United States District Court, E.D. Virginia, Newport News Division
OPINION AND ORDER
G. Doumar, Senior United States District Judge.
matter comes before the Court on the United States'
("Government") Motion to Dismiss or, in the
Alternative, for Summary Judgment with Respect to the
Petition of the Defendant's Minor Child. ECF No. 114. For
the reasons stated herein, the Government's Motion to
Dismiss the Petition of the Defendant's Minor Child is
GRANTED, and the Petition of the
Defendant's Minor Child is hereby DISMISSED WITH
FACTUAL AND PROCEDURAL BACKGROUND
October 15, 2015, a grand jury named Deborah Wagner
("Defendant") in an eleven-count indictment. It
also cited forfeiture of assets pursuant to 18 U.S.C.
§§ 981 and 982, and 21 U.S.C. § 853(p). ECF
No. 11. On September 9, 2016, Defendant pled guilty to Count
One, Conspiracy to Commit Mail and Wire Fraud, in violation
of 18 U.S.C. § 1349. ECF No. 49.
to the Agreed Statement of Facts, Defendant and her
co-conspirators engaged in a scheme that recruited straw
purchasers to serve as grantees in fraudulent transfers of
timeshare units. From 2011 to 2013, Defendant and her
employees, acting in and through her law firm, Wagner &
Hyman, provided third party transfer services to GoodBye
Timeshare, owned and operated by Brendan Hawkins. Statement
of Facts, ECF No. 51 ¶¶ 2-3. From August 2013 until
the end of 2013, Defendant provided similar services to
Exotic Equity Transfers, owned and operated by Keith Kosco.
Id. ¶¶ 2, 4, 9. Mr. Kosco and Mr. Hawkins,
through their respective companies, would charge the original
owners a substantial fee to transfer their timeshare units
(usually three times the maintenance fees) while assuring the
original owners that such transfers were legal and
legitimate. Id. ¶¶ 6-7. Defendant's
role was to aid in the transfer to straw purchasers by having
a fraudulent deed and contract produced to document the sale.
Id. ¶ 14. Defendant and her co-conspirators
were aware that the straw purchasers had neither the ability
nor the intention of satisfying the financial obligations of
timeshare unit ownership. Id. ¶ 11. For
instance, at least one of the many straw purchasers was a
jail inmate who did not know the conspirators were
transferring units into her name. Mr. Hawkins and Mr. Kosco,
through their companies, paid fees to Defendant and her law
firm for her role in the scheme. Id. ¶ 10.
resorts began objecting to certain transfers because of the
repeated use of a straw purchaser, Defendant, her employees,
and others would attempt to shift the transfer into the name
of another straw purchaser. Id. ¶ 21. In
addition, Defendant formed a separate nominee company,
Vacation Match, LLC, with a business address at the location
of a tanning salon she owned, for the purpose of finding new
straw purchasers (many of these straw purchasers were paid
between $20 and $50 for the use of their identities). See
Virginia Corporate Records, ECF No. 61-5. The straw
purchasers did not pay their fee obligations, resulting in
losses of $2, 050, 739.29 to fourteen resorts. See Statement
of Facts, ECF No. 51 ¶ 29; Losses by Resort, ECF No.
20, 2017, this Court sentenced Defendant to imprisonment for
fifty (50) months. ECF No. 85. At that time, the Court also
entered an agreed Preliminary Order of Forfeiture and
recognized that the Mandatory Victims Restitution Act
("MVRA"), 18 U.S.C. § 3663A, applied. After
briefing and a hearing, the Court ordered Defendant to pay
restitution in the amount of $1, 845, 665.36. ECF No. 120.
meantime, beginning August 14, 2017, and ending September 12,
2017, the Government continuously published notice of
forfeiture as to the assets listed in the Preliminary Order
of Forfeiture, as required by 21 U.S.C. § 853(n)(1) and
Federal Rule of Criminal Procedure 32.2(b)(6). ECF No. 111-1.
The Government also mailed notice to entities that the
Government knew may have an interest in the property. ECF No.
117. Three people/entities filed timely petitions asserting
interests in the forfeited property:
1. Chesapeake Bank filed a petition asserting an interest in
112 Peyton Road, Williamsburg, Virginia, in the amount of
$19, 667.59, ECF No. 100;
2. Mortgage Electronic Registration Systems, Inc. as designee
for Wells Fargo (hereinafter "MERS") filed a
petition asserting an interest in 112 Peyton Road,
Williamsburg, Virginia in the amount of $308, 810.45 and an
interest in 53 Summer East, Williamsburg, Virginia in the
amount of $109, 151.28, ECF No. 106; and
3. Dale and Carole Wagner, as guardians of Defendant's
minor child, filed a petition asserting an interest for the
child in 112 Peyton Road, Williamsburg, Virginia in an
unspecified amount. ECF No. 101.
Government subsequently filed a status report stating it
acknowledged and had no objection to the petitions filed by
Chesapeake Bank and MERS; it only opposes the petition filed
on behalf of Defendant's minor child. ECF No. 117.
October 25, 2017, the Government filed the instant Motion to
Dismiss or, in the Alternative, for Summary Judgment with
Respect to the Petition of the Defendant's Minor Child.
On November 9, 2017, Defendant's minor child, through
guardians, mailed his or her response to the Government's
motion. ECF No. 118 at 4. The Government replied on ...