United States of America v. 5,012,294.90 in TetherUS et al

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
WO
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
United States of America,
Plaintiff,
v.
5,012,294.90 in TetherUS, et al.,
Defendants.
No. CV-23-01988-PHX-JJT
ORDER
At issue are three Motions filed by Claimants Suradet Totsaponvised and Kosit
Sisawigon: a Request for Judicial Notice in Support of Motion to Dismiss (Doc. 29); a
Motion to Dismiss for Lack of In Rem Jurisdiction and Venue and Failure to State a Claim
(Doc. 31), to which Plaintiff the United States filed a Response (Doc. 54) and Claimants
filed a Reply (Doc. 57); and a Motion to Suppress Evidence of the Untraceable Funds in
Claimants’ Accounts (Doc. 43), to which the United States filed a Response (Doc. 55) and
Claimants filed a Reply (Doc. 56). The Court finds these matters appropriate for resolution
without oral argument. LRCiv 7.2(f).
I. BACKGROUND
On September 20, 2023, the United States filed a Verified Complaint for Forfeiture
In Rem (Doc. 1, Verified Compl.) against virtual currency, commonly referred to as
cryptocurrency, in three separate accounts opened in Binance, a virtual currency exchange.
The government avers that Binance Account 1 is held in the name of Claimant Sisawigon,
Case 2:23-cv-01988-JJT Document 58 Filed 03/11/26 Page 1 of 13

- 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Binance Account 2 is held in the name of Claimant Totsaponvised, and Binance Account
3 is held in the name of non-claimant Low Li Yu. (Verified Compl. ¶¶ 5–7.)
The government claims the Defendant property “was swindled from victims through
the course of an investment fraud scam” commonly referred to as “pig butchering,”
whereby scammers gain the trust of victims and convince them to transfer funds to a
cryptocurrency address the scammers control. (Verified Compl. ¶¶ 17–20.) The investment
schemes “have the appearance of a legitimate enterprise through the use of fabricated
interfaces, derivative or ‘spoofed’ websites that appear related to legitimate companies,
and other techniques designed to bolster the scheme’s legitimacy.” (Verified Compl. ¶ 19.)
The investment platform indicates to the victim that the investment is producing substantial
returns, and in some instances, the victim is able to make a small withdrawal from the
investment account, further bolstering the apparent legitimacy of the investment scheme.
(E.g., Verified Compl. ¶ 28.) Ultimately, the victims are unable to withdraw anything from
the investment accounts, thereby losing their funds. (Verified Compl. ¶ 20.) The United
States Federal Bureau of Investigation (FBI) traced victims’ lost funds to all three Binance
accounts containing the Defendant property. (E.g. Verified Compl. ¶¶ 35–37, 39, 42–45,
49–50.) After the government initiated this action to seize and gain clear title to the
Defendant virtual currency so that it “may be returned to the victims of the fraud” (Verified
Compl. ¶ 17), the Court issued a warrant for the arrest in rem of the Defendant virtual
currency on November 21, 2023 (Doc. 3). Pursuant to the warrant, the FBI seized and took
into its possession the Defendant virtual currency on November 24, 2023. (Doc. 4.)
Sisawigon filed an Amended Verified Claim and Statement of Interest on
February 26, 2025, in which he avers he is the owner of Binance Account 1 and thereby
asserts an interest and claims possessory and/or ownership rights to the funds seized from
Binance Account 1. (Doc. 25.) Totsaponvised also filed an Amended Verified Claim and
Statement of Interest on February 26, 2025, in which he also asserts an interest and claims
any and all rights to the funds seized from Binance Account 1, and in which he avers he is
Case 2:23-cv-01988-JJT Document 58 Filed 03/11/26 Page 2 of 13

- 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
the owner of Binance Account 2, thereby asserting an interest and claiming any and all
rights to the funds seized from Binance Account 2. (Doc. 26.)
Now before the Court are Claimants’ Motion to Dismiss for Lack of In Rem
Jurisdiction and Venue and Failure to State a Claim (Doc. 31) and Motion to Suppress
Evidence of the Untraceable Funds in Claimants’ Accounts (Doc. 43). After the Court
compelled Claimants to respond to special interrogatories the government served on them
under Supplemental Rule (“Supp. R.”) G(6) of the Federal Rules of Civil Procedure (Doc.
45), the government filed its Responses to the Motions (Docs. 54, 55) and Claimants filed
their Replies (Docs. 56, 57).
II. SUPPLEMENTAL RULE G
In relevant part, Supplemental Rule G provides that a complaint in an in rem
forfeiture action must “state the grounds for subject-matter, in rem jurisdiction over the
defendant property, and venue,” Supp. R. G(2)(b), and “state sufficiently detailed facts to
support a reasonable belief that the government will be able to meet its burden of proof at
trial,” Supp. R. G(2)(f). “A claimant who establishes standing to contest forfeiture may
move to dismiss the action under Rule 12(b).” Supp. R. G(8)(b)(i).
On a finding of probable cause, the court “must issue a warrant to arrest the property
if it is not in the government’s possession, custody, or control and is not subject to a judicial
restraining order.” Supp. R. G(3)(b)(ii). “If the defendant property was seized, a party with
standing to contest the lawfulness of the seizure may move to suppress use of the property
as evidence. Suppression does not affect forfeiture of the property based on independently
derived evidence.” Supp. R. G(8)(a).
III. CLAIMANTS’ MOTION TO DISMISS
A. Legal Standard
Here, Claimants move to dismiss this forfeiture action for lack of in rem jurisdiction
under Federal Rule of Civil Procedure 12(b)(2), improper venue under Rule 12(b)(3), and
failure to state a claim under Rule 12(b)(6). (Doc. 31 at 2.) As for the last basis, Rule
12(b)(6) is designed to “test[] the legal sufficiency of a claim.” Navarro v. Block, 250 F.3d
Case 2:23-cv-01988-JJT Document 58 Filed 03/11/26 Page 3 of 13

- 4 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
729, 732 (9th Cir. 2001). A dismissal under Rule 12(b)(6) for failure to state a claim can
be based on either: (1) the lack of a cognizable legal theory; or (2) the absence of sufficient
factual allegations to support a cognizable legal theory. Balistreri v. Pacifica Police Dep’t,
901 F.2d 696, 699 (9th Cir. 1990). When analyzing a complaint for failure to state a claim,
the well-pled factual allegations are taken as true and construed in the light most favorable
to the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). A
plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (citing Twombly, 550 U.S. at 556). “The plausibility standard is not akin to a
‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has
acted unlawfully.” Id.
“While a complaint attacked by a Rule 12(b)(6) motion does not need detailed
factual allegations, a plaintiff’s obligation to provide the grounds of his entitlement to relief
requires more than labels and conclusions, and a formulaic recitation of the elements of a
cause of action will not do.” Twombly, 550 U.S. at 555 (cleaned up and citations omitted).
Legal conclusions couched as factual allegations are not entitled to the assumption of truth
and therefore are insufficient to defeat a motion to dismiss for failure to state a claim. Iqbal,
556 U.S. at 679–80. However, “a well-pleaded complaint may proceed even if it strikes a
savvy judge that actual proof of those facts is improbable, and that ‘recovery is very remote
and unlikely.’” Twombly, 550 U.S. at 556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236
(1974)).
B. The Verified Complaint Adequately States a Claim and the Grounds for
In Rem Jurisdiction and Venue
In conjunction with their Motion to Dismiss, Claimants ask the Court to take judicial
notice of the value of the virtual currency in Binance Accounts 1 and 2 as of March 3,
2025, as valued through the virtual currency platform Coinbase. (Doc. 29.) According to
Case 2:23-cv-01988-JJT Document 58 Filed 03/11/26 Page 4 of 13

- 5 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
that valuation, the virtual currency in Binance Account 1 was worth $988,286.19, and the
virtual currency in Binance Account 2 was worth $114,305,807.78, for a total value in both
accounts of $115,294,093.97. (Doc. 29.) Because the government does not contest
Claimants’ request or the Coinbase valuation, and the Court can take judicial notice of such
currency conversion valuations not subject to reasonable dispute under Federal Rule of
Evidence 201(b), see Senah, Inc. v. AVIC Forstar S&T Co., 2019 WL 3486064, at *2 n.3
(N.D. Cal. Aug. 1, 2019), aff’d, 809 F. App’x 441 (9th Cir. 2020), the Court will grant
Claimants’ request (Doc. 29).
Claimants first argue that the Court should dismiss this action because the
government’s Verified Complaint fails to state facts sufficient to demonstrate that this
Court has in rem jurisdiction or that the District of Arizona is a proper venue. Akin to
surviving a motion to dismiss for lack of personal jurisdiction, the government as plaintiff
bears the burden of demonstrating in rem jurisdiction and venue. See Menken v. Emm, 503
F.3d 1050, 1056 (9th Cir. 2007). The government need “make only a prima facie showing
of jurisdictional facts to withstand the motion to dismiss” where the court takes
“uncontroverted allegations in the complaint . . . as true” and “resolves all disputed facts
in favor of the [government].” Id.; see also United States v. 3 Parcels in La Plata Cnty.,
Colo., 919 F. Supp. 1449, 1452 (D. Nev. 1995). Under 28 U.S.C. § 1355, among the venues
in which an in rem forfeiture action may be brought is “the district court for the district in
which any of the acts or omissions giving rise to the forfeiture occurred.” Id.
§ 1355(b)(1)(A); see United States v. Approx. $1.67 Million (US), 513 F.3d 991, 998 (9th
Cir. 2008); United States v. 2007 Custom Motorcycle, VIN 1R9SM29627I423003, 2010
WL 2721899, at *3 (D. Ariz. July 7, 2010) (stating 28 U.S.C. § 1355 guides both in rem
jurisdiction and venue in a forfeiture action in rem).
In the Verified Complaint, the government alleges that numerous acts leading to the
forfeiture at issue took place in Arizona, including that victims of the alleged investment
fraud scam were located in Arizona and the FBI traced the victims’ investments to the
Defendant virtual currency in the Binance accounts. (Verified Compl. ¶ 18.) This is a
Case 2:23-cv-01988-JJT Document 58 Filed 03/11/26 Page 5 of 13

- 6 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
statement of the grounds for in rem jurisdiction and venue consistent with the requirement
set forth in Supplemental Rule G(2)(b).
Claimants argue that the only Arizona victim of the investment fraud scam the
government identifies with specificity in the Verified Complaint is K.C. and that the
allegations in the Verified Complaint fail to adequately tie K.C. to the virtual currency in
the Binance accounts. (Doc. 31 at 12–13; Doc. 57 at 2–4.) The Court disagrees. The
government alleges that, “[b]eginning in March of 2022, the [FBI] identified numerous
victims of a pig butchering scheme based on fraudulent investment platforms including
NTU Capital Limited.” (Verified Compl. ¶ 21 (emphasis added).) K.C., an Arizona
resident, registered on the fraudulent NTU Capital website (ntucapital.com), and after K.C.
invested approximately $1 million in cryptocurrency, “the fraudulent NTU platform falsely
indicated that his investment was producing substantial returns” when in fact K.C. had been
scammed out of his entire investment. (Verified Compl. ¶¶ 26, 28, 29.) Through another
victim, W.C., the FBI traced investments stolen through the fraudulent NTU Capital
platform to the three Binance accounts. (Verified Compl. ¶¶ 36–39.) These alleged facts—
critically the link the FBI established between investments through the fraudulent NTU
Capital platform and the funds in the three Binance accounts—are not too tenuous, as
Claimants argue; rather, they are sufficient to demonstrate that K.C.’s acts in Arizona of
investing his money by relying on misrepresentations on the fraudulent NTU Capital
platform give rise to the forfeiture of the three Binance accounts the government seeks in
this action, such that this Court has in rem jurisdiction and the District of Arizona is a
proper venue under 28 U.S.C. § 1355(b)(1)(A). In short, the government has adequately
alleged in the Verified Complaint that K.C.’s investment in Arizona ended up in one of the
Binance accounts by way of the fraudulent NTU Capital platform, and the government has
thus made a prima facie showing of jurisdictional facts to demonstrate that in rem
jurisdiction and venue are proper in Arizona under § 1355(b)(1)(A). See Approx. $1.67
Million (US), 513 F.3d at 998 (emphasizing that “‘any act’ giving rise to the forfeiture
occurring within the district” satisfies the statutory jurisdictional requirement).
Case 2:23-cv-01988-JJT Document 58 Filed 03/11/26 Page 6 of 13

- 7 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Claimants next contend that the government fails to state an in rem forfeiture claim
under the Rule 12(b)(6) standard because its allegations in the Verified Complaint only
explicitly trace a small portion of the virtual currency in Binance Accounts 1 and 2 to
specified unlawful activity (SUA). (Doc. 31 at 15.) As stated supra, Supplemental Rule
G(2)(f) provides the pleading standard for an in rem forfeiture complaint, and the Ninth
Circuit has observed that, while it “is a higher standard than ‘notice pleading,” it remains
a “low bar”—that is, it is not an “onerous standard”—and a complaint must simply “state
the circumstances giving rise to the forfeiture claim with sufficient particularity that the
claimant can commence a meaningful investigation of the facts and draft a responsive
pleading”; in other words, the complaint must “permit a reasonable belief for pleading
purposes that the property in question is subject to forfeiture.” United States v. Aguilar,
782 F.3d 1101, 1108–09 (9th Cir. 2015) (cleaned up and internal quotations omitted)
(citing Advisory Committee Note to Supplemental Rule G(2) and United States v.
Mondragon, 313 F.3d 862 (4th Cir. 2002)). “[T]he government need not show that all of
the claimed property is tainted to satisfy Supplemental Rule G(2)(f),” and district courts
are instructed to “wait until trial to adjudicate arguments that a portion of the property that
the government claims is not subject to forfeiture.” Aguilar, 782 F.3d at 1109 (citing United
States v. One Parcel of Real Prop., 921 F.2d 370, 375 (1st Cir. 1990) (“Whether none, all,
or only a portion of the defendant property is forfeitable is not determined at the pleadings
stage, but at trial.”)).
First, in its claim under 18 U.S.C. § 981(a)(1)(C), the government seeks forfeiture
of property constituting or derived from proceeds traceable to an SUA as defined in 18
U.S.C. § 1956(c)(7), and the SUA alleged here is wire fraud and/or conspiracy to commit
wire fraud under 18 U.S.C. § 1343. (Verified Compl. ¶ 75.) Wire fraud under § 1343 is (1)
a scheme or artifice to obtain money or property by fraudulent representations; (2) by use
of wires in interstate or foreign commerce; (3) with a specific intent to defraud. United
States v. Jinian, 725 F.3d 954, 960 (9th Cir. 2013).
. . .
Case 2:23-cv-01988-JJT Document 58 Filed 03/11/26 Page 7 of 13

- 8 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
In support of this claim, the government alleges the FBI uncovered a sophisticated
“pig butchering” operation that entailed a complex series of transfers whereby proceeds
landed in the three Binance Accounts. (Verified Compl. ¶¶ 50–73.) The victims were the
targets of multiple fraudulent representations by wire, including with regard to the
legitimacy of NTU Capital as a virtual currency investment platform, upon which the
victims relied to invest large sums of money by wire. (Verified Compl. ¶¶ 21–25.) The
victims received fraudulent information by wire that their investments were making large
gains, encouraging them to invest more. (Verified Compl. ¶¶ 28, 31, 44, 48.) The victims
were ultimately unable to access any funds from their investments, raising the reasonable
inference that the scammers intended to defraud them. (Verified Compl. ¶¶ 29, 34–35, 44,
48.) The government has thus sufficiently alleged facts supporting the SUA of wire fraud
under § 1343. Moreover, the FBI traced the “sophisticated and convoluted” movement of
funds from the victims identified in the Verified Complaint to the three Binance Accounts
and noted that “the same individual(s) or entity(ies) appear to control the three Binance
Accounts.” (Verified Compl. ¶ 50; see also ¶¶ 36, 39, 43, 45, 49.) The government has thus
adequately alleged the link, or substantial nexus, between the SUA and the property
contained in the three Binance Accounts, such that it is reasonable to believe that the
property is subject to forfeiture.
Claimants’ principal objection to the government’s claim is that the funds from the
victims specifically identified in the Verified Complaint constitute only a small portion of
the virtual currency seized in the three Binance Accounts, valued at approximately $115
million a year ago. But as the case law provides and the Court noted supra, the
government’s Verified Complaint need not trace every dollar’s worth of virtual currency
in the Binance Accounts to the wire fraud scheme; the final portion of proceeds from the
SUA contained in the Binance Accounts is better determined at summary judgment or trial,
not the pleading stage. Aguilar, 782 F.3d at 1109. In sum, the allegations in the Verified
Complaint raise the reasonable belief for pleading purposes that the Binance Accounts are
subject to forfeiture, and the government’s claim is sufficient to allow Claimants to conduct
Case 2:23-cv-01988-JJT Document 58 Filed 03/11/26 Page 8 of 13

- 9 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
a meaningful investigation of the facts alleged. See id. at 1108–09. That is all that is
required at the pleading stage.
In its second claim, brought under 18 U.S.C. § 981(a)(1)(A), the government seeks
forfeiture of property involved in a transaction in violation of 18 U.S.C. §§ 1956 and/or
1957. (Verified Compl. ¶ 77.) Specifically, the government asserts a concealment money
laundering theory under 18 U.S.C. § 1956(a)(1)(B). (Doc. 54 at 12–15; see also Verified
Compl. ¶¶ 51–73.) The elements of such an offense are as follows: (1) a financial
transaction, (2) involving the proceeds of unlawful activity, with (3) knowledge that the
proceeds were from unlawful activity, and (4) knowledge “that the transaction was
designed in whole or in part . . . to conceal or disguise the nature, the location, the source,
the ownership, or the control of the proceeds of specified unlawful activity.” United States
v. Singh, 995 F.3d 1069, 1075 (9th Cir. 2021) (internal quotation omitted).
Claimants challenge the adequacy of the Verified Complaint’s factual allegations
with respect to elements 3 and 4 of the government’s concealment money laundering
theory. To begin with, the government’s allegations that a portion of the virtual currency
in the Binance Accounts can be traced back to a fraudulent investment scheme, as discussed
supra, go part of the way to show knowledge that the proceeds involved in the financial
transactions were from unlawful activity and that the transactions were designed to disguise
those proceeds. In addition, the Verified Complaint contains detailed allegations regarding
the complexity of the transactions (Verified Compl. ¶¶ 51–73), including rapid transfers
from virtual currency wallet to wallet in a short time period, each of which transfer incurs
a transaction fee and therefore does not ordinarily make economic sense (Verified Compl.
¶ 64); and transactions involving splitting and recombining virtual currency and “chain
hopping,” which “occurs when the holder of the cryptocurrency converts it from one [form]
of cryptocurrency to another—for instance, converting Bitcoin to Ethereum,” and “can
make it harder to trace because it will often result in the currency being moved onto a
separate blockchain ledger” (Verified Compl. ¶¶ 66–72). From the allegations as a whole,
it is reasonable to believe that the transactions were being conducted to disguise proceeds
Case 2:23-cv-01988-JJT Document 58 Filed 03/11/26 Page 9 of 13

- 10 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
because they came from unlawful activity, as required in concealment money laundering.
See United States v. Tekle, 329 F.3d 1108, 1113–14 (9th Cir. 2003) (finding evidence of
the transactional structure supported concealment money laundering conviction and stating
that, although the transactions in question may have been “open, notorious, and did not
disguise defendant’s identity,” the concealment necessary under the statute “is that of the
source of the funds, not the identity of the money-launderer”).
In their Reply, Claimants argue the government’s allegations are insufficient
because they do not adequately connect the upstream transactions the government
identifies to criminal activity. (Doc. 57 at 8–10.) But, as the Court stated supra in
examining whether the government stated a claim for forfeiture based on the proceeds of
wire fraud, the Verified Complaint contains sufficient allegations at this stage of the
litigation that the Binance Accounts contain the virtual currency proceeds of a pig
butchering fraud scheme. Considering the proceeds from unlawful activity have been
traced to Binance Accounts 1 and 2 and the forensic analysis of those accounts by the FBI
shows that transfers into and out of those accounts were made rapidly, in short periods of
time, using splitting, recombining, and chain hopping—and indeed that Binance Account
1 is most likely simply a pass-through account to Binance Account 2 (Verified Compl.
¶ 57)—the Court can readily believe the government’s concealment money laundering
theory at this stage of the litigation.1
In short, under Rule 12(b)(6) and Supplemental Rule G, the government has stated
claims for forfeiture under 18 U.S.C. § 981(a)(1) based on both its theories of wire fraud
and concealment money laundering. That the government has not connected all the funds
in the Binance Accounts to unlawful activity is not reason for the Court to dismiss the
forfeiture claims at this stage of the litigation. See Aguilar, 782 F.3d at 1109; United States
v. One 2005 Lagoon 440 Sailing Catamaran Named Bohemian Rhapsody, 2017 WL
1 The cases the parties cited in their arguments here, while informative, were either not in
the same posture as this case—the motion to dismiss stage—or not sufficiently factually
akin to the allegations in the Verified Complaint, so the Court does not specifically address
them here.
Case 2:23-cv-01988-JJT Document 58 Filed 03/11/26 Page 10 of 13

- 11 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
10573807, at *2 (C.D. Cal. Aug. 23, 2017) (stating that “forfeitable property . . . need only
be ‘involved’ in a monetary transaction with criminal proceeds” but “need not be limited
to property specifically traceable to illegal proceeds”). For all these reasons, the Court will
deny Claimants’ Motion to Dismiss for Lack of In Rem Jurisdiction and Venue and Failure
to State a Claim (Doc. 31).2
IV. CLAIMANTS’ MOTION TO SUPPRESS
Finally, pursuant to Supplemental Rule G(8)(a), Claimants move to suppress
evidence of what they term the “untraceable” virtual currency in the Binance Accounts
because the warrant to arrest and seize the so-called “untraceable” portion of those accounts
was not supported by probable cause. (Doc. 43.) In 18 U.S.C. § 981(b)(2) and (3), Congress
authorized seizure pursuant to a warrant in a case such as the present one if there is probable
cause to believe the property is subject to forfeiture. “The standard of probable cause to
support forfeiture is similar to that required to obtain a search warrant.” United States v.
Real Property 874 Gartel Drive, Walnut, Cal., 79 F.3d 918, 922 (9th Cir. 1996) (citing
United States v. One 56-Foot Motor Yacht Named Tahuna, 702 F.2d 1276, 1281 (9th Cir.
1983)). “The government need prove only that it had reasonable grounds to believe that
the property was involved in the alleged offenses, ‘supported by less that prima facie proof
but more than mere suspicion,’ and that belief may be supported by hearsay evidence.” Id.
(quoting Yacht Named Tahuna, 702 F.2d at 1283). A magistrate judge’s “determination of
probable cause should be paid great deference by reviewing courts,” and a court must not
“invalidate the warrant by interpreting the affidavit in a hypertechnical, rather than a
commonsense, manner.” United States v. King, 985 F.3d 702, 707 (9th Cir. 2021) (quoting
Illinois v. Gates, 462 U.S. 213, 236 (1983), and United States v. Ventresca, 380 U.S. 102,
109 (1965)).
. . .
2 The Court agrees with the government that Claimants’ argument that forfeiture in this
case constitutes an excessive fine under the Eighth Amendment (Doc. 31 at 23–24) is
premature. Supplemental Rule G(8)(e) provides that a “claimant may seek to mitigate a
forfeiture under the Excessive Fines Clause of the Eighth Amendment by motion for
summary judgment or by motion made after entry of a forfeiture judgment.”
Case 2:23-cv-01988-JJT Document 58 Filed 03/11/26 Page 11 of 13

- 12 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
In the Verified Complaint and the Affidavit of FBI Special Agent John Pollard
supporting the government’s application for a seizure warrant (Case No. MB-22-08388-
PHX-JZB, Doc. 1-1 at 3–55, Pollard Aff.), the government only explicitly traces a portion
of the virtual currency in the Binance Accounts to unlawful activity. But the Court cannot
conclude from those allegations at this point in the litigation that any funds in the Binance
Accounts are “untraceable” to unlawful activity, as characterized by Claimants. The
government never so alleges, and the only conclusion that can be drawn from the
allegations before the Court is that the government has explicitly and directly traced certain
virtual currency in the Binance Accounts to the proceeds of pig butchering fraud schemes.
The remaining virtual currency in the Binance Accounts is therefore not “untraceable”; it
is at most not explicitly traced in the Affidavit or Verified Complaint.
In support of the magistrate judge’s finding of probable cause to seize Binance
Accounts 1, 2, and 3 in their entirety, the government begins with the portions of the
Affidavit—which portions were mirrored by allegations in the Verified Complaint and
discussed supra—alleging details of the pig butchering schemes and the proceeds
therefrom, the use of the NTU website to “ensnare multiple victims,” and the FBI’s tracing
of the proceeds from the fraudulent schemes to the Binance Accounts. (Doc. 55 at 7 (citing
Pollard Aff. ¶¶ 21–77).) Particularly related to the government’s forfeiture claim based on
concealment money laundering, the Pollard Affidavit also details that transfers into and out
of those accounts were made rapidly, in short periods of time, using splitting, recombining,
and chain hopping; that Binance Account 1 is most likely simply a pass-through account
or shield for Binance Account 2; and that the accounts were under common control. (Doc.
55 at 7 (citing Pollard Aff. ¶¶ 79–103).) These allegations are more than what Claimants
refer to as “smoke and mirrors” (Doc. 56 at 10) and beyond the facts alleged in the cases
cited by Claimants; the allegations in the Pollard Affidavit raise the reasonable belief that
the Binance Accounts were being used in concealment money laundering and, critically,
the reasonable belief that any ultimately untraced virtual currency in the accounts was
being used to conceal the proceeds of unlawful activity that ultimately were traceable. See
Case 2:23-cv-01988-JJT Document 58 Filed 03/11/26 Page 12 of 13

- 13 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
18 U.S.C. § 981(a)(1)(A) (providing property is subject to forfeiture if it is “involved in a
transaction or attempted transaction in violation of section 1956 [or] 1957”); United States
v. Bikundi, 926 F.3d 761, 793 (D.C. Cir. 2019) (finding the government’s evidence
sufficient that unlaundered funds were used to facilitate concealment money laundering
scheme).
The allegations in the Pollard Affidavit thus constitute more than “vague references
to commingling,” as characterized by Claimants. (Doc. 43 at 3.) Because the Court draws
from the allegations the reasonable belief that any ultimately untraced funds in the Binance
Accounts were being used to conceal the proceeds of the pig butchering scheme forming
the foundation of the government’s forfeiture claims in this lawsuit, the Court cannot
conclude that the magistrate judge did not have a substantial basis to find that probable
cause existed to issue a warrant for the arrest in rem of the entirety of the Binance Accounts.
As a result, the Court will deny the Motion to Suppress Evidence of the Untraceable Funds
in Claimants’ Accounts (Doc. 43).
IT IS THEREFORE ORDERED granting the Request for Judicial Notice in
Support of Motion to Dismiss (Doc. 29).
IT IS FURTHER ORDERED denying the Motion to Dismiss for Lack of In Rem
Jurisdiction and Venue and Failure to State a Claim (Doc. 31).
IT IS FURTHER ORDERED denying the Motion to Suppress Evidence of the
Untraceable Funds in Claimants’ Accounts (Doc. 43).
IT IS FURTHER ORDERED that, by March 27, 2026, the government and
Claimants shall jointly file a proposed case management schedule for this matter going
forward.
Dated this 11th day of March, 2026.
Honorable John J. Tuchi
United States District Judge
Case 2:23-cv-01988-JJT Document 58 Filed 03/11/26 Page 13 of 13