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United States v. Gan

United States District Court, D. New Mexico

November 16, 2018

UNITED STATES OF AMERICA, Plaintiff,
v.
HAI GAN, Defendant.

          MEMORANDUM OPINION AND FINAL ORDER OF FORFEITURE REGARDING BANK OF AMERICA AND JP MORGAN CHASE ACCOUNTS AND ONE PARCEL OF TEXAS PROPERTY

          ROBERT C. BRACK SENIOR U.S. DISTRICT JUDGE.

         This case is before the Court on the United States' Motion for Summary Judgment as to Third Party Petition Filed by Wei Wang. (Doc. 448.) Defendant Hai Gan was convicted on 62 counts including document fraud, transporting illegal aliens, and money laundering. (Doc. 305.) Each of the counts related to a scheme in which Mr. Gan helped undocumented aliens obtain fraudulent New Mexico driver's licenses. Following conviction, the Court entered a Preliminary Order of Forfeiture for five bank accounts[1] and four parcels of real property. (Doc. 355.) Wei Wang, Mr. Gan's wife, filed a timely petition objecting to the forfeiture of one parcel of property located in Texas (the Texas property) and four of the five bank accounts. (Doc. 371.) Her petition alleges an interest in the Texas property based on payments made with community funds, and an interest in four of the bank accounts based on her salary contributions. (See Id. at 1-2.)

         The United States asks the Court to deny Ms. Wang's claims and seeks an order of final forfeiture of the bank accounts and the Texas property, subject to Ms. Wang's interest in the property that existed prior to Mr. Gan using criminal proceeds to pay off the home loan. (Doc. 448.) Ms. Wang did not respond to the United States' Motion for Summary Judgment, and the United States' efforts to serve her with its Notice of Completion of Briefing were unsuccessful. (See Docs. 449; 449-1; 449-2; 449-3.) Having considered the parties' submissions and relevant law, the Court finds that there are no material issues of fact in dispute and will grant the United States' Motion for Summary Judgment and order final forfeiture of the bank accounts and Texas property, subject to Ms. Wang's limited property interest.

         I. Factual Background[2]

         On February 11, 2014, a jury convicted Defendant Hai Gan on 62 counts including fraud in connection with identification documents, transporting illegal aliens, and engaging in monetary transactions in property derived from unlawful activity (money laundering).[3] (Doc. 305 at 1-5.) Each count was related to a scheme to help undocumented aliens who were not New Mexico residents fraudulently obtain New Mexico driver's licenses. (See Docs. 218 at 2; 448 at 4.) In exchange for payments of up to $3, 000, Mr. Gan allowed undocumented individuals to list his New Mexico properties on their driver's license applications and helped them fabricate other necessary documents. (Docs. 218 at 2-3; 448 at 4.) The Third Superseding Indictment included forfeiture allegations for the crimes charged in counts 1 through 62. (Doc. 218 at 12.) It charged that, upon conviction, Mr. Gan would be required to forfeit to the United States: (1) any property constituting or derived from proceeds obtained as the result of identification document fraud and any personal property used or intended to be used to commit that offense, (2) any property constituting, derived from, or traceable to the offense of transporting illegal aliens, or used or intended to be used to facilitate that offense; and (3) any property involved in or traceable to money laundering. (See id.; see also 18 U.S.C. §§ 982(a)(1), (a)(6), (a)(2)(B).)

         Following Mr. Gan's conviction, the United States moved for a preliminary order of forfeiture for five bank accounts at Bank of America, Wells Fargo, and JP Morgan Chase, three properties in New Mexico, and the Texas property which had been Mr. Gan's and Ms. Wang's residence. (Doc. 308 at 1-2, 6.) The Bank of America accounts contain $8, 008.66 and the JP Morgan Chase accounts contain $18, 989.47. (See Doc 308-1 at 1.) The two Bank of America accounts were held jointly by Mr. Gan and Ms. Wang. (Docs. 308 at 5; 448 at 4.) Mr. Gan told investigators that the Wells Fargo and JP Morgan Chase Accounts were “funded solely by his illegal business.” (Doc. 448 at 4.) Mr. Han also told investigators that he gave “the majority of the cash he made from his business to his wife, who in turn deposited the funds into [the Bank of America] accounts.” (Doc. 448 at 4; see also Docs. 308 at 3; 308-1 at 2.) Citing evidence introduced at trial and a sworn declaration from Homeland Security Investigations Special Agent Joshua Fry, the United States alleged that there was a sufficient nexus between Mr. Gan's offenses and the bank accounts and real property that they should be subject to forfeiture. (See Doc. 308 at 3-10.)

         The first fraudulent driver's license issued to an individual claiming to reside at one of Mr. Gan's New Mexico properties was issued on December 8, 2008. (Docs. 308 at 5; 308-1 at 3; 448 at 4.) Between that date and Mr. Gan's arrest on May 11, 2011, “approximately $465, 554.20 was deposited in the [JP Morgan Chase, Wells Fargo, and Bank of America] accounts.” (Docs. 308 at 5; 308-1 at 3.) During that time period Ms. Wang received approximately $11, 325 in reported income, according to Texas Workforce Commission records. (Docs. 308 at 5; 308-1 at 3; 448 at 5.) Agents who searched the Texas property found photocopies of fraudulently obtained licenses, various incriminating property records and banking records, and other documents. (Docs. 308 at 6; 448 at 5.) The United States alleged that, “[b]ased on the sheer mass of the documents seized and their location in almost every room of the residence, the Texas property served as the base of Hai Gan's illegal operation.” (Doc. 308 at 6-7 (emphasis omitted); see also Doc. 308-1 at 4.)

         Mr. Gan purchased the Texas property on October 31, 2008, approximately one month before the first fraudulent driver's license was issued. (Docs. 308 at 7; 308-1 at 4.) He made a $190, 096.16 down payment and financed the remaining $78, 100 with a loan. (Docs. 308 at 7; 308-1 at 4-5.) Mr. Gan had paid off the loan in its entirety by March 2, 2009. (Docs. 308 at 7; 308-1 at 5; 448 at 4.) Between December 8, 2008 (when the fraudulent operation began) and March 2, 2009 (when Mr. Gan paid off the loan on the Texas property), Mr. Gan deposited approximately $82, 271 into the Bank of America accounts. (Id.) Of that amount, $50, 000 came from two wire transfers from Sun Ya Li Di Wai in China. (Id.) Ms. Wang alleges that the $50, 000 wire transfers were a gift from Mr. Gan's mother to assist the couple in paying off their home loan. (See Doc. 371 at 1.) Mr. Gan used $68, 890 in checks from the Bank of America accounts to pay off the loan on the Texas property. (Docs. 308 at 7; 308-1 at 5.)

         In the Preliminary Order of Forfeiture, the Court found “based upon the evidence already in the record and on evidence and information presented at a post-trial hearing . . . that the Subject Property is subject to forfeiture . . . and that the government has established the requisite nexus between the Subject Property and the offenses of the conviction.” (Doc. 355 at 3.) The Court has thus already determined that all the listed property-each of the five bank accounts, the three New Mexico parcels, and the Texas Property-was properly subject to forfeiture based on Mr. Gan's offenses. (See id.)

         As there were no third party claims filed regarding the Wells Fargo bank account or the three New Mexico properties, on April 6, 2017, the Court issued a Final Order of Forfeiture Regarding Wells Fargo Account No.-4215 and Three New Mexico Real Properties. (Doc. 441.) The final order was later amended to dismiss two of the New Mexico properties after the United States determined that, due to their poor condition and numerous back taxes and liens, the cost to the Government to dispose of the properties exceeded their fair market value. (Doc. 444.)

         Thus, the only property subject to the Court's Preliminary Order of Forfeiture that remains to be addressed is (1) $8, 008.66 in the two Bank of America accounts under Hai Gan's and Wei Wang's names; (2) $18, 989.47 in the two JP Morgan Chase accounts under Hai Gan's name; and (3) the real property located at 4005 Lakeside Drive, The Colony, Texas, 75056. (See Doc. 355 at 1.) After being served with notice of the preliminary forfeiture order (see Doc. 365), Ms. Wang filed a third party motion objecting to forfeiture of the Texas property, Bank of America accounts, and JP Morgan Chase accounts. (Doc. 371.)[4]

         Ms. Wang asserts that she is the co-owner of the Texas property, and that the home loan payments were made with funds including her salary and the $50, 000 gift from her mother-in-law. (See Id. at 1.) She also argues that she has an interest in the Bank of America accounts because she continued to deposit her salary into those accounts until they were frozen. (See Id. at 2.) Finally, Ms. Wang asserts that she has a property interest in Mr. Gan's JP Morgan Chase accounts because “almost all the funds [in the JP Morgan accounts] [were] transferred earlier or later from the above Bank of America accounts[.]” (Id.) Ms. Wang also objects to the seizure of $6, 600 in cash and several laptop computers, items for which the government has not sought forfeiture. (See Id. at 2- 3.)

         II. Legal Standard

         A. Ancillary Proceedings in ...


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