Monday, October 6, 2008
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Court Reinstates Forfeiture Suit Against Former City Commissioner
By STEVEN M. ELLIS, Staff Writer
The Ninth U.S. Circuit Court of Appeals on Friday rejected a claim by a former Los Angeles city commissioner extradited to South Korea last year on fraud and embezzlement charges that the U.S. government waited too long to file a civil forfeiture complaint against his assets.
Reversing a ruling dismissing the government’s complaint against Christopher Kim’s bank accounts and luxury vehicles worth over $1 million, Judge Sidney R. Thomas wrote that the federal Civil Asset Forfeiture Reform Act of 2000 allows courts to authorize ex parte extensions of the deadline to file such complaints, and that the district court retains in rem jurisdiction to adjudicate competing claims of ownership where it dismisses such complaints.
According to the government, Kim, also known as Kyung Joon Kim, fraudulently obtained control over a South Korean corporation, DAS Corporation, and then renamed it Optional Capital Inc. before embezzling at least $30 million dollars—which he allegedly funneled into bank accounts in the United States and used to acquire the assets—and then fleeing to the United States in 2001.
Fought Extradition
A U.S. citizen who grew up in Los Angeles and still has strong ties to the local Korean community, Kim was taken into custody in 2004 and initially fought extradition before unexpectedly agreeing to it last November.
While a fugitive sought by the Korean government, he was appointed in 2003 by then-Mayor James Hahn as a commissioner to the seven-member board governing the Industrial Development Authority for the Los Angeles Community Development Department.
Kim also led the Asian Pacific Islander Advisory Committee, a citizen group that makes recommendations to the Los Angeles Police Department, and two weeks before his arrest hosted a town hall meeting in Koreatown to mobilize Asian communities’ support for a sales tax to cover the cost of hiring more police officers.
The former business partner of South Korean President Myung-bak Lee was ultimately sentenced in South Korea to 10 years in prison and ordered to pay $15.2 million in fines for charges related to stock manipulation and embezzlement. However, despite Kim’s implication of Lee, then a leading presidential candidate, South Korean prosecutors cleared Lee after he won the December election.
Forfeiture Notice
As a result of the Republic of Korea’s extradition request and a subsequent investigation, the United States in 2004 seized more than $1 million in three U.S. bank accounts along with six vehicles, including Mercedes Benzes, Porsches and a Ferrari, and notified Kim and other interested parties of its intent to administratively forfeit the property.
Based on its ongoing investigation, the government also filed subsequent ex parte applications for extensions of time to file its forfeiture complaint, which U.S. District Judge Dale S. Fischer of the Central District of California granted, and the investigation led to the seizure of other assets before the government ultimately brought its complaint in 2005.
The case was transferred to U.S. District Judge Audrey B. Collins and consolidated with two related proceedings involving forfeiture of real property, and Kim and others filed a motion to dismiss the complaint originally before Fischer on the basis that the Civil Asset Forfeiture Reform Act did not allow district courts to grant ex parte extensions of the filing deadline.
Collins granted the motion and, following her dismissal of the complaint, ruled that she no longer had jurisdiction to adjudicate competing claims to the affected items of property.
Authorized by Congress
But Thomas, noting on appeal that the act “neither expressly permits nor prohibits ex parte extensions of time,” wrote that “there is little doubt that Congress intended to authorize” such applications.
He explained:
“There is nothing in the statute that prohibits the practice, and to hold otherwise would thwart one of the objects of the statute by forcing the government to reveal when an investigation that led to an initial seizure of property is ongoing and has a broader scope than might be apparent from the initial seizure.”
Assuming for the sake of argument that Collins’ dismissal had been proper, Thomas further opined that the purpose and reach of proceedings in rem—“generally proceedings ‘against all the world’”—indicated that the district court retained jurisdiction to determine ownership of the property following its dismissal of the government’s complaint.
“Indeed, the court had not only the jurisdiction but the duty to resolve the parties’ competing claims to the res,” Thomas commented, before pointing to the U.S. Supreme Court’s quotation in 1992 of an 1818 opinion by then- Chief Justice John Marshall, sitting as circuit justice.
“To conclude otherwise would do violence to the general principle in in rem forfeiture actions that jurisdiction, once vested, is not divested.”
Judges Stephen S. Trott and Raymond C. Fisher joined Thomas in his opinion.
The case is Kim v. Real Property Located at 475 Martin Lane, 06-56158.
Copyright 2008, Metropolitan News Company