## Facts

- Colombian business entities and individuals claimed ownership of funds sent by international electronic funds transfers (EFTs) from Europe to South America, routed through New York correspondent/intermediary banks.
- Federal authorities suspected the transfers were connected to narcotics money laundering and initiated civil forfeiture action under federal statutes.
- Government requests, subpoenas, and court orders directed the intermediary banks to stop transmission of the EFTs and deliver the funds into court custody.
- The banks complied by interrupting the transfers and turning the funds over to the court.
- Plaintiffs sued the intermediary banks for damages, including loss of use of the funds and other alleged state and federal law violations.
- The actions against three intermediary banks were consolidated; the banks moved to dismiss.

## Issues

1. Whether intermediary banks that comply with government subpoenas, court orders, and forfeiture directives stopping EFTs in transit may be held civilly liable to claimants asserting ownership of the funds.
2. Whether, under federal civil forfeiture statutes, the United States’ right, title, and interest in allegedly forfeitable property vests upon commission of the underlying offense, cutting off claimants’ asserted property rights as against the banks.

## Decision

- The court granted the intermediary banks’ motions to dismiss the consolidated actions.
- It held that the banks were not civilly liable for complying with government process directing them to stop the transfers and surrender the funds.
- It concluded that, under the forfeiture statutes, the United States is treated as holding title to forfeitable property upon commission of the act giving rise to forfeiture; therefore, plaintiffs’ claims against the banks failed as a matter of law.

## Legal Principles

- Under 21 U.S.C. § 881(h) and related forfeiture provisions, “all right, title, and interest” in property subject to forfeiture vests in the United States upon commission of the act giving rise to forfeiture.
- When the government acts as putative owner of allegedly forfeitable funds and uses lawful process to take custody, an intermediary bank’s compliance with subpoenas and court orders does not create civil liability to private claimants.
- Private claims sounding in contract or tort cannot override statutory forfeiture vesting rules where the bank’s challenged conduct is compliance with federal seizure and custody directives.

## Conclusion

The court dismissed the claimants’ suits against the New York intermediary banks, ruling that federal forfeiture law treats title to forfeitable funds as vesting in the United States upon the underlying offense and that banks incur no civil liability to claimants for complying with government process that stops and surrenders EFTs in transit.


Manufacturas Int'l, LTDA v. Mfrs. Hanover Tr. Co., 792 F. Supp. 180 (E.D.N.Y. 1992)