Free Reply - District Court of Arizona - Arizona

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PAUL K. CHARLTON United States Attorney District of Arizona Reid C. Pixler Assistant U.S. Attorney Arizona State Bar No. 12850 Two Renaissance Square 40 North Central, Suite 1200 Phoenix, Arizona 85004-4408 Telephone: (602) 514-7500 [email protected]

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA UNITED STATES OF AMERICA, Plaintiff, v. 1. Lear Jet, Model 31A, Serial Number 31A-224, U.S. Registration # N224LJ; 2. Agusta Helicopter, Model A109E, Serial Number 11116, Mexican Registration # XA-TSR; 3. Cessna Caravan, Model 208B, Serial Number 208B-0941, Mexican Registration # XA-TUF. Defendants. PRELIMINARY STATEMENT Plaintiff files this pleading in support of the entry of default judgment and in an effort to CIV-04-363-PHX-JWS
REPLY IN SUPPORT OF DEFAULT JUDGMENT AND IN OPPOSITION TO OBJECTION BY SIASA.

20 address the Objection filed by counsel for SIASA. The pleading filed by counsel for SIASA is 21 incomprehensible. SIASA admits that it filed a Statement of Interest on May 28, 2004. Counsel 22 for SIASA is an experienced federal court litigator and has participated, although unsuccessfully, 23 in numerous federal civil forfeiture actions. The objection is meaningless. All that it recites is 24 the consequences to SIASA of the entry of judgment. However, those consequences are directly 25 related to the fact that SIASA has chosen not to file and Answer and at the same time attempt 26 to obstruct or merely appear to obstruct the service of the in rem process of this Court in Mexico. 27 The purpose is apparently to be free to argue that the Court has no personal jurisdiction over 28 SIASA because it is not formally a party to this litigation. SIASA is either a party to this suit

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1 or it is not. If it is not, judgment should enter in favor of plaintiff, forfeiting the interest of 2 SIASA in the defendant aircraft. Based upon that judgment, plaintiff will cause to be dismissed 3 all of the amparos in Mexico. If SIASA is a party before this Court, the Court can order SIASA 4 to bring the defendant aircraft to Arizona. 5 6 ARGUMENT It is apparent that counsel for Abed/SIASA have been working together in an effort to

7 convince this Court there is a defect in the international service of the in rem warrants, pursuant 8 to the Mutual Legal Assistance Treaty. SIASA has participated in that process by both executing 9 a Substitute Custodian Agreement with the PGR in Mexico and then unilaterally breaching the 10 agreement in an effort to create standing for the use of the Mexican writ called an Amparo. The 11 point of this charade is to convince the Court that there are numerous Amparos filed around the 12 country which are supposed to prove that the Government of Mexico is not cooperating with the 13 Government of the United States regarding the service of in rem process executed by this Court. 14 In fact, the pleadings proposed and presented by counsel for Abed should cause this Court 15 substantial concern. The fact is it is apparent that counsel for SIASA have engaged in a very 16 visible form of forum shopping in Mexico to obtain an Amparo from a sympathetic or 17 "influenced court" in a jurisdiction unrelated to the base of operation of SAISA and inconvenient 18 to the PGR of Mexico. As quickly as the Amparos have been issued they have been lifted or 19 removed when the position of the government has been presented. Notice that one Amparo was 20 applied for in Quintana Roo and another was applied for in Toluca, and the location of the 21 "Twenty-Seventh Collegiate Court" is not mentioned. Quintana Roo is located on the Yucatan 22 Peninsula adjoining the Gulf of Mexico and Toluca is a mountain community near Mexico City. 23 What should be apparent is that SIASA has been required to run all over the country, continually 24 seeking a new order from a friendly judge unfamiliar with the history of the case. 25 The Amparo process is a temporary action to insure the review of the actions of the

26 government. Amazingly, a litigant such as SIASA is free to apply for as many Amparos as they 27 may choose at every step along the process, and the resolution of one Amparo does not 28 necessarily have any impact upon the next application. The process becomes the objective. At
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1 any given point in time SIASA can have a number of Amparos pending to prevent some action 2 until further review. The very fact that SIASA has to admit that the PGR continues to control 3 the aircraft and continues to engage and defeat the filings of SIASA, is proof positive that the 4 process has been served and is continuing to be pressed by the government of Mexico. 5 It is absolutely clearly the intent of the government of Mexico to serve the process, including

6 litigating all of the Amparo suits filed by SIASA. It is absolutely clear that Abed and his 7 attorneys will attempt to exploit the differences in the process and judicial procedures of these 8 two countries to try to convince this Court that the process has not been served. SIASA 9 attempted to obtain its first Amparo simply on the basis that the United States had requested the 10 service of the in rem process in Mexico, incorrectly assuming that the request would be made 11 to physically restrain the aircraft. For reasons explained in a previous pleading, plaintiff 12 requested the use of a constructive seizure and substitute custodian agreement, executed by 13 representatives of SIASA, to prevent exactly the type of activity now alleged regarding the loss 14 of revenue and harm occasioned by SIASA. 15 What has Abed/SIASA done related to the assertion of its interest in the defendant aircraft?

16 In the United States AbedSIASA has claimed that the Court has no jurisdiction over the res 17 unless the res is actually physically taken into custody. The United States disputes this false 18 argument, relies upon the substitute custodian agreement executed by the representatives of 19 SIASA, and that is the basis for the Motion to Reconsider the Order from Chambers of July 26, 20 2005. SIASA has appeared before the Court by filing a Statement of Interest and an objection 21 to plaintiff's Motion for Entry of Default. SIASA has not filed an Answer and default judgment 22 is appropriately before this Court. When judgment is entered in favor of plaintiff and the interest 23 of SIASA is awarded to plaintiff, through international requests, plaintiff will own the interest 24 of SIASA in the res and will order all of the Amparos in Mexico dismissed or withdrawn. Once 25 the obstacles intentionally placed in the record by Abed/SIASA have been removed, there will 26 be no doubt that the PGR and the government of Mexico is fully cooperating with the United 27 States in this joint investigation directed to an international bank fraud and money laundering 28 scheme which benefits only the possessors of the tainted assets.
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In Mexico Abed/SIASA has taken a different approach, 180 degrees opposite from that

2 which Abed/SIASA has taken in the United States. It accepted the execution of a substitute 3 custodian agreement which crippled the ability to apply for an Amparo. Because the aircraft 4 were not removed from the custody and control of the company, all that was required was the 5 payment of the lease to the PGR, pending resolution of the issues contained in this action. 6 SIASA clearly accepted the in rem process in the agreement. To force the issue into a situation 7 where Abed/SIASA could claim damage and have an ability to obtain multiple amparos, 8 Abed/SIASA forced a confrontation by refusing to pay the lease payments, as required in the 9 substitute custodian agreement. In response, according to the materials presented by Abed, the 10 PGR took the aircraft into custody. For the purpose of attempting to defeat the jurisdiction of 11 this Court, Abed/SIASA has filed multiple suits in Mexico seeking to temporarily block the 12 transfer or sale of the aircraft, providing a basis for counsel for Abed to misrepresent the 13 significance of the impact of these temporary order. These are intentional acts taken solely to 14 manipulate the record, create issues to cloud the ultimate focus on the administration of justice 15 i.e., the ownership of the funds used to acquire the aircraft, and to confuse and mislead this 16 Court. 17 As an alternative, the Court has before it all of the claimants to this action who file pleadings

18 which urge the Court to find the service of in rem process has failed, while at the same time 19 utilize the unique Mexican judicial process to avoid or prevent compliance by Mexico with the 20 MLAT treaty it has with the United States. To clarify what is really the obstacle, plaintiff urges 21 this Court to consider ordering Abed/SIASA to bring the two aircraft to the United States 22 District of Arizona, in obedience to the service of the of in rem process. If Abed/SIASA no 23 longer has a basis in Mexico to support the amparo claims that the government of Mexico is 24 acting in an unconstitutional manner, then the obstacles disappear. If Abed/SIASA cannot 25 comply with the order of this Court because the government of Mexico cannot comply with the 26 Order of the Court, then it is apparent that in rem process and the MLAT procedure has failed. 27 This approach would also provide an immediate solution regarding the continued storage and 28 maintenance expenses incurred by the Republic of Mexico in serving these warrants. As the
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1 Court is aware, the expenses associated with maintaining aircraft are huge, and the consequences 2 of improperly caring for the aircraft are extreme. Mexico wishes to avoid these expenses by 3 quickly selling the aircraft and limiting its liability. It has advised that it needs the approval of 4 this Court to sell the aircraft. Continued delay in addressing this issue only magnifies the 5 expenses and potential liability of Mexico in the service of the warrants issued by this Court. 6 Requiring the aircraft to be brought to Phoenix by SIASA cures all of the issues before this 7 Court. 8 The Court has personal jurisdiction over the claimants appearing before the Court and can

9 enter such an order to enforce its jurisdiction. See Barnstead Broadcasting Corp. V. Offshore 10 Broadcasting Corp. 869 F.Supp 38 (D.D.C. 1994); Burger King v. Radzwiz, 471 U.S. 462 11 (1985); Hanson v. Denkla, 357 U.S. 235 (1958). SIASA has no more than a possessory interest 12 in defendants 2 and 3, modified by the execution of the Substitute Custodian Agreement. As the 13 result of a breach of that agreement, SIASA no longer has possession of the res now in the 14 custody of the government of Mexico. The actions of Abed and Ross Castillo involved in money 15 laundering activity within the District of Arizona may be imputed to SAISA and all of the other 16 shell or front companies appear in this action. See Duoe v. Unocal Corp., 448 F.3d 915, 92517 931 (9th Cir. 2001). The personal jurisdiction over SIASA is also supported by the fact that 18 SIASA has filed a statement of interest and an objection to entry of default, and therefore has 19 clearly appeared in this action seeking to recover its interest in the three defendants. See Giusto 20 v. Ashland Chem. Co., 994 F. Supp 587 (E.D. PA. 1998). In short, if SIASA has any interest 21 in the defendant aircraft, then this Court can order SIASA to bring the Aircraft to Arizona and 22 to stop interfering with the service of the warrants. If SIASA no longer as an interest in the 23 aircraft, either due to its failure to comply with the Substitute Custodian Agreement with the 24 PGR or for any other reason in Mexico, or due to the award of Judgment of its interest in the 25 United States, then the issue regarding the significance of the Amparos is moot. Either the 26 recognition that in rem process has been served on these aircraft in Mexico or the alternative of 27 entry of Judgment forfeiting the interests of SIASA in the defendant aircraft to plaintiff will 28 resolve the issues.
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SUMMARY There is no basis alleged in the Objection of SIASA which justifies the appearance in this

3 action and the failure to file an Answer. Counsel for SIASA has provided no explanation 4 whatever for the failure to file and Answer. There is no question that the sole effort by any of 5 the claimants to litigate this case has been focused upon SIASA and its activity with the aircraft 6 in Mexico. The concept of fundamental fairness requires a court somewhere to hear the 7 allegations of the fraud and money laundering which have deprived Inverlat Bank of the funds 8 stolen from it by Ross Castillo and his colleagues. If SIASA seeks to be an obstacle but not a 9 participant in the resolution of this matter, then judgment should be entered. The important thing 10 is to progress to the merits of the case and contribute no more delay to the maliciously false and 11 indefensible allegations of the Abed claimants. Plaintiff urges this Honorable Court to quickly 12 enter judgment of forfeiture of the interest of SIASA in favor of the Untied States. 13 Respectfully submitted this 6th day of October, 2005. 14 15 16 17 S/ Reid C. Pixler 18 19 20 21 22 23 24 25 26 27 28
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PAUL K. CHARLTON United States Attorney District of Arizona

REID C. PIXLER Assistant U.S. Attorney

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Leonard J McDonald, Jr Tiffany & Bosco PA Camelback Esplanade II 2525 E Camelback Rd 3rd Floor Phoenix, AZ 85016 Cynthia Eva Hujar Orr Goldstein Goldstein & Hilley 2900 Tower Life Bldg 310 S St Mary's St, Ste 2900 San Antonio, TX 78205 [email protected] K Lawson Pedigo Miller Keffer & Pedigo 8401 N Central Expressway , Ste 630 Dallas, TX 75225 [email protected]

CERTIFICATE OF SERVICE
I hereby certify that on October 6, 2005, 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: Allen B Bickart Law Office of Allen B Bickart PO Box 44005 Phoenix, AZ 85064 [email protected] Douglas F Behm Jennings Strouss & Salmon PLC Collier Ctr 201 E Washington St, Ste 1100 Phoenix, AZ 85004-2385 [email protected]

I hereby certify that on October 6, 2005, I served the attached document by U.S. mail, who are not registered participants of the CM/ECF System:

Marc S. Nurik Ruden McClosky Smith Schuster & Russell, PA PO Box 1900 Ft Lauderdale, FL 33302

S/

Victoria Tiffany

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