Opinion
No. 00 Civ. 6215 (HB)
September 12, 2002
OPINION AND ORDER
The United States of America (the "government") seized $13,477.00 pursuant to two search warrants executed on August 18, 1998, and August 19, 1998. The government, contending that the currency represents proceeds from, and was used to facilitate, the sale of controlled substances, commenced a forfeiture action under 21 U.S.C. § 881(a)(6). The claimant, German Fernandez ("Fernandez" or "claimant"), filed a claim and an answer asserting an interest in the currency. The government moves for summary judgment. For the following reasons, the government's motion is GRANTED.
I. BACKGROUND
The following facts are as set forth in the government's verified complaint unless otherwise noted. In May 1998, the New York City Police Department (the "police") began an investigation of the claimant and three other men, Ramon Fernandez, William Jiminez ("Jiminez") and Eusebio Fernandez (collectively the "Fernandez Organization"), who were allegedly involved in heroin trafficking. On May 20, 1998, two people who would later act as confidential informants were arrested in Manhattan with approximately 765 envelopes of heroin. Following their arrest, one of the men informed the police that the heroin had come from Ramon Fernandez and Jiminez at 2-12 Sickles Street in Manhattan. Ramon Fernandez and Jiminez later told an undercover detective posing as a potential purchaser that they were moving their operation to a location at 95th Street and Fourth Avenue in Brooklyn. On June 30, 1998, the informants and the undercover officer went to 95th Street and Fourth Avenue and purchased heroin from Ramon Fernandez. Eusebio Fernandez and German Fernandez were also present at the sale. The police subsequently conducted four additional purchases of heroin from the Fernandez Organization in neighborhood of 88th Street in Brooklyn. On several occasions, German Fernandez was observed entering and exiting a building on 137 88th Street and later returning to the location of the sale with packages of heroin. By August 16, 1998, the total amount of money paid to the Fernandez Organization in connection with the sales was in excess of $6,000. The next day, the government obtained arrest warrants for all four members of the Fernandez Organization, in addition to a warrant to search an apartment on 137 88th Street that was believed to be the location used by the Fernandez Organization to store narcotics.
On August 18, 1998, the undercover officer gave $8,000 in cash to Ramon Fernandez for another purchase. Ramon Fernandez then drove a van with German Fernandez to 88th Street and 5th Avenue in Brooklyn to pick up Eusebio Fernandez. Shortly thereafter, Eusebio Fernandez was observed exiting the van and walking into the apartment on 137 88th Street. Police executed the search warrant and arrested him, seizing $976.00 that was found on his person. Additionally, the police recovered more than a kilogram of heroin and other drug paraphernalia, two loaded firearms and ammunition from the apartment. Ramon Fernandez was arrested moments later and police recovered $115 from his person. Police then forcibly entered German Fernandez's apartment at 455 87th Street, where he had retreated from the police, and arrested him as well. The police recovered two paging devices and $2,667 in cash from his person, and an additional $1,100 on a living room table. The next day, the police obtained a search warrant and again entered German Fernandez's apartment where they recovered an additional $8,619, drug records, a loaded firearm and ammunition. The total amount recovered by the police in connection with the searches and arrests was $13,477, the amount now sought by the government.
The four members of the Fernandez Organization were indicted on September 1, 1998, by a grand jury on one count of conspiring to possess with intent to distribute and to distribute heroin, in violation of 21 U.S.C. § 846.
On April 23, 1999, German Fernandez pleaded guilty before Magistrate Judge James C. Francis IV to the charges in the indictment. During the plea hearing, Fernandez allocuted that he had conspired to possess at least 100 grams of heroin from between May 1998 to August 1998 and that he was aware that his conduct was illegal. See Plea Tr. at 22.
Ramon and Eusebio Fernandez also pleaded guilty to the indictment on April 23, 1999. William Jiminez, however, was never arraigned on the original indictment and the government notes that he remains a fugitive.
Fernandez was sentenced by Judge Martin to 108 months' imprisonment and is currently serving his sentence. On July 30, 2001, Fernandez, the sole claimant in this action, filed an answer and a claim to obtain the defendant currency. A pre-trial conference was held on May 3, 2002, during which Fernandez, appearing pro se by telephone from prison in Fort Dix, claimed that $3,000 of the defendant currency belonged to his sister, Delia Fernandez. He did not, however, claim ownership to the remaining money. According to Fernandez, he had accompanied. his sister on the day before his arrest to the Banco Popular on 53rd Street and 5th Avenue in Brooklyn where she withdrew either $5,000 or $6,000 from her account for a trip she was intending to take to the Dominican Republic. At the conference, Fernandez was unable to provide his sister's current place of residence, her Social Security number or the number for her account at Banco Popular, nor did he provide any other information or evidence in support of his claim or which could assist the government in contacting his sister. In an attempt to verify Fernandez's assertions, the government served a subpoena on Banco Popular, at my direction, for the bank records for Delia Fernandez. On May 13, 2002, Banco Popular notified the government that it could not locate any records for Delia Fernandez absent additional information such as an account number or social security number. The government on May 14, 2002, sent a letter to Fernandez to inform him of the bank's response and to request that he forward any additional information with respect to his sister's account. Fernandez never responded. On August 5, 2002, the government submitted its motion for summary judgment, to which Fernandez also never responded.
Fernandez initially submitted a "Notice of Appeal" on September 13, 2000, challenging the decision of Judge Martin to dismiss a civil action commenced by Fernandez seeking the return of the money seized at the time of his arrest. The notice did not comport with the requirements of Rule C of the Supplemental Rules for Certain Admiralty Claims to constitute a claim. The government moved for default judgment, which was granted. On December 18, 2000, Fernandez filed a "Motion to Reconsider." On March 13, 2001, the Court vacated the default judgment, on agreement by the government and directed Fernandez to file a verified claim and answer. After several extensions, Fernandez filed the claim and answer on July 30, 2001.
II. DISCUSSION
A. Standard for Summary Judgment
A motion for summary judgment may not be granted unless the Court determines there is no genuine issue of material fact to be tried. Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 247-52 (1986). The moving party has the burden of demonstrating the absence of any genuine issue of material fact. See Adickes v. S.H. Kress Co., 398 U.S. 144, 157 (1970). A fact is material "if it might affect the outcome of the suit under the governing law, " while an issue of fact is genuine "where the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Giordano v. City of New York, 20001 WL 1637383, at *5 (2d Cir. 2001). Furthermore, the court must "draw all factual inferences in favor of the party whom summary judgment is sought." Cronin v. Aetna Life Ins. Co., 46 F.3d 196, 202 (2d Cir. 1995).
B. Forfeiture
The government seeks forfeiture of the defendant funds under 21 U.S.C. § 881(a)(6). "Forfeiture may be had under § 881(a)(6) of all moneys, negotiable instruments, securities, or other things of value furnished or intended to be furnished by any person in exchange for a controlled substance as well as all proceeds traceable to such an exchange." United States v. 785 St. Nicholas Ave., 983 F.2d 396, 402 (2d Cir. 1993). Forfeiture of funds under § 881 requires that the government demonstrate probable cause that the funds are subject to forfeiture. United States v. Funds Held in the Name or For the Benefit of John Hugh Wetterer, 210 F.3d 96, 104 (2d. Cir. 2000) ("Wetterer"); see also Marine Midland Bank. N.A. v. United States, 11 F.3d 1119, 1126 (2d Cir. 1993). "Probable cause is established if the government can show that it has reasonable grounds, more than mere suspicion, to believe that the property is subject to forfeiture." Marine Midland, 11 F.3d at 1126. The Second Circuit has interpreted the probable cause standard in the context of forfeiture to mean that the government has the burden "to show a nexus between the illegal conduct" and the property to be forfeited. Id. If the government establishes probable cause, the burden shifts to the claimant to demonstrate "by a preponderance of the evidence (1) that the defendant property was not in fact used unlawfully, " or (2) that the right to the defendant currency.
While both a seizure or forfeiture require the government to show probable cause, "the consequences of a lack of probable cause may differ depending on the event." United States v. Daccarett, 6 F.3d 37, 46 (2d Cir. 1993) ("seizure and forfeiture are two distinct events"). Additionally, "[a]bsence of probable cause at the time of the seizure may result in the suppression of evidence in later proceedings, but the defendant property itself cannot be suppressed from the forfeiture action. In contrast, a failure to establish probable cause on the forfeiture issue will preclude forfeiture of the property altogether." Id.
III. CONCLUSION
For the above reasons, the government's motion is GRANTED. The Clerk of the Court is instructed to close this case and remove it from my docket.