United States of America v. $481,480.00 U.S. Currency

OCR transcription for search; preserved printed pages are authoritative

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United States District Court
Southem District of Texas

ENTERED
July 30, 2026
Nathan Ochsner, Clerk

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

UNITED STATES OF AMERICA, §
§

VS. § CIVIL ACTION NO, 4:25-CV-02674
§
481,480.00 U.S CURRENCY, et al, §
§
Defendants. §

ORDER

Before the Court are United States Magistrate Judge Dena Hanovice Palermo’s Report and
Recommendation (Doe. #37) and Claimant Norma Kesaria’s (“Claimant’’) Objections (Doc. #38).!
The Magistrate Judge’s findings and conclusions are reviewed de novo. Fed, R, Civ. P. 72(b); 28
U.S.C. § 636(b)(1); United States vy. Wilson, 864 F.2d 1219, 1221 (Sth Cir. 1989). Having
reviewed the parties’ arguments and the applicable legal authority, the Court adopts the Report
and Recommendation,

This is an in rem asset-forfeiture case arising from a trade-based money laundering network
that laundered narcotics proceeds through the wholesale procurement and sale of cellular
telephones. Doc, #37 at 2. Asad Kesaria owns and operates Parts4Cells Inc. (“Parts4Cells”), a
wholesale cellphone business in Houston, Texas. fd Between August and October 2024, a
confidential source and an undercover officer—each acting at the direction of the same Mexico-

based drug cartel member—made four deliveries of cash narcotics proceeds to Parts4Cells totaling

' Claimant has never filed a verified claim in this action, and her Answer was struck for that reason.
Doc. #33. The Court refers to Norma Kesaria as “Claimant” for convenience and for consistency
with the Magistrate Judge’s prior order, without suggesting that she has established standing to
contest the forfeiture.

AUTHENTICATED
U.S. GOVERNMENT
INFORMATION

GPO

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$481,480. /d, at 2-3. Bank records reflect that at least $969,411 was deposited during that same
period into the Golden Bank account ending in 6321, which Parts4Cells opened in May 2022, and
investigators determined that the $481,480 in narcotics proceeds was among those deposits, Jd. at
3-4, The Government seized the $481,480 from that account in January 2025. Jd. at 4, On January
23, 2025, federal agents executed a search warrant at Parts4Cells in connection with a federal arrest
warrant for Asad Kesaria and seized $371,000 from a safe in the storage area of the business. Jd.
A review of Parts4Cells’s business software revealed that, between November 1, 2024 and January
10, 2025, the company received thirteen payments totaling $1,327,753 from a known participant
in the laundering network, /d. Asad Kesaria was later indicted and pled guilty to structuring
transactions to avoid reporting requirements, and he agreed to forfeit the Defendant Currency as
part of his plea agreement.” Jd.; Doc. #31 at 1 n.1.

The Government filed its original Verified Complaint for Forfeiture In Rem against the
$481,480 on June 9, 2025, and published notice of that complaint on forfeiture.gov from June 13
through July 12, 2025. Doc. #1; Doc, #5. It sent Asad and Norma Kesaria a notice package on
June 11, 2025, advising them that a verified claim was due no later than thirty-five days from the
date the netice was sent. Doc. #26; see Doc. #33 at 3. On July 17, 2025, Asad and Norma Kesatia
filed an Answer without first filing a verified claim. Doc. #6, The Government filed its Amended
Verified Complaint on February 12, 2026, adding the $371,000 seized from Parts4Cells; published
notice of the amended complaint from February 14 through March 15, 2026; and sent a second
notice package on February 19, 2026. Doc. #18; Doc. #23; Doc. #26. No verified claim was ever

filed as to etther complaint. On April 28, 2026, Magistrate Judge Palermo granted the

2 See United States y. Asad Wali Kesaria, No. 4:24-cr-580-10 (S.D, Tex.), The Report and
Recommendation refers at one point to case number 4:24-cr-581-10. Doc. #37 at 4. But the correct
case number appears elsewhere in the record. See Doc. #33 at 10; Doc. #37 at 14,

2

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Government’s Motion to Strike, struck the Answer, and denied Claimant’s Motion for Leave to
File Verified Claim Out of Time. Doc. #33. The Government then moved for a final judgment of
forfeiture by default, and the Clerk entered default against all potential claimants. Doc. #34; Doc.
#36. Magistrate Judge Palermo issued her Report and Recommendation on May 11, 2026,
recommending that the Government’s Motion for Default Judgment (Doc, #34) be granted and the
Defendant Currency forfeited to the United States. Doc. #37.

Claimant raises three objections. First, she reargues the Motion to Strike, contending that
default judgment is disfavored and unwarranted here because she attempted “in good faith” to
comply with the Supplemental Rules. Doc, #38 at 4-6. This objection “merely rehashes”
arguments Magistrate Judge Palermo already considered and rejected. Elmihi v. Paypal Holdings,
Ine., No. 2:25-cv-00025, 2026 WL 92046, at *2 (S.D. Tex. Jan. 13, 2026). As the order striking
Claimant’s untimely Answer explained, courts in the Fifth Circuit require strict compliance with
the Supplemental Rules governing forfeiture claims, and Claimant offered no explanation for her
failure to file a verified claim. Doc. #33 at 5, 12. Second, Claimant contends that the currency
seized from the Parts4Ceils safe is insufficiently connected to criminal activity and that she is an
innocent shareholder entitled to at least a portion of it. Doc, #38 at 7-8. Third, she observes that
the Report and Recommendation misidentifies the statute of conviction in Asad Kesaria’s criminal
case.’ Doc. #38 at 9.

Claimant’s second objection is waived. She did not present either the sufficiency-of-the-

3 The Report and Recommendation states in one place that Asad Kesaria “pled guilty to violating
§ 5321.” Doc, #37 at 10. Twice elsewhere, however, it correctly states that he pled guilty to
“Structuring Transactions to Avoid Reporting Requirements, in violation of 31 U.S.C. §§
5324(b)C1) and 5324(d)(1).” fd. at 4, 14. Section 5321 provides for civil money penalties and is
not an offense of conviction. The Court therefore reads the single reference to § 5321 as a
scrivener’s error and corrects it to § 5324, The error is immaterial to the Magistrate Judge’s
analysis,

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connection argument or the innocent-shareholder theory to Magistrate Judge Palermo in her
response to the Motion to Strike or in her Motion for Leave. See Doc. #28; Doc. #29. “[A] party
who objects to the magistrate judge’s report waives legal arguments not made in the first instance
before the magistrate judge.” Lam v. USCIS, No, 4:23-CV-02751, 2025 WL, 2430887, at 1 (S.D.
Tex. Aug. 22, 2025) (quoting Freeman v. Cnty. of Bexar, 142 F.3d 848, 851 (Sth Cir. 1998)); see
also Shambaugh & Son, L.P. v, Steadfast Ins, Co., 91 F 4th 364, 369 (Sth Cir. 2024) (“[T}his court
considers arguments forfeited if they are not raised before a magistrate judge, even if they are
subsequently raised before the reviewing district court in objections to the magistrate judge’s
report and recommendation.”); Simmons Bank v. Monocoque Diversified Ints., LLC, No, 4:24-CV-
00492, 2025 WL 895831, at 1 (S.D. Tex. Mar. 20, 2025) (holding that new arguments raised for
the first time in objections “are not properly before the Court for consideration”); Reser v. Martin,
No. 2:25-CV-00123, 2026 WL 74071, at *1 (S.D. Tex, Jan. 9, 2026) (“[A]n objection is not valid
if it raises a new argument not presented to the magistrate judge.”).

Furthermore, the second objection fails on the merits. The forensic evidence recounted in
the Report and Recommendation-—-thirteen payments from a known participant in the laundering
network, totaling $1,327,753, in the ten weeks preceding the search—amply supports a reasonable
belief that the Government could establish the required connection between the currency in the
safe and the underlying offense. Doc. #37 at 13; see 18 U.S.C. § 983(c)(1), (3). And Claimant
offers no authority for her innocent-shareholder theory, which regardless runs against settled law
that ‘shareholders’ interest in the corporation does not equate to ownership by the shareholder of
specific corporation assets,” United States v. M/Y Galactica Star, 13 F 4th 448, 456 (5th Cir. 2021)
(quoting United States v. Wyly, 193 F.3d 289, 304 (Sth Cir. 1999)); see also Farnsworth v, Thaler,

No. H-10-1104, 2011 WL 2490405, at *4 (S.D. Tex. June 20, 2011) (finding arguments without

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legal or factual support to be without merit). Upon de novo review, the Court agrees with
Magistrate Judge Palermo’s analysis. Claimant’s objections are overruled.

In conclusion, the Court adopts the Report and Recommendation (Doc. #37) as its Order,
Accordingly, Claimant’s Objections (Doc. #38) are OVERRULED, and the Government’s Motion
for Final Judgment of Forfeiture by Default (Doc. #34) is hereby GRANTED. Any person or
entity who could assert an interest in the Defendant Currency is held in DEFAULT. The Defendant
Currency-—-$48 1,480.00 in U.S. Currency seized from Golden Bank account ending in 6321 and
$371,000.00 in U.S, Currency seized from Parts4Cells Inc_—is FORFEITED to the United States
of America, which shall dispose of it in accordance with applicable law. The Court will enter a
separate final judgment.

It is so ORDERED.

JUL 2 9 2026

Date The HonorablafAlfred H. Bennett
United States [District Judge