JW Nile Motion To Dismiss
JW Nile Motion To Dismiss
1
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 3 of 31 Page ID #:1354
1 TABLE OF CONTENTS
Page
2
I. INTRODUCTION ............................................................................................. 1
3
II. BACKGROUND ............................................................................................... 3
4
A. Procedural History .................................................................................. 3
5
B. Allegations In The Complaint ................................................................. 3
6
1. The Good Star Phase .................................................................... 4
7
2. The Tanore Phase ......................................................................... 6
8
3. The Purchase of the Out-of-State Assets ...................................... 8
9
4. The Claims for Forfeiture ........................................................... 12
10
III. LEGAL STANDARD ..................................................................................... 13
11
IV. ARGUMENT .................................................................................................. 14
12
A. Jurisdiction and Venue Do Not Exist under 1355(b)(1)(B)
13 Because the Out-of-State Assets Are Not Located in This District...... 15
14 B. Jurisdiction and Venue Do Not Exist under 1355(b)(1)(A)
Because No Acts or Omissions Giving Rise to Forfeiture of
15 Out-of-State Assets Occurred in This District ...................................... 15
16 1. None Of the Alleged SUAs Occurred in This District ............... 17
17 2. None Of the Alleged Subsequent Money Laundering
Transactions Occurred in this District ........................................ 19
18
C. A Conspiracy Label Does Not Establish The Requisite Nexus
19 Between the Out-of-State Assets And This District ............................. 20
20 D. The Exercise of Jurisdiction Over the Out-of-State Assets Would
Violate Due Process .............................................................................. 22
21
V. CONCLUSION ............................................................................................... 25
22
23
24
25
26
27
28
i
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 4 of 31 Page ID #:1355
1 TABLE OF AUTHORITIES
2 Page(s)
3
Cases
4
All for Multilingual Multicultural Educ. v. Garcia,
5 No. CV 11-0215 PJH, 2011 WL 2532478 (N.D. Cal. June 24, 2011) ................. 16
6
Allstar Mktg. Grp., LLC v. Your Store Online, LLC,
7 666 F. Supp. 2d 1109 (C.D. Cal. 2009) ................................................................ 13
8 Contents of Account No. 03001288 v. United States,
9 344 F.3d 399 (3d Cir. 2003) ................................................................................. 13
10 Helicopteros Nacionales de Colombia, S.A. v. Hall,
466 U.S. 408 (1984) ............................................................................................. 24
11
12 Intl Shoe Co. v. State of Wash., Office of Unemployment Comp. &
Placement,
13 326 U.S. 310 (1945) ............................................................................................. 23
14
Intl Shoe Co. Co. v. Kemper Cas. Ins. Co.,
15 585 F.3d 382 (7th Cir. 2009) ................................................................................ 20
16 Jenkins Brick Co. v. Bremer,
17 321 F.3d 1366 (11th Cir. 2003) ............................................................................ 20
18 Menken v. Emm,
19 503 F.3d 1050 (9th Cir. 2007) .............................................................................. 14
ii
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 5 of 31 Page ID #:1356
14 United States v. Funds Held in the Name or for the Benefit of Wetterer,
210 F.3d 96 (2d Cir. 2000) ............................................................................... 2, 21
15
16 United States v. Funds Representing Proceeds of Drug Trafficking of
$75,868.62,
17 52 F. Supp.2d 1160 (C.D. Cal. 1999) ............................................................. 15, 17
18 United States v. Jinian,
19 725 F.3d 954 (9th Cir. 2013) ................................................................................ 19
20 United States v. Kennedy,
21 201 F.3d 1324 (11th Cir. 2000) ............................................................................ 16
iii
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 6 of 31 Page ID #:1357
1 Statutes
2 U.S. CONST. V. ..................................................................................................... 14, 23
3
Fed. R. Civ. P. 12 ............................................................................................... 2, 3, 13
4
Fed. R. Civ. P. Supp. Rule G ................................................................................. 2, 13
5
18 U.S.C. 1343........................................................................................................ 12
6
7 18 U.S.C. 1956................................................................................................... 12-13
8 18 U.S.C. 1957........................................................................................................ 12
9 18 U.S.C. 2314........................................................................................................ 12
10
18 U.S.C. 2315........................................................................................................ 12
11
28 U.S.C 1355.................................................................................................. passim
12
28 U.S.C. 1391........................................................................................................ 20
13
14 28 U.S.C. 1395.................................................................................................. 14, 15
15
16
17
18
19
20
21
22
23
24
25
26
27
28
iv
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 7 of 31 Page ID #:1358
1
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 8 of 31 Page ID #:1359
1 must be directly and closely causally connected to the forfeiture of the specific
2 Defendant Asset in this case. See United States v. Funds Held in the Name or for
3 the Benefit of Wetterer, 210 F.3d 96, 104-05 (2d Cir. 2000) (rejecting Governments
4 argument that independent assets form a single ball of wax for purposes of
5 forfeiture, and instead evaluating separately each asset for jurisdiction and venue);
6 28 U.S.C. 1355(b)(1)(A) (providing for jurisdiction and venue only in a district in
7 which any of the acts or omissions giving rise to the forfeiture occurred (emphasis
8 added)). The five Out-of-State Assets have no connection to this District they are
9 neither located in this District nor traceable to any transaction that occurred in this
10 District. They are therefore not properly before this Court.
11 Claimants ask this Court to dismiss these actions for lack of in rem
12 jurisdiction and improper venue. Because none of the Out-of-State Assets is located
13 in this District, jurisdiction and venue may only be founded upon 28 U.S.C.
14 1355(b)(1)(A). But 1355(b)(1)(A) requires that some act or omission giving
15 rise to the forfeiture occurred in this District, and the Governments sprawling
16 Complaint lacks any allegation that fulfills this critical nexus requirement. In fact,
17 only about 20 of the Complaints 136 pages concern the five Out-of-State Assets,2
18 and none of those allegations assert that any act or omission occurred in this
19 District.
20 Remarkably, the Government does not claim that any of the Complaints
21 California-related allegations has any direct causal relationship with the forfeiture of
22 the Out-of-State Assets. Instead, the Government claims that it can avoid the statutory
23 limitations on the Courts jurisdiction by affixing a vague conspiracy label to all of
24 the allegations in the Complaint. As set forth below, the statutory text cannot be
25 manipulated to support the Governments argument. The Government cannot cure
26
2
27 See, e.g., CV 16-5364, Dkt. 1, Compl. at pp. 100-107 (EMI Rights), pp. 93-95
(Bombardier Jet), pp. 90-93 (Symphony CP (Park Lane) Assets), pp. 95-98 (Time
28 Warner Penthouse and Storage), and pp. 99-100 (Greene Condominium).
2
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 9 of 31 Page ID #:1360
3
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 10 of 31 Page ID
#:1361
1 wholly owned by the Malaysian Government. (Compl. 5.)4 The Complaint alleges
2 that between 2009 and 2013, millions of dollars were siphoned from 1MDB, in three
3 phases: the Good Star Phase, the Aabar-BVI Phase, and the Tanore Phase. (Compl.
4 612.) Four of the five Out-of-State Assets that are the subject of this motion are
5 alleged to be traceable to the Good Star Phase, and the fifth is alleged to be traceable
6 to the Tanore Phase.
7 1. The Good Star Phase
8 During the Good Star Phase, millions of dollars were allegedly diverted from
9 1MDB to a Seychelles company called Good Star Limited (Good Star). The
10 Complaint describes the following transactions:
11 GOOD STAR PHASE TRANSACTIONS
12 DATE AMT FROM TO COMPL.
09/30/09 $700 million 1MDB (Deutsche Bank/Bank Good Star (RBS Coutts) 60, 65
13
Negara) SWITZERLAND
14 MALAYSIA
05/20/11 $330 million 1MDB (AmBank/Deutsche Good Star (RBS Coutts) 93-94
15 - Bank) SWITZERLAND
10/25/11 MALAYSIA
16
The Complaint alleges that 1MDB formed a joint venture with a Saudi oil
17
extraction company call PetroSaudi International (PetroSaudi), and that 1MDB
18
initiated multiple funds transfers to the joint venture in relation to energy
19
investments in Turkmenistan and Argentina. (Compl. 8, 40, 41, 52.) The
20
Complaint alleges that the funds for this investment were improperly diverted to a
21
bank account in Switzerland, held in the name of Good Star Limited (the Good Star
22
Account). (Compl. 60.) The Government claims that 1MDB officials in
23
Malaysia made multiple misrepresentations, including to banks in Malaysia, in order
24
to effectuate the misappropriation. (Compl. 8, 93-94, 95.) The Complaint also
25
26
4
27 All citations to Compl. will refer to the Complaint filed as Dkt. 1 in CV 16-
5364 (EMI Rights). The Complaints filed in the other cases are substantially
28 identical, except for the paragraphs describing the named Out-of-State Asset.
4
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 11 of 31 Page ID
#:1362
1 alleges that between February and June of 2011, approximately $45 million was
2 transferred from the Good Star Account to the bank account of MALAYSIAN
3 OFFICIAL 1 (either directly or through the bank account of a Saudi Arabian
4 Prince). (Compl. 99-101.)
5 None of the events set forth above are alleged to have occurred in this
6 District, nor are any of the relevant people or entities alleged to be located in this
7 District. To the contrary, all of the allegations relating to the Good Star Phase
8 happened outside of the United States. The following chart summarizes the location
9 of the events, people, and entities involved in the Good Star Phase, as pled in the
10 Complaint.
11 GOOD STAR PHASE LOCATIONS
12 EVENT/PERSON/ENTITY LOCATION COMPL.
Good Star SEYCHELLES 44, n.6
13
Low Taek Jho MALAYSIA, SINGAPORE 24, 46
14
Good Star bank account (RBS Coutts Bank) Opened in SINGAPORE; 24, 46
15 Funds transferred to
SWITZERLAND
16 1MDB MALAYSIA 5
17 PetroSaudi SAUDI ARABIA 8
18 Joint Venture bank account (JP Morgan Bank) SWITZERLAND 61
19 1MDB Board Meetings MALAYSIA 47-51,
82-90
20 Bank Negara (Malaysias Central Bank) MALAYSIA 65
21 1MDB Officials Misrepresentations to Bank MALAYSIA 65, 95
Negara
22 Deutsche Bank (Malaysia) Marhad MALAYSIA 43, 51
23 1MDB Officials Misrepresentations to Deutsche MALAYSIA 60, 66
Bank
24 AmBank MALAYSIA 94
25 1MDB Officials Misrepresentations to AmBank MALAYSIA 94
26 MALAYSIAN OFFICIAL 1 MALAYSIA 28
27 MALAYSIAN OFFICIAL 1 bank account MALAYSIA 94,
(AmBank) 101-02
28
5
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 12 of 31 Page ID
#:1363
6
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 13 of 31 Page ID
#:1364
10 03/25/13 $378 million Tanore Account (Falcon Bank) Granton Account (Falcon Bank) 253
SINGAPORE SINGAPORE
11
* The sum of $835 million and $430 million make up the $1.26 billion alleged in the Complaint.
12
The Complaint also alleges that in March of 2013, approximately $681 million was
13
transferred from the Tanore account to the bank account of MALAYSIAN OFFICIAL
14
1. (Compl. 260.) MALAYSIAN OFFICIAL 1 is claimed to have later returned $620
15
million to the Tanore account in August of 2013. (Compl. 262.)
16
As was the case with the Good Star Phase, none of the events described in the
17
Tanore Phase is alleged to have occurred in this District, nor are any of the relevant
18
people or entities alleged to be located in this District. The following chart
19
summarizes the locations of the events, people, and entities involved in the Tanore
20
Phase, as pled in the Complaint.
21
TANORE PHASE LOCATIONS
22
EVENT/PERSON/ENTITY LOCATION COMPL.
23 1MDB Global BRITISH VIRGIN ISLANDS 237
24 1MDB Global bank account (BSI Bank) SINGAPORE 244
25 Tanore bank account (Falcon Bank) SINGAPORE 241
7
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 14 of 31 Page ID
#:1365
10 Of the five Out-of-State Assets that are the subject of this motion, the
11 Symphony Park Lane Assets (CV 16-5370) were allegedly acquired using funds
12 traceable to the Tanore Phase. The transfers leading to the acquisition of the Out-of-
13 State Assets are described in further detail in the next section.
14 3. The Purchase of the Out-of-State Assets
15 Starting from page 82, the Complaint traces the money from the Good Star and
16 Tanore Phases to the purchase of the Out-of-State Assets. The following charts
17 summarize the locations of the transactions leading up to the purchase of each asset.
18 None of the transactions is alleged to have occurred in this District, nor are any of the
19 Out-of-State Assets below alleged to be located in this District. On occasion, the
20 Complaint fails to allege the location of some of the bank accounts. For example, the
21 Complaint alleges that certain funds flowed through the Shearman IOLA Account, an
22 account held by Shearman & Sterling LLP,5 but does not specify where the account
23 was located. For these accounts, the charts below list the location as UNKNOWN.
24 EMI Assets (CV 16-5364) [Traced to GOODSTAR]
25 Claimant for EMI Assets is JW Nile (BVI) Ltd., an entity located in the
26
5
27 The website for Shearman & Sterling LLP indicates it is a law firm with no
office in this District. See http://www.shearman.com/en/offices (accessed May 13,
28 2017).
8
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 15 of 31 Page ID
#:1366
1 British Virgin Islands. The Complaint alleges Low acquired an interest in the EMI
2 Rights using money from the Good Star Phase, as reflected in the following chart.
3 DATE AMT FROM TO COMPL.
06/08/12 $120 million Good Star (RBS Coutts) ADKMIC BSI (BSI Bank) 378-79
4 SWITZERLAND SINGAPORE
5 06/11/12 $120 millions ADKMIC BSI (BSI Bank) Low Hock Peng (BSI Bank) 379
SINGAPORE SINGAPORE
6
06/11/12 $118 million Low Hock Peng (BSI Bank) Low Taek Jho (BSI Bank) 379
7 SINGAPORE SINGAPORE
8 06/11/12 $115 million Low Taek Jho (BSI Bank) Jynnwel Account A (BSI Bank) 379
SINGAPORE SINGAPORE
9
06/11/12 $115 million Jynnwel Account A (BSI Bank) Jynnwel Account B (BSI Bank) 379
10 SINGAPORE SINGAPORE
11 06/11/12 $110 million Jynnwel Account B (BSI Bank) JW Nile Account aka LOW EMI 379, 384
SINGAPORE Partner (CLAIMANT) (BSI Bank)
12 SINGAPORE
06/26/12 $107 million JW Nile Account aka LOW EMI EMI Escrow Account (Bank of NY 380,
13 Partner (CLAIMANT) (BSI Mellon) 382
Bank) UNITED STATES
14 SINGAPORE (UNKNOWN)
16 Claimant for Bombardier Jet is Global One Aviation (Global 5000) Ltd., an
17 entity located in the British Virgin Islands. The Complaint alleges Low acquired an
18 interest in the jet using money from the Good Star Phase, as reflected in the
19 following chart.
DATE AMT FROM TO COMPL.
20
10/21/09 $148 million Good Star (RBS Coutts) Shearman IOLA Account 338,
21 SWITZERLAND UNKNOWN 105
22 12/31/09 $7 million Shearman IOLA Account Crowe Escrow Account (Bank of 339
UNKNOWN Oklahoma)
23 OKLAHOMA
24 01/26/10 $117 million Good Star (RBS Coutts) Shearman IOLA Account 338
SWITZERLAND UNKNOWN
25 03/26/10 $28 million Shearman IOLA Account Crowe Aircraft Escrow Account 341
UNKNOWN (Bank of Oklahoma)
26 OKLAHOMA
27 03/31/10 $35 million Crowe Aircraft Escrow Account J.T. Aviation Corp. (Citibank) 333,
(Bank of Oklahoma) UNKNOWN 342
28 OKLAHOMA
9
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 16 of 31 Page ID
#:1367
9 03/25/13 $378 million Granton Account (Falcon Bank) Dragon Market (RBS Coutts) 405
SINGAPORE SWITZERLAND
10
11/05/13 $93 million Granton Account (Falcon Bank) Dragon Market (RBS Coutts) 405
11 SINGAPORE SWITZERLAND
12 11/06/13 $47 million Granton Account (Falcon Bank) Dragon Market (RBS Coutts) 405
SINGAPORE SWITZERLAND
13
04/25/13 $98 million Dragon Market (RBS Coutts) Dragon Dynasty (BSI Bank) 406
14 SWITZERLAND SINGAPORE
15 07/05/13 $120 million Dragon Market (RBS Coutts) Dragon Dynasty (BSI Bank) 406
SWITZERLAND SINGAPORE
16 09/10/13 $9.8 million Dragon Market (RBS Coutts) Dragon Dynasty (BSI Bank) 406
SWITZERLAND SINGAPORE
17
11/08/13 $248.5 Dragon Market (RBS Coutts) Dragon Dynasty (BSI Bank) 406
18 million SWITZERLAND SINGAPORE
19 11/12/13 $248.5 Dragon Dynasty (BSI Bank) Low Hock Peng (BSI Bank) 408
million SINGAPORE SINGAPORE
20
11/12/13 $235.5 Low Hock Peng (BSI Bank) Low Taek Jho (BSI Bank) 408
21 million SINGAPORE SINGAPORE
22 11/12/13 $12.5 million Low Hock Peng (BSI Bank) Low Taek Szen (BSI Bank) 409
SINGAPORE SINGAPORE
23
11/12/13 $206 million Low Taek Jho (BSI Bank) DLA Piper IOLA (Citibank) 410
24 SINGAPORE NEW YORK
25 11/12/13 $12.2 million Low Taek Szen (BSI Bank) DLA Piper IOLA (Citibank) 411
SINGAPORE NEW YORK
26
11/23/13 $202 million DLA Piper IOLA (Citibank) Commonwealth Title Ins. (JP 422
27 NEW YORK Morgan)
UNKNOWN
28
10
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 17 of 31 Page ID
#:1368
8 06/28/11 $54.8 million ADKMIC BSI (BSI Bank) Low Hock Peng (BSI Bank) 346
SINGAPORE SINGAPORE
9
06/28/11 $30 million Low Hock Peng (BSI Bank) Selune Ltd. (Rothschild Bank AG) 346
10 SINGAPORE SWITZERLAND
11 Unknown $27 million Selune Ltd. (Rothschild Bank 1/80 Columbus (Rothschild Bank 347
AG) AG)
12 SWITZERLAND SWITZERLAND
07/05/11 $27 million 1/80 Columbus (Rothschild Bank Shearman IOLA Account 347
13 AG) UNKNOWN
SWITZERLAND
14 07/05/11 $27 million Shearman IOLA Account Checks written to: 348
UNKNOWN Prudential Douglass Elliman
15 NY State Sales Tax
Former owner of asset (JP Morgan
16 Chase)
Chicago Title Insurance Company
17 UNKNOWN
25 11/05/12 $153 million ADKMIC BSI (BSI Bank) Low Hock Peng (BSI Bank) 360
SINGAPORE SINGAPORE
26
11/07/12 $150 million Low Hock Peng (BSI Bank) Low Taek Jho (BSI Bank) 360
27 SINGAPORE SINGAPORE
28
11
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 18 of 31 Page ID
#:1369
3 02/12/14 $13.7 millions DLA Piper (Citibank) Chicago Title Insurance Company 361
UNKNOWN UNKNOWN
4
5 4. The Claims for Forfeiture
6 Based on the above allegations, the Government seeks forfeiture against the
7 Out-of-State Assets under four claims for relief:
8 First Claim (Assets traceable to SUAs Compl. 502-04)
9 The Complaint alleges the Out-of-State Assets are forfeitable because they
10 constitute and are derived from proceeds traceable to the following specified
11 unlawful activities (SUAs) as defined in 18 U.S.C. 1956(c)(7) or a
12 conspiracy to commit such SUAs:
13 (1) a foreign offense involving the misappropriation of public funds by or for
14 the benefit of a public official (18 U.S.C. 1956(c)(7)(B)(iv))
15 (2) fraud by or against a foreign bank (18 U.S.C. 1956(c)(7)(B)(iii))
16 (3) wire fraud (18 U.S.C. 1343)
17 (4) international transportation/receipt of stolen property (18 U.S.C. 2314)
18 and receipt of stolen money (18 U.S.C. 2315).
19 Second Claim (Assets traceable to 1957 transaction Compl. 505-07)
20 The Complaint alleges the Out-of-State Assets are forfeitable because they
21 were involved in or are traceable to a violation of (or a conspiracy to violate)
22 18 U.S.C. 1957, which prohibits knowingly conducting a financial
23 transaction with proceeds of the above SUAs in an amount greater than
24 $10,000.
25 Third Claim (Assets traceable to 1956 transaction Compl. 508-10)
26 The Complaint alleges the Out-of-State Assets are forfeitable because they
27 were involved in or are traceable to a violation of (or a conspiracy to violate)
28 18 U.S.C. 1956(a)(1)(B)(i), which prohibits conducting a transaction with
12
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 19 of 31 Page ID
#:1370
1 proceeds of the above SUAs with the intent to conceal the criminal nature of
2 the proceeds.
3 Fourth Claim (Assets traceable to 1956 transaction Compl. 511-13)
4 The Complaint alleges the Out-of-State Assets are forfeitable because they
5 were involved in or are traceable to a violation of (or a conspiracy to violate)
6 18 U.S.C. 1956(a)(2)(B), which prohibits transporting proceeds of the
7 above SUAs from overseas into the United States with the intent to conceal
8 the criminal nature of the proceeds.
9 For the Out-of-State Assets that are the subject of this motion, none of the SUAs
10 or the subsequent acts of laundering the proceeds are alleged to have occurred in this
11 District.
12 III. LEGAL STANDARD
13 This in rem civil forfeiture action is governed by the Supplemental Rules. See
14 Fed. R. Civ. P. Supp. R. (Supp. R.) A(1)(B). A civil forfeiture complaint must state
15 the grounds for in rem jurisdiction and for venue, Supp. R. G(2)(b), and state
16 sufficiently detailed facts to support a reasonable belief that the government will be
17 able to meet its burden of proof at trial, Supp. R. G(2)(f). The Supplemental Rules
18 thus impose a particularity requirement on civil in rem complaints, in addition to the
19 requirements under the Federal Rules of Civil Procedure. United States v. Eleven (11)
20 New Util. Vehicles, 2014 WL 4385734, at *1 (D.P.R. Sept. 4, 2014).
21 Supplemental Rule G(8)(b)(i) allows a claimant to move to dismiss a civil
22 forfeiture complaint under Rule 12(b). Here, Claimant moves to dismiss under Rule
23 12(b)(2) and 12(b)(3) because the Complaint fails to set forth a viable basis for in rem
24 jurisdiction or venue in this District over the Out-of-State Assets. In an in rem
25 forfeiture action, 28 U.S.C 1355 establishes the statutory requirements for both
26 jurisdiction and venue. See United States v. Approximately $1.67 Million, 513 F.3d
27 991, 998 (9th Cir. 2008) (section 1355 provides for jurisdiction in forfeiture cases).
28 Contents of Account No. 03001288 v. United States, 344 F.3d 399, 403 (3d Cir. 2003)
13
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 20 of 31 Page ID
#:1371
1 (Though the District Court concluded that 1355(b) merely provides for venue, we
2 find that it also grants district courts jurisdiction over the property at issue in forfeiture
3 actions based on the plain language of the statute.). The Government, as plaintiff,
4 bears the burden of establishing proper venue and jurisdiction. See, e.g., Menken v.
5 Emm, 503 F.3d 1050, 1056 (9th Cir. 2007); Piedmont Label Co. v. Sun Garden
6 Packing Co., 598 F.2d 491, 496 (9th Cir. 1979). In deciding a motion to dismiss for
7 lack of jurisdiction or improper venue, the Court must accept the Complaints well-
8 pled factual allegations as true. See Allstar Mktg. Grp., LLC v. Your Store Online,
9 LLC, 666 F. Supp. 2d 1109, 1129 (C.D. Cal. 2009) (collecting cases); United States
10 v. $198,573.85 in U.S. Currency, No. 5:13-CV-1180, 2014 WL 859137, at *2
11 (N.D.N.Y. Mar. 5, 2014). The Government bears the burden of alleging sufficient
12 jurisdictional facts to make a prima facie showing that must be more than bare
13 allegations of jurisdiction; plaintiff must establish the existence of the requisite
14 jurisdictional facts. See United States v. 3 Parcels in La Plata County, Colo., 919 F.
15 Supp. 1449, 1452 (D. Nev. 1995).
16 IV. ARGUMENT
17 The actions against the Out-of-State Assets should be dismissed for lack of
18 jurisdiction and improper venue. Under 1355, jurisdiction and venue in a civil asset
19 forfeiture action are proper (i) in any district where the property to be forfeited is
20 located (28 U.S.C. 1355(b)(1)(B); 28 U.S.C. 1395(b)); or (ii) in the district court
21 for the district in which any of the acts or omissions giving rise to the forfeiture
22 occurred (28 U.S.C. 1355(b)(1)(A)). The Government cannot establish statutory
23 jurisdiction or venue over the Out-of-State Assets under either theory. Even if the
24 Government could satisfy the statute, exercising jurisdiction over the Out-of-State
25 Assets in this District would not comport with the Due Process clause of the Fifth
26 Amendment.
27
28
14
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 21 of 31 Page ID
#:1372
15
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 22 of 31 Page ID
#:1373
1 proscribed acts directly related to said property within the Southern District of
2 Florida (emphasis added)); United States v. One Oil Painting Entitled Femme en
3 Blanc, 362 F.Supp.2d 1175, 1185 (C.D.Cal. 2005) (Because the painting was
4 transported from this district to Illinois, and this transportation in interstate commerce
5 is the basis for the forfeiture action, at least one of the acts or omissions giving rise to
6 the action occurred in this district).
7 In the context of forfeiture cases, courts have recognized that the acts or
8 omissions giving rise to the forfeiture are the acts or omissions constituting the
9 predicate criminal offenses. See, e.g., United States v. One 2006 Lamborghini
10 Murcielago, No. SACV 13-0907-DOC, 2015 WL 3752338, at *6 (C.D. Cal. June 16,
11 2015) (finding the predicate offense of an unlawful structured transaction as the event
12 giving rise to the forfeiture) affd 2017 WL 663488 (9th Cir. Feb. 16, 2017); United
13 States v. Kennedy, 201 F.3d 1324, 1331 (11th Cir. 2000) (finding predicate offense of
14 mail fraud was the act giving rise to the forfeiture); Approximately $1.67 Million, 513
15 F.3d at 998 (finding allegations that the claimant attended meetings, stored cash and
16 narcotics, and mailed a false identification in the Northern District of California in
17 furtherance of a narcotics smuggling scheme constituted acts giving rise to
18 forfeiture in the district); see also All for Multilingual Multicultural Educ. v. Garcia,
19 No. CV 11-0215 PJH, 2011 WL 2532478, at *7 (N.D. Cal. June 24, 2011) (explaining
20 that the alleged wrongful acts are the acts or omissions giving rise to a claim).
21 Here, the Complaint contains no allegation that the acts or omissions giving
22 rise to the forfeiture of any of the five Out-of-State Assets occurred in this District.
23 As a preliminary matter, the Governments statement of venue contains only the
24 following conclusory allegation:
25
Venue lies in this district pursuant to 28 U.S.C. 1355(b)(1)(A) and
26 1355(b)(2) because acts and omissions giving rise to the forfeiture took
27
28
16
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 23 of 31 Page ID
#:1374
17
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 24 of 31 Page ID
#:1375
1 the people or entities involved were located in the United States, nor did any of the
2 relevant transactions occur in the United States.7 For example, the Complaint alleges
3 that funds from both the Good Star and Tanore phases were sent to MALAYSIAN
4 OFFICIAL 1 for payment. But all of the acts and omissions related to the Good Star
5 Phase occurred in Malaysia, Saudi Arabia, Seychelles, Singapore, and Switzerland.
6 (Mot. at 4-6.) And all of the acts and omissions related to the Tanore Phase occurred
7 in Abu Dhabi, British Virgin Islands, Curacao, Malaysia, and Singapore. (Mot. at 7-
8 8.) MALAYSIAN OFFICIAL 1 is not alleged to have had any contact with this
9 District. The bank accounts in which he allegedly received money were located in
10 Singapore. (Compl. 94, 101, 260-62.)
11 The second SUA foreign bank fraud refers to misrepresentations that
12 resulted in the fraudulent transfer of 1MDB funds by foreign banks. Again, none of
13 the acts or omissions occurred in this country. For example, Good Star was formed
14 in Seychelles, and the 1MBD-PetroSaudi joint venture was formed in Malaysia.
15 (Compl. 44 n.6, 4758.) The alleged misrepresentations involved communications
16 between foreign parties and took place on foreign soil. (Mot. at 4-6). For instance,
17 the Government alleges that misstatements were made to the 1MDB Board at board
18 meetings held in Malaysia, or were communicated between 1MDB officials and
19 representatives of Deutsche Bank (Malaysia) Berhad, the Malaysian branch of a
20 German bank, or Bank Negara in Malaysia. (Compl. 41, 43, 60, 65.) Likewise,
21
22 7
On occasion, the Complaint notes that transfers between the foreign banks were
23 routed through a U.S. correspondent bank account at J.P. Morgan. (See, e.g., Compl.
79.) Although the Complaint does not specify the location of the J.P. Morgan
24 account, it is immaterial because that alone is insufficient to create a connection to
25 the United States. See United States v. Prevezon Holdings, LTD., 122 F. Supp. 3d 57,
71 (S.D.N.Y. 2015) (In an otherwise wholly foreign wire fraud scheme, the only
26 domestic contact is a single wire transfer directed from [one offshore bank account to
27 another], with the transfer routed through New York . . . . [T]he court cannot conclude
that this single transfer is sufficient to overcome the presumption against
28 extraterritoriality).
18
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 25 of 31 Page ID
#:1376
1 the alleged concealment of the misappropriated funds all occurred overseas (Compl.
2 8190.)
3 As to the last two SUAs wire fraud and transportation of stolen property
4 although the Complaint contains allegations that certain acts or omissions occurred in
5 the United States, not one is alleged to have occurred in this District. Wire fraud
6 occurs upon the use of a United States wire in furtherance of a scheme or artifice to
7 defraud with the specific intent to defraud. See United States v. Jinian, 725 F.3d 954,
8 960 (9th Cir. 2013). And transportation of stolen property and receipt of stolen money
9 under 2314 and 2315 occur when stolen property or money is transferred between
10 states, i.e., in interstate commerce, or between a foreign country and any state, i.e., in
11 foreign commerce. Here, no wire fraud transactions or transportation of stolen
12 property took place in California. Rather, as illustrated in the charts on pages 4-12 of
13 this motion, all of the transactions related to the Out-of-State Assets are alleged to
14 have occurred overseas or in unspecified locations in the United States. (Compl. 42
15 (alleging that $700 million [was] sent to an account at RBS Coutts Bank in Zurich);
16 94 (each of the four wire transfers totaling $330 million was a foreign exchange
17 transaction completed through financial institutions in Malaysia); 99 ($24,500,000
18 was transferred to an account at Riyad Bank, in Saudi Arabia); 104 (eleven wire
19 transfers totaling $368 million were sent from the Good Star Account to an account
20 held by Shearman & Sterling LLP (location unknown)); 109 (five wire transfers
21 totaling $389 million was transferred from the Good Star Account to an account at
22 BSI Bank in Singapore).) Accordingly, the alleged SUAs cannot form the basis for
23 in rem jurisdiction over the Out-of-State Assets in this District.
24 2. None Of the Alleged Subsequent Money Laundering Transactions
25 Occurred in this District
26 The Complaint similarly fails to allege that any subsequent laundering of
27 proceeds from the SUAs occurred in this District. The proceeds from the SUAs were
28 allegedly laundered, in part, through the purchase of the Out-of-State Assets in the
19
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 26 of 31 Page ID
#:1377
1 United States. But as demonstrated in pages 8-12 of this motion, none of the
2 transactions leading up to the purchase of the Out-of-State Assets occurred in this
3 District. Instead, the transactions are alleged to have flowed through Switzerland,
4 Singapore, New York, Oklahoma, and other unspecified locations in the United
5 States. (Mot. 8-12.) Finally, none of the parties involved in the purchase of the Out-
6 of-State Assets are alleged to be located in this District.
7 In sum, none of the acts or omissions constituting the SUAs or the subsequent
8 money laundering of the SUA proceeds occurred in this District. Accordingly, there
9 is no jurisdiction over the Out-of-State Assets. For the same reasons, venue in this
10 District is also improper. See $50,900, 2016 WL 4257328, at *3 (finding venue
11 improper where there are no . . . facts alleged connecting any acts or omissions of
12 claimants to this district).
13 C. A Conspiracy Label Does Not Establish The Requisite Nexus Between the
14 Out-of-State Assets And This District
15 The Government has suggested that it can cure these jurisdictional defects by
16 attaching a conspiracy label to the Complaints allegations. The mere reference to
17 an ill-defined conspiracy to commit the alleged SUAs or acts of money
18 laundering, however, is not enough to establish the requisite connection between
19 these Out-of-State Assets and the assets located in this District. First, the plain
20 language of 1355(b)(1)(A) does not provide any explicit or implicit conspiracy
21 exception. Instead, it requires identification of an act or omission in this District
22 giving rise to the forfeiture. This phrasing requires a close and direct causal
23 connection between the particular act or omission in this District (here, the alleged
24 conspiracy) and the forfeiture of the specific Out-of-State Asset. See, e.g.,
25 Jenkins Brick Co. v. Bremer, 321 F.3d 1366, 1371 (11th Cir. 2003) (holding with
26 regard to 28 U.S.C. 1391(b)(2), which provides for venue where events or
27 omissions giving rise to the claim occurred, that [o]nly the events that directly
28 give rise to a claim are relevant); James River Ins. Co. v. Kemper Cas. Ins. Co.,
20
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 27 of 31 Page ID
#:1378
1 585 F.3d 382, 386 (7th Cir. 2009) (Posner, J.) (explaining that arising from
2 implies a tighter connection than a mere but for cause). But the Government has
3 failed to identify any causal link at all between the purported acts in furtherance of
4 the alleged conspiracy and the Out-of-State Assets.
5 Nor does the clumping of all sixteen assets including assets that are
6 completely distinct from the Out-of-State Assets in one complaint create a nexus
7 between the Out-of-State Assets and this District. The Government seems to take the
8 position that a mere connection between this District and some of the assets named in
9 the Complaint is sufficient to establish jurisdiction for all of the sixteen assets,
10 including the Out-of-State Assets. This position has been soundly rejected. See, e.g.,
11 United States v. Funds Held in the Name or for the Benefit of Wetterer, 210 F.3d 96,
12 104-05 (2d Cir. 2000) (rejecting Governments argument that independent assets
13 form a single ball of wax for purposes of forfeiture, and instead evaluating
14 separately each asset for jurisdiction and venue); United States v. 51 Pieces of Real
15 Prop. Roswell, N.M., 17 F.3d 1306, 1310 (10th Cir. 1994) (Even if a district is the
16 proper venue for a civil forfeiture action, the court cannot proceed unless it has
17 jurisdiction over the defendant property.).
18 The Governments reliance on conspiracy as the basis for jurisdiction and
19 venue is further problematic where, as here, the allegations in the Complaint fail to
20 clearly delineate what the conspiracy is. The Government is required to make a
21 prima facie case of conspiracy going well beyond the bare, conclusory allegations of
22 conspiracy set forth in the Complaint. See, e.g., First Chicago Intl v. United Exch.
23 Co, 836 F.2d 1375, 1377-78 (D.C. Cir. 1988) (rejecting claim for jurisdiction based
24 on conspiracy where plaintiff made conclusory allegations of conspiracy and there
25 was no concrete evidence in the record indicating that there was a common plan).
26 The Governments entire 136-page Complaint contains only two factual allegations
27 concerning a purported conspiracy: (1) that this is a civil action in rem to forfeit
28 assets traceable to an international conspiracy to launder money misappropriated
21
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 28 of 31 Page ID
#:1379
1 from 1MDB; and (2) that multiple individuals, including public officials and their
2 associates, conspired to fraudulently divert billions of dollars from 1MDB through
3 various means. (Compl. 5, 6.) The Government fails to identify with any clarity
4 the members of the conspiracy, the overt acts taken in furtherance of the conspiracy,
5 or the locations of the acts and omissions constituting the conspiracy. Instead, the
6 Government merely repeats the phrase conspiracy to commit such offenses when
7 alleging each of its claims for relief without alleging any more specific facts that
8 supposedly constitute that alleged conspiracy. (Compl. 503, 506, 509, 512.)
9 These vague, generalized, and conclusory statements fall far short of allegations
10 made with reasonable particularity that establish a prima facie case of conspiracy.
11 See, e.g.; United States v. $50,040 in U.S. Currency, No. C 06-04552 WHA, 2007
12 WL 1176631, at *3 (N.D. Cal. Apr. 20, 2007); First Chicago, 836 F.2d at 1377-78.
13 The Complaint makes it impossible for the Court to determine the locations of the
14 acts or omissions constituting the alleged conspiracy for the purpose of assessing
15 jurisdiction or venue.
16 In short, having failed to allege that a single wrongful act giving rise to
17 forfeiture of the Out-of-State Assets occurred in the Central District, the Government
18 has also failed to allege the existence of any conspiracy that could potentially
19 subject the Out-of-State Assets to jurisdiction or venue in this District. It cannot
20 overcome this deficiency by simply repeating the boilerplate label of conspiracy
21 and claiming that this label brings assets with no connection to this District within
22 this Courts in rem jurisdiction.
23 D. The Exercise of Jurisdiction Over the Out-of-State Assets Would Violate
24 Due Process
25 Even if the Court were to conclude that statutory in rem jurisdiction and venue
26 lie under 28 U.S.C. 1355, jurisdiction would still be barred by the Due Process
27 Clause of the Fifth Amendment. While Congress has substantial power to set the
28 jurisdiction of the federal courts, the Due Process Clause limits that power. United
22
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 29 of 31 Page ID
#:1380
1 States v. Batato, 833 F.3d 413, 423 (4th Cir. 2016). In this case, the Government
2 contends that it can, through the simple expedient of a conspiracy allegation, cause a
3 court to exercise jurisdiction over property located anywhere in the world even though
4 neither the property nor the owner of the property has any direct connection to this
5 District. Such potentially unbounded authority offends traditional notions of fair play
6 and substantial justice and cannot withstand scrutiny under the Fifth Amendment.
7 [I]n order to justify exercising jurisdiction in rem, the basis for jurisdiction
8 must be sufficient to justify an exercise of jurisdiction over the interests of persons in
9 a thing. Shaffer v. Heitner, 433 U.S. 186, 207 (1977); see also Intl Shoe Co. v. State
10 of Wash., Office of Unemployment Comp. & Placement, 326 U.S. 310, 315 (1945).8
11 . Accordingly, [t]he standard for determining whether an exercise of jurisdiction
12 over the interest of persons is consistent with the Due Process Clause is the minimum-
13 contacts standard elucidated in International Shoe. Id. Here, the Government has
14 not established minimum contacts over the property owner, and therefore a finding of
15 jurisdiction would be unconstitutional.
16 Under International Shoe, a court may not exercise jurisdiction over a
17 nonresident defendant unless the defendant has certain minimum contacts with the
18 state, such that the maintenance of the suit does not offend traditional notions of fair
19 play and substantial justice. Newhard Cook & Co. v. Inspired Life Ctrs., Inc., 895
20 F.2d 1226, 1228 (8th Cir. 1990). The application of the fair play and substantial
21 justice test to in rem jurisdiction is premised on recognition that the phrase, judicial
22
23
8
Traditionally, in rem jurisdiction could only be asserted if the res was located in
24 the state or if it had been removed by accident or fraud. United States v. Ten
25 Thousand Dollars ($10,000.00) in U.S. Currency, 860 F.2d 1511, 1513 (9th Cir.
1988). The Ninth Circuit has declined to decide whether such jurisdiction can be
26 expanded by the minimum contacts test of International Shoe. Id.; accord Batato,
27 833 F.3d at 423-24. Claimant here asserts that the exercise of in rem jurisdiction on
the facts here violates Due Process, regardless of whether the International Shoe test
28 applies.
23
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 30 of 31 Page ID
#:1381
24
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE
Case 2:16-cv-05364-DSF-PLA Document 130 Filed 05/15/17 Page 31 of 31 Page ID
#:1382
1 V. CONCLUSION
2 For the foregoing reasons, the Complaint should be dismissed with prejudice.
3
4 DATED: May 15, 2017 Respectfully submitted,
5
Ekwan E. Rhow
6 Jeremy D. Matz
Naeun Rim
7
Patricia H. Jun
8 Bird, Marella, Boxer, Wolpert, Nessim,
Drooks, Lincenberg & Rhow, P.C.
9
10 By: /s/ Naeun Rim
11 Naeun Rim
Attorneys for Claimant JW Nile (BVI) Ltd.
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
25
MOTION TO DISMISS FOR LACK OF JURISDICTION AND VENUE