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U.S. v. RIGHT

October 14, 2005.

UNITED STATES OF AMERICA
v.
ALL RIGHT, TITLE AND INTEREST IN REAL PROPERTY, APPURTENANCES, AND IMPROVEMENTS KNOWN AS 479 TAMARIND DRIVE, HALLANDALE, FLORIDA, LISTED AS LOT 30 IN BLOCK 7 OF GOLDEN ISLES SECTION "B", AND RECORDED IN PLAT BOOK 45, PAGE 30 OF BROWARD COUNTY, FLORIDA, Defendant in rem.



The opinion of the court was delivered by: ROBERT CARTER, Senior District Judge

OPINION

The Government brought this action seeking judicial forfeiture of all right, title, and interest in real property and appurtenances located at 479 Tamarind Drive, Hallandale, Florida ("defendant property"). Arthur Froom, a.k.a. Arthur Kissel ("Froom") and other individual claimants to the property (Elliot Pearl ("Pearl") and Susan Szilazi ("Szilazi"), collectively the "individual claimants") contested the forfeiture.

The individual claimants move to dismiss the Government's verified complaint, asserting their own claims and those of the two corporate claimants to the property (LaFontaine Rish Medical Group Ltd. ("LRMG") and Medical Group Research Group Associates, Ltd. ("MGRA"), each registered in Ontario, Canada*fn1 (collectively, the "corporate claimants.")) They also move for summary judgment against the Government. The Government asserts that the individual claimants lack standing to contest the forfeiture and request that the court treat the motion to dismiss brought on behalf of the corporate claimants as a request for summary judgment which the court would defer ruling upon until after further discovery. I. BACKGROUND

  Froom's wife and former business associate, Sonia LaFontaine ("LaFontaine") was arrested on March 2, 1998. On March 12, 1998, a grand jury returned an indictment charging LaFontaine and Froom with mail fraud. Indictment, United States v. LaFontaine, No. 98 Cr. 251 (S.D.N.Y. March 20, 1998). A superseding indictment adding additional counts was later issued. Superseding Indictment, United States v. LaFontaine, No. 98 Cr. 251 (S.D.N.Y. March 29, 2000). LaFontaine was convicted of charges related to a healthcare fraud conspiracy and sentenced to 135 months of imprisonment. Judgment, United States v. Lafontaine, No. 98 Cr. 251 (S.D.N.Y. March 14, 2002).

  On or about February 27, 1998, Froom fled to Canada to avoid arrest for his role in the healthcare fraud conspiracy. Four months later, a request for his extradition was approved by the Canadian authorities. Minister's Approval of Treaty Request, No. 000372 (June 18, 1998). Froom was subsequently arrested in Toronto on an immigration warrant. Record of Inquiry, In re Froom, No. 0003-98-00800 at 8 (Can. Immigration and Refugee Bd. May 25, 2000). He was released on bond pending the outcome of his appeals of his deportation order. Froom v. Canada, No. T-2024-01, 2002 Fed.C.C. Lexis 567 (Fed. Ct. Dec. 9, 2002). Froom appealed without success to the Canadian Federal Court of Appeals (Froom v. Canada, No. A-570-03, 2004 W.C.B.J. Lexis 2262 (Fed. Ct. App. Oct. 21, 2004) (extradition order affirmed)) and to the Supreme Court of Canada. Froom v. The Minister of Justice, No. 30686 (Can. March 17, 2005) (leave to appeal dismissed).*fn2 Froom remains at large.

  The Government seeks judicial forfeiture of the defendant property, which the Government maintains was purchased by Froom and LaFontaine in order to launder proceeds of the healthcare fraud conspiracy. Verified Compl. ¶ 16-20. While appealing his extradition from Canada to face criminal charges in this court, Froom sought to appear before this court (by mail) in order to contest the forfeiture. Claim of Arthur Froom, May 13, 1998.

  In the instant motion, Froom reasserts his claim to the defendant property and seeks dismissal the forfeiture action.*fn3 Because of Froom's persistent refusal to submit to this court's criminal jurisdiction, the Government cross-moves to dismiss his claim, citing the fugitive disentitlement provisions of the Civil Asset Forfeiture Reform Act of 2000.

  II. FROOM'S RIGHT TO MAKE A CLAIM TO DEFENDANT PROPERTY

  The federal civil forfeiture statute subjects property involved in a transaction in violation of 18 U.S.C. § 1956 or § 1957 to forfeiture. 18 U.S.C. § 981 (2000). Section 1956, commonly known as the "money laundering statute," outlaws financial transactions involving the proceeds of unlawful activity. Section 1957 imposes a criminal penalty on anyone who "knowingly engages in or attempts to engage in a monetary transaction in criminally derived property that is of a value greater than $10,000 and is derived from specified [criminal] activity."*fn4

  A claimant to the property who is also a defendant in a related criminal action may ordinarily contest forfeiture. See United States v. Contents of Account No. 68108021, 228 F. Supp. 2d 436, 444 (S.D.N.Y. 2002) (Sprizzo, J.). However, a criminal defendant may not use the resources of a federal court for personal benefit while knowingly evading the jurisdiction of the same court so as to avoid prosecution. Courts have express statutory authority to dismiss civil forfeiture claims related to criminal cases when the claimant is a fugitive from justice. 28 U.S.C. § 2466 (2000); Collazos v. United States, 368 F.3d 190 (2d Cir. 2004). A defendant is a fugitive from justice when he "actively resists returning from abroad to face [criminal] charges." United States v. Eng, 951 F.2d 461, 464 (2d Cir. 1991) abrogated on other grounds by Degen v. United States, 517 U.S. 820 (1996).

  Section 2466 was enacted as part of a comprehensive revision of the federal civil forfeiture laws known as the Civil Asset Forfeiture Reform Act of 2000. ("CAFRA".) It sets out the prerequisites to fugitive disentitlement:
(a) A judicial officer may disallow a person from using the resources of the courts of the United States in furtherance of a claim in any related civil forfeiture action . . . upon a finding that such person: (1) after notice or knowledge of the fact that a warrant or process has been issued for his apprehension, in order to avoid criminal prosecution. . . . (B) declines to enter or reenter the United States to submit to its jurisdiction. . . . and (2) is not confined or held in custody in any other jurisdiction for commission of criminal conduct in that jurisdiction.
Pub.L. No. 106-185, § 14, 114 Stat. 202, 219 (2000), codified at 28 U.S.C. § 2466. Once the requirements of the statute are met, "the ultimate decision whether to order disentitlement in a particular case rests in the sound discretion of the district court." Collazos, 368 F.3d at 198.

  The prerequisites to invoking CAFRA to dismiss Froom's claim to defendant property are met in this case. First, a warrant was issued for Froom's arrest. Arrest Warrant, United States v. Lafontaine, No. 98-MJ-0044, February 27, 1998. Second, Froom had notice that he is named as a defendant in pending criminal charges and he actively resisted being extradited to face them. Finally, Froom is not in custody in Canada for having committed a crime in that jurisdiction.

  Froom has provided an affidavit from a Canadian attorney that states that he is bound by the conditions of his release on bond not to leave the province of Ontario, Canada. Galati Aff. App. to Claimant's Br. in Supp. of Mot. for Summ. J., Ex. 12. However, it is clear from that affidavit that Froom is free to leave Canada without penalty. In doing so he would merely forfeit his right to contest his extradition. United States v. Lafontaine, No. 98 Cr. 251, 2000 U.S. Dist. LEXIS 9199 (S.D.N.Y. July 5, 2000) (Mukasey, J.). The Canadian authorities arrested Froom in order to expel him from the country, and not because he committed an offense within their jurisdiction. Therefore, the conditions of his release on bond do not preclude the court from subjecting Froom to fugitive disentitlement under CAFRA. See United States v. $1,231,349.68 in Funds, 227 F. Supp. 2d 130, 132-33 (D.D.C. 2001); Collazos, 368 F.3d at 201.

  As a fugitive from justice, Froom "has demonstrated such disrespect for the legal processes that he has no right to call upon the court to adjudicate his claim." Ortega-Rodriguez v. United States, 507 U.S. 234, 246 (1993), quoting Ali v. Sims, 788 F.2d 954, 959 (3d Cir. 1986). Froom may not use the court's resources to pursue a civil forfeiture claim while simultaneously evading our criminal jurisdiction.*fn5 Therefore, to protect the integrity of the judicial ...


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