U.S. v. Cambio Exacto, S.A.
| Decision Date | 25 June 1996 |
| Citation | 166 F.3d 522 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. CAMBIO EXACTO, S.A., Pan American Money Transfer, Inc., and Perusa, Inc., Claimants-Appellants, All Funds on Deposit and to be Deposited, Through and Including |
| Court | U.S. Court of Appeals — Second Circuit |
Zachary W. Carter, United States Attorney for the Eastern District of New York (Varuni Nelson, Arthur P. Hui, Jennifer C. Boal, Elliot M. Schachner, Assistant United States Attorneys, Of Counsel), for Plaintiff-Appellee.
Steven Cohn, Carle Place, New York, for Claimant-Appellant, Cambio Exacto, S.A.
Pierre F.V. Merle, Stairs Dillenbeck Finley & Merle, New York, New York, for Claimant-Appellant Pan American Money Transfer, Inc .
T. James Bryan, Bryan, Levitin & Bab, LLP, New York, New York, for Claimant-Appellant Perusa, Inc.
Before: CARDAMONE, PARKER, AND SACK, Circuit Judges.
Claimants, Pan American Express, Inc., 1 Perusa, Inc. and Cambio Exacto, S.A., appeal from three decisions of the United States District Court for the Eastern District of New York (Mishler, J.) in a civil forfeiture action in which the United States obtained final decrees of forfeiture of funds held in their accounts. Claimants appeal: (1) an order denying motions by Pan American and Perusa to dismiss the government's complaint and vacate the warrants of arrest in rem, and denying Perusa's motion for summary judgment; (2) an order dismissing the claims of Pan American and Perusa for lack of standing and denying Cambio Exacto, S.A. leave to file a claim; and (3) an order denying Pan American leave to file an amended claim as a bailee. We conclude that Perusa and Pan American have standing to contest the forfeitures. We therefore reverse the district court's order dismissing Perusa's and Pan American's claims and vacate the decrees of forfeiture of the funds held in their accounts. We affirm the order of the district court denying Cambio Exacto leave to file a claim. We dismiss the appeal with respect to the order denying the motions by Perusa and Pan American to dismiss the complaint and for summary judgment because it is not an appealable final judgment. We also dismiss as moot the appeal of the order denying Pan American leave to file an amended claim.
In this civil forfeiture action the United States seized $1,282,322.00 from an account at Chemical Bank in the name of Perusa, Inc., $778,709.40 from an account at Ponce de Leon Federal Savings Bank in the name of Pan American Express, Inc., and an additional $82,000.00 from a Pan American account at Citibank.
According to the government's complaint filed in June 1996, a confidential informant laundered drug money through Perusa's and Pan American's accounts during the period from June 1995 to January 1996. The complaint alleges that the defendant funds therefore constitute property involved in and proceeds traceable to transactions or attempted transactions in violation of 18 U.S.C. §§ 981, 984, 1956 and 1957 (money laundering), and proceeds traceable to violations of 21 U.S.C. § 841 et seq. (controlled substances) and 31 U.S.C. § 5324 (structuring), and are therefore subject to seizure and forfeiture under 18 U.S.C. §§ 981 and 984 and 21 U.S.C. § 881. Finding that the government had established probable cause for the seizures, the district court issued warrants for arrest of the funds on June 20 and June 27, 1996.
Perusa and Pan American are money transmitters, licensed in New York. A money transmitter, as the name rather strongly implies, is in the business of sending money: collecting it from customers and, for a commission, delivering it to a designated recipient, typically in another country. Money transmitters rely on independent agents at both ends of each transaction. Customers give local agents the money they want sent; the agents then notify the money transmitter of the transaction and deposit the funds to be transferred in the transmitter's bank account. Similarly, to physically turn over the Several provisions of New York banking law, designed to protect customers of money transmitters, are relevant to this appeal. First, the agents of money transmitters are required to deposit the money they receive from customers for transmission in a special bank account operated by the money transmitter. N.Y. BANKING LAW § 651-a (McKinney 1998). The defendant accounts are such accounts. Second, in exchange for their cash deposits, customers receive a receipt confirming the contractual obligation of the transmitter to deliver the funds to the intended recipient and setting forth the transmitter's liability if it fails to deliver the funds. N.Y. COMP.CODES R. & REGS. tit. 3, § 406.3(f) (1998). Finally, to ensure that it will meet its obligations to its customers, a money transmitter must post a bond of at least $500,000 with the New York Superintendent of Banking. N.Y. BANKING LAW § 643(1) (McKinney 1998). Perusa satisfied this requirement by posting certificates of deposit worth $500,000.
funds to the recipient, money transmitters use entities doing business in the recipient's vicinity. When performing that function, they are known as correspondents. To expedite the delivery process, correspondents sometimes distribute funds to the recipients before the amount actually arrives from the money transmitter. Cambio Exacto was a correspondent in Colombia for Perusa.
Shortly after the government seized the funds in their accounts, Perusa and Pan American gave notice of their claims to the funds. On July 3, 1996, Pan American filed a Notice of Claim in which it asserted a "possessory interest" in the funds seized from its account. On July 5, 1996, Perusa filed a Claim for Arrested Property.
Perusa and Pan American then moved to vacate the warrants of arrest and to dismiss the government's complaint for lack of probable cause pursuant to Fed.R.Civ.P. 12(b)(6) and Rule 12 of the Local Rules for Admiralty and Maritime Claims, which are applicable to such proceedings. Perusa also sought an order granting it summary judgment under Fed.R.Civ.P. 56. The district court treated Pan American's motion as one for summary judgment also. In making these motions, Perusa and Pan American asserted that even if, as the government claimed, drug money had at one time been laundered through their accounts, it had long since been delivered to its intended recipients. Thus the funds the government had seized were deposits belonging to other, presumably legitimate, customers.
On July 26, 1996, the district court denied Perusa's and Pan American's motions, finding that the government had met its burden of showing probable cause for the seizure of the funds and that there were issues of material fact for adjudication. United States v. All Funds in Name of Perusa, Inc., 935 F.Supp. 208, 213-15 (E.D.N.Y.1996). For the sole purpose of deciding these motions, the district court assumed that Perusa and Pan American had standing to contest the forfeitures. Id. at 212.
Perusa then moved for leave to appeal to this Court pursuant to 28 U.S.C. § 1292(b), which motion Pan American joined and which the district court granted on August 9, 1996. We denied both claimants leave to appeal. See United States v. All Funds on Deposit and to be Deposited, Docket Nos. 96-8007, 8008 (Oct. 1, 1996).
On April 15, 1997, the district court, sua sponte, directed Perusa and Pan American to brief the issue of their standing to contest the forfeitures.
On May 12, 1997, Cambio Exacto moved for leave to file a late notice of claim, alleging that it had an ownership interest of $830,000 in the funds seized from Perusa's account at Chemical Bank. Cambio Exacto asserted that it had followed Perusa's instructions and paid out this sum to recipients designated by Perusa's customers but that Perusa had failed to reimburse it for the payments it made. The money the government seized, Cambio Exacto argued, therefore belonged to it.
In a Memorandum and Order dated June 18, 1997, the district court dismissed Perusa's and Pan American's claims to the seized funds on the ground that, as money remitters, they lacked standing to challenge the forfeiture of funds deposited by their customers. And the district court found that Cambio Exacto, as a local correspondent, also did With no valid claimants to the seized funds, on September 29, 1997, the district court entered decrees of forfeiture of the funds in the Perusa account and the two Pan American accounts. By stipulation of the parties, the decrees are stayed pending this appeal.
not have standing. The court therefore denied Cambio Exacto's motion to file a late claim. Pan American then moved for leave to amend its claim to assert an interest in the seized funds as a bailee. This motion was also denied.
Appellants make two claims. First, each appellant asserts that the district court erred in finding that it lacked standing to challenge the forfeiture of the funds. Second, Pan American and Perusa argue that the...
To continue reading
Request your trial
-
Medina-Rodríguez v. $3,072,266.59 in U.S. Currency
...they have standing to intervene in this action. Supp. R. Admin. or Mar. Cl. & Asset Forfeiture Actions G(8); United States v Cambio Exacto, S.A., 166 F.3d 522, 526 (1st Cir. 1998) (holding that standing is a "threshold question in every federal case," including civil forfeiture actions). St......
-
Havana Docks Corp. v. Norwegian Cruise Line Holdings, Ltd.
...would be redressed by a successful challenge to the forfeiture. Article III does not require more.’ " (quoting United States v. Cambio Exacto , 166 F.3d 522, 528 (2nd Cir. 1999) )). At this stage, the Court concludes that Plaintiff has sufficiently established the redressability requirement......
-
U.S. v. $244,320.00 in U.S. Currency, 4:03-CV-40019.
...are two types of standing the claimant needs to demonstrate, Article III standing and statutory standing. See United States v. Cambio Exacto, S.A., 166 F.3d 522, 526 (2d Cir. 1999) ("In order to contest a governmental forfeiture action, claimants must have both standing under the statute or......
-
U.S. v. $557,933.89, More or Less, in U.S. Funds
...not — is of no moment. Standing is, moreover, a legal question to be determined by the court, not a jury. See United States v. Cambio Exacto, S.A., 166 F.3d 522, 526 (2d Cir.1999). The larger question begged by our initial response, of course, is whether the issue of standing should be revi......
-
Developments in the Second Circuit: 1998-1999
...a New York police procedure restricting officers' public statements regarding department matters); United States v. Cambio Exacto, S.A., 166 F.3d 522 (2d Cir. 1999) (concluding banks have standing to challenge forfeiture of funds from two separate accounts; the banks had a financial stake i......
-
Is "policing for Profit" Really a Police Power Exception? Civil Asset Forfeiture as an Excessive Fine and the Police Power Exception to the Automatic Stay
...Dery, Interplay between Forfeiture and Bankruptcy, 66 U.S. Att'ys Bull. 117, 121-22 (2018) (citing United States v. Cambio Exacto, S.A., 166 F.3d 522 (2d Cir. 1999)). 205. 18 U.S.C. § 853(n)(2).206. See generally Dery, supra note 204, at 117.207. § 981(c) ("Property taken or detained under ......