United States District Court, D. Colorado
ORDER ON MOTION FOR DEFAULT JUDGMENT AND FINAL ORDER
B. Shaffer United States Magistrate Judge.
action comes before the court on Plaintiff United States'
Motion for Default and Final Order of Forfeiture (doc. #34),
filed on December 15, 2016. This case was assigned to the
court under the Magistrate Judge Pilot Project to Assign
Civil Cases to Full Time Magistrate Judges (doc. #5) on
December 5, 2014. As of this date, no response to the Motion
has been filed. The court has reviewed the Motion, the entire
case file, and the applicable law, and is sufficiently
advised in the premises.
United States commenced this action on December 4, 2014 by
filing a Verified Complaint (doc. #3) in rem
pursuant to 18 U.S.C. § 981(a)(1)(C) seeking forfeiture
of the contents of five JPMorgan Chase bank accounts
[hereinafter the Bank Accounts]: $1, 700.00 from account
XXXXX1080; $840, 093.15 from account XXXXXX6386; $5, 603.45
from account XXXXX2707; $32, 841.67 from account XXXXX1829;
and $50, 175.31 from account XXXXXXX3111. The United States
alleges in its Complaint that the Bank Accounts were used in
a fraudulent investment scheme. Between filing the Complaint
in 2014 and the pending motion for default judgment in 2016,
Plaintiff filed several status reports indicating that the
underlying criminal investigation was ongoing. On October 14,
2016 the court informed Plaintiff it had until December 14,
2016 to move the case forward. Following Plaintiff's
Motion for Entry of Default (doc. #32) on December 14, 2016,
default (doc. #33) was entered by the Clerk under Federal
Rules of Civil Procedure 55(a) as to the Bank Accounts. The
United States then filed a motion for default judgment (doc.
#34) on December 15, 2016. Plaintiff United States tendered
written consent (doc. #37) to magistrate judge jurisdiction
on March 27, 2017. Pursuant to 28 U.S.C. §§ 1345
and 1355, the United States District Court for the District
of Colorado has subject matter jurisdiction over forfeiture
actions brought by the United States, and venue here is
proper under 28 U.S.C § 1395 as some of the acts
occurred in the District of Colorado.
actions in rem are governed by Rule G of the
Supplemental Rules for Admiralty or Maritime Claims and Asset
Forfeiture Actions [hereinafter the Supplemental Rules].
United States v. $9, 020.00 in U.S. Currency, 30 F.
App'x 855, 856 (10th Cir. 2002). Rule G(4)(a) of the
Supplemental Rules requires that notice containing a
description of the property, deadline to file a claim, and
the name of the attorney to be served with the claim be
published in a newspaper or government website for 30 days.
Rule G(4)(b) of the Supplemental Rules requires that notice
containing the date, deadline for a claim, and the name of
the attorney to be served with the claim be sent to all
persons reasonably known by the government to be a potential
claimant. Under Rule G(5)(a) of the Supplemental Rules, a
claim must be filed by the time stated in the notice sent
under Rule G(4)b, or “no later than 60 days after the
first day of publication on an official internet government
potential claimant lacks standing to assert a claim over the
property outside of the proper procedures and deadlines in
the Supplemental Rules. United States v. $5, 565.000 in
United States Currency, No. 09-cv-02212-WDM-MEH, 2010 WL
4256211, at *2 (D. Colo. Sept. 20, 2010) (citations omitted).
The requirements for filing a claim under the Supplemental
Rules “must be strictly enforced.” Id.
To contest the forfeiture, a person who asserts an interest
in the property must file a claim with the court while the
action is pending. Id. Time restrictions in the
Supplemental Rules ensure that claimants come forward as soon
as possible after forfeiture proceedings have been initiated
so that all interested parties can be heard and the dispute
resolved without delay. United States v. One Parcel of
Real Prop. Known as 16614 Cayuga Road, 69 F. App'x
915, 921 (10th Cir. 2003). If no claim or response has been
filed within the time limits required by law, the district
court should enter a default judgment for the government.
$5, 565.000 in United States Currency, 2010 WL
4256211, at *2.
states it has complied with all notice and service
requirements for forfeiture outlined in the Supplemental
Rules. The United States filed a Notice for Forfeiture Action
(doc. # 27), which was published on the government site
www.forfeiture.gov on July 12, 2016, and remained
public for 30 days. Plaintiff then, on October 14, 2016,
served a Notice of Complaint for Forfeiture (doc. #31) to all
parties known to reasonably be potential claimants. The
deadline for filing a claim has passed, and no claims or
responsive pleadings have been filed. Thus, the United States
is the only party to this action.
the court has consent jurisdiction over this claim is a
threshold matter. A magistrate judge “may conduct any
or all proceedings in a…civil matter and order the
entry of judgment in the case” with the consent of the
parties. 28 U.S.C. § 636(c)(1). Voluntary consent is
necessary to vest a magistrate judge with the authority to
enter judgment on claims under § 636(c). See Roell
v. Withrow, 538 U.S. 580, 581 (2003). In accordance with
§ 636(c), a magistrate judge only needs the consent of
all parties to the action at the time of the order for
default judgment. See United States v. Real Prop.,
135 F.3d 1312, 1317 (9th Cir. 1998); see also UFCW Local
880-Retail Food Emp'r Joint Pension Fund v. Newmont
Mining Corp., 261 F. App'x 105, 109 (10th Cir.
from a property owner in an in rem proceeding is not
required for magistrate judge jurisdiction when notice and
service requirements are satisfied. Real Prop., 135
F.3d at 1317. “A [potential] defendant or respondent
who does not receive service or make an appearance in a
proceeding is not a ‘party' to that case.”
Solan v. Chappell, No. EDCV 13-01779 SS, 2013 WL
6839433, at n. 3 (C.D. Cal. Dec. 27, 2013) (citing
Travelers Cas. & Sur. Co. of Am. v. Brenneke,
551 F.3d 1132, 1135 (9th Cir. 2009)); see also United
States ex. rel. Eisenstein v. City of New York, 556 U.S.
928, 937 (2009). Proper notice has been appropriately
delivered and published under the Supplemental Rules. No
other parties or claimants have come forward or are part of
this proceeding. Accordingly, with the consent of all parties
in this action, the court has the authority to enter
judgment. See Buckley v. Wagstaffe, No.
15-cv-06231-DMR, 2016 WL 2641541, at n. 1 (C.D. Cal. May 10,
2016) (citations omitted); see also United States v. 709
Santa Barbara Av., No. 14-cv-01360-MJW, 2014 WL 7051365,
at *1 (D. Colo. Dec. 12, 2014).
to Rule 55(b), default judgment may enter against a party who
fails to appear or otherwise defend a case brought against
him or her. However, a party is not entitled to the entry of
default judgment as a matter of right. Greenwich Ins. Co.
v. Daniel Law Firm, No. 07-cv-02445-LTB-MJW, 2008 WL
793606, at *2 (D. Colo. Mar. 22, 2008) (quoting
Cablevision of S. Conn. Ltd. P'ship v. Smith,
141 F.Supp.2d 277, 281 (D. Conn. 2001)). Even after the entry
of default, it remains for the court to consider whether the
unchallenged facts constitute a legitimate basis for the
entry of a judgment. McCabe v. Campos, No.
05-cv-00846-RPM-BNB, 2008 WL 576245, at *2 (D. Colo. Feb. 28,
2008) (citing Black v. Lane, 22 F.3d 1395, 1407 (7th
Cir. 1994)). In determining whether a claim for relief has
been established, the well-pleaded facts of the complaint are
deemed true. Id. The decision whether to enter
judgment by default is committed to the sound discretion of
the court. Olcott v. Del. Flood Co., 327 F.3d 1115,
1124 (10th Cir. 2003).
forfeiture of any property, real or personal, which
constitutes or is derived from proceeds traceable to a
violation of “specified unlawful activity” or a
conspiracy to commit such an offense is provided for in 18
U.S.C. § 981(a)(1)(C). “Specified unlawful
activity” under § 1956(c)(7) includes violations
of §§ 1343 (wire fraud) and 1341 (mail fraud).
See United States v. Fishman, 645 F.3d 1175, 1187
(10th Cir. 2011). Plaintiff United States alleges in its
Verified Complaint that the funds seized from the Bank
Accounts constitute and derive from proceeds traceable to
violations of 18 U.S.C. §§ 1343 and 1341.
Specifically, Plaintiff asserts that these funds derive from
an investment scheme claiming high yields through the trading
of fictitious “medium term bank notes” overseas.
Plaintiff claims the principle investments were actually used
to pay back purported interest and as personal funds by the
perpetrators. Based upon the facts and verification set forth
in the Verified Complaint, it appears by a preponderance of
the evidence that there is cause to issue a forfeiture order
under 18 U.S.C. § 981(a)(1)(C).
court grants Plaintiff United States' Motion for Default
and Final Order of Forfeiture and enters default judgment and
forfeiture of the funds seized from the subject JPMorgan
Chase bank accounts: $1, 700.00 from account XXXXX1080; $840,
093.15 from account XXXXXX6386; $5, 603.45 from account
XXXXX2707; $32, 841.67 from account XXXXX1829; and $50,