Tuesday, October 9, 2018

Case of the Day: United States v. Lamborghini Aventador LP700-4, 2018 U.S. Dist. LEXIS 133880 (E.D. Cal. Aug. 8, 2018)


Plaintiff United States filed an in rem civil forfeiture action against numerous pieces of property, including luxury vehicles, bank accounts, real properties and cryptocurrencies belonging to several individuals and entities affiliated with AlphaBay, the "eBay-style underworld marketplace." The forfeiture is connected with the criminal indictment issued against Alexandre Cazes, a Canadian citizen who was operating AlphaBay.

The court issued a default judgment as to the properties. The court found the complaint sufficiently alleged personal and subject matter jurisdiction, and there was sufficient notice through US government website and mail.


Many, many interesting aspects in this case. First of all, I always love case captions for an in rem action where it looks like the defendant is a piece of property. (Who's the lawyer for the Lamborghini?) But the substance of the case is even more interesting. AlphaBay is one of the largest "dark web" marketplaces, and Cazes was residing in Thailand when he was arrested. (He committed suicide eight days after the arrest, while being under Thai police custody.) The US court did not only feel comfortable ordering arrest of a Canadian citizen residing in Thailand; it also felt comfortable ordering the seizure of real estate located in Thailand. (How will the US court enforce its order if the real estate is under encumbrance?) 

Further, although AlphaBay had many transactions in cryptocurrency which is supposed to be untraceable, the US government had no trouble seizing the cryptocurrency belonging to Cazes and his affiliates. I always tell my clients that the supposedly "untraceability" of cryptocurrency is greatly overrated, and this is another case in point. It doesn't matter how well the transaction itself is encrypted, as long as there is an actual person sitting at the end of the transaction.

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