The opinion
11 McGREGOR W. SCOTT
United States Attorney
22 ANDRE M. ESPINOZA
KEVIN C. KHASIGIAN
33 Assistant U.S. Attorney
501 I Street, Suite 10-100
44 Sacramento, CA 95814
Telephone: (916) 554-2700
55
Attorneys for the United States
66
77
88 IN THE UNITED STATES DISTRICT COURT
99 EASTERN DISTRICT OF CALIFORNIA
1100
1111 UNITED STATES OF AMERICA, 2:19-CV-00636-JAM-DB
1122 Plaintiff,
UNITED STATES’ REQUEST TO
1133 v. EXTEND THE DEADLINE TO
SUBMIT A JOINT STATUS REPORT
1144 REAL PROPERTY LOCATED AT 5383 FROM SEPTEMBER 12, 2019 TO
STONEHURST DRIVE, MARTINEZ, NOVEMBER 12, 2019
1155 CALIFORNIA CONTRA COSTA COUNTY,
APN: 367-230-018-7, INCLUDING ALL
1166 APPURTENANCES AND IMPROVEMENTS
THERETO, et al.,
1177
Defendants.
1188
1199 The United States submits the following Request to Extend the Deadline to file a Joint Status
2200 Report from September 12, 2019 to November 12, 2019.
2211 Introduction
2222 On April 15, 2019, the United States filed a civil forfeiture complaint in rem against fourteen real
2233 properties (“defendant properties”) connected to fraud and money laundering crimes in the Eastern
2244 District of California and other areas. All known potential claimants to the defendant properties were
2255 served in a manner consistent with Dusenbery v. United States, 534 U.S. 161, 168 (2002) and the
2266 applicable statutory authority. Furthermore, public notice on the official internet government forfeiture
2277 site, www.forfeiture.gov, began on May 4, 2019, and ran for thirty consecutive days, as required by Rule
11 See ECF No. 4. A Declaration of Publication was filed on July 12, 2019, which set forth, among other
22 items, that publication on the government’s forfeiture website was complete on June 2, 2019. See Dkt.
33 40.
44 The United States has also lodged the complaint on the bankruptcy docket for DC Solar’s parent
55 company, In re Double Jump Inc., Case 19-bk-50102, a bankruptcy case filed in Reno, Nevada after the
66 United States executed federal search and seizure warrants at DC Solar’s business and other locations in
77 California associated with the company and its founders. The United States’ application for a
88 restraining order, Dkt. 42, describes the United States’ law enforcement action, the subsequent Reno
99 bankruptcy filings, DC Solar’s reorganization efforts, the conversion from a Chapter 11 bankruptcy case
1100 to a Chapter 7, and recent litigation involving the Chapter 7 bankruptcy trustee.
1111 Good Cause
1122 The United States has provided notice to all potential claimants pursuant to law. Specifically,
1133 the defendant properties are collectively owned by Jeffrey and Paulette Carpoff personally and through
1144 several LLCs, Dora Dog Properties, LLC, Dog Blue Properties, LLC, 475 Channel Road, LLC, 2750
1155 Maxwell Way, LLC, Fou Dog, LLC, Antioch Mini Storage, LLC, and 4021 Pike Lane, LLC. The
1166 government served copies of the complaint documents on the above LLCs through their registered agent
1177 for service of process, as listed on the California Secretary of State’s website. Further, the government
1188 served copies of the complaint on the principals of each respective LLC, Jeffrey and Paulette Carpoff.
1199 Lastly, the government has provided notice of this action to the lienholders who are identified on chain-
2200 of-title documents and may have a security interest in the defendant properties.
2211 Five parties have so far appeared in the case. First, the only parties who have asserted an
2222 ownership interest, Jeff and Paulette Carpoff, filed claims as to each property in their personal capacity
2233 and through their LLCs. See Dkt. 27-28. Second, a bank filed claims concerning outstanding loans as
2244 relates to two In Rem Defendants (2750 Maxwell Way and 4021 Pike Lane) currently being sold by the
2255 U.S. Marshals Service, as discussed below. Dkt. 6-7. Third, a construction company filed a claim and
2266 answer associated with labor/materials supplied in connection with retaining walls installed at one of the
2277 In Rem Defendants. Dkt. 37. Fourth, Dish Network, a provider of cable and television services, filed a
11 California Franchise Tax Board (“FTB”) filed a claim to several of the In Rem Defendants based on
22 alleged taxes owed to the FTB by Jeff and Paulette Carpoff. Dkt. 35. The FTB and Daysh Development
33 filed answers.
44 No other party has filed an answer. However, based on the claimants’ requests for additional
55 time to review the allegations and potential privilege issues and other defenses, and given the lengthy
66 facts and complicated issues in this case, the United States has agreed to their requests for more time.
77 The answers are currently due on October 15, 2019.
88 Furthermore, several potential tax equity investor-victims and the Chapter 7 and 11 bankruptcy
99 trustees have requested extensions of time to file claims in this case. The United States granted each
1100 request and they currently have until October 7, 2019 to file a claim in the case.
1111 To allow the above individuals, entities, investors, and trustees sufficient time to file a claim and
1122 research the issues raised by the facts alleged in the Complaint, the United States seeks to continue the
1133 deadline to file a Joint Status Report from September 12, 2019 to November 12, 2019 (or to another date
1144 the Court deems appropriate).
1155 Accordingly, there is good cause to extend the deadline to file a joint status report in this case
1166 from September 12, 2019 to November 12, 2019, or to a date the Court deems appropriate.
1177
U.S. Marshals’ Efforts to Manage and Sell In Rem Defendants
1188 2750 Maxwell Way and 4021 Pike Lane
1199 As explained in the United States’ application for a restraining order, 2750 Maxwell Way and
2200 4021 Pike Lane were purchased using a combination of alleged fraud proceeds and millions of dollars in
2211 bank loans, the latter which went into default status some months ago. To preserve the availability
2222 equity, the United States requested and this Court ordered, the U.S. Marshals to maintain and sell each
2233 property, and the U.S. Marshals started those efforts in earnest immediately following the entry of the
2244 sale order in May 2019.
2255 Particularly, the U.S. Marshals have secured each property, changed the locks and alarm codes,
2266 entered occupancy agreements with existing tenants, and taken other actions to ensure the properties are
2277 safe and properly monitored by professional custodians. The U.S. Marshals have also obtained
11 appraisals and title reports for each property, designated a point person for any property issues that arise
22 from tenants and/or other interested parties, and engaged an experienced commercial broker to market
33 and sell the properties. The broker listed the properties for sale in late May 2019 and reports significant
44 interest from local and institutional buyers. As to 4021 Pike Lane, several offers were submitted and the
55 strongest offer was accepted after a subsequent “best and final” round. The successful bidder has
66 waived all due diligence and the sale is expected to close any day, if it has not closed already.
77 According to the broker and U.S. Marshals, the anticipated sales figure for that property will likely
88 surpass its appraised value. As to 2750 Maxwell Way, an offer was accepted in July 2019, but that
99 buyer pulled out of escrow prior to waiving due diligence. The property has returned to the market and
1100 the U.S. Marshals represent that there has been strong interest from local owner-users.
1111
1122 Dated: 9/11/2019 McGREGOR W. SCOTT
United States Attorney
1133
1144
/s/ Kevin C. Khasigian
1155 ANDRE M. ESPINOZA
KEVIN C. KHASIGIAN
1166 Assistant U.S. Attorney
1177
1188
ORDER
1199
Pursuant to the United States’ request and good cause appearing, the Court makes the following
2200
order:
2211
The deadline to file a Joint Status Report is extended from September 12, 2019 to November 12,
2222
2019.
2233
IT IS SO ORDERED.
2244
2255
Dated: 9/11/2019 /s/ John A. Mendez____________
2266 JOHN A. MENDEZ
United States District Court Judge
2277