U.S. v. $1,646,000 in Cashiers Checks and Currency
| Decision Date | 02 November 2000 |
| Docket Number | No. C 97-20326 JF.,C 97-20326 JF. |
| Court | U.S. District Court — Northern District of California |
| Parties | UNITED STATES of America, Plaintiff, v. $1,646,000 IN CASHIERS CHECKS AND CURRENCY, Defendant. |
U.S. Attorney's Office, Robert Ward, San Francisco, CA, for plaintiff.
Peter S. Hwu & Associates, Peter Hwu, San Jose, CA, for claimant.
ORDER1 DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND GRANTING CLAIMANT'S MOTION FOR SUMMARY JUDGMENT
The parties' cross-motions for summary judgment were heard on September 28, 1998. The Court has read the moving and responding papers and heard the argument of counsel. For the reasons set forth below, the Government's motion is denied and claimant's motion is granted.
This case arises out of a "sting" operation conducted by the Santa Clara Police Department ("SCPD") concerning trafficking in stolen computer components. Both parties have provided elaborate and somewhat differing versions of the facts, the essence of which will be provided here as background.2
In October 1992, the SCPD seized $1,646,000 in cashier's checks and United States currency allegedly intended to be transported in interstate or foreign commerce. Federal authorities subsequently adopted the seizure in November 1992. Thereafter, Magistrate Judge Patricia V. Trumbull determined that probable cause existed and issued a federal seizure warrant for the checks and cash. The United States Customs Service ("Customs") executed the warrant and seized the funds, thereby taking responsibility for the federal forfeiture action.
Following the federal seizure in November 1992, administrative proceedings commenced during which time the District Customs Office in San Francisco and the Customs Office of Regulations and Rulings ("Customs ORR") in Washington, D.C., considered Petitions for Remission by all claimants to the seized property, including CAF Technology, Inc. ("CAF"), the moving and responding claimant herein.3 Two and one-half years later on May 22, 1995, Customs ORR issued a written decision denying relief to CAF.
After some routine administrative filings, the case was finally referred to the United States Attorney's Office on August 10, 1995, for commencement of a judicial forfeiture action. Soon thereafter, the case settled with respect to all claimants except CAF. The sum of $296,000 remains in dispute. For reasons which are at issue here, the Government did not file its Complaint for Forfeiture in rem until April 9, 1997.
Both parties now move for summary judgment. The Government claims that it is entitled to summary judgment because it proceeded with probable cause as is required for civil forfeiture pursuant to 18 U.S.C. § 981(a)(1)(A) and that CAF is unable defeat forfeiture because it can neither prove that the property was not connected to illegal activity nor establish an innocent owner defense under 18 U.S.C. § 981(a)(2). CAF opposes the Government's motion and moves for summary judgment in its own right claiming that its right to due process of law was violated by undue governmental delay in the judicial prosecution of this case.
A motion for summary judgment should be granted if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986). The moving party bears the initial burden of informing the Court of the basis for the motion, and identifying the portions of the pleadings, depositions, answers to interrogatories, admissions, or affidavits which demonstrate the absence of a triable issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986).
If the moving party meets its initial burden, the burden shifts to the non-moving party to present specific facts showing that there is a genuine issue for trial. See Fed.R.Civ.P. 56(e); Celotex, 477 U.S. at 324, 106 S.Ct. at 2553. A genuine issue for trial exists if the non-moving party presents evidence from which a reasonable jury, viewing the evidence in the light most favorable to that party, could resolve the material issue in his or her favor. See Anderson, 477 U.S. 242, 248-49, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986); Barlow v. Ground, 943 F.2d 1132, 1134-36 (9th Cir.1991).
On a motion for summary judgment, the Court will not consider new argument or evidence presented in a reply brief unless the non-moving party has had an opportunity to respond. See Provenz v. Miller, 102 F.3d 1478, 1483 (9th Cir.1996); Ferguson v. City of Phoenix, 931 F.Supp. 688, 696 (D.Ariz.1996). But See Mid Valley Bank v. North Valley Bank, 764 F.Supp. 1377, 1387 n. 10 (E.D.Cal.1991) ().
In particular, with respect to summary judgment and the law of forfeiture, the Court of Appeals for the Ninth Circuit has commented in United States v. One 56-Foot Motor Yacht Named Tahuna: " United States v. Property Titled in the Names of Moises Ponce, 751 F.Supp. 1436, 1438 (D.Hawai'i 1990) (citing 702 F.2d 1276, 1282 (9th Cir.1983) (citations omitted)).
In an in rem forfeiture proceeding, the Government first must establish probable cause to show the relationship of the property subject to forfeiture and the predicate offense. United States v. Eaton Acres, 904 F.2d 487, 490-91 (9th Cir.1990). If the Government establishes such a connection, the onus shifts to the claimant to show by a preponderance of the evidence that the property was not involved in the specific violation of the law alleged or otherwise to refute the Government's showing of probable cause. United States v. $5,644,540 in U.S. Currency, 799 F.2d 1357, 1362 (9th Cir.1986).
Because the prerequisite to the viability of any civil forfeiture case is a finding that the Government acted with probable cause to believe the property was subject to forfeiture, the Court begins its analysis there. Probable cause exists when the aggregate of facts gives rise to more than a mere suspicion that the property is related to unlawful activity. United States v. Padilla, 888 F.2d 642, 643-44 (9th Cir.1989). The Government may establish probable cause using circumstantial or hearsay evidence because "the finding does not depend upon admissibility but rather on the sufficiency and reliability of the evidence." United States v. 1982 Yukon Delta Houseboat, 774 F.2d 1432, 1434 (9th Cir.1985).
In this case, the Government's asserted basis for forfeiture is 18 U.S.C. § 981(a)(1)(A) which provides in pertinent part:
... the following property is subject to forfeiture in the United States: (A) Any property, real or personal, involved in a transaction or attempted transaction in violation of ... section 1956 ... of this title, or any property traceable to such property.
18 U.S.C. § 981(a)(1)(A).
As required by the statute, the Government alleges that the $296,000 in question was involved in a transaction or attempted transaction in violation of 18 U.S.C. § 1956(a)(2). In relevant part, this section provides:
(2) Whoever transports, transmits, or transfers, or attempts to transport, transmit, or transfer a monetary instrument or funds ... to a place in the United States from or through a place outside the United States—
(A) with the intent to promote the carrying on of specific unlawful activity; ... [violates the statute].
18 U.S.C. § 1956(a)(2).
The "specified unlawful activity" charged in this case is 18 U.S.C. § 2314 the applicable paragraph of which provides:
"Whoever transports, transmits, or transfers in interstate or foreign commerce any goods, wares, merchandise, securities or money, of the value of $5,000 or more, knowing the same to have been stolen, converted, or taken by fraud ..." [violates the law].
18 U.S.C. § 2314.
Thus, to show probable cause in this case the Government must present evidence amounting to more than a mere suspicion that CAF violated or intended to violate 18 U.S.C. § 2314, a statute which requires knowledge that the subject property was misappropriated in some way.4 Specifically, in this case, both parties agree that to establish probable cause for forfeiture the Government must present evidence amounting to more than a mere suspicion that the funds for the purchase of the chips came into the United States from a foreign country, that officers of CAF believed the transaction involved stolen property, and that the central processing units (CPUs) were destined for transport in interstate or foreign commerce.
While not all of the Government's evidence is probative, the Court concludes that the evidence marshaled by the Government is sufficient in the aggregate to surpass the level of mere suspicion. Among the evidence presented, the Government submits the declarations of Sergeants James McMahon and Mark Kerby, two officers directly involved in the investigation. Sergeant McMahon's declaration, which includes information from his postseizure interview with Hsuanchang Tseng, the CAF accountant in possession of the checks and currency at the time of the seizure, as well as the transcription of his post-seizure telephone conversation with Earl Yang, the Chief...
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