United States v. $4,224, 958.57

Sandra V. Boylan, et al. (Appellants) appeal the judgment of the district court denying them Article III standing to enter claims against the funds in this forfeiture proceeding brought by the United States. Holding that they do in fact have a cognizable legal interest in the property, we reverse the judgment against them and remand for proceedings in conformity with this opinion.

FACTS AND PROCEEDINGS

Bringing a civil action for forfeiture, the government alleged a fraud committed on the 25 Appellants and 53 others by one James Carroll Sexton. The facts of the fraud alleged by the government are undisputed by the Appellants, and for the purposes of this appeal we assume them to be true.

In the course of 1998 and 1999, Sexton persuaded a number of persons, including the Appellants, to send him money that he would invest on their behalf. Contrary to his representations, he shuffled the money so collected through various bank accounts in Liechtenstein, which he controlled. In these acts, Sexton committed mail fraud, wire fraud and money laundering.

In 1999, Liechtenstein opened a criminal investigation into Sexton’s activities. Eventually, ten of the Appellants, represented by…