United States v. All Funds on Deposit At

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
)
UNITED STATES OF AMERICA, )
)
Plaintiff, )
)
v. ) Civil Action No. 04-0798 (PLF)
)
ALL ASSETS HELD AT BANK JULIUS )
Baer & Company, Ltd., Guernsey )
Branch, account number 121128, in the )
Name of Pavlo Lazarenko et al., )
)
Defendants In Rem. )
____________________________________)
OPINION
This matter is before the Court on the motion of the United States [Dkt. No. 1275]
to strike the claim of Pavel Lazarenko, also known as Pavlo Lazarenko, to the defendant assets
held in the name of Beranco Engineering Establishments, Ylorex Establishments, and Tanas AG
in Liechtenstein, and all assets traceable thereto (collectively, “Liechtenstein Accounts”). Also
before the Court is Mr. Lazarenko’s cross-motion [Dkt. No. 1319] to amend his amended claim.
Upon consideration of the parties’ written submissions, the relevant legal authorities, and the
entire record in this case, the Court will grant the motion to strike Mr. Lazarenko’s claim to the
Liechtenstein Accounts and deny Mr. Lazarenko’s cross-motion. 1
1
The documents reviewed in connection with the United States’ motion to strike
include: the verified complaint for forfeiture in rem (“Complaint”) [Dkt No. 1]; the first amended
verified complaint for forfeiture in rem (“Amended Complaint”) [Dkt. No. 20]; Mr. Lazarenko’s
claim to the amended complaint (“Amended Claim”) [Dkt. No. 29]; Mr. Lazarenko’s answer to
the amended complaint, 2011 (“2011 Answer”) [Dkt. No. 268]; the United States’ first set of
interrogatories to claimant Pavel Lazarenko (“US Interrog.”) [Dkt. No. 365-2]; Mr. Lazarenko’s
amended answer to the amended complaint, Feb. 2017 (“2017 Answer”) [Dkt. No. 882];
I. FACTUAL AND PROCEDURAL BACKGROUND
A. History of this Civil Forfeiture Proceeding
The Court’s prior opinions summarize the factual and procedural history of this
case, starting with the criminal prosecution of Mr. Lazarenko in 2004 and continuing through
this long-running in rem civil forfeiture proceeding. See, e.g., United States v. All Assets Held
at Bank Julius, Baer & Company, Ltd. (“All Assets VI”), 228 F. Supp. 3d 118, 120-21
(D.D.C. 2017); United States v. All Assets Held at Bank Julius Baer & Co. (“All Assets V”), 307
F.R.D. 249, 250-51 (D.D.C. 2014); United States v. All Assets Held at Bank Julius Baer & Co.,
Ltd. (“All Assets IV”), 959 F. Supp. 2d 81, 84-93 (D.D.C. 2013); United States v. All Assets
Held at Bank Julius Baer & Co., Ltd. (“All Assets III”), 772 F. Supp. 2d 205, 207-08
(D.D.C. 2011); United States v. All Assets Held at Bank Julius Baer & Co., Ltd. (“All
Assets II”), 664 F. Supp. 2d 97, 104-05 (D.D.C. 2009); United States v. All Assets Held at Bank
Julius Baer & Co., Ltd. (“All Assets I”), 571 F. Supp. 2d 1, 3-6 (D.D.C. 2008). In brief, Mr.
Mr. Lazarenko’s second amended answer to the amended complaint, Aug. 2017 (“Second 2017
Answer”) [Dkt. No. 998]; Mr. Lazarenko’s notice of withdrawal of claim to account 0153633 in
the name of Tanas AG (“Withdrawal”) [Dkt. No. 1144]; the United States’ motion to strike Mr.
Lazarenko’s claim from the Liechtenstein assets (“Mot. Strike”) [Dkt. No. 1275]; the United
States’ memorandum in support of its motion to strike claimant Mr. Lazarenko’s claim to the
Liechtenstein assets (“Mem. Mot. Strike”) [Dkt. No. 1275-1]; the United States’ appendix
accompanying its motion to strike Mr. Lazarenko’s claim to the Liechtenstein assets (“US
App’x”) [Dkt. Nos. 1275-3 through 1275-6]; translations of portions of the US App’x
(“Translations”) [Dkt. No. 1275-7]; Mr. Lazarenko’s opposition and cross-motion to amend his
amended claim (“Opp.”) [Dkt. No. 1319]; the 2020 Liechtenstein order freezing Mr. Lazarenko’s
Liechtenstein assets (“Freeze Order”) [Dkt. No. 1319-5]; excerpts from the Liechtenstein
criminal code (“Crim. Code”) [Dkt. No. 1319-7]; Mr. Lazarenko’s proposed amendment to his
amended claim (“Prop. Amend.”) [Dkt. No. 1321-1]; the United States’ reply in support of its
motion to strike and opposition to Mr. Lazarenko’s cross-motion to amend (“US Reply and
Opp.”) [Dkt. No. 1338]; Mr. Lazarenko’s reply in support of his motion to amend (“Lazarenko
Reply”) [Dkt. No. 1347]; additional excerpts from the Liechtenstein criminal code (“Crim. Code
2”) [Dkt. No. 1347-1]; and the Liechtenstein statute on mutual legal assistance (“Mutual
Assistance Statute”) [Dkt. No. 1347-2].
2
Lazarenko was “a prominent Ukrainian politician who, with the aid of various associates, was
‘able to acquire hundreds of millions of United States dollars through a variety of acts of fraud,
extortion, bribery, misappropriation and/or embezzlement’ committed during the 1990s.” All
Assets IV, 959 F. Supp. 2d at 85 (quoting the Amended Complaint ¶¶ 1, 10).
In May 2004, the United States filed an in rem forfeiture complaint seeking
forfeiture of various funds on deposit in foreign bank accounts in Guernsey and Antigua and
Barbuda. Complaint ¶ 1. The following year, in June 2005, the United States filed an amended
complaint identifying additional accounts for forfeiture, including “[a]ll assets held at various
accounts in Liechtenstein.” Amended Complaint ¶ 5(i). The complaint states that
[t]hese defendant assets were last valued at the equivalent of approximately $7
million in United States dollars and are held at:
(i) Verwaltungs-und PrivatBank AG account number 325.295.900, in the
name of Beranco Engineering Establishments;
(ii) Verwaltungs-und PrivatBank AG account number 326.284.900, in the
name of Ylorex Establishments;
(iii) LGT Bank in Liechtenstein AG account numbers 0153633 AB and
0153633 AC, in the name of Tanas AG;
(iv) Liechtensteinische Landesank AG in the name of NRKTO 7541 or Pavlo
Lazarenko, including in, but not limited to, account numbers 527.908.09,
187.764.68, and 187.775.88.
Id. ¶ 5(i)(i-iv). The complaint also names “all assets traceable” to the Liechtenstein accounts as
defendants in rem. Amended Complaint ¶ 5(j). The complaint alleges that Mr. Lazarenko
sought to conceal and layer criminal proceeds by “creating and causing the creation of various
shell corporations and trusts and through the opening of numerous bank accounts,” into which
Mr. Lazarenko “and his associates would deposit or direct the deposit of money from individuals
and businesses in Ukraine, and transfer or direct the transfer of money to Lazarenko or to entities
he and his associates controlled.” Id. ¶ 55. The Liechtenstein Accounts are among those into
which Mr. Lazarenko “transferred the proceeds of [his] criminal conduct.” See id. ¶ 77.
3
The complaint goes on to explain the timeline of the transfer of funds into the
Liechtenstein Accounts; it states that “[b]etween approximately April 16 and August 8, 1998,
Lazarenko opened several bank accounts in Liechtenstein, including various accounts at
Liechtensteinische Landesbank AG and at least three accounts at LGT Bank in Liechtenstein
AG.” Amended Complaint ¶ 114. It further states that Mr. Lazarenko “was the beneficial owner
of [those accounts], as well as the assets held in [those] accounts.” Id. The complaint then
alleges that in September 1999, assets with a total value of approximately $7 million in United
States dollars were withdrawn from those accounts and deposited “into account number
325.295.900, in the name of Beranco Engineering Establishment at Verwaltungs-und
PrivatBank: AG; account number 326.284.900, in the name of Ylorex Establishment at
Verwaltungs-und PrivatBank: AG; account numbers 0153633 AB an 0153633 AC, in the name
of Tanas AG at LGT Bank in Liechtenstein AG; and Lazarenko's NRKTO 7541 accounts at
Liechtensteinische Landesbank AG.” Id. ¶ 119.
In July 2005, Mr. Lazarenko filed a verified claim in response to the United
States’ amended complaint. See Amended Claim. In his amended claim, Mr. Lazarenko stated
that he “claims” all assets held in the Liechtenstein Accounts. See id. at 1, ¶ 8. He did not
specify the nature of his interest in the assets. See id. at 5. In July 2005, Mr. Lazarenko also
filed a motion to dismiss the amended complaint, which this Court denied in March 2007. All
Assets I, 571 F. Supp. 2d at 3. Six years later, in November 2011, Mr. Lazarenko filed an
answer to the amended complaint in which he “admit[ted] that the accounts in the name of
Beranco Engineering, Ylorex Establishment and Tanas AG contain funds of which he is the
beneficial owner.” 2011 Answer ¶ 119.
4
On February 16, 2016, Mr. Lazarenko filed his fifth supplemental response to the
United States’ set of interrogatories. See US App’x at 729. In his interrogatory responses, Mr.
Lazarenko states that he “has a legal interest in [the Liechtenstein Accounts] under the relation
back doctrine.” Id. at 730. He further states that “if the funds are forfeited to the United States,
he cannot use the funds to pay [a] possible judgment to Ukraine.” Id. Finally, his interrogatory
responses state that he is the “owner” of the Liechtenstein Assets, id. at 731, and that he “knows
that these funds belong to him but cannot identify the source of the funds without additional
records,” id. at 743.
Also in 2016, the United States filed a motion to strike Mr. Lazarenko’s claim to
the Balford Trust assets identified in the amended complaint. See United States v. All Assets
Held at Bank Julius (“All Assets VII”), Civil Action No. 04-0798, 2020 WL 1615870, at *3
(D.D.C. Apr. 2, 2020). The United States argued that Mr. Lazarenko lacked constitutional
standing to assert an interest in the Balford Trust because he had no ownership interest in the
assets and did not “have a right to benefit from them.” Id. at *10. The United States also
pointed out that Mr. Lazarenko’s amended claim asserted only a “residual and reversionary
interest” in the Balford Trust, and argued that such an interest was insufficient to confer statutory
standing. Id. (quoting the Amended Claim at 5).
After conducting a painstaking and comprehensive analysis, this Court granted
the United States’ motion. See All Assets VII, 2020 WL 1615870, at *19. The Court found that
Mr. Lazarenko could not “claim any interest in the Balford Trust assets other than a ‘residual and
reversionary interest’ because that [was] the only interest he . . . included in his [amended]
claim.” Id. at *11. The Court further concluded that this interest was insufficient to confer
standing, reasoning that because the Balford Trust was irrevocable and discretionary, Mr.
5
Lazarenko did not in fact have a residual or reversionary interest to the funds contained within
the trust. Id. at *10. In other words, the Court concluded that the only interest asserted in Mr.
Lazarenko’s claim was unsupported by evidence. The Court also found that Mr. Lazarenko
lacked standing because, among other things, he lacked dominion and control over the Balford
Trust. Id. at *13-15. The Court therefore struck Mr. Lazarenko’s claim to the Balford Trust.
B. The United States’ Motion to Strike Pavel Lazarenko’s Claim to the Liechtenstein Accounts
On May 15, 2020, the United States filed the instant motion to strike Mr.
Lazarenko’s claim to the Liechtenstein Accounts. See Mot. Strike. 2 The United States argues
that Mr. Lazarenko lacks statutory, constitutional, and prudential standing to contest the
forfeiture of the Liechtenstein Accounts. Mem. Mot. Strike at 11. Mr. Lazarenko opposes the
motion, asserting that he has an interest in the Liechtenstein Accounts due to a Ukrainian lien on
the accounts. Opp. at 2. He also asks for leave to amend his claim to reflect this interest. Id.
at 10-11.
II. LEGAL STANDARDS
A. Motion to Strike
In a forfeiture action brought in rem pursuant to a federal statute, at any time
before trial, the United States “may move to strike a claim or answer . . . because the claimant
2
On April 2, 2019, Mr. Lazarenko filed a notice withdrawing his claim to account
number 0153633 in the name of Tanas AG. See Withdrawal at 1. Magistrate Judge Harvey
issued a report and recommendation recommending that Mr. Lazarenko’s claim be dismissed
with prejudice. See Report and Recommendation of May 19, 2020 [Dkt. No. 1278] at 8. This
Court adopted and approved the report and recommendation and dismissed the claim with
prejudice. See Order of June 17, 2020 [Dkt. No. 1304] at 2. In addition, the United States does
not move to strike Mr. Lazarenko’s claim to the Liechtensteinische Landesbank AG account.
Mot. Strike at 1 n.1. The United States’ motion therefore pertains only to the Beranco and
Ylorex accounts.
6
lacks standing.” SUPP. R. G(8)(c)(i)(B). Such a challenge to a party’s claim and answer “may be
presented . . . as a motion to determine after a hearing or by summary judgment whether the
claimant can carry the burden of establishing standing by a preponderance of the evidence.”
SUPP. R. G(8)(c)(ii)(B).
Summary judgment is appropriate only if “the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the movant is entitled to judgment as a matter of
law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); see Baumann v. District of
Columbia, 795 F.3d 209, 215 (D.C. Cir. 2015); FED. R. CIV. P. 56(a), (c). In making that
determination, the Court must view the evidence in the light most favorable to the non-moving
party and draw all reasonable inferences in its favor. Baumann v. District of Columbia, 795 F.3d
at 215; Anderson v. Liberty Lobby, Inc., 477 U.S. at 255. A disputed fact is “material” if it
“might affect the outcome of the suit under the governing law.” Talavera v. Shah, 638
F.3d 303, 308 (D.C. Cir. 2011) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. at 248). A
dispute over a material fact is “genuine” if it could lead a reasonable jury to return a verdict in
favor of the non-moving party. See Scott v. Harris, 550 U.S. 372, 380 (2007); Grimes v. District
of Columbia, 794 F.3d 83, 94-95 (D.C. Cir. 2015).
Although all reasonable inferences must be drawn in favor of the non-moving
party, that party’s opposition to the summary judgment motion must consist of more than mere
unsupported allegations or denials, and must instead be supported by affidavits, declarations, or
other competent evidence, setting forth specific facts showing that there is a genuine issue for
trial. See FED. R. CIV. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). The
non-moving party is required to provide evidence that would permit a reasonable jury to find in
7
his favor. Laningham v. United States Navy, 813 F.2d 1236, 1241 (D.C. Cir. 1987). If the
non-movant’s evidence is “merely colorable” or “not significantly probative,” summary
judgment may be granted. Anderson v. Liberty Lobby, Inc., 477 U.S. at 249-50; see also Scott v.
Harris, 550 U.S. at 380 (“[W]here the record taken as a whole could not lead a rational trier of
fact to find for the nonmoving party, there is ‘no genuine issue for trial.’”) (quoting Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).
“Credibility determinations, the weighing of the evidence, and the drawing of
legitimate inferences from the facts are jury functions, not those of a judge at summary
judgment.” Barnett v. PA Consulting Grp., Inc., 715 F.3d 354, 358 (D.C. Cir. 2013) (quoting
Pardo-Kronemann v. Donovan, 601 F.3d 599, 604 (D.C. Cir. 2010)). “The inquiry performed [at
this phase] is the threshold inquiry of determining whether there is the need for a trial – whether,
in other words, there are any genuine factual issues that properly can be resolved only by a finder
of fact because they may reasonably be resolved in favor of either party.” Anderson v. Liberty
Lobby, Inc., 477 U.S. at 250.
B. Standing in Civil Forfeiture Actions
“Civil forfeiture actions are brought against property, not people. The owner of
the property may intervene to protect his interest.” United States v. All Funds in Account
Nos. 747.034/278, 747.009/278, & 747.714/278 in Banco Espanol de Credito, Spain, 295
F.3d 23, 25 (D.C. Cir. 2002). Civil forfeiture actions are governed by the procedures set forth
in 18 U.S.C. § 983 and the Supplemental Rules for Admiralty or Maritime Claims and Asset
Forfeiture Actions (“Supplemental Rules”), a subset of the Federal Rules of Civil Procedure.
When the government files a complaint for forfeiture, “any person claiming an interest in the
8
seized property may file a claim asserting such person’s interest in the property in the manner set
forth in the Supplemental Rules.” 18 U.S.C. § 983(a)(4)(A); see also SUPP. R. G(5)(a).
When the government moves to strike a claim for lack of standing pursuant to
Supplemental Rule G(8)(c), the claimant has the burden of “establishing standing by a
preponderance of the evidence.” SUPP. R. G(8)(c)(ii)(B). “To prevail, a claimant must meet both
Article III and statutory standing requirements.” United States v. $17,900 in U.S. Currency, 859
F.3d 1085, 1089 (D.C. Cir. 2017) (internal quotations omitted); see also All Assets VI, 228 F.
Supp. 3d 118 at 122 (explaining that a claimant “must demonstrate Article III standing in
addition to the separate, though partly overlapping, requirements of statutory standing”). 3 “The
term ‘statutory standing’ relates to a claimant’s ability to show that he has satisfied whatever
statutory requirements Congress has imposed for contesting a civil forfeiture action in federal
court, while ‘Article III standing’ [or ‘constitutional standing’] relates to the claimant’s ability to
show that he has a sufficient interest in the property to satisfy the case-or-controversy
requirement of Article III of the Constitution.” United States v. 8 Gilcrease Lane, Quincy
Fla. 32351 (“United States v. 8 Gilcrease Lane”), 641 F. Supp. 2d 1, 5-6 (D.D.C. 2009) (citing
Stefan D. Cassella, ASSET FORFEITURE IN THE UNITED STATES: A TREATISE ON FORFEITURE
LAW § 9-4 at 326 (2006)).
Because the United States, rather than the claimant, is the plaintiff and bears the
burden of proving the property’s forfeitability, “[t]he function of standing in a forfeiture action
3
There is some suggestion that the standing requirements imposed on a claimant in
a forfeiture action are statutory or prudential, not constitutional, in nature. See All Assets
III, 772 F. Supp. 2d at 198 n.2 (citing United States v. $557,933.89, More or Less, in U.S.
Funds, 287 F.3d 66, 78 n.9 (2d Cir. 2002)). Because the United States argues that Mr.
Lazarenko lacks all three types of standing, however, the Court need not decide that question
here, and will address each type of standing in turn.
9
is . . . truly threshold only—to ensure that the government is put to its proof only where someone
with a legitimate interest contests the forfeiture.” United States v. $557,933.89, More or Less, in
U.S. Funds, 287 F.3d 66, 79 (2d Cir. 2002); see also United States v. $17,900 in U.S.
Currency, 859 F.3d at 1089-90.
III. STANDING
The United States moves to strike Pavel Lazarenko’s claim to the Liechtenstein
Accounts, arguing that he does not have statutory, constitutional, or prudential standing to assert
a claim to those assets. See Mem. Mot. Strike at 11. Mr. Lazarenko opposes the motion,
asserting that he has both statutory and constitutional standing and that prudential considerations
are irrelevant. See Reply at 6, 8, 10. The Court will address each type of standing in turn.
A. Article III Constitutional Standing
1. Legal Standard
Standing is one of the three “inter-related judicial doctrines” that – along with the
requirements of mootness and ripeness – “ensure that federal courts assert jurisdiction only over
‘Cases’ and ‘Controversies.’” Worth v. Jackson, 451 F.3d 854, 855 (D.C. Cir. 2006) (quoting
U.S. CONST. art. III, § 2). Standing is an Article III requirement under which the plaintiffs must
show, at an “irreducible constitutional minimum,” that: (1) they have suffered an injury in fact –
the invasion of a legally protected interest; (2) the injury is fairly traceable to the defendant's
conduct (a causal connection); and (3) a favorable decision on the merits likely will redress the
injury. See Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992); Worth v. Jackson, 451 F.3d
at 858. The alleged injury must be concrete and particularized and actual or imminent, not
10
conjectural, hypothetical or speculative. See Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1548
(2016); Lujan v. Defs. of Wildlife, 504 U.S. at 560-61; Worth v. Jackson, 451 F.3d at 858.
“Standing is a threshold consideration in all cases, including civil forfeiture
cases.” United States v. One-Sixth Share of Mass Millions Lottery Ticket (“United States v.
One-Sixth Share”), 326 F.3d 36, 40 (1st Cir. 2003). In the civil forfeiture context, the D.C.
Circuit has explained that “the requirements for a claimant to demonstrate constitutional standing
to challenge a forfeiture are very forgiving.” United States v. $17,900 in U.S. Currency, 859
F.3d at 1089 (citing United States v. Emor, 785 F.3d 671, 676 (D.C. Cir. 2015)) (alterations
omitted). “While some courts have focused on whether a party had an ownership or possessory
interest under state law at the time of forfeiture, other courts have noted [that] it is the injury to
the party seeking standing that remains the ultimate focus.” United States v. Emor, 785 F.3d
at 676 (internal citations omitted); see also United States v. 8 Gilcrease Lane, 641 F. Supp. 2d
at 6 (“[I]n a civil forfeiture case, a claimant’s constitutional standing turns upon whether the
claimant has a sufficient interest in the property to create a case or controversy.”) (citation
omitted) (internal quotation marks omitted). “In general, any colorable claim on the property
suffices, if the claim of injury is “redressable, at least in part, by a return of the property.” United
States v. Emor, 785 F.3d at 676 (citations omitted).
The nature of a claimant’s asserted property interest is “defined by the law of the
State” – or here, nation – “in which the interest arose.” United States v. One Lincoln
Navigator, 328 F.3d 1011, 1013 (8th Cir. 2003); see also United States v. $100,348 in U.S.
Currency, 354 F.3d 1110, 1119 (9th Cir. 2004); United States v. One-Sixth Share, 326 F.3d
at 45. But while state law defines a claimant’s interest in specific property, “federal law
determines the effect of [that] interest on [the claimant’s] right to bring a claim.” United
11
States v. U.S. Currency, $81,000.00, 189 F.3d 28, 33 (1st Cir. 1999) (citing United States v.
National Bank of Commerce, 472 U.S. 713, 722 (1985)); see also United States v. 5 S 351
Tuthill Rd., 233 F.3d 1017, 1021 (7th Cir. 2000) (“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.”); United States v. BCCI Holdings, Luxembourg,
S.A., 69 F. Supp. 2d 36, 57 (D.D.C. 1999) (same).
At the summary judgment stage, the question is “whether a fairminded jury could
find that the claimant had standing on the evidence presented.” United States v. $133,420.00 in
U.S. Currency, 672 F.3d 629, 638 (9th Cir. 2012). In other words, “each claimant must point to
some evidence in the record that would allow a reasonable factfinder to conclude” that the
claimant has “a cognizable interest in the assets potentially subject to forfeiture.” All
Assets II, 664 F. Supp. 2d at 104-05. When the government moves to strike a claim because the
claimant lacks standing, courts must not conflate the standing inquiry “with the merits
determination that comes later.” United States v. One-Sixth Share, 326 F.3d at 41; see also
United States v. One Lincoln Navigator, 328 F.3d at 1013 (“This threshold burden is not
rigorous: To have standing, a claimant . . . need only show a colorable interest in the property,
redressable, at least in part, by a return of the property.”) (internal quotation marks and citations
omitted); United States v. $17,900 in U.S. Currency, 859 F.3d at 1091. “Although a claimant
must make [this] initial evidentiary showing of such an interest, a claimant need not definitively
prove the existence of that interest.” United States v. $148,840 in U.S. Currency, 521
F.3d 1268, 1273 (10th Cir. 2008); see also United States v. $557,933.89, More or Less, in U.S.
Funds, 287 F.3d at 79; United States v. 116 Emerson St., 942 F.2d 74, 78 (1st Cir. 1991).
12
“[S]tanding ‘must be supported . . . with the manner and degree of evidence
required at [each] successive stage[] of litigation.’” United States v. $17,900 in U.S.
Currency, 859 F.3d at 1090 (citing Lujan v. Defs. of Wildlife, 504 U.S. at 561). In response to a
summary judgment motion, the claimant cannot rest on “mere allegations,” but must “set
forth . . . specific facts, which for purposes of the summary judgment motion will be taken to be
true.” Id. (citing Lujan v. Defs. of Wildlife, 504 U.S. at 561). Further, “[a] variety of property
interests may serve as the basis for a claimant’s entitlement to contest a civil forfeiture, including
not only ownership but also possessory and other lesser forms of interest.” All Assets IV, 959 F.
Supp. 2d at 99. Accordingly, “[t]he type of interest claimed dictates the type of evidence
required to establish standing.” Id. at 99-100 (citing United States v. $148,840 in U.S.
Currency, 521 F.3d at 1274).
For instance, when a claimant responding to a summary judgment motion
predicates his claim on an ownership interest, the “manner and degree of evidence required” is
the “assertion of ownership” combined with “some evidence of ownership.” United
States v. $17,900 in U.S. Currency, 859 F.3d at 1090 (citing United States v. $239,400, 795
F.3d 639, 642-43 (7th Cir. 2015)). When assessing the “sufficiency and probity of the evidence
that purports to demonstrate a colorable ownership interest,” therefore, “courts generally look to
‘indicia of dominion and control such as possession, title, and financial stake.’” All
Assets IV, 959 F. Supp. 2d at 100 (citing United States v. $38,570 U.S. Currency, 950
F.2d 1108, 1113 (5th Cir. 1992)).
2. Analysis
To have constitutional standing, Mr. Lazarenko “need only show a colorable
interest in the property, redressable, at least in part, by a return of the property.” United States v.
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One Lincoln Navigator, 328 F.3d at 1013. He cannot, however, rest on mere assertions, but must
be able to point to evidence in the record that would allow a reasonable factfinder to conclude
that he has a “cognizable interest in the assets.” See All Assets II, 664 F. Supp. 2d at 104-05.
There are two possible sources for Mr. Lazarenko’s interest in the Liechtenstein accounts: a
restraining order issued in Liechtenstein or an asserted ownership interest. The Court will
address each source in turn.
a. Restraining Order
Mr. Lazarenko argues that he has an interest in the Liechtenstein Accounts based
on a Ukrainian “restraining order” that freezes his assets pending resolution of criminal
proceedings in Ukraine. See Opp. at 8. He contends that because Ukraine may ultimately seek
to use the Liechtenstein Assets “to satisfy a judgment it seeks to obtain against Mr. Lazarenko,”
he has an interest in ensuring that the assets are not forfeited and instead remain available to
satisfy that potential judgment. See id. at 10. The United States responds that this is insufficient
to demonstrate that Mr. Lazarenko has a cognizable interest in the assets because he has not
shown a legal basis for his interest under Ukrainian or Liechtenstein law. See US Reply and
Opp. at 4-5. It further argues that Mr. Lazarenko’s alleged injury is “conjectural, hypothetical, or
speculative,” and therefore insufficient to confer Article III standing. Id. at 5.
To reiterate, see supra Section III(A)(1), determining whether a claimant has an
interest that satisfies constitutional standing requires a two-part inquiry. First, a court must
determine the nature of the claimant’s interest by looking at the law of the nation in which the
interest arose. See All Assets VII, 2020 WL 1615870, at *8. Then, a court must look to federal
law to “determine[] the effect of that interest on the claimant’s right to bring a claim.” Id.(quoting United States v. U.S. Currency, $81,000.00, 189 F.3d at 33) (alterations omitted)).
14
Mr. Lazarenko’s asserted interest arose in Liechtenstein. He therefore must show
that he has an interest in the Liechtenstein Accounts under Liechtenstein law. Mr. Lazarenko
bases his interest on Ukraine’s purported lien. But Mr. Lazarenko cannot derive an interest from
a party that itself has no interest. To establish the nature of his interest, therefore,
Mr. Lazarenko must first show that the restraint gives Ukraine an interest in the Liechtenstein
Accounts under Liechtenstein law and then show that Ukraine’s interest gives Mr. Lazarenko an
interest under Liechtenstein law. Finally, Mr. Lazarenko must demonstrate that his interest is
constitutionally cognizable under United States law.
As to the question of whether Ukraine has an interest in the Liechtenstein
Accounts, Mr. Lazarenko can clearly demonstrate that the Liechtenstein Accounts are frozen
pending the resolution of a criminal case against him in Ukraine. See Freeze Order. But he
misunderstands the nature of the restraint. He mischaracterizes the restraint as a Ukrainian
“lien” on the Liechtenstein Accounts. See Opp. at 2, 10; Lazarenko Reply at 2. He states that
this “lien permits Ukraine to forfeit these accounts as substitute assets to satisfy Mr. Lazarenko’s
criminal debts.” Lazarenko Reply at 2. The order freezing the Liechtenstein Accounts, however,
states that Liechtenstein, at the request of Ukrainian authorities, froze the accounts “to ensure
that illegally transferred funds are returned to Ukraine” and to preserve them “until a court
decision has been made.” Freeze Order at 2, 3. Mr. Lazarenko has presented no evidence that
such an order constitutes a lien under Liechtenstein law.
Generally, a lien is a legally enforceable security interest in property. See, e.g.,
SEC v. Credit Bancorp., Ltd., 297 F.3d 127, 138 (2d Cir. 2002). Ukraine has merely sought
Liechtenstein’s assistance to restrain the assets in anticipation of prosecution; and Liechtenstein
has granted that request as “part of the pre-judicial investigation in criminal proceedings.” See
15
Freeze Order at 2-3. The order, on its face, does not guarantee that Ukraine will be able to forfeit
these accounts, nor has Mr. Lazarenko offered other evidence to prove such a guarantee. Mr.
Lazarenko therefore has failed to show that Ukraine has a “legally protected interest” under
Liechtenstein law that is being invaded by these forfeiture proceedings. See Lujan v. Defs. of
Wildlife, 504 U.S. at 560-61; cf. United States v. One-Sixth Share, 326 F.3d at 44 (“‘[T]he
federal courts have consistently held that unsecured creditors do not have standing to challenge
the civil forfeiture of their debtors' property.’”) (quoting United States v. $20,193.39, 16
F.3d 344, 346 (9th Cir. 1994) (collecting cases)); 18 U.S.C. § 983(d)(6)(B)(i) (stating that the
term “owner” does not include “a person with only a general unsecured interest in, or claim
against, the property or estate of another”).
Even if Mr. Lazarenko could show that Ukraine has a legally enforceable interest
in the Liechtenstein Accounts, he has failed to articulate how that would give him any interest in
those assets under Liechtenstein law. Although he need not definitively prove the existence of
his alleged interest, see United States v. $148,840 in U.S. Currency, 521 F.3d at 1273, he must
still offer some competent evidence to support his claimed interest in the accounts, see All Assets
VII, 2020 WL 1615870, at *10 (“[W]hen assessing a motion to strike a claim as a summary
judgment motion, the non-moving party’s opposition must consist of more than mere
unsupported allegations or denials and must be supported by affidavits, declarations, or other
competent evidence, setting forth specific facts showing that there is a genuine issue for trial.”)
(citing Fed. R. Civ. P. 56(c)). Mr. Lazarenko has not pointed the Court to any affidavits,
declarations, or other significantly probative evidence to support his contention that
Liechtenstein’s restraint confers an interest on him. He therefore has failed to meet his burden.
16
Mr. Lazarenko also has failed to show that any derivative, contingent interest he
might have based on the Liechtenstein freeze order would be sufficient under United States law
to give him standing as a claimant to the Liechtenstein Accounts. See All Assets VII, 2020
WL 1615870, at *8. Mr. Lazarenko argues that the proceedings in Liechtenstein are analogous
to proceedings “in the United States brought pursuant to 28 U.S.C. § 2467” because
“Section 2467 permits a district court to restrain property in the United States after a foreign
court enters a forfeiture judgment.” Opp. at 8; see also 28 U.S.C. § 2467(b)(1) (permitting a
foreign nation to apply to “have a forfeiture or confiscation judgment registered and enforced by
a district court of the United States”). He purports to find support for his alleged interest in cases
in which United States courts have determined that judgment creditors have standing to intervene
in Section 2467 forfeiture proceedings. See Opp. at 8-9 (citing In re $6, 871, 042.36, 217 F.
Supp. 3d 84 (D.D.C. 2016), and In re Arelma, S.A., Misc. No. 16-1339, 2019 WL 3084706(D.D.C. July 15, 2019)). As the United States correctly points out, however, these cases, at best,
“only support the right of the lienholder or secured judgment creditor to assert standing to
contest the forfeiture of restrained assets or enforcement of a foreign forfeiture judgment.” US
Reply and Opp. at 5.
In re $6,871,042.36 concerned the restraint and forfeiture of funds owned by
Kesten Development Corporation (“Kesten”), a British Virgin Islands company. 217 F. Supp. 3d
at 87-88. In that case, liquidators of a bank had obtained a judgment against Kesten in the
British Virgin Islands. Id. at 88. Two years later, Brazil obtained a judgment against Kesten.
The Southern District of New York “recognized [recognized Brazil’s] superior title to the
[Kesten funds], [] ordered the United States to transfer the funds to the São Paulo Court,” and
granted Brazil’s request for a protective order under Section 2467. Id. at 89-90. The bank
17
liquidators sought to intervene and dissolve the protective order. Id. at 90. The court concluded
that the liquidators had standing because they “sustained an injury . . . because the Protective
Order has placed on hold the resolution of the Liquidators' claim to the [Kesten funds].” Id.
at 93. If that case is analogous to this case – a questionable proposition, given that Ukraine has
not obtained any judgment against Mr. Lazarenko – it is Ukraine, not Mr. Lazarenko, that is the
analogue to the liquidators.
The same is true for In re Arelma, S.A. In that case, the district court found that a
class of individuals in possession of two judgments against an estate had standing to intervene in
the United States’ effort to enforce a Philippines forfeiture judgment against that estate. 2019
WL 3084706, at *3. Again, because Ukraine is the entity that Mr. Lazarenko urges has a “lien”
on the Liechtenstein Accounts, it is Ukraine that stands in the place of the class in this analogy.
Mr. Lazarenko therefore can find no support in this case.
Finally, Mr. Lazarenko argues that he will suffer an injury if the funds in the
Liechtenstein Accounts are made unavailable to satisfy a criminal judgment in Ukraine. But this
injury is insufficiently “concrete and particularized and actual or imminent” to satisfy Article III
standing requirements. See Spokeo, Inc. v. Robins, 136 S. Ct. at 1548. It is possible that, at
some point in the future, Ukraine will obtain a criminal judgment against Mr. Lazarenko. It is
also possible that, at that time, Ukraine will wish to satisfy that judgment using the funds in the
Liechtenstein Accounts. But this Court can only speculate as to whether or when these events
might occur. This Court certainly cannot be sure that the Liechtenstein Accounts are the only
assets that Mr. Lazarenko might use to pay any potential future liability. When the injury is this
speculative, it does not amount to one “that can be redress[ed], at least in part, by a return of the
property.” See United State v. One Lincoln Navigator, 328 F.3d at 1013; cf. Doraville
18
Props., 299 F. Supp. 3d at 137 (holding that beneficiaries of discretionary trusts who have only a
future, contingent interest in trust assets have an interest that is too hypothetical to create
standing to contest forfeiture of the trust assets).
Mr. Lazarenko has not carried his burden of showing, by a preponderance of the
evidence, that the restraint of the Liechtenstein Accounts confers standing on him.
b. Ownership interest
In his briefing, Mr. Lazarenko does not argue that he has an ownership interest in
the Liechtenstein Accounts. But because Mr. Lazarenko’s 2016 interrogatory responses state
that he is “owner” of the Liechtenstein Accounts, US App’x at 731, and ownership interests
“may serve as the basis for a claimant’s entitlement to contest a civil forfeiture,” All
Assets IV, 959 F. Supp. 2d at 99, this Court will briefly address whether he has demonstrated
any ownership interest that could give him standing.
First, there is no evidence in the record to suggest that Mr. Lazarenko has an
ownership interest in the Liechtenstein Assets. In fact, the evidence suggests precisely the
opposite. The Liechtenstein Accounts are not held in Mr. Lazarenko’s name. Instead, they are
held in the names of Beranco Engineering Establishments, Ylorex Establishments, and Tanas
AG. See US App’x at 513, 542; Translations at 5, 12. Mr. Lazarenko is listed as neither an
account signatory for nor a beneficial owner of the accounts. See US App’x at 513, 518,
Translations at 3, 11 (Beranco); US App’x at 532, 542, 544, Translations at 6, 8-10 (Ylorex); US
App’x at 547, Translations at 4-5, 12-13 (Tanas).
Second, although case law indicates that “indicia of dominion and control,” such
as “possession, title, and financial stake,” would be supportive of an ownership interest, Mr.
Lazarenko has provided no such evidence. See All Assets VII, 2020 WL 1615870, at *13.
19
Indeed, during the course of his criminal proceedings, he stated that he had “gifted assets in
Liechtenstein” that “are under restraint and forfeiture in the DC forfeiture case, Antigua and
Liechtenstein.” US App’x at 571. He has also stated in interrogatory responses that “he never
received bank statements for these accounts, or certainly did not receive them on a regular
basis,” and that he “has no specific recollection of any financial transactions or decision relating
to these accounts.” Id. at 730. Based on this evidence, Mr. Lazarenko would suffer no injury if
the Liechtenstein Accounts were forfeited to the United States because he does not have even a
facially colorable ownership interest in those accounts. See United States v. Emor, 785 F.3d
at 676 (stating that “it is the injury to the party seeking standing that remains the ultimate
focus.”).
Mr. Lazarenko has failed to show, by a preponderance of the evidence, that he has
a colorable interest in the Liechtenstein Accounts. See United States v. $557,933.89, More or
Less, in U.S. Funds, 287 F.3d at 79. The Court concludes that Mr. Lazarenko lacks
constitutional standing to contest the forfeiture of the Liechtenstein Accounts.
B. Statutory Standing
1. Legal Standard
In order to demonstrate statutory standing in an in rem forfeiture proceeding, a
claimant must have “assert[ed] [their] interest in the property in the manner set forth in the
Supplemental Rules.” All Assets VI, 228 F. Supp. 3d at 122 (citing 18 U.S.C. § 983(a)(4)(A);
All Assets IV, 959 F. Supp. 2d at 96 n.10). The statutory standing requirement is grounded in 18
U.S.C. § 983, which limits intervention in civil forfeiture actions to “any person claiming an
interest in the seized property” who “file[s] a claim asserting such person’s interest in the
property in the manner set forth in the Supplemental Rules.” Id. at § 983(a)(4)(A).
20
Supplemental Rule C requires a claimant to file a “verified statement of right or interest” that
“must describe the interest in the property that supports the person’s demand for its restitution or
right to defend the action.” SUPP. R. C(6)(a)(i)-(ii); see also 18 U.S.C. § 983(a)(4)(A) (“[A]ny
person claiming an interest in the seized property may file a claim asserting such person’s
interest in the property[.]”). “This statement is known as a ‘verified claim’ and is essential to
conferring statutory standing upon a claimant in a forfeiture action.” United States v. 8 Gilcrease
Lane, 638 F.3d at 299 n.1 (alterations omitted) (citing United States v. $125,938.62, 370
F.3d 1325, 1328 (11th Cir. 2004) (per curiam)). Supplemental Rule G requires that a claimant
contesting the United States’ forfeiture file a claim that “state[s] the claimant’s interest in the
property.” SUPP. R. G (5)(a)(i)(B). 4
Courts generally expect claimants to “adhere strictly” to these statutory
requirements governing civil forfeiture proceedings. All Assets II, 664 F. Supp. 2d at 101;
United States v. Funds from Prudential Securities, 300 F. Supp. 2d 99, 104 (D.D.C. 2004) (“[I]n
order to have standing to challenge a forfeiture proceeding, a claimant must strictly comply with
the pleading requirements of Supplemental Rule C(6).”) (internal citation omitted) (referring to
Supplemental Rule C(6), the predecessor of Supplemental Rules G(5) and G(6)).
While courts may “excuse” procedural failings “so long as the ‘underlying goals
of’ the Supplemental Rules ‘are not frustrated,’” All Assets II, 664 F. Supp. 2d at 102 (citing
United States v. Funds From Prudential Sec., 300 F.Supp.2d at 104 (collecting cases)), the Third
Circuit has identified compliance with the Supplemental Rule C’s verified claim requirement as
4
Supplemental Rule G went into effect on December 1, 2006. See 2006 U.S.
ORDER 20 (C.O. 20) (Apr. 12, 2006), available at
http://www.supremecourt.gov/orders/courtorders/frcv06p.pdf (stating that Supplemental Rule G
governs cases filed after December 1, 2006, and “insofar as just and practicable, all proceedings
then pending”).
21
the “most significant requirement,” United States v. $487,825 in U.S. Currency, 484
F.3d 662, 664 (3d Cir. 2007), as amended (May 14, 2007); see also United States v. $39,557.00,
More or Less, in U.S. Currency, 683 F. Supp. 2d 335, 339 (D.N.J. 2010) (saying the same about
Supplemental Rule G). This is because the requirement for a verified claim serves the dual
purposes of (1) forcing claimants to “come forward as quickly as possible . . . so that the court
may hear all interested parties and resolve the dispute without delay,” and (2) minimizing “the
danger of false claims by requiring claims to be verified or solemnly affirmed.”
United States v. $487,825 in U.S. Currency, 484 F.3d at 664-65; see also United States v. All
Funds on Deposit with R.J. O’Brien & Assocs., 783 F.3d 607, 618 (7th Cir. 2015). “A claimant
who fails to file a verified [claim] has no standing to contest a forfeiture.” United
States v. $487,825 in U.S. Currency, 484 F.3d at 665.
2. Analysis
Even if Mr. Lazarenko had satisfied constitutional standing requirements, he must
also satisfy statutory standing requirements. See United States v. $17,900 in U.S. Currency, 859
F.3d at 1089. The United States argues that Mr. Lazarenko lacks statutory standing to contest
forfeiture of the Liechtenstein Accounts because his claim “does not set forth the nature of” his
interest in the accounts. See Mem. Mot. Strike at 12. It also argues that Mr. Lazarenko’s “most
recent answer to the Amended Complaint is equally unclear in establishing the nature of his
claim to the Defendant Liechtenstein [Accounts].” Id. Mr. Lazarenko contends that he has
statutory standing to contest the forfeiture of the Liechtenstein Accounts because he filed a
verified claim to the assets. See Opp. at 6. He also states that he “later provided interrogatory
responses about the nature of his claim to the Liechtensteiner [accounts].” Id. He alleges that
22
through a combination of these two filings, he has explained the nature of his interest in the
accounts. Id.
While it is true that Mr. Lazarenko filed a verified claim as required by
Supplemental Rule C, see SUPP. R. C(6)(a), merely filing a document entitled “verified claim” is
not sufficient to satisfy the Supplemental Rules. Supplemental Rule C also requires that the
claim “describe the interest in the property that supports the person’s demand for its restitution or
right to defend the action.” SUPP. R. C(6)(a)(ii) (emphasis added); see also SUPP. R.
G(5)(a)(i)(B) (requiring that a claimant contesting the United States’ forfeiture file a claim that
“state[s] the claimant’s interest in the property”). This Mr. Lazarenko failed to do. Although his
amended claim states that he “claims” the Liechtenstein Accounts, nowhere does it describe his
interest in those assets. See generally Amended Claim. The amended claim identifies specific
interests in other defendant assets, but it is silent regarding the Liechtenstein Accounts. See
Amended Claim at 5. Mr. Lazarenko therefore has not “adhere[d] strictly” to the statutory
requirements governing civil forfeiture proceedings. All Assets II, 664 F. Supp. 2d at 101.
Mr. Lazarenko’s interrogatory responses do not cure the deficiencies in his claim.
The Supplemental Rules are clear: the verified claim, not some other filing, must describe the
claimant’s interest. Of course, in forfeiture actions, courts may excuse procedural failings. See
All Assets II, 664 F. Supp. 2d at 102. But courts may only do so when those procedural failings
do not frustrate the underlying goals of the Supplemental Rules. Id. Mr. Lazarenko issued these
interrogatory responses eleven years after filing his amended claim and only did so in response to
interrogatories posed by the United States. See U.S. App’x at 729. The lapse in time between
when Mr. Lazarenko filed his amended claim and when he first described his interest in his
interrogatory responses frustrates the goals of the Supplemental Rules by preventing the
23
Court from resolving this dispute “without delay.” See United States v. $487,825 in U.S.
Currency, 484 F.3d at 664-66.
Mr. Lazarenko responds that the United States has long been “afforded the
opportunity to follow up” on the nature of his interest in the Liechtenstein Accounts. Opp. at 6.
It is not the responsibility of the United States, however, to correct Mr. Lazarenko’s flawed
claim. Moreover, the United States did follow up by posing the very interrogatories to which
Mr. Lazarenko now turns for support. See US Interrog.; US App’x at 729. Mr. Lazarenko’s
responses to the interrogatories provide further support for the United States’ argument that he
lacks statutory standing. Moreover, the Supplemental Rules place no time limit on the United
States’ ability to move to strike a claim for lack of standing. See SUPP. R. G(8)(c)(i) (stating that
the government may move to strike a claim for lack of standing “[a]t any time before trial”). The
United States therefore is well within its rights to move to strike Mr. Lazarenko’s claim now.
Mr. Lazarenko’s amended answer similarly provides him no support for his
position. In its amended complaint, the United States alleges that Mr. Lazarenko “was the
beneficial owner” of several foundations with bank accounts in Liechtenstein and also “was the
beneficial owner” of the assets within those accounts. Amended Complaint ¶ 114. The
complaint also alleges that the funds in those accounts were eventually transferred into the
Liechtenstein Accounts. Amended Complaint ¶ 119. The complaint does not state that Mr.
Lazarenko is the beneficial owner of the Liechtenstein Accounts themselves. It says nothing
about Mr. Lazarenko’s relationship to the funds after they were settled in the Liechtenstein
Accounts. See generally Amended Complaint.
In his amended answer, Mr. Lazarenko admits “that funds belonging to him had
been deposited in several bank accounts in Liechtenstein.” Second 2017 Answer ¶ 114. He
24
further admits “that the accounts in the name of Beranco Engineering, Ylorex Establishment and
Tanas AG contain funds of which he is the beneficial owner.” Second 2017 Answer ¶ 119. As
the United States correctly observes, however, Mr. Lazarenko does not specify in which “funds
within each of the Defendant Liechtenstein [Accounts he] claims to have a beneficial ownership
interest.” Mem. Mot. Strike at 12 (citing SUPP. R. C(6)(a)(i)-(ii)). And, importantly, responsive
pleadings should only “admit or deny the allegations asserted . . . by an opposing party.” Fed. R.
Civ. P. 8(b)(1)(B). They should not respond to unasserted allegations. The United States did not
allege that Mr. Lazarenko was the beneficial owner of the Liechtenstein Accounts or of the funds
now located therein. It only stated that he had been the beneficial owner of those funds when
they were held in the previous accounts. See Amended Complaint ¶ 114-119. Mr. Lazarenko’s
admission of something that was not alleged cannot be used to satisfy the claim requirements of
the Supplemental Rules.
Finally, to the extent that Mr. Lazarenko argues that the relation back doctrine
gives him a legal interest in the Liechtenstein accounts because his later pleadings – namely, his
answer – should be construed to amend his amended claim, the Court rejects that argument. See
Opp. at 3 (quoting Mr. Lazarenko’s 2016 interrogatory responses) (stating that Mr. Lazarenko
“has a legal interest in these accounts under the relation back doctrine”). Rule 15(c) of the
Federal Rules of Civil Procedure states that an “amendment to a pleading relates back to the date
of the original pleading when . . . the amendment asserts a claim or defense that arose out of the
conduct, transaction, or occurrence set out – or attempted to be set out – in the original
pleading.” Fed. R. Civ. P. 15(c)(1)(B). This rule provides for relation back when an amended
version of the same pleading is filed. Here, Mr. Lazarenko did not file an amended claim that
25
asserts an interest in the Liechtenstein Accounts. Rather, he filed an answer and responses to
interrogatories. There is therefore nothing to relate back. 5
For these reasons, the Court concludes that Mr. Lazarenko lacks statutory
standing to contest forfeiture of the Liechtenstein Accounts.
C. Prudential Standing
1. Legal Standard
Prior to the Supreme Court’s decision in Lexmark Int’l, Inc. v. Static Control
Components, Inc., 572 U.S. 118 (2014), prudential standing was understood to encompass “at
least three broad principles: ‘the general prohibition on a litigant’s raising another person’s legal
rights, the rule barring adjudication of generalized grievances more appropriately addressed in
the representative branches, and the requirement that a plaintiff’s complaint fall within the zone
of interests protected by the law invoked.’” Id. at 126 (quoting Elk Grove Unified Sch. Dist. v.
Newdow, 542 U.S. 1, 12 (2005)). In Lexmark, however, the Court clarified that the
zone-of-interests test is not a prudential consideration, but rather “requires [courts] to determine,
using traditional tools of statutory interpretation, whether a legislatively conferred cause of
action encompasses a particular plaintiff’s claim.” Id. at 127. “[P]ut another way, a court asks
whether the [claimant] has a cause of action under the statute.” Crossroads Grassroots Pol’y
5
The Court notes that Mr. Lazarenko has long had the opportunity to amend his
claim. See All Assets VII, 2020 WL 1615870, at *11. In 2015, Mr. Lazarenko indicated that he
planned to amend his claim after this Court ruled on a motion for leave to amend his answer.
See id. The Court granted Mr. Lazarenko’s motion for leave to amend his answer in
January 2017. See id. (citing United States v. All Assets Held at Bank Julius Baer & Co.,
Ltd., 229 F. Supp. 3d 62 (D.D.C. 2017)). Almost four years passed without Mr. Lazarenko
seeking leave to amend his claim. In his motion for reconsideration of the Court’s decision in
All Assets VII, Mr. Lazarenko for the first time requested leave to amend his claim to describe
his interest in the Balford Trust. See Civil Action No. 04-0798, 2020 WL 6591391, at *7. This
Court denied the request as futile. See id. at *8.
26
Strategies v. FEC, 788 F.3d 312, 319 (D.C. Cir. 2015). The Court in Lexmark also pointed out
that it had already moved the rule against “generalized grievances” out of the prudential standing
bucket. See Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. at 137 n.3
(discussing Lance v. Coffman, 549 U.S. 437, 439 (2007) (per curiam); DaimlerChrysler Corp. v.
Cuno, 547 U.S. 332, 344-46 (2006); and Lujan v. Defs. of Wildlife, 504 U.S. 555, 573-74
(1992)). Rather than invoking prudential concerns, the Court clarified, the prohibition on raising
generalized grievances exists because “such suits do not present constitutional ‘cases’ or
‘controversies.’” Id.Thus, the only remaining principle that may arguably be considered “prudential”
in nature is the rule against raising another person’s legal rights. Indeed, the Supreme Court has
characterized this rule as prudential as recently as June of 2020. See June Med. Servs., L.L.C. v.
Russo, 140 S. Ct. 2103, 2117 (2020). According to this rule, a party “generally must assert his
own legal rights and interests and cannot rest his claim to relief on the legal rights or interests of
third parties.” Warth v. Saldin, 422 U.S. 490, 499 (1975). “This rule assumes that the party with
the right has the appropriate incentive to challenge (or not challenge) governmental action and to
do so with the necessary zeal and appropriate presentation.” Kowalski v. Tesmer, 543
U.S. 125, 129 (2004).
2. Analysis
The United States argues that Mr. Lazarenko violates prudential standing
principles by raising another person’s legal rights. See Mem. Mot. Strike at 17. It states that
because Mr. Lazarenko gifted the funds in the Liechtenstein Accounts to his family members, he
is improperly raising their legal rights. Id. Mr. Lazarenko responds that prudential standing is
irrelevant because he is not raising a claim on any other party’s behalf. See Opp. at 10. He
27
argues that the Court need not conduct a prudential standing analysis. Because the Court has
already concluded that Mr. Lazarenko lacks both statutory and constitutional standing to contest
forfeiture of the Liechtenstein Accounts, the prudential standing question is not dispositive.
Moreover, the Court agrees with Mr. Lazarenko that he is clearly asserting his own standing to
contest forfeiture of the Liechtenstein Accounts. A prudential standing analysis therefore is
unnecessary.
IV. LEAVE TO AMEND CLAIM
Mr. Lazarenko requests that, in the event the Court concludes that his claim is
insufficient, the Court grant him leave to amend his claim. See Opp. at 11. His proposed
amendment would state:
I have an interest in these assets because the government of Ukraine
has filed a lis pendens on all of the in rem accounts in Liechtenstein
to satisfy any criminal judgment imposed against me in Ukraine.
This lis pendens has been pending for many years. If I prevail in
this forfeiture action, the funds can be used to satisfy my debts to
Ukraine.
Prop. Amend. at 1-2. Mr. Lazarenko states that the United States would not be prejudiced by
permitting him to amend his claim because it has known of the nature of his interest for at least
four years. Id. The United States responds that the Court should deny Mr. Lazarenko’s request
as futile because the amendment “would not clarify the nature of his claim to the Defendant
Liechtenstein Assets.” US Reply and Opp. at 8.
“Although the grant or denial of leave to amend is committed to a district court’s
discretion, it is an abuse of discretion to deny leave to amend unless there is sufficient reason,
such as ‘undue delay, bad faith or dilatory motive . . . repeated failure to cure deficiencies by
[previous] amendments . . . [or] futility of amendment.” Firestone v. Firestone, 76
28
F.3d 1205, 1208 (D.C. Cir. 1996) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)). The
Court has concluded that the restraining order pertaining to the Liechtenstein Accounts does not
afford Mr. Lazarenko an interest in those accounts that satisfies Article III standing
requirements. The proposed amendment, which purports to further explain this interest, does not
alter this conclusion. Mr. Lazarenko’s proposed amendment therefore would be futile. Mr.
Lazarenko’s motion for leave to amend his claim will be denied.
V. CONCLUSION
For the foregoing reasons, the Court will grant the United States’ motion [Dkt.
No. 1275] to strike Mr. Lazarenko’s claim to the Liechtenstein Accounts and will deny
Mr. Lazarenko’s cross-motion [Dkt. No. 1319] to amend his amended claim. An Order
consistent with this Opinion will issue this same day.
SO ORDERED.
/s/
PAUL L. FRIEDMAN
United States District Judge
DATE: December 23, 2020
29