UNITED STATES OF AMERICA v. $113,550.58 IN FUNDS FROM JP MORGAN CHASE BANK, ACCOUNT #768982881, IN THE NAME OF LEGAL SERVICES

Filing 16

MEMORANDUM OPINION. Signed by District Judge Robert E. Payne on 10/20/2016. (jsmi, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division

UNITED STATES OF AMERICA,
Plaintiff,

v.

Civil Action No. 3:16cv341

$113,550.58 IN FUNDS FROM
JP MORGAN CHASE BANK,
ACCOUNT #768982881, IN THE
NAME OF LEGAL SERVICES,
Defendant.

MEMORANDUM OPINION

This matter
CLAIMANTS

FIAD

is

before

SERVICES

COOPER'S ANSWER (ECF No.

the Court
LLC,

7),

on the MOTION TO STRIKE

LEGAL

SERVICES,

AND

MICHAEL

filed by the United States and the

MOTION FOR LEAVE TO FILE CLAIM OUT OF TIME AND TO AMEND ANSWER
(ECF No.

13),

filed by FIAD Services LLC,

the reasons set forth below,

Legal Services.

For

the MOTION FOR LEAVE TO FILE CLAIM

OUT OF TIME AND TO AMEND ANSWER (ECF No. 13) will be granted and
the

MOTION

SERVICES,

TO

AND

STRIKE
MICHAEL

CLAIMANTS
COOPER'S

FIAD

ANSWER

SERVICES
(ECF

No.

LLC,
7)

LEGAL

will

be

granted as to Michael Cooper's Answer and denied as moot as to
FIAD Services LLC, d/b/a Legal Services.

BACKGROUND

On June 6,
No. 1)

2016,

the COMPLAINT FOR FORFEITURE IN REM

(ECF

(the "Complaint"), was filed by the United States against

defendant

$113,550.58

account #768982881,
"defendant

in

from

JP

Morgan

Chase

in the name of Legal Services

property"),

Supplemental

funds

Rule

in

accordance

G(2).

The

with

action

is

(hereinafter

Fed.
a

Bank,

R.

Civ.

P.

in

rem

civil,

proceeding to forfeit money seized as property constituting or
derived

from

the

proceeds

involving

violations

fraud

U.S.C.

(18

§

of

mail

1343),

fraud and mail fraud

traceable
fraud

and/or

(18 U.S.C.

a

to
(18

a

U.S.C.

to

defraud,

§

1341),

wire

to

conspiracy

commit

wire

(ECF No.

1349).

§

scheme

Compl.

1,

~

4) •

The WARRANT AND SUMMONS FOR ARREST OF ARTICLES IN REM (ECF
No.

2)

(the

pursuant

to

"Warrant")
Rule

was

G(3) (b)

duly

and

executed

on

June

Proof

of

Service

(c).

10,

Warrant was filed with the Clerk of Court on June 15,

2016,
of

2016

the
(ECF

No. 3) .
On June 21,

2016,

pursuant to Rule G(4) (b),

of the civil forfeiture action
Complaint

were

receipts

to

interest

in

all
the

sent

by

entities'
defendant

(the "Notice")

regular
and

persons

property,
2

and

direct notice

and a copy of the

certified
believed

including:

( 1)

mail-return
to

have

an

Michael

D.

Cooper,

(2)

Michael

for Michael
D. Cooper,
the

D.

D.

Cooper,

Cooper;

c/o A.

and

FIAD Services,

(3)

owner FIAD Services,

Notice

LLC.

all mention the name

that appellation was

FIAD' s

Jeff Irah,

Esq.,

LLC;

counsel

c/o Michael

The Complaint, Warrant and

"LEGAL SERVICES."

It

"doing business name."

appears

Thus,

FIAD

and LEGAL SERVICES will be referred to only as FIAD.

The Notice

twice stated that a claim must be filed by July 26,

2016.

regular mail was

never returned as

undeliverable;

however,

The
the

only return receipt received was from Jeff Irah, Esq.
The

Notice

was

internet site for a
June

17,

2016,

provided that,

also

published

on

period of thirty days

pursuant

to

a

official

The

2016,

beginning

internet notice

received,

claim by August 16,

government

days),

(30

Rule G ( 4) (a) .

if no direct notice was

party could file

an

an interested

pursuant

to Rule

G(S) (a) (ii) (B).
On June 26,

REM (ECF No.

4)

2016, the ANSWER TO COMPLAINT FOR FORFEITURE IN
was filed by FIAD,

Legal Services,

all of whom were referred to as "claimants."

But,

and Cooper,
none of them

filed a claim as is required by Rule G(S).
On August 15,

2016,

the United States filed the MOTION TO

STRIKE CLAIMANTS FIAD SERVICES LLC,

LEGAL SERVICES,

COOPER's ANSWER AND BRIEF IN SUPPORT (ECF No. 7).

3

AND MICHAEL

On August 29,
the MOTION
ANSWER

2016,

FIAD,

FOR LEAVE TO

(ECF No.

13) .

this time through counsel,

filed

FILE CLAIM OUT OF TIME AND TO AMEND

Attached to the motion,

FIAD provided a

PROPOSED AMENDED ANSWER (ECF No. 14-3).

POSITIONS OF PARTIES

In its MOTION TO STRIKE CLAIMANTS FIAD SERVICES LLC, LEGAL
SERVICES,

AND MICHAEL COOPER' s

States asserts that

ANSWER

( ECF No.

7) ,

the United

FIAD and Cooper failed to comply with the

requirements of Rule G(S) because, although they filed an Answer
(ECF No.

4),

they did not file a claim.

Thus,

States, neither has standing to file an Answer.

says the United
And, the United

States rightly contends that, because Cooper is not an attorney,
he

cannot,

under

Local

Civil

Rule

83(0) (3),

file

papers

on

behalf of another, specifically FIAD.
In support of its MOTION
TIME AND TO AMEND ANSWER,

FOR LEAVE TO FILE CLAIM OUT OF
( 1)

FIAD asserts that:

The Answer

gave notice that the defendant property is owned and claimed by
FIAD;

(2) Cooper made a good faith attempt to comply with Rule G

as a pro se litigant;

(3)

FIAD's counsel has acted diligently to

correct the alleged deficiencies; and (4) the United States will
suffer no prejudice from excusing FIAD's procedural errors.
In

the

GOVERNMENT'S

REPLY

TO

RESPONSE

IN

OPPOSITION

TO

MOTION TO STRIKE ANSWER AND GOVERNMENT'S RESPONSE TO MOTION OF
4

FIAD SERVICES LLC FOR LEAVE TO FILE CLAIM OUT OF TIME AND TO
AMEND ANSWER

(ECF No.

15), the United States agrees with FIAD's

MOTION FOR LEAVE TO FILE CLAIM OUT OF TIME AND TO AMEND ANSWER
(ECF No.

13),

on the condition that the Answer of Michael

D.

Cooper, individually, is stricken.

LEGAL STANDARD

Rule G of the Supplemental Rules for Admiralty or Maritime
Claims

and

actions

in

Asset
rem

Forfeiture

arising

Actions

from

govern

civil

federal

statutes.

forfeiture

Rule

G(S) (a)

provides that a person contesting the forfeiture of property in
a civil forfeiture action may oppose the forfeiture by filing a
claim in the court where the action is pending,
the

specific

stating

property

the

claimed,

claimant's

identifying

interest

in

the

by identifying

the

claimant,

property.

In addition to filing a claim,

G(S) (a) (i) (A) (B).

and
Rule

Rule G (5) (b)

provides that "(a] claimant must serve and file an answer to the
complaint or a motion under Rule 12 within 21 days after filing
the claim."
"In

order

to

contest

a

governmental

forfeiture

action,

claimants must have both standing under the statute [] governing
their claims and standing under Article III of the Constitution
as required for any action brought in federal court."

U.S.

Vazquez-Alvarez,

(quoting

760

F.3d

193,
5

197

(2d

Cir.

2014)

v.

United States v. Cambio Exacto, S.A., 166 F.3d 522, 526 (2d Cir.
1999)).
Rule G (8) (c)

provides

that

the United States may move to

strike a claim or answer for failing to comply with Rule G (5).
See United States v.
2d

560,

563

Hundred

(D.

Md.

2013);

Seventeen Thousand,

Forty-Eight

Cents

5178121,

*4

trial,

$104,250.00 in U.S. Currency,

at
the

One

(E.D.N.Y.

United

Hundred
No.

13-CV-5567

2,

2015)

government may move

to

strike a

comply

with

States

Forty-Three

Sept.

("At

v.

Four

Dollars

MKB,

2015

&

WL

any time before

claim pursuant

to

on the grounds that the claimant lacks

standing to make the claim,
not

also

($417,143.48),

Forfeiture Rule G ( 8) ( c)

did

see

947 F. Supp.

or on the grounds that the claimant

Forfeiture

Rule

• If) •

G(5)

The

Advisory Committee Notes on Rule G "provides that the government
may move to strike a claim or answer for failure to comply with
the

pleading

requirements

other pleadings,

of

subdivision

As

( 5)

with

the court should strike a claim or answer only

if satisfied that an opportunity should not be afforded to cure
the defects under Rule 15."
"A claimant who fails to comply with the Supplemental Rules
lacks statutory standing to assert a claim."

United States v.

$18, 690. 00 in U.S.

Currency,

No.

2014 WL 1379914,

at

Apr.

2014)

*2

(W.D.

Va.

8,

6

5: 13CV00026,
(citing

United

States

v.

$119,030.00

in

(W.D.Va.2013)).
procedural

U.S.

Currency,

577

569,

F. Supp. 2d

955

While courts have the discretion to excuse some

failures,

strict

See United States v.

compliance

Amiel,

995

is

normally

F. 2d 3 67,

371

required.

( 2d Cir.

1993)

(granting motion to strike claim when claimant failed to file an
answer

to

the

complaint

or

demonstrate

excusable

neglect

for

failing to do so); see also United States v. $39,557.00, More or
Less,

in U.S. Currency,

683 F.Supp.2d 335,

338-39

(D.N.J.

2010)

(striking claim for failure to identify ownership and failure to
comply
have

with

verification

required

claimants

requirement).
follow

to

F.2d

750,

752

(4th

Cir.

the

consistently

language

United States v.

Supplemental Rules to the letter."
945

"Courts

1991);

accord,

United

of

the

Borromeo,
States

v.

Estevez, 845 F.2d 1409 (7th Cir. 1988).
However,

"[e]ven where a claimant is properly served .

a court may allow a claim to be filed out of time on a showing
of excusable neglect.
Borromeo,

945

consider the

F.2d

Fed. R. Ci v. P.
750,

following

753

(4th

factors

to

6 (b) ( 2) . "
Cir.

United States v.

1991) . 1

determine

A court

whether

there

may
was

excusable neglect:

1

"A district court's ruling on excusable neglect is reviewed
for abuse of discretion."
United States v. Borromeo, 945 F.2d
750, 754 (4th Cir. 1991).
7

[W]hen the claimant became aware of the
seizure, whether the claimant was properly
served,
whether the government would be
prejudiced,
whether
the
government
encouraged
the
delay
or
misguided
the
claimant, whether the claimant informed the
government and the court of his interest
before the deadline, whether the claimant
had expended resources preparing for trial,
the claimant's good faith, the claimant's
heal th problems, whether the government has
complied with procedural rules, and whether
the claimant was acting pro se.
United States v. Borromeo, 945 F.2d 750, 753 (4th Cir. 1991).

ANALYSIS AND APPLICATION OF LAW
A.

Michael D. Cooper
Behalf of FIAD

Lacks

Standing

to

Assert

a

Claim

on

By failing to follow the requirements of Rule 5(G), Cooper
lacks statutory standing to assert a claim on behalf of himself
and

FIAD,

and therefore,

SERVICES LLC,
No.

7)

the

LEGAL SERVICES,

MOTION

TO

STRIKE

CLAIMANTS

FIAD

AND MICHAEL COOPER'S ANSWER

(ECF

will be partially granted and Cooper's Answer will be

stricken.

See United States v. Four Hundred Seventeen Thousand,

One Hundred Forty-Three Dollars and Forty-Eight Cents,

No.

13-

CV-5567 MKB, 2015 WL 5178121, at *1 (E.D.N.Y. Sept. 2, 2015).
The
forfeiture
Currency,

filing

of

request.
828 F.

a

claim

See

Supp.

is

United

2d 822,

essential

States
824

v.

(D. Md.

to

$12,914.00
2011)

the most significant requirement in Rule G(5)).
8

contesting
in

a

U.S.

(The claim is
Cooper has not

requested an extension of time to file a claim to cure his Rule
G

violations.

request,
MOTION
AND

Al though

that

TO

motion does

STRIKE

MICHAEL

FIAD
not

CLAIMANTS

COOPER'S

has

include

FIAD

ANSWER

made

a

No.

LLC,
7)

for

such

Therefore,

Cooper.

SERVICES

{ECF

motion

LEGAL

will

be

a

the

SERVICES,
partially

granted with respect to Cooper's Answer.
B.

Even if Cooper had Standing,
Behalf of FIAD.

Wholly

apart

from

the

failure to file a claim,

pleading

where
or

a

notice

procedural

bar

created

by

Claim on

Cooper's

Cooper cannot assert a claim on behalf

Pursuant to Local Civil Rule 8 3. 1 {D) ( 3) ,

of FIAD in any event.
"[e]xcept

He Cannot Assert a

party

conducts

required

to

be

his

or

her

signed by

own

counsel

case,

no

shall

be

filed unless

signed by counsel who shall have been admitted to

practice

in

this

services

states

in its

SUPPORT OF MOTION
AMEND ANSWER
attorney.

II

Court

the

BRIEF OF CLAIMANT

FOR LEAVE TO

(ECF No.

As

14),

The local rules

attorney

for

FIAD

FIAD SERVICES LLC

IN

FILE CLAIM OUT OF TIME AND TO

Cooper is a prose litigant,

not an

forbid Cooper from filing papers on

behalf of FIAD.

9

C.

FIAD Will Be Permitted to File Claim Out of Time and Amend
Answer.

FIAD,

as the United States acknowledges,

has satisfied the

requirement for an extension of time in which to file its claim
and an Amended Answer.

That part of its motion will be granted.

CONCLUSION

For
CLAIMANTS
COOPER'S

the

reasons

FIAD
ANSWER

set

forth

SERVICES

7)

LEGAL

LLC,

(ECF

No.

above,

will

be

the

MOTION

SERVICES,
granted

as

TO

STRIKE

AND

MICHAEL

to

Cooper's

Answer and will be denied as moot as to FIAD Services LLC, d/b/a
Legal

Services and the MOTION

FOR LEAVE TO

FILE CLAIM OUT OF

T.IME AND TO AMEND ANSWER (ECF No. 13) will be granted.
It is so ORDERED.

Isl

Robert E. Payne
Senior United States District Judge

Richmond, Virginia
Date: October _Lj_, 2016

10