U.S. v. Five Hundred Thousand Dollars

• Decision Date: 30 April 1984
• Docket Number: No. 83-5220,83-5220
• Citation: 730 F.2d 1437
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. FIVE HUNDRED THOUSAND DOLLARS, etc., et al., Defendant, Arturo Fernandez, etc., Movant-Appellant. Non-Argument Calendar.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1437

730 F.2d 1437

UNITED STATES of America, Plaintiff-Appellee, v. FIVE HUNDRED THOUSAND DOLLARS, etc., et al., Defendant, Arturo Fernandez, etc., Movant-Appellant.

No. 83-5220

Non-Argument Calendar.

United States Court of Appeals, Eleventh Circuit.

April 30, 1984.

Richard F. O'Brien III, Miami, Fla., for movant-appellant.

Robert A. Rosenberg, Linda Collins Hertz, Asst. U.S. Attys., Miami, Fla., for plaintiff-appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before GODBOLD, Chief Judge, RONEY and TJOFLAT, Circuit Judges.

PER CURIAM:

The government instituted forfeiture proceedings against five different sums of money that were allegedly used to facilitate or resulted from drug transactions. The sums were seized on November 9, 1981, and a notice of the action was published in the Miami Review on November 25, 1981. The only individual whom the government personally served was Rafael Ujueta, the person who deposited the money in a Miami bank. However, the Marshal's Office returned the summons unexecuted and indicated that Ujueta had left the United States. After no one filed a claim to the money within thirty days, the district court entered a final default judgment and the funds in question were paid to the Federal Bureau of Investigation (FBI).

Nearly eight months later, appellant Fernandez filed a motion to set aside the default judgment. He claimed that he was in the business of exchanging international currencies and that he had suffered a serious financial loss when the FBI seized two of the sums of money, a $500,000 amount and a $400,000 amount. The district court denied the motion to set aside the default judgment, finding that Fernandez was not the "owner" of the funds and thus had no standing to claim them. Similarly, the district court denied Fernandez' subsequent Fed.R.Civ.P. 59 motion to vacate its earlier ruling. Fernandez appeals both rulings.

The undisputed circumstances surrounding the forfeiture are as follows. The FBI was conducting a "sting" operation to investigate the laundering of drug money through Miami banks. It established a company called C.R.V. with a bank account in the name of Uniworld Holdings at a Miami bank. Drug dealers would deposit money in Uniworld's account and give Uniworld instructions to wire the money to other bank accounts throughout the country or to issue cashier's checks. On various occasions, Ujueta brought sums of money in cash to make use of C.R.V.'s Uniworld account.

With respect to the $500,000, Ujueta brought the money to the bank and instructed C.R.V. to wire the funds to Fernandez' company's account at a New York City bank. C.R.V. deposited the money in its Uniworld account and instructed the bank to wire the funds to the New York bank. For reasons not disclosed by the record, the wire transfer was never executed, however; C.R.V. subsequently told the bank to cancel the transfer, and the FBI seized the $500,000.

Before the seizure of the $500,000 took place, Ujueta brought $400,000 in cash to C.R.V. and instructed it to have four cashier's checks in the amount of $100,000 issued. C.R.V. gave Ujueta the cashier's checks but he returned on the following day and asked C.R.V. to exchange them for two cashier's checks payable to different persons. C.R.V. took the four checks back but never reissued any others. The $400,000 was then seized.

Fernandez is a money changer who buys U.S. dollars with pesos by having the seller transfer U.S. funds to Fernandez' New York bank account. Then Fernandez or his company, Inversal, issues the seller a check in pesos from a Colombian bank. In this case, Fernandez relied upon a representation that the $900,000 had been transferred by wire to his New York bank account and paid out that sum in pesos. He therefore suffered a loss.

Fernandez argued that an affidavit to this effect filed with the district court established his standing to contest the default judgment. He also included a copy of the transfer order originally issued by C.R.V. and Uniworld instructing the Miami bank to transfer the $500,000 sum to his New York account and copies of two telexes from the New York bank indicating that the $500,000 was never received.

On appeal, Fernandez argues (1) that the district court should have had an evidentiary hearing on the issue of standing; (2) that he had standing; and (3) that the district court erred in entering the default judgment because Fernandez was not given actual notice of the forfeiture proceeding despite the fact the FBI knew he had an interest in the funds. Because we...