US v. Betancourt-Perez

Filing

OPINION issued by Sandra L. Lynch, Appellate Judge; Bruce M. Selya, Appellate Judge and Rogeriee Thompson, Appellate Judge. Published. [14-1175]. CLERK'S NOTE: Docket entry was edited to modify the docket text.

Case: 14-1175

Document: 00117041114

Page: 1

Date Filed: 08/10/2016

Entry ID: 6024402

United States Court of Appeals
For the First Circuit
No. 14-1175
UNITED STATES OF AMERICA,
Appellee,
v.
ASSORTED JEWELRY APPROXIMATELY VALUED OF $44,328.00,
Defendant In Rem,
ANGEL ABNER BETANCOURT-PÉREZ,
Claimant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Camille L. Vélez-Rivé, U.S. Magistrate Judge]

Before
Lynch, Selya, and Thompson,
Circuit Judges.

Joshua L. Gordon on brief for appellant.
Mainon A. Schwartz, Assistant United States Attorney, Nelson
Pérez-Sosa, Assistant United States Attorney, Chief, Appellate
Division, and Rosa Emilia Rodríguez-Vélez, United States Attorney,
on brief for appellee.

August 10, 2016

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THOMPSON,

Page: 2

Circuit

Date Filed: 08/10/2016

Judge.

While

executing

Entry ID: 6024402

a

search

warrant on Angel Abner Betancourt-Pérez's apartment, government
agents found drugs in various quantities, a gun, and assorted
jewelry

valued

at

$44,328.00.

This

civil

forfeiture

action

concerns the jewelry, which Betancourt-Pérez claims belonged to
him lawfully and was unrelated to the illegal drug activities that
are the subject of his criminal case.

Unconvinced, the district

court granted summary judgment to the government and ordered the
jewelry forfeited.

Betancourt-Pérez now appeals.

For the reasons

we explain, we vacate and remand for further proceedings.
BACKGROUND
For over a year after the government filed a 70-defendant
indictment for the activities of the drug trafficking organization
"El

Castillo,"

Betancourt-Pérez,

a

member

of

the

conspiracy,

remained a fugitive.
On the day of Betancourt-Pérez's eventual arrest, law
enforcement surveilling his apartment on a tip observed him loading
boxes (in which large quantities of marijuana were later found)
into a vehicle in the parking lot.

After arresting Betancourt-

Pérez,

a

government

agents

executed

search

warrant

in

his

apartment, where it appears Betancourt-Pérez lived solo.

In

Betancourt-Pérez's kitchen, they found cocaine and marijuana in
various quantities ("behind the refrigerator kitchen cabinet,"
under the sink, in the oven, and in the kitchen closet), a pistol

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(on top of the washer/dryer machine), and a collection of jewelry
(also

"hidden

behind

refrigerator").

the

kitchen

cabinet

on

top

of

the

The jewelry, which is the topic of the present

appeal, consisted of two men's watches, several men's chains and
bracelets, a man's ring, several women's bracelets, and various
other ornaments, together valued at approximately $44,328.
A second indictment was filed charging Betancourt-Pérez
with drug and firearm counts related to his activities on the day
of his arrest, and then a third charging him for his role in
another unrelated conspiracy to source marijuana from Mexico,
California, and Florida, and distribute it throughout Puerto Rico.
Eventually, Betancourt-Pérez pled guilty to one count from each of
the three criminal cases for conspiracy to possess with intent to
distribute, as well as to one count of possession of a firearm in
furtherance of a drug trafficking crime.1
On November 1, 2011, the government filed a verified
complaint

for

forfeiture

in

rem

against

the

seized

jewelry,

alleging that the jewelry was subject to civil forfeiture because
it

was

linked

to

Betancourt-Pérez's

illegal

drug

activity.

Betancourt-Pérez intervened in the forfeiture action, averring
that the jewelry was "not related in any way to illegal activity,"
and

that

"[a]ll

of

said

property

1

belong[ed]

to

Angel

A.

Betancourt-Pérez's appeal of his criminal sentence is the
subject of a related opinion that we issue today separately.

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Betancour[t]-Pérez."

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Entry ID: 6024402

During a brief discovery period, Betancourt-

Pérez responded to the government's interrogatories by asserting
again that all of the jewelry was "either bought by me with the
fruits of my work, a gift, or my mother's belongings which I was
storing for her."
The government subsequently moved for summary judgment,
granted.2

the

Betancourt-Pérez

timely

We review a grant of summary judgment de novo.

which

Ortiz-

district

court

appeals.
DISCUSSION

Cameron v. Drug Enf't Admin., 139 F.3d 4, 5 (1st Cir. 1998).
Summary judgment is appropriate where there are no genuine issues
as to any material facts and the moving party is entitled to
judgment as a matter of law.

Fed. R. Civ. P. 56(c).

The forfeiture provision of the Controlled Substances
Act provides that all money or "other things of value" that are
furnished "in exchange for a controlled substance," and "all
proceeds traceable" to such an exchange are subject to forfeiture.
21

U.S.C.

§

881(a)(6).

Where

the

government's

theory

in

a

forfeiture action is, as it is here, "that the property . . . was
involved in the commission of a criminal offense," the Civil Asset

2

The government alternatively moved to dismiss BetancourtPérez's claim for lack of standing, which the district court
denied.

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Forfeiture Reform Act of 2000 ("CAFRA") puts the burden on the
government to prove, by a preponderance of the evidence, that there
is "a substantial connection between the property and the offense."
18 U.S.C. § 983(c)(3).

Although the government must show that

"the property was connected with illegal drug transactions," it
need not "link[] the property to a particular transaction." United
States v. 1933 Commonwealth Ave., 913 F.2d 1, 3 (1st Cir. 1990).
The government argues that it has met its burden here
based

on

the

following

Betancourt-Pérez's
substances,

(2)

facts:

kitchen

in

(1)

the

close

Betancourt-Pérez

pled

jewelry

proximity
guilty

to

was
to

found

in

controlled

various

drug

conspiracy counts in his related criminal case, and (3) BetancourtPérez's legitimate earnings were so meager that he could not have
bought the jewelry with his legal income.

The problem with the

government's case is that only the first two of these facts are
supported by the record, and without the third, the government
falls short of clearing the preponderance-of-the-evidence hurdle.
First, a few words about the location of the jewelry and
Betancourt-Pérez's guilty pleas.

As the government has stated,

the jewelry was found hidden in a refrigerator cabinet near a
1,056-gram brick of cocaine.3

Additional drugs and a firearm were

3

The Drug Enforcement Administration's investigation report
stated that the jewelry was "behind the kitchen cabinet on top of
the refrigerator," and that the brick of cocaine was found "behind
the refrigerator kitchen cabinet."
Thus, even if the report
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also found hidden throughout the kitchen, all facts that support
a possible connection between the jewelry and the illegal drug
activity.

See United States v. $58,422.00 in U.S. Currency, 154

F. App'x 20, 22 (9th Cir. 2005) (noting that the fact that "both
drugs and drug paraphernalia were found in close proximity to some
of the [seized] assets" is persuasive evidence that the assets
were acquired from drug trafficking); see also United States v.
$149,442.43 in U.S. Currency, 965 F.2d 868, 877 (10th Cir. 1992)
(coming to a similar conclusion).4

referred to two different refrigerator cabinets, it is clear that
the jewelry and drugs were found in close proximity to each other.
4

Betancourt-Pérez argues for the first time on appeal that
we may not consider the fact that the jewelry was found in close
proximity to the cocaine because, he claims, the government lacked
sufficient probable cause for a warrant.
But Betancourt-Pérez
gives this unpreserved argument short shrift, and so shall we. To
prevail on this argument, Betancourt-Pérez would first need to
establish that the warrant was unlawful, which Betancourt-Pérez
fails to do.
He perfunctorily claims: "Nothing in the record
discloses any probable cause for the government to believe the
boxes [that Betancourt-Pérez was loading in the van on the day of
his arrest] contained contraband or anything suspicious that might
create probable cause to search." But he develops this argument
no further (and has failed to include the search warrant itself in
the record, we might add).
What's more, Betancourt-Pérez
stipulated in his plea agreement to the contradictory fact that
the search warrant had been issued not on the basis of agents
observing him loading boxes into the van, but upon the discovery
during a search incident to arrest that those boxes contained
marijuana. We thus cannot tell what Betancourt-Pérez's illegal
search argument is, or whether it has any merit.
In short,
Betancourt-Pérez did not properly preserve the argument below and
we cannot make sense of it now -- both are grounds for us to
consider the argument waived. See Poloquin v. Garden Way, Inc.,
989 F.2d 527, 531 (1st Cir. 1993); United States v. Zannino, 895
F.2d 1, 17 (1st Cir. 1990).

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Likewise, it is also true that Betancourt-Pérez pled
guilty to participating in two large-scale drug conspiracies, as
well as to conspiring to possess drugs with intent to distribute
on the day of his arrest, and "[a] claimant's record of drug
activity is a highly probative factor in the forfeiture calculus."
United States v. $21,510.00 in U.S. Currency, 144 F. App'x 888,
889 (1st Cir. 2005) (quoting United States v. $67,220.00 in U.S.
Currency, 957 F.2d 280, 286 (6th Cir. 1992)).

But we think these

two facts alone -- Betancourt-Pérez's admitted participation in
drug conspiracies and the close proximity of the jewelry to the
drugs -- do not establish by a preponderance of the evidence that
the jewelry was purchased with proceeds from Betancourt-Pérez's
illegal drug activity.
To put it another way, the undisputed facts give rise to
two possible stories: either Betancourt-Pérez was a drug dealer
who

kept

his

valuables

in

his

kitchen,

and

this

included

a

collection of jewelry that he had amassed through legitimate means,
potentially over the span of his life; or Betancourt-Pérez was a
drug dealer who kept his valuables in his kitchen, and this
included a collection of jewelry that he had purchased with drug
money.

Because the record does not compel a conclusion that the

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second scenario is more likely than not, the government has failed
to meet its summary judgment burden.5
We add that meeting the preponderance-of-the-evidence
standard is not an exacting exercise, but it is also not a
meaningless one.

It is, moreover, an exercise that Congress, in

passing CAFRA, deliberately chose to require of the government,
heightening
probable

the

cause

standard
standard

of

proof

that

from

formerly

the

less-burdensome

applied.

18

U.S.C.

§ 983(c)(1); see also United States v. Funds in the Amount of
$3,670.00, 403 F.3d 448, 454 (7th Cir. 2005).

Thus, it was the

government's congressionally-imposed burden to put together a
summary judgment record that would tip the scale toward connecting
the jewelry to the drug activity, and it failed to do so here.
It bears mention that we would likely have been persuaded
of a substantial link between the jewelry and drug activity if the
record bore out the government's additional claim that BetancourtPérez lacked the means to purchase the jewelry with legal income
because, aside from drug dealing, he had only limited, part-time
work.

In fact, in other civil forfeiture cases, a defendant's

inability to purchase the seized property through legitimate means

5

Indeed, the first scenario may be the more likely one.
After all, far from a collection of costly investment pieces bought
for purposes of laundering drug money, the jewelry appears to be
a random assortment that includes several trinkets worth less than
$100 and a "sweet fifteen" ring.

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appears to be a core factor considered by the court in determining
whether the property should be forfeited.

See United States v. 6

Fox St., 480 F.3d 38, 43-44 (1st Cir. 2007) (upholding forfeiture
based, in part, on "evidence that [the claimant's] legitimate
employment as a car salesperson," from which he earned only a few
thousand dollars of taxable income, "could not support his lavish
spending"

on

$58,422.00

in

expensive
U.S.

vehicles

Currency,

and

money

market

accounts);

F.

App'x

at

(upholding

154

22

forfeiture on the basis of the property being found in "close
proximity" to drugs and drug paraphernalia and the claimant's "lack
of legitimate income sources").
Here, it appears that the government did have access to
information regarding Betancourt-Pérez's employment and income:
the government told the district court during a pretrial conference
that Betancourt-Pérez earned only "a couple thousand dollars a
year,"

and

pretrial

documents

suggest

that

during

discovery

Betancourt-Pérez provided the government with letters from prior
employers and his 2010 tax returns.
contains none of this evidence.

The record itself, however,

Nor is there any evidence that

the jewelry was part of a lifestyle so lavish that it, on its own,
would strongly support the inference that it could not have been
purchased through above-board means.
The

government's

brief,

perhaps

recognizing

this

omission, attempts belatedly to cure the defect by referring us to

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the employment history section of the pre-sentence investigation
("PSI") report in Betancourt-Pérez's criminal case.

But the PSI

report (which was prepared several months after the district court
had ruled on the summary judgment motion) was never in the record
in this civil case, and thus we may not consider it now.

Without

it, the government has not done enough to establish a link between
the

jewelry

and

Betancourt-Pérez's

drug

activities

by

a

preponderance of the evidence.6
The district court was thus incorrect to grant summary
judgment for the government.

We vacate and remand for further

proceedings in accordance with this decision.7

6

We do not mean to suggest that proof of a defendant's
legitimate income is required in every civil forfeiture case. The
government could have established a connection between the jewelry
and drugs by means of other evidence, as well. For example, in
United States v. $21,510.00 in U.S. Currency, 144 F. App'x 888,
889 (1st Cir. 2005), we found the government's burden met where
large amounts of cash were found hidden in the claimant's house,
the claimant had pled guilty to conspiracy to distribute narcotics
and admitted to discussing a drug deal with his co-conspirator
less than four months before the seizure, and a canine search
revealed traces of controlled substances on the cash itself.
7

Although our decision followed the parties' lead in treating
the jewelry as a collection and made no distinction among the
different items, on remand, the parties will have an opportunity
to make their respective cases as to each item.

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