United States of America v. Approximately $50205 US Currency et al

Filing 130

ORDER signed by Judge J P Stadtmueller on 7/12/13: denying 109 claimants 6 Degrees Marketing Group LLC, Synergy Botanicals Co LLC, Amy Wilhoite and John Wilhoite's Motion for Reconsideration; and, denying 111 120 121 and 122 Claimants' Motions to Dismiss. See Order. (cc: all counsel) (nm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
UNITED STATES OF AMERICA,
Plaintiff,
v.

Case No. 12-CV-1183-JPS

APPROXIMATELY $50,205.00 IN UNITED
STATES CURRENCY, et al.,

ORDER

Defendants.

1.

Background
The United States of America brings this civil forfeiture action in rem

based on allegations that the defendant properties1 constitute, inter alia,
proceeds traceable to knowing and intentional exchange(s) for controlled
substances, analogs thereof, or both, all in violation of 21 U.S.C. §§ 841(a)(1),
813 and 802(32), and, therefore, are subject to forfeiture to the United States
under 21 U.S.C. § 881(a)(6). (Docket #104, ¶¶ 5 and 19).2
In response to the United States’ third amended verified complaint,
claimants of interests in the defendant properties – John Wilhoite, Amy
Wilhoite, 6 Degrees Marketing Group, Synergy Botanicals Co., LLC, Brothers
Wholesale, Purity Brokers, Alec Nicholas Consulting, Christopher Brett
Hinton, J&B Packaging LLC, JV Imports LLC, Yi Zhou, Hong Yong Zou, and

1

2

A full list of the defendant properties in Section 2.1 of this Order.

This theory appears to account for thirty-four of the thirty-five defendant
properties; as to the remaining property – one 2005 Infiniti FX35 – the United States
alleges that it was used to facilitate the knowing and intentional transportation or
concealment of materials intended for use in the knowing and intentional
trafficking of controlled substances, analogs thereof, or both, all in violation of 21
U.S.C. §§ 841(a)(1), 813 and 802(32) and therefore is subject to forfeiture to the
United States under 21 U.S.C. § 881(a)(4). See (Docket #104, ¶¶ 5 and 20) and
(Docket #104, Exhibit A, ¶¶ 67-69).

Jia Zou (collectively, “Claimants”) – move to dismiss the complaint against
the defendant properties on three grounds: (1) mens rea for the alleged
predicate offenses is not adequately alleged through specific factual
allegations to state a claim upon which relief may be granted; (2) nexuses
between the alleged predicate offense(s) and the defendant properties are not
adequately alleged through specific factual allegations to state a claim upon
which relief may be granted; and (3) the Federal Analogue Act is
unconstitutionally vague as-applied to the chemicals underlying the alleged
predicate offenses. See (Docket #s 111, 120, 121 and 122).
For the reasons set forth below, the Court is obliged to deny
Claimants’ motions to dismiss.
2.

The United States’ Statement of the Case
2.1

The Defendant Properties

Following is a list of the defendant properties in this case: (A)
approximately $50,205.00 in United States currency; (B) one 2008 Hummer
H2 bearing vehicle identification number (VIN) 5GRGN23898H102440; (C)
one 2005 Infiniti FX35 bearing vehicle identification number (VIN)
JNRAS08U65X103279; (D) one Colt AR-15 Carbine rifle; (E) one Draco-C
pistol; (F) one Aimpoint Comp M4s rifle optic; (G) one iTac defense weapon
mounted tactical light/laser; (H) one magnifier for rifle optics; (I)
approximately $137,132.07 in United States currency from JPMorgan Chase
Bank N.A. account ending in 9124; (J) approximately $44,307.54 in United
States currency from JPMorgan Chase Bank N.A. account ending in 9132; (K)
approximately $218,816.79 in United States currency from a cashier’s check
originating from Wells Fargo Bank account ending in 1880; (L) approximately
$242,675.69 in United States currency from a cashier’s check originating from
Wells Fargo Bank accounts ending in 8782 and 2333; (M) approximately
Page 2 of 16

$10,000.00 in United States currency from a cashier’s check originating from
East West Bank account ending in 0778; (N) approximately $10,000.00 in
United States currency from a cashier’s check originating from East West
Bank account ending in 0885; (O) approximately $50,000.00 in United States
currency from a cashier’s check originating from East West Bank account
ending in 0828; (P) approximately $181,812.70 in United States currency from
Bank of America account ending in 2345; (Q) approximately $45,003.17 in
United States currency from Bank of America account ending in 2329; (R)
approximately $21,105.37 in United States currency from East West Bank
account ending in 0778; (S) approximately $126,538.63 in United States
currency from East West Bank account ending in 0828; (T) approximately
$13,314.64 in United States currency from East West bank account ending in
0869; (U) approximately $53,103.25 in United States currency from
MetroBank account ending in 8965; (V) approximately $36,346.90 in United
States currency from Wells Fargo Bank account ending in 6316; (W)
approximately $70,403.61 in United States currency from Wells Fargo Bank
account ending in 4256; (X) approximately $154,696.20 in United States
currency from Wells Fargo Bank account ending in 9755; (Y) approximately
$4,512.51 in United States currency from Wells Fargo Bank account ending
in 8653; (Z) approximately $12,535.48 in United States currency from Wells
Fargo Bank account ending in 1416; (AA) approximately $36,053.52 in United
States currency from Wells Fargo Bank account ending in 1600; (BB)
approximately $19,326.61 in United States currency from Wells Fargo Bank
account ending in 5873; (CC) two DBF900 horizontal continuous band
sealers; (DD) approximately 18,978 pounds of damiana leaves; (EE) one
Chicago electric chipper shredder 66910; (FF) one 2009 Syntron F-TO-C
magnetic feeder with serial number GPMF49856; (GG) approximately 3,425
Page 3 of 16

pounds of damiana leaves; (HH) approximately $65,027.00 in United States
currency; and (II) assorted jewelry identified as one 18-carat white gold
ladies Breguet Reine de Naples watch and one 18-carat white gold diamond
pendant.
2.2

Summary of the United States’ Factual Allegations

To contextual the legal analysis set forth below in Section 3, the Court
will briefly summarize the United States’ statement of the case.3 Because
Claimants move to dismiss the complaint for failure to state a claim, the
United States’ allegations are entitled to due deference: “[a]ll well-pleaded
facts are accepted as true, and all reasonable inferences are drawn in the
plaintiff’s favor.” Hale v. Victor Chu, 614 F.3d 741, 744 (7th Cir. 2010).4
2.2.1

The Organization

Between approximately March 1, 2011, and September 19, 2012,
Claimants (with the exception of JV Imports LLC)5 and others6 conspired to

3

The verifying affidavit of Ann Marie Phillippi – “a Federally Deputized
Task Force Agent” “assigned to the United States Department of Justice, Drug
Enforcement Administration (DEA)” (Docket #104, Exhibit A, ¶ 1) – is incorporated
into the complaint by reference. (Docket #104, ¶ 5).
4

Having reviewed the bases for jurisdiction and venue proposed by the
United States, the Court is satisfied that this case is properly before this Court.
5

JV Imports LLC is absent from the cast of characters set forth in paragraph
41 of Agent Phillipi’s affidavit. (Docket #104, Exhibit A, ¶ 41). The omission may
be intentional or simply an inadvertent ministerial oversight by the United States.
Regardless, the Court finds that the complaint adequately alleges a nexus between
the defendant properties claimed by JV Imports LLC and the predicate offenses
because: (i) certain accused Claimants control this entity; and (ii) JV Imports LLC
sells SSCs (defined below) through the same website that serves as the primary web
portal for the predicate offenses: WWW.BUY-HERBAL-INCENSE.COM. See e.g.,
(Docket #104, Exhibit A, ¶¶ 39 and 40).
6

This subset of predicate violators includes Alec Nicholas Tundidor
(“Tundidor”). (Docket #104, Exhibit A, ¶ 41).

Page 4 of 16

intentionally manufacture, distribute and sell, and did intentionally
manufacture, distribute and sell, smokeable synthetic cannabinoid products
(“SSCs”): (i) that contained, and which they knew to contain, two controlled
substance analogues – UR-144 and XLR-11 – of a scheduled controlled
substance (JWH-018); and (ii) which they intended for human consumption
(such enterprise, collectively, the “Organization”). (Docket #104, Exhibit A,
¶¶ 32-98).7
Although the Organization’s several participants “have distinct entity
names, principals, and accounts at financial institutions,” the Organization
operates under a single umbrella called “DS APPLICATIONS/SYNERGY
BOTANICALS[.]” (Id. at ¶¶ 41 and 43). The Organization’s SSCs were
marketed primarily through a single website: WWW.BUY-HERBALINCENSE.COM (“Website”) (Id., ¶¶ 32, 36, 37, 39, 43, 54, 55, 57, 59, 73, 98).
On May 8, 2012, Agent Phillipi, while operating in an undercover capacity,
called the telephone number posted on the Website. (Id. at ¶ 55). The
telephone call led to an in-person meeting on May 23, 2012, at which time
Agent Phillipi “met with and purchased 1,000 pieces of SSC product from
TUNDIDOR and his business partner, John WILHOITE, for $5,000” (the
“May Order”). (Id. at ¶ 55). Once delivered, the May Order was analyzed by
the DEA North Central Lab and “found to contain the synthetic cannabinoids
UR-144 and XLR-11[.]" (Id. at ¶ 63).
Prior to that controlled buy, on February 1, 2012, DEA Milwaukee
agents and Milwaukee Police officers seized 27,315 SSC units that contained

7

Claimants’ first proposed ground for dismissal focuses on only a subset of
this alleged scheme: mens rea. In other words, Claimants challenge only whether
they conducted themselves with the requisite criminally culpable mental state.
Therefore, this summary of facts is limited accordingly.

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AM2201 (presently scheduled as a controlled substance within the meaning
of 21 U.S.C. § 841) and “that had a total weight of approximately 54,059
grams, or about 119 pounds, and a retail value of approximately $368,886."
(Id. at ¶¶ 50-54). The majority of these goods carried one of the
Organization’s brand names and had the Website “printed on the back of the
product packaging.” (Id. at ¶ 54). The first stage of this seizure occurred at
three Milwaukee area retail convenience stores (whereas the second stage
occurred at the local wholesaler) and, at these retail locations, SSCs were
“available for sale, but not publicly displayed despite being the most
profitable item sold.” (Id. at ¶ 50).8
The invoice for a subsequent controlled buy, initiated on July 10, 2012,
refers to packets containing 1-gram, 2-gram and 4-gram quantities of SSCs.
(Id. at ¶¶ 60-61). In general, sales of SSCs at weights in this range “are more
consistent with drug weights for human consumption than with that of
legitimate ‘potpourri,’ ‘incense,’ ‘BOTANICALS sachets,’ and ‘air fresheners,’
as these products are purportedly marketed and labeled.” (Id. at ¶ 81).
Moreover, in general, “the prices charged for SSC[s] are more in line with
drug prices than with those of legitimate products.” (Id.).
2.2.2

John Wilhoite

According to a former importer and distributor of synthetic
cannabinoid compounds, in the course of his/her9 dealings with Purity

8

The United States submits that, in general, this clandestine manner of sale
is a tactic to avoid selling SSCs “to a confidential informant or an undercover law
enforcement officer.” (Id. at ¶ 31(h)).
9

Agent Phillipi’s affidavit uses gender-neutral phrases to refer to this
individual. As the individual is cooperating with the United States – “against
his/her own penal interests,” – this gender-masking is designed presumably to
protect the cooperator’s identity. See, e.g., (Docket #104, Exhibit A, ¶¶ 87-88).

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Brokers – one of the Claimants (and one of the predicate violators) – he/she
purchased synthetic cannabinoid compound and “John WILHOITE would
have to sign off on any deals regarding prices charged.” (Docket #104,
Exhibit A, ¶¶ 87-88).
In addition to serving this gating function for the Organization (as
Purity Brokers is a constituent entity of the Organization), John Wilhoite kept
detailed notes of his research on SSCs that reveal, inter alia, the following: (i)
“[i]n notes dated February24, 2012, WILHOITE wrote: ‘Brett Someone in
Kansas was prosecuted under the Analog Act’” (Id. at ¶ 82(L)); (ii) “just three
days before JWH-018 and four other cannabinoids became emergency
scheduled [as illicit controlled substances], WILHOITE wrote:…‘Masking
agents through several nitriles. New compounds can’t test what they’re not
looking for’” (Id. at ¶ 82(G)); and (iii) “in notes dated around September 2011,
he wrote: ‘AM-2233 for potency. AM-2322 for smoothness.’” (Id. at ¶ 82(N)).
Notably, in a conversation on May 23, 2012, John Wilhoite
acknowledged to Agent Phillipi (who was operating in an undercover
capacity) “that people are not supposed to smoke potpourri or incense but
they do.” (Id. at ¶ 80).
3.

Analysis
3.1

Ground One: Are the factual allegations regarding mens rea
adequate?

Claimants assert that the United States’ complaint fails to state a claim
upon which relief can be granted because the factual allegations regarding
mens rea are inadequate. See (Docket #s 111, 120, 121 and 122).
In general, to state a cognizable claim under the federal notice
pleading system, the plaintiff is required to provide a “short and plain
statement of the claim showing that the pleader is entitled to relief[.]” Fed.
Page 7 of 16

R. Civ. P. 8(a)(2). The plaintiff’s statement need only “give the defendant fair
notice of what the…claim is and the grounds upon which it rests.” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson,
355 U.S. 41, 47 (1957)). However, a complaint that offers “labels and
conclusions” or “formulaic recitation of the elements of a cause of action will
not do.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S.
at 555). In other words, the complaint must “contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Id.
(quoting Twombly, 550 U.S. at 570) (emphasis added). “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.” Id. (citing Twombly, 550 U.S. at 556). The complaint allegations
“must be enough to raise a right to relief above the speculative level.”
Twombly, 550 U.S. at 555 (citation omitted).
In considering whether a complaint states a claim, courts should
follow the principles set forth in Twombly by first, “identifying pleadings that,
because they are no more than conclusions, are not entitled to the assumption
of truth.” Iqbal, 556 U.S. at 679. Legal conclusions must be supported by
factual allegations. Id. If there are well-pleaded factual allegations, the court
must, second, “assume their veracity and then determine whether they
plausibly give rise to an entitlement to relief.” Id.
Here, the United States brings a civil forfeiture action in rem under a
federal statute and so Rule G of the Supplemental Rules for Admiralty or
Maritime Claims and Asset Forfeiture Actions applies.10 Rule G(2)(f) provides

10

Under Rule G(1), the Federal Rules of Civil Procedure, inter alia, apply to
the extent that Rule G does not address an issue.

Page 8 of 16

that the complaint must “state sufficiently detailed facts to support a
reasonable belief that the government will be able to meet its burden of proof
at trial.” To meet its burden of proof at trial, the United States must
“establish, by a preponderance of the evidence, that the property is subject
to forfeiture[.]” 18 U.S.C. §983(c)(1).11
Therefore, the question before the Court is whether the United States’
complaint states sufficiently detailed facts to support a reasonable belief that
the government will be able to establish at trial, by a preponderance of the
evidence, that the defendant properties are proceeds traceable to knowing
and intentional exchange(s) for controlled substances, analogs thereof, or
both.12

11

“Civil forfeiture is an in rem proceeding. The Property is the defendant
in the case…” and therefore the relevant question is whether “the property was
involved in a violation to which forfeiture attaches.” U.S. v. Sandini 816 F.2d 872
(3rd Cir. 1987).
12

As noted supra in Section 1, the United States alleges that the defendant
properties constitute, inter alia, proceeds traceable to knowing and intentional
exchange(s) for controlled substances, analogs thereof, or both, all in violation of
21 U.S.C. §§ 841(a)(1), 813 and 802(32), and therefore are subject to forfeiture to the
United States under 21 U.S.C. § 881(a)(6). (Docket #104, ¶¶ 5 and 19).
As noted supra in the second footnote, this theory appears to account for
thirty-four of the thirty-five defendant properties; as to the remaining property –
one 2005 Infiniti FX35 – the United States alleges that it was used to facilitate the
knowing and intentional transportation or concealment of materials intended for
use in the knowing and intentional trafficking of controlled substances, analogs
thereof, or both, all in violation of 21 U.S.C. §§ 841(a)(1), 813 and 802(32), and
therefore is subject to forfeiture to the United States under 21 U.S.C. § 881(a)(4). See
(Docket #104, ¶¶ 5 and 20) and (Docket #104, Exhibit A, ¶¶ 67-69).
Because Claimants’ first proposed ground focuses on a common
denominator among the thirty-five properties – whether the intentional trafficking
was also done knowingly – the Court need not (and will not) distinguish further this
thirty-fifth property in the analysis that follows.

Page 9 of 16

To establish that a substance is a “controlled substance analogue”
within the meaning of the Controlled Substances Analogue Enforcement Act
(“Analogue Act”), the United States must prove two criteria: (1) the
substance’s chemical structure “is substantially similar” to that of a
controlled substance (“Criterion One”); and (2) the substance’s physiological
effect on the central nervous system (“Criterion Two”): (a) “is substantially
similar to or greater than” that of a controlled substance; or, (b) is represented
or intended to have such an effect. 21 U.S.C. § 802(32)(A); United States v.
Turcotte, 405 F.3d 515, 524 (7th Cir. 2005) (“serv[ing] notice that courts in this
circuit should henceforth apply a conjunctive reading of the CSA’s Analogue
Provision”).
In addition, the Analogue Act imposes a scienter requirement:
[T]he defendant must know that the substance at issue meets
the definition of a controlled substance analogue set forth in
§ 802(32)(A): A defendant must know that the substance at
issue has a chemical structure substantially similar to that of a
controlled substance, and he or she must either know that it
has similar physiological effects or intend or represent that it
has such effects. We recognize that requiring the government
to prove scienter as to these criteria may impose a significant
prosecutorial burden in some cases. The question of similar
chemical structure is particularly nettlesome since, even if such
chemical similarities exist, and even if the defendant is aware
of these similarities, the intricacies of chemical science may
render it extremely difficult to prove that a defendant had such
knowledge. As a provisional remedy for this problem, we
prescribe that, in such cases, if the scienter requirement is met
with regard to the second part of the analogue definition
(knowledge or representation of similar physiological effects),
the jury is permitted–but not required–to infer that the
defendant also had knowledge of the relevant chemical
similarities.
Turcotte, 405 F.3d at 527.
Page 10 of 16

Here, Claimants argue that the facts alleged in the United States’
complaint do not provide the Court an adequate basis to support a
reasonable belief that the government will be able to meet its burden of proof
at trial as to the scienter requirement.
In light of the teachings of Turcotte, the Court turns to allegations in
the complaint relevant to Criterion Two (knowledge of similar physiological
effects). In the Court’s view, the factual allegations set forth above in Section
2.2.1, when viewed together with the balance of the facts alleged in the
United States’ complaint, amply paint a picture of the Organization
distributing (in exchange for proceeds) substances Claimants both: (i)
intended for human consumption; and (ii) knew have physiological effects
similar to that of a controlled substance.
In particular, the Court observes that the Organization turned factors
of production – here, damiana leaves laced with certain chemicals – into
outputs marketed in quantities (e.g., 1-gram, 2-grams, etc.) which one could
reasonably infer are designed to signal to consumers that the outputs are
substitutes for controlled substances intended for human consumption. In
addition, the sheer volume of proceeds the Organization appears to have
netted

from its enterprise,

taken

together

with

allegations

of

supracompetitive pricing,13 permit the reasonable inference that consumers
in fact viewed the outputs as substitutes for controlled substances and so,
concomitantly, viewed the physiological effects as similar to that of a
controlled substance. More importantly, one can reasonably infer that the
13

One logical explanation for supracompetitive pricing– prices above those
which can be sustained in a competitive market – is that the outputs are not, in fact,
what they are nominally marketed to be (e.g., incense, botanical sachets and car
fresheners). Moreover, the United States’ factual allegations are sufficiently detailed
and salient so as to permit the inferences which follow this footnote.

Page 11 of 16

Organization’s supracompetitive profits, when divvied up among its
constituent elements (e.g., Claimants), signaled to each Claimant that the
outputs’ physiological effects are similar to that of a controlled substance.
From this, Claimants’ several knowledge of the relevant chemicals’
similarities is a permissible inference. Turcotte, 405 F.3d at 527. Therefore, the
Court finds that the United States’ complaint states sufficiently detailed facts
to support a reasonable belief that the government will be able to establish
at trial, by a preponderance of the evidence, that the Organization knowingly
and intentionally trafficked in one or more controlled substances analogs that
were exchanged for proceeds (“Proceeds”).14
Therefore, the Court is obliged to and will deny Claimants’ motions
to dismiss on this ground.
Although the Court stands on the analysis set forth supra, an
alternative analysis to support a predicate offense to which the Proceeds can
be traced is available: John Wilhoite’s notes permit inferences not only that
he intended the Organization’s outputs for human consumption (e.g., his
notes on smoothness and potency bespeak mindfulness as to the criteria by
which smokeable products are commonly evaluated), but also that he knew
he was orchestrating the manufacture and distribution of outputs with
physiological effects similar to a controlled substance (e.g., his notes on
someone being prosecuted under the Analog Act and his notes remarking
that “[n]ew compounds can’t test what they’re not looking for”). Therefore,
the Court also finds that the United States’ complaint states sufficiently
detailed facts to support a reasonable belief that the government will be able

14

The next section of the analysis will address whether the United States’
complaint adequately alleges the nexus between the Proceeds and the defendant
properties.

Page 12 of 16

to establish at trial, by a preponderance of the evidence, that at least John
Wilhoite had the requisite mens rea with regard to his part in the
Organization’s distribution of one or more controlled substances analogs that
were exchanged for Proceeds. In this connection, the Court finds that John
Wilhoite’s alleged control over the Organization’s pricing15 permits the
inference that the Organization’s Proceeds are all tainted by his mens rea.16
3.2

Ground Two: Are the factual allegations of nexus adequate?

The United States claims that the defendant properties constitute, inter
alia, proceeds traceable to knowing and intentional exchange(s) for controlled
substances, analogs thereof, or both, all in violation of 21 U.S.C. §§ 841(a)(1),
813 and 802(32), and therefore are subject to forfeiture to the United States
under 21 U.S.C. § 881(a)(6). (Docket #104, ¶¶ 5 and 19).
In alleging traceability of the defendant properties to the predicate
violation analyzed in supra in Section 3.1, the United States’ complaint
alleges, inter alia: (i) that none of the Organization’s proceeds derive from
legitimate sources of revenue,17 see (Docket #104, Exhibit A, ¶¶ 43 and 49);
(ii) claimants John Wilhoite, Amy Wilhoite, Tundidor, Hong Yong Zou and
Yi Zhou have reported income (each under $48,245 per year and most far

15

As noted supra in Section 2.2.2, according to a former importer and
distributor of synthetic cannabinoid compounds, in the course of his/her dealings
with Purity Brokers – one of the Claimants, a member of the Organization, and one
of the predicate violators – he/she purchased synthetic cannabinoid compound and
“John WILHOITE would have to sign off on any deals regarding prices charged.”
(Docket #104, Exhibit A, ¶¶ 87-88).
16

Again, it bears repeating that Claimants do not appear to contest that the
Organization engaged in an enterprise where it exchanged its outputs for proceeds.
Rather, Claimants focus on the mental state with which they conducted themselves.
17

As noted above, the Organization includes, inter alia, each of the several
entities which have submitted claims in this action.

Page 13 of 16

beneath that amount) to the United States Internal Revenue Service in recent
years (Id. at ¶¶ 104-107) far beneath the value of the respective defendant
properties in which these Claimants assert interests;18 (iii) and myriad factual
details establishing at least one nexus between the Organization (including
one or more of its several members) and each of the defendant properties (Id
at ¶¶ 109-269).
Viewing these allegations, together with the remainder of the
allegations in the United States’ complaint, the Court finds that the complaint
alleges sufficiently detailed facts to support a reasonable belief that the
government will be able to establish at trial, by a preponderance of the
evidence, that the defendant properties are subject to forfeiture as proceeds
traceable to (at least) knowing and intentional exchange(s) for controlled

18

The remaining natural persons who have submitted claims – Christopher
Brett Hinton and Jia Zou – seek (with one exception) exclusively money seized from
East West Bank accounts. (Docket #104, ¶¶ 10 and 13). The East West Bank accounts
seized are each held in the name of a claimant entity (in contrast to natural
persons). (Id. at Exhibit A, ¶ 130).
As for the one exception: Jia Zou also claims $65,027.00 in United States
currency, (Docket #104, ¶ 13a), however that particular amount of currency was
seized from the bedroom of Hong Yong Zou and Yi Zhou (Id. at ¶ 120). Jia Zou may
claim this amount nevertheless, but his claim is contextualized by the fact that it
was seized from the bedroom of two individuals for whom reported income “had
not exceeded $12,000 a year to date.” (Id. at ¶ 107).

Page 14 of 16

substances, analogs thereof, or both, all in violation of 21 U.S.C. §§ 841(a)(1),
813 and 802(32).19 20
Therefore, the Court is obliged to and will deny Claimants’ motions
to dismiss on this ground.
3.3

Ground Three: Vagueness as applied?

Claimants’ vagueness challenge to the Analogue Act as applied to
chemicals UR-144 and XLR-11 (those at issue in at least some of the
Organization’s output), when distilled to its essence, reveals only
countervailing evidence regarding the issues of similarity of chemical
structure and similarity of physiological effect on the central nervous system
(Criterion One and Criterion Two, respectively, addressed supra in Section
3.1). Such evidence, extrinsic to the complaint, is not a proper subject of a
motion to dismiss a civil forfeiture complaint because it challenges the
sufficiency of the evidence underlying the allegations in the complaint rather
than the sufficiency of the allegations in the complaint themselves. See Rule
G(8)(b)(i) of Rule G of the Supplemental Rules for Admiralty or Maritime
Claims and Asset Forfeiture Actions.

19

The Court is mindful that, in civil forfeiture proceedings generally, “[n]o
complaint may be dismissed on the ground that the Government did not have
adequate evidence at the time the complaint was filed to establish the forfeitability
of the property.” 18 U.S.C. § 983(a)(3)(D).
20

The Court acknowledges Claimants’ motions, in the alternative, for a more
definite statement as to the connection between the defendant properties and
predicate violation(s). For the reasons set forth above, these motions will be denied
as well.

Page 15 of 16

Therefore, the Court is obliged to and will deny Claimants’ motions
to dismiss on this ground.21
Accordingly,
IT IS ORDERED that Claimants’ motions to dismiss (Docket #s 111,
120, 121 and 122) be and the same are hereby DENIED; and
IT IS FURTHER ORDERED that claimants 6 Degrees Marketing
Group LLC, Synergy Botanicals Co LLC, Amy Wilhoite and John Wilhoite’s
“Motion for Reconsideration” (Docket #109) be and the same is hereby
DENIED.
Dated at Milwaukee, Wisconsin, this 11th day of July, 2013
BY THE COURT:

J.P. Stadtmueller
U.S. District Judge

21

The Court acknowledges the outstanding motion for reconsideration of
the stay in this case. (Docket #109). At bottom, that motion requests an end of the
stay with a view to holding a hearing on Claimants’ as-applied challenge. In light
of the Court’s disposition of that ground in this order, the Court will likewise deny
the motion to lift the stay.

Page 16 of 16