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O'Donnell v. Federal Bureau of Investigation

United States District Court, N.D. Illinois, Eastern Division

April 16, 2015

MICHAEL P. O'DONNELL, Plaintiff,
v.
FEDERAL BUREAU OF INVESTIGATION, Defendant

For Michael P. O'Donnell, Plaintiff: Bradley H. Foreman, LEAD ATTORNEY, Law Offices of Bradley H. Foreman, P.C., Chicago, IL.

For Federal Bureau of Investigation, Defendant: Daniel Edward May, LEAD ATTORNEY, United States Attorney's Office (NDIL), Chicago, IL.

Page 869

MEMORANDUM OPINION AND ORDER

JOHN W. DARRAH, United States District Court Judge.

Plaintiff Michael O'Donnell (" O'Donnell" ) filed an Amended Motion to Set Aside Forfeiture [17], pursuant to 18 U.S.C. § 983 and 28 U.S.C. § 1331. For the reasons stated below, the Motion is denied.

BACKGROUND

O'Donnell brings this Motion to challenge the administrative forfeiture of assets that once belonged to his ex-wife, Tara Kersch. (Pl.'s Motion to Set Aside Forfeiture " MSAF" at 1.) O'Donnell and Kersch were divorced in 2009 in Georgia. ( Id. ) The Georgia court awarded O'Donnell child support and unpaid health insurance benefits for his minor child. ( Id. ) That court found Kersch in criminal contempt after she failed to make the payments despite having the ability to do so. ( Id. at 2). Following the contempt order, Kersch filed for Chapter 13 bankruptcy in the Northern District of Illinois on April 19, 2010. ( Id. ) The bankruptcy court judge dismissed Kersch's proceeding due to false statements and misrepresentations about her assets. ( Id. )

On January 14, 2011, in Vonore, Tennessee, the Federal Bureau of Investigation (" FBI" ) executed a search warrant based on suspicion of criminal bankruptcy fraud. ( Id. at 3.) The FBI opened a safe, with a key supplied by O'Donnell, and found $149,460.00 in cash, valuable jewelry appraised at $102,105.11, and other items, all belonging to Kersch. ( Id. ; Def's Resp., at 1.) The FBI seized the items for evidence in the criminal prosecution of Kersch for bankruptcy fraud. (MSAF, at 3; Def's Resp., at 2) The FBI sent actual notice of the forfeitures by certified mail to the known owner of the contents of the safe, Kersch, and to her parents, Robert and Cheryl Mundle, who possessed the safe at the time of the seizure. (Def's Resp., at 2.) The FBI also published public notice of the forfeiture in the Wall Street Journal for three consecutive weeks. (Def's Resp., at 2.) Although O'Donnell filed a citation to discover assets to issue from the United States Bankruptcy Court for the Northern District of Illinois to the FBI in March 2011, no claims or petitions contesting the forfeiture were filed by the deadline of June 13, 2011. (MSAF, at 3; Def's Resp., at 2.) After review by the Legal Forfeiture Unit at the FBI, the properties were declared forfeited on January 31, 2012. (Def's Resp., at 2). On October 15, 2013, the FBI received a claim from O'Donnell, in which he notified them that he was a " priority unsecured creditor" of Kersch and had a lien against her assets. (Def's Resp., at 3.)

Kersch was indicted in the Northern District of Illinois for criminal bankruptcy fraud on February 23, 2013. ( United States v. Tara Kersch, 13-CR-169, Dkt #1; MSAF, at 3; Def's Resp., at 3.) Kersch filed a motion for return of property

Page 870

pursuant to Fed. R. Crim. P. 41(g), alleging improper forfeiture due to lack of notice. (13-CR-169, Dkt. #31; Def's Resp., at 3.) O'Donnell filed an opposition memorandum in addition to the government's opposition to the motion. (13-CR-169, Dkt. #36, 38; Def's Resp., at 3.) Judge Chang later denied Kersch's motion and found that she had received adequate notice of the forfeiture. (13-CR-169, Dkt. #39; Def's Resp., at 3-4.) On April 24, 2014, Kersch pled guilty to concealing assets amounting to criminal bankruptcy fraud and was sentenced to sixteen months in a federal penitentiary. (13-CR-169, Dkt. #45, 46, 74; MSAF, at 3; Def's Resp., at 4.) The District Court did not identify any victims entitled to restitution as part of Kersch's criminal sentence. (13-CR-169, Dkt. #74; Def's Resp., at 4.)

LEGAL STANDARD

When bringing a civil forfeiture action under the Civil Asset Forfeiture Reform Act (" CAFRA" ), the government bears the burden of proving, by a preponderance of the evidence, that the seized property is subject to forfeiture. 18 U.S.C. § 983(c); see also United States v. Funds in the Amount of Thirty ...


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