United States of America v. $208,420.00 in U.S. Currency

Filing 36

ORDER DENYING CLAIMANT'S MOTION TO STAY CASE 23 by Judge Otis D. Wright, II. For the foregoing reasons, the Court DENIES Smith's Motion. (ECF No. 23 .) Additionally, the stay of discovery in this action is hereby LIFTED. (lom)

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United States District Court
Central District of California

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UNITED STATES OF AMERICA,

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Plaintiff,

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Case No. 2:20-CV-01156-ODW (RAOx)
ORDER DENYING CLAIMANT’S
MOTION TO STAY CASE [23]

v.
$208,420.00 IN U.S. CURRENCY,

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Defendant.

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I.

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INTRODUCTION

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On February 5, 2020, Plaintiff United States of America (“the Government”)

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initiated this in rem forfeiture action against Defendant $208,420.00 in U.S. Currency

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(“Defendant Currency”).

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contends that the Defendant Currency constitutes lawful rent proceeds and moves for

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a mandatory stay pursuant to 18 U.S.C. § 981(g)(2).

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(“Motion” or “Mot.”), ECF No. 23.) For the following reasons, Smith’s Motion is

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DENIED.1

(See Compl., ECF No. 1.)

Claimant Stephanie Smith
(See generally Mot. Stay

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Having carefully considered the papers filed in connection with the Motion, the Court deemed the
matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15.

II.

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BACKGROUND

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In 2017, law enforcement officers received information that three commercial

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properties Smith owned in San Bernardino, California, were being used for illegal

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indoor marijuana growing operations. (Compl. ¶¶ 8, 11.) Subsequently, officers

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executed a search warrant on the properties and discovered approximately 35,221

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mature marijuana plants. (Id. ¶ 13.) On February 20, 2019, officers searched Smith’s

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residence and found the Defendant Currency in the backyard inside an ammunitions

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can.

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traceable proceeds of illegal narcotic transactions and/or was involved in illegal

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(Id. ¶ 20.)

The Government alleges the Defendant Currency “constitutes

money laundering transactions.” (Id. ¶ 21.)

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The Government initiated this action against the Defendant Currency, asserting

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that it is subject to forfeiture based on its connection to unlawful activity. (See

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generally Compl.) Smith moved for a mandatory stay, claiming there is a related

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criminal investigation against her, and this civil forfeiture action burdens her Fifth

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Amendment right against self-incrimination. (See generally Mot.) Smith also claims

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the Defendant Currency “constitutes lawful rent proceeds.” (See Am. Verified Claim,

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ECF No. 26.) The Motion is fully briefed. (See Opp’n, ECF No. 25; Reply, ECF

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No. 27; Surreply, ECF No. 33.) On August 12, 2020, the Court granted Smith’s

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ex parte application to stay discovery pending resolution of this Motion. (See Order,

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ECF No. 24.)

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III.

LEGAL STANDARD

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Under the Civil Asset Forfeiture Reform Act of 2000, courts must grant a

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claimant’s request to stay a civil forfeiture action where the claimant shows that she:

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(1) “is the subject of a related criminal investigation or case”; (2) “has standing to

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assert a claim in the civil forfeiture proceeding”; and (3) failure to stay the case will

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burden her right against self-incrimination in the related criminal investigation or case.

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See 18 U.S.C. § 981(g)(2).

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IV.

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DISCUSSION

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Smith contends that the Court must stay this forfeiture action because, among

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other things, she is the subject of a criminal investigation that is closely related to this

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case. (See Mot. 5–6.) The Government counters, asserting that Smith has failed to

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demonstrate that she is the subject of any criminal investigation. (See Opp’n 6–7.)

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The Government is correct.

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Pursuant to 18 U.S.C. § 981(g)(4): “the terms ‘related criminal case’ and

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‘related criminal investigation’ mean an actual prosecution or investigation in

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progress at the time at which the request for the stay . . . is made.” (emphasis added).

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Smith submits several documents to support her claim that she is currently the subject

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of a related criminal investigation, including: (1) notices of violation from the City of

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San Bernardino served in November 2017; (2) copies of discovery requests and

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responses concerning an action in state court that were served in 2018; (3) a search

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warrant from the San Bernardino Police dated February 19, 2019; and (4) the docket

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from a criminal case closed in June 2019. (See Decl. of Ben Eilenberg, Exs. A–G,

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ECF Nos. 23-2–23-8.) However, none of these documents demonstrate an actual

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investigation or case in progress when Smith moved to stay this civil forfeiture action.

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Cf. United States v. Proceeds from Sale of a Condo. Located at Ritz-Carlton in Los

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Angeles, California, No. SACV15CV01110JVSDFMX, 2018 WL 6318833, at *3

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(C.D. Cal. Oct. 23, 2018) (finding a mandatory stay warranted where the claimants

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demonstrated they were indicted in a closely related criminal case just two months

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before moving to stay the civil forfeiture proceeding).

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The Government correctly notes that, “at best, [Smith] has shown that the San

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Bernardino Police Department conducted a criminal investigation of [her] between

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November 2017 and June 2019.” (Opp’n 7.) Relevantly, the Government represents

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that “there is no actual federal criminal drug investigation in progress regarding

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[Smith].” (Id.) Thus, there is no evidence that any agency—state or federal—was

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conducting a related criminal investigation or case involving Smith after June 2019.

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Smith’s failure to demonstrate the existence of a related ongoing criminal

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investigation or case in progress when she filed the Motion defeats her claim that she

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is entitled to a mandatory stay.2

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DENIED.
V.

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Accordingly, the Motion is

CONCLUSION

For the foregoing reasons, the Court DENIES Smith’s Motion. (ECF No. 23.)

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(See Mot. 5–6.)

Additionally, the stay of discovery in this action is hereby LIFTED.

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IT IS SO ORDERED.

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February 18, 2021

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____________________________________
OTIS D. WRIGHT, II
UNITED STATES DISTRICT JUDGE

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Based on the Court’s determination that a stay is not warranted, it need not consider Smith’s
remaining arguments concerning standing and the Fifth Amendment.

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