Rule G Standing Hearings: Preponderance Fact-Finding and “Bare Title” Insufficiency for Straw Owners

1. Introduction

United States v. the M/Y Amadea is a Second Circuit civil forfeiture decision arising from the U.S. Government’s seizure of a 348-foot superyacht allegedly beneficially owned by sanctioned Russian national Suleiman Kerimov. Claimants Eduard Yurievich Khudainatov and his company, Millemarin Investments Ltd., asserted that Khudainatov (through Millemarin) was the yacht’s beneficial owner and therefore had standing to contest forfeiture.

The central issues were (i) the evidentiary standard and factfinding posture governing an evidentiary hearing on Article III standing under Supplemental Rule G(8)(c), and (ii) whether the Claimants’ asserted ownership interest was real or merely “straw” (i.e., “bare title” held for someone else), which would negate constitutional standing.

2. Summary of the Opinion

The Second Circuit affirmed the Southern District of New York (Ho, J.) order striking the Claimants’ claim for lack of Article III standing. After a four-day evidentiary hearing, the District Court found by a preponderance of the evidence that—at least after a September 2021 Memorandum of Agreement—the Claimants retained only bare title while relinquishing possession, dominion and control, and financial stake, rendering them straw owners who suffer no cognizable injury from forfeiture.

The Second Circuit also upheld the exclusion of Khudainatov’s declaration as inadmissible hearsay at the Rule G evidentiary hearing, emphasizing that the Federal Rules of Evidence apply (unlike in suppression or sentencing contexts where hearsay is often permitted).

3. Analysis

A. Precedents Cited

• Schneiderman v. Am. Chem. Soc'y, 172 F.4th 158 (2d Cir. 2026): Cited for waiver—because the Claimants conceded the preponderance burden, the argument that Rule 56 standards should govern was waived on appeal.
• United States v. One Lincoln Navigator 1998, 328 F.3d 1011 (8th Cir. 2003) and All. for Env't Renewal, Inc. v. Pyramid Crossgates Co., 436 F.3d 82 (2d Cir. 2006): Used to validate the procedural move: when standing turns on disputed facts and credibility, a court may hold a limited evidentiary hearing to resolve those disputes.
• United States v. $133,420.00 in U.S. Currency, 672 F.3d 629 (9th Cir. 2012) and Lujan v. Defs. of Wildlife, 504 U.S. 555 (1992): Support the staged-burden concept—standing demands more proof as litigation progresses; what defeats summary judgment may not satisfy proof at a hearing.
• Marine Midland Bank, N.A. v. Miller, 664 F.2d 899 (2d Cir. 1981): Anchors the preponderance standard for jurisdictional facts resolved at a pretrial evidentiary hearing.
• Carter v. HealthPort Techs., LLC, 822 F.3d 47 (2d Cir. 2016): Supplies the standard of review: standing legal conclusions de novo; factual findings for clear error.
• United States v. Ross, 161 F.4th 100 (2d Cir. 2025) and United States v. $557,933.89, More or Less, in U.S. Funds, 287 F.3d 66 (2d Cir. 2002): Establish that civil forfeiture claimants must show Article III (and statutory) standing and need only a “facially colorable interest”—not proof of full merits—to pass the constitutional threshold.
• United States v. Cambio Exacto, S.A., 166 F.3d 522 (2d Cir. 1999) and United States v. Premises & Real Prop. with Bldgs., Appurtenance & Improvements at 500 Del. St., Tonawanda, N.Y., 113 F.3d 310 (2d Cir. 1997): Provide the key doctrinal lever: Article III standing turns on injury; “straw” owners who hold title for another do not suffer injury when property is forfeited, so “bare title” can be insufficient.
• United States v. JP Morgan Chase Bank Acct. No. Ending 8215, 835 F.3d 1159 (9th Cir. 2016): Reinforces that “bare title, standing alone” does not necessarily confer standing in forfeiture.
• United States v. One-Sixth Share of James J. Bulger in All Present & Future Proceeds of Mass Millions Lottery Ticket No. M246233, 326 F.3d 36 (1st Cir. 2003) and Broidy Cap. Mgmt. LLC v. Benomar, 944 F.3d 436 (2d Cir. 2019): Cited to police the boundary between standing and merits; overlapping evidence does not itself convert jurisdictional factfinding into an impermissible merits adjudication.

B. Legal Reasoning

1. Rule G provides distinct procedural tracks for standing challenges.
   The court emphasized Supplemental Rule G(8)(c)’s structure: standing can be tested “on the pleadings,” “by summary judgment,” or “after a hearing.” The “after a hearing” option exists precisely where material facts are disputed, making summary judgment inappropriate.
2. At a Rule G evidentiary hearing, the claimant must prove standing by a preponderance.
   The Second Circuit endorsed the District Court’s approach: once the court opts for a hearing, it may weigh evidence, make credibility determinations, and resolve factual disputes, and the claimant must carry the burden by a preponderance of the evidence—mirroring jurisdictional factfinding in other civil contexts.
3. “Bare title” does not defeat a straw-owner finding.
   Even though legal title often suggests standing, the Second Circuit reiterated that Article III standing is about injury. Under United States v. Cambio Exacto, S.A., an ostensible owner holding title “for somebody else” does not suffer injury from forfeiture. Once the Government made a prima facie showing that the Claimants were straw owners, the Claimants had to rebut it with evidence of an interest “beyond mere title.”
4. Post-MOA facts defeated any “facially colorable” ongoing interest.
   The court treated the September 2021 MOA and ensuing conduct as decisive: after the MOA was consummated, the Claimants no longer used the yacht, had no personal belongings aboard at seizure, and (critically) offered no evidence of paying insurance or operating costs thereafter—supporting the conclusion that they held only bare title without real dominion, control, or financial stake.
5. Evidentiary rules apply at the Rule G hearing; hearsay declarations may be excluded.
   The Second Circuit rejected analogies to suppression and sentencing hearings, noting those are generally exempt from the Federal Rules of Evidence by rule, whereas Rule G hearings are not. The District Court gave advance notice it would likely exclude declarations where the declarant was not presented for cross-examination or deposition, and excluding Khudainatov’s declaration was not error.

C. Impact

• Clarifies Second Circuit practice under Supplemental Rule G(8)(c). The decision squarely confirms that a Rule G “hearing” is not a dressed-up summary judgment proceeding; it is a factfinding mechanism where courts may resolve disputed jurisdictional facts by a preponderance.
• Strengthens screening of nominee/straw claims in high-value forfeitures. In contested beneficial-ownership cases (including sanctions-related asset seizures), claimants relying on formal title should expect focused inquiry into dominion/control, financial responsibilities, and real-world use.
• Raises the evidentiary bar for claimants at the standing stage once a hearing is ordered. Claimants must come prepared with admissible evidence and live testimony (or depositions), not just declarations, to establish a genuine ownership interest beyond paperwork.

4. Complex Concepts Simplified

Article III standing (in forfeiture)

The constitutional requirement that a claimant show a real, personal stake—an “injury”—from the forfeiture. In this context, it generally means a genuine ownership or possessory interest that would be harmed if the property is forfeited.

“Facially colorable interest”

A plausible, non-frivolous interest in the property—less than proving you will win on the merits, but more than unsupported assertion when evidence is tested at a hearing.

Straw owner / nominee owner

Someone who holds title in name only for the benefit of another. Because the straw owner is not the true economic or controlling owner, forfeiture may not “injure” them in the constitutional sense.

Supplemental Rule G(8)(c) hearing

A procedure specific to civil forfeiture allowing the court to resolve disputed standing facts through an evidentiary hearing—where the judge can evaluate credibility and weigh evidence.

Preponderance of the evidence

“More likely than not.” At the Rule G hearing stage, the claimant must persuade the court that it is more likely than not that they have a genuine interest sufficient for standing.

5. Conclusion

United States v. the M/Y Amadea cements two practical rules for Second Circuit forfeiture litigation: (1) when standing is tried “after a hearing” under Supplemental Rule G(8)(c), the claimant must prove standing by a preponderance, and the court may resolve factual disputes and credibility; and (2) legal title alone will not establish Article III standing where the evidence shows the claimant is a straw owner lacking real dominion, control, or financial stake. The decision signals rigorous, evidence-driven scrutiny of nominee ownership—especially salient in sanctions-era forfeitures where beneficial ownership is frequently contested.