position, defendant cites to United States v. Garced, No. Cr. 92-934 (E.D.N.Y. 1992), wherein Judge Nickerson, in sentencing a defendant, held that the government had suffered no financial loss as a result of illegal food stamp transactions.
The Court cannot glean from defendant's papers what relief he may seek in this regard. Certainly, the question of profits to the defendant or losses to the government is not related to whether this Court will grant the government's request for a seizure warrant. Judge Nickerson reached this issue in the Garced case only because the amount of the loss was relevant to the defendant's sentence. Accordingly, this motion is denied without prejudice to the defendant to explain to the Court what relief he seeks, short of asking the Court not to issue a warrant on this ground.
C. Government's Reliance on Money Laundering Statutes
Defendant argues that because the crux of this forfeiture action and of the companion criminal prosecution is a violation of the Food Stamp Act, 7 U.S.C. § 2024(c), the government cannot prove a violation of 18 U.S.C. §§ 1956 or 1957, a requisite to forfeiture under 18 U.S.C. § 981.
As explained above, the civil forfeiture statute invoked by the government in this case, 18 U.S.C. § 981, authorizes forfeiture of "any property, real or personal, involved in a transaction or attempted transaction in violation of . . . Section 1956 or 1957 of [Title 18], or any property traceable to such property." 18 U.S.C. § 981(a)(1)(A). Thus, defendant points out that forfeiture in this case is entirely dependent on a legally sufficient allegation of a violation of section 1956 or 1957.
Defendant properly states that there can be no violation of section 1956 or 1957 unless the property involved in a financial transaction is related to the proceeds of "specified unlawful activity". It was not until October 29, 1992, after the instant action was filed, that food stamp violations became a "specified unlawful activity" under sections 1956 and 1957. Thus, it is defendant's position that "the Amended Complaint cannot transform an alleged food stamp violation into a money laundering offense, for activity prior to the recent statutory amendment." Defendant's Supplemental Memorandum at 6.
However, the complaint in this case clearly alleges violations of several sections of Title 18 that constitute "specified unlawful activity" under section 1956 and 1957, including sections 641 (theft of public money, property or records), 1341 (mail fraud) and 1343 (wire fraud). Because these statutes cover the allegations in the complaint, defendant's argument that the forfeiture statute cannot apply to the alleged conduct in this case is misplaced.
For the foregoing reasons, the government's application for a warrant to seize the defendant properties pending a full adjudication of this action on the merits is hereby granted. A seizure warrant bearing today's date will be forwarded to the United States Marshal for execution. Defendant's cross-motions are denied, except that the full adjudication of this action will be stayed pending a disposition of the criminal proceeding against defendant.
Dated: Brooklyn, New York
March 1, 1993
DENIS R. HURLEY, U.S.D.J.