In United States v. Nasri, No. 22-55685 (9th Cir. 2026) the Ninth Circuit, addressing the constitutional limits of a federal court’s in rem jurisdiction in a civil forfeiture action, held that the Due Process Clause of the U.S. Constitution requires a district court to establish actual or constructive control over property to exercise in rem jurisdiction over that property.
Younes Nasri, a Canadian citizen residing in Dubai, was indicted on RICO and drug trafficking conspiracy charges. The government alleged that Nasri led a Canadian-based company, called Phantom Secure, that distributed encrypted communication devices and marketed uncrackable phones to criminals. According to the government’s complaint, Phantom Secure operated across the world, including the Southern District of California. The government’s complaint further alleges that Nasri was a significant worldwide distributor of Phantom Secure devices utilizing foreign shell companies, naming Golden Castle Technology as one such shell company, to then launder the enterprise’s profits, through Bendura Bank AG in Liechtenstein.
The United States initiated a civil forfeiture action against approximately $1.2 million in Nasri’s Liechtenstein bank accounts pursuant to 18 U.S.C. § 981 and 21 U.S.C. § 881, alleging that the funds were proceeds of illegal drug exchanges in the Southern District of California. In response, Nasri filed a verified claim asserting innocent ownership of the assets. After global resolution negotiations subsequently failed and Nasri failed to appear in court for his civil case or surrender in his criminal case, the government then moved to strike Nasri’s claim under the fugitive disentitlement statute, 28 U.S.C. § 2466. Nasri opposed this motion, arguing that the court lacked jurisdiction over the foreign assets. The district court granted the government’s motion to strike finding that it had in rem jurisdiction under 28 U.S.C. § 1355 because the statute did not require the government to establish constructive control over foreign-held proceeds. Nasri appealed the decision to the Ninth Circuit Court of Appeals.
The Ninth Circuit ultimately held that under fundamental due process principles, in rem jurisdiction is strictly premised on the property itself. Because the United States lacked any connection, possession, or control over the Liechtenstein bank accounts, the district court’s exercise of in rem jurisdiction violated due process. While 28 U.S.C. § 1355(b)(2) permits a forfeiture action involving property located in a foreign country to be brought in the district court where the underlying acts occurred, or in the U.S. District Court for the District of Columbia, the court reasoned that prior decisions never addressed whether doing so without actual or constructive control comported with the Due Process Clause. In so doing, the court found that seizing or constructively seizing property serves as a vital mechanism to put potential claimants on notice, and without seizure, the court cannot ensure that notice was reasonably calculated to apprise all interested parties of the pending litigation.
Ultimately, the court adopted the Second Circuit’s framework established in United States v. All Funds Deposit in Any Accounts Maintained in the Names of Meza or De Castro, 63 F.3d 148 (2d Cir. 1995) to determine whether a district court can establish constructive control over assets located in a foreign nation. A district court can establish constructive control if the foreign government acts essentially as an agent of the United States for the purposes of the forfeiture action. The district court may look at factors such as: (1) foreign restraining orders issued at the request of U.S. authorities; (2) foreign court judgments affirming those restraining orders; and (3) general cooperation and sufficient assurances from the foreign government regarding the assets. The court determined that so long as the U.S. has received sufficient assurances and cooperation from the foreign government to constitute constructive control over the assets, the court may exercise in rem jurisdiction over the assets, otherwise, the action must be dismissed.
Importantly, this decision does not strike down the statutory venue provision of U.S.C. § 1355. Rather, this decision overlays a mandatory constitutional due process requirement of control or constructive control that must be satisfied before a court may exercise in rem jurisdiction.