United States v. $133,735.30 Seized from U.S. Bancorp Brokerage Account No. 32130630

In this appeal, we decide whether the United States sufficiently disgorges the benefit that it receives from holding improperly seized funds when it turns over the interest that accrues in an interest-bearing Treasury account into which the funds are deposited.

William C. Vosburgh, a prevailing claimant in the government’s civil in renv action to forfeit currency and computer equipment, appeals the district court’s order directing the government to pay interest on the seized money at “the prevailing government rate.” Instead, Vosburgh contends, he was entitled to interest at the government’s “alternative borrowing rate” under our decision in United States v. $277,000 U.S. Currency, 69 F.3d 1491 (9th Cir.1995), or at least to a hearing to determine what portion of his funds reflected money the government avoided borrowing to meet other debts. We held in $277,000 that the government must disgorge earnings on a claimant’s property, and that funds deposited into a non-interest-bearing account should be considered as constructively earning interest at the government’s alternative borrowing rate. However, Vosburgh’s funds were placed in an interest-bearing account. We hold that under…