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United States v. All Funds on Deposit at Sun Secured Advantage

United States Court of Appeals, Fifth Circuit

July 19, 2017

UNITED STATES OF AMERICA, Plaintiff - Appellee
v.
ALL FUNDS ON DEPOSIT AT SUN SECURED ADVANTAGE, ACCOUNT NUMBER *3748, Held at the Bank of NT Butterfield & Son Limited in Bermuda Defendant ERICK SILVA SANTOS, Claimant - Appellant

         Appeal from the United States District Court for the Southern District of Texas

          Before JOLLY, SMITH, and GRAVES, Circuit Judges.

          E. GRADY JOLLY, CIRCUIT JUDGE.

         Erick Silva Santos ("Silva"), a Mexican citizen, faces a federal indictment charging money laundering and fraud that he allegedly committed in connection with his tenure as mayor of Matamoros, Tamaulipas, Mexico. Silva had various assets in the United States and Mexico. After his federal indictment, he took flight and has not returned to this country. The Government subsequently filed this civil forfeiture proceeding, seeking certain of Silva's assets that were allegedly tied to his conduct as a corrupt Mexican official. The district court ordered fugitive disentitlement under 28 U.S.C. § 2466 and subsequently entered final default judgment and order of forfeiture. Silva challenges these orders. We AFFIRM the fugitive disentitlement order and DISMISS Silva's appeal of the default judgment of forfeiture.

         I.

         A.

         In July 2014, Silva was indicted by a federal grand jury and charged with money laundering conspiracy, aiding and abetting bank fraud, aiding and abetting mail fraud, and wire fraud. Silva has not returned to the United States since his indictment, and an active warrant exists for his arrest.

         In November 2014, the Government filed a verified complaint for civil forfeiture in rem, seeking the forfeiture of a residence in Brownsville, Texas, and all funds in Silva's Bermuda bank account ("Bermuda account"). Both were allegedly tied to Silva's misappropriated campaign contributions and kickbacks from municipal contracts.[1] The Government published public notice of the forfeiture proceeding for at least thirty days. Notice was also sent to the known claimants, Silva and Maria Castaneda Torres ("Castaneda"). Castaneda is Silva's alleged common law wife.

         Silva filed claims to the Bermuda account and Brownsville residence. Castaneda only filed a claim to the Brownsville residence. At the expiration of the time for filing, no other claim or answer was filed.

         In July 2015, the district court held an initial pretrial conference for the civil forfeiture action, at which time it learned that Silva was a fugitive in the criminal proceeding. The court then set the civil case for trial.

         Shortly thereafter, Silva and Castaneda moved for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c), contending that the Government's complaint did not sufficiently identify underlying violations of Mexican law that would authorize civil forfeiture under 18 U.S.C. §§ 981(a)(1)(A), (B), or (C). Instead of responding to this motion, the Government, inter alia, moved for a finding of fugitive disentitlement as to Silva and, on that basis, further moved to strike Silva's claim, answer, and request for relief under Rule 12(c).

         The district court granted the Government's motions as to Silva and ordered the Government to respond to Castaneda's request for Rule 12(c) relief. The Government responded to Castaneda's Rule 12(c) motion by specifying Silva's alleged violations of Mexican law. With the court's permission, it also amended its complaint to allege that Silva violated four provisions of the Tamaulipas Penal Code.[2] The court then mooted Castaneda's 12(c) motion to dismiss. The Government subsequently non-suited its claim for the Brownsville home, which left the Bermuda account as the only remaining defendant in the forfeiture action and Silva-now a disentitled fugitive-as the only claimant.

         Silva filed a motion for reconsideration of the order granting fugitive disentitlement. But the district court denied Silva's motion. The Government then moved for entry of default judgment of forfeiture as to all funds in the Bermuda account. Because there were no further claims against that account, the district court ordered the clerk of court to enter default against the account and against any known or unknown potential claimants to it. The ...


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