USA v. Contents of Smith Barney Citig, et al

Filing

OPINION filed : AFFIRMED the judgment of the district court, decision not for publication pursuant to local rule 206. Danny J. Boggs, AUTHORING Circuit Judge; Alan E. Norris, Circuit Judge and Raymond M. Kethledge, Circuit Judge.

Case: 09-3466

Document: 006111326202

Filed: 06/05/2012

Page: 1

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 12a0571n.06
No. 09-3466

FILED

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

Jun 05, 2012

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)
Plaintiff-Appellee,
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v.
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CONTENTS OF SMITH BARNEY CITIGROUP )
ACCOUNT NO. 34-19, ET AL.,
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Defendants,
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JAMES DOYLE,
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Claimant-Appellant.
)

LEONARD GREEN, Clerk

UNITED STATES OF AMERICA,

Before:

On Appeal from the United States
District Court for the Southern
District of Ohio

BOGGS, NORRIS, and KETHLEDGE, Circuit Judges.
BOGGS, Circuit Judge. James Doyle appeals the district court’s grant of summary

judgment that resulted in the civil forfeiture of approximately $500,000 that Doyle had on deposit
in a Smith Barney Citigroup account. The district court granted summary judgment because Doyle
failed to prove that he was an innocent owner of the money under 18 U.S.C. § 983(d)(3). We affirm
the district court’s decision.
I

Case: 09-3466

Document: 006111326202

Filed: 06/05/2012

Page: 2

No. 09-3466
United States v. Contents of Smith Barney Citigroup Account No. 34-19
James Doyle was a retired American Airlines ramp-services supervisor in 2000, when he met
and began dating Harriet Warshak. R.116 at 6–7. Doyle soon began to work for Harriet Warshak’s
son, Steve Warshak.
In 2000, Doyle helped Steve string advertisements on shoelaces for one business. Id. at 7.
He was paid $100. Id. at 8. In 2001, Doyle worked for Warshak’s company, Lifekey, sending out
mailings. He was paid roughly $5,000 that year. Id. at 10. In 2002, Doyle worked at least 40 hours
per week for Lifekey. Ibid. He was paid about $14,000 for his work that year. Id. at 21. In 2003,
Doyle worked at least 40 hours per week at Lifekey. He was paid $56,475 in wages and $34,493 in
non-employee compensation. Ibid. In 2004, Doyle received wages from Lifekey as well as
Berkeley, another company operated by Steve Warshak. He worked in shipping for both companies.
Id. at 10–11. Lifekey paid Doyle $8,000 in wages and Berkeley paid him $94,000 in wages. Id. at
21.
On September 22, 2004, Steve Warshak gave Doyle a check, drawn on the account of TCI
Media, one of Steve’s companies, for $1,000,000. Steve, when presenting the check, told Doyle:
“Here, that’s for everything you have done.” R.116 at 13. Doyle admitted he was very surprised to
receive the check. Warshak gave Doyle the check at an informal get-together at Harriet Warshak’s
house, specifically stating that “I started to cry because never did I expect anything like that.” Id.
at 13.1

1

Warshak also gave his mother and his two sisters checks for $1,000,000 each. The jury in
Warshak’s criminal trial found that these checks represented proceeds from Warshak’s illegal
activities.
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Case: 09-3466

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No. 09-3466
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Doyle deposited the one-million-dollar check into his Fifth Third bank account on October
1, 2004. R.116 at 14. Doyle reported the $1 million as “Other Income” on his 2004 federal-incometax return. Id. at 20. This was in addition to $111,000 he reported in wages for that year. Ibid.
Doyle then wrote checks from the Fifth Third account to the Smith Barney account numbered 30-12
for $3355.64, on December 6, 2004, and $500,000, on March 7, 2005. Id. at 14.
Steve Warshak was convicted of multiple counts of mail fraud, bank fraud, and money
laundering after a jury trial. See United States v. Warshak, 631 F.3d 266 (6th Cir. 2010) (affirming
Warshak’s convictions but vacating his sentence and remanding for resentencing). The jury’s verdict
established that the contents of Doyle’s Smith Barney account number 30-12 contained assets
directly traceable to money laundering. R.119 at 1. The government moved to forfeit the money in
the account, pursuant to 18 U.S.C. § 983.
On May 2, 2006, Doyle filed a claim in the district court pursuant to 18 U.S.C. §
983(a)(4)(A), asserting his ownership of the assets in Smith Barney Account Number 30-12. R.36.
Because the government had satisfied its burden of proving, by a preponderance of the evidence, that
the contents of the account were subject to forfeiture, the burden is on Doyle, as claimant, to
establish that he was an “innocent owner” by a preponderance of the evidence. 18 U.S.C. §
983(d)(1). Because the $1 million-dollar check had been found to have been the product of
Warshak’s fraudulent activities, Doyle was required to prove (1) that he had been a bona fide
purchaser for value and (2) that he “did not know and was reasonably without cause to believe” that
the money was subject to forfeiture. 18 U.S.C. § 983(d)(3)(A). Doyle argued that he earned the onemillion-dollar check from Warshak, as it was meant to compensate him for the work he did for
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Warshak’s companies in 2000 and 2001, when he was paid very little, as well to be a bonus for his
work during those years. R.116 at 15. He argued that no portion of the money was a gift. R.116 at
21. He stated that he was never aware of any criminal activity on the part of Warshak—he only
became aware of a criminal investigation when Warshak’s business was raided in 2006. Id. at 22.
The district court determined that Doyle’s claim failed on the first element—that he was a
bona fide purchaser for value. The court stated in support that Doyle had been compensated in
wages and non-employee compensation for the work he had done for Warshak. R.119 at 9. The
court noted that there was no evidence that any of Warshak’s other employees earned equivalent
compensation for shipping and packing and that there was no evidence that the industry places such
a value on those services. Id. at 10. The district court therefore granted the government’s motion
for summary judgment.
Doyle filed this timely appeal.
II
We review the decision to grant summary judgment in a forfeiture action de novo. United
States v. $5,000 in U.S. Currency, 40 F.3d 846, 848 (6th Cir. 1994). Granting summary judgment
is appropriate when there is “no genuine issue as to any material fact” and “the moving party is
entitled to judgment as a matter of law.” FED . R. CIV . P. 56(a). When reviewing a summary
judgment motion, we do not assess credibility or weigh the evidence. We view the evidence in the
light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986).

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No. 09-3466
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The sole issue on appeal is whether Doyle put forth evidence giving rise to a genuine
question of whether he was a “bona fide purchaser” of the one-million-dollar check. To be a bona
fide purchaser, one must “‘give value . . . in an arms’-length transaction with the expectation that
[one] would receive equivalent value in return.’” United States v. One 1996 Vector M12, 442 F.
Supp. 2d 482, 486 (S.D. Ohio 2005) (quoting 21 U.S.C. § 853(n)(6)(B)).2
We find that the record below supports the district court’s ruling. We agree with the district
court that Doyle has put forth no evidence to suggest that he provided Warshak with good or services
equivalent in value to the one-million-dollar check he received. The context of the presentation of
the check suggests that Warshak was treating Doyle like family members to whom he also gave
similar checks. There is no indication that Doyle provided work to Warshak with an expectation that
he would one day be compensated by such a large sum. In fact, Doyle admitted that he was very
surprised to receive the check. There is simply no indication that the check was the product of an
arms’-length transaction for value.
III
For the foregoing reasons, the judgment of the district court is AFFIRMED.

2

The civil-forfeiture statute, 18 U.S.C. § 983, does not provide a definition of “bona fide
purchaser for value,” so courts have borrowed the definition from the Continuing Criminal
Enterprise Act, 21 U.S.C. § 853(n)(6)(B). Ibid.
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