United States of America v. Seventeen Thousand Four Hundred Sixty-Six ($17466.00) Dollars in United States Currency
MEMORANDUM OPINION AND ORDER directing as follows: 1) The Government's 21 MOTION for Summary Judgment is GRANTED; 2) Having failed to in any way establish an entitlement to judgment as a matter of law, the 17 MOTION for Summary Judgment file d by Sheila Delgado-Solis is DENIED; 3) It is ORDERED that the Government shall file a proposed Decree of Forfeiture on or before 12/19/2010; 4) The pretrial conference scheduled for 2/25/2011 and the trial scheduled for 3/21/2011 are CANCELLED; 5) T he Court will enter a separate final judgment consistent with this Memorandum Opinion and Order after entry of the Decree of Forfeiture. Signed by Hon. Chief Judge Mark E. Fuller on 11/29/2010. (furn: Calendar, kg)(term: PTC for 02/25/2011; Non-Jury Trial for 03/21/2011)(Attachments: # 1 Civil Appeals Checklist) (wcl, )
-CSC United States of America v. Seventeen Thousand Four Hundred Si...ars in United States Currency
IN THE UNITED STATES DISTRICT COURT F O R THE MIDDLE DISTRICT OF ALABAMA N O R T H E R N DIVISION U N IT E D STATES OF AMERICA, P L A IN T IF F , v. S E V E N T E E N THOUSAND FOUR H U N D R E D SIXTY-SIX ($17,466.00) D O L L A R S IN UNITED STATES CURRENCY, D EFEN D A N T. ) ) ) ) ) ) ) ) ) ) ) )
C A S E No. 2:09-cv-887-MEF
(W O - DO NOT PUBLISH)
M E M O R A N D U M OPINION AND ORDER
In this action for Forfeiture In Rem pursuant to Title II of the Controlled Substances A c t, 21 U.S.C. § 801 et seq., the United States seeks to forfeit and condemn seventeen th o u s a n d four hundred sixty-six dollars ($17,466.00) in United States currency seized during th e arrest of Federico Vieyra-Garcia ("Garcia") for trafficking illegal drugs. The sole c la im a n t before this Court is Shelia Delgado-Solis ("Solis"), Garcia's wife. This cause is b e f o re the Court on cross motions for summary judgment. See Doc. # 17 and Doc. # 21. The C o u rt has carefully considered the submissions of the parties and the applicable law. For the re a s o n s set forth below, the Court finds that Solis' motion is due to be DENIED and the U n ite d States of America's motion is due to be GRANTED.
JURISDICTION AND VENUE J u ris d ic tio n is proper pursuant to 28 U.S.C. §§ 1345 and 1355.1 Venue is proper in th is district pursuant to 28 U.S.C. § 1395 and 21 U.S.C. § 881(j) because the act or omissions g iv in g rise to the forfeiture occurred in this district and the property is located within this d is tr ic t. F A C T S AND PROCEDURAL HISTORY O n February 19, 2009, agents from the Montgomery Resident Office, initiated a Title III investigation on a drug trafficking organization with activities in Alabama, Illinois, North C a ro lin a , and elsewhere. During the investigation, agents identified Garcia as a distributor f o r the organization. The investigation identified Garcia's residence located at 3605 County R o a d 47, Lot 4, Verbena, Alabama, as a stash house for the organization. As a result of f u rth e r investigation, a federal grand jury returned an indictment against Garcia and others o n April 21, 2009. On April 30, 2009, Commander Todd Mims, with the Central Alabama Drug Task F o rc e , obtained a state search warrant for Garcia's residence in Verbena. Agents conducted s u rv e illa n c e of the Verbena address. They saw Garcia at the residence and observed vehicles
Pursuant to 28 U.S.C. § 1345, "the [federal] district courts shall have original ju ris d ic tio n of all civil actions, suits or proceedings commenced by the United States . . ." In addition, 28 U.S.C. § 1355(a) provides that "the [federal] district courts shall have original ju ris d ic tio n , exclusive of the courts of the States, of any action or proceeding for the recovery o r enforcement of any fine, penalty, or forfeiture, pecuniary or otherwise, incurred under any A c t of Congress, except matters within the jurisdiction of the Court of International Trade u n d e r section 1582 of this title." 2
parked at the residence that were registered to Garcia. On May 1, 2009, agents from the M o n tg o m e ry Resident Office, the Chilton County Sheriff's Office, and the Central Alabama D ru g Task Force, executed the state search warrant at 3605 County Road 47, Lot 4, Verbena, A la b a m a . They intended to arrest Garcia if he was there, but he was not present. They did s e iz e one and one half kilograms of cocaine HCL and three bricks of marijuana during this s e a rc h . They also observed three vehicles parked at the residence; all three vehicles were re g is te re d to Garcia. Prior to the search of 3605 County Road 47, Lot 4, Verbena, Alabama, agents had le a rn e d that Garcia sometimes lived at 115 Colonial Circle, Clanton, Alabama. They p ro c e e d e d there hoping to locate him for arrest. Garcia was present at this address along w ith his common-law wife Solis. Agents took Garcia into custody as he was attempting to re trie v e a 9mm hand gun from inside the master bedroom. After Garcia was arrested and advised of his rights, he indicated that he wished to c o o p e ra te with agents. Agent Shaw asked Garcia if there were any drugs, currency, or other w e a p o n s in the house. Garcia indicated that there were and gave the agents consent to search th e residence. During the search, agents located a total of $17,466.00 in United States Currency from v a rio u s places within 115 Colonial Circle. There were two vacuum sealed bags of currency, c o n ta in in g $5,000 and $6,000 respectively, located in the bathroom. There was $85.00 in U .S . currency located on the dresser in the master bedroom. A shoe box in the master
bedroom closet contained $1,582.00 in U.S. currency. Finally, the agents located $4,800.00 in U.S. currency bound with money bands and wrapped in lingerie in a the master bedroom c lo s e t. In addition to the currency, the search also yielded nine firearms, keys to the three v e h ic le s located at 3605 County Road 47, Lot 4, Verbena, Alabama, and a set of keys that o p e n e d a shed in the back yard. Garcia indicated that he rented this shed to a couple of H is p a n ic males, but that he did not know their names. In the shed, agents found
a p p ro x im a te ly a half a kilogram of cocaine HCL, a bottle of GNC Inositol Powder ("Cut"), a n d a bullet proof vest. In June of 2009, Solis filed a verified claim in which she indicated that at least $7,000 o f the money seized from her home on May 1, 2009 was her money that she had earned from h e r employment at a grocery store. According to Solis, she was paid $300.00 per week in c a s h beginning in November of 2005. Along with her verified claim, Solis submitted a form le tte r signed by her employer confirming her employment at that rate from November 23, 2 0 0 5 through the date of the search. Garcia filed a verified claim in the Administrative p ro c e e d in g claiming ownership of approximately $10,500 of the currency seized. Garcia c la im e d that he earned this currency from his legitimate tree planting business, but the c u rre n c y was packaged consistently with drug trafficking transactions. Furthermore, Garcia s u b s e q u e n tly entered a plea of guilty to charges relating to a narcotics trafficking conspiracy. Garcia has not filed a claim in this action asserting any interest in the U.S. Currency found a t 115 Colonial Circle on the date of his arrest.
On June 10, 2010, Solis filed her claim in this action asserting an interest in the U.S. C u rre n c y found in the master bedroom closet during the search, but not to any of the other f u n d s . See Doc. # 17-2 at n.1. Solis estimated that the currency in the closet was a p p ro x im a te ly $7,000,2 but the undisputed evidence before this Court establishes that the c u rre n c y in the master bedroom closet was $6,382.00. At her depostion, Solis testified that h e r money in the closet totaled about $4,000. Solis testified that the money found in the m a s te r bedroom closet was money she was saving. Some of this money came from her
e m p lo ym e n t at a grocery store.3 Solis admits, however, that some of the money in the master b e d ro o m closet was money Garcia gave her which is combined with money she earned. Solis d e n ie s knowing, prior to Garcia's arrest, that the money Garcia gave her came from illegal d ru g activities, but she conceded that she did not know where all of Garcia's money came f ro m , including money he gave her. Solis testified that she did know that Garcia was e n g a g e d in agricultural work for various farmers and that he had a business involving trees. When asked directly if she knew of any other ways he was earning money prior to his arrest, S o lis invoked her rights under the Fifth Amendment.
At her deposition, she admitted this number was a guess.
From the record before this Court, it appears that this employment was under the ta b le , and her employer has no records documenting specific amount she paid Solis. Solis w a s not living or working in this country legally. She was not paying taxes on the income s h e earned. 5
SUMMARY JUDGMENT STANDARD U n d e r Federal Rule of Civil Procedure 56(c), summary judgment is appropriate "if th e pleadings, depositions, answers to interrogatories, and admissions on file, together with th e affidavits, if any, show that there is no genuine issue as to any material fact and that the m o v in g party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 3 1 7 , 322 (1986). The party asking for summary judgment "always bears the initial
re s p o n s ib ility of informing the district court of the basis for its motion, and identifying those p o rtio n s of `the pleadings, depositions, answers to interrogatories, and admissions on file, to g e th e r with the affidavits, if any,' which it believes demonstrate the absence of a genuine is su e of material fact." Id. at 323. The movant can meet this burden by presenting evidence s h o w in g there is no dispute of material fact, or by showing the non-moving party has failed to present evidence in support of some element of its case on which it bears the ultimate b u rd e n of proof. Id. at 322-23. O n c e the moving party has met its burden, Rule 56(e) "requires the nonmoving party to go beyond the pleadings and by [his] own affidavits, or by the `depositions, answers to in te rro g a to rie s , and admissions on file,' designate `specific facts showing that there is a g e n u in e issue for trial.'" Id. at 324. To avoid summary judgment, the nonmoving party " m u s t do more than simply show that there is some metaphysical doubt as to the material fa c ts ." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (e m p h a s is added). A plaintiff must present evidence demonstrating that he can establish the
basic elements of his claim. Celotex, 477 U.S. at 322. A court ruling on a motion for s u m m a ry judgment must believe the evidence of the non-movant and must draw all ju s tif ia b le inferences from the evidence in the non-moving party's favor. Anderson v. Liberty L o b b y , Inc., 477 U.S. 242, 255 (1986). After the nonmoving party has responded to the m o tio n for summary judgment, the court must grant summary judgment if there is no genuine is su e of material fact and the moving party is entitled to judgment as a matter of law. See F e d . R. Civ. P. 56(c). D IS C U SS IO N I . Forfeitability A. Civil Asset Forfeiture Reform Act
T h e civil forfeiture statute invoked by the United States in this case operates to allow a court to declare any property which is involved in certain types of illegal transactions to be f o rf e ita b le to the government. See United States v. $557,933.89, 287 F.3d 66, 77 (2nd Cir. 2 0 0 2 ). The justification for such a law is that such property is either the proceeds of illegal tra n s a c tio n s or somehow being used to facilitate illegal transactions. Id. In an action such a s this one, the government is the plaintiff and the property is the defendant. Id. at 79. It is th e government's right to forfeiture that is the sole cause of action adjudicated. Id. If the g o v e rn m e n t fails to meet its burden of proof, a person with a proper claim to the defendant p ro p e rty may take the property without presenting any evidence. Id. On April 25, 2000, Congress passed the Civil Asset Forfeiture Reform Act of 2000
(hereinafter "CAFRA"), Pub. L. No. 106-185, 114 Stat. 202, to address concerns associated w ith federal civil forfeitures. Since the Government commenced this action after August 23, 2 0 0 0 , the date on which the CAFRA became effective, CAFRA applies to this case. CAFRA o v e rh a u le d the procedures for civil judicial forfeiture proceedings. See 18 U.S.C. § 983. Significantly, the Government now has the burden of proving by a preponderance of the e v id e n c e that the property is subject to forfeiture. See 18 U.S.C. § 983(c)(1); also United S ta te s v. One 1991 Chevrolet Corvette, 2005 WL 1846996, * 4 (S.D. Ala. 2005) (citing 18 U .S .C . § 983(c)(1)). Once the Government has shown that the property is subject to f o rf e itu re , "the burden of proof shifts to the claimant to show, by a preponderance of the e v id e n c e that the property is not subject to forfeiture." United States v. Cleckler, 270 F.3d 1 3 3 1 , 1334 (11th Cir. 2001) (citation omitted). "The claimant may meet this burden either b y rebutting the government's evidence or by showing that the claimant is an innocent o w n e r." Id. B. G o v e rn m e n t's Burden of Proof
A t the outset, the Court first must determine whether the Government has met its in itia l burden of proof to establish that the property is subject to forfeiture. Under the CAFRA , (1) (2 ) the burden of proof is on the Government to establish, by a p r e p o n d e r a n c e of the evidence, that the property is subject to forfeiture. the Government may use evidence gathered after the filing of a c o m p la in t for forfeiture to establish, by a preponderance of the e v id e n c e , that property is subject to forfeiture; and if the Government's theory of forfeiture is that the property was used 8
to commit or facilitate the commission of a criminal offense, or was in v o lv e d in the commission of a criminal offense, the Government shall e s ta b lish that there was a substantial connection between the property a n d the offense. 1 8 U.S.C. § 983(c) (emphasis added). The Government alleges that the defendant currency is subject to forfeiture pursuant to 21 U.S.C. § 881, which provides for forfeiture of: A ll moneys, negotiable instruments, securities, or other things of value f u rn is h e d or intended to be furnished by any person in exchange for controlled s u b s ta n c e , or listed chemical in violation of this subchapter, all proceeds tra c e a b le to such an exchange, and all moneys, negotiable instruments, and s e c u ritie s used or intended to be used to facilitate any violation of this s u b c h a p te r. 2 1 U.S.C. § 881(a)(6). "To obtain a civil forfeiture, the government must establish by a p re p o n d e ra n c e of evidence `a substantial connection between the property and the offense.'" U .S . v. 3402 53rd Street W., Bradenton, FL, 178 Fed. Appx. 946, 947 (11th Cir. 2006) (citing 1 8 U.S.C. § 983(c)(1) & (3)). The government "may use both circumstantial evidence and h e a rs a y," and the district court should evaluate the evidence presented with "a common sense v ie w to the realities of normal life." United States v. Four Parcels of Real Property, 941 F .2 d 1428, 1440 (11th Cir.1991) (internal citations and quotation marks omitted). Indeed, if the Government's theory of forfeiture is that the property was used to c o m m it or facilitate the commission of a criminal offense, or was involved in th e commission of a criminal offense, the Government shall establish that there w a s a substantial connection between the property and the offense. 1 8 U.S.C. § 983(c)(3). "The government need not connect the defendant currency to any p a rtic u la r drug transaction." United States v. $121,100.00 in United States Currency, 999 F .2 d 1503, 1508 (11th Cir. 1993). 9
"Whether the government has shown probable cause for forfeiture is a question of la w ." United States v. Cleckler, 270 F.3d 1331, 1334 (11th Cir. 2001). (citation omitted). "Probable cause in this context is a reasonable ground for belief: something more than mere s u s p ic io n but less than prima facie proof." Id. (citation omitted). The undisputed facts in this case establish that Garcia was knowingly and willfully in v o lv e d in an illegal narcotics trafficking conspiracy. Moreover, from the undisputed e v id e n c e before it, the Court finds that the United States has shown by a preponderance of th e evidence a substantial connection between Garcia's currency and his narcotics tra f f ic k in g . Thus, the United States has shown probable cause for forfeiture of Garcia's c u r r e n c y. There is also evidence in this case which when credited establishes that both Garcia a n d Solis earned money from activities unrelated to Garcia's drug trafficking. There is no e v i d e n c e that Garcia segregated such money from his drug trafficking money. When le g itim a te funds are "knowingly commingled" with forfeitable funds, the legitimate funds a ls o become subject to forfeiture. See, e.g., United States v. One Single Family Residence L o c a te d at 15603 85th Ave. N., 933 F.2d 976, 982 (11th Cir. 1991); United States v. Six T h o u sa n d Two Hundred Seven Dollars ($6,207) in United States Currency, No. 2:08cv999M E F , 2010 WL 3825596, at *4-*5 (M.D. Ala. Sept. 24, 2010); United States v. $52,000, M o r e or Less, in United States Currency, 508 F. Supp. 2d 1036, 1044-45 (S.D. Ala. 2007). Thus, Garcia rendered any legitimate earnings forfeitable by commingling them with
forfeitable funds. With respect to Solis, the question becomes whether she knowingly commingled her e a rn in g s with Garcia's forfeitable funds thereby subjecting all of her earnings forfeitable as w e ll. It is undisputed that Solis received cash from Garcia which she commingled with her c a s h payments for her work. Thus, the central question is did Solis know that some of G a rc ia 's money was subject to forfeiture because it was connected to illegal drug activity. Solis admits that she could not tell how Garcia came to possess the cash he gave her. She w a s aware that he was engaged in work relating to farms and to trees. When specifically a s k e d if she knew, prior to his arrest, of other ways he was earning money, she invoked he rig h t under the Fifth Amendment in order to avoid answering the question. While she is free to invoke these rights, it is not without consequence to her claims in this action. In a civil suit such as this one, a court may draw adverse inferences against a party who invokes the Fifth Amendment. See, e.g., Eagle Hosp. Physicians, LLC v. SRG C o n s u ltin g , Inc., 561 F.3d 1298, 1304 (11th Cir. 2009); U.S. v. Three Hundred Thirty-Nine T h o u sa n d , Eight Hundred Eighty Four Dollars ($339,884) in United States Currency, No. 9 9 -2 2 3 8 -C IV , 2000 WL 34612065, at *7 (S.D. Fla. Mar. 2, 2000). This is true even in a c iv il forfeiture action unless the claimant in the civil case is also then a defendant in a c rim in a l case and is forced to choose between waiving the privilege and losing the civil case o n summary judgment. See, e.g., United States v. Two Parcels of Real Property Located in R u ss e ll County, Ala., 92 F.3d 1123, 1129 (11th Cir. 1996); United States v. One Hundred
Thirty Thousand Fifty-Two Dollars ($130,052.00) in United States Currency, 909 F. Supp. 1 5 0 6 , (M.D. Ala. 1995). Thus, the well-settled law allows this Court to infer that Solis' testimony in response to the question regarding her knowledge of Garcia's other ways of earning money would not h a v e been favorable to her position as a claimant to the defendant currency. United States v . Two Parcels Located at 2730 Highway 31, Jemison, Ala., 909 F. Supp. 1450, 1462-63 (M .D . Ala. 1995). Simply put, Solis' invocation of her Fifth Amendment rights gives rise to the inference that she knew that Garcia was involved in earning money through drug tra f f ic k in g . Thus, when she knowingly commingled her earnings with money from Garcia s h e rendered her earnings subject to forfeiture. Thus, the United States has established p ro b a b le cause for the forfeiture of all currency seized from 115 Colonial Circle. C. Claimant's Burden
O n c e the Government establishes probable cause, the burden of proof shifts to the c la im a n ts to show by a preponderance of the evidence that the property is not subject to f o rf e itu re . Id. The claimant may do so either by rebutting the government's evidence or by s h o w in g that she is an "innocent owner" as set forth in 18 U.S.C. § 983(d). Id. "A claimant p o s s e s s in g actual knowledge of the commingling of legitimate and drug funds may still claim th e innocent owner defense `if the claimant can prove that everything reasonably possible w a s done to withdraw the commingled funds.'" United States v. Six Thousand Two Hundred S e v e n ($6,207) Dollars in United States Currency, 2010 WL 3825596 at *5. Simply put, "if
a claimant has actual knowledge of the drug proceeds at the time [s]he takes [her] interest in them, then the innocent owner defense is unavailable and all property that the claimant c o m m in g le s with the drug proceeds is forfeitable." Id. Where as here, the only evidence b e f o re the Court regarding Solis' knowledge of Garcia's earnings from drug trafficking is th e adverse inference created by her refusal to respond to the questions about her knowledge o f those activities. This evidence strips her of the innocent owner defense with which to re b u t the government's evidence. CONCLUSION It is understood that one who engages in criminal conduct runs the risk of i n c a rc e ra tio n and the forfeiture of his property; this case, however, provides a crucial w a rn in g for those who knowingly associate with criminals. One cannot receive money from d ru g dealers, with a wink and a nod, and then be immune to the consequences. For the f o re g o in g reasons, it is hereby ORDERED as follows: 1 . The Government's Motion for Summary Judgment (Doc. # 21) is GRANTED. 2 . Having failed to in any way establish an entitlement to judgment as a matter of law, th e Motion for Summary Judgment filed by Sheila Delgado-Solis (Doc. # 17) is DENIED. 3 . It is ORDERED that the Government shall file a proposed Decree of Forfeiture on o r before December 19, 2010. 4. The pretrial conference scheduled for February 25, 2011 and the trial scheduled f o r March 21, 2011 are CANCELLED.
5. The Court will enter a separate final judgment consistent with this Memorandum O p in io n and Order after entry of the Decree of Forfeiture. DONE this the 29 day of November, 2010. /s/ Mark E. Fuller CHIEF UNITED STATES DISTRICT JUDGE
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