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United States v. $525

United States Court of Appeals, Sixth Circuit

August 23, 2017

United States of America, Plaintiff-Appellee,
v.
$525, 695.24, Seized from JPMorgan Chase Bank Investment Account #74068415, et al., Defendants, Sbeih A. Sbeih, Claimant-Appellant.

          Argued: March 7, 2017

         Appeal from the United States District Court for the Northern District of Ohio at Cleveland. No. 1:13-cv-01455-Donald C. Nugent, District Judge.

         ARGUED:

          Joan E. Pettinelli, North Royalton, Ohio, for Appellant.

          Phillip J. Tripi, UNITED STATES ATTORNEY'S OFFICE, Cleveland, Ohio, for Appellee.

         ON BRIEF:

          Joan E. Pettinelli, North Royalton, Ohio, for Appellant.

          Phillip J. Tripi, UNITED STATES ATTORNEY'S OFFICE, Cleveland, Ohio, for Appellee.

          Before: CLAY, GIBBONS, and STRANCH, Circuit Judges.

          OPINION

          CLAY, Circuit Judge.

         The United States filed a civil forfeiture complaint against numerous bank accounts, as well as three cars and various real properties, asserting that the named properties were either used in the transportation and sale of controlled substances, were used or intended to be used to facilitate drug trafficking, or were involved in money laundering. The government thus asserted that the properties were subject to forfeiture pursuant to 21 U.S.C. § 881(a)(4), (a)(6), and (a)(7), as well as 18 U.S.C. § 981. Claimant Sbeih Sbeih filed a verified claim to seven of the bank accounts; however, the government moved to strike that claim based on the fugitive disentitlement statute, 28 U.S.C. § 2466. The district court granted the government's motion to strike Sbeih's claim and subsequently ordered the accounts forfeited. Sbeih now appeals the order of forfeiture and the decision by the district court striking his claim. For the reasons set forth below, we VACATE the district court's judgment and REMAND the action for further proceedings consistent with this opinion.

         BACKGROUND

         On June 3, 2013, the government filed a civil in rem forfeiture complaint against twenty bank accounts, two real properties, three vehicles, and $91, 500 in United States currency. This civil forfeiture action is related to the government's investigation of Sbeih and Osama Salouha, a claimant in a related case. Salouha is alleged to have illegally sold prescription drugs, including oxycodone, oxymorphone, and hydrocodone, through the two pharmacies he owns in Ohio, in violation of 21 U.S.C. § 841. Sbeih was a joint owner in one of Salouha's pharmacies, and together Sbeih and Salouha are alleged to have laundered the receipts from Salouha's illegal drug sales through their personal and business accounts, in violation of 18 U.S.C. § 1956. The government sought forfeiture pursuant to 21 U.S.C. § 881(a)(4), (a)(6), and (a)(7), as well as 18 U.S.C. § 981, as the bank accounts contained proceeds from drug trafficking activities, were used to facilitate drug trafficking, or were involved in money laundering.

         On August 7, 2013, Sbeih and his wife, Nimeh Ahmad-Sbeih, filed verified claims to seven of the personal bank accounts held in one or both of their names. The case was then stayed for a year because of the related criminal investigation. Sbeih was indicted on June 3, 2014, on one count of conspiracy to commit money laundering, one count of conspiracy to defraud the Internal Revenue Service, and three counts of making and subscribing false income tax returns. When Sbeih failed to appear for his arraignment on his criminal charges, the district court issued a warrant for his arrest.

         Meanwhile, the district court lifted the stay on the civil forfeiture case and scheduled a status conference for June 24, 2014. Sbeih's counsel sought the district court's permission for Sbeih not to attend the conference in person, as he was in Israel. Sbeih alleged that he was in danger of losing his Jerusalem permanent residency permit if he left Israel. The district court granted the motion, excusing Sbeih.

         On September 18, 2014, the government filed a motion to strike Sbeih's claim pursuant to the fugitive disentitlement statute. Sbeih opposed that motion. The district court did not immediately rule on the issue and instead waited to see whether the Salouhas, Sbeih's co-defendants in the criminal case, were able to reenter the country, as they were reportedly stuck in Gaza. On April 10, 2015, the government refiled its motion to strike Sbeih's claims pursuant to the fugitive disentitlement statute. After receiving a response from Sbeih, the district court granted the government's motion to strike Sbeih's claim on May 12, 2015. On January 14, 2016, the district court entered judgment against the relevant defendant properties, ordering them forfeited to the United States. This timely appeal followed.[1]

         DISCUSSION

         On appeal, Sbeih challenges the district court's determination that he should be prevented from pursuing his interest in the defendant properties based on his status as a fugitive. We conclude that the district court clearly erred in finding that, based on the record as preserved for appeal, Sbeih should be disentitled because he was evading criminal prosecution by not returning to the United States.

         A. Jurisdiction

         The district court had jurisdiction over this action pursuant to 28 U.S.C. § 1345, which provides that "district courts shall have original jurisdiction of all civil actions, suits or proceedings commenced by the United States." The district court also had jurisdiction pursuant to 28 U.S.C. § 1355, as this is an action for forfeiture. This Court has jurisdiction to hear the appeal pursuant to 28 U.S.C. § 1291.

         B. ...


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