U.S. v. U.S. Currency in Amount of $119,984
| Decision Date | 17 January 2001 |
| Docket Number | No. CV-99-1978 (CPS).,CV-99-1978 (CPS). |
| Citation | 129 F.Supp.2d 471 |
| Parties | UNITED STATES of America, Plaintiff, v. U.S. CURRENCY IN THE AMOUNT OF $119,984, Defendant. |
| Court | U.S. District Court — Eastern District of New York |
David L. Goldberg, United States Attorney's Office, Civil Division, Brooklyn, NY, for Plaintiff.
Simone Monasebian, Michael Kennedy, P.C., New York City, for Defendant.
This is a civil forfeiture action brought by the United States to recover $119,984 that claimant Cesar Castro attempted to take out of the country without properly declaring it. Presently before this Court is the motion of claimants Castro and Maria Ansueto to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Alternatively, their motion seeks judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure or summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. The United States seeks production of documents used by the Court's probation department in preparing the presentence report in Castro's related criminal case, CR-96-1079.
For the reasons set forth below, claimants' motion for summary judgment is granted. The relief requested by the United States is denied.
The following facts are taken from the submissions of the parties in connection with the instant motions and are undisputed unless otherwise noted. On November 22, 1996, claimant Cesar Castro was stopped by a customs inspector while attempting to board a flight bound for the Dominican Republic at Kennedy Airport. The customs inspector advised Castro orally of the requirement that he declare any United States currency on his person in excess of $10,000 and gave him a Spanish-language form to the same effect. Although Castro stated that he had only $2,000, a subsequent search revealed $119,984 in currency in his possession.
On December 5, 1996, Castro was charged in a two-count indictment of violating 31 U.S.C. §§ 5316 and 53221 (Count 1) and 18 U.S.C. § 1001 (Count 2). See United States v. Castro, CR-96-1079 (CPS). On January 13, 1997, Castro entered into a plea agreement with Assistant United States Attorney James Tatum pursuant to which Castro would plead guilty to Count 1 of the indictment. The agreement stipulated that Castro would plead guilty to the crime of willful failure to report currency that was not illegal proceeds or to be used for illegal purposes. The plea agreement calculated Castro's base offense level at 6 points based on United States Sentencing Guidelines ("USSG") § 2S1.3(b)(2) (). On January 16, 1997, Castro pled guilty to Count 1 of the indictment pursuant to this agreement.
On March 11, 1997, after conducting an investigation into the details of Castro's case, the probation department issued a presentence report ("PSR"). After finding that the base offense level of Castro's violation of the currency reporting laws would be 12 points but that (PSR ¶ 13.) The PSR reported that Castro explained that the currency was a loan from Maria Ansueto, the mother-in-law of his ex-wife, to allow him to purchase a house in Santo Domingo for his children. The PSR further stated that Castro provided documentary evidence that "seem[s] to support the fact that it was possible for Ms. Ansueto to be in possession of funds in the amount allegedly loaned to the defendant." (PSR ¶¶ 10-11.)
On March 27, 1997, Castro was sentenced by the Court. During the sentencing, the Court inquired whether the money was going to be forfeited. Castro's attorney informed the Court that the forfeiture proceedings were in abeyance pending the completion of the criminal case and that her client would likely commence a civil proceeding seeking the return of the money. The government stated that it had no position on forfeiture at that time. During the sentencing proceedings, the following colloquy ensued between the Court and Simone Monasebian, counsel for Castro in the criminal case against him:
Well, I said that, but then I see that actually this sentence is based on a specific offense characteristic, which the defendant is entitled to upon a showing that he did not act with reckless disregard to the source of the funds, that the funds were the proceeds of lawful activity, and the funds were used for lawful purpose.
I have to say having read it, it doesn't make too much sense, since if the funds were the proceeds of lawful activity, I don't know what it means to say that the defendant did not act with the reckless disregard of the fact that they were the proceeds of lawful activity.
In any event, it seems to me he's entitled to this, if there's evidence to support that finding. The evidence recited in the probation report, and the government has not—is disputing—is not offering me any evidence in this proceeding to the contrary, Accordingly, I'm prepared to accept the conclusion of the Probation Department that this a case in which the offense level is appropriately decreased to a level six.
Whatever the impact of a government's failure to offer any proof to rebut this proffer by the defendant in the context of a criminal sentencing proceeding, may have in the context of a forfeiture proceeding, I leave to the finder of fact in the forfeiture proceeding.
I just want clear what's going on here, whether this will act as some kind of collateral estoppel or res judicata, I rather doubt, since the government's motivation in the context of sentencing is certainly quite different than its motivations in securing the forfeiture of money, but [I] might be wrong. Maybe this is an estoppel of some sort.
(Tr. of Sentence, CR-96-1079, Mar. 27, 1997, at 5-6.) The Court sentenced Castro to two years' probation and ordered him to pay a $2,500 fine. On March 31, 1997, judgment was entered to that effect based on the factual findings of the PSR.
On March 18, 1999, after unsuccessfully attempting to recover the currency in question from the United States Customs Service and the Department of Justice, Castro and Ansueto filed a motion pursuant to Rule 41(e) seeking the return of the currency. On April 9, 1999, the government filed a complaint in rem for forfeiture of the currency pursuant to 31 U.S.C. § 5317. On the same date, this Court issued a warrant of arrest in rem for the currency. By order dated April 14, 1999, this Court converted the Rule 41(e) motion to a civil complaint pursuant to the Second Circuit's ruling in Onwubiko v. United States, 969 F.2d 1392 (2d Cir.1992). On July 20, 1999, the Court dismissed, without prejudice, the civil action, Castro and Ansueto v. United States, CV-99-1594 (CPS), due to the commencement of the forfeiture action. On September 9, 1999, Magistrate Judge Gold stayed discovery in this action pending the outcome of the motions presently before the Court.
Claimants move to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) or in the alternative for summary judgment pursuant to Federal Rule of Civil Procedure 56(c).2 If material outside the pleadings is considered, a motion under Rule 12(b)(6) may be considered a motion for summary judgment. See Federal Rule of Civil Procedure 12(b)(6); Sellers v. M.C. Floor Crafters, Inc., 842 F.2d 639, 642 (2d Cir.1988). When deciding whether summary judgment is appropriate, "[t]he essential inquiry is whether the ... [parties] ... should reasonably have recognized the possibility that the motion might be converted into one for summary judgment or [were] taken by surprise and deprived of a reasonable opportunity to meet facts outside the pleadings." In Re G. & A. Books, Inc., 770 F.2d 288, 295 (2d Cir.1985). In this case, both parties have proceeded as though this were a motion for summary judgment. They have submitted materials outside the scope of the pleadings, including a statement of undisputed material facts pursuant to Local Rule 56.1. As a result, this motion is appropriately treated as one for summary judgment.
Federal Rule of Civil Procedure 56(c) provides that summary judgment must be granted if there is no genuine issue as to any material fact and if the moving party is entitled to judgment as a matter of law. The moving party has the burden of demonstrating the absence of any disputed material facts, and the court must resolve all ambiguities and draw all inferences in favor of the party against whom summary judgment is sought. See Thompson v. Gjivoje, 896 F.2d 716, 720 (2d Cir.1990).
The showing needed on summary judgment reflects the burden of proof in the underlying action. The court must consider "the actual quantum and quality of proof" demanded by the underlying cause of action and must consider which party must present such proof. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Therefore, where the ultimate burden of proof is on the nonmoving party,...
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