p investment l l c it appealing to this court i asked the court to answer one question in a fitting against appeal the united states has asked the court to answer a different question they're both fairly simple questions i think and i think before i address either i should ask this court if the question you would like to have answered is what is the significance of the ruling i'm asking you to make and i think the answer to that is depends somewhat on whether or not you're practically minded or philosophically minded if you are practically minded that i want to tell you that  outcome in this case is important to the creditors of every fairly only corporate entity whose assets might someday be subject to forfeiture due to the crimes of that energy shareholders if the united states can season its dees assets due to crimes committed by the shareholder the united states is free to essentially create a super priority step in front of those creditors and decide for itself its discretion or whether it make any of those assets available to the creditors when that be true just with respect to one defendant who commits a crime and has a lot of out you have less they meet other requirements unless they meet other requirements yes your honor those creditors are saying you're saying all this is this is dangerous to the creditors of the company but if the company is the same as as the as the principle then  creditors are going to lose out just as much as if there wasn't a company that and their creditors were creditors of the principle but i'm not saying what the differences ok you are the the biggest difference is and you agree with you that if you're dealing with  as they are written the property does have to have a nexus to the crime or the crip will forfeiture law as i understand it yes or no whether or not a property is used in the crime isn't really an issue for purposes of criminal sufficient connection to the property that the property can be forfeited if if there are debts to the two or if there are creditors of a corporation they deserve some sort of interpretation on our part to protect them were accurate when if they were creditors to the principle we wouldn't have that so on the correct you're right why that should be as a policy because because the all big policy thing but that's the way forfeiture works isn't it if you have creditors of a person who has is that you have a creditor or a third party you're dealing with a corporate entity it's an it's a juristic existence a body recognized by created by defined by the laws of the various states that we're talking about forfeiture law for property that was used as a worse fishley used for a crime by the person who only on this company and is indistinguishable from exist i mean there are some distinctions you can make but it's substantially where there's no quid there's no question that if the six circuit federal view of alter ego as a concept distinct from piercing the corporate veil is applied i lose my client loses but i submit that the high old does not recognize that point of view the alter ego doctrine that is developed under the federal law is broader than that which one heigho has adopted if it's if it's but isn't it true that when you come over here and play in our ballpark we when i say we they make the not mandated or even suggested that the courts should adopt a federal common law for corporations not in maine to suggest that i'm just saying that they allow for perturbed property use one of these people went out and committed a crime the property that they used in doing it could be forfeit in the united states and suppose they were used the car that they had mortgage and and they use this car garage a bank  the government as they could would try to force a dent car perhaps they would or but there's two different issues there one there's the forfeiture of the car and the government certainly has the ability for for the car under the civil forfeiture laws because the car is presumed guilty of the crime and so under civil forfeiture law they proceed directly against the car if they're proceeding on the basis that the owner of the car is a criminal and thus proceeding against the car i'm submitting that you've got to get the right owner of the car oh but you can take my car but you can't take my brother's car you can take my car but not another car that if i bought my car bought my car using proceeds of the bank that iraq then even know it's in my bra and i put it in my brother's name  still which is not what happened here here the well here the title ownership of the car the policies existed in n k p asking hypotheticals but here i want to get a little bit closer to what actually happened the question is whether n k p is a person other than the the defendant right if if it's not a person other than the defendant you lose exactly other than the defendant are federal words in a federal statute yes or right so it's not if we interpret those words in a certain way we're not creating federal common law we're just interpreting a statute the question be common laws when they when the court says go and make a rule and then we make a rule because where the core and we're required by congress to make a rule but this is interpreted in language it's persons other than and then the defendant you can say well what they meant was persons other than the defendant as defined by state law then we would have to go into state law so we can read those words into it and maybe they should why should we though you're going to just seems like persons other now there are some other cases i understand that deal with language referring to property where the interpretation was what property is such a state law context that we have to use state law to figure out what the federal words property mean because property is is a legal construct but other than offend and i don't see why we have to you go to state law to figure out a simple words like person the defendant can you address that issue because seems to me me break issue for you i think it is your are and the question i think becomes it's almost a circular question you have to decide where do the rule of law that we're going to yell and normally we look at the words and see what the statue is trying to accomplish and look at the plain meaning of the words and ignore it where we're going be able to speak english and look at english words from congress and come up with what they mean i mean would your honor ok let's let's we'll do exactly that in this case if we look at this statute in its entirety try to interpret it as a whole as numerous authorities say we detect it it's the same per person for purposes have been very carefully maintained you know i mean it's like why would you why would you say that was a person other than the defendant for forfeiture purposes it would seem like all the policies for forfeiting the defendant's property would apply just as well too to this wholly owned subsidiary that did things at his behest all the time because it is a because it is a corporate body is the only policy you could give me i thought for saying it should be treated differently is the creditors and i don't see how the creditors are different from if this person was if this  s if if this person is wholly owned how the creditors of n k p stand in any different position than if they were creditors of the defendant your perfect example in this case is that because there is no need are different than the creditors of thomas parents of the creditors of m k p include for example chase manhattan bank which has a one million dollar judgment there are trade creditors it's clear to me your honor well as i read the statute that congress never i'm asking them souter and you say well they didn't mean it but no no no i'm sorry no i mean i understand you it is a little circular if you say congressman x and the other people say you should i'm asking if you want to look at the policy how is the policy making a difference i j n i am submitting that congress did not  congress has you're right there's a policy for purposes of forfeiture law that the fruits of a crime should not be enjoyed by the criminal defendant but here here the criminal defendant that would be exactly what was happening and the only home only possible reason you might want to be different is the creditors but i'm not seeing how that makes a difference i just don't see that you are in what i'm hearing then is that you find the federal i don't have even asking you to explain why that's wrong on doing this ask obviously bar money it didn't do the actual building your honor i don't know the answer to that i believe that there were i believe that m p p did do some construction  but i don't i guess i don't know enough about mr parent affairs in that respect to know whether it's though this is all hypothetical i mean which i appreciate your converse you're discussion of these issues and in fact i do think there's a difference between a criminal defendant and a wholly owned corporation of a criminal defendant but i think a lot of that is case by case and it depends upon what that wholly owned corporation does  so you don't seem to be able to address that i mean i know it was in the building business but or at least it bought and sold these luxury homes but it's unclear to me whether it actually built them whether it  had whether there were people who supplied lumber with that there were people who worked on it and all the rest of it and whether that's the nature of the creditors or whether we're talking about that the creditors of the the most difficult case for me to explain under ohio law in danziger the court of course terribly bitterly divided course court concluded that we would ignore a corporate entity that held the shares of a second corporate entity in order to permit the shareholders to examine the books of the second entity there is no reason not to permit under the policy reasons for corporate entities under the reach under the policies to justify the creation of corporations there simply was no reason not to give those shareholders the right to examine the books of the second entity there there's nothing to be gained and nothing to be lost and  no actual cogent reason why that shouldn't be permitted in this case however what the government is asking  the existence of mr parent to reach through a blood and flesh human being in fact the individual that it tried and convicted in order to get to the assets being held by another entity are somewhat controversial well if we're going to have them then at least loads use them as they were written and in this case mr parent  there's been my point mr parent as assets he has his interest in the entity and that interest is available to the government through eight fifty three p and if the government takes the interest rate fifty three p then the creditors of m k p possess exactly whatever rights they had so they would be getting rights that they wouldn't have a fee on this directly true but he doesn't know you care about this case presumably yes you know for the question thank you counsel thank you your honors and thank you for the additional  good morning your honour's may best young on behalf of the united states i'd like to begin with a general point that i think is clear and that is that while if criminal forfeiture proceeding is in percent  issues that when a criminal defendant effectively controlled the property that's been forfeit despite nominal ownership being with someone else  a problem with this there or many many wholly owned corporations i mean and they're perfectly legitimate and they  wholly owned and run by the sole owner and they perform they engage in business as an entity and yes it's true the individual does everything controls everything but there's no question that the law honors the separate corporate existence of these wholly owned corporations and the law in the the law wants that to be a separate entity and mean it promotes the business and it's very troubling to think that just because an entity is a wholly owned corporation of a defendant that the government can swoop in and take the assets of the corporation in leave the rest of the world just with their m open and that cannot be the law thank you your honor the united states does not assert that it is the law for what is it that makes this possible i mean i i totally understand the idea of having a separate a for fitting the dependence of interest in that wholly owned corporation if it has the requisite value but i don't understand how you just a race the corporate existence alter ego standard that has been applied in other contexts and that is discussed in our brief you so look at considerations similar to what the district court looked at here although it was discussing ohio the consideration set looked at as far as disregard of corporate formalities and so forth still have to be considered and if you look at the facts of this case keep in mind there's no challenge to  judgment creditor that's a bank however to the extent the m k p has a problem with the united states sort of getting ahead of unsecured creditors that's a problem with the concept of forfeiture of more than  it's a problem with which state which law applies to the alter ego question to suggest that the united states is relegated to the substitute asset parent trust in the corporation which is what k p suggests year that is first it's meant as a substitute when the tainted asset is unavailable not to use because  has been put in someone else's name strategically second it's not an adequate substitute because well for one in many situations there may not be other assets that are of comparable value and in fact here we submit that's likely going to be the case for the very reason that the united states has put behind intervening creditors the  tainted asset relates back to the time of the commission of the offense so the united states took the is forfeited life insurance policies at the beginning tom parent owes conspiracy two thousand four i think was the first charge conduct if we were relegated to a substitute asset theory we would take as of the date of the substitute assets under this court's precedent that's just systematically not an adequate substitute what give me an example well because you're taking as up now and all intervening creditors during that time period that now have claims against him k p c would stand ahead of the united states by virtue of time i would point out the united states is supposed to get the priority as of the time of the crime yes legitimate corporate forms that it doesn't what you're arguing doesn't mean that if you have a criminal with property you can take all the property of his wholly owned subsidiaries are owned companies but not only do you have to find these these factors that you're suggesting apply you know like it's no use for various purposes the actual property that they take has to be property th is sufficiently connected with the crime right so we're a little you're talking about a creditor who's do you who's lending to a company that has property that's being used for sufficiently connected under the forfeiture statute to the to the whole owner of the company only exactly it's involved in this is under money money laundering forfeiture the standard is a property that's involved and the money laundering and the district court here found in fact that these sponsors were entered really involved in the offenses charged in count two because they were used to commit facilitate and disguise or conceal the money laundering unless i'm missing something this whole discussion of federal law and ohio law did that that take place below it was not developed below and i think i would attribute that primarily to the fact that we did simultaneous briefing if you look back when the filed its ancillary petition the united states responded with a motion to amend the preliminary order and it is citing federal law we have the hearing which was fairly abbreviated didn't really discuss legal points about this and then we had a simultaneous briefing schedule at the post chairing briefs were sort of two ships passing in the night and we sort of didn't join issue and of course united states won under the district courts reading of ohio law this was honestly to be frank a case where my first instinct first thing in your briefest defend the district squidward did you just get a decision on the briefs we had a hearing we had an effort into your hearing right but did you or do the application was not an argument at that hearing about which law applied it was  the post sharing brief n k p was the first place that really articulated the issues that are being briefed here and the united states  to be sure and under the the end sigur case that was mentioned we think one thing that illustrates is that even the ohio courts understand that context matters  there's a lot of talk about they the ohio courts don't reverse peers they don't reverse pearson situations involving you know contract claims tort claims and the question of are we going to impose this liability on a corporation for shareholder liabilities but when they have a different context such as this question about access to records in the end sigur they come to a different conclusion about when you treat him to  us the same and that's affectively what we're asking the court to do here i point the court to the d c circuits decision and b c c on at the second circuit's decision in peter's which are both situations where the courts were faced with questions about state versus federal law in looking at other issues under the federal forfeiture statutes and both those courts said this is a federal statute we're not looking at st law we're going to treat this is a matter of statutory interpretation and we think that's the most appropriate treatment here in the way the way you view it is the question is whether the i mean in that it does a person  whether the person who's making claim to the particular asset is separate would you add with respect to that asset that for tradition when you're talking about an alter ego which you need not be your interpretive statutory language that says other than the defendant that doesn't naturally seem to me to lend itself to a item specific inquiry now when you're talking about a nominee it is item specific in other words if the girlfriend on the drug dealers car it was affectively the drug dealers car but he put it in her name under nominee theory you do you're limited to looking at did the defendant have an interest in that car despite the fact that t was with someone else so it is more i don't specific in interpretating other than the defendant i think you're looking at is the corporation so dominated and controlled by the defendant that they cease to effectively be separate entities now where this the specific item comes and is that we have to have nexus to the item for it to have been for football at all i mean to to be even in this position of someone filing and it's like a petition the item has already been found to be forfeited by virtue of its nexus to the crime consequences of the suggested approach of him k p having the united states make indictment decisions to indict additional defendants to be sure that it can forfeit things although as a matter of culpability the corporate entity is indistinguishable from the individual is not a good use of resources nor would it be a good use of resources to routinely have to do forfeiture proceedings for the question no thank you thank you most stirring thing i've heard was the very end of the colloquy the practical consequences let's let's remove this from the real world let's talk about the practical consequences just of the procedure in this case when is it convenient to determine that you're going to indict a corporate entity or when is it you know they're making those decisions your counsel was asking why there wasn't as a practical matter why there wasn't an but it does make a difference sure i understand it makes a difference it just procedurally procedurally here in the way the statute a structure maybe difference if you're right on the underlying statute doesn't make a difference if it doesn't so i think it makes a difference whether i'm right or wrong and procedurally let me explain what all if they're able to get the assets without indicting why should they indict if they can get the assets without indicting if they have to because there's an order to get the assets than they should have indicted but i mean that to say why didn't they do it they didn't do it because they thought they didn't need to do it you're out of issue here is whether they needed to do it or not the way the statute is written m p p is precluded from participating in the criminal trial ok and there is no way during that trial that that n k p can be heard that it can introduce evidence or can do anything it's precluded which is fine but in this case they tried tom parents so for eight weeks then there was a true day forfeiture hearing and at no point in time ever during that proceeding did the words alter ego or piercing the corporate veil come out of the prosecutor's meant that if given evidence that showed that they were other than the defendant your the truth of the matter is i can't answer that because again as m p peace council i wasn't there now i will assume you are them i'm just saying they had a hearing on the issue of whether they were other than the defendant if they weren't other than the defendant then they couldn't succeed in the ancillary proceeding that hearing that there's nothing that says if they weren't able to give sufficient and that's what we're here talking about is whether there was enough evidence that they were other than the defendant whether it was legally enough i suppose but to say that that that's not giving them due process they should have been indicted that's not consistent with how the statute structured statute just says you have to be other than defendant does it say other than the defendant to be determined by a jury in a criminal case