Free Status Report - District Court of Arizona - Arizona

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Gerald H. Goldstein TX Bar No. 08101000 Cynthia E. Orr TX Bar No. 15313350 Goldstein, Goldstein & Hilley 310 S. St. Mary's St., 29 th Floor San Antonio, Texas 78205 210-226-1463

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA UNITED STATES OF AMERICA, Plaintiff, versus 1. Lear Jet, Model 31A, Serial Number 31A-244, U.S. Registration No.N224LJ, Defendant. § § § § § § § § CIV-04-363-PHX-JWS STATUS REPORT

NOW COMES, ALBERTO ABED-SCHEBAIKAN, Calezar, Ltd., and Uptongrove, Ltd. and file this STATUS REPORT required by the Order granting a stay of these proceedings at Docket Number 173 as follows:

SALE OF LEAR JET 31A

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The undersigned have been advised that the defendant property, Lear Jet 31A,was sold at a public sale for $4.4 million pursuant to 28 U.S.C §2001(a), and this Court's Order at Docket Number 106.

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Assistant United States Attorney Michael Davitt plans to file a formal report regarding the sale upon the receipt of the report from Customs Agent Carlos Martel. Mr. Davitt and the undersigned have agreed to meet in order to discuss the allocation of expenses regarding the Lear Jet, consistent with this Honorable Court's "Order For Public Judicial Interlocutory Sale of Defendant 1" at Docket Number 106. Counsel will bring any disputed matters regarding 1

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expense allocation to this Court's attention in the event that they are not covered by this Court's previous order. Pursuant to this Honorable Court's order at Docket Number 106, the net proceeds of the sale are to be used to pay the outstanding taxes on the aircraft and the costs incurred to maintain the property since the seizure on September 14, 2002. Furthermore, "The net equity is to be held at the direction of this Court for hearing upon the issue of whether and how much of the proceeds may be applied to any claimant to the res. If the net proceeds are insufficient to pay the contract due between Bombardier Capital, Inc. (BCI) or if BCI is not successful in its claim against the defendant Lear Jet 31A, then this order

11 shall not affect any rights BCI may have to seek a deficiency judgment against 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 4. The undersigned conferred with Plaintiff's Counsel in regard to settlement discussions. Counsel will pursue such discussions. Uncertainty exists about the status of a criminal investigation by the Government. While Plaintiff's Counsel stated in conference with the undersigned that the criminal PENDING CRIMINAL INVESTIGATON its obligor or its guarantor, the Defendant, and other company or individual which BCI may have, pursuant to the terms of the contract. No deficiency resulting from a sale pursuant to this order shall be a basis for action or recovery against the United States or any agency or personnel thereof. The remaining proceeds shall be deposited in the Registry of the Court, and shall be substituted as the defendant res in this action." Order for Public Judicial Interlocutory Sale of Defendant 1, at page 7, Docket Number 106.

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investigation, presumably, of Mr. Abed, Uptongrove, Ltd. and Calezar, Ltd. is currently inactive, the undersigned is uncertain regarding the status of the Plaintiff's investigation. Mexican counsel, Juan Jose Salinas, advised the undersigned that Mexican authorities have made the dismissed Defendants 2 and 3, Augusta and Cessna aircraft, subject to Aseguramiento and continue to defend this provisional security of the aircraft. The aircraft are still being flown but are under a protective order to prevent their sale or transfer. While the undersigned has no ability to determine the credence of Mexico's representations in the current Aseguramiento litigation, the reason given Mr. Salinas for that proceeding is

11 the United States' criminal investigation. The Aseguramiento could possibly 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 6. be proceeding in error. Counsel is not aware that the Plaintiff has obtained any additional information tending to show any knowledge by Mr. Abed, Uptongrove Ltd., or Calezar, Ltd. of Ross' wrongdoing. Therefore, Claimants respectfully request that this Honorable Court's analysis in its "Order From Chambers [Re: Motions at Dockets 153, 156, 159, 161, and 171]" is correct and therefore, the Court must continue to stay the proceedings against Mr. Abed. As this Honorable Court rightfully found "[I]ndividuals who show how civil proceedings might prejudice them in a criminal case may be entitled to a stay of the civil proceedings. In light of that case law, Subsection 981(g)(2) should be read as acknowledging the same dilemma and resolving it by making a stay mandatory instead of discretionary. Because Abed faces that dilemma, the court must stay these proceedings." Order From Chambers [Re: Motions at Dockets 153, 156, 159, 161, and 171], p. 7, Docket Number 106.

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Respectfully submitted,

GERALD H. GOLDSTEIN Bar No. 08101000 CYNTHIA EVA HUJAR ORR Bar No. 15313350 GOLDSTEIN, GOLDSTEIN & HILLEY 310 S. St. Mary's St. 29 th Floor Tower Life Bldg. San Antonio, Texas 78205 210-226-1463 210-226-8367 facsimile BY: ________/s/_______________________ Cynthia E. Orr

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CERTIFICATE OF SERVICE I HEREBY CERTIFY that on August 21, 2006, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Reid Pixler Assistant United States Attorney 2 Renaissance Sq. 40 N. Central, Ste. 1200 Phoenix, Arizona 85004-4408 [email protected] Allen B. Bickart 6508 N. 10 th Place Phoenix, Arizona 85014 [email protected] Douglas F. Behm Jennings Strouss & Salmon P.L.C. Collier Cntr. 201 E. Washington St., Ste. 1100 Phoenix, AZ 85004-2385 [email protected] Lawson Pedigo Miller, Keffer & Pedigo 8401 N. Central Expressway, Ste. 630 Dallas, Texas 75225 [email protected] Walter B. Nash III P.O. Box 2310 Tucson, AZ 85702 [email protected] Natman Schaye Chandler & Udall, L.L.P. 33 N. Stone Ave., Ste. 2100 Tucson, AZ 85701 [email protected]

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and via U.S. Mail, first class, on August 22, 2006 to the following who are not registered participants of the CM/ECF: Jennifer Collins Mark Hopson Sidley, Austin, Brown & Wood 1501 "K" Street, N.W. Washington, D.C. 20005 Geoffrey Young Ruden McClosky 150 2 nd Ave., Suite 1700 St. Petersburg, FL 33701 Marc S. Nurik, Esq. Ruden, McClosky, Smith, Schuster & Russell, P.A. 200 East Broward Blvd., Ste. 1500 P.O. Box 1900 Ft. Lauderdale, FL 33302 and Leonard J. McDonald, Jr. Tiffany & Bosco, P.A. 2525 E. Camelback Rd. Phoenix, AZ 86015-4237 Michael Davitt 1400 New York Ave. Washington, D.C. 20005

__________/s/_______________________ Cynthia E. Orr

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