U.S. v. Six Negotiable Checks Various Denomination, 01-71679.

• Decision Date: 30 September 2005
• Docket Number: No. 01-71679.,01-71679.
• Citation: 389 F.Supp.2d 813
• 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

389 F.Supp.2d 813

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.

September 30, 2005.

Tauras N. Ziedas, United States Attorney's Office, Detroit, MI, for Plaintiff.

Dama J. Brown, Ghandchi & Brown, Ziad A. Fadel, Fadel & Akouri, Dearborn, MI, for Claimants.

OPINION AND ORDER SETTING FORTH THE COURT'S FINDINGS OF FACT AND CONCLUSIONS OF LAW

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, filed claims in opposition to the Government's forfeiture effort, asserting that they were entitled on a number of grounds to the return of the Defendant property that the Government had seized from Leila Farha.

In an earlier Opinion and Order, the Court held that the Government had met its threshold burden of demonstrating that the Defendant property is subject to forfeiture, but that issues of fact remained as to (i) whether Claimant Amado Faria could successfully invoke an "innocent owner" defense to forfeiture, and (ii) whether forfeiture of the entire amount seized from the Claimants would violate the Excessive Fines Clause of the Eighth Amendment. See United States v. Six Negotiable Checks, 207 F.Supp.2d 677 (E.D.Mich.2002). Accordingly, the case proceeded to trial by the Court in order to resolve these outstanding issues. In the course of this trial, the Court heard the testimony of Claimant Amado Faria, U.S. Customs Special Agent James Sinnott, and IRS Revenue Agent Carl Selz. In addition, a number of exhibits were received into evidence.

Having heard the testimony of the witnesses and reviewed the exhibits introduced at trial, and having reviewed and considered the Government's and the Claimants' post-trial submissions, the Court makes the following findings of fact and conclusions of law. To the extent that any findings of fact constitute conclusions of law, they are adopted as such. To the extent that any conclusions of law constitute findings of fact, they are so adopted.

II. FINDINGS OF FACT

A. The Seizure of the Defendant Property at Detroit Metropolitan Airport

1. 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.

2. Farha, a naturalized U.S. citizen, had planned to travel from Detroit to Tel Aviv, Israel, along with several other members of her family who had gathered in Michigan for the Thanksgiving holiday.

3. According to the testimony of U.S. Customs Special Agent James Sinnott, and as corroborated in an investigative report prepared by Special Agent Sinnott shortly after the incident, (see Gov't Ex. 9), Farha declared to customs officials at the airport that she was carrying $9,000.00 in U.S. currency. Upon being given the opportunity to amend her declaration, Farha declined, and again maintained that she was carrying only $9,000.00 in cash.

4. Customs agents then searched Farha's purse and discovered approximately $8,500 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 cash that Farha was carrying, are the property at issue in this civil forfeiture action.¹

5. Upon discovering these undeclared items, customs officials escorted Farha to an office at the airport, where Special Agent Sinnott advised Farha of her Miranda rights and questioned her further about the checks found in her purse.

6. In the course of this questioning, Farha stated that the two largest 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 have been endorsed by, Farha's husband, Claimant Amado Faria, and her daughter, Reema Faria, along with an individual named Ishak Hussein Aoudi. (See Claimants' Ex. A.)²

7. According to Special Agent Sinnott, Farha claimed during questioning that she had forged the signatures on these checks, and that her husband was not aware that she had these checks in her possession or that she planned to take them out of the country.

8. Special Agent Sinnott then telephoned Claimant Amado Faria at the residence where he and his wife had been staying during their visit to Michigan. According to Special Agent Sinnott, Faria contradicted his wife by acknowledging his awareness that she had the two above-mentioned checks in her possession as she prepared to board the airplane that day. Faria also stated, contrary to his wife, that he had signed both of the checks, and that he had witnessed his daughter Reema sign both checks.

9. As a result of this incident, Leila Farha was criminally charged with violating 31 U.S.C. § 5316 and was sentenced to six months of pretrial diversion. She successfully completed this program and the criminal proceedings were dismissed without a record of conviction. Farha was not called as a witness at the trial in the present case.

B. The Testimony of Claimant Amado Faria Regarding the Two Largest Negotiable Checks.

10. The principal witness at trial was Claimant Amado Faria. Faria is the husband of Claimant Leila Farha and, like his wife, is a naturalized U.S. citizen.³ Faria and Farha reside in Tampa, Florida.

11. Faria testified that the two largest checks seized in this case, in the amounts of $107,117.98 and $64,553.71, were the proceeds of a 1998 real estate transaction involving a convenience store located at 1115 57th Avenue West in Bradenton, Florida.

12. In March of 1996, Faria and his daughter Reema sold this business property to Ishak Aoudi for $360,000, with a down payment of $100,000 and the balance to be paid in monthly installments of $2,500 over 30 years.

13. In the fall of 1998, Aoudi obtained additional financing and purchased the Farias' remaining interest in the property at 1115 57th Avenue West. The two above-referenced checks, dated October 28, 1998 and made out to Amado and Reema Faria and Ishak Aoudi, were disbursed to the Farias as part of this transaction.⁴

14. Faria confirmed that the two checks were signed by himself, his daughter Reema, and Ishak Aoudi.

15. At the time of this transaction in the fall of 1998, Faria planned to reinvest the proceeds of this sale into the purchase of a building in Tampa, Florida.

16. On October 25, 1998, Faria executed a written offer to purchase the Tampa property for $550,000. Faria testified that he gave the two above-referenced (and signed) checks to a real estate broker in connection with this offer.

17. The written offer documentation reflects that Faria gave a deposit of $50,000 in support of his offer on the Tampa property. Faria testified that he initially wrote a $50,000 check as a deposit, but that he supplanted this initial deposit with the two checks, totaling $171,671.69, that he subsequently received in late October or early November from the sale of the Bradenton property. Although Faria stated that he was given a receipt reflecting this larger deposit, he was unable to produce any such receipt.

18. Faria's offer on the Tampa property was rejected in favor of a higher bid, and the broker then returned the two checks to him. Faria testified that he picked up the checks from the broker's office on or around November 20, 1998.

19. Although both Faria and his wife had bank accounts in Tampa, Faria testified that his wife initially put the two checks in her purse for safekeeping, with the intention that they eventually would be deposited in one of the couple's bank accounts.

20. Within the next day or so after Faria purportedly retrieved the two checks from the real estate broker, he and his wife traveled to Ann Arbor, Michigan to spend the Thanksgiving holiday with relatives. Faria testified that the checks remained in his wife's purse during this trip, a circumstance he characterized as "stupid" and attributed to lack of time to get to a bank before leaving for Michigan.

21. Faria testified that he was unaware that the two checks were negotiable and could be endorsed and cashed by anyone who obtained them. Rather, he believed that only he or his daughter could cash the checks. He acknowledged, however, that he had cashed checks for customers as a convenience store operator, which he then submitted for deposit into his own bank account.

22. Faria testified that, during this Thanksgiving visit to Michigan, his wife was urged by a number of her relatives to join their upcoming trip to Israel to visit another family member. Although Faria opposed this plan, his wife decided to make the trip.

23. While Faria knew that the checks had been placed in his wife's purse before the couple left for Michigan, he testified that he did not think about or discuss the checks while in Michigan, nor did he realize that they remained in his wife's possession as she prepared to embark on her trip to Israel.

24. As noted during Faria's cross-examination, Faria's testimony on this point conflicts with the investigative report of Leila Farha's November 28, 1998...