NEW YORK — A jury in a federal district court has ruled in favor of tire importer Unicorn Tire Corp. and an affiliated company saying the federal government must reimburse property and funds seized during a fraud investigation.
The jury before the U.S. District Court for the Southern District of New York voted for reimbursement Feb. 23, but Unicorn Tire —which had its property and funds seized along with that of Efans Trading Corp. — announced the court victory in June.
Although Unicorn and Efans are separate companies, they are owned and operated by a husband and wife, Erxin Zhou and Yifan Kong, and operate out of the same building in Memphis.
The U.S. District Attorney's Office in New York filed suit against Unicorn and Efans in the Southern District Court in November 2013. The government sought forfeiture of 47 luxury vehicles in three lots, as well as bank accounts held by Efans and Unicorn, according to the complaint.
It accused the companies of being complicit in a scheme to illegally export vehicles outside of approved manufacturers' channels.
According to the complaint, Efans and Unicorn used "straw buyers" to purchase and title the vehicles. The straw buyers would then turn the titles over to Efans and Unicorn, clearing the way for their immediate export, the U.S. Attorney alleged.
A magistrate judge in the Southern District court issued seizure warrants for the vehicles and bank accounts on Oct. 7, 2013, according to the complaint.
In the jury verdict, however, the jury found in every instance that Efans and Unicorn had proved by a preponderance of the evidence that their property was not subject to forfeiture.
This included not only the 47 vehicles, but also two bank accounts belonging to Unicorn — one worth more than $2.3 million, the other worth nearly $700,000 — and an Efans bank account of just under $490,000.
"While justice may have been delayed, we are grateful for the final outcome," said Michael I. Dorr, director of sales and marketing for Unicorn Tire. "It was a difficult journey, but we are thankful for the support from our friends and customers that stood by us."