United States v. Young
United States v. Young
Opinion of the Court
ORDER
On December 13, 2013, Defendant David Young pleaded guilty to money laundering and conspiring to violate the Procurement Integrity Act. As part of his plea, Mr. Young agreed to forfeit his interest in assets related to his conviction, • including properties connected to two entities, Wel-venture and HCH. (Statement by Def. in Advance of Plea of Guilty ¶ 12(A)(3)(a), Dkt. No. 527.) The court ordered the forfeiture of these and other assets related to Mr. Young’s convictions in its March 4, 2014 Order of Forfeiture (Dkt. No. 553).
On April 11, 2014, Petitioners John Pierce and Jamison McAllister filed a pro se petition, contending that they were acting on behalf of themselves, “up to 54 families of former contractors,” Welven-ture, HCH, and “other potential members of interest” and were asserting rights to “all assets as members of interest in Wel-venture and all interests in Hernando County Holdings’ Properties.” (Petition ¶ 1, Dkt. No. 558.) Only Mr. Pierce signed the petition.
A month later, Mr. Pierce filed a second petition in which he claimed that he and Mr. McAllister were the “only two remaining members of interest” in Welventure
To claim an interest in property subject to criminal forfeiture, a petitioner must establish standing by asserting a “legal interest in the property which has been ordered forfeited to the United States.” 21 U.S.C. § 853(n)(2); United States v. Brinton, 880 F.Supp.2d 1158, 1159-60 (D.Utah 2012). If a petitioner lacks standing, the court may, on motion, dismiss the petition. Fed.R.Crim.P. 32.2(c)(1)(A).
Neither Mr. Pierce nor Mr. McAl-lister has authority to act on behalf of Welventure or HCH. Defendant David Young created both entities as LLCs under Florida law. The court in In re Whittle, 449 B.R. 427, 430 (Bkrtcy.M.D.Fla. 2011) explained:
Plaintiffs orally argued that, by virtue of their membership in the LLC, its damages are their own personal damages. This argument fails because it disregards the fact that [the LLC] is a separate legal entity created pursuant to Florida statutes. The Florida statutory scheme is clear that a limited liability company holds property separate and apart from the property of its members.
Mr. Pierce and Mr. McAllister are not listed in the corporate records as managers. Moreover, the United States sent notice of the forfeiture to the LLCs’ listed agents and managers and their attorneys. None of these people filed a petition on behalf of Welventure or HCH and the time for filing petitions has passed.
If Mr. Pierce and Mr. McAllister filed their petitions on the grounds that they are members of Welventure and/or HCH and so have an interest in the property, they are incorrect. Established case law has made clear that shareholders of a corporation and members of an LLC do not have standing to challenge the forfeiture of the entity’s assets. United States v. All Funds in the Account of Prop. Futures, Inc., 820 F.Supp.2d 1305, 1333 (S.D.Fla. 2011) (like shareholders in a corporation, members of an LLC lack standing to contest the forfeiture of the LLC’s assets; they are merely general, unsecured creditors of the LLC).
Because Petitioners lack standing to file a petition, the United States’ motion (Dkt. No. 569) is GRANTED and the petitions are DISMISSED.
Reference
- Full Case Name
- United States v. David YOUNG, John Pierce and Jamison McAllister, Third Party
- Cited By
- 3 cases
- Status
- Published