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United States v. 99

United States District Court, D. New Mexico

March 27, 2018

UNITED STATES OF AMERICA Plaintiff,
v.
99, 337 PIECES OF COUNTERFEIT NATIVE AMERICAN JEWELRY, 72, 620 PIECES OF COUNTERFEIT NATIVE AMERICAN JEWELRY, 21, 249 PIECES OF COUNTERFEIT NATIVE AMERICAN JEWELRY, 108 PIECES OF COUNTERFEIT NATIVE AMERICAN JEWELRY, $288, 738.94 IN FUNDS FROM BANK OF AMERICA ACCOUNT -3826, Defendants-in rem.

          MEMORANDUM OPINION AND ORDER

         This matter comes before the Court upon Claimant Romie Salem's Motion to Dismiss for Failure to State a Claim (Motion to Dismiss), filed March 6, 2017. (Doc. 11). Mr. Salem requests that the Court dismiss the United States' claim against his property, asserting he is an innocent bystander whose property the United States wrongfully seized. Mr. Salem further asserts that his property is now subject to forfeiture simply because it was stored in the same facility where other property subject to forfeiture was stored and that his property, therefore, is implicated in a criminal investigation not related to his property. The United States responded on March 20, 2017, and argues the Court should deny the Motion to Dismiss because the Verified Complaint for Forfeiture In Rem (Complaint) (Doc. 1) states a claim for relief.[1] (Doc. 20). On April 26, 2017, Mr. Salem filed his reply. (Doc. 27).

         On February 1, 2018, the Court held a hearing on the Motion to Dismiss. (Doc. 49). The Court took the matter under advisement but allowed Mr. Salem leave to file a supplemental brief and the United States leave to file a supplemental reply, which they did. (Docs. 50 and 51). Having considered the original and supplemental briefs, the arguments of counsel, as well as the applicable law, the Court denies Mr. Salem's Motion to Dismiss.

         Allegations in the Complaint

         The United States brings this civil action to forfeit and condemn property, alleging violations of

         (1) 18 U.S.C. § 542 (“Entry of goods by means of false statements”), and forfeiture pursuant to 18 U.S.C. § 981(a)(1)(C);

         (2) 18 U.S.C. § 545 (“Smuggling goods in the United States”), and forfeiture pursuant to 18 U.S.C. § 545;

         (3) 19 U.S.C. § 1304 (“Marking of imported articles and containers”), and forfeiture pursuant to 19 U.S.C. § 1595a(c)(2)(E); and

         (4) 18 U.S.C. § 1956 (“Laundering of monetary instruments”) and § 1957 (“Engaging in monetary transactions in property derived from specified unlawful activity”), and forfeiture pursuant to 18 U.S.C. § 981(a)(1)(A).

         Defendants in rem include (a) 99, 337 Pieces of Counterfeit Native American Jewelry; (b) 72, 620 Pieces of Counterfeit Native American Jewelry; (c) 21, 249 Pieces of Counterfeit Native American Jewelry; and (d) $288, 738.94 in Funds from Bank of America Account No.-3826 (collectively, Defendant Property).

         The allegations stem from an investigation by the United States Fish and Wildlife Service and the Indian Arts and Crafts Board into the sale of alleged counterfeit Native American jewelry and violations of the Indian Arts and Crafts Act (IACA) by Sterling Islands, Inc. (Sterling), located at 5815 Menaul Boulevard, NE, Albuquerque, New Mexico. The Complaint alleges Sterling and other associated businesses worked in concert both inside and outside the District of New Mexico to design, manufacture, import, and fraudulently sell counterfeit Native American Jewelry in violation of the IACA.

         As a result of this long-term investigation, on October 28, 2015, federal search warrants were obtained and executed on Sterling's business located at 5815 Menaul Boulevard NE, Albuquerque, New Mexico, where agents seized 53 boxes of alleged counterfeit Native American jewelry, including 99, 337 pieces of jewelry. In addition, agents seized $288, 738.94. Agents also executed search warrants at Al Zuni Global Jewelry, located at 1603 West Highway 66, Gallup, New Mexico, where they seized 72, 620 pieces of alleged counterfeit Native American jewelry and at 1924 Count Fleet Street SE, Albuquerque, New Mexico, where agents seized 21, 249 pieces of alleged counterfeit Native American jewelry.

         Mr. Salem argues the Complaint fails to state a claim against his property because (1) it does not include his name or that of his company, “Turquoise Network;” (2) there are no allegations against him of any wrongdoing; and (3) there is no justification for the seizure of his property. (Doc. 11) at 4. Mr. Salem also argues there is “absolutely no way for [him] to know or reasonably expect that he or his property were involved at all.” Id.

         Rule G of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions

         Both parties agree the correct standard to apply in this in rem action is Supplemental Rule G(2). This Rule requires that a complaint, inter alia, “state sufficiently detailed facts to support a reasonable belief that the government will be able to meet its burden of proof at trial.” Fed.R.Civ.P. Supp. R. G(2)(f). “It is sufficient for the Government to simply plead enough facts for the claimant to understand the theory of forfeiture, to file a responsive pleading, and to undertake an adequate investigation.” United States v. $506, 069.09 Seized From First Merit Bank, 664 Fed.Appx. 422, 434 (6th Cir. 2016), cert. denied sub nom. Akhtar-Zaidi v. United States, 137 S.Ct. 2249 (2017) (citation omitted). Also, a complaint need only ‚Äúcontain either direct or inferential allegations respecting all material elements to sustain a recovery under some viable legal ...


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