United States of America v. Certified Check in the Amount of $1,500,000

Filing 2

CONSENT JUDGMENT OF FORFEITURE signed by District Judge Troy L. Nunley on 9/7/16. (Kaminski, H)

1 PHILLIP A. TALBERT
Acting United States Attorney
2 KEVIN C. KHASIGIAN
CHRISTOPHER S. HALES
3 Assistant U. S. Attorneys
501 I Street, Suite 10-100
4 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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2:16-MC-00152-TLN-DB

Plaintiff,
CONSENT JUDGMENT OF FORFEITURE

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v.
CERTIFIED CHECK IN THE AMOUNT OF
$1,500,000,

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Defendant.
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Pursuant to the Stipulation for Consent Judgment of Forfeiture, the Court finds:

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1.

Potential claimant Mary’s Gone Crackers, Inc. (“MGC”, the “Company”, or “claimant”)

19 agreed and stipulated that the following Statement of Facts is true and accurate. The Company admitted,
20 accepted, and acknowledged that it is responsible for the acts of its officers, directors, employees, and
21 agents as set forth below. The parties also agreed that nothing in this Consent Judgment or any other
22 documents filed herein is, or should be in any way construed as, an acknowledgment or knowledge of
23 any conduct resulting in civil liability or criminal culpability on the part of the Company or any of its
24 directors, officers, management or other employees.
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2.

MGC is a food industry company that makes gluten-free cookies and crackers. MGC is

26 based in Gridley, California and has its baking facility there. On or about December 31, 2012, after the
27 conduct described below, MGC was acquired by an unrelated entity and is now a wholly owned
28 subsidiary of that entity. On March 29, 2012, United States Immigration and Customs Enforcement
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Consent Judgment of Forfeiture
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1 (“ICE”) notified MGC that ICE would be conducting an audit of MGC’s I-9 forms by delivering a notice
2 of inspection letter to MGC in Gridley. ICE provided MGC notice that ICE representatives would return
3 on April 3, 2012 to collect MGC’s I-9 forms for review.
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3.

On May 4, 2012, ICE sent MGC a “Notice of Suspect Documents” letter notifying MGC

5 that the right-to-work documentation provided by 49 of its employees did not satisfy the Form I-9
6 eligibility verification requirements, and that those 49 individuals appeared not to be authorized to work
7 in the United States. One employee of the 49 provided corrected documentation. On Friday, May 18,
8 2012, MGC informed ICE that the other 48 employees had either been terminated or resigned.
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4.

One of the 48 employees supposedly terminated or resigned never stopped working for

10 MGC at all in May 2012. That employee, an operations supervisor, continued working at MGC under a
11 new assumed name. Several MGC employees knew this employee was not eligible to work in the United
12 States. MGC subsequently started paying that individual as an independent contractor, rather than under
13 MGC’s ordinary payroll. Approximately five months later, on or about September 30, 2012, that
14 employee was terminated by MGC for other reasons.
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5.

Between June 1 and June 5, 2012, MGC rehired 12 more people who it had previously

16 represented to ICE had been terminated or resigned, all of them under new names. Most of these
17 individuals were production shift supervisors. In total, MGC employed at least 13 people under new
18 names following the I-9 audit. During the course of the I-9 audit and rehiring of individuals, MGC at
19 times consulted with an outside counsel from the Chico area.
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6.

On January 31, 2013, a search warrant was executed by federal law enforcement at

21 MGC’s facility in Gridley, California. At that time, at least 12 individuals rehired under new names
22 were still working at MGC. After the execution of the search warrant, MGC substantially revised its
23 immigration compliance procedures.
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7.

The Company agreed to pay a forfeiture monetary penalty in the amount of $1,500,000

25 (the “defendant funds”). On August 18, 2016, the Company delivered the payment via cashier’s check
26 made payable to the U.S. Customs and Border Protection to the U.S. Attorney’s Office, Att: Asset
27 Forfeiture Unit, 501 I Street, Suite 10-100, Sacramento, CA 95814.
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8.

The parties agree that the defendant funds are forfeitable to the United States pursuant to
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Consent Judgment of Forfeiture

1 8 U.S.C. § 1324(b) and 18 U.S.C § 982(a)(6).
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9.

Without admitting the truth of the factual assertions contained above, claimant

3 specifically denying the same, and for the purpose of reaching an amicable resolution and compromise
4 of this matter, claimant agrees that an adequate factual basis exists to support forfeiture of the defendant
5 funds. Claimant acknowledged that it is the sole owner of the defendant funds, and that no other person
6 or entity has any legitimate claim of interest therein. Should any person or entity institute any kind of
7 claim or action against the government with regard to its forfeiture of the defendant funds, claimant
8 shall hold harmless and indemnify the United States, as set forth below.
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10.

This Court has jurisdiction in this matter pursuant to 28 U.S.C. §§ 1345 and 1355, as this

10 is the judicial district in which acts or omissions giving rise to the forfeiture occurred.
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11.

This Court has venue pursuant to 28 U.S.C. § 1395, as this is the judicial district in

12 which the defendant funds were seized.
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12.

The parties herein desire to settle this matter pursuant to the terms of a duly executed

14 Stipulation for Consent Judgment of Forfeiture.
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Based upon the above findings, and the files and records of the Court, it is hereby ORDERED

16 AND ADJUDGED:
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13.

The Court adopts the Stipulation for Consent Judgment of Forfeiture entered into by and

18 between the parties.
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14.

Upon entry of this Consent Judgment of Forfeiture, $1,500,000, together with any interest

20 that may have accrued on that amount, shall be forfeited to the United States pursuant to 8 U.S.C. §
21 1324(b) and 18 U.S.C § 982(a)(6), to be disposed of according to law.
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15.

The Company acknowledged that no United States tax deduction may be sought in

23 connection with the payment of any part of this $1,500,000 forfeiture.
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16.

The United States of America and its servants, agents, and employees and all other public

25 entities, their servants, agents and employees, are released from any and all liability arising out of or in
26 any way connected with the seizure or forfeiture of the defendant funds. The United States released
27 Claimant and its officers, directors, employees, and agents from any liability arising out of or in any way
28 connected with the seizure or forfeiture of the defendant funds. This is a full and final release applying to
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Consent Judgment of Forfeiture
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1 all unknown and unanticipated injuries, and/or damages arising out of said seizure or forfeiture, as well
2 as to those now known or disclosed. The parties waived the provisions of California Civil Code § 1542.
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17.

No portion of the stipulated settlement, including statements or admissions made

4 therein, shall be admissible in any civil or criminal litigation pursuant to Rules 408 and 410(a)(4) of the
5 Federal Rules of Evidence.
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18.

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

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19.

Pursuant to the Stipulation for Consent Judgment of Forfeiture filed herein, the Court

8 enters this Certificate of Reasonable Cause pursuant to 28 U.S.C. § 2465, that there was reasonable cause
9 for the seizure of the above-described defendant funds.
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IT IS SO ORDERED.

11 Dated: September 7, 2016
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Troy L. Nunley
United States District Judge

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Consent Judgment of Forfeiture