Opinion
Case No. CR2-06-129.
April 6, 2007
OPINION AND ORDER
This matter is before the Court on the Government's Motion to Reconsider this Court's Opinion dated February 28, 2007, in which the Court granted Defendant Donald H. Ayers' ("Defendant") Motion to Dismiss Notice of Lis Pendens filed by the Government on certain property in Ohio owned by Defendant. For the reasons set forth below, the Government's Motion is DENIED.
FACTS
On May 19, 2006, Defendant and six other individuals were charged in a 60-count indictment alleging violations of 18 U.S.C. § 371, 15 U.S.C. §§ 77q(a) and 77x (Securities Fraud); 18 U.S.C. § 1343 (Wire Fraud); 18 U.S.C. § 1341 (Mail Fraud); 18 U.S.C. § 1956(h) (Money Laundering Conspiracy); 18 U.S.C. § 1956(a)(1)(A)(I) (Promotion Money Laundering) and 18 U.S.C. § 2. Count 60, a forfeiture claim, asserts the following:
Each defendant who is convicted of Count 1 (conspiracy) and Counts 2-37 shall forfeit to the United States, pursuant to 18 U.S.C. § 981(a)(1)(c)) and 28 U.S.C. § 2461(c), any property constituting or derived from proceeds obtained directly or indirectly as a result of the said violation, including but not limited to a sum of money in the amount of approximately $1,900,000,000 representing the proceeds from the conspiracy to violate statutes of the United States. . . . If more than one defendant is convicted of an offense, the defendants so convicted are jointly and severally liable for the amount involved in such offense.
Pursuant to 18 U.S.C. § 982, each defendant who is convicted of one or more of the offenses set forth in Count 38 (money laundering conspiracy . . .) or Counts 39-59 (money laundering) shall forfeit to the United States the following property:
(a) All right, title, and interest in any and all property involved in each offense . . . for which the defendant is convicted, and all property traceable to such property. . . .
(b) A sum of money equal to approximately $1,900,000,000 representing the total amount of money involved in each offense, or involved in the conspiracy to commit violations . . . as charged in Count 38, for which the defendant is convicted. If more than one defendant is convicted of an offense, the defendants so convicted are jointly and severally liable for the amount involved in such offense.
Pursuant to 21 U.S.C. § 853(p), as incorporated by 18 U.S.C. § 982(b) and 28 U.S.C. § 2461(c), each defendant shall forfeit substitute property, up to the value of the amount described in the foregoing paragraphs, if, by any act or omission of a defendant, the property described in such paragraphs, or any portion thereof, cannot be located upon the exercise of due diligence; has been transferred, sold to or deposited with a third party; has been placed beyond the jurisdiction of the court; has been substantially diminished in value; or has been commingled with other property which cannot be divided without difficulty.
Indictment at ¶ 135-37 (emphasis added).
Count 60 does not specifically list any property allegedly involved in each charged offense or any property traceable to such offenses.
On September 19, 2006 and September 22, 2006, the Government filed Notices of lis pendens in Delaware County and Franklin County, respectively, with regard to Defendant's property located at 8639 Gavington Court, Dublin, Ohio 43017 (the "Gavington Property"). Each lis pendens gives notice of the pending criminal action, and the possible resulting forfeiture. In addition, the Government indicates in each notice that "the name of the person whose estate is intended to be affected is Elise C. Ayers." Mrs. Ayers is Defendant's wife and not a party to the pending criminal action against her husband.
Defendant alleges that, as of Thursday, February 15, 2007, Mrs. Ayers has entered into an acceptable contract for the sale of the Gavington Property, but because of the lis pendens notice, is unable to successfully complete the transaction.
PROCEDURAL HISTORY
On January 23, 2007, Defendant filed a Motion to Dismiss Notice of lis pendens filed by the Government with respect to the Gavington Property. The Government did not file a response before the applicable deadline passed. On February 28, 2007, the Court granted Defendant's Motion to Dismiss the Notice of lis pendens. On February 28, 2007, the Government filed the instant Motion for Reconsideration. Defendant responded. The Government did not reply and the motion deadline has now passed. Accordingly, Defendant's Motion is now ripe for this Court's review.
STANDARD OF REVIEW
As a general principle, motions for reconsideration are granted if the moving party demonstrates: (1) a clear error of law; (2) newly discovered evidence that was not previously available to the parties; or (3) an intervening change in controlling law. GenCorp. Inc. v. American Int'l Underwriters, 178 F.3d 804, 834 (6th Cir. 1999). Motions for reconsideration do not allow the losing party to "repeat old arguments previously considered and rejected, or to raise new legal theories that should have been raised earlier." National Metal Finishing Co. v. BarclaysAmerican/Commercial, Inc., 899 F.2d 119, 123 (1st Cir. 1990) (citation omitted). This type of motion "should not be used to re-litigate issues previously considered." American Marietta Corp. v. Essroc Cement Corp., Case No. 01-3752, 2003 U.S. App. LEXIS 3211, at *9 (6th Cir. Feb. 19, 2003).
ANALYSIS
The Government claims that "in sum the Court's Order if February 28, 2007, was issued before it had all of the evidence and, in particular, evidence that the Gavington Court property was proceeds, not a substitute asset." Gov. Motion at 7.
The Court, in its February 28, 2007, granted Defendant's motion to dismiss the notice of lis pendens on the Gavington Property because it found that:
The Government has presented no evidence that the Gavington Property was involved in criminal activity, or that any alleged criminal proceeds from National Century Financial Enterprises can be traced to this property. Therefore, the Gavington Property may be subject to post-conviction forfeiture as a substitute asset, but it is not subject to post-indictment/pretrial restraint.
The Government, in its Motion for Reconsideration, states that public records reveal that Defendant has an interest in the Gavington Property. In addition, the Government submits an affidavit from IRS Special Agent Gregory Ruwe (the "Ruwe Affidavit"). This affidavit describes the methodology and the tracing of over $250,000 of proceeds from Defendant's purportedly illegal conduct, or property traceable therefrom, used to pay for the mortgage and improvements on the Gavington Property. The Court, its previous rulings, has held that proceeds directly traceable to the alleged conduct in this case are subject to pre-trial restraint. The Government asserts that the Ruwe Affidavit shows that the illicit proceeds are traceable to the Gavington Property and, as a result, the Court should reconsider its previous ruling and hold that the Gavington Property is restrainable.
The Government does not, however, indicate under what theory this Court should hear this evidence. As noted above, a motion for reconsideration is proper if it is based on: (1) a clear error of law; (2) newly discovered evidence that was not previously available to the parties; or (3) an intervening change in controlling law. GenCorp. Inc. v. American Int'l Underwriters, 178 F.3d 804, 834 (6th Cir. 1999).
The Government does not contend that there has been an intervening change in controlling law nor that the Court misapplied current law. Rather, the Government asserts that it has presented the Court with evidence that was not available to the Court at the time it granted Defendant's motion. Thus, the Court must decide whether the evidence the Government presents in its motion is "newly discovered evidence that was not previously available to the parties."
The Court, however, notes that the Government is appealing this Court's ruling that substitute assets are only restrainable post-trial.
The two "new" pieces of evidence are: (1) the public records that show Defendant's interest in the Gavington Property; and (2) the Ruwe Affidavit. The Court notes that the Government did not file a response to Defendant's Motion to remove the notice of lis pendens within the twenty-one day period allotted by the local rules. The Government attempts to excuse its inaction by claiming: (1) that it was on the verge of filing its response to Defendant's Motion when the Court issued its decision; and (2) the lead attorney for the Government in this case, Mark Youst was deployed with the Air Force overseas.
The fact remains that the Government did not file its response in time. The Government's response was due on February 13, 2007. It did not file the instant motion until two weeks after the deadline. Aside from Attorney Youst, Attorney Dale Williams and others are assigned to this case and could have responded on behalf of the Government. Thus, this Court will not reconsider its previous ruling unless the Government can show that the Government, and not this Court, did not have the evidence in question at the time it should have filed its response brief.
The Government makes no showing that the public records were not available prior to February 13, 2007. Moreover, neither the Government's brief nor the Ruwe Affidavit state that Agent Ruwe had not traced the illicit proceeds to the Gavington Property prior to February 13, 2007. In fact, these proceeds should have been traced prior to the Government filing a notice of lis pendens on the Gavington Property. Therefore, it is clear to the Court that the Government had knowledge of the evidence it produces in its Motion for Reconsideration at the time it should have filed its response to Defendant's Motion to Dismiss the Notice of lis pendens on the Gavington Property. Therefore, this Court finds that the Government has not established an adequate basis for bringing a motion for reconsideration and, as such, its Motion is DENIED.