Background
Timofey V registered waronfakes.com through the Russia-based registrar Reg.Ru and used it with his employer, ANO Dialog, to publish content focused primarily on Russian political issues. In August 2024, the U.S. government seized the domain under a warrant, alleging that Reg.Ru’s payment to U.S.-based registry Verisign was an international money-laundering transaction intended to benefit sanctioned Russian official Sergei Kiriyenko and violate the International Emergency Economic Powers Act.
Five days after the seizure, the Treasury Department’s Office of Foreign Assets Control designated ANO Dialog and its director as blocked persons. Timofey V and ANO Dialog later sought return of the domain under Federal Rule of Criminal Procedure 41(g). The District Court denied the motion without an evidentiary hearing because ANO Dialog was sanctioned and neither appellant had obtained an OFAC license permitting transfer of the domain.
The Court’s Holding
The Third Circuit affirmed. It first held that the appellants had Article III standing because they claimed a possessory interest in the domain and submitted evidence that Timofey V remained its registrant when it was seized. Whether sanctions prevented the requested return concerned the merits of lawful possession, not constitutional standing or redressability.
On the merits, the court held that the appellants had not established a present lawful entitlement to possess the domain. Because ANO Dialog was a blocked person, the domain was effectively frozen and could not be transferred to the appellants without OFAC authorization. The undisputed sanctions status and absence of a license made an evidentiary hearing unnecessary.
The court also held that the appellants forfeited their arguments under IEEPA’s exception for informational materials and OFAC’s general license for certain telecommunications transactions because they had not raised those statutory and regulatory theories in the District Court. Their earlier First Amendment arguments did not preserve the distinct theories advanced on appeal.
Key Takeaways
- A claimed possessory interest in seized property can establish standing for a Rule 41(g) motion even when sanctions may ultimately prevent its return.
- A court cannot order property returned under Rule 41(g) when the movant cannot lawfully receive it without an OFAC license.
- No evidentiary hearing is required when no disputed factual issue necessary to resolve the Rule 41(g) motion exists.
- Arguments based on IEEPA exceptions or OFAC licenses must be raised in the District Court; related First Amendment arguments do not necessarily preserve them.
Why It Matters
The decision separates Article III standing from the merits requirement that a Rule 41(g) movant be lawfully entitled to possess seized property. For sanctioned parties seeking the return of digital assets, obtaining an OFAC license or other sanctions relief may be essential before a court can order a transfer.
The court nevertheless warned that its ruling did not endorse indefinite government retention. With no indictment, forfeiture action, or communication with the owners for more than twenty months, the retention appeared to be approaching the limits of reasonableness, although it was not yet an abuse of discretion on the record presented.