Collazos v. U.S.

• Citation: 368 F.3d 190
• Decision Date: 18 May 2004
• Docket Number: No. 02-6324.,02-6324.
• Parties: Stella COLLAZOS, Claimant-Appellant, Contents of Account Number 68108021 Held in the Name of Stella Collazos Located at Prudential Securities, Inc., 199 Water Street, New York, New York, 10292, Defendant-in-Rem, v. UNITED STATES, Plaintiff-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

368 F.3d 190

Stella COLLAZOS, Claimant-Appellant, Contents of Account Number 68108021 Held in the Name of Stella Collazos Located at Prudential Securities, Inc., 199 Water Street, New York, New York, 10292, Defendant-in-Rem, v. UNITED STATES, Plaintiff-Appellee.

No. 02-6324.

United States Court of Appeals, Second Circuit.

Argued: September 25, 2003.

Decided: May 18, 2004.

COPYRIGHT MATERIAL OMITTED

Joel M. Wolosky, Bondy & Schloss LLP, New York, New York, for Claimant-Appellant.

Jane A. Levine, Assistant United States Attorney, Southern District of New York, New York, New York (James B. Comey, United States Attorney; Gary Stein, Assistant United States Attorney, on the brief), for Plaintiff-Appellee.

Before: MESKILL, KATZMANN, and RAGGI, Circuit Judges.

Judge KATZMANN concurs in the majority opinion, and files a separate concurring opinion.

RAGGI, Circuit Judge.

This case presents us with the first opportunity to interpret the disentitlement provision of the Civil Asset Forfeiture Reform Act of 2000 ("CAFRA"), Pub.L. No. 106-185, § 14, 114 Stat. 202, 219 (2000), codified at 28 U.S.C. § 2466.

Stella Collazos is a Colombian national indicted in federal and state courts for her alleged operation of a multi-million dollar money-laundering enterprise. In 1996, law enforcement authorities seized $1.1 million from account number 68108021 in Ms. Collazos's name at Prudential Securities, Inc., in New York (the "Prudential Account"), alleging that these monies were related to Ms. Collazos's criminal activities. Ms. Collazos now appeals from a judgment of the United States District Court for the Southern District of New York (John E. Sprizzo, Judge), entered October 25, 2002, which dismissed her claim to the seized monies pursuant to 28 U.S.C. § 2466 based on Ms. Collazos's refusal to enter the United States to face the related criminal charges. See United States v. Contents of Account Number 68108021, 228 F.Supp.2d 436 (S.D.N.Y.2002). Ms. Collazos challenges this judgment on three grounds: (1) the disentitlement provision of § 2466 should not have been applied to her case because she is not a fugitive as that term is understood at common law; (2) dismissal of her claim pursuant to § 2466 deprived her of property without due process of law; and (3) retroactive application of § 2466 to the 1996 seizure of her Prudential Account further violated due process.

We conclude that none of these arguments has merit. First, as the plain language of § 2466 indicates, the statute permits disentitlement of a civil forfeiture claimant who has never been in the United States if, upon notice or knowledge of an outstanding criminal warrant for his arrest, the person "declines to enter" the United States or "otherwise evades the jurisdiction of the court" in which the criminal proceeding is pending in order to avoid prosecution. 28 U.S.C. § 2466(a)(1)(B), (C). Second, application of § 2466 to Ms. Collazos did not deprive her of due process with respect to the seized money; rather, she waived her right to be heard in the civil case when she refused to submit to state and federal jurisdiction in related criminal cases. Finally, § 2466 was not applied retroactively to Ms. Collazos because her refusal to enter the United States continued after CAFRA's enactment. Accordingly, we affirm the district court's judgment.

I. Factual Background

A. The Seizure of the Prudential Account

On March 23, 1999, the United States commenced this in rem forfeiture action against the $1.1 million contents of Ms. Collazos's Prudential Account on the grounds that the funds were the proceeds of illegal narcotics activity, see 21 U.S.C. § 881(a)(6), or were property involved in, or traceable to property involved in, a violation of the money-laundering statutes, see 18 U.S.C. §§ 981(a)(1)(A), 1956(a).

In its complaint, the government detailed events leading to the initial seizure of the defendant Prudential Account on June 10, 1996. The previous month, on May 1, 1996, Texas state authorities had searched the Houston office of UFF Exchange and Giros Inc. ("UFF"), a money-remitting business owned on paper by Alba Marina Arias but owned in fact by Stella Collazos, who supervised its operation from her home in Cali, Colombia.¹ Papers seized pursuant to the Texas search revealed that UFF routinely deposited money in Houston bank accounts on behalf of fictitious individuals and then wired those funds to nominee or fictitious accounts at BankAtlantic in Miami, Florida. In the sixteen months between January 1995 and April 1996, UFF wire transferred approximately $4.5 million, or about 95% of its total wire volume, from such Texas bank accounts to BankAtlantic. Mindful that such a pattern of money laundering is frequently employed by drug traffickers, Texas authorities had previously analyzed some of the actual currency deposited by UFF and obtained positive test results for cocaine.

In the weeks immediately following execution of the search warrant, a federal court-ordered wiretap intercepted numerous telephonic and facsimile communications between Ms. Collazos and Blanca Piedad Ortiz, a BankAtlantic manager who was subsequently convicted for her role in the laundering scheme, about the need to change names on various accounts listed to fictitious owners. In one such conversation, Ms. Collazos and Ms. Ortiz spoke about the need to move funds from certain nominee accounts to a BankAtlantic account in the name of Javier Rojas. They further discussed the need to dissociate Ms. Collazos's husband, Victor, from the nominee accounts.

Soon thereafter, on May 31, 1996, arrangements were made through the London office of Prudential Securities to open an account in Ms. Collazos's name in New York. That same day, Alba Marina Arias instructed Ms. Ortiz to wire $650,000 from BankAtlantic accounts in the names of Javier Rojas and Victor Collazos to Ms. Collazos's new Prudential Account. Over the next week, an additional $450,000 was transferred to the Prudential Account from bank accounts linked to another money-remitting business owned and operated by Ms. Collazos, Stella Giros Al Minuto ("Stella Giros"). Wire transfers showed that Stella Giros, like UFF, had wired millions of dollars to nominee accounts at Bank Atlantic in 1995-96.

Within days of these transfers, on June 5, 1996, federal authorities concluded a year-long investigation into money laundering out of BankAtlantic accounts by arresting Ms. Ortiz and freezing 1100 BankAtlantic accounts supervised by her. See generally Coronado v. BankAtlantic Bancorp., Inc., 222 F.3d 1315, 1317-18 (11th Cir.2000) (detailing history of the investigation). On June 10, 1996, the New York City Criminal Court issued a warrant for the seizure of Ms. Collazos's Prudential Account. By order dated September 24, 1996, the city court directed that the $1.1 million contents of the Prudential Account be turned over to the United States Customs Service for forfeiture. Ms. Collazos was notified of this fact by letter dated October 23, 1996, and on December 12, 1996, she filed a cash bond and requested that the case be referred for judicial forfeiture. See 19 U.S.C. § 1608; 19 C.F.R. § 162.47; 21 C.F.R. § 1316.76.

B. The Federal Forfeiture Proceedings — Ms. Collazos's Refusal to Appear for Deposition

For reasons not apparent on the record before us, the federal forfeiture proceedings here at issue were not commenced until March 23, 1999. In the interim, on July 17, 1998, a Texas grand jury returned a sealed indictment charging Ms. Collazos with unlawfully engaging in the business of currency transmission without a license, a state felony crime. Eight days after the filing of the forfeiture complaint, on March 31, 1999, Ms. Collazos, through counsel, filed a claim to the subject funds, and on April 23, 1999, she formally answered the complaint, generally denying the allegations of criminal activity and asserting, inter alia, that she was an innocent owner of the seized money. See, e.g., United States v. All Assets of G.P.S. Automotive Corp., 66 F.3d 483, 487-88 (2d Cir.1995) (discussing innocent-owner provision of former 18 U.S.C. § 981(a)(2)).

The United States noticed Ms. Collazos's deposition for May 1999, but she declined to appear at that time, prompting a series of adjournments. Correspondence between the parties reveals that Ms. Collazos sought to avoid deposition in the United States lest she be arrested on the pending Texas criminal charge. On October 6,2000, the district court entered an order requiring the parties to complete discovery by January 4, 2001, specifically directing Ms. Collazos to appear for deposition in the United States on or before that date or face an order of default or dismissal in the case. This order was vacated on November 15, 2000, and a new order entered adhering to the January 4, 2001 discovery deadline but stating that the penalty for Ms. Collazos's failure to appear for deposition by that date would be the entry of "an appropriate preclusion order." Ms. Collazos did not appear for deposition as directed in January 2001. On June 5, 2001, the district court set the case down for trial on September 25, 2001.

C. The Federal Indictment and Criminal Trial

A few days earlier, on June 1, 2001, a federal grand jury sitting in the Southern District of Florida returned a sealed indictment charging Ms. Collazos, Ms. Ortiz, and Lucia Ramirez, an assistant to Ms. Ortiz at BankAtlantic, with conspiracy to commit money laundering in violation of 18 U.S.C. § 1956(h). The indictment also sought criminal forfeiture pursuant to 18 U.S.C. § 982(a)(1) of $144,281,503, the total amount allegedly laundered during the conspiracy. The indictment specifically noted that this amount "includes but is not limited to the contents of Account No. 68108[0]21 held in the name of Stella Collazos located at Prudential Securities, Inc.," i.e., the $1.1 million then at issue in the New York civil forfeiture proceeding. United...