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CPLR 1311

This is an action for a forfeiture claim. In essence, plaintiff alleges that the non criminal defendants are dentists who billed the state program for unauthorized dental services provided by the criminal defendant and companies he is alleged to have controlled.

A Queens County Criminal attorney said that the forfeiture action was commenced by order to show cause in May 2005, at which time the court granted plaintiff’s request for a temporary restraining order attaching the personal and real property of the criminal defendant and the non-criminal defendants, and restrained all defendants and all persons and entities having knowledge of the order from removing from the State, transferring, assigning, disposing of, encumbering or secreting such property. Defendants appeared by counsel and the court approved a stipulation modifying the temporary restraining order, and permitted the release of funds from certain accounts held by the non-criminal defendants, including the release of approximately $7,000.00, to be used for living, business and legal expenses.

Thereafter, the court approved a stipulation and order further modifying the temporary restraining order, and permitted the release of additional funds from certain accounts held by certain defendants, including $23,187.37 to be used for living, business and legal expenses. In July 2005 the Attorney General and non-criminal defendants individually and on behalf of his interests entered into a Stipulated Preliminary Injunction. These defendants also executed an Affidavit of Confession of Judgment in favor of the State of New York to secure plaintiff’s interest in real property owned by these defendants, and agreed to plaintiff’s filing of judgments in the counties where they possess real property and the filing of notices of pendency against several of the real properties.

The Affidavit of the Confession of Judgment and the Confession of Judgment were filed with the Queens County Clerk. Plaintiff, pursuant to the Stipulated Preliminary Injunction, agreed to vacate previous restraints upon the assets of the defendants, including all bank accounts. Thereafter, the plaintiff filed copies of the Queens County judgment in all of the counties where the defendants were known to possess an interest in real property and notices of pendency were filed against several properties. All restraints on the bank accounts were removed, pursuant to the terms of the Stipulated Preliminary Injunction. Defendants were also permitted to draw upon existing home equity lines of credit. There was no burglary and no robbery charged.

To Be Cont….

That branch of the defendants’ motion which seeks to lift the statutory stay that has been in place is denied as moot. The court, in a so-ordered stipulation, lifted the stay pursuant to CPLR 1311.

That branch of the defendants’ motion which seeks to recover business property that was seized or produced voluntarily or pursuant to a subpoena is denied. It is noted that the parties have yet to conduct discovery in this forfeiture action, and that the enumerated business property was seized or produced in connection with the criminal action.

Thus, in order to recover this property, the non-criminal defendants are required to commence a replevin action pursuant to CPLR Article 71.

That branch of the defendants’ motion which seeks to vacate the Confession of Judgment on the ground that it was signed under duress is denied. Repudiation of an agreement on the ground that it was procured under duress requires the showing of a wrongful threat and the preclusion of the exercise of free will. Furthermore, an agreement purportedly procured under duress must be promptly repudiated. Here, the defendants were represented by counsel at the time they entered into the Stipulated Preliminary Injunction and Judgment of Confession. They now claim that their former counsel wrongfully advised them to enter into the Judgment of Confession, that they were advised by their former counsel that the restraints on their property would only last a few months, and that they were then “under threat” of criminal prosecution. Defendants’ assertion that the restraints would be in effect for no more than a few months is based on double hearsay.

That branch of the defendants’ motion which seeks to vacate the Confession of Judgment, and the notices of pendency filed against real properties in this state and in Florida, is denied, as defendant’s claims of financial hardship are not supported by any documentary evidence. Defendants’ claim that permitting plaintiff to restrain these assets would be unjust and inequitable, as the value of the properties far exceed the $4,795,764.00 set forth in the Confession of Judgment, is also rejected. Defendant has not submitted any evidence of the 2005 and present appraised value of the properties in question. Therefore, his claims regarding the value of these properties, are purely speculative.

In view of the foregoing, that branch of the defendants’ motion which seeks to lift the statutory stay is denied as moot, and the remainder of the defendants’ motion is denied.

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