner and degree of evidence required at [each] successive stage[ ] of the litigation. At the
pleading stage, a claimant need only allege a colorable interest in the property. In response to a
summary judgment motion, however, the [claimant] can no longer rest on such mere
allegations . . . .” (alterations in original) (internal quotation marks and citations omitted)).
Claimants contend that the “closest analogue” to the instant case is United States v. 5 S
351 Tuthill Road, 233 F.3d 1017 (7th Cir. 2000). See Tr. of Oct. 26, 2017 Hr’g at 54:1–2. In that
case, the claimant was the sole beneficiary of a land trust that gave him a fixed right to the
“earnings, avails, and proceeds arising from the sale or . . . disposition” of the land. Id. at 1021.
The claimant did not own or possess the land, and he had no power to manage, lease, or sell the
land. Id. And the trustee had discretion to sell the land on “any terms, with or without
consideration.” Id. The court stated that nonetheless, the claimant had an interest in “a right to
future proceeds of unknown value.” Id. at 1022. Because the claimant would “lose the opportunity
to receive the proceeds, if and when the land is sold,” he had “an actual stake in the outcome of
the suit” sufficient to establish standing. Id.Tuthill Road appears similar to this case on the surface, but a closer look reveals some
significant differences. The claimant in Tuthill Road was the sole beneficiary of a trust, whereas
claimants here are among the beneficiaries of a trust where the trustee has absolute discretion to
add or subtract beneficiaries. Like the claimant in Tuthill Road, forfeiture will cause claimants
here to lose an opportunity: to request future distributions from the trust funds. But the claimant
23
in Tuthill Road faced a different type of contingency than claimants do here. The value of his
proceeds was contingent on the discretion of the trustee, while his interest in the proceeds was
vested. See id. (“[T]he fact remains that should the property be sold for any amount of money,
that money is due to [the claimant].”). Here, by contrast, whether or not claimants have any interest
in the trust assets is contingent on the discretion of the trustee, and their status as beneficiaries does
not provide them with any vested interest. Pl.’s Mot. to Strike at 16 (“Claimants not only cannot
say how much they will one day receive, they also cannot say—unlike the beneficiary in Tuthill
Road—whether they will receive anything . . . .”). Claimants, then, have a far weaker interest than
did the claimant in Tuthill Road.
Ultimately, whether claimants have a legally cognizable interest in the assets of these trusts
is a close question, even under the forgiving standard that applies in the civil forfeiture context.
Claimants—as the beneficiaries of discretionary trusts who have not been favored by the trustee—
have a future, contingent interest in the trust assets, but they lack present rights to any specific trust
property. In other contexts, courts have generally found such interests too hypothetical to create
an actual case or controversy. Claimants have failed to provide the Court with any authority in
which a claimant with a similar unvested, contingent interest in property was found to have
standing to contest a forfeiture. The Court therefore concludes that claimants have failed to satisfy
their burden of demonstrating standing by a preponderance of the evidence.
2. Whether Claimants Can Avoid the Doctrine of Corporate Separateness
The government asserts that even if claimants could show that they have a legally
cognizable interest in the trusts’ assets, they would lack standing for an independent reason: “it is
undisputed and indisputable that the Trusts’ assets are not the Claimed Assets.” Id. at 21. Instead,
the trusts’ assets consist entirely of shares of stock in the Blue Holdings Companies, and it is the
24
Blue Holdings Companies that hold title to the claimed assets (i.e., the account portfolios).
Claimants accuse the government of “elevating form over substance” and ignoring the “over-
arching unified family trust structure.” Cls.’ Opp’n at 31–32. But the government did not create
this “multi-layered, interlocking trusts structure” with separate corporate entities. Pl.’s Reply at 1.
It simply seeks to have claimants “honor and adhere to the forms and procedures commensurate
with this freely-chosen design.” Id. at 2.
To that end, it is undisputed that Singapore law, like U.S. law, recognizes the doctrine of
corporate separateness. Cls.’ Opp’n at 38; Tang Decl. ¶¶ 28–30; Tjio Decl. ¶¶ 21–22. Hence,
shareholders of a Singapore company do not own or have any proprietary interest in the assets of
that company. Tang Decl. ¶¶ 28–30; Tjio Decl. ¶¶ 3, 22. Claimants nonetheless contend that the
doctrine of corporate separateness is “merely the ‘starting point,’” and they present several
arguments why it should be disregarded here. Cls.’ Opp’n at 38 (quoting Tjio Decl. ¶ 22).
To start, claimants state that Singapore law “leaves room ‘for reverse veil piercing,’” and
“other means to disregard the corporate form where it [is] rational and pragmatic to do so.” Id. at
39–40. But claimants’ expert conceded that he is unaware of any Singapore court that has
permitted the shareholders of a company to lift the corporate veil or disregard the corporate form
for their own benefit. Tjio Dep. Tr. at 132:4–13. Nor do any of the Singapore cases cited by
claimants suggest that the corporate veil should be set aside here. 19
Claimants similarly suggest that Singapore courts would assess whether shareholders
“have a financial interest” in a corporation’s assets and, if so, take a “pragmatic . . . approach” to
19
Koh Kim Tek v. Credit Suisse AG Singapore Branch, [2015] SGCH 63, was an interlocutory decision, not
decided on the merits, where the court merely observed that veil piercing “is certainly not unarguable and
unsustainable,” but ultimately held that the issue was best considered in another forum. Tjio Decl. ¶ 27. Pek Seng
Co. Pte Ltd v. Low Tin Kee, [1989] SGHC 83, arose in the context of a “Mareva injunction,” which Professor Tjio
himself acknowledged presents a different “factual matrix” than this case, and was not a reverse veil piercing case.
Tjio Decl. ¶ 24.
25
permit those shareholders to assert claims to such assets. Cls.’ Opp’n at 38 (quoting Tjio Decl.
¶ 3). But whether or not Singapore courts would do so is immaterial—the relevant question is
whether, under U.S. law, a shareholder has a sufficient “financial interest” in a corporation’s assets
to establish Article III standing. 20 See Bank Julius Baer II, 959 F. Supp. 2d at 96. The answer is
overwhelmingly no.
Courts here have consistently held under federal law that a shareholder lacks standing to
contest the forfeiture of a corporation’s assets. See, e.g., Young, 77 F. Supp. 3d at 1192; United
States v. Four Thousand Two Hundred Seventy-Eight Dollars, No. 12-10253, 2014 WL 3420774,
at *4 (E.D. Mich. July 14, 2014) (“[S]hareholders generally do not have Article III standing to
contest the forfeiture of corporate property.”); United States v. Real Prop. Associated with First
Beneficial Mortg. Corp., No. 3:08CV285, 2009 WL 1035233, at *3 (W.D.N.C. Apr. 16, 2009)
(“Because of this lack of ownership interest in the specific property, it has been held in each of the
cases deciding the issue that a shareholder in a corporation does not have Article III standing to
contest the forfeiture of corporate property.”). Moreover, courts have applied this principle equally
to closely held companies and sole shareholders. In First Beneficial Mortgage Corporation, for
example, the court held that a sole shareholder lacked standing to contest a civil forfeiture action.
2009 WL 1035233, at *3 (“The law cannot allow a sole corporate shareholder to disregard the
corporate entity when it suits him and allow him the benefit of the corporate entity when he
desires.”); see also United States v. Two Bank Accounts Described as: Bank Account in Amount
of $197,524.99 Bank of Am., Seattle, Wash., No. 06-4005, 2008 WL 5431199, at *5 (D.S.D. Dec.
31, 2008) (holding that sole shareholder lacked standing to contest forfeiture of corporate assets).
20
Likewise irrelevant is whether “Singapore courts . . . recognize that shareholders are harmed by events
which result in the diminution [of] their shares.” Cls.’ Opp’n at 39. The same is true for U.S. shareholders, yet
established case law has made clear that shareholders lack standing to contest the forfeiture of corporate assets.
26
It follows, then, that Blue PTC, as the sole shareholder of the Blue Holdings Companies, lacks
standing to contest the forfeiture. And even if claimants could step into Blue PTC’s shoes based
on their interest in the trusts’ assets, they too would lack standing. At bottom, under the corporate
separateness doctrine, only the Blue Holdings Companies themselves would arguably have
standing to challenge the forfeiture of the claimed assets. 21
Claimants nonetheless argue that “[i]n certain circumstances, courts have found a
shareholder possesses sufficient interest to contest the forfeiture of corporate assets.” Cls.’ Opp’n
at 41. The cases that claimants cite, however, do not convince the Court that standing exists here.
In United States v. All Funds in Bluffview Securities Account, LP, No. CV-11-05472 AHM, 2012
WL 12855582, at *4 (C.D. Cal. Nov. 26, 2012), the court dismissed a shareholder claimant seeking
to contest the forfeiture of brokerage accounts for lack of statutory standing and, only in dictum,
stated that he “arguably presented enough evidence to establish Article III standing.” And in
United States v. Emor, 785 F.3d 671, 676 (D.C. Cir. 2015), the claimant was not asserting a claim
as a shareholder, but instead as a victim who owned the seized funds prior to being induced to pay
them over by fraud.
Claimants have identified only two cases—both from courts in other jurisdictions—that
have held that shareholders have standing to contest the forfeiture of corporate assets. In United
States v. One 1983 Dodge Ram Van, 1989 WL 42581 (E.D. La. Apr. 21, 1989), two claimants
contested the forfeiture of a van seized in a drug operation—the corporation that held legal title to
the van and the corporation’s majority shareholder. Id. at *1. The court held, without citing any
authority, that the shareholder claimant had standing because she “can be considered as an owner”
21
Although the government sent notice of the forfeiture complaint to counsel for both Blue Holdings
Companies, see Aff. in Supp. of Default, June 2, 2014 [ECF No. 44] ¶ 8(b), neither company has appeared to file a
claim to the claimed assets.
27
of the van, based on her role as the majority shareholder and president of the corporation. 22 Id.Here, unlike the posture of One 1983 Dodge Ram Van, the Blue Holdings Companies have not
appeared alongside the claimants to contest the forfeiture. And under Singapore law a shareholder
is not considered as an owner of the corporate assets. Tang Decl. ¶¶ 28–30; Tjio Decl. ¶¶ 3, 22.
In the other case, United States v. Eleven Million Seventy-One Thousand One Hundred &
Eighty-Eight Dollars & Sixty-Four Cents ($11,071,188.64) in U.S. Currency, 825 F.3d 365 (8th
Cir. 2016), the government seized allegedly money-laundered drug trafficking funds from banking
and brokerage accounts. Id. at 368. The corporation that held title to the funds filed a claim along
with the corporation’s sole shareholder. Id. The court dismissed the corporation’s claim based on
its repeated discovery violations. Id. at 369. Then, after dismissing the corporation, the court
determined that the sole shareholder had standing because she was the person with “the greatest
financial stake” in putting the government to its proof that the corporate assets were subject to
forfeiture. Id. at 371. But the Eighth Circuit’s decision has only been cited sparingly, and it
appears to be the only case that has found that a shareholder has standing to contest a civil forfeiture
because the shareholder had the “greatest financial stake” in a corporation’s assets.
Both of these cases are non-binding and inconsistent with the majority of cases that have
held that a shareholder—even a sole shareholder—lacks standing to contest the forfeiture of a
corporation’s assets. And it remains settled law in this Circuit that a corporate shareholder “cannot
bring a personal suit in his own name to vindicate the rights of [a corporation] except under limited
exceptions.” Kay v. FCC, 621 F. App’x 5, 6 (D.C. Cir. 2015) (mem.); see Am. Airways Charters,
Inc. v. Regan, 746 F.2d 865, 873 n.14 (D.C. Cir. 1984) (“No shareholder—not even a sole
shareholder—has standing in the usual case to bring suit in his individual capacity on a claim that
22
The court later noted, in rejecting the innocent-owner defenses of both claimants, that “the van was the
property of the company.” Id. at *2.
28
belongs to the corporation.”). 23 Therefore, claimants have provided no basis to set aside the
doctrine of corporate separateness, and they also lack standing for this independent reason.
CONCLUSION
For the foregoing reasons, the Court will grant the government’s motion to strike as to
seven of the eight claimants, and grant in part and deny in part the government’s motion to strike
as to the remaining claimant, Ibrahim Bagudu. Ibrahim Bagudu has standing to contest the
forfeiture of certain of the defendant properties—specifically, the assets designated as Assets 4(i)
and 4(k) in the Complaint—associated with Blue Family Trust II. A separate Order accompanies
this Memorandum Opinion.
/s/
JOHN D. BATES
United States District Judge
Dated: March 5, 2018
23
Claimants cite two other D.C. Circuit cases. In Whelan v. Abel, 953 F.2d 663, 672 (D.C. Cir. 1992), the
D.C. Circuit concluded that a party’s Article III challenge was more appropriately viewed as a real-party-in-interest
challenge under Federal Rule of Civil Procedure 17(a). But Whelan did not disturb the rule of Regan. See Cherry v.
FCC, 641 F.3d 494, 497 (D.C. Cir. 2011) (citing Regan approvingly but noting that Whelan recognized that certain
shareholder issues do not implicate Article III standing and are better addressed as real-party-in-interest inquiries).
And in BellSouth Corp. v. FCC, 144 F.3d 58, 62 (D.C. Cir. 1998), the D.C. Circuit held that a corporation had standing
to challenge a regulation of two of its subsidiaries, for which the corporation was the sole shareholder, because the
corporation was “itself affected” by the regulation. These cases, too, are of no aid to claimants.
29