UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

______________________________

)

UNITED STATES OF AMERICA, )

)

Plaintiff, )

)

v. ) Civil Action No. 12-1905 (RWR)

)

SUM OF $70,990,605, et al., )

)

Defendants. )

______________________________)

MEMORANDUM OPINION AND ORDER

Plaintiff United States filed this civil in rem forfeiture 

action, alleging that the defendant funds -- approximately $63

million in three different banks -- are the proceeds of a wire 

fraud conspiracy and subject to seizure under 18 U.S.C. §§ 981, 

983 and 984. The United States moves under 18 U.S.C. 

§ 981(g)(1) to stay the civil forfeiture proceeding, except for 

any forthcoming government motions to strike under Supplemental 

Rule G(8)(c), until the conclusion of the related criminal 

proceedings. Claimants Hikmatullah Shadman, Najibullah, and 

Rohullah (“Shadman claimants”) and Afghanistan International 

Bank (“AIB”) also move for leave to file surreplies. Because a 

protective order can protect the interests of the parties, a 

complete stay is unjustified and the government’s motion to stay

will be denied. Because the proposed surreplies are 
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unnecessary, the claimants’ motions for leave to file surreplies 

will also be denied. 

BACKGROUND

In short, the United States has alleged that the defendant 

property is subject to forfeiture as the proceeds of a wire 

fraud conspiracy and that Shadman, as a subcontractor and owner 

of Hikmat Shadman Logistics Services Company (“HSLSC”), 

“conspired to obtain payments from the United States for the 

transportation of military supplies in Afghanistan through the 

illegal and fraudulent use of the wires . . . [by making] bribe 

payments, fraudulently inflat[ing] prices, and caus[ing] the 

United States to be invoiced for and to make payments of 

$77,920,605 to two bank accounts in Afghanistan[.]” 2d Am. 

Compl. ¶¶ 10, 34. The United States alleges that Shadman paid 

bribes to TOIFOR Global Life Support Services operations 

managers Henry Omonobi-Newton and Paul Hele, id. ¶¶ 24, 38, and 

that Shadman conspired with Hele to “inflate[] and manipulate[]” 

subcontractors’ bids, id. ¶ 39, to allow Hele “to award TMRs

[Transportation Movement Requests] to [HSLSC] at an inflated 

rate,” id. ¶¶ 23, 39g. Allegedly because of the bribery and 

fraud, HSLSC was awarded 5,421 TMRs, which cost the United 

States $77,920,605. See id. ¶¶ 35, 43. 
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On August 27, 2013, Shadman, Najibullah, and Rohullah filed 

a verified claim and statement of interest in the seized 

property, asserting that they are the owners of the seized 

funds. Verified Claim and Statement of Interest or Right in 

Property Subject to Forfeiture In Rem at 8. They made these 

claims both individually, and on behalf of their companies. Id.

at 14-16. It appears that all the accounts are held in the name 

of the companies, rather than the individuals, except for one 

account at Emirate National Bank. Id. at 8-12. The Shadman 

claimants then filed a motion under 18 U.S.C. § 983(f) for 

immediate release of funds and a motion for preliminary 

injunctive relief, both of which have been denied. The Shadman 

claimants also filed a motion to dismiss for failure to state a 

claim and based on the affirmative defenses of international 

comity and the act of state doctrine, which was also denied.

On October 16, 2013, AIB filed a verified claim, asserting 

that it has legal title, ownership, and possessory interest to 

$4,330,287.03 of the defendant funds. AIB’s Verified Claim of 

Interest in Defendant Property at 2, 4.

The United States now moves under 18 U.S.C. § 981(g)(1) to 

stay the civil forfeiture proceedings because “the United States 

has a related criminal investigation and allowing discovery now 

may jeopardize that investigation.” United States’ Mot. for a 
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Stay Pursuant to 18 U.S.C. § 981(g) (“U.S. Mot.”) at 1. The 

government requests that the proceeding be stayed until the 

conclusion of the criminal case, with the exception of any 

forthcoming government motions to strike a claim or answer under 

Rule G(8)(c). Id. The government proposes a status report in 

180 days to allow assessment of the continuing need for a stay. 

Id. attach. 1 at 2. Claimants oppose. See Claimants’ Opp’n to 

United States’ Mot. for a Stay (“Shadman Claimants’ Opp’n”); 

Claimant AIB’s Opp’n to the United States’ Mot. for a Stay 

Pursuant to 18 U.S.C. § 981(g) (“AIB’s Opp’n”). Both the 

Shadman claimants and AIB also filed opposed motions for leave 

to file a surreply. 

DISCUSSION

I. MOTION TO STAY

When the United States moves for a stay, “the court shall 

stay the civil forfeiture proceeding if the court determines 

that civil discovery will adversely affect the ability of the 

Government to conduct a related criminal investigation or the 

prosecution of a related criminal case.” 18 U.S.C. § 981(g)(1). 

To determine if the criminal case is related, “the court 

shall consider the degree of similarity between the parties, 

witnesses, facts, and circumstances involved in the two 

proceedings, without requiring an identity with respect to any 
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one or more factors.” 18 U.S.C. § 981(g)(4). The United States 

“may, in appropriate cases, submit evidence ex parte in order to 

avoid disclosing any matter that may adversely affect an ongoing 

criminal investigation or pending criminal trial.” 18 U.S.C. 

§ 981(g)(5).1 

Here, the government states that a United States Attorney’s 

Office, the Fraud Section of the United States Department of 

Justice, and the Office of the Special Inspector General for 

Afghanistan Reconstruction are all “investigating whether Mr. 

Shadman and others violated U.S. criminal laws in connection 

with the award and receipt of lucrative contracts and payments 

for the transportation of U.S. military supplies in Afghanistan 

. . . .” U.S. Mot. at 5. Because the United States’ criminal 

investigation stems, at least in part, from the same conduct 

that gives rise to this forfeiture action, the facts and 

circumstances involved in both the criminal and civil 

proceedings are similar. Id. at 5-6. The identity of facts and 

circumstances also means that the witnesses -- such as the 

 1 The United States here chose not to submit any matters ex 

parte, though it did request leave to do so “[i]f this Court 

finds that the record set forth herein is insufficient to 

establish that civil discovery will adversely affect the ability 

of the Government to conduct the related criminal 

investigation.” U.S. Mot. at 2, 8. However, because, as is 

explained below, the United States has shown that some specific 

civil discovery may adversely affect the criminal investigation, 

such ex parte evidence may not be necessary.
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confidential informants and others that either witnessed or were 

involved in the alleged fraud and bribery -- will be similar 

since the operative events in both cases are the same. Id. at 

5-7. Finally, while the parties are not identical, the parties 

are similar as Shadman is one of the claimants in the civil 

proceeding and Shadman is being investigated criminally. Id. at 

5. Thus, where, as here, “a criminal investigation and a civil 

forfeiture action have common facts, similar alleged violations 

and some common parties, the actions are clearly related.” 

United States v. All Funds on Deposit in Suntrust Account No. 

XXXXXXXXX8359 in the Name of Gold and Silver Reserve, Inc., 456 

F. Supp. 2d 64, 65 (D.D.C. 2006). 

In addition to being related, civil discovery must 

adversely affect the related criminal investigation to merit a 

stay. For example, civil discovery will adversely affect the 

related criminal investigation when “civil discovery would 

subject the Government’s criminal investigation to ‘early and 

broader civil discovery than would otherwise be possible in the 

context of the criminal proceeding.’” Suntrust, 456 F. Supp. 2d 

at 65 (quoting United States v. One Assortment of Seventy-Three 

Firearms, 352 F. Supp. 2d 2, 4 (D. Me. 2005)). This is because 

“civil discovery may not be used to subvert limitations on 

discovery in criminal cases, by either the government or by 
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private parties.” McSurely v. McClellan, 426 F.2d 664, 671-72 

(D.C. Cir. 1970) (footnotes omitted). However, if the 

government fails to show that civil discovery will in fact 

adversely affect its criminal investigation, a stay should be 

denied. See Suntrust, 456 F. Supp. 2d at 65; United States v.

All Funds ($357,311.68) Contained in Northern Trust Bank of Fla. 

Account No. 7240001868, No. Civ.A.3:04-CV-1476-G, 2004 WL 

1834589, at *2 (N.D. Tex. 2004) (“There is no presumption that 

civil discovery, in itself, automatically creates an adverse 

affect on the government’s related criminal proceeding.”).

The government asserts that civil discovery “will subject 

the United States to broader and earlier discovery than would 

occur in the criminal proceeding[,]” U.S. Mot. at 6, because the 

claimants have requested access to “any evidence in [the 

government’s] possession relating to the facts alleged in this 

case[,]” id. (quoting Shadman Claimants’ Request for Status 

Conference and Motion for Protective and Preservation Orders at 

9), which may “require the United States prematurely to disclose 

to the Claimants the identities of confidential informants,” id.

at 7. The United States contends that, if it were to disclose 

the identities of the confidential informants, then witnesses 

may be put “at risk and [the disclosure could] interfere with 

the Government’s ability to obtain confidential information from 
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others in the criminal investigation.” Id. Exposing 

confidential informants can justify a stay. See, e.g., 

Suntrust, 456 F. Supp. 2d at 66 (“Such discovery could 

compromise any existing confidential informants and/or interfere 

with the Government’s ability to obtain confidential information 

from others.”); United States v. Funds Held in Names or for Ben. 

of Wetterer, 138 F.R.D. 356, 360 (E.D.N.Y. 1991) (finding, under 

the good cause standard that predated the Civil Asset Forfeiture 

Reform Act, that a stay was justified because the 

interrogatories would reveal “cooperating witnesses and identity 

of informants”). 

Here, the Shadman claimants have not only tried to identify 

the confidential informants, e.g., Claimants’ Mot. for Expedited 

Review and Mot. to Dismiss Complaint at 11, 13 (asserting that 

“we believe we know the identity of these confidential sources” 

and identifying people the Shadman claimants suspect are the 

confidential informants), but the Shadman claimants have also 

requested statements of the confidential informants via 

interrogatories, Claimants’ Notice of Supplemental Authority in 

Support of Mot. to Dismiss (“Supp. Authority”), Ex. 1 (Request 

21) (requesting “[a]ny and all written statements of all 

confidential sources”), as well as statements from other 

witnesses, id. (requesting “all statements of witnesses who are 
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specifically referenced by name”), which it would not

necessarily be entitled to in criminal discovery. Compare

Federal Rule of Criminal Procedure 16 (“[T]his rule does not 

authorize the discovery . . . of statements made by prospective 

government witnesses except as provided in 18 U.S.C. § 3500.”)

with Federal Rule of Civil Procedure 26 (allowing discovery of 

“any nonprivileged matter that is relevant to any party’s claim 

or defense”); see also United States v. Morrow, Criminal No. 04-

355 (CKK), 2005 WL 3163806, at *4 (D.D.C. April 13, 2005) 

(“[T]he Government enjoys a qualified although time-honored 

privilege to withhold the identity of its informants from 

criminal defendants.” (internal quotation marks omitted)); 

United States v. Edelin, 128 F. Supp. 2d 23, 33 (D.D.C. 2001) 

(“Criminal defendants are only entitled to statements of nontestifying witnesses or co-conspirators if those statements 

qualify as Brady material.”). The breadth of these discovery 

requests from the claimants could certainly adversely affect the 

United States by allowing the claimants access to discovery that 

they ordinarily would not have access to in a criminal case. 

See Campbell v. Eastland, 307 F.2d 478, 487 (5th Cir. 1962) (“In 

handling motions for a stay of a civil suit until the 

disposition of a criminal prosecution on related matters and in 

ruling on motions under the civil discovery procedures, a judge 
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should be sensitive to the difference in the rules of discovery 

in civil and criminal cases. While the Federal Rules of Civil 

Procedure have provided a well-stocked battery of discovery 

procedures, the rules governing criminal discovery are far more 

restrictive.”).2

The government also states that civil discovery for 

individuals currently under investigation would impair the 

criminal investigation because “it may prematurely expose facts 

and testimony of witnesses to potential subjects of the 

investigation[,]” U.S. Mot. at 7, and the requested discovery 

with respect to law enforcement officers would require discovery 

from those still actively involved in the investigation, id. at 

8. Discovery of officers actively involved in a criminal 

investigation could adversely affect the investigation. E.g., 

United States v. All Funds Deposited in Account No. 20008524845, 

 2 AIB argues that only the Shadman claimants “have sought 

discovery that would adversely affect [the government’s] ongoing 

investigations.” AIB’s Opp’n at 5. While that may be true, AIB 

provides no legal authority supporting its implicit argument 

that individual claims should be parsed out and evaluated on a 

case by case basis. The provision permitting a stay is 

unequivocal: “the court shall stay the civil forfeiture 

proceeding if the court determines that civil discovery will 

adversely affect the ability of the Government to conduct a 

related criminal investigation[.]” 18 U.S.C. § 981(g)(1). 

While, as is discussed below, Section 981(g)(3) permits a court 

to institute a protective order instead of a stay in certain 

situations, the provision does not appear to contemplate 

assessing who causes the adverse impact in determining if a stay 

is appropriate. 
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First Union Nat’l Bank, 162 F. Supp. 2d 1325, 1332 (D. Wyo. 

2001). However, the United States does not point to any

requests to depose law enforcement officials, or how particular 

requested discovery would adversely affect the investigation.

Additionally, the United States claims that civil discovery 

“would also expose prematurely the identities of those 

individuals presently under investigation, which could result in 

the destruction of evidence.” U.S. Mot. at 7. The United 

States offers no evidence, however, that destruction of evidence 

is likely. While destruction of evidence would adversely affect 

a criminal investigation, the United States cannot rest on 

speculation about what may happen. 

Ultimately, a stay may be “unnecessary if a protective 

order limiting discovery would protect the interest of one party 

without unfairly limiting the ability of the opposing party to 

pursue the civil case.” 18 U.S.C. § 981(g)(3). “In no case, 

however, shall the court impose a protective order as an 

alternative to a stay if the effect of such protective order 

would be to allow one party to pursue discovery while the other 

party is substantially unable to do so.” 18 U.S.C. § 981(g)(3). 

Here, a well-crafted protective order limiting discovery could 

“protect the interest” of the government while preserving the 

ability of the claimants to pursue the civil case. See id. 
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There are several areas in which the claimants can seek 

discovery that would not implicate the sensitive information 

that the government seeks to protect, such as additional 

information about the applicability of international comity, the 

act of state doctrine, or the innocent owner defense. 

The government, however, argues that civil discovery “may 

have the effect of inappropriately allowing one party to conduct 

discovery while the other party –- the United States -– would be 

unable to take discovery from the persons with pertinent 

knowledge of the facts” because the witnesses may claim the 

Fifth Amendment privilege against self-incrimination. U.S. Mot. 

at 7. Yet, the government offers no evidence that any witness 

has claimed the Fifth Amendment, and no indictment has yet been 

returned. Cf. SEC v. Dresser Indus., 628 F.2d 1368, 1376 (D.C. 

Cir. 1980) (affirming the district court’s refusal to stay a 

proceeding at the request of a person under investigation

because there had been no indictment or threat to the person’s 

Fifth Amendment privilege, and because Federal Rule of Criminal 

Procedure 16(b) “ha[d] not come into effect” nor had the 

subpoena required the person to reveal the basis of his 

defense). The United States offers no evidence that it cannot 
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take discovery because of the pending criminal investigation.3 

E.g., Northern Trust Bank, 2004 WL 1834589, at *2 (“[T]he 

Government’s arguments do nothing more than speculate about how 

civil discovery will adversely affect its criminal 

investigation. . . . Such speculative and conclusory theories 

undercut the requirement of section 981(g) that the Government 

actually show that civil discovery will adversely affect its 

ability to conduct the criminal investigation.” (emphasis 

omitted)). Accordingly, because there is no evidence that only 

one side will be able to take discovery with a properly crafted 

protective order in place, a protective order is permissible. 

II. MOTIONS FOR LEAVE TO FILE SURREPLY

“The standard for granting . . . leave to file a surreply 

is whether the party making the motion would be unable to 

contest matters presented to the court for the first time in the 

opposing party’s reply.” Lewis v. Rumsfeld, 154 F. Supp. 2d 56, 

61 (D.D.C. 2001). A surreply is not justified to correct “an 

alleged mischaracterization.” Id. 

The Shadman claimants and AIB request leave to file a 

surreply. AIB contends that the government “improperly raised 

[a standing argument] for the first time in its reply.” 

 3 There is, of course, nothing that prevents the government 

from renewing its motion for a stay if its ability to conduct 

discovery is impaired by parties and witnesses who do, in fact, 

assert their Fifth Amendment privilege.
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Claimant AIB’s Mot. for Leave to File a Surreply in Further 

Opp’n to the U.S.’s Mot. for a Stay Pursuant to 18 U.S.C. 

§ 981(g) at 2. Because the government’s standing argument was 

not considered, AIB is not “unable to contest” the matter, and 

thus a surreply is unnecessary.

The Shadman claimants argue that the government made “new 

assertions and material misrepresentations” in its reply. 

Claimants’ Mot. for Leave to File Surreply in Opp’n to the 

U.S.’s Mot. for a Stay Pursuant to 18 U.S.C. § 981(g) at 1. A 

surreply, however, is not justified to correct alleged 

mischaracterizations. Lewis, 154 F. Supp. 2d at 61. 

Additionally, the Shadman claimants did not identify any 

arguments that the government raised for the first time in its 

reply. While the Shadman claimants point to the government’s 

argument that a protective order is inappropriate, the United 

States brought up this argument in its original motion for a 

stay. Accordingly, a surreply is unjustified and will be 

denied. See id. 

CONCLUSION

The government has failed to demonstrate that a stay is 

necessary because a well-crafted protective order limiting 

discovery will suffice to protect the United States’ asserted 

interest and the protective order will not allow only one side 
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to pursue discovery. Additionally, the claimants do not prove 

that a surreply is necessary. Accordingly, it is hereby 

ORDERED that the government’s motion to stay [56] be, and 

hereby is, DENIED without prejudice. It is further 

ORDERED that the United States consult the claimants and

submit within 30 days a proposed protective order suggesting 

limitations to discovery that will protect its interests while 

also allowing claimants to move forward with the case. It is 

further

ORDERED that AIB’s motion for leave to file a surreply [64] 

be, and hereby is, DENIED. It is further 

ORDERED that the Shadman claimants’ motion for leave to 

file a surreply [65] be, and hereby is, DENIED. 

SIGNED this 17th day of April, 2014.

 /s/ 

RICHARD W. ROBERTS

Chief Judge