Southern District of New York Court Denies Petition for Possession of Diamonds Forfeited Upon Money Laundering Conviction
In a high profile case, defendant Roman Nektalov, a diamond dealer on 47th Street, was convicted in July 2004 of one count of money laundering. On November 3, 2004, the U.S. District Court for the Southern District of New York entered a preliminary order of forfeiture providing that defendant's right, title, and interest in certain diamonds seized during defendant's arrest be forfeited to the United States.
On November 19 and 29, 2004, respectively, nonparties E.J.D. Diamonds Manufacturer ("EJD") and Sergey Diamonds ("Sergey") petitioned the Court, pursuant to Federal Rule of Criminal Procedure 32.2(c), for an ancillary proceeding at which they would seek to demonstrate that they were the true owners of the diamonds, that the diamonds were only in Nektalov's possession on consignment, and that the forfeited diamonds should be returned to them. The Court conducted an ancillary proceeding on January 10 and 11, 2006. After reviewing the evidence and the parties' post-hearing submissions, the Court denied EJD's and Sergey's petitions for the reasons set forth in a decision issued on July 20, 2006 in the case of United States v. Roman Nektalov. The decision is available online at http://www.nylj.com.