U.S. v. $125,938.62
| Decision Date | 06 August 2008 |
| Docket Number | No. 07-10380.,07-10380. |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. $125,938.62, Proceeds of certificates of deposit number 1271734730, $60,851.73, number 1271736329, et al., Defendants, Arnoldo Jose Aleman Cardenal, Ana Eugenia Flores, Jose Grullon, Norma L. Flores, Maria Alejandra Aleman Cardenal, Carlos Miguel Aleman Cardenal, Maria Dolores Aleman Cardenal, Claimants-Appellants. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
George M. Evans, Law Office of George M. Evans, P.A., Coral Gables, FL, for Claimants-Appellants.
Lisette M. Reid, Anne R. Schultz, Asst. U.S. Atty., Stephen Schlessinger, Madeleine R. Shirley, Miami, FL, for U.S.
Appeal from the United States District Court for the Southern District of Florida.
Before TJOFLAT and BLACK, Circuit Judges, and RESTANI,* Judge.
In this civil forfeiture action brought under the Civil Asset Forfeiture Reform Act of 2000 (CAFRA), 18 U.S.C. § 983, the district court found seven certificates of deposit held in the names of Claimant-Appellants Maria Alejandra Alemán, Norma Flores, José Grullon, and Ana Flores were subject to forfeiture under 18 U.S.C. § 981(a)(1)(B) because they were derived from funds stolen from the Nicaraguan treasury during the presidency of Arnoldo Alemán.
On appeal, Appellants contend the Government failed to meet its burden of linking the certificates of deposit to embezzled funds. Although the Government now concedes that key evidence on which it relied at trial was inadmissible, it asserts the properly admitted evidence was sufficient to show, by a preponderance of the evidence, that the funds are subject to forfeiture. Having reviewed the entire record, we affirm the judgment of the district court with respect to certificates number 1275218528 and 1263604528 because the evidence properly presented to the court with respect to those funds was minimally sufficient to meet the Government's burden of proof. However, because the Government failed as a matter of law to meet its burden of proving by a preponderance of the evidence that certificates number 1271734730, 1256700028, 1279734728, 1271734729, and 1271737129 were derived from funds embezzled from the Nicaraguan treasury, we reverse the district court's order of forfeiture with respect to those certificates.
During the late 1990s, while Arnoldo Alemán was President of Nicaragua, millions of dollars disappeared from the Nicaraguan national treasury. Around the same time, Byron Jerez, a friend of the Alemán family and a high-ranking official working in the Nicaraguan Treasury Department, withdrew funds from two entities, Consultores Corporativos (a company with which he was affiliated) and the Nicaraguan Democratic Foundation (of which he was a founding member). Jerez used the money to purchase certificates of deposit from Terrabank in Coral Gables, Florida, in the name of Alemán and several of his relatives. Alemán and his wife also opened several certificates of deposit at Terrabank during this period. Some of these certificates of deposit were later assigned to other members of the Alemán family.
In March 2003, the United States Government filed a civil forfeiture action in the United States District Court for the Southern District of Florida, contending that eight of the Terrabank certificates of deposit were subject to forfeiture because they were derived from funds stolen from the Nicaraguan treasury.1 The chart below summarizes the relevant details of each certificate at issue in this case:
(Dist. Ct. Findings of Fact & Conclusions of Law, at 2-3.)
After a few procedural false starts (including an appeal to and remand from this Court), the case proceeded to a bench trial.
At trial, the Government attempted to present several summary witnesses, including Francisco Saavedra, a member of the U.S. Customs Asset Forfeiture Group, and Ivan Lara, the Nicaraguan lawyer who had prosecuted Alemán and Jerez on charges of embezzlement, money laundering, and other fraud. (Alemán was convicted of the charges against him; Jerez was acquitted.)
Unfortunately, many of the Government's key witnesses, including Saavedra and Lara had minimal non-hearsay testimony to offer; therefore, the Government's case turned primarily on the adequacy of the documentary evidence admitted at trial. Among that evidence was an audit conducted by the Nicaraguan Government and prepared by witness José Calderón. According to Calderón's testimony and portions of the audit, which were translated into English and admitted into evidence, millions of dollars were illegally removed from the Nicaraguan treasury between 1997 and 2002, and were diverted to unauthorized, "extra-budgetary" funds controlled by the Ministry of the Presidency. Calderón testified that the audit did not trace any pilfered funds to the Terrabank accounts.
In addition to the audit evidence, the Government introduced through Lara numerous authenticated checks and other financial documents which Lara had obtained from Nicaraguan banks. The checks and their accompanying notations were not translated into English, and the district court did not permit the prosecutor to provide testimony regarding the meaning or relevance of the financial documents on the ground that such testimony would be hearsay coming from someone other than the records custodian. The Government argued the documents revealed money had been routed from presidential funds to a changing house and from the changing house to Consultores Corporativos, a business with which Jerez was affiliated. The Government produced no financial documents linking embezzled money to either Milerstone Business or the Nicaraguan Democratic Foundation.
Of central importance to the Government's case was Exhibit 67, a copy of the final judgment of criminal conviction in Jerez and Alemán's Nicaraguan prosecution. Over the Claimants' strong objection, and after extensive discussion regarding the admissibility of the evidence, the district judge admitted two small portions of the judgment under the public records exception to the hearsay rule. Specifically, the court admitted the fact of Alemán's conviction for "laundering of money and/or assets proceeding from illegal activities, fraud, embezzlement of public monies, peculation, and association and instigation to commit crimes and electoral crime." (See generally Trial Trans. at 54:3-21, 80:19-81:9 see also Certified Translation of Final Decision of the Nicaraguan First Criminal Court of the District, penultimate page.) The court also admitted a portion of the judgment acquitting Jerez, but suggesting he was guilty in fact of aiding and abetting the crimes of which Alemán had been convicted and that Jerez had done so in furtherance of Alemán's financial interests.
To bolster its claim that the money in the certificates of deposit could not have come from Alemán's personal holdings, the Government admitted financial disclosure statements filed by Alemán in 1997 and 2000, which list modest real property holdings and income.
After the Government rested, the district court heard testimony from each of the claimants and from a friend of the Alemán family, who argued the money in the certificates of deposit had come from legitimate family business endeavors and from legitimate expenditures from the Nicaraguan Democratic Foundation. Maria Alejandra Alemán testified that her...
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