order pursuant to Rule E(5) of those Supplemental Rules vacating the warrant of arrest and seizure.
Supplemental Rule E(2)a states:
In actions to which this rule is applicable the complaint shall state the circumstances from which the claim arises with such particularity that the defendant or claimant will be able, without moving for a more definite statement, to commence an investigation of the facts and to frame a responsive pleading.
The civil forfeiture statute on which the government relies states in pertinent part:
(a) (1) Except as provided in paragraph (2), the following property is subject to forfeiture to the United States:
(A) Any property, real or personal, involved in a transaction or attempted transaction in violation of . . . section 1956 . . . of this title, or any property traceable to such property.
18 U.S.C. § 981 (1988).
Plainly the real property known as 651 Fountain Avenue was "involved in" the transaction constituting violations of 18 U.S.C. § 1956. Citiwide was situated on that property.
Section 1956 provides, in pertinent part, that criminal penalties shall be imposed on anyone who, "knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction with . . . the intent to promote the carrying on of specified unlawful activity."
The forfeiture complaint alleges information so that the claimants know what sort of financial transactions the property was "involved in", the unlawful activity, and the means in which the property was involved in promoting the unlawful activity. See United States v. Property at 4492 S. Livonia Rd., 889 F.2d 1258, 1266 (2d Cir. 1989) (supporting affidavits may cure lack of particularity in complaint itself), see also United States v. Banco Cafetero Int'l, 608 F. Supp. 1394, 1401 (S.D.N.Y. 1985), aff'd sub nom United States v. Banco Cafetero Panama, 797 F.2d 1154 (2d Cir. 1986) ("failure to abide with the pleading requirements should constitute a defect that can be freely remedied by amendment . . . so that it is not necessary to release property previously arrested or attached"), quoting 7A J. Moore & A. Pelaez, Moore's Federal Practice P E.03 at E-106 (2d ed. 1983).
It is true that the complaint, as supplemented by the affidavits, does not state that the real property was "the proceeds of some form of unlawful activity" within the meaning of section 1956. But the complaint does allege that various persons knowing that other kinds of "property", including vehicles and New York State titles to vehicles, constituted the proceeds of unlawful activity consisting of transactions prohibited by section 1956.
The real and personal property referred to in section 981 is not restricted to property that "represents the proceeds" of unlawful activity as section 1956 reads. To be forfeitable under section 981, it is enough that the property was "involved" in a transaction violative of section 1956. A common sense reading of the term "involved" as used in section 981 surely includes real property indispensable to the carrying out of actions made criminal by section 1956. See 141 st Street Corp. by Hersh, supra, 911 F.2d 870 (entire building of forty-one apartments forfeitable due to involvement of twenty-four apartments in drug trafficking).
Running through the claimants' contention is the assumption that to state a valid claim under section 981 the government must allege that the owners of the property involved must have participated in or at least have known of the commission of a crime. That is a false assumption. The government must allege that the real property is tainted, that is, "involved", in a criminal transaction. But because forfeiture is an in rem proceeding the government need not allege that the present owner participated in the criminal violation or was even aware of it. United States v. 316 Units of Mun. Sec., 725 F. Supp. 172, 177 (S.D.N.Y. 1989).
If claimants as owners of 651 Fountain Avenue wish to do so, they may assert pursuant to section 981(a)(2) that the alleged crimes were committed without their knowledge. That subsection provides, in pertinent part, that no property shall be forfeited under section 981 to the extent of the interest of an owner by reason of any act "established by that owner" to have been committed "without the knowledge of" that owner. The subsection thus puts the burden of establishing lack of knowledge on the owner.
The motions to dismiss the complaint and to vacate the warrants of seizure and arrest are denied.
Dated: Brooklyn New York
March 19, 1992
Eugene H. Nickerson, U.S.D.J.
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