United States of America v. Approximately $23,032.07 in U.S. Currency seized from Bank of America Account No. 03842-03399 et al

Filing 56

FINAL JUDGMENT OF FORFEITURE signed by Judge John A. Mendez on 2/21/14. (Kaminski, H)

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BENJAMIN B. WAGNER
United States Attorney
KEVIN C. KHASIGIAN
Assistant U. S. Attorney
501 I Street, Suite 10-100
Sacramento, CA 95814
Telephone: [phone]

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Attorneys for the United States

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IN THE UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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UNITED STATES OF AMERICA,

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Plaintiff,

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2:08-CV-02753-JAM-CKD
FINAL JUDGMENT OF
FORFEITURE

v.
APPROXIMATELY $23,032.07 IN U.S.
CURRENCY SEIZED FROM BANK OF
AMERICA ACCOUNT NO. 03842-03399,
HELD IN THE NAME OF PAY-LESS
WHOLESALE,
APPROXIMATELY 135,455 CIGARS,
(SMOKEABLE OTP) IN PACKS OF 5, 10,
AND 20 RECOVERED FROM PAY-LESS
WHOLESALE,
APPROXIMATELY 2,297 CIGARS
(SMOKEABLE OTP) IN PACKS OF 50
RECOVERED FROM PAY-LESS
WHOLESALE,
APPROXIMATELY 151 CIGARS
(SMOKEABLE OTP) IN PACKS OF 240
RECOVERED FROM PAY-LESS
WHOLESALE,
APPROXIMATELY 326,942 INDIVIDUAL
CIGARS (SMOKEABLE OTP) RECOVERED
FROM PAY-LESS WHOLESALE,
APPROXIMATELY 57 CASES OF
SMOKEABLE OTP RECOVERED FROM
PAY-LESS WHOLESALE,
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Final Judgment of Forfeiture

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APPROXIMATELY 4,952 BOXES OF
SMOKEABLE OTP RECOVERED FROM
PAY-LESS WHOLESALE,
APPROXIMATELY 11,584 CANS OF
SMOKEABLE OTP RECOVERED FROM
PAY-LESS WHOLESALE,
APPROXIMATELY 6,914 TUBS OF
SMOKEABLE OTP RECOVERED FROM
PAY-LESS WHOLESALE,
APPROXIMATELY 15,141 UNITS OF
SMOKEABLE OTP IN PACKS OF 5, 10,
AND 20 RECOVERED FROM PAY-LESS
WHOLESALE,
APPROXIMATELY 136,221
BAGS/POUCHES OF SMOKEABLE OTP
RECOVERED FROM PAY-LESS
WHOLESALE,
APPROXIMATELY 855 CASES
(CONTAINING APPROXIMATELY 10,608
UNITS) OF AL FAKHER TOBACCO
SMOKEABLE OTP EVIDENCE
RECOVERED FROM PAY-LESS
WHOLESALE,
APPROXIMATELY 272 CASES
(CONTAINING APPROXIMATELY 6,676
UNITS) OF AL WAHA MOLASSES
TOBACCO SMOKEABLE OTP EVIDENCE
RECOVERED FROM PAY-LESS
WHOLESALE,
APPROXIMATELY 995 CASES
(CONTAINING APPROXIMATELY 46,112
UNITS) OF EVA MODSAL TOBACCO
SMOKEABLE OTP EVIDENCE
RECOVERED FROM PAY-LESS
WHOLESALE,
APPROXIMATELY 420 CASES
(CONTAINING APPROXIMATELY 5,040
UNITS) OF JAWATTER TOBACCO
SMOKEABLE OTP EVIDENCE
RECOVERED FROM PAY-LESS
WHOLESALE,
APPROXIMATELY 1,473 CASES
(CONTAINING APPROXIMATELY 16,674
UNITS) OF LAYALINA TOBACCO
SMOKEABLE OTP EVIDENCE
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Final Judgment of Forfeiture

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RECOVERED FROM PAY-LESS
WHOLESALE,
APPROXIMATELY 352 UNITS OF
MISCELLANEOUS SMOKEABLE OTP
EVIDENCE RECOVERED FROM
PAY-LESS WHOLESALE,
APPROXIMATELY 2,124 CASES
(CONTAINING APPROXIMATELY 14,740
UNITS) OF MOLASSES TOBACCO
SMOKEABLE OTP EVIDENCE
RECOVERED FROM PAY-LESS
WHOLESALE,
APPROXIMATELY 640 CASES
(CONTAINING APPROXIMATELY 19,884
UNITS) OF PRIME TIME CIGARS
SMOKEABLE OTP EVIDENCE
RECOVERED FROM PAY-LESS
WHOLESALE,
APPROXIMATELY 113 CASES
(CONTAINING APPROXIMATELY 5,112
UNITS) OF ERIK CIGARS SMOKEABLE
OTP EVIDENCE RECOVERED FROM
PAY-LESS WHOLESALE,
APPROXIMATELY 11 CASES
(CONTAINING APPROXIMATELY 440
UNITS) OF HAV-A-TAMPA JEWLS
CIGARS SMOKEABLE OTP EVIDENCE
RECOVERED FROM PAY-LESS
WHOLESALE,
APPROXIMATELY 5,906 POUCHES OF
MOLASSES SMOKEABLE OTP
EVIDENCE RECOVERED FROM
PAY-LESS WHOLESALE,
APPROXIMATELY 1,200 PACKS OF
PHILLIES CIGARILLOS SMOKEABLE
OTP EVIDENCE RECOVERED FROM
PAY-LESS WHOLESALE,
Defendants.

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Pursuant to the Stipulation for Final Judgment of Forfeiture, the Court finds:

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1.

This is a civil forfeiture action against the above-captioned assets seized on

27 August 13, 2008, by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”).
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Final Judgment of Forfeiture

1 The above-captioned assets are referred to herein as "Defendant Properties.” The non-cash
2 portion of the Defendant Properties are referred to separately as “Defendant Other Tobacco
3 Products.”
2.

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A Verified Complaint for Forfeiture In Rem (“Complaint”) was filed on

5 November 14, 2008, alleging that said Defendant Properties are subject to forfeiture to the
6 United States pursuant to 18 U.S.C. §§ 981(a)(1)(A) and (a)(1)(C).
3.

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On or about November 19, 2008, the Clerk issued a Warrant for Arrest for the

8 Defendant Properties, and that warrant was executed on November 25, 2008 and
9 December 22, 2008.
4.

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Beginning on December 11, 2008, for at least thirty consecutive days, the

11 United States published Notice of the Forfeiture Action on the official internet government
12 forfeiture site www.forfeiture.gov. A Declaration of Publication was filed on February 2,
13 2009.
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5.

In addition to the public notice on the official internet government forfeiture

15 site www.forfeiture.gov, actual notice or attempted notice was given to the following
16 individuals:
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a.

Adib Sirope (“Sirope”)

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b.

Rimoun Mansour (“Mansour”)

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6.

Sirope and Mansour filed a joint Claim alleging an interest in all of the

20 Defendant Properties on December 30, 2008, and an Answer to the Complaint on January
21 13, 2009. Nara Bank, N.A.1 filed a Verified Claim alleging a perfected security interest in
22 all of the Defendant Other Tobacco Products on April 28, 2011, and an Answer to the
23 Complaint on May 10, 2011. The Bank’s Claim to the Defendant Other Tobacco Products
24 is based on an April 9, 2007 commercial loan and related security agreement between Bank
25 and Pay Less Wholesale, a tobacco distributor (“Pay-Less”), which loan documents were
26 executed by Sirope and Mansour, as general partners of Pay-Less (“the Nara Bank Loan”).
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All references to “Nara Bank” and/or “the Bank” mean and include BBCN Bank, N.A., as successorin-interest to Nara Bank N.A.
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Final Judgment of Forfeiture

1 As of October 21, 2011, the amount of the Bank’s lien in connection with the Nara Bank
2 Loan, inclusive of interest, fees and costs, is $786,155.36. Interest accrues at the daily rate
3 of $87.99.
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7.

No other parties have filed claims or answers in this matter, and the time in

5 which any person or entity may file a claim and answer has expired.
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8.

Defendant Other Tobacco Products are perishable property, and are currently

7 being stored at Schafer Logistics, Inc., a commercial storage facility in Carson, California
8 (“Schafer Logistics”), at the sole expense of the United States.
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Based on the above findings, and the files and records of the Court, it is hereby

10 ORDERED AND ADJUDGED:
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1.

The Court adopts the Stipulation for Final Judgment of Forfeiture entered

12 into by and between the parties to this action.
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2.

That judgment is hereby entered against Claimants Sirope, Mansour, and

14 Nara Bank, and all other potential claimants who have not filed claims in this action.
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3.

All right, title, and interest of Sirope and Mansour in the Approximately

16 $23,032.07 in U.S. Currency seized from Bank of America Account No. 03842-03399, held
17 in the name of Pay-Less Wholesale, plus all accrued interest, shall be forfeited to the
18 United States pursuant to 18 U.S.C. §§ 981(a)(1)(A) and (a)(1)(C), to be disposed of
19 according to law.
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4.

All right, title, and interest of Sirope and Mansour in the Defendant Other

21 Tobacco Products (listed in Exhibit A attached hereto) shall be forfeited to the United
22 States pursuant to 18 U.S.C. §§ 981(a)(1)(A) and (a)(1)(C). Once forfeited, the Defendant
23 Other Tobacco Products shall be released to Bank. The Defendant Other Tobacco
24 Products are referred to herein as the “Tobacco Products.”
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5.

The further disposition of the Tobacco Products will be conducted as follows:
a.

Transfer.

The Tobacco Products shall be transferred from the United States to the Bank (to
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Final Judgment of Forfeiture

1 include its designated agents) at the Schafer Logistics facility where the Tobacco Products
2 are presently located (“the Property Transfer”). The parties shall ensure that the Property
3 Transfer take place within thirty days of entry of this Final Judgment of Forfeiture.
4 Following the transfer, Bank will also utilize the services of Schafer Logistics for post5 transfer storage. Accordingly, the Tobacco Products will be physically moved within the
6 Schafer Logistics facility only to the extent reasonably necessary to ensure that proper
7 security procedures are maintained, and/or to facilitate subsequent inspection and sale (as
8 further detailed below). The physical transfer of the Tobacco Products shall be conducted
9 by Schafer Logistics personnel, under the supervision of the ATF (or its designee/agent).
10 The parties shall cooperate in providing further documentation as may be reasonably
11 necessary to evidence the transfer of all right, title and interest in the Tobacco Products to
12 the Bank (to include its designated agents). If the Property Transfer does not take place
13 within thirty days of entry of this Final Judgment of Forfeiture, the United States is
14 authorized to destroy all of the Tobacco Products.
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Storage Costs.

The United States shall be responsible for all storage costs of the Tobacco Products

17 through and including the date of the Property Transfer. The Bank shall be responsible
18 for all storage costs of the Tobacco Products following the date of the Property Transfer.
c.

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Inspection.

Following the Property Transfer, the Bank (including its designated agents), at its

21 sole expense, will conduct a further inspection of the Tobacco Products2 to determine the
22 marketability of such products (“Inspection”). Bank shall utilize its best efforts to
23 conduct the Inspection within thirty days of the date of the Property Transfer. Based on
24 the results of the Inspection, Bank, at its sole discretion, may designate certain of the
25 Tobacco Products as “unmarketable;” i.e., without any significant sale value.
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A preliminary inspection was previously conducted on or about May 28, 2013.
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Final Judgment of Forfeiture

d.

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Destruction of Unmarketable Tobacco Products.

Following the Inspection, any Tobacco Products deemed unmarketable by the Bank

3 shall be subject to a “certified destruction” by Schafer Logistics, and appropriate
4 documentation shall issue from Schafer Logistics certifying such destruction. The parties
5 shall utilize best efforts to ensure that such destruction takes place within thirty days of
6 the Bank’s designation of such Tobacco Products as unmarketable. The United States shall
7 be responsible for the cost of the certified destruction of the unmarketable portion of the
8 Tobacco Products, and the cost of documentation evidencing such certified destruction.
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Sale of Marketable Tobacco Products; Application of Proceeds.

Following the Inspection, the Bank (to include its designated agents) will, at its sole

11 expense, arrange for sale of the remaining Tobacco Products. The sale shall be conducted
12 in a commercially reasonable manner consistent with applicable state and federal law
13 relating to tobacco products. The net proceeds of the sale will include all funds realized
14 from the sale of the tobacco products, less expenses incurred by Bank since the date of
15 transfer and expenses related to the sale. The net proceeds of any such sale(s) shall
16 operate as an offset to Sirope’s and Mansour's obligations under the Nara Bank Loan.
17 Within thirty days of any sale, Bank shall advise the parties of the results of the sale and
18 corresponding offsets enjoyed by Sirope and Mansour. The United States has no role in the
19 sale.
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Further Obligations of United States.

Following the date of the Property Transfer, the United States will not bear any

22 responsibility or coverage for costs, fees, or liability associated with the storage, disposal,
23 audit, inspection, or sale of the Defendant Other Tobacco Products.
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6.

The United States and its servants, agents, and employees and all other

25 public entities, their servants, agents, and employees, are released from any and all
26 liability arising out of or in any way connected with the seizure, arrest, sale, or forfeiture of
27 the Defendant Properties. This is a full and final release applying to all unknown and
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Final Judgment of Forfeiture

1 unanticipated injuries, and/or damages arising out of said seizure, arrest, sale, or forfeiture
2 of the Defendant Properties, as well as to those now known or disclosed. The parties
3 waived the provisions of California Civil Code § 1542.
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7.

All parties are to bear their own costs and attorney’s fees.

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The U.S. District Court for the Eastern District of California, Hon. John A.

6 Mendez, District Judge, shall retain jurisdiction to enforce the terms of this Final
7 Judgment of Forfeiture.
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9.

Based upon the allegations set forth in the Complaint filed November 14,

9 2008, and the Stipulation for Final Judgment of Forfeiture filed herein, the Court enters a
10 Certificate of Reasonable Cause pursuant to 28 U.S.C. § 2465, that there was reasonable
11 cause for the seizure and arrest of the Defendant Properties, and for the commencement
12 and prosecution of this forfeiture action.
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SO ORDERED THIS 21st day of February, 2014.

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/s/ John A. Mendez_______________
JOHN A. MENDEZ
United States District Court Judge

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Final Judgment of Forfeiture

Exhibit A

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a.

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b.

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c.

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d.

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e.

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f.

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g.

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h.

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i.

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j.

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k.

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l.

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m.
n.
o.

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p.

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q.

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r.
s.
t.

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u.

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v.

Approximately 135,455 Cigars (Smokeable OTP) in Packs of 5, 10, and 20
recovered from Pay-Less Wholesale,
Approximately 2,297 Cigars (Smokeable OTP) in Packs of 50 recovered from
Pay-Less Wholesale,
Approximately 151 Cigars (Smokeable OTP) in Packs of 240 recovered from
Pay-Less Wholesale,
Approximately 326,942 Individual Cigars (Smokeable OTP) recovered from
Pay-Less Wholesale,
Approximately 57 Cases of Smokeable OTP recovered from Pay-Less
Wholesale,
Approximately 4,952 Boxes of Smokeable OTP recovered from Pay-Less
Wholesale,
Approximately 11,584 Cans of Smokeable OTP recovered from Pay-Less
Wholesale,
Approximately 6,914 Tubs of Smokeable OTP recovered from Pay-Less
Wholesale,
Approximately 15,141 Units of Smokeable OTP in Packs of 5, 10, and 20
recovered from Pay-Less Wholesale,
Approximately 136,221 Bags/Pouches of Smokeable OTP recovered from PayLess Wholesale,
Approximately 855 Cases (Containing Approximately 10,608 Units) of Al
Fakher Tobacco Smokeable OTP Evidence recovered from Pay-Less
Wholesale,
Approximately 272 Cases (Containing Approximately 6,676 Units) of Al Waha
Molasses Tobacco Smokeable OTP Evidence recovered from Pay-Less
Wholesale,
Approximately 995 Cases (Containing Approximately 46,112 Units) of Eva
Modsal Tobacco Smokeable OTP Evidence recovered from Pay-Less
Wholesale,
Approximately 420 Cases (Containing Approximately 5,040 Units) of Jawatter
Tobacco Smokeable OTP Evidence recovered from Pay-Less Wholesale,
Approximately 1,473 Cases (Containing Approximately 16,674 Units) of
Layalina Tobacco Smokeable OTP Evidence recovered from Pay-Less
Wholesale,
Approximately 352 Units of Miscellaneous Smokeable OTP Evidence
recovered from Pay-Less Wholesale,
Approximately 2,124 Cases (Containing Approximately 14,740 Units) of
Molasses Tobacco Smokeable OTP Evidence recovered from Pay-Less
Wholesale,
Approximately 640 Cases (Containing Approximately 19,884 Units) of Prime
Time Cigars Smokeable OTP Evidence recovered from Pay-Less Wholesale,
Approximately 113 Cases (Containing Approximately 5,112 Units) of Erik
Cigars Smokeable OTP Evidence recovered from Pay-Less Wholesale,
Approximately 11 Cases (Containing Approximately 440 Units) of
Hav-A-Tampa Jewls Cigars Smokeable OTP Evidence recovered from PayLess Wholesale,
Approximately 5,906 Pouches of Molasses Smokeable OTP Evidence recovered
from Pay-Less Wholesale, and
Approximately 1,200 Packs of Phillies Cigarillos Smokeable OTP Evidence
recovered from Pay-Less Wholesale.

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Final Judgment of Forfeiture