Government's Notice of Motion and Motion to Dismiss or for Summary Judgment — United States v. Cassie Will-Darnall (Dkt. 77)
Summary
The Government’s Notice of Motion and Motion to Dismiss or for Summary Judgment, filed July 25, 2025 as Document 77 in United States of America v. Cassie Will-Darnall, Case 5:24-cr-00292-PCP, in the U.S. District Court for the Northern District of California, San Jose Division. It asks for dismissal or summary adjudication of the claim to real property asserted in the petition of third party Sandra Will, with a hearing noticed for October 15, 2025, at 10:00 a.m. before the Honorable P. Casey Pitts. The government states that it relinquishes the forfeiture of the Almaden Property and argues that Will’s claim to the Belwood Property should be dismissed under 21 U.S.C. § 853(n)(6). It states forfeiture amounts of $746,372.98 for proceeds traced into the Belwood Property and $1,406,594.56 for the money judgment expected at sentencing.
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“Government's Notice of Motion and Motion to Dismiss or for Summary Judgment — United States v. Cassie Will-Darnall (Dkt. 77).”
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Case 5:24-cr-00292-PCP Document 77 Filed 07/25/25 Page 1 of 25
1 CRAIG H. MISSAKIAN (CABN 125202)
United States Attorney
2
MARTHA BOERSCH (CABN 126569)
3 Chief, Criminal Division
4 GALEN A. PHILLIPS (CABN 307644)
Assistant United States Attorney
5
450 Golden Gate Avenue, Box 36055
6 San Francisco, California 94102-3495
Telephone: (415) 436-7110
7 Email: Galen.Phillips@usdoj.gov
8 Attorneys for United States of America
9 UNITED STATES DISTRICT COURT
10 NORTHERN DISTRICT OF CALIFORNIA
11 SAN JOSE DIVISION
12
UNITED STATES OF AMERICA, ) CASE NO. CR-24-00292-PCP
13 )
Plaintiff, ) GOVERNMENT’S NOTICE OF MOTION AND
14 ) MOTION TO DISMISS OR FOR SUMMARY
v. ) JUDGMENT
15 )
CASSIE WILL-DARNALL, ) Date: October 15, 2025
16 ) Time: 10:00 a.m.
Defendant. ) Courtroom: Courtroom 8, 4th Floor
17 ) Judge: Honorable P. Casey Pitts
SANDRA WILL, )
18 )
)
19 Third Party Petitioner. )
)
20 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
21 PLEASE TAKE NOTICE that, on October 15, 2025, at 10:00 a.m., or as soon thereafter as the
22 parties may be heard, in Courtroom 8 of the Robert F. Peckham Federal Building and United States
23 Courthouse, the United States of America will and hereby does move for a dismissal or summary
24 adjudication of the claim to the real property located at 111 Belwood Gateway, Los Gatos, CA 95032,
25 APN 527-31-019, asserted in the petition filed by third party Sandra Will.
26 This motion is based on Federal Rule of Criminal Procedure Rule 32, the accompanying
27 Memorandum of Points and Authorities, the supporting declarations, the pleadings and documents on
28 file in this action, and any argument and evidence the Court may permit at the hearing.
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1 TABLE OF CONTENTS
2 Introduction…….....……………………………………………………………………………………….1
3 I. Factual and Procedural Background: ...............................................................................................5
4 A. The Government Published Notice Of The Preliminary Order Of Forfeiture
And Sent The Preliminary Order Of Forfeiture To Serenity And Plato, Though
5 Neither Has Asserted A Claim.............................................................................................5
6 B. The Government Attempted To Serve Will Through Her Former Counsel. .......................5
7 C. Will Filed a Claim Concerning Both the Almaden Property and the Belwood
Property. ...............................................................................................................................5
8
1. The Almaden Property’s Title History Reflects An Uncanny Parallel
9 To The Government’s Theory Of The Case, Evidencing Both Will’s
And Will-Darnall’s Familiarity With “Asset Protection.”.......................................5
10
2. Will Concedes That Will-Darnall Repaid Will’s $1,000,000 Loan And
11 That Will-Darnall Has Occupied the Belwood Property Continuously
Since 2012................................................................................................................7
12
3. Will, As A Third Party, Asserts A Constitutional Violation. ..................................8
13
D. Will-Darnall Has Persisted In Claiming She Does Not Own The Belwood
14 Property. ...............................................................................................................................9
15 II. Legal Standard .................................................................................................................................9
16 A. Statutory Framework of Ancillary Proceedings ..................................................................9
17 B. Standard of Review ............................................................................................................11
18 III. Argument .......................................................................................................................................12
19 A. Will’s Claim To The Belwood Property Should Be Dismissed Because the
2019 Deed of Trust Did Not Give Her An Interest Superior To Will-Darnall’s
20 Interest................................................................................................................................12
21 B. Will’s Claim To The Belwood Property Should Be Dismissed Because Her
Vested Interest In The Belwood Property Was Extinguished After Will-
22 Darnall Repaid Will’s $1,000,000 Loan. ...........................................................................13
23 C. Will’s Claim To The Belwood Property Should Be Dismissed Because Will
Cannot Meet The Elements Required Under § 853(n)(6)(B) And Her Failure
24 To Meet Any One Element Is Fatal. ..................................................................................14
25 1. Will Lacks A Legal Interest In The Belwood Property Because She
Received Title To The Property Through A Fraudulent Transfer. ........................14
26
2. Will Did Not Provide Anything Of Value In Exchange For The
27 Belwood Property. .................................................................................................17
28 3. Will Knew Or Should Have Known That The Belwood Property Was
Subject To Forfeiture When Transferred To Her. .................................................18
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1 D. While Will Lacks Standing From Asserting Constitutional Violations On
Behalf Of Will-Darnall, Forfeiture of the Belwood Property is Not an
2 Excessive Fine, In Any Event, Because It Is Proportional To Will-Darnall’s
Crimes. ...............................................................................................................................19
3
IV. Conclusion .....................................................................................................................................20
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1 TABLE OF AUTHORITIES
2 Cases
3 Aghaian v. Minassian, 59 Cal. App. 5th 447 (2020) ................................................................................ 14
4 Ashcroft v. Iqbal, 556 U.S. 662 (2009) ..................................................................................................... 11
5 Bailey v. Citibank, N.A., 66 Cal. App. 5th 335 (2021) ............................................................................. 12
6 Gates Rubber Co. v. Ulman, 214 Cal. App. 3d 356 (1989) ...................................................................... 12
7 Melendrez v. D & I Inv., Inc., 127 Cal. App. 4th 1238 (2005) ................................................................. 17
8 Monterey S. P. P’ship v. W. L. Bangham, Inc., 49 Cal. 3d 454 (1989) .................................................... 12
9 Nguyen v. Calhoun, 105 Cal. App. 4th 428 (2003)................................................................................... 13
10 RNT Holdings, LLC v. United Gen. Title Ins. Co., 230 Cal. App. 4th 1289 (2014) ........................... 17, 18
11 Singleton v. Hartford Fire Ins. Co., 127 Cal. App. 635 (1932) ................................................................ 13
12 Sprewell v. Golden State Warriors, 266 F.3d 979 (9th Cir. 2001) ........................................................... 11
13 United States v. Bajakajian, 524 U.S. 321 (1998) .................................................................................... 20
14 United States v. Coffman, 612 F. App’x 278 (6th Cir. 2015) ............................................................. 16, 19
15 United States v. Crew, 537 F. App’x 3 (2d Cir. 2013) ............................................................................. 16
16 United States v. Espada, 128 F. Supp. 3d 555 (E.D.N.Y. 2015) .............................................................. 19
17 United States v. Frykholm, 362 F.3d 413 (7th Cir. 2004)................................................................... 17, 18
18 United States v. Furando, 40 F.4th 567 (7th Cir. 2022) ........................................................................... 11
19 United States v. Gordon, 710 F.3d 1124 (10th Cir. 2013) .......................................................................... 9
20 United States v. Guerra, 216 F. App’x. 906 (11th Cir. 2007) .................................................................. 17
21 United States v. Gutierrez, 734 F. App’x. 441 (9th Cir. 2018)................................................................. 17
22 United States v. Lo, 839 F.3d 777 (9th Cir. 2016) .................................................................................... 20
23 United States v. Mar. Life Caribbean Ltd., 913 F.3d 1027 (11th Cir. 2019)............................................ 11
24 United States v. Miller, 911 F.3d 229 (4th Cir. 2018) .............................................................................. 16
25 United States v. Nava, 404 F.3d 1119 (9th Cir. 2005) .............................................................................. 10
26 United States v. Newman, 659 F.3d 1235 (9th Cir. 2011) ........................................................................ 19
27 United States v. Nicoll, 711 F. App’x. 108 (3d Cir. 2017) ....................................................................... 17
28 United States v. Omidi, 125 F.4th 1283 (9th Cir. 2025) ........................................................................... 20
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1 United States v. One Parcel of Land, Known as Lot 111–B, 902 F.2d 1443 (9th Cir.1990) .................... 16
2 United States v. Peterson, 820 F. Supp. 2d 576 (S.D.N.Y. 2011) ............................................................ 16
3 United States v. Pole No. 3172, Hopkinton, 852 F.2d 636 (1st Cir. 1988) .............................................. 16
4 United States v. Porchay, 533 F.3d 704 (8th Cir.2008)............................................................................ 19
5 United States v. Real Prop. Located at 5208 Los Franciscos Way, Los Angeles, Cal.,
6 385 F.3d 1187 (9th Cir. 2004) ........................................................................................................ 15, 16
7 United States v. Ribandeniera, 105 F.3d 833 (2d Cir. 1997).................................................................... 10
8 United States v. Rosin, 263 F. App’x 16 (11th Cir. 2008) ........................................................................ 19
9 United States v. Shepherd, 171 F. App’x 611 (9th Cir. 2006) .................................................................. 19
10 United States v. Soreide, 461 F.3d 1351 (11th Cir. 2006) ........................................................................ 10
11 United States v. Strube, 58 F. Supp. 2d 576 (M.D. Pa. 1999) .................................................................. 10
12 United States v. Tarraf, 725 F. Supp. 2d 625 (E.D. Mich. 2010) ............................................................. 19
13 United States v. Timley, 507 F.3d 1125 (8th Cir. 2007) ........................................................................... 10
14 Warth v. Seldin, 422 U.S. 490 (1975) ....................................................................................................... 19
15 Willis Mgmt. (Vt.), Ltd. v. United States, 652 F.3d 236 (2d Cir. 2011) ...................................................... 9
16 Winnett v. Roberts, 179 Cal. App. 3d 909 (1986) ..................................................................................... 13
17 Rules
18 Fed. R. Civ. P. 12 ...................................................................................................................................... 11
19 Fed. R. Crim. P. 32.2 ............................................................................................................................ 9, 11
20 Other Authorities
21 5 Cal. Real Est. § 13:2 .............................................................................................................................. 12
22 5 Cal. Real Est. §§ 13:11–14 .................................................................................................................... 13
23
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1 INTRODUCTION
2 Cassie Will-Darnall defrauded victims out of $2,833,554. She claims she is committed to
3 “ensuring that every penny is repaid.” Dkt. 59 (“PSR”), ¶ 35). But repayment—in the form of restitution
4 or forfeiture—will never happen if Will-Darnall is allowed to hide her assets.
5 In its application for a preliminary order of forfeiture, the government detailed Will-Darnall’s
6 efforts to hide the Belwood Property. 1 Dkt. 43 (the “Application”), at 7–11. 2 Among other things, Will-
7 Darnall:
8 1. recorded a deed of trust for a $3.25 million loan on June 27, 2019 (Ex. Q 3);
9 2. recorded a quitclaim deed transferring the property to a trust on August 15, 2019 (Ex. T);
10 3. recorded a deed of trust for a $1,900,850 loan on September 30, 2019 (Ex. U); and
11 4. signed a quitclaim deed transferring the property to her mother Sandra Will on June 20,
12 2020 (Ex. CC (the “2020 Quitclaim Deed”)), after Will-Darnall repaid Will’s $1,000,000
13 Loan with fraud proceeds.
14 None of these title documents reflect reality. Instead, Will-Darnall recorded them only to cloud
15 title and evade creditors, including the government now. As evidence, neither Serenity Family Limited
16 Partnership (“Serenity”) nor Plato Global Ventures LLC (Nevis) (“Plato”)—which each purportedly
17 loaned Will-Darnall millions and secured those loans with the above two deeds of trust—have asserted
18 any claim to the Belwood Property. In truth, neither likely ever loaned Will-Darnall a cent.
19 Only Will-Darnall’s mother, Sandra Will, filed a claim asserting an interest in the Belwood
20 Property. Dkt. 65 (the “Petition”). Will asserts that she has interests in both the Almaden Property and
21 the Belwood Property, that her interests in those properties were acquired before Will-Darnall’s crimes,
22 and that the properties’ forfeiture would constitute an excessive fine violating the Eighth Amendment. Id
23 All of this, she claims, requires the Court to remove both properties from the final order of forfeiture
24 announced at Will-Darnall’s sentencing. Id.
25
26
1
27 Defined terms retain the definitions provided in the Application.
2
Citations to ECF-filed documents refer to the ECF-provided page number.
28 3
Exhibit citations refer to exhibits filed with the Application, unless otherwise noted.
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1 The government has conceded since the start that Will owns the Almaden Property. Application,
2 at 6. And the government now relinquishes the forfeiture of the Almaden Property in this case. While
3 the government can seek forfeiture of property owned by a third party, it need not forfeit the Almaden
4 Property because—based on Serenity’s and Plato’s failures to file claims for the Belwood Property in
5 this ancillary proceeding—it appears the Belwood Property has sufficient equity to satisfy both the
6 forfeiture amount of the proceeds traced into that property—$746,372.98—and the forfeiture amount of
7 the money judgment expected to be entered at sentencing—$1,406,594.56. 4
8 Will’s efforts to prevent the forfeiture of the Belwood Property, however, are futile. To prevail
9 on her claim to all or part of the Belwood Property, Will must establish—by a preponderance of the
10 evidence—that she meets one, or both, of the grounds for relief available to a petitioner in an ancillary
11 proceeding under 21 U.S.C. § 853(n). Those grounds are: (1) that Will had a right, title, or interest in the
12 Belwood Property that was either vested in Will or was superior to any right, title, or interest of Will-
13 Darnall’s at the time of the crimes; or (2) that Will was a bona fide purchaser for value of a right, title, or
14 interest to the Belwood Property. See 21 U.S.C. § 853(n)(6).
15 Will cannot meet either of these grounds, and her Petition as to the Belwood Property should be
16 dismissed for at least the following reasons:
17 First, Will has not pled adequate facts to assert a superior interest to Will-Darnall’s interest in
18 the Belwood Property under 21 U.S.C. § 853(n)(6)(A). In the Petition, Will bases her interest in the
19 Belwood Property on the deed of trust securing Will’s $1,000,000 Loan. Petition at 15–16; see also Ex.
20 J (the “2019 Deed of Trust”). Will, thus, claims that by securing a loan with a deed of trust she obtained
21 a “superior” interest to Will-Darnall, the property’s then titleholder. Id. But Will herself correctly
22 disposes of this exact logic on the preceding page of her Petition: “The existence of a deed of trust on [a]
23 property . . . does not change the conclusion [that the titleholder, not a lienholder, is the legal owner of
24 the property].” Petition at 15; see also id. (acknowledging that “A ‘deed of trust carries none of the
25 incidents of ownership of the property, other than the trustee’s right to convey upon default . . . .”).
26 Thus, as pled, the Petition does not state a colorable legal claim because the 2019 Deed of Trust did not
27
4
28 The government also seeks forfeiture of the 6846 Account. Because that forfeiture is
uncontested, the government does not address it here.
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1 provide Will with any “superior” interest to Will-Darnall in the Belwood Property when Will-Darnall
2 committed her crimes.
3 Second, Will has not pled adequate (let alone any) facts to support a claim that she had a vested
4 interest in the Belwood Property before Will-Darnall’s crimes, but that argument too would fail if
5 asserted. As a beneficiary to the 2019 Deed of Trust, Will would have had an interest in the Belwood
6 Property that had vested before Will-Darnall’s crimes in 2020 (though that interest was not superior to
7 Will-Darnall’s interest). But that argument fails because Will acknowledges that Will-Darnall repaid
8 Will’s $1,000,000 Loan. See Dkt. 65-1 (“Will Decl.”), ¶ 24 (“In May 2020, [Will-Darnall “sent me
9 [Sandra Will] a check that covered the outstanding balance on the Bank of America loan.”); see also Ex.
10 AA (check dated June 15, 2020, to Will “for 111 Bell payoff”). Because Will-Darnall repaid the loan
11 secured by the 2019 Deed of Trust, Will’s interest in the Belwood Property predicated on the 2019 Deed
12 of Trust has been extinguished.
13 Third, Will has not pled adequate (let alone any) facts to support a claim that she is a bona fide
14 purchaser for value of the Belwood Property, which requires she establish: (1) an ownership interest in
15 the Belwood Property, (2) which she received in exchange for a thing of value, and (3) with no
16 awareness the government had a superior interest in the property at the time.
17 First, while, after the 2020 Quitclaim Deed, Will was listed as the owner on title of the Belwood
18 Property, there is abundant evidence (unrefuted, and even acknowledged by Will) that her daughter
19 Will-Darnall retained her ownership interest in the property after quitclaiming it to her mother,
20 including:
21 1. Will-Darnall has continuously resided in the Belwood Property since 2012 (Will Decl.,
22 ¶¶ 11–12, 23);
23 2. Will-Darnall earned income for herself from the Belwood Property after the purported
24 transfer by quitclaim to her mother Will, including $47,000 in tax year 2021 (Declaration
25 of Special Agent Huling (“Huling Decl.”), Ex. PP–QQ; see also Ex. RR);
26 3. Before repaying Will’s $1,000,000 Loan, Will-Darnall consistently characterized her
27 payments to Will as mortgage payments, not rent payments (Dkt. 65-7, at 5, 6, 8); and
28
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1 4. Since repaying Will’s $1,000,000 Loan, Will-Darnall has not paid Will any amounts for
2 Will-Darnall’s tenancy of the Belwood Property.
3 Thus, the 2020 Quitclaim Deed is a fraudulent transfer and is voidable as such.
4 Second, Will has not presented any evidence, documentary or otherwise, that she provided
5 anything of value for the 2020 Quitclaim Deed to the Belwood Property. This alone is fatal to her claim
6 for the Belwood Property under § 853(n)(6)(B).
7 Third, Will has not alleged, as she must, that she had no awareness of the government’s interest
8 in the Belwood Property when it was quitclaimed to her. Will simply cannot provide any credible
9 alternative explanation why Will-Darnall quitclaimed the Belwood Property to Will after having just
10 repaid Will’s $1,000,000 Loan. This is particularly so because Will-Darnall and Will have a history of
11 obfuscating title. Indeed, Will admits that she transferred the Almaden Property to Westward Properties,
12 Inc., a Nevada entity registered to a felon whose conviction stemmed from marketing “asset-protection
13 services” to its clients and its consultants, such as Will-Darnall. Given this history, Will knew or should
14 have known about the government’s interest in the Belwood Property when Will-Darnall quitclaimed it
15 to Will in exchange for no consideration.
16 Finally, while Will claims that forfeiture of both the Belwood Property and the Almaden
17 Property constitutes an excessive fine, the government has relinquished its claim to the Almaden
18 Property, and, as a third party without an interest in the Belwood Property, Will lacks any standing to
19 assert a constitutional violation stemming from its forfeiture. And, even if standing existed, the claim is
20 baseless because courts routinely acknowledge that the government may seek equivalent amounts for
21 forfeiture and restitution, both predicated on a defendant’s financial gain from the scheme to defraud,
22 which is what the government seeks here.
23 For these reasons and those that follow, the government respectfully submits that the Court in
24 entering a final order of forfeiture at sentencing should leave intact the preliminary order of forfeiture
25 contemplated by the Application, except for removing the Almaden Property from it.
26 ///
27
28 ///
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1 I. Factual and Procedural Background:
2 The government hereby supplements the record provided in the Application.
3 A. The Government Published Notice Of The Preliminary Order Of Forfeiture And
Sent The Preliminary Order Of Forfeiture To Serenity And Plato, Though Neither
4 Has Asserted A Claim.
5 On April 30, 2025, the Court entered the preliminary order of forfeiture. Dkt. 50. The
6 government published notice of the preliminary order of forfeiture from May 2, 2025, through May 31,
7 2025, on forfeiture.gov, an official internet government forfeiture site. Dkt. 60. On June 2, 2025, the
8 government served Serenity and Plato, both third parties with a potential interest in the Belwood
9 Property. Dkt. 61; see also Dkt. 47 (reflecting service of the Application and its exhibits on Serenity and
10 Plato). But neither Serenity nor Plato have appeared to contest forfeiture.
11 B. The Government Attempted To Serve Will Through Her Former Counsel.
12 On April 9, 2025, the government emailed copies of the Application to Will’s counsel in Sandra
13 Will v. United States et al., 24cv9030 (N.D. Cal.) (“Will’s Lawsuit”). Phillips Declaration (“Phillips
14 Decl.”), Ex. SS. On April 21, 2025, Will’s then counsel informed the government that its representation
15 of Will was limited to Will’s Lawsuit. Phillips Decl., Ex TT. The same day, the government served by
16 first-class mail the Application on Will at the Almaden Property. Dkt. 48.
17 On May 8, 2025, Will’s then counsel contacted the government, indicating he expected to
18 represent Will-Darnall. Phillips Decl., Ex. TT. That never happened. Instead, by May 23, 2025, Will had
19 retained new counsel and sought dismissal of Will’s Lawsuit. Will’s Lawsuit, Dkt. 15.
20 C. Will Filed a Claim Concerning Both the Almaden Property and the Belwood
Property.
21 On June 6, 2025, Will filed a petition asserting a claim to both the Almaden Property and the
22 Belwood Property.
23 1. The Almaden Property’s Title History Reflects An Uncanny Parallel To The
Government’s Theory Of The Case, Evidencing Both Will’s And Will-
24 Darnall’s Familiarity With “Asset Protection.”
25 Will contends that the title history of the Almaden Property is “simple.” Petition at 6. Of the
26 events that punctuate its “simple” history, the following two are worth highlighting:
27
28
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1 • On January 13, 2004, Will and her late husband, Robert Will, signed a quitclaim deed
2 transferring their interest in the Almaden Property to Westward Properties, Inc.
3 (“Westward”) (Huling Decl., Ex. UU); 5 and
4 • On May 13, 2004, William S. Reed, President of Westward, signed a quitclaim deed
5 transferring the Almaden Property to Sandra and Robert Will (Id., Ex. VV). 6
6 Will claims she “does not remember the circumstances surrounding” the transfer of the Almaden
7 Property to Westward. Petition at 2. Will’s inability to explain absolutely anything about such an
8 unusual and significant title transfer raises concerns. And the following public information about
9 Westward’s President, William S. Reed, who worked with Will and Will-Darnall to complete the above
10 transfers, compounds those concerns:
11 Reed was convicted in October of 2013 in the District of Nevada. Phillips Decl., Ex. XX. As a
12 part of that conviction, Reed agreed to the following facts:
13 • On or about November 4, 1998, Reed and his business partner signed an agreement
14 outlining a business venture, the Asset Protection Group, Inc. (“APG”) (Phillips Decl.,
15 Ex. YY at 15);
16 • From 1999 to mid-2006, APG operated with its sole office located at 4601 W. Sahara,
17 Suite #1, Las Vegas, Nevada (Id. at 16, 23);
18 • Reed authored a book entitled “Bulletproof Asset Protection,” which purported to teach
19 readers how to “hide” their assets from creditors, including the government (Id. at p 16);
20 • Reed helped clients hide assets by creating and using Nevada corporations that listed
21 Reed as the nominee officer (Id.).
22 • APG also offered clients “friendly liens.” These liens allowed APG clients to falsely
23 protect equity in their real estate holdings against creditors. Through a nominee
24
25 5
Notably, Will-Darnall participated in the transfer of the Almaden Property to Westward, as her
name (then Cassie Will) is listed twice on the document. Huling Decl., Ex. UU. She also appears to have
26 written “loans exceed value of property,” (id.), which is potentially the purported basis for the transfer.
6
27 Will asserts that Westward held title to the Almaden Property for only a month. Petition at 6.
That is an understandable error, given the unusual title history. In fact, it appears that Westward held
28 title to the Almaden Property for at least four months (from January 13, 2004, until May 13, 2004) and
potentially longer. See Huling Decl., Ex. WW (July 28, 2004, Quitclaim of the Almaden Property).
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1 corporation formed by APG, an APG client would execute a deed of trust in favor of the
2 corporation against the client’s property without any consideration (Id. at 17).
3 During their existence, APG and Westward shared an address. Huling Decl., Exs. ZZ, AAA.
4 The government supplements the public record with the following: Will-Darnall operated as a
5 consultant for APG. See Declaration of Special Agent Ryan Rickey (“Rickey Decl.”), ¶¶ 3–6. In APG’s
6 files Will-Darnall is listed as a consultant for Westward. Rickey Decl., ¶ 4. And Will-Darnall is
7 separately listed in APG’s files as serving as the consultant for “friendly liens” obtained from June 2004
8 through October 2005, associated with Louis Holdings and Wealth Protection, Inc. Id. ¶ 5. An APG
9 consultant is someone who paid for access to APG’s marketing materials. Id., ¶ 6. Consultants could
10 sign up clients for APG and sell them APG’s various products and services directly, receiving a cut of
11 the sales for their referrals. Id.
12 2. Will Concedes That Will-Darnall Repaid Will’s $1,000,000 Loan And That
Will-Darnall Has Occupied the Belwood Property Continuously Since 2012.
13
14 Will contends that the title and ownership history of the Belwood Property is “straightforward.”
15 Petition at 6. Despite this characterization, Will makes no effort to explain or even address the clouds on
16 title, including the deed of trust for Serenity’s $3.25 million loan (Ex. Q); the quitclaim deed transferring
17 the property to a trust (Ex. T); the deed of trust for Plato’s $1,900,850 loan (Ex. U); or even the 2020
18 Quitclaim Deed (Ex. CC), about which Will, as the recipient of title, might be expected to know
19 something, anything.
20 Will’s description of the Belwood Property’s title and ownership tracks the government’s
21 characterization in the Application, including the following:
22 • In obtaining the BofA Loan, Will repaid existing debts secured by the Almaden Property
23 and the Rosswood Property (Application at 6; Exs. D–E; Petition at 7; Will Decl. ¶ 19);
24 • Will used some of the BofA Loan and other money to pay off PLM Lender Services
25 Inc.’s loan to Will-Darnall secured by the Belwood Property, clearing the property’s title
26 of any arm’s-length loans (Application at 6; Ex. L; Petition at 7);
27 • Will-Darnall secured Will’s $1,000,000 Loan with the 2019 Deed of Trust (Application
28 at 6; Exs. I–J; Petition at 7); and
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1 • Will-Darnall repaid Will’s $1,000,000 Loan (Application at 11; ex. AA; see Will Decl.
2 ¶ 24).
3 Will also concedes that Will-Darnall has continuously occupied the Belwood Property since
4 2012. Will Decl., ¶ 11–12, and 23.
5 Against this backdrop, Will asserts that the 2019 Deed of Trust gave her a “superior” interest in
6 the Belwood Property to “any interest belonging to Ms. Will-Darnall.” Petition at 15–16. Will further
7 claims that, as to the Belwood Property, she was the “landlord” and Will-Darnall was her “tenant.” See
8 Will Decl., ¶ 22.
9 Will insists this is true even though Will admits that Will-Darnall repaid the loan which was
10 secured by the 2019 Deed of Trust. 7 See Will Decl. ¶ 24. Will insists this is true even though Will’s own
11 evidence shows that Will-Darnall has not sent Will any amount concerning Will-Darnall’s tenancy of
12 the Belwood Property beyond the amounts owed for Will’s $1,000,000 Loan. See Will Decl., ¶ 22
13 (detailing payments from January 2018 until March 2020). And Will insists this is true even though
14 Will’s own exhibits similarly reflect that Will-Darnall characterized her payments to Will not as rent
15 payments but as mortgage payments. E.g., Dkt. 65-7, at 5 (“Belwood mortgage”); 6 (“Belwood
16 mortgage may”); 8 (“June payment mortg. Bel”); see also Ex. AA (“for 111 Bel payoff”).
17 Finally, despite claiming Will-Darnall is simply a tenant of the Belwood Property, Will does not
18 address why her purported tenant, Will-Darnall, earned income from a “rental on site” at the Belwood
19 Property, including more than $47,000 from AirBnb in tax year 2021. See Huling Decl., Exs. PP–QQ;
20 see also Ex. RR (asserting Will-Darnall’s rent for the Belwood Property was “1500$ per month”).
21 3. Will, As A Third Party, Asserts A Constitutional Violation.
22 In the longest section of the Petition, Will asserts that forfeiture of the Almaden and Belwood
23 Property would constitute an excessive fine. Petition at 16–19. Much of her argument is predicated on
24 the fact that Will herself has not been charged with any crime. Id. at 17. She also contends (incorrectly)
25
26 7
Will offers no explanation why the 2019 Deed of Trust was not extinguished with a deed of
27 reconveyance. Typically, the beneficiary and trustee of a deed of trust work together to reconvey title
with the trustee executing and recording a deed of reconveyance following the beneficiary’s request for
28 reconveyance. Cal. Civ. Code § 2941. Here, the trustee had no record of the 2019 Deed of Trust, which
provides at least a part of the answer. See Huling Decl., Exs. BBB–CCC.
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1 that the maximum fine for Count 1 is $1 million and the maximum fine for Count 2 is $250,000. Id.
2 at 18.
3 D. Will-Darnall Has Persisted In Claiming She Does Not Own The Belwood Property.
4 Will-Darnall and her attorney have asserted that the government have wrongfully sought the
5 forfeiture of Will’s properties. PSR, ¶ 78 (“Defense counsel advised the government is going after her
6 mother’s properties who had nothing to do with the underlying offense, as repayment of loans.”
7 (emphasis added)); see also Dkt. 73, at 2 (“[T]he government decided to take my mother’s house to pay
8 off my business loan.” (emphasis added)). And, in the financial condition section of her PSR, on advice
9 of counsel, Will-Darnall refused to provide any financial information, though she disclosed “a pending
10 civil case with U.S. District Judge Pitts,” (PSR ¶ 78), which the government understands to refer to
11 Will’s Lawsuit, not Will-Darnall’s.
12 II. Legal Standard
13 A. Statutory Framework of Ancillary Proceedings
14 The procedure by which a third party may seek to recover an alleged interest in forfeited
15 property in a criminal case is through the ancillary proceeding. See 21 U.S.C. § 853(n); 28 U.S.C.
16 § 2461(c) (incorporating procedure set forth in 21 U.S.C. § 853 into criminal forfeiture proceedings);
17 Fed. R. Crim. P. 32.2(c). “[T]he purpose of the ancillary proceeding is for the District Court . . . to
18 amend orders of forfeiture and apportion assets when one or more third parties claim an interest in the
19 property to be forfeited.” Willis Mgmt. (Vt.), Ltd. v. United States, 652 F.3d 236, 246 (2d Cir. 2011).
20 Only if a third party establishes a valid and superior interest in the forfeited property shall that property
21 be stricken in whole or in part from the final order of forfeiture. 21 U.S.C. § 853(n)(6). If, however, the
22 third party does not establish a valid and superior interest in the property, then the United States “shall
23 have clear title to property that is the subject of the order of forfeiture and may warrant good title to any
24 subsequent purchaser or transferee.” 21 U.S.C. § 853(n)(7). Thus, the sole purpose of the ancillary
25 proceeding under Section 853(n) is to determine ownership of a forfeited asset. See United States v.
26 Gordon, 710 F.3d 1124, 1167–8 (10th Cir. 2013) (noting “third-party ownership disputes are generally
27 deferred to ancillary proceeding” (cleaned up)).
28
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1
2 A third-party petition must be filed within 30 days of either final publication by the government
3 of notice of the forfeiture, or the claimant’s receipt of notice of the order of forfeiture, whichever is
4 earlier. 21 U.S.C. § 853(n)(2). Section 853(n)(3) further provides that:
5 The petition shall be signed by the petitioner under penalty of perjury and
shall set forth the nature and extent of the petitioner’s right, title, or
6 interest in the property, the time and circumstances of the petitioner’s
acquisition of the right, title, or interest in the property, any additional
7
facts supporting the petitioner’s claim, and the relief sought.
8 21 U.S.C. § 853(n)(3). Thus, a third party must set forth the legal basis and all grounds for her claimed
9 interest in the petition and may not later amend the petition to assert additional grounds for relief. United
10 States v. Soreide, 461 F.3d 1351, 1355 (11th Cir. 2006) (holding that claims not asserted in petition were
11 statutorily time-barred); United States v. Strube, 58 F. Supp. 2d 576, 585 (M.D. Pa. 1999) (rejecting
12 third-party claims as untimely because they were not raised in petition but first asserted in response to
13 government’s motion to dismiss).
14 To state a claim in an ancillary proceeding, a third-party petitioner must first establish a “legal
15 interest” in a particular asset within the meaning of 21 U.S.C. § 853(n)(2). See United States v.
16 Ribandeniera, 105 F.3d 833, 834–35 (2d Cir. 1997); see also United States v. Timley, 507 F.3d 1125,
17 1129 (8th Cir. 2007) (“[A] party seeking to challenge the government’s forfeiture of money or property .
18 . . must first demonstrate a legal interest in the seized item sufficient to satisfy the court of its standing to
19 contest the forfeiture.” (cleaned up)).
20 In determining whether a party has demonstrated a legal interest, a court must look to the law of
21 the jurisdiction that created the property right. United States v. Nava, 404 F.3d 1119, 1127 (9th Cir.
22 2005). The petitioner may prevail only upon showing, by a preponderance of the evidence, that:
23 (A) the petitioner has a legal right, title, or interest in the property, and
such right, title, or interest renders the order of forfeiture invalid in whole
24 or in part because the right, title, or interest was vested in the petitioner
rather than the defendant or was superior to any right, title, or interest of
25
the defendant at the time of the commission of the acts which gave rise to
26 the forfeiture of the property under this section; or
27 (B) the petitioner is a bona fide purchaser for value of the right, title, or
interest in the property and was at the time of purchase reasonably without
28
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1 cause to believe that the property was subject to forfeiture under this
section[.]
2
3 21 U.S.C. § 853(n)(6)(A), (B).
4 B. Standard of Review
5 Ancillary proceedings are governed by Federal Rule of Criminal Procedure 32.2(c), which
6 provides, in pertinent part: “[T]he court may, on motion, dismiss the petition for lack of standing, for
7 failure to state a claim, or for any other lawful reason. For purposes of the motion, the facts set forth in
8 the petition are assumed to be true.” Fed. R. Crim. P. 32.2(c)(1)(A). The ancillary proceeding, which
9 closely resembles a civil action, is generally governed by the same procedures as those set forth in the
10 Federal Rules of Civil Procedure. United States v. Mar. Life Caribbean Ltd., 913 F.3d 1027, 1036 (11th
11 Cir. 2019) (“[A]n ancillary proceeding conducted under section 853(n) . . . is civil in nature.”)
12 (collecting cases). Accordingly, a motion to dismiss a third-party petition in a forfeiture proceeding prior
13 to discovery or a hearing should be treated like a motion to dismiss a civil complaint under Rule 12(b) of
14 the Federal Rules of Civil Procedure.
15 When ruling on such motions, the court presumes the facts set forth in the petitions to be true.
16 Fed. R. Crim. P. 32.2(c)(1)(A); see also Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009). A court is not,
17 however, “required to accept as true allegations that are merely conclusory, unwarranted deductions of
18 fact, or unreasonable inferences.” Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).
19 As with motions to dismiss in civil cases, courts should allow the petitioner an opportunity to amend
20 unless it is beyond doubt that amendment could not cure the deficiencies. United States v. Furando, 40
21 F.4th 567, 579–80 (7th Cir. 2022) (remanding a petition that was dismissed for lack of subject matter
22 jurisdiction without first giving petitioner an opportunity to amend). And when the parties rely on
23 extrinsic evidence, the motion to dismiss may be converted to a motion for summary judgment, with all
24 parties given a reasonable opportunity to present pertinent material. Fed. R. Civ. P. 12(d).
25
26
27
28
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1 III. Argument
2 A. Will’s Claim To The Belwood Property Should Be Dismissed Because the 2019 Deed
of Trust Did Not Give Her An Interest Superior To Will-Darnall’s Interest.
3
4 Will argues that she had a “superior” interest in the Belwood Property to Will-Darnall in May
5 2020. Petition at 15 (citing 21 U.S.C. § 853(n)(6)(A)). Will bases this interest on the 2019 Deed of
6 Trust, claiming a lien gave her a superior interest to the property’s owner. Id. at 16.
7 Will’s position is baseless. Under California law, a beneficiary to a deed of trust (a secured
8 lender) does not have a superior interest to the trustor or settlor (the homeowner). See generally, 5 Cal.
9 Real Est. § 13:2 (4th ed.) (“While technically the ‘title’ to the property security is in the trustee, the
10 trustor retains the right to possession of the property and its rents and profits. The trustor can secure
11 another trust deed by a lien on the property . . . . The trustor retains the right to sell, transfer, or devise
12 the encumbered property, or grant an easement across it, without the consent of the beneficiary or
13 trustee, even though the beneficiary may be able to demand a payment of the debt as a result of the
14 transfer.”); see also Monterey S. P. P’ship v. W. L. Bangham, Inc., 49 Cal. 3d 454, 459–61 (1989); cf.
15 Cal. Civ. Code § 2898 (“A mortgage or deed of trust given for the price of real property, at the time of
16 its conveyance, has priority over all other liens created against the purchaser, subject to the operation of
17 the recording laws.” (emphasis added)).
18 Will acknowledges this is an accurate statement of California law in the preceding section of the
19 Petition when discussing the Almaden Property. Petition at 15. And Bailey v. Citibank, N.A., 66 Cal.
20 App. 5th 335 (2021), relied on by Will in her argument concerning the Belwood Property, does not
21 support a different conclusion.
22 In Bailey, the California Court of Appeal addressed whether a party’s adverse possession of a
23 property was adverse to a lender’s rights under a preexisting deed of trust, requiring the deed of trust to
24 be removed from title after the party obtained title by adverse possession. The court concluded that
25 “[b]ecause . . . a trust deed beneficiary does not have a right of possession, but stands in substance as a
26 lienholder, the occupation of the property by a person seeking to acquire title by adverse possession
27 would not be considered hostile to the trust deed beneficiary whose rights under the preexisting trust
28 deed would be unaffected.” Bailey, 66 Cal. App. 5th, at 353. Will nowhere alleges that Will-Darnall
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1 obtained her interest in the Belwood Property by adverse possession. In fact, she concedes that Will-
2 Darnall has held title since 2016. Petition at 7. Thus, Bailey does not support a different conclusion. 8
3 Because Will’s sole claim to the Belwood Property is legally deficient under California law, the
4 Petition should be dismissed as to the Belwood Property.
5 B. Will’s Claim To The Belwood Property Should Be Dismissed Because Her Vested
Interest In The Belwood Property Was Extinguished After Will-Darnall Repaid
6 Will’s $1,000,000 Loan.
7 Will could (but does not) argue that she had an interest in the Belwood Property that had vested
8 before Will-Darnall’s crimes based on the 2019 Deed of Trust. This argument (if made) would fail, too,
9 however, because Will admits that Will-Darnall repaid her the amounts owed under Will’s $1,000,000
10 Loan. Will Decl. ¶ 24; see also Application at 8 (asserting Will-Darnall “appeared to receive the value
11 of only $607,629.02”), 11 (asserting Will-Darnall repaid Will $971,504.21 with the June 15 Check).
12 Under California law, repayment of a loan extinguishes the obligation. Winnett v. Roberts, 179
13 Cal. App. 3d 909, 922 (1986) (“Any time before foreclosure, a tender of the full amount properly due on
14 a loan secured by a trust deed extinguishes the lien on the property . . . .”); Nguyen v. Calhoun, 105 Cal.
15 App. 4th 428, 440 (2003) (“In sum, on adequate proof that payment has been properly made or tendered,
16 the debt is satisfied and the lien is extinguished. If the lien has been extinguished, there can be no
17 foreclosure sale.”); Singleton v. Hartford Fire Ins. Co., 127 Cal. App. 635, 642 (1932) (“The very
18 moment the indebtedness ceases to exist and the note is canceled, there is an end to all other rights.”);
19 see also Cal. Civil Code § 1473.
20 Will might argue in her opposition that the 2019 Deed of Trust secured other loans to Will. She
21 hints at this argument when stating that she loaned “Will-Darnall well over $1 million.” Petition at 7.
22 But Will cannot use the 2019 Deed of Trust as a catchall, securing all amounts—past, present, and
23 future—ever loaned to Will-Darnall. Instead, the 2019 Deed of Trust secured only Will’s $1,000,000
24
8
25 Will also relies on Gates Rubber Co. v. Ulman, 214 Cal. App. 3d 356 (1989). Ulman is even
less helpful because there the California Court of Appeal addressed whether the holder of an unrecorded
26 option could exercise that option against a subsequent purchaser who acquired the property without
actual or constructive knowledge of the option. The court held that where the possession of a tenant with
27 an unrecorded option is consistent with the terms of a recorded lease that does not refer to an additional
unrecorded option to purchase, and there are no circumstances indicating the tenant has additional rights,
28 the purchaser does not have a duty to inquire of the tenant as to any other rights the tenant may possess.
Id. at 370.
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1 Loan as memorialized in the promissory note dated February 7, 2018. 9 Exs. I–J. Because Will-Darnall
2 repaid Will’s $1,000,000 Loan, the 2019 Deed of Trust has been extinguished, meaning Will no longer
3 has a vested interest in the Belwood Property based on it.
4 Thus, this additional argument under (n)(6)(A) would fail, too, if made.
5 C. Will’s Claim To The Belwood Property Should Be Dismissed Because Will Cannot
Meet The Elements Required Under § 853(n)(6)(B) And Her Failure To Meet Any
6 One Element Is Fatal.
7 Will could also (but does not) argue that she was a bona fide purchaser for value of the Belwood
8 Property under 21 U.S.C. § 853(n)(6)(B) based on the 2020 Quitclaim Deed. That argument if made
9 would fail for the following three reasons, though the Court need find in favor of the government as to
10 only one to dismiss Will’s claim to the Belwood Property under § 853(n)(6)(B).
11 1. Will Lacks A Legal Interest In The Belwood Property Because She Received
Title To The Property Through A Fraudulent Transfer.
12
13 Under the Uniform Voidable Transactions Act (California Civil Code §§ 3439–3439.12), 10 a
14 transfer of property is fraudulent as to both present and future creditors if it is made with actual intent to
15 hinder, delay, or defraud any creditor of the debtor. Cal. Civ. Code § 3439.04(a)(1).
16 Among the badges of fraud indicating an intent to hinder, delay, or defraud a creditor, a court
17 may consider whether: (1) the transfer was to an insider; (2) the debtor retained possession or control of
18 the property after its transfer; (3) the transfer was disclosed or concealed; (4) before the transfer, the
19 debtor had been threatened with litigation; (5) the transfer was of substantially all the debtor’s assets; (6)
20 the debtor absconded; (7) the debtor removed or concealed assets; (8) the value of the consideration
21 received by the debtor was reasonably equivalent to the value of the asset transferred; (9) the debtor was
22 insolvent or became insolvent shortly after the transfer was made; (10) the transfer occurred shortly
23 before or shortly after a substantial debt was incurred; and (11) the debtor transferred the essential assets
24
25 9
A lender may include a clause allowing it to secure with one deed of trust multiple obligations.
See generally, 5 Cal. Real Est. §§ 13:11–14 (4th ed.).The 2019 Deed of Trust and the promissory note
26 memorializing Will’s $1,000,000, however, are not drafted to include such a clause and Will nowhere
suggests they do.
27 10
The Act was formerly titled the Uniform Fraudulent Transfer Act (the “UFTA”), though in
28 2016 the California Legislature retitled it the Uniform Voidable Transaction Act (the “UVTA”). See Cal.
Civ. Code § 3439.
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1 of the business to a lienor that transferred the assets to an insider of the debtor. Cal. Civ. Code
2 § 3439.04(b). None of these factors is determinative, and no minimum or maximum number of factors is
3 required. Aghaian v. Minassian, 59 Cal. App. 5th 447, 456 (2020).
4 The record establishes that Will-Darnall transferred the Belwood Property to Will with the intent
5 to hinder, delay, or defraud:
6 1. Will-Darnall transferred the Belwood Property to her mother, Will, an insider;
7 2. Will did not provide anything let alone a thing of reasonably equivalent value in
8 exchange for the Belwood Property; 11
9 3. Will-Darnall has continuously resided in the Belwood Property since 2012 (Will Decl.,
10 ¶¶ 11–12, 23);
11 4. Will-Darnall earned income from the Belwood Property after its transfer to Will
12 including $47,000 in tax year 2021 (Huling Decl., Exs. PP–RR);
13 5. Will-Darnall never paid Will any rent for her tenancy of the Belwood Property, after
14 repaying Will’s $1,000,000 Loan (cf. Will Decl.¶ 22);
15 6. The quitclaim was concealed for four months, with Will delaying its recording until
16 October 19, 2020 (ex. CC);
17 7. Before the transfer, Will-Darnall had been threatened with litigation, namely the Civil
18 Suit (Application at 7) and should have expected a government investigation based on her
19 fraudulent loan applications; and
20 8. After Will-Darnall poured $746,372.98 of fraud proceeds into the Belwood Property and
21 just before quitclaiming it to Will, the Belwood Property constituted her largest asset.
22 Because the evidence supports the conclusion that Will-Darnall transferred her interest in the Belwood
23 Property with the intent to hinder, delay, or defraud, the Court may set aside the transfer and hold that
24 Will does not have a legal interest in the Belwood Property. Cal. Civ. Code § 3439.04(a)(1).
25
26
27 11
Because Will provided nothing of value in exchange for title to the Belwood Property, the
28 Court may separately set aside the transfer of title as constructively fraudulent. Cal. Civ. Code §
3439.04(a)(2).
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1 United States v. Real Prop. Located at 5208 Los Franciscos Way, Los Angeles, Cal., 385 F.3d
2 1187 (9th Cir. 2004) is dispositive because, there, the Ninth Circuit affirmed both the forfeiture of real
3 property and a holding that the transfer of the property was fraudulent under section 3494(a)(1) of the
4 UVTA on a similar record, including the following facts:
5 1. the defendant transferred the property to an insider, her parents;
6 2. the defendant did not receive reasonably equivalent value for the transfer;
7 3. the defendant retained control and possession of the property after the transfer;
8 4. the defendant delayed recording the transfer and continued to represent that she was the
9 property owner; and
10 5. the defendant knew she was being investigated by the government, when she transferred
11 the property.
12 Id. at 1191; see also, United States v. Peterson, 820 F. Supp. 2d 576, 581–83 (S.D.N.Y. 2011) (applying
13 California law and allowing forfeiture of real properties that had been transferred to domestic partner
14 through actual and constructive fraud), aff’d sub nom. United States v. Crew, 537 F. App’x 3 (2d Cir.
15 2013). Here, as in 5208 Los Franciscos Way, the record shows that Will-Darnall transferred her interest
16 in the Belwood Property with actual intent to hinder, delay, or defraud under the UVTA. 12
17 Thus, the Court should find that the transfer is void and that Will lacks an ownership interest in
18 the Belwood Property based on the 2020 Quitclaim Deed. See United States v. Coffman, 612 F. App’x
19 278, 286 (6th Cir. 2015). (“Bare legal title, however, in the absence of assertions of dominion, control or
20 some other indicia of ownership of or interest in the seized property, is insufficient to confer standing to
21 challenge a forfeiture. This is so because people engaged in illegal activities often attempt to disguise
22
23 12
Will may attempt to distinguish Los Franscisos by claiming that, there, the downpayment for
24 the property was composed entirely of fraud proceeds. That point is not apparent from the decision. But
if Will were to make that argument it would fail, as courts routinely hold real property is forfeitable
25 when just the mortgage payments, not the downpayment, are traceable to the offense of conviction. E.g.,
United States v. Miller, 911 F.3d 229, 234 (4th Cir. 2018) (rejecting defendant’s argument that “fraud
26 proceeds used to pay interest but not principal on a mortgage are not traceable to equity in a property”);
United States v. Pole No. 3172, Hopkinton, 852 F.2d 636, 639 (1st Cir. 1988) (“We agree that the
27 interest acquired as a result of mortgage payments made with the proceeds of drug transactions should
be forfeitable.”). A contrary holding would create the unusual circumstance in which a defendant could
28 acquire a home with a no-down-payment loan and then shield their crime proceeds from forfeiture
simply by making their mortgage payments.
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1 their interests in property by placing title in someone else’s name.” (cleaned up)); see also 18 U.S.C.
2 § 983 (excluding from definition of “owner” in civil forfeiture proceedings “a nominee who exercises no
3 dominion or control over the property”); United States v. One Parcel of Land, Known as Lot 111–B, 902
4 F.2d 1443, 1444 (9th Cir.1990) (per curiam) (“‘[P]ossession of mere legal title by one who does not
5 exercise dominion and control over the property is insufficient even to establish standing to challenge a
6 forfeiture.’”).
7 2. Will Did Not Provide Anything Of Value In Exchange For The Belwood
Property.
8
9 Under California law, to be a bona fide purchaser for value, the buyer must purchase the property
10 in good faith for value. RNT Holdings, LLC v. United Gen. Title Ins. Co., 230 Cal. App. 4th 1289, 1296
11 (2014). The value exchanged for the property need not be the “fair market value of the property (or
12 anything approaching it).” Melendrez v. D & I Inv., Inc., 127 Cal. App. 4th 1238, 1251 (2005). But the
13 buyer need part with “something of value in exchange for the property.” Id.
14 As detailed above, Will acknowledges that Will-Darnall repaid Will the amounts owed under the
15 2019 Deed of Trust and the promissory note memorializing Will’s $1,000,000 Loan. And Will has not
16 alleged that Will-Darnall received any amount in exchange for the Belwood Property when Will-Darnall
17 quitclaimed it to Will. In short, there is no evidence that Will gave anything of value for the Belwood
18 Property.
19 Thus, Will-Darnall’s transfer of the Belwood Property through the 2020 Quitclaim Deed is
20 nothing more than a gratuitous transfer, which is fatal to Will’s ability to establish that she was a bona
21 fide purchaser based on the 2020 Quitclaim Deed. See United States v. Gutierrez, 734 F. App’x. 441,
22 447 (9th Cir. 2018) (holding that petitioner could not establish that it was a bona fide purchaser for value
23 under 21 U.S.C. § 853(n)(6)(B) when “there was no evidence presented that [claimant] contributed its . .
24 . assets toward the purchase price of the property”); see also United States v. Frykholm, 362 F.3d 413,
25 417 (7th Cir. 2004) (petitioner who obtains an interest in insolvent defendant’s property without giving
26 something of equivalent value is engaged in a fraudulent conveyance and, thus, cannot be a bona fide
27 purchaser); United States v. Nicoll, 711 F. App’x. 108, 111 (3d Cir. 2017) (petitioner who purchased real
28 property with illegal proceeds she received as a gift from convicted defendant is not a bona fide
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1 purchaser under § 853(n)(6)(B)); United States v. Guerra, 216 F. App’x. 906, 910–11 (11th Cir. 2007)
2 (defendant’s husband was not a bona fide purchaser in terms of § 853(n)(6)(B) because he gave no
3 consideration in exchange for defendant’s transfer of her property).
4 3. Will Knew Or Should Have Known That The Belwood Property Was Subject
To Forfeiture When Transferred To Her.
5
6 California law requires that a bona fide purchaser have no knowledge or notice—actual or
7 constructive—of the asserted rights of another. RNT Holdings, LLC, 230 Cal. App. 4th at 1296. In the
8 context of forfeiture, this element addresses whether a petitioner had reason to know of the defendant’s
9 criminal activity and that the property defendant transferred to petitioner was subject to forfeiture.
10 Frykholm, 362 F.3d at 416 (holding that a petitioner who remains willfully blind cannot claim to have
11 been without reason to know that defendant’s property was subject to forfeiture); United States v.
12 Parenteau, 647 F. App’x. 601, 605 (6th Cir. 2016) (affirming dismissal of section 853(n) because at the
13 time petitioner obtained assignment of interest in forfeited property he was not reasonably without cause
14 to believe that property may be subject to forfeiture).
15 Will admits that Will-Darnall repaid her the amounts secured by the 2019 Deed of Trust. Will
16 Decl., ¶ 24. And Will claims not to know the repayment was the result of Will-Darnall’s fraud. Id. But
17 Will makes no effort to explain why her daughter—after repaying Will in full—would transfer the
18 Belwood Property to her. This fact alone merits the conclusion that Will should have known the
19 Belwood Property was subject to forfeiture. But there is more.
20 Will and Will-Darnall both previously were involved in transferring real property in an apparent
21 effort to avoid creditors, including the government. While Will does not remember the circumstances of
22 the Almaden Property’s transfer to Westward, she does not claim to have forgotten Will-Darnall’s
23 involvement with APG, generally. In that role, Will-Darnall consulted individuals, including likely her
24 parents, in strategies to hide property from the government. Given this history and its clear parallel to
25 the present circumstances, Will should have known that her daughter’s transfer of the Belwood Property
26 after having repaid her mother in full was intended to hide the Belwood Property from a creditor,
27 namely the government.
28
UNITED STATES’ MTD OR MSJ
CR-24-00292-PCP 18
Case 5:24-cr-00292-PCP Document 77 Filed 07/25/25 Page 24 of 25
1 D. While Will Lacks Standing From Asserting Constitutional Violations On Behalf Of
Will-Darnall, Forfeiture of the Belwood Property is Not an Excessive Fine, In Any
2 Event, Because It Is Proportional To Will-Darnall’s Crimes.
3 Will claims that forfeiture of both the Almaden Property and the Belwood Property would
4 constitute an excessive fine because she has not been charged with any crime. Petition at 17. The
5 government has relinquished its claim to forfeit the Almaden Property in this case. And Will does not
6 have any interest in the Belwood Property for the reasons stated in the above sections. Thus, Will lacks
7 standing to assert a constitutional violation stemming from the forfeiture of the Belwood Property. See
8 United States v. Coffman, 612 F. App’x. 278, 289 (6th Cir. 2015) (petitioner’s Eight Amendment
9 Excessive Fines claim failed because in ancillary proceeding she was not facing prosecution and
10 therefore was not subject to the possibility of a fine and in any event she lacked an ownership interest in
11 the assets subject to forfeiture); United States v. Espada, 128 F. Supp. 3d 555, 557 (E.D.N.Y. 2015)
12 (“[Petitioner’s] constitutional claim can be readily dismissed since she may not, in the context of an
13 ancillary proceeding, vicariously assert constitutional claims on [a defendant’s] behalf.”); United States
14 v. Tarraf, 725 F. Supp. 2d 625, 635 (E.D. Mich. 2010) (rejecting petitioner’s Eighth Amendment
15 argument because the excessive fines argument was defendant’s to make); see also United States v.
16 Porchay, 533 F.3d 704, 710 (8th Cir.2008) (“[The petitioner] was a third party to the forfeiture and has
17 no standing to challenge the legality of the seizure under the Fourth Amendment.”); cf., Warth v. Seldin,
18 422 U.S. 490, 499 (1975) (“[T]his Court has held that the plaintiff generally must assert his own legal
19 rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties.”).
20 Even if Will had standing to contest the forfeiture of the Belwood Property (which she does not),
21 her excessive fines argument would fail because courts routinely hold that imposition of restitution and
22 forfeiture together in a single judgment does not constitute an excessive fine because requiring a
23 defendant to disgorge no more than twice the proceeds of her crimes cannot be disproportionate to the
24 harm inflicted on the defendant’s victims. United States v. Shepherd, 171 F. App’x 611, 616 (9th Cir.
25 2006) (“Here, the money judgment against [the defendant] is perfectly proportional with the amount of
26 money he fraudulently obtained . . . . Since those funds are unavailable, the government can rightly use
27 § 853(p) to forfeit substitute assets . . . . Thus, the forfeiture of the family home is proportional with the
28 offense and does not constitute an excessive punishment.”); United States v. Rosin, 263 F. App’x 16,
UNITED STATES’ MTD OR MSJ
CR-24-00292-PCP 19
Case 5:24-cr-00292-PCP Document 77 Filed 07/25/25 Page 25 of 25
1 36–7 (11th Cir. 2008) (holding that ordering defendant to pay $3.7 million in forfeiture in addition to
2 having to pay the same amount in restitution does not violate Eighth Amendment); see also United
3 States v. Newman, 659 F.3d 1235, 1241 (9th Cir. 2011) (forcing defendant to pay both forfeiture and
4 restitution “at worst” forces him to disgorge twice the value of the proceeds of his crime, which “is in no
5 way disproportionate to the harm inflicted on government and society”); cf. United States v. Omidi, 125
6 F.4th 1283, 1287 (9th Cir. 2025) (“This case requires us to examine forfeiture, which is ‘much broader’
7 and ‘serves an entirely different purpose’ than restitution.” (quoting United States v. Lo, 839 F.3d 777,
8 789 (9th Cir. 2016)).
9 By definition, forfeiture in an amount equivalent to the amount of the defendant’s proceeds is
10 exactly proportional to the gravity of the offense. Will appears to suggest otherwise by mistakenly
11 claiming that the fines for Counts One and Two are $1,000,000, and $250,000, respectively. Petition at
12 18. In fact, Congress authorized for both Counts fines twice the amount sought by the government in
13 forfeiture, here. 18 U.S.C. § 3571(d) (“If any person derives pecuniary gain from the offense, or if the
14 offense results in pecuniary loss to a person other than the defendant, the defendant may be fined not
15 more than the greater of twice the gross gain or twice the gross loss, unless imposition of a fine under
16 this subsection would unduly complicate or prolong the sentencing process” (emphasis added)). Thus,
17 Will’s claim as to an excessive fine is unavailing. United States v. Bajakajian, 524 U.S. 321, 322 (1998)
18 (“[J]udgments about the appropriate punishment belong in the first instance to the legislature.”).
19 IV. Conclusion
20 Based on the foregoing, the government respectfully submits that the Court in entering a final
21 order of forfeiture at sentencing should remove the Almaden Property but otherwise leave intact the
22 preliminary order of forfeiture contemplated by the Application.
23
24 DATED: July 25, 2025 Respectfully submitted,
25
CRAIG H. MISSAKIAN
26 United States Attorney
27 __________________________
GALEN A. PHILLIPS
28 Assistant United States Attorney
UNITED STATES’ MTD OR MSJ
CR-24-00292-PCP 20
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