FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
RHODE ISLAND [Hon. John J. McConnell, Jr., U.S. District
Judge] [Hon. Lincoln D. Almond, U.S. Magistrate Judge]
Barbara A. Barrow, Moore, Virgadamo & Lynch Ltd., David
Vogel, and Vogel Law PLLC on brief for appellant.
Stephen G. Dambruch, Acting United States Attorney, and
Donald C. Lockhart, Assistant United States Attorney, on
brief for appellee.
Lynch, Selya and Thompson, Circuit Judges.
case requires us to answer a question of first impression in
this circuit - a question involving the relative priority, as
between the government and a general creditor, with respect
to claims relating to assets forfeited as the proceeds of
criminal activity. The district court resolved this question
in the government's favor and denied the general
creditor's claim. After careful consideration, we affirm.
facts are straightforward. In April of 2007,
claimant-appellant David Vogel loaned an acquaintance,
defendant Juan G. Catala, $8, 500 during a trip to Las Vegas.
When Catala did not repay the loan, the appellant sued him in
a Rhode Island state court. In April of 2012, a state judge
entered a judgment in the amount of $8, 500, plus statutory
interest and costs, in favor of the appellant. The Rhode
Island Supreme Court subsequently affirmed that judgment.
See Vogel v. Catala, 63 A.3d 519, 522-23 (R.I.
several years, the appellant's efforts to collect the
judgment proved fruitless. A ray of hope appeared when, in
mid-2016, federal authorities charged the defendant with
distributing oxycodone and marijuana in violation of federal
law. See 21 U.S.C. § 841(a). As part of the
investigation leading to those charges, federal agents had
searched the defendant's home and seized $14, 792 in
case was docketed in the United States District Court for the
District of Rhode Island, and the defendant pleaded guilty to
the charges. The court determined that the $14, 792 in cash
represented the proceeds of the defendant's illegal drug
dealings and was, therefore, subject to forfeiture.
See 21 U.S.C. § 853(a). Based on this
determination, the court entered a preliminary order of
a matter of days, the appellant filed a third-party petition,
in which he asserted a claim to the seized cash under 21
U.S.C. § 853(n) and Federal Rule of Criminal Procedure
32.2(c). The government moved to dismiss his claim under Rule
32.2(c)(1)(A), which authorizes dismissal of a third-party
petition for, among other things, lack of standing or failure
to state a claim. The district court granted the
government's motion, ruling that the appellant had no
legal right to the forfeited proceeds. This timely
motion to dismiss a third-party petition in a criminal
forfeiture proceeding is analyzed in the same way as a motion
to dismiss a complaint under Rule 12(b) of the Federal Rules
of Civil Procedure. See Willis Mgmt. (Vt.), Ltd. v.
United States, 652 F.3d 236, 241 (2d Cir. 2011).
Consequently, a third-party petitioner under section 853(n)
must plead "enough facts to state a claim to relief that
is plausible on its face." Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). Where, as here, the
district court finds that the petition does not satisfy this
standard, its order of dismissal is reviewed de novo. See
Nisselson v. Lernout, 469 F.3d 143, 150 (1st Cir. 2006).
section 853, individuals convicted of drug-trafficking crimes
must forfeit "any property constituting, or derived
from, any proceeds the person obtained, directly or
indirectly, as the result of such violation." 21 U.S.C.
§ 853(a)(1). They also must forfeit any
instrumentalities used to commit the crime. See id.
appeal, the appellant takes issue with the district
court's application of section 853(n). Pertinently, the
statute sets forth the procedures through which a third party
can challenge a preliminary order of forfeiture. To initiate
the process, the third party must petition the court for a
hearing to evaluate his interest in the property that the
government says is subject to forfeiture. See 21
U.S.C. § 853(n)(2); United States v.
Zorrilla-Echevarría, 671 F.3d 1, 6 (1st Cir.
2011). At the hearing, the third party must establish that he
has standing within the meaning of section 853 by
"asserting a legal interest" in the property. 21
U.S.C. § 853(n)(2); see United States v. Watts,
786 F.3d 152, 160 (2d Cir. 2015). He must then show his
entitlement to relief on the merits by establishing (as
relevant here) that the order of forfeiture is invalid
because any right to the property "was vested in [him]
rather than the defendant or [that his right to the property]
was superior to any right . . . of the defendant at the time
of the commission of the acts which gave rise to the
forfeiture." 21 U.S.C. §
court determines that the third party has standing and that
his interest is valid and superior to that of the
defendant's interest within the meaning of section
853(n), it may amend the preliminary order of forfeiture
accordingly. See Fed. R. Crim. P. 32.2(c)(2). If,
however, the court concludes that the third party ...