United States of America v. United States Currency in the Amount of $423,059.02
Filing
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ORDER and OPINION denying 13 motion to stay. Signed on 05/30/2012 by District Judge Ortrie D. Smith. (Will-Fees, Eva)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
SOUTHERN DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
vs.
UNITED STATES CURRENCY
IN THE AMOUNT OF $423,059.02,
et al.,
Defendant.
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Case No. 12-3054-CV-S-ODS
ORDER AND OPINION DENYING MOTION TO STAY (DOC. 13)
The United States moves to stay this case. The motion is denied.
I. BACKGROUND
The United States alleges Claimant 4 States Grease, LLC stole spent cooking oil
from locked restaurant collection containers. The United States seeks to forfeit
$423,059.02 seized from bank accounts of 4 States and Claimants Jesse and Michele
Arnold.
The United States claims this currency is forfeitable because it is derived from
and/or involved in violations of wire fraud, money laundering, interstate transportation of
stolen property, and currency structuring. Claimants maintain the money is derived
exclusively from an inheritance, not illegal activity.
The United States moves to stay this case, contending discovery will adversely
affect its ability to conduct a related ongoing criminal investigation and prosecution. (No
charges have been filed yet.) Claimants oppose the motion, asserting they will be
prejudiced by the continued confiscation of their property. In addition, Claimants
warrant they will not seek any discovery from the United States in this case. The United
States did not file a reply to Claimants’ suggestions in opposition.
II. BACKGROUND
The Court is required to grant the United States’ motion if the Court “determines
that civil discovery will adversely affect the ability of the Government to conduct a
related criminal investigation or the prosecution of a related criminal case.” 18 U.S.C.
§ 981(g)(1). In determining whether civil discovery will adversely affect a criminal
investigation the Court “may determine that a stay is unnecessary if a protective order
limiting discovery would protect the interest of one party without unfairly limiting the
ability of the opposing party to pursue the civil case.” § 981(g)(3).
The United States contends that
[a]llowing claimants to conduct civil discovery at this juncture would
interfere with the criminal investigation by compromising the identities of
cooperating witnesses, and forecasting the Government’s intent to
interview additional prospective witnesses. It would also provide advance
discovery of the government’s investigative and prosecution strategies,
and allow claimants earlier and broader discovery than
they would be allowed in the criminal context under Rule 16. Civil
discovery would also expose the Government’s witnesses to
cross-examination and the law enforcement officers to testimonial
declarations before the investigation is complete, and all facts are known.
Finally, it would permit Claimants to learn about the nature and scope of
the investigation and to anticipate future investigative action.
Most of these conclusory reasons for a stay are similar to the ones rejected in
United States v. All Funds ($357,311.68) Contained in N. Trust Bank of Fla. Account
No. 7240001868, No. Civ. A. 3:04–1476, 2004 WL 1834589, at *2 (N.D. Tex. Aug. 10,
2004). In that case the court observed that “[t]he Government's arguments do nothing
more than speculate about how civil discovery will adversely affect its criminal
investigation. Under either of the Government's theories, every civil forfeiture case with
a related criminal investigation is entitled to a stay.” Id. The court noted “[t]here is no
presumption that civil discovery, in itself, automatically creates an adverse affect on the
government's related criminal proceeding.” Id.
The one allegation deserving further consideration is that the identity of
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witnesses will be compromised. This allegation—while itself conclusory—is later
supported by a more particularized statement of facts: the United States alleges “[a]t
least one cooperating witness in the criminal investigation has expressed concern for
their safety if the Claimants are made aware of the witness’ cooperation.”
The government however has failed to submit any evidence ex parte (as
permitted by § 981(g)(5)) to support its allegation regarding this witness. The Court
consequently has no way to determine for itself whether civil discovery will adversely
impact the criminal investigation or whether a protective order would suffice. And “[t]he
Government's failure to avail itself of this [ex parte] procedure, in the Court's view,
weakens its claim that civil discovery will impair the criminal case . . . .” United States v.
Real Property and Premises, 657 F. Supp. 2d 1060, 1064 (D. Minn. 2009).
Moreover, Claimants warrant they will not seek any discovery from the United
States in this forfeiture action. This would seem to address the government’s concerns.
The United States notably did not avail itself of its opportunity to argue otherwise.
III. CONCLUSION
The United States’ motion to stay is denied.
IT IS SO ORDERED.
/s/ Ortrie D. Smith
ORTRIE D. SMITH, SENIOR JUDGE
UNITED STATES DISTRICT COURT
DATE: May 30, 2012
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