U.S. v. $69,292.00 in U.S. Currency

• Decision Date: 07 August 1995
• Docket Number: No. 93-56545,93-56545
• Citation: 62 F.3d 1161
• Parties: 95 Cal. Daily Op. Serv. 6226, 95 Daily Journal D.A.R. 10,617 UNITED STATES of America, Plaintiff-Appellee, v. $69,292.00 IN U.S. CURRENCY, Defendant, Abdul Majeed Faheemi and Abdul Aziz Faheemi, Claimants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1161

62 F.3d 1161

95 Cal. Daily Op. Serv. 6226, 95 Daily Journal

D.A.R. 10,617

UNITED STATES of America, Plaintiff-Appellee, v. $69,292.00 IN U.S. CURRENCY, Defendant, Abdul Majeed Faheemi and Abdul Aziz Faheemi, Claimants-Appellants.

No. 93-56545.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Dec. 9, 1994.

Decided Aug. 7, 1995.

Michael J. Brennan, Manhattan Beach, CA, and Susan A. Kerans, Los Angeles, CA, for claimants-appellants.

Mark A. Feldman, Asst. U.S. Atty., Los Angeles, CA, for plaintiff-appellee.

Appeal from the United States District Court for the Central District of California.

Before: Betty B. FLETCHER, David R. THOMPSON and Pamela Ann RYMER, Circuit Judges.

Opinion by Judge FLETCHER; Partial Concurrence and Partial Dissent by Judge RYMER.

FLETCHER, Circuit Judge:

The Faheemi brothers--Adbul Aziz Faheemi and Abdul Majeed Faheemi--appeal a summary judgment in the Government's favor. The district court forfeited to the government funds seized from Abdul Aziz as he was boarding an airplane for a flight to the United Arab Emirates. We reverse and remand.

What defenses and claims may be asserted and by whom turns on the ownership of the defendant currency--each of the brothers claims to own it. ¹ Thus, on remand the district court should first resolve the competing claims to ownership before it turns to the merits of the defenses and claims. If Abdul Aziz can prove an ownership interest in some of the currency, he is entitled to assert a Double Jeopardy claim. If Abdul Majeed can establish an ownership interest in some of the currency, he is entitled to assert an innocent owner defense. Finally, only if these claims are not dispositive must the district court address whether the forfeiture was excessive. In the event the district court reaches the excessive forfeiture claim it should apply the factors set forth in United States v. Real Property Located in El Dorado County, 59 F.3d 974 (9th Cir.1995). We reverse and remand for further proceedings in accordance with our instructions.

FACTS

On August 9, 1990, Abdul Majeed Faheemi wired $68,792 to an account held in the name of his brother, Abdul Aziz Faheemi, at a U.S. bank. The next day Abdul Aziz withdrew all of these funds in cash, completing a report to the Internal Revenue Service as required under U.S. law. Abdul Aziz had decided to leave the United States and return to his home country, the United Arab Emirates. Both brothers agreed that to avoid wire transfer fees, Abdul Aziz would hand-carry the money back to the United Arab Emirates. Abdul Majeed did not inquire of his brother as to whether he, Abdul Aziz, intended to comply with U.S. Customs laws when departing. Nor did he attempt to, himself, ascertain what requirements there might be or to comply with them.

On August 15, 1990, as Abdul Aziz was about to board a flight out of the country, he was stopped by Customs Inspectors. They Abdul Aziz was arrested and charged with failing to report the export of monetary instruments in excess of $10,000, 31 U.S.C. Sec. 5316, and with making a false statement to a customs officer, 18 U.S.C. Sec. 1001. Abdul Aziz pled guilty. Judgment was entered on March 13, 1991. He served four days in prison, and paid a $50 special assessment and a $5,000 fine.

explained to Abdul Aziz that if he intended to carry currency in excess of $10,000 out of the United States, he was required to complete a report declaring the amount of money he was taking out of the country. Abdul Aziz completed the form, but declared that he was carrying only $5,000. The inspectors searched Abdul Aziz and discovered $69,292 in his briefcase.

Almost two years later, on February 10, 1993, the Government filed a complaint for the forfeiture of the $69,292 seized from Abdul Aziz. Each brother asserted ownership and filed a claim to the money. The Government moved for summary judgment; the brothers opposed, asserting that the forfeiture violated the Eighth Amendment. In addition, Abdul Majeed asserted an "innocent owner" defense. The district court entered summary judgment for the Government, and this timely appeal followed.

JURISDICTION

The district court had jurisdiction pursuant to 28 U.S.C. Sec. 1331. We have jurisdiction pursuant to 28 U.S.C. Sec. 1291.

DISCUSSION

I. DOUBLE JEOPARDY

Abdul Aziz claims that the forfeiture of the money violated his rights under the Double Jeopardy Clause by subjecting him to multiple punishments for the same crime. He relies on our recent decision in United States v. $405,089.23 in U.S. Currency, 33 F.3d 1210 (9th Cir.1994), which was decided after the briefs were filed in this case. ²

We have no doubt forfeiture under section 5317 is punishment. See United States v. $405,089.23 in U.S. Currency, 33 F.3d 1210 (9th Cir.1994) (interpreting Austin v. United States, --- U.S. ----, 113 S.Ct. 2801, 125 L.Ed.2d 488 (1993)). The $405,089.23 court reasoned:

First, because of "the historical understanding of forfeiture as punishment," [Austin, --- U.S. at ----, 113 S.Ct. at 2812,] there is a strong presumption that any forfeiture statute does not serve solely a remedial purpose. Second, where such a statute focuses on the culpability of the property owner by exempting innocent owners or lienholders, it is likely that the enactment serves at least in part to deter and punish guilty conduct. Finally, where Congress has tied forfeiture directly to the commission of specified offenses, it is reasonable that the forfeiture is at least partially intended as an additional deterrent to or punishment for those violations of law.

$405,089.23, 33 F.3d at 1221 (emphasis in original). Our determination requires us to look to the entire scope of the statutes which the government seeks to employ rather than to the characteristics of the specific property the government seeks to forfeit. Id. at 1220. The statutes at issue here are found in Subchapter II of Chapter 53 of Title 31, 31 U.S.C. Secs. 5311-28 (1988). They make it apparent that the forfeiture of unreported currency is intended, at least in part, to punish as well as to deter--both underlying purposes for punishment.

There are a number of indications that Congress viewed forfeiture under section 5317 as more than a civil penalty. Most important, section 5317 permits the Government to seek forfeiture of the entire amount of the unreported currency without regard to the cost or loss to the Government. See 31 U.S.C. Sec. 5317(c). In addition, the forfeiture provision is directly tied to the crime of failing to report the currency. See 31 U.S.C. Secs. 5316, 5317; see generally United States v We conclude that the statutory scheme viewed as a whole intends forfeiture under section 5317 to be "punishment."

$145,139.00, 18 F.3d 73, 78-80 (2d Cir.) (Kearse, J., dissenting) (analyzing criminal purpose of section 5317), cert. denied, --- U.S. ----, 115 S.Ct. 72, 130 L.Ed.2d 27 (1994). The penalties under section 5321, which apply to domestic financial institutions and their principals, officers, or employees, are explicitly denominated "civil," 31 U.S.C. Sec. 5321, while section 5317 does not employ the word "civil," thereby implying a purpose of criminal punishment underlying the forfeiture. See 31 U.S.C. Sec. 5317(c). Also, the "civil" penalty under section 5321(a) is limited to an amount not exceeding $100,000. See 31 U.S.C. Sec. 5321(a). In contrast, a forfeiture under section 5317 is limited only by the value of the unreported funds. See 31 U.S.C. Sec. 5317(c).

There also cannot be any question but that Abdul Aziz has been subjected to two separate proceedings. Id. at 1217 ("[P]arallel actions, instituted at about the same time and involving the same criminal conduct, constitute separate proceedings for double jeopardy purposes.") (emphasis in original) (citing Jeffers v. United States, 432 U.S. 137, 97 S.Ct. 2207, 53 L.Ed.2d 168 (1977)).

We do not hold that Abdul Aziz has been put twice in jeopardy because no determination has been made as to the ownership of the currency. Any such determination must be made by the district court on remand.

II. INNOCENT OWNER DEFENSE

Abdul Majeed argues that the district court erred by entering summary judgment for the plaintiff on his innocent owner defense under 31 U.S.C. Sec. 5317. Abdul Majeed claims that he is the owner and has raised a genuine issue of material fact as to whether he took all reasonable steps to prevent the unlawful use of the defendant currency.

A district court's grant of summary judgment is reviewed de novo. Jones v. Union Pac. R.R., 968 F.2d 937, 940 (9th Cir.1992). The district court must view the facts in the light most favorable to the nonmoving party, and may grant summary judgment only if there are no issues of material fact and summary judgment is appropriate as a matter of law. Tzung v. State Farm Fire & Casualty Co., 873 F.2d 1338, 1339-40 (9th Cir.1989). Once the government demonstrates probable cause that property was involved in an illegal transaction, the burden shifts to the claimant to refute the government's showing by a preponderance of the evidence. United States v. $5,644,540.00, 799 F.2d 1357, 1362 (9th Cir.1986).

On its face, section 5317 does not contain an innocent owner exception. However, in Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 689-90, 94 S.Ct. 2080, 2094-95, 40 L.Ed.2d 452 (1974), the Supreme Court opined that even if an innocent owner provision does not exist in a forfeiture statute, an owner has a right to establish his or her innocence. ³ The Court stated:

[I]t would be difficult to reject the constitutional claim of an owner whose property has been taken from him without his privity or consent. Similarly, the same might be said of an owner who proved not only that he was uninvolved in and unaware of the wrongful activity, but also that he had done all that reasonably could be expected to prevent the proscribed use of his property....

Id. at 689, 94 S.Ct. at 2094 ...