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Panek v. United States

December 4, 2007


The opinion of the court was delivered by: Scullin, Senior Judge



Currently before the Court are the Government's motion for summary judgment and Plaintiff's cross-motion for summary judgment.*fn1 Both of these motions relate to the forfeiture judgment in the underlying criminal case, United States v. Panek, 5:97-CR-446. In that judgment, the Court noted, among other things, that, "[p]ursuant to 21 U.S.C. § 853, [Alexander Panek] shall forfeit to the United States the items detailed in the Preliminary Order of Forfeiture previously ordered by the Court and detailed in the Memorandum-Decision and Order dated June 22, 2000." See id. at Dkt. No. 502.*fn2

Plaintiff appealed his conviction and sentence on several grounds. For purposes of these motions, the relevant issue involves Plaintiff's argument that this Court erred when it denied his request for pro tanto credit against all funds that the Government had already collected from his jointly-and-severally-liable co-conspirators.

In its decision resolving this aspect of Plaintiff's appeal, the Second Circuit found that the issue of whether Plaintiff should be given pro tanto credit for the amounts that the Government had already collected from his co-conspirators was "not fit for judicial resolution at this time because the government has not collected more than $400,000 from [Plaintiff] and [his] co-conspirators." United States v. Henry, 325 F.3d 93, 108 (2d Cir. 2001) (citing United States v. Wilson, 244 F.3d 1208, 1213-14 (10th Cir. 2001)). The court explained that the government represents that it has collected only $176,274.28 from William Henry. While it is unclear whether the government has seized any of [Alexander Panek's and Edmund Panek's] assets in partial satisfaction of their liability, the government also represents that the total forfeitures in this case do not exceed $400,000. Thus, even were Henry's forfeitures credited against [Alexander Panek's and Edmund Panek's] liability of $400,000, the government could still collect from [them] $223,725.72 minus the value of the assets, if any, they already have forfeited.

Accordingly, [Alexander Panek and Edmund Panek] have no justiciable claims unless and until the government attempts to seize assets from them that would place the total forfeiture amount in this case over $400,000.

Id. at 108-09.

Plaintiff then filed his Rule 41(e) motion -- which serves as the complaint in this action -- for return of property, arguing that the threshold for ripeness that the Second Circuit had identified had been met. To support this argument, he asserted that, in calculating the total assets forfeited to date, the Court should include not only the $176,274 that the Government had seized from his co-Defendant Henry in the underlying criminal action, see United States v. Panek, 5:97-CR-446, but also the currency totaling $113,744 that the Government had seized from his co-Defendant Henry's residence in a separate pre-indictment administrative proceeding in 1996, the assets that the Government had seized in Arizona in 1996 from unindicted co-conspirator Duane Hudson, and any other assets that the Government had seized from any of his co-Defendants and/or unindicted co-conspirators.

In a Memorandum-Decision and Order dated September 1, 2004, the Court rejected Plaintiff's arguments. First, the Court held that it "lack[ed] subject matter jurisdiction to review the seizure of Mr. Henry's property [in the separate administrative proceeding] because the Court may not review the merits of an administrative forfeiture decision once the administrative process is underway." See 5:97-CR-446, at Dkt. No. 592 at 6 (citation omitted). Furthermore, the Court found that Plaintiff was "incorrect that the Government should apply $400,000.00 seized from co-Defendant Mr. Sanatamaria to [his] liabilities, as the Court's docket reflects that Mr. Santamaria was solely, not jointly, liable for that amount. Likewise, Duane Hudson was never a defendant in this action, and so any funds that the Government seized from him have no bearing whatsoever on [Plaintiff's] liability." See id. at 7. Therefore, the Court denied Plaintiff's Rule 41(e) motion because it was not ripe. See id.

Plaintiff appealed that decision. In a summary order dated December 30, 2005, the Second Circuit affirmed the decision in part and vacated in part and remanded the case to this Court for further proceedings. In pertinent part, the court vacated and remanded the decision insofar as this Court had accepted unsworn factual assertions in the Government's responding papers to dispose of Plaintiff's claims. Thus, the court vacated the Court's denial of Plaintiff's motion and remanded to allow the action to go forward, with the suggestion that the Government move, if it wished, for summary judgment. The Government has taken the Second Circuit's advice and now moves for summary judgment, once again arguing that Plaintiff's claim is not ripe.


In support of its motion for summary judgment, the Government argues that Plaintiff's claim for pro tanto credit is still not ripe for review because the $400,000 threshold has not been reached. The Government also notes that "[i]t is highly unlikely that the issue will ever ripen since the government has forfeited a total of $285,335 and is unaware at this time of any additional forfeitable assets." See Government's Memorandum of Law at 13 n.3; Affidavit of Thomas A. Capezza, sworn to November 16, 2007, at ¶¶ 3-5.

In response and in support of his cross-motion, Plaintiff offers two arguments. First, he asserts that the Court should grant his motion because the $400,000 jury finding is statutorily unenforceable against him because joint and several liability does not apply to the criminal forfeiture statute, 21 U.S.C. § 853. To support this argument, he relies primarily on a colloquy that occurred between Judge Pooler and his counsel at oral argument before the Second Circuit. He submits that this colloquy demonstrates that Judge Pooler does not believe that the concept of joint-and-several liability is applicable to criminal forfeiture actions. See Plaintiff's Memorandum of Law at 11-12.

Second, he argues, once again, that, in determining whether the $400,000 threshold has been met, the Court should take into consideration the amount of money and property that the Government has seized ...

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