In re Seizure of $82,000 More or Less

Decision Date01 November 2000
Docket NumberNo. 99-0715-CV-W-5.,No. 99-0927-CV-W-5.,99-0715-CV-W-5.,99-0927-CV-W-5.
PartiesIn re SEIZURE OF $82,000 MORE OR LESS. Jeffery Chappell, et al., Movants, v. United States of America, Respondent.
CourtU.S. District Court — Western District of Missouri

Paul R. Katz, Kansas City, MO, for Plaintiffs.

Frances E. Reddis, U.S. Attorney's Office, Kansas City, MO, for Respondent.


LAUGHREY, District Judge.

These consolidated cases concern the ownership of $82,000 found in a 1995 Volkswagen Golf titled in the name of Helen Chappell. The United States Government asserts that the $82,000 came from illegal drug sales and should be forfeited to the Government. The Chappells contend that the $82,000 belongs to them because it was found in the gas tank of a car which they purchased from the Government, after the car had been forfeited by its owner. For the reasons stated below, the Court finds that the Government is not entitled to the currency.

I. Factual Background

The following facts have been stipulated by the parties.1 On February 15, 1996, Corporal Jack McMullin of the Missouri State Highway Patrol stopped a 1995 Volkswagen Golf for speeding and following too closely. During the stop, Corporal McMullin interviewed and became suspicious of both passengers in the vehicle, Roberto Lopez-Velez and Guadalupe Cortez-Amezcua. After a consensual search indicated fresh silicone on the undercarriage of the vehicle, Corporal McMullin asked the occupants if they would mind bringing the vehicle to the Missouri State Highway Patrol garage for a more thorough inspection. The occupants agreed to do so.

Once at the garage, Corporal McMullin found that the battery in the vehicle had recently been removed, and he observed plastic baggies in the battery case. He then contacted Special Agent Carl Hicks, of the Drug Enforcement Association ("DEA"), who responded to assist2 Corporal McMullin. Special Agent Hicks observed that the plastic baggies contained foil-wrapped objects. When he opened the baggies and foil, he found $24,000 in United States Currency and noticed a strong odor of methamphetamine coming from the baggies.

Special Agent Hicks then interviewed Lopez-Velez and Cortez-Amezcua. Both Lopez-Velez and Cortez-Amezcua explained that they had driven the vehicle from Mexico to a Holiday Inn in St. Louis, Missouri; however, they were unable to identify the Holiday Inn. Lopez-Velez stated that he had parked the vehicle in the parking lot. The vehicle was then picked up by unknown persons and returned. Lopez-Velez admitted that he had known that $24,000 was in the battery of the car and that the currency was from the sale of illegal drugs. Lopez-Velez stated that Cortez-Amezcua did not know about the currency. Lopez-Velez refused to name the person who had hired him to make the trip to St. Louis.

At the conclusion of the interview, Special Agent Hicks announced that he was going to seize the $24,000 as drug proceeds, and was going to seize the vehicle as an item used to transport drug proceeds. Hicks advised Lopez-Velez that he was not under arrest and was free to leave. Lopez-Velez and Cortez-Amezcua left the highway patrol garage and have not returned.

Special Agent Hicks sent the plastic baggies and foil for analysis. The substance on the foil was found to be caffeine, an ingredient commonly used as a cutting agent for methamphetamine. The DEA subsequently determined that the 1995 Volkswagen Golf was registered to Miguel Angel Sanchez-Cortez, Punta Del Este, 967 Saltillo, Coah, Mexico.

Following the procedures established by Congress for the disposition of seized property, the DEA initiated an administrative forfeiture action against the $24,000 and the 1995 Volkswagen Golf. The only claimant who came forward to contest the forfeiture of those items was Lopez-Velez, who filed a claim and cost bond on April 30, 1996. On July 10, 1996, an Assistant United States Attorney mailed a stipulation to an attorney for Lopez-Velez, proposing the settlement of the claim prior to the filing of a judicial action. The attorney for Lopez-Velez requested that the stipulation be mailed to him for his client's signature. The stipulation was never returned to the United States Attorney's Office. On April 2, 1998, the United States Attorney's Office, with the concurrence of the attorney for Lopez-Velez, referred the case back to the DEA to have the vehicle and the $24,000 declared abandoned. On June 12, 1998, the DEA declared the 1995 Volkswagen Golf and the $24,000 abandoned.

On September 24, 1998, the DEA referred the 1995 Volkswagen Golf to the General Services Administration ("GSA") for sale because the DEA did not have the capacity to conduct a public auction. The DEA authorized GSA to sell the car but made no mention of the vehicle's contents. The DEA advised GSA that it had no information indicating that the vehicle required repairs, but also advised GSA that it believed the odometer reading was incorrect.3

On February 1, 1999, GSA advertised the 1995 Volkswagen Golf for bids. Item No. 030 on the advertisement described the property as follows: "Sedan 1996 Volkswagen Golf 4 cyl (IT-96-0037) Vin: 3VW1931HMSM113340 est 5,955 mile— mileage will not be certified—odometer discrepancy (156435-8267-0001) 1 EA." Helen Chappell was the successful bidder for the 1995 Volkswagen Golf. On April 14, 1999, Jeffery Chappell's Discover credit card was used to pay for the vehicle, and Helen Chappell received from GSA a Certificate to Obtain Title to a Vehicle. The vehicle is currently titled in Helen Chappell's name. At the time of this purchase, neither the Chappells, the DEA nor GSA knew that $82,000 was hidden in the fuel tank of the vehicle.

Not surprisingly, the Chappells noticed that the Volkswagen Golf had a fuel problem. Jeffery Chappell took the vehicle to Waldo Imports in Kansas City, Missouri, to have the fuel problem fixed. While working on the car, the Waldo Imports' mechanic found several bundles of currency floating in the fuel tank of the vehicle. He reported his find to the DEA office in Overland Park, Kansas. DEA agents went to Waldo Imports and seized 20 bundles of currency wrapped in plastic, totaling $82,000, more or less. A check of each bill revealed that none of the bills had a printing date later than 1996, when the vehicle was originally seized. On the date of the seizure, Special Agent Melton contacted Jeffery Chappell, who explained that he had recently purchased the vehicle from GSA and had been unaware that the currency was inside the fuel tank.

The Chappells have filed for the return of the currency pursuant to Federal Rule of Criminal Procedure 41(e) (1999). The United States has filed for judicial foreclosure claiming the currency as drug proceeds pursuant to 21 U.S.C. § 881.

II. Discussion
A. Jurisdiction

The parties have now stipulated that the Government's administrative proceeding was commenced before the Chappell's filed their Rule 41(e) Motion. For this reason, the Court lacks jurisdiction to address the Chappell's Motion. See Muhammed v. Drug Enforcement Agency, Asset Forfeiture Unit, 92 F.3d 648, 652 n.4 (8th Cir. 1996). The Court, therefore, dismisses the Chappell's Rule 41(e) Motion, leaving only the United States' forfeiture action.

The Government also claims that the Chappell's lack standing to contest the United States' forfeiture action because neither will suffer an injury-in-fact if the currency is forfeited to the United States. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) (holding that Article III of the United States Constitution limits federal jurisdiction to "cases & controversies," meaning instances in which plaintiffs will suffer "injury-in-fact" if relief is denied.) The Government first argues that Jeffery Chappell will suffer no injury because his mother holds title to the Volkswagen Golf, not Jeffery. It reasons that any right Jeffery may have in the $82,000 is derived from an ownership interest in the Volkswagen and he does not own it.

It is true that Helen Chappell holds legal title to the car, but Jeffery Chappell paid for the vehicle using his Discover credit card, arguably creating an equitable interest in the Volkswagen Golf vis a vis his mother, but not third parties. There is also evidence that Jeffery had possession of the vehicle and paid for its repairs. For purposes of this litigation, therefore, both Helen and Jeffery Chappell have at least a colorable ownership interest in the Volkswagen. "An ownership interest, of course may be evidenced in a number of ways including showings of actual possession, control, title, and financial stake." United States v. One 1945 Douglas C-54 (DC-4) Aircraft, Serial No. 22186, 647 F.2d 864, 866 (8th Cir.1981). Furthermore, it is clear that the vehicle is owned by Jeffery Chappell, Helen Chappell or both. A definitive ruling on ownership at this juncture will not benefit the Government. Even if the Court dismissed Jeffery Chappell's claim, Helen Chappell's identical claim would go forward.

The Government also argues that neither Jeffery nor Helen Chappell will suffer an injury-in-fact because the Chappells don't own the $82,000 found in the Volkswagen. Definitive proof of ownership is not needed to establish standing. United States v. Cambio Exacto, S.A., 166 F.3d 522, 527 (2nd Cir.1999) ("An allegation of ownership and some evidence of ownership are together sufficient to establish standing to contest a civil forfeiture.") (quoting Torres v. $36,256.80 United States Currency, 25 F.3d 1154 (2nd Cir. 1994)).4 In a case such as this where there is a colorable claim of ownership, the question of standing and the merits of the Chappells' claim are effectively one and the same. The Court now turns to the merits of the dispute.

B. The Innocent Owners Defense

This judicial forfeiture action is governed by 21 U.S.C. § 881, which provides,...

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    • California Court of Appeals Court of Appeals
    • October 31, 2002
    ...standing, but need only show a facially colorable interest in the proceedings]; In re Seizure of $82,000 more or less (W.D.Mo.2000) 119 F.Supp.2d 1013, 1017 ["Definitive proof of is not needed to establish standing"]; U.S. v. Forfeiture, Stop Six Center (N.D.Tex. 1991) 781 F.Supp. 1200, 120......

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