USA v. $19,000.00 IN U.S. CURRENCY
Filing
18
OPINION AND ORDER. Signed by Judge Salvador E. Casellas on 2/14/2014.(YUC)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
UNITED STATES OF AMERICA,
Plaintiff,
v.
Civil No. 12-1670 (SEC)
$19,000.00 IN U.S. CURRENCY,
Defendant.
OPINION AND ORDER
Before the Court is the plaintiff’s unopposed motion for summary judgment (Docket
# 10). After reviewing the filings and the applicable law, the plaintiff’s motion is
GRANTED.
Factual and Procedural Background
The plaintiff United States of America (Government) filed this civil forfeiture action
under 31 U.S.C. §§ 5317, 5332, and seeks the forfeiture of $19,000 in U.S. Currency seized
from Clidia Pujols de Robles (Pujols) and her son Lakey Samir Guerra Pujols (Guerra)
(collectively, Claimants). On November 29, 2012, the Claimants filed a verified answer, and
on April 5, 2013, the Government moved for summary judgment alleging lack of standing.
The relevant, uncontroverted facts are as follows.1
On April 22, 2012, Claimants were waiting to board an international JetBlue flight to
Santo Domingo, Dominican Republic, at the Luis Muñoz Marín International Airport in San
1
The Court draws the relevant facts from the uncontested statement of facts and the record. See
Dockets # 1-1 and 11.
2
12-1670 (SEC)
Juan, Puerto Rico. Docket # 11, p. 1. Pujols was selected for inspection by U.S. Customs
and Border Protection Officers (CBP Officers). Id. The CBP Officers explained to her the
currency reporting requirements for transporting monetary instruments of more than
$10,000 in her native language (Spanish). Id.; see 31 U.S.C. § 5316(a)(1)(A). Pujols
declared verbally and in writing that she was in possession of $9,000. Id. at 1-2. During
inspection, however, Pujols extracted from her pockets and purse four bundles of currency;
in all, she was carrying $10,300. Id. at 2. No additional currency was found in her luggage.
Id. Pujols then informed the CBP Officers that she was traveling with her son, Guerra, but
that they had entered the jet bridge separately. Id.
Guerra was then selected for inspection by another CBP Officer, to whom he stated
that he was carrying $5,000. Id. Nonetheless, Guerra had signed and completed the CBP
Form 503 for the amount of $7,000, thus contradicting his previous statement. Id. During
inspection, Guerra extracted from his pockets two bundles of currency that, when added,
totaled $8,923. Id. Guerra’s luggage was inspected for additional currency, with negative
results. Id.
During a secondary inspection procedure, Claimants informed the CBP Officers that
they had split the money to avoid the currency reporting requirements. Id. A personal search
was conducted with negative results for contraband and/or additional currency. Id. at 2-3.
The final count of the currency produced a grand total of $19,227. Id. at 3. Out of that total,
$227 were given to Pujols for “humanitarian reasons,” after being released without further
incidents or complaints. Id. Travel arrangements to the Dominican Republic were made for
both passengers by the federal authorities, and the balance of the currency ($19,000) was
seized. Id.
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12-1670 (SEC)
On August 16, 2012, the Government filed a verified complaint for civil forfeiture in
rem against the $19,000 pursuant to 31 U.S.C. §§ 5317 and 5332. Docket # 1. Under that
provision:
Any property involved in a violation of section … 5316 [report on exporting
and importing monetary instruments], or 5324 [structuring transactions to
evade reporting requirements] … or any conspiracy to commit any such
violation, and any property traceable to any such violation or conspiracy, may
be seized and forfeited to the United States in accordance with the procedures
governing civil forfeitures in money laundering cases pursuant to section
981(a)(1)(A) of title 18, United States Code.
In addition, Section 5332 provides for the civil forfeiture of any property involved in a
violation of the bulk cash smuggling provision, or any conspiracy to commit such a
violation, and any property traceable to such a violation or conspiracy.
Claimants then filed a verified answer alleging to be the owners of the money seized,
which was purportedly “acquired lawfully with the proceeds of their lawful work and/or
savings.” Docket # 9.2 In response, the Government filed a motion for summary judgment
under Rule G(8)(c) of the Supplemental Rules for Admiralty or Maritime and Asset
Forfeiture Claims (Supplemental Rules) for lack of Article III standing.3 Docket # 10. In the
summary judgment motion, the Government argues that Claimants do not have Article III
standing to contest the forfeiture of the defendant property because “evidence is lacking
2
The federal forfeiture statute sets forth rules as to who may intervene in such proceedings
and when they must do it. United States v. $41,800.00 in U.S. Currency, No. 09-1185, 2010 WL
4117111, *3 (D.P.R. October 14, 2010). “By virtue of the roots of in rem jurisdiction in admiralty
law, the procedures for intervention in civil forfeitures are governed by the Supplemental Rules for
Certain Admiralty and Maritime Claims [Supplemental Rules].” United States v. One-Sixth Share
of James J. Bulger In All Present and Future Proceeds of Mass Millions Lottery Ticket No.
M246233, 326 Fd 36, 40 (1st Cir. 2003); see also 18 U.S.C. § 981(b)(2).
3
Supplemental Rule G(8)(c) provides that a motion to strike a claim or answer “may be
presented as a motion for judgment on the pleadings or as a motion to determine after a hearing or
by summary judgment whether the claimant can carry the burden of establishing standing by a
preponderance of the evidence.”
4
12-1670 (SEC)
establishing their interest in the property and the basis for their claim of ownership.” Id. The
Government further asserts that Claimants failed to answer the special interrogatories served
upon them on January 24, 2013. Id. at 5, 8. As a result, the Government requests that
Claimants’ answer be stricken. Claimants never opposed the Government’s motion.4
Standard of Review
The court may grant a summary judgment if the “movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). A dispute is genuine if a reasonable factfinder “could resolve the
point in favor of the non-moving party.” Johnson v. Univ. of P.R., 714 F.3d 48, 52 (1st Cir.
2013) (internal quotation marks omitted). A material fact, in turn, is one that may affect the
outcome of the suit under the governing law. Maymí v. P.R. Ports Auth., 515 F.3d 20, 25
(1st Cir. 2008).
At this stage, facts must be viewed in the light most favorable to the non-movant, and
all reasonable inferences drawn in his favor. United States v. $8,440,190.00 in U.S.
Currency, 719 F.3d 49, 57 (1st Cir. 2013) (citing Rared Manchester NH, LLC v. Rite Aid of
N.H., Inc., 693 F.3d 48, 52 (1st Cir. 2012). The non-movant may not rest on conclusory
allegations and improbable inferences. Shafmaster v. United States, 707 F.3d 130, 135 (1st
Cir. 2013); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986).
Applicable Law and Analysis
Civil forfeiture is an in rem proceeding, in which the property subject to forfeiture is
the defendant. United States v. One-Sixth Share of James J. Bulger In All Present and
4
On January 23, 2014, Claimants requested an extension of time to oppose the motion for summary
judgment. Claimants’ request, however, was made many months after the deadline, and they offered
no reasonable explanation for the delay. Since Claimants did not demonstrate excusable neglect, or
any meritorious reason for their delay, the Court denied the motion. See Dockets # 15 & 16.
5
12-1670 (SEC)
Future Proceeds of Mass Millions Lottery Ticket No. M246233, 326 F.3d 36, 40 (1st Cir.
2003). Therefore, defenses against the forfeiture can only be brought by a third party
intervenor, who generally must have independent standing. United States v. $8,440,190.00
in U.S. Currency, 719 F.3d 49, 57 (1st Cir. 2013).
Standing “is a threshold consideration in all cases, including civil forfeiture cases.”
Id. at 57; see also United States v. Union Bank for Sav. & Inv., 487 F.3d 8, 22 (1st Cir.
2007) (stating that in a civil forfeiture action, Article III standing is an issue that must be
resolved before proceeding to the merits); United States v. 5208 Los Franciscos Way, 385
F.3d 1187, 1193 (9th Cir. 2004) (holding that a claimant has “no legal basis” to object to the
forfeiture if he lacks standing). In forfeiture actions, standing has “both constitutional and
statutory aspects.” $8,440,190.00 in U.S. Currency, 719 F.3d at 57, n. 11.
As noted, the Government challenged only Article III standing. The following three
components must be satisfied for Article III standing: “a concrete and particularized injury,
a causal connection between the injury and the wrongdoer’s conduct, and the likelihood that
prevailing in the action will rectify the injury in some way.” Id. In forfeiture cases, however,
the inquiry is more focused, and courts generally do not deny standing to a claimant who is
either the colorable owner of the res or who has any colorable possessory interest in it. See
United States v. U.S. Currency $81,000.00, 189 F.3d 28, 35 (1st Cir. 1999); United States v.
Contents of Accounts Numbers 3034504504 and 144-07143 at Merrill Lynch, Pierce,
Fenner and Smith, Inc., 971 F.2d 974, 985 (3rd Cir. 1992). “An owner or possessor of
property that has been seized necessarily suffers an injury that can be redressed, at least in
part, by return of the seized property.” Id. The function of standing in a forfeiture action is
thus truly “threshold only -to ensure that the government is put to its proof only where
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12-1670 (SEC)
someone with a legitimate interest contests the forfeiture.” United States v. $557,933.89
More or Less, in U.S. Funds, 287 F.3d 66, 79 (2nd Cir. 2002).
In order to commence a civil judicial forfeiture, the government must file a verified
complaint for forfeiture in rem. See Supplemental Rule G(2). Once filed, any person who
asserts an interest in the defendant property may challenge the forfeiture by filing a claim in
the court where the action is pending. Id. G(5)(a). The claim must identify the property
claimed, and identify the claimant and the claimant’s interest in the property. Id. It must also
be signed by the claimant under penalty of perjury. Id. A claimant must then serve and file
an answer to the complaint. Id. G(5)(b). The First Circuit, however, “has not required strict
compliance with this technicality, … [and has] consistently held that a verified answer
which asserts all the information necessary to a verified claim may substitute for the verified
claim.” United States v. One Parcel of Real Property with Bldgs., 942 F.2d 74, 78 (1st Cir.
1991); see also United States v One Urban Lot Located at 1 Street A-1, 885 F.2d 994, 1001
(1st Cir. 1989) (allowing standing without claim where verified answer was timely filed and
there was no prejudice to government from delay, but dismissing where claimant filed
neither claim nor answer).
Under Supplemental Rule G(8)(c), the government may then move to strike a claim
or answer for lack of standing. When a motion seeking to strike a claim is filed, “the burden
is on the party contesting the forfeiture (the claimant) to establish standing by a
preponderance of the evidence.” Supplemental Rule G(8)(c)(ii)(B); see also $8,440,190.00
in U.S. Currency, 719 F.3d at 57. To meet this burden, the claimant must start by
demonstrating an ownership or possessory interest in the seized property. Id. (citing OneSixth Share of James J. Bulger, 326 F.3d at 41). The First Circuit has required “some
evidence of ownership” in addition to an allegation of ownership in order to establish
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12-1670 (SEC)
constitutional standing to contest a forfeiture. Id. Mere “‘naked possession’ claims are
insufficient to establish standing.” $515,060 in U.S. Currency, 152 F.3d 491, 498 (6th Cir.
1998). Thus, “[w]hen confronted with mere physical possession of property as a basis for
standing, we require some explanation or contextual information regarding the claimant’s
relationship to the seized property.” Id.5
In the case at bar, Claimants never filed a verified claim as required by the
Supplemental Rules. They instead filed a verified answer that, arguably, could be
considered as containing all the information necessary for a verified claim. However, since
the Government did not challenge their claim on this ground, the Court will treat the verified
answer as satisfying the verified claim requirement. Therefore, the Court’s inquiry turns to
Claimants’ Article III standing, which the Government disputes by asserting that the
information on record does not support their ownership claim. The Court agrees.
Claimants assert only that they are the “owners” of the seized property “which was
acquired lawfully with the proceeds of their lawful work and/or savings.” Docket # 9. But
they have not offered any evidence in support of their contention. Their answer contains no
evidence demonstrating their ownership interest nor provides any kind of explanation about
5
As explained by the Sixth Circuit:
The assertion of simple physical possession of property as a basis for standing must
be accompanied by factual allegations regarding how the claimant came to possess
the property, the nature of the claimant’s relationship to the property, and/or the story
behind the claimant’s control of the property. This requirement derives from a
common concern for ‘straw man’ transfers of property from criminal defendants to
third parties and subsequent assertions of ownership by claimants who lack a legal
interest in the property subject to forfeiture. Id.
Similarly, in United States v. Certain Real Property Located at River Road, Eliot, York
County, Maine, 23 F.3d 395 (1st Cir. 1994), the First Circuit recognized other Circuits’
Article III standing jurisprudence requiring a claimant to show more than bare legal title to
establish standing to challenge a forfeiture in order to avoid standing of “straw owners.” See
id.
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12-1670 (SEC)
the origin of the defendant money, and if traceable to any legal activity. Moreover,
Claimants did not respond to the Government’s motion for summary judgment asserting
their lack of standing. The facts are uncontroverted, and there is no information on record to
show that, at the moment of the inspection, Claimants had indicated to the CBP Officers that
they were the owners of the money or that they had any possessory interest in all or any
portion of the seized currency. Furthermore, Claimants did not answer or object to the
special interrogatories that delved into their relationship with the defendant property. And
although Claimants were in possession of the money at the moment of the inspection, mere
“naked possession” claims are insufficient to establish standing. See $515,060 in U.S.
Currency, 152 F.3d at 498.
Therefore, Claimants have failed to prove a colorable interest in the defendant
property sufficient to demonstrate “an injury at the hands of the government that can be
remedied by forfeiture of the [$19,000] not going forward.” Although Claimants’ ownership
allegations were made under penalty of perjury, they are still conclusory. These conclusory
allegations, without more, do not suffice to confer standing. See United States v. Funds in
the Amount of $127,300.00, 2011 WL 3471507 (N.D. Ill. Aug. 8, 2011) (granting
Government’s motion for summary judgment for lack of standing where claimant’s
assertion of ownership was ‘factually unsupported’); United States v. $133,420.00 U.S.
Currency, 2010 WL 2594304, *6 (D. Ariz. June 23, 2010) (if the Government challenges
standing by filing a motion for summary judgment, claimant must show that there is
sufficient evidence to allow the court to find that he can establish standing by a
preponderance of the evidence; “if mere allegations were enough at the summary judgment
and trial stages, it would be impossible, as a practical matter, for the Government to
challenge illegitimate claims of ownership”).
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12-1670 (SEC)
Viewing all relevant facts in the light most favorable to Claimants and drawing all
inferences in their favor, see $8,440,190.00 in U.S. Currency, 719 F.3d at 57, Claimants
have not met their burden of establishing standing by a preponderance of the evidence. See
Supplemental Rule G(8)(c)(ii)(B); $8,440,190.00 in U.S. Currency, 719 F.3d at 57.
Accordingly, Claimants’ answer is stricken.
In any event, the Court finds that Claimants’ answer can be independently stricken
due to their failure to answer or object to the special interrogatories served by the
Government on January 24, 2013. Supplemental Rule G(6)(a) allows the Government,
without the court’s leave, and at any time after a claim is filed and before discovery is
closed, to serve special interrogatories limited to the claimant’s identity and relationship to
the defendant property. Within 21 days after the interrogatories are served, the claimant
must answer or object to these interrogatories. Id. G(6)(b). Failure to comply, allows the
government to move to strike the claim or answer. Supplemental Rule G(8)(c)(i)(A).
In the present case, Claimants’ responses to the interrogatories were due by February
14, 2013. To this date, Claimants have not responded. Accordingly, the Court also strikes
Claimants’ answer for failure to comply with Supplemental Rule G(6)(b). See id.; see also
United States v. $27,970.00 in U.S. Currency, No. 1:09-139, 2010 WL 933762 (S.D. Ga.
March 16, 2010); United States v. $2,409.00 in U.S. Currency, No. WDQ-10-CV0220, 2010
WL 2670982 (D. Md. June 24, 2010).
Conclusion
For the reasons stated above, the Government’s motion is GRANTED, and it is
ORDERED that Claimants’ answer in this civil forfeiture action be stricken pursuant to
Rule G(8)(c)(i)(A) of the Supplemental Rules for Admiralty or Maritime and Asset
Forfeiture Claims.
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12-1670 (SEC)
IT IS SO ORDERED.
In San Juan, Puerto Rico, this 14th day of February, 2014.
s/ Salvador E. Casellas
SALVADOR E. CASELLAS
U.S. Senior District Judge
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