U.S. v. Fifty Thousand Dollars ($50,000) U.S. Currency, 84-1062

• Decision Date: 22 March 1985
• Docket Number: No. 84-1062,84-1062
• Citation: 757 F.2d 103
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. FIFTY THOUSAND DOLLARS ($50,000) U.S. CURRENCY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 103

757 F.2d 103

UNITED STATES of America, Plaintiff-Appellee, v. FIFTY THOUSAND DOLLARS ($50,000) U.S. CURRENCY, Defendant-Appellant.

No. 84-1062.

United States Court of Appeals Sixth Circuit.

Argued Aug. 31, 1984.

Decided March 22, 1985.

James D. O'Connell (argued), Highland Park, Mich., for defendant-appellant.

Leonard R. Gilman, U.S. Atty., Detroit, Mich., Ronald W. Rice, Asst. U.S. Atty. (argued), for plaintiff-appellee.

Before MERRITT, Circuit Judge, PHILLIPS, Senior Circuit Judge and BERTELSMAN, District Judge. ^*

PHILLIPS, Senior Circuit Judge.

This civil forfeiture action involves $50,000 in currency paid by Glenn Lasuita to federal undercover agents for the purchase of a large amount of marijuana.

I.

On May 5, 1982 the Government filed a civil complaint in the United States District Court for the Eastern District of Michigan for forfeiture of the currency. The complaint alleged that the defendant currency was used in an illegal sale or exchange for a controlled substance in violation of 21 U.S.C. Sec. 881(a)(6). ¹

On June 14, 1982 Lasuita filed a claim of title to the $50,000 in currency. He also filed an answer to the complaint praying that the $50,000 be returned to him.

The civil forfeiture action was assigned to the docket of District Judge James P. Churchill.

On January 20, 1983 a grand jury for the Eastern District of Michigan returned an indictment against Lasuita charging him with conspiracy with intent to distribute marijuana and with various overt acts in connection therewith. Lasuita filed a defense of entrapment. The criminal case was assigned to the docket of District Judge Horace W. Gilmore.

The forfeiture action in Judge Churchill's court was stayed until disposition of the criminal action. The jury returned a verdict of guilty against Lasuita in the criminal case. This conviction was reversed by this Court on the ground of an error in the charge of the district court to the jury with respect to the defense of entrapment. We reversed and remanded for a new trial. Reference is made to the opinion of this Court in United States v. Lasuita, 752 F.2d 249 (6th Cir.1985) for a more comprehensive statement of pertinent facts.

II.

After the conviction of Lasuita in the criminal action, the Government moved for summary judgment in the forfeiture proceeding. Lasuita continued to rely upon the defense of entrapment. District Judge Churchill entered an order on December 1, 1983 granting summary judgment in favor of the Government.

Judge Churchill found that "[t]here is no real factual issue concerning the use of the $50,000 to attempt to purchase marijuana from a government agent on a 'reverse buy and bust' operation. Although there is evidence that he had borrowed some of the money, there is no genuine issue of fact concerning Glenn F. Lasuita's (the claimant) ownership of the money." Judge Churchill further held that "the Court's only concern in granting the motion for summary judgment forthwith was the possible dilemma that would be created if Lasuita's conviction is reversed on appeal.

"The money is subject to forfeiture if used in exchange for a controlled substance in violation of the Controlled Substances Act. Lasuita raised the defense of entrapment. The defense of entrapment is a defense based upon policy. The policy is that because of the circumstances a person ought not be convicted of a crime he has committed, rather than because the crime was not in fact committed. See 21 Am.Jur.2d, Criminal Law Sections 2-2-209. Also see United States v. One 1977 Pontiac Grand Prix, 483 F.Supp. 48 (N.D.Ill.1979).

"The government is entitled to forfeiture even if the conviction is reversed on the grounds of entrapment."

Lasuita appeals.

We affirm the summary judgment in the forfeiture proceeding on authority of the recent decision of the Supreme Court in United States v. One Assortment of 89 Firearms, --- U.S. ----, 104 S.Ct. 1099, 79 L.Ed.2d 361 (1984). In that forfeiture case, as on the present appeal, the claimant for the forfeited property relied upon a defense of entrapment. In the earlier criminal case, he was found not guilty on the criminal charge of knowingly engaging in the business of dealing in firearms without a license. The Government then instituted an in rem proceeding for forfeiture of the firearms involved. The Supreme Court held that the acquittal of the gun owner on the criminal charges involving firearms did not preclude a subsequent in rem civil proceeding against the firearms. Chief Justice Burger, writing for a unanimous Court, held that the difference in the relative burden of proof in criminal and civil actions precludes acquittal on the forfeiture charge; that acquittal on a criminal charge merely reflects the existence of a reasonable doubt as to the guilt of the defendant, not innocence; and that neither the doctrine of collateral estoppel nor double jeopardy is applicable. The Court disapproved its earlier decision in Coffey v. United States, 116 U.S. 436, 6 S.Ct. 437, 29 L.Ed. 684 (1886), to the extent that it suggests to the contrary. The Chief Justice placed emphasis upon Helvering v. Mitchell, 303 U.S. 391, 58 S.Ct. 630, 82 L.Ed. 917 (1938). In Mitchell, a taxpayer was acquitted on criminal charges that he willfully attempted to defeat income taxes by fraudulently misstating certain items on his tax return. The Commissioner of Internal Revenue then brought an action to recover a substantial monetary penalty for fraudulent avoidance of income tax. The Supreme Court, in Mitchell, speaking through Justice Brandeis, held that recovery of the civil penalty by the Government was not barred by the acquittal of the defendant in the criminal case and that the doctrines of res judicata and double jeopardy were not applicable.

The Chief Justice also placed emphasis upon One Lot Emerald Cut Stones and One Ring v. United States, 409 U.S. 232, 93 S.Ct. 489, 34 L.Ed.2d 438 (1972) (per curiam), holding that a civil action for forfeiture of a ring and stones was not barred by the prior acquittal of the owner on charges of willfully and knowingly, with intent to defraud the United States, smuggling articles into this Country without complying with customs procedures. The Court held that entrapment was not an absolute bar to the institution of forfeiture subsequent to the acquittal. The Court ruled that the forfeiture proceeding was not precluded, whether defendant had been acquitted on grounds of entrapment or lack of intent, see 104 S.Ct. at 1104-05, because of the different standard of proof required in the forfeiture proceeding, see 104 S.Ct. at 1105.

III.

Under the express provisions of 21 U.S.C. Sec. 881(a)(6) quoted in footnote 1 of this opinion, money is subject to forfeiture when furnished in exchange for a controlled substance. The Government has the burden of showing probable cause that the currency was furnished in exchange for a controlled substance. The burden of proof is the same as that applicable to forfeiture under the customs laws, as determined by 19 U.S.C. Sec. 1615, made applicable to this proceeding by 21 U.S.C. Sec. 881(d). United States v. $83,320 in United States Currency and $40 in Canadian Currency, 682 F.2d 573, 576-7 (6th Cir.1982). See also Colonial Finance Co. v. United States, 210 F.2d 531, 533 (6th Cir.1954) (per curiam); United States v. $22,287.00 in U.S. Currency, 520 F.Supp. 675 (E.D.Mich.1981).

The burden then shifts to the claimant to prove that the money was not used in violation of the statute. Claimant Lasuita has not carried this burden in the present case.

Lasuita does not dispute that the currency involved was furnished by him for the purchase of marijuana. Nor does he dispute that he delivered the currency to a DEA agent to purchase marijuana. We agree with District Judge Churchill that "There is no real factual issue concerning the use of the $50,000 to attempt to purchase marijuana from a Government agent."

Thus, the record shows that there is no genuine issue as to any material fact and that the Government is entitled to summary judgment as a matter of law. Fed.R.Civ.P. 56(c).

The judgment of the district court is AFFIRMED.

MERRITT, Circuit Judge, dissenting.

The import of the majority's holding is that claimant Lasuita cannot assert the entrapment defense in this forfeiture proceeding. Implicit in this holding is the theory that the government need show probable cause only for the physical act of exchanging money for the marijuana. Because I believe the opinion contains several fundamental errors, I respectfully dissent.

First, the majority, after reproducing the language of 21 U.S.C. Sec. 881(a)(6) verbatim, incorrectly paraphrases that provision by stating: "Under the express provisions of 21 U.S.C. Sec. 881(a)(6) ... money is subject to forfeiture when furnished in exchange for a controlled substance." Ante at p. 105. In fact, the express provisions of section 881(a)(6) establish that money is subject to forfeiture when "furnished ... by any person in exchange for a controlled substance in violation of this subchapter." 21 U.S.C. Sec. 881(a)(6) (1982) (emphasis supplied). By reference to "violation of this subchapter," section 881(a)(6) clearly establishes the necessity of proving the underlying statutory violation in order to forfeit "derivative contraband," i.e., items otherwise legal like cars and money, which become forfeitable because used in connection with a criminal event. When the property to be forfeited is derivative contraband, that property "derives" its illegality from its connection to a prohibited act rather than from the inherently illegal nature of the property itself. In derivative contraband cases, the violation of a criminal law usually becomes, as here, an essential part of the statutory scheme and the government's burden of proof. Unlike the forfeiture of inherently illegal items that occurs within the context of a criminal prosecution, see, e.g., United States v. Jeffers...