U.S. v. Rodriguez
| Decision Date | 12 May 2006 |
| Docket Number | Criminal Action No. 03-789 (FLW). |
| Citation | 430 F.Supp.2d 388 |
| Parties | UNITED STATES of America v. Angelo C. RODRIGUEZ. |
| Court | U.S. District Court — District of New Jersey |
Christopher J. Christie, United States Attorney by Mark D. Larkins, Assistant United States Attorney, Office of the United States Attorney, Newark, NJ, for United States of America.
Carroll & Brotman by Ellen C. Brotman, Esq. and John Rogers Carroll, Esq., Philadelphia, PA, for Defendant Angelo Rodriguez.
This matter comes before the Court upon Defendant Angelo C. Rodriguez's Motion to Vacate the Court's Preliminary Order of Forfeiture, in which the Court entered judgment against Defendant in the amount of $1,245,018 following his conviction by a jury on a six-count Indictment charging him with knowingly structuring transactions to avoid a domestic financial institution's obligation to file currency transaction reports, in violation of 31 U.S.C. § 5313(a) and 31 U.S.C. § 5324(a)(3). The jury also found that Defendant's structuring acts constituted a pattern of illegal activity involving more than $100,000 in a twelve-month period, in violation of 31 U.S.C. § 5324(d)(2) and 18 U.S.C. § 2. As required by Fed.R.Crim.P. 7(c)(2) and 32.2(a), the Indictment also contained a forfeiture allegation in which the Government asserted that Defendant's structuring activity involved $1,300,000 in United States currency, which was subject to forfeiture upon Defendant's conviction, pursuant to 31 U.S.C. § 5317(c)(1)(A). The forfeiture allegation noted the Government's intent to seek forfeiture of substitute assets in the event it could not locate the currency involved in the offense because Defendant had transferred, dissipated, placed beyond the jurisdiction of the Court, substantially diminished, or commingled it with other funds such that it could not be subdivided without difficulty. After trial, Defendant waived his right to have the jury decide the forfeiture allegation in the Indictment. Consequently, following a hearing on the matter before this Court, I conducted a review of the entire record and determined, by a preponderance of the evidence, that Defendant's structuring offenses involved $1,245,018 in United States currency, which was subject to forfeiture. On June 13, 2005, I issued a Preliminary Order of Forfeiture, and entered a money judgement against Defendant in that amount.
Defendant now challenges the Court's Preliminary Order of Forfeiture on multiple grounds. He argues that: (1) the Court should have determined the amount subject to forfeiture beyond a reasonable doubt, rather than by a preponderance of the evidence; (2) the Court lacks statutory authority to order forfeiture of substitute assets in this case; and (3) the amount subject to forfeiture is unjustly high and violates the Excessive Fines Clause of the Eighth Amendment to the Constitution. On March 31, 2006, I heard oral argument on Defendant's Motion. For the reasons discussed more fully below, I conclude that: (1) a forfeiture amount in a proceeding pursuant to 31 U.S.C. § 5317(c)(1)(A) need only be determined by a preponderance of the evidence; (2) 31 U.S.C. § 5317(c)(1)(B) does not authorize the Government to seize substitute assets in forfeiture proceedings following a conviction for violation of 31 U.S.C. § 5324; and (3) the forfeiture amount in this case is not grossly disproportionate to the gravity of Defendant's criminal offense and, thus, does not violate the Eighth Amendment's Excessive Fines Clause. Accordingly, Defendant's Motion to Vacate the Court's Preliminary Order of Forfeiture is denied, but the Government is precluded from seizing substitute assets, pursuant to 21 U.S.C. § 853(p), to satisfy the forfeiture amount contained therein.
On April 4, 2005, a jury found Defendant guilty of Counts 1 through 6 of an Indictment which charged him with knowingly structuring transactions to avoid a domestic financial institution's obligation to file currency transaction reports, in violation of 31 U.S.C. § 5313(a) and 31 U.S.C. § 5324(a)(3). Jury Verdict ¶¶ 1-6. In addition, the jury found Defendant's acts of structuring were part of a pattern of illegal activity involving more than $100,000 in a twelve-month period, in violation of 31 U.S.C. § 5324(d)(2) and 18 U.S.C. § 2.2 Id. ¶ 7. Pursuant to 31 U.S.C. § 5317(c), the Government sought forfeiture of "$1,300,000 in United States currency and all property traceable [thereto]," which it alleged constituted an amount representing all of Defendant's property involved in or traceable to offenses for which he was convicted.3 See Indict. Forf. Alleg. ¶ 2. On April 5, 2005, Defendant waived his right to have a jury decide the applicable forfeiture amount and that duty fell to the Court. See April 5, 2005 Jury Waiver.
Defendant disputed the Government's allegation of the amount subject to forfeiture. In an April 20, 2005 letter to the Court, he asserted that the Government's calculation of $1,300,000 was "arbitrary and capricious and not based on the evidence presented at trial." See United States v. Rodriguez, No. 03-789 slip op. at 2 (D.N.J. June 6, 2005) (). Defendant argued that the Government did not establish that each of the deposits totaling $1,300,000 was involved in one of the six specific substantive structuring offenses alleged in the Indictment. Id. Accordingly, he urged the Court to restrict the total amount subject to forfeiture to the amount the jury found, beyond a reasonable doubt, connected to the substantive structuring counts of the Indictment—namely, $372,000. Id.
In response, the Government asserted that it was entitled to look beyond the six substantive counts alleged in the Indictment to calculate the total amount subject to forfeiture. Id. The Government argued that because the jury also specifically found that Defendant engaged in a pattern of illegal activity committed over a twelve-month period, the total forfeiture amount should not be limited to the amounts involved in the particular transactions alleged in the Indictment. Id. Instead, the Government asserted that it was free to consider any amount involved in Defendant's banking activity during the entire period set forth in the Indictment, so long as evidence of those transactions was presented at trial, and thus formed the basis of Defendant's conviction. Id.
In a June 6, 2005 Memorandum Opinion, I held that funds beyond those specifically enumerated in the substantive counts of the Indictment, which were involved in transactions during the twelve-month period set forth in the aggregate count, were subject to forfeiture so long as the Government established, by a preponderance of the evidence, a factual nexus between such funds and Defendant's offenses. Id. at 4-5. I also noted that neither party presented any additional evidence during the post-trial forfeiture hearing, pursuant to Fed. R.Crim.P. 32.2(b)(1). United States v. Rodriguez, No. 03-789 slip op. at 5. Consequently, relying on the evidence presented at trial, which included all of Defendant's relevant banking records for the twelve-month period specified in the Indictment, I independently evaluated Defendant's financial transactions during the period and found that "most but not all, bank deposits constituting the $1,300,000 amount [asserted by the Government as subject to forfeiture] were proven by a preponderance of the evidence to be part of" Defendant's structuring activity. Id. After excluding certain amounts related to transactions deemed outside of Defendant's structuring activity, I concluded that $1,245,018 in United States currency constituted the total amount involved in Defendant's offenses, and was thus subject to forfeiture to the United States. Id. at 6 (). On June 13, 2005, I filed a Preliminary Order of Forfeiture in which I entered judgment in the amount of $1,245,018 against Defendant.
On March 7, 2006, Defendant filed the instant Motion to Vacate the Preliminary Order of Forfeiture and the judgement entered pursuant thereto. See Def. Motion to Vacate. The Government filed a brief in opposition to the Motion on March 17, 2006. See Gov. Opp. Br. The parties filed supplemental briefs expanding and clarifying their arguments, and, on March 31, 2006, I heard oral argument on the Motion.4 See Transcript of March 31, 2006 Oral Argument ("Tr.").
Before addressing Defendant's arguments, a brief discussion of the interplay between the separate statutes imposing the currency transaction reporting requirement, prohibiting evasion of that requirement through structured transactions, imposing forfeiture as a consequence upon a conviction for structuring transactions, and facilitating seizure of property subject to forfeiture, is in order. First, 31 U.S.C. § 5313(a) establishes the authority of the Secretary of the Treasury to promulgate rules requiring domestic financial institutions to report certain transactions beyond a particular amount. Pursuant to those rules, each such financial institution "shall file a report of each deposit, withdrawal, exchange of currency or other payment or transfer, by, through, or to such financial institution which involves a transaction in currency of more than $10,000. . . ."5 31 C.F.R. 103.22(b). A second statute, 31 U.S.C. § 5324, proscribes evasion of the reporting requirement. Specifically, § 5324(a)(3) provides that "[n]o person shall, for the purpose of evading the reporting requirements of section 5313(a) . . . structure or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions." The same statute also contains a provision that imposes enhanced penalties on one who "violates this section . . . as part of a pattern of...
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