United States District Court, D. New Jersey
LETTER OPINION AND ORDER
Leda Dunn Wettre United States Magistrate Judge.
letter opinion addresses the Government's Motion to
Compel claimants Paul Parmar, 21B One River Park, LLC, 2
River Terrace Apartment 12J, LLC, and Dioskouroi Kastor
Polydeuces, LLC (collectively, "Claimants") to
respond to Rule G special interrogatories. (ECF No. 43). For
the reasons that follow, the Government's motion is
GRANTED IN PART and DENIED IN PART.
16, 2018, the Government filed a complaint seeking forfeiture
of the following defendant in rem real properties:
(1) 50 Riverside Boulevard, Unit 21B, New York, New York; (2)
2 River Terrace, Unit 12J, New York, New York; (3) 40 Broad
Street, Unit 20FG, New York, New York; and (4) 18 and 19
Colts Gait Lane, Colts Neck, New Jersey. (ECF No. 1). The
Government alleges that these properties were purchased with
the proceeds of a securities fraud scheme perpetrated by Paul
Parmar, Sotirios Zaharis, and Ravi Chivukula, who have been
indicted in related criminal proceedings. See United
States v. Parmar, No. 18-cr-735 (MCA). Following the
filing of the forfeiture complaint, a number of parties
submitted verified claims setting forth their alleged
interests in the defendant properties. Of relevance here,
Paul Parmar - in his own name and on behalf of the three LLC
claimants - filed verified claims in each of the defendant
properties. (ECF Nos. 16, 17, 18, 19). Claimants assert that
they are the purchasers of record of each defendant property
and, as such, have right, title, and interest in the
properties superior to that of the Government.
(Id.). On August 25, 2018, Claimants filed a Rule
12(b)(6) motion to dismiss the civil forfeiture complaint,
arguing, inter alia, that they purchased three of
the four defendant properties with legitimately obtained
funds prior to the alleged securities fraud scheme. (ECF No.
of responding to the motion to dismiss, the Government
exercised its right to serve Claimants with 12 special
interrogatories seeking additional information about their
interests in the defendant properties. See Fed. R.
Civ. P. Supp. R. G(6)(a), (c) ("[I]f the claimant serves
a motion to dismiss the action, the government must serve the
interrogatories within 21 days after the motion is
served," but "[t]he government need not respond to
a claimant's motion to dismiss the action under Rule
G(8)(b) until 21 days after the claimant has answered the
interrogatories."). Claimants asserted blanket objections
to the special interrogatories and failed to respond. The
Court directed the parties to meet and confer regarding their
disputes as to the scope of the special interrogatories and
the sufficiency of Claimants' responses thereto, to no
avail. (ECF Nos. 36, 41). This motion to compel followed.
G(6) permits the government to serve special interrogatories
"limited to the claimant's identity and relationship
to the defendant property without the court's leave at
any time after the claim is filed and before discovery is
closed" in order to "gather information that bears
on the claimant's standing." Fed.R.Civ.P. Supp. R.
G(6)(a) & advisory committee's note to 2006 adoption.
Indeed, only a claimant "who establishes standing to
contest forfeiture may move to dismiss the action under Rule
12(b)," the government may move at any time before trial
to strike a claim "because the claimant lacks
standing," and any such motion to strike must be
adjudicated prior to a motion to dismiss. Fed.R.Civ.P. Supp.
R. G(8)(b)(i), (c)(i)(B), (c)(ii)(A).
order to stand before a court and contest a forfeiture, a
claimant must meet both Article III and statutory standing
requirements." United States v. $487, 825.00 in U.S.
Currency, 484 F.3d 662, 664 (3d Cir. 2007). Statutory
standing generally is established by timely filing a verified
claim or statement of interest in the defendant property in
accordance with Rule G(5). United States v. $410, 000.00
in U.S. Currency, Civ. A. No. 07-598, 2007 WL 4557647,
at *4 (D.N.J. Dec. 21, 2007). Article III standing, on the
other hand, requires a claimant to establish a case or
controversy in the form of "a legally cognizable
interest in the property that will be injured if the property
is forfeited to the government." Id. (quotation
omitted). The Third Circuit has made clear that "even
possession of legal title to the res may be
insufficient to establish standing to contest the
forfeiture" where claimants are merely "nominal or
straw owners." United States v. Contents of Accounts
Nos. 3034504504 & 144-07143 at Merrill, Lynch, Pierce,
Fenner & Smith, Inc. (In re Friko Corp.), 971 F.2d
974, 985 (3d Cir. 1992). Instead, "to find the ownership
or possessory interest colorable, we have generally required
a showing that the claimant independently exercised some
dominion or control over the property."
Munoz-Valencia v. United States, 169 Fed.Appx. 150,
152 (3d Cir. 2006).
asserted a number of general objections to the
Government's special interrogatories. First, Claimants
assert that they need not respond to the special
interrogatories because the allegations of the civil
forfeiture complaint itself establish that that they are the
registered owners of the defendant properties and thus have
standing to contest forfeiture and also in light of their
motion to dismiss. (ECF No. 31-5). Second, Claimants object
that the Government propounded the special interrogatories
for the improper purpose of avoiding having to answer
Claimants' motion to dismiss and motion for
disqualification. (Id.). Finally, Claimants argue
that the interrogatories "go beyond the permissible
scope" of information that can be requested pursuant
Court rejects at the outset any argument that Claimants'
motion to dismiss should be resolved prior to requiring
responses to the Government's special interrogatories.
Claimants' proposal is contrary to both the plain
language of the Supplemental Rules and Judge Arleo's
Order terminating the motion to dismiss pending fully
responsive answers to the special interrogatories, See
United States v. $272, 000.00, More or Less, in U.S.
Currency, Civ. A. No. 16-6564, 2017 WL 8780158, at *3
(E.D.N.Y. Oct. 26, 2017) ("The filing of a motion to
dismiss does not relieve the claimant of her obligation to
provide full and complete answers to the government's
Special Interrogatories."); United States v.
Approximately $750, 000.00 in U.S. Currency, No. 10 Civ.
6069, 2011 WL 6155687, at *2 (S.D.N.Y. Dec. 8, 2011)
(agreeing that "the clear language of Supplemental Rule
G prohibits the Court from taking Claimant's proposed
approach of deferring his responses to the Special
Interrogatories until after the Court addresses his Motion to
their first blanket objection to the special interrogatories,
Claimants are correct that the civil forfeiture complaint
establishes that they are the purchasers of record of each of
me respective defendant properties. See Compl.
¶¶ 90, 99, 110, 131. But, under Friko,
possession of legal title to a defendant property does not
necessarily end the Article III standing inquiry. A
titleholder may still be a nominee who lacks standing. In
re Friko, 971 F.2d at 986. The complaint alleges
detailed schemes to conceal behind corporate entities the
true ownership of the 2 River Terrace, 40 Broad Street, and
50 Riverside Boulevard properties, as well as the identity of
me purchaser of a mortgage on the Colts Neck property.
See, e.g., Compl. ¶¶ 90, 91, 97 (alleging
that the address listed on the deed for the LLC that
purchased 2 River Terrace is that of a law firm, the true
purchaser was Paul Parmar, but the proposed occupants of the
property were Salil and Kiran Sharma); id.
¶¶ 110, 113 (alleging that the address listed on
the deed for the LLC that purchased 40 Broad Street is an
office building in Hazlet, New Jersey and the proposed
occupant was Harry Parmar); id. ¶¶ 130-31
(alleging that the address for the LLC that purchased 50
Riverside Boulevard is that of a law firm and the ultimate
owner was identified only as a "family trust");
id. ¶¶ 107-09 (alleging that "Aquila
Alpha LLC" purchased mortgage on Colts Neck property
from Deutsche Bank, Paul Parmar "appears to be the
person in control of the company," but Aquila Alpha LLC
filed a notice of foreclosure against Paul Parmjit a/k/a
Parmjit Singh Parmar a/k/a Parmjit Parmarpar as to the Colts
Neck property). Thus, the Government may propound Rule G
special interrogatories to inquire whether Claimants are
merely straw owners or if they "independently exercised
some dominion or control" over the defendant properties.
See United States v. $39, 557, More or Less, in U.S.
Currency, Civ. A. No. 07-449, 2008 WL 2901318, at *2
(D.N.J. May 21, 2008) (granting Government's motion to
compel responses to special interrogatories and finding that
"[s]ince plaintiff is challenging Harold's standing
to pursue his claim to the seized money, it is clear that
plaintiff may conduct discovery relevant to determining
Harold's Article III standing"). Cf. United
States v. $215, 587.22 in U.S. Currency, 282 F.Supp.3d
109, 113 (D.D.C. 2017) ("Because the Government is not
limited to when it may issue Rule G(6) interrogatories,
having standing to challenge a forfeiture case with a motion
to dismiss does not preclude the Government from issuing G(6)
interrogatories early in the case to test whether a claimant
has standing on the merits."); United States v.
$307, 970.00 in U.S. Currency, No. 4:12-CV-136-FL, 2013
WL 4095373, at *3 (E.D. N.C. Aug. 13, 2013) ("Even
assuming that claimants' sworn assertion of ownership
successfully establishes standing sufficient to survive a
motion to dismiss, that assertion may not be sufficient to
establish standing by a preponderance of the evidence at
hearing. Accordingly claimants' argument that the
government's motion to compel [responses to Rule G
special interrogatories] is improper where they claim to have
sufficiently established standing for the pleading stage
misses the mark.").
their second blanket objection to the special
interrogatories, the Court can discern no improper purpose
from the Government's use of special interrogatories in
this case to date. While Claimants believe the Government is
attempting to "improperly shift the burden" to
require them to disprove the allegations in the complaint,
the Court finds that these special interrogatories are
specifically authorized by the Supplemental Rules, and, as
discussed and limited below, generally go to the
"threshold consideration" in civil forfeiture
actions - i.e., standing. United Slates v. $225, 894 in
US. Currency, 852 F.Supp.2d 578, 580 (D.NJ. 2012).
determined that Claimants' general objections have no
merit, the Court now considers whether the special
interrogatories are sufficiently tailored to seek information
relevant to the Claimants' standing to contest forfeiture
of the defendant properties. In making this determination,
the Court is guided by the relevance standard of Rule 26(b)
of the Federal Rules of Civil Procedure. $39, 557, More
or Less, in U.S. Currency, 2008 WL 2901318, at *2.
Courts have approved special interrogatories that inquire
into a claimant's identity, its interest in the defendant
property, and the circumstances surrounding its acquisition
of the defendant property. See United States v. $133,
420.00 in U.S. Currency,672 F.3d 629, 642-43 (9th Cir.
2012) (rejecting claimant's argument that Rule G(6)
"does not allow the government to pose any questions
about the circumstances in which the claimant obtained an
interest in the property... because it is contrary to the
text of Rule G(6)(a) itself, which broadly allows the
government to collect information regarding the
claimant's 'relationship to the defendant
property'" and because this "limited
interpretation would make Supplemental Rule G(6)(a)
superfluous because Supplemental Rule G(5)(a)(i)(B) already
requires the verified claim to 'identify the claimant and
state the claimant's interest in the
property'"); United States v. $63, 575 in U.S.
Currency, No. 4:18CV02131 JCH, 2019 WL 2996001, at *2-3
(E.D. Mo. July 9, 2019) (granting Government's motion to
compel responses to special interrogatories seeking "the
time, date, and places in which any portion of the property
was acquired," as well as "whether the defendant
property was claimed on her local, state or federal income
taxes"); $272, 000.00 in US. Currency, 2017 WL