United States of America v. $93,110.00 in U.S. Currency

Filing 22

JUDGMENT AND ORDER OF FORFEITURE : that Plaintiffs Motion for Judgment on the Pleadings, 17 , is GRANTED. That the Defendant res in this action, $93,110.00 in U.S. currency, is hereby forfeited to the United States pursuant to 31 U.S.C. §5 332(a)(1) and (c). That the res is also currency for which no Currency and Monetary Instrument Report was filed when Claimant transported the currency across the United States-Mexico Border and is also forfeited to the United States. The United State s Marshals Service shall delay disposing of the forfeited res pending further order of the Court, including after the resolution of the issues identified herein, specifically, any Petition filed by Claimant seeking to reduce or eliminate the forfeiture of the res pursuant to 18 U.S.C. § 983(g). Signed by Magistrate Judge Lawrence O Anderson on 11/19/08. (see judgment for full details) (DMT, )

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WO IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA United States of America, ) ) Plaintiff, ) ) vs. ) ) ) $93,110.00 in U.S. Currency, ) ) Defendant. ) ) ) Elsa Bernal, ) Claimant. ) _________________________________ ) CV-08-1499-PHX-LOA JUDGMENT AND ORDER OF FORFEITURE This Judgment and Order of Forfeiture having been approved as to form and content by Government's and Claimant's counsel, docket # 21, there is pending before the Court Plaintiff's uncontested Motion for Judgment on the Pleadings, pursuant to Fed.R.Civ.P 12(c), filed on September 18, 2008. (docket # 17) The Court has considered the subject Motion and the following: 1. Verified Complaint For Forfeiture In Rem, filed August 14, 2008; 2. Warrant For Arrest In Rem, filed by the Court on August 21, 2008; 3. The Answer filed by Claimant on August 25, 2008; and 4. The Joint Case Management Report filed by both parties on October 16, 2008, which contains stipulations, incorporated herein, and an explanation as to why Claimant did not oppose Plaintiff's pending Motion. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Venue and jurisdiction are predicated upon 21 U.S.C. 881(j), 28 U.S.C. 1355(b) and 1395. This District Court has jurisdiction over this matter by virtue of 28 U.S.C. 1345, 1355, and 18 U.S.C. 981(h) because the Defendant res was found in this District. Specific statutes critical to the analysis are 31 U.S.C. 5316(a)(2) and 5317(c)(2), 31 U.S.C. 5332(a)(1) and (c), and 18 U.S.C. 983(g). All parties have heretofore consented to magistrate- judge jurisdiction pursuant to 28 U.S.C. 636(c). (docket # 8 and # 9) Nature of the case: This is a federal civil forfeiture action seeking the forfeiture of a res in the amount of approximately $93,110. Plaintiff's claim: The res in this case is currency raised to pay the ransom demanded from the kidnappers of "Pedro" and are proceeds of criminal conduct, to wit: proceeds of alien trafficking and/or proceeds of drug trafficking. The currency crossed the border without declaration. Those involved in the kidnaping of Pedro, an alien trafficker from a competing criminal enterprise, demanded a large sum of funds from the criminal enterprise with which he was associated in order to purchase his release. Claimant is, at least, partially supported by Pedro with proceeds of his criminal conduct. Claimant could never raise the sum demanded as ransom without substantial contribution of funds from the trafficking enterprise which employed Pedro. During the course of attempting to comply with the kidnapers' demands, Claimant transported the res from Arizona into Mexico and back into Arizona while concealed on her person and/or in her automobile; directed others to transport the res from Arizona into Mexico and back into Arizona while concealing the res; and/or received or aggregated the res, which had been transported into the United States, knowing the required Currency and Monetary Instrument Report ("CMIR") was not submitted each time the funds crossed the border. Claimant also alleged she structured the transportation of the res across the Arizona-Mexico border in such a manner that the sum required exceeded the $10,000 amount required to be reported, but the individual amounts were less than $10,000, in order to avoid filing of the required CMIR form. Plaintiff's theory is the res is proceeds of criminal conduct, essentially part of the funds are proceeds of a conspiracy to illegally transport aliens into the United States and -2- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 part of the funds appear to be connected to trafficking in drugs. All of the res has been involved in multiple trips across the U.S./Mexico Border without the required filing of declarations regarding the currency referred to as CMIR forms. All of the activity supports forfeiture under a collection of forfeiture statutes. Plaintiff has filed a Motion for Judgment on the Pleadings, based upon admissions made in the Answer. These admissions relate to the movement of the currency across the United States-Mexico border. Claimant's claim: In response to the urgent need to raise funds to satisfy a kidnapers' ransom demand, and working with police to monitor the demands and in anticipation of a controlled delivery of the ransom, Claimant raised funds from several sources including her own resources and loan proceeds from others. All these funds were raised in Mexico, converted to U.S. currency there, and then imported into the United States without declaration at the port of entry. Claimant admits the res crossed the border and the required CMIR forms were not filed. In her Answer, she asserts she is an innocent owner of the funds pursuant to 18 U.S.C. 983(d)(1) & (3). However, this defense does not address the claims by Plaintiff regarding bulk cash smuggling and required CMIR declarations. While Claimant denies the funds are proceeds of alien smuggling or drug trafficking, she acknowledges the claim of innocent owner cannot be dispositive regarding the movement of currency across the border at her direction and with her assistance and participation. Claimant acknowledges it is possible the entire res can be ordered forfeited. However, Claimant asserts forfeiture of the entire res is an unconstitutionally excessive fine. A petition to contest the constitutionality of the forfeiture of the entire res can only be filed after entry of this Judgment. Factual and Legal issues: The parties agree the seized currency is forfeitable under either or both of the following theories of forfeiture: (1) Failure to report importation of currency: 31 U.S.C. 5316(a)(2) and 5317(c)(2); and/or (2) Bulk cash smuggling: 31 U.S.C. 5332(a)(1) and (c). The parties agree the legal issue which must be resolved is a review as to the breadth of any forfeiture order pursuant to 18 U.S.C. 983(g), Proportionality and the -3- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Excessive Fines Clause. This analysis may involve both legal and factual determinations. The threshold issue is solely a question of law: whether a civil action based on bulk cash smuggling may constitutionally allow the forfeiture of all the funds involved. If the Court finds the entire res may be constitutionally forfeited, a proportionality determination is not required. Otherwise, a fact based proportionality determination is needed under 18 U.S.C 983(g) and United States v. Bajakajian, 524 U.S. 321 (1998). The full extent of formal discovery required will be apparent once the Court makes its ruling on this critical issue. Based upon the forgoing, IT IS ORDERED that Plaintiff's Motion for Judgment on the Pleadings, docket # 17, filed on September 18, 2008, is GRANTED. IT IS FURTHER ORDERED that the Defendant res in this action, $93,110.00 in U.S. currency transported across the United States-Mexico Border in violation of the Bulk Cash Smuggling Act, is hereby forfeited to the United States pursuant to 31 U.S.C. 5332(a)(1) and (c). IT IS FURTHER ORDERED that the res is also currency for which no Currency and Monetary Instrument Report was filed when Claimant transported the currency across the United States-Mexico Border in violation of 31 U.S.C. 5316(a)(2) and 5317(c)(2) and is also forfeited to the United States. IT IS FURTHER ORDERED that the United States Marshals Service shall delay disposing of the forfeited res pending further order of the Court, including after the resolution of the issues identified herein, specifically, any Petition filed by Claimant seeking to reduce or eliminate the forfeiture of the res pursuant to 18 U.S.C. 983(g). IT IS FURTHER ORDERED that, unless extended by court order upon stipulation and for good cause shown, within sixty (60) days of the entry of this Judgment and Order of Forfeiture, Claimant shall file her Proportionality Petition, as contemplated in 18 U.S.C. 983(g), including therein all issues regarding the whether the forfeiture of the entire res is unconstitutional. Plaintiff shall have thirty (30) days from the date of filing and service of the Petition to file a Response. Claimant may file an optional Reply within fifteen -4- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (15) days of filing and service of the Response. The Court will determine whether an evidentiary hearing is necessary after its review of the parties' briefings. Dated this 19th day of November, 2008. -5-

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