United States v. Two an/apv Monocular Night Vision Devices ( 2018 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
Plaintiff,
v. Case No. 17-cv-1262 (CRC)
TWO AN/PVS-14 MONOCULAR NIGHT
VISION DEVICES; THREE PVS-14/6015-
HPTN MONOCULAR NIGHT VISION
DIVICES; and TWO PVS7-3N NIGHT
VISION DEVICES,
Defendants.
MEMORANDUM OPINION
The Government brings this civil forfeiture action in rem against three sets of night vision
devices, or “NVDs,” that it is currently holding in Washington, D.C.1 In a verified complaint
filed June 2017, the Government alleges that these NVDs were seized as part of an investigation
by the U.S. Department of Homeland Security into a scheme designed to circumvent federal
export laws and to launder money. Because they have been designated as “defense articles,”
NVDs are subject to export controls under the Arms Export Control Act, 22 U.S.C. § 2778,
meaning that anyone who wants to export them from the United States must obtain an export
license from the the Directorate of Defense Trade Controls (“DDTC”), id. § 2778(b)(2).
According to the Government, a Tokyo-based company identified in the complaint as “Company
1” purchased the NVDs from U.S. manufacturers in three transactions. Verified Compl. ¶ 17.
1
The Government describes the defendant property as follows: (1) two AN/PVS-14
Monocular NVDs, including two helmet mount kits, two weapon mounts, and two storage cases;
(2) three PVS-14/6015-HPTN Monocular NVDs, including three helmet mount kits; and (3) two
PVS7-3N NVDs.
When making these purchases, the company filed export declarations with the DDTC stating that
the end user of the devices was a branch of the Japanese military. Id. ¶ 18. Each declaration
contained the signature of Company 1’s president and that of a Japanese military officer. Based
on those declarations, DDTC issued an export license for each NVD. Id. ¶¶ 25, 31, 36. But the
Department of Homeland Security later learned that the signatures purportedly made on behalf of
the Japanese military were forged, and that some of the purchased equipment was actually being
stored in Company 1’s warehouse. Id. ¶¶ 19–20. Meanwhile, the Japanese Ministry of Defense
had seized some of the equipment, and Company 1’s president eventually agreed to return all of
it to the United States. Id. ¶ 20.
In the Government’s view, Company 1’s actions violated three federal laws: First, the
Arms Export Control Act (“AECA”), which prohibits the willful failure to obtain an export
license before exporting a defense article to another country, 22 U.S.C. § 2778(c), see 22 C.F.R.
§ 127.1(a)(1); second, an anti-smuggling statute that criminalizes the knowing export of any
article contrary to any federal law, 18 U.S.C. § 554(a); and third, the federal money-laundering
statute, which proscribes the transmission of funds into the United States with the intent to
promote the commission of any “specified unlawful activity,” 18 U.S.C. § 1956(a)(1)(A)(i)—
including a violation of the AECA or the anti-smuggling statute, see 18 U.S.C. §
1956(c)(7)(B)(v)(I), (c)(7)(D)—or conspiracy to do the same, id. § 1956(h). The Government
thus contends that the NVDs are subject to forfeiture under 18 U.S.C.
§ 981(a)(1)(C)—which makes property forfeitable if it “constitutes or is derived from proceeds
traceable to a violation of” AECA or § 554(a)—and under 18 U.S.C. § 981(a)(1)(A)—which
makes property forfeitable if it is “involved in a transaction or attempted transaction in violation
of” 18 U.S.C. § 1956.
2
On June 27, 2017, the Government filed a verified complaint alleging the foregoing. A
warrant for the arrest of the NVDs issued the next day. As required by the Supplemental Rules
that apply to asset forfeiture actions, 2 the Government gave written notice to Company 1 and its
president—as parties “who reasonably appear[ed] to be a potential claimant,” Supp. R.
G(4)(b)—on July 26, 2017. That same day, Company 1 provided to the Government a signed
Consent and Agreement to Forfeiture, in which Company 1 waived any interest it had in the
NVDs. Gov’s Aff. Supp. Default ¶ 5 (ECF No. 5). The Government also published notice on its
official forfeiture website for 30 consecutive days beginning July 26. Id. ¶ 6. The notice
provided that any claim to the property was due September 25, 2017. Id. No such claims were
filed. The Government moved for an entry of default, which the Clerk entered on October 5. It
then filed this motion for default judgment on November 22.
Default judgment is proper “when the adversary process has been halted because of an
essentially unresponsive party.” H.F. Livermore Corp. v. Aktiengesellschaft Gebruder Loepfe,
432 F.2d 689, 691 (D.C. Cir. 1970). When a plaintiff has moved for default judgment, the Court
must ensure that default was properly entered and, if so, decide whether the facts stated in the
complaint, accepted as true, entitle the plaintiff to judgment in her favor. See Boland v. Elite
Terrazzo Flooring, Inc., 763 F. Supp. 2d 64, 67 (D.D.C. 2011). These same principles apply in
forfeiture actions: when no party has filed a claim to property that the Government seeks, the
Court must ensure that the Government’s allegations show that the property is subject to
forfeiture. See, e.g., United States v. $10,409, 585 F. Supp. 2d 10 (D.D.C. 2008).
2
See Supplemental Rules for Admiralty or Maritime Claims & Asset Forfeiture Actions
(“Supp. R.”).
3
The Court finds that default judgment is warranted here. The Government properly
notified potential claimants as required by the Supplemental Rules. Company 1 has consented to
the forfeiture and no other party has claimed ownership of the NVDs. Default was thus properly
entered. And, based on the Government’s allegations in its verified complaint, the Court finds
that the NVDs constituted or were derived from proceeds traceable to violations of the AECA,
22 U.S.C. § 2778(c); the anti-smuggling statute, 18 U.S.C. § 554(a); and the money-laundering
statute, id. § 1956(a)(1)(A)(i). As a result, the Court finds that the NVDs are subject to forfeiture
to the United States under 18 U.S.C. § 981(a)(1)(C) and (A).
The Court will therefore grant Plaintiff’s Motion for Entry of Default Judgment and
Order of Forfeiture. A separate Order accompanies this Memorandum Opinion.
CHRISTOPHER R. COOPER
United States District Judge
Date: April 2, 2018
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