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United States of America v. Lebanese Canadian Bank Sal et al

June 6, 2012

UNITED STATES OF AMERICA, PLAINTIFF,
v.
LEBANESE CANADIAN BANK SAL ET AL., DEFENDANTS.



The opinion of the court was delivered by: Paul A. Engelmayer, District Judge:

OPINION & ORDER

The United States moves for (1) leave to effect service of the Summons and Complaint in this matter by alternative means, upon defendants Lebanese Canadian Bank SAL, Ellissa Holding Company, and Hassan Ayash Exchange Company, and (2) issuance of letters rogatory as to the Republic of Lebanon, Togo, and Benin. Specifically, the government seeks authority to effect service on LCB, Ellissa, and Ayash via service by mail on the respective counsel who have appeared for each entity in connection with in rem proceedings in this action. LCB opposes the government's motion as to alternative service, but not as to letters rogatory. Neither Ellissa nor Ayash submitted a response to the government's motion. For the reasons that follow, the motion is granted in full.

I. Background*fn1

On December 15, 2011, the United States brought this in rem forfeiture action and civil money laundering complaint against multiple Lebanese financial institutions, as well as against various United States-based used car purchasers. The action arises out of an investigation, conducted by the U.S. Drug Enforcement Agency and other federal law enforcement agencies, into an alleged scheme to launder money, through the U.S. financial system and the used car market, for the benefit of Hizballah, designated as a Foreign Terrorist Organization by the U.S. Department of State, based in Lebanon.

Defendants Lebanese Canadian Bank SAL ("LCB"), Ellissa Holding Company ("Ellissa"), and Hassan Ayash Exchange Company ("Ayash") are headquartered in Lebanon. Defendants Salhab Travel Agency ("Salhab") and STE Marco SARL ("Marco") are located in Togo. Defendant STE Nomeco SARL ("Nomeco") is located in Benin. Lebanon, Togo, and Benin are not parties to the Hague Service Convention. See Convention on the Service Abroad of Judicial and Extra-judicial Documents in Civil or Commercial Matters, 20 U.S.T. 361, 658 U.N.T.S. 163 (Nov. 15, 1965) ("Hague Convention").

Between March 1 and March 7, 2012, copies of the Complaint, instructions for filing a claim in this action, and requests to waive formal service of process pursuant to Rule 4(d) of the Federal Rules of Civil Procedure were sent by commercial carrier to LCB, Ayash, and Ellissa at addresses in Lebanon. The packages sent to LCB and Ayash were delivered successfully; the packages sent to Ellissa were not delivered.

Between March 1 and March 7, 2012, copies of the Complaint, instructions for filing a claim in this action, and requests to waive formal service of process pursuant to Rule 4(d) were sent by commercial carrier to Salhab and Marco at addresses in Togo. The packages sent to Salhab were not delivered successfully; Marco is reported to have refused to accept the packages.

Between March 6 and March 7, 2012, copies of the Complaint, instructions for filing a claim in this action, and requests to waive formal service of process pursuant to Rule 4(d) of the Federal Rules of Civil Procedure were sent by commercial carrier to Nomeco at an address in Benin. The packages sent to Nomeco were delivered successfully.

On April 9, 2012, LCB filed a claim in the forfeiture action. In its claim, LCB asserted: "Claimant's appearance is expressly restricted to the defense of this claim, and the Verified Claim does not constitute an appearance for any other purpose, nor does it confer jurisdiction over Claimant." Dkt. 183.

In a letter dated April 12, 2012, the government requested additional time to serve LCB, Ayash, Ellissa, Salhab, Marco, and Nomeco, citing difficulties in perfecting service on those foreign entities. The government represented that it had retained counsel in Lebanon to assist the government in serving the entities in Lebanon, identified counsel in Togo to assist in serving the entities in Togo, and engaged State Department representatives in Benin to locate local counsel to assist in serving Nomeco.

On April 13, 2012, Ayash and Ellissa filed claims in the forfeiture action. In their claims, Ayash and Ellissa asserted: "Claimant's appearance is expressly restricted to the defense of this claim, and the Verified Claim does not constitute an appearance for any other purpose, nor does it confer jurisdiction over Claimant." Dkts. 191 & 192.

On April 23, 2012, counsel for LCB entered a "restricted appearance" in this matter for the purpose of moving to dismiss the government's Verified Complaint for lack of in rem jurisdiction over its assets.*fn2

On May 4, 2012, the government filed its motion to effect service on LCB, Ayash, and Ellissa through alternative means, and for the issuance of letters rogatory to Lebanon, Togo, and Benin. On May 18, 2012, LCB filed its opposition to the motion to effect service through alternative means; LCB does not oppose the government's motion for letters rogatory. Ayash and Ellissa did not submit a response to the government's motion.

Claims in this matter have been filed on behalf of LCB, all assets of Ayash, and all assets of Ellissa. Salhab, Marco, ...


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