UNITED STATES OF AMERICA v. $1,879,991.64 PREVIOUSLY CONTAINED IN SBERBANK OF RUSSIA'S INTERBANK OR CORRESPONDENT BANK ACCOUNT NUMBERS 0004403077 AND 0004169401, HELD AT DEUSTCHE BANK TRUST COMPANY AMERICAS
OPINION. Signed by Judge William J. Martini on 1/30/17. (gh, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
UNITED STATES OF AMERICA,
Civ. No. 2:15-6442
CONTAINED IN SBERBANK OF
RUSSIA’S INTERBANK OR
CORRESPONDENT BANK ACCOUNT
NUMBERS 0004403077 AND 0004169401,
HELD AT DEUTSCHE BANK TRUST
Defendant in rem.
WILLIAM J. MARTINI, U.S.D.J.:
The United States of America (the “Government”) brings this action against
Sberbank of Russia (“Sberbank”), seeking forfeiture of $1,879,991.64, in connection with
the criminal conviction of Alexander Brazhnikov, Jr. This matter comes before the Court
on the Government’s motion for an order striking a claim filed by Sberbank pursuant to
Supplemental Admiralty and Maritime Claims Rule G(8)(c) (“Supplemental Rule G”) and
18 U.S.C. § 981(k) (“§ 981(k)”), and on Sberbank’s motion for leave to file an amended
answer to the Government’s complaint. There was no oral argument. Fed. R. Civ. P. 78(b).
For the reasons set forth below, the Government’s motion to strike is GRANTED, in part,
and DENIED, in part. Sberbank’s motion to amend is GRANTED.
This forfeiture proceeding arises out of Alexander Brazhnikov, Jr.’s criminal
proceeding, in which he pled guilty to three conspiracy charges related to the smuggling of
restricted items from the United States to Russia. The Court assumes the parties’
familiarity with the facts. A more complete recitation can be found in the Court’s previous
opinion, filed on May 10, 2016. See Op. 1–3, ECF No. 18.
The following facts are of particular relevance to the instant motion. On June 26,
2014, the FBI seized the funds at issue from Sberbank’s interbank account held at Deutsche
Bank Trust Company of Americas. Id. at 2. Sberbank contested the seizure, first to the
Attorney General via an administrative petition under § 981(k)(1)(B), and then in this Court
by filing a claim pursuant to Supplemental Rule G and answering the Government’s
complaint. Id. In its answer, Sberbank asserted that it was an innocent party, but that it
could not disclose account balances and transaction records that were sought by the
Government due to Russian bank secrecy laws. Id. at 2–3. Sberbank then moved to stay
the forfeiture proceedings and compel the Attorney General to rule on its administrative
petition. This Court denied the motion in its entirety, calling into question, without
deciding, Sberbank’s statutory standing to contest the seizure. Id. at 5–7. Significantly,
the Court found that “Sberbank has not produced a scintilla of evidence suggesting that it
had discharged the obligations to Brazhnikov prior to the seizure of the funds.” Id. at 6.
On July 22, 2016, the Government moved to strike Sberbank’s claim pursuant to
Supplemental Rule G(8)(c), contending that Sberbank lacks standing to contest the seizure
because it cannot prove its ownership of the funds beyond a preponderance of the evidence.
See Br. of the United States in Supp. of Its Mot. for an Order Striking the Claim Filed by
Sberbank of Russia (“Gov’t Mot.”) 6–10, ECF No. 28. The Government further argued
that § 981(k) provided for the seizure of funds from Sberbank’s interbank account because
Sberbank did not meet the statutory definition of “owner” by failing to show that it had
discharged its obligations to Brazhnikov prior to the date of seizure. See id. at 10–19.
On September 20, 2016, before filing its opposition, Sberbank sought leave to file
an amended answer to the Government’s complaint. See Letter from Winston & Strawn
LLP (“Mot. to Amend”), ECF No. 31. In its motion, Sberbank claimed that it was now
able to disclose customer account and transactional information due to the discovery of
additional facts that altered its position under Russian bank secrecy laws. See id. at 2.
Specifically, Sberbank discovered that Brazhnikov assigned a power of attorney to an
agent, which was subsequently used to withdraw the funds at issue from Brazhnikov’s
accounts. Id. Under Russian law, Sberbank could now disclose the necessary information
to establish standing because it determined that Brazhnikov had acted in bad faith when he
pleaded guilty and falsely purported to surrender those funds to the Government. Id.
On September 22, 2016, Sberbank filed its opposition to the motion to strike,
making essentially the same argument that it was now able to establish standing. See Br.
in Opp’n to Mot. to Strike the Claim (“Opp’n to Strike”) 6–7, ECF No. 32. Sberbank also
admitted that there was an outstanding balance of $808,661.28 in the three bank accounts
identified by the Government on the date of seizure. See id. at 3–4. Sberbank further stated
that it issued amended objections and responses to the Government that sufficiently
established standing on August 11, 2016. See id. at 6–7, Exs. 3–4.
On October 11, 2016, the Government filed a reply to Sberbank’s opposition,
arguing that the claim should be stricken because Sberbank had acted in bad faith by
entirely changing its position. See Reply Br. to Opp’n to Mot. to Strike the Claim (“Gov’t
Reply”) 2–4, ECF No. 36. The Government also simultaneously filed an opposition to
Sberbank’s motion to amend, similarly arguing that Sberbank acted in bad faith. See Letter
from United States (“Gov’t Opp’n to Amend”), ECF No. 37. Sberbank filed responses to
both, making similar arguments against a finding of bad faith. See Letter from Winston &
Strawn LLP, ECF No. 40; Resp. in Opp’n to Mot. to Strike the Claim (“Sur-Reply”), ECF
Finally, at the Court’s request, the Government filed a letter, arguing that the Court
should decide its motion to strike prior to Sberbank’s motion to amend because the
amendment would be futile if the Court were to find that Sberbank lacked statutory
standing. See Letter from United States, ECF No. 49. The Court finds that the briefing
papers for both motions argue essentially the same points. It will, therefore, decide both
motions in the instant opinion, beginning with the Government’s motion to strike.
It has been previously established that 18 U.S.C. § 981 governs this action. See
ECF No. 18 at 3. More specifically, § 981(k) addresses the seizure of funds in interbank
accounts. Only the “owner” of the seized funds may contest the forfeiture, which is defined
as “the person who was the owner . . . of the funds that were deposited into the foreign
financial institution . . . at the time such funds were deposited.” See 18 U.S.C. §§ 981(k)(3),
(k)(4)(B)(i)(I). Generally, a foreign financial institution whose interbank account
possesses the seized funds cannot contest the seizure as an “owner.” See 18 U.S.C. §
981(k)(4)(B)(i)(II). An exception exists, however, that allows the institution to challenge
forfeiture if it can show, by a preponderance of the evidence, that it had discharged all or
part of its obligations to the owner before the seizure of funds. See 18 U.S.C. §
981(k)(4)(B)(ii)(II). Sberbank’s standing, therefore, hinges on whether it can show that it
discharged all or part of its obligations to Brazhnikov prior to June 26, 2014.1
The Government’s motion to strike is also subject to Supplemental Rule G, which
governs the procedure concerning a forfeiture action in rem arising from a federal statute.
See Fed. R. Civ. P. Supp. A.M.C.R. G(1) [hereinafter “Supp. R. G”]. The Government
may move to strike a claim of ownership for failure to establish standing at any time before
trial. See Supp. R. G(8)(c)(i)(B). The motion “may be presented as a motion for judgment
on the pleadings or as a motion to determine after a hearing or by summary judgment
whether the claimant can carry the burden of establishing standing by a preponderance of
the evidence.” See Supp. R. G(8)(c)(ii)(B).
The Government has chosen to present its motion to strike as a motion for summary
judgment. See Gov’t Mot. at 9–10. Federal Rule of Civil Procedure 56 provides for
summary judgment “if the movant shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see
Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986); Turner v. Schering-Plough Corp.,
901 F.2d 335, 340 (3d Cir. 1990). A factual dispute is genuine if a reasonable jury could
find for the non-moving party, and is material if it will affect the outcome of the trial under
The Government does not contest Sberbank’s Article III standing.
governing substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The Court considers all evidence and inferences drawn therefrom in the light most
favorable to the non-moving party. Andreoli v. Gates, 482 F.3d 641, 647 (3d Cir. 2007).
Where the non-moving party bears the burden of proof, however, it “must show specific
facts that a reasonable jury could find in its favor; mere allegations are insufficient.” See
Goodall-Gaillard v. N.J. Dep’t of Corr., 625 F. App’x 123, 126 (3d Cir. 2015) (internal
quotations and citations omitted).
Finally, Federal Rule of Civil Procedure 15 governs amended pleadings and
provides, in pertinent part, that “[t]he court should freely give leave [to amend] when
justice so requires.” See Fed. R. Civ. P. 15(a)(2). The Third Circuit requires that “motions
to amend pleadings should be liberally granted.” See Long v. Wilson, 393 F.3d 390, 400
(3d Cir. 2004) (citing Adams v. Gould, Inc., 739 F.2d 858, 867–68 (3d Cir. 1984)). An
amendment should be allowed absent a finding of “bad faith or dilatory motive, truly undue
or unexplained delay, repeated failure to cure deficiency by amendments previously
allowed or futility of amendment.” See id. (internal quotations and citations omitted). “The
liberal right to amend extends to an answer to the complaint.” Id.
The Court agrees with the Government that Sberbank’s motion to amend would be
futile, and therefore disallowed, if the Court finds that Sberbank lacks standing to contest
the seizure under § 981(k). For this reason, the Court will first address the issue of standing
before turning to the motion to amend.
A. Judicial Interpretations of the Foreign Financial Institution Exception
As a preliminary matter, the Court acknowledges that there is a dearth of case law
interpreting § 981(k) at present; however, both the First Circuit and the District Court for
the District of Columbia (“D.D.C.”) have considered the ownership exception for a foreign
financial institution under § 981(k)(4)(B)(ii)(II). The First Circuit determined that the
statutory term “obligation” was clear in the context of bank account deposits:
A deposit of a certain amount into a bank account creates a corresponding
obligation on the part of the bank to repay that amount on demand. Such
an obligation is discharged by repaying the appropriate amount. Thus, a
bank’s obligation to a depositor is measured by that depositor’s account
United States v. Union Bank for Sav. & Inv. (Jordan), 487 F.3d 8, 18 (1st Cir. 2007)
(internal citations omitted). The First Circuit held that the defendant bank did not fit within
the exception because the depositors had funds on deposit in various accounts at the time
of seizure and the bank, therefore, “had not discharged its obligation to the prior owners,
and it is thus not an owner of any portion of the seized funds.” See id.
Notably, the First Circuit rejected the bank’s argument that its “‘obligation’ should
be tied to its ability to obtain recourse for seizure from its depositor” because recourse,
which is not an obligation but “the nature of a legal right or a contingency on an obligation,”
was absent from the statutory language. See id. The Court also rejected the bank’s
argument that forfeitures should be limited to the balances of particular accounts containing
illicit funds and found that the aggregate amount of a depositor’s funds on deposit was
subject to forfeiture. As the Court reasoned, the statutory language creates an obligation
to the prior owner of funds, “not the obligation under a specific account or the obligation
‘arising’ from the deposit of forfeitable funds.” See id. at 20.
The D.D.C. took issue with the First Circuit’s broad interpretation of “obligation,”
stating that “the statutory purpose of putting interbank accounts on the same footing in
forfeiture proceedings as other U.S. bank accounts strongly suggests that the term
‘obligation’ refers only to the foreign bank’s obligation pursuant to the contract that created
the account in to which undifferentiated funds traceable to criminal activity were
deposited.” See United States v. Sum of $70,990,605, 128 F. Supp. 3d 350, 361 (D.D.C.
2015). The D.D.C. noted that the statute “creates a rebuttable presumption that illicit funds
deposited in a foreign bank remain there” and it shifts the burden to the bank “to show that
[it has] returned illicit proceeds to [its] depositors,” not that it has returned all funds on
deposit. See id.
Despite their differing conclusions, both courts agreed, as does this Court, that
Congress intended to treat foreign deposits as domestic deposits under § 981(k). See Union
Bank, 487 F.3d at 17; $70,990,605, 128 F. Supp. 3d at 361. At this point, a critical factual
distinction between the aforementioned cases and the case at bar warrants mentioning:
neither court applied § 981(k) to a case where, as here, a federal criminal defendant had
pleaded guilty to, or was otherwise convicted of, the offenses predicating the forfeiture
proceeding. Both cases concerned illegal activity conducted by foreign nationals in foreign
countries, but whose conduct adversely affected parties inside the United States. See Union
Bank, 487 F.3d at 11–15 (describing telemarketing scheme perpetrated by foreign nationals
located outside of the United States that victimized American citizens); $70,990,605, 128
F. Supp. 3d at 352–54 (describing wire fraud conspiracy perpetrated by Afghan nationals
against the U.S. government in Afghanistan). In light of the statutory purpose to put foreign
and domestic deposits on equal footing, this Court is compelled to consider a hypothetical
scenario: the result that would occur if the funds in question were deposited into a domestic
account by Brazhnikov and the Government subsequently pursued civil forfeiture.
Brazhnikov pleaded guilty to, among other crimes, conspiracy to commit money
laundering in violation of 18 U.S.C. § 1956 (“§ 1956”). See id. at 1–2. The funds in
question, if deposited domestically, would have been subject to civil forfeiture under §
981(a)(1)(A).2 Recovery of these funds would have been governed by 28 U.S.C. § 2461(c)
(“§ 2461(c)”), which authorizes civil or criminal forfeiture when a defendant is convicted
As it happened, Brazhnikov forfeited money held in eleven different domestic bank accounts, among other
domestically located assets, pursuant to the criminal forfeiture statute 18 U.S.C. § 1982, after entering his guilty plea.
See Consent J. 2, 4–5, June 11, 2015, ECF No. 29.
of a violation of an Act of Congress—e.g., § 1956. See United States v. Vampire Nation,
451 F.3d 189, 199–200 (3d Cir. 2006) (interpreting § 2461(c) as applicable to both civil
and criminal forfeiture arising from violations of § 1956). Section 2461(c), in turn,
incorporates the forfeiture procedures set forth in 21 U.S.C. § 853 (“§ 853”).
Section 853(p) mandates the forfeiture of “substitute property” when any property
that would otherwise be subject to forfeiture is unavailable as a result of an act or omission
by the defendant in the following circumstances: “(A) [the property] cannot be located
upon the exercise of due diligence; (B) has been transferred or sold to, or deposited with,
a third party; (C) has been placed beyond the jurisdiction of the court; (D) has been
substantially diminished in value; or (E) has been commingled with other property which
cannot be divided without difficulty.” Thus, if Brazhnikov had originally deposited the
funds into a domestic bank account but subsequently moved them beyond the reach of this
Court prior to seizure, then the Government would have been entitled to the equivalent
amount of money located in any other domestic bank account or accounts owned by
Brazhnikov, regardless of its nexus to the predicate criminality. See United States v. Patel,
949 F. Supp. 2d 642, 656 (W.D. Va. 2013) (concluding that the government may seek
forfeiture of substitute assets pursuant to § 853(p) in civil forfeiture proceedings); cf.
Vampire Nation, 451 F.3d at 201–03 (finding that Congress intended to make criminal and
civil forfeitures “coextensive”).
In light of the statutory purpose to put foreign and domestic deposits on equal
footing, it stands to reason that § 853(p) should apply to forfeitures under § 981(k) in the
same manner as it applies under § 981(a)(1)(A). That is, where the funds subject to
forfeiture under § 981(k) are unavailable by the act or omission of the convicted defendant,
then the Government is entitled to the forfeiture of substitute property. Specific to the
instant case, any funds remaining in any Sberbank account connected to Brazhnikov or his
agent at the time of the FBI’s seizure are subject to forfeiture as substitute property. For
this reason, in the limited circumstance before it, this Court joins the First Circuit in holding
that a foreign financial institution must show beyond a preponderance of the evidence that
it has discharged its entire obligation to the prior owner of funds in establishing statutory
standing under § 981(k)(4)(B)(ii)(II). See Union Bank, 487 F.3d at 17–22.
With this understanding, the Court now turns to the facts at hand. The facts indicate
two separate sums of money in dispute: the first is the $808,661.28 that Sberbank admits
remained on deposit in the three identified accounts on June 24, 2014; the second is the
remaining $1,071,330.36 of the total amount seized by the FBI that Sberbank contends was
not on deposit in those accounts at the time of seizure. See Opp’n to Strike at 3–4. The
Court will address each sum in turn.
In the Government’s special interrogatories to Sberbank, it identified three Sberbank
accounts connected to Brazhnikov. See Gov’t Mot. at 4. In its amended responses,
Sberbank admitted that at the time of seizure, “[t]he total balance of the accounts was
$808,661.28.”3 See Opp’n to Strike at 4; Sur-Reply at 2. Sberbank does not contest that
these accounts belonged to Brazhnikov or were otherwise associated with the money
subject to forfeiture. Instead, Sberbank first argues that the Government’s motion should
be denied on procedural grounds for failing to comply with Local Rule 56.1. Second,
Sberbank argues that it can now establish standing by virtue of its discovery of
Brazhnikov’s purported bad faith in issuing a power of attorney to withdraw money from
his accounts. See Opp’n to Strike at 5–7.
Sberbank’s procedural argument fails. As stated above, the procedure that governs
the instant motion is Supplemental Rule G, which the Government properly followed. See
Part II, supra. The rule allows for the Government’s motion to be presented as a motion
for summary judgment, but it does not transform the motion into a motion for summary
judgment, thereby requiring the conformity to every procedural detail under Rule 56, local
or otherwise. See Supp. R. G(8)(c)(ii)(B).
Sberbank’s bad faith argument also plainly fails. Brazhnikov’s bad faith in dealing
with Sberbank is between Brazhnikov and Sberbank. It is clearly not a defense against
forfeiture under § 981(k)(4)(B)(ii)(II). See Union Bank, 487 F.3d at 18–19 (“Nothing in
the language of the statute ties the definition of ‘obligation’ to the foreign bank’s rights of
recourse or setoff.”). The Court, therefore, finds that Sberbank cannot establish standing
to contest the seizure of the $808,661.28 on deposit in the three identified accounts on June
26, 2014, and the Government’s motion with respect to these funds is granted.
The second sum presents a harder question. The Government is correct that
Sberbank’s initial position that it could not divulge account information sought by the
Government due to Russian bank secrecy laws would have been fatal to its claim of
ownership under § 981(k)(4)(B)(ii)(II). See Gov’t Mot. at 19–21. Sberbank, however,
changed its position when it issued amended responses to the Government’s interrogatories
and provided the requisite information. Most notably, Sberbank provided the account
balances of the three identified accounts as of June 26, 2014. See Opp’n to Strike, Ex. 3 at
9–12. Sberbank also responded that Brazhnikov did not own any other accounts apart from
those identified by the Government. See id. at 15–16. Taking these responses at face value,
Sberbank has established beyond a preponderance of the evidence that it is the owner of
the remaining $1,071,330.36.
The Government would not have this Court take Sberbank’s responses at face value;
instead, it asserts that Sberbank has acted in bad faith as signified by the complete reversal
in Sberbank’s position only after the Government filed the instant motion to strike. See
Gov’t Reply at 2–3. The Government argues that this Court should disregard Sberbank’s
amended responses for the following reasons: (1) Sberbank’s new position is vague and
cites no Russian law, see id. at 3; (2) Sberbank did not produce the purported newly
The Court addresses Sberbank’s ability to amend below.
discovered power of attorney with its amended responses, which the Government deems
suspicious and improbable, see id. at 4–5; (3) Sberbank’s interrogatory response that it
could not restrain funds under Russian law is inconsistent with the evidence, see id. at 5–
9; and (4) Sberbank did not disclose at least two other accounts connected to Brazhnikov,
see id. In support, the Government relies heavily on two intercepted conversations between
Brazhnikov and his father, and a bank statement of a savings account owned by
Brazhnikov, Sr., none of which were produced to Sberbank prior to filing the reply. See
Decl. of Peter W. Gaeta (“Gaeta Decl.”), Exs. 1–3, ECF No. 37.
The Government basically charges Sberbank with lying to it and this Court, a grave
charge for which this Court will hold the Government to a standard beyond mere
speculation. Specifically, being that the Government presented this motion as one for
summary judgment, the Court will decide all inferences in favor of Sberbank.
First, Sberbank’s new position is not inexplicable or vague. It claims to have found
the power of attorney after it submitted its initial responses to the Government. This power
of attorney is the foundation of bad faith on the part of Brazhnikov against Sberbank, which
in turn releases Sberbank from the constraints of Russian bank secrecy laws and permits
its defense. Sberbank cites to Article 10 of the Russian Civil Code for the basis of its new
legal position. See Sur-Reply at 2. The Government provides no counter legal argument
under Russian law. The Court finds no bad faith with Sberbank’s changed position.
Second, the timing of Sberbank’s amended responses may be suspicious, but it is
not improbable. Sberbank is one of the largest financial institutions in the world and it is
not improbable that “it took significant time and effort to trace the funds that were
withdrawn from Brazhnikov’s accounts.” See id. at 3. Suspicion alone does not support a
finding of bad faith here.
Third, the Government points to the intercepted conversations as evidence that
Sberbank restrained the movement of funds in Brazhnikov’s accounts, in contradiction of
its response to an interrogatory. One conversation references Brazhnikov, Sr.’s savings
account, which he said was “blocked” at one point. See Gov’t Reply at 6–7. The
interrogatory was directed specifically at the three identified accounts and did not mention
the savings account, which was only brought to the fore in the Government’s reply. See
Opp’n to Strike, Ex. 3 at 19–20. Thus, whatever action was or was not taken against the
savings account was irrelevant to Sberbank’s interrogatory response, not inconsistent.
The Government also points to a transactional record related to one of the identified
accounts that shows “an attempted withdrawal [that was] apparently blocked or undone by
Sberbank.” See Gov’t Reply at 8 (emphasis added); Gaeta Decl., Ex. 4 at 19. The
document indicates “reversing entry” in one column, but the Government provides no
further evidence of what this phrase means. Furthermore, Sberbank contests the claim that
it restrained funds in any account relating to Brazhnikov or his father. See Sur-Reply at 4.
At summary judgment, “apparently” does not cut it. The Court finds that there is a genuine
dispute of material fact concerning the claim of Sberbank restraining funds.
Finally, the Government claims that Sberbank failed to disclose at least two other
accounts belonging to Brazhnikov or his father. The second interrogatory asked Sberbank
to identify “any other personal or business accounts maintained and/or controlled by
Alexander Brahznikov, Jr. and/or Alexander Brazhnikov, Sr.” See Mot. to Strike, Ex. 3 at
7 (emphasis added). In one conversation, Brazhnikov refers to “the IBT account.” See
Gov’t Reply at 7–8. It is entirely unclear, however, whether “IBT” refers to a different
account or whether it refers to one of the three already identified. The Court finds a genuine
dispute of material fact as to whether Sberbank failed to disclose “the IBT account.”
The second account is the aforementioned savings account. In its interrogatory
response, Sberbank failed to identify the savings account, which may have been purposeful
or it may have simply been an oversight. See id. at 7–8. Regardless, the Government has
known about this account since October 1, 2014, and chose not to identify it to Sberbank
in the interrogatories for whatever reason. See Gov’t Reply at 6–7. The Court will not
entertain a claim of bad faith when the complaining party could have easily avoided the
situation by simply asking for the information that it desired.
Nonetheless, the Court finds that the savings account is potentially relevant to the
forfeiture. The bank statement appears to indicate a balance of $855,466.43 as of August
7, 2014; however, the document is in Russian and the Court will not make a determination
until it has seen a translated version. Furthermore, Mr. Gaeta declared this document to be
“a true and correct copy of an August 7, 2014 Sberbank of Russia bank account statement
for an account ending in 3160.” See Gaeta Decl. at ¶ 3. The Government, however,
represented that this document was provided by Brazhnikov, Jr.’s defense counsel on
October 1, 2014. See Gov’t Reply at 6–7. The Court does not doubt Mr. Gaeta’s
declaration, but it is nonetheless a copy of a document that the Government received, not
from the document’s creator, but from a non-party to the instant motion. The Court
requires further authentication by the Government before the Court will rely on it.
Additionally, the relevant date of this proceeding is June 26, 2014. The Court, therefore,
requires the balance of the savings account as of June 26, 2014, to appropriately determine
how much of the remaining funds should be forfeited.
The Court further notes that it seems clear from the recorded conversations that
Brazhnikov and his father were working together to launder the illicit funds and evade
forfeiture. If this is indeed the case, then the Court would likely find that the balance of
the savings account is subject to forfeiture. Sberbank does not appear to deny that the
savings account belonged to Brazhnikov, Sr.; however, Sberbank was only confronted with
this evidence on reply. This Court requires that an adequate opportunity be provided to
Sberbank to defend its claim in light of this evidence. The Court, therefore, finds a genuine
dispute of material fact concerning the savings account. Accordingly, the Government’s
motion to strike regarding the remaining $1,071,330.36 is denied without prejudice.
D. Sberbank’s Motion to Amend
As noted, the Third Circuit requires that “motions to amend pleadings should be
liberally granted.” See Wilson, 393 F.3d at 400. The Government makes the same claims
concerning Sberbank’s bad faith in opposition to the motion to amend. For the same
reasons already stated, the Court finds that the Government has not sufficiently established
bad faith by Sberbank. Accordingly, the Court will grant Sberbank’s motion to amend.
For the reasons stated above, the Government’s motion to strike is GRANTED, in
part, and DENIED, in part, without prejudice. Sberbank’s motion to amend is
GRANTED. An appropriate order follows.
/s/ William J. Martini
WILLIAM J. MARTINI, U.S.D.J.
Date: January 30, 2016
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