USA v. Real Property located at 6920 Kilconnell Drive, Elk Grove, California, Sacramento County, APN: 116-1410-006-0000 et al

Filing 53

STIPULATION and ORDER signed by District Judge Kimberly J. Mueller on 8/6/18. CASE STAYED until the resolution of companion criminal cases. The parties shall file a joint status report within 30 days of the conclusion of the parallel criminal cases, or as the court deems appropriate. (Mena-Sanchez, L)

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McGREGOR W. SCOTT
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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2:18-CV-00750-KJM-CKD

Plaintiff,
v.

STIPULATION TO STAY FURTHER
PROCEEDINGS AND ORDER

REAL PROPERTY LOCATED AT 6920
KILCONNELL DRIVE, ELK GROVE,
CALIFORNIA, SACRAMENTO
COUNTY, APN: 116-1410-006-0000,
INCLUDING ALL APPURTENANCES
AND IMPROVEMENTS THERETO,

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REAL PROPERTY LOCATED AT 9297
FIFE RANCH WAY, ELK GROVE,
CALIFORNIA, SACRAMENTO
COUNTY, APN: 127-0990-028-0000,
INCLUDING ALL APPURTENANCES
AND IMPROVEMENTS THERETO,
REAL PROPERTY LOCATED AT 9717
SUTTON POINTE CIRCLE, ELK GROVE,
CALIFORNIA, SACRAMENTO
COUNTY, APN: 132-1110-062-0000,
INCLUDING ALL APPURTENANCES
AND IMPROVEMENTS THERETO,

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REAL PROPERTY LOCATED AT 9913
JASPER COURT, ELK GROVE,
CALIFORNIA, SACRAMENTO
COUNTY, APN: 122-0690-082-0000,
INCLUDING ALL APPURTENANCES
AND IMPROVEMENTS THERETO,

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Stipulation to Stay Further Proceedings and Order

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REAL PROPERTY LOCATED AT 4305
SAN MARINO COURT, ELK GROVE,
CALIFORNIA, SACRAMENTO
COUNTY, APN: 119-1980-056-0000,
INCLUDING ALL APPURTENANCES
AND IMPROVEMENTS THERETO,

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REAL PROPERTY LOCATED AT 8771
DILLARD ROAD, WILTON,
CALIFORNIA, SACRAMENTO
COUNTY, APN: 126-0390-002-0000,
INCLUDING ALL APPURTENANCES
AND IMPROVEMENTS THERETO, and
REAL PROPERTY LOCATED AT 4871
WATSEKA WAY, SACRAMENTO,
CALIFORNIA, SACRAMENTO
COUNTY, APN: 225-1790-028-0000,
INCLUDING ALL APPURTENANCES
AND IMPROVEMENTS THERETO,

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Defendants.
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The United States and Claimants Meina Zheng, Shi Zhong Chen, Cai Dong Li, Bernard Horton or

14 Lennette Horton Trustees, The Horton Family Trust dtd 9-10-1986, Bernard Horton or Lennette Horton
15 Trustees, HFT Mortgage LLC 401K Plan Trust dtd 10/20/2006, and Wayne E. Stahmer and Linda K.
16 Stahmer, Trustees, The Stahmer Family Trust dated June 4, 2002, Northern California Mortgage Fund
17 XI, LLC, FJM Private Mortgage Fund, LLC., Lin Jiang Lin, Xia Yang, and East West Bank, through
18 their respective counsel, hereby stipulate that a stay is necessary in the above-entitled action and request
19 that the Court enter an order staying all further proceedings until the resolution of the related criminal
20 cases, United States v. Leonard Yang, et al., Case 2:16-CR-00189-KJM and United States v. Xiu Ping Li,
21 et al., Case No. 2:17-CR-00136-KJM, and ongoing criminal investigation into marijuana grows at the
22 defendant properties.
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1.

This is a forfeiture in rem action against three properties pursuant to 18 U.S.C. §§

24 981(a)(1)(A) and 981(a)(1)(C) and 21 U.S.C. §§ 881(a)(6) and 881(a)(7) because they were allegedly
25 used to commit or facilitate violations of federal drug and money laundering laws:
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a.
Real Property located at 6920 Kilconnell Drive, Elk Grove, California, the
“Defendant Kilconnell Drive.” Meron Jappy Hailu has filed a claim asserting an
ownership interest in defendant Kilconnell Drive. Shi Zhong Chen mistakenly filed a
claim asserting an ownership interest in defendant Kilconnell Drive. No other party has
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Stipulation to Stay Further Proceedings and Order

filed a claim asserting an interest in defendant Kilconnell Drive. A Stipulation and Order
Dismissing the Kilconnell Drive property from this action was lodged on July 26, 2018.

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b.
Real Property located at 9297 Fife Ranch Way, Elk Grove, California, the
“Defendant Fife Ranch Way.” Shi Zhong Chen has filed a claim asserting an ownership
interest in defendant Fife Ranch Way. No other party has filed a claim asserting an
interest in defendant Fife Ranch Way.

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c.
Real Property located at 9717 Sutton Pointe Circle, Elk Grove, California, the
“Defendant Sutton Pointe Circle”. Meina Zheng has filed a claim asserting an ownership
interest in defendant Sutton Pointe Circle. FJM Private Mortgage Fund, LLC filed a claim
asserting a lienholder interest in defendant Sutton Pointe Circle.

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d.
Real Property located at 9913 Jasper Court, Sacramento, California, the
“Defendant Jasper Court”. Cai Dong Li has filed a claim asserting an ownership interest
in defendant Jasper Court. Hannah Prasad, Annabelle Prasad, and Elizabeth Prasad filed a
claim asserting a lienholder interest in defendant Jasper Court. This property was sold and
the proceeds were used to satisfy Hannah Prasad, Annabelle Prasad, and Elizabeth
Prasad’s loan.1 The Prasad’s filed a Stipulation of Withdrawal of Claim on July 26, 2018.
The net proceeds from the sale shall be substituted for the defendant Jasper Court.

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e.
Real Property located at 4305 San Marino Court, Elk Grove, California, the
“Defendant San Marino Court”. Shi Zhong Chen has filed a claim asserting an ownership
interest in defendant San Marino Court. Bernard Horton or Lennette Horton Trustees, The
Horton Family Trust dtd 9-10-1986, Bernard Horton or Lennette Horton Trustees, HFT
Mortgage LLC 401K Plan Trust dtd 10/20/2006, and Wayne E. Stahmer and Linda K.
Stahmer, Trustees, The Stahmer Family Trust dated June 4, 2002, filed a claim asserting a
lienholder interest in defendant San Marino Court.

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f.
Real Property located at 8771 Dillard Road, Wilton, California, the “Defendant
Dillard Road”. Xia Yang has filed a claim asserting an ownership interest in defendant
Dillard Road. East West Bank filed a claim asserting a lienholder interest in defendant
Dillard Road.

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g.
Real Property located at 4871 Watseka Way, Sacramento, California, the
“Defendant Watseka Way”. Lin Jiang Lin has filed a claim asserting an ownership interest
in defendant Watseka Way. Northern California Mortgage Fund XI, LLC filed a claim
asserting a lienholder interest in defendant Watseka Way.

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3.

The stay is requested pursuant to 18 U.S.C. §§ 981(g)(1), 981(g)(2), and 21 U.S.C. §

881(i). The United States contends that the defendant properties were used and intended to be used to
commit or facilitate violations of federal drug laws in violation of 21 U.S.C. §§ 841 et seq. Claimants
deny these allegations.

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Accordingly, Hannah Prasad, Annabelle Prasad, and Elizabeth Prasad no longer have an interest in
28 Defendant Jasper Court.
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Stipulation to Stay Further Proceedings and Order

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4.

To date, several individuals have been charged with federal crimes related to marijuana

2 manufacturing and distribution in two related cases, United States v. Leonard Yang, et al., Case 2:16-CR3 00189-KJM and United States v. Xiu Ping Li, et al., Case No. 2:17-CR-00136-KJM. It is the United
4 States’ position that the statute of limitations has not expired on potential criminal charges relating to the
5 drug trafficking involving the defendant properties. Nevertheless, the United States intends to depose
6 claimants (and others) regarding their ownership of the defendant properties, as well as their knowledge
7 and participation in large scale marijuana cultivation, including the marijuana grow at the defendant
8 properties, as well as the circumstances behind the purchase of the properties. If discovery proceeds at
9 this time, claimants will be placed in the difficult position of either invoking their Fifth Amendment
10 rights against self-incrimination and losing the ability to pursue their claims to the defendant properties,
11 or waiving their Fifth Amendment rights and submitting to a deposition and potentially incriminating
12 themselves. If they invoke their Fifth Amendment rights, the United States will be deprived of the ability
13 to explore the factual basis for the claims they filed with this court.
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5.

In addition, claimants intend to depose, among others, the agents involved with this

15 investigation, including but not limited to, the agents with the Drug Enforcement Administration and
16 Internal Revenue Service – Criminal Investigation. Allowing depositions of the law enforcement officers
17 at this time would adversely impact the federal prosecution and ongoing investigation.
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6.

The parties recognize that proceeding with these actions at this time has potential adverse

19 effects on the investigation of the underlying criminal conduct and/or upon the claimant’s ability to assert
20 any defenses to forfeiture. For these reasons, the parties jointly request that these matters be stayed until
21 the conclusion of the related criminal cases. At that time the parties will advise the court of the status of
22 the criminal investigation, if any, and will advise the court whether a further stay is necessary.
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If any of the defendant properties go into default, the parties reserve the right to seek all

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Stipulation to Stay Further Proceedings and Order

1 avenues of redress to preserve the real properties, including filing a motion for interlocutory sale or
2 seeking a receiver appointment to collect rents and maintain the properties.
3 Dated: 7/27/2018

McGREGOR W. SCOTT
United States Attorney

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By:
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/s/ Kevin C. Khasigian
KEVIN C. KHASIGIAN
Assistant U.S. Attorney

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/s/ J. Patrick McCarthy
J. PATRICK McCARTHY
Attorney for Claimant Meina Zheng
(Authorized by email)

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Dated: 7/30/18

/s/ Patrick J. Wingfield
PATRICK J. WINGFIELD
Attorney for Claimant Northern California Mortgage
Fund XI, LLC and FJM Private Mortgage Fund,
LLC (Authorized by email)

Dated: 7/29/18

/s/ Mark J. Reichel
MARK J. REICHEL
Attorney for Claimant Shi Zhong Chen
(Authorized by email)

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/s/ Ernest Chen
ERNEST CHEN
Attorney for Claimant Cai Dong Li
(Authorized by email)

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/s/ Larissa A. Branes
LARISSA A. BRANES
Attorney for Claimants Bernard Horton or Lennette
Horton Trustees, The Horton Family Trust dtd 9-101986, Bernard Horton or Lennette Horton Trustees,
HFT Mortgage LLC 401K Plan Trust dtd
10/20/2006, and Wayne E. Stahmer and Linda K.
Stahmer, Trustees, The Stahmer Family Trust dated
June 4, 2002 (Authorized by email)
/s/ Linda M. Parisi
LINDA M. PARISI
Attorney for Claimants Xia Yang and Lin Jiang Lin
(Authorized by email)

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/s/ William G. Malcolm
WILLIAM G. MALCOLM
Attorney for Claimant East West Bank
(Authorized by email)

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Stipulation to Stay Further Proceedings and Order

ORDER

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For the reasons set forth above, this matter is stayed under 18 U.S.C. §§ 981(g)(1), 981(g)(2) and

3 21 U.S.C. § 881(i) until the resolution of companion criminal cases. The parties shall file a joint status
4 report within 30 days of the conclusion of the parallel criminal cases, or as the court deems appropriate.
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IT IS SO ORDERED.

6 DATED: August 6, 2018.
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UNITED STATES DISTRICT JUDGE

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Stipulation to Stay Further Proceedings and Order