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THOMAS H. BIENERT, JR., CA State Bar No. 135311 

(Admitted Pro Hac Vice)

tbienert@bmkattorneys.com 

KENNETH M. MILLER, CA State Bar No. 151874 

(Admitted Pro Hac Vice)

kmiller@bmkattorneys.com 

ANTHONY R. BISCONTI, CA State Bar No. 269230 

(Admitted Pro Hac Vice)

tbisconti@bmkattorneys.com 

WHITNEY Z. BERNSTEIN, CA State Bar No. 304917 

(Admitted Pro Hac Vice)

wbernstein@bmkattorneys.com 

BIENERT, MILLER & KATZMAN, PLC 

903 Calle Amanecer, Suite 350 

San Clemente, California 92673 

Telephone (949) 369-3700 / Facsimile (949) 369-3701 

Attorneys for JAMES LARKIN 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

UNITED STATES OF AMERICA, 

 

 Plaintiff, 

 vs. 

MICHAEL LACEY, ET AL., 

 Defendants. 

Case No. CR-18-00422-PHX-SPL (BSB)

Response to Government’s Motion for Leave 

to File Untimely Reply in Support of Its 

Application for Order Regarding Criminal 

Forfeiture 

Case 2:18-cr-00422-DJH Document 304 Filed 09/14/18 Page 1 of 8
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2

RESPONSE TO GOVERNMENT’S MOTION TO FILE UNTIMELY REPLY 

The government has filed a motion for leave to late file a reply to defendants’ 

opposition to the government’s Application for an Order Regarding Criminal Forfeiture of 

Property in Government Custody (the “Application”). See Dkt. 303. Defendants oppose 

the government’s late filing. But if this Court accepts the late Reply, defendants submit the 

following response for consideration. 

I. BACKGROUND 

Defendants have a Fifth Amendment right to a prompt hearing on the government’s 

massive pretrial seizures of their property. Defendants have been denied that right to date, 

and the government continues to try to deny defendants that right. 

Between March and June 2018, government counsel from the Central District of 

California (“CDCA”) submitted ex parte civil seizure warrants in the CDCA to obtain seizure 

warrants from the U.S. District Court for the CDCA allowing the government to seize tens 

of millions of dollars-worth of assets from defendants. On August 1, 2018, defendants moved 

to vacate or modify the warrants (the “Motion to Vacate”) in the CDCA because: (1) the 

seizures violated defendants’ rights under the First Amendment, which prohibits the pre-trial 

seizure of publishing proceeds; (2) any seizure of publishing proceeds requires more than 

“probable cause,” which the government did not even purport to establish; (3) the seizure 

warrants were obtained through knowing, material misrepresentations and omissions, in 

violation of defendants’ First and Fourth Amendment rights; (4) even assuming, arguendo, 

that some assets were subject to seizure, the government failed to trace the seized publishing 

proceeds to any alleged criminal wrongdoing, let alone the knowing and specific violation of 

prostitution statutes that are required to support forfeiture in the publishing context; and (5) 

defendants (i.e., the Movants in the CDCA) had a Fifth Amendment right to a prompt hearing 

on their claims. See Dkt. 285, Exhibit A. The challenged CDCA seizure warrants provide 

the only purported findings to justify the government’s pre-trial seizures of defendants’ 

assets. Defendants have been deprived of their assets for almost 6 months and counting, and 

have yet to have a hearing to substantively challenge the illegality of the seizures. 

// 

Case 2:18-cr-00422-DJH Document 304 Filed 09/14/18 Page 2 of 8
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RESPONSE TO GOVERNMENT’S MOTION TO FILE UNTIMELY REPLY 

After several requests by the government to delay the hearing date, a hearing on the 

Motion to Vacate is now scheduled for September 24, 2018 before the Honorable R. Gary 

Klausner, U.S. District Judge for the CDCA. Despite requesting and receiving multiple 

extensions of time to file any opposition in the CDCA, the government has ignored 

opposition due dates and failed to file a substantive opposition addressing the many 

constitutional violations raised in defendants’ Motion to Vacate. Instead, the government 

came to this Court and filed its Application, seeking an Order from this Court summarily 

maintaining the pretrial seizure of these assets until the criminal case concludes. It then filed 

with Judge Klausner a copy of the Application advising him that “[s]hould that Order issue, 

the government intends to move [the CDCA] to find that defendants’ Motion is moot.”1 

In short, the government’s Application is an improper attempt to prevent defendants 

from having a substantive hearing to address the government’s illegal pretrial seizure of their 

assets. It seeks to use this Court in an attempt to stop the court in the CDCA – the jurisdiction 

in which the government chose to seek and obtain the civil seizure warrants at issue – from 

holding the scheduled September 24 hearing to examine the impropriety and 

unconstitutionality of the warrants the government submitted in the CDCA and has used to 

illegally deprive defendants of tens of millions of dollars of assets. 

In response to the government’s actions and Application, defendants immediately 

filed an Opposition explaining that the government’s Application was procedurally 

improper and should be rejected as an impermissible attempt to forum shop, interfere with 

the authority and jurisdiction of another district court, and keep possession of assets to 

which it has no right. See Dkt. 285. The government now seeks to submit an untimely 

reply to defendants’ Opposition. 

II. ARGUMENT 

Defendants are entitled to a hearing in the place where the warrants issued. That 

process is underway and scheduled for hearing on September 24 in the CDCA. By the 

 

1

 Exhibit A, In the Matter of Seizure of: Any and all funds held in Republic Bank of Arizona 

Accounts xxxx1889, xxxx2592, xxxx1938, xxxx2912, and xxxx2500, C.D. Cal. Docket 18-

CV-6742-RGK-PJW, Doc. 40 at 2. 

Case 2:18-cr-00422-DJH Document 304 Filed 09/14/18 Page 3 of 8
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RESPONSE TO GOVERNMENT’S MOTION TO FILE UNTIMELY REPLY 

Application and proposed Reply, the government is trying to improperly deprive defendants 

not only of their property but also of their fundamental right to due process. This Court 

should not countenance the government’s manipulation of the system and should reject its 

Application. 

A. The Government’s Pretrial Seizures Are Unlawful. 

The government’s Application and proposed Reply do not justify its continued 

possession of the assets it took from defendants. The government essentially argues that it 

is in possession of various assets, the assets were identified in the forfeiture allegations of 

the Superseding Indictment, so pursuant to 21 U.S.C. § 853(e), it simply seeks an Order from 

this Court authorizing the issuance of a restraining order or injunction to preserve the 

property for forfeiture: 

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. 

Dkt. 282 at 6. 

But the “seized assets are already in government custody” only because of the CDCA 

civil seizure warrants. Thus, the government’s right to continue to maintain custody of the 

seized assets turns on whether it rightly possessed those assets in the first place. That issue 

is being litigated in the district where the warrants issued (the CDCA). If those warrants 

are invalid, there is no basis for this Court to uphold the government’s continued control of 

those assets. 

 The government cannot rely on forfeiture allegations in the Superseding Indictment 

to justify a continued seizure of defendants’ assets. The issue here is a pretrial restraint of 

the assets. Naming the assets in forfeiture allegations of the Superseding Indictment does 

not give the government a basis to effect pretrial seizures of those assets. Including the 

Case 2:18-cr-00422-DJH Document 304 Filed 09/14/18 Page 4 of 8
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RESPONSE TO GOVERNMENT’S MOTION TO FILE UNTIMELY REPLY 

assets in the forfeiture allegations simply provides notice that if convicted, the government 

intends to seek forfeiture of the identified assets in the future as part of sentencing. Indeed, 

the express language of the forfeiture allegations in the Superseding Indictment makes clear 

it is only a notice of potential future actions: “notice is hereby given that the United States 

will seek forfeiture as part of any sentence . . . in the event of any defendant’s conviction . . 

.” Dkt. 230 at page 63, ¶ 2 and page 77, ¶ 2. This is not an independent, legal basis to seize 

or restrain any of defendants’ assets pretrial. Notably, neither the Superseding Indictment 

nor any other government filing reflect that the grand jury specifically was presented with 

evidence and found probable cause or any higher standard2 related to the two forfeiture 

allegation counts in the Superseding Indictment. 

The government’s legal support is suspect. The government does not cite a single 

case where a court granted a Section 853(e)(1) Order authorizing the government’s 

continued possession of property where: (1) the government wrongfully acquired the 

property in the first place, via a misleading ex parte application; or, (2) where the propriety 

of the government’s acquisition of that same property was already being litigated in front of 

another district court where the misleading ex parte application was made. No applicable 

case is cited because the government’s conduct here is flagrant, unprecedented and 

fundamentally improper. 

No judicial proceeding has occurred in Arizona authorizing the pretrial restraint of the 

assets that the government has taken from defendants. The only basis on which the assets 

were seized and came to be in the government’s possession was through the government’s 

illegal ex parte warrant applications in the CDCA. Absent a finding that all of the assets 

were properly seized based on the CDCA civil seizure warrants, this Court has no basis in 

front of it to make a finding that any of those assets can continue to be held. 

 

2

 As noted in the Motion to Vacate, Supreme Court authority establishes that in order to 

restrain publishing materials or proceeds pre-trial, a finding by more than probable cause is 

required. See, e.g., Fort Wayne Books, Inc. v. Indiana, 489 U.S. 46, 63 (1989); see also 

Adult Video Assd’n v. Reno, 41 F.3d 503 (9th Cir. 1994) (“[t]he First Amendment will not 

tolerate such seizures until the government’s reasons for seizure weather the crucible of an 

adversary hearing.”).

Case 2:18-cr-00422-DJH Document 304 Filed 09/14/18 Page 5 of 8
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6

RESPONSE TO GOVERNMENT’S MOTION TO FILE UNTIMELY REPLY 

B. The Central District of California Must Decide the Validity of the 

Underlying Civil Seizure Warrants. 

The assets in question were seized through illegal ex parte civil warrant applications 

in the CDCA by government counsel based in the CDCA. The validity of these warrants is 

precisely what is being litigated in the CDCA, where the litigation rightly belongs. 

The government’s tautological Application and proposed Reply ignore the fact that 

defendants have challenged in the CDCA the validity of the civil seizures warrants. The 

government is asking this Court to issue an Order premised upon its challenged and 

unresolved actions in another district. Unless and until the CDCA resolves that challenge in 

the government’s favor, there is no valid basis for the Section 853(e) Order the government 

seeks. Defendants’ Motion to Vacate is litigating these exact issues and will be heard at the 

September 24, 2018 hearing in the CDCA. 

The government’s request to late file its Reply here comes on the heels of its repeated 

failure to timely file any opposition to the Motion to Vacate in the CDCA, which has now 

been pending for over six weeks. Its delay is against the backdrop where defendants are 

constitutionally entitled to a prompt hearing addressing tens of millions of dollars taken 

from them almost 6 months ago. Yet the government continues to disregard its obligation 

to ensure defendants have a prompt hearing. Instead it ignores the pending proceedings in 

the CDCA and seeks to further delay and prevent the legitimate issues in the CDCA from 

being addressed by obtaining an Order from this Court. The government’s tactics seem 

more aimed at stalling for time to improperly try and wrest the issues away from the CDCA 

than about meeting its constitutional mandates. The government’s Application should be 

denied, and the issues related to the government’s illegal seizures of defendants’ assets 

should be decided in the CDCA as scheduled. 

III. REQUEST FOR ORAL ARGUMENT 

Defendants submit that this Court should deny both the government’s request to late 

file a Reply and the government’s Application on the papers. However, to the extent that this 

Court considers the matter further, defendants respectfully request oral argument. 

Case 2:18-cr-00422-DJH Document 304 Filed 09/14/18 Page 6 of 8
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RESPONSE TO GOVERNMENT’S MOTION TO FILE UNTIMELY REPLY 

IV. CONCLUSION 

For all the foregoing reasons, defendants respectfully request that the Court reject the 

government’s request to late file its Reply and deny the government’s Application. 

 Respectfully submitted, 

Dated: September 14, 2018 /s/ Thomas H. Bienert, Jr. 

 BIENERT, MILLER & KATZMAN, PLC 

 Attorneys for James Larkin 

 

 

Case 2:18-cr-00422-DJH Document 304 Filed 09/14/18 Page 7 of 8
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RESPONSE TO GOVERNMENT’S MOTION TO FILE UNTIMELY REPLY 

CERTIFICATE OF SERVICE 

I certify that on this 14th day of September, 2018, I electronically transmitted a PDF 

version of this document to the Clerk of Court, using the CM/ECF System, for filing and 

for transmittal of a Notice of Electronic Filing to the following CM/ECF registrants listed 

below. 

/s/ Anthony R. Bisconti 

Anthony R. Bisconti 

 

CM/ECF Registrants: 

 Whitney Z Bernstein ,wbernstein@bmkattorneys.com,admin@bmkattorneys.com 

 Thomas Henry Bienert , Jr, tbienert@bmkattorneys.com,tlindemann@bmkattorneys.com,admin@bmkattorneys.com 

 Anthony Ray Bisconti, tbisconti@bmkattorneys.com,3166673420@filings.docketbird.com,admin@bmkattorneys.com 

 Paul John Cambria , Jr, pcambria@lglaw.com,kdrewery@lglaw.com,gpelletterie@lglaw.com 

 Anne Michelle Chapman, anne@mscclaw.com,julie@mscclaw.com 

 Janey Henze Cook, janey@henzecookmurphy.com,jackie@henzecookmurphy.com 

 Robert Corn-Revere, bobcornrevere@dwt.com,carolkaltenbaugh@dwt.com,ronnielondon@dwt.com 

 Bruce S Feder, bf@federlawpa.com,fl@federlawpa.com 

 James C Grant, jimgrant@dwt.com,danielanajera@dwt.com,seadocket@dwt.com 

 Reginald E Jones, reginald.jones4@usdoj.gov 

 Michael D Kimerer, MDK@kimerer.com,mwallingsford@kimerer.com,jpak@kimerer.com 

 Peter Shawn Kozinets, Peter.Kozinets@usdoj.gov,tammie.holm@usdoj.gov,melody.karmgard@usdoj.gov 

 John Jacob Kucera, john.kucera@usdoj.gov,shannen.beckman@usdoj.gov,deena.bowman@usdoj.gov 

 Gary S Lincenberg, glincenberg@birdmarella.com,kferguson@birdmarella.com 

 John Lewis Littrell, jlittrell@bmkattorneys.com,tlindemann@bmkattorneys.com,admin@bmkattorneys.com 

 Ronald Gary London, ronnielondon@dwt.com 

 K C Maxwell, kcm@kcmaxlaw.com,dtc@kcmaxlaw.com 

 Erin E McCampbell, emccampbell@lglaw.com,akelly@lglaw.com 

 Kenneth Morley Miller, kmiller@bmkattorneys.com,pkralich@bmkattorneys.com,admin@bmkattorneys.com 

 Rhonda Elaine Neff, rneff@kimerer.com,mwallingsford@kimerer.com 

 Ariel A Neuman, aneuman@birdmarella.com,blee@birdmarella.com 

 Gopi K Panchapakesan, gpanchapakesan@birdmarella.com,kminutelli@birdmarella.com,docket@birdmarella.com 

 Margaret Wu Perlmeter, margaret.perlmeter@usdoj.gov,nicole.thomas@usdoj.gov,CaseView.ECF@usdoj.gov 

 Michael L Piccarreta, mlp@pd-law.com,bpolowetz@pd-law.com,jkeenan@pd-law.com 

 Kevin M Rapp, Kevin.Rapp@usdoj.gov,CaseView.ECF@usdoj.gov,sally.hawley@usdoj.gov 

 Lee David Stein, lee@mscclaw.com,julie@mscclaw.com,brianne@mscclaw.com 

 Andrew C Stone, andrew.stone@usdoj.gov,CaseView.ECF@usdoj.gov,gaynell.smith@usdoj.gov 

 Stephen M Weiss sweiss@karpweiss.com,vvitolo@karpweiss.com,aconner@karpweiss.com 

 Gregory Michael Zamora, gmz@dkwlawyers.com 

477330-1 

Case 2:18-cr-00422-DJH Document 304 Filed 09/14/18 Page 8 of 8