United States of America v. $115,413.00 In US Currency

Filing 149

ORDER - The court GRANTS the plaintiff's motion for summary judgment D.E. 133 and STRIKES claimant's third verified claim D.E. 106 . Plaintiff may file a motion for costs in accordance with the Federal Rules of Civil Procedure and the court's local rules. The clerk SHALL close the case. Signed by District Judge James C. Dever III on 3/12/2025. (Mann, Stephanie)

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IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DMSION
No. 5:20-CV-539-D

UNITEDSTATESOFAMERIC~
Plaintiff,
v.
$115,413.00 IN U.S. CURRENCY,
Defendant.
RAMONL.LYON,
Claimant.

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ORDER

On October 9, 2020, the United States of America ("United States" or "plaintiff') filed an
action in rem for $115,413.00 in United States currency [D.E. 1]. On November 30, 2020, Ramon
L. Lyon ("Lyon" or "claimant") filed a verified claim of interest contesting the forfeiture of the
$115,413.00 [D.E. 5]. On May 13, 2021, Lyon filed a second verified claim of interest [D.E. 23].
On May 21, 2021, Lyon moved to dismiss the United States' amended complaint for forfeiture
[D.E. 25]. On November 18, 2021, the court denied Lyon's motion to dismiss [D.E. 35].
On January 11, 2024, the United States moved for leave to amend its complaint to conform
to the evidence by alleging two additional alternative theories of forfeiture [D.E. 92] and filed a
memorandum in support [D.E. 94]. On February 22, 2024, Lyon opposed the motion to amend
[D.E. 99]. On March 7, 2024, the United States replied [D.E. 100]. On March 14, 2024, the court
granted the United States' motion for leave to amend its complaint [D.E. 102]. On the same day,
the United States filed its amended complaint for forfeiture [D.E. 103, 103-1].

On April 23, 2024, Lyon filed a third verified claim of interest [D.E. 106]. On May 28,
2024, Lyon moved to dismiss the United States' amended complaint for forfeiture [D.E. 113] and
filed a memorandum in support [D.E. 114]. On June 11, 2024, the United States responded in
opposition [D.E. 115]. On July 22, 2024, the court denied Lyon's motion to dismiss the amended
complaint for forfeiture [D.E. 116].
On August 12, 2024, Lyon answered the amended complaint for forfeiture [D.E. 117]. On
September 26, 2024, the United States moved for summary judgment and to strike Lyon's claim
[D.E. 133], and filed a memorandum [D.E. 134], statement of materials facts [D.E. 135], and
appendix in support [D.E. 136]. On October 7, 2024, Lyon amended his answer to the amended
complaint for forfeiture [D.E. 140]. On November 1, 2024, Lyon responded to the United States'
motion for summary judgment and to strike Lyon's claim [D.E. 144]. 1 On December 11, 2024,
the United States replied [D.E. 147]. As explained below, the court grants the United States'
motion for summary judgment and strikes Lyon's claim of interest.
I.
On June 3, 2020, Lyon entered a security checkpoint at Raleigh-Durham International
Airport (''RDU'') in Morrisville, North Carolina, to board a flight to Los Angeles. See Pl.'s
Statement of Material Facts (''PSMF") [D.E. 135] ,r 116; [D.E. 103-1] ,r 9; [D.E. 140] 2.

1

Lyon's response fails to comport with the Local Civil Rule 56.1 (a)(2). Lyon fails to offer
facts or evidence to controvert the numbered paragraphs in the United States' statement of material
facts. See Local Civil Rule 56.l(a)(2), E.D.N.C. Accordingly, the facts contained within each
numbered paragraph of the United States' statement of material facts are deemed admitted by
Lyon. See id. ("Each numbered paragraph in the movant's statement of material facts will be
deemed admitted for purposes of the motion unless it is specifically controverted by a
correspondingly numbered paragraph in the opposing statement."); Williamson v. Bridgestone
Ams., Inc., 625 F. Supp. 3d 466, 470-71 (E.D.N.C. 2022); Felton v. Moneysworth Linen Serv.,
Inc., 295 F. Supp. 3d 595, 597 n.1 (E.D.N.C. 2018); Howard v. Coll. of the Albemarle, 262 F. Supp.
3d 322, 329 n.1 •(E.D.N.C. 2017), aff'd, 697 F. App'x. 257 (4th Cir. 2017) (per curiam)
(unpublished).
2

A Transportation Security Administration (''TSA") official monitoring the x-ray machine
identified one of Lyon's bags for further inspection. See PSMF ,m 116-18;· [D.E. 103-1] ,r 9. After
searching Lyon's bag, the United States seized $115,413.00 in United States currency hidden in
the bag. See PSMF ,r 124; [D.E. 103-1] ,i,r 9-15, 33. Lyon claimed that the currency was from
the Phish Lounge, an internet sweepstakes business, which he claimed to operate. See PSMF ,i,r
125-28; [D.E. 103-1] ,i,r 9-10; [D.E. 140] 3-4
Following this seizure, RDU police interviewed Lyon. See PSMF ,i,r 118-23; [D.E. 1031] ,r 12; [D.E. 140] 3. During the interview, Lyon misrepresented: (1) the amount of currency he

was carrying, (2) the purpose of his travel, and (3) his role with Phish Lounge. See PSMF ,i,r 11823; [D.E. 103-1] ,m 12-15; [D.E. 140] 3. Lyon first told police he was traveling to California to
purchase land. See PSMF ,r 123; [D.E. 103-1] ,r 12; [D.E. 140] 3. He later changed his story and
said he was traveling to California to purchase video poker machines. See PSMF ,r 128; [D.E.
103-1] ,r 14; [D.E. 140] 3.
Because Lyon had no employment history in North Carolina and an extensive criminal
record, including multiple drug trafficking convictions, the Department of Homeland Security
(''OHS") concluded that there was probable cause that the $115,413.00 was an intended payment
for a controlled substance or the proceeds from a controlled substance sale. See [D.E. 54] 2, 1314; [D.E. 54-10] 1-8; PSMF ,r 119; [D.E. 103-1] ,i,r 16-18, 33; [D.E. 140] 3. Lyon agreed to
surrender the bulk currency and signed a OHS Form 4607. See PSMF ,r 124; [D.E. 103-1] ,r 15;
[D.E. 140] 3. The United States filed a complaint for the seized currency. See [D.E. 1].
Lyon contends that the seized currency is ''proceeds from the Phish Lounge located at 1825
Garner Rd., Raleigh NC." [D.E. 140] 3. On January 11, 2024, based on belated discovery
responses from Lyon, and deposition testimony from Lyon and his fiancee Denise Williamson

3

("Williamson") concerning the Phish Lounge, the United States moved for leave to amend its
complaint to add two additional, alternative theories of forfeiture. See [D.E. 92] 1-2. Specifically,
DHS concluded that there was probable cause that the seized currency derived from proceeds
traceable to specified unlawful activity, including an illegal gambling business, or was used in the
operation of an illegal gambling business. See PSMF ,i,r 125-28; [D.E. 103-1] ,i,r 30-33.
Williamson ''was the sole owner of the Phish Lounge" located at 1825 Gamer Rd., Raleigh
NC, and operated the Phish Lounge for a time under the business registration Plush Lounge & Bar
LLC. PSMF ,i,f 10-11; see [D.E. 136-3] 1-2; [D.E. 136-6] 1-2. Originally, Williamson operated
thePlushLoungeandBaras"anactualbar." PSMF,r 16; [D.E.136-3] 1-2. Williamson,however,
noticed her patrons were "always talking about ... phishing," video gaming machines that allow
patrons to shoot at sea creatures on a screen after purchasing credits to wager. [D.E. 136-2] 17;
see PSMF ,i,f 49, 51-53. These "fish tables" turn entirely upon luck. PSMF ,r 48; ~ PSMF ,i,f
54-55; [D.E. 103-1] ,i,f 29, 31; [D.E. 136-2] 56-58, 76-77.
In late 2015 or early 2016, after researching the games, Williamson purchased several fish
tables and converted the Plush Lounge and Bar into a gambling business. See [D.E. 103-1] ,i,r 2829; [D.E. 134] 6-7; PSMF ,i,r 16-21; [D.E. 140] 4. After finding success with the fish tables,
Williamson purchased additional machines, closed the Plush Lounge and Bar, and opened the
Phish Lounge. See [D.E. 103-1] ,i,f 28-29; [D.E. 134] 6-7; PSMF ,i,f 11, 16-21; [D.E. 136-2] 89, 12, 17-21; [D.E. 140] 4. In addition to fish tables, the Phish Lounge also offered stand-up
consoles, large machines that allowed patrons to wager credits in luck-based games. See [D.E.
103-1] ,r 28-29; [D.E. 134] 9-10; PSMF ,i,f 43, 48, 54, 58-60; [D.E. 136-2] 20, 58-64, 112-114.
The Phish Lounge operated 24/7 and Williamson hired personnel to work around-theclock. See [D.E. 103-1] ,r 28-29; [D.E. 134] 25-28; PSMF ,i,f 40--47; [D.E. 136-1] 50-52; [D.E.

4

136-2] 37-38, 45, 82; [D.E. 136-8] 1-2. Lyon identified at least nine employees who worked for
Williamson at the Phish Lounge. See PSMF 40-47; [D.E. 136-8] 1-2. Williamson controlled
virtually every aspect of the Phish Lounge, including "leasing space for the business; researching
and acquiring gambling software and equipment, including fish tables; hiring and firing employees
and setting their work schedules; handling bookkeeping and payroll; working as cashier when
needed; and removing, counting, and logging cash generated by the gambling machines at the
Phish Lounge."

PSMF ,r 28; see [D.E. 136-2] 13-14, 17-23, 25-28, 31, 66-71, 82-83.

Williamson referred to the Phish Lounge as "my sweepstakes" and ''my business." PSMF ,r 31;
[D.E. 136-2] 59, 61. Likewise, referring to Williamson, Lyon called the Phish Lounge ''her
business." [D.E. 136-1] 77. According to Lyon, he was '~ust the manager'' at the Phish Lounge.
See, ~ [D.E. 136-1] 16-19, 23-24, 27-31, 33, 36-37, 47, 49, 67, 78. Lyon worked for
Williamson and Williamson was the "Boss Lady." [D.E. 136-8] 2; see,~ PSMF ,Ml 37-39.
For Williamson and the Phish Lounge, business boomed.

See PSMF ,Ml 67-68.

Williamson tracked the Phish Lounge's daily profits and cash flow on pull sheets: forms recording
''how much money was taken out of [each] machine" and counted at a given time. [D.E. 136-1]
44; see PSMF ,Ml 69-74; [D.E. 136-1] 42-46; [D.E. 136-2] 31-32, 34, 69-70. In 2018, the Phish
Lounge regularly generated daily gross revenues in excess of $2,000.00. See PSMF ,Ml 78-83.
For example, on at least 16 days between January and February 2018, the Phish Lounge generated
over $10,000.00 in daily gross revenue. See PSMF ,r 79; [D.E. 136-2] 117, 121-22, 129, 142-47,
152, 161, 172-74, 178-80, 182, 184-85, 188-91. From February 18, 2018, through March 8,
2018, the Phish Lounge grossed at least $25,000.00 a day. See PSMF ,r 80; [D.E. 136-2] 115-16,
118-23, 125, 125, 140-41, 149-50, 152, 167, 169-71, 181, 183, 192, 198. The Phish Lounge
continued to rake in money, grossing over $1.8 million from January to May 2018. See PSMF ,r

5

83; see generally IJ).E. 136-2] 115-98. The Phish Lounge's financial success continued into 2020.
See PSMF W84-93; ~ generally [D.E. 136-2] 115-98.2 In addition to cash-purchased credits,
the Phish Lounge also accepted payment via cash app. See PSMF 193; [D.E. 103-1] 129.
On June 2, 2020, Williamson opened the Phish Lounge's safe-located in Williamson's
office-and allowed Lyon to count out $115,413.00. See PSMF W103--04; [D.E. 136-1] 69-71;
[D.E. 136-2] 88; [D.E. 136-9] 9. Williamson tasked Lyon with traveling to California and using
• the money to purchase more fish tables for the lounge. See PSMF W 104; [D.E. 136-1] 69-71;
[D.E. 136-2] 88; [D.E. 136-9] 9. Williamson forbade Lyon from using the money for any purpose
other than purchasing the fish tables-"not even to buy somebody a drink." [D.E. 136-2] 89. Lyon
vacuumed sealed the money, took it home after work, and packed it in his carry-on for his flight
to California the next day. See PSMF 1 114; [D.E. 72] 12-15; [D.E. 136-1] 75-76; [D.E. 136-9]

9; [D.E. 136-11] 4. On June 3, 2020, the TSA seized the $115,413.00 from Lyon's duffle bag.
See PSMF 1 1; [D.E. 103-1] W 33; [D.E. 140] 3. Neither Williamson nor the Phish Lounge
asserted claims to the seized currency.
In its motion for !ilummary judgment, the United States argues Lyon lacks standing to
pursue his claim and that Lyon has no legal right to the currency because the currency amounts to
the fruits of an illegal enterprise. See [D.E. 134] 15-29. Specifically, the United States argues
Lyon lacks both Article m and statutory standing to pursue his claim because the currency
belonged to Williamson or the Phish Lounge LLC. See id. at 15-19. Moreover, the United States

2

In its memorandum supporting its motion for summary judgment, the United States
details the Phish Lounge's financial success. See PSMF W84-93; see generally (D.E. 136-2] 11598. The Phish Lounge thrived financially from the day it opened until it closed sometime after
June 3, 2020. See PSMF ,i,r 84-93, 127. The COVID pandemic brought the Phish Lounge its
largest daily gross earnings, with some days yielding over $30,000.00. See PSMF 192; [D.E. 1362] 52.
6

argues Lyon would not be entitled to the currency even if he were its owner because ''the seized
currency constitutes proceeds traceable to, and/or money used in, an illegal gambling business,
and is forfeitable to the United States." Id. at 19.
In opposition, Lyon argues he ''has repeatedly demonstrated his possessory and/or
ownership interest in the money'' seized from him:, [D.E. 144] 3. Moreover, Lyon claims he "and
his family'' suffered an injury when TSA seized the currency. Id. at 3.3 Lyon asserts "[o]ther
courts have consistently held that simple possession is sufficient, if accompanied by an
explanation, and the person from whom the property was taken ... always has standing." Id. at
3--6 (collecting cases). Alternatively, Lyon argues that ambiguities in North Carolina state law
indicate "that sweepstakes operations were not clearly illegal under state law, which is a
prerequisite for federal prosecution under 18 U.S.C. 1955." Id. at 7. In support, Lyon cites Hest
Technologies, Inc. v. State ex rel. Perdue, 219 N.C. App. 308, 725 S.E.2d 10 (2012), and argues
that the legal landscape at the time of the seizure ''was characterized by significant ambiguities
and inconsistences ... regarding sweepstakes operations" and that "conflicting court decisions,"
coupled with allegedly inconsistent enforcement, "raises doubt about the illegality of sweepstakes"
under North Carolina law. Id. at 2-3, 6-7. 4 Lyon also argues that, at the time of the seizure, ''there

3

Lyon makes a nonsensical argument that if he and his fiancee, Williamson, had lived in
South Carolina, then South Carolina law would ·vest him with an ownership interest in the seized
currency. See id. at 3 n.2. Neither Lyon nor Williamson lived in South Carolina. Accordingly,
South Carolina law provides no comfort.
4

On December 14, 2012, the Supreme Court of North Carolina reversed Hest. See Hest
Techs., Inc. v. State ex rel. Perdue, 366 N.C. 298, 303, 749 S.E.2d 429, 439 (2012). Accordingly,
Hest provides no comfort.

7

was a moratorium on prosecuting fish table establishments in North Carolina." Id. at 2. 5 Apart
from these legal arguments, Lyon offers no contrary evidence. Cf. Fed. R. Civ. P. S6(c)(l)(A).
The United States argues that because Lyon failed to offer any evidence of a possessory
interest in the seized currency, he cannot establish Article m standing to pursue his claim. See
[D.E. 147] 3-4. The United States also argues that Lyon's claim fails because "Lyon has never
asserted a possessory interest in the seized currency'' in accordance with Supplemental Rule
G(S)(a). [D.E. 147] 4. Although Lyon now purports to assert an interest, the United States argues
that Lyon's "[b]elatedly asserted interests" conflict with his "sworn claim" and cannot confer
standing. Id. at 4. Alternatively, the United States argues that Williamson and Lyon, at best, had
a bailor-bailee relationship regarding the $115,413.00. See id. at S-7. Supplement Rule G(S)
requires claimants to allege any claims based on a purported bailment, to identify the bailor, and,
if filing a claim on behalf of a bailor, to state the bailee's authority to do so. See Fed. Supp. R.
G(S)(a)(i)(B), G(S)(a)(iii) & 2006 Committee Notes on Rules, Subdivision (S); United States v.
$244,320.00 in U.S. Currency, 29S F. Supp. 2d 10S0, 1060--61 & n.7 (S.D. Iowa 2003) (applying
Supplemental Rule C(6), which applied to forfeiture proceedings before 2006, when Supplemental
Rule G was adopted); United States v. $746,198.00 in U.S. Currency, More or Less, 299 F. Supp.
2d 923, 931-32 (S.D. Iowa 2004) (same). According to the United States, because Lyon failed to
comply with the requirements for bailees contesting forfeiture under Supplement Rule G(S), Lyon
lacks statutory standing. See [D.E. 147] 7-8. Finally, the United States argues that the Phish
Lounge violated North Carolina state law and that the seized currency, as proceeds of illegal
•gambling, "is, in fact, forfeitable to the United States." Id. at 10.

5

When Lyon made this same argument in his motion to dismiss, the court rejected it. See
[D.E. 116] 4-S. The argument has not improved with age. The court once again rejects Lyon's
moratorium argument.
8

II.
Summary judgment is appropriate when, after reviewing the record as a whole, the court
determines that no genuine issue of material fact exists and the moving party is entitled to judgment
as a matter of law. See Fed. R. Civ. P. 56(a); Scott v. Harris, 550 U.S. 372, 378, 380 (2007);
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). The party seeking summary
judgment initially must demonstrate the absence of a genuine issue of material fact or the absence
of evidence to support the nonmoving party's case. See Celotex Coip. v. Catrett, 477 U.S. 317,
325 (1986). Once the moving party has met its burden, the nonmoving party may not rest on the
allegations or denials in its pleading, see Anderson, 477 U.S. at 248-49, but "must come forward
\

with specific facts showing that there is a genuine issue for trial." Matsushita Elec. Indus. Co. v.
Zenith Radio Coip., 475 U.S. 574, 587 (1986) (emphasis and quotation omitted). A trial court
reviewing a motion for summary judgment should determine whether a genuine issue of material
fact exists for trial. See Anderson, 477 U.S. at 249. In making this determination, the court must
view the evidence and the inferences drawn therefrom in the light most favorable to the nonmoving
party. See Harris, 550 U.S. at 378.
A genuine issue of material fact exists if there is sufficient evidence favoring the
nonmoving party for a jury to return a verdict for that party. See Anderson, 477 U.S. at 249. ''The
mere existence of a scintilla of evidence in support of the [nonmoving party's] position [is]
insufficient ...." Id. at 252; see Beale v. Hardy. 769 F.2d 213, 214 (4th Cir. 1985) (''The
nonmoving party, however, cannot create a genuine issue ofmaterial fact through mere speculation
or the building of one inference upon another."). Only factual disputes that affect the outcome
under substantive law properly preclude summary judgment. See Anderson, 477 U.S. at 248.

9

This dispute requires the court to interpret North Carolina's gaming regulations and apply
North Carolina law. Accordingly, this court must predict how the Supreme Court of North
Carolina would rule on any disputed state-law issues. See Twin City Fire Ins. Co. v. Ben ArnoldSunbelt Beverage Co. of S.C., 433 F.3d 365, 369 (4th Cir. 2005). In doing so, the court must look

first to opinions of the Supreme Court of North Carolina. See YL; Parkway 1046, LLC v. U.S.
Home Com.. 961 F.3d 301, 306 (4th Cir. 2020); Stahle v. CTS Com.. 817 F.3d 96, 100 (4th Cir.
2016). If there are no governing opinions from that court, this court may consider the opinions of
the North Carolina Court ofAppeals, treatises, and ''the practices of other states." Twin City Fire
Ins. Co., 433 F.3d at 369 (quotation omitted). In predicting how the highest court of a state would
\-

address an issue, this court must "follow the decision of an intermediate state appellate court unless
there is persuasive data that the highest court would decide differently." Town of Nags Head v.
Toloczk:o, 728 F.3d 391, 398 (4th Cir. 2013) (quotation omitted); see Hicks v. Feiock, 485 U.S.
624, 630 & n.3 (1988). Moreover, in predicting how the highest court of a state would address an
issue, this court "should not create or expand a state's public policy." Time Warner Ent.Advance/Newhouse P'ship v. Carteret-Craven Blee. Membership Com., 506 F.3d 304, 314 (4th
Cir. 2007) (cleaned up); see Day & Zimmermann, Inc. v. Challoner, 423 U.S. 3, 4 (1975) (per
curiam); Wade v. Danek Med., Inc., 182 F.3d 281, 286 (4th Cir. 1999).
A.
In a civil forfeiture case, a claimant must show "a colorable interest in the property to have
standing." United States v. Phillips, 883 F.3d 399, 402 (4th Cir. 2018). Merely asserting "an
ownership interest in the property'' does not suffice. Id. at 403; see United States v. $17.900.00 in
U.S. Currency, 859 F.3d 1085, 1089-90 (D.C. Cir. 2017). A claimant must prove both statutory
standing and Article ill standing by a preponderance of the evidence. See $17.900.00 in U.S.

10

Currency. 859 F.3d at 1089. "[S]tatutory standing relates to a claimant's ability to show that he has
satisfied whatever statutory requirements Congress has imposed for contesting a civil forfeiture
action in federal court." United States v. 8 Gilcrease Lane, Quincy FL 32351, 641 F. Supp. 2d 1,
5--{; (D.D.C. 2009) (quotation omitted). "Article m standing ..-. relates to the claimant's ability
to show that he has a sufficient interest in the property to satisfy the caSe-or-controversy
requirement of Article m." Id. at 6 (quotation omitted); see United States v. Real Prop. Located
at 229 Potter Rd., N. Kingstown. R.I., 91 F. Supp. 3d 303, 306 (D. Conn. 2015).
A plaintiff establishes Article m standing by showing: (1) that the plaintiff has "suffered
an injury in fact-a.Q. invasion of a legally-protected interest which is (a) concrete and
particularized and (b) actual or jmmjnent, not conjectural or hypothetical"; (2) "a causal
connection between the injury and the conduct complained of:-the injury has to be fairly traceable
to the challenged action of the defendant, and not the result ofthe independent action of some third
party not before the court"; and (3) that it is "likely, as opposed to merely speculative, that the
injury will be redressed by a favorable decision" from the court. Chambers Med. Techs. of S.C.,
Inc. v. Bryant, 52 F.3d 1252, 1265 (4th Cir. 1995) (cleaned up); see Food & Drug Adm.in. v. All.
for Hippocratic Med., 602 U.S. 367, 380 (2024); 'Iyler v. Hennepin Cnty., 598 U.S. 631, 636
(2023); TransUnion LLC v. Ramirez, 594 U.S. 413, 423-30 (2021); Frank v. Gaos, 586 U.S. 485,
491 (2019); Spokeo, Inc. v. Robins, 578 U.S. 330,338 (2016); Lujan v. Defs. ofWtldlife, 504 U.S.
555, 560--{)1 (1992); Laufer v. Naranda Hotels, LLC, 60 F.4th 156, 161 (4th Cir. 2023); Nanni v.
Aberdeen Marketplace, Inc., 878 F.3d 447, 450 (4th Cir. 2017). These requirements are ''the
irreducible constitutional mfojmum of standing." Lujan, 504 U.S. at 560; see Spokeo, Inc., 578
U.S. at 338. If a plaintiff does not have standing, the court does not have subject-matter jurisdiction
to hear the plaintiff's claim. See. .Y:., Lujan, 504 U.S. at 560--{)1; White Tail Park, Inc. v. Stroube,

11

413 F.3d 451, 459 (4th Cir. 2005); Payne v. Sears, Roebuck & Co., No. 5:ll-CV-614, 2012 WL
1965389, at *3 (E.D.N.C. May 31, 2012) (unpublished).
Injury-in-fact requires the plaintiff to demonstrate a "concrete and particularized" harm.
Krakauerv. Dish Network, L.L.C., 925 F.3d643, 653 (4th Cir. 2019); see Spokeo, 578 U.S. at 340.
Specifically, concreteness means the injury must be "real, and not abstract," even if the harm is
intangible. Spokeo, 578 U.S. at 340 (quotation omitted);~ Curtis v. Propel Prop. Tax Funding,
L.L.C., 915 F.3d 234, 240--41 (4th Cir. 2019). Furthermore, "in determining whether a given injury
meets the constitutional threshold, [courts] look to both historic practice and the judgment of
Congress." Krakauer, 925 F.3d at 653; see TransUnion, 594 U.S. at 424-26; Spokeo, 578 U.S. at
340-41; ~ 504 U.S. at 560; Garey v. James S. Farrin, P.C., 35 F.4th 917, 921-22 (4th Cir.
2022). Tangible or intangible injuries can satisfy the requirement of concreteness. See Spokeo,
578 U.S. at 340--41. If a plaintiff fails to establish Article ill standing, the court lacks subjectmatter jurisdiction.
Lyon admits that Wtlliamson owned the Phish Lounge, and Lyon was just a manager. See
[D.E. 136-1] 16-19, 23-24, 27-31, 33, 36-37, 47, 49, 67, 77, 78; see also [D.E. 103-1] ,r 28; [D.E.
134] 6-7; PSMF ff 11, 16-21; [D.E. 136-2] 8-9, 12, 17-21, 90; [D.E. 140] 4. Lyon also admits
that Williamson tasked Lyon with traveling to California to purchase more fish tables for the
lounge and that Williamson provided the money to Lyon for the fish tables. See PSMF ff 104;
[D.E. 136-1] 69-71; [D.E. 136-2] 88; [D.E. 136-9] 9. Lyon also concedes that Williamson forbade
Lyon from using the money for any purpose other than purchasing the fish tables-"not even to
buy somebody a drink." [D.E. 136-2] 89. Under Williamson's order, Lyon admits he vacuumed
sealed the money, took it home after work, and packed it in his carry-on luggage for the flight to
California the next day. See PSMF ,r 114; [D.E. 72] 12-15; [D.E. 136-1] 75-76; [D.E. 136-9] 9;

12

[D.E. 136-11] 4. Furthermore, Lyon admits the $115,413.00 came from Williamson's safe and
originated from the Phish Lounge. See PSMF ,i,r 103--04; [D.E. 136-1] 69-71; [D.E. 136-2] 88;
[D.E. 136-9] 9. Thus, the seized currency belonged either to Williamson or the Phish Lounge
LLC. The seized currency has never belonged to Lyon.
Because the United States met its burden to establish the absence of a genuine issue of
material fact concerning ownership, Lyon may not rest on the allegations or denials in his pleading.
See Anderson, 477 U.S. at 248-49. Rather, Lyon "must come forward with specific facts showing
that there is a genuine issue for trial." Matsushita Blee. Indus. Co, 475 U.S. at 587 (emphasis and
quotation omitted); Phillips, 833 F.3d at 402-03. Lyon, however, offers no such evidence. Thus,
no genuine issue or material fact exists about who owned the seized money and who did not own
the seized money. Because Lyon did not own the money, he cannot establish that he suffered an
injury-in fact-an invasion of a legally-protected interest. Accordingly, Lyon lacks Article ill
standing to pursue his claim, and the court grants the United States' motion for summary judgment
and strikes Lyon's claim. See, e.&, Phillips, 833 F.3d at 402-06.
Alternatively, Lyon lacks statutory standing to pursue his claim. "Statutory standing
applies only to legislatively-created causes of action and concerns whether a statute creating a
private right of action authorizes a particular plaintiff to avail herself ofthat right of action." CGM,
LLC v. BellSouth Telecommunications, Inc., 664 F.3d 46, 52 (4th Cir. 2011) (quotation omitted).
''The question of who can sue under a statutory cause of action turns on whether the party is within
the statute's zone of interests." Krakauer, 925 F.3d at 656; see Lexmark Int'l., Inc. v. Static Control
Components, Inc., 572 U.S. 118, 129-30 (2014). "If a plaintiff is the sort of person the law
intended to protect, he can press his claim." Krakauer, 925 _F.3d at 656. Applying statutory
standing requires the court to "simply look to the statute itself." Id.

13

The court need not consider any bailor-bailee relationship that may have existed between
Williamson and Lyon because Lyon failed to comply with Supplemental Rule G(5)(a).
Supplemental Rule G governs in rem forfeiture actions arising from a federal statute. See Fed.
Supp. R. G(l). Under Supplemental Rule G(5)(a)(i), "[a] person who asserts an interest in the
defendant property may contest the forfeiture by filing a claim in the court where the action is
pending." Fed. Supp. R. G(5)(a)(i); see 18 U.S.C. § 983(a)(4)(A). Supplemental Rule 0(5)
requires a person to "state the claimant's interest in the property." Fed. Supp. R. G(5)(a)(i)(B).
Lyon's verified claims, however, merely offer a threadbare assertion that Lyon is the "owner'' of
the seized currency without providing any factual support. See [D.E. 5]; [D.E. 23]; [D.E. 106].
These threadbare assertions fail to comport with Supplemental Rule G(5)(a)'s requirement that
claimants state their "interest in the property." Fed. Supp. R. G(5)(a)(i)(B). Moreover, when
viewed against the raft of evidence establishing the ownership of the currency, Lyon's ipse dixit
claim of interest disintegrates. See, ~ Phillips, 833 F.3d at 402--06. Accordingly, Lyon lacks
statutory standing to pursue his claim, and the court grants the United States' motion for summary
judgment and strikes Lyon's claim.
Alternatively, assuming without deciding that Williamson and Lyon shared a bailor-bailee
relationship, Supplement Rule 0(5) requires claimants to allege any claims based on a purported
bailment, to identify the bailor, and, if filing a claim on behalf of a bailor, to state the bailee's
authority to do so. See Fed. Supp. R. G(5)(a)(i)(B), G(5)(a)(iii) & 2006 Committee Notes on
Rules, Subdivision (5); see $244,320.00 in U.S. Currency. 295 F. Supp. 2d at 1060--61 & n.7
(applying Supplemental Rule C(6), which applied to forfeiture proceedings before 2006, when
Supplemental Rule G was adopted): $746,198.00 in U.S. Currency, More or Less, 299 F. Supp. 2d
at 932 (same). Lyon failed to comply with any of these requirements. Accordingly, Lyon lacks

14

statutory standing to pursue his claim, and the court grants the United States' motion for summary
judgment and strikes Lyon's claim.

B.
Alternatively, the United States seeks civil forfeiture under 18 U.S.C. § 981(a)(l)(C) and
18 U.S.C. § 195S(d). See [D.E. 103] 1-2.6 Section 195S(d) allows for the forfeiture of "[a]ny
property, including money, used in violation of [section 195S]." 18 U.S.C. § 195S(d); see United
States v. King. 231 F. Supp. 3d 872, 894 (W,D. Okla. 2017). Section 98l(a)(l)(C) allows for the
forfeiture of "[a]ny property, real or personal, which constitutes or is derived from proceeds
traceable to ... 'specified unlawful activity."' 18 U.S.C. § 98l(a)(l)(C). A violation of 18 U.S.C.
195S constitutes "specified unlawful activity." 18 U.S.C. §§ 1956(c)(7)(A), 1961(1).
"A conviction for the underlying offense . . . is not a necessary prerequisite to a civil
forfeiture proceeding." United States v. Stewart, 21 F.3d 426, 1994 WL 89803, at •t n.2 (4th Cir.
1994) (per curiam) (unpublished table decision); United States v. One Parcel ofReal Estate located
at7715 Betsy Bruce Lane, 906F.2d 110, 111-12 (4th Cir. 1990). The government, however, must
"establish, by a preponderance ofthe evidence, that the property is subject to forfeiture." 18 U.S.C.
§ 983(c)(l).
In order to seek forfeiture under section 195S(d) or section 98l(a)(l)(C), the government
first must show the claimant violated section 19S5. Section 195S makes it a federal crime to
"conduct, finance, manage, supervise, direct, or own all or part of an illegal gambling business."
United States v. Murray. 928 F.2d 1242, 124S (1st Cir. 1991); see 18 U.S.C. § 195S(a). An "illegal
gambling business" is defined as a gambling business which:

6

The United States asserts other grounds for forfeiture but does not seek summary
judgment on those grounds. See [D.E. 134] 6 n.2.
15

(i) is a violation of the law of a State or political subdivision in which it is
conducted;

(ii) involves five or more persons who conduct, finance, manage, supervise, direct,
or own all or part of such business; and
(iii) has been or remains in substantially continuous operation for aperiod in excess
of thirty days or has a gross revenue of $2,000 in any single day.
18 U.S.C. § 19SS(b).
As for the five-participant requirement, the statute does not define the required degree of
participation. See Murray, 928 F.2d at 124S; United States v. Gresko, 632 F.2d 1128, 1132-33
(4th Cir. 1980). The term "conduct," however, means "any degree of participation in an illegal
gambling business except participation as a mere bettor." Sanabria v. United States, 437 U.S. S4,
70 n.26 (1978); see Murray, 928 F.2d at 124S; United States v. Merrell, 701 F.2d S3, S4-SS (6th
Cir. 1983); United States v. Jenkins, 649 F.2d 273, 27S (4th Cir. 1981); United States v. Greco,
619 F.2d 63S, 638-39 (7th Cir. 1980). For example, in United States v. Merrell, the United States
Court of Appeals for the Sixth Circuit held that an individual who served coffee to gambling
patrons and performed janitorial services qualified as a participant in the gambling operation
because the individual performed a service that was ''helpful in operating the enterprise." Merrell,
701 F.2d at S4-SS (emphasis in original); see United States v. Follin, 979 F.2d 369, 372-73 (5th
Cir. 1992); United States v. Hammond, 821 F.2d 473, 47S-77 (8th Cir. 1987).7 Furthermore, ''the
government need not show that the same five participants were involved in the business for all
thirty days; however, there must be evidence that the business involved at least five people at all

7

The Tenth Circuit, however, has held that "some function necessary to the gambling
operation is required and that activity which may be merely helpful to an illegal gambling business
does not make the actor a conductor of the illegal business." United States v. Boss, 671 F.2d 396,
399 (10th Cir. 1982). Other courts have rejected this approach. See Merrell, 701 F.2d at SS
(collecting cases).
16

times for thirty days." United States v. Parker, 790 F.3d 550, 554 (4th Cir. 2015) (alteration and
quotation omitted); see Gresko, 632 F.2d at 1133. Thus, the five-participant requirement is met if
any five persons were continuously involved over any thirty-day period, or on any single day in
which gross revenues exceed $2,000.00. See Parker, 790 F.3d at 554.
In order for an individual to be counted towards the five-participant requirement, the
individual must be subject to a conviction under section 1955, but the participant does not need to
be charged or convicted. See,~ Boss, 671 F.2d at 400--01. Moreover, a participant need not
''know that [his] conduct constitutes illegal gambling under state law." United States v. Lawson,
677 F.3d 629, 652-53 & n.32 (4th Cir. 2012); United States v. O'Brien, 131 F.3d 1428, 1430 (10th
Cir. 1997).
As for the predicate state law violation, North Carolina law prohibits "any person or
organization that operates any game of chance ... at which any money, property or other thing of
value is bet." N.C. Gen. Stat. § 14-292. This court held that fish tables and stand-up consoles
offered at the Phish Lounge ''were illegal under North Carolina law during the relevant time
period." See [D.E. 116] 4; ~ also N.C. Gen. Stat. §§ 14-292, 14-295, 14-306, 14-306.IA, 14306.4. That holding remains true today. The games offered at the Phish Lounge permitted patrons
to wager money on games ofluck. See [D.E. 103-1] ff 28-29, 31; PSMF ,m 54-55; [D.E. 136-2]
56-58, 76-77. Williamson and Lyon knew that the Phish Lounge facilitated gambling. See [D.E.
103-1] 128-29; [D.E. 134] 9-10; PSMF ff 28, 34-35, 48--60; [D.E. 136-2] 20, 58-64, 112-114;
O'Brien, 131 F.3d at 1430; cf. Lawson, 677 F.3d at 652-53 & n.32. Lyon offers no evidence to
create a genuine issue of material fact concerning the illegality of the games under North Carolina
law. Accordingly, the Phish Lounge operated gaming machines in violation of North Carolina
state law. See 18 U.S.C. § 1955(b)(i).

17

As for section 1955's remajning elements, Lyon identified at least nine employees who
worked for Williamson at the Phish Lounge. See PSMF ,Mr 40-47; [D.E. 136-8] 1-2. Moreover,
the uncontested evidence establishes that the Phish Lounge continuously operated for more than •
thirty days and with daily profits often far exceeding $2,000.00. See PSMF ,i,r 78-83; [D.E. 136-

2] 115-98. Thus, no genuine issue of material fact exists concerning whether the seized currency
is forfeitable to the United States as proceeds from an illegal gambling operation. Moreover, Lyon
has no claim to this currency. Accordingly, no genuine issue of material fact exists concerning
whether the $115,413.00 was forfeitable to the United States, and the court grants the United
States' motion for summary judgment and strikes Lyon's claim.
In opposition to this conclusion, Lyon cites the North Carolina Court of Appeals opinion
in Hest. As the United States notes in its reply, the Supreme Court of North Carolina reversed and
remanded in Hest "on December 14, 2012, approximately 3 years before the Phish Lounge opened
and approximately 7.5 years before the seizure." [D.E. 147] Sc-9; see Hest Techs., Inc. v. State ex
rel. Perdue, 366 N.C. 289, 303, 749 S.E.2d 429, 439 (2012). Thus, any ambiguity in the law that
the North Carolina Court Qf Appeals decision in Hest created had long dissipated when Williamson
began her illegal gambling business and when the United States seized the currency.

m.
In sum, the court GRANTS the plaintiff's motion for summary judgment [D.E. 133] and
STRIKES claimant's third verified claim [D.E. 106]. Plaintiff may file a motion for costs in
accordance with the Federal Rules of Civil Procedure and the court's local rules. The clerk
SHALL close the case.

18

SO ORDERED. This .11:. day of March, 202S.

J

SC.DEVERID

United States District Judge

19