USA v. $23,400 (US)

Filing 27

OPINION AND ORDER: Granting Plaintiff's Motion for Summary Judgment 21 . Plaintiff shall submit a proposed form of judgment. Signed on 5/25/2017 by Judge Malcolm F. Marsh. (ps2)

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON Case No. 3:14-cv-01480-MA UNITED STATES OF AMERICA, Plaintiff, OPINION AND ORDER v. $23,400 IN UNITED STATES CURRENCY, in rem, Defendant. MARSH, Judge Plaintiff, the United States of America, brings this civil forfeiture proceeding seeking the forfeiture of the Defendant in rem $23,400 in U.S. Currency. On October 30, 2014, Claimant Cesar Cruz-Reyes filed a Claim and Answer assetting thathe is the owner of the currency. Claim (ECF No. 5); Answer (ECF No. 6). Currently before the Com1 is Plaintiff's Motion for Summary Judgment (ECFNo. 21 ). Claimant did not file an opposition to the Motion. For the reasons set f011h below, this Court grants Plaintiffs Motion. BACKGROUND The circumstances of the seizure of the Defendant in rem $23,400 in U.S. Currency is set fot1h in the Declaration of Jeremy Stinson, a Task Force Officer with the Drug Enforcement 1 - OPINION AND ORDER Administration (DEA). See Comp!. (ECF No. 1), Ex. A. In his Declaration, Stinson states that after intercepting telephone communications between Juan Orozco-Lopez and Ariel Salazar-Galindo suggesting drug activity, he obtained a warrant to search Salazar-Galindo's residence. Id., Ex. A at 4-18. On March 19, 2014, members of the Clackamas County Inter-Agency Task Force and the Portland DEA executed the search warrant and seized, among other things, approximately one-half pound ofmethamphetamine and $23,400 in U.S. Currency. Id. at 18-20. According to Stinson, Salazar-Galindo admitted to selling heroin and methamphetamine. Id. at 19-20. However, both Salazar-Galindo and his father Rosalina Salazar-Maceda (who also was present in the residence at the time of the search) stated that the $23,400 found in the residence was a loan from family friend Cesar Cruz-Reyes. Id at 21. Stinson summarized the evidence and the statements concerning the alleged loan as follows: 45. . ... Ariel told me the money came from a $20,000 loan his father had received from a family friend named Cesar. Ariel told me the money was intended to start a business. 46. After I was finished speaking with Ariel I asked Rosalina SALAZARMACEDA (Ariel's father) ifhe would be willing to speak with me. Rosalina agreed .... I asked Rosalina about the money we found in Ariel's room. Rosalina told me the money came from a personal loan a friend had given him the day before. 4 7. I asked Rosalina if he had spent any of the loan his friend had given him[.] Rosalina told me he had spent some of the money already to re-pay a family member money owed on another loan, to make a payment on his black 2013 Nissan Altima, and to re-pay a loan company who had previously loaned him money. Rosalina estimated he had spent $10,000 of the $20,000 his friend had loaned him. 48. Rosalina told me his son was holding onto the remaining $10,000 of the personal loan he had received from his friend. Rosalina told me the loan he had received from his friend was all in $100 denominations. I viewed the currency seized from Ariel's bedroom, and noted much of it was in $20 denominations an amount common in drug transactions. 2 - OPINION AND ORDER 53. On September 5, 2014, at about 1:30 p.m., I called CRUZ-REYES by phone .... Mr. CRUZ-REYES told me he had loaned the money to the family for a cleaning business. I asked Mr. CRUZ-REYES how much he loaned the SALAZAR family and he replied "$20,000", then corrected himself and slowly stated "$23,400" as ifhe was reading the number. Mr. CRUZ-REYES told me he gave the money to the family in cash which he withdrew from his personal Key Bank money market account .... 56. Mr. CRUZ-REYES told me the SALAZAR family was supposed to pay him back the money he loaned them starting six months after he gave them the loan and in the amount of $500 a month .... 59. . ... CRUZ-REYES told me the loan was an agreement between himself and Ariel's father, though Ariel helped mediate the deal because CRUZ-REYES does not speak Spanish and Ariel's father, Rosalino Galindo-Salazar, does not speak English. Id at 21-25. In his answers to Plaintiffs First Request for Special Interrogatories, Claimant similarly stated that the $23,400 was a "business loan for a HVAC and cleaning business." Mot. for Summ. J. (ECF No. 21), Att. 2 at 2. Claimant explained that the loan was interest free and made to "better the life" of the Salazar-Maceda family. Id. STANDARDS "Summary judgment is appropriate when, viewing the evidence in the light most favorable to the nonmovingparty, there 'is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter oflaw. "' United States v. JP Morgan Chase Bank Account No. Ending 8215 in Name ofLadislau V. Samaniego, 835 F.3d 1159, 1162 (9th Cir. 2016) (quoting Fed. R. Civ. P. 56(a)). "A genuine dispute of material fact exists if there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Id. (internal quotations omitted). In a civil forfeiture proceeding, the government may move for summary judgment on the basis that the claimant lacks standing. Id at 1163 (citing Rule G(8)(c)(ii)(B) of the Supplemental 3 - OPINION AND ORDER Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions)). To withstand a motion for summaiy judgment on the ground that the claimant lacks standing, a claimant cannot rely on mere allegations but rather must set fmth by affidavit or other evidence specific facts from which a jury could reasonably find he or she has an ownership or possessoty interest in the defendant in rem. United States v. $133,420.00 in US. Currency, 672 F.3d 629, 638 (9th Cir. 2012). "[A] claimant's bare assertion of an ownership or possesso1y interest, in the absence of some other evidence, is not enough to survive a motion for summary judgment." Id. DISCUSSION Plaintiff moves for summary judgment on the basis that Claimant lacks standing to contest the forfeiture of the Defendant currency. A claimant seeking recove1y ofprope1ty subject to a civil forfeiture proceeding must demonstrate Article III standing by showing that he or she has a colorable interest in the property, which includes an ownership interest or a possessoty interest in the specific property seized. Id. at 637-38; United States v. Real Prop. Located at 475 Martin Lane, Beverly Hills, CA, 545 F.3d 1134, 1140 (9th Cir. 2008). Although the burden of demonstrating a colorable ownership interest is not a heavy one, federal couits have consistently held that unsecured creditors of the person whose prope1ty was seized lack a sufficient property interest to have standing to challenge the forfeiture. United States v. $20, 193.39 US. Currency, 16 F.3d 344, 346 (9th Cir. 1994); United States v. One Hundred Thirty-Three (133) US. Postal Serv. Money Orders Totaling $127,479.24 in US. Currency, 496 F. Appx 723, 724 (9th Cir. 2012); see also 18 U.S.C. § 983(d)(6)(B)(i) (excluding "a person with only a general unsecured interest in, or claim against, the propetty or estate of another" from the definition of "owner"). The Ninth Circuit explains: Ill Ill 4 - OPINION AND ORDER "Unlike secured creditors, general creditors cannot claim an interest in any particular asset that makes up the debtor's estate. For this reason, the federal courts have consistently held that unsecured creditors do not have standing to challenge the civil forfeiture of their debtors' property. $20,193.39 US. Currency, 16 F.3d at 346. It is undisputed that Claimant is an unsecured creditor under Oregon law because he was given no security interest as collateral for the loan. See Or. Rev. Stat. § 79.0102(ttt)(A) (defining "secured party" as "[a] person in whose favor a security interest is created or provided for under a security agreement."); Or. Rev. Stat. § 79.0203(2) (setting forth requisites of an enforceable security interest); see also United States v. Real Prop. Located at 5208 Los Franciscos Way, 385 F.3d 1187, 1191 (9th Cir. 2004) (nature of a claimant's ownership or possessoty interest is governed by the law of the state where the interest arose). Claimant has offered no evidence in opposition to Plaintiffs Motion for Summary Judgment on the issue of standing. Accordingly, this Court grants Plaintiffs Motion for Summaiy Judgment on the basis that there is no genuine issue of fact as to whether Claimant lacks standing to assert a claim to the Defendant currency. CONCLUSION Based on the foregoing, this Comt grants Plaintiffs Motion for Summary Judgment (ECF No. 21). Plaintiff shall submit a proposed form of judgment. IT IS SO ORDERED. DATED this ..;z &""day of May, 2017. .it?a b,,.,L,. ..,? m~ Malcolm F. Marsh United States District Judge 5 - OPINION AND ORDER

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