Michael Prime was arrested in 2019 for counterfeiting, identity theft, and illegal firearm possession. During his arrest, authorities seized numerous electronic devices, including an external hard drive. Following his arrest, Prime pleaded guilty and agreed to disclose all assets. However, in his financial disclosures and at his sentencing hearing, Prime repeatedly stated that he owned very little cryptocurrency, reporting only $200 to $1,500 in bitcoin. He did not mention the hard drive or significant bitcoin holdings until more than three years after his plea agreement, when he filed a motion under Federal Rule of Criminal Procedure 41(g) seeking the return of the drive, which he claimed contained keys to nearly 3,443 bitcoin worth over $345 million. By that time, the government had destroyed the drive after Prime failed to cooperate with a process to remove contraband from his devices.
The Eleventh Circuit treated Prime's Rule 41(g) motion as a civil action in equity, where the court must balance equitable considerations. The government raised the defense of laches, which requires showing (1) a delay in asserting a right, (2) that the delay was not excusable, and (3) that the delay caused undue prejudice to the government. The court found all three elements satisfied. First, Prime waited more than three years after his plea to assert his claim, and during that time, he and his attorney repeatedly denied owning significant bitcoin. Second, Prime offered no valid excuse for this delay; his claim that he was negotiating with the government was unsupported by the record. Third, the delay prejudiced the government because, relying on Prime's representations that he owned little bitcoin, the government destroyed the hard drive. The court noted that it would be inequitable to award Prime an equitable remedy now that the property is gone, especially given his inconsistent statements and the massive financial prejudice to the government.
The decision affirms the district court's judgment, meaning Prime receives no return of the hard drive or compensation for the alleged bitcoin. The ruling reinforces that litigants seeking the return of seized property must act promptly and cannot make inconsistent representations about their assets. It leaves open the question of whether the bitcoin would have been subject to forfeiture if it had existed, but confirms that equitable remedies are unavailable when a claimant's delay and misrepresentations prejudice the government.