U.S. v. Twenty-Two Thousand, Two Hundred Eighty Seven Dollars ($22,287.00), U.S. Currency

• Decision Date: 13 June 1983
• Docket Number: No. 81-1603,TWENTY-TWO,81-1603
• Parties: UNITED STATES of America, Plaintiff-Appellee, v.THOUSAND, TWO HUNDRED EIGHTY SEVEN DOLLARS ($22,287.00), UNITED STATES CURRENCY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 442

709 F.2d 442

UNITED STATES of America, Plaintiff-Appellee, v. TWENTY-TWO THOUSAND, TWO HUNDRED EIGHTY SEVEN DOLLARS

($22,287.00), UNITED STATES CURRENCY, Defendant-Appellant.

No. 81-1603.

United States Court of Appeals, Sixth Circuit.

Argued Jan. 13, 1983.

Decided June 13, 1983.

Thomas D. Burkhart (argued), Saginaw, Mich., for defendant-appellant.

Leonard R. Gilman, U.S. Atty., Detroit, Mich., Robert Haviland, Michael J. Hluchaniuk (argued), Asst. U.S. Atty., Bay City, Mich., for plaintiff-appellee.

Before KEITH and MERRITT, Circuit Judges, BROWN, Senior Circuit Judge.

I

BAILEY BROWN, Senior Circuit Judge.

This forfeiture proceeding stems from the government's seizure of a total of $22,287.00 from the person and from the house of Jesse Montez on March 6, 1980. The seizures followed an on-the-street narcotics transaction between Montez and two undercover police officers in Saginaw, Michigan. Montez was convicted, before the same district judge, of federal narcotics violations prior to this forfeiture proceeding. United States v. Montez, No. 80-20013 (E.D.Mich. January 16, 1981), aff'd. mem., 673 F.2d 1331 (6th Cir.1981).

The district court decided that, although the search warrant used to seize that part of the currency ($21,860) and other evidence in the house was issued in violation of certain provisions in Rule 41(c)(1), Fed.R.Crim.P., thus requiring, in the district court's view, the application of the exclusionary rule to the evidence obtained pursuant to the warrant, there was sufficient additional evidence to establish probable cause for the institution of the forfeiture proceeding. Because this finding shifted the burden to the claimant ¹ to prove that the currency was not forfeitable as derivative contraband and because the claimant made no attempt to meet this burden at trial, the district court ordered all of the currency forfeited. We affirm, but by a different route than that of the district court.

The issues before us on appeal are: (1) whether the search warrant used to seize the currency and other evidence in Montez's home was valid under Rule 41, Fed.R.Crim.P. and the fourth amendment to the United States Constitution; (2) whether, if invalid only under Rule 41, the exclusionary rule applies to the seized items; and (3) whether the government, considering only the admissible evidence, showed probable cause to institute the forfeiture proceeding.

The facts are not disputed, and they have been summarized by the district court as follows:

On March 6, 1980, Sergeant Melvin Turner of the Wayne County Sheriff's Department, using a fictitious identity, engaged in a telephone conversation with individuals at 1703 Infantry Street, Detroit, Michigan. One of the persons participating in that conversation was identified as "Jess" or "Jesse." During the conversation, heroin was not specifically mentioned, but statements were made concerning quantity and price which led Turner to believe that the parties on the line were offering to sell him an amount of heroin. A meeting location in Saginaw, Michigan was tentatively agreed to by Turner and Jesse.

Sergeant Turner then contacted Special Agent James King of the Drug Enforcement Administration (DEA) who, in turn, contacted the Saginaw Police Department. The various law enforcement officers agreed to cooperate in investigating this matter.

Later the same day, March 6, 1980, Sergeant Turner received a phone call from Jesse, on his undercover line, confirming a meeting location in Saginaw, Michigan, wherein Turner could test a sample of the substance which was to be the subject of the transaction. Jesse then gave Sergeant Turner a phone number where he could be reached upon Turner's arrival in Saginaw. Turner, acting on information provided by the Saginaw Police Department, then traced the phone number to the address of 3221 Harold Street, Saginaw, Michigan, the known residence of one "Jessie," a/k/a "Jesse Mandezs," a/k/a "Jesse Joe Mendoza." Turner, while still at his Detroit office, then prepared a search warrant and affidavit for the foregoing address and person.

At approximately 7:30 P.M. that evening, Sergeant Turner met with Special Agent King and members of the Saginaw Police Department at a restaurant in Saginaw. Turner was then transported to the home of Judge Gary McDonald of the Saginaw County Circuit Court who signed the warrant which Turner had earlier prepared.

At approximately 9:05 P.M. Sergeant Turner placed a phone call to Jesse and finalized plans for a meeting. Shortly thereafter Turner, accompanied by another undercover officer, drove to the location and met with an individual later identified as Jesse Montez, and acquired a substance later identified as heroin. Upon delivery of the heroin, Jesse Montez was arrested. An amount of $427.00 in U.S. currency was seized from his person at the time of the arrest. After being taken into custody, Montez was informed that a search warrant had been obtained for 3221 Harold Street, Saginaw, Michigan. He was then taken to that location.

The search warrant was executed by Special Agent King of the DEA, Sergeant Turner, and various members of the Detroit Metropolitan Narcotics Squad and the Saginaw Police Department. Pursuant to the warrant the officers seized $21,860.00 in U.S. currency, one plastic zip-lock bag containing a brown lumpy substance later determined to contain 3.5% heroin, two scales, and assorted firearms. Montez, who was present, stated that the seized currency was his money.

Following the search, all seized items were turned over to Special Agent King who later forwarded the suspected narcotics to the Chicago Regional Laboratory of the DEA.

Montez was tried in the United States District Court for the Eastern District of Michigan before a jury and convicted of conspiracy to violate the federal narcotics laws, 21 U.S.C. Secs. 841(a)(1) and 846, and unlawful distribution of heroin. 21 U.S.C. Sec. 841(a)(1) and (2). Montez was sentenced to twelve years imprisonment for his convictions. Since the convictions were based upon the sample of heroin delivered by Montez to Turner, and not upon the heroin seized from Montez's home along with the other evidence, the validity of the search warrant was not an issue in the criminal trial.

The government filed its forfeiture complaint on October 1, 1980, alleging that all of the seized currency was forfeitable pursuant to 21 U.S.C. Sec. 881(a)(6). ² The district court, before deciding whether the government had established probable cause to institute the forfeiture proceeding, in its memorandum opinion first addressed the question of the search warrant's validity. The court held that the search warrant was invalid because it had not been issued in compliance with four of the requirements of Rule 41(c)(1), Fed.R.Crim.P.: ³ (1) that the warrant be directed to a civil officer of the United States; (2) that the warrant provide a maximum time period of ten days; (3) that the warrant be served in the daytime (which the district court found was not done) unless a night search is authorized; and (4) that the warrant designate a federal magistrate to whom it shall be returned. While the government had argued that the search was solely a state search to which Rule 41(c)(1) would not be applicable, the court determined that it was applicable in view of the federal DEA officer's participation in the events before, during and after the search, relying on United States v. Searp, 586 F.2d 1117 (6th Cir.1978), cert. denied, 440 U.S. 921, 99 S.Ct. 1247, 59 L.Ed.2d 474 (1979). Since the court determined that the currency seized at the house and the heroin and other items seized there were seized under an invalid search warrant, it applied the exclusionary rule and did not give these items (other than the amount of such currency) any evidentiary weight when deciding whether the currency must be forfeited. The court went on to find, however, that probable cause did exist for the forfeiture based upon "the government's independent evidence of probable cause that the currency was used for the purposes proscribed by 21 U.S.C. Sec. 881(a)(6)...." United States v. $22,287.00 in U.S. Currency, 520 F.Supp. 675, 679 (E.D.Mich.1981). This finding was based upon statements made by individuals at the Infantry Street address, while talking to Sergeant Turner on the telephone, which indicated that Jesse Montez had been recently involved in a drug transaction which provided him with a sum of money close to the amount seized from his apartment. ⁴

Claimant now urges us to reverse the district court for three reasons. First, he argues that because the district court found the very seizure of the currency to be illegal, it should have concluded that for this reason alone the currency was not subject to forfeiture. Second, he argues that if the currency, although seized illegally, was subject to forfeiture, the district court should not have considered as evidence the amount of currency when determining whether there was sufficient independent evidence to support probable cause for the institution of the forfeiture proceeding. Third, claimant argues that the government did not by admissible evidence meet its burden of establishing that probable cause existed to institute the forfeiture proceeding.

Since we determine that the search warrant under which the currency and other evidence seized at Montez's home satisfied the fourth amendment and since we determine that, though the warrant did not satisfy the requirements of Rule 41(c)(1), the exclusionary rule should not be applied here, we further determine: (1) that the currency found in Montez's home was subject to forfeiture ⁵ and (2) that there was ample evidence to support probable cause to institute the forfeiture proceeding.

II

The burden of proof in a forfeiture action is set forth in 19 U.S.C. Sec. 1615, as incorporated by 21 U.S.C. Sec. 881(d):

In all suits or actions ... brought for the forfeiture...