F ILED U.S. COURT O F APP EALS EL EV EN TH C IRC UIT October 18, 20 06 T HOMA S K. KA HN CLERK

Honora ble Arthur L . Alarc ü n, United States Circuit J udg e for the Ninth Circuit, sitt ing * by desig nation. [PUBLIS H]

IN THE UN ITED STATES COURT OF APPEALS FO R T HE EL EV EN TH CIRC UI T

____ ____ ____ ____ ____ ____ N os. 05- 1366 1, 05- 1395 5, 05- 1401 2

____ ____ ____ ____ ____ ____ D. C. Dock etNo. 9 8- 00 09 9- CR-OR L-19 -DAB UNITED STAT ES OF AMERIC A, Plaintiffs-Appellee, ve rs us SH OL AM W EI SS, D ef en dant. THE STONE W ELL CORPORATION, Cl ai m an t- Appe llant.

____ ____ ____ ____ ____ ____ Appeals fr om

the United State s District Court fo r the Mi ddl e D istri ct

of F lor ida

____ ____ ____ ____ ____ ____ _ (O ct ob er 18, 200 6) Be fo re E D MO N D SO N , BI RC H and A L A RC Ó N , Ci rc uit Jud ge s. * AL ARC ÓN , C ircuit Judg e:2

The S tonewell Corporation (“ Stonewell”) appeals from 1) the Sum

m ary Judg m ent in favor of the G overnm ent, 2) the S econd Am ended Prelim inary Or der of F or fe iture , and 3 ) the F ina l O rd er of F or fe iture , giv ing the U nit ed S ta te s th e pr oc ee ds o f the sa le of

apr ope rty

kno w n a s th e Ce nte r Ma ll (“ the Ce nte r Ma ll p ro p er ty”). Th es e o rd er s ef fe ct u at e t h e D i s tri ct Co u rt ’s o rd ero n St o n ew el l ’s pe ti ti on fil edpu rs ua nt to 18 U.S.C. § 1 96 3 (2 00 0) . The D istrict Court determ ined that Stonewell lacked standing to claim an int er es t i n am ortga ge on the Ce nte r Ma ll pr ope rty ( “ Ce nte r Ma ll m ortga ge ”) and
w as oth er w ise “ una ble to es ta

bli sh any of the c ri te ri a ne ce ssary

to de fe at the G ove rn m en t’ s e nti tle m en t un de r the S ec ond A m en de d P re lim inary O rd er of Forfe iture.” T hus, the District C ourt conclud ed that the Governm ent was e ntitled to “ al l r igh t, ti tle , and i nte re st o f D ef en dant, S hol am

W ei ss, in the pr oc ee ds o f the sale of the Ce nter Mall located in Monm outh County , N ewJersey ,” fre e and clear of any claim of Stonewe ll. T he District C ourt ordered the forf eiture of the Ce nter M al l m o rt g ag e a s a s ub s t i tu t e a s s et p u rs u an tt o 1 8 U.S .C . § 1 9 6 3 (m) ( 2 0 0 0 ). We ag re e w iththe D istri ct

Co urt tha t S ton ew el l l ac ks s tandi ng t o c la im an in te re st i n the m ortga ge on the Ce nte r Ma ll pr ope rty . W e dis m iss thi s a ppe al f or la ck of j ur isd ic tio n.A p e rs on c ann ot h ave a

ve ste d inte re st i n p ro pe rt y if he is f ound to b e a c tin ga s a 1 nominee for

persons whose proper

ty is subject to the forf

eiture. Braxton v. United States , 858 F.2d 650, 652- 53 (11th Cir. 1988). Nominee “ connotes the de leg ation of authority to the nominee in a r epre sentative or nominal c apac ity only , and does not c onnote the tra nsfer or assig nment to the nominee of a ny proper ty in, or owner ship of, the rig hts of the per son nominating him.” Id . at 653 n.6. 3 I Sh olam W ei ss, Mi ch ae l B lutri ch , L y le P fe ff er , and o the rs sc he m ed

to de fr au d th e N at ion al H er ita ge L if e In sur an ce Co m

pany ( “N H L IC ”) of

m ill ion s of dollars and to u se the stolen fund s to comm it further fr auds. T he conspiracy began around 19 90 and was car ried out for nearly

a deca de. Part of

the schem e involv ed launde ri ng m one y

sto le n f ro m N H L IC thr oughase ri es of pr ope rty pur ch as es and resales to corporations set up bynom inees of Mr. W eiss. Stonewe ll was one such 1
nom inee who, through its officer, director and shareholder, Richard G ladston e, knowingl y

becam e involv ed in Mr. W eiss’ s m oney laundering schem e. A On April 29, 1998, a grand j ury in the Middle District of Florida indicted Mr . W ei ss o n c harg es of

vio la tin g th e Ra ck et ee r In fl ue nc ed and C or ru pt O rg an iz at ion s A ct

( “ RI CO ”) , 18 U . S. C. § 19 62 ( 2000 ), and o the r cr im ina l st at ute s, in r el at ionto the loo tin g of N H L IC . O n N ove m

be r 2, 199 9, f

oll ow ing aj ur

y tr ia l, Mr. W eiss and his co-defendants were convicted on charges of violating 18 U. S. C.Mr. W eis s’s co-d efen dan ts were K eit h P ou nd , J an R . S chn eid erm an, Ri char d B. 2 Her man, I sack Rosenbe rg , Nadine A llen, Robert Gorski, Richar d L ang er, South Star M an age m en t , In c. , Ad o s E qu i t i es , In c. , Na t i o n al Ho u s i n g E x ch an ge, In c. , AP X M o rt gage Se rv ic e s, Inc ., Re so ur c e As se t Ma na g e me nt, Inc ., Natio na l Wor ko ut S pe c ia lis t, I

nc ., and Spr ite Equities, Inc. 4 § 196 2, and other cr im inal statutes. T he indictm ent charged that Mr. W eiss used 2 funds sto le n f

ro m N H L IC to pur ch as e ana sse t kn ow n a s th e Ce nte r Ma ll m ortga ge an d h idth e m or tg ag e b y

ass ig ni ng itto pe rs on s ac ti ng as M r. W ei ss ’s no m in ees . T he ind ic tm en t so ught

f or fe iture of

the pr oc ee ds o f Mr . W ei ss’ s lo oti ng unde r 18 U . S . C . § 1 9 6 3 . T h e j u ry r e n d e r e das p e c i a l v e r d i c to f f o r f e i tu r e f o r s e v e r a l i t e ms of pr ope rty , inc lud ing the sum of $3. 1 m ill ionw hic h M r. W ei ss h ad sto le n and used to bu y

the Center M all m ortgage. T he special verdict also forf eited Mr. W ei ss’ s in te re st i n se ve ra l c om panie s, inc lud ing Ce nte r Ma ll, I nc . , Ce nte r Po int Mal l, In c., Ja sp er Pro pe rti es , Inc ., andth e St on ewel l Co rp or at io n. B As a result of the special verdict, the District C ourt for the Middle District of Flo rid a fi le d apre li m in ary or de r of for fei tu re o n No ve m

be r 2, 1 99 9. An am en de d o rd er was fil edon May 12, 2 00 0. Th e o rd er fo rfei te d, int er ali a , “ al l rig ht , ti tl e an d i nt eres t o f de fen da nt , Sho la m W ei ss ” in “ St on ewel l Co rp .” an d $ 3.1
m ill ionw hic h “ sum

r ep re se nts the a m ount

of m one y inv olv ed in [the Ce nte r Ma ll tr an sa ct ion ] . . . that w as obt ai ne d by de fe ndant o r that the de fe ndant c oul dEvidentiary hear ings w ere held August 20, 21, 22 and 23, 2001, and on Nove mber 13 3 and 14, 2001. 5 r e a s o n ab l y fo r e s e e wo u l db e o b t a i n e db y o th e r memb e r s o f

th e . . . c o n s p i r a c y, du rin g t he co ur se of t he cri m in al co nd uc t.” O n Apr il 5, 200 0, Mr . G la dst one f ile d ape tit ionof

inn oc en t owne r in the Mi ddl e D istri ct

of F lor ida f or fe iture pr oc ee din g ( “ G la dst one P et iti on” ), c ont es tin g the f or fe iture of

S ton ew el l. I n hi s pe tit ion , Mr . G la dst one a sse rt ed that he w as the

“ sol e share hol de r, of

fi ce r an d di re ct or ” of

S ton ew el l and the re fo re S ton ew el l shou ld b e sur

re nde re d to him . O n Apr il 27, 200 1, Mr . G la dst one f ile d aMo tio n fo r Sum m ar y Jud gm en t i n th e Mi ddl e D istri ct of F lor ida f or fe iture pr oc ee din g, cl ai m ing S ton ew el l w as asub se que nt b onaf ide pur ch as er

of the a ssi gnm en t of

the Cen te r Mal l m or tg ag e. Ma gis tr at e Judg e Sp au ldi ng h el d e xte nsi ve e vid en tiary he ar ing s inthe Gladstone Petition proceeding. T he testim ony of Mr. Gla dston e, Mr. Pfe ffer , Mr . 3 Blutrich, and Ms. Schneiderm an established th at in early 1997 , Mr . G ladston e w as intro duc ed

to Mr . W ei ss thr ougham utu al a cqua int an ce . Mr . W ei ss s ugge ste d to Mr . G la dst one that he buy an a ssi gnm en t of

the m ortga ge on the Ce nte r Ma ll pr ope rty , ow ne d a t the ti m e by Mr . W ei ss’ s no m ine e, Ja spe r Pr ope rt ie s, I nc . ( “ the Jasper m ortgage”). Mr. W eiss propos ed selling th e Jasper m ortgage to Mr.6

Gladstone at a discount, in exchange for the forgiveness of an unpaid loan Mr. Gladstone had m ade to Ne w C ontend ers, a com pany with w hich Mr. Blutrich wa s af fi liate d. Mr . P fe ff

er tol d M r. G la dst one that the m ortga ge w as non -p er fo rm ing an d th at ta x paym en ts w er e de lin que nt. Mr . G la dst one und er sto od tha t i n or de r fo r him to re co ve r any

f unds f ro m anon -p er fo rm ing m ortga ge , he w oul d have to fo re cl ose on the pr ope rty . Mr . P fe ff er a lso tol d M r. G la dst one , in the pr es en ce of Mr. Blutrich and Mr. W eiss, that there wa s a lis pe nde ns on th e p ro pe rty. O n M ar ch12, 199 7, Mr . G la dst one f orm ed S ton ew el l t o ho ld the as sig nm en t of

the Ja spe r m ortga ge . Mr . G la dst one ha s be en , a t a ll tim es , the sol e of fi ce r, dir ec tor

and s hare hol de r of

S ton ew el l. O n M ar ch20, 199 7, Mr . G la dst one w en t t o M r. P fe ff

er ’ s of fi ce in N ewY ork. T he re , Mr . P fe ff er sig ne d do cum en ts assigni ng the Jasper m ortgage to Stonewell. Mr. Gla dston e told Mr. Pfef fer that he w as ste ppi ng i nto Mr . P fe ff er ’ s sh oe s a s W ei ss’ s no m ine e in c au sin g S ton ew el l to acquire the Center Mall m ortgage. Mr . G ladston e also told Mr. P feff er that Mr . W ei ss h ad

a gr ee d to r et

ur n th e m one y

that M r. G la dst one w as pay ing to pur ch as e th e as si gn m en t. Af ter the assignm ent of the Jasper m ortgage, Mr . W eiss toldMr. Pfe ffer

“ not to worr

y ” because they

“ we re still at som e point go ing to be able to rea lize a lot of m oney

out of the property

and that he was in control of ever ything .” A fter7

the Ja spe r m ortga ge w as a ssi gne d to S ton ew el l, Mr . G la dst one did not se nd any dem and letters to the owner of the Center Ma ll property or begin foreclosure pr oc ee din gs. T he D istri ct

Co urt de nie d th e G la dst one P et iti on, hol din g in ste ad that the G ove rn m en t w as e nti tle d to the Ce nte r Ma ll m ortga ge . T he D istri ct Co urt he ld that Mr. Gla dston e acte d as one of Mr. W eiss’ s nom inees when he cr eated St one w el l t o a cc ep t the Ce nte r Ma ll m ortga ge . B ec au se Mr . G la dst one and St one w el l w er e nom ine es of Mr . W ei ss, S ton ew el l ne ve r ow ne d th e m ortga ge in its ow n r igh t. T he D istri ct Co urt c onc lud ed

that M r. G la dst one did

not have standi ng t o c ont es t the f

or fe iture of

the Ce nte r Ma ll m ortga ge and o rd er ed that the
m ortga ge be f

or fe ite d to the G ove rn m en t. On Dec em

be r 17 , 20 03 , Mr. Gla ds to ne fil eda no ti ce o f ap pe al to th is Co ur t. O n Apr il 15, 200 4, thi s C ourt r ev er se d th e Mi ddl e D istri ct of F lor ida ’ s r

uli ng, in part, hold ing th at it exceeded the scope of its authority in awarding the Center M al l m o rt g ag e t o th e G o v ern m en t . Th e s p ec i al v er d i ct fo rm fr o m Mr . Wei s s ’s cr im ina l tri al dir ec te d th at Mr . W ei ss’ s in te re st i n c er ta in c om panie s in vol ve d in th e Cen te r Mal l m or tg ag e tr an sa ct io n b e fo rfei te d, i nc lu di ng Cen te r Mal l, In c., Center P oint Mall, Inc. , Jasper Properties, Inc. , and Stonewell. The special verdict fo rm di d n ot in cl ud e th e Cen te r Mal l m or tg ag e it se lf a s an ass etth atwas fo rfei te d.Se c tio n 1 96 3( m) pr ov ide s: 4 I f any of the prope rty

descr ibed in subsection (a ), as a result of a

ny act or omission of the de fenda

nt-- (1) c annot be loca

ted upon the exerc ise of due dilig ence ; ( 2 ) h a s b e e ntr an s f

e r r e d o r s o l d t o , o r d e p o s i t e d

w i th , a th i r d p arty; (3 ) h a s b e e n p la c e d b e yon d th e jur isd ic tio n o f t he c ourt ; (4) ha s been substantially diminis hed in value; or ( 5 ) h a s b e e nc o m m i n g l e d w i tho th e r

p r o p e rty w h i c hc ann o tb e d i v i d e d w i th o u td i f

f i c u l ty; the cour t shall order the forf

eiture of any other prope rty

of the de fenda

nt up to the value of any proper ty descr ibed in para g raphs ( 1) through (5).

8 Th i s Co u rts t at edi n a f

o o tn o t e t h at i th ad“ n o o p i n i o n ” o n th e G o v ern m en t ’s ab ili ty to pur sue the m ortga ge a s asub sti tut e as se t “ba se d onthe f or fe iture of

the $3.1 m illion .” U

nit ed Sta tes v . G lad

sto ne , N o. 02- 1684 4, sli p op . a t 5 n. 2 ( 11th Ci r. Apr . 15, 200 4) . T his Co urt a lso he ld the D istri ct Co urt’ s f ind ing s th at

( 1) the
m ortga ge w as ne ve r ana sse t owne d by S ton ew el l and ( 2) S ton ew el l be lon ge d to Mr. Gla dston e and thus was not sub j ect to forf

eiture w ere “ not clearly

err oneous .” Id . a t 10 . On July 20, 2004, the District C ourt issu ed a second am ended prelim inary o rd ero f f o rf ei tu re up o n ap p l i ca t i o n b y th e G o v ern m en t . Th e G o v ern m en t ’s ap pli catio n so ught

f or fe iture of

the pr oc ee ds o f the sa le of the Ce nte r Ma ll property based on a subs titute assets theory pursuant to 18 U. S. C. § 196 3(m ). 4 T he G ove rn m ent a sse rt ed that the pr oc ee ds f

ro m the Ce nte r Ma ll pr ope rty sho uld be f or fe ite d a s an a sse t tra ce ab le to the sum of $3. 1 m ill ionor de re d f

or fe ite d by the j ur y in Mr . W ei ss’ s c ri m ina l tri al . T he or de r furthe r de cl ar ed that any9

ind ivi dua ls c la im ing an in te re st i n th e pr oc ee ds o f the sa le of the Ce nte r Ma ll pr op ert y m us t fi le pe ti ti on s wi th in th irt y da y s. O n Augus t 18 , 200 4, S ton ew el l, but not Mr . G la dst one , c ha lle nge d th e se co nd am en de d pr el im inary or de r of f or fe iture by

f ili ng a pe tit ionof

inn oc en t ow ne r- cl ai m

to pr ope rty

( “ St one w el l P et iti on” ). S ton ew el l c la im ed f ull ow ne rs hip of the m ortga ge and arg ue d th at it w as e nti tle d to the pr oc ee ds o f the sa le of the C e n t e r M a l l p r o p e rty. O n M ar ch11, 200 5, the G ove rn m en t m ove d f or sum m ar y j udgm en t onit s application for a second am ended prelim inary order of f

orfeiture. Its m otion wa s granted by

the District C ourt on May 6, 2005. T he District C ourt conclud ed that the G ove rn m en t w as e nti tle d to the pr oc ee ds f ro m the m ortga ge on the sub sti tut e as se t the or

y and e nte re d ase co nd am en de d pr el im inary or de r of f or fe iture . T he D istri ct Co urt a lso he ld tha t S ton ew el l l ac ke d st an din g to br ing ape tit ionbe ca use (1 ) the Ce nte r Ma ll m ortga ge w as not an a sse t of

S ton ew el l and ( 2) Mr . G la dst one ad equa te ly

r ep re se nte d S ton ew el l’ s in te re sts w he n he f ile d th e Pe tit ionin Apr il 2000 . S ton ew el l ha s ti m el y appe al ed f ro m the D istri ct

Co urt’ s j udgm en t. C Inase parate a ct ion , D onna L . W ill iam s, I nsur an ce Co m m iss ion er f or the St at e of D el aw ar e an d st at

uto ry r ec ei ve r fo r N H L IC ( “ Re ce ive r” ), br ough t a c ivi lDue to NHL I C’s insolvency , the Dela war e Chanc ery

Court entere d a Reha

bilitation 5 Or de r, on the Re c e ive r’ s r e qu e st, on Ma y 25 , 1 99 4, dir e c tin gthe Re c e ive r t o ta ke imm e diate possession and control of a ll NHL I C assets. On Novembe r 21, 1995, the De lawar e Chanc ery Court entere d a L iquidation and Injunction Order repla cingthe Rehabilitation Order . The L iquidation Order a

uthorized the Receive r to sue on beha lf of NHL I C and for the benef it of NH L I C’ s p oli c y

ho lde rs . 10 ac tio n a ga ins t M r. P fe ff

er and o the r as soc ia te s and n om ine es of Mr . W ei ss ( “ the L PD Ade fe ndants ”) in the U nit ed S ta te s D istri ct

Co urt f or the S outhe rnD istri ct

of New Yorkin Apri l 1 99 6. Se e W il li ams v. LPDA , N o. 96-Civ.- 3079 (CL B) (S . D . N . Y . f

ile d Apr il 1996 ). T he sui t so ught ti tle to vari ous sto le n a sse ts, 5 inc lud ing the Ce nte r Ma ll pr ope rty . O n Augus t 15 , 199 6, the Re ce ive r fi le d a notice of lis pe nde ns p e rt a i n i n g t o th e C e n t e r M a l l p r o p e rty i n M o n mo u th C o u n ty, N e wJ e r s e y. In Novem

ber of 1997, the Rec eiver in the W il li ams a ct ionsou ght

le av e to se ll the Ce nte r Ma ll pr ope rty f re e of a ll lie ns and m ortga ge s ba se d onthe N oti ce of Li s P en de ns filed in Ne w Jer sey . On N ovem ber 7, 1997 , the c ourt in the W il li ams ac tio n is sue d an O rd er

to Sh owCa

use w hy an or de r shou ld n ot b e m ad e an d en te re d auth or iz ing the Re ce ive r to: ( a) e nte r int o, e xe cu te and p er fo rm the contract of sale f

or the Center Point Mall; (b) enter into, e xecute and perform such oth er and f urthe r ag re em en ts and i nstrum en ts a s m ay be ne ce ssary

to ac co m pli sh the sale of the property ; and (c) se ll the property fre e and clear

of the Jasper Mor tga ge w hic h a tta ch ed

to the pr oc ee ds o f the sa le pe ndi ng the de te rm inatio n of11

w h e th e r th i s mo rt g a g e c o n s t i tu t e s av a l i dan de n f o r c e ab l e l i e n o n th e p r o p e rty. O n N ove m

be r 13, 199 7, S ton ew el l w as not if ie d of the a ct ionby

c opy of the O rd er to Sh owCa

use . O n N ove m

be r 14, 199 7, the L PD Ade fe ndants in the W il li ams a ct ionf

ile d an O ppos iti on t o th e Re ce ive r’ s a ppl ic at ionto se ll the property fre e and clear

of all liens. In the oppo sition , the L PD A def endants argued that allowing the Receiver to sell the property would infringe on the right s of third pa rty m or tg ag ees , su ch as S to ne well , who were n ot be fo re t he co ur t. O n N ove m

be r 18, 199 7, S ton ew el l f ile d anon -p ar

ty m em or an dum

of lawin the W il li ams a ct ion , in oppo sit ionto the Re ce ive r’ s a ppl ic at ionto al lowthe sa le of the pr ope rty

f re e an d c le ar

of m ortga ge s. O n N ove m

be r 20, 199 7, the c ourt i n th e W il li ams a ct ionor de re d S ton ew el l t o sh owc au se w hy an or de r shou ld n ot b e en t er edau th o ri zi n g th e R ec ei v ert o s el l th e p ro p er ty fr ee an dcl ea r o f S t o n ew el l ’s
m ortga ge , w ithsuc h m ortga ge to atta chto the pr oc ee ds o f the sa le pe ndi ng the de te rm inatio n of

w he the r the m ortga ge c onst itu te s ava lid and e nf or ce ab le li enon th e p ro p er ty. OnNo v emb er2 0 , 1 9 9 7 , o ra l ar g u m en twa s h ea rdo n th e R ec ei v er ’s Su ppl em en ta l O rd er

to Sh owCa

use . O n D ec em

be r 2, 199 7, S ton ew el l f

ile d a supp le m en ta l m em or an dum of lawin oppo sit ionto the Re ce ive r’ s a ppl ic at ionto allow sale of property

fre e and clear

of m ortgages in the W

il li ams act io n. On D ecem

ber 3, 1997 , the W

il li ams c ourt gr an te d le av e to the Re ce ive r toOn Novembe r 20, 2000, the W illiams c ourt

g ra nte d St on e we ll’ s mo tio n f or an inte ri m 6 stay pendingthe outcome of

the cr iminal and forf

eiture pr ocee dings a g ainst Mr. Weiss. S ince that date, c ounsel for Stonewe ll has filed per iodic status reports in the W illiams matter, updating that court a s to the status of these for feiture proce eding s. 12 se ll th e Cen te r Mal l p ro pe rty free an d c le ar o f al l l ie ns an d m or tg ag es . On De cem ber 4, 1997 , in re spon se to a request by counsel for Stonewe ll, the W il li ams co urt e nte re d asup ple m en ta l or de r, dir ec tin g th e Re ce ive r to d ep osi t the pr oc ee ds of the sa le of

the Ce nte r Ma ll int o an in te re st b eari ng e sc ro wa cc ount ; and tha t no w ith dr aw al s m ay

be m ad e fr om

the e sc ro wa cc ount

w ith out f urthe r or de r of

the Co urt onnot ic e to the part ie s to thi s a ct ionand t o S ton ew el l. T he Re ce ive r sol d the Ce nte r Ma ll fo r ove r $2. 2 m ill ionto CRL Re al ty A sso ci at es , L . P. , pla ci ng the ne t pr oc ee ds o f $1. 8 m ill ionin ane sc ro wa cc ount . 6 II St one w el l c ont en ds, w ith out c iti ng any

auth or ity , that this Co urt l ac ks j ur isd ic tio n to he ar

thi s a ppe al be ca

use the U nit ed

S ta te s D istri ct

Co urt, S outhe rnD istri ct

of N ewY ork, ha s e xc lus ive j ur isd ic tio n ov er the P ro ce ed s of the S al e of

the Ce nte r Ma ll Pr ope rty w hic h are be ing h e l di ne s c r o wp e n d i n g th e o u t c o me o f th e Wi l l i a ms ac tio n, and the D istri ct

Co urt do es not

have j ur isd ic tio n ov er t he m

as a m at te r of

law.

“ Jurisdictio nal issues are question s of lawwhich w e decide de novo .” Malowney
v. F ed
. Co lle ct ion D ep osi t G roup , 19 3 F .3d13 42 , 13 46 (11 th Cir . 19 99 ).Section 1963(j) provide s: “[t] he district cour ts of the United States shall have 7 jurisdiction to enter orde rs as provide d in this section without reg ard to the loc ation of any proper ty which may

be subjec t to forfe iture under this section or which ha s been or dere d forf eited under

this section.” 13 St one w el l’ s c ont en tio n th at the D istri ct

Co urt do es not

have j ur isd ic tio n ov er t he pro ceed s fr om

th e sa le of t he Cen te r Mal l p ro pe rty m is st at es th e is su e. T he ins tant f

or fe iture pr oc ee din gs are not in rem pro ceed in gs . United States v. G ilb er t , 244 F . 3d 8 88, 919 ( 11th C ir . 200 1) ( “ Cr im ina l f or fe iture und er

RI CO is in pe rso nam . ”) . T he D istri ct Co urt ha d j ur isd ic tio n ov er thi s in pe rs on am crim inal fo rfei tu re p ro ceed in g p ur su an t t o 1 8 U.S.C. § 32 31 . See 18 U . S. C. § 32 31 ( 2000 ) (“ T he dis tr ic t c ourts o f the U nit ed S ta te s sh al l have or igi na l j ur isd ic tio n, e xc lus ive of th e co ur ts of t he Sta te s, o f al l o ffen se s ag ai ns t t he laws of t he Uni te d S ta te s.”) . Se ct ion196 3(

j ) of T itl e 18 o f the U nit ed

S ta te s C ode c onf

er s j ur isd ic tio n up on the D istri ct Co urt t o e nte r or de rs r el at ing to pr ope rty sub j ec t t o f or fe iture , w ith out re gard to the loc at ionof

that pr ope rty . T his Co urt ha s j ur isd ic tio n purs uant t o 28

7 U. S. C. § 129 1 (2000). The W il li ams a ct ion , a lso an in p er sona m suit, wa s filed in the District Co urt f or the S outhe rnD istri ct

of N ewY ork purs uant t o th at c ourt’ s di ve rs ity j ur isd ic tio n un de r 28 U . S. C § 133 2 ( 2000 ). T he Re ce ive r fo r N H L IC br ough t su it ag ai nst pe rs ons an d e nti tie s, not pr ope rty , se ek ing r ec ove ry of f unds be lie ve d toTh e pr oc e dura l e ff e c t of a fi na l or de r a

nd jud g me nt o f f

or fe iture of

the Ce nte r M a ll 8 mortg ag e, as a

substitut e asse t for the $3.1 million forfe ited by the jury in Mr. Weiss’s criminal trial, is that the Gover

nment will be in a position to seek enfor ceme nt of that judg ment with the court in the W

illiams action, which is holdingthe Center Ma ll property proce eds in escr ow, should it choose to do so. 14 have be ensto le n f

ro m N H L IC . T he f

ac t tha t the c ourt i n W

il li ams is ex er ci sin g co ntr ol o ve r the pr oc ee ds f ro m the sa le of

the Ce nte r Ma ll pr ope rty doe s no t tr an sf orm that su it int o an in rem p ro ce ed i n g o r a l t erth e b as i s o f t h e c o u rt ’s juri sd ic ti on . See U

nited Sta tes v. $174 ,206.00 in United States Curr ency , 320 F. 3d 65 8, 661 (6th Cir. 2003) (holding that the district court properly exerc ised j ur isd ic tio n ov er

ac ri m ina l f

or fe iture a ct ionw he re astate c ourt, in a re la te d st at e co urt f or fe iture pr oc ee din g, ha d in p er sona m j urisdictio n over the sam e curr ency subject to forf

eiture). 8 III The G overnm ent contends that this Court do es not have jurisdiction to hear this appeal because Stonewell lac ks stand ing to bring a petition of innocent-owner cl ai m ing an in te re st i n th e Ce nte r Ma ll m ortga ge . S tandi ng i s athr es hol d is sue that i s su bj ec t t o de novo rev ie w. R eg ion 8 F orest S erv. T im be r P urc hase rs Council v. A lcock , 993 F . 2d 8 00, 806 ( 11th C ir . 1993 ); U nit ed Sta tes v . $38, 000 in U. S. Currency , 816 F . 2d 1 538, 154 3 ( 11th C ir . 198 7) . I f a cl ai m an t l ac ks Art ic le II I standi ng t o c ha lle nge af or fe iture , thi s C ourt do es not have j ur isd ic tio n to15

co ns id er t he cla im . $38,000 in U. S. Currency , 816 F . 2d at 15 43 ( “ It is w el l established th at in order to contest a forf eiture, a claim ant first m

ust dem onstrate a sufficient interest in the property to give him

Ar ticle III standing ; otherwise, there is n o ‘ ca se or

c ontro ve rs y , ’ in the c onst itu tio na l se nse , c ap ab le of a dj udi catio n in the f ed er al c ourts. ”) . T he S upr em e Co urt ha s in str uc te d th at : [t] he party

invok ing federal j urisdictio n bears the burden of establishin g [standing ] . Since they are not m ere ple ad ing r equir em en ts b ut r athe r anind isp en sa ble part of the pla int if

f’ s c as e, e ac h e le m en t [ of standi ng] m

ust be supp orted in the sam e w ay as any other m atter on w hich th e p la in ti ff b ears th e b ur de n o f pr oo f, i.e . , w iththe m anne r an d de gr ee of

e vid en ce r equir ed

a t the suc ce ssi ve sta ge s of the li tig at ion . Lu jan v . D ef

en de rs o f W ild lif e , 504 U . S. 555 , 561 ( 1992 ) (c itatio ns o m itt ed )

. T he G ove rn m en t m ai nta ins that S ton ew el l l ac ks s tandi ng t o c ha lle nge the fo rf ei tur e of the Ce nte r Ma ll pr ope rty pr oc ee ds b ec au se S ton ew el l i s bo und by the District Court’ s ruling in the Gla dston e Pe tition proceedings that Stonewell never ow ne d th e Ce nte r Ma ll m ortga ge . T he gov er nm en t arg ue s th at

und er the doc tr ine of c oll at er al e sto ppe l, S ton ew el l i s pr ec lud ed f ro m r el iti ga tin g is sue s de ci de d by the D istri ct

Co urt whe n it

de nie d th e G la dst one P et iti on, inc lud ing the iss ue of
w ho o w ne d th e Ce nte r Ma ll m ortga ge . T he D istri ct Co urt he ld tha t the doc tr ine of co l l at er al es t o p p el b arre dSt o n ew el l fr o m re l i t i g at i n g th e o wn er s h i p i s s u e. We16

rev ie w de novo a district court’ s decision abo ut whether c ollateral estoppel ap pl ie s. Q uin n v . M

onro e Co unt

y , 33 0 F .3d13 20 , 13 28 (11 th Cir . 20 03 ). A

“ dis tr ic t c ourt’ s f

ac tua l de te rm inatio ns unde rl y ing it s le ga l c onc lus ionare uph el d unless clearly

err oneous .” Id

.

“ Co llate ra l e sto ppe l bars r el iti ga tio n of an is sue pr ev iou sly

de ci de d if

the p a rty a g a i n s twh o m th e p r i o r d e c i s i o n i s a s s e rt e dh a d‘af u l l an df a i r o p p o rtu n i ty’ to litig ate that issue in an earlier case. ” B loh m v . Co m m ’r of In te rnal

R ev en ue , 994 F. 2d 1 542, 155 3 ( 11th C ir . 199 3) ( quot ing A lle n v . M cC urr y , 449 U . S. 90, 94- 95 ( 1980 )) . T he party

se ek ing to inv oke c oll at er al e sto ppe l m ust e sta bli sh tha t ( 1) the iss ue in the pe ndi ng c as e is i de nti ca l t o th at de ci de d inapr ior

pr oc ee din g; ( 2) the iss ue w as ne ce ssari ly de ci de d inthe pr ior

pr oc ee din g; ( 3) the party to be es top pe d w as aparty

or w as a de quate ly

r ep re se nte d by

aparty in the pr ior pr oc ee din g; and ( 4) the pr ec lud ed iss ue w as a ct

ua lly li tig at ed in the pr ior pr oc eed in g. B loh m , 994 F . 2d at 15 53 ( ci tin g In re R aif ord , 695 F . 2d 5 21, 523 (11th Cir.1983)). T he iss ue be fo re the D istri ct Co urt i n th e G la dst one P et iti on, the “pr ior pr oc ee din g” f

or c oll at er al e sto ppe l purp ose s, w as ide nti ca l t o th e iss ue in thi s c as e: nam el y , the ow ne rs hip of the Ce nte r Ma ll m ortga ge . I n a dj udi catin g th e G la dst one P et iti on, the D istri ct Co urt ne ce ssari ly

de ci de d th e ow ne rs hip iss ue17

be ca use it ha d to de te rm ine w hic h a sse ts, if any , S ton ew el l owne d inor de r to de ci de w he the r Mr . W ei ss h ad any int er es t i n S ton ew el l. I n th e G la dst one P et iti on ruling, the District C ourt determ ined that Mr. G ladston e, through Stonewe ll, w as acting as Mr. W eiss’ s nom inee. Beca use a person or entity

cannot have a vested int er es t i n pr ope rty

if that pe rs on o r en tity

is fo und to b e ac tin g a s anom ine e fo r so m eo ne who se pro pe rty is s ub ject t o t he for fei tu re, B rax ton , 858 F . 2d at 65 2- 53 & 6 53 n . 6, the D istri ct

Co urt he ld tha t S ton ew el l ha s no ve ste d in te re st i n th e Center Ma ll m ortgage. T he r ec or d a lso de m onstrate s th at the iss ue w as a ct

ua lly li tig at ed in the pr ior pr oc ee din g, a s e vid en ce d by the le ngthy

te sti m ony

of Mr . G la dst one and others at the evidentiary

hearings held before Magistrate Judge Spaulding. In de ny ing the G la dst one P et iti on, the D istri ct Co urt he ld, in part , that: [ w ]i th i n th e c o n t e x to f

th e C e n t e r

M a l l mo rt g a g e s c a m, the evidence clear ly

ref lects that Richard G ladston e, th ro u g h St o n ew el l Co rp o ra t i o n , a ct edas Sh o l am W ei s s ’s nom inee; [w ] hen Gladstone caused Stonewell to take an as sig nm en t of

[ the Ce nte r Ma ll] m ortga ge in 1997 , he an d S ton ew el l no t on ly

a ct ed a s anothe r nom ine e of W eiss, but also Stonewell as a ssign ee stood in th e shoes of the a ssi gnor

and t ook the m ortga ge sub j ec t t o a ll the de fe ct s kn ow n to the a ssi gnor , in thi s c as e Sh olam W ei ss ac tin g th ro ugh Ja spe r an d P fe ff er ; and,The jury forf eited De fenda

nt Weiss’s int ere st in the St onewe ll Corporation so the 9 Di str ic t Co ur

t ha d to de te rm ine , in

the e arl ie r P e tit ion , who owne d St on e we ll a nd wh e the r We iss ha d a n inte re st i n St on e we ll. 18 . . . the evidence shows that [the m ortgage] wa s not an as se t owne d by

S ton ew el l. G la dst one , usi ng this co rp o ra t i o n , a ct edas Wei s s ’s n o m i n ee t o h i d e We i s s ’s interest in this m ortgage. T he asset, the m ortgage, w as never owned by

Stonewe ll in its o wn right. Ther efore, St o n ew el l h as n o s t an d i n g t o co n t es tth e M ag i s tra t e’s fi ndi ng tha t the m ortga ge on, and the pr oc ee ds o f the sa le of , the Ce nte r Ma ll Pr ope rty sho uld be f or fe ite d to the U nit ed S ta te s. In the order on appeal, the District C ourt conclud ed that Stonewell lac ked standi ng t o c la im

an in te re st i n th e Ce nte r Ma ll m or tga ge and w as c oll at er al ly estoppedfrom

relitigating the iss ue of its ownership because [t ] he iss ue of

the ow ne rs hip of

the Ce nte r Ma ll m ortga ge w as ne ce ssari ly

de ci de d and a ct

ua lly li tig at ed in the proceeding on Gladston e’ s Petition because it was ne ce ssary f or the Co urt t o de te rm ine the ow ne rs hip [i ssu e] in de te rm ini ng the ow ne rs hip of the S ton ew el l Co rp or at ionand the a sse ts o f the S ton ew el l C or por at ion , an d e xte nsi ve e vid en ce w as pr es en te d by G la dst one and the G ove rn m en t onthe se iss ue s. 9 A ddi tio na lly , the D istri ct Co urt he ld tha t “ St one w el l w as a de quate ly re pr es en te d by

G la dst one in the e ar lie r pr oc ee din g” be ca use S ton ew el l i s ac los el y he ld c or por at ion . Mr . G la dst one both a lle ge d inhis pe tit ionand t es tif ie d a t the evidentiary

hearing, held in connection therewith, that he is the sole officer,19

dir ec tor and s hare hol de r of

S ton ew el l. S ton ew el l r ai se d th e sam e al le ga tio ns i n it s pe ti ti on th atMr. Gla ds to ne rai se d i n h is pe ti ti on . The D istrict Court addressed the evidentiary issues and correctly

concluded that the pur

porte d a ddi tio na l e vid en ce S ton ew el l w oul d pr es en t i n su ppor t of it s posi tio n w as e ith er

ina dm iss ibl e or

unp er sua siv e. F or

e xam ple , the a ff

idavit of Matth ewD oll ing er , a tto rn ey f or S ton ew el l, is ina dm iss ibl e be ca use it a lle ge s f ac ts ab out w hic h M r. D oll ing er

la ck s pe rs ona l kn ow le dge . S ton ew el l a lso of fe re d in supp ort of

it s pe tit ion , the de posi tio n te sti m ony of I sa ac N uss entake n inthe W il li ams ac t i o n . S t o n ew el l ’s co u n s el ad m i t t ed , h o we v er , t h at Mr . Nu s s en ’s testim ony in the W il li ams a ct ionw as sub stanti al ly the sam e as his te sti m ony a t the cr im ina l tri al , w hic h th e Ma gis tr at e Judg e co nsi de re d w he n ana ly zi ng the G la dst one P et iti on. St one w el l c ont en ds tha t the doc tr ine of c oll at er al e sto ppe l do es not appl y to str ip i t of standi ng i n th is c as e be ca use the D istri ct

Co urt’ s c onc lus ion s inde ci din g the Gladstone Petition are dicta. A ccording to Stonewell, this Court’ s earlier de te rm inatio n th at

“ the dis tr ic t c ourt ha d no j ur isd ic tio n to aw ar d th e m ortga ge to the U nit ed

S ta te s be ca

use the j ur

y did not f ind that the m ortga ge w as f

or fe it, and th e d i s tri ct co u rtd i dn o ti n cl u d e t h e f o rf ei tu re o f t h e mor t g ag e i n Wei s s ’s sentence” constitutes a “ m andate” fr om the Ele venth Circuit, m aking th e D istrictSection 1963( l) p ro vid e s in re le va nt p art : 10 (1) F ollowing the e ntry

of an or der of

forf eiture unde r this section, the United State s sh a ll p ub lis h n oti c e of the or de r a

nd of its int e nt t o d isp os e of

the pr op e rt

y in s uc h ma

nn e r a s th e At

tor ne y Ge ne ra l ma

y dir e c t. T he Go ve rnme nt m ay a lso , to the extent practica

ble, provide dire ct written notice to any person known to have a lle g e d a n inte re st i n th e pr op e rt

y that is the su

bje c t of the or de r o f f

or fe iture a s a substitut e for

published notice as to those pe rsons so notified. (2 ) Any pe rs on , o the r t

ha n th e de fe nd ant, a sse rt inga le g a l inte re st i n p ro pe rt

y w h i c hh a s b e e n

o r d e r e d f o r f e i t e d t o th e U n i t e d

S t at e s p ur s u an tt o th i s s e c t i o nm ay, within thirty

day s of the fina l publication of notice or his re ceipt of notice under pa ra g ra ph(1 ), wh ic he ve r i s e arl ie r, pe tit ion the c ourt fo r a he ari ngto a dju dic ate the va lid ity

of his a lle g e d inte re st i n th e pr op e rt y . T he he ari ngsh a ll b e he ld befor e the c ourt alone, w ithout a jury . . . . (6) I f, af ter the he aring , the cour

t determines that the pe titioner has established by a pr e po nd e ra

nc e of the e vid e nc e that– ( A ) th e p e t i t i o n e r

h a s a l e g a l r i g h t , t i t l e , o r

i n t e r e s ti nth e p r o p e rty, and such r ight, title, or intere st render s the order of for feiture invalid in whole or in part be cause the rig ht, titl e, or inter est was ve ste d in the pe tit ion e r r athe r t

ha n th e de fe nd ant o r w a s su pe ri or to any rig ht, titl e, or inter est of the de fenda nt at the time of the commission of the acts which g ave r ise to the forf eiture of the proper ty under this sec tion; or (B ) t he pe tit ion e r i s a

bo na fi de purc ha se r f

or va lue of the ri g ht, tit le , o r i nte re st i n th e pr op e rt y and wa s at th e tim e of

purc ha se re a so na bly wi tho ut c a

us e to b e lie ve that th e pr op e rt y wa s su bje c t to 20 Co urt’ s c onc lus ion s inthe G la dst one P et iti on r uli ng d ic ta . T his arg um en t i s no t pe rs ua si ve . T his Co urt di d no t i ssu e a “ m an da te ” to the D istri ct Co urt, nor

did it co nc lud e that the D istri ct Co urt l ac ke d j ur isd ic tio n to de te rm ine the ow ne rs hip of the Ce nte r Ma ll m ortga ge . I nst ea d, thi s C ourt “ re ve rs e[ d] that po rt ionof the dis tr ic t c ourt’ s j udgm en t, e nte re d un de r § 19 63, giv ing the m ortga ge to the 10fo rf e iture un de r t

his se c tio n; the cour t shall amend the orde r of f orfe iture in ac corda

nce w ith its deter

mination. . . . The spec ial verdic t of forf eiture did not spec ifically find that the mortg ag e wa s 11 forf eitable but instead f

ound that “the g overnme nt has proven . . . that the de fe nd an t’ s in te re st in the followingproper

ty is forfe itable bec ause the proper ty , Center Ma ll, I nc., . . . wa s . . . acquire d or maintained in violation of [18 U.S.C. § 1962 and] . . . constituting, or de rived fr om, any proce eds of r acke teer ing” and that $3,100,000 “r epre sents the amount of money involved” in that rac ketee ringactivity . 21 Uni te d S ta te s.” G lad

sto ne , N o. 02- 1684 4, sli p op . a t 11 . T his Co urt up he ld the 11 District Court’ s finding that Stonewell did not and had n ot owned the m ortgage as

“ not clearly

err oneous ,” id . at 10, and “ express[ed] no opi nion . . . on the United States’ s ability

to pursue the m ortgage based on the forfeiture of the $3. 1 m illion .” Id . at 5 n.2 . Stonewell a lso argues that it has stan ding because, under W arth v
. Se ldi n , 422 U . S. 490 ( 1975 ), it

is en tit le d to have the c ourt de ci de the m er its of it s c la im because the invasion of legal rights created by the forfe iture statutes create s Arti cl e III s ta nd in g. Id

. a t 50 0 ( ci tin g Li nd

a R. S. v. Rich ar d D. , 410 U . S. 614 , 617 n. 3 ( 1973 ) (e xpl ai nin g th at “ Co ngr es s m ay

e na ct statut es c re at ing le ga l r igh ts, the inv as ionof

w hic h c re at es standi ng, e ve n th oughno i nj ur y w oul d e xis t w ith out

the statut e” ); se e als o Traff

ic ant e v. M

etropo litan L ifeI

ns. Co
. , 409 U . S. 205 , 212 (1 972) ( Whit e, J. , c onc ur ri ng) ( expla ini ng tha t be ca use Co ngr es s in te nde d to define standing under the Civil Rights Ac t of 1964 as broadl y as possib le under22

A rt ic le I II , the F ai r H ousi ng A ct c onf er re d st an din g to sue on any r es ide nt o f the hous ing uni t who h ad

be eninj ur ed

by r ac ia l di sc ri m inatio n inthe m an ag em en t of th e fac il it ie s) . These c ases do not su pport Stonewell’ s theory . While it is true that

“ Congress m ay

enact statutes cre ating legal rights , the invasion of which cre ates standin g, even though n o injury would exist without th e statute,” Li nda R
. S. , 410 U . S. a t 61 7 n. 3, “ [a ] f

ed er al c ourt’ s j ur isd ic tio n . . . c anbe inv oke d on ly w he n th e pla int if f him se lf ha s su ff er ed ‘ som e thr eate ne d or

a ct ua l i nj ur y r es ult ing f

ro m the putativ ely

illegal action . . . .’ ” W

arth , 422 U . S. at 49 9 ( quot ing Li nd a R. S . , 410 U . S. a t 61 7) . A s th e Su

pr em e Co urt po int ed

out in Li nda R
. S. , “ [e ] ve n th oughthe past law of standing is so clu ttered and confused that alm ost every proposi tion h as som e ex ce pti on, the f

ed er al c ourts h av e co nsi ste ntl y a dhe re d to one m aj or pr opos iti on w ith out

e xc ep tio n: One w ho ha s no int erest of his own at stake alw ay s la ck s standi ng .” Li nd

a R. S . , 410 U . S. a t 61 7 n. 4 ( quot ing K . D av is, Adm in is tra ti ve Law Text42 8- 42 9 (3 d e d. 1 97 2) ) (em ph as is ad de d) . St one w el l ha s no t de m onstrate d th at it ha s an in te re st i n th e Ce nte r Ma ll
m ortga ge and the re fo re la ck s st an din g to br ing thi s a ppe al c ha lle ngi ng the f o r f e i tu r e o f th e p r o c e e d s o f

th e s a l e o f

th e C e n t e r

M a l l p r o p e rty. T his appe al is D IS MI SS E D f or la ck of j ur isd ic tio n.