United States District Court, S.D. New York
OPINION & ORDER
HAROLD BAER, Jr., District Judge.
Before the Court are Defendant William Cosme's ("Defendant") motion to vacate or modify pretrial restraints on Defendant's property,  and pretrial motions for a bill of particulars, discovery, suppression of evidence, dismissal of Counts 1 and 2 of the Indictment and to make further motions. The Court denied these motions from the bench on March 27, 2014 and in a letter dated April 11, 2014, but promised that this written more detailed decision would follow.
Defendant was arrested by the FBI at his home in Jericho, N.Y. on December 19, 2012 pursuant to an arrest warrant. (Govt. Feb. 3 Opp'n Mem. Ex. B; Kessler Decl. Ex. 1.) On December 18, 2012, Defendant was charged with wire fraud in a criminal complaint alleging, inter alia, that Defendant defrauded an international school of approximately $5.5 million. (Complaint, Govt. Feb. 3 Opp'n Mem. Ex. A, ¶ 4.) At the time of his arrest, Defendant's Cadillac Escalade was parked in the driveway of his home, and his Lamborghini and Ferrari were in the garage, adjacent to the foyer where he was arrested. (Govt. Feb. 3 Opp'n Mem. at 2; Def.'s Jan. 25 Mem. at 30.) Defendant claims that during the course of his arrest and in the presence of FBI agents, he asked his girlfriend to call his attorney. Once arrested, Defendant was transported to the FBI's New York City Office at 26 Federal Plaza. (Govt. Feb. 3 Opp'n Mem. Ex. B; Kessler Decl. Ex. 1.) Several agents remained at the house to conduct an inventory search of the three cars. (Govt. Feb. 3 Opp'n Mem. Ex. D; Kessler Decl. Ex. 1.) In the course of those searches, agents found a bag in the Cadillac containing over $630, 000 in cash. Kessler Decl. Ex. 1. At the FBI Office, Defendant signed a written waiver of his Miranda rights before providing post-arrest statements to the FBI. (Govt. Feb. 3 Opp. Mem., Ex. E; Kessler Decl. Ex. 1.) Defendant alleges that before signing the waiver, he asked, "What about my attorney?" to which an agent responded, "he's not coming, he's lost."
On January 17, 2013, the Defendant was indicted on (1) securities fraud, 15 U.S.C. §§ 78j(b), 78ff; (2) investment advisor fraud, 15 U.S.C. §§ 80b-6, 80b-17; and (3) wire fraud, 18 U.SC. § 1343. (Indictment, Dckt. No. 4.) The Indictment also included a forfeiture allegation pursuant to 18 U.S.C. 981 §§ (a)(1)(C) and 982(a)(2), and 28 U.S.C. § 2461, with respect to, among other things, $5.5 million dollars, three Scottrade bank accounts (Acct. Nos. 22510394, 22508316, 22512257), a Sterling National Bank Account (Acct. No. XXXXXXXXXX), the Lamborghini, Ferrari and Cadillac, and the $634, 894 cash found in the Cadillac. (Indictment, Dckt. No. 4.)
On February 14, 2013, the Defendant received forfeiture notices from the FBI for the Cadillac, the Lamborghini and the Ferrari, stating that their forfeiture was sought pursuant to 18 U.S.C. § 981(a)(1)(C) and 19 U.S.C. §§ 1602-1619, 18 U.S.C. § 983, and 28 C.F.R. 8. (Kessler Decl. Ex. 5.) The notice informed the Defendant that he could file a claim of ownership by March 21, 2013, which he did.
On July 5, 2013 the Government filed a Forfeiture Bill of Particulars, and on July 7, 2013, the Government submitted an ex parte application for an order to maintain custody of the property in question until the conclusion of the pending criminal case. (Dckt. Nos. 21; Govt. Feb. 28 Opp'n Mot. Ex. G.) The Court granted the Order on August 6, 2013 ("August 6 Order"). (Dckt. No. 28.)
A. Motion to Vacate or Modify Pretrial Restraints
1. Concurrent Civil and Criminal Forfeitures
The Defendant's property is subject to criminal forfeiture pursuant to the forfeiture allegation in the Indictment. The criminal forfeiture statute provides that "[u]pon application of the United States, the court may enter a restraining order or injunction... or take any other action to preserve the availability of property... upon the filing of an indictment... for which criminal forfeiture may be ordered... and alleging that the property with respect to which the order is sought would, in the event of conviction, be subject to forfeiture..." 21 U.S.C.A. § 853(e)(1)(A). The Indictment includes forfeiture allegations for the cars and accounts that Defendant now claims must be returned.
On February 14, 2013, the Government sent notices of administrative forfeiture to Defendant regarding the Cadillac, Lamborghini and Ferrari. Defendant filed a timely claim for these vehicles. To continue the civil forfeiture process, the Government was required to either commence civil forfeiture proceedings, or seek and obtain a criminal indictment and take the necessary steps to maintain custody, within 90 days of Defendant's claim. See 18 U.S.C. § 983 (a)(3)(B). The Government did neither, rather it filed a Forfeiture Bill of Particulars on July 5, 2013, and an ex parte application to restrain the property, on July 7, 2013, both after the expiration of the 90-day period.
Before granting the Government's application to restrain Defendant's property, I asked whether "this order was constructed pursuant to 21 U.S.C., Section 853, which is the forfeiture section, " and the Government assured me that it was. August 6, 2013 Tr. 5: 19-25. The Defendant argues that in spite of the Government's representation to the contrary, the property was not forfeitable under this section because it was not derived from, nor was it used to facilitate, criminal conduct. See 21 U.S.C. §§ 853 (a) & (e)(1)(A). The Defendant is mistaken. All of the property included in the August 6 Restraining Order was also included in the forfeiture allegation spelled out in the Indictment. Thus, the Government has satisfied its requirement, i.e. that this property is derived from the criminal activity at issue in this case. The Defendant argues that a seizure warrant under 21 U.S.C. § 853(f) would have been the preferred method of maintaining custody, but makes no showing that such a warrant is required. Defendant also insists that probable cause was not shown prior to the forfeiture. Here again, he is mistaken. The Government made a sufficient showing of probable cause by virtue of the Indictment, which included the forfeiture ...