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U.S. v. CONTENTS OF ACCOUNT # 03001288

October 11, 2001

UNITED STATES OF AMERICA, PLAINTIFF,
v.
CONTENTS OF ACCOUNT # 03001288, HELD IN THE NAME OF TASNEEM JALAL LOCATED AT UNION NATIONAL BANK, RASHIDIYA BRANCH, DEIRA-DUBAI, UNITED ARAB EMIRATES; AND CONTENTS OF ACCOUNT # 01123121673, HELD IN THE NAME OF TASNEEM JALAL LOCATED AT HABIB BANK AG ZURICH, SHARJAH BRANCH, UNITED ARAB EMIRATES; AND CONTENTS OF ACCOUNT # 01120121673, HELD IN THE NAME OF TASNEEM JALAL LOCATED AT HABIB BANK AG ZURICH, SHARJAH BRANCH, UNITED ARAB EMIRATES, DEFENDANTS IN REM.



The opinion of the court was delivered by: Bassler, District Judge.

OPINION

This is a civil action in rem for the forfeiture of funds located in the three above-captioned bank accounts (collectively "the Defendant Accounts" or "the Accounts"), pursuant to 21 U.S.C. § 881 (a)(6) and 18 U.S.C. § 981. The United States seeks forfeiture of the funds because they are the alleged proceeds of Claimant Tasneem Jalal's illegal narcotics sales. Claimant contends that the funds are instead the lawful proceeds of his gold-trading activities in the United Arab Emirates.

The matter is now before the Court on Claimant's Motion to Dismiss pursuant to Fed.R.Civ.P. 12(b)(6), or in the alternative for Summary Judgment. Also pending is the Claimant's motion for a Protective Order pursuant to Fed.R.Civ.P. 26(c). Broadly, Claimant contends that the action should be dismissed because 1) it was not filed within the five-year limitations period for commencement of forfeiture actions prescribed by 19 U.S.C. § 1621; and 2) because the Government's near eight-year delay between discovery of the funds' existence and commencement of the forfeiture action has deprived Claimant of his due process rights. Having heard oral argument on Claimant's motion and having reviewed supplemental submissions, the Court now concludes that both of Claimant's motions must be denied for the following reasons.

I. BACKGROUND

The facts material to Claimant's motion are not in dispute.*fn1 Claimant Jalal was arrested on or about August 19, 1992 for his participation in the delivery of 250 grams of heroin into New Jersey. Claimant was subsequently indicted for Conspiracy to Distribute and Possess Heroin in violation of 21 U.S.C. § 846, and Possession with Intent to Distribute Heroin in violation of 21 U.S.C. § 841. Jalal pled guilty to both counts on October 15, 1992. After his guilty plea, but prior to his sentencing, Jalal admitted that he had been engaged in the trafficking of Heroin from Pakistan for approximately 16 years. He further admitted that on the day of his arrest he had planned on collecting a payment of approximately $48,000 for his heroin deliveries over the previous three years.

On June 29, 1993, Jalal was sentenced to 108 months in prison by United States District Judge Joseph H. Rodriguez. After serving his sentence, Jalal, a national of Pakistan, was committed to the custody of the Immigration and Naturalization Service. The INS deported Jalal to Pakistan on September 26, 2000.

The records recovered demonstrate that the Defendant Accounts were funded between November 24, 1991 and April 1, 1992, during the time that Claimant Jalal was engaged in illegal narcotics trafficking. (Complaint ¶ 11.) Jalal claimed that his wealth, including the account funds, derived from legitimate gold trading in Dubai.*fn2 (Decl. of Michael J. Vaillancourt ("Vaillancourt Aff."), ¶ 3; Ex. B.) Despite being asked to do so, Jalal indicated that he was unsure if he could produce any documents to substantiate his claim. (Id.) As of the time the Government instituted the forfeiture proceeding, Claimant had still failed to provide any evidence to support the alleged legitimacy of his wealth.

In October, 1992, approximately 2 months after Jalal's arrest, agents of the D.E.A. informally approached the police in Dubai to determine whether the Defendant Accounts could be frozen while the investigation into the source of the funds in the Accounts continued. (Vaillancourt Aff. ¶ 4; Ex. C, ¶ 2.) As a result of this informal request, police in the U.A.E. obtained a local court order freezing the funds in at least one of the accounts. (Id.)

In or about August, 1994, representatives of the D.E.A. met with authorities in the U.A.E., to further pursue the matter of the Defendant Accounts. (Vaillancourt Aff. ¶ 5.) During that meeting, the local police in the U.A.E. indicated that they were optimistic that the Dubai court would entertain a motion to allow the Dubai Police or the United States to seize the accounts if probable cause could be established that the funds in the account were generated by narcotics trafficking, and that the Dubai police would be willing to present the forfeiture case to the Dubai court. (Id.) A similar meeting took place in Sharjah regarding the accounts there. (Vaillancourt Aff. ¶ 6.)

During this same general period, several of the Emirates took the first steps toward passage of a federal law in the U.A.E. on money laundering. (Vaillancourt Aff. ¶ 7.) While this legislation was pending, in January, 1995 U.S. authorities were informed that further unilateral action would not be taken against the Accounts, and that forfeiture would either need to be pursued through official diplomatic channels, or await passage of asset forfeiture/seizure legislation in the U.A.E. (Vaillancourt Aff. ¶ 8; Ex. C ¶¶ 3-4.)

Because no mutual assistance treaty existed between the United States and the U.A.E., on November 21, 1995 the United States was forced to make a treaty request for forfeiture of the funds pursuant to the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances. (Vaillancourt Aff. ¶ 11.) At the time the United States made the treaty request it knew the request might not have any effect, because at the time of the request the U.A.E. was not in compliance with the Vienna Convention of 1988 concerning money laundering, and because authorities in the U.A.E. had stated they would not act on the Jalal matter until their legislative efforts on passage of an asset forfeiture law were complete. (Vaillancourt Aff. ¶¶ 9-11.)

On September 27, 1999 the Senior Legal Advisor at the U.A.E. Ministry of Foreign Affairs informed U.S. authorities that if the U.A.E. were presented with a forfeiture order from an American court, the funds in the Accounts would be forfeited pursuant to the United States' 1995 treaty request (Vaillancourt Aff. ¶ 12; Ex. F.) He also informed U.S. authorities that the accounts had been frozen by the U.A.E. since May, 1997 as a result of the November, 1995 treaty request. (Id.)

This action was commenced on May 21, 2000. On June 28, 2000 the U.S. Department of Justice forwarded certified copies of the Verified Complaint and Warrants for Arrest to the U.S. Embassy in Abu Dhabi. (Vaillancourt Aff. ¶ 13; Ex. G.) On July 1, 2000 the Verified Complaint and Warrants for Arrest were served under Diplomatic Note to the Ministry of Foreign Affairs of the U.A.E. in Abu Dhabi. (Vaillancourt Aff. ¶ 14.)

II. ANALYSIS

A. Jurisdiction In Rem

As an initial matter, at oral argument this Court sua sponte asked the parties to brief whether the Court had in rem jurisdiction over the accounts in question. Having reviewed the parties' post argument submissions, for the following reasons the Court is satisfied that it has jurisdiction to consider Claimant's motion in all respects.

28 U.S.C. § 1355 (a) provides a district court with original subject matter jurisdiction to hear any forfeiture action that arises under any Act of Congress. Further, 28 U.S.C. § 1355 (b)(1) & (2) provide that when such a forfeiture action involves property located in a foreign country, venue is proper in any "district court for the district in which any of the acts or omissions giving rise to the forfeiture occurred."

Given those provisions, it is apparent that this Court has subject matter jurisdiction over the Government's forfeiture action, which was brought against the Defendant Accounts pursuant to 21 U.S.C. § 881. Similarly, even though the Accounts are located abroad, because the Accounts were allegedly funded with the proceeds of drug transactions that occurred in New Jersey, venue for the Government's action is proper before this Court.

Just because a district court has subject matter jurisdiction over a forfeiture action and is the proper venue for the commencement of that action, however, does not mean that a Court may reach the action's merits. Absent in rem jurisdiction over the Defendant property, any forfeiture order directed to the defendant property would be wholly unenforceable. This state of affairs would defeat the entire purpose of conducting the forfeiture proceeding in the first place.

In an in rem action, such as a forfeiture action brought pursuant to 21 U.S.C. § 881, while an "actual and continuous possession of the res" is not required to sustain a Court's jurisdiction, a court must have "actual or constructive control of the res" at the time the in rem forfeiture suit is initiated. Republic National Bank of Miami v. United States, 506 U.S. 80, 84-87, 113 S.Ct. 554, 121 L.Ed.2d 474 (1992), citing The Brig Ann, 13 U.S. (9 Cranch) 289, 3 L.Ed. 734 (1815). In cases where the res consists of property located in a foreign country, a district court obtains constructive control over the property if the foreign state sufficiently cooperates with the United States so as to make it likely that a future forfeiture order against the property would be enforced. See, e.g., United States v. All Funds in Any Accounts Maintained in the Name of Meza, 63 F.3d 148, 154 (2d Cir. 1995)(constructive control existed after British Government froze funds pursuant to treaty request, and served copies of U.S. court's forfeiture ...


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