U.S. v. Six Negotiable Checks($191,671.69)

• Decision Date: 27 June 2002
• Docket Number: No. 01-71679.,01-71679.
• Citation: 207 F.Supp.2d 677
• Parties: UNITED STATES of America, Plaintiff, v. SIX NEGOTIABLE CHECKS IN VARIOUS DENOMINATIONS TOTALING ONE HUNDRED NINETY ONE THOUSAND SIX HUNDRED SEVENTY ONE DOLLARS AND SIXTY NINE CENTS ($191,671.69), and Eight Thousand Five Hundred Fifty Nine Dollars in United States Currency ($8,559.00), Defendants.
• Court: U.S. District Court — Eastern District of Michigan

207 F.Supp.2d 677

UNITED STATES of America, Plaintiff, v. SIX NEGOTIABLE CHECKS IN VARIOUS DENOMINATIONS TOTALING ONE HUNDRED NINETY ONE THOUSAND SIX HUNDRED SEVENTY ONE DOLLARS AND SIXTY NINE CENTS ($191,671.69), and Eight Thousand Five Hundred Fifty Nine Dollars in United States Currency ($8,559.00), Defendants.

No. 01-71679.

United States District Court, E.D. Michigan, Southern Division.

June 27, 2002.

COPYRIGHT MATERIAL OMITTED

Tauras N. Ziedas, U.S. Attorney, Detroit, MI, for plaintiff.

Ziad A. Fadel, Dama J. Brown, Dearborn, MI, for defendant.

OPINION AND ORDER REGARDING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

ROSEN, District Judge.

I. INTRODUCTION

Plaintiff United States of America commenced this suit on April 30, 2001, seeking the civil forfeiture of the Defendant negotiable checks and U.S. Currency, which were seized on November 28, 1998 by agents of the U.S. Customs Service at the Detroit Metropolitan Wayne County Airport in Romulus, Michigan. The Government alleged in its complaint that there is probable cause to forfeit this property, because the checks and currency are monetary instruments that Leila Farha attempted to transport out of the United States without properly reporting them to customs agents as required under 31 U.S.C. § 5316. Two Claimants, Leila Farha and her husband Amado Faria, have filed claims in opposition to the Government's forfeiture effort, asserting that they committed no wrong that would warrant the Government's seizure of the Defendant property from them.

By motion filed on January 31, 2002, the Government now seeks summary judgment in its favor and the entry of a final order of forfeiture, arguing that the record conclusively establishes probable cause for the forfeiture of the Defendant checks and currency, and that, as a matter of law, Claimants cannot establish any affirmative defense to this forfeiture. Claimants responded to this motion on March 8, 2002, contending that the Government bears a higher burden than probable cause under recently enacted federal legislation, and that issues of fact preclude a determination as a matter of law as to whether the Government has met this burden or whether Claimants, in turn, can establish a defense to forfeiture. Claimants also challenge the forfeiture as grossly disproportionate to any alleged wrongdoing, and hence violative of the Eighth Amendment prohibition against "excessive fines," U.S. Const. amend. VIII, and they contend that the Government's delay in commencing this action violated their constitutional right to due process.¹ The Government addressed these arguments in a reply brief filed on March 18, 2002.

The Court heard oral argument on the Government's motion on June 20, 2002. Having reviewed the parties' briefs and supporting exhibits, and having considered the arguments of counsel at the June 20 hearing, the Court is now prepared to rule on this motion. This Opinion and Order sets forth the Court's rulings.

II. FACTUAL AND PROCEDURAL BACKGROUND

On November 28, 1998, U.S. customs officials stopped and questioned Claimant Leila Farha as she was about to board Northwest Airlines Flight Number 68 at the Detroit Metropolitan Airport in Romulus, Michigan. Farha, a naturalized U.S. citizen, had planned to travel from Detroit to Tel Aviv, Israel to visit her sister.

According to Stephen L. Clark, the customs inspector who questioned Farha at the airport that day, Farha was advised of the relevant currency reporting requirements, and was told that she must declare any currency, travelers' checks, and other negotiable monetary instruments totaling more than $10,000.00. (See Plaintiffs Reply Br., Ex. M, Clark Aff. at ¶ 7; see also Plaintiff's Motion, Ex. A, Investigative Report at 2.) Farha disputes this, stating in an affidavit that she believed that she was only required to disclose the amount of currency that she was carrying, and that she was never told that her reporting duties encompassed negotiable checks. (See Claimants' Response, Ex. B, Farha Aff. at ¶¶ 6-7.)

In any event, in response to Clark's inquiry, Farha stated that she was carrying $9,000.00 in cash. Clark states that he offered Farha the opportunity to amend her declaration, and that he specifically advised her of the need to report the transportation of monetary instruments on behalf of others. (Clark Aff. at ¶ 9.) Farha, however, declined this invitation, and again stated that she was carrying only $9,000.00 in cash. Upon searching Farha's purse, Clark discovered $8,559.00 in cash, along with 13 commercial checks totaling $250,671.69. Six of these checks were negotiable, totaling $191,671.69. These six checks, along with the $8,559.00 in cash that Farha was carrying, are the property at issue in this civil forfeiture action.²

Upon discovering these items, U.S. customs officials escorted Farha to an office, advised her of her Miranda rights, and questioned her further about the checks found in her purse. According to a Customs Service investigative report, Farha stated that two of the negotiable checks, in the amounts of $107,117.98 and $64,553.71, were the proceeds of a sale of certain land in Florida. These checks were made out to, and appeared to be endorsed by, Farha's husband, Claimant Amado Faria,³ and her daughter, Reema Faria, along with an individual named Ishak Hussein Aoudi. (See Claimants' Response, Ex. C.)⁴ According to customs officials, Farha claimed that she had forged the signatures on these checks, and that neither Amado nor Reema Faria was aware that she had these checks in her possession or that she planned to take them out of the country. Farha also allegedly stated that Amado Faria was her husband, and that Reema Faria was her sister—although, in fact, Reema is her daughter. Farha then advised the customs officials that her husband was staying with her "sister," Reema, in Ann Arbor, Michigan, and the interview concluded when she invoked her right to counsel.

Customs agents then telephoned Claimant Amado Faria at his daughter's residence in Ann Arbor. Faria contradicted his wife on a number of points, stating that he had, in fact, signed the two checks bearing his name, that he had witnessed his daughter Reema signing these checks, and that he was aware that his wife had these checks in her possession as she left the United States. According to Faria's deposition testimony in this action, his wife kept the checks so that he would not, in her absence and without her final approval, invest these funds in the purchase of a building in Tampa, Florida. (See Plaintiff's Motion, Ex. D, Amado Faria Dep. at 63-64.)

As noted, the two largest negotiable checks at issue in this case, in the amounts of $107,117.98 and $64,553.71, purportedly were proceeds from the sale of property located at 1115 57th Avenue West, Bradenton, Florida.⁵ At some point in 1994 or 1995, Claimant Amado Faria purchased a convenience store at that location, and then, within a few months, he also purchased the land upon which this store was located. These purchases apparently were in the name of either Amado Faria, his daughter Reema Faria, or both,⁶ and the family apparently paid around $165,000 for the business and property. In March of 1996, the family sold the business and property to Ishak Aoudi for $360,000, with $252,500 of this amount to be paid in installments of $2,500 per month over 30 years. In 1998, however, Aoudi evidently obtained additional financing and purchased the Farias' remaining interest in the property. The two checks, dated October 28, 1998 and made out to Ishak Aoudi, Amado Faria, and Reema Faria, purportedly were disbursed to the Farias as part of this transaction.

These checks, along with eleven other checks and $8,559.00 in cash, were seized from Leila Farha a month later, on November 28, 1998. On December 8, 1998, a criminal complaint was filed against Farha, charging her with violating the reporting requirements of 31 U.S.C. § 5316 and making false statements to customs officials. On May 1, 2000, Farha was sentenced to six months of pretrial diversion. Farha successfully completed this program, and the criminal proceedings were dismissed without conviction.

On January 18, 1999, Farha filed an administrative petition for return of the seized property. Following lengthy administrative proceedings, a decision was issued in April of 2000 granting Farha's petition in part and denying it in part, with seven of the checks returned to Farha as a result. The Government then commenced this action on April 30, 2001, seeking the civil forfeiture of the remaining six negotiable checks and currency seized from Farha in November of 1998. On May 30, 2001, Claimants Leila Farha and Amado Faria filed verified statements of their claimed interests in this seized property.

III. ANALYSIS

A. The Standards Governing the Government's Motion

Through its present motion, the Government seeks summary judgment in its favor pursuant to Fed.R.Civ.P. 56. Under this Rule, summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R.Civ.P. 56(c).

Three 1986 Supreme Court cases—Matsushita Electrical Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), and Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)—ushered in a "new era" in the federal courts' review of motions for summary judgment. These cases, in the aggregate, lowered the movant's burden in seeking summary judgment. As stated in Celotex:

In our view, the plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing...