Property Forfeiture

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7^th Circuit Court of Appeals

Case Name: United States of America v. Joshua N. Bowser, et al: Apppeal of Bradly W. Carlson

Case No.: 15-2258

Officials: EASTERBROOK, ROVNER, and SYKES, Circuit Judges.

Focus: Property Forfeiture

Appellant was not due direct notice of the forfeiture action.

“The district court in United States v. Rosga, 864 F. Supp. 2d 439 (E.D. Va. 2012),recognized such a danger in a case presenting the same issues here—an effort to intervene in forfeiture actions based on ownership by the collective membership of the Outlaws. As in this case, the Rosga court was presented with forfeiture of Outlaws paraphernalia following RICO convictions of sixteen Outlaws members, and the government provided notice to those defendants as well as the public notice on its website. Four Outlaws members not named as defendants in the criminal case then contested the forfeiture, seeking the return of all indicia and other property associated with the Outlaws based on the argument that none of the individual defendants owned the Outlaws items. The court held that, in order to adequately allege standing to contest a forfeiture, the claimants must establish “at least ‘a facially colorable owner‐ ship interest’ in the property in question.” Id. at 448. The Rosga court noted that dismissal of the petition on such standing grounds would be proper only if the facts taken as true in the light most favorable to petitioners, “do not plausibly demonstrate a cognizable legal interest in the forfeited assets.” Id at 449. Faced with the same “collective membership” argument raised here, the court held that the petitioners—who never claimed to have been in possession of the property and asserted only unsupported legal conclusions of collective ownership—failed to demonstrate a cognizable interest in the items. The court noted that criminal forfeiture statutes should be construed to deny relief to parties engaged in manipulating ownership. The court deemed “well‐founded” the government’s argument that the collective ownership mechanism asserted by the Outlaws was “designed solely ‘to insulate from forfeiture property used by convicted members of the organization.’” Id. at 450.”

Affirmed

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.