814 F. Supp. 491

UNITED STATES of America, v. Bin WU, Jing Ping Li, Pinzhe Zhang, Defendants.

Crim. No. 92-188-N.

United States District Court, E.D. Virginia, Norfolk Division.

March 4, 1993.

James A. Metcalfe, Asst. U.S. Atty., Norfolk, VA, for US.

James O. Broccoletti, Norfolk, VA, for defendant Bin Wu.

Bart Daniel, Norfolk, VA, for defendant Jing Ping Li.

Andrew R. Sebok, Norfolk, VA, for defendant Pinzhe Zhang.

OPINION AND ORDER

REBECCA BEACH SMITH, District Judge.

This matter comes before the court on defendant Bin Wu’s Petition for Release of Frozen Assets. For the reasons set forth below, the court DENIES defendant Wu’s petition.

I. Procedural History

On October 27, 1992, the court issued an Order that extended a temporary restraining order previously entered in this case, thereby enjoining, with limited exceptions,1 the dis-*492posai of any property in which defendants had an interest.2 On November 4, 1992, the grand jury returned an indictment charging defendants, among other things, with five counts of violating 22 U.S.C. § 2778 (unauthorized export of defense articles), thirty-eight counts of violating 18 U.S.C. § 1956 (transfer of funds with intent to promote unlawful activity), and one count of violating 18 U.S.C. § 1957 (engaging in a monetary transaction in property derived from specified unlawful activity), and alleging criminal forfeiture against them under 50 App.U.S.C. § 2410(g) and 18 U.S.C. § 982(a)(1). Upon the indictment, the October 27, 1992 Restraining Order by its terms was continued in full effect until further order of the court. Order dated Oct. 27, 1992, at 2-3; see 21 U.S.C. § 853(e)(1)(A),3 18 U.S.C. § 1963(d)(1)(A).4 The Restraining Order remains in effect today.

On November 2, 1992, defendant Wu filed his Petition for Release of Frozen Assets. On January 11, 1993, he submitted a Memorandum in support thereof. Defendant Wu. seeks the release of all monies from Nations-bank account 8422-1627, in the name of Jiey-ing Wang, apparently defendant Wu’s wife. (Def.’s Mem. in Supp. of Mot. to Release Assets, at 1, ¶ I.B.)5 On January 19, 1993, the United States submitted its Memorandum in opposition to defendant Wu’s petition.

II. Defendant Wu’s Petition

The primary legal question presented by the petition is whether a restraining order issued pursuant to 18 U.S.C. § 1963(d)(1)(A)6 may apply to “substitute” assets under 18 U.S.C. § 1963(m).7 The petition also raises the additional, though virtually identical, question of whether a restraining order issued pursuant to 21 U.S.C. *493§ 853(e)(1)(A)8 may apply to substitute assets under 21 U.S.C. § 853(p).9 By his petition, defendant Wu contests the propriety under the relevant statutes of restraining, before any conviction, assets that would not themselves be forfeitable in the first instance but that would be forfeitable only if other, primarily forfeitable assets were effectively out of reach.10

Fourth Circuit caselaw provides simple answers to the questions raised by the petition, defendant Wu’s arguments to the contrary notwithstanding. In re Billman, 915 F.2d 916 (4th Cir.1990), cert. denied, — U.S. -, 111 S.Ct. 2258, 114 L.Ed.2d 711 (1991), holds that “subsection (d)(1)(A) [of 18 U.S.C. § 1963] must be read in conjunction with subsection (m) [of 18 U.S.C. § 1963] to preserve the availability of substitute assets pending trial.” Id. at 921. The Fourth Circuit observed that “[t]he purpose of § 1963(d)(1)(A) is to preserve pending trial the availability for forfeiture of property that can be forfeited after trial.” Id. Looking to congressional intent, the Court of Appeals liberally construed the statute to effect its purpose. Id. 11

Billman ratifies the pre-conviction restraint, under 18 U.S.C. § 1963, of assets that would not upon conviction be directly and firstly forfeitable, but that would be for-feitable only if primarily forfeitable assets were in effect unreachable. Billman stands for the proposition that, pursuant to 18 U.S.C. § 1963, a district court legitimately may restrain, pending trial, the disposal of substitute assets, that is, assets that would only be secondarily forfeitable upon conviction.

Given the nearly identical purposes and structures of 18 U.S.C. § 1963 and 21 U.S.C. § 853,12 this court concludes, under the same rationale as the appellate court used in Billman, that a restraining order issued pursuant to 21 U.S.C. § 853(e)(1)(A) may apply to substitute assets under 21 U.S.C. § 853(p). In fact, it is easier to construe section 853 of Title 21 as allowing for pretrial restraint of substitute assets than it is so to read section 1963 of Title 18. Whereas the text of 18 U.S.C. § 1963 does not address the issue, 21 U.S.C. § 853 expressly provides that its provisions “shall be liberally construed to effectuate its remedial purposes.” 21 U.S.C. § 853(o).

This court has issued the only reported decision on the issue of whether a section 853(e) restraining order can reach section 853(p) substitute assets. In United States v. Swank Corp., 797 F.Supp. 497 (E.D.Va.1992), the court concluded that a restraining order issued pursuant to 21 U.S.C. § 853(e) may apply to substitute assets under 21 U.S.C. § 853(p). Id at 500-04. The court sees no reason now to reconsider Swank.

Thus, the court holds that a restraining order issued pursuant to 18 U.S.C. § 1963(d)(1)(A) may apply to substitute assets under 18 U.S.C. § 1963(m), and that a restraining order issued pursuant to 21 U.S.C. § 853(e)(1)(A) may apply to substitute assets under 21 U.S.C. § 853(p). Given the scope of the forfeiture alleged in the indictment, restraint of substitute assets appears necessary in this case reasonably to ensure the fullest possible satisfaction of any forfeiture order that the court ultimately might enter. To the extent, then, that assets subject to the October 27, 1992 Order, including Jieying Wang’s Nationsbank account 8422-1627, are substitute assets under 18 U.S.C. *494§ 1963(m) and 21 U.S.C. § 853(p), the Order lawfully restrains their disposal.13 Accordingly, the court DENIES defendant Wu’s petition.

III. Issues Not Addressed

In the court’s view, the central legal issues posed by defendant Wu’s petition are whether Jieying Wang can intervene in this case at this juncture to contest the breadth of the October 27, 1992 Restraining Order, and whether defendant Wu has standing to contest the Restraining Order on her behalf. The first issue arises under 18 U.S.C. § 1963® and (l) 14 and 21 U.S.C. § 853(k) and (n),15 and the second under Article III of the Constitution.16 Defendant Wu has not addressed these issues.

The court has located no reported decisions addressing the first issue. Although the applicable statutes might appear to bar intervention by a third party claiming an interest in property allegedly subject to potential forfeiture until the court actually enters a judgment of forfeiture, 18 U.S.C. § 1963®, 21 U.S.C. § 853(k), the language of the statutes does not necessarily compel such a conclusion. The relevant legislative histories, moreover, suggest the propriety of allowing third party intervention at this stage of the case.17 Further, as stated previously, the court liberally reads the statutes in question with an eye toward effectuating their common purposes. One such purpose is the avoidance of overinclusiveness; the statutes sanction neither forfeiture nor, presumably, restraints on - the alienability, of property with respect to which a third party can establish, by a preponderance of the evidence, a right, title, or interest exclusive of or superi- *495or to the criminal defendant’s right, title, or interest. See 18 U.S.C. § 1963(i)(6); 21 U.S.C. § 853(n)(6).

With respect to the second issue, the court notes only the question of whether defendant Wu could show a personal stake in the outcome of the controversy, Orr v. Orr, 440 U.S. 268, 273, 99 S.Ct. 1102, 1108-09, 59 L.Ed.2d 306 (1979), when a third party’s right, if any, to relief from the October 27, 1992 Restraining Order would depend on that party’s establishing a right, title, or interest separate from or paramount to that of defendant.

It is so ORDERED.

United States v. Bin Wu
814 F. Supp. 491

Case Details

Name
United States v. Bin Wu
Decision Date
Mar 4, 1993
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814 F. Supp. 491

Jurisdiction
United States

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