United States of America v. $257,497.93 in United States Currency

Filing 45

DEFAULT JUDGMENT is entered against Tony H. Xie, Xin Hui Liu, Neng M. Ren, Shui Ying Zou, Lan Qing Liu, Chang Biao Zheng, Hui Qing Chen, Henry Zhiheng Xu, Yan Louie, Yidong Zheng, and all persons or entities who may claim an interest in the $25 7,497.93 in United States Currency in the above-entitled action. FURTHER ORDERED that that Final Judgment of Forfeiture is entered against the $257,497.93 in United States Currency and Feng Zheng.FURTHER ORDERED that the $257,497.93 in United States Currency is forfeited to the United States of America, and no right, title, or interest in the property shall exist in any other party, other than Feng Zheng, whose rights and liabilities are adjudged below.FURTHER ORDERED that, t he property having been forfeited, within a practicable time hereafter for the United States, the United States must release to Feng Zheng, through Patricia Marr, one payment of $78,542.92, less any debt owed the United States, any agency of the United States, or any debt in which the United States is authorized to collect.IT IS HEREBY CERTIFIED, pursuant to 28 U.S.C. § 2465(a)(2), that there was reasonable cause for the seizure or arrest of the property. Signed by Judge Lloyd D. George on 9/30/16. (Copies have been distributed pursuant to the NEF - MMM)

Case 2:13-cv-01691-LDG-GWF Document 44-1 Filed 05/27/16 Page 1 of 14

1 DANIEL G. BOGDEN
United States Attorney
2 Nevada State Bar No. 2137
MICHAEL A. HUMPHREYS
3 Assistant United States Attorney
501 Las Vegas Boulevard South, Suite 1100
4 Las Vegas, Nevada 89101
Telephone: [phone]
5 Facsimile: [phone]
[e-mail]
6 Counsel for United States
7
8
9
10

UNITED STATES DISTRICT COURT

11

DISTRICT OF NEVADA

12 UNITED STATES OF AMERICA,
13
14

Plaintiff,
v.

15 $257,497.93 IN UNITED STATES
CURRENCY,
16
Defendant.
17

)
)
)
)
)
)
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)

2:13-CV-1691-LDG-(GWF)
Default Judgment of Forfeiture as to
Withdrawn Claimants and all Persons or
Entities Who May Claim an Interest in the
$257,497.93 in United States Currency and
Final Judgment of Forfeiture as to
$257,497.93 in United States Currency and
Feng Zheng

18 I. FACTS
19

From at least November 2012 through the date of their arrest on January 9, 2013, Chang

20 Zheng, Hui Chen and others have been engaged in a conspiracy to distribute controlled
21 substances, specifically large quantities of marijuana, and also conducted frequent acts of
22 money-laundering. Following their arrest, and after being advised of their Miranda rights, Chang
23 Zheng and Hui Chen told investigators that they had no source of income other than proceeds
24 from the sale of marijuana.
25

Chang Zheng and Hui Chen are either married to each other or have a common-law

26 relationship. On further information and belief, Chang Zheng and Hui Chen, are the parents of

Case 2:13-cv-01691-LDG-GWF Document 44-1 Filed 05/27/16 Page 2 of 14

1 Feng Zheng, a college student in Columbia, South Carolina, who at all times relevant held a job
2 at the Jasmine Buffet in Columbia, South Carolina.
3

The house located at 3337 Trickling Stream Circle, Las Vegas, Nevada, was the site of a

4 residential marijuana grow operation.
5

On January 9, 2013, Chang Zheng and Hui Chen were at the house where 1481 marijuana

6 plants were found. There was no furniture, food, clothing, or any other items to suggest the
7 residence was being used for anything more than a marijuana grow facility.
8

Several false drivers licenses and social security cards for Chang Zheng and Hui Chen,

9 several bank cards in the name of Hui Chen, and approximately $10,000 in United States
10 currency were in the house.
11

Chang Zheng and Hui Chen sold the marijuana from their residential grow to a man

12 driving a white car with California tags, who came to pick up the marijuana every few months.
13

Hui Chen had several bank deposit receipts on her person. The bank deposit receipts

14 showed that deposits had been made between December 28, 2012, and January 9, 2013, into
15 several bank accounts maintained by Citibank, Bank of America, and JPMorgan Chase. These
16 receipts were deposited into the accounts of third parties in amounts ranging from $3,000 to
17 $6,600, except for one transaction that showed a deposit for $29,000. Hui Chen also had bank
18 deposit receipts in her possession for deposits into bank accounts in her name and the name of
19 Chang Zheng. These deposits went into bank accounts maintained by Citibank, Bank of
20 America, and JPMorgan Chase. The total cash deposits for all of the receipts that Hui Chen had
21 in her possession was $90,100.
22

Hui Chen had 14 money order receipts in her possession ranging in amounts from $500

23 to $1,000. MoneyGram or the United States Postal Service had issued them.
24

Many of the deposit receipts Hui Chen possessed reflected movement of funds that could

25 be traced from the bank where that money was deposited in Nevada to a bank account
26 maintained by a third-party (most commonly a New York bank) and in the name of that party.

2

Case 2:13-cv-01691-LDG-GWF Document 44-1 Filed 05/27/16 Page 3 of 14

1 Within a day or two, in most instances, the amount of money that had been deposited into that
2 third-party account was moved primarily by checks drawn on those third-party accounts to the
3 South Carolina Bank of America account held in the name of Feng Zheng, the daughter of Chang
4 Zheng and Hui Chen.
5

An example of the money is graphically depicted as follows:

6 Date; Name of Bank Where
funds Deposited; Amount
7
12/31/12; Citibank; $3,000
8 01/02/2013; Bank of America;
$3,000
9

Account Holder Name
Account Number
Xin Hui Liu; x6910
Shui Ying Zou; x0936

10
01-02-2013; JP Morgan;
11 $4,500
01/02/2013; JP Morgan;
12 $5,000
01/02/2013; JP Morgan;
13 $5,000
14

Yang Chen & Min Chen;
x2395
Tony H. Xie, Gong H. Xie,
De Xie; x6200
Neng M. Ren; x3914

Date; Amount Funds Moved
to Feng Zheng’s BofA
Account
01/03/2013; $3,000
01/04/2013, Zou withdrew
$3,000 from his BofA account
& wrote check from Citibank
No. x0136 to Feng Zheng’s
BofA account
01/03/2013; $4,500
01/02/2013; $5,000
01/03/2013; $5,000

In addition to funds traced from the deposits that were in Hui Chen’s possession to Feng

15 Zheng’s South Carolina Bank of America account, Hui Chen had a receipt that was deposited
16 directly into Feng Cheng’s account in the amount $29,000. The deposit slip denoted six separate
17 checks drawn on different banks. However, the payee for all of those checks was Feng Zheng.
18

Chang Zheng and Hui Chen had separate accounts at the Bank of America in Nevada in

19 the name of Chang Zheng and Hui Chen. Five thousand dollars ($5,000) was deposited into each
20 of those accounts on January 2, 2013. Special Agents seized any and all funds in these accounts
21 and gave administrative notice on them. No person including either Chang Zheng or Hui Chen
22 filed administrative claims for those monies. Both Zheng and Chen had no gainful employment
23 and all of their income was derived from marijuana.
24

The following accounts are examples that represent drug proceeds that were deposited

25 into third-party accounts as reflected by deposit receipts from Hui Chen.
26 / / /

3

Case 2:13-cv-01691-LDG-GWF Document 44-1 Filed 05/27/16 Page 4 of 14

1 Date; Name of Bank Where Funds
Deposited; Amount
2
01/07/2013; Bank of America; $6,600
3
01/09/2013; Bank of America; $6,000
4

Account Holder Name; Account Number
Henry Zhiheng Xu; x6735
Yan Louie; x1875

5

B. Procedural History

6

The United States filed a verified Complaint for Forfeiture in Rem on September 16,

7 2013. Complaint, ECF No. 1. The Complaint (ECF No.1) alleges the $257,497.93 in United
8 States Currency (property):
9

a. was furnished or was intended to be furnished in exchange for controlled substances

10

in violation of Title II of the Controlled Substances Act, 21 U.S.C. § 801 et seq., and

11

is subject to forfeiture to the United States pursuant to 21 U.S.C. § 881(a)(6);

12

b. is proceeds traceable to exchanges of controlled substances in violation of Title II of

13

the Controlled Substances Act, 21 U.S.C. § 801 et seq., and is subject to forfeiture to

14

the United States pursuant to 21 U.S.C. § 881(a)(6);

15

c. was used or was intended to be used to facilitate violations of Title II of the

16

Controlled Substances Act, 21 U.S.C. § 801 et seq., and is subject to forfeiture to the

17

United States pursuant to 21 U.S.C. § 881(a)(6);

18

d. was involved in a transaction or attempted transaction in violation of 18 U.S.C. §

19

1956 or any property traceable to such property is, therefore, subject to forfeiture

20

pursuant to 18 U.S.C. § 981(a)(1)(A); and

21

e. constitutes or is derived from proceeds traceable to a violation of 18 U.S.C. § 1956, a

22

specified unlawful activity, as defined by 18 U.S.C. § 1956(c)(7)(A) and 18 U.S.C. §

23

1961(1)(D), and is subject to forfeiture pursuant to 18 U.S.C. § 981(a)(1)(C) or a

24

conspiracy to commit such an offense.

25 / / /
26 / / /

4

Case 2:13-cv-01691-LDG-GWF Document 44-1 Filed 05/27/16 Page 5 of 14

1

On September 20, 2013, this Court entered an Order for Summons and Warrant of Arrest

2 in Rem for the Property and Notice (Order) and issued the Summons and Warrant of Arrest in
3 Rem (Summons and Warrant). Order, ECF No. 3; Summons and Warrant, ECF No. 4.
4

Pursuant to the Order (ECF No. 3), the Complaint (ECF No. 1), the Order (ECF No. 3),

5 the Summons and Warrant (ECF No. 4), and the Notice of Complaint for Forfeiture (Notice of
6 Complaint) (ECF No. 24, p. 3-4) were served on the property and all persons claiming an interest
7 in the property. Notice was published according to law.
8

Pursuant to Fed. R. Civ. P. Supp. Rule G(5), all persons interested in the property were

9 required to: (1) file a verified claim, setting forth the person=s or its interest in the property, that
10 (a) identifies the specific interest in the property claimed, (b) identifies the claimant and states
11 the claimant=s interest in the property, and (c) is signed by the claimant under penalty of perjury
12 pursuant to 28 U.S.C. ' 1746; (2) file the verified claim with the Clerk of the above-entitled
13 Court no later than 35 days after the notice is sent or, if direct notice was not sent, no later than
14 60 days after the first day of publication on the official internet government forfeiture site,
15 www.forfeiture.gov; (3) file an answer to the Complaint for Forfeiture in Rem or a motion under
16 Rule 12 with the Clerk of the Court, Lloyd D. George United States Courthouse, 333 Las Vegas
17 Boulevard South, Las Vegas, NV 89101, no later than 21 days after filing the verified claim; and
18 (4) serve a copy of the verified claim and the answer at the time of each filing on Michael A.
19 Humphreys, Assistant United States Attorney, Lloyd D. George United States
20 Courthouse, 333 Las Vegas Boulevard South, Suite 5000, Las Vegas, Nevada 89101. Complaint,
21 ECF No. 1; Order for Summons and Warrant, ECF No. 3; Summons and Warrant, ECF No. 4;
22 Notice of Complaint, ECF No. 24, p. 3-4.
23

Public notice of the forfeiture action and arrest was given to all persons and entities by

24 publication via the official internet government forfeiture site, www.forfeiture.gov, from April 1,
25 2014, through April 30, 2014. Notice of Filing Proof of Publication, ECF No. 19.
26 / / /

5

Case 2:13-cv-01691-LDG-GWF Document 44-1 Filed 05/27/16 Page 6 of 14

1

On April 9, 2014, the Internal Revenue Service (IRS) served the Complaint, the Order,

2 the Summons and Warrant, and the Notice of Complaint by executing them on the property.
3 Notice of Filing Service of Process, ECF No. 24, p. 2-18.
4

On April 10, 2014, the IRS personally served the Complaint, the Order, the Summons

5 and Warrant, and the Notice of Complaint on Patricia Marr, attorney for Feng Zheng, Chang
6 Biao Zheng, Hui Qing Chen, Henry Zhiheng Xu, Yan Louie, and Yidong Zheng. Notice of Filing
7 Service of Process, ECF No. 24, p. 19-36.
8

On April 9, 2014, the IRS served the Complaint, the Order, the Summons and Warrant,

9 and the Notice of Complaint on Chang Biao Zheng by certified return receipt mail and regular
10 mail. Notice of Filing Service of Process, ECF No. 24, p. 37-56.
11

On April 23, 2014, the IRS served the Complaint, the Order, the Summons and Warrant,

12 and the Notice of Complaint on Chang Biao Zheng by certified return receipt mail and regular
13 mail. Notice of Filing Service of Process, ECF No. 24, p. 57-77.
14

On April 9, 2014, the IRS served the Complaint, the Order, the Summons and Warrant,

15 and the Notice of Complaint on Chang Biao Zheng by certified return receipt mail and regular
16 mail. Notice of Filing Service of Process, ECF No. 24, p. 78-98 & ECF No. 24-1, p. 1-21.
17

On April 9, 2014, the IRS served the Complaint, the Order, the Summons and Warrant,

18 and the Notice of Complaint on Hui Qing Chen by certified return receipt mail and regular mail.
19 Notice of Filing Service of Process, ECF No. 24-1, p. 22-41 & p. 62-103.
20

On April 23, 2014, the IRS served the Complaint, the Order, the Summons and Warrant,

21 and the Notice of Complaint on Hui Qing Chen by certified return receipt mail and regular mail.
22 Notice of Filing Service of Process, ECF No. 24-1, p. 42-61.
23

On April 9, 2014, the IRS served the Complaint, the Order, the Summons and Warrant,

24 and the Notice of Complaint on Henry Zhiheng Xu by certified return receipt mail and regular
25 mail. Notice of Filing Service of Process, ECF No. 24-2, p. 1-36.
26 / / /

6

Case 2:13-cv-01691-LDG-GWF Document 44-1 Filed 05/27/16 Page 7 of 14

1

On April 9, 2014, the IRS served the Complaint, the Order, the Summons and Warrant,

2 and the Notice of Complaint on Yan Louie by certified return receipt mail and regular mail.
3 Notice of Filing Service of Process, ECF No. 24-2, p. 37-54.
4

On April 9, 2014, the IRS served the Complaint, the Order, the Summons and Warrant,

5 and the Notice of Complaint on Yidong Zheng by certified return receipt mail and regular mail.
6 Notice of Filing Service of Process, ECF No. 24-2, p. 55-74 & ECF No. 24-3, p. 22-42.
7

On April 23, 2014, the IRS served the Complaint, the Order, the Summons and Warrant,

8 and the Notice of Complaint on Yidong Zheng by certified return receipt mail and regular mail.
9 Notice of Filing Service of Process, ECF No. 24-2, p. 75-95 & ECF No. 24-3, P. 1-21.
10

On April 9, 2014, the IRS served the Complaint, the Order, the Summons and Warrant,

11 and the Notice of Complaint on Feng Zheng by certified return receipt mail and regular mail.
12 Notice of Filing Service of Process, ECF No. 24-3, p. 43-63.
13

On April 29, 2014, Feng Zheng, Tony H. Xie, Xin Hui Liu, Neng M. Ren, Shui Ying

14 Zou, and Lan Qing Liu filed claims. Declaration, ECF Nos. 5-10; Notice of Claim, ECF No. 1115 18.
16

On May 12, 2014, Feng Zheng, Tony H. Xie, Xin Hui Liu, Neng M. Ren, Shui Ying Zou,

17 and Lan Qing Liu filed an Answer to the Complaint. Answer, ECF No. 20.
18

On May 15, 2014, Feng Zheng, Tony H. Xie, Xin Hui Liu, Neng M. Ren, Shui Ying Zou,

19 and Lan Qing Liu filed an Amended Answer to the Complaint. Amended Answer, ECF No. 21.
20

On January 27, 2016, the United States filed a Settlement Agreement for Entry of

21 Judgment of Forfeiture as to $257,497.93 and Order. Feng Zheng waived, among other things,
22 service of process. The government agreed to return $78,542.92 to Feng Zheng subject to the
23 Treasury Offset Program, which collects any delinquent tax and non-tax debts owed to the
24 United States and to individual states (including past-due child support) Feng Zheng may owe.
25 The amount returned to her may be a lesser amount. Settlement Agreement, ECF No. 30.
26 / / /

7

Case 2:13-cv-01691-LDG-GWF Document 44-1 Filed 05/27/16 Page 8 of 14

1

On February 1, 2016, this Court entered the Order granting the Settlement Agreement for

2 Entry of Judgment of Forfeiture as to $257,497.93 and Order. Order Granting Settlement
3 Agreement, ECF No. 31.
4

On April 13, 2016, Lan Qing Liu, Neng M. Ren, Shui Ying Zou, Tony Xie, and Xin Hui

5 Liu withdrew their claims on the property. Motions for Withdrawal of Claims, ECF Nos. 32-36.
6

On April 26, 2016, this Court entered orders granting the Motions for Withdrawal of

7 Claims with prejudice. (ECF Nos. 37-39, 41, and 42).
8

No other person or entity has filed a claim, answer, or responsive pleading within the

9 time permitted by 18 U.S.C. § 983(a)(4) and Fed. R. Civ. P. Supp. Rule G(4) and (5).
10

On April 26, 2016, the United States filed a Motion for Entry of Clerk’s Default against

11 the $257,497.93 in United States Currency, Tony H. Xie, Xin Hui Liu, Neng M. Ren, Shui Ying
12 Zou, Lan Qing Liu, Chang Biao Zheng, Hui Qing Chen, Henry Zhiheng Xu, Yan Louie, Yidong
13 Zheng, and all persons or entities who claim an interest in the $257,497.93 in United States
14 Currency in the above-entitled action except Feng Zheng. Motion for Entry of Clerk’s Default,
15 ECF No. 40.
16

On April 27, 2016, the Clerk of the Court entered a Default against the $257,497.93 in

17 United States Currency, Tony H. Xie, Xin Hui Liu, Neng M. Ren, Shui Ying Zou, Lan Qing Liu,
18 Chang Biao Zheng, Hui Qing Chen, Henry Zhiheng Xu, Yan Louie, Yidong Zheng, and all
19 persons or entities who claim an interest in the $257,497.93 in United States Currency in the
20 above-entitled action except Feng Zheng. Entry of Clerk’s Default, ECF No. 43.
21

Feng Zheng, Tony H. Xie, Xin Hui Liu, Neng M. Ren, Shui Ying Zou, Lan Qing Liu,

22 Chang Biao Zheng, Hui Qing Chen, Henry Zhiheng Xu, Yan Louie, and Yidong Zheng are not in
23 the military service within the purview of the Servicemen’s Civil Relief Act of 2003. See Motion
24 for Entry of Clerk’s Default, ECF No. 40, Exhibits 1-11.
25 / / /
26 / / /

8

Case 2:13-cv-01691-LDG-GWF Document 44-1 Filed 05/27/16 Page 9 of 14

1

Feng Zheng, Tony H. Xie, Xin Hui Liu, Neng M. Ren, Shui Ying Zou, Lan Qing Liu,

2 Chang Biao Zheng, Hui Qing Chen, Henry Zhiheng Xu, Yan Louie, and Yidong Zheng are
3 neither minors nor incompetent persons.
4 III. LEGAL STANDARD
5

For purposes of a default judgment, the well-pled allegations of the complaint are taken

6 as true. Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 918 (9th Cir. 1987). Furthermore, upon
7 default, the defendant’s liability is conclusively established and the factual allegations in the
8 complaint, except those relating to damages, are accepted as true. Geddes v. United Fin. Grp.,
9 559 F.2d 557, 560 (9th Cir. 1977). The power to grant or deny relief upon an application for
10 default judgment is within the discretion of this Court. Aldabe v. Aldabe, 616 F.2d 1089, 1092
11 (9th Cir. 1980).
12

Civil forfeiture cases have five elements that must be met to fulfill the legal standard and

13 complete a default: (a) publication and personal service were completed as required in Fed. R.
14 Civ. P. Supp. Rule G(4); (b) the judgment sought does not differ in kind from, or exceed in
15 amount, from what is demanded in the pleadings pursuant to Fed. R. Civ. P. 54(c); (c) the Clerk
16 of the Court has entered default for the specified amount pursuant to Fed. R. Civ. P. 55(b); (d)
17 the complaint is legally sufficient to support a reasonable belief that the government will be able
18 to meet its burden of proof pursuant to Fed. R. Civ. P. Supp. Rule G(2) (Alan Neuman Prod., Inc.
19 v. Albright, 862 F.2d 1388, 1392 (9th Cir. 1998)); and (e) no person has filed a claim, or the
20 claim(s) have been resolved under 18 U.S.C. § 983(a)(4)(A) or Fed. R. Civ. P. Supp. Rule G(5).
21 United States v. Approximately $67,900.00 in U.S. Currency, No. 2:13-CV-1173 JAM AC, 2014
22 WL 1330668 (E.D. Cal. Mar. 31, 2014).
23

Civil cases which do not directly address forfeiture have seven elements for

24 consideration before entry of default: (a) the possibility of prejudice to the plaintiff if relief is
25 denied; (b) the substantive merit of the plaintiff’s claims; (c) the sufficiency of the complaint; (d)
26 the amount of money at stake; (e) the possibility of disputes to any material facts in the case; (f)

9

Case 2:13-cv-01691-LDG-GWF Document 44-1 Filed 05/27/16 Page 10 of 14

1 whether default resulted from excusable neglect; and (g) the public policy favoring resolution of
2 cases on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986); United States v.
3 $150,990.00 in U.S. Currency, No. 2-12-CV-01014-JAD, 2014 WL 6065815, at 2 (D. Nev. Nov.
4 10, 2014).
5 IV. THE LEGAL REQUIREMENTS FOR DEFAULT ARE MET
6
7

1. Notice
Pursuant to Fed. R. Civ. P. Supp. Rule G(4)(a)(iv)(C), the United States published notice

8 via the official internet government forfeiture site, www.forfeiture.gov, for thirty consecutive
9 days. See above. Pursuant to Fed. R. Civ. P. Supp. Rule G(4)(b), the United States served the
10 Complaint, the Order, the Summons and Warrant, and the Notice of Complaint on all known
11 potential claimants. See above.
12
13

2. Judgment Sought
Pursuant to Fed. R. Civ. P. 54(c), the judgment by default does not “differ in kind from,

14 or exceed [the] amount[]” of relief listed in the complaint for forfeiture. (brackets added).
15
16

3. Default and Entry of Default
As shown above, the United States has requested entry of Clerk’s Default against the

17 $257,497.93 in United States Currency, Tony H. Xie, Xin Hui Liu, Neng M. Ren, Shui Ying
18 Zou, Lan Qing Liu, Chang Biao Zheng, Hui Qing Chen, Henry Zhiheng Xu, Yan Louie, Yidong
19 Zheng, and all persons or entities who claim an interest in the $257,497.93 in United States
20 Currency in the above-entitled action except Feng Zheng (ECF No. 40). The Clerk entered the
21 Default as requested (ECF No. 43) pursuant to Fed. R. Civ. P. 55(a) and (b)(1).
22
23

4. Legal Sufficiency of the Complaint
The Complaint filed in this action was verified. The Court has subject matter

24 jurisdiction, in rem jurisdiction over the $257,497.93 in United States Currency, and venue. The
25 Complaint described the property with reasonable particularity. The Complaint states where the
26 seizure of the $257,497.93 in United States Currency occurred and its current location. The

10

Case 2:13-cv-01691-LDG-GWF Document 44-1 Filed 05/27/16 Page 11 of 14

1 Complaint identifies the statutes under which the forfeiture action is brought. The Complaint
2 alleges sufficiently detailed facts to support a reasonable belief that the United States will be able
3 to meet its burden proof at trial. See facts above. Complaint, ECF No. 1. Fed. R. Civ. P. Supp.
4 Rule G(2).
5

The allegations of the Complaint are sustained by the evidence and are adopted as

6 findings of fact. The Court concludes as a matter of law that the United States is entitled to the
7 relief requested in the Complaint.
8
9

5. Potential Claimants
Feng Zheng has entered into a Settlement Agreement with the United States which

10 resolves her claim on the property (ECF No. 31). Tony H. Xie, Xin Hui Liu, Neng M. Ren, Shui
11 Ying Zou, Lan Qing Liu, Chang Biao Zheng, Hui Qing Chen, Henry Zhiheng Xu, Yan Louie,
12 Yidong Zheng withdrew their claims and this Court granted their motions to withdraw with
13 prejudice (ECF Nos. 37-39, 41, and 42). No other person has filed a claim and the time to file a
14 claim has passed.
15
16

6. The Plaintiff will be Prejudiced Without a Judgment
The government would clearly be prejudiced if it were to try this case rather than receive

17 a default judgment, since it would incur the additional expense and effort of presenting evidence,
18 which is unnecessary because the allegations of the complaint have been established by Tony H.
19 Xie, Xin Hui Liu, Neng M. Ren, Shui Ying Zou, Lan Qing Liu, Chang Biao Zheng, Hui Qing
20 Chen, Henry Zhiheng Xu, Yan Louie, Yidong Zheng’s default. Litigation is unnecessary and
21 impractical. “[T]he government would be prejudiced by having to expend additional resources
22 litigating an action that appears to be uncontested. This factor favors default judgment. United
23 States v. $150,990.00 in U.S. Currency, No. 2-12-CV-01014-JAD, 2014 WL 6065815, at 2 (D.
24 Nev. Nov. 10, 2014) (brackets added).
25 / / /
26 / / /

11

Case 2:13-cv-01691-LDG-GWF Document 44-1 Filed 05/27/16 Page 12 of 14

1
2

7. The Government’s Claims are Meritorious and the Complaint is Sufficient
As shown in the statement of the case above, the government has a clear case against the

3 property and the Complaint sufficiently alleges the facts of the case.
4
5

8. The Amount of Money at Stake
The amount of money at stake was clearly established in the Complaint (ECF No. 1) and

6 is forfeitable pursuant to 21 U.S.C. § 881(a)(6) and 18 U.S.C § 981(a)(1)(A) and (C).
7
8

9. There are No Possible Disputes of Material Fact
If default judgment were denied, there would be no issues of material fact. The ability of

9 law enforcement to trace the property from drug sales through a series of bank accounts
10 establishes the seized property is illegal proceeds. The default has, in any event, rendered the
11 allegations of the complaint conclusively established as a matter of law.
12
13

10. Default Was Not the Result of Excusable Neglect
The record shows that the claimants were properly served with the Complaint, Order,

14 Summons and Warrant, and the Notice and filed claims and answers to the complaint. The
15 Claims and Answers were withdrawn with prejudice. As a result, there is no evidence of
16 excusable neglect.
17
18

11. Public Policy Does not Prevent Default Judgment
“While the Federal Rules favor decisions on the merits, they also allow for the

19 termination of cases before the court can reach the merits… [t]hus, the preference to decide cases
20 on the merits does not preclude a court from granting “default judgment.” Kloepping v.
21 Fireman's Fund, No. C 94-2684 TEH, 1996 WL 75314, at 3 (N.D. Cal. Feb. 13, 1996) (brackets
22 added). Under Fed. R. Civ. P. 55(b), default judgments are allowed. Here, the claimants
23 withdrew their claims and answers to the government’s Complaint. Denying the government’s
24 motion would not further public policy. Instead, it would delay the return of property as set forth
25 in the Settlement Agreement (ECF No. 31). While cases should be decided on the merits when
26 possible, the settlement with Feng Zheng and the other Claimants’ withdrawals of their claims

12

Case 2:13-cv-01691-LDG-GWF Document 44-1 Filed 05/27/16 Page 13 of 14

1 makes a decision on the merits impractical, and default judgment and final judgment is therefore
2 appropriate. Rockstar, Inc. v. Rap Star 360 LLC, No. 2:10-CV-00179-LRH, 2010 WL 2773588,
3 at 3 (D. Nev. July 8, 2010).
Based on the foregoing this Court finds that the United States has shown its entitlement

4

5 to a Default Judgment of Forfeiture as to Tony H. Xie, Xin Hui Liu, Neng M. Ren, Shui Ying
6 Zou, Lan Qing Liu, Chang Biao Zheng, Hui Qing Chen, Henry Zhiheng Xu, Yan Louie, Yidong
7 Zheng, and all persons or entities who may claim an interest in the $257,497.93 in United States
8 Currency and Final Judgment of Forfeiture as to $257,497.93 in United States Currency and
9 Feng Zheng.
NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that

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11 Default Judgment of Forfeiture is entered against Tony H. Xie, Xin Hui Liu, Neng M. Ren, Shui
12 Ying Zou, Lan Qing Liu, Chang Biao Zheng, Hui Qing Chen, Henry Zhiheng Xu, Yan Louie,
13 Yidong Zheng, and all persons or entities who may claim an interest in the $257,497.93 in
14 United States Currency in the above-entitled action.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Final Judgment of

15

16 Forfeiture is entered against the $257,497.93 in United States Currency and Feng Zheng.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the $257,497.93 in

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18 United States Currency is forfeited to the United States of America, and no right, title, or interest
19 in the property shall exist in any other party, other than Feng Zheng, whose rights and liabilities
20 are adjudged below.
IT IS FURTHER ORDERED, ADJUDED AND DECREED, that, the property having

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22 been forfeited, within a practicable time hereafter for the United States, the United States must
23 release to Feng Zheng, through Patricia Marr, one payment of $78,542.92, less any debt owed
24 the United States, any agency of the United States, or any debt in which the United States is
25 authorized to collect.
26 / / /
///
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Case 2:13-cv-01691-LDG-GWF Document 44-1 Filed 05/27/16 Page 14 of 14

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IT IS HEREBY CERTIFIED, pursuant to 28 U.S.C. § 2465(a)(2), that there was

2 reasonable cause for the seizure or arrest of the property.
3

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___________________________________
UNITED STATES DISTRICT JUDGE
LLOYD D. GEORGE

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DATED:___________________________
September 2016

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