U.S. v. Alcaraz-Garcia, ALCARAZ-GARCI

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Writing for the CourtWIGGINS
Citation79 F.3d 769
Parties96 Cal. Daily Op. Serv. 1414, 96 Daily Journal D.A.R. 2423 UNITED STATES of America, Plaintiff-Appellee, v. Franciscoefendant, v. Raul D. COVARRUBIAS; Daniel Haro; Javier Aguirre, Third-party-defendants-Appellants.
Docket NumberD,ALCARAZ-GARCI,No. 95-50155
Decision Date10 January 1996

Page 769

79 F.3d 769
96 Cal. Daily Op. Serv. 1414, 96 Daily Journal
D.A.R. 2423
UNITED STATES of America, Plaintiff-Appellee,
v.
Francisco ALCARAZ-GARCIA, Defendant,
v.
Raul D. COVARRUBIAS; Daniel Haro; Javier Aguirre,
Third-party-defendants-Appellants.
No. 95-50155.
United States Court of Appeals,
Ninth Circuit.
Submitted Jan. 10, 1996 *.
Decided March 4, 1996.

Page 771

Appeal from the United States District Court for the Southern District of California; Howard B. Turrentine, Senior District Judge, Presiding.

Stephen E. Hoffman, Frank & Milchen, San Diego, California, for third-party-defendants-appellants.

L.J. O'Neale, Assistant United States Attorney, San Diego, California, for plaintiff-appellee.

Before: BRIGHT, ** SKOPIL, and WIGGINS, Circuit Judges.

WIGGINS, Circuit Judge:

Raul D. Covarrubias, David Haro and Javier R. Aguirre ("Appellants") appeal the district court's denial of their third party petition to amend an order of forfeiture imposed under 18 U.S.C. § 982(a). The criminal forfeiture arose from the defendant Francisco Alcaraz-Garcia's ("Alcaraz") failure to report that he was carrying $35,020 in cash when crossing the border. In their petition, Appellants claimed ownership of a portion of the $25,020 that was forfeited, alleging they had each given sums of money to Alcaraz to deliver to their families in Colima, Mexico. After a hearing, the district court denied their petition, finding that the Appellants failed to establish their ownership interest in the forfeited funds under California law.

We have jurisdiction under 28 U.S.C. § 1291 and, for the following reasons, we REVERSE the district court's denial of the third party petition and REMAND to the

Page 772

district court for an appropriate amendment of the forfeiture order.

I.

On June 22, 1994, while driving from Southern California to the airport in Tijuana, Mexico, Alcaraz was stopped at the Otay Mesa, California Port of Entry. In response to questioning during primary and secondary customs inspections, Alcaraz told two inspectors of the United States Customs Service and an officer of the Chula Vista Police Department that he was not carrying more than $10,000 in cash. After a search by a customs inspector, $35,020 in U.S. currency was found concealed in Alcaraz' boots.

Based on the above conduct, Alcaraz was convicted in a jury trial of failing to file a currency report in violation of 31 U.S.C. § 5324(b)(1) and making a false statement to a U.S. Customs Service Inspector in violation of 18 U.S.C. § 1001. After further argument and deliberation, the jury ordered the criminal forfeiture of $25,020 pursuant to 18 U.S.C. § 982.

Appellants filed a timely third party petition in the district court under 21 U.S.C. § 853(n)(2), alleging ownership of the forfeited funds. Appellants stated in their petition that they and Alcaraz were from Colima, Mexico. They had immigrated legally to the United States in order to find gainful employment and assist their families. When Appellants learned that Alcaraz planned to travel to Colima to visit family and friends, Appellants asked Alcaraz to deliver various sums from their savings to their respective families in Colima. 1 Thus, Appellants claimed that forfeiture of the funds in Alcaraz' possession was improper because Appellants were innocent owners of the funds. 2

The district court granted Appellants a hearing pursuant to 21 U.S.C. § 853(n)(4). At the hearing, counsel for Appellants declined to present further evidence, relying on the facts presented in the petition. The district court denied the petition at the hearing and issued an order denying the third party claim on February 15, 1995. The court found that under California law, Alcaraz was a gratuitous bailee; therefore, the Appellants' gifts to their relatives were complete upon delivery of the funds to Alcaraz. Alternatively, the court found that if Alcaraz were the agent of the Appellants, their right to the funds would not be superior to Alcaraz' right. Therefore, the court concluded that the petition failed to show by a preponderance of the evidence that Appellants had a legal right, title or interest in the forfeited funds within the meaning of 21 U.S.C. § 853(n)(6)(A). 3

Covarrubias, Haro and Aguirre appeal the district court's denial of their third party petition.

II.

A. STANDARD OF REVIEW

We review the district court's interpretation of federal forfeiture law de novo. United States v. 1980 Lear Jet, Model 35A Serial No. 277, 38 F.3d 398, 400 (9th Cir.1994). However, we review the district court's findings of fact for clear error. See United States v. One Parcel of Land, Known as Lot 111-B, Tax Map Key 4-4-03-71(4), Waipouli, Kapaa, Island and County of Kauai, State of Hawaii, 902 F.2d 1443, 1445 (9th Cir.1990) (finding of nominal ownership in forfeiture action not clearly erroneous). 4

Page 773

B. DID THE DISTRICT COURT ERR IN DENYING THE APPELLANTS' THIRD PARTY PETITION?

As a preliminary matter, we note that Appellants' primary argument on appeal is misplaced. Appellants contend that the district court erred in denying their third party petition because their petition demonstrates that they were "innocent owners" of the funds seized from Alcaraz under Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 94 S.Ct. 2080, 40 L.Ed.2d 452 (1974). 5 However, for the following reasons, the "innocent owner defense" as formulated by Calero-Toledo is not available under the forfeiture statute at issue here.

First, Appellants rely solely on cases that discuss the innocent owner defense under 18 U.S.C. § 981(a)(2), rather than § 982(a)--the forfeiture statute at issue here. 6 The reasoning of these cases is inapplicable to the case at bar because it is dependent upon the language of § 981--which differs significantly from the relevant language of § 982(a) and § 853(n). See infra, pp. 773-774. 7 More importantly, the "innocent owner defense" as formulated by Calero-Toledo does not apply where the forfeiture statute at issue supplies its own requirements to enable an innocent owner to challenge the forfeiture. See $69,292.00 in U.S. Currency, 62 F.3d at 1165 & n. 3 (noting that Calero-Toledo applies where an innocent owner provision does not exist in a forfeiture statute while applying Calero-Toledo to a forfeiture under 31 U.S.C. § 5317(c)). Here, 18 U.S.C. § 982(b) incorporates specified forfeiture procedures contained in 21 U.S.C. § 853, including an innocent owner provision which permits a third party to petition to amend a forfeiture order by establishing certain legal interests in the property. See infra pp. 773-774. Consequently, Appellants must satisfy the requirements of the innocent owner exception explicitly provided by § 853(n), rather than the relying upon the Calero-Toledo formulation of the innocent owner exception. 8

1. Standard for Third Party Petition to Amend a Forfeiture Order.

Thus, we turn to the appropriate standard for a third party to petition to amend a forfeiture order under 18 U.S.C. § 982(a). Alcaraz was convicted of failing to file a currency report in violation of 31 U.S.C. § 5324(b)(1), one of the enumerated offenses

Page 774

in 18 U.S.C. § 982(a)(1); therefore, the property involved in the offense was subject to criminal forfeiture under § 982(a)(1) as part of his sentence. 18 U.S.C. § 982(a)(1). The proceedings relating to property forfeited under § 982 are governed by 21 U.S.C. §§ 853(c) and (e) through (p). 18 U.S.C. § 982(b)(1)(A). Under 21 U.S.C. § 853(n)(2), "any person ... asserting a legal interest in property which has been ordered forfeited to the United States" may petition the court for a hearing to adjudicate his or her alleged interest in the property. 21 U.S.C. § 853(n)(2).

Further, in order to obtain an amendment to the forfeiture order, the third party petitioner must establish by a preponderance of the evidence that:

(A) the Petitioner has a legal right, title, or interest in the property, and such right, title, or interest renders the order of forfeiture invalid in whole or in part because the right, title, or interest was vested in the Petitioner rather than the defendant or was superior to any right, title, or interest of the defendant at the time of the commission of the acts which gave rise to the forfeiture of the property under this section.

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44 practice notes
  • U.S. v. Bcci Holdings (Luxembourg), S.A., Crim. A. No. 91-0655 (JHG).
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • April 22, 1997
    ...merely demonstrate standing before the Court can grant a motion to amend the Order of Forfeiture. See United States v. Alcaraz-Garcia, 79 F.3d 769, 774 n. 10 (9th Summary judgment is appropriate when there is "no genuine issue as to any material fact and ... the moving party is entitle......
  • In re Sony Gaming Networks & Customer Data Sec. Breach Litig., MDL No. 11md2258 AJB (MDD).
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • October 11, 2012
    ...defined bailment as “the deposit of personal property with another, usually for a particular purpose.” United States v. Alcaraz–Garcia, 79 F.3d 769, 774 n. 11 (9th Cir.1996); see also Whitcombe v. Stevedoring Servs. of Am., 2 F.3d 312, 317 (9th Cir.1993) (stating “California law generally d......
  • In re Sony Gaming Networks & Customer Data Sec. Breach Litig., MDL No.11md2258 AJB (MDD)
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • October 11, 2012
    ...bailment as "the deposit of personal property with another, usually for a particular purpose." United States v. Alcaraz-Garcia, 79 F.3d 769, 774 n. 11 (9th Cir.1996); see also Whitcombe v. Stevedoring Servs. of Am., 2 F.3d 312, 317 (9th Cir.1993) (stating "California law gene......
  • U.S. v. Gilbert, PLAINTIFF-APPELLANT
    • United States
    • U.S. Court of Appeals — Eleventh Circuit
    • March 16, 2001
    ...action for purposes of permitting an award of attorney's fees under the Equal Access to Justice Act); United States v. Alcaraz-Garcia, 79 F.3d 769, 772 n.4 (9th Cir. 1996) (stating that an appeal from the denial of a third-party petition under 21 U.S.C. §853(n) is civil in nature for purpos......
  • Request a trial to view additional results
44 cases
  • U.S. v. Bcci Holdings (Luxembourg), S.A., Crim. A. No. 91-0655 (JHG).
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • April 22, 1997
    ...merely demonstrate standing before the Court can grant a motion to amend the Order of Forfeiture. See United States v. Alcaraz-Garcia, 79 F.3d 769, 774 n. 10 (9th Summary judgment is appropriate when there is "no genuine issue as to any material fact and ... the moving party is entitle......
  • In re Sony Gaming Networks & Customer Data Sec. Breach Litig., MDL No. 11md2258 AJB (MDD).
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • October 11, 2012
    ...defined bailment as “the deposit of personal property with another, usually for a particular purpose.” United States v. Alcaraz–Garcia, 79 F.3d 769, 774 n. 11 (9th Cir.1996); see also Whitcombe v. Stevedoring Servs. of Am., 2 F.3d 312, 317 (9th Cir.1993) (stating “California law generally d......
  • In re Sony Gaming Networks & Customer Data Sec. Breach Litig., MDL No.11md2258 AJB (MDD)
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • October 11, 2012
    ...bailment as "the deposit of personal property with another, usually for a particular purpose." United States v. Alcaraz-Garcia, 79 F.3d 769, 774 n. 11 (9th Cir.1996); see also Whitcombe v. Stevedoring Servs. of Am., 2 F.3d 312, 317 (9th Cir.1993) (stating "California law gene......
  • U.S. v. Gilbert, PLAINTIFF-APPELLANT
    • United States
    • U.S. Court of Appeals — Eleventh Circuit
    • March 16, 2001
    ...action for purposes of permitting an award of attorney's fees under the Equal Access to Justice Act); United States v. Alcaraz-Garcia, 79 F.3d 769, 772 n.4 (9th Cir. 1996) (stating that an appeal from the denial of a third-party petition under 21 U.S.C. §853(n) is civil in nature for purpos......
  • Request a trial to view additional results

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