Govt Proposed Forfeiture Order For Mongols Marks PDF

Case 2:13-cr-00106-DOC Document 354 Filed 01/14/19 Page 1 of 18 Page ID #:3031
1 NICOLA T. HANNA
2 United States Attorney
LAWRENCE S. MIDDLETON
3 Assistant United States Attorney
4 Chief, Criminal Division
STEVEN R. WELK (Cal. Bar No. 149883)
6 Chief, Asset Forfeiture Section
CHRISTOPHER BRUNWIN (Cal. Bar No. 158939)
Violent and Organized Crime Section
8 1400 United States Courthouse
9 312 North Spring Street
Los Angeles, California 90012
10 Telephone: (213) 894-6166/4242
Facsimile: (213) 894-3713
11 E-mail: Steven.Welk@usdoj.gov
12 Christopher.Brunwin@usdoj.gov
13 Attorneys for Plaintiff
UNITED STATES OF AMERICA
14
15 UNITED STATES DISTRICT COURT
16 FOR THE CENTRAL DISTRICT OF CALIFORNIA
17 UNITED STATES OF AMERICA, ) No. CR 13-106(A)-DOC
)
18 Plaintiff, )
) GOVERNMENT’S NOTICE OF
19 vs. )
) MOTION AND MOTION FOR
20 ) PRELIMINARY ORDER OF
MONGOL NATION, ) FORFEITURE AGAINST
21 an unincorporated association, )
) DEFENDANT MONGOL NATION
22 Defendant. )
)
23 ) DATE: February 28, 2019
) TIME: 8:00 a.m.
24 )
) LOCATION: Courtroom of the
25 ) Hon. David O. Carter
)
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1 PLEASE TAKE NOTICE that on February 28, 2019, at 8:00 a.m., in

2 Courtroom 10D of the Federal Courthouse in Santa Ana, California, before the
3 Honorable David O. Carter, Plaintiff United States of America (“the government”),
4 will and hereby does move to request that the Court enter the proposed Preliminary
5 Order of Forfeiture (“POF”) lodged contemporaneously herewith, against
6 defendant Mongol Nation (“Defendant”), pursuant to Fed. R. Crim. P. 32.2 (“Rule
7 32.2”), 18 U.S.C. § 1963 (“§ 1963”), the guilty verdict entered against Defendant
8 on December 13, 2018, on Counts One and Two of the First Superseding
9 Indictment (“FSI”), for violations of Title 18 U.S.C. § 1962 (Docket Number
10 (“DN”) 311), and the jury’s forfeiture verdict against Defendant, entered on
11 January 11, 2019 (DN 350).
12 This motion is made following the conference of counsel pursuant to L.R. 7-
13 3, which took place on January 11, 2019.
14 The proposed POF orders the forfeiture of any and all right, title and
15 interests of Defendant in, associated with, or appurtenant to: (1) three federally
16 registered collective membership marks, referred to respectively below and in the
17 POF as the “Word Mark,” the “Center Patch Image,” and the “Combined Mark”
18 (collectively, the “Marks”); (2) items of tangible personal property bearing the
19 Word Mark and/or all or part of the Center Patch Image, which items were seized
20 by state, local or federal law enforcement agencies, and are currently in the custody
21 of the United States as a result of the investigation by the United States Bureau of
22 Alcohol, Tobacco, Firearms & Explosives into the racketeering and overt acts
23 alleged in the First Superseding Indictment, to include vests or “cuts,” patches,
24 clothing and documents; and (3) the firearms, ammunition and concealable body
25 armor entered into evidence in this action, all of which are more particularly
26 described in exhibit “A” to the proposed POF. The property described
27 immediately above is referred to collectively herein as the “Forfeitable Property.”
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1 All of Defendant’s right, title and interest in and to the Forfeitable Property
2 is subject to mandatory forfeiture as a result of Defendant’s conviction of Counts
3 One and Two in the FSI and the jury’s subsequent Special Verdict findings that the
4 Forfeitable Property represents either (1) an interest Defendant acquired or
5 maintained in violation of 18 U.S.C. § 1962, as charged in Count Two of the FSI;
6 or (2) an interest in, security of, claim against, or property or contractual right of
7 any kind that afforded a source of influence over any enterprise that Defendant
8 established, operated, controlled, conducted, or participated in the conduct of, in
9 violation of 18 U.S.C. § 1962, as charged in Count Two of the FSI; or (3) property
10 constituting, or derived from, any proceeds that Defendant obtained, directly or
11 indirectly, from racketeering activity, in violation of 18 U.S.C. § 1962, as charged
12 in Count Two of the FSI.
13 As explained in the attached memorandum, in light of the jury’s verdicts,
14 entry of the proposed POF is mandatory pursuant to 18 U.S.C. § 1963(a) and (e),
15 and Rule 32.2(b)(2)(A).1 This motion is supported by Defendant’s conviction, the
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While the ultimate forfeiture of the Marks arguably presents potential
26 Constitutional issues, the government contends that the entry of the POF, which
27 does nothing more than forfeit the convicted defendant unincorporated
association’s interest in the Forfeitable Property, does not implicate any
28 Constitutional concerns or issues.
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1 jury’s findings in the Special Verdict re Forfeiture that the Forfeitable Property is
2 subject to forfeiture, and the matters set forth in the accompanying Memorandum
3 of Points and Authorities.
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5 DATED: January 14, 2019 NICOLA T. HANNA
United States Attorney
6 LAWRENCE S. MIDDLETON
Chief, Criminal Division
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9 /s/
STEVEN R. WELK
10 CHRISTOPHER BRUNWIN
Assistant United States Attorneys
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1 I.
2 INTRODUCTION
3 Criminal forfeiture is a remedy governed entirely by statute and rule, both
4 substantively and procedurally. It follows a specific and well-defined process,
5 intended both to eliminate interference with the substantive criminal case by third
6 parties and protect the rights of potential third-party claimants (i.e., non-
7 defendants) to forfeitable property. The criminal forfeiture process began here
8 with the December 13, 2018 conviction of the Defendant, followed by the jury’s
9 January 11, 2019 finding of a nexus between the Defendant’s conviction on Count
10 Two of the FSI and the Forfeitable Property. The jury having now returned a
11 Special Verdict re Forfeiture identifying specific property with a connection to the
12 RICO conspiracy, the entry of a preliminary order of forfeiture against Defendant
13 is mandatory, and must be entered promptly. See 18 U.S.C. § 1963(a) and (e);
14 Rule 32.2(b)(2)(A). By this application, the government requests that the Court
15 enter the proposed Preliminary Order of Forfeiture (“POF”), lodged
16 contemporaneously herewith, against defendant Mongol Nation, an unincorporated
17 association (“Defendant”).
18 II.
19 PROPERTY SOUGHT AND LEGAL BASIS
20 A. The Property Sought for Forfeiture
21 The government sought the forfeiture of three basic categories of property in
22 this case: (1) all rights associated with the collective membership marks described
23 in the FSI and the government’s Bills of Particulars, including what has been
24 referred to as the Word Mark (that is, the word “MONGOLS”), the Image Mark
25 (that is, the Center Patch Image), and the “Combined Mark,” which contains both
26 the Word and Center Patch Image (collectively, the “Marks”); (2) items of personal
27 property bearing any of the Marks, or any portion of any the Marks, which items
28 are currently in government custody as a result of the government’s investigation
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1 of the racketeering and overt acts alleged in the FSI, including Mongols vests (or
2 “cuts”); and (3) particular firearms, ammunition and concealable body armor
3 admitted into evidence during the guilt phase of the trial. The jury concluded that
4 the government had established the requisite connection with respect to the Marks;
5 vests, patches, clothing and documents bearing any of the Marks or any portion of
6 any of the Marks, and all of the firearms, ammunition and body armor.
7 B. Forfeiture Is an Aspect of Sentencing
8 Criminal forfeiture is imposed on a convicted defendant as part of
9 sentencing. It is not an element of the underlying substantive offense. See Libretti
10 v. United States, 516 U.S. 29, 39 (1995) (“Our precedents have likewise
11 characterized criminal forfeiture as an aspect of punishment imposed following
12 conviction of a substantive criminal offense.”). It is an important sentencing tool,
13 carrying into effect Congressional intent to deprive criminals and criminal
14 organizations of the instrumentalities and profits of their illegal conduct. See
15 Kaley v. United States, 134 S. Ct. 1090 (2014) (forfeiture serves to punish the
16 wrongdoer, deter future illegality, lessen the economic power of criminal
17 enterprises, compensate victims, improve conditions in crime-damaged
18 communities, and support law enforcement activities such as police training);
19 Caplin & Drysdale v. United States, 491 U.S. 617, 630 (1989) (“a major purpose
20 motivating congressional adoption and continued refinement of the Racketeer
21 Influenced and Corrupt Organizations (RICO) and Continuing Criminal Enterprise
22 (CCE) forfeiture provisions has been the desire to lessen the economic power of
23 organized crime and drug enterprises”).
24 C. The Broad Scope of RICO Forfeiture
25 Both the Supreme Court and the Ninth Circuit have commented on the
26 broad, comprehensive reach of criminal forfeiture under the RICO Act. See, e.g.,
27 Russello v. United States, 464 U.S. 16, 26 (1983) (Congress enacted RICO Ato
28 provide new weapons of unprecedented scope for an assault upon organized crime
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1 and its economic roots@). The Ninth Circuit, citing Russello, has held that the
2 forfeiture provisions of '1963 are “purposely broad . . .[,] designed to totally
3 separate a racketeer from the enterprise he operates,” and that “forfeiture is not
4 limited to those assets of a RICO enterprise that are tainted by use in connection
5 with racketeering activity, but rather extends to the convicted person’s entire
6 interest in the enterprise.” United States v. Busher, 817 F.2d 1409, 1413 (9th Cir.
7 1987). “RICO’s forfeiture provision affords the trial court no discretion” and “is
8 quite literally without limitation” except, obviously, possible Constitutional
9 limitations. Id. at 1412-14.
10 Other Circuits have held the same. See, e.g., United States v. Angiulo, 897
11 F.2d 1169, 1211 (1st Cir. 1990) (Aany interests in an enterprise, including the
12 enterprise itself, are subject to forfeiture in their entirety, regardless of whether
13 some portion of the enterprise is not tainted by the racketeering activity@); United
14 States v. Segal, 495 F.3d 826, 838-39 (7th Cir. 2007) (defendant’s entire interest in
15 the enterprise is forfeitable under § 1963(a)(2); if a business is forfeited, so are all
16 of its assets, including any subsidiary business that is wholly owned by the
17 forfeited business; there need not be an independent basis for the forfeiture of the
18 wholly-owned subsidiary); United States v. Sarbello, 985 F.2d 716, 724 & n.13 (3d
19 Cir. 1993) (under RICO, 100 percent of a defendant’s interest in the enterprise is
20 subject to forfeiture, even if those “interests are acquired legitimately and the
21 enterprise is primarily engaged in legitimate activity”); United States v. Anderson,
22 782 F.2d 908, 918 (11th Cir. 1986) (“a defendant’s conviction under the RICO
23 statute subjects all his interests in the enterprise to forfeiture ‘regardless of whether
24 those assets were themselves ‘tainted’ by use in connection with the racketeering
25 activity’”), relying upon United States v. Cauble, 706 F.2d 1322, 1359 (5th Cir.
26 1983); United States v. Porcelli, 865 F.2d 1352, 1364 (2d Cir. 1989) (“a RICO
27 enterprise found in violation of section 1962(c) is indivisible and is forfeitable in
28 its entirety”); and United States v. Najjar, 300 F.3d 466, 485 (4th Cir. 2002) (all of
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1 the assets of a corporation convicted of a RICO offense are subject to forfeiture

2 under section 1963). See also United States v. BCCI Holdings (Luxembourg) S.A.
3 (Petition of Pacific Bank), 956 F. Supp. 5, 12 (D.D.C. 1997) (even untainted
4 property received by the enterprise after the racketeering activity had ceased is
5 subject to forfeiture under subsection (a)(2)(A) because “all of a RICO defendant’s
6 interests in an enterprise, including the enterprise itself, are subject to forfeiture in
7 their entirety, regardless of whether some portion of the enterprise is untainted by
8 racketeering activity”).
9 Criminal forfeiture is in personam, meaning that it may be imposed only
10 after a criminal conviction, and applies only to property of the convicted
11 defendant. See United States v. Lazarenko, 476 F.3d 642, 647 (9th Cir. 2007);
12 United States v. Louthian, 756 F.3d 295, 307 n.12 (4th Cir. 2014) (criminal and
13 civil forfeiture are “distinct law enforcement tools:” the former is an in personam
14 action that requires a conviction, and the latter is an in rem action against the
15 property itself); and United States v. Vampire Nation, 451 F.3d 189, 202 (3d Cir.
16 2006) (distinguishing civil and criminal forfeiture). For that reason, the proposed
17 POF forfeits only the defendant’s interest in the Forfeitable Property. Finally, the
18 extent of criminal forfeiture is determined by the conviction. The forfeiture must
19 correspond in nature and scope to the underlying criminal conduct of which the
20 defendant was convicted. See United States v. Messino, 382 F.3d 704, 714 (7th
21 Cir. 2004).
22 III.
23 APPLICABLE SUBSTANTIVE AND PROCEDURAL AUTHORITY
24 A. Substantive RICO Forfeiture Authority
25 The substantive forfeiture authority applicable here is found at 18 U.S.C. §
26 1963 (a) - (c), which describes the penalties for violation of the criminal RICO
27 statute. Subsection (a) authorizes the criminal forfeiture of
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1 (1) any interest the person has acquired or maintained in violation of

section 1962;
2 (2) any –
3 (A) interest in;
(B) security of;
4 (C) claim against; or
5 (D) property or contractual right of any kind affording a source of
6 influence over; any enterprise which the person has established,
operated, controlled, conducted, or participated in the conduct
7 of, in violation of section 1962; and
8 (3) any property constituting, or derived from, any proceeds which the
person obtained, directly or indirectly, from racketeering activity or
9 unlawful debt collection in violation of section 1962.
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11 Subsection (b)(2) provides that property subject to forfeiture includes
12 “tangible and intangible personal property, including rights, privileges, interests,
13 claims and securities.”
14 Subsection (c) provides that
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All right, title, and interest in property described in subsection (a)
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vests in the United States upon the commission of the act giving rise
17 to forfeiture under this section. Any such property that is
18 subsequently transferred to a person other than the defendant may be
the subject of a special verdict of forfeiture and thereafter shall be
19 ordered forfeited to the United States, unless the transferee establishes
20 in a hearing pursuant to subsection (1) that he is a bona fide purchaser
for value of such property who at the time of the purchase was
21 reasonably without cause to believe that the property was subject to
22 forfeiture under this section.
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24 The Marks clearly fall within the scope of “property” as defined at 18 U.S.C.
25 § 1963(b), which specifically provides for the forfeiture of intangible property,
26 including rights, privileges, interests, claims and securities. The government and
27 defendant stipulated that the Marsk had been in continuous use by the defendant
28 (in some form) since 1969. Registration of a mark provided additional protections
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1 to defendant, and constitutes prima facie evidence of “the validity of the registered
2 mark and of the registration of the mark, of the registrant’s ownership of the mark,
3 and of the registrant’s exclusive right to use the registered mark,” each of which is
4 an element of ownership. See 15 U.S.C. § 1115(a)); In re International Flavors &
5 Fragrances, Inc., 183 F.3d 1361, 1366 (9th Cir. 1999) (“Trademark owners who
6 register their marks with the PTO are afforded additional protection [i.e., rights and
7 privileges] not provided by the common law,” including the right to prevent others
8 from using the mark). This conclusion is bolstered by the overwhelming authority
9 concerning the extraordinarily broad reach of the forfeiture authority of § 1963.
10 See Russello, 464 U.S. at 26; Busher, 817 F.2d at 1413; Angiulo, 897 F.2d at 1211;
11 and Segal, 432 F.3d at 779.
12 B. Procedural RICO Forfeiture Authority
13 Procedurally, criminal forfeitures are governed by 18 U.S.C. § 1963(e) -
14 (m), and Federal Rule of Criminal Procedure 32.2 (“Rule 32.2"), entitled “Criminal
15 Forfeiture.” While both set out procedural rules, Rule 32.2 is the primary source.
16 See United States v. Marquez, 685 F.3d 501, 509 (5th Cir. 2012) (reciting the
17 requirements in Rule 32.2 and holding that they are mandatory, and “not empty
18 formalities”). While § 1963 also includes procedural provisions, they are either
19 essentially identical to those in Rule 32.2, provide additional powers or authority
20 unique to RICO forfeitures (some of which are discussed below), or are
21 inapplicable to this particular case. Moreover, while the government does not
22 believe that any of the provisions of § 1963 are inconsistent with those of Rule
23 32.2, to the extent conflicts are found, Rule 32.2 governs. See 28 U.S.C. §
24 2072(b) (“All laws in conflict with [the Federal Rules of Criminal Procedure] shall
25 be of no force or effect after such rules have taken effect.”).
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1 IV.
2 THE PRELIMINARY ORDER OF FORFEITURE AND ANCILLARY
3 PROCEEDING
4 A. Entry of the Preliminary Order
5 The determination of the forfeitability of the property sought by the
6 government was made by the jury pursuant to Rule 32.2(b)(5). Following that
7 determination, the Court “must promptly enter a preliminary order of forfeiture . . .
8 directing the forfeiture of specific property . . . .” Rule 32.2(b)(2)(A). That order
9 forfeits any interest the defendant may have in the property described in the
10 preliminary order, becomes final with respect to the defendant at the time of
11 sentencing, but remains preliminary as to third parties until the ancillary
12 proceeding is concluded under Rule 32.2(c). Rule 32.2(b)(4)(A).
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Under [the statutory forfeiture scheme first enacted in 1984, including
14 18 U.S.C. § 1963(l)], the court orders the forfeiture of the defendant’s
15 interest in the property - whatever that interest may be -- in the
criminal case. At that point, the court conducts a separate proceeding
16 in which all potential third party claimants are given an opportunity to
17 challenge the forfeiture by asserting a superior interest in the property.
This proceeding does not involve relitigation of the forfeitability of
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the property; its only purpose is to determine whether any third party
19 has a legal interest in the forfeited property.
20 Advisory Committee Notes to Federal Rule of Criminal Procedure 32.2 (2000
21 Adoption) (emphasis added).
22 B. The Ownership Determination
23 Following entry of the POF, the second phase of the forfeiture proceedings
24 generally begins, to determine the existence and effect, if any, of alleged third
25 party rights in the property described in the POF. Rule 32.2(c); 18 U.S.C. §
26 1963(l); Andrews, 530 F.3d at 1236 (the purpose of the ancillary proceeding is to
27 determine whether any third party has an interest in the forfeited property and to
28 amend the preliminary order of forfeiture accordingly); United States v. McHan,
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1 345 F.3d 262, 275 (4th Cir. 2003) (ancillary proceeding tests a third party’s claim
2 of an ownership interest; it is not a civil forfeiture proceeding in which the
3 government is seeking to forfeit a third party’s interest in property); United States
4 v. Gilbert, 244 F.3d 888, 909 (11th Cir. 2001) (ancillary proceeding creates an
5 orderly procedure whereby third parties who claim their property interests have
6 been forfeited in a criminal case can “challenge the validity of the forfeiture order
7 and establish their legitimate ownership interests”; discussing legislative history).
8 This process allows any purported third parties in interest to intervene in the case
9 and seek to validate their claimed rights in the property listed in the POF.
10 Ownership of the property listed in the POF is not an issue to be determined
11 before entry of the POF because forfeiture of the defendant’s interest in property
12 found to have a nexus to the underlying violation for which he has been convicted
13 is mandatory. Alexander v. United States, 509 U.S. 544, 562 (1993) (“a RICO
14 conviction subjects the violator not only to traditional, thought stringent, criminal
15 fines and prison terms, but also mandatory forfeiture under § 1963"); Nava, 404
16 F.3d at 1124. The court need not define the defendant’s interest before entering
17 the POF because it is impossible as a matter of law for the defendant to retain any
18 interest in property as to which the requisite nexus has been shown. “Thus, the
19 ancillary proceeding has become the forum for determining the extent of the
20 defendant’s forfeitable interest in the property.” Rule 32.2, Advisory Committee
21 Notes, 2000 Adoption. Rule 32.2 thus establishes the “more sensible procedure
22 [whereby] the court, once it (or a jury) determines that property was involved in
23 the criminal offense for which the defendant has been convicted, [orders] the
24 forfeiture of whatever interest a defendant may have in the property without having
25 to determine exactly what that interest is.” Id. (emphasis added).2
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27 The deferral of the ownership determination serves both the letter and spirit of the
forfeiture scheme. See Andrews, 530 F.3d at 1236 (once forfeitability is
28 determined, the court does not – “and indeed may not” -- determine ownership;
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1 A defendant cannot object to the entry of a preliminary order on the ground

2 that the property at issue does not belong to it. United States v. Schlesinger, 396
3 F.Supp.2d 267, 273 (E.D.N.Y. 2005); United States v. Nicolo, 597 F. Supp. 2d 342,
4 346 (W.D.N.Y. 2009) (in the forfeiture phase of the trial, the court “is not to
5 consider potentially thorny issues concerning third party ownership of property
6 sought to be forfeited;” if the Government establishes the required nexus to the
7 offense, the property must be forfeited; if the property belonged to a third party, he
8 will have an opportunity in the ancillary proceeding to make that claim).
9 Pursuant to Rule 32.2(b)(6)(A), “if the court orders the forfeiture of specific
10 property [in a POF], the government must publish notice of the order and send
11 notice to any person who reasonably appears to be a potential claimant with
12 standing to contest the forfeiture in the ancillary proceeding.”3 “The notice must
13 describe the forfeited property, state the times under the applicable statute when a
14 petition contesting the forfeiture must be filed, and state the name and contact
15 information for the government attorney to be served with the petition.” Rule
16 32.2(b)(6)(B). 4
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that issue is deferred to the ancillary proceeding); Lazerenko, 476 F.3d at 648;
18 Gaskin, 2002 WL 459005, at *9 n.4 (ownership is a question for the court alone to
19 determine in the ancillary proceeding), aff’d, 364 F.3d 438 (2d Cir. 2004).
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Publication notice is to be given as described in Supplemental Rule G(4)(a)(iii) of
21 the Federal Rules of Civil Procedure, and may be accomplished by any means
22 described in Supplemental Rule G(4)(a)(iv). Rule 32.2(b)(6)(C). An essentially
identical notice requirement is found at § 1963(l)(1). Here, the government intends
23 to publish notice on “an official internet government forfeiture site for at least 30
24 consecutive days” in accordance with Rule G(4)(a)(iv)(C).
25 4
The applicable time period for a RICO criminal forfeiture is found at
26 § 1963(l)(2), which provides that “any person, other than the defendant, asserting a
27 legal interest in property which has been ordered forfeited to the United States
pursuant to this section may, within thirty days of the final publication of notice or
28 his receipt of notice under paragraph (1), whichever is earlier, petition the court
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1 A petition must be signed under penalty of perjury and set forth the nature
2 and extent of the petitioner’s purported right, title or interest in the property, the
3 time and circumstances of the petitioner’s acquisition of the right, title or interest
4 in the property, any additional facts supporting the petitioner’s claim, and the relief
5 sought. 18 U.S.C. § 1963(l)(3).
6 If any third party files a timely ancillary petition asserting an interest in the
7 property to be forfeited, “the court must conduct an ancillary proceeding.” Rule
8 32.2(c)(1). That hearing “shall, to the extent practicable and consistent with the
9 interests of justice, be held within thirty days of the filing of the petition. The
10 court may consolidate the hearing on the petition with a hearing on any other
11 petition filed by a person other than the defendant under this subsection.”
12 § 1963(l)(4). However, the government may move prior to a hearing to dismiss a
13 petition for lack of standing, failure to state a claim, or “any other lawful reason”
14 (Rule 32.2(c)(1)(A)), and the Court may authorize pre-hearing discovery in
15 accordance with the Federal Rules of Civil Procedure (Rule 32.2(c)(1)(B)). The
16 exercise of either of these options will likely delay a hearing beyond the 30-day
17 window suggested in the Rule.
18 At the petition hearing, the petitioner may testify and present evidence and
19 witnesses on his own behalf, and cross-examine witnesses who appear at the
20 hearing. The United States likewise may present evidence and witnesses in
21 rebuttal to the petitioner’s evidence, and in defense of its claim to the property and
22 cross-examine witnesses who appear at the hearing. In addition to testimony and
23 evidence presented at the hearing, the court shall consider the relevant portions of
24 the record of the criminal case which resulted in the entry of the POF.
25 § 1963(l)(5).
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for a hearing to adjudicate the validity of his alleged interest in the property. The
28 hearing shall be held before the court alone, without a jury.” (Emphasis added).
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1 The petitioner bears the burden of proof in the ancillary proceeding to prove
2 by a preponderance of the evidence either that
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4 (A) the petitioner has a legal right, title, or interest in the property, and such
right, title or interest renders the [POF] invalid in whole or part because the
5 right, title or interest was vested in the petitioner rather than the defendant
6 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
7 under this section; or
8 (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 the purchase reasonably
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without cause to believe that the property was subject to forfeiture under
10 this section.
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12 § 1963(l)(6); Nava, 404 F.3d at 1125 (in ancillary proceeding, “the petitioner bears
13 the burden of proving his right, title, or interest”) (interpreting similar provision in
14 21 U.S.C. § 853(n)(6)); United States v. Teadt, 653 F. App’x. 421 (6th Cir. 2016)
15 (in an ancillary proceeding, the burden shifts to the petitioner to establish the
16 petitioner’s third party claim by a preponderance of the evidence).
17 A petitioner may not argue that the entry of the POF was improper or not
18 adequately supported by the evidence at trial. See Advisory Committee Note to
19 Rule 32.2 (“[The ancillary proceeding] does not involve relitigation of the
20 forfeitability of the property; its only purpose is to determine whether any third
21 party has a legal interest in the forfeited property.” (Emphasis added)); United
22 States v. Dejanu, 163 F. App’x. 493, 498 (9th Cir. 2006) (“Whether the criminal
23 forfeiture of the property was proper is not an issue subject to litigation by third
24 parties in the ancillary proceeding”); United States v. Cooper, 679 F. App’x. 738
25 (11th Cir. 2017) (third party cannot relitigate the merits of the forfeitability
26 determination).
27 Whether a third party petitioner has a valid right, title or interest in the
28 property described in the POF is determined according to state law. Federal law
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1 determines whether any such interest is subject to forfeiture. United States v.

2 Lester, 85 F.3d 1409, 1412 (9th Cir. 1996) (court looks to state law to see what
3 interest the claimant has in the property and looks to the federal statute to see if
4 that interest is subject to forfeiture); United States v. Kennedy, 201 F.3d 1324,
5 1334 (11th Cir. 2000).
6 C. Further Orders
7 Finally, Section 1963(e) provides:
8 Upon conviction of a person under this section, the court shall
9 enter a judgment of forfeiture of the property to the United States
10 and shall also authorize the Attorney General to seize all property
ordered forfeited upon such terms and conditions as the court shall
11 deem proper. Following the entry of an order declaring the
12 property forfeited, the court may, upon application of the United
States, enter such appropriate restraining orders or injunctions,
13 require the execution of satisfactory performance bonds, appoint
14 receivers, conservators, appraisers, accountants, or trustees, or take
any other action to protect the interest of the United States in the
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property ordered forfeited.
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17 The Proposed POF does not include seizure authority (indeed, it explicitly
18 prohibits any seizures in furtherance of the POF in the absence of a further order
19 from this Court), but it does include restraint provisions preventing Defendant
20 from taking or attempting any action that might affect the availability,
21 marketability or value of the Marks, or any of them, including but not limited to
22 selling, conveying, transferring, licensing, distributing, bailing, assigning,
23 mortgaging, pledging, collateralizing, hypothecating, wasting, secreting, damaging,
24 diminishing the value of, conveying, encumbering, or otherwise disposing of the
25 Marks, or any of them, or any personal property bearing all or part of the Marks, or
26 any of them. It further provides that Defendant shall not (1) alter the terms of any
27 existing license or license agreement relating to the Marks, or any of them; (2)
28 purport to grant any ownership interest of any kind or nature in the Marks, or any
16
1 of them, to any person with a current license to possess or display the Marks; or (3)
2 grant any new license to any person allowing that person to possess or display the
3 Marks, or any of them.
4 These provisions will offset the potential prejudice to the government
5 resulting from the delay in the authorization of enforcement authority with respect
6 to the Marks, and will prevent Defendant from taking or attempting any action that
7 could result in the diminution of the rights and privileges forfeited.
8 V.
9 THE FINAL ORDER OF FORFEITURE
10 A. Entry of the Final Order
11 When all third party petitions have been adjudicated, the court must enter a
12 final order of forfeiture by amending the preliminary order of forfeiture as
13 necessary to account for any third-party rights. If no third party files a timely
14 petition, the preliminary order becomes the final order of forfeiture if the court
15 finds that the defendant had an interest in the property that is forfeitable under the
16 applicable statute.5 The defendant may not object to the entry of the final order on
17 the ground that the property belongs, in whole or in part, to a third party; nor may a
18 third party object to the final order on the ground that the third party has an interest
19 in the property. Rule 32.2(c)(2).6
20 5
In making the determination whether the defendant is the owner of the property
21 described in the preliminary order, the court or jury “may rely upon reasonable
22 inferences. For example, the fact that the defendant used the property in
committing the crime and no third party claimed an interest in the property may
23 give rise to the inference that the defendant had a forfeitable interest in the
24 property.” Rule 32.2 Advisory Committee Notes (2000 Adoption).
25 6
Section 1963(l)(7) provides that “following the court’s disposition of all petitions
26 filed under this subsection, or if no such petitions are filed following the expiration
27 of the period provided in paragraph (2) for the filing of such petitions, the United
States shall have clear title to property that is the subject of the [POF] and may
28 warrant good title to any subsequent purchaser or transferee.”
17
1 VI.
2 FORFEITURE TO BE ANNOUNCED AS PART OF SENTENCE
3 Pursuant to Rule 32.2(b)(4)(B), the Court must mention the forfeiture order
4 when orally announcing the Defendant’s sentence, or otherwise ensure that the
5 Defendant knows of the forfeiture at sentencing. The court must also include the
6 forfeiture order, directly or by reference, in the judgment. The government
7 recommends the following language be read to the Defendant at sentencing, and
8 modified as necessary for inclusion in the judgment and commitment order:
9
10 Pursuant to 18 U.S.C. § 1963, the forfeiture allegation of the First
Superseding Indictment, and the Bills of Particulars filed by the
11 government, all of Defendant’s right, title and interest in the property
12 described in the Preliminary Order of Forfeiture, entered on [DATE]
as docket number [xxx] has been forfeited to the United States.
13
14 VII.
15 CONCLUSION
16 For the foregoing reasons, the government respectfully requests that the
17 Court forthwith enter the proposed preliminary order of forfeiture lodged herewith.
18
19 DATED: January 14, 2019 NICOLA T. HANNA
20 United States Attorney
LAWRENCE S. MIDDLETON
22
/s/
23 STEVEN R. WELK
25
27 UNITED STATES OF AMERICA
28
18
Case 2:13-cr-00106-DOC Document 354-1 Filed 01/14/19 Page 1 of 11 Page ID #:3049
1
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UNITED STATES DISTRICT COURT
9
FOR THE CENTRAL DISTRICT OF CALIFORNIA
10
11 UNITED STATES OF AMERICA, ) No. CR 13-106(A)-DOC
)
12 Plaintiff, )
) [PROPOSED]
13 vs. ) PRELIMINARY ORDER OF
)
14 ) FORFEITURE AGAINST
MONGOL NATION, ) DEFENDANT MONGOL NATION
15 An unincorporated association, )
)
16 Defendant. )
)
17 )
18
19 The Court has read and considered the briefing and heard the arguments of
20 the parties on the government’s motion for a preliminary order of forfeiture,
21 following the December 13, 2018 jury verdict finding Defendant Mongol Nation,
22 an unincorporated association (“Defendant”), guilty of the crimes alleged in
23 Counts One and Two of the First Superseding Indictment (“FSI”) (Docket Number
24 (“DN”) 311), and the jury’s subsequent verdict re criminal forfeiture, entered on
25 January 11, 2019 as DN 350. Pursuant to those verdicts, the forfeiture allegation
26 of the FSI, the Bills of Particulars filed by the government on June 18, 2018, and
27 November 26, 2018 (DN 192 and 269, respectively), Rule 32.2 of the Federal
28
1
1 Rules of Criminal Procedure (“Rule 32.2”), and Title 18, United States Code,
2 Section 1963 (“§ 1963”), the Court ORDERS, ADJUDGES AND DECREES:
3 I. FORFEITED PROPERTY
4 All right, title and interest of the Defendant in the following described
5 property (collectively, the “Forfeited Property”), are forfeited to the United States,
6 the government having established the requisite nexus between the Forfeited
7 Property and the offense of conviction charged in Count Two of the First
8 Superseding Indictment.
9 1. Any and all legal and equitable rights of any kind or nature associated
10 with or appurtenant to the Collective Membership Mark consisting of the word
11 “Mongols” (the “Word Mark”) that, at various times, was or is registered with the
12 United States Patent and Trademark Office (“USPTO”) under registration numbers
13 2916965, 4406187 and 4730806, whether for the purposes of commerce,
14 associative purpose, or any other purpose, whether in connection with promoting
15 the interests of persons interested in the recreation of riding motorcycles or
16 otherwise, and which has been used by Defendant Mongol Nation, among other
17 uses, as the top rocker of the three-piece patch awarded to full-patch and
18 probationary members of the Defendant Mongol Nation.
19 ///
20 ///
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14 with or appurtenant to the Collective Membership Mark consisting of the drawn
15 image of a Genghis Khan-type character with sunglasses and a ponytail, riding a
16 motorcycle, with the letters “M.C.” appearing below the motorcycle (the “Center
17 Patch Image”), that, at various times, was or is registered with the USPTO under
18 registration numbers 3076731 and 4730806, whether for the purposes of
19 commerce, associative purpose, or any other purpose, whether in connection with
20 promoting the interests of persons interested in the recreation of riding motorcycles
21 or otherwise, and which has been used by Defendant Mongol Nation, among other
22 uses, as the center patch of the three-piece patch awarded to full-patch,
23 probationary and prospective members of the Defendant Mongol Nation.
24 ///
25 ///
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17 with or appurtenant to the Collective Membership Mark consisting of both the
18 Word Mark (“Mongols”) and the Center Patch Image that, at various times, were
19 or are registered with the USPTO under registration number 4730806, whether for
20 the purposes of commerce, associative purpose, or any other purpose, whether in
21 connection with promoting the interests of persons interested in the recreation of
22 riding motorcycles or otherwise, and which has been used by Defendant Mongol
23 Nation, among other uses, as the top rocker and center patch of the three-piece
24 patch awarded to full-patch and probationary members of the Defendant Mongol
25 Nation.1
26
1
27 The forfeited rights and privileges associated with and appurtenant to the Word
Mark, Center Patch Image and Combined Image are collectively referred to herein
28 as “the Forfeited Marks.”
4
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19 4. Items of tangible personal property bearing the Word Mark
20 (“Mongols”) and/or all or part of the Center Patch Image, to include vests or
21 “cuts,” patches, clothing and documents, which items were seized by state, local or
22 federal law enforcement agencies, and are currently in the custody of the United
23 States, as a result of the investigation by the United States Bureau of Alcohol,
24 Tobacco, Firearms & Explosives into the racketeering and overt acts alleged in the
25 First Superseding Indictment.
26 5. All body armor, firearms and ammunition entered into evidence
27 during the trial of this action, more particularly described in exhibit A hereto.
28
5
1 II. IMPLEMENTATION
2 IT IS FURTHER ORDERED:
3 A. This Order, standing alone, does not authorize the government to seize
4 any tangible or intangible Forfeited Property not already in its custody and
5 possession at the time of this Order. 18 U.S.C. § 1963(e). The government shall
6 not apply to any Court (other than this Court) requesting seizure or enforcement
7 authority based upon this Order. Any such request shall be made pursuant to 18
8 U.S.C. § 1963(e), and shall include a request to amend this or any other then-
9 existing order of forfeiture in this matter to include a description of the property
10 sought to be seized, pursuant to Rule 32.2(e).
11 B. Pursuant to Rule 32.2(b)(3) and § 1963(e),
12 1. Defendant2 is restrained and enjoined from taking or attempting
13 any action that might affect the availability, marketability or value of the Forfeited
14 Marks, or any of them, including but not limited to selling, conveying, transferring,
15 licensing, distributing, bailing, assigning, mortgaging, pledging, collateralizing,
16 hypothecating, wasting, secreting, damaging, diminishing the value of,
17 encumbering, or otherwise diluting or disposing of the Forfeited Marks, or any of
18 them, or any personal property bearing all or part of the Forfeited Marks, or any of
19 them.
20 2. Defendant shall not, without further order of this Court,
21 (a) alter the terms of any existing license or license
22 agreement relating to the Forfeited Marks, or any of them, including any license
23 issued to, or license agreement with any full-patch, probationary or prospective
24 member of the Defendant, or anyone else;
25 ///
26
2
27 The term “Defendant” as used herein includes any and all agents, officers,
members and employees of Defendant Mongol Nation purporting to act on
28 Defendant’s behalf or with Defendant’s permission or authority.
6
1 (b) grant, transfer or convey any ownership interest of any

2 kind or nature in the Forfeited Marks, or any of them, to any person or other entity;
3 or
4 (c) grant any license to any person allowing such person to
5 possess or display the Forfeited Marks, or any of them.
6 C. Upon entry of this Order, and at any time in the future after any
7 amendment of the applicable order of forfeiture in this matter, the United States
8 Attorney General (or a designee) is authorized to commence any applicable
9 proceeding to comply with statutes governing third party rights, including giving
10 notice of this and any other Order affecting specific property. Rule 32.2(c); 18
11 U.S.C. § 1963(f). The following shall apply to any ancillary proceeding conducted
12 in this matter:
13 1. The United States shall publish at www.forfeiture.gov for
14 30 consecutive days, notice of this order; notice of the Department of Justice’s
15 intent to dispose of the Forfeited Property in such manner as the Attorney General
16 may direct; and notice that any person, other than Defendant, having or claiming a
17 legal interest in the property, must file a petition with the Court within thirty (30)
18 days of the publication of notice or receipt of actual notice, whichever is earlier.
19 Such publication shall be carried out pursuant to 21 U.S.C. § 853(n)(1) and Rule
20 32.2(b). The United States shall also, to the extent practicable, provide written
21 notice to any person known to have an alleged interest in the Forfeitable Property.
22 Rule 32.2(b)(6)(A) and (D), and 18 U.S.C. § 1963(l)(1).
23 2. Such notice shall describe the Forfeited Property, the
24 time by which any petition contesting the forfeiture is required to be filed, and the
25 name and contact information for the government attorney to be served with the
26 petition. Rule 32.2(b)(6)(B).
27 ///
28 ///
7
1 3. Any petition filed by a third party asserting an interest in

2 the Forfeited Property shall be signed by the petitioner under penalty of perjury
3 and shall set forth the nature and extent of the petitioner’s alleged right, title, or
4 interest in such property, the time and circumstances of the petitioner’s acquisition
5 of the right, title or interest in the property, any additional facts supporting the
6 petitioner’s claim, and the relief sought. 18 U.S.C. § 1963(l)(3).
7 4. The Court shall adjudicate any ancillary petitions
8 according to 18 U.S.C. § 1963(l)(4) - (6).
9 5. Following the Court’s adjudication of all third party
10 petitions, or if no such petitions are filed during the period of time allowed for such
11 filing, the Court shall enter a Final Order of Forfeiture, and the United States shall
12 have clear title to the Forfeited Property. Rule 32.2(c)(2). Defendant may not
13 object to the Final Order of Forfeiture on the ground that the Forfeited Property
14 belongs, in whole or in part, to a third party.
15 D. Pursuant to Rule 32.2(b)(4), this Preliminary Order of Forfeiture shall
16 become final as to Defendant at the time of sentencing, shall be a part of
17 Defendant’s sentence, and shall be included, directly or by reference, in the
18 judgment entered against Defendant. Any property right or interest forfeited to the
19 United States, which right or interest is not exercisable by, or transferable for value
20 to, the United States, shall expire and shall not revert to Defendant. 18 U.S.C.
21 § 1963(f).
22 ///
23 ///
24 ///
25
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8
1 E. This Court shall retain jurisdiction to enforce this Order, and to amend
2 it as necessary, pursuant to Rule 32.2(e) and 18 U.S.C. § 1963(b)(4)(B).
3
4
5 DATED: _____________, 2019 ___________________________________
6 THE HONORABLE DAVID O. CARTER
UNITED STATES DISTRICT JUDGE
7
8
9 Presented by:
10 NICOLA T. HANNA
United States Attorney
11 LAWRENCE S. MIDDLETON
Chief, Criminal Division
13
14 /s/
STEVEN R. WELK
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Exhibit A
1
2 One Kel-Tec Rifle, Serial No. N5052 (Exhibit 162)
3 One Mini 30 Semi-automatic Rifle, Serial No. 197-09346 (Exhibit 163)
4
One Beretta Semi-automatic Handgun, Serial No. 098560MC (Exhibit 164)
5
One Marlin Rifle, Serial No. 93448421 (Exhibit 165)
6
7 One Mossberg Shotgun, Serial No. K419567 (Exhibit 166)
8 One US Carbine Rifle, Serial No. AA66083 (Exhibit 167)
9
One Kel-Tec Rifle, Serial No. N4M46 (Exhibit 168)
10
One FireStorm Semi-automatic Handgun, Serial No. 71-04-09140-02 (Exhibit 170)
11
12 One Para-Ordnance Warthog Semi-automatic Handgun, Serial No. P162909
(Exhibit 171)
13
One Taurus Semi-automatic Handgun, Serial No. TVI66551 (Exhibit 172)
14
15 One Sig Sauer Semi-automatic Handgun, Serial No. G343763 (Exhibit 173)
16 One Colt Semi-automatic Handgun, Serial No. 15829B70 (Exhibit 174)
17 One Taurus Semi-automatic Handgun, Serial No. TJH52492 (Exhibit 175)
18
One Arminius Revolver in Blue Steel, Serial No. 0523545 (Exhibit 176)
19
20 One Smith & Wesson Revolver, Serial No. BBT4960 (Exhibit 177)
21 110 Rounds of 7.62mm Ammunition (Exhibits 180, 194 and 199)

22 11 Rounds of .38 Caliber Ammunition (Exhibits 187 and 189)
23
60 Rounds of .223 Caliber Ammunition (Exhibits 186, 191 and 199)
24
42 Rounds of .45 Caliber Ammunition (Exhibits 188, 193, 195 and 197)
25
26 35 Rounds of 9mm Ammunition (Exhibits 190 and 196)
27 19 Rounds of .30 Caliber Ammunition (Exhibit 192)
28
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49 Rounds of .22 Caliber Ammunition (Exhibits 198 and 199)

1
2 120 Rounds of 5.56mm Ammunition (Exhibit 199)
3 3 Pieces of Concealable Body Armor (Exhibits 183, 184 and 185)
4
One Semi-Automatic Rifle, Serial No. 89200042 (Exhibit 155)
5
One Winchester 12 Gauge Shotgun, Serial No. L2345396 (Exhibit 156)
6
7 One .25 Caliber Handgun, Serial No. U020505 (Exhibit 157)
8 One Springfield .40 Caliber Handgun, Serial No. US246381 (Exhibit 158)
9
One Uzi Assault Rifle, Serial No. SA66483 (Exhibit 159)
10
Five 12 Gauge Shotgun Shells (Exhibit 160)
11
12 249 Rounds of .40 Caliber Ammunition (Exhibits 205 and 206)
13 23 Rounds of .25 Caliber Ammunition (Exhibit 204)

14 17 Rounds of 7.62mm Ammunition (Exhibit 161)
15
34 Rounds of .44 Caliber Ammunition (Exhibit 205)
16
49 Rounds of 10mm Ammunition (Exhibit 205)
17
18 Rounds of 9mm Ammunition (Exhibit 203)
19 One Baikal Pistol, Serial No. G020976-BTM9983 (Exhibit 79)
20
21
22
23
24
25
26
27
28
11

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Case 2:13-cr-00106-DOC Document 354 Filed 01/14/19 Page 1 of 18 Page ID #:3031

1 PLEASE TAKE NOTICE that on February 28, 2019, at 8:00 a.m., in

1 the assets of a corporation convicted of a RICO offense are subject to forfeiture

1 (1) any interest the person has acquired or maintained in violation of

1 A defendant cannot object to the entry of a preliminary order on the ground

1 determines whether any such interest is subject to forfeiture. United States v.

1 (b) grant, transfer or convey any ownership interest of any

1 3. Any petition filed by a third party asserting an interest in

21 110 Rounds of 7.62mm Ammunition (Exhibits 180, 194 and 199)

49 Rounds of .22 Caliber Ammunition (Exhibits 198 and 199)

13 23 Rounds of .25 Caliber Ammunition (Exhibit 204)

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