Opinion ID: 493334
Heading Depth: 2
Heading Rank: 4

Heading: seizure and retention of assets

Text: 37 Van Cauwenberghe argues that the district court erred in denying his motion under Fed.R.Crim.P. 41(e) for the return of the property that was seized from his Swiss accounts. He argues that the property was illegally seized under Article XII of the Treaty and under the fourth amendment of the United States Constitution. In addition, Van Cauwenberghe argues that the district court had no statutory or other legitimate basis on which to retain his property in order to ensure payment of restitution. 38 To prevail on a Rule 41(e) motion, a criminal defendant must demonstrate that (1) he is entitled to lawful possession of the seized property; (2) the property is not contraband; and (3) either the seizure was illegal or the government's need for the property as evidence has ended. See Sovereign News Co. v. United States, 690 F.2d 569, 577 (6th Cir.1982), cert. denied, 464 U.S. 814, 104 S.Ct. 69, 78 L.Ed.2d 83 (1983); United States v. Hubbard, 650 F.2d 293, 303 (D.C.Cir.1980); Fed.R.Crim.P. advisory committee note; 3 C. Wright, Federal Practice and Procedure Sec. 673, at 761-65 (2d ed. 1982). 39 There is no dispute that Van Cauwenberghe was the rightful owner of the property at the time it was seized from his Swiss bank accounts. 4 However, he no longer owns the property. On limited remand from this court, 5 the district court found, and Van Cauwenberghe admits, that he irrevocably transferred full title to the property to his own attorney and counsel for the United States, acting jointly, to satisfy his restitution condition. Thus, although the district court may have been under a duty to return property that neither was contraband nor had any evidentiary value, 6 see Hubbard, 650 F.2d at 303 & n. 26, Van Cauwenberghe can no longer demonstrate that he is entitled to lawful possession of the property and, therefore, no longer satisfies the first requirement under Rule 41(e). 40 Van Cauwenberghe argues that the transfer of property was not made voluntarily, but was made at the order and direction of the district court. He contends that under these circumstances he should not be deemed to have waived his challenges to the legality of the seizure. We have considerable difficulty accepting the predicate of this argument. First, the record below shows that Van Cauwenberghe sought and willingly complied with the order, filed on January 23, 1986 after the district court entered the guilty verdict, in order that he be permitted to leave the country and return to Belgium. Under the terms of his probation, the district court required Van Cauwenberghe to remain in this country until he satisfied his restitutionary obligation. The order itself declares that counsel for Van Cauwenberghe and the government jointly submit the foregoing proposed order and request approval by the Court. Order, Jan. 23, 1986, at 2. 41 Second, while Van Cauwenberghe's appeal was pending, he lodged an emergency motion in this court in which he argued strenuously that he should be permitted to return to Belgium (which does not extradite its nationals) because he had irrevocably transferred full title to the assets to his attorney and the government's counsel for liquidation to satisfy his restitutionary obligations. The motions panel remanded to the district court for further findings to ensure that an irrevocable transfer had in fact occurred and that the assets would cover his restitutionary obligation. The district court made such findings and concluded that, since the assets were sufficient, the defendant could return home. It thus comes as something of a surprise that, after the avowals in his affidavit accompanying the emergency motion, in his petition for rehearing the defendant is still claiming entitlement to lawful possession of the assets. 42 In light of these circumstances, the record does not support Van Cauwenberghe's contention that he did not transfer title to the assets voluntarily. Absent a showing that the individual requesting return of property under Rule 41(e) is entitled to its lawful possession, the property may not be released to him. Fed.R.Crim.P. 41(e); see United States v. King, 528 F.2d 68, 69 (9th Cir.1975) (per curiam). Although Van Cauwenberghe remains the beneficial owner of the assets and any proceeds derived from their sale, he has not demonstrated entitlement to lawful possession of the assets. Return of the assets under Rule 41(e) is therefore inappropriate. 43 Even if we were to conclude that Van Cauwenberghe could substantiate his claim of lawful possession, we believe that we would reach the same result. Assuming that the property was illegally seized under the treaty and the fourth amendment, return of the property might nonetheless be barred by the existence of a civil writ of attachment filed against the property. See United States v. Francis, 646 F.2d 251, 263 (6th Cir.) (denying return of illegally seized property where state tax lien had been placed on the property), cert. denied, 454 U.S. 1082, 102 S.Ct. 637, 70 L.Ed.2d 616 (1981); United States v. Freedman, 444 F.2d 1387, 1388 (9th Cir.1971) (denying return of illegally seized property because of pending IRS lien); Guerra v. United States, 645 F.Supp. 775, 779-80 (C.D.Cal.1986) (same). However, because of our holding above, we express no view on whether the seizure was illegal or whether the property would have been returnable to Van Cauwenberghe despite the civil writ of attachment. We do not hold that Van Cauwenberghe lacks standing to challenge the legality of the seizure; rather, resolution of that question is unnecessary to the disposition of his Rule 41(e) challenge on appeal.