Court Opinion

ID: 56635
Source: CourtListenerOpinion
Date Created: 2010-04-26 01:56:43+00
Date Added: 2024-06-11T17:19:35.152544
License: Public Domain

[DO NOT PUBLISH]

                  IN THE UNITED STATES COURT OF APPEALS

                            FOR THE ELEVENTH CIRCUIT
                             ________________________
                                                                      FILED
                                       No. 06-12715        U.S. COURT OF APPEALS
                                                             ELEVENTH CIRCUIT
                                ________________________         October 10, 2007
                                                              THOMAS K. KAHN
                          D.   C. Docket No. 04-60107 CR-MGC         CLERK

UNITED STATES OF AMERICA,

                                                                            Plaintiff-Appellee,

                                             versus

THOMAS J. FOLEY, III,
a.k.a. Thomas Richards,
                                                                                     Defendant,

LESLIE S. OSBORNE,

                                                       Interested Party-Appellant.
                               ________________________

                       Appeal from the United States District Court
                           for the Southern District of Florida
                             _________________________

                                     (October 10, 2007)

Before ANDERSON and PRYOR, Circuit Judges, and VINING,* District Judge.

_________________

       *Honorable Robert L. Vining, Jr., United States District Judge for the Northern District of
Georgia, sitting by designation.
PER CURIAM:

       After oral argument and careful consideration, we conclude that the

judgment of the district court is due to be affirmed. The statute is clear that the

trustee has the burden of proving by a preponderance of the evidence that the funds

in the Union Bank account as of the time of its seizure by the FBI were funds of

Global – i.e., that Global’s legal interest in the funds was superior to the legal

interest of the government. 21 U.S.C. §853(n)(6)(A). Notwithstanding the

trustee’s burden of proof, its argument in its brief on appeal relies entirely upon the

assertion that the government has failed to trace the funds in the account as of that

time to defendant Foley’s criminal fraud. In other words, the trustee’s argument is

that the government has failed to prove that the funds were proceeds of the crime.

Of course, if the funds in the account were proceeds of the crime, the

Government’s interest would prevail. Thus, the flaw in the trustee’s argument on

appeal is its failure to recognize that it, and not the government, bears the burden of

proof.1

       We have carefully examined the record on appeal. We readily conclude that

the trustee has failed to carry its burden of proof. The only way the trustee could

       1
                 Although the district court clearly placed the burden of proof on the trustee, the
trustee in its brief on appeal does not straightforwardly challenge that placement, and certainly
advances no legal argument that the district court erred in this regard.

                                                   2
satisfy its burden of proof is by proving that the funds in the account as of the time

of the FBI seizure were derived from legitimate business operations, as opposed to

having been derived from Foley’s criminal activity. Although the trustee makes the

conclusory assertion that $80-$90,000 per month of legitimate income was

generated from the ATM machines and that this income was “legitimate,” the

trustee wholly failed to prove that such funds were in fact legitimate. Indeed, the

record suggests that such “earnings” were part of the criminal scheme in which

Foley fraudulently assigned multiple investors to a single machine. The record

contains no evidence of any persuasive attempt by the trustee to prove that the

monthly earnings from the machines were in fact legitimate, or otherwise prove

that the funds in the account as of the time of the FBI seizure were legitimate.2

       Accordingly, the judgment of the district court is

       AFFIRMED.

       2
                 At oral argument, the trustee argued for the first time that it had no opportunity to
prove its case in the district court. However, this argument was not fairly presented in the
trustee’s initial brief on appeal. We decline to entertain an argument raised for the first time at
oral argument.

                                                   3