UNITED STATES OF AMERICA v. All Funds on Deposit at Old Mutual of Bermuda, Ltd. Contract Number CX4011696 in Bermuda

Filing 69

ORDER ADOPTING MEMORANDUM AND RECOMMENDATION granting 48 MOTION for Fugitive Disentitlement, denying 36 MOTION to Stay Depositions and Civil Trial of Jorge Javier Torres Lopez As Per Title 18 USC Sec. 981(g)(2), denying 41 ; adopts 50 Memorandum and Recommendation, (Signed by Judge Nelva Gonzales Ramos) Parties notified.(mserpa, 2)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
CORPUS CHRISTI DIVISION
UNITED STATES OF AMERICA
VS.
ALL FUNDS ON DEPOSIT AT OLD
MUTUAL OF BERMUDA LTD.
CONTRACT NUMBER CX4011696 IN
BERMUDA

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CIVIL ACTION NO. 2:13-CV-294

ORDER ADOPTING MEMORANDUM AND RECOMMENDATION
Pending before the Court are Claimant Jorge Juan Torres Lopez’s motion to stay
proceedings pursuant to 18 U.S.C. § 981(g)(2) and both Claimants’ motion for protective
order pursuant to FED. R. CIV. P. 26. D.E. 36. Also pending is Plaintiff’s motion for
fugitive disentitlement pursuant to 28 U.S.C. § 2466. D.E. 48. On June 5, 2014, United
States Magistrate Judge B. Janice Ellington submitted a Memorandum and
Recommendation recommending that Claimants’ motions be denied and Plaintiff’s
motion be granted. D.E. 50. Claimants filed objections on June 19, 2014. D.E. 54.
Plaintiff filed a response to Claimants’ objections on June 23, 2014. D.E. 56. Claimants’
objections are set out and discussed below.
First, Claimants object to the entry of any dispositive judgment on Claimant
Torres’s claims until after the motion for a more definite statement (D.E. 49) has been
ruled on.

On June 24, 2014, Magistrate Judge Ellington issued an order denying

Claimants’ motion for a more definite statement on the grounds that the complaint was
not so vague or ambiguous that Claimants could not frame a response given that
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Claimants had already filed an answer in which they responded to each paragraph of the
complaint and asserted defenses. D.E. 57, p. 2. There was no appeal of this order. To
the extent that Claimants reurge that motion through their objections, the motion is
DENIED for the same reasons relied upon by the Magistrate Judge in her order dated
June 24, 2014.
Second, Claimants object to the Magistrate Judge’s recommendation on the basis
that it “fails to cite any fact or set of facts that show an illegal act committed by
Claimants.” D.E. 54, p. 2, ¶ 1. Claimants argue that the facts recited by the Magistrate
Judge do not establish probable cause to believe that the funds in question are the
proceeds of illegal activity. Claimants argue that no single fact relied upon by the
Magistrate Judge constitutes an illegal act in and of itself. Claimants therefore reurge
their motion to dismiss (D.E. 7) and their motion to stay (D.E. 41). D.E. 54, pp. 2-3, ¶ 2.
Claimants also urge the Court to “demand from the government sufficient pleadings to
support probable cause.” D.E. 54, p. 5, ¶ 11.
“To survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to state a claim to relief that is plausible on its face. A claim has
facial plausibility when the plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations and quotations omitted). “The
complaint must contain either direct allegations on every material point necessary to
sustain a recovery . . . or contain allegations from which an inference fairly may be drawn
that evidence on these material points will be introduced at trial.” Rios v. City of Del Rio,
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Tex., 444 F.3d 417, 420-21 (5th Cir. 2006). “The purpose of a motion to dismiss is to test
the sufficiency of the complaint, not to decide the merits. Thus, a motion to dismiss for a
failure to state a claim can be granted only if it appears beyond doubt that the plaintiff
could prove no set of facts entitling him to relief.” Triad Associates Inc., v. Chicago
Housing Authority, 892 F.2d 583, 586 (7th Cir. 1989) (citing Hishon v. King & Spalding,
467 U.S. 69, 73 (1984)).
Supplemental Admiralty and Maritime Claims Rule G(2) requires, among other
things, that a complaint state sufficiently detailed facts to support a reasonable belief that
the government will be able to meet its burden of proof at trial. Supplemental Rule
(G)(2)(f). A complaint can withstand a motion to dismiss if it alleges “facts sufficient to
support a reasonable belief that the property [in question] is subject to forfeiture.” U.S. v.
$79,650 Seized from Bank of America Account Ending in -8247, in name of Afework,
2009 WL 331294, at *5 (E.D. Va. Feb. 9, 2009) (citing United States v. Mondragon, 313
F.3d 862, 865-55 (4th Cir. 2002)). The pleading requirements of Rule (G)(2) are satisfied
if the government pleads enough facts to support a reasonable belief that it will be able to
meet its burden of proof at trial; the government is not required to prove its case simply
to get into the courthouse door. U.S. v. $74,500 in U.S. Currency, 2011 WL 2712604, at
*2 (D. Md. July 11, 2011).
The Court finds that Plaintiff’s factual allegations are sufficient to withstand a
motion to dismiss for failure to state a claim because the allegations in the complaint
allow the Court to draw the reasonable inference that Claimants are liable for the
misconduct alleged.
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Even if no one fact in isolation establishes that an illegal act

occurred, the facts in the aggregate form the basis for the reasonable belief that evidence
on these material points will be introduced at trial after discovery. Moreover, Plaintiff is
not required to prove its entire case at the pleading stage and can maintain its complaint
without conclusively establishing, for example, that the funds in the Bermuda account
were the fruit of criminal activity. That is a burden reserved for trial; at this stage of the
proceedings, the Court is charged with the task of evaluating the sufficiency of the
complaint, not with deciding the merits. See Triad Associates Inc., 892 F.2d at 586. For
these reasons, Claimants’ second objection is OVERRULED.
Third, Claimants object to the Magistrate Judge’s conclusion that Claimant
Llaguno has no fear of coming to the United States to be deposed. The Magistrate Judge
found that Claimant Llaguno “failed to present any evidence to support her motion for
protective order” which would show that attending a deposition in Corpus Christi would
cause her annoyance, embarrassment, oppression, undue burden, or expense. D.E. 50, p.
9. The Magistrate Judge noted that Claimant Llaguno owns real property in Texas, hired
an attorney who practices in Texas, and filed her third party ownership claim with the
knowledge that this case was being litigated in the Corpus Christi Division. D.E. 50, p. 9.
Claimants counter that the Magistrate Judge ignored the fact that Claimant Llaguno’s
most recent experience with United States government agents “raised within her a fear
that the government was asking for her deposition, but was hiding its true intention to
hold her indefinitely and without her family.” D.E. 54, p. 7, ¶ 17. Specifically,

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Claimants allege that Claimant Llaguno was “detained, questioned under oath, denied reentry and accused of violating immigrations laws, when in fact she had a valid visa and
Mexican passport.” D.E. 54, p. 7, ¶ 17.
A court may issue a protective order where good cause is shown to protect a party
from annoyance, embarrassment, oppression, or undue burden or expense. FED. R. CIV.
P. 26(c)(1). Here, Claimant Llaguno has not demonstrated good cause for the issuance of
a protective order regarding her deposition. Although Claimant Llaguno’s fears may be
real, that does not make them reasonable and tantamount to a showing of good cause.
Moreover, the numerous considerations cited by the government in its response
concerning the Court’s supervision of the proceedings, the Court’s ability to resolve
disputes and impose remedies, and preventing undue delay (D.E. 56, p. 30) outweigh
Claimant Llaguno’s apprehension resulting from her unpleasant encounter with United
States government agents. Claimant Llaguno has not demonstrated that she is entitled to
a protective order so the third objection is OVERRULED as to her.
Finally, this Court agrees with the Magistrate Judge’s conclusion that Claimant
Torres is subject to the Fugitive Disentitlement Act and that the applicability of that Act
precludes Claimant Torres from prevailing on his motion to stay and motion for
protective order (D.E. 36, 41).
Having reviewed the findings of fact, conclusions of law, and recommendations
set forth in the Magistrate Judge’s Memorandum and Recommendation, as well as
Claimants’ objections, and all other relevant documents in the record, and having made a
de novo disposition of the portions of the Magistrate Judge’s Memorandum and
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Recommendation

to

which

objections

were

specifically

directed,

the

Court

OVERRULES Claimants’ objections and ADOPTS as its own the findings and
conclusions of the Magistrate Judge. Accordingly, Claimants motion for stay and motion
for protective order (D.E. 36, 41) are DENIED and Plaintiff’s motion for fugitive
disentitlement (D.E. 48) is GRANTED.

ORDERED this 18th day of August, 2014.

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NELVA GONZALES RAMOS
UNITED STATES DISTRICT JUDGE

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