E.D.N.C.: U.S. v. Cox- In rem Jurisdiction for Judicial Foreclosure

Summary: Mr. And Mrs. Cox, through their then attorney, entered into a settlement agreement in a civil forfeiture action brought for the collection of taxes, wherein they agreed to pay the government more than $3 million and granted Deeds of Trust against thirty-five tracts of land located throughout Alabama and North Carolina. After entering into this settlement, the government then initiated criminal prosecution of both of the Coxes and they subsequently pleaded guilty, with Mr. Cox being sentence to 33 months imprisonment, Mrs. Cox to 3 years probation, and each being fined $50,000. The when the Coxes failed to pay the agreed amount (perhaps in part because they were in prison), the government sought to judicially foreclose on the properties. The Coxes successfully argued that the District Court for the Eastern District of North Carolina only had in rem jurisdiction to authorize foreclosure for real property located in its district. Accordingly, the foreclosure actions against properties located elsewhere were dismissed. The judicial foreclosures against the property within the Eastern District was, however, allowed. The Coxes claims that the criminal prosecution following the civil settlement constituted Double Jeopardy was rejected following United States v. Ursery, 518 U.S. 267 (1996). Their contention that their prior lawyer had no authority to enter into the civil settlement was also rejected, as the district court found that their behavior, including personally signing the Deeds of Trust, clearly indicated that the settlement was authorized. For a copy of the opinion, please see: U.S. v. Cox- In rem Jurisdiction for Judicial Foreclosure