United States v. Tardon

Full title: UNITED STATES OF AMERICA, v. ALVARO LOPEZ TARDON, Defendant. re: MIAMARK…

Court: UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

Date published: Oct 8, 2020

493 F. Supp. 3d 1188 (S.D. Fla. 2020)

Opinion

CASE NO. 11-20470-CR-LENARD/GOODMAN

2020-10-08

UNITED STATES of America, v. Alvaro Lopez TARDON, Defendant. re: Miamark LLC and Murano 908 LLC, Petitioners, and Kyte Schooll (a Spanish corporation), Maria Tardon Torrego, and Artemio Lopez Tardon, Petitioners.

JOAN A. LENARD, UNITED STATES DISTRICT JUDGE

OMNIBUS ORDER ADOPTING AND SUPPLEMENTING REPORT AND RECOMMENDATIONS ON PETITIONS TO SET ASIDE FORFEITURE OF SUBSTITUTE ASSETS (D.E. 906), DISMISSING AMENDED PETITIONS FOR THIRD-PARTY INTEREST IN FORFEITED PROPERTY (D.E. 734, 735), AND DENYING AS MOOT THE MOTIONS ASSOCIATED WITH DOCKET ENTRIES 620, 714, 760, 776, 825, AND 826

THIS CAUSE is before the Court on the Report and Recommendations on Petitions to Set Aside Forfeiture of Substitute Assets issued by Magistrate Judge Jonathan Goodman on February 4, 2020. ("Report," D.E. 906.) Third-party Petitioners Miamark LLC, Murano 908 LLC, Kyte Schooll (a Spanish corporation), Maria Tardon Torrego, and Artemio Lopez Tardon (collectively, "Petitioners") filed Objections on March 19, 2020, ("Objections," D.E. 909), to which the Government filed a Response on June 1, 2020, ("Response," D.E. 914). Upon review of the Report, Objections, Response, and the record, the Court finds as follows.

I. Background

a. Procedural background

On May 29, 2012, a Grand Jury returned a Second Superseding Indictment ("SSI") charging Defendant Alvaro Lopez Tardon with one count of conspiring to launder money in violation of 18 U.S.C. § 1956(h) (Count 1) and thirteen counts of substantive money laundering in violation of 18 U.S.C. § 1957 (Counts 2 through 14). (See D.E. 203.) The SSI also contained forfeiture allegations seeking a money judgment of $26,443,771.00, twelve luxury automobiles, sixteen pieces of real property, twenty-six bank accounts, and several other items. (Id. at 5-11.)

On June 11, 2014, a jury found Defendant guilty of all charges. (See Jury Verdict, D.E. 484.) The jury was retained for forfeiture proceedings which occurred on June 11 and 12, 2014. (See D.E. 488.) The jury returned a Special Verdict finding that some, but not all, of the property listed in the SSI's forfeiture allegations was involved in or traceable to the offenses of conviction, and therefore subject to criminal forfeiture ("forfeitable property").¹

1 The forfeitable property includes:

1) One 2008 Bugatti Veyron (VIN: VF9SA25C08795118);

2) One Ferrari Enzo (VIN: ZFFCW56A830133927);

3) One 2009 Mercedes-Benz Maybach 57S (VIN: WDBVF79J89A002576);

4) One 2011 Mercedes-Benz G55K (VIN: WDCYC7BF8BX190896);

5) One 2010 Mercedes-Benz G55 AMG (VIN: WDCYC7BF8AX183252);

6) One 2010 Land Rover Range Rover (VIN: SALMF1E48AA327736);

7) Real property known and numbered as 2475 S. Bayshore Drive, Villa 3, Coconut Grove, FL 33133, together with all appurtenances, improvements and attachments thereon;

8) Real property known and numbered as 100 S Pointe Drive, Unit #3801, Miami Beach, FL 33139, together with all appurtenances, improvements and attachments thereon;

9) All principal, deposits, interest, dividends and other amounts credited to account number 229016239866 at Bank of America, N.A., in the name of Sharon Cohen, Maria De Las Nieves Tardon Lopez;

10) All principal, deposits, interest, dividends and other amounts credited to account number 229037949711 at Bank of America, N.A. in the name of Alvaro Lopez Tardon; and

11) All principal, deposits, interest, dividends and other amounts credited to account number 1100002143680 at Branch Banking and Trust (BB&T), f/k/a Colonial Bank in the name of Alvaro Lopez Tardon and MIAMARK LLC.

(Special Verdict, D.E. 487 at 1-3, 9-10, 12-19.)

The property that the jury did not find was subject to forfeiture ("non-traceable property") includes:

1) One 2010 Rolls-Royce Ghost (VIN: SCA664S50AUX48905);

2) One 2006 Mercedes-Benz SLR McLaren (VIN: WDDAJ76F06M000724);

3) Real property known and numbered as 1155 Brickell Bay Drive, #202, Miami, FL 33131, with all appurtenances, improvements and attachments thereon;

4) Real property known and numbered as 1155 Brickell Bay Drive, #502, Miami, FL 33131, with all appurtenances, improvements and attachments thereon;

5) Real property known and numbered as 1155 Brickell Bay Drive, #2703, Miami, FL 33131, with all appurtenances, improvements and attachments thereon; and

6) Real property known and numbered as 1000 S. Pointe Dr., Unit #908, Miami Beach, Florida 33139, with all appurtenances, improvements and attachments thereon.

(See Special Verdict, D.E. 487.)²

2 Other property that the jury did not find was subject to forfeiture includes:

1) One (1) diamond holder, with eight (8) diamonds;

2) Eight (8) watches:

a. one (1) Audemars Peguet - black/silver with blue face;

b. one (1) Audemars Peguet - black/silver with white face;

c. one (1) Audemars Peguet - black/blue face;

d. one (1) Audemars Peguet - white/red face;

e. one (1) Audemars Peguet Ltd. Edition 93/150-blue/white & red face;

f. one (1) Royal Offshore - red/black/yellow face, Ltd. Ed 724/150;

g. one (1) Royal Oak Offshore Grand Prix - copper /black; and

h. one (1) Royal Oak Offshore Ltd. Edition Juan P. Montoya –black/blue/white; and

3) Seven (7) miscellaneous items of jewelry:

a. one (1) silver bracelet chain;

b. one (1) chain with ivory tusk;

c. one (1) gold/silver color bracelet;

d. gold/silver color necklace;

e. cheetah print tusk;

f. gold/black watch with diamond Cartier; and

g. extra link.

(See Special Verdict, D.E. 487.) On April 26, 2016, the Court entered a Final Order of Forfeiture of Substitute Property as to the eight watches listed above. (D.E. 764.) On February 20, 2019, the Court entered an Order Granting the Government's Motion for Final Order of Forfeiture of Substitute Assets as to the diamond holder with eight diamonds and seven miscellaneous items of jewelry listed above. (D.E. 867.)

On August 15, 2014, the Government filed a Motion for Forfeiture Money Judgment and for Order of Forfeiture of Substitute Assets, seeking a forfeiture money judgment pursuant to Federal Rule of Criminal Procedure 32.2(b)(1)(B) in the amount of $14,358,639.64, and the forfeiture of the non-traceable property listed above as substitute assets pursuant to 21 U.S.C. § 853(p) in partial satisfaction of the prospective forfeiture money judgment. (D.E. 550.) On October 22, 2014, the Court entered an Order Granting in Part the Government's Motion for Forfeiture Money Judgment and for Order of Forfeiture of Substitute Assets. ("Forfeiture Order," D.E. 601.) Relevant here, the Court concluded that: (1) The Government was entitled to a forfeiture money judgment against Defendant for $14,358,369.64; and (2) the Government was entitled to an Order of Forfeiture of Substitute Assets with respect to the non-traceable property to satisfy any deficiency in the money judgment.³ (See id. at 27.) Thereafter, the Parties submitted an agreed-upon proposed Amended Order of Forfeiture of Substitute Property, which this Court entered on October 30, 2014. (D.E. 613.) On August 25, 2015, the Court entered a Second Amended Order of Forfeiture of Substitute Property, which clarified the descriptions of certain forfeited substitute assets. (D.E. 703.) Pursuant to the Second Amended Order, the non-traceable property was forfeited to the Government as substitute assets in partial satisfaction of the forfeiture money judgment.⁴ (Id. ¶ 2.)

3 The Court also granted in part Defendant's Motion for Return of Property and to Release Lis Pendens, (D.E. 517), ordering the Government to release certain non-traceable property to Defendant to satisfy his outstanding legal fees. (D.E. 601 at 28.)

4 Pursuant to the Second Amended Order of Forfeiture, the Government returned to defense counsel's law firm $104,308.73 that was derived from the interlocutory sale of 1155 Brickell Bay Drive, #202, Miami, Florida 33131, to satisfy Defendant's outstanding legal fees. (D.E. 613 ¶ 4; see also D.E. 703 at 28.)

In December 2014, several third parties asserted an interest in the non-traceable property and petitioned the Court pursuant to 21 U.S.C. § 853(n) for an adjudication of their rights regarding their claimed interest in the property, including the Third-Party Petitioners herein.⁵ (See D.E. 620, 623, 631, 637, and 638.) On December 11, 2015, the Court dismissed without prejudice the Third-Party Petitions associated with Docket Entries 623, 631, 637, and 638, which were filed by the Third-Party Petitioners herein.^{6 , 7} (See D.E. 732; see also D.E. 745 at 49, 51.)

5 In addition to the petitions regarding non-traceable property, Longview Villas Owners Association, Inc. filed a Petition to Protect Third Party Interest from Forfeiture regarding the forfeited real property located at 2475 South Bayshore Drive, Villa 3, Coconut Grove, Florida 33133. (D.E. 632.) The Court referred this petition to Judge Goodman (D.E. 634) who issued a Report recommending that the Final Order of Forfeiture acknowledge the Government's obligation to pay monies owed to Longview based upon Defendant's failure to pay Longview. (D.E. 659.) On February 4, 2015, the Court adopted Judge Goodman's Report and ordered that "[t]he Final Order of Forfeiture shall include the Government's obligation to pay Longview any fees, interest, penalties, etc. lawfully owed to Longview based upon Defendant's failure to pay Longview." (D.E. 669.)

6 On November 10, 2015, the Government filed a Motion for Inquiry as to whether Defendant's trial attorney Richard Klugh—who at the time also represented all of the third-party petitioners (except the Rubins), including The Collection Motor Sports of Madrid, Kyte Schooll, Maria Tardon, Artemio Lopez Tardon, Murano 908, LLC and Miamark, LLC—had a potential advocate/witness conflict with respect to his representation of the petitioners. (D.E. 714.) A status hearing was scheduled for November 23, 2015. (D.E. 712.)
At the November 23, 2015 hearing, Mr. Klugh stated that he did not anticipate a conflict, but that a deposition of the Government's witness would determine whether he would be required to serve as a witness for his client(s). (See Tr. of Nov. 23, 2015 Hr'g (D.E. 720) at 5; Response (D.E. 721) at 3.) The Court set the matter for a further status hearing on December 8, 2015. (D.E. 718.)
At the December 8, 2015 status hearing, the Court scheduled a bench trial for December 10, 2015. (See Minute Entry, D.E. 722; Notice of Hr'g, D.E. 723.)
On December 10, 2015, Mr. Klugh filed a Motion to Withdraw as counsel for all petitioners. (D.E. 728.) Therein, he informed the Court that he had "come to the conclusion that multiple conflicts of interest arise from the present status of this case," (id. at 2), and requested that the Court grant the petitioners at least thirty days to retain new counsel, (id. at 5). On December 10, 2015, after a hearing on the matter, the Court granted Mr. Klugh's request to withdraw as counsel for Petitioner Murano 908, LLC. (Tr. of Bench Trial (12/10/15), D.E. 740 at 19, 74.) The trial went forward as to the other Petitioners. (See id. at 19.)
On December 11, 2015, Mr. Klugh renewed his Motion to Withdraw as counsel for all remaining petitioners. (See Tr. of Bench Trial (12/11/16), D.E. 745 at 6.) Based on Mr. Klugh's conflict, the Court dismissed without prejudice all of the petitions and indicated that the claims may be refiled pursuant to statute. (Id. at 48-51.)

7 The Court referred the Petition associated with Docket Entry 620, filed by James and Olga Rubin claiming an interest in the real property located at 1000 S. Pointe Drive, Unit 908, Miami Beach, Florida 33139, to Judge Goodman. (D.E. 627.) On December 18, 2014, the Government filed a Response acknowledging the Rubin's property lien interest in the Murano Unit 908, stating that a court hearing on this matter was not necessary to resolving the petition, and stating that the Government will, "upon vesting of clear title to the subject real property in its favor, and sale of the subject real property thereafter, satisfy the Petitioners’ property lien interest claimed against the subject real property based on the terms of the Default Judgment." (D.E. 643.) Accordingly, the Court denies the Rubin's Motion as moot.

On January 14, 2016, Third-Party Petitioners Miamark LLC and Murano 908 LLC filed an Amended Petition for Third-Party Interest in Forfeited Property. (D.E. 734.) Therein, Murano 908 LLC ("Murano")—which is owned by Artemio Lopez (Defendant's brother and indicted co-defendant), Maria Tardon Torrego (Defendant's mother), and Nieves Tardon Torrego (Defendant's sister)—claims ownership of the real property located at 1000 S. Pointe Drive, Unit 908, Miami Beach Florida 33139, (the "Murano Unit 908") "by virtue of purchase and satisfaction of all mortgages on the property[.]" (Id. at 1.) Murano claims that it "acquired the property via purchase from the existing mortgage holder and owner on January 26, 2006." (Id. at 2 (citing D.E. 734 at 6).) Miamark LLC ("Miamark")—which is also owned by Artemio Lopez, Maria Tardon Torrego, and Nieves Tardon Torrego—claims that it is "the record title owner via purchase" of 1155 Brickell Bay Drive, Units 202, 502 and 2703, Miami, Florida 33131 (the "Marks Units"). (Id. at 1-2.) Miamark argues that it "acquired title to the properties via purchases on May 17, 2006 (Units 502 and 2703) and November 18, 2006 (Unit 202)."⁸ (Id. at 2.)

8 At a May 25, 2018 status conference before Judge Goodman, counsel for Miamark clarified that Miamark is claiming only the Mark Unit 202 Forfeited Proceeds, and not all of the net seller proceeds from the interlocutory sale of Mark Unit 202, which included funds released to satisfy Defendant's outstanding trial attorney fees in the underlying criminal case. (See Report at 10.)

Also on January 14, 2016, Third-Party Petitioners Kyte Schooll (a Spanish corporation), Maria Tardon Torrego, and Artemio Lopez Tardon filed an Amended Petition for Third-Party Interest in Forfeited Property. (D.E. 735.) The Petition claims that "Florida car title records and other transactional records show that" (1) Maria Tardon Torrego and Artemio Lopez Tardon own the 2010 Rolls-Royce Ghost (VIN: SCA664S50AUX48905), and (2) Maria Tardon Torrego, Artemio Lopez Tardon, and Kyte Schooll (a Spanish corporation) own the 2006 Mercedes-Benz SLR McLaren (VIN: WDDAJ76F06M000724).⁹ (Id. at 1-2.) The Petitioners argue that their "interest is superior to any interest claimed by the defendant[.]" (Id. at 2.)

9 In the same Petition, The Collection Motor Sports of Madrid (a Spanish Corporation) claimed ownership of the eight (8) Audemars Piguet watches that the Court ordered to be forfeited to the Government as substitute assets in partial satisfaction of the forfeiture money judgment. (See D.E. 735 at 1-2.) On January 25, 2016, the Government filed a Motion to Dismiss The Collection's Petition. (D.E. 736.) On February 24, 2016, the Court granted the Government's Motion to Dismiss the Collection's Petition and dismissed the Petition with prejudice. (D.E. 747.) The Court subsequently issued a Final Order of Forfeiture of Substitute Property of the Eight (8) Seized Watches. (D.E. 764.)

On February 1, 2016, the Government filed a Motion to Dismiss the Artemio Lopez Tardon Petition Claiming an Interest in the 2006 Mercedes-Benz SLR McLaren, or in the Alternative, to Show Cause Why His Petition Should Not be Dismissed. (D.E. 737.) Artemio filed a Response, (D.E. 746), to which the Government filed a Reply, (D.E. 748). The Court subsequently granted the Motion to Dismiss, finding that Artemio had failed to establish standing to proceed in his claim for the Mercedes.¹⁰ (D.E. 762 at 9-11.)

10 The Court's Order did not resolve Kyte Schooll and Maria Tardon's ownership claim of the 2006 Mercedes-Benz SLR McClaren, or Kyte Schooll, Maria Tardon, and Artemio Lopez Tardon's ownership claim of the 2010 Rolls-Royce Ghost.

On April 13, 2016, the Government filed a Motion for Order Compelling the Remaining Petitioners to Show Cause Why They Have Standing to Proceed, or in the Alternative, to Clarify Pending Petitions. (D.E. 760.) Miamark, Murano, Kyte Schooll, Artemio Lopez Tardon, and Maria Tardon Torrego filed a Response, (D.E. 765), to which the Government filed a Reply, (D.E. 767).

On October 6, 2016, the Government filed a Motion for Summary Judgment against the Petitioners Claiming the Forfeited Mercedes Benz and Rolls Royce (the "Forfeited Vehicles"). (D.E. 776.) Artemio Lopez Tardon, Maria Tardon Torrego, and Kyte Schooll filed a Response, (D.E. 777), to which the Government filed a Reply, (D.E. 778).

On May 14, 2018, the Court entered a Paperless Order referring all pending motions to Judge Goodman. ("Paperless Order of Referral," D.E. 813.)

On June 22, 2018, the Government filed a Motion for Summary Judgment Against Petitioner Miamark LLC Claiming Three Forfeited Condominium Units (i.e., "the Marks Units"). (D.E. 825.) Miamark filed a Response, (D.E. 827), to which the Government filed a Reply, (D.E. 834).

On June 25, 2018, the Government filed a Motion for Summary Judgment Regarding Murano 908, LLC's Petition Claiming Ownership to Forfeited Real Property (i.e., "the Murano Unit 908"). (D.E. 826.) Murano filed a Corrected Response, (D.E. 832), to which the Government filed a Reply, (D.E. 835).

Judge Goodman held an evidentiary hearing on February 19, 2019. (See Minute Entry, D.E. 863; Tr. of Evid. Hr'g, D.E. 876.) "During the evidentiary hearing, Petitioners presented no witnesses, and they submitted nine exhibits, which included title documentation and a selection of company records." (Report at 11 (citing Tr. of Evid. Hr'g at 41:24 – 46:18, 47:12-21, 135:3-19).) "[T]he United States presented FBI Special Agent Daniel Gaitan" and "submitted more than 100 exhibits in support of its defense." (Id. (citing Tr. of Evid. Hr'g at 50:25 – 134:11).)

On April 17, 2019, Judge Goodman issued an Order directing the Parties to mediate the forfeiture issues before United States Magistrate Judge Chris M. McAliley. (D.E. 889.) The mediation began on July 11, 2019, (D.E. 898), and continued to a second day on July 22, 2019, after which Judge McAliley declared an impasse, (D.E. 900).

b. Report and recommendations

On February 4, 2020, Judge Goodman issued the instant Report. (D.E. 906.) Judge Goodman found that Petitioners lack statutory standing to assert a legal interest in the property which has been ordered forfeited to the United States because Petitioners are not persons "other than the defendant," 21 U.S.C. § 853(n)(2). (Report at 73.) Judge Goodman further found that Petitioners are mere nominee owners who lack standing under Article III of the United States Constitution. (Id. )

First, Judge Goodman rejected the position (advocated by Petitioners) taken by United States Magistrate Judge Alicia M. Otazo-Reyes's Report and Recommendation, and subsequently adopted by United States District Judge Darrin P. Gayles, in United States v. Silva, 15-20727-Cr-Gayles, D.E. 120, 2018 WL 5849738 (S.D. Fla. Sept. 6, 2018). (See Report at 19-24.) Briefly, in Silva, Judge Otazo-Reyes found that Maisons Floride LLC was a person "other than the defendant" for purposes of 21 U.S.C. § 853(n)(2) based only on the fact that it held record title to the at-issue properties, even though the Government had submitted significant evidence that the defendant "was in total control of the entity, that no one else played a role in its activities and that no corporate formalities were followed." (Report at 20.) Judge Goodman found that: (1) he was not bound by Silva, (id. at 23); (2) neither the Report and Recommendations nor the Order adopting it cite to any law to support the notion that a corporate filing is always sufficient to, by itself, establish statutory or Article III standing at an evidentiary hearing in an ancillary forfeiture proceeding, (id. at 24); (3) "if the Silva ruling were to be followed by this Court (or other Courts), the United States would be foreclosed from challenging the standing of all corporate petitioners and claimants who took the strategic step of filing incorporation records with the State[,]" (id. ); and (4)

Silva would permit criminals to act with impunity and protect their assets and substitute assets by simply taking the administrative step of incorporating (while still maintaining dominion and control of the assets technically listed in the name of another). That one strategic step would be sufficient to establish standing and prevent further inquiry -- because corporate records would show the entity as technically separate from the convicted criminal defendant. See generally United States v. Morgan, 224 F.3d 339, 343 (4th Cir. 2000) ("Failing to look beyond bare legal title or whether the petitioner has a property interest under state law would foster manipulation of ownership by persons engaged in criminal activity.").

(Id. at 24.) To Judge Goodman, this "makes no sense" and "would render superfluous the statutory requirement that a petitioner be someone "other than the defendant." (Id. ) Thus, Judge Goodman rejected the approach taken in Silva.

Instead, recognizing that the Eleventh Circuit had not considered how to interpret "other than the defendant" under 21 U.S.C. § 853(n)(2), Judge Goodman adopted the approach taken by the Sixth Circuit in United States v. Parenteau, 647 F. App'x 593 (6th Cir. 2016). (Id. ) As summarized by Judge Goodman:

In Parenteau, a case similar to the one presented here, the Sixth Circuit found that interpreting 21 U.S.C. § 853(n)(2) ’s requirement that petitioner be a person "other than the defendant" is one of "ordinary statutory construction," and not governed by federal common law or state law. See id. at 598-99 (quoting Mississippi Band of Choctaw Indians v. Holyfield, 490 U.S. 30 [109 S.Ct. 1597, 104 L.Ed.2d 29] (1989) ) ("[T]he presumption is that ‘in the absence of a plain indication to the contrary,’ a federal statute's application ‘is not ... dependent on state law.’ "). The issue "is not whether [petitioner] has a property right in the first place but rather who is eligible to petition for relief ..." Id. at 598 (emphasis in original).

The Parenteau Court rejected the notion that record title ownership is sufficient to confer statutory standing: "the fact that an ancillary petition is not in the name of the criminal defendant is not , by itself, enough to conclude that the petitioner is a person other than the defendant. " Id. at 596. (emphasis added).

In interpreting 21 U.S.C. § 853(n)(2), the Sixth Circuit focused on defendant's ownership and control of the third-party petitioner, a limited liability company, as well as the facts of the underlying criminal case, which established that the company's assets were "involved in [the defendant's] schemes." See id. at 596-98. The Sixth Circuit cited petitioner's failure, aside from incorporation documents, to introduce evidence at the ancillary hearing that it had an identity separate from the defendant or that it had followed any corporate formalities, including recordkeeping. See id. at 596.

Moreover, the Sixth Circuit noted that it was undisputed the petitioner was "completely dominated" by the defendant, was a "mere façade" for the defendant, and that defendant "diverted funds" from the company for personal use. Id. The Court observed that "[n]othing suggests that [the company's] legal existence ever stood in the way of [the defendant's] manipulation of [the company's] assets." Id. at 598.

The Parenteau Court also reasoned that affording standing to "a corporate entity solely because that entity is legally distinct from a natural person" would undermine two policies that underpin the federal forfeiture scheme, that of defendant's punishment and of the United States’ interest in finality in the defendant's sentence. See id. at 596. " Section 853(n)(2) is best read to preclude such a result." Id.

(Id. at 25-26.) Judge Goodman found that the Sixth Circuit's approach "is supported by the language of 21 U.S.C. § 853(o), which specifically provides that the statute's provisions ‘shall be liberally construed to effectuate its remedial purposes.’ " (Id. at 26 (citing 21 U.S.C. § 853(o) ); see also id. at 26-27 ("In other words, it would be inconsistent with the forfeiture statute's remedial purposes to enable a defendant to avoid forfeiture by simply establishing a shell company."). Judge Goodman also found that this approach was consistent with the Undersigned's Order dismissing Artemio's Petition claiming an interest in the 2006 Mercedes-Benz SLR McClaren. (Id. at 29-30 (citing D.E. 762 at 8-10).) Accordingly, Judge Goodman did not "rely solely on the mere record title ownership of Petitioners" and instead "look[ed] behind title (which is, to be sure, a factor to consider) to see whether Petitioners have met their burden of establishing statutory standing by demonstrating that they are parties ‘other than the defendant.’ " (Id. at 28 (citations omitted)).)

Next, Judge Goodman rejected Petitioners’ suggestion that there is a distinction between the applicable rules and procedure for forfeited assets that are substitute property—what Petitioners refer to as "untainted" property—and assets that are directly forfeited as "tainted" property. (Id. at 30.) Judge Goodman found that: (1) The Eleventh Circuit has made clear that the purpose of the ancillary proceeding is to determine the ownership of the forfeited property, which makes it akin to a quiet title proceeding, (id. at 31 (citing United States v. Gilbert, 244 F.3d 888, 911 (11th Cir. 2001) (stating that the ancillary proceeding is "essentially a quiet title proceeding"); Amodeo, 916 F.3d at 972 ("Although it occurs in the context of criminal forfeiture, the ancillary proceeding is civil in nature.")); (2) the nature of the proceeding remains a quiet title proceeding regardless of whether the forfeited assets are substitute or directly forfeited property, (id. (citing United States v. Fleet, 498 F.3d 1225, 1228 (11th Cir. 2007) (holding provisions in the subsection pertaining to forfeiture of facilitating and derived property, 21 U.S.C. § 853(a), apply in the same way to the subsection pertaining to forfeiture of substitute property, § 853(p) )); and (3)

regardless of whether forfeited assets are so-called "untainted" property or facilitating or derived "tainted" property, a petitioner in an ancillary proceeding has the same threshold burden of establishing that a petitioner has standing to contest the forfeiture. Once standing is established, a petitioner has the burden of meeting one of the criteria listed in 21 U.S.C. § 853(n)(6) by a preponderance of the evidence. Neither the burden to establish standing nor the requirement to establish the statutory criteria is affected by the nature of the assets (i.e., substitute proceeds or tainted property).

(Id. at 31-32.)

Judge Goodman noted that although state law determines the nature of a claimant's interest in the forfeited property, straw owners "do not necessarily suffer an injury that is sufficient to demonstrate standing[;]" similarly, "[n]ominee connotes the delegation of authority to the nominee in a representative or nominal capacity only, and does not connote the transfer or assignment to the nominee of any property in, or ownership of, the rights of the person nominating him." (Id. at 34 (quoting Henry, 621 F. App'x at 972 ).) Thus, although it is undisputed that Petitioners are listed as the record title owners of the at-issue properties, Judge Goodman examined the evidence to determine whether "Petitioners have established statutory standing by demonstrating primary dominion or control over the properties (i.e., whether they are ‘other than’ Alvaro)." (Id. at 34.)

Next, Judge Goodman examined all of the evidence and arguments Petitioners relied on to establish their ownership in the real estate properties, (id. at 34-38), and the Government's rebuttal evidence and arguments, (id. at 39-44 (the Marks Units), 51-55 (Murano Unit 908)). The Court highlights the following evidence regarding ownership of the Murano Unit 908 because it is relevant to one of Petitioners’ Objections:

12. [T]he [Murano Unit 908] has generated income, as tenants have leased Murano Unit 908 from [defense counsel Richard] Klugh, who used his power-of-attorney to act on behalf of Murano and to also receive rental payments. See ECF Nos. 880-86; 880-85; 880-97; 880-70. For instance, The Lakes LDT Partnership leased Murano Unit 908 from November 2013, through January 2015, and paid approximately $70,000 in rent directly to Mr. Klugh, and not to Murano's company account. See ECF Nos. 880-97; 880-85. Mr. Klugh, in turn, has paid both Murano's and the tenant agent fees from his law firm's account. See ECF No. 880-86.

(Report at 55.) The Court highlights the following evidence regarding ownership of the Marks Units because it is relevant to one of Petitioners’ Objections:

15. In ... pre-trial litigation, the Defendant argued (in a motion filed by Mr. Klugh, as counsel for Alvaro) that he "concealed nothing" because the company records for Miamark "list the defendant as the owner and give his address and identifying information ." [ECF No. 75 (emphasis in original)]. Similarly, the motion represented that "every single property as to which an LLC was the purchaser was "identified by name with the defendant" and that "all of the LLCs and corporations go directly back to the defendant on the official Florida records sites...." Id. (emphasis in original).

...

17. Alvaro and his personal attorney, Mr. Klugh, are the only representatives who Miamark has produced in this litigation, and they, and not Miamark, would benefit from the release of Forfeited Mark Units. Mr. Klugh represented at Alvaro's deposition that he, in effect, helped to manage the Forfeited Mark Units after Defendant's detention, by, for example, paying maintenance fees.¹¹ See ECF No. 880-4.

11 Mr. Klugh blurted out this information as substantive factual information in response to a deposition question asked of his client, Alvaro, who was appearing as Miamark's corporate representative.

(Report at 44 (footnote in original).) After reciting this evidence, Judge Goodman paused for a six page "Note About Deposition Behavior" in which he describes conduct by Mr. Klugh during Alvaro's deposition as, "to be diplomatic, frowned upon." (Id. at 46.) "Mr. Klugh did not merely interpose objections. He sometimes assumed the role of witness and volunteered a substantive answer, as if he were the deponent. This is impermissible." (Id. ) Judge Goodman's "review of Alvaro's deposition transcript reveals that Mr. Klugh interrupted, gave answers himself (even though he was not under oath and was not the deponent), interposed inappropriate objections, and made comments designed to coach his client." (Id. at 47.) Judge Goodman quoted specific examples from the Deposition Transcript of such behavior. (Id. at 47-50.) Judge Goodman noted that that the Government did not adjourn the deposition and contact Judge Goodman's chambers to object to the behavior, but if it had, Judge Goodman would have entertained such objections. (Id. at 50.)

Ultimately, Judge Goodman found that "[t]he evidence establishes that Petitioners have, at best, nominal ownership to the real properties at issue. The mere fact that some family members may have at times stayed at the apartments is woefully inadequate to establish that the corporate entities (and not Alvaro) are the actual, real owners of the properties." (Id. at 57.) Judge Goodman then highlighted some (but not all) of the evidence that informed this conclusion:

First, at trial, Alvaro's then-spouse, Sharon Cohen, testified that Alvaro owned the Mark Units and created LLCs to hold properties that actually belonged to him. Second, the LLCs’ articles of organization list Alvaro as the managing member. Third, Alvaro's attorney, Mr. Klugh, represented in the underlying criminal case that Alvaro "concealed nothing" because the records of Miamark and Murano 908 "list the defendant as the owner and give his address and identifying information." [ECF No. 75 (emphasis added)]. Fourth, Alvaro admitted that the transfer of title to The Mark Units "weren't sales" because they merely "changed names to Miamark." [ECF No. 880-50]. Fifth, both Miamark and Murano selected Alvaro to be its corporate representative for a deposition which the United States took of the corporate Petitioners. [ECF Nos. 825-3; 826, p. 3]. Miamark and Murano both designated the Defendant even though he was a convicted felon. Sixth, Alvaro often represented that he was the owner of Miamark and The Mark Units before his conviction. For example, in correspondence with The Mark's condominium association, he was identified as the "owner" of The Mark Units "through various entities." [ECF No. 825-8, p. 87].

Focusing on the specifics of the financial circumstances, Miamark did not pay any consideration to obtain title to The Mark Units. Instead, Defendant Alvaro executed purchase agreements to acquire Unit 2703 and Unit 202, and eventually, in or around 2001, Defendant Krentz, a convicted co-conspirator, acquired title to The Mark Units. See ECF No. 825. Defendant Krentz held title to The Mark Units for approximately five years, before transferring the properties, via quitclaim deeds, to Miamark. See id. at ¶ 6. As noted above, Defendant Alvaro admitted in Miamark's deposition, "They weren't sales ... They changed names to Miamark." See id. at ¶ 7.

For the Murano unit, Ideal Properties, Inc. ("Ideal") conveyed title for Unit 908 to Murano, subject to a first mortgage, on January 25, 2006, after receiving two-installment payments. [ECF No. 826]. However, Murano did not make either of these payments. Rather, the first payment for $50,000 came from Alvaro's personal checking account that he held jointly with his convicted co-conspirator, Defendant Krentz, and the second payment for $460,000 came from loan proceeds Defendant Krentz obtained by refinancing a loan on a luxury condominium owned by Contion, LLC,

for which Alvaro was Managing Member. See ECF No. 826-1.

Furthermore, Murano (the record title owner) did not make the payments to satisfy and release WAMU's first mortgage on Unit 908 either. Rather, Alvaro paid off WAMU's first mortgage between November and December 2008 using funds from personal checking accounts that he held either solely or jointly with his brother, Artemio Lopez Tardon, and his sister, Maria Tardon Lopez, despite requirements in Murano's Operating Agreement mandating payment of Murano expenses from a company account. See ECF No. 826-1, ¶¶ 12-13, 22. In fact, Murano was not able to pay off WAMU's first mortgage using company funds because Alvaro, as sole Managing Member, did not open a company account for Murano until June 1, 2009. Id. at ¶¶ 19, 20. As Murano's sole Managing Member, Alvaro opened Murano's only bank account – over which he had sole signature authority. Id. at ¶¶ 19, 22.

In addition, attorney Peter Lopez testified that realtor Daisy Martins first introduced him to Alvaro in order to create Murano so that Alvaro could acquire the Murano unit. [ECF No. 826-14, p. 6]. According to Lopez's deposition testimony, Alvaro showed up in person in his office and asked him "to create the company, so that he could purchase that property." Id. at p. 7 (emphasis added).

(Id. at 57-60.) For these reasons, Judge Goodman found that Miamark and Murano are not "other than the Defendant" and, as such, lacked statutory standing to challenge the Court's forfeiture order. (Id. at 60.)

Next, Judge Goodman reviewed all of the evidence and arguments Petitioners relied on to establish their ownership in the Forfeited Vehicles.¹² (Id. at 60-65.) In addition to having record title to the vehicles, Petitioners asserted the following:

12 For clarity, Maria Tardon and Artemio Tardon claim ownership of the Rolls Royce, while Maria Tardon and Kyte Schooll claim ownership of the Mercedes-Benz. (D.E. 735.) Artemio's claim to the Mercedes-Benz was previously dismissed for lack of standing. (D.E. 762.)

1. They say the United States does not dispute that Alvaro and his family members were involved in car sales as part of Spanish and U.S. corporate entities about which there was substantial testimony at trial (including The Collection Motor Sports of Madrid, Kyte Schooll, and The Collection Motor Sport of Miami, LLC). Similarly, they represent that the United States has acknowledged that the car business entities provided the funds to purchase the Mercedes (Kyte Schooll wire transfers, see ECF No. 550-6, p. 3) and the Rolls Royce (Spanish car companies provided the funding by wire transfer, see id. ).

2. Concerning the Mercedes, the United States introduced evidence showing that all of the purchase money for the car was provided by Petitioner Kyte Schooll in four wire transfers amounting to $343,700. [ECF No. 713, p. 60]. In fact, Petitioners note that the United States’ motion for forfeiture attached a chart showing each of the payments by Kyte Schooll to purchase the Mercedes. [ECF No. 550-6, p. 3 (showing wire transfer payments from Kyte Schooll to Rick Case Honda on Feb. 21-23, 2007, for full price of Mercedes)].

3. Kyte Schooll has always been listed at least as a co-owner in the titling of the Mercedes.

4. Concerning the Rolls Royce purchase, at the forfeiture jury trial, the United States sought to show improper

sources for the funding of the purchase, explaining that two Spanish car companies with ties to the Tardon family had provided the funds. See ECF No. 713, pp. 47-48 (Agent Gaitan explains that car dealer Cars Boats Madrid SL wired $315,960 to Braman Motors to purchase the Rolls Royce); ECF No. 550-6 (noting additional $49,000 from The Collection Exotic Cars went to the purchase of the Rolls Royce); ECF No. 550-6, p. 3 (showing purchase funded by Cars Boats Madrid SL); ECF No. 536, p. 69 (counsel for the United States stating: "[W]e have two separate wires going to purchase an automobile [the Rolls Royce] -- a luxury automobile that was then titled in the name of a company.") (emphasis added).

5. The trial testimony showed that while Alvaro was going through a divorce proceeding, he sought to ship various vehicles to Spain, and that Alvaro communicated with the general manager for The Collection Motor Sports regarding those proposed shipments. When it was ready to be shipped to Spain (where Maria and Artemio lived and whe[re] The Collection Motor Sports dealership did business), the Mercedes title included Maria, along with Kyte Schooll and Alvaro in the titles.

6. The title for the Rolls Royce was originally in Alvaro's name, when the car was purchased in July 2010, less than a year before Alvaro's arrest. Title was transferred to Claimants Artemio Tardon and Maria Tardon when the car was to be shipped to Spain in 2011.

7. Sharon Cohen's testimony, and the testimony of David Pollack [ECF No. 776-9, p. 18] showed that the reason for shipping cars to Spain was to advance the interest of the Tardon family's car business. That business was shown to have millions of dollars in sales and two showrooms, with a record that included highly profitable transactions. See ECF Nos. 531, pp. 6-62; 532, pp. 95-130.

8. Alvaro, a co-owner of The Collection who worked without a salary, according to the financial evidence introduced at trial by the United States, purchased many used cars for shipment to the Spanish dealership he and his family owned. David Pollack testified that: "He would keep them for a few months, up to a year ... And then he would ship them over to Spain to be sold in his dealership." [ECF No. 776-9, p. 18]. There was no evidence offered that any use or other action by Alvaro (including any delay in sending the cars to Spain) caused any diminution of the value of the collectible cars that he worked to select for resale. To the contrary, when other collectible cars were auctioned for sale in this case by the United States, they were offered as being in excellent condition and they produced millions of dollars at auction.

9. Even if the timing of the shipment of cars to Spain was affected by ongoing divorce proceedings, testimony by the United States’ witness Pollack shows that the purpose of the shipment of the cars was so that they could "be sold in a dealership." [ECF No. 776-9, p. 18]. According to Petitioners, the United States failed to contest their interrogatory answers pertaining to the vehicles [ECF Nos. 776-3; 776-4; 776-5] that made that very point, that the transactions were conducted in the ordinary course of the family's car dealer operations that included permitting individual members of the family to personally own or co-own vehicles, including to facilitate handling and shipment.

10. The United States’ effort to treat Artemio Tardon's interest in the cars as stemming just from the retitling of a vehicle ignores his other interrogatory

answers [ECF No. 776-4] revealing his ownership of the car businesses and the assets of the dealer-use cars. Interrogatory answers by Artemio and Maria Tardon clearly state that "the cars were purchased for Kyte Schooll (the McLaren) and The Collection Motor Sports (Rolls Royce), were held in Miami for dealer use and then were to be transported to Europe for sale." [ECF Nos. 776-3; 776-4]. An interrogatory answer by Kyte Schooll explains that the cars were "under the control of agents of the company." [ECF No. 776-5].

Thus, the answers maintain that the cars were at all times destined for use in the family car businesses, Kyte Schooll and The Collection, or were to be used by dealer agents pending or prior to sale, and were titled accurately and validly. Kyte Schooll, which was initially owned by Artemio Tardon, Maria de las Nieves Tardon, Julio Cesar Fraile Garcia, and Maria Tardon Torrego, was a coordinating entity for assets of the Tardon car sales company, The Collection Motor Sports of Madrid. [ECF No. 525, pp. 91-92]. And Kyte Schooll paid in full for the Mercedes and was invoiced accordingly. [ECF No. 877-1, p. 110].

(Id. at 61-65.)

Judge Goodman then reviewed the following rebuttal evidence and arguments put forth by the Government:

1. After several years of litigation, Petitioners’ exclusive reliance on title documentation to support their claims to the Forfeited Vehicles demonstrates that Maria Tardon, Artemio Tardon, and Kyte Schooll hold only nominal title to the Mercedes Benz or the Rolls Royce.

2. There is overwhelming evidence in the record that shows Alvaro's dominion and control over the Forfeited Vehicles before their seizure. Alvaro purchased, possessed, and insured the Forfeited Vehicles, while Petitioners gave nothing of extrinsic value in obtaining title and did not exercise any other form of dominion or control over either of them.

3. In July 2010, Alvaro purchased the Rolls Royce for more than $330,000, and certified that he personally had automobile insurance then-in effect for the vehicle. See ECF Nos. 877-1 (Evidentiary Hr'g Tr. 119:4-120:5; 121:21-122:3); 880-80 (ADM135-00007 to ADM135-00008); 776-6, p. 104.

4. In February 2007, the Mercedes Benz was purchased for approximately $343,201, initially shipped to Spain, and then returned to Alvaro. See ECF Nos. 877-1 (Evidentiary Hr'g Tr. 110:10-111:10); 880-83 (ANC001-00340); 776-6, p. 6, 12. In a letter to the tag agency upon the vehicle's return, Alvaro stated that the Mercedes Benz "was unregistered in Spain to its owner, Alvaro Lopez [the Defendant], who is also the owner of Kyte Schooll SL." [ECF No. 880-83, p. 13].

5. The Defendant also personally insured the Mercedes under a policy held by him and his then-spouse, Sharon Cohen. See ECF No. 880-82.

6. After their purchase, Alvaro registered and titled the Forfeited Vehicles in his name at his address at 2475 S. Bayshore Drive, Villa 3, Coconut Grove, Florida ("Bayshore residence"). See ECF No. 880-83.

7. The Defendant drove the Mercedes Benz and the Rolls Royce and would "show [them] off" at restaurants or clubs, and he stored them at his various residences. See ECF Nos. 523 (Cohen Trial Tr. 83:11-14); 776; 519.

8. In further demonstration of Alvaro's dominion and control, it was Alvaro who decided to transfer nominal title to the Forfeited Vehicles to his mother, Maria Tardon, and his brother, Artemio

Tardon, because he feared that his then-spouse, Sharon Cohen, might try to obtain them in pending divorce proceedings. See ECF Nos. 884-2; 880-32. In fact, after a domestic dispute with Sharon Cohen, Alvaro told David Pollack, a convicted co-conspirator, that he was going to ship approximately seven cars to Spain because he feared that Sharon Cohen would get the vehicles in divorce proceedings. See ECF No. 520 (Pollack Trial Tr. 38:12-39:12). Indeed, the Defendant titled other vehicles and property he owned in the names of other persons, including Sharon Cohen and David Pollack, who did not exchange funds or sign paperwork to obtain the property. See ECF Nos. 523 (Cohen Trial Tr. 80:23-82:25, 87:24-88:10); 776-7; 519 (Pollack Trial Tr. 182:19-190:1).

9. Petitioners Maria Tardon and Artemio Tardon, who were not present at the evidentiary hearing, admitted in their interrogatory answers that they did not acquire title through a financial transaction, and no funds were exchanged when title to the Forfeited Vehicles was transferred to their names. See ECF Nos. 880-77; 880-78; 776-2; 776-3.

10. Significantly, Maria Tardon and Artemio Tardon have both asserted that their respective interests in the Forfeited Vehicles "arose from [their] expenditure of effort and money in arranging to help effectuate the resale of the vehicles." See ECF Nos. 776; 880-77; 880-78.

11. When asked in interrogatories about specific instances of their dominion and control over the Forfeited Vehicles, Maria Tardon and Artemio Tardon in nearly identical fashion referenced only their assistance with the transfer of title , and nothing more. See id.

12. Petitioners also admitted that the Forfeited Vehicles were located in Miami, out of their possession. See ECF Nos. 776-2; 880-77; 880-78.

13. In interrogatory answers, both Maria Tardon and Artemio Tardon have acknowledged that they obtained their claimed interests in the Forfeited Vehicles "following the separation of [the Defendant] from his wife." See ECF Nos. 776; 880-77; 880-78. Accordingly, Maria Tardon and Artemio Tardon's only proffered instance of dominion and control over the Forfeited Vehicles was their limited interaction in transferring title to the Forfeited Vehicles for the benefit of Alvaro.

(Id. at 66-69 (footnote omitted).)

When weighing the evidence, Judge Goodman initially found that "Petitioners’ interrogatory answers [are] largely detail-free, vague responses which appear designed to provide as little information as possible. In addition, the answers, nebulous as they are, are somewhat equivocal, and reveal unfamiliarity with the specific facts surrounding the very vehicles at issue in their Petitions."¹³ (Id. at 69.) Ultimately, Judge Goodman concluded that Petitioners (1) lack statutory standing because they are not persons "other than the Defendant" for purposes of 21 U.S.C. § 853(n)(2), and (2) lack constitutional standing because they are mere naked title owners who are nominees for Alvaro. (Id. at 71 (citations omitted).) Judge Goodman opined:

13 For example, "in response to an interrogatory asking for the date the vehicle was purchased and the contact information of the seller and buyer, Maria Tardon gave the following under-oath answer: ‘My understanding is that the cars were purchased for Kyte Schooll (the McLaren) and The Collection Motor Sports (Rolls), were held in Miami for dealer use and then were to be transported to Europe for sale. These addresses are of record in the case. The principals in the sales companies are Artemio and Alvaro Lopez Tardon.’ " (Id. at 69-70 (citing D.E. 880-78 at 9).)
As another example, "in response to an interrogatory asking if the vehicle was a gift, Maria Tardon gave the following under-oath answer: ‘It was my understanding that my interest in the property arose from my expenditure of effort and money in arranging to help effectuate the resale of the vehicles.’ " (Id. at 70 (citing D.E. 880-78 at 14).)

Petitioners have not claimed that they paid for the vehicles, ever used the luxury vehicles, or ever drove the vehicles. Indeed, they have not even said that they have ever been in the vehicles. Rather, their theory is that they traveled to Miami to help make arrangements for transfer of title. This is inadequate to offset Alvaro's substantial involvement in the purchase and use of the vehicles....

Framed by the evidence demonstrating Alvaro's dominion and control over the two luxury vehicles, comparing Petitioners’ purported interests with a claimant who received a mere gift is analytically helpful (but unhelpful to their position).

(Id. at 72 (citations omitted).)

Therefore, Judge Goodman recommends that the Court deny and/or reject the Amended Petitions for Third-Party Interest in Forfeited Property (D.E. 734, 735) for lack of standing. (Id. at 73.) He further recommends that the Court deny as moot the United States’ (1) Motion for Summary Judgment Against Petitioners Claiming Forfeited Mercedes Benz and Rolls Royce, (D.E. 776); (2) Motion for Summary Judgment Against Petitioner Miamark LLC Claiming Three Forfeited Condominium Units, (D.E. 825); (3) Motion for Summary Judgment Regarding Murano 908, LLC's Petition Claiming Ownership to Forfeited Real Property, (D.E. 826); (4) Motion for Order Compelling Remaining Petitioners to Show Cause why they Have Standing to Proceed, or in the Alternative, to Clarify Pending Petitions, (D.E. 760); and (5) Motion for Inquiry Regarding Potential Conflict (because the Court already held a hearing on that matter, (see D.E. 717)).¹⁴

14 Judge Goodman also recommends denying as moot the United States’ Motion to Dismiss the Artemio Lopez Tardon Petition Claiming an Interest in One (1) 2006 Mercedes-Benz SLR McClaren, or in the Alternative, to Show Cause why his Petition Should not be Dismissed, (D.E. 737). (See Report at 6, 74.) However, the Court already granted that Motion and dismissed Artemio's claim for the Mercedes for lack of standing. (D.E. 762.) For this reason, Judge Goodman's discussion as to whether Artemio has standing to challenge the forfeiture of the Mercedes was unnecessary.

c. Objections

On March 19, 2020, Petitioners filed Objections to Judge Goodman's Report. (D.E. 909.) Therein, they initially argue (for the first time) that Judge Goodman lacked jurisdiction to conduct ancillary forfeiture proceedings or make forfeiture decisions as to Defendant's property interests that were not made in the criminal case. (Id. at 4-7.) They further object to: the "procedural and substantive framework" Judge Goodman applied to determining the issues, (id. at 7-10); Judge Goodman's reliance on post-indictment representations made by Defendant's trial attorney and Petitioners’ former attorney, Richard Klugh, (id. at 10-13); Judge Goodman's reliance on authority from other circuits, (id. at 13-17); Judge Goodman's "[f]ailure to address Florida case law on LLC management and ownership and recognition/apportionment of member property interests as to LLC assets[,]" (id. at 17-19); Judge Goodman's alleged failure to make credibility findings regarding evidentiary hearing testimony and affidavits, (id. at 19-21); Judge Goodman's alleged failure to "undertake effective review of [the] criminal case record," (id. at 21-28); Judge Goodman's alleged failure to "adhere to the express terms of [the] stipulation for sale of Miamark Unit 202[,]" (id. at 28); and Judge Goodman's alleged failure to address the car purchase ownership interests of Kyte Schooll and Artemio Tardon, (id. at 28-31).

II. Legal Standards

a. Forfeiture

Following the entry of a preliminary order of forfeiture, "[a]ny person, other than the defendant, asserting a legal interest in property which has been ordered forfeited to the United States ... may ... petition the court for a hearing to adjudicate the validity of his alleged interest in the property." 21 U.S.C. § 853(n)(2). The petitioner must establish, by a preponderance of the evidence, that

(A) the petitioner has a legal right, title, or interest in the property, and such right, title, or interest renders the order of forfeiture invalid in whole or in part because the right, title, or interest was vested in the petitioner rather than the defendant or was superior to any right, title, or interest of the defendant at the time of the commission of the acts which gave rise to the forfeiture of the property under this section; or

(B) the petitioner is a bona fide purchaser for value of the right, title, or interest in the property and was at the time of purchase reasonably without cause to believe that the property was subject to forfeiture under this section[.]

21 U.S.C. § 853(n)(6). In determining whether the petitioner has satisfied this burden, the Court must consider the evidence and witnesses presented by both parties at the hearing, as well as "the relevant portions of the record of the criminal case which resulted in the order of forfeiture." 21 U.S.C. § 853(n)(5). "If, after the hearing, the court determines that the petitioner has" satisfied this burden, "the court shall amend the order of forfeiture in accordance with its determination." 21 U.S.C. § 853(n)(6). The Court looks to state law to determine the nature of a petitioner's interest in the property, but federal law determines whether the petitioner's interest in the forfeited property is superior and requires an amendment to the forfeiture order. See United States v. Shefton, 548 F.3d 1360, 1364 (11th Cir. 2008) (citing United States v. Fleet, 498 F.3d 1225, 1231 (11th Cir. 2007) ).

"Standing in forfeiture cases has ‘both constitutional and statutory aspects.’ " United States v. Timley, 507 F.3d 1125, 1129 (8th Cir. 2007) (quoting United States v. One-Sixth Share of James J. Bulger in All Present & Future Proceeds of Mass Millions Lottery Ticket No. M246233 (hereafter, " Bulger"), 326 F.3d 36, 40 (1st Cir. 2003) ). "As to constitutional standing, ‘[i]t is well established that a party seeking to challenge a forfeiture of property must first demonstrate an ownership or possessory interest in the seized property in order to have standing to contest the forfeiture.’ " Id. (citing Bulger, 326 F.3d at 41 ); see also United States v. Amodeo, 916 F.3d 967, 971 (11th Cir. 2019) ("To establish standing in a forfeiture proceeding, we have looked to whether the litigant has an interest in the property subject to the forfeiture because, absent an interest in that property, there is no case or controversy."). "Bare legal title, however, ‘in the absence of assertions of dominion, control or some other indicia of ownership of or interest in the seized property, is insufficient to confer standing to challenge a forfeiture.’ " United States v. Coffman, 612 F. App'x 278, 286 (6th Cir. 2015) (citing United States v. $515,060.42 in U.S. Currency, 152 F.3d 491, 498 n.6 (6th Cir. 1998) ). "This is so because ‘people engaged in illegal activities often attempt to disguise their interests in property by placing title in someone else's name.... [C]ourts look behind the formal title to determine whether the record title owner is a ‘strawman’ set up to conceal the financial affairs of illegal dealings of someone else." Id. (quoting United States v. Carrell, 252 F.3d 1193, 1204 (11th Cir. 2001) ). See also Via Mat Int'l S. Am. Ltd. v. United States, 446 F.3d 1258, 1262 n.5 (11th Cir. 2006) (" ‘[S]traw owners’ and persons who might have unknowingly been in possession of property that is seized do not necessarily suffer an injury that is sufficient to demonstrate standing."); United States v. Henry, 621 F. App'x 968, 972 (11th Cir. 2015). "Likewise, a person found to be acting as a nominee for others whose property is subject to forfeiture cannot have a vested interest in the property." Henry, 621 F. App'x at 972 (citing United States v. Weiss, 467 F.3d 1300, 1303 n.1 (11th Cir. 2006) ). "Nominee connotes the delegation of authority to the nominee in a representative or nominal capacity only, and does not connote the transfer or assignment to the nominee of any property in, or ownership of, the rights of the person nominating him." Weiss, 467 F.3d at 1303 n.1 (citation and internal quotation marks omitted).

Statutory standing under 21 U.S.C. § 853(n)(2) requires a claimant to be "[a]ny person, other than the defendant, asserting a legal interest in property which has been ordered forfeited to the United States[.]" Thus, one aspect of statutory standing under Section 853(n)(2) requires the claimant to show that he is someone "other than the defendant." See United States v. Parenteau, 647 F. App'x 593, 595, 598 (6th Cir. 2016) (finding that corporate claimant in forfeiture proceedings lacked standing to petition for an amendment of the forfeiture order because it was not someone "other than" the defendant). "[T]he fact that an ancillary petition is not in the name of the criminal defendant is not, by itself, enough to conclude that the petitioner is a person other than the defendant." Id. at 596. Another aspect of standing under Section 853(n)(2) requires the claimant to show that he has a "legal interest" in the property. United States v. Timley, 507 F.3d 1125, 1129 (11th Cir. 2007).

b. Report and recommendation

Pursuant to Rule 59(b)(3) of the Federal Rules of Criminal Procedure and 28 U.S.C. § 636(b)(1)(B), the Court must consider de novo any objection to the magistrate judge's recommendation. "Parties filing objections to a magistrate's report and recommendation must specifically identify those findings objected to. Frivolous, conclusive, or general objections need not be considered by the district court." Marsden v. Moore, 847 F.2d 1536, 1548 (11th Cir. 1988). Those portions of a magistrate judge's report and recommendation to which no objection has been made are reviewed for clear error. See Lombardo v. United States, 222 F. Supp. 2d 1367, 1369 (S.D. Fla. 2002) ; see also Macort v. Prem, Inc., 208 F. App'x 781, 784 (11th Cir. 2006) ("Most circuits agree that [i]n the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.") (internal quotation marks and citations omitted). The Court "may accept, reject, or modify the recommendation, receive further evidence, or resubmit the matter to the magistrate judge with instructions." Fed. R. Crim. P. 59(b)(3) ; see also 28 U.S.C. § 636(b)(1)(B).

"To the extent that the magistrate has made findings of fact based upon the testimony of the witnesses heard before the magistrate, the district court is obligated to review the transcript or listen to the tape-recording of those proceedings." LoConte v. Dugger, 847 F.2d 745, 750 (11th Cir. 1988). The Eleventh Circuit has explained that "[c]redibility determinations are typically the province of the fact finder because the fact finder personally observes the testimony and is thus in a better position than a reviewing court to assess the credibility of witnesses." United States v. Ramirez-Chilel, 289 F.3d 744, 749 (11th Cir. 2002) (citing Viehman v. Schweiker, 679 F.2d 223, 227-28 (11th Cir. 1982) ). "[I]n evaluating the factual version of events," the Court "should defer to the magistrate judge's determinations unless his understanding of the facts appears to be ‘unbelievable.’ " Id. (citing United States v. Rivera, 775 F.2d 1559, 1561 (11th Cir. 1985) ); see also United States v. Cravero, 530 F.2d 666, 670 (5th Cir. 1976) ("We believe that for the testimony to be incredible it must be unbelievable on its face.").¹⁵

15 In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981), the Eleventh Circuit adopted as binding precedent all decisions handed down by the former Fifth Circuit before October 1, 1981.

III. Discussion

Petitioners initially argue that Judge Goodman lacked jurisdiction to conduct ancillary forfeiture proceedings or make forfeiture decisions as to Defendant's property interests that were not made in the criminal case. (Id. at 4-7.) Petitioners further object to: the "procedural and substantive framework" Judge Goodman applied to determine the issues, (id. at 7-10); Judge Goodman's reliance on post-indictment representations made by Defendant's trial attorney and Petitioners’ former attorney, Richard Klugh, (id. at 10-13); Judge Goodman's reliance on authority from other circuits, (id. at 13-17); Judge Goodman's "[f]ailure to address Florida case law on LLC management and ownership and recognition/apportionment of member property interests as to LLC assets[,]" (id. at 17-19); Judge Goodman's alleged failure to make credibility findings regarding evidentiary hearing testimony and affidavits, (id. at 19-21); Judge Goodman's alleged failure to "undertake effective review of [the] criminal case record," (id. at 21-28); Judge Goodman's alleged failure to "adhere to the express terms of [the] stipulation for sale of Miamark Unit 202[,]" (id. at 28); and Judge Goodman's alleged failure to address the car purchase ownership interests of Kyte Schooll and Artemio Tardon, (id. at 28-31). The Court will discuss each in turn.

a. Magistrate Jurisdiction

As an initial matter, Petitioners argue—for the first time—that Judge Goodman lacked jurisdiction to determine whether Defendant, Alvaro Lopez Tardon, has an ownership interest in the subject real estate. (Obj. at 4 (citing United States v. Morgan, 224 F.3d 339, 343 (4th Cir. 2000) ).) They further argue the Court made no findings regarding Defendant's ownership interests in the subject real estate in prior proceedings or orders upon which Judge Goodman could rely. (Id. ) They argue that there was no "jurisdictional basis for the magistrate judge to issue a report and recommendation on ultimate relief on ancillary forfeiture[.]" (Id. at 5 (discussing Gomez v. United States, 490 U.S. 858, 109 S.Ct. 2237, 104 L.Ed.2d 923 (1989) ).) They argue that the Eleventh Circuit has held that a magistrate judge lacks "authority, either independently or on a district court's referral for a report and recommendation, to conduct the evidentiary and fact-finding portions of a sentencing hearing in a felony case absent the defendant's consent." (Id. at 6 (citing United States v. Ruiz-Rodriguez, 277 F.3d 1281, 1293 (11th Cir. 2002) ).) They appear to argue that these ancillary forfeiture proceedings are akin to proceedings under 28 U.S.C. § 2255, which the Eleventh Circuit has held are "not a ‘civil matter’ for purposes of [ 28 U.S.C. §] 636(c)." (Id. at 7 (citing Brown v. United States, 748 F.3d 1045, 1056, 1059, 1072 (11th Cir. 2014) ).) Finally, they argue that "even if there were a provision for consent to delegation of ancillary forfeiture to the magistrate judge," Petitioners did not consent to such a delegation in this case, and consent cannot be implied. (Id. (citing Roell v. Withrow, 538 U.S. 580, 586, 123 S.Ct. 1696, 155 L.Ed.2d 775 (2003) ).)

The Government argues that Petitioners never raised this issue to Judge Goodman and, as such, this is an untimely and improper objection that the Court should decline to consider. (Resp. at 2 (citing Disler v. Royal Caribbean Cruise Ltd., No. 17-23874-CIV, 2019 WL 1992929, at *1 n.1 (S.D. Fla. Mar. 15, 2019) (citing Williams v. McNeil, 557 F.3d 1287, 1292 (11th Cir. 2009) )).) It further argues that even assuming arguendo the objection is timely raised, it fails substantively because the Court properly referred the forfeiture issues to Judge Goodman on May 14, 2018. (Id. at 3 (citing Paperless Order of Referral (D.E. 813)).) It argues that 28 U.S.C. § 636(b)(1) "provides for such a delegation, which Petitioners have tacitly acknowledged" by, for example, relying heavily on Magistrate Judge Alicia M. Otzao-Reyes's Report and Recommendation on a Petition for Third-Party Interest in Forfeited Property in United States v. Silva, 15-20727-Cr-Gayles, 2018 WL 5849738 (S.D. Fla. Sept. 6, 2018), "which involved precisely the same delegation." (Resp. at 3.) It argues that the cases on which Petitioners rely are inapposite as they involved "criminal felony proceedings in which the magistrate court did not have jurisdiction to conduct an evidentiary hearing absent the parties’ consent." (Id. at 4 (citing Obj. at 5-6 (citing Gomez, 490 U.S. 858, 109 S.Ct. 2237 ; Ruiz-Rodriguez, 277 F.3d 1281 ; Brown, 748 F.3d 1045 )).) In this regard, the Government observes that

It appears that Petitioners are mistakenly inferring that the Court delegated or referred the ancillary proceeding to the Magistrate Court in accordance with § 636(c), rather than § 636(b). If this is the case, then Petitioners are clearly mistaken in this regard for two important and related reasons. A referral under § 636(c), which does require consent of the parties, does not require a magistrate judge to issue a report and recommendation because § 636(c)(1) gives the magistrate court full authority to enter a judgment without district court review. See 28 U.S.C. § 636(c). Indeed, a magistrate court's judgment in cases referred under § 636(c) is final and not subject to appeal to a district court. See 28 U.S.C. § 636(c)(3) ("Upon entry of judgment in any case referred under paragraph (1) of this subsection, an aggrieved party may appeal directly to the appropriate United States court of appeals from the judgment of the magistrate judge in the same manner as an appeal from any other judgment of a district court."); see also Roell v. Withrow, 538 U.S. 580, 585, 123 S. Ct. 1696, 155 L. Ed. 2d 775 (2003) (A referral under § 636(c)(1) gives the magistrate full authority without district court review).

(Id. at 4-5 (footnote omitted).) Finally, the Government argues that even if the Parties were required to consent to the Magistrate Judge conducting a hearing in this ancillary proceeding, "Petitioners provided consent through their participation in the litigation," having "attended numerous status conferences, submitted exhibit and witness lists in preparation for the evidentiary hearing, attended the evidentiary hearing, and even drafted a proposed report and recommendation after the evidentiary hearing, without ever expressing or even implying an objection to the Court's referral to the Magistrate Court." (Id. (citing Roell, 538 U.S. at 584, 586-87, 123 S.Ct. 1696 ).)

The Court finds that Petitioners failure to raise their jurisdictional arguments to Judge Goodman resulted in a waiver of those arguments. See Knight v. Thompson, 797 F.3d 934, 937 n.1 (11th Cir. 2015) (finding that the plaintiffs’ waived argument made for the first time in objections to a magistrate judge's report and recommendation because the district court did not consider the argument when it ruled on the report and recommendation). Although the Court has discretion to consider the argument, the Court declines to consider it. Williams, 557 F.3d at 1291 (holding that "a district court has discretion to decline to consider a party's argument when that argument was not first presented to the magistrate judge").

b. Procedural and substantive framework

Petitioners next assert "[s]tatutory interpretation, due process, and other constitutional objections regarding the R&R's procedural and substantive framework for denying relief to" Petitioners. (Id. at 7.) First, they argue that Judge Goodman imposed an improper burden of proof, requiring them to establish " ‘their standing to the fullest degree at the evidentiary hearing.’ " (Id. at 8 (quoting Report at 73).) They further object to Judge Goodman discounting Petitioners’ recorded ownership interests in the property in favor of focusing on Defendant Alvaro's exercise of dominion over the property to determine whether they have standing. (Id. at 8-10.) They argue that there is no precedent supporting the position that an owner who has "naked title" to a property "lack[s] standing to petition to show that the record title ownership interest is greater than any interest a non-owner," and such a position is particularly unreasonable when the property is "untainted real estate." (Id. at 8.) They argue that "any party who has properly recorded title to the real estate, and is subject to taxation and other liability due to such recorded ownership, has standing to pursue that ownership interest in ancillary proceedings." (Id. at 9 (citing United States v. Kennedy, 201 F.3d 1324, 1334 (11th Cir. 2000) ).) They argue that under Florida law, an LLC is permitted to have a manager (like Alvaro) who acts with the authority of the members and "properly exercises the dominion and control of the members." (Id. at 9-10.) They further argue that Judge Goodman's "constricted conception of ownership interests, entirely discarding state property law, violates due process. To say that a record owner of real estate has no standing based on forfeiture statutes would render the forfeiture statutes unconstitutional." (Id. at 10.) Finally, they argue that the forfeiture of all interest in an LLC due to mismanagement or misnomers in a corporate document would create unacceptable tension with the Eighth Amendment ...." (Id. (citing Austin v. United States, 509 U.S. 602, 604, 113 S.Ct. 2801, 125 L.Ed.2d 488 (1993) ).)

The Government argues that Petitioners’ "do not distinguish the ample precedential case law cited in the R&R, nor do they cite to any controlling authority to support their conclusory statements." (Resp. at 7.) They argue that Judge Goodman correctly observed that "the Eleventh Circuit has made it clear that the purpose of the ancillary proceeding is to determine the ownership of the forfeited property, which makes it akin to a quiet title proceeding." (Id. (citing Report at 30-31 (citing United States v. Gilbert, 244 F.3d 888, 911 (11th Cir. 2001) )).) And

[r]egardless of whether forfeited assets are so-called "untainted" property or facilitating or derived "tainted" property, a petitioner in an ancillary proceeding has the same threshold burden of establishing that petitioner has standing to contest the forfeiture. Once standing is established, petitioner has the burden of meeting one of the two criteria listed in 21 U.S.C. § 853(n)(6) by a preponderance of the evidence. In these ancillary proceedings, addressing the threshold question of standing would lead to the same result if the "merits" question of ownership under § 853(n)(6) were also addressed. As the R&R observed, if "Petitioners lack statutory standing because their record title ownership is insufficient to establish that they are ‘other than the defendant’ or ... Petitioners are mere naked title holders and cannot establish Article III constitutional standing, then they lack the requisite ‘legal interest’ to amend the forfeiture order." See R&R, ECF No. 906:32-33 (also referencing United States v. Morgan, 224 F.3d 339, 334 [343] (4th Cir. 2000) and United States v. Weiss, 467 F.3d 1300, 1300 n.1, 1311 (11th Cir. 2006) ). See also United States v. Masilotti, 510 F. App'x 809, 2013 WL 646375, at *1 n.2 (11th Cir. 2013) (no need to address substantive merits of third-party claim if petitioner lacks standing) (cited in R&R, ECF No. 906:15-16).

(Resp. at 8.) The Government further argues that Judge Goodman's finding that Petitioners lack standing does not violate procedural due process or implicate the Excessive Fines Clause of the Eighth Amendment. (Id. at 8-12.)

The Court overrules Petitioners’ statutory interpretation and constitutional objections regarding the Report's procedural and substantive framework for determining whether Petitioners have standing. First, the Court finds that Judge Goodman did not impose an improper burden of proof. In the "Conclusion" Section of the Report, Judge Goodman states: "Even if the United States had elected to not present evidence at the evidentiary hearing, the Undersigned would have reached the same conclusion, as Petitioners bear the burden of establishing their standing to the fullest degree at the evidentiary hearing." (Report at 73 (emphasis added).) However, the Court finds that this was not a recitation of the standard of proof Judge Goodman required of Petitioners, as no such standard exists in American law. Rather, Judge Goodman was observing that at an evidentiary hearing, claimants in forfeiture proceedings cannot rely solely on record title ownership and must establish dominion and control over the property in order to establish standing. (See id.; see also id. at 17-18.) Indeed, this is precisely what Judge Goodman stated when discussing the principles of statutory and constitutional standing, and when identifying the correct burden of proof: "[A]t an evidentiary hearing, as opposed to a hearing on a motion to dismiss or one seeking summary judgment, a third-party petitioner must demonstrate, by a preponderance, ‘ primary dominion or control’ over the property to establish standing." (Id. at 18 (quoting Coffman, 612 F. App'x at 286 (underlined emphasis added)).) Thus, Judge Goodman applied the "preponderance of the evidence" standard, and Petitioners do not object to the application of that standard. Nor is Judge Goodman's application of the preponderance standard clearly erroneous or contrary to law. See United States v. ADT Servs., Inc., 522 F. App'x 480, 491 (11th Cir. 2013) (finding that the district court "correctly" found that in a civil forfeiture proceeding the claimant "has the burden to demonstrate standing by a preponderance of the evidence") (quoting United States v. All Funds in the Account of Property Futures, Inc., 820 F. Supp. 2d 1305, 1325 (S.D. Fla. 2011) ); see also Property Futures, Inc., 820 F. Supp. 2d at 1331 ("Claimants would do well to remember that the burden in this case to show standing is on them. In this regard, the burden is a heavy one, requiring Claimants to show standing by a preponderance of the evidence.") (citing United States v. $38,000.00 in U.S. Currency, 816 F.2d 1538, 1543 n.11 (11th Cir. 1987) ).

Next, the Court finds that Judge Goodman did not improperly discount Petitioners’ recorded ownership interests in the property. In fact, he explicitly acknowledged that title ownership "is, to be sure, a factor to consider ...." (Report at 28.) Judge Goodman merely found it appropriate to "look behind title ... to see whether Petitioners have met their burden of establishing statutory standing by demonstrating that they are parties ‘other than the defendant.’ " (Id. )

Next, the Court rejects Petitioners’ argument that there is no precedent supporting the position that an owner who has "naked title" to a property "lack[s] standing to petition to show that the record title ownership interest is greater than any interest a non-owner ... might claim[.]" (Id. at 8.) There is such precedent, and Judge Goodman cited it. (See Report at 28 (citing United States v. Gamory, Criminal File No. 1:08-CR-153-1-TWT, 2010 WL 3880880, at *4-5 (N.D. Ga. Sept. 28, 2010) (finding that although it was "undisputed that [the petitioner] is the record titleholder of the Mercedes[,]" he did not pay for the Mercedes, never drove the Mercedes, never possessed the Mercedes, and therefore, he was a mere nominee who could not challenge the forfeiture order); United States v. Hovind, No. 3:06cr83/MCR, 2009 WL 2369340, at *5-6 (N.D. Fla. July 29, 2009) (finding that although the petitioner held legal title to the properties in his capacity as corporate trustee, the petitioner was a mere nominee title holder for the defendants who lacked standing to challenge the court's forfeiture orders); United States v. Gomez, No. CR98-3002, 2000 WL 34029288, at *2-3 (N.D. Iowa Aug. 3, 2000) ("Possession of mere legal title by one who does not exercise dominion and control over the property is insufficient even to establish standing to challenge a forfeiture.");¹⁶ United States v. Rogers, No. 94-CR-138 (FJS), 93-CV-156 (FJS), 1996 WL 252659, at *5-6 (N.D.N.Y. May 8, 1996) (finding that the petitioner's "holding of the title to the Mercedes was nothing more than a sham designed to protect the true owner" and finding that she therefore lacked standing to challenge the civil forfeiture). These cases refute Petitioners’ argument that any party with properly recorded title has standing to pursue an ownership interest in ancillary proceedings. The case to which Petitioners cite for this proposition, United States v. Kennedy, 201 F.3d 1324, 1335 (11th Cir. 2000), does not even mention standing.

16 In Gomez, the magistrate judge found that although the petitioners (who were the defendant's parents) held title to a residential property, the evidence showed that the petitioners "have no interest in the property in question[,]" "are nominal or straw owners of that residence[,]" and therefore lacked standing to challenge the forfeiture order.

Next, the Court rejects Petitioners’ argument that Judge Goodman's framework violates procedural due process rights under the Fifth and Fourteenth Amendments and the Excessive Fines Clause of the Eighth Amendment. (See Obj. at 10.) These objections are vague, general, and conclusory, (see id. ), and therefore need not be considered by the Court. See Marsden, 847 F.2d at 1548 ("Frivolous, conclusive, or general objections need not be considered by the district court."). Regardless, the objections are meritless.

"Procedural due process requires notice and an opportunity to be heard before any governmental deprivation of a property interest." Zipperer v. City of Fort Myers, 41 F.3d 619, 623 (11th Cir. 1995) (citing Donaldson v. Clark, 819 F.2d 1551, 1558 (11th Cir. 1987) (en banc) (citing Boddie v. Connecticut, 401 U.S. 371, 378-79, 91 S.Ct. 780, 28 L.Ed.2d 113 (1971) )). Here, Petitioners received notice and the opportunity to be heard before the Court determines their interest in the property. As the Government puts it:

Since the Court entered its orders of forfeiture [ECF Nos. 601, 613] more than five years ago, Petitioners have known of the forfeiture and had a full, unimpeded opportunity to conduct civil discovery pursuant to Fed. R. Crim. P. 32.2(c)(1)(B), and to present their case at an evidentiary hearing in accordance with 21 U.S.C. § 853(n)(6).

(Resp. at 8.) Petitioners do not identify how Judge Goodman's standing analysis violated their rights to procedural due process.

The Eighth Amendment prohibits the imposition of excessive fines. U.S. Const., Amend VIII. The Supreme Court has held that the Excessive Fines Clause "limits the government's power to extract payments, whether in cash or in kind, ‘as punishment for some offense.’ " Austin v. United States, 509 U.S. 602, 609-10, 113 S.Ct. 2801, 125 L.Ed.2d 488 (1993). The Supreme Court has also held that "[f]orfeitures—payments in kind—are thus ‘fines’ if they constitute punishment for an offense." United States v. Bajakajian, 524 U.S. 321, 328, 118 S.Ct. 2028, 141 L.Ed.2d 314 (1998).

In this case, the Court imposed forfeiture against Alvaro Lopez Tardon, not Petitioners. Therefore, the Court did not fine Petitioners, excessively or otherwise, and the Eighth Amendment is therefore not implicated by Judge Goodman's standing analysis.

In sum, the Court overrules Petitioners’ statutory interpretation, due process, and other constitutional objections regarding the Report's procedural and substantive framework for determining whether Petitioners have standing.

c. Post-Indictment Actions by Defendant's Trial Attorney

Next, Petitioners argue that Judge Goodman erroneously relied "on post-indictment actions of criminal defense counsel [Richard Klugh] ... thereby penalizing the defendant's Sixth Amendment rights." (Obj. at 10.) They argue that the Report "should not address anything to do with the handling of the real estate to pay expenses of criminal representation. The implications of such a focus misses the point of the entire forfeiture analysis and puts a strain on privileged communications with the defendant and the defendant's family." (Id. at 11.) They argue that "intruding in that area of funding the criminal defense as a means of thwarting standing fundamentally interferes with the right to retain counsel with untainted funds." (Id. ) They assert that any rental income used to pay defense counsel's attorneys’ fees was "expressly authorized by, and of benefit to," the Petitioners. (Id. ) And "even if there had been no direct benefit to the family members from spending their money to help their brother/son, the defendant, it would be reasonable for a family to take such action, just as it would for them to simply take money out of their pockets to fund the defense." (Id. ) Thus, they argue that "no adverse inference can be drawn from such expenditures[.]" (Id. )

Petitioners further argue that Judge Goodman's "note" regarding Mr. Klugh's questionable behavior during Defendant's deposition as corporate representative for the LLC Petitioners should be stricken because the Government did not object to counsel's behavior during the deposition, and counsel was representing Defendant in a dual role as corporate representative and defendant, and therefore had a responsibility to protect Defendant's rights. (Id. at 12.) They argue that the Report's discussion of defense counsel's behavior during the deposition "distort[s] unfairly the record[.]" (Id. at 13.) Finally, they argue that the Report "mistakes the import of a suppression motion filed by criminal defense counsel, in which counsel argued that the corporate business records for entities that the government had searched were publicly available and showed a clear link to Alvaro." (Id. )

The Government argues that any reliance on defense counsel's post-indictment actions and statements was appropriate. (Resp. at 13.) It argues that "Petitioners do not explain how the R&R's current observations of evidence in the public record deprives Alvaro, who was convicted and sentenced in 2014, of his Sixth Amendment right to counsel, nor is that issue relevant to these ancillary proceedings." (Id. ) The Government argues that the Report "correctly relied upon Alvaro's defense counsel's representations in demonstrating that the Petitioners were not ‘other than Alvaro.’ " (Id. )

For example, the R&R correctly pointed out that approximately $70,000 of rental income for Murano Unit 908, that should have be [sic] going to Murano 908 LLC, went to Alvaro's defense counsel, Mr. Klugh instead. See ECF No. 906:55. Petitioners fail to demonstrate in their objection how such evidence is not relevant to the standing issue presented here.

(Id. )

The Court overrules Petitioners’ objection. First, Petitioners do not explain, and it is not otherwise apparent, how the statements made by Mr. Klugh "penalize the defendant's Sixth Amendment rights." (Obj. at 10.) The Court finds this to be a vague, general, and conclusory objection that need not be considered by the Court. See Marsden, 847 F.2d at 1548 ("Frivolous, conclusive, or general objections need not be considered by the district court."). Regardless, the Court finds nothing inappropriate in Judge Goodman relying on the record when determining whether Petitioners established an ownership interest in the at-issue property, see 21 U.S.C. § 853(n)(5) (stating that in criminal forfeiture proceedings, "the court shall consider the relevant portions of the record of the criminal case which resulted in the order of forfeiture"), including statements made by Mr. Klugh regarding ownership of the at-issue property. (See Report at 44 (citing Mot. to Suppress, D.E. 75 at 6 (stating that exhibits attached to motion "list the defendant as the owner and give his address and identifying information .") (emphasis in original)).) That Mr. Klugh's attorneys’ fees were paid out of rental monies generated by the properties is also evidence in the record relevant to ownership of the at issue properties. (See D.E. 880-97, 880-85.) Finally, the Court sees no basis for striking Judge Goodman's "note" regarding Mr. Klugh's behavior during Defendant's deposition.

d. Reliance on Authority from other Circuits

Next, Petitioners argue that Judge Goodman erroneously relied on "non-precedential language from another circuit that also does not address recorded real estate interests." (Obj. at 13 (citing Report at 15-18 (citing United States v. Coffman, 612 F. App'x 278 (6th Cir. 2015) )).) Petitioners distinguish Coffman (and its citation to the Eleventh Circuit's decision in United States v. Carrell, 252 F.3d 1193, 1204 (11th Cir. 2001) ) on the grounds that it involved the defendant's directly-forfeited bank account that was used to launder money. (Id. at 13-14.) They argue that

[t]he jury verdict, conclusively acquitting the property in this case, such that any bare-title argument that may be relevant to an innocent owner defense is irrelevant here (for multiple reasons, including that the property was obtained through expenditures of funds from the LLC members). Nothing in Eleventh Circuit case law suggests that valid legal title to innocent real estate is insufficient to establish standing....

Given the recorded real estate records, deeds, mortgages, and corporate records in this case—which the government and claimants both introduced in evidence—there is no question that the LLCs offered evidence that they alone own the real estate at issue, that the ownership interests of the LLCs are divided one-third each to Tardon family members (Maria, Artemio, and Nieves); that the LLCs have the power and authority under Florida law to dispose of the real estate; and that the forfeiture order adversely affects them and impedes the exercise of their property rights. See United States v. Henry, 621 F. App'x 968, 972 (11th Cir. 2015) (" ‘State law determines the nature of a claimant's interest in forfeited property." ’). The real estate and corporate records in this case show a superior (and exclusive) interest by the LLC entities in the condominiums at issue, and thus the government has abandoned merits arguments. Cf. Henry, 621 F. App'x at 973 (" ‘certificate of title" ’ to forfeited automobile was " ‘prima facie evidence" ’ of ownership).

(Id. at 14.) Petitioners further object to Judge Goodman's reliance on United States v. Morgan, 224 F.3d 339 (4th Cir. 2000) because " Morgan is a merits case" and not a standing case, and is distinguishable on the facts. (Id. at 15.)

In a separately-numbered but related objection, Petitioners assert that Judge Goodman "mistakenly relied on unpublished, non-precedential decisions from the Sixth Circuit addressing tainted, criminally-involved property"—specifically, Coffman, 612 F App'x 278 (6th Cir. 2015) and United States v. Parenteau, 647 F. App'x 593, 596 (6th Cir. 2016).

The Government argues that Petitioner's attempt to distinguish Coffman, Parenteau, and Carrell on the ground that it involved different property (i.e., substitute property versus directly forfeited, or "tainted" property) is unavailing and does not displace the holdings in those cases that the third-party Petitioners lacked standing to proceed on their claims. (Resp. at 13-15.) They argue that Coffman, Carrell, Morgan, and Parenteau are applicable, support Judge Goodman's findings, and compel the conclusion that Petitioners here lack standing to contest the forfeiture of the at-issue property. (Id. )

The Court overrules Petitioners’ objections. Coffman and Carrell dealt with Constitutional standing. In Coffman, the Sixth Circuit held that "[b]are legal title, ... ‘in the absence of assertions of dominion, control or some other indicia of ownership of or interest in the seized property, is insufficient to confer standing to challenge a forfeiture.’ " 612 F. App'x at 286 (citing $515,060.42 in U.S. Currency, 152 F.3d at 498 n.6 ). "This is so because ‘people engaged in illegal activities often attempt to disguise their interests in property by placing title in someone else's name.... [C]ourts look behind the formal title to determine whether the record title owner is a ‘strawman’ set up to conceal the financial affairs of illegal dealings of someone else." Id. (quoting Carrell, 252 F.3d at 1204 ). Although Coffman involved directly forfeitable property that was "involved in" or "traceable to" the underlying criminal prosecution under 21 U.S.C. § 982(a)(1), as opposed to substitute property under 21 U.S.C. § 853(p), Petitioners have cited no authority holding (or even suggesting) that bare legal title is sufficient to establish ownership in substitute property at an evidentiary hearing. Nor have they adequately explained why the Sixth and Eleventh Circuit's concerns regarding strawmen and nominees are any less relevant when the property subject to forfeiture is substitute property (or, for that matter, real estate). Petitioners appear to argue that Judge Goodman should have found that they established standing despite finding that "they are mere nominee owners ...." (Report at 5.) This makes no sense to the Court, and the Court overrules their objection to Judge Goodman's reliance on Coffman and Carrell.

In Parenteau, the Sixth Circuit dealt with statutory standing. 647 F. App'x at 595-98. Statutory standing under 21 U.S.C. § 853(n)(2) requires a claimant to be "[a]ny person, other than the defendant, asserting a legal interest in property which has been ordered forfeited to the United States[.]" (Emphasis added.) The Sixth Circuit in Parenteau held that a petitioning corporation which was owned and completely controlled by the defendant was not a person "other than the defendant" with statutory standing to challenge the forfeiture order. Id. at 596, 598. Although Parenteau, like Coffman, involved directly forfeitable property that was "involved in" or "traceable to" the underlying criminal prosecution under 21 U.S.C. § 982(a)(1), Petitioners have not explained why a different rule should apply to substitute property. It would make no sense to find that a corporation that is wholly owned and controlled by a defendant is a person "other than the defendant" simply because the at-issue property is substitute property (or, for that matter, real estate). Accordingly, the Court overrules Petitioners’ objection to Judge Goodman's reliance on Parenteau.

Finally, Judge Goodman (see Report at 24, 33 n.9) relies on the following quote from Morgan: "Failing to look beyond bare legal title or whether the petitioner has a property interest under state law would foster manipulation of ownership by persons engaged in criminal activity." 224 F.3d at 343 (citing United States v. 526 Liscum Drive, Dayton, Montgomery Cnty., Ohio, 866 F.2d 213, 217 (6th Cir. 1989) ). Although Morgan is a merits case, the Sixth Circuit case to which it cites for this principle is a standing case. Specifically, in 526 Liscum Dr., the Sixth Circuit noted that in forfeiture proceedings under 19 U.S.C. § 1615, the burden is on "the claimant to show by a preponderance of the evidence that the property is not subject to forfeiture." 866 F.2d at 216. "As an element of this burden, claimant has the burden of proving an interest in the property sufficient to establish her standing under the statute to contest the seizure and resulting forfeiture." Id. The Sixth Circuit held:

[W]hen the government establishes probable cause to believe that a claimant is merely a nominal or straw owner, as it has done here, a claimant cannot meet its burden of establishing standing to challenge a forfeiture by presenting proof of legal title alone. The claimant must also present evidence of dominion

and control or other indicia of true ownership. Since the government has established probable cause to believe that Booker is not the true owner, we do not decide the issue of whether a claimant is required to show more than legal title in the absence of such a probable cause showing of lack of true ownership.

Id. at 217. Accordingly, the Sixth Circuit found that the claimant lacked standing to contest the forfeiture. Id. As such, the at-issue quote from Morgan is relevant and applicable to issues before the Court, and Judge Goodman did not improperly rely on it.

e. Failure to address Florida case law on LLC management and ownership

Next, Petitioners object to Judge Goodman's failure to address Florida case law addressing LLC management and ownership, like Judge Otazo-Reyes did in her R&R in Silva. (Obj. at 17.) Petitioners argue that Judge Goodman's concerns about the Silva decision are alleviated by Petitioners’ reliance on the record in the criminal case and the forfeiture trial. (Id. ) They argue that this Court's prior finding that Artemio lacked standing to challenge forfeiture of the 2006 Mercedes-Benz SLR McLaren properly relied on Florida law and, as such, is consistent with the Silva decision. (Id. at 17-18.) They argue that Judge Goodman's reasoning is not supported by Florida law. (Id. at 19.)

The Government argues that Judge Goodman correctly found the reasoning in Silva unpersuasive. (Resp. at 16.) It argues that Judge Goodman correctly relied on the Sixth Circuit's reasoning in Parenteau which interprets 21 U.S.C. § 853(n)(2) ’s requirement that a petitioner be a person "other than the defendant" as one of "ordinary statutory construction," and not governed by federal common law or state law. (Id. (quoting Parenteau, 647 F. App'x at 598-99 ).) "The issue ‘is not whether [petitioner] has a property right in the first place but rather who is eligible to petition for relief ....’ " (Id. at 17 (quoting Parenteau, 647 F. App'x at 598 ).)

The Court overrules Petitioners’ objection. The Court only applies state law to determine a petitioner's interest in forfeited property after that petitioner establishes standing. See Shefton, 548 F.3d at 1364 (stating that courts apply state law to determine the nature of a petitioner's interest in forfeited property, but federal law determines whether the petitioner's interest in the forfeited property is superior and requires an amendment to the forfeiture order) (citing Fleet, 498 F.3d at 1231 ). Because Petitioners did not establish standing, Judge Goodman did not need to apply Florida law to determine their interest in the forfeited property. Parenteau, 647 F. App'x at 594 (finding that the "application of state law" was not required because the petitioner did not establish statutory standing to challenge the forfeiture).

Judge Goodman properly rejected the reasoning in Silva, where Judge Otazo-Reyes found that the petitioning LLC was a person "other than the defendant" for purposes of 21 U.S.C. § 853(n)(2) based only on the fact that it held record title to the at-issue properties, even though the Government had submitted significant evidence that the defendant "was in total control of the entity, that no one else played a role in its activities and that no corporate formalities were followed." (Report at 20.) Judge Goodman found that: (1) he was not bound by Silva, (id. at 23); (2) neither the Report and Recommendations nor the Order adopting it cite to any law to support the notion that a corporate filing is always sufficient to, by itself, establish statutory or Article III standing at an evidentiary hearing in an ancillary forfeiture proceeding, (id. at 24); (3) "if the Silva ruling were to be followed by this Court (or other Courts), the United States would be foreclosed from challenging the standing of all corporate petitioners and claimants who took the strategic step of filing incorporation records with the State[,]" (id. ); and (4)

Silva would permit criminals to act with impunity and protect their assets and substitute assets by simply taking the administrative step of incorporating (while still maintaining dominion and control of the assets technically listed in the name of another). That one strategic step would be sufficient to establish standing and prevent further inquiry -- because corporate records would show the entity as technically separate from the convicted criminal defendant. See generally United States v. Morgan, 224 F.3d 339, 343 (4th Cir. 2000) ("Failing to look beyond bare legal title or whether the petitioner has a property interest under state law would foster manipulation of ownership by persons engaged in criminal activity.").

(Id. at 24.) To Judge Goodman, this "makes no sense" and "would render superfluous the statutory requirement that a petitioner be someone "other than the defendant." (Id. )

The Court adopts these findings. Judge Otazo-Reyes's determination that a petitioner with bare legal title has standing to challenge an order of forfeiture does not adequately address the Eleventh Circuit's concern about strawmen and nominees challenging forfeiture orders. See Weiss, 467 F.3d at 1303 n.1 (dismissing appeal of petitioning corporation because it was a mere nominee which lacked standing to challenge forfeiture); United States v. A Single Family Residence & Real Prop. Located at 900 Rio Vista Blvd., Ft. Lauderdale, 803 F.2d 625, 630 (11th Cir. 1986) (observing that "possession of bare legal title by one who does not exercise dominion and control over the property is insufficient even to establish standing to challenge a forfeiture[,]" and affirming the district court's finding that the petitioner was a "strawman" who lacked standing to challenge the forfeiture). Also, it does not address Parenteau’s observation that statutory standing is a matter of ordinary statutory construction, and a district court need not apply state law to determine a petitioner's interest in forfeited property if the petitioner lacks standing.¹⁷ 647 F. App'x at 594, 596, 598-99. Thus, Petitioners’ objection is overruled.

17 The Government discussed Parenteau in a memorandum submitted to Judge Otazo-Reyes. See United States v. Silva, Case No. 15-20727-Cr-Gayles, D.E. 113 at 6-7 (S.D. Fla. June 20, 2018).

f. Failure to Make Credibility Findings

The heading of Petitioners’ next objection is: "Failure to make credibility findings regarding evidentiary hearing testimony." (Obj. at 19.) In this section, they discuss the testimony of Peter Lopez—the attorney who met with Defendant and others and prepared the corporate paperwork for Murano 908 LLC and Miamark LLC. (See id. ) However, as the Government correctly observes, "Peter Lopez did not testify at the evidentiary hearing, as Petitioners failed to call him as a witness." (Resp. at 17.) Accordingly, to the extent that Petitioners object to Judge Goodman's failure to make credibility findings as to Peter Lopez's evidentiary hearing testimony, the objection is overruled.

However, construed together with Petitioners’ next objection, Petitioners appear to argue that Judge Goodman "omits crucial [deposition] testimony by" Peter Lopez explaining that the term "managing member," as it applies to Alvaro, refers to a manager who has no ownership interest in the LLC, and this omission must mean that Judge Goodman found that testimony to be incredible. (Id. at 19-20.) Thus, Petitioners object to Judge Goodman's "failure to make any findings as to attorney Peter Lopez's credibility, or indeed as to any witness, deponent, or affiant in this case ...." (Id. at 20.)

The Government argues that although "Petitioners appear to complain that the R&R implicitly made a finding based on Peter Lopez’ deposition testimony that he was not credible[,] ... the only citation in the R&R to Peter Lopez’ testimony assumes the truth of his statements that cut against Petitioners’ position[.]" (Id. (citing Report at 60).)

The Court overrules Petitioners’ objection. First, Judge Goodman acknowledged both the Government's argument that Alvaro's position as "managing member" of the LLCs was evidence that he owned the LLCs, (see Report at 42, 54), and Petitioners’ rebuttal argument that Alvaro's position as a "managing member" of Miamark LLC was a "misnomer," (id. at 43-44). Ultimately, Judge Goodman did not find that Alvaro's position as "managing member" was evidence that he owned the LLCs as a matter of state law, but rather considered it as evidence that he controlled the LLCs, and therefore "that Petitioners have, at best, nominal ownership to the real properties at issue." (Id. at 57.) Thus, Judge Goodman did not reject Mr. Lopez's testimony regarding the meaning of "managing member," and no credibility finding was necessary. Even assuming the veracity of Mr. Lopez's testimony that "managing member" simply means "manager"-with-no-ownership-interest, it does not overcome the other overwhelming evidence Judge Goodman relied upon when finding that Petitioners lacked standing to challenge the forfeiture order. (See Report at 56-60.) Therefore, this objection is overruled.

g. Failure to Effectively Review the Criminal Record

In their next objection, Petitioners appear to argue—albeit confusingly—that although Judge Goodman acknowledged that Petitioners were relying on the exhibits introduced at the evidentiary hearing and on "evidence from the criminal trial and other pre-hearing evidence[,]" (Obj. at 22 (citing Report at 14 n.2)), Judge Goodman must have only considered the newly-introduced exhibits when considering their claims because the record evidence establishes that Murano and Miamark are persons "other than the Defendant" who own the at-issue condominiums, (id. at 21-22). They then offer argument regarding portions of the record that they believe establish that the LLCs own the forfeited condominium units. (Id. at 22-28.) Thus, Petitioners are essentially arguing that if Judge Goodman had "effective[ly] reviewed" the record in the underlying criminal case he would have determined that Petitioners have standing to challenge the Court's forfeiture order. (See Obj. at 21-28.)

The Government argues that this is an improper objection that the Court should decline to consider because Petitioners fail to identify any part of the Report to which they object. (Resp. at 18 (citing Battle v. U.S. Parole Comm'n, 834 F.2d 419, 421 (5th Cir. 1987) ).) The Government further argues that the objection is meritless because Judge Goodman "recites or references relevant portions of the criminal record throughout, including, for example, the testimony of Sharon Cohen, and David Pollack at Alvaro's criminal trial regarding the Forfeited Mark Units and the Murano 908." (Id. (citing Report at 40-44, 51-55).)

The Court overrules the objection because Judge Goodman properly considered all of the evidence proffered by Petitioners. Judge Goodman explicitly identifies the portions of the underlying criminal case upon which Petitioners rely. (See, e.g., Report at 62 (discussing Agent Gaitan's testimony at the forfeiture jury trial); id. at 63 (discussing trial testimony regarding reason Alvaro sought to ship the Mercedes to Spain); id. (discussing Sharon Cohen and David Pollack's trial testimony); id. at 64 (discussing David Pollack's testimony). However, Judge Goodman correctly observed that "Petitioners rely mostly on contentions and theories, as opposed to actual evidence." (Id. at 56.) Judge Goodman ultimately relied (in part) on portions of record in the underlying criminal case cited by the Government. (See, e.g., Report at 57 (referencing Sharon Cohen's trial testimony); id. at 57-58 (referencing Mr. Klugh's representations in the underlying criminal case).) That Judge Goodman was more persuaded by the evidence cited by the Government than Petitioners’ contentions and theories does not mean that he failed to effectively review the record.

h. Failure to Adhere to the Stipulation for Sale of Miamark Unit 202

Next, Petitioners argue that the Report "relies on an unwarranted misinterpretation of the agreed sale of Miamark 202 and transfer of the sale proceeds to escrow pending resolution of the criminal case." (Obj. at 28 (citing Report at 42-43).) They argue that

the R&R notably ignores the express language of the stipulation for sale which bars reliance on the terms and agreements in the stipulation for sale in any aspect of the criminal case. See 403-1 ("This Stipulation to Sell Property does not constitute a representation, agreement or admission by any of the Parties as to the merits, or lack thereof, of any matter at issue in the instant action."). That provision was meant to do exactly what it said, and it allowed the parties to proceed without risk of exactly the misuse the R&R proposes to make of it, to turn it into an admission of some sort—the very thing that cannot be done according to the government's agreement. The manager's title was not what gave him authority; it was his status as manager; because Florida law requires a management structure, compliance with the law by having the local family member be the manager did not to diminish the dominion and control the equity members of the LLC exercised, including the power to hire or fire Alvaro at will.

(Id. )

The Government argues that "[t]he R&R does not even reference the Stipulation to Sell Property." (Resp. at 18.)

Rather, the R&R specifically cites to supplemental filings, ECF Nos. 406 and 406-3, which the Court required the Parties to submit affirmatively establishing Alvaro's authority to act consistent with the terms of the Stipulation to Sell Property, and his counsel's authority to act on his behalf. See Paperless Order, ECF 404, dated January 9, 2014; R&R, ECF No. 909:42 (citing Joint Suppl. to Mot. for Court Appr'l of Stip. to Sell Property, ECF No. 406, and Sworn Decl. of Richard C. Klugh, ECF No. 406-3). These supplemental filings are not part of the Stipulation to Sell Property itself, but instead were provided to the Court to support that Alvaro and/or his counsel, Mr. Klugh, had the requisite authority to sell Mark Unit 202 in accordance with the Stipulation to Sell Property.

Therefore, these submissions are not subject to the prohibition referenced by the Petitioners. Additionally, the Magistrate Court's recitation of this authority in the R&R was perfectly appropriate and highly relevant.

(Id. at 18-19.)

The Court overrules this objection. In the Report, Judge Goodman included the following in his recitation of the evidence the Government offered in opposition to Petitioner's claims:

14. After Alvaro was criminally charged in 2011, Miamark submitted a 2013 restatement and 2014 annual report indicating that he was its managing member. See ECF No. 880-96. Furthermore, in support of the interlocutory sale of Mark Unit 202, Richard Klugh, criminal defense counsel for the Defendant, submitted a sworn declaration to the Court that verified Defendant's status as Miamark's "managing member." See ECF Nos. 406; 406-3.1.¹⁸

18 In particular, Mr. Klugh's sworn declaration said:

The undersigned, attorney for Alvaro Lopez Tardon, has verified the authenticity of the documentation of the defendant's stipulation to sell property in this case [D.E. 403-1], of the power of attorney from the defendant to the undersigned granting the undersigned authority to conduct transactions including the present property sale (attached as Ex. A to the joint supplement to joint motion to approve stipulated sale), and of the defendant's status as managing member of MiaMark LLC (Ex. B to the joint supplement to joint motion to approve stipulated sale).

[ECF No. 406-3 (emphasis added)].

(Report at 42-43 (footnote in original).) Although Judge Goodman appears to rely on this evidence, (see id. at 57 ("[t]he myriad factors listed above convincingly demonstrate that Petitioners lack statutory standing")), he does not specifically discuss it in his findings and conclusion, (see id. at 57-60).

Regardless, Judge Goodman does not find—or even suggest—that the Stipulation to Sell Property is evidence that Alvaro owned the Mark Unit 202. Indeed, the Report does not even reference the Stipulation to Sell Property. The Report references only the "Sworn Declaration of Richard C. Klugh," and only to note that Alvaro was a "managing member" of Miamark LLC with authority to approve its sale. (See id. at 42-43.) This is hardly improper considering that Petitioners do not deny that Alvaro was Miamark's "managing member"; indeed, two of the nine exhibits Petitioners introduced in support of their claims at the evidentiary hearing—Miamark's Articles of Organization, (D.E. 880-96 at 4) and Miamark's Operating Agreement, (D.E. 880-95 at 4)—identify Alvaro as Miamark's "managing member." (See Tr. of Evid. Hr'g, D.E. 876 at 43:18-25.) As such, the Court finds this objection to be borderline frivolous, and is overruled.

i. Failure to Address Car Purchase Ownership Interests

Finally, Petitioners object to Judge Goodman's alleged "[f]ailure to address car purchase ownership interests of record title holders Kyte School and Artemio Tardon."¹⁹ (Obj. at 28.) They argue that at the forfeiture trial, "Agent Gaitan conceded that Kyte Schooll provided the funding for the purchase of the Mercedes McLaren automobile at issue, while other car business provided funds for the Rolls Royce automobile." (Id. at 29.) They further argue that "[b]ecause Alvaro is a partner in the Kyte Schooll entity, his apparently minimal dealer use of the car did not divest Kyte Schooll of its ownership interest that has always been reflected on the title records for the Mercedes." (Id.; see also id. at 30.)

19 The Court summarily overrules Petitioners’ apparent argument in this section that Artemio is a person "other than" Alvaro because they are not physically the same person. (See Obj. at 28.) Obviously, the question is not whether Artemio and Alvaro are different human beings, but whether Artemio is a strawman or nominee owner of the at-issue forfeited property.

The Government argues that, in fact, the Report "exhaustively details the facts and circumstances of record regarding the purchase, storage, maintenance, use, titling and registration of the Forfeited Vehicles, and correctly concludes, based on overwhelming evidence in the record, that the Petitioners, Maria Tardon, Artemio Tardon and Kyte Schooll, hold only nominal title to the Forfeited Vehicles and therefore lack standing to contest their forfeiture." (Resp. at 19-20.)

The R&R specifically details the facts that Alvaro personally purchased the Rolls-Royce and that he personally wrote a letter to the Florida Tag Agency in which he stated that he owned both the Mercedes-Benz and Kyte Schooll. See R&R, ECF No. 906:66-67. Additionally, the R&R goes on to recite the facts of record showing that Alvaro registered, titled, and insured the Forfeited the Vehicles in his name using his home address, drove them and showed them off at restaurants and clubs, stored them at his various residences, and transferred nominal title to them to the Petitioners when he feared his then-spouse, Sharon Cohen, would acquire them in a pending divorce proceeding. See id. at 67-68. Importantly, the R&R explains that Petitioners Maria Tardon and Artemio Tardon admitted in their interrogatory answers that they did not acquire title to the Forfeited Vehicles through a financial transaction, that they did not exchange anything of extrinsic value when nominal title to the Forfeited Vehicles was transferred to their names, and that they acquired their claimed interests in the Forfeited Vehicles "following the separation of [Alvaro] from his wife. See id. at 68-69. The R&R is replete with facts of record specifically showing that Alvaro, not the Petitioners, exercised complete dominance and control of the Forfeited Vehicles from their purchase until their seizure, while the Petitioners gave nothing of extrinsic value in exchange for title changing in their names, nor exercised any form of dominion or control over them at any time.

(Id. at 20.)

The Court finds that Judge Goodman correctly found that Artemio Lopez Tardon, Maria Torrego Tardon, and Kyte Schooll are not persons "other than" Alvaro for purposes of 21 U.S.C. § 853(n)(2) (and therefore lack statutory standing), and are "mere naked title owners who are nominees for Alvaro" (and therefore lack Article III standing).²⁰ (Report at 69-70.) The Court need not recite the overwhelming evidence establishing that Alvaro owned both vehicles, as that evidence is recounted in Judge Goodman's Report and reproduced above in Section I(b). Petitioners arguments to the contrary are unavailing.

20 As previously stated, (see Note 12, supra ), Maria Tardon Torrego and Artemio Lopez Tardon claim ownership of the Rolls Royce, while Maria Tardon Torrego and Kyte Schooll claim ownership of the Mercedes-Benz. (D.E. 735.) Artemio's claim to the Mercedes-Benz was previously dismissed for lack of standing. (D.E. 762.)

Petitioners argue that there is evidence that "two Spanish car companies with ties to the Tardon family or businesses provided the funds" for the Rolls Royce. (Obj. at 30 (citing Trial Tr. (June 11, 2014), D.E. 713 at 13:47-48, 56).) This is true: Agent Gaitan testified during the forfeiture phase of the trial that Cars Collection Sports, SL transferred $21,532.50 to Braman Motors, and Car Boats Madrid, SL transferred $315,960.53. (D.E. 713 at 47.) Agent Gaitan further testified that Spanish police had intercepted telephone calls between the husband of the owner of Cars Collection Sports, SL and the Tardon brothers discussing drug activity and being followed by police. (Id. at 55:22 – 57:17.) However, this evidence does not show, or tend to show, that Petitioners have any ownership interest in the Rolls Royce.

Petitioners also cite the fact that Alvaro shipped the Rolls Royce to The Collection Motor Sports in Spain and transferred title to Artemio Tardon and Maria Tardon. (Obj. at 30-31.) Although they argue that "Sharon Cohen's testimony, and that of David Pollack, DE:776-9:18, showed the reason for shipping cars to Spain was to advance the Tardon family's car business," they cite only to David Pollack's testimony, which was inconsistent. (See id. ) Pollack initially testified that he did not know why Alvaro sent cars (including the Rolls Royce) to Spain. (D.E. 776-9 at 14:3-5 ("Q. What would be the triggering event, if you know, to have one of those cars, ‘Okay. Let's send it off to Spain’? A. I don't know, unless he got bored.").) He then testified that Alvaro sent cars to Spain "[t]o be sold in a dealership" and "[a]lso because he was fearing divorce with Sharon and wanted to get rid of some of his assets in case she was coming after them." (Id. at 18:19-24.) However, Pollack never testified that Alvaro shipped cars to Spain "to advance the family's car business." The Court finds that Judge Goodman correctly credited the evidence showing that Alvaro shipped the Rolls Royce to Spain and transferred title to his brother and mother "because he feared that his then-spouse, Sharon Cohen, might try to obtain them in pending divorce proceedings." (Report at 67 (citing Transcribed Conversation between Alvaro Lopez Tardon and Patricia Scheel, D.E. 880-32, 884-2; Trial Tr. (May 6, 2014), D.E. 520 at 38:12 – 39:12 (testimony of David Pollack)²¹ ).)

21 Q. After Mr. Tardon's domestic issues, did you have any conversations with him concerning the cars that he had?

A. Yes.

Q. What was that conversation?

A. He was going to ship -- I think it was seven of the cars to Madrid.

Q. Did he tell you why he wanted to do that?

A. To be sold in a dealership.

Q. Did he tell you why he wanted to do it then and there versus any other time?

A. Also because he was fearing divorce with Sharon and wanted to get rid of some of his assets in case she was coming after them.

Q. Did he have any conversations with you at all about any problems he was having getting the cars out of the country?

A. Yes. Once I put all the cars on two trucks to be driven to wherever they were to be transported out of the country, they were stuck there. They were not leaving.

Q. Did he tell you why?

A. No. He did not know why.

Q. Do you know whether or not there were any issues with the names that the cars were titled under?

A. No.

Q. Now, in all the time that you've known Mr. Tardon, did he ever tell you that his money came from anything other than trafficking in drugs?

A. No.

As to the Mercedes, Petitioners appear to argue that Kyte Schooll has established a "business ownership" interest because it paid for the vehicle. (Obj. at 29.) They argue that "[b]ecause Alvaro is a partner in the Kyte Schooll entity, his apparently minimal dealer use of the car did not divest Kyte Schooll of its ownership interest that has always been reflected on the title records for the Mercedes." (Id. ) It appears undisputed that Kyte Schooll paid for the Mercedes (at least nominally), (see D.E. 550-6 at 3, Trial Tr. (June 11, 2014), D.E. 713 at 59:24 – 60:25), and that the Mercedes was shipped to Kyte Schooll in Spain after it was purchased, (see id. at 61:1-3; D.E. 776-6 at 6, 10, 12). However, it is also undisputed that Alvaro is a part owner of Kyte Schooll, (see Obj. at 29), and Alvaro's name is listed with Kyte Schooll as a "Buyer" of the Mercedes on the Motor Vehicle Dealer Title Reassignment Supplement, (D.E. 776-6 at 10). The evidence also shows that in 2010, Kyte Schooll shipped the Mercedes back to Alvaro at his personal residence in Miami. (Id. at 7; see also Trial Tr. (June 11, 2014), D.E. 713 at 61:1-3.) By letter dated April 13, 2010, Alvaro notified Trail Tag Agency that the Mercedes "was unregistered in Madrid Spain to owner, Alvaro Lopez, who is also owner of Kyte Schooll." (Id. at 9.) The April 19, 2010 Certificate of Title lists "Alvaro Lopez Tardon or Kyte Schooll" as the owners of the Mercedes, and lists Alvaro's personal address. (Id. at 15.) Alvaro (in a joint policy with his wife, Sharon Cohen) personally insured the Mercedes with State Farm Insurance. (D.E. 880-82.) Sharon Cohen testified that Alvaro drove the Mercedes. (Trial Tr. (May 13, 2014), D.E. 523 at 83:3-4, 16-17.) And, as with the Rolls Royce, the evidence shows that Alvaro personally decided to ship the Mercedes back to Spain because he feared that Sharon may try to obtain it in their divorce proceedings. (See D.E. 884-2; D.E. 520 at 38:12 – 39:12.) Consequently, the Court adopts Judge Goodman's conclusion that Kyte Schooll had nominal ownership in the Mercedes, and was not a person "other than" Alvaro for purposes of asserting an ownership interest in the Mercedes.

The Court further adopts Judge Goodman's conclusion that Maria Tardon has not established any ownership interest in the Mercedes (outside any ownership interest she may have had in Kyte Schooll, which the Court has just found held mere nominal ownership). In her Answers to Interrogatories, Maria asserted that she acquired ownership in the vehicles through "arranging for proper paper work for resale of the cars in Spain." (D.E., 880-78 at 6.) The only instances of Maria exercising possession, dominion and control over the vehicles was placing the vehicles "into transfer for resale and [insuring] appropriate handling of the cars ...." (D.E. 880-77 at 12; D.E. 880-78 at 12.) In other words, Maria's only assertion of dominion and control over the vehicles was helping Alvaro transfer the cars to Spain so that Alvaro would not lose them in the divorce. As such, the Court finds that, at best, Maria had nominal ownership in the Mercedes, and was not a person "other than" Alvaro for purposes of asserting an ownership interest in the Mercedes.

In sum, the Court overrules Petitioners’ objections to Judge Goodman's findings and conclusions regarding the forfeited Rolls Royce and Mercedes.

IV. Conclusion

Accordingly, it is ORDERED AND ADJUDGED that:

1. The Report and Recommendations on Petitions to Set Aside Forfeiture of Substitute Assets (D.E. 906) is ADOPTED AND SUPPLEMENTED consistent with this Order;

2. The Amended Petition for Third-Party Interest in Forfeited Property filed by Miamark LLC and Murano 908 LLC (D.E. 734) is DISMISSED for lack of standing;

3. The Amended Petition for Third-Party Interest in Forfeited Property filed by Kyte Schooll (a Spanish Corporation), Maria Tardon Torrego, and Artemio Lopez Tardon (D.E. 735) is DISMISSED for lack of standing;

4. The United States’ Motion for Summary Judgment Against Petitioners Claiming Forfeited Mercedes Benz and Rolls Royce (D.E. 776) is DENIED AS MOOT ;

5. The United States’ Motion for Summary Judgment Against Petitioner Miamark LLC Claiming Three Forfeited Condominium Units (D.E. 825) is DENIED AS MOOT ;

6. The United States’ Motion for Summary Judgment Regarding Murano 908, LLC's Petition Claiming Ownership to Forfeited Real Property (D.E. 826) is DENIED AS MOOT ;

7. The United States’ Motion for Order Compelling Remaining Petitioners to Show Cause Why They Have Standing to Proceed, or in the Alternative, to Clarify Pending Petitions (D.E. 760) is DENIED AS MOOT ;

8. The United States’ Motion for Inquiry Regarding Potential Conflict (D.E. 714) is DENIED AS MOOT ;²² and

9. James Rubin's and Olga Rubin's Verified Petition to Adjudicate Claimed Interest in Property Subject to Forfeiture (D.E. 620) is DENIED AS MOOT .²³

22 See Note 6, supra.

23 See Note 7, supra.

DONE AND ORDERED in Chambers at Miami, Florida this 8th day of October, 2020.

REPORT AND RECOMMENDATIONS ON PETITIONS TO SET ASIDE FORFEITURE OF SUBSTITUTE ASSETS

Jonathan Goodman, UNITED STATES MAGISTRATE JUDGE

I. Introduction

This Report and Recommendations ("Report") concerns petitions filed by third parties who assert interests in both real and personal properties which the United States seeks to forfeit as substitute assets following (1) the criminal conviction of Defendant Alvaro Lopez Tardon ("Alvaro") and (2) a forfeiture judgment concerning Alvaro's interest in those properties. Although this Report concerns the facts developed at the criminal trial and through later proceedings in the instant post-trial ancillary forfeiture proceedings, the parties (i.e., the United States and the third parties) have spent a considerable amount of time litigating here over another criminal forfeiture proceeding in a completely unrelated case: United States v. Silva , U.S. District Court for the Southern District of Florida, Case No. 15-20727-CR-DPG. The third-party petitioners rely on Silva while the United States describes Silva as a non-binding district court case which reached a result the United States deems incorrect (even though it never pursued an appeal).

Although the Undersigned readily agrees, as I must, that Silva is non-binding, the parties’ views about that case and their penchant for extensively discussing it here compel me to assess it in this Report. As this Report outlines below, the Undersigned does not find Silva persuasive. Silva would immunize all record title owners from scrutiny over their standing and prevent the United States and the Court from determining whether a record title owner is a mere nominee or straw owner lacking standing to challenge a proposed forfeiture.

Therefore, this Report will substantively evaluate the United States’ related standing arguments that (1) the third parties do not meet the statutory definition of being someone "other than the Defendant" and (2) these third-party petitioners hold only bare legal title to the properties at issue -- and therefore cannot, as mere nominal title owners, establish the requisite standing.

By way of additional introductory background, following the trial and conviction of Defendant Alvaro on 14 counts of money laundering, Murano 908, LLC; Miamark, LLC; Maria Tardon Torrego; Artemio Lopez Tardon; and Kyte Schooll (a Spanish corporation) ("Petitioners") filed petitions to determine their respective ownership interests in vehicles and condominium units forfeited to the United States as Alvaro's substitute property. See ECF Nos. 601; 613. United States District Judge Joan A. Lenard then presided over an ancillary hearing on their petitions and dismissed their claims without prejudice. See ECF Nos. 722; 729; 732. The Petitioners subsequently re-filed their claims through amended motions to assert third party interests in forfeited property. [ECF Nos. 734; 735].

The United States sought denial of these petitions on summary judgment. [ECF Nos. 776; 825; 826]. Judge Lenard referred the pending petitions and related motions to the Undersigned. [ECF No. 813]. The parties have fully briefed the matters, and on February 19, 2019, the Undersigned held an evidentiary hearing. [ECF No. 863].

Petitioners, which include Artemio Tardon, an indicted co-defendant, have asserted that they have ownership interests in the properties which were vested in them (rather than Alvaro) and that their rights were superior to Alvaro's at the time of the commission of the facts giving rise to the forfeitures. Petitioners say they are entitled under 21 U.S.C. § 853(n)(6)(A) to have the forfeiture orders amended in order to prevent their interests from being improperly forfeited.

In response, the United States has consistently argued that Petitioners are precluded from relief because they are not someone "other than defendant" (as required by 21 U.S.C. § 853(n)(2) to file a third-party claim to forfeited assets) and (alternatively) because they hold only naked legal title and lack standing. [ECF Nos. 716; 725; 776; 825; 826; 855].

At the evidentiary hearing, which was scheduled seven months earlier, Petitioners presented no witnesses and submitted a total of nine exhibits (a handful of title records and company records) in support of their claims. See ECF No. 874; see also ECF Nos. 876 (2/19/19 Evidentiary Hr'g Tr. 41:24-46:18, 47:12-21, 135:3-19). Sitting at counsel's table for Petitioners was Richard Klugh, their former counsel, who appeared as the corporate representative of Murano, Miamark, and Kyte Schooll. The United States presented Special Agent Daniel Gaitan of the Federal Bureau of Investigation as a witness and submitted more than 100 exhibits in support of its defense. See ECF Nos. 863; 864; 880; 884.

At a prior hearing concerning the ancillary hearing scheduled for Petitioners’ claims to the substitute assets which Judge Lenard ordered forfeited to the United States, Petitioners’ counsel waived the presence of Petitioners and their principals. [ECF No. 744, pp. 54-56]. Although their presence was waived, Petitioners could have presented live witness testimony at the evidentiary hearing. As noted, they did not.

In post-hearing submissions, the United States took the position that none of the Petitioners established statutory standing or Article III standing (and asked the Court to reject their petitions and deny their claims). On the other hand, Petitioners took the position that they are entitled to the proceeds from the sales of the three parcels of real estate and half of the proceeds of the sales of the two vehicles (with half going to the United States and the other half going to some of the petitioning third parties). [ECF No. 905].

For the reasons provided below, the Undersigned respectfully recommends that Judge Lenard deny the petitions because Petitioners have not established that they are "other than" the Defendant Alvaro, which means they lack statutory standing. Alternatively, Petitioners have not established that they have Article III constitutional standing because they are mere nominee owners with formal record title but without sufficient dominion or control over the properties. For all practical purposes, the facts demonstrating that Petitioners failed to establish statutory standing are the same ones which reveal that they lack Article III standing.

Finally, the Undersigned respectfully recommends that Judge Lenard deny the following additional motions for the reasons mentioned: (1) the United States’ summary judgment motion concerning the vehicles [ECF No. 776] because they are now moot, given this Report and Recommendations; (2) the United States’ summary judgment motions concerning the real properties [ECF Nos. 825; 826] because they are now moot, given this Report and Recommendations; (3) the United States’ motion for a show cause order concerning Petitioners’ standing [ECF No. 760] because this Report and Recommendations is based on a lack of standing and renders the motion moot; (4) the United States’ motion to dismiss regarding the petition for the Mercedes [ECF No. 737] because it is moot; (5) the Petitioners’ amended motions to assert third party interests in property [ECF Nos. 734; 735] because those requests are moot; and (6) the United States’ motion for a hearing to inquire about a potential conflict [ECF No. 714] because Judge Lenard already had the hearing [ECF No. 717] and ruled on the purported conflict issue.

II. Procedural History

a. Criminal Proceedings and Forfeiture of Subject Assets

On June 11, 2014, Defendant Alvaro was found guilty of all 14 counts of federal money laundering charged in the Second Superseding Indictment. [ECF Nos. 483; 484; 203].

Concerning the real and personal property at issue in this Report, the jury found (by a preponderance of the evidence) that the properties were not "traceable to property that was involved in the money laundering offense charged in Count I of the Second Superseding Indictment." [ECF No. 487, pp. 7-9 (emphasis added)].

On October 22 and 30, 2014, the Court entered an order imposing a forfeiture money judgment against the Defendant in the amount of $14,358,639.64 and the forfeiture of certain assets in partial satisfaction of the forfeiture money judgment, including the following substitute assets¹ that are the subject of these ancillary proceedings:

1 Because the jury found that the properties were not subject to forfeiture, Judge Lenard refers to the substitute assets properties as the "non-traceable property." See, e.g. , ECF No. 601, p. 3.

The "Forfeited Vehicles" :

One (1) 2006 Mercedes-Benz SLR McLaren (VIN: WDDAJ76F06M000724) (the "Mercedes Benz" or the "Mercedes");

One (1) 2010 Rolls-Royce Ghost (VIN: SCA664S50AUX48905) (the "Rolls-Royce");

The "Forfeited Mark Units":

Real property known and numbered as 1155 Brickell Bay Drive, Unit 202, Miami, FL 33131, with all appurtenances, improvements, and attachments thereon ("Mark Unit 202");

Real property known and numbered as 1155 Brickell Bay Drive, Unit 502, Miami, FL 33131, with all appurtenances, improvements, and attachments thereon ("Mark Unit 502");

Real property known and numbered as 1155 Brickell Bay Drive, Unit 2703, Miami, FL 33131, with all appurtenances, improvements, and attachments thereon ("Mark Unit 2703"); and

The "Murano Unit 908":

Real property known and numbered as 1000 South Pointe Drive, Unit 908, Miami, FL 33139, with all appurtenances, improvements, and attachments thereon ("Murano Unit 908").

See ECF Nos. 601; 613.

The Court released a portion of the net seller proceeds from the interlocutory sale of Mark Unit 202, approximately $104,308.73, to satisfy the Defendant's outstanding trial attorney fees in the underlying criminal case. See ECF Nos. 613; 703. The remaining balance of the Mark Unit 202's net seller proceeds is approximately $133,188.83 (the "Mark Unit 202 Forfeited Proceeds" and part of the "Forfeited Mark Units").

b. Maria Tardon, Artemio Tardon and Kyte Schooll's Claims to Forfeited Vehicles

On December 7, 2014, Kyte Schooll, Maria Tardon, and Artemio Tardon jointly filed their Petition to Assert Third-Party Interest in Forfeited Property, and on December 14, 2014, they filed a Supplemental Petition Asserting Third-Party Interest in Forfeited Property. [ECF Nos. 631; 638]. After the start of an evidentiary hearing on their claims in December 2015, the Court dismissed their petition without prejudice. See ECF Nos. 722; 729; 732; 745.

On January 14, 2016, Artemio Tardon, Maria Tardon, and Kyte Schooll jointly re-filed their pending Amended Petition for Third-Party Interest in Forfeited Property [ECF No. 735] (hereinafter, the "Vehicle Petition"), in which they asserted: "Florida car title records and other transactional records show that [the Rolls Royce] is owned by Maria [Tardon] and Artemio [Tardon]; [and the Mercedes Benz] is owned by Maria [Tardon], Kyte Schooll, and Artemio [Tardon]." [ECF No. 735, p. 2]. Additionally, they claimed that "interest in [the Forfeited Vehicles] is vested in the Petitioners, not the defendant, and Petitioners’ interest is superior to any claimed by the defendant." Id. Artemio Tardon, Maria Tardon, and Kyte Schooll "claim[ed] all legal right, title and interest in [the Forfeited Vehicles]," and asserted that "any claim of the defendant was extinguished prior to the forfeiture judgment." Id. at pp. 2-3.

On April 21, 2016, upon motion by the United States, the Court dismissed with prejudice Artemio Tardon's claim to the Mercedes Benz because Florida Department of Highway Safety and Motor Vehicles ("DMV") records showed that he was not a titled owner of the vehicle. See ECF No. 762. Instead, DMV records indicated that the Defendant, Kyte Schooll, or Maria Tardon are the current titled owners of the Mercedes Benz. See id. at p. 10.

c. Miamark's and Murano's Claims to Forfeited Mark Units and Murano Unit 908

On December 2, 2014, Miamark and Murano jointly filed their Petition to Assert Third-Party Interest in Forfeited Property, and on December 14, 2014, they filed a Supplemental Petition Asserting Third-Party Interest in Forfeited Property. [ECF Nos. 623; 637]. After the start of an evidentiary hearing on their claims in December 2015, the Court dismissed their petition without prejudice. See ECF Nos. 722; 729; 732; 745.

On January 14, 2016, Miamark and Murano jointly re-filed their pending Amended Petition for Third-Party Interest in Forfeited Property [ECF No. 734] (hereinafter, the "Condominium Petition"), in which they asserted an ownership interest in "condominiums described as 1155 Brickell Bay Drive, Units 202, 502, and 2703, Miami, Florida 33132, and 1000 S. Pointe Dr., Unit 908, Miami Beach, Florida 33139." [ECF No. 734, p. 1]. They claimed that "[Miamark] is the record title owner via purchase of 1155 Brickell Bay Drive, Units 202, 502, and 2703, Miami, Florida 33131 [or the Forfeited Mark Units]." Id. Additionally, Miamark claimed "all legal right, title and interest in the property, with no viable prior interest or claim of the defendant having ever existed prior to the forfeiture judgment." Id. at 2.

In addition, Murano asserted that it "holds ownership of [the Murano Unit 908] by virtue of purchase and satisfaction of all mortgages on the property ..." Id. Additionally, Murano claimed "all legal right, title and interest in [the Murano Unit 908], with no viable prior interest or claim of the defendant having ever existed prior to the forfeiture judgment." Id.

During a status hearing on May 25, 2018, before the Undersigned, Miamark's counsel clarified that Miamark is claiming only the Mark Unit 202 Forfeited Proceeds, and not all of the net seller proceeds from the interlocutory sale of Mark Unit 202, which included funds released to satisfy the Defendant's outstanding trial attorney fees in the underlying criminal case. [ECF No. 817 (Evidentiary Hr'g Tr. 49:9-15)].

No other third-party claimants have filed a judicial claim to the Forfeited Vehicles, Forfeited Mark Units, Mark Unit 202 Forfeited Proceeds, or Murano Unit 908, and the time for filing a claim has expired.

d. Summary Judgment Motions

On October 6, 2016, the United States filed a motion for summary judgment against the claims made by Artemio Tardon, Maria Tardon, and Kyte Schooll to the Forfeited Vehicles, which has since been fully briefed. [ECF Nos. 776; 777; 778].

On May 14, 2018, Judge Lenard referred the Vehicle Petition, Condominium Petition, and all pending motions, which included the motion for summary judgment regarding the Forfeited Vehicles, to the Undersigned. [ECF No. 813].

On May 30, 2018, after a status conference on May 25, 2018, the Undersigned set June 25, 2018 as the deadline for additional motions for summary judgment and scheduled a two-day evidentiary hearing for February 19 to 20, 2019. [ECF Nos. 817; 820]. On June 22, 2018, the United States filed a motion for summary judgment against Miamark's claim to the Forfeited Mark Units, which has since been fully briefed. [ECF Nos. 825; 827; 834]. And on June 25, 2018, the United States filed a motion for summary judgment against Murano's claim to the Murano Unit 908, which has since been fully briefed. [ECF Nos. 826; 832; 835].

e. Evidentiary Hearing

The Undersigned held an evidentiary hearing on Petitioners’ claims on February 19, 2019. During the evidentiary hearing, Petitioners presented no witnesses, and they submitted nine exhibits, which included title documentation and a selection of company records. [ECF Nos. 876; 877 (41:24-46:18, 47:12-21, 135:3-19)]. At the conclusion of Petitioners’ case, the United States requested, pursuant to Rule 50 of the Federal Rules of Civil Procedure, judgment as a matter of law and renewed the pending motions for summary judgment against Petitioners’ claims to the Forfeited Vehicles, Forfeited Mark Units, and Murano Unit 908. See ECF No. 877, 48:6-50:24. The Undersigned reserved ruling on the Rule 50 motion, and the United States presented FBI Special Agent Daniel Gaitan. The United States submitted more than 100 exhibits in support of its defense. See id. at 50:25-134:11; [ECF Nos. 880; 884].

After the evidentiary hearing, the Undersigned required [ECF No. 889] the parties to attend a mediation with United States Magistrate Judge Chris M. McAliley, who mediated the case on July 11 and July 22, 2019 [ECF Nos. 898; 900]. The case did not settle.

The Undersigned also required the parties to each submit a proposed Report and Recommendations and a rebuttal to the opposing party's proposal. The parties complied. [ECF Nos. 885; 886; 904; 905]. The rebuttal memoranda were filed on October 21, 2019.

III. Applicable Legal Standards

Following the entry of a preliminary order of forfeiture, a person, "other than the defendant , asserting a legal interest in property which has been ordered forfeited ... may ... petition the court for a hearing to adjudicate the validity of his alleged interest in the property." 21 U.S.C. § 853(n)(2) (emphasis added).

Section 853(n) provides, in relevant part, as follows:

If, after the hearing, the court determines that the petitioner has established by a preponderance of the evidence that—

(A) the petitioner has a legal right, title, or interest in the property, and such right, title, or interest renders the order of forfeiture invalid in whole or in part because the right, title, or interest was vested in the petitioner rather than the defendant or was superior to any right, title, or interest of the defendant at the time of the commission of the acts which gave rise to the forfeiture of the property under this section; or

(B) the petitioner is a bona fide purchaser for value of the right, title, or interest in the property and was at the time of purchase reasonably without cause to believe that the property was subject to forfeiture under this section;

the court shall amend the order of forfeiture in accordance with its determination.

21 U.S.C. § 853(n)(6) (emphasis added).

Thus, there are three grounds on which a petitioner can defeat the United States’ entitlement to property under the forfeiture order: (1) title to the property was vested in the petitioner rather than the defendant at the time of the act which made the property subject to forfeiture; (2) the petitioner's title to the property was superior to the title held by the defendant at the time of the act which made the property subject to forfeiture; or (3) that the petitioner purchased his interest without reasonable cause to know that the property was subject to forfeiture.

A third-party petitioner bears the burden of proof in the forfeiture ancillary proceeding to demonstrate by a preponderance of the evidence one of these grounds. See 21 U.S.C. § 853(n)(6) ; see also United States v. Gilbert , 244 F.3d 888, 911 (11th Cir. 2001). In determining whether a petitioner has met this burden, the district court must consider relevant portions of the criminal record, including the forfeiture phase of the trial, and additional evidence presented at a hearing. See 21 U.S.C. § 853(n)(5) ; see also United States v. Cohen , 243 F. App'x 531, 533-34 (11th Cir. 2007) (upholding court's reliance on facts established in criminal case in considering third-party claim).²

2 In their proposed Reports and Recommendations and rebuttal memoranda, the United States and Petitioners refer to exhibits and testimony from the criminal trial, the forfeiture portion of the trial, discovery depositions and testimony and exhibits from the evidentiary hearing held by the Undersigned.

The ancillary proceeding is not a forum in which third parties can re-litigate issues that were already determined in the criminal case. See United States v. Davenport , 668 F.3d 1316, 1321 (11th Cir. 2012) (stating a third-party claimant "may not relitigate the merits of a forfeitability determination" and upholding district court's finding that claimant lacked standing to challenge the validity of the preliminary order of forfeiture); see also United States v. Cooper , 679 F. App'x 738, 742 (11th Cir. 2017) (affirming order dismissing third party petition and noting that petitioner lacked standing to challenge the legality of the seizure which purportedly gave rise to the forfeitures).

But that same principle also means that the United States cannot relitigate the issue of whether the properties are traceable to the money laundering offenses on which Alvaro was convicted. The jury already resolved that issue in its special verdict on the proposed forfeitures. [ECF No. 487].

The jury did not, however, determine whether (1) Alvaro was the actual owner of the properties at issue (even though they are titled in Petitioners’ names, not his name); (2) the Petitioners are parties "other than" Alvaro (and therefore cannot successfully pursue their petitions); and (3) the Petitioners hold merely naked title and therefore lack standing.

a. Constitutional and Statutory Standing

Standing "is the threshold question in every federal case, determining the power of the court to entertain the suit." United States v. 960,000 Dollars in U.S. Currency , 307 F. App'x 251, 255 (11th Cir. 2006) (quoting Warth v. Seldin , 422 U.S. 490, 499, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) ); see also United States v. Henry , 621 F. App'x 968, 971-72 (11th Cir. 2015) (quoting United States v. Weiss , 467 F.3d 1300, 1307-08 (11th Cir. 2006) ) ("If a claimant lacks Article III standing to challenge a forfeiture, this Court does not have jurisdiction to consider the claim.").

"The party invoking federal jurisdiction bears the burden of proving standing." Bischoff v. Osceola Cty. , 222 F.3d 874, 878 (11th Cir. 2000) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ); see also Henry , 621 F. App'x at 972 ; Gilbert , 244 F. 3d at 911.

Thus, the burden of proof rests on the third-party petitioner throughout the forfeiture ancillary proceeding. See United States v. Coffman , 612 F. App'x 278, 284 (6th Cir. 2015). If a petitioner lacks standing, then the Court need not address the substantive merits of its claim. See United States v. Masilotti , 510 F. App'x 809, 810 n.2 (11th Cir. 2013).

The Court looks to state law to determine the nature of a Petitioner's interest in the property, but federal law determines whether the Petitioner's interest in the forfeited property is superior and requires an amendment to the forfeiture order. United States v. Shefton , 548 F.3d 1360, 1364 (11th Cir. 2008) ; see also United States v. Timley , 507 F.3d 1125, 1129 (8th Cir. 2007) ("Standing in forfeiture cases has both constitutional and statutory aspects.").

Constitutional standing, also referred to as Article III standing, requires a petitioner to establish an "injury-in-fact" that is connected to the complained-of conduct, and to show that such injury is likely to be redressed by a favorable decision. Henry , 621 F. App'x at 971-72 (citing Lujan , 504 U.S. at 560-61, 112 S.Ct. 2130 ).

Statutory standing requires compliance with the prerequisites of 21 U.S.C. § 853(n)(2), which oblige a claimant to be a person "other than the defendant" asserting a "legal interest in the property which has been ordered forfeited to the United States." See United States v. Parenteau , 647 F. App'x 593, 598 (6th Cir. 2016) (upholding dismissal of third-party petition on standing because claimant was not a person "other than the defendant" and lacked statutory standing); see also Timley , 507 F.3d at 1129-30 (claimant must show that he has a "legal interest" under 21 U.S.C. § 853(n)(2) to have standing).

Consequently, a defendant's nominee or straw man, lacking injury-in-fact, cannot establish constitutional standing to claim forfeited property, whereas a person who is "other than the defendant" can satisfy statutory standing under 21 U.S.C. § 853(n)(2).³

3 The United States has previously argued that Petitioners should be precluded from relief under 21 U.S.C. § 853(n)(2) as defendant's alter ego, which the United States concedes would require the piercing of the corporate veil. [ECF No. 885, p. 12, n. 5]. But the Undersigned finds that the requirement that Petitioners be parties "other than the defendant" is a matter of statutory interpretation, so these additional theories from the United States and associated case law do not directly apply here. The United States did not attempt to demonstrate the alter ego theory through a piercing-the-corporate-veil analysis.

"[E]ach element of standing must be supported in the same way as any other matter on which the [party] bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation." Bischoff , 222 F.3d at 878 (internal citation omitted). "Therefore, when standing becomes an issue on a motion to dismiss, general factual allegations of injury resulting from the [opposing party's] conduct may be sufficient to show standing. However, when standing is raised at the summary judgment stage, the [party whose standing is in question] can no longer rest on mere allegations." Id. (internal citation omitted); see also Henry , 621 F. App'x at 972.

"Bare legal title ... in the absence of assertions of dominion, control or some other indicia of ownership of or interest in the seized property, is insufficient to confer standing to challenge a forfeiture." Coffman , 612 F. App'x at 286 (internal quotations omitted) (emphasis added). "In short, courts look behind the formal title to determine whether the record title owner is a ‘strawman’ set up to conceal the financial affairs of illegal dealings of someone else." Id. (quoting United States v. Carrell , 252 F.3d 1193, 1204 (11th Cir. 2001) ) (emphasis added).

In Coffman , the Sixth Circuit held that the petitioners (nominal account holders) failed to carry the burden that "they asserted primary dominion or control over the [forfeited] funds in the accounts." Coffman , 612 F. App'x at 286. The Court found the petitioner's husband "had primary control of the money coming into the accounts, the money when it was in the accounts, and the money going out of the accounts." Id. Because the defendant exercised dominion and control over the forfeited property, the Sixth Circuit upheld the district court's decision to deny the wife's petition claiming forfeited funds. See id. ; cf. Henry , 621 F. App'x at 972-73 (finding in "close case" at the summary judgment stage, that third-party claimant sufficiently established standing where petitioner held nominal title of forfeited vehicle even though another person was listed on bill of sale and insurance, as there was a possibility that petitioner received payments for the vehicle from the defendant).

But at an evidentiary hearing, as opposed to a hearing on a motion to dismiss or one seeking summary judgment, a third-party petitioner must demonstrate, by a preponderance, " primary dominion or control" over the property to establish standing. Coffman , 612 F. App'x at 286 (emphasis added).

b. Silva and the "other than the defendant" principle

On the morning of the evidentiary hearing, petitioners filed, as supplemental authority [ECF No. 862], a decision from the third-party ancillary proceedings held in United States v. Silva , U.S. District Court for the Southern District of Florida, Case No. 15-20727-CR-DPG ("Silva ").

In Silva , the Court forfeited real properties owned by the defendant, Silva. Shortly thereafter, Maisons Floride LLC ("Maisons Floride") filed a third-party petition, executed by the defendant's daughter, claiming a superior interest in the net proceeds of the assets, which had been sold in a court-ordered interlocutory sale. See Silva , ECF No. 120, pp. 4-7.

After an evidentiary hearing held by Magistrate Judge Alicia Otazo-Reyes, United States District Judge Darrin Gayles adopted Judge Alicia Otazo-Reyes’ Report and Recommendations, and, over the objections of the United States, found that (1) based on public records filed with the Florida's Department of State, Maisons Floride is someone other than the defendant under 21 U.S.C. § 853(n)(2), and (2) that the "Government failed to meet its ‘very heavy burden’ to pierce the corporate veil" under Florida law. Silva , ECF No. 123, pp. 2-3 (citing Johnson v. New Destiny Christian Center Church, Inc., 303 F. Supp. 3d 1282, 1287 (M.D. Fla. 2018) ) (quoting In re Hillsborough Holdings Corp. , 166 B.R. 461, 468 (Bankr. M.D. Fla. 1994) ). The Silva Court then recognized the claim of Maisons Floride in part and forfeited only a third of the net proceeds from the sale of the real properties.⁴ See Silva , ECF No. 123, p. 3.

4 Judge Otazo-Reyes recommended dividing the remaining two thirds among the defendant's children, who were the other members of Maisons Floride. See Silva , ECF No. 120, pp. 12-13. The United States took (and still takes) issue with that relief, but it never pursued an appeal of Judge Gayles's Order adopting the Report and Recommendation. Because the issue of piercing the corporate veil and the Florida law doctrine that a corporate officer or shareholder lacks standing to personally contest a forfeiture of property owned by the corporation is not involved in the instant case, the Undersigned has no reason to discuss those concepts in detail here. See United States v. Devlin , No. 6:11-CR-56-ORL-28KRS, 2013 WL 275968, at *8 (M.D. Fla. Jan. 22, 2013) (quoting United States v. DeGregory , No. 05-60201-CR, 2007 WL 949804, at *1 (S.D. Fla. March 19, 2007) ) ("Under Florida law, a corporate officer or shareholder does not have standing to contest a forfeiture of property owned by the corporation.").

In Silva, the United States argued that Maisons Floride was not a party "other than the defendant." It argued that Silva was in total control of the entity, that no one else played a role in its activities and that no corporate formalities were followed. The United States relied on the following factors to support its position: 1. Silva's admission, in her factual proffer for her change of plea, that "as a result of [her] illegal conduct in the immigration fraud scheme, she derived over $1,500,000 during the period of the charged conspiracy[;]" and that she "used funds, in part to maintain and pay mortgages on her real properties, including [the Williams Island Property and the Bay Drive Property]." [ECF No. 48, p. 4].

2. Silva, as Member, was the only signatory for the Maisons Floride bank accounts accounts ending in 7462 and 9259.

3. Maisons Floride's Answer to Plaintiff's Interrogatories, executed by Silva's daughter, Andreina Colmenares, states: "There are no accounts in Claimant's name," and "Claimant has no accounts." [ECF No. 121, p. 5].

4. Maisons Floride did not produce any evidence to show that anyone other than Silva performed any actions for Maisons Floride, which makes the corporate entity "truly the Defendant" and therefore not entitled to assert a claim. Id. at p. 7.

5. Silva's daughter presented no evidence showing that she played any role in the operation of Maisons Floride -- and, in fact, did not testify at the hearing.

But in her Report and Recommendations, Judge Otazo-Reyes focused only on record title to reject the United States’ arguments. Specifically, Judge Otazo-Reyes explained that "Claimant has produced the State of Florida corporation records for Maisons Floride, showing it to be an active corporation from its inception in 2012 through 2017." Silva , ECF No. 120, p. 11. And based solely on that, Judge Otazo-Reyes concluded that "because Maisons Florida has been documented to constitute a legal entity in Florida, it cannot be said that it is ‘truly the Defendant" for purposes of 21 U.S.C. § 853(n)(2). Id.

Not surprisingly, the United States filed Objections to this Report and Recommendations. Silva , ECF No. 121. In its Objections, the United States emphasized several facts which it believed demonstrated Silva's control over Maisons Floride and established that the entity was not someone other than the defendant.

For example, the United States highlighted a substantial amount of evidence: (1) Silva formed Maisons Floride; (2) Silva was the principal manager member/manager and registered agent; (3) Silva signed the original documentation forming the corporation and verifying subsequent annual reports; (4) Silva was the sole signatory on financial accounts held in the name of Maisons Floride; (5) Silva purchased the condominium unit in Aventura and then transferred the property to Maisons Floride by quitclaim deed for $10; (6) Silva was a managing member/manager of Maisons Floride at the time of the quitclaim deed; (7) Silva used the same mailbox address used by Maisons Floride for the Aventura condominium and another condominium it purchased in Miami Beach; (8) Silva acknowledged in her factual proffer (supporting her guilty plea) that she used funds derived from the offenses to make mortgage payments and other payments for the real properties at issue in the forfeiture proceeding; and (9) although Silva's daughter's title changed to director/manager of Maisons Floride over the years, she did not become a signatory on its bank accounts -- and did not even know about them.

In sum, the United States urged the District Court to conclude that the sole piece of evidence in Maisons Floride's favor is bare, naked legal title. And it argued that the Court was required to "go ‘behind the formal title’ and not rely solely on the names as written in the public records." Silva , ECF No. 121, p. 6. Similarly, it argued that "sole reliance ... on the Petitioner's electronic filings with the State of Florida should not be dispositive of whether or not the Petitioner is "someone other than the Defendant" within the meaning of Section 853(n)(2), and therefore, has standing to challenge forfeiture of the subject properties." Id. at p. 8. The United States took the position that Colmenares was "no more than a nominee director for Petitioner [Maisons Floride], and that Petitioner was solely controlled by the Defendant." Id. at p. 10.

Despite the circumstances outlined above, the District Court adopted in its entirety the Report and Recommendations. In a two-and-a-half-page Order [ECF No. 123], the Court addressed the "other than the defendant" issue in a one-sentence observation, noting that Florida's corporation records "clearly show Claimant as a legal entity separate and distinct from Silva." Silva , ECF No. 123, p. 2.

The Undersigned has several observations and conclusions to make about Silva.

First, at the risk of stating and repeating the obvious, the Undersigned is not bound by Silva. The Undersigned is bound only by decisions of the United States Supreme Court and the Eleventh Circuit Court of Appeals. The decision of a federal district judge is not binding precedent in a different judicial district, the same judicial district -- or even upon the same judge in a different case. Camreta v. Greene, 563 U.S. 692, 709 n.7, 131 S.Ct. 2020, 179 L.Ed.2d 1118 (2011) ; Dow Jones & Co., Inc. v. Kaye, 256 F.3d 1251, 1258 n.10 (11th Cir. 2001) ; Fishman & Tobin, Inc. v. Tropical Shipping & Constr. Co., Ltd. , 240 F.3d 956, 965 n.14 (11th Cir. 2001) ; see also Martins v. Royal Caribbean Cruises Ltd. , 174 F. Supp. 3d 1345, 1351 n.4 (S.D. Fla. 2016).

Second, neither the Report and Recommendations nor the Order adopting it cite to any law to support the notion that a corporate filing is always sufficient to, by itself, establish statutory or Article III standing at an evidentiary hearing in an ancillary forfeiture proceeding.

Third, if the Silva ruling were to be followed by this Court (or other Courts), the United States would be foreclosed from challenging the standing of all corporate petitioners and claimants who took the strategic step of filing incorporation records with the State.

Fourth, Silva would permit criminals to act with impunity and protect their assets and substitute assets by simply taking the administrative step of incorporating (while still maintaining dominion and control of the assets technically listed in the name of another). That one strategic step would be sufficient to establish standing and prevent further inquiry -- because corporate records would show the entity as technically separate from the convicted criminal defendant. See generally United States v. Morgan , 224 F.3d 339, 343 (4th Cir. 2000) ("Failing to look beyond bare legal title or whether the petitioner has a property interest under state law would foster manipulation of ownership by persons engaged in criminal activity.").

This, in my view, makes no sense. And it would render superfluous the statutory requirement that a petitioner be someone "other than the defendant."

Although the Eleventh Circuit Court of Appeals has not squarely considered how to interpret "other than the defendant" under 21 U.S.C. § 853(n)(2), the Undersigned is persuaded by the Sixth Circuit Court of Appeals’ careful review of standing and this statute-based limitation in United States v. Parenteau , 647 F. App'x 593 (6th Cir. 2016). In Parenteau , a case similar to the one presented here, the Sixth Circuit found that interpreting 21 U.S.C. § 853(n)(2) ’s requirement that petitioner be a person "other than the defendant" is one of "ordinary statutory construction," and not governed by federal common law or state law. See id. at 598-99 (quoting Mississippi Band of Choctaw Indians v. Holyfield , 490 U.S. 30, 109 S.Ct. 1597, 104 L.Ed.2d 29 (1989) ) ("[T]he presumption is that ‘in the absence of a plain indication to the contrary,’ a federal statute's application ‘is not ... dependent on state law.’ "). The issue "is not whether [petitioner] has a property right in the first place but rather who is eligible to petition for relief ..." Id. at 598 (emphasis in original).

The Parenteau Court rejected the notion that record title ownership is sufficient to confer statutory standing: "the fact that an ancillary petition is not in the name of the criminal defendant is not , by itself, enough to conclude that the petitioner is a person other than the defendant. " Id. at 596. (emphasis added).

In interpreting 21 U.S.C. § 853(n)(2), the Sixth Circuit focused on defendant's ownership and control of the third-party petitioner, a limited liability company, as well as the facts of the underlying criminal case, which established that the company's assets were "involved in [the defendant's] schemes." See id. at 596-98. The Sixth Circuit cited petitioner's failure, aside from incorporation documents, to introduce evidence at the ancillary hearing that it had an identity separate from the defendant or that it had followed any corporate formalities, including recordkeeping. See id. at 596.

Moreover, the Sixth Circuit noted that it was undisputed the petitioner was "completely dominated" by the defendant, was a "mere façade" for the defendant, and that defendant "diverted funds" from the company for personal use. Id. The Court observed that "[n]othing suggests that [the company's] legal existence ever stood in the way of [the defendant's] manipulation of [the company's] assets." Id. at 598.

The Parenteau Court also reasoned that affording standing to "a corporate entity solely because that entity is legally distinct from a natural person" would undermine two policies that underpin the federal forfeiture scheme, that of defendant's punishment and of the United States’ interest in finality in the defendant's sentence. See id. at 596. " Section 853(n)(2) is best read to preclude such a result." Id.

The title-focused approach rejected by Parenteau ⁵ is, however, the precise perspective used by the Court in Silva.

5 The United States cited Parenteau in Silva, but neither the Report and Recommendations nor the Order adopting it discussed it at all.

The Undersigned agrees that the Sixth Circuit's approach is supported by the language of 21 U.S.C. § 853(o), which specifically provides that the statute's provisions "shall be liberally construed to effectuate its remedial purposes." 21 U.S.C. § 853(o). In other words, it would be inconsistent with the forfeiture statute's remedial purposes to enable a defendant to avoid forfeiture by simply establishing a shell company.

Moreover, requiring the United States to sustain a "heavy burden" for piercing the corporate veil under Florida law is also inconsistent with the petitioners’ burden of proving standing "with the manner and degree of evidence required at the successive stages of litigation." See Bischoff , 222 F.3d at 878 ; see also Henry , 621 F. App'x at 972 ; Gilbert , 244 F. 3d at 911 ; Coffman , 612 F. App'x at 284.⁶

6 The United States did not pursue the alter ego theory in its proposed Report and Recommendations.

Although nominal title may survive summary judgment, petitioners are required to produce more than a handful of company records to prove their standing at the evidentiary hearing. Accord Coffman , 612 F. App'x at 286 ; cf. Henry , 621 F. App'x at 972-73 (finding by Eleventh Circuit that nominal title sufficient at summary judgment stage to sustain title when there was a possibility petitioner paid for vehicle).

If "merely evidence of title was dispositive, [determining whether petitioner had statutory or constitutional standing] would be an easy matter." United States v. Reed , No. 1:10cr133-1, 2015 WL 1809343, at *2 (S.D. Ohio, April 21, 2015) (noting that title alone will not suffice and explaining that the Court must evaluate facts concerning domain and control over the property at issue).

Therefore, as outlined above, the Undersigned will not rely solely on the mere record title ownership of Petitioners. Instead, the Court will look behind title (which is, to be sure, a factor to consider) to see whether Petitioners have met their burden of establishing statutory standing by demonstrating that they are parties "other than the defendant." See United States v. Gamory , No. 08-CR-153-1-TWT, 2010 WL 3880880, at *1, *4 (N.D. Ga. Sept. 28, 2010) (finding defendant's father lacked standing to contest forfeiture of vehicle titled in his name because undisputed evidence was that he exercised no dominion and control); see also United States v. Hovind , No. 06-CR-83/MCR, 2009 WL 2369340, at *1, *5 (N.D. Fla. July 29, 2009) (finding nominee who exercised no dominion or control over the forfeited property lacks a legal interest under state law, and therefore lacks standing, even though he was the titled owner); United States v. Gomez , No. 98-CR-3002, 2000 WL 34029288, at *1, *2 (N.D. Iowa Aug. 3, 2000) ("Possession of mere legal title by one who does not exercise dominion and control over the property is insufficient even to establish standing to challenge a forfeiture."); United States v. Rogers , No. 94-CR-138(FJS), 1996 WL 252659, at *5 (N.D.N.Y. May 8, 1996) (finding nominee's name on title to car was a sham to protect true owner from forfeiture).

The Undersigned's conclusions about the standing requirements for Petitioners in ancillary proceedings following a preliminary forfeiture order in a criminal case are entirely consistent with a comprehensive ruling which Judge Lenard entered [ECF No. 762] when the Court granted the United States’ motion to dismiss Artemio Lopez Tardon's ("Artemio") Petition claiming an interest in the Mercedes Benz because he is not listed as a titled or registered owner of the Mercedes. Although Artemio claimed to have "sufficient ties to ownership of the vehicle" such that he should have an opportunity to establish that interest, Judge Lenard rejected that theory. Id. In doing so, Judge Lenard emphasized the significance of standing and a petitioner's inability to contest the forfeiture without standing.

Specifically, the Court issued several holdings relevant to the standing requirement. Although the Court did not specifically discuss the issue of whether Artemio was a person "other than the defendant," it did emphasize the Court's obligation to scrutinize a petition to determine if the petitioner did more than simply allege an interest in property. The following holdings entered earlier in this case inform the Undersigned's analysis of whether Petitioners have met their burden of establishing that they are parties "other than the defendant" and therefore have statutory standing:

1. [I]f a claimant is unable to establish that he has an interest in the forfeited property under state law, the "inquiry ends ." United States v. Ramunno , 599 F.3d 1269, 1272 (11th Cir. 2010). This is because "in order to contest a forfeiture, a claimant first must demonstrate a sufficient interest in the property to give him Article III standing; otherwise, there is no ‘case or controversy,’ in the constitutional sense, capable of adjudication in the federal courts." United States v. $38,000.00 in U.S. Currency , 816 F.2d 1538, 1543 (11th Cir. 1987.)

2. "Standing ... ‘is a threshold jurisdictional question which must be addressed prior to and independent of the merits of a party's claims.’ " AT & T Mobility, LLC v. Nat'l Ass'n for Stock Car Auto Racing, Inc., 494 F.3d 1356, 1360 (11th Cir. 2007) (quoting Dillard v. Baldwin Cnty. Comm'rs , 225 F.3d 1271, 1275 (11th Cir. 2000) ). In fact, "every court has an independent duty to review standing as a basis for jurisdiction at any time, for every case it adjudicates." Fla. Ass'n of Med. Equip. Dealers, Med-Health Care v. Apfel , 194 F.3d 1227, 1230 (11th Cir. 1999).

3. "[T]he plain language of 21 U.S.C. § 853(n)(3) requires that a claimant do more than simply allege that he has an ownership interest in forfeited property—he must, inter alia, "set forth the nature and extent of [his] right, title, or interest in the property," and "the time and circumstances of the [his] acquisition of the right, title, or interest in the property[.]"⁷ The vague and conclusory assertions made in the instant Petition are simply insufficient. See United States v. Kokko, No. 06-20065-CR, 2007 WL 2209260, at *5 (S.D. Fla. July 30, 2007) ("Consistent with § 853(n)(3), a claimant of some interest in property must do more than state that interest in a conclusory fashion[.]").

7 The word, "interest," is from Section 853(n)(2), which authorizes "any person, other than the defendant, asserting a legal interest in property" to petition for a hearing to "adjudicate the validity of his alleged interest in the property." As noted, subsection (3) mentions the petitioner's "right, title, or interest" in the property -- which means that an "interest" may well be different than title ownership or some other type of right. The statute does not, however, define "interest."

[ECF No. 762, pp. 8-10 (emphasis added)].

c. Alleged Distinction Between Forfeiture of Substitute Assets and Forfeiture of Tainted Property

Petitioners’ proposed report implies a distinction between applicable rules and procedure for forfeited assets that are substitute property (or so-called "untainted" property) and assets which are directly forfeited property (or facilitating and/or derived "tainted" property). [ECF No. 886, pp. 3-4]. The Undersigned does not find this purported distinction to exist.

First, the Eleventh Circuit has made it clear that the purpose of the ancillary proceeding is to determine the ownership of the forfeited property, which makes it akin to a quiet title proceeding. See, e.g., Gilbert , 244 F.3d at 911 (stating that the ancillary proceeding is "essentially a quiet title proceeding"); see also United States v. Amodeo , 916 F.3d 967, 972 (11th Cir. 2019) ("Although it occurs in the context of criminal forfeiture, the ancillary proceeding is civil in nature.").

Second, the nature of the proceeding remains a quiet title proceeding regardless of whether the forfeited assets are substitute or directly forfeited property. See generally 21 U.S.C. § 853(n) (providing no distinction between forfeited property); see also United States v. Fleet , 498 F.3d 1225, 1228 (11th Cir. 2007) (holding provisions in the subsection pertaining to forfeiture of facilitating and derived property, 21 U.S.C. § 853(a), apply in the same way to the subsection pertaining to forfeiture of substitute property, § 853(p) ).⁸

8 Fleet noted that (1) statutory language mandating the forfeiture of substitute property "does not convey discretion" and (2) the word "any" is "not susceptible to fudging either. Id. at 1229. Therefore, the Court held, there is no stated exception for homestead property or entireties property from the substitute property provision of the federal criminal forfeiture statute, 21 U.S.C. § 853(p).

Third, regardless of whether forfeited assets are so-called "untainted" property or facilitating or derived "tainted" property, a petitioner in an ancillary proceeding has the same threshold burden of establishing that a petitioner has standing to contest the forfeiture. Once standing is established, a petitioner has the burden of meeting one of the criteria listed in 21 U.S.C. § 853(n)(6) by a preponderance of the evidence. Neither the burden to establish standing nor the requirement to establish the statutory criteria is affected by the nature of the assets (i.e., substitute proceeds or tainted property).

d. Standing v. Merits

Although standing to contest the forfeiture may sometimes overlap with the merits of a petitioner's claim, that is not always correct. For example, a third party may have an ownership interest in the property sufficient to establish standing under Section 853(n)(2) and Article III of the Constitution, but he may not have, for example, acquired that interest before the time when the property became subject to forfeiture and thus fail to prevail on the merits under Section 853(n)(6)(A). See, e.g., United States v. Oregon , 671 F.3d 484, 490 (4th Cir. 2012) (finding possession of a "legal interest" in the property is sufficient and allowed States, as obliges of an escrow account, to have standing -- but their interest was not superior to that of the defendant tobacco company); see also Timley , 507 F.3d at 1130 n. 2 (emphasis added) (stating section 853(n)(2) requires initial showing of a "legal interest" to obtain an ancillary hearing but section (n)(6) requires a showing of a "superior legal interest" to actually prevail at the hearing).

As a practical matter in this case, however, this distinction is academic, as the United States is pressing only the standing issue, albeit both the statutory and constitutional standing theories. If the United States is correct and (1) Petitioners lack statutory standing because their record title ownership is insufficient to establish that they are "other than the defendant" or (2) Petitioners are mere naked title holders and cannot establish Article III constitutional standing, then they lack the requisite "legal interest" to amend the forfeiture order. See Morgan , 224 F.3d at 343 (finding claimant -- the wife of the criminal defendant -- who had no dominion or control over joint bank account had no "legal interest" under federal law, despite state law interest)⁹ ; cf. United States v. Weiss , 467 F.3d 1300, 1303 n. 1, 1311 (11th Cir. 2006) (emphasis in original) (discussing standing and citing U.S. Supreme Court precedent for principle that "federal courts have consistently adhered to one major proposition [about standing] without exception: One who has no interest of his own at sake always lacks standing " and mere nominee lacks the legal interest to establish standing).

9 The Morgan Court explained that "failing to look beyond bare legal title ... would foster manipulation of ownership by persons engaged in criminal activity." Morgan , 224 F.3d at 343. It also stated that Congress noted that Section 853(n)(6) "should be construed to deny relief to third parties acting as nominees of the defendant." Id.

IV. Analysis

Although state law determines the nature of a claimant's interest in forfeited property, "straw owners and persons who might have unknowingly been in possession of property that is seized do not necessarily suffer an injury that is sufficient to demonstrate standing." Henry , 621 F. App'x at 972 (emphasis added). Likewise, "[n]ominee connotes the delegation of authority to the nominee in a representative or nominal capacity only, and does not connote the transfer or assignment to the nominee of any property in, or ownership of, the rights of the person nominating him." Id. (emphasis added).

Therefore, because there is no dispute that Petitioners are in fact listed as the record title owners of the properties at issue, the Undersigned will evaluate the facts to determine if Petitioners have established statutory standing by demonstrating primary dominion or control over the properties (i.e., whether they are "other than" Alvaro).

Because Petitioners bear the burden of establishing standing, this analysis will first discuss the facts which they rely on, other than record title, and then it will outline the United States’ factual arguments. The evaluations will begin with the real properties.

a. Petitioners’ Position Re: The Real Properties

From an overarching perspective, Petitioners contend that the documents establish that (1) the LLCs exist and are validly-formed entities under Florida law; (2) the owners of the LLCs, as expressly stated in the attorney-drafted corporate documents that the individuals personally signed, are Maria Tardon, Artemio and Nieves Tardon, in equal one-third shares; (3) the LLCs own the real estate; (4) the deeds, mortgages, and other documents establish that the LLCs own the properties; (4) the LLCs have power to dispose of the real estate; and (5) the forfeiture order adversely affects them and impedes the exercise of their property rights.

In other words, Petitioners say they are "clearly ‘other’ than the defendant." [ECF No. 905, p. 6].

Recognizing that the United States contends that the LLCs have mere naked title and lack dominion or control, the LLC Petitioners say they are relying on more than the undisputed corporate and real estate records. Because no live witness testified at the evidentiary hearing on Petitioners’ behalf, they rely on evidence from the criminal trial and other pre-hearing evidence. They point to the following factors:

1. The presence and participation of the family members in traveling from Spain to Miami and meeting with corporate counsel to establish the LLCs in order to acquire the real estate;¹⁰ 2. The fact that family members would manage the real estate assets when necessary;

10 Attorney Peter Lopez's deposition testimony shows that realtor Daisy Martins was responsible for introducing Artemio to Lopez in Miami, and that the purpose of the LLCs was to purchase the Murano 908 property. [ECF No. 702-4, pp. 18-20]. In addition, Lopez said he met with Artemio several times that week and that he understood that the LLC was the buyer in the transactions. Id.

3. The family members used the condominiums for their stays in the United States;

4. "Substantial financial contributions made by family members other than the defendant to the acquisition of the real estate at issue";¹¹

11 The Undersigned will outline the specifics of Petitioners’ presentation on this point later in the Report.

5. The absence of any showing that Defendant caused any diminution of the LLCs’ assets;

6. The Tardon family members in Spain were very wealthy and had extensive property interests;

7. When the rent did not cover expenses, "the money for the homeowner associate fees, the property taxes, ... came from Spain" [ECF No. 524, pp. 83-84]¹² ;

12 This testimony came from Sharon Cohen, who, at the time of her testimony in the criminal trial, was married to Defendant Alvaro.

8. All distributions were used to pay the expenses of managing the LLCs and there was no showing of any excess compensation or reimbursement to the Defendant;

9. The LLC entities are family-owned businesses, a fact the agent confirmed [ECF No. 143, p. 124], and that it was reasonable to use family members living in the United States, such as Alvaro, for day-to-day management of the rentals and payments to the LLCs, including the use of professionals to assist in real estate activities.

b. Petitioners’ Position Re: Their Financial Contributions to Acquire the Real Estate

Petitioners’ latest articulation of their arguments concerning the funding for the acquisition of the real properties at issue here was asserted in their Rebuttal to the United States’ Proposed Report and Recommendations. [ECF No. 905]. They rely on the following points:

With regard to the condominium units at The Mark, the government showed that the down payment money was provided by a group of investors that included members of the Tardon family and Fabiani Krentz in what was then called Luxhouse International Rent Apartments Corp. ECF # 535:66–67 (testimony of Agent Gaitan: " ‘Yes, there's two, the Spanish one and then there's the Luxhouse International Rent Apartments Corp., which is the U.S. LLC.’ "); id. at 69 (Gaitan: " ‘This one, there was a series of escrow deposits made from Krentz, another wire from Valladares Garcia, and a wire from Artemio Lopez Tardon totaling $52,180 in the escrow account.’ "); see also ECF #75-1:15-16 (affidavit of FBI Agent Madeleine Albrecht stating: " ‘In January of 2002, Lux House International Rent Apartments Corp., (Lux House Miami) was incorporated in Florida. Krentz, Artemio and Maria Lopez, ... Artemio's sister, were the officers and shareholders’ "; " ‘Artemio deposited almost 600,000 Euros ... into the Lux House Spain account. These funds were wired to the Lux House Miami account on April 4, 2002’ "; " ‘[m]ost’ " of approximately 3 million Euros sent for Krentz to purchase real estate in Miami was deposited by Artemio Tardon). ECF # 536:78–79 (government indicates that the purchase money for the units at The Mark may

have " ‘come from The Collection's account’ " as well as several " ‘third parties’ "). At the ancillary hearing, Agent Gaitan confirmed this funding of purchases of the relevant units at The Mark. ECF # 877-1:82, 84, 89, 92. Similarly, the defendant's testimony, ECF Nos. 702-1, 702-2, Krentz sentencing transcript, ECF # 805-2, and forfeiture trial transcript, ECF Nos. 535, 536, 713, all confirm this financial history.

[ECF No. 905, p. 8].

Concerning Unit 908 at Murano Portofino, Petitioners say:

[M]ortgages taken out by Artemio Tardon and Krentz on a property owned by Contion LLC (an entity whose membership was identical to the membership of Murano 908 LLC) funded the purchase.¹³ Agent Gaitan explained at the criminal trial: " ‘Artemio Lopez Tardon is the one who's making a 798,000-plus loan payment on that mortgage.’ " ECF # 525:26 (cited at ECF # 826-4:19). Agent Gaitan stated: " ‘Artemio, who had bought the [Contion] property along with Fabiani,’ " transferred title to the LLC as owner. ECF # 525:35 (cited at ECF # 826-4:28). Agent Gaitan's testimony at the evidentiary hearing included charts showing the acquisition and purchase of the relevant assets. ECF # 877-1:61–92. The testimony confirmed the transactions described in the forfeiture jury trial as to Murano 908, including the use of equity from an apartment purchased principally by Artemio Tardon in Miami Beach. Id. at 68–81. The testimony also showed funds going from Spain to a joint account in which Artemio Tardon, the defendant, and their sister, Nieves, were owners, followed by use of those funds to purchase Murano 908. Id. at 78."¹⁴

13 The Petitioners further explain in a footnote [ECF No. 905, p. 9, n. 8]:

See ECF # 536:79 (government closing argument describing evidence regarding obtaining an equity line of credit from another apartment to purchase Murano 908); see also ECF # 713:74 (showing principal payoff check for purchase of Murano 908 was from an account " ‘in the name of Alvaro Lopez Tardon, Artemio, and Maria D. Tardon Lopez ... in the amount of $483,355.75’ "). On the other hand, the prosecutor's closing also argued that the other apartment (i.e., "The Continuum") (from which the line of credit was obtained) was "bought with dirty money." [ECF No. 536, 79].

14 Petitioners further explain in a footnote:

Agent Gaitan also testified about his examination of real estate taxes paid during the year prior to the defendant's 2011 arrest. Id. at 93. The account from which 2010 taxes were paid was jointly owned by Artemio Tardon, the defendant, and their sister, Nieves, and approximately $2.5 million had been transferred to that account after it was wired from Spain. Id. at 94, 96–103. Agent Gaitan explained that the monies were sent by Artemio Tardon and others from Spain. Id. at 129. On cross-examination, Agent Gaitan explained: that he was " ‘able to trace who sent that money,’ " and that the sources were " ‘Artemio and other sources of income.’ " ECF # 877-1:129.

[ECF No. 905, p. 8, n. 9 (emphasis added)].

Id. at pp. 8-9.

c. The United States’ Position Re: The Real Properties

The United States’ contentions (included in their proposed Report) will be outlined in two sections. The first section concerns the three Mark units and the second section involves Murano Unit 908.

i. The Mark Units

At the evidentiary hearing, Miamark offered only public company records, an operating agreement, and quitclaim deeds to substantiate its standing and interest in the Mark Units. See ECF Nos. 874-1 to 874-5. The United States relies on the following to support its view that Miamark did not meet its burden of showing that it has a separate identity from the Defendant or that it followed corporate formalities:

1. The quitclaim deeds for the Mark Units dispute Miamark's assertion in the Condominium Petition that it acquired title "via purchases on May 17, 2006 (Units 502 and 2703) and November 18, 2006 (Unit 202)." Compare ECF Nos. 874-3; 874-4; 874-5 with ECF No. 734 (Condominium Petition 2). The quitclaim deeds, however, have dates of November 2, 2006, and April 5, 2006 (twice). Petitioners have not explained this inconsistency.

2. Alvaro executed purchase agreements to acquire Mark Unit 2703 and Mark Unit 202, and eventually, in or around 2001, he directed Fabiani Krentz, a convicted co-conspirator, to acquire title to the Forfeited Mark Units. See ECF Nos. 880-67; 880-65. Fabiani Krentz held title to the Forfeited Mark Units for approximately five years, before transferring the properties, via quitclaim deeds, to Miamark. See ECF Nos. 880-34; 880-99; 825; 880-74; 734 (Appendices B, C, & D). But in his deposition, Alvaro, as managing member of Miamark, admitted that such transfers "are quitclaims. They weren't sales ... They changed names to Miamark." See ECF No. 880-50 (emphasis added).

3. Although he managed and served as Miamark's registered agent, the Defendant (i.e., Alvaro) did not observe corporate formalities and treated the company's assets as his own. For example, although required by the company's operating agreement to maintain records at the principal place of business, he did not do so. See ECF Nos. 880-95; 880-42.

4. Alvaro also used the Forfeited Mark Units to house his friends, including David Pollack, a convicted co-defendant who resided in Mark Unit 202 for two years without paying rent. Alvaro is the one who allowed Pollack to stay in the apartment without paying rent. [ECF Nos. 520 (5/6/2014 Pollack Trial Tr. 21:1-21:17; 144:9-144:13); 880-44].

5. Alvaro failed to segregate Miamark's funds in accordance with its operating agreement. It took more than two years after Miamark's formation for the Defendant to open a company bank account (at Colonial Bank). See ECF Nos. 880-41, p. 10; 825.

6. Before and after opening the account, Alvaro used personal and other accounts to receive rental income and satisfy the company's expenses instead of a designated business account as required by the operating agreement. See ECF Nos. 880-47 (Miamark Tardon Dep'n 117:19-118:16); 884-1.

7. Defendant also used Miamark's bank account to pay for expenses related to his other real properties. See id. ; ECF No. 880-41.

8. Despite provisions in its operating agreement (Section 8.4) on timely preparation and filing of tax returns, Miamark failed to file any federal income tax returns. See ECF Nos. 880-95; 825 (Exhibit G, pp. 53-118); 880-61; 880-43 (Tardon Dep'n 134:13-136:5).

9. The Defendant and his then-wife, Sharon Cohen, instead personally claimed the Forfeited Mark Units on their jointly filed federal tax return in 2008. See id.

10. At trial, Sharon Cohen confirmed that the Defendant owned the Forfeited Mark Units, and that the Defendant created limited liability companies to hold real properties that really belonged to him. See ECF No. 523 (5/13/2014 Cohen Trial Tr. 77:13-80:19).

11. In fact, before his conviction, the Defendant often represented that he was the owner of Miamark and the Forfeited Mark Units. Miamark's articles of organization identify the Defendant, Alvaro, as the company's managing member. See ECF Nos. 880-96; ECF No. 880-95.

12. A member of a Florida limited liability company is an owner, and by default, a Florida limited liability company is member-managed. See Florida Statutes §§ 608.402(20), (21), 608.422(1) (2006) ; Florida Statutes § 605.0407 (2013 & 2019). To the extent an internal operating agreement conflicts with publicly filed articles of organization and reports, outsiders may "reasonably rely" on the external record. See Florida Statutes § 605.0107(4)(b) (2013 & 2018) ("The record prevails as to other persons to the extent the other persons reasonably rely on the record.").

13. The Defendant, regardless of his intended status within the company, held himself out to be an owner of Miamark and the Forfeited Mark Units on several occasions. In correspondence with The Mark's condominium association, he was identified as the "owner" of the Forfeited Mark Units "through various entities." See ECF No. 884-1 (emphasis added).¹⁵ In addition, in public documents filed at the time of Miamark's formation through his indictment in 2011, the Defendant consistently identified himself as a managing member, and therefore, an owner of Miamark. See ECF No. 880-96.

15 This exhibit is a letter, sent on an attorney's letterhead and signed by the Miami attorney, advising that his client, Alvaro, is the owner of units 202, 502 and 2703 "through his various entities." (emphasis added).

14. After Alvaro was criminally charged in 2011, Miamark submitted a 2013 restatement and 2014 annual report indicating that he was its managing member. See ECF No. 880-96. Furthermore, in support of the interlocutory sale of Mark Unit 202, Richard Klugh, criminal defense counsel for the Defendant, submitted a sworn declaration to the Court that verified Defendant's status as Miamark's "managing member." See ECF Nos. 406; 406-3.¹⁶

16 In particular, Mr. Klugh's sworn declaration said:

The undersigned, attorney for Alvaro Lopez Tardon, has verified the authenticity of the documentation of the defendant's stipulation to sell property in this case [D.E. 403-1], of the power of attorney from the defendant to the undersigned granting the undersigned authority to conduct transactions including the present property sale (attached as Ex. A to the joint supplement to joint motion to approve stipulated sale), and of the defendant's status as managing member of MiaMark LLC (Ex. B to the joint supplement to joint motion to approve stipulated sale).

[ECF No. 406-3 (emphasis added)].

15. In other pre-trial litigation, the Defendant argued (in a motion filed by Mr. Klugh, as counsel for Alvaro) that he "concealed nothing" because the company records for Miamark "list the defendant as the owner and give his address and identifying information ." [ECF No. 75 (emphasis in original)]. Similarly, the motion represented that "every single property as to which an LLC was the purchaser was "identified by name with the defendant" and that "all of the LLCs and corporations go directly back to the defendant on the official Florida records sites...." Id. (emphasis in original).

16. In spite of these prior admissions, the Defendant, after his conviction and the forfeiture of the Forfeited Mark Units, has claimed to be only a manager of Miamark; the company, he has asserted, really belongs to his family members.

For instance, shortly before the Defendant's conviction, on or about April 27, 2014, Miamark's annual report indicated that the Defendant was its "MGRM" and "MANAGING MEMBER." See ECF No. 880-96. However, after his conviction in or around December 2014, the Defendant verified Miamark's initial petitions claiming the Forfeited Mark Units as the company's "authorized manager." See ECF Nos. 623; 637. Then, in Miamark's 2015 annual report, publicly filed on or about April 18, 2015, the Defendant was listed only as the company's manager. See ECF No. 880-96. Also, on or about May 15, 2015, the Defendant verified Miamark's interrogatory answers as its manager, and indicated that any reference to him as a managing member in corporate documents was a "misnomer" in "corporate documents prepared by counsel." See ECF No. 880-51, p. 13.¹⁷

17 Alvaro signed the interrogatory answers and Mr. Klugh served as the notary for his under-oath signature.

17. Alvaro and his personal attorney, Mr. Klugh, are the only representatives who Miamark has produced in this litigation, and they, and not Miamark, would benefit from the release of Forfeited Mark Units. Mr. Klugh represented at Alvaro's deposition that he, in effect, helped to manage the Forfeited Mark Units after Defendant's detention, by, for example, paying maintenance fees.¹⁸ See ECF No. 880-4.

18 Mr. Klugh blurted out this information as substantive factual information in response to a deposition question asked of his client, Alvaro, who was appearing as Miamark's corporate representative.

***

[A Note About Deposition Behavior]

Federal Rule of Criminal Procedure 32.2(c)(1)(B) provides that the "the court may permit the parties to conduct discovery in accordance with the Federal Rules of Civil Procedure." (emphasis added). The Rules of Civil Procedure do not permit attorneys representing deponents to (1) coach the client by raising rhetoric-filled objections designed to feed the deponent information or advice; (2) answer the substantive questions themselves, before the deponent has provided an under-oath substantive response; and (3) instruct the deponent to not answer questions in the absence of a legitimate privilege objection or a Court-ordered limitation on the subject matter. See generally Amodeo , 916 F.3d at 972 (ancillary proceeding is civil in nature).

In fact, courts regularly condemn attorneys who engage in that type of conduct at depositions. Quantachrome Corp. v. Micromeritics Instrument Corp. , 189 F.R.D. 697, 700 (S.D. Fla. 1999) (requiring offending party, who made speaking objections which amounted to providing the witness with counsel's preferred answer, to bear the costs of bringing the motion to compel and the cost of retaking a deposition); see also Regions Bank v. Legal Outsource PA , No. 14-CV-476FTM29MRM, 2016 WL 7228738, at *5 (M.D. Fla. Mar. 10, 2016) (finding counsel's conduct of delaying the deposition through "patently improper" speaking objections warranted a continuation of deposition); Perrymond v. Lockheed Martin Corp. , No. 109CV01936TWTAJB, 2011 WL 13269787, at *2 (N.D. Ga. Feb. 18, 2011) (internal citation omitted) ("[T]here is no proper need for the witness's own lawyer to act as an intermediary, interpreting questions, deciding which questions the witness should answer, and helping the witness to formulate answers.").

There is no doubt that the conduct Mr. Klugh exhibited at Alvaro's deposition is, to be diplomatic, frowned upon. See Collins v. Int'l Dairy Queen, Inc. , No. CIV.A. 94-95-4MACWDO, 1998 WL 293314, at *2 (M.D. Ga. June 4, 1998) ("A lawyer should not object to a question ... unless the lawyer reasonably believes that the witness may be misled or the witness indicates confusion by the question" and even then, a lawyer "should simply ask examining counsel to rephrase and clarify the question"); see also Odone v. Croda Int'l PLC. , 170 F.R.D. 66, 68 (D.D.C. 1997) ("It is well settled that in the course of a deposition [an] [a]ttorney ... may not object to questions in such a way as to ‘coach’ the witness or suggest an answer.").

Mr. Klugh did not merely interpose objections. He sometimes assumed the role of witness and volunteered a substantive answer, as if he were the deponent. This is impermissible. See Frazier v. Se. Pa. Transp. Auth. , 161 F.R.D. 309, 317 (E.D. Pa. 1995) (granting motion for a re-deposition where plaintiff's counsel provided answers to deposition questions on behalf of his client); see also State Farm Mut. Auto. Ins. Co. v. Dowdy ex rel. Dowdy , 445 F. Supp. 2d 1289, 1293 (N.D. Okla. 2006) ("The Court ... finds 33 instances in which counsel ... answered questions for the deponent Holtmann, suggested answers for Holtmann or improperly commented on answers given, all in violation of the letter and spirit of Fed. R. Civ. P. 30."); Damaj v. Farmers Ins. Co. , 164 F.R.D. 559, 560 (N.D. Okla. 1995) ("Thus, it would be fair to characterize Mr. Banks's deposition as primarily conversation and argument between counsel as opposed to a question and answer session between the deposing attorney and the witness."); In re Stratosphere Corp. Sec. Litig. , 182 F.R.D. 614, 621 (D. Nev. 1998) (emphasis added) ("[A] questioning attorney is entitled to have the witness, and the witness alone, answer questions .").

Despite these clear rules, the Undersigned's review of Alvaro's deposition transcript reveals that Mr. Klugh interrupted, gave answers himself (even though he was not under oath and was not the deponent), interposed inappropriate objections, and made comments designed to coach his client.

Whether part of an intentional strategy or perhaps an ill-advised, overly-zealous commitment to his client, Mr. Klugh's deposition behavior disrupted an orderly question-and-answer flow. The AUSA sometimes responded to Mr. Klugh's answers and coaching (e.g., "he's [referring to Alvaro] got to answer these questions" [ECF No. 825-3, p. 163]), but he did not adjourn the deposition or contact Chambers. The following four examples illustrate Mr. Klugh's deposition behavior:

Q. So you did not have any experience prior to that in managing a limited liability company?

MR. KLUGH: You know, it's of record. He's not a professional manager. These are family companies. These are the only LLCs he formed.

MR. GROVE: He needs to answer the question.

MR. KLUGH: But the questions can be interpreted all kinds of ways. That's why I'm objecting¹⁹ for the record, to make sure we understand what the question is. These are the only LLCs he's ever been involved with.

19 Mr. Klugh's interruption was not an objection. It was a substantive answer.

[ECF No. 825-3, pp. 77-78 (emphasis added)].

Q. So the members or the owners never received a penny for the business activities of Miamark?

MR. KLUGH: They received no compensation for their services and no distributions.

(In English.) THE WITNESS: For the benefits.

MR. KLUGH: For him to know that, he would have to go through the bank records, and I think family members had signing authority on the banks.

MR. GROVE: No, that's not -- well, what was said during this deposition was, there was one account for Miamark.

MR. KLUGH: Right. I don't know whether he said they would pay taxes for it. So there might have been an exchange of money ...

Id. at p. 97 (emphasis added).

Q. According to the operating agreement, you are the only person who could authorize a member being compensated.

MR. KLUGH: I object to that. This just gives an authority. I don't know if it says he's the only one.

MR. GROVE: Where else in the operating agreement does it give authority to anyone else to allow a member to be compensated for services?

MR. KLUGH: I'm not sure. I'm just saying that this agreement does not say that it's the only way. It's a way to provide money to the managing members without changing the contribution –

MR. GROVE: Well, the section speaks for itself, compensation for services, and it says that upon agreement of the managing member, if there is more than one, a member may be compensated for the performance of services. But it's got to be by the managing member. A managing member has to decide that.

MR. KLUGH: Compensation for services.

MR. GROVE: For services. Like, for instance, the services they were providing that we discussed.

MR. KLUGH: I still disagree that it has to be.

MR. GROVE: Okay.

MR. KLUGH: It's possible that it is.

BY MR. GROVE:

Q. But you don't believe you had the authority?

A. Based on my understanding, since I was a person that can be fired and I was not part of a corporation –

MR. KLUGH: It's sort of like Archibald Cox's authority to subpoena Nixon for the tapes. It didn't last very long.

Id. at pp. 130-131 (emphasis added).

Q. Okay. Now, previously, we, the government, served interrogatories and a request for production. In that, both sets, there is an authorization for us to receive income tax returns, and there is another form too that would come with the return – I forget. But basically they are release forms.

MR. KLUGH: I've gotten them signed, but I mean, we are willing to stipulate there were no returns filed. That may have been an error, but I mean, I just don't know that –

MR. GROVE: I'm just trying to get out whether or not income tax returns were filed or not.

MR. KLUGH: As far as he knows, he doesn't remember signing one or filing one. I'm not aware how it could be filed.

BY MR. GROVE:

Q. And you are aware, according to the agreement, that you are the tax matters partner?

MR. KLUGH: I'm not sure that he is aware, even if that term exists.

BY MR. GROVE:

Q. Well, let's ask the question. Are you aware that under the terms of the operating agreement, you as the manager are the tax matters partner? That's Section 8.5.

MR. KLUGH: Just for the record, it says that he is, but if he is unwilling to

do it, the members, you know, have a responsibility to find somebody else. So it's up to his willingness.

Id. at pp. 135-136 (emphasis added).

Had the AUSA adjourned the deposition to contact the Undersigned's chambers, I would have (if available) immediately entertained objections to Mr. Klugh's deposition behavior in order to determine whether I should direct Mr. Klugh to immediately stop raising incorrect objections, giving improper directions to not answer questions and volunteering answers. At times, it appeared as though Mr. KIugh was the deponent , as opposed to an attorney representing the deponent.

When the Undersigned is confronted with this type of attorney conduct in civil depositions, I sometimes enter a fee-shifting award against the misbehaving attorney. Had I held a hearing about the comments and objections made at Alvaro's deposition, Mr. Klugh would have had the opportunity to explain his conduct, of course. But the transcript I have reviewed presumably sets out exactly what happened -- what Mr. Klugh said and the circumstances under which he said them. That transcript does not reflect adequate legal support for all the instructions, comments, coaching and volunteered information. Perhaps Mr. Klugh would have been able to offer some type of outside-the-transcript/off-the-record explanation to try to justify his conduct, but the transcript itself does not suggest the existence of such a rationale.

[end of note about deposition conduct]

***

Finally, it is the United States’ contention, that like other real properties that were finally forfeited by the Court, the Defendant acquired the Forfeited Mark Units through a nominee, and then transferred the assets to a company he created and controlled. See ECF Nos. 884-4 ²⁰ ; 523.

20 Ms. Cohen testified that the LLCs were created in order for Alvaro to acquire property.

ii. The Murano 908 Unit

The United States relies on the following factors to support its view that Murano is not a person "other than" Alvaro:

1. Murano did not purchase Murano Unit 908. Instead, on January 25, 2006, title was conveyed to Murano, subject to a first mortgage held by Washington Mutual Bank ("WAMU") and after two installment payments were made from Alvaro's personal account and another shell company account. See generally ECF No. 877-1 (2/19/2019 Evidentiary Hr'g Tr. 60:23-81:22); see also ECF Nos. 713 (6/11/14 Trial Tr. 70:20-72:19); 880-36 (G075-00004-G075-00006); 880-62; 826-6, p. 5.

More specifically, the first payment for $50,000 came from Alvaro's personal checking account, which he jointly held with Fabiani Krentz, a convicted co-conspirator. The second payment for $460,000 came from loan proceeds²¹ that Fabiani Krentz obtained by refinancing a loan on a luxury condominium, Unit 3801 at the Continuum on South Beach (hereinafter, "Unit 3801"),²² which was then-titled to Contion, LLC, for which Alvaro was managing member. Id. ; see also ECF Nos. 713 (6/11/14 Trial Tr. 70:20-73:10); 880-36; 880-2; 884-60; 880-62. Unit 3801 was forfeited in the criminal case, after a trial and the jury's finding that it was involved in the money laundering conspiracy. See ECF Nos. 484; 487; 496.

21 More than half a million dollars in loan proceeds remained after this payment, which went to Alvaro's personal checking account held jointly with Fabiani Krentz. See id.; see also ECF Nos. 880-6 (G071-00009); 880-2 (G018-00350).

22 Unit 3801 is located at 100 S. Point Drive, Miami, Florida 33139.

2. In addition, Alvaro, and not Murano, paid down the WAMU mortgage on Murano Unit 908. Between November and December 2008, the mortgage was satisfied with funds from personal checking accounts held solely by Alvaro, or jointly with his brother, Artemio Tardon, and his sister, Maria Tardon. See ECF Nos. 877-1 (Hr'g Tr. 75:22-81:22); 713 (Trial Tr. 70:20-73:10); 880-2; 880-6.

3. These payments from personal accounts contravened Murano's operating agreement, which mandated that company expenses be paid from a company bank account. See id. ; see also ECF Nos. 713 (Trial Tr. 73:24-75:11); 880-2; 880-5; 880-90. However, a company bank account was not opened until June 1, 2009, well after Murano was established, despite the operating agreement's requirement to do so. See Ancillary Ex. 279, ECF No. 880-40 (G017-01222). Indeed, before and after opening Murano's corporate account, Alvaro used personal and other accounts to receive rental income and pay company expenses. For example, he used a personal account jointly held with Fabiani Krentz to pay Murano Unit 908's condominium association fees between January 2009 and March 2009. See Tr. Ex. 1, ECF No. 880-2 (G001-00621, G001-00624, and G001-00629).

4. Moreover, the Defendant admitted that once he opened an account for Murano, he often left blank company checks with his then-spouse, Sharon Cohen, for her to use while he was away. See ECF No. 880-58 (Dep'n Tr. Murano Tardon 57:8-65:6). According to Alvaro, Sharon Cohen had authority to use company checks based on her status as "wife of the manager [Alvaro]," despite the fact that he was the sole account signatory. See ECF Nos. 880-57 (Dep'n Tr. Murano Tardon 57:19-58:2); 880-40 (G017-01222); 880-60 (Dep'n Tr. Murano Tardon 55:22-56:23, 64:4-9).

5. Approximately $15,000 from Murano's account was used for non-business-related expenses, including plastic (or cosmetic) surgery, personal dining, massage and spa services, payment of credit card debts, payments to "cash," and payment of Unit 3801's condominium association fees. See generally ECF No. 880-40.

6. Murano failed to follow corporate formalities in other respects. Murano's operating agreement was not maintained at its principal place of business, as required under the terms of the operating agreement and under Florida law. See ECF Nos. 880-61; 880-90; see also Fla. Stat. § 608.401(1)(d) (2006) ; Fla. Stat. § 608.423 (2006).²³

23 The Florida Limited Liability Act, Fla. Stat. § 608.401, et seq. was in effect when Murano was formed. See Fla. Stat. § 608.401, et seq. (2006). Since 2013, the Florida Revised Limited Liability Act has been in effect, with minor changes in 2015. However, the Revised Limited Liability Act governs only limited liability companies formed after January 1, 2015. See Fla. Stat. § 605.1108(1).

7. Murano failed to file federal income tax returns despite receiving substantial rental income from Murano Unit 908. See ECF Nos. 880-86; 880-97; 880-90; 528 (Trial Tr. 100:2-102:9); 880-27. Instead, Alvaro and Sharon Cohen claimed ownership of and listed rental income from Murano Unit 908 in a joint individual federal tax return for 2008. See ECF Nos. 880-23; 880-53. The 2008 return represents that Alvaro and his wife received $60,000 in revenue from Murano Unit 908.

8. Before his conviction in the underlying criminal case, Alvaro represented that he was the owner of Murano. Murano's articles of organization list him as its managing member. [ECF Nos. 880-90; 880-91]. In addition, all of Murano's annual reports up to 2011, which was the last report filed by the company, list the Defendant as its managing member. See ECF No. 880-91. A member of a Florida limited liability company is an owner, and by default, a Florida limited liability company is member-managed. See Fla. Stat. §§ 608.402(20), (21), 608.422(1) (2006) ; Fla. Stat. § 605.0407 (2013 & 2018).

9. In pre-trial litigation in the underlying criminal case, Alvaro argued that he "concealed nothing" because the company records for Murano "list the defendant as the owner and give his address and identifying information ." [ECF No. 75 (emphasis in original)].

10. Similar to his involvement with Miamark, despite his detention and confinement, Alvaro continues to dominate and control Murano, remaining its only managing member. In these proceedings, Alvaro, who has been sentenced to 150 years of imprisonment, signed and attested to the Condominium Petition and was designated for deposition as the company's corporate representative . See ECF Nos. 734; 880-59.

11. Since the Defendant's detention in July 2011, Murano has not filed an annual report with the Florida Department of State, resulting in the administrative dissolution of Murano. See ECF No. 880-91. No property taxes have been paid for Murano Unit 908 since the Defendant's detention. See ECF No. 880-54.

12. However, the property has generated income, as tenants have leased Murano Unit 908 from Mr. Klugh, who used his power-of-attorney to act on behalf of Murano and to also receive rental payments. See ECF Nos. 880-86; 880-85; 880-97; 880-70. For instance, The Lakes LDT Partnership leased Murano Unit 908 from November 2013, through January 2015, and paid approximately $70,000 in rent directly to Mr. Klugh, and not to Murano's company account. See ECF Nos. 880-97; 880-85. Mr. Klugh, in turn, has paid both Murano's and the tenant agent fees from his law firm's account. See ECF No. 880-86.

d. Assessment of Competing Contentions Re: Real Estate Parcels

The Undersigned finds that Petitioners are not entities "other than the defendant" and therefore lack statutory standing to challenge the preliminary forfeitures of these real properties.

Petitioners did not put on any live witnesses at the evidentiary hearing. They submitted only limited documentary evidence. They designated Alvaro as the corporate representative to provide deposition testimony to bind Murano. Their attorney, Mr. Klugh, provided substantive answers and made comments which appear to be efforts at improperly coaching Alvaro on the various answers. Petitioners did not meet their burden of establishing that they are entities other than Alvaro.

To the contrary, Alvaro often represented himself to be the owner of Miamark and the Mark Units, and he dominated and controlled the entities who submitted the petitions (i.e., Miamark, LLC and Murano 908, LLC). The mere fact that these properties were titled in the names of entities does not mean that Alvaro was not the actual owner who primarily dominated the entities.

To be sure, there are conflicting contentions. But the United States’ submission of specific evidence is substantial. Petitioners rely mostly on contentions and theories, as opposed to actual evidence. Because the Undersigned is not relying solely on record title and is evaluating the evidentiary realities of control and management, record title is insufficient. See Parenteau , 647 F. App'x at 596-98 (finding claimant was not a person "other than the defendant" even though the claimant had record title ownership where claimant failed to introduce evidence at hearing that that it had an identity separate from the defendant or that it had followed any corporate formalities, including recordkeeping).

The evidence establishes that Petitioners have, at best, nominal ownership to the real properties at issue. The mere fact that some family members may have at times stayed at the apartments is woefully inadequate to establish that the corporate entities (and not Alvaro) are the actual, real owners of the properties.

The myriad factors listed above convincingly demonstrate that Petitioners lack statutory standing. Although it is not the United States’ burden to establish that Petitioners lack standing, it submitted a large amount of compelling and persuasive evidence on the statutory standing point. Petitioners, on the other hand, submitted precious little evidence, even though they have the burden to establish standing.

The Undersigned will not here repeat all the factors listed above in the more-comprehensive discussion of the United States’ evidentiary factors. But the Undersigned is highlighting the more-significant ones, all of which demonstrate that Petitioners have not met their burden of establishing standing to challenge the forfeiture of the four real properties.

First, at trial, Alvaro's then-spouse, Sharon Cohen, testified that Alvaro owned the Mark Units and created LLCs to hold properties that actually belonged to him. Second, the LLCs’ articles of organization list Alvaro as the managing member. Third, Alvaro's attorney, Mr. Klugh, represented in the underlying criminal case that Alvaro "concealed nothing" because the records of Miamark and Murano 908 "list the defendant as the owner and give his address and identifying information." [ECF No. 75 (emphasis added)]. Fourth, Alvaro admitted that the transfer of title to The Mark Units "weren't sales" because they merely "changed names to Miamark." [ECF No. 880-50]. Fifth, both Miamark and Murano selected Alvaro to be its corporate representative for a deposition which the United States took of the corporate Petitioners. [ECF Nos. 825-3; 826, p. 3]. Miamark and Murano both designated the Defendant even though he was a convicted felon. Sixth, Alvaro often represented that he was the owner of Miamark and The Mark Units before his conviction. For example, in correspondence with The Mark's condominium association, he was identified as the "owner" of The Mark Units "through various entities." [ECF No. 825-8, p. 87].

Focusing on the specifics of the financial circumstances, Miamark did not pay any consideration to obtain title to The Mark Units. Instead, Defendant Alvaro executed purchase agreements to acquire Unit 2703 and Unit 202, and eventually, in or around 2001, Defendant Krentz, a convicted co-conspirator, acquired title to The Mark Units. See ECF No. 825. Defendant Krentz held title to The Mark Units for approximately five years, before transferring the properties, via quitclaim deeds, to Miamark. See id. at ¶ 6. As noted above, Defendant Alvaro admitted in Miamark's deposition, "They weren't sales ... They changed names to Miamark." See id. at ¶ 7.

For the Murano unit, Ideal Properties, Inc. ("Ideal") conveyed title for Unit 908 to Murano, subject to a first mortgage, on January 25, 2006, after receiving two-installment payments. [ECF No. 826]. However, Murano did not make either of these payments. Rather, the first payment for $50,000 came from Alvaro's personal checking account that he held jointly with his convicted co-conspirator, Defendant Krentz, and the second payment for $460,000 came from loan proceeds Defendant Krentz obtained by refinancing a loan on a luxury condominium owned by Contion, LLC, for which Alvaro was Managing Member. See ECF No. 826-1.

Furthermore, Murano (the record title owner) did not make the payments to satisfy and release WAMU's first mortgage on Unit 908 either. Rather, Alvaro paid off WAMU's first mortgage between November and December 2008 using funds from personal checking accounts that he held either solely or jointly with his brother, Artemio Lopez Tardon, and his sister, Maria Tardon Lopez, despite requirements in Murano's Operating Agreement mandating payment of Murano expenses from a company account. See ECF No. 826-1, ¶¶ 12-13, 22. In fact, Murano was not able to pay off WAMU's first mortgage using company funds because Alvaro, as sole Managing Member, did not open a company account for Murano until June 1, 2009. Id. at ¶¶ 19, 20. As Murano's sole Managing Member, Alvaro opened Murano's only bank account -- over which he had sole signature authority. Id. at ¶¶ 19, 22.

In addition, attorney Peter Lopez testified that realtor Daisy Martins first introduced him to Alvaro in order to create Murano so that Alvaro could acquire the Murano unit. [ECF No. 826-14, p. 6]. According to Lopez's deposition testimony, Alvaro showed up in person in his office and asked him "to create the company, so that he could purchase that property." Id. at p. 7 (emphasis added).

Because Petitioners are not "other than the Defendant," they cannot seek to demonstrate that they have a superior interest in the real properties. Thus, they are not entitled to an order amending the order of forfeiture in order to protect their alleged interest in the property. Given that Petitioners lack statutory standing to challenge the forfeiture, the Court need not address the substantive merits of their claims. Masilotti , 510 F. App'x at 810 n.2²⁴ ; cf. Henry, 621 F. App'x at 972 ("[A] person found to be acting as a nominee for others whose property is subject to forfeiture cannot have a vested interest in the property.").

24 Attorney Richard Klugh was counsel for appellants in Masilotti .

e. Forfeited Vehicles

i. Petitioners’ Position Re: The Two Luxury Vehicles

In the Vehicle Petitions, Maria Tardon and Artemio Tardon have claimed ownership of the Rolls Royce, and Maria Tardon and Kyte Schooll have claimed ownership of the Mercedes Benz.²⁵ See ECF No. 735. They have record title to the two vehicles.

25 Artemio Tardon, an indicted co-defendant, initially claimed an interest in the Mercedes Benz, as well as the Rolls Royce; however, his claim to the Mercedes Benz was dismissed. See ECF No. 762.

The United States, however, contends that the title interests are inadequate by themselves to establish statutory standing and constitutional standing, as Petitioners are not "other than the defendant" and also lack Article III standing. The United States also asserts that Alvaro made some level of personal use of the cars and that the decision to transfer the cars to Spain in July 2011 was precipitated by divorce proceedings that Alvaro initiated against his wife. See ECF No. 776-11.

The United States contends that Petitioners’ mere "involvement" in helping to obtain title does not mean that they exerted primary dominion and control over the vehicles. In other words, the United States argues that helping to arrange title in the names of the corporate entities is inadequate to disguise the reality that Alvaro is the true owner.

Petitioners disagree and rely on the following factors:

1. They say the United States does not dispute that Alvaro and his family members were involved in car sales as part of Spanish and U.S. corporate entities about which there was substantial testimony at trial (including The Collection Motor Sports of Madrid, Kyte Schooll, and The Collection Motor Sport of Miami, LLC). Similarly, they represent that the United States has acknowledged that the car business entities provided the funds to purchase the Mercedes (Kyte Schooll wire transfers, see ECF No. 550-6, p. 3) and the Rolls Royce (Spanish car companies provided the funding by wire transfer, see id. ).

2. Concerning the Mercedes, the United States introduced evidence showing that all of the purchase money for the car was provided by Petitioner Kyte Schooll in four wire transfers amounting to $343,700. [ECF No. 713, p. 60]. In fact, Petitioners note that the United States’ motion for forfeiture attached a chart showing each of the payments by Kyte Schooll to purchase the Mercedes. [ECF No. 550-6, p. 3 (showing wire transfer payments from Kyte Schooll to Rick Case Honda on Feb. 21-23, 2007, for full price of Mercedes)].

3. Kyte Schooll has always been listed at least as a co-owner in the titling of the Mercedes.

4. Concerning the Rolls Royce purchase, at the forfeiture jury trial, the United States sought to show improper sources for the funding of the purchase, explaining that two Spanish car companies with ties to the Tardon family had provided the funds. See ECF No. 713, pp. 47-48 (Agent Gaitan explains that car dealer Cars Boats Madrid SL wired $315,960 to Braman Motors to purchase the Rolls Royce); ECF No. 550-6 (noting additional $49,000 from The Collection Exotic Cars went to the purchase of the Rolls Royce); ECF No. 550-6, p. 3 (showing purchase funded by Cars Boats Madrid SL); ECF No. 536, p. 69 (counsel for the United States stating: "[W]e have two separate wires going to purchase an automobile [the Rolls Royce] -- a luxury automobile that was then titled in the name of a company. ") (emphasis added).

5. The trial testimony showed that while Alvaro was going through a divorce proceeding, he sought to ship various vehicles to Spain, and that Alvaro communicated with the general manager for The Collection Motor Sports regarding those proposed shipments. When it was ready to be shipped to Spain (where Maria and Artemio lived and whether The Collection Motor Sports dealership did business), the Mercedes title included Maria, along with Kyte Schooll and Alvaro in the titles.

6. The title for the Rolls Royce was originally in Alvaro's name, when the car was purchased in July 2010, less than a year before Alvaro's arrest. Title was transferred to Claimants Artemio Tardon and Maria Tardon when the car was to be shipped to Spain in 2011.

7. Sharon Cohen's testimony, and the testimony of David Pollack [ECF No. 776-9, p. 18] showed that the reason for shipping cars to Spain was to advance the interest of the Tardon family's car business. That business was shown to have millions of dollars in sales and two showrooms, with a record that included highly profitable transactions. See ECF Nos. 531, pp. 6-62; 532, pp. 95-130.

8. Alvaro, a co-owner of The Collection who worked without a salary, according to the financial evidence introduced at trial by the United States, purchased many used cars for shipment to the Spanish dealership he and his family owned. David Pollack testified that: "He would keep them for a few months, up to a year ... And then he would ship them over to Spain to be sold in his dealership." [ECF No. 776-9, p. 18]. There was no evidence offered that any use or other action by Alvaro (including any delay in sending the cars to Spain) caused any diminution of the value of the collectible cars that he worked to select for resale. To the contrary, when other collectible cars were auctioned for sale in this case by the United States, they were offered as being in excellent condition and they produced millions of dollars at auction.

9. Even if the timing of the shipment of cars to Spain was affected by ongoing divorce proceedings, testimony by the United States’ witness Pollack shows that the purpose of the shipment of the cars was so that they could "be sold in a dealership." [ECF No. 776-9, p. 18]. According to Petitioners, the United States failed to contest their interrogatory answers pertaining to the vehicles [ECF Nos. 776-3; 776-4; 776-5] that made that very point, that the transactions were conducted in the ordinary course of the family's car dealer operations that included permitting individual members of the family to personally own or co-own vehicles, including to facilitate handling and shipment.

10. The United States’ effort to treat Artemio Tardon's interest in the cars as stemming just from the retitling of a vehicle ignores his other interrogatory answers [ECF No. 776-4] revealing his ownership of the car businesses and the assets of the dealer-use cars. Interrogatory answers by Artemio and Maria Tardon clearly state that "the cars were purchased for Kyte Schooll (the McLaren) and The Collection Motor Sports (Rolls Royce), were held in Miami for dealer use and then were to be transported to Europe for sale." [ECF Nos. 776-3; 776-4]. An interrogatory answer by Kyte Schooll explains that the cars were "under the control of agents of the company." [ECF No. 776-5].

Thus, the answers maintain that the cars were at all times destined for use in the family car businesses, Kyte Schooll and The Collection, or were to be used by dealer agents pending or prior to sale, and were titled accurately and validly. Kyte Schooll, which was initially owned by Artemio Tardon, Maria de las Nieves Tardon, Julio Cesar Fraile Garcia, and Maria Tardon Torrego, was a coordinating entity for assets of the Tardon car sales company, The Collection Motor Sports of Madrid. [ECF No. 525, pp. 91-92]. And Kyte Schooll paid in full for the Mercedes and was invoiced accordingly. [ECF No. 877-1, p. 110].

ii. The United States’ Position Regarding the Luxury Vehicles ²⁶

26 In addition to challenging statutory and constitutional standing, the United States has asserted a technical argument about the Mercedes. It points out that the title is registered to Alvaro or Kyte Schooll or Maria Tardon. Therefore, the United States argues, the three owners (including Alvaro) are joint tenants, and Maria Tardon and Kyte Schooll therefore cannot have superior interest to Alvaro (because, as joint tenants, they all have the same interest). The Undersigned need not address this argument because I have determined that Petitioners lack standing. Therefore, there is no reason to discuss the merits (i.e., whether Petitioners met their burden of establishing a superior interest to Alvaro in the Mercedes) when Petitioners have not cleared the standing hurdle.

1. After several years of litigation, Petitioners’ exclusive reliance on title documentation to support their claims to the Forfeited Vehicles demonstrates that Maria Tardon, Artemio Tardon, and Kyte Schooll hold only nominal title to the Mercedes Benz or the Rolls Royce. 2. There is overwhelming evidence in the record that shows Alvaro's dominion and control over the Forfeited Vehicles before their seizure. Alvaro purchased, possessed, and insured the Forfeited Vehicles, while Petitioners gave nothing of extrinsic value in obtaining title and did not exercise any other form of dominion or control over either of them.

3. In July 2010, Alvaro purchased the Rolls Royce for more than $330,000, and certified that he personally had automobile insurance then-in effect for the vehicle. See ECF Nos. 877-1 (Evidentiary Hr'g Tr. 119:4-120:5; 121:21-122:3); 880-80 (ADM135-00007 to ADM135-00008); 776-6, p. 104.

4. In February 2007, the Mercedes Benz was purchased for approximately $343,201, initially shipped to Spain, and then returned to Alvaro. See ECF Nos. 877-1 (Evidentiary Hr'g Tr. 110:10-111:10); 880-83 (ANC001-00340); 776-6, p. 6, 12. In a letter to the tag agency upon the vehicle's return, Alvaro stated that the Mercedes Benz "was unregistered in Spain to its owner, Alvaro Lopez [the Defendant], who is also the owner of Kyte Schooll SL." [ECF No. 880-83, p. 13].

5. The Defendant also personally insured the Mercedes under a policy held by him and his then-spouse, Sharon Cohen. See ECF No. 880-82.

6. After their purchase, Alvaro registered and titled the Forfeited Vehicles in his name at his address at 2475 S. Bayshore Drive, Villa 3, Coconut Grove, Florida ("Bayshore residence").²⁷ See ECF No. 880-83.

27 The Bayshore residence was forfeited as property involved in Alvaro's offenses. [ECF Nos. 496; 682].

7. The Defendant drove the Mercedes Benz and the Rolls Royce and would "show [them] off" at restaurants or clubs, and he stored them at his various residences. See ECF Nos. 523 (Cohen Trial Tr. 83:11-14); 776; 519.

8. In further demonstration of Alvaro's dominion and control, it was Alvaro who decided to transfer nominal title to the Forfeited Vehicles to his mother, Maria Tardon, and his brother, Artemio Tardon, because he feared that his then-spouse, Sharon Cohen, might try to obtain them in pending divorce proceedings. See ECF Nos. 884-2; 880-32. In fact, after a domestic dispute with Sharon Cohen, Alvaro told David Pollack, a convicted co-conspirator, that he was going to ship approximately seven cars to Spain because he feared that Sharon Cohen would get the vehicles in divorce proceedings. See ECF No. 520 (Pollack Trial Tr. 38:12-39:12). Indeed, the Defendant titled other vehicles and property he owned in the names of other persons, including Sharon Cohen and David Pollack, who did not exchange funds or sign paperwork to obtain the property. See ECF Nos. 523 (Cohen Trial Tr. 80:23-82:25, 87:24-88:10); 776-7; 519 (Pollack Trial Tr. 182:19-190:1).

9. Petitioners Maria Tardon and Artemio Tardon, who were not present at the evidentiary hearing, admitted in their interrogatory answers that they did not acquire title through a financial transaction, and no funds were exchanged when title to the Forfeited Vehicles was transferred to their names. See ECF Nos. 880-77; 880-78; 776-2; 776-3.

10. Significantly, Maria Tardon and Artemio Tardon have both asserted that their respective interests in the Forfeited Vehicles "arose from [their] expenditure of effort and money in arranging to help effectuate the resale of the vehicles." See ECF Nos. 776; 880-77; 880-78.

11. When asked in interrogatories about specific instances of their dominion and control over the Forfeited Vehicles, Maria Tardon and Artemio Tardon in nearly identical fashion referenced only their assistance with the transfer of title , and nothing more. See id.

12. Petitioners also admitted that the Forfeited Vehicles were located in Miami, out of their possession. See ECF Nos. 776-2; 880-77; 880-78.

13. In interrogatory answers, both Maria Tardon and Artemio Tardon have acknowledged that they obtained their claimed interests in the Forfeited Vehicles "following the separation of [the Defendant] from his wife." See ECF Nos. 776; 880-77; 880-78. Accordingly, Maria Tardon and Artemio Tardon's only proffered instance of dominion and control over the Forfeited Vehicles was their limited interaction in transferring title to the Forfeited Vehicles for the benefit of Alvaro.

f. Assessment of Competing Interests Re: The Luxury Vehicles

Before outlining the evaluation of the Petitioners’ standing, it is appropriate to note that the Undersigned views Petitioners’ interrogatory answers to be largely detail-free, vague responses which appear designed to provide as little information as possible. In addition, the answers, nebulous as they are, are somewhat equivocal, and reveal unfamiliarity with the specific facts surrounding the very vehicles at issue in their Petitions.

For example, in response to an interrogatory asking for the date the vehicle was purchased and the contact information of the seller and buyer, Maria Tardon gave the following under-oath answer: "My understanding is that the cars were purchased for Kyte Schooll (the McLaren) and The Collection Motor Sports (Rolls), were held in Miami for dealer use and then were to be transported to Europe for sale. These addresses are of record in the case. The principals in the sales companies are Artemio and Alvaro Lopez Tardon." [ECF No. 880-78, p. 9 (emphasis added)].

Similarly, in response to an interrogatory asking if the vehicle was a gift, Maria Tardon gave the following under-oath answer: "It was my understanding that my interest in the property arose from my expenditure of effort and money in arranging to help effectuate the resale of the vehicles." Id. at p. 14 (emphasis added).

Although courts have found that nominal ownership precludes relief on the merits under 21 U.S.C. § 853(n)(6)(A), the Eleventh Circuit, citing a United States Supreme Court opinion,²⁸ held in Weiss that "[o]ne who has no interest of his own at stake always lacks standing ." Weiss , 467 F.3d at 1311 (emphasis added); cf. Morgan, 224 F.3d at 343 ("[C]ourts must evaluate whether the petitioner is a nominee when reviewing the substance of a § 853(n) claim.").

28 Linda R.S. v. Richard D , 410 U.S. 614, 617, 93 S.Ct. 1146, 35 L.Ed.2d 536 (1973).

In other words, although the Petitioners would also lack a superior interest under 21 U.S.C. § 853(n)(6)(A) on the merits of their purported claims to the vehicles, the Undersigned concludes that their claims should be rejected first for lack of standing, which is a threshold issue.

As outlined above, Petitioners rely on their status as legal title owners to the two vehicles, but this is insufficient here to establish standing. The Undersigned concludes that they lack both statutory standing (because they are not "other than" Alvaro) and constitutional standing (because they are mere naked title owners who are nominees for Alvaro). See Weiss , 467 F.3d at 1308-09.

There is ample legal authority to support the conclusion that Petitioners cannot challenge the forfeiture of the two luxury vehicles because they lack standing and because helping to make arrangements to transfer title is insufficient to confer the requisite standing under the facts here. See United States v. Bond , No. 6:13-CR-03103-MDH-2, 2015 WL 403102, at *3 (W.D. Mo. Jan. 28, 2015) (holding that petitioner lacked standing because he held only bare legal title to the boat and did not exercise dominion and control over it where the defendant, and not petitioner, paid insurance and marina fees for forfeited boat); see also Rogers , 1996 WL 252659, at *3 (finding no standing where defendant registered forfeited Mercedes and paid sales tax and claimant did not use the car); Gamory , 2010 WL 3880880, at *5 (concluding titled petitioner, who admitted that he did not pay for forfeited Mercedes, was the nominee of his son, the defendant); United States v. Washington , No. CR 3:11-2064-10-JFA, 2013 WL 3762906, at *3 (D.S.C. July 16, 2013) (granting summary judgment against petitioner who denied ownership of Cadillac, gave nothing of value to receive title, and never drove it); United States v. One 1990 Beechcraft , 619 F.3d 1275, 1277 n.3 (11th Cir. 2010) (finding title owner of aircraft lacked standing); United States v. One 1981 Datsun , 563 F. Supp. 470, 476 (E.D. Pa. 1983) (finding titled claimant lacked standing because he neither paid for nor used vehicle).

Petitioners have not claimed that they paid for the vehicles, ever used the luxury vehicles, or ever drove the vehicles. Indeed, they have not even said that they have ever been in the vehicles. Rather, their theory is that they traveled to Miami to help make arrangements for transfer of title. This is inadequate to offset Alvaro's substantial involvement in the purchase and use of the vehicles. See, e.g., Gamory , 2010 WL 3880880, at *5 (finding no standing where petitioner never drove forfeited Mercedes, could not identify vehicle's color, and admitted that car was parked at defendant's property); Washington , 2013 WL 3762906, at *3 (noting petitioner did not drive Cadillac); Rogers , 1996 WL 252659, at *3 (finding titled petitioner to be nominee when she did not use forfeited Mercedes and was not involved in the defendant's significant modifications to the vehicle); United States v. Pavlock , No. 1:10CR7, 2014 WL 11380927, at *2 (N.D.W. Va. Mar. 4, 2014) (finding petitioner, the purported owner of company that held title to forfeited vehicles that defendant drove, was defendant's nominee because he did not exercise dominion or control over relevant business or forfeited assets); cf. United States v. One 1982 Porsche 928 , 732 F. Supp. 447, 452 (E.D.N.Y. 1990) (in civil forfeiture case, finding titled claimants, having never driven the subject vehicle, lacked dominion and control).

Framed by the evidence demonstrating Alvaro's dominion and control over the two luxury vehicles, comparing Petitioners’ purported interests with a claimant who received a mere gift is analytically helpful (but unhelpful to their position). See, e.g. , United States v. McCorkle , 143 F. Supp. 2d 1311, 1321 (M.D. Fla. 2001) (finding petitioner, an animal foundation, to be nominee when it received vehicle as a "gift").

Thus, by way of summary, because they hold bare legal title to property for the benefit of another (i.e., Alvaro) and did not exercise significant dominion or control over the vehicles, Maria Tardon, Artemio Tardon, and Kyte Schooll are not "other than" Alvaro. To the contrary, they are his nominees and lack both statutory and Article III standing to challenge the forfeiture of either the Mercedes Benz or Rolls Royce.

V. Conclusion

For the foregoing reasons, the Undersigned finds that Miamark, Murano, Maria Tardon, Artemio Tardon, and Kyte Schooll are not persons "other than the defendant" under 21 U.S.C. § 853(n)(2). I likewise find that they are mere nominee owners and lack Article III standing. Even if the United States had elected to not present evidence at the evidentiary hearing, the Undersigned would have reached the same conclusion, as Petitioners bear the burden of establishing their standing to the fullest degree at the evidentiary hearing. Here, they have spent years in litigation and had more than six months’ notice of the hearing, yet only mustered nine exhibits that show nominal rather than actual ownership of the Forfeited Vehicles, Forfeited Mark Units, and Murano Unit 908. Accordingly, the Undersigned respectfully recommends that the Vehicle Petition [ECF No. 735] and Condominium Petition [ECF No. 734] be denied and/or rejected for lack of standing.

Finally, the Undersigned respectfully recommends that Judge Lenard also deny the following additional motions: the United States’ summary judgment motion concerning the vehicles [ECF No. 776]; the United States’ summary judgment motions concerning the real properties [ECF Nos. 825; 826]; the United States’ motion for a show cause order concerning Petitioners’ standing [ECF No. 760]; the United States’ motion to dismiss regarding the petition for the Mercedes [ECF No. 737]; the Petitioners’ amended motions to assert third party interests in property [ECF Nos. 734; 735]; and the United States’ motion for a hearing to inquire about a potential conflict [ECF No. 714].

VI. Objections

The parties shall have fourteen (14) calendar days from the date of this report to file written objections, if any, with the District Judge. Each party may file a response to the other party's objection within fourteen (14) calendar days from the date of the objection. Failure to timely file objections shall bar the parties from a de novo determination by the District Judge of an issue covered in the report, and shall bar the parties from attacking on appeal unobjected-to factual and legal conclusions contained in this report, except upon grounds of plain error and if necessary in the interest of justice. See 28 U.S.C. § 636(b)(1) ; Thomas v. Arn , 474 U.S. 140, 149, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985) ; Henley v. Johnson , 885 F.2d 790, 794 (11th Cir. 1989) ; 11th Cir. R. 3-1 (2016).

RESPECTFULLY RECOMMENDED in Chambers at Miami, Florida, on February 4, 2020.