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U.S. v. CONTENTS OF ACCOUNT NUMBER 901121707

February 16, 1999

UNITED STATES OF AMERICA, PLAINTIFF,
v.
CONTENTS OF ACCOUNT NUMBER 901121707 IN THE NAME OF HAN KUK KUEN YOUNG, INC., AT KOREA FIRST BANK, ET AL., DEFENDANTS-IN-REM.



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

OPINION

Kil Young Maeng ("Maeng") has moved, on behalf of Han Kuk Kuen Young, Inc. ("Han Kuk") and Interlink Finance Co. ("Interlink"), for an enlargement of time to file a claim in this civil forfeiture action. For the reasons stated below, Maeng's motion is denied.

Background

This action seeks the forfeiture of the contents of three bank accounts and $22,782.00 in United States currency (collectively, the "defendant-in-rem funds") seized by the Internal Revenue Service (the "IRS") in 1992 from Han Kuk and Interlink, two check cashing services controlled by Maeng. The verified complaint alleges that the defendant-in-rem funds (which aggregate approximately $210,000) constitute property involved in the transactions and attempted transactions in violation of the cash reporting and anti-structuring provisions of 31 U.S.C. § 5313(a) and 5324(a), and hence are subject to forfeiture to the United States pursuant to 18 U.S.C. § 981(a)(1)(A).

According to the verified complaint, on July 17, 1997, a federal grand jury in the Southern District of New York returned an indictment charging Maeng with one count of conspiracy to violate 31 U.S.C. § 5313(a), 5322(b) and 5324(a)(3) and with eight substantive counts of violating 31 U.S.C. § 5313(a) and 5322(b). See United States v. Kil Young Maeng, S1 97 Cr. 645. The indictments alleged, among other things, that from 1988 to on or about July 17, 1992, Maeng, through his company Han Kuk, cashed checks for more than $10,000 on behalf of his customers in the garment industry without filing the required currency transaction reports ("CTRs") with the Federal Government. The indictment also alleged that on several occasions in July 1992, Maeng and Han Kuk cashed multiple checks from the same customer aggregating more than $10,000, even though each individual check was for less than $10,000, without filing the required CTRs. The indictment also contained a forfeiture allegation seeking forfeiture of all property involved in Maeng's violations of the currency reporting requirements of Title 31.

On February 27, 1998, Maeng executed a plea agreement (the "Plea Agreement") in which, among other things, Maeng admitted that the value of the funds involved in his currency reporting offense was more than $20 million. The Plea Agreement also resolved the Government's forfeiture claims against Maeng. The Plea Agreement states that "the defendant agrees to forfeiture, pursuant to Title 18, United States Code, Section 981(a)(1)(A)," of the three bank accounts and currency which constitute the defendant-in-rem funds in this action. (Plea Agreement at 1-2). Maeng further agreed "to take whatever steps are necessary to pass clear title [to the defendant-in-rem funds] to the United States." The parties stipulated that Maeng did not act with reckless disregard of the source of the funds, and that the funds were the proceeds of lawful activity and were used for a lawful purpose. Pursuant to the Plea Agreement, the Government dismissed all but one count against Maeng and agreed not to seek forfeiture of an additional two bank accounts that had been seized by the IRS.

On March 4, 1998, Maeng plead guilty to Count One of the Indictment before the Honorable Sonia Sotomayor. The issue of forfeiture was not addressed.

On July 29, 1998, in accordance with the Plea Agreement, the Government commenced the instant action, pursuant to 18 U.S.C. § 981(a)(1)(A), to forfeit the defendant-in-rem funds. The Government sent written notice of the commencement of this action, via certified mail, to Maeng, Maeng's criminal defense attorney, Mr. Anolik ("Anolik"), Han Kuk, and Interlink.

On or about August 2, 1998, Maeng and his daughter, Julia Maeng, met with Anolik in preparation for Maeng's sentencing. Ms. Maeng showed Anolik a newspaper article discussing the Supreme Court's recent ruling in United States v. Bajakajian, 524 U.S. 321, 118 S.Ct. 2028, 141 L.Ed.2d 314 (1998). According to Maeng, Anolik indicated that he would research the issues arising from the Bajakajian decision and raise them at Maeng's sentencing. Anolik also advised Maeng that the forfeiture was separate from the original criminal case, and requested an additional retainer fee.

On August 13, 1998, Judge Sotomayor sentenced Maeng to one year of probation, a $250 fine, and a $50 special assessment. The Bajakajian decision was not mentioned, and Maeng did not indicate in any way to the Government or to Judge Sotomayor that he intended to contest the forfeiture which had been specifically agreed to in the Plea Agreement.

On September 1, 1998, Maeng retained new counsel. On September 7, 1998, the Government received a letter from Maeng's counsel proposing a "modification" of the terms of the Plea Agreement and suggesting a "settlement" of the matter. The Government responded in a letter dated September 11, 1998, rejecting Maeng's proposed "settlement" and stating that the Government would oppose any effort by Maeng to file a claim in this action in light of the Plea Agreement.

Maeng submitted a letter to the Court on October 5, 1998, requesting permission to file a late claim. In a letter to the Court dated October 13, 1998, the Government opposed Maeng's request based, in part, on the fact that in Maeng had agreed to forfeiture of the relevant funds as part of the Plea Agreement. The parties appeared before the Court on October 14, 1998, at which time the Government agreed that Maeng should be permitted to file papers in support of his motion to file a late claim.

On October 23, 1998, Maeng filed the instant motion for an order nunc pro tunc enlarging the time to file a Notice of Claim. Oral argument was heard on November 18, 1998, at which ...


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