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United States v. $263

United States District Court, D. New Jersey

March 27, 2013

UNITED STATES OF AMERICA, Plaintiff,
v.
$263,327.95, et al., Defendants in rem

For UNITED STATES OF AMERICA, Plaintiff: PETER W. GAETA, OFFICE OF THE U.S. ATTORNEY, NEWARK, NJ.

For STEVE N. CHAN, Claimant: RONALD L. GREENBLATT, LEAD ATTORNEY, GREENBLATT PIERCE FUNT & FLORES, PHILADELPHIA, PA.

OPINION

Page 469

WILLIAM J. MARTINI, United States District Judge.

Plaintiff United States of America (the " Government" ) brings this civil forfeiture action to forfeit and condemn a total of $263,327.95. This matter comes before the Court on a motion to dismiss filed by Claimant Steve N. Chan (" Chan" ). There was no oral argument. Fed.R.Civ.P. 78(b). For the reasons set forth below, the motion to dismiss is DENIED.

I. BACKGROUND

This is a civil forfeiture action in which the Government seeks to forfeit $263,327.95. The Government alleges that this was the remaining balance of over $658,000.00 that was structured into three separate bank accounts in violation of 31 U.S.C. § 5324(a).

Under federal law, U.S. financial institutions are required to file a currency transaction report (" CTR" ) for each deposit, withdrawal, or exchange of currency of more than $10,000. See 31 U.S.C. § 5313(a) (2012). 31 U.S.C. § 5324(a) prohibits people from structuring their transactions to avoid the $10,000 reporting requirement. That statute provides that:

No person shall, for the purpose of evading the reporting requirements of section 5313(a) . . . structure or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions.

31 U.S.C. § 5324(a)(3). Pursuant to 31 U.S.C. § 5317(c)(2), " [a]ny property involved in a violation of section 5313 . . . and any property traceable to any such violation or conspiracy, may be seized and forfeited to the United States."

The Complaint alleges that the Internal Revenue Service, Criminal Investigation (" IRS-CI" ) conducted an investigation of bank accounts held " in the name and/or for the benefit of Steve Chan." Compl. ¶ 2,

Page 470

ECF No. 1. The Complaint alleges that " Chan maintains the following bank accounts" : (1) a " Sovereign Bank personal checking account . . . in the name of Steven N. Chan" ; (2) a " TD Bank, N.A. personal checking account . . . in the name of Steve Chan" ; (3) a TD Bank, N.A. " personal savings account . . . in the name of Steve Chan" ; and (4) a " Merrill Lynch Brokerage account . . . in the name of Steve N. Chan." Compl. ¶ 11. The Complaint also alleges that " Steven Chan and Lieng Kang Kay maintain [a] Bank of America, N.A. personal checking account." Compl. ¶ 8. The Complaint alleges that, between July 16, 2010 and July 12, 2011, Chan deposited a total of $658,277.08 in U.S. currency without making a single deposit over the $10,000 CTR threshold. Compl. ¶ 19; see also Gov.'s Opp. Br. at 9-10. Attached to the Complaint is a set of three spreadsheets labeled " Steve Chan . . . TD Bank, N.A." ; " Steven N. Chan . . . Sovereign Bank" ; and " Steven N Chan and Lieng Kang Kay . . . Bank of America, N.A." Compl. Attachment A, ECF No. 1. The spreadsheets list a total of 96 transactions taking place across Chan's various bank accounts. See id.

The Complaint and the attached spreadsheets provide information about numerous individual transactions. For example, on January 21, 2011, Chan made a $6,000 deposit at Bank of America, a $6,000 deposit at TD Bank, and a $6,000 deposit at Sovereign Bank. Compl. Attachment A. On March 1, 2011, Chan made an $8,000 deposit at TD Bank. Id. On March 1, 2011, Chan also made two separate deposits at Sovereign Bank, one for $9,700 and another for $8,990. Id. On March 3, 2011, Chan made a $9,000 deposit at TD Bank and an $8,000 deposit at Sovereign Bank. Id. On March 11, 2011, Chan deposited $8,000 at Bank of America and $8,900 at TD Bank. Id. On March 11, 2011, Chan also made two separate deposits at Sovereign Bank, one for $8,300 and one for $9,000. Id. On May 6, 2011, Chan purchased a TD Bank official check in the amount of $165,000, which was issued to Knights Abstract, Inc. for the purchase of real property located in Philadelphia, Pennsylvania. Compl. ¶ 15. Chan also used $194,500 from his Bank of America account to purchase another piece of real property in Philadelphia. Compl. ¶ 18.

On September 15, 2011, seizure warrants were executed by the Honorable Michael A. Shipp. Compl. ¶ 20. On September 19, 2011, IRS-CI executed the seizure warrants and seized $19,585.95 in Chan's TD Bank account, $17,742.00 in Chan's Sovereign Bank account, and $226,000.00 in Chan's Merrill Lynch account. [1] Compl. ¶ 21. On March 30, 2012, the Government filed its Complaint in this action. See ECF No. 1. On April 20, 2012, the Government filed a Notice of Forfeiture, stating that any claims to the property " must be filed by May 25, 2012." Notice of Forfeiture at 2-3 (" Notice" ), ECF No. 3. On May 25, 2012, Chan filed a Verified Claim of Interest (the " Claim" ). See Claim of Ownership by Steve N. Chan (" Claim" ), ECF No. 4. The Claim states, " I, Steve N. Chan, claimant, am the sole owner of ...


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