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ELIZABETH A. STRANGE

First Assistant United States Attorney

District of Arizona

KEVIN M. RAPP (Ariz. Bar No. 14249, kevin.rapp@usdoj.gov)

MARGARET PERLMETER (Ariz. Bar No. 024805, 

margaret.perlmeter@usdoj.gov)

PETER S. KOZINETS (Ariz. Bar No. 019856, 

peter.kozinets@usdoj.gov) 

DOMINIC LANZA (Cal. Bar No. 225989, dominic.lanza@usdoj.gov)

Assistant U.S. Attorneys

40 North Central Avenue, Suite 1800

Phoenix, Arizona 85004-4408

Telephone: 602-514-7500

JOHN J. KUCERA (Cal. Bar No. 274184, john.kucera@usdoj.gov)

Special Assistant U.S. Attorney

312 North Spring Street, Suite 1400

Los Angeles, CA 90012

Telephone: 213-894-3391

BRIAN BENCZKOWSKI Assistant Attorney General

Criminal Division, U.S. Department of Justice

REGINALD E. JONES (Miss. Bar No. 102806, 

reginald.jones@usdoj.gov)

Senior Trial Attorney, U.S. Department of Justice

Child Exploitation and Obscenity Section

950 Pennsylvania Ave. N.W., Room 2116

Washington, D.C. 20530

Telephone: 202-616-2807

Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United States of America,

Plaintiff,

v.

Michael Lacey, et al.,

Defendant(s).

CR 18-422-PHX-SPL (BSB)

GOVERNMENT’S APPLICATION FOR 

ORDER REGARDING CRIMINAL 

FORFEITURE OF PROPERTY IN 

GOVERNMENT CUSTODY

The United States of America, by and through its counsel of 

record, the United States Attorney’s Office for the District of 

Case 2:18-cr-00422-DJH Document 282 Filed 08/27/18 Page 1 of 8
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Arizona and Special Assistant United States Attorney John J. 

Kucera, hereby moves for an order allowing the government to 

maintain custody of property already in the government’s 

possession pending the resolution of this criminal matter. In 

support of its motion, the Government states as follows:

On March 28, April 9, April 26, and June 24, 2018, pursuant 

to civil seizure warrants issued by three separate United States 

Magistrate Judges in the Central District of California, for the 

purpose of initiating forfeiture proceedings, the United States 

seized all right, title, and interest in the following assets (the 

“seized assets”):

1. Funds held in the following bank accounts:

a. Prosperity Bank account number XXXXX7188 

b. Compass Bank Account number XXXXXX3873 

c. Compass Bank Account number XXXXXX3825 

d. National Bank of Arizona Account number XXXX0178 

e. National Bank of Arizona Account number XXXX0151 

f. National Bank of Arizona Account number XXXX3645 

g. Live Oak Bank Account Number XXXXXXXXXX2523 

h. Ascensus Broker Dealer Services Account Number 

XXXXX6943-01 

i. Ascensus Broker Dealer Services account Number 

XXXXX5280-01 

j. First Federal Savings & Loan of San Rafael account number 

XXXX3620 

k. Republic Bank of Arizona account number XXXX1889 

l. Republic Bank of Arizona account number XXXX2592 

m. Republic Bank of Arizona account number XXXX2912 

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n. Republic Bank of Arizona account number XXXX2500 

o. Republic Bank of Arizona account number XXXX1938 

p. Bank of America Account number XXXXXXXXXXXX8225 

q. Bank of America Account number XXXXXXXXXXXX7054 

r. Bank of America Account number XXXXXXXXXXXX9342 

s. Bank of America Account number XXXXXXXXXXXX0071 

t. San Francisco Fire Credit Union Account Number 

XXXXXXXXXX2523 

u. Ally Bank Account Number XXXXXX6292 

v. Branch Banking and Trust Bank account number 

XXXXXXXXX0218 

w. Green Bank Account number XXX4832 

x. Green Bank Account number XXXXXX4293 

y. Plains Capital Bank account number XXXXXX1098

z. Bank of America IOLTA Account #50033414

2. The following domain names:

a. atlantabackpage.com

b. backpage.be

c. backpage.com

d. backpage.com.br

e. backpage.cz

f. backpage.dk

g. backpage.ee

h. backpage.es

i. backpage.fi

j. backpage.fr

k. backpage.gr

l. backpage.hu

Case 2:18-cr-00422-DJH Document 282 Filed 08/27/18 Page 3 of 8
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m. backpage.ie

n. backpage.it

o. backpage.lt

p. backpage.mx

q. backpage.net

r. backpage.no

s. backpage.pl

t. backpage.pt

u. backpage.ro

v. backpage.si

w. backpage.sk

x. backpage.us

y. backpage-insider.com

z. bestofbackpage.com

aa. bestofbigcity.com

bb. bigcity.com

cc. chicagobackpage.com

dd. denverbackpage.com

ee. newyorkbackpage.com

ff. phoenixbackpage.com

gg. sandiegobackpage.com

hh. seattlebackpage.com

ii. tampabackpage.com

The government included certain of these assets in its 

Indictment, unsealed on March 28, 2018. (CR 18-422-PHX-SPL (BSB) 

Dkt. #3). Thereafter, on July 25, 2018, in its Superseding 

Indictment (CR 18-422-PHX-SPL (BSB), Dkt. #230), and on August 24, 

2018, in the First Bill of Particulars (CR 18-422-PHX-SPL (BSB), 

Case 2:18-cr-00422-DJH Document 282 Filed 08/27/18 Page 4 of 8
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Dkt. 281), the government included for criminal forfeiture each of 

the above-listed seized assets. Finally, certain defendants 

recently filed a motion in the Central District of California 

challenging the civil seizure warrants that were initially 

utilized to seize some of the assets at issue.

Title 18, United States Code, Section 983(a)(3)(B)(ii)(II) 

provides that when the government elects to include assets subject 

to forfeiture in its indictment, it must “take the steps necessary 

to preserve its right to maintain custody of the property as 

provided in the applicable criminal forfeiture statute.” The 

applicable criminal forfeiture statute in this case is 21 U.S.C. 

§ 853, which prescribes several methods for preserving property 

for the purpose of criminal forfeiture:

1. Section 853(f) authorizes the issuance of a criminal 

seizure warrant. However, where, as here, the property in question 

is already in government custody, it is inappropriate for a court 

to issue a seizure warrant directing the government to seize the 

property from itself;

2. Section 853(e) authorizes a court to issue a restraining 

order or an injunction to preserve the property for forfeiture.

Again, it is unnecessary to issue an order enjoining the government 

from disposing of property that it has already taken into its 

custody for the purpose of forfeiture, and that it represents it 

will preserve for that purpose through the conclusion of the 

pending criminal case; and

3. Section 853(e)(1) authorizes a court to “take any other 

action to preserve the availability of property” subject to 

forfeiture.

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In determining whether to issue a restraining order, an 

indictment against the defendant conclusively establishes probable 

cause that the charged offenses were committed. See Kaley v. United 

States, 571 U.S. 320, 322 (2014) (“A federal statute, 21 U.S.C. § 

853(e), authorizes a court to freeze an indicted defendant’s assets 

prior to trial if they would be subject to forfeiture upon 

conviction. . . . The question presented is whether criminal 

defendants are constitutionally entitled at [a pretrial] hearing 

to contest a grand jury’s prior determination of probable cause to 

believe they committed the crimes charged. We hold that they have 

no right to relitigate that finding.”). See also id. at 340-41 

(“If the question in a pre-trial forfeiture case is whether there 

is probable cause to think the defendant committed the crime 

alleged, then the answer is: whatever the grand jury decides.”).

In this case, the seized assets are already in government 

custody, and the government intends to preserve the assets for the 

purpose of forfeiture through the conclusion of the pending 

criminal case. All that is required to comply with section 

983(a)(3)(B)(ii)(II) is an order from this Court directing the 

United States and its agencies to continue to maintain custody of 

the seized assets until the criminal case is concluded. See, e.g.,

United States v. Scarmazzo, 2007 WL 587183, *2-3 (E.D. Cal. 2007) 

(granting government’s motion for an order under 18 U.S.C. § 

853(e)(1) to maintain custody of property that was already in the 

government’s possession, having been previously seized pursuant to 

search and seizure warrants); In re 2000 White Mercedes ML320, 220 

F. Supp. 2d 1322, 1326 & n.5 (M.D. Fla. 2001) (declining to issue 

criminal seizure warrant under 18 U.S.C. § 853(f) as to property 

Case 2:18-cr-00422-DJH Document 282 Filed 08/27/18 Page 6 of 8
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that was already in the government’s possession and noting that 

the government instead should have sought an order under 18 U.S.C. 

§ 853(e)(1) to maintain custody of the property).

For restraining orders issued after an indictment or 

information has been returned, a pre-restraint hearing is not 

required. United States v. Musson, 802 F. 2d 384, 386-87 (10th

Cir. 1986). If any third parties have claims on the assets subject 

to the requested restraint, section 853(n) sets out a specific 

procedure for the adjudication of such claims. This process begins, 

however, “[f]ollowing the entry of an order of forfeiture under 

this section . . . .” 21 U.S.C. § 853(n)(1); see also Libretti v. 

United States, 516 U.S. 29, 44 (1995); United States v. Gilbert, 

244 F.3d 888, 911 (11th Cir. 2001) (ancillary proceeding is 

“exclusive means” for third parties to assert claims to forfeited 

property; citing legislative history); United States v. Messino, 

122 F.3d 427, 428 (7th Cir. 1997) (under Sections 853(k) and (n), 

third parties must wait until the court has entered a preliminary 

order of forfeiture to challenge the forfeiture action).

///

///

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WHEREFORE, pursuant to section 853(e)(1), the United States 

respectfully moves this Court to issue an order directing that the 

United States may maintain custody of the seized assets described 

above through the conclusion of the pending criminal case, and 

stating that such order satisfies the requirements of 18 U.S.C. § 

983(a)(3)(B)(ii)(II).

August 27, 2018 ELIZABETH STRANGE

First Assistant United States Attorney 

District of Arizona 

BRIAN BENCZKOWSKI Assistant Attorney 

General

Criminal Division, U.S. Department of 

Justice

KEVIN RAPP

MARGARET PERLMETER

DOMINIC LANZA

Assistant United States Attorneys

REGINALD JONES

Senior Trial Attorney

/s/ John J. Kucera

JOHN J. KUCERA 

Special Assistant United States Attorney

Attorneys for Plaintiff

UNITED STATES OF AMERICA

Case 2:18-cr-00422-DJH Document 282 Filed 08/27/18 Page 8 of 8