United States of America’s Motion for Disbursement of $67,420.89 to Mercedes Benz Financial Services USA LLC from Net Proceeds Minus Storage Fees, Costs, and Expenses from the Interlocutory Sale of the 2018 Mercedes Benz G63 AMG, ECF No. 40, and Order — United States v. Chapon (Dkt. 44, D. Nev.)

Summary

On June 8, 2021, the United States asked the District of Nevada to let it disburse $67,420.89 by ACH to pay off the lien of Mercedes Benz Financial Services USA LLC on a gray 2018 Mercedes Benz G63 AMG held in the name of Karen Chapon, aka "Karen Hannafious." The motion says Chapon bought the vehicle in June 2020 for $105,995 plus a $695 documentary fee, paid $49,987.73 down from fraudulently obtained illegal proceeds, financed $65,000 and never made a car payment. The United States Marshals Service sold the vehicle in an interlocutory sale on April 12, 2021 for $105,000 and took $10,511.24 for storage fees, costs and selling expenses, leaving net sale proceeds of $94,488.76. The motion argues that the lien keeps accruing interest, which reduces the net proceeds. The attached order bears the name of Judge James C. Mahan and is dated June 25, 2021.

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Case 2:20-cr-00286-JCM-NJK Document 44 Filed 06/08/21 Page 1 of 4



 1 CHRISTOPHER CHIOU
   Acting United States Attorney
 2 District of Nevada
   Nevada Bar No. 14853
 3 DANIEL D. HOLLINGSWORTH
   Assistant United States Attorney
 4 Nevada State Bar No. 1925
   501 Las Vegas Boulevard South, Suite 1100
 5 Las Vegas, Nevada 89101
   (702) 388-6336
 6 Daniel.Hollingsworth@usdoj.gov
   Attorneys for the United States
 7

 8
                                UNITED STATES DISTRICT COURT
 9                                   DISTRICT OF NEVADA

10 UNITED STATES OF AMERICA,                          2:20-CR-286-JCM-NJK

11                 Plaintiff,                         United States of America’s Motion for
                                                      Disbursement of $67,420.89 to Mercedes
12          v.                                        Benz Financial Services USA LLC from net
                                                      proceeds minus storage fees, costs, and
13 KAREN CHAPON,                                      expenses from the Interlocutory Sale of the
       aka “Karen Hannafious,”                        2018 Mercedes Benz G63 AMG, ECF No.
14                                                    40, and Order
             Defendant.
15

16          The United States requests this Court enter an order authorizing the government to

17 disburse $67,420.89 by ACH to pay off the lien of Mercedes Benz Financial Services USA

18 LLC (Mercedes Benz LLC) from the net proceeds minus the cost of storage and expenses

19 from the interlocutory sale of the gray 2018 Mercedes Benz G63 AMG sports utility vehicle

20 VIN WDCYC7DH6JX291626 (2018 Mercedes) held in the name of Karen Chapon, aka

21 “Karen Hannafious,”(Chapon), listed in the forfeiture allegations of the Criminal

22 Indictment (Indictment), ECF No. 22.

23          The grounds for granting this motion are as follows. First, the lien on the 2018

24 Mercedes continues to accrue interest. Second, the sooner the 2018 Mercedes unpaid

25 vehicle loan is paid in full, the more net sale proceeds will exist. Third, this Court is

26 authorized to approve the distribution of funds from interlocutory sales.

27          This Motion is made and is based on the papers and pleadings on file herein and the

28 attached Memorandum of Points and Authorities, and the attached Exhibits.

           Case 2:20-cr-00286-JCM-NJK Document 44 Filed 06/08/21 Page 2 of 4



 1                    MEMORANDUM OF POINTS AND AUTHORITIES

 2   I. STATEMENT OF THE CASE

 3          A. Procedural History

 4          The Grand Jury returned a Seven-Count Indictment, alleging forfeitures against

 5   Chapon, including, among other things, the 2018 Mercedes, ECF No. 22. This Court

 6   scheduled the jury trial for December 14, 2020, ECF No. 26. Chapon requested

 7   continuances of the trial, and this Court granted them, scheduling the jury trial for

 8   November 1, 2021, ECF Nos. 32, 33, 37, 39, 41.

 9          The government filed a Motion for Interlocutory Sale of the 2018 Mercedes, ECF

10   No. 34. Chapon failed to respond, and the government filed a Reply to Chapon’s Failure to

11   Respond to Government’s Motion for Interlocutory Sale, ECF No. 38. This Court ordered

12   the interlocutory sale of the 2018 Mercedes, ECF No. 40.

13          B. Statement of Facts

14          In June 2020, Chapon bought the 2018 Mercedes for $105,995 plus a documentary

15   fee of $695 for a total of $106,690. She made a down payment of $49,987.73 from

16   fraudulently obtained illegal proceeds and financed $65,000 at 7.64% annual percentage rate

17   with the total cost including interest at $81,493.92 with payments of 72 months at $1,131.86

18   per month. Chapon never made a car payment towards the 2018 Mercedes. ECF Nos. 22,

19   34; Exhibit (Ex.) 1, Declaration of Federal Bureau of Investigation Special Agent (FBI SA)

20   Thomas Lydiksen; Ex. 2, Vehicle Purchase Contract; Ex. 4, Mercedes Payoff Letter, all of

21   which are attached hereto and incorporated herein by reference as if fully set forth herein.

22          The FBI seized the 2018 Mercedes. On September 8, 2020, the United States

23   Marshals Service (USMS) took custody of the 2018 Mercedes, and it began to accrue

24   storage fees, costs, and expenses. Ex. 1. On April 12, 2021, the USMS sold the 2018

25   Mercedes through an interlocutory sale for $105,000. The USMS took $10,511.24 for

26   storage fees, costs, expenses, and costs of selling. 21 U.S.C. § 853(g); 19 U.S.C. §§ 1609(a)

27   1611, and 1613(a) and (b). The net sale proceeds are $94,488.76. Ex. 3, USMS Interlocutory

28   Sale Proceeds, attached hereto and incorporated herein by reference as if fully set forth


                                                    2

            Case 2:20-cr-00286-JCM-NJK Document 44 Filed 06/08/21 Page 3 of 4



 1   herein. The United States has not yet paid off Mercedes Benz LLC’s currently due lien of

 2   $67,420.89 on the 2018 Mercedes. Ex. 4; Ex. 5, ACH form, attached hereto and

 3   incorporated herein by reference as if fully set forth herein.

 4   II. ARGUMENT

 5          This Court has authority to issue an Interlocutory Order of Sale. See Fed. R. Crim. P.

 6   32.2(b)(7); Supplemental Rules for Admiralty or Maritime Claims and Assets Forfeiture

 7   G(7) of the Federal Rules of Civil Procedure (paying of lien in default). Some reasons for

 8   the interlocutory sale were Chapon’s default on the loan payment, the accruing interest on

 9   the lien, and the depreciating value of the 2018 Mercedes. Without paying off the lien, the

10   accruing interest will continue to reduce the net sale proceeds or the remaining illegal

11   proceeds. The interlocutory sale is meant to prevent the continue loss of the forfeitable asset.

12   Ex. 4 and Ex. 5. Paying off the lien will achieve its purpose.

13   III. CONCLUSION

14          For the foregoing reasons, the Court should order the USMS to pay $67,420.89 in

15   full for the unpaid lien to Mercedes-Benz LLC from the net sale proceeds from the

16   interlocutory sale of the 2018 Mercedes.

17          Dated: June 8, 2021.

18                                                Respectfully submitted,
19                                                CHRISTOPHER CHIOU
                                                  Acting United States Attorney
20
                                                  /s/ Daniel D. Hollingsworth
21                                                DANIEL D. HOLLINGSWORTH
                                                  Assistant United States Attorney
22

23

24
                                                  IT IS SO ORDERED:
25

26                                                                                              _
                                                  JAMES C. MAHAN
27                                                UNITED STATES DISTRICT JUDGE
28                                                DATED: June 25, 2021


                                                     3

           Case 2:20-cr-00286-JCM-NJK Document 44 Filed 06/08/21 Page 4 of 4



 1                               CERTIFICATE OF SERVICE

 2         A copy of the foregoing was served upon counsel of record via Electronic Filing on

 3   June 8, 2021, and by

 4         Certified Mail Return Receipt and First Class Mail:

 5         Goldfein Attorneys at Law
           Gregory Mgrditchian, Attorney at Law
 6         140 East Ridgewood Avenue, Suite 415 South Tower
           Paramus, NJ 07652
 7
           Daimler Trust, Daimler Title Co., and Mercedes Benz Financial Services, LLC
 8         14372 Hermitage Parkway
           Fort Worth, TX 76177
 9

10

11                                                          /s/ Misty L. Dante
                                                            MISTY L. DANTE
12                                                          FSA Contractor Law Clerk
13

14

15

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