Opinion ID: 3012321
Heading Depth: 2
Heading Rank: 3

Heading: The Claimants’ Burden.

Text: Although Claimants make several arguments in opposing forfeiture, most if not all of those arguments can be reduced to a subset of Claimants’ main contention that IFSNJ’s activities in New Jersey cannot be illegal because all of the gambling occurred in England, where the relevant actors were properly licensed to engage in this activity. They maintain that the New Jersey gambling statute does not apply in England where the bets were accepted. They cite no authority for their basic proposition other than the testimony of various experts on the legislative history and intent of New Jersey’s gambling statutes. Claimants’ experts testified that N.J.S.A. 2C:37-2was always intended to apply . . . to the promotion of‘illegal’ gambling only, not gambling under a governmental license. _________________________________________________________________ 18. Claimants cite United States v. One Single Family Residence Located at 18755 North Bay Road, Miami, 13 F.3d 1493 (11th Cir. 1994) in stating that Pokoyoway’s conviction has no significance here, where there was no testimony. Claimants’ Br. at 1. However, One Family Residence turned on the district court’s erroneously concluding that a spouse was estopped from challenging a forfeiture petition filed against a residence owned by husband and wife as tenants by the entireties. The Court of Appeals for the Eleventh Circuit reversed because the wife had not been a party to her husband’s criminal trial and therefore was not estopped from challenging any of the factual determinations her husband’s conviction was based upon. The government’s probable cause showing here is based upon Pokoyoway’s own admissions during his plea colloquy. Government’s Br. at 26. 20 See Appellants’ Br. at 8. Claimants’ experts testified that the district court’s interpretation of the statute would criminalize such things as legitimate interstate banking and advertising relationships. Id. Although Claimants’ argument has some appeal, it ignores the text of New Jersey’s statute. That statute prohibits conduct, which materially aids any form of gambling activity, and the scope of that language is illustrated by the New Jersey Appellate Division’s analysis in State v. Fiola, 576 A.2d 338 (N. J. App. Div. 1990). The business in Fiola involve[d] the solicitation and receipt of money in New Jersey for the purchase of lottery tickets issued by other states, the transport of money to other states to purchase lottery tickets and the return of the tickets to New Jersey for delivery to customers. Id. at 339. The New Jersey Attorney General petitioned to enjoin the defendants’ business alleging that it violated the state’s constitutional and statutory prohibitions against gambling. The trial court refused to grant an injunction, but the Appellate Division reversed. That court held that even though the defendants’ criminal culpability was not at issue, their transport of gambling requests and money to out-of-state gambling sites and the return of lottery tickets to New Jersey gamblers ‘materially aids [a] form of gambling activity’ within the intent of N.J.S.A. 2C:37-2(a)(2). Id. at 340. The Appellate Division held that the defendants’ mere possession of lottery tickets for distribution to their customers violates N.J.S.A. 2C:37-2(a)(2). Id. Therefore, even if we accept Claimants’ argument that the gambling occurred outside of New Jersey where it is legal, their activity inside of New Jersey was nevertheless illegal because it promoted a gambling enterprise. Claimants’ argument requires that we ignore the wording of the statute as well as relevant decisions of New jersey appellate courts that have interpreted it. We will do neither. In fact, despite Claimant’s insistence that we view IFS-NJ’s conduct through the narrowest of lenses, it is clear to us that the conduct here exemplifies the breadth of the statute. Similarly, we reject Claimants’ assertion that the district court applied New Jersey criminal law extraterritorially contrary to the limitations to specific provisions of the New 21 Jersey Crimes Code. See N.J.S.A. 2C:1-3a(1)-(6). More specifically, Claimants argue that under N.J.S.A. 2C:1-3a(4) New Jersey’s prohibition against promoting gambling can not be applied to IFS-NJ’s conduct inside of New Jersey unless that conduct is also illegal in England. See N.J.S.A. 2C:1-3a(4). This argument ignores the critical fact that New Jersey has not attempted to prosecute IFS-NJ for violating its promoting gambling statute. Rather, the United States government has instituted civil forfeiture proceedings based upon IFS-NJ’s violation of 18 U.S.C. S 1955. As noted above, S 1955 is a criminal statute that is part of the Organized Crime Control Act. That Act is a federal law that, among other things, defines certain federal crimes over which the district courts have exclusive jurisdiction. Cabazon Band of Mission Indians, 480 U. S. at 213. We are therefore concerned with an exercise of federal, not state, authority. Moreover, as noted above, the forfeiture action is predicated solely upon conduct that occurred in New Jersey. Claimants are therefore actually arguing that the laws of England insulate them from forfeiture based upon their conduct in New Jersey.19 We reject that argument. The Claimants next argue that this forfeiture proceeding is essentially being waged against an innocent, foreign citizen and his gambling companies. However, this action does not turn on the culpability of Bowman or his British or Canadian companies. Moreover, as we noted earlier, forfeiture is not conditioned upon the culpability of the owner of the defendant property. We reiterate: the innocence of the owner is irrelevant in a civil forfeiture proceeding. Sandini, 816 F.2d at 872. Therefore, the legality and/or licensure of the businesses in England is simply irrelevant to the issues raised in the instant forfeiture proceeding.20 _________________________________________________________________ 19. Inasmuch as IFS-NJ’s accounts are subject to forfeiture based solely upon IFS-NJ’s conduct, this case does not raise any issue of whether IFS-NJ is the alter ego of Bowman or his companies in Canada or the United Kingdom as Claimants suggest. See Claimants’ Br. at 6. 20. As we noted in United States v. Sandini , civil in rem forfeiture proceedings enjoy a venerable history and existed in Mosaic law if not 22 Claimants’ also attempt to draw substance from the rule of lenity. The main function of the rule of lenity is to protect citizens from the unfair application of ambiguous punitive statutes. United States v. Thompson/Center Arms Co., 504 U. S. 505, 525 (1992) (Stevens, J., dissenting). Therefore, where a statute is punitive in nature, the rule of lenity requires that any ambiguity in the statute be resolved in favor of the claimant. One 1973 Rolls Royce , 43 F.3d at 801. Claimants argue that even if a technical violation of S 1955 could have been made out, the rule of lenity nevertheless precludes forfeiture under the circumstances here. Claimants’ Br. at 26. This argument is twofold. First, Claimants seize upon the district court’s statement that there is no law directly defining the criminality of the conduct in question. App. at 9. Second, they argue that the district court incorrectly held that the rule of lenity does not apply to civil forfeiture proceedings. They insist that this forfeiture was punitive and therefore the rule of lenity should apply.21 We interpret the first prong of this argument as an assertion that the district court believed that there was no New Jersey case law from which it could determine if IFSNJ’s activities constituted a violation of N.J.S.A. 2C:372a(2). However, the rule of lenity applies only if there is a grievous ambiguity or uncertainty in the statute. Muscarello v. United States, 524 U.S. 125, 138 (1998)(citation and internal quotations omitted). The _________________________________________________________________ in other ancient codes as well. 816 F.2d at 872. Therefore, [h]owever inapplicable its original justification may be today, in rem, or civil forfeiture, has become ‘too firmly fixed in the punitive and remedial jurisprudence of the country to be now displaced.’  Id. (quoting Goldsmith-Grant Co. v. United States, 254 U. S. 505, 511 (1921)). 21. While civil forfeitures are usually not regarded as punishment, Sandini, at 872-873, certain kinds of civil forfeitures can indeed be punitive. In Austin v. United States, 509 U. S. 602, 619-620 (1993), the Court held that civil drug forfeitures under 21 U.S.C. SS 881(a)(4) and (7) are punishment under the Eight Amendment’s Excessive Fines Clause. See also United States v. One 1973 Rolls Royce, 43 F.3d 794, 819 (1994)(Section 881(a)(4) forfeiture is punitive and quasi-criminal in nature.). 23 parameters of New Jersey’s prohibition against promoting gambling are not ambiguous, and they are certainly not grievous[ly] ambiguous. New Jersey’s statute plainly includes conduct that materially aids any form of gambling activity, and it even provides examples of such conduct. This portion of Claimants’ argument really does not implicate the rule of lenity as much as it simply reiterates their belief that IFS-NJ’s activities are beyond New Jersey’s reach because the bets were accepted in England. Moreover, the mere possibility that New Jersey’s promoting gambling statute lends itself to a more narrow interpretation than the district court allowed (or that the New Jersey court gave it in Fiola), does not trigger the rule of lenity. Smith v. United States, 508 U. S. 223, 240 (1993) (Noting that the possibility of articulating a narrower construction of a statute does not make the rule of lenity applicable). We also reject the second prong of Claimants’ rule of lenity argument; the district court’s statement that the rule does not apply in a civil proceeding. That was not the district court’s holding. Rather, the district court merely noted that Claimants had failed to cite any authority for the argument that the rule of lenity is applicable in a forfeiture proceeding because of criminality of the underlying conduct may be a matter of dispute. App. at 13. We have held that the rule of lenity does apply in a civil forfeiture proceeding when the nominally civil forfeiture statute is actually punitive and quasi-criminal in nature. One 1973 Rolls Royce, 43 F.3d at 819. However, even when the punitive nature of a civil forfeiture is sufficient to apply the rule of lenity, the rule will still not apply where there is little more than a suggestion of ambiguity. [M]ost statutes are ambiguous to some degree . . . . [however,] the rule of lenity only applies if, after seizing everything from which it can be derived, we can make no more than a guess as to what Congress intended. United States v. Muscarello, 524 U.S. at 138 (citations and internal quotations omitted). [A]s is true of any guide to statutory construction, [the rule] only serves as an aid for resolving an ambiguity; it is not to be used to beget one. Callanan v. United States, 364 U.S. 587, 596 24 (1961). The rule comes into operation at the end of the process of construing what Congress expressed, not at the beginning . . . . Id. Here, we have no problem determining Congress’s intent from the text of S 1955(1). The Claimants’ rule of lenity objection to this proceeding is nothing more than an invitation to read ambiguity into an unambiguous statute based on their perception that it is being applied unfairly. We will not accept Claimants’ invitation to manufacture an ambiguity merely to achieve a result which they believe is fairer than the result required by the breadth of the statute. Claimants’ remaining assertion is based upon international law. They claim the seizure and subsequent forfeiture violate the Treaty Between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland on Mutual Legal Assistance in Criminal Matters (MLAT). According to Claimants, under the MLAT, the United States was obligated to consult with the United Kingdom’s Home Secretary before seizing the accounts. They also claim that the United States did not exhaust certain procedures as required by the treaty. We again disagree. The United States and the United Kingdom entered into the MLAT which became effective on December 2, 1996. According to the treaty’s Preamble, the parties entered into that treaty to improve the effectiveness of the law enforcement authorities of both countries in the investigation, prosecution, and combating of crime through co-operation and mutual legal assistance in criminal matters. App. at 116. The treaty is primarily concerned with drug trafficking, and related offenses, and seizure and forfeiture of proceeds and instrumentalities related to drug trafficking. Id. The parties to the treaty intended to allow the United States and the United Kingdom to develop and share evidence . . . to facilitate criminal prosecutions abroad. United States v. Balsys, 524 U.S. 666, 715 (1998) (Breyer, J., dissenting). However, the treaty explicitly states that it is not intended to provide a private remedy. It states in pertinent part: [t]his Treaty is intended solely for mutual legal assistance between the Parties. The provisions of this 25 Treaty shall not give rise to a right on the part of any private person to obtain, suppress, or exclude any evidence, or to impede the execution of a request. App. at 116. (emphasis added). Therefore, even it if is assumed for argument’s sake that the United States violated the MLAT, Claimants have no private right to enforce its terms. Claimants’ essential claim is that the district court had no jurisdiction to apply United States gambling law to a British citizen and British companies operating legal gambling businesses on English soil. To support that argument, they cite Zoelsch v. Arthur Anderson & Co., 824 F.2d 27 (D.C. Cir. 1987). However, to the extent it applies, we believe Zoelsch actually supports the district court’s exercise of jurisdiction. There, in affirming the district court’s dismissal for lack of subject matter jurisdiction, the court of appeals stated: [J]urisdiction is appropriate when the fraudulent statements or misrepresentations originate in the United States, are made with scienter and in connection with the purchase and sale of securities, and ‘directly cause’ the harm to those who claim to be defrauded, even if reliance and damages occur elsewhere. Id. at 33. The court concluded that these jurisdictional prerequisites are only a slight recasting, if at all, of the traditional view that jurisdiction will lie in American courts only over proscribed acts done in this country. Id. Claimants argue that Zoelsch stands for the proposition that federal securities law does not apply to conduct in the United States that was merely preparatory to an alleged securities violation which occurred overseas. Reply Br. at 18. They then attempt to draw parallels to the S 1955(d) forfeiture by arguing that IFS-NJ’s activities in New Jersey were merely preparatory to legal gambling activities in England, and they conclude that the district court therefore lacked jurisdiction under Zoelsch. However, Zoelsch affirms that American courts have jurisdiction over proscribed acts done in this country[ ] that have the required nexus to activities elsewhere. We therefore find no merit in Claimants’ jurisdictional challenge to this in rem proceeding over New Jersey 26 property based upon conduct occurring in New Jersey. It may well be true that British citizens and British companies will be affected by this in rem action in New Jersey. This does not mean that the law of New Jersey or the law of the United States is being applied to those citizens or companies. Claimants’ international exhaustion argument arises from the fact that both the United States and England belong to the Organization of Economic Cooperation and Development (OECD). Claimants argue that the OECD requires consultation and moderation by the U.S. in this context. Claimants’ Br. at 39-40. However, Claimants never bother to explain how the government’s institution of this forfeiture violated requirements of international law or, if a violation occurred, how it provides a defense from this forfeiture action. In a related argument, Claimants insist that considerations of international comity preclude the instant forfeiture. That contention is again bottomed on the Claimants’ belief that the forfeiture is an extraterritorial application of federal law against British citizens. We have already explained why there is no extraterritorial application of federal law to British citizens here. Claimants also think it significant that S 1955 was originally aimed at organized crime, that Bowman’s businesses are entirely legal in England, and that gambling no longer is regarded as the evil it once was in the United States. Indeed, argue Claimants, the fact that New Jersey itself has legalized casinos and lotteries plainly demonstrates that gambling is no longer associated with vice. Thus, the argument continues, comity required the district court to defer to Bowman’s British licenses to conduct a gambling enterprise. However, the change in society’s views towards gambling does not offer the district court a license to ignore a federal statute (or the state statute it incorporates) under the guise of international comity. Comity, . . . is the recognition which one nation allows within its territory to the legislative, executive, or judicial acts of another nation, having due regard both 27 to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protections of its laws.