United States of America v. $338,492.00 in United States Currency, et al et al

Filing 33

ORDER denying Motion to Dismiss. Signed by Judge Samuel H. Mays, Jr on 08/20/2012.

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION

UNITED STATES OF AMERICA,

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Plaintiff,
v.
THREE HUNDRED THIRTY-EIGHT
THOUSAND FOUR HUNDRED NINETY-TWO
DOLLARS ($338,492.00) IN UNITED
STATES CURRENCY, et al.,
Defendants.

No.

11-3072

ORDER DENYING MOTION TO DISMISS

Before

the

Court

is

Claimant

Elizabeth

Keys’

(“Keys”)

January 17, 2012 Motion to Dismiss.

(See Motion, ECF No. 6; see

also Claimant’s Mem., ECF No. 6-6.)

Plaintiff the United States

of America (the Government”) responded on February 16, 2012.
(See Pl.’s Resp., ECF No. 9.)

Keys seeks dismissal of the

Government’s forfeiture action against her 2006 BMW 650ci (the
“BMW”) as insufficiently pled.

For the following reasons, Keys’

Motion is DENIED.
I.

Background

On December 9, 2011, the Government instituted forfeiture
proceedings
Government

under
to

21

seize

U.S.C.
property

§

881(a)(6),

traceable
1

to

which
the

allows

exchange

the
of

a

controlled substance in violation of 21 U.S.C. §§ 801, et seq.
(See Am. Verified Compl., ECF No. 3) (the “Complaint.”)

The

Government seeks forfeiture of money, vehicles, and electronic
equipment

during

(“Taylor”)

Taylor

seized

in

charged,

along

with

the

July

21,

Collierville,
fourteen

2011

arrest

Tennessee.

others,

with

of

Vernon

Taylor

is

conspiracy

to

distribute at least 1,000 kilograms of marijuana, in violation
of 21 U.S.C. § 846.

(See Ex. C ¶ 4, ECF No. 1-3.) 1

After Taylor’s arrest, DEA Task Force officers allegedly
conducted a consensual search of Keys’ Mississippi residence.
(See Ex. C, ECF No. 1-3.)
Officer

Hoing,

Keys

Under questioning from Task Force

allegedly

stated

that

she

owned

three

vehicles: a 2002 Volkswagen; a 2008 Mercedes Benz SUV; and the
BMW.

The BMW was at Smith Imports, a mechanics shop, during the

search

and

investigation.

(Id.

¶

15.)

According

to

the

Government, Keys denied that Taylor had bought or provided the
money

for

her

to

purchase

the

BMW.

claimed to have “pa[id] her own way.”

(Id.)
(Id.)

Keys

allegedly

The Government

alleges that, following the interview, DEA task force officers
seized the BMW from Smith Imports.

(Id.)

The Government avers that bank records and a receipt from
Smith Imports refute Keys’ claim that she purchased the BMW with

1

Exhibit C is attached to the original Complaint. (See ECF No. 1-3.)
Amended Verified Complaint incorporates Exhibit C by reference. (Am.
Verified Compl. 3.)

2

The

her own money.
purchased,

Records from Smith Imports, where the BMW was

allegedly

show

that

Keys

paid

$30,000.00

of

the

$34,500.00 purchase price by trading in a 2006 Mercedes Benz
SL500

(the

Taylor

“Mercedes

bought

the

SL500”).

Mercedes

The

SL500

Government

for

alleges
(Id.

Keys.

that
16.)

¶

Taylor’s bank records allegedly confirm that he paid for the
Mercedes SL500.
recorded

(Id.)

telephone

purchase the BMW.

Taylor also allegedly admitted in a

conversation
(Id. ¶ 17.)

that

he

gave

Keys

money

to

The Government avers that Keys

purchased the Mercedes with money from Taylor’s participation in
the drug conspiracy.

(Id. ¶¶ 16-17.)

Surveillance conducted by the DEA on Taylor allegedly shows
that he gave cash to Keys on “various occasions.”

(Id. ¶ 17.)

The Government avers that cash deposits in Keys’ bank accounts
exceed “what would be expected from her claimed occupation as a
hairdresser.”
II.

(Id.)

Standard of Review

Under the Comprehensive Drug Abuse Prevention and Control
Act, the Government may initiate forfeiture proceedings against
all “money, negotiable instruments, securities and other things
of value furnished or intended to be furnished by a person in
exchange for a controlled substance,” including “all proceeds
traceable to such exchange.”

21 U.S.C. § 881(a)(6).

Actions

brought in civil forfeiture are “the servants of two procedural
3

masters: the Supplemental Rules specially devised for admiralty
and in rem proceedings, and the generally applicable Federal
Rules of Civil Procedure [].”

United States v. $8,221,877.16 in

United States Currency, 330 F.3d 141, 149 (3d Cir. 2003).

Of

these “two procedural masters,” the Supplemental Rules govern
the filing of a civil forfeiture complaint.

See 18 U.S.C. § 983

(directing the Government to “file a complaint for forfeiture in
the

manner

set

forth

in

the

Supplemental

Rules”);

see

also

$8,221,877.16 in United States Currency, 330 F.3d at 149 (“The
balance between the two is struck in favor of the Supplemental
Rules, which always apply to civil forfeiture proceedings.”).
The Federal Rules of Civil Procedure apply when the Supplemental
Rules are silent, but “only to the extent that they are not
‘inconsistent with’ the Supplemental Rules.”

See $8,221,877.16

in United States Currency, 330 F.3d at 149 (quoting Supp. R. A)
(“The

Federal

foregoing

Rules

of

proceedings

Civil

except

Procedure
to

the

also

to

the

that

they

are

Supplemental

Rules

are

extent

apply

inconsistent with these Supplemental Rules.”).
The
found
E(2)(a)

pleading

in

two

complementary

provides

circumstances
particularity

requirements

that

from
that

in

provisions.

forfeiture
which

the

the

the

defendant

Supplemental

complaints
claim
or

must

arises

claimant

Rule

“state
with

will

be

the
such

able,

without moving for a more definite statement, to commence an
4

investigation of the facts and to frame a responsive pleading.”
The “particularity” requirement is found in Supplemental Rule
G(2)(f), which requires the Government to provide “sufficiently
detailed

facts

to

support

a

reasonable

belief

that

the

government will be able to meet its burden of proof at trial.”
The Civil Asset Forfeiture Reform Act of 2000 (“CAFRA”)
requires the Government to establish, “by a preponderance of the
evidence, that the property [taken] is subject to forfeiture.”
18

U.S.C.

§

983(a)(1).

The

preponderance

of

the

evidence

standard is the Government’s burden at trial; when confronted
with

a

motion

to

dismiss

a

civil

forfeiture

complaint,

the

Government need only plead sufficiently “to support a reasonable
belief that the government could demonstrate probable cause for
finding

the

property

tainted.”

United

States

v.

One

1974

Learjet 24D, Serial Number 24D-290, Mexican Registration XA-RMF,
191 F.3d 668, 674 (6th Cir. 1999) (emphasis in original).
plain

reading

of

CAFRA

shows

that

probable

cause

does

A
not

implicate the sufficiency of the evidence in the Government’s
complaint.

“‘No complaint may be dismissed on the ground that

the Government did not have adequate evidence at the time the
complaint

was

property.’”

filed

to

establish

the

forfeitability

of

the

United States v. 630 Ardmore Drive, 178 F. Supp. 2d

572, 581 (M.D.N.C. 2001) (emphasis added) (quoting 18 U.S.C. §
983(a)(3)(D)).

“[T]he Government’s forfeiture claim can advance
5

forward in the face of a 12(b)(6) motion to dismiss even if the
Government’s complaint does not provide all the facts that would
allow the Government to ultimately succeed in the forfeiture
proceeding.”

Id. at 580-81.

III. Analysis
Keys moves to dismiss the Government’s complaint on two
grounds.
plead

First, she argues that the Government has failed to

“and

cannot

establish

that

acquisition

traceable to any specified unlawful activity.”
4.)
of

of

the

BMW

is

(Claimant’s Mem.

Second, she argues that “the BMW cannot constitute proceeds
specified

unlawful

981(a)(2)(B).”
As

a

activity”

activity

pursuant

to

Santos

and

§

(Id.)

threshold
does

not

matter,
appear

the
in

phrase

21

“specified

U.S.C.

§

881(a)(6),

statutory provision on which the Government relies.
881(a)(6)

permits

traceable”

to

an

the

Government

“exchange

of

a

to

seize

controlled

unlawful

“all

the

Section
proceeds

substance.”

The

Government’s allegations, if accepted as true, establish that
the

BMW

was

purchased

substance transactions.

with

proceeds

traceable

to

controlled

Taylor allegedly admitted that he gave

Keys the money to purchase the BMW.

(See Ex. C ¶ 17.)

Bank

records allegedly showed that Taylor purchased the Mercedes that
Keys traded for the BMW.

(Id.)

Surveillance footage of Taylor

allegedly confirmed that he provided cash to Keys on multiple
6

occasions,

exceeded

amounts

expected from her occupation as a hairdresser.

(Id.)

Taylor’s

role

detail.

in

and

the

her

drug

bank

deposits

conspiracy

is

allegedly

alleged

in

These

allegations support the inference that the BMW was “purchased .
. . with illegal funds.”

630 Ardmore Drive, 178 F. Supp. 2d at

583; see also United States v. $ 335,260.00 in U.S. Currency,
2010 U.S. Dist. LEXIS 33681, at *6-7 (N.D. Ohio Apr. 6, 2010).
The

Government’s

allegations

are

adequate

to

survive

Keys’

Motion because “the Government [must] simply plead enough facts
for the claimant to understand the theory of forfeiture, to file
a

responsive

investigation.”

pleading,

and

to

undertake

an

adequate

United States v. Mask of Ka-Nefer-Nefer, No.

4:11CV504 HEA, 2012 U.S. Dist. LEXIS 47012, at *4 (E.D. Mo. Mar.
31, 2012).
Keys argues that the Government’s allegations do not show
that

the

BMW

constituted

proceeds

of

“specified

activity pursuant to Santos and § 981(a)(2)(B).”
Mem. 4.)

(Claimant’s

The Government seeks forfeiture under § 881(a)(6), not

§ 981(a)(2)(B).
U.S.

unlawful

507

Keys’ reliance on Santos v. United States, 553

(2010),

is

also

misplaced.

Santos

answered

the

question of whether proceeds under the federal money laundering
statute meant net profits or gross receipts.
525-29.
cause:

See 553 U.S. at

The Supreme Court made no mention of the issue in this
the

Government’s

pleading
7

burden

in

civil

forfeiture

actions

to

survive

a

motion

to

dismiss.

Thus,

Santos

is

distinguishable.
IV.

Conclusion

For the foregoing reasons, Keys’ Motion is DENIED.
So ordered this 20th day of August, 2012.

s/ Samuel H. Mays, Jr._______
SAMUEL H. MAYS, JR.
UNITED STATES DISTRICT JUDGE

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