IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF KANSAS

UNITED STATES, )
)
Plaintiff, )
)
v. ) Case No. 07-20124-CM
)
CARRIE MARIE NEIGHBORS, )
and )
GUY MADISON NEIGHBORS, )
)
Defendants. )
______________________________)

UNITED STATES’ RESPONSE TO DEFENDANTS’ MOTION TO DISMISS

FORFEITURE ALLEGATION II OF SECOND SUPERSEDING INDICTMENT

Comes now the United States, by and through its counsel, Assistant United States

Attorney Marietta Parker, and responds to the defendants’ joint motion to dismiss the Forfeiture

Allegation II of the Second Superseding Indictment. The defendants contend that the forfeiture

statute cited in the Forfeiture Allegation II does not permit forfeiture for the crimes charged

against the defendants and that the $525,000.00 amount sought as a forfeiture judgment against

the defendants has no rational relationship with the amount of money alleged to have been

received illegally. As shown below, the defendants’ contentions have no merit and their motion

should be denied.

I. NATURE OF THE CASE

1. The Second Superseding Indictment charges the defendants with conspiracy to

commit wire fraud, mail fraud, and money laundering (Count 1), wire fraud (Counts 2-15), and

money laundering (Counts 16-18). There are two forfeiture allegations included in the Second

Superseding Indictment. The first forfeiture allegation pertains to the money laundering
violations (Counts 1, 16-18) pursuant to 18 U.S.C. § 982. This allegation is not the subject of the

defendants’ motion. The second forfeiture allegation seeks forfeiture based upon the wire fraud

violations, Counts 1-15. It is this allegation that the defendants seek to have dismissed.

2. Forfeiture for the criminal conduct alleged in Count 1 (conspiracy) is included in

both Forfeiture Allegations. This is because forfeiture for money laundering and forfeiture for

wire fraud are different. Forfeiture for money laundering covers all property involved in the

money laundering offense, while forfeiture for wire fraud covers any property constituting or

derived from proceeds traceable to the wire fraud offense. Forfeiture brought in a criminal

proceeding for money laundering violations is pursuant to 18 U.S.C. § 982 (a)(1). Forfeiture

brought in a criminal proceeding for wire fraud violations is pursuant to 18 U.S.C. § 981(a)(1)(C)

and 28 U.S.C. §2461(c).

II. ARGUMENTS AND AUTHORITIES

A. Forfeiture For Wire Fraud Allegations Is Specifically Authorized By Statute

3. The authority for criminal forfeiture arising from wire fraud offenses is 18 U.S.C.

§ 981(a)(1)(C) which is a civil forfeiture statute that is made applicable to this criminal case

pursuant to 28 U.S.C. § 2461(c). 18 U.S.C. §981(a)(1)(C) provides:

(a)(1) The following property is subject to forfeiture to the United States:

. . . . . .
(C) Any property, real or personal, which constitutes or is derived from
proceeds traceable to any offense constituting “specified unlawful activity” (as
defined in section 1956(c)(7) of this title), or a conspiracy to commit such offense.

4. The next step is to determine if 18 U.S.C. §1956(c)(7) includes wire fraud (18

U.S.C. § 1343) is a specified unlawful activity. Pursuant to 18 U.S.C. §1956(c)(7)(A), the term

“specified unlawful activity” includes any act or activity constituting an offense listed in 18

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U.S.C. § 1961(1). Title 18 U.S.C. §1961(1)(B) which also defines “racketeering activity”,

includes 18 U.S.C. §1343 in the long list of crimes enumerated in that section. Thus, since wire

fraud is included in 18 U.S.C. 1961(1)(B), it is also incorporated into 18 U.S.C. §1956(c)(7) and

18 U.S.C. § 981(a)(1)(C), and accordingly, there is civil forfeiture for wire fraud violations.

5. Although 18 U.S.C. § 981 is a civil forfeiture statute, it is applicable to the present

criminal case pursuant to 28 U.S.C. §2461 (c). Section 28 U.S.C. § 2461(c) provides:

If a forfeiture of property is authorized in connection with a violation of an

Act of Congress, and any person is charged in an indictment or information with
such violation but no specific statutory provision is made for criminal forfeiture
upon conviction, the Government may include the forfeiture in the indictment or
information . . . . If the defendant is convicted of the offense giving rise to the
forfeiture, the court shall order the forfeiture of the property as part of the
sentence in the criminal case . . . .

As demonstrated above, wire fraud is included as a crime for which there is civil forfeiture under

18 U.S.C. § 981. It follows then that there is also criminal forfeiture for wire fraud as a result of

the application of 28 U.S.C. §2461(c).

B. Criminal Forfeiture For Wire Fraud Is Supported by Case Law.

6. Not only is criminal forfeiture statutorily provided for wire fraud, but several

courts have found that 28 U.S.C. § 2461(c) authorizes criminal forfeiture whenever civil

forfeiture is authorized, and so held that there is criminal forfeiture for wire fraud offenses. In

United States v. Razmilovic, 419 F.3d 134 (2d Cir. 2005), which was a wire fraud case, the court

held that 28 U.S.C. § 2461(c) “authorizes criminal forfeiture as a punishment for any act for

which civil forfeiture is authorized, and allows the government to combine criminal conviction

and criminal forfeiture in a consolidated proceeding.” Razmilovic, 419 F.3d at 136. Although

criminal forfeiture for mail fraud violations was the issue in United States v. Vampire Nation,

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451 F.3d 189 (3d Cir. 2006), mail fraud and wire fraud appear together in the relevant statutes,

18 U.S.C. §§ 981, 1956, and 1961. In Vampire Nation, the defendant claimed the court lacked

statutory authority to issue a criminal forfeiture of the mail fraud proceeds he had obtained. The

court disagreed and read that the plain language of Section 2461(c), by virtue of the chain of

cross-references leading to §1956(c)(7) and §1961(1), explicitly permits criminal forfeiture for

general mail fraud, not just for mail fraud against financial institutions. Vampire Nation, 451

F.3d at 199-201. See also, United States v. Jennings, 487 F.3d 564, 584-585 (8th Cir. 2007);

United States v. Silvious, 512 F.3d 364, 369 (7th Cir. 2008); United States v. Schlesinger, 514

F.3d 277 (2nd Cir. 2008) (mail and wire fraud ); and, United States v. Foley, 508 F3d 627 (11th

Cir. 2007). Lastly, in United States v. Wittig, 333 F. Supp.2d 1048 (D. Kan. 2004), the

defendant was charged with conspiracy to commit wire fraud and money laundering. The court

stated,

Specifically, the civil forfeiture provision found at 18 U.S.C. § 981(a)(1)(C)

provides for forfeiture of property “which constitutes or is derived from proceeds
traceable to” a violation of “specified unlawful activity” or a “conspiracy to
commit such offense.” “Specified unlawful activity” includes both money
laundering under 18 U.S.C. § 1957 and wire fraud under 18 U.S.C. § 1343.
Section 981(a)(1)(C) authorizes criminal forfeiture through the application of 28
U.S.C. § 2641(c), which allows for the criminal forfeiture of property based on
conviction of a violation of a statute where “no specific statutory provision is
made for criminal forfeiture upon conviction” of a violation of that statute.

Wittig, 333 F. Supp.2d at 1051.

7. As demonstrated above, criminal forfeiture for defendants’ wire fraud charges is

specifically authorized by statute and case law. Accordingly, defendants’ motion to dismiss the

Forfeiture Allegation II (Wire Fraud Forfeiture) on this basis should be denied.

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 C. The Forfeiture Judgment Sought In Forfeiture Allegation II Is Proper

8. Forfeiture Allegation II (Wire Fraud Forfeiture) seeks a forfeiture money

judgment against the defendants in an amount up to $525,000.00 which sum represents the

proceeds allegedly obtained as a result of the wire fraud violations (Count 1 - Conspiracy and

Counts 2-15 - substantive wire fraud counts). In their motion to dismiss this forfeiture allegation,

the defendants claim that the United States has provided no basis for the claim that $525,000.00

was obtained through illegal means. However, as demonstrated below, a forfeiture allegation

serves only as a general notice that forfeiture will be sought and a specific dollar amount is not

required to be stated in the indictment. Additionally, if a forfeiture judgment amount is alleged,

the United States is not required to state in the indictment how it arrived at the judgment amount.

9. Forfeiture allegations are put in indictments because they are required by Fed. R.

Crim. Pro. 32.3 (a) in order to give notice to the defendant that upon conviction forfeiture will be

sought. The Rule provides:

(a) Notice to the Defendant. A court must not enter a judgment of

forfeiture in a criminal proceeding unless the indictment or information contains
notice to the defendant that the government will seek the forfeiture of property as
part of any sentence in accordance with the applicable statute.

Rule 32.2 and its legislative history make clear that a defendant is not entitled to an itemized list

of the property to be forfeited as part of the indictment. United States v. Lazarenko, 504

F.Supp.2d 791, 796-796 (N.D. Cal. 2007). The Rule only requires that the United States give the

defendant general notice that it will be seeking forfeiture in accordance with the applicable

statute. Id.

10. Likewise, the United States is not required to put in the exact amount it seeks as a

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forfeiture judgment in the forfeiture allegation. In United States v. Segal, 495 F.3d 826 (7th Cir.

2007), the indictment sought “at least $20,000,000, including but not limited to all salary,

bonuses, dividends, pension and profit sharing benefits received by defendant.” Segal, 495 F.3d

at 838. Segal tried to argue that the forfeiture allegation must be interpreted to mean that only his

salary of $120,000 per year, the cash he took from petty cash, and the claims for personal

expenses were subject to forfeiture. The Court disagreed and stated that while certain items were

specifically mentioned, the forfeiture was not limited to those items and “at least”

$20,000,000.00 was subject to forfeiture. Segal, 495 F.3d 838-839. In addition to allowing the

use of qualifiers such as “at least” in forfeiture allegations, the United States is not required to

specify the amount of the forfeiture judgment it will be seeking in the indictment. See, United

States v. McKay, 506 F. Supp.2d 1206, 1210-1211 (S.D. Fla. 2007); and, United States v.

DeFries, 129 F.3d 1293, 1315 n. 17 (D.C.Cir.1997).

11. In the present case, the United States has complied with Rule 32.2 when it put the

defendants on notice that it would seek forfeiture of up to $525,000.00. Nothing in the Rule

requires the United States to explain in the indictment how or why it chose this particular figure.

In fact, pursuant to McKay and Defries, the United States did not have to put any dollar amount

for the forfeiture judgment allegation. Instead, the indictment could have generally ought a

forfeiture judgment for any and all proceeds obtained from the wire fraud violations. See, United

States v. Rupley, 706 F. Supp. 751, 754 (Nev. 1989) (indictment that makes the defendant aware

that all property arising from drug trafficking is subject to forfeiture is sufficient to allow

defendant to formulate his dismiss; motion to dismiss denied).

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 12. Count 1 charges a conspiracy to commit wire fraud that lasted from January 2,

2004 until July, 7, 2006. If the defendants are convicted of the conspiracy and wire fraud

charges, the United States is entitled to a forfeiture money judgment for the entire amount of

proceeds derived from these convictions. Where the convictions involve a continuing scheme to

defraud or a conspiracy, the amount involved in the entire scheme is forfeitable. United States v.

Hasson, 333 F.3d 1264, 1279 (11th Cir. 2003); United States v. Boesen, 473 F. Supp. 2d 932,

952-953 (S.D. Iowa 2007). It will be up to the trier of fact to determine by a preponderance of

the evidence the total amount of proceeds obtained from the wire fraud conspiracy and scheme to

defraud. This amount will constitute the amount of the forfeiture judgment despite the amount

alleged in the Forfeiture Allegation II of the Second Superseding Indictment. See, United States

v. Di Gilio, 667 F. Supp. 191, 198, (D.N.J. 1987) (the government must establish its forfeiture

allegations at trial; indictment that alleges defendants received financial benefits and sought

forfeiture of those benefits is sufficient to withstand a motion to dismiss).

III. CONCLUSION

13. Wherefore, for the reasons state herein and based upon the relevant statutes and

case law, the United States respectfully requests that the Court deny the defendants’ motion to

dismiss the Forfeiture Allegation II.

Respectfully submitted,

Lanny D. Welch
United States Attorney

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s/Marietta Parker
MARIETTA PARKER KS Dist. Ct. # 77807
Assistant United States Attorney
500 State Avenue, Suite 360
Kansas City, Kansas 66101
(913) 551-6730 (telephone)
(913) 551-6541 (facsimile)
E-mail: marietta.parker@usdoj.gov

s/Terra D. Morehead
TERRA D. MOREHEAD KS S.Ct # #12759
Assistant United States Attorney
500 State Avenue, Suite 360
Kansas City, Kansas 66101
(913) 551-6730 (telephone)
(913) 551-6541 (facsimile)
E-mail: terra.morehead@usdoj.gov