United States v. Wilson

Under U.S.C. § 853(n)(2) any person may petition the court for the property seized as a result of a fraudulent investment investigation, with the exception of the defendant, based on Congressional negation of the zone of interests test.

Richard Gray, unaware of any government investigation, executed a standard subscription agreement with Stefan Wilson who was operating a fraudulent investment fund. Wilson transferred the entirety of Gray's funds to a brokerage account, whereas Wilson carried out his fraud. Wilson was arrested and the balance of the brokerage account was seized. Gray asserts he can trace portions of the seized funds to his investment. Based on the plea entered by Wilson, Gray alleged an interest in the seized assets, such that his interest was superior to Wilson and the government. The district court granted the government's motion to dismiss Gray's petition. The Ninth Circuit held the district court erred in holding that Gray lacked prudential standing under the zone of interest test (in order for a litigant to have prudential standing, the litigant's claim must fall within the zone of interest protected by the law invoked), because the test is not applicable. The Ninth Circuit reversed the district court's dismissal of Gray's petition, and held Gray had prudential standing to assert a claim. Additionally, the Ninth Circuit held Gray's interest is greater than Wilson's because the government is merely standing in Wilson's shoes, and its interests cannot exceed Wilson's interest. REVERSED and REMANDED.