United States of America v. Bank Account et al

Filing 16

MEMORANDUM OPINION. Signed by Chief Judge Sharon Lovelace Blackburn on 3/6/2013. (KAM, )

FILED
2013 Mar-06 AM 10:27
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
vs.
ANY AND ALL FUNDS CONTAINED
IN BANCORPSOUTH ACCOUNT NO.
XXXX-581-3, HELD IN THE NAME OF
NAGEL ENTERPRISES INC.; ANY
AND ALL FUNDS CONTAINED IN
BANCORPSOUTH ACCOUNT NO.
XXXX-746-5, HELD IN THE NAME OF
JED L. NAGEL; ANY AND ALL
FUNDS CONTAINED IN SOUTHCITY
BANK ACCOUNT NO. XXX5204,
HELD IN THE NAME OF NAGEL
ENTERPRISES, INC., d/b/a Abanks
Mortuary; ANY AND ALL FUNDS
CONTAINED IN SOUTHCITY BANK
ACCOUNT NO. XXX3977, HELD IN
THE NAME OF JED. L. NAGEL; ANY
AND ALL FUNDS CONTAINED IN
SOUTHCITY BANK ACCOUNT NO.
XXX4893, HELD IN THE NAME OF
NAGEL ENTERPRISES, INC. d/b/a
Abanks Mortuary,
Defendants.

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CASE NO. 2:12-CV-0735-SLB

MEMORANDUM OPINION
This case is presently pending before the court on Motions to Dismiss and Motions
to Strike filed by claimants, Nagel Enterprises, Inc., (doc. 9), Abanks Mortuary and
Crematory, (doc. 10), and Jed L. Nagel, (doc. 11). The United States has filed a Verified

Complaint for Forfeiture in Rem, seeking forfeiture of defendant funds held in the identified
accounts. (Doc. 1.) Claimants allege the Complaint is due to be dismissed because it is not
properly verified, (see doc. 9 at 2; doc. 10 at 2-3; doc. 11 at 2), it does not “state sufficiently
detailed facts to support a reasonable belief that the government will be able to meet its
burden of proof at trial,” (see doc. 9 at 2-3; doc. 10 at 3; doc. 11 at 2-3), and “[t]he Complaint
fails to state facts on which relief can be granted,” (see doc. 9 at 3; doc. 10 at 3; doc. 11 at
3). Also, claimants have moved to strike ¶ 33 of the Complaint as irrelevant to the defendant
bank accounts. (See doc. 9 at 7-8; doc. 10 at 8; doc. 11 at 7.) Upon consideration of the
record, the submissions of the parties, and the relevant law, the court is of the opinion that
claimants’ Motion to Dismiss and Motions to Strike, (docs. 9, 10, 11) are due to be denied.
I. MOTION TO STRIKE
Claimants have filed a Motion to Strike paragraph 33 of the Verified Complaint,
which refers to the guilty pleas of Demosthenes Lalisan, the Director of the Alabama Organ
Center [AOC], and Richard Hicks, the Assistant Director of AOC. They contend:
The matter of the AOC employees pleading guilty has not been set out
in the Complaint with any facts that relate their pleas to the Defendant
property. From aught that appears, their pleas do not relate to the Defendant
property. Supplemental Rule G[(2)](f) requires facts to be alleged in the
Complaint, but those allegations merely hint at some connection between those
pleas and this matter without factually relating them. The mere fact that two
[people pled] guilty to some offenses which could as well arise from their
relationship with their employer as from any relationship with the Claimants.
[sic] The suggestion of a relationship is clear enough, but there are no
relational facts as Supplemental Rule G[(2)](f) requires. So, the guilty pleas
of the two AOC employees add nothing to the case for forfeiture and should
be struck from the Complaint.
2

(Doc. 11 at 7; see also doc. 9 at 7-8; doc. 10 at 8.)
“The court may strike from a pleading . . . any redundant, immaterial, impertinent, or
scandalous matter.” Fed. R. Civ. P. 12(f). The allegation – that two AOC employees,
involved in the fraud at issue in this case, have pled guilty to health care fraud, mail fraud,
and conspiracy – is not redundant, immaterial, impertinent, or scandalous.
The Verified Complaint alleges that Lalisan approved invoices containing false
charges, and, in return, Abanks Mortuary sent checks to Lalisan and Hicks, written on the
BancorpSouth account XXXX-581-3 and SouthCity Bank account XXX4893. The court
takes judicial notice of the Amended Information in United States v. Lalisan and Hicks, Case
No. 2:11-CR-0315-RDP-TMP, doc. 6 (N.D. Ala. Sept. 28, 2011).1

The Amended

Information alleges that the owner of a Birmingham funeral home made kickback payments
to Lalisan and Hicks on accounts owned or controlled by the owner. The kickback payments
were in return for “recommend[ing] and promot[ing] AOC’s employment of the Funeral
Home for services to be provided to AOC and paid for by UAHSF,” and for “approv[ing]
payments to the Funeral Home from UAHSF.” Id. ¶¶ 19-20. Abanks Mortuary was the only
funeral home involved in AOC’s tissue procurement process. (Doc. 1 ¶ 18.)

1

See In re Delta Resources, Inc., 54 F.3d 722, 725 (11th Cir. 1995)(quoting United
States v. Jones, 29 F.3d 1549, 1553-54 (11th Cir.1994)); see also Horne v. Potter, 392 Fed.
Appx. 800, 802 (11th Cir. 2010)(citing, inter alia, Fed. R. Evid. 201(b)).
3

The court finds that the allegation in the Complaint that Lalisan and Hicks have pled
guilty to taking kickbacks from Abanks is not redundant, immaterial to the civil forfeiture
action, impertinent, or scandalous. Therefore, claimants’ Motion to Strike will be denied.
II. MOTIONS TO DISMISS
A. MOTION TO DISMISS STANDARD
Claimants has moved to dismiss plaintiff’s Verified Complaint for failure to state a
claim upon which relief can be granted. The purpose of such a motion, authorized by Rule
12(b)(6) of the Federal Rules of Civil Procedure, is to test the facial sufficiency of the
plaintiff’s statement of a claim for relief. Brooks v. Blue Cross and Blue Shield of Florida,
Inc., 116 F.3d 1364, 1367 (11th Cir. 1997). “Fed. R. Civ. P. 8(a)(2) requires that a pleading
contain a short and plain statement of the claim showing that the pleader is entitled to relief
in order to give the defendant fair notice of what the claim is and the grounds upon which
it rests.”

American Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1288 (11th Cir.

2010)(internal citations and quotations omitted).
When addressing a 12(b)(6) motion to dismiss, the court accepts the allegations in the
Complaint as true and construes those allegations in the light most favorable to plaintiff.
Ironworkers Local Union 68 v. AstraZeneca Pharmaceuticals, LP, 634 F.3d 1352, 1359
(11th Cir. 2011)(quoting Am. Dental Ass’n, 605 F.3d at 1288). To survive a Motion to
Dismiss, “the complaint must contain sufficient factual matter . . . to state a claim to relief
that is plausible on its face.” Id. (quoting Am. Dental Ass’n, 605 F.3d at 1289 (quoting Bell

4

Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)))(internal quotations omitted). A claim
is “plausible” if the facts are sufficient “to allow[ ] the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009).
Notwithstanding the Rule 12(b)(6) standard, Supplemental Rule G(2)
also governs the sufficiency of the complaint in civil forfeiture cases. Fed.
Supp. R. G(8)(b)(ii). Supplemental Rule G(2) requires a verified complaint
stating the grounds for subject matter jurisdiction, in rem jurisdiction, and
venue. Fed. Supp. R. G(2)(a) & (b). The complaint must also describe the
property with reasonable particularity; if the property is tangible, allege its
current location and its location when seizure occurred; and identify the statute
enabling forfeiture. Fed. Supp. R. G(2)(c)-(e). Finally, the complaint must
“state sufficiently detailed facts to support a reasonable belief that the
government will be able to meet its burden of proof at trial.” Fed. Supp. R.
G(2)(f). “No complaint may be dismissed on the ground that the Government
did not have adequate evidence at the time the complaint was filed to establish
the forfeitability of the property.” 18 U.S.C. § 983(a)(3)(D); Fed. Supp. R.
G(8)(b)(ii).
United States v. Nineteen Thousand Eight Hundred Fifty Five ($19,855.00) Dollars in U.S.
Currency, No. 2:12-CV-146-WKW, 2012 WL 5869090, *1 (M.D. Ala. Nov. 19,
2012)(footnote omitted). “[The] standards [set forth in Fed. Supp. R G(2)] are more stringent
than the general pleading requirements set forth in the Federal Rules of Civil Procedure, . .
. an implicit accommodation to the drastic nature of the civil forfeiture remedy. See United
States v. Daccarett, 6 F.3d 37, 47 (2d Cir. 1993). Because the court finds that the Verified
Complaint meets the Fed. Supp. R. G(2)(f) standard, it will not discuss whether the Verified
Complaint meets the standards under Fed. R. Civ. P. 12(b)(6).

5

B. STATEMENT OF FACTS
In the Verified Complaint for Forfeiture in Rem, plaintiff alleges:
5. On August 10, 2011, agents of the Federal Bureau of Investigation
(“FBI”) restrained $137,798.20 contained in BancorpSouth Account No.
XXXX-581-3, held in the name of Nagel Enterprises, Inc.; $1,062,206.68
contained in BancorpSouth Account No. XXXX-746-5, held in the name of
Jed L. Nagel; $38,431.47 contained in SouthCity Bank Account No.
XXX5204, held in the name of Nagel Enterprises, Inc., d/b/a Abanks
Mortuary; $1,240,672.66 contained in SouthCity Bank Account No.
XXX3977,. held in the name of Jed L. Nagel, and $80,746.01 contained in
SouthCity Bank Account No. XXX4893, held in the name of Nagel
Enterprises, d/b/a Abanks Mortuary (hereafter, collectively, the “Defendant
Funds”), within the Northern District of Alabama.
6. The Defendant Funds remain within the Northern District of
Alabama.
...
14. The Alabama Organ Center (AOC) is a component of the
Department of Surgery for the University of Alabama Health Services
Foundation (UAHSF). UAHSF is responsible for the financial obligations of
AOC. All AOC officers and directors are employed by UAHSF.
15. The AOC is the designated federally approved organ procurement
organization for the state of Alabama. Its primary purpose is to provide organs
and tissue to persons in need of transplantation. The AOC is approved by the
Medicare program for reimbursement.
16. Since its founding, the AOC has provided thousands of kidneys for
transplantation, as well as hundreds of other transplantable organs such as
hearts, lungs, livers, and pancreases. In addition, the AOC harvests cadaveric
tissues such as bone, skin, corneas, ligaments, tendons, dura mater, and heart
valves.
17. Nagel Enterprises, Inc., is an Alabama corporation established in
1997, conducting business as Abanks Mortuary & Crematory. Jed L. Nagel
is the director of Nagel Enterprises d/b/a Abanks Mortuary.
6

18. In or around 2003, AOC undertook a quality improvement initiative
to centralize its tissue procurement process in one location, specifically the
Abanks Mortuary, in order to save the significant costs associated with tissue
procurement that had previously been performed using hospital operating
rooms.
19. The arrangement between Abanks and AOC called for Abanks to
provide transportation of the donor body from the referring hospital to the
embalming room at the Abanks facility in order to recover the tissue. AOC
was to pay Abanks a contracted fee for all costs associated with its services,
including transportation and use of the embalming room for tissue recovery
procedures.
20. In approximately June 2009, AOC completed construction of a
tissue recovery room, located on property adjacent to the Abanks mortuary and
owned by Jed Nagel, for exclusive use to conduct tissue recovery procedures
(hereafter, the “AOC facility”). Construction of the AOC facility eliminated
the need for use of the Abanks embalming room to recover cadaveric tissue,
however, Abanks still provided transportation services for the donor body from
the referring hospital to the AOC facility. AOC paid Nagel a monthly lease
amount for use of this property, that was billed separately from the
transportation services provided by Abanks.
21. The new AOC facility was in operation no later than July 2009.
22. As of July 2009, the Director of AOC was Demosthenes “Dem” Y.
Lalisan. The Associate Director of AOC as of July 2009 was Richard Alan
Hicks.
23. As of July 2009, no tissue recovery procedures were performed on
behalf of AOC in the Abanks embalming room.
24. Abanks continued to charge AOC for use of the Abanks embalming
room for tissue recovery cases after July 2009, when the only service Abanks
provided for those tissue recovery cases was transportation of the donor body.
25. The following table reflects the invoices submitted by Abanks to
AOC for payment that include false charges for use of the Abanks embalming
room for tissue recovery cases when no such service was provided by Abanks:

7

...
26. Each of the above invoices was submitted to the Director of AOC,
Demosthenes Lalisan, for approval, and was then forwarded on to UAHSF for
payment. UAHSF sent checks payable to Abanks Mortuary through the United
States Postal Service in payment of the above invoices.
27. Each check that was mailed to Abanks Mortuary, containing
payment for fraudulent charges, constitutes the proceeds of mail fraud, in
violation of 18 U.S.C. § 1341. The following table reflects some of the checks
that were mailed to Abanks Mortuary in payment for the invoices listed above.
...
28. Each of the checks listed above was deposited by Abanks Mortuary
into either BancorpSouth Account No. XXXX-581-3, or SouthCity Bank
account X4893, which constitutes a monetary transaction with the proceeds of
mail fraud, in violation of 18 U.S.C. § 1957.
29. BancorpSouth is, and was as of July 2009, a financial institution
insured by the Federal Deposit Insurance Corporation, operating in and
affecting interstate commerce.
30. SouthCity Bank is, and was as of July 2009, a financial institution
insured by the Federal Deposit Insurance Corporation, operating in and
affecting interstate commerce.
31. In conjunction with the submission of invoices for approval to
Demosthenes Lalisan, the Director of AOC, for payment, Abanks Mortuary
would pay a kickback in the form of checks payable to Demosthenes Lalisan
and Richard Hicks personally. The checks were written off of BancorpSouth
Account No. XXXX-581-3 and occasionally from the SouthCity Bank
Account No. XXX4893.
32. The following table reflects the kickbacks that were paid by
Abanks Mortuary to Demosthenes Lalisan and Richard Hicks from July 2009
through June 2011. Each check, tendered to Lalisan and Hicks at the same
time the invoices containing fraudulent charges were submitted for approval
by the AOC officers, constitutes a money laundering transaction, in violation
of 18 U.S.C. § 1956(a)(I)(A).
8

...
33. As a result of the kickbacks and mail fraud activities surrounding the
relationship between AOC and Abanks Mortuary, Demosthenes Lalisan was
charged in a three-count Information with conspiracy, health care fraud, and
mail fraud, and pled guilty to all three counts on November 18, 2011. [NDAL
Criminal Case No. 2:11-CR-315-RDP-TMP, Docket at 6, 8, and Docket Entry
11/18/11]. Also as a result of those activities, Richard Hicks was charged in
the same Information with conspiracy, health care fraud, and mail fraud, and
pled guilty to all three counts on November 18, 2011. [NDAL Criminal Case
No.2:11-CR-315-RDP-TMP, Docket at 6, 7, and Docket Entry 11/18/11].
34. Jed Nagel and Abanks Mortuary also conducted numerous other
financial transactions with the mail fraud proceeds received through the
payments from UAHSF. The funds were frequently moved among other
accounts held in the name of Nagel Enterprises and/or Jed Nagel individually.
The following table reflects some of the movements of the Defendant Funds
through the financial system.
...
35. Regions Bank is, and was as of July 2009, a financial institution
insured by the Federal Deposit Insurance Corporation, operating in and
affecting interstate commerce.
36. National Bank of Commerce is, and was as of July 2009, a financial
institution insured by the Federal Deposit Insurance Corporation, operating in
and affecting interstate commerce.
37. Each financial transaction detailed above constitutes a monetary
transaction conducted with criminally derived property, in violation of 18
U.S.C. § 1957.
38. Based on the facts set forth above, the Defendant Funds are subject
to forfeiture pursuant to 18 U.S.C. § 981(a)(1)(A), as property involved in or
traceable to a transaction or attempted transaction in violation of 18 U.S.C. §
1956 or 1957. The Defendant Funds are also subject to forfeiture pursuant to
18 U.S.C. § 981(a)(1)(C) as property which constitutes or is derived from
proceeds traceable to a violation of 18 U.S.C. §§ 1341, 1956, or 1957.

9

(Doc. 1 ¶¶ 5-6, 14-38.)
The court takes judicial notice of the following facts set forth in the Amended Plea
Agreement of Demosthenes Lalisan:
g. In or about 2003, at the suggestion of defendant DEMOSTHENES
LALISAN and [Richard Hicks], AOC began a process to centralize its tissue
procurement system.
h. The process involved selecting a third party funeral home to provide
these services for which UAHSF would pay a fee.
i. In or about 2003, defendant DEMOSTHENES LALISAN and
[Richard Hicks] recommended to UAHSF the selection of a funeral home
located in Birmingham, Alabama (the “Funeral Home”) to provide these
services.2
j. UAHSF made regular payments to Funeral Home from sometime in
or about 2003 until sometime in June 2011 for services rendered to AOC.
Payments from UAHSF to the Funeral Home were made approximately once
a month. The amount of the payments to the funeral home were based on
invoices submitted by the Funeral Home and approved by defendant
DEMOSTHENES LALISAN.
k. Payments from UAHSF to the Funeral Home were made by checks
drawn on UAHSF bank accounts and sent to the Funeral Home by United
States Mail.
l. Beginning in or about 2003, the owner of the Funeral Home, an
individual hereinafter identified as Owner A,3 began making kickback
payments to defendant DEMOSTHENES LALISAN and [Richard Hicks].

2

The Verified Complaint alleges that Abanks Mortuary was selected by AOC a the
centralized location for tissue procurement. (Doc. 1 ¶ 18.)
3

Claimant Jed Nagel is the Director of Nagel Enterprises, Inc., doing business as
Abanks Mortuary. (Doc. 1 ¶ 17.) The court infers that “Owner A” refers to Jed Nagel.
10

m. The kickback payments to defendant DEMOSTHENES LALISAN
and [Richard Hicks] were made by checks drawn on accounts owned or
controlled by Owner A.
n. The purpose of the kickback payments from Owner A, either
directly, or by and through entities under Owner A’s control, was for defendant
DEMOSTHENES LALISAN and [Richard Hicks] to improperly obtain funds
from UAHSF.
o.
The kickback payments to defendant DEMOSTHENES
LALISAN and [Richard Hicks] typically coincided with invoices submitted
from the Funeral Home to UAHSF. The total kickback payments to defendant
DEMOSTHENES LALISAN and [Richard Hicks] were approximately 20%
of the amounts paid by UAHSF to the Funeral Home.
...
q. In exchange for receiving kickback payments from Owner A,
defendant DEMOSTHENES LALISAN did recommend and promote AOC’s
employment of the Funeral Home for services to be provided to AOC and paid
for by UAHSF.
r. In exchange for receiving kickback payments from Owner A,
defendant DEMOSTHENES LALISAN did participate in ensuring that the
invoices from 2003 to June 2011 submitted to AOC totaling $2,310,649.81 by
the Funeral Home were paid by UAHSF.
s. In exchange for receiving kickback payments from Owner A,
defendant DEMOSTHENES LALISAN knowingly and intentionally
concealed from UAHSF the receipt of the kickback payments from Owner A
to defendant DEMOSTHENES LALISAN and [Richard Hicks].
United States v. Lalisan, Case No. 2:11-CR-0315-RDP-TMP, doc. 8 at 4-7 (N.D. Ala. Sept.
29, 2011)(footnotes added).

11

C. DISCUSSION
1. Verification
Claimants allege:
1. The Court lacks jurisdiction of this action because Supplemental
Rule G(2)(a) requires that the Complaint for Forfeiture in rem must be
“verified” and the Complaint in this case is not verified in accordance with the
rule. The so-called verification of the Complaint only consists of:
a) A repetition of hearsay obtained from “other law enforcement
officers” who are not otherwise identified. There is no identification of the
form, date, place, or substance of the alleged hearsay communication;
b) A law enforcement officer’s statement that part of the verification
is based on his unidentified and undefined “participation in the investigation
surrounding the seizure of the Defendant Funds in this action”. There is no
indication of what the alleged “participation” was or what information, if any,
it produced; and
c) The officer’s undefined experience in investigation. There is no
statement of what the experience is or how it added to the verification
knowledge.
None of these grounds equate with personal knowledge of the facts
sought to be verified. In fact, for all the verifier knows, none of the facts
sought to be verified are true, or even completely stated. There is nothing to
support the use of the description “kickbacks” used in the Complaint. Since
the Complaint is not properly verified, this Court lacks jurisdiction of this
matter and the Complaint must be dismissed.
2. The Complaint must be dismissed because it fails to comply with
Supplemental Rule G(2)(a) in that it is not properly verified.
(Doc. 11 at 2; see also doc. 9 at 2; doc. 10 at 2-3.)

12

Supplemental Rule G(2)(a) requires that a complaint in a forfeiture action must be
verified. Fed. Supp. R. G(2)(a). Unlike affidavits submitted under Fed. R. Civ. P. 56(c)(4),4
verification does not have to be made on personal knowledge; verification pursuant to 28
U.S.C. § 17465 may be made on “information and belief.” See United States v. 8 Gilcrease
Lane, 587 F. Supp. 2d 133, 139 (D.D.C. 2008)(quoting Cobell v. Norton, 391 F.3d 251, 260
(D.C. Cir. 2004) and citing 28 U.S.C. § 1746). “Thus, the inclusion of the qualifying

4

Fed. R. Civ. P. 56(c)(4)(“An affidavit or declaration used to support or oppose a
motion must be made on personal knowledge, set out facts that would be admissible in
evidence, and show that the affiant or declarant is competent to testify on the matters
stated.”).
5

28 U.S.C. § 1746 states:

Wherever, under any law of the United States or under any rule, regulation,
order, or requirement made pursuant to law, any matter is required or permitted
to be supported, evidenced, established, or proved by the sworn declaration,
verification, certificate, statement, oath, or affidavit, in writing of the person
making the same (other than a deposition, or an oath of office, or an oath
required to be taken before a specified official other than a notary public), such
matter may, with like force and effect, be supported, evidenced, established,
or proved by the unsworn declaration, certificate, verification, or statement, in
writing of such person which is subscribed by him, as true under penalty of
perjury, and dated, in substantially the following form:
...
(2) If executed within the United States, its territories, possessions, or
commonwealths: “I declare (or certify, verify, or state) under penalty of
perjury that the foregoing is true and correct. Executed on (date).
(Signature)”.
13

language, ‘to the best of my knowledge and belief,’ does not render the Complaint’s
Verification deficient.” (Id.)
The verification in this case states:
I, MICHAEL MARQUET, am a Special Agent with the Federal Bureau
of [Investigation] (FBI), and the agent assigned responsibility for this case.
I have read the contents of the foregoing Complaint for Forfeiture In
Rem, and the statements contained therein are true to the best of my knowledge
and belief. I base my knowledge for this verification of the Complaint for
Forfeiture In Rem on the following:
a.

Information provided to me by other law enforcement officers
who have participated in the investigation of Jed Nagel, Abanks
Mortuary, Demosthenes Lalisan and Richard Hicks;

b.

My participation in the investigation surrounding the seizure of
the Defendant Funds in this action;

c.

My experience in investigations of mail fraud and money
laundering transactions, and the experience of other law
enforcement officers related to mail fraud and money laundering
investigations.

I declare under penalty of perjury pursuant to 28 U.S.C. § 1746 that the
foregoing is true and correct.
(Doc. 1 at 16.)
This statement, which includes “an assertion that the facts are true and correct” and
“an averment that the first assertion is made under penalty of perjury,” is sufficient to satisfy
the requirement that the Complaint for Forfeiture In Rem be verified. See 8 Gilcrease Lane,
587 F. Supp. 2d at 139. Therefore, claimants’ Motion to Dismiss based on an inadequate
verification will be denied.
14

2. Failure to State a Claim
Federal Supplemental Rule G(2)(f) provides, “The complaint must . . . state
sufficiently detailed facts to support a reasonable belief that the government will be able to
meet its burden of proof at trial.” Claimants contend that “[t]he Complaint is due to be
dismissed because it fails as required by Supplemental Rule G(2)(f) to state sufficiently
detailed facts.” (Doc. 11 at 2; see also doc. 9 at 2; doc. 10 at 3.) Specifically, claimants
contend that the Verified Complaint “fails to allege any facts to show that [claimants have]
done anything wrong.” (Doc. 9 at 3; doc. 10 at 3; doc. 11 at 3.) They also contend that
Lalisan and Hicks were “authorized . . . to make personal profit from the body parts work
for AOC,” and that the space created by AOC for tissue removal was leased to AOC by
Nagel. (Doc. 9 at 3, 4; doc. 10 at 3, 4; doc. 11 at 3, 4.)
Plaintiff responds:
Here, in its complaint, the United States has set forth its theories of forfeiture
[footnote], the criminal activity to which it alleges that all of the Defendant
Funds are connected [footnote], and has listed in detail, where relevant, each
invoice, check number, recipient, amount, date and account number it contends
are involved in the criminal activity and thus subject to forfeiture. [Doc. 1]
[Footnote] The theories of forfeiture are that the Defendant Funds constitute
proceeds of a violation of 18 U.S.C. §§ 1341, 1956, or 1957, and/or that the
Defendant Funds constitute property involved in a violation of 18 U.S.C. §§
1956 or 1957. [Doc. 1].
[Footnote] The criminal activit[ies] alleged by the United States in the
complaint [are] mail fraud in violation of 18 U.S.C. § 1341, promotion money
laundering in violation of 18 U.S.C. § 1956, and/or so-called “money
spending” money laundering in violation of 18 U.S.C. § 1957. [Doc. 1].

15

(Doc. 14 at 6 and nn. 2-3.) The court finds that the allegations in the Verified Complaint
have “state[d] sufficiently detailed facts to support a reasonable belief that the government
will be able to meet its burden of proof at trial.” Fed. Supp. R. G(2)(f).
The Verified Complaint alleges that the tissue recovery room, adjacent to Abanks
Mortuary, was leased by AOC and billed separately from the transportation services. (Doc.
1¶ 20.) In addition to the lease payments, Abanks Mortuary also billed AOC for use of its
embalming room, after the establishment of the tissue recovery room, in its invoices for
transportation services. (Id. ¶¶ 24-25.) Contrary to claimants’ assertions, the Verified
Complaint does not contain a claim based on the lease payments for the tissue room; rather
the claim is that Abanks Mortuary continued to bill for the use of its embalming room after
the construction of the tissue recovery room next door.
Also, claimants assert that UAHSF authorized the kickbacks – payment of
approximately 20% of the amount received by Abanks from UAHSF for services rendered
to AOC; therefore, the payments to Lalisan and Hicks are not “facts that support a reasonable
belief that the government will be able to meet its burden of proof at trial.” The Verified
Complaint alleges that Abanks Mortuary submitted false invoices to AOC that were approved
by Lalisan and Hicks; at the same time, Abanks Mortuary sent checks to Lalisan and Hicks,
representing approximately 20% of the fraudulent invoices. Although claimants may be able
to show that Lalisan and Hicks were authorized to receive certain payments, the court finds

16

incredible the suggestion that UAHSF authorized Lalisan and Hicks to receive payments for
approving false invoices.
The Verified Complaint alleges that Abanks Mortuary received payments for the
fraudulent invoices through the mail in violation of 18 U.S.C. § 1341. (Doc. 1 ¶¶ 26-27.)
These checks, the proceeds of the mail fraud, were deposited into one of two of the accounts
from which the defendant funds were seized – BancorpSouth No. XXXX-581-3 or SouthCity
Bank No. X4893; this activity “constitutes a monetary transaction with the proceeds of mail
fraud, [which is a] violation of 18 U.S.C. § 1957.” (Id. ¶ 28.) Moreover, the checks payable
to Lalisan and Hicks from these two accounts constitute money laundering transactions in
violation of 18 U.S.C. § 1956(a)(1)(A). (Id. ¶ 32.) Also, plaintiff contends that claimants
Nagel and Abanks Mortuary “conducted numerous other financial transactions with the mail
fraud proceeds received through the payments from UAHSF. The funds were frequently
moved among other accounts held in the name of Nagel Enterprises and/or Jed Nagel
individually,” including the accounts from which the defendant funds were seized. (Doc. 1
¶ 34.)
The court finds that the Verified Complaint states sufficient facts to support a
reasonable belief that plaintiff, at trial, will be able to prove that “the Defendant Funds are
subject to forfeiture pursuant to 18 U.S.C. § 981(a)(1)(A), as property involved in or
traceable to a transaction or attempted transaction in violation of 18 U.S.C. §[§] 1956 or
1957,” and/or that “[t]he Defendant Funds are also subject to forfeiture pursuant to 18 U.S.C.

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§ 981(a)(1)(C) as property which constitutes or is derived from proceeds traceable to a
violation of 18 U.S.C. §§ 1341, 1956, or 1957.” (See doc. 1 § 38.) Therefore, claimants’
Motions to Dismiss will be denied.
CONCLUSION
For the foregoing reasons, the court is of the opinion that claimants’ Motions to Strike
and Motions to Dismiss, (docs. 9-11), are due to be denied. An Order denying claimants’
Motions to Strike and Motions to Dismiss, (docs. 9-11), will be entered contemporaneously
with this Memorandum Opinion.
DONE, this 6th day of March, 2013.

SHARON LOVELACE BLACKBURN
CHIEF UNITED STATES DISTRICT JUDGE

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