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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS WESTERN DIVISION UNITED STATES OF AMERICA, Plaintiff, v. HAVE FAITH IN MONEY, A QUARTER HORSE AND 400 OTHER QUARTER HORSES AND 21 EMBRYOS, ALL IDENTIFIED ON ATTACHMENT A, 13 SADDLES IDENTIFIED ON ATTACHMENT B, AND FROZEN STALLION SEMEN IDENTIFIED ON ATTACHMENT C Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

No.

12 CV 50153

AGREED APPLICATION FOR PROTECTIVE ORDER FOR ASSETS SUBJECT TO FORFEITURE The United States of America, by PATRICK J. FITZGERALD, United States Attorney for the Northern District of Illinois, and pursuant to 18 U.S.C. 983(j)(1)(A), hereby submits an Agreed Application for Protective Order for Assets Subject to Forfeiture and requests a Protective Order to preserve the availability of the following property that is subject to forfeiture in the above-styled civil forfeiture action pursuant to 18 U.S.C. 981(a)(1)(C): Have Faith in Money, a quarter horse and 400 other quarter horses and 21 embryos, all identified on Attachment A, 13 saddles, identified on Attachment B, and frozen stallion semen from 8 horses, identified in Attachment C (defendant properties), and in support of its requests states as follows.

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I.

Background 1. On May 1, 2012, the United States filed a civil forfeiture complaint

against properties owned by Rita A. Crundwell. The defendant properties were comprised of 311 quarter horses located throughout the United States as identified on Attachment A. On May 25, 2012, the United States filed an amended civil forfeiture complaint against properties owned by Rita A. Crundwell. In the amended complaint, the defendant properties were comprised of 395 quarter horses and 21 embryos, all identified on Attachment A, 13 saddles, identified on Attachment B, and frozen stallion semen from 8 horses, identified in Attachment C. On June 13, 2012, the United States filed a second amended civil forfeiture complaint against properties owned by Rita A. Crundwell. In the amended complaint, the defendant properties are comprised of 401 quarter horses and 21 embryos, all identified on Attachment A, 13 saddles, identified on Attachment B, and frozen stallion semen from 8 horses, identified in Attachment C. As set forth in detail in the Governments civil forfeiture complaint and the factual declarations contained therein, the United States has probable cause to believe that the defendant properties described in Attachments A, B, and C constitute and are derived from proceeds obtained from violations of Title 18, United States Code, Section 1343, and as such are subject to forfeiture to the United States pursuant18 U.S.C. 981(a)(1)(C) (property derived from wire fraud). The United States seeks this protective order to bar Rita A. Crundwell and any other person acting in concert with her from alienating, encumbering, transferring, selling or taking any action to diminish the value of the defendant properties described 2

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in Attachments A, B, and C. Claimant Rita A. Crundwell, through her attorneys, does not object to the issuance of the restraining order but in doing so is not admitting to the allegations contained in the indictment or the civil forfeiture complaint. The United States also seeks this protective order to permit the United States to take all necessary steps to ensure the health and well-being of the defendant properties. II. Authority for Issuing Post-Complaint Restraining Order Pursuant to Section 983(j)(1), upon a showing of probable cause, the court is authorized to enter a restraining order or injunction or take any other action to preserve the availability of property subject to forfeiture in a civil case following the filing of a complaint. See United States v. Monsanto, 491 U.S. 600, 615-16 (1989) (the standard for issuing a restraining order is probable cause); United States v. Farmer, 274 F.3d 800, 805-06 (4th Cir. 2001) (same).1 In order to ensure the availability of property for civil forfeiture, 18 U.S.C. 983(j)(1)(A) provides that the court may enter a restraining order upon the filing of a civil forfeiture complaint alleging that the property with respect to which the order is sought is subject to civil forfeiture.

Most of the case law cited in this Application concerns restraining orders issued under the identically-worded provisions in the criminal forfeiture statute, 21 U.S.C. 853(e). Because of the similarity in the statutes, the case law applicable to criminal forfeiture restraining orders is also applicable to restraining orders issued under Section 983(j). See United States v. Melrose East Subdivision, 357 F.3d 493, 499 (5th Cir. 2004) (applying section 853(e) case law to section 983(j) restraining order); United States v. Real Property . . . 2526 155th Place SE, 2008 WL 5246381, *2 (W.D. Wash. Dec. 17, 2008) (because 983(j) is virtually identical to 853(e), the Supreme Courts decision in Monsanto, holding that the issuance of a restraining order in a criminal case is mandatory upon a showing of probable cause, applies equally to civil cases).
1

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If the Government makes the required probable cause showing, the issuance of the pre-trial restraining order is mandatory; the courts only discretion concerns the manner of the restraint. See United States v. Monsanto, 491 U.S. at 612-13 (the word may in section 853(e) means only that the district court may enter a restraining order if the Government requests it, but not otherwise, and that it is not required to enter the order if a bond or other means exists to preserve the property; it cannot sensibly be construed to give district court[s] discretion to permit the dissipation of the very property that section 853(a) requires to be forfeited upon conviction). Title 18, United States Code, Section 981(a)(1)(C) provides that any property, real or personal, which constitutes or is derived from proceeds traceable to a violation of ... any offense constituting specified unlawful activity (as defined in section 1956(c)(7) of this title), ... is subject to forfeiture to the United States. An offense involving wire fraud, in violation of 18 U.S.C. 1343 is a specified unlawful activity pursuant to 18 U.S.C. 1956(c)(7)(A) and 1961(1)(B). The statutory scheme for the restraint of civil forfeiture defendants parallels the scheme of the statutory scheme for the pretrial restraint of property for criminal forfeiture. Compare 18 U.S.C. 983(j) with 21 U.S.C. 853(e). The ability of the court to impose restraints against persons to prevent the dissipation or removal of a defendants assets prior to the resolution of criminal forfeiture proceedings is wellestablished. See United States v. Monsanto, 491 U.S. 600, 109 S. Ct. 2657 (1989) (permitting pretrial restraint of assets intended to be used for attorneys fees). The United States interest in property subject to forfeiture vests at the time of 4

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the commission of the offense giving rise to forfeiture. 18 U.S.C. 981(f). Because of this relation back doctrine, it is logical to permit pretrial restraint on the alienation of property that may ultimately be forfeited to the United States. III. Analysis In this case, the United States filed a civil forfeiture complaint alleging that the defendant properties are subject to forfeiture to the United States pursuant to 18 U.S.C. 981(a)(1)(C) because the defendant properties are, or were maintained with, proceeds of wire fraud, in violation of 18 U.S.C. 1343. The factual description contained in the civil forfeiture complaint filed establishes probable cause to believe that the defendant properties in rem are subject to forfeiture. The entry of the pretrial restraining order will prevent Rita A. Crundwell and others acting on her behalf, from selling, dissipating or transferring the defendant properties identified in Attachments A, B and C to third parties who might claim to be innocent owners before the United States could take action to seize and secure the property. The entry of the pretrial restraining order will also allow the United States to take necessary steps to ensure the health and well-being of the defendant properties. Accordingly, the court may enter an order restraining Rita A. Crundwell and others acting on her behalf, from selling, dissipating or transferring or taking any action to diminish the value of the defendant properties. For the foregoing reasons, the United States respectfully requests that the Court enter a Protective Order regarding the defendant properties. A proposed Protective Order is submitted herewith for the convenience of the Court. 5

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Respectfully submitted, PATRICK J. FITZGERALD United States Attorney By: /s JOSEPH C. PEDERSEN JOSEPH C. PEDERSEN Assistant United States Attorneys 327 South Church Street, Suite 3300 Rockford, Illinois 61101

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CERTIFICATE OF FILING AND SERVICE I, JOSEPH C. PEDERSEN, certify that on June 14, 2012, in accordance with FED. R. CRIM. P. 49, FED. R. CIV. P. 5, LR5.5, and the General Order on Electronic Case Filing (ECF), the following document: AGREED APPLICATION FOR PROTECTIVE ORDER FOR ASSETS SUBJECT TO FORFEITURE was served pursuant to the district courts ECF system as to ECF filers. /s Joseph C. Pedersen Assistant United States Attorney 327 South Church Street, Suite 3300 Rockford, Illinois 61101 815-987-4444