Opinion ID: 3064630
Heading Depth: 3
Heading Rank: 1

Heading: Forfeiture of the Club

Text: What Park Place did not know was that LCP had financed more than twelve million dollars of the initial investment using the proceeds of a drug trafficking ring. United States v. Gilbert, 244 F.3d 888, 894 (11th Cir. 2001). The United States discovered this fraudulent activity following a money laundering investigation, and in 1987, indicted various individuals, including some LCP partners, in the Southern District of Florida. In March 1990, certain LCP partners were convicted of laundering the profits of a drug-smuggling business. In April 1990, a jury returned a verdict in favor of the United States in a subsequent forfeiture proceeding pursuant to the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1963. In response, the Southern Dis- 2 In full, section 5.03 provides: 5.03 Arbitration. Any dispute or controversy arising under, out of, in connection with, or in relation to this Agreement, or any breach thereof, or in connection with the dissolution thereof, shall be determined and settled by arbitration in Los Angeles County pursuant to the rules of the American Arbitration Association. Any award rendered therein shall be final and binding on all of the parties, and judgment may be entered thereon in any court of competent jurisdiction in the State of California. 3 By 1990 the Club was reportedly the largest card club in the world. The Club differs from a Las Vegas-style casino in that the house has no stake in the game, but makes its money by charging players a fee for playing. See United States v. Gilbert, 244 F.3d 888, 893 n.5 (11th Cir. 2001). UNITED STATES v. PARK PLACE ASSOCIATES 4673 trict of Florida entered an order forfeiting the entire Club to the United States in rem and freezing all distributions to LCP, Park Place, and their respective partners. In either May or September 1990, the district court confirmed that Park Place was an innocent owner and returned its thirty-five percent interest in the Club. The United States retained its interest in LCP following the forfeiture proceedings. By August 1993, as the result of negotiated settlements with LCP partners, the United States ultimately obtained a fifty-five percent interest in LCP. Consequently, the United States controlled the LCP partnership and, because LCP was the majority shareholder in the venture, possessed effective control of the Club under the terms of the JVA. From 1990 to 1999, the United States managed its interest in LCP—and the Club—through a series of trustees appointed by the Southern District of Florida on its behalf. The United States continued its control of the Club’s management until it sold its LCP interests in May 1999.4 According to Park Place, the Club’s value declined dramatically during the period the United States managed it.