A claimant who holds only bare legal title to a seized vessel lacks standing under Article III of the U.S. Constitution to contest its civil forfeiture. The U.S. Court of Appeals for the Second Circuit reached that conclusion in United States v. Khudainatov, No. 25-869-CV, 2026 WL 1532043 (2d Cir. June 1, 2026).
The case arose from the U.S. Government’s in rem action against the superyacht Amadea, which was seized in Fiji in 2022 at the request of the United States on the allegation that it was beneficially owned by a sanctioned Russian individual. After the Government commenced a civil forfeiture action, another individual and his company filed a claim contending that he—not the sanctioned individual—was the beneficial owner of the yacht through his company, which held legal title to the vessel. The Government moved to strike their claim for lack of standing, and it succeeded.
I. Background
In or about April 2022, Fijian law enforcement authorities seized the 348-foot luxury yacht Amadea pursuant to a warrant issued by a Fijian court. The warrant was issued in response to a mutual legal assistance request from the U.S. Department of Justice, following the issuance of a seizure warrant for the vessel by the U.S. District Court for the District of Columbia.
In October 2023, the U.S. Government commenced a civil forfeiture action seeking the forfeiture of the Amadea. The Government’s theory was that the yacht was beneficially owned by Suleiman Kerimov, a sanctioned Russian “[o]ligarch,” and that after Kerimov became subject to sanctions, he or others acting on his behalf spent more than a million dollars to maintain and provision the vessel, routing the money through U.S. financial institutions. Those transactions, the Government alleged, violated the sanctions imposed on Kerimov and therefore constituted “specified unlawful activity” under 18 U.S.C. § 1956(c)(7)(D), which in turn rendered the Amadea forfeitable under 18 U.S.C. § 981(a)(1)(C).
In November 2023, Eduard Khudainatov, a Russian businessman and former CEO of Rosneft, and his company Millemarin Investments Ltd. filed a claim asserting that he, not Kerimov, was the beneficial owner of the Amadea through his ownership of Millemarin, which held legal title to the yacht. The Government moved, by way of summary judgment, to strike the claim under Rule G(8)(c)(i)(B) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions, arguing that the Claimants were mere straw owners of the Amadea and therefore lacked constitutional standing to challenge the forfeiture. (To clarify, a motion to strike a claim is a request asking the court to remove a party’s claim from the proceeding—in effect, to knock that party out of the case before the merits are reached.)
The U.S. District Court for the Southern District of New York declined to resolve the Government’s motion to strike on summary judgment due to factual disputes between the parties. Instead, it conducted an evidentiary hearing to determine whether the Claimants could demonstrate, by a preponderance of the evidence, that they were not mere straw owners of the Amadea. Following a four-day hearing, the District Court granted the Government’s motion, finding that the Claimants failed to meet this burden.
The decisive fact was a September 2021 Memorandum of Agreement (MOA) under which Millemarin committed to sell the Amadea for €225 million to a Cayman Islands entity that had been formed less than a week before the MOA was signed. The MOA shifted the right to use the vessel and the obligation to pay its operating costs to the buyer once the first €45 million installment was paid. The full purchase price of €225 million was paid by the end of October 2021. The District Court concluded that all of the incidents of ownership of the Amadea were transferred from Millemarin to the Cayman Islands entity upon full payment of its €225 million purchase price and that, whatever the Claimants once held, thereafter they retained only bare title and were accordingly mere straw owners who lacked constitutional standing to challenge the Amadea’s forfeiture.
Because the Claimants’ claim had been struck and no one else remained to contest the action, the District Court entered a default judgment of forfeiture (March 11, 2025) and, a week later, a final judgment of forfeiture (March 18, 2025).
The Claimants timely appealed.
II. The Second Circuit’s Opinion: “The District Court correctly concluded that the Claimants’ legal title to the Amadea did not itself establish standing to contest the Amadea’s forfeiture.”
The U.S. Court of Appeals for the Second Circuit affirmed the District Court’s judgments.
The Court began with the governing rule: “[B]efore a claimant can be heard to contest a civil forfeiture claim, he must demonstrate both Article III and statutory standing.” United States v. Ross, 161 F.4th 100, 109 (2d Cir. 2025). “Standing is a question that determines whether the claimant may properly invoke the jurisdiction of the federal courts to determine the merits of the underlying dispute, and it therefore logically precedes, not follows, that determination.” United States v. $557,933.89, More or Less, in U.S. Funds, 287 F.3d 66, 78 (2d Cir. 2002). Consequently, to establish standing, the claimant does not need to prove “the full merits of [his] underlying claim”; rather, he needs to show only a “facially colorable interest in the proceedings sufficient to satisfy the case-or-controversy requirement and prudential considerations defining and limiting the role of the court.” Id. (internal quotation marks omitted).
How can the claimant prove a “facially colorable interest in the proceedings”? In United States v. Cambio Exacto, S.A., 166 F.3d 522, 527 (2d Cir. 1999), the Second Circuit held that the ultimate focus of the standing inquiry is whether the party seeking to be heard has suffered an injury that flows from the challenged conduct and can be redressed by the relief sought. In a civil forfeiture action, a true owner of the seized property will normally meet this test because losing the property is a real injury to them. A straw owner will not. Holding title for someone else, a straw owner suffers no injury when the property is taken and therefore lacks Article III standing to contest the forfeiture.
Here, the Claimants insisted that they had a “facially colorable interest in the proceedings” based on their legal title in the Amadea. The Second Circuit rejected that argument, finding that the Claimants failed to rebut the Government’s prima facie showing that they were mere straw owners. Under settled circuit precedent, straw owners lack standing to contest the forfeiture.
The Claimants argued that they established a “facially colorable interest” in the Amadea beyond bare title through evidence that Khudainatov commissioned the vessel and that he and his family used it prior to the September 2021 MOA. However, it was undisputed that such use ceased after the MOA and that no personal belongings were aboard at the time of seizure. The Second Circuit concluded that pre-MOA connections did not support a post-MOA “facially colorable interest” in the Amadea. The Claimants also relied on their alleged continued management of the vessel through insurance coverage, but the District Court found no evidence of insurance payments after the September 2021 MOA and concluded that they bore no ongoing costs thereafter. That finding supported the conclusion that the Claimants functioned as straw owners after the MOA, and mere maintenance of an insurance policy at the time of seizure did not establish a continuing ownership interest in the property.
Turning to a different theory, the Claimants argued that the District Court impermissibly converted the threshold standing inquiry into a premature assessment of the merits of the Amadea’s ownership. The Second Circuit agreed that courts must not conflate standing with the merits but concluded that no such error occurred in this case. The District Court correctly recognized that the Claimants needed to show only an interest beyond title, not the full merits of their claim. The District Court, in its turn, needed only to assess whether the Claimants held a “facially colorable interest” in the property, not whether Kerimov was the true beneficial owner of the vessel. The fact that some evidence may be relevant to both the standing inquiry and the ultimate question of who owns the Amadea does not transform the threshold standing inquiry into an adjudication on the merits, the Second Circuit concluded.
The Second Circuit affirmed the District Court’s judgments, holding that the Claimants lacked constitutional standing to contest the forfeiture of the Amadea. Having resolved the case on that ground, it declined to reach the District Court’s alternative basis for striking the claim as a case-dispositive discovery sanction—that is, dismissing it as a penalty for the Claimants’ conduct during the evidence-exchange phase of the case.
III. Takeaways
The interesting thing about this opinion is that the Second Circuit never reached the headline question—was Kerimov the real beneficial owner?—because the standing gateway disposed of the case first.
Striking a claim for lack of standing is not a ruling that the property is or is not forfeitable—it is a ruling that this claimant has no right to be heard contesting it. Once the claim is struck, the claimant is out. And if no other valid claimant remains, the action stands unopposed, and the Government can take a default judgment of forfeiture, provided its allegations establish a sufficient basis for forfeiture.
The case illustrates that counsel opposing a motion to strike under Rule G(8)(c)(i)(B) on behalf of a corporate titleholder cannot rely solely on the certificate of registry or share register. The claimant must prove that it has a “facially colorable interest” in the vessel that goes beyond bare title. Importantly, the evidence of such “interest” should be contemporaneous with the date of seizure. This was the fatal flaw in Khudainatov: all the good evidence (commissioning the vessel, family use) predated the transfer, and the Claimants offered nothing showing continuing “interest” in the property at the moment of seizure. Where a sale or transfer agreement has stripped away the incidents of ownership, and in the absence of any other specific, documented interest, bare title will not suffice to overcome the threshold standing inquiry.
The case also demonstrates the importance of carefully planning litigation strategy before contesting the forfeiture. A claimant who defeats a motion for summary judgment does not thereby win; it may instead be exposed to an evidentiary hearing, at which the court can weigh the evidence, make credibility determinations, and resolve the very factual disputes that precluded summary judgment in the first place. The evidentiary standard at that stage is demanding: to defeat a motion to strike for lack of standing once the matter reaches an evidentiary hearing, the claimant must establish standing by a preponderance of the evidence. That prospect raises several questions that the claimant would need to weigh carefully before stepping into an evidentiary hearing. Does the claimant hold evidence sufficient to meet the preponderance-of-the-evidence standard? Would it hold up under cross-examination? Can the person whose “facially colorable interest” is asserted testify? For claimants with a genuine interest, this scrutiny is simply the price of being heard. For straw owners, the same exposure may work against them, revealing the ownership they sought to conceal.
Finally, the seizure of the Amadea illustrates the transnational nature of U.S. sanctions enforcement. The vessel was seized in Fiji, an island nation in the South Pacific located more than 6,500 miles from the continental United States—farther than the width of the continental United States itself. Yet geographic distance proved irrelevant. U.S. authorities successfully relied on international legal cooperation to obtain control of the asset. The case suggests that asset holders cannot assume that relocation to a foreign jurisdiction will shield property from enforcement measures when international cooperation arrangements are available.
The information provided in this article is intended for informational purposes only and does not constitute legal advice. It should not be relied upon or applied without consulting an attorney to address your specific circumstances. Please note that this article was published on the date indicated and may not reflect subsequent changes in the law.
