United States v. $240,431 in U.S. Currency
| Decision Date | 11 March 2020 |
| Docket Number | Civil Action No. 19-12834 |
| Parties | UNITED STATES OF AMERICA, Plaintiff, v. $240,431 IN UNITED STATES CURRENCY, Defendant in Rem. |
| Court | U.S. District Court — District of New Jersey |
NOT FOR PUBLICATION
THIS MATTER comes before the Court on Plaintiff United States of America's (the "Government") motion for the entry of default judgment and final order of forfeiture of a total of $240,431 in United States currency (the "Defendant Property") pursuant to Federal Rule of Civil Procedure 55(b). ECF No. 5. For the reasons set forth herein, the Government's Motion is GRANTED.
This civil in rem asset forfeiture action arises from the Government's investigation into a Peruvian and Colombia drug trafficking organization ("DTO") operating in Newark, New Jersey and other locations across the United States and abroad. Compl. ¶ 6, ECF No. 1. During the DTO investigation, the Federal Bureau of Investigation ("FBI") developed a confidential source ("CS") who provided substantial assistance to the Government against subjects associated with the DTO. Id. ¶ 7. In April 2013, the CS learned that a Newark-based DTO (the "Newark DTO") operated by Danny Estevez ("Estevez") and Christopher DaSilva ("DaSilva") sought to purchase twenty kilograms of cocaine for a price of $500,000. Id. ¶¶ 8-10.
At the FBI's direction, the CS conducted a series of recorded meetings and telephone calls with Estevez and DaSilva, among other DTO members, related to the Newark DTO's prospective cocaine purchase. Id. ¶ 8. As part of a sting operation, through those meetings and conversations, the CS negotiated with Estevez and DaSilva to arrange a cocaine transaction between New Jersey and Florida—the purported location of the CS's cocaine supply. See id. ¶¶ 10-11. On or about April 23, 2013, the CS showed Estevez and DaSilva a sample of cocaine the Newark DTO would be able to buy in Florida and told the men they needed to pay half of the money ($250,000) in New Jersey before the cocaine would be delivered. Id. ¶ 11. After some back-and-forth about the money, on April 24, 2013, the CS was taken to a money and cocaine "stash house" in Hillside, New Jersey, where Estevez and DaSilva had approximately $250,000 in United States currency on a table. See id. ¶ 13. After it was counted, Estevez and DaSilva placed the money plastic bags and then heat-sealed bags. Id. The CS was then told that Estevez and DaSilva would personally transport the money from New Jersey to Miami, Florida to meet the CS's associates who had twenty kilograms of cocaine to give in exchange. See id. ¶ 14.
On or about April 26, 2013, in coordination with the FBI, the Florida Highway Patrol ("FHP") conducted a traffic stop of a black 2012 GMC crew cab pickup truck, with a license plate number belonging to Estevez, based on a window-tinting violation. Id. ¶ 15. Other officers arrived at the scene to provide backup. Id. ¶ 16. The officer conducting the stop observed three men in the car: the driver, a front-seat passenger, and a back-seat passenger. See id. ¶¶ 15-17. From the driver's licenses the driver and front-seat passenger provided, the officer identified those individuals as Estevez and DaSilva, respectively. See id. ¶ 16. After giving his driver's license to the officer, Estevez reached between the vehicle's seats, and the officer asked him, DaSilva, and the backseat passenger to exit the vehicle. Id. The occupants provided conflicting statementsabout the purpose of their travel and its planning. See id. ¶¶ 17, 21. Accordingly, the officer deployed a drug-detection canine to conduct an exterior inspection of the vehicle, and the canine positively alerted to the passenger side rear window. See id.
The police thereafter searched the vehicle. See id. ¶ 18. Inside, they found several cellular phones, a radar detector, a black plastic bag containing a large amount of money in a vacuum-sealed bag, two other vacuum-sealed packages with large amounts of money, and two Glock semi-automatic pistols. Id. Two of the packages were labeled "100,000" in black ink. Id. An official count determined that the currency totaled $240,431. Id. ¶ 20.
After the search, the officers brought Estevez, DaSilva, and the remaining passenger to the FHP station for further interview. Id. ¶ 19. Estevez claimed he won the currency gambling at casinos and that he was headed to Miami to party. Id. The other two men claimed no knowledge of the money and each signed an FHP Waiver of Claim to Assets Form to that effect. Id. Based on the men's inconsistent statements to the officers during the traffic stop, the drug-detection canine's positive signal to the vehicle, and the manner in which the currency was packaged in the vehicle, the FHP seized the defendant currency. Id. ¶ 21. All three individuals were released later that same day. Id. Estevez thereafter contacted the CS, explaining the details of the traffic stop, including that police asked questions, had a canine go around the vehicle, searched the vehicle, and found and seized the money. Id. ¶ 22. He also told the CS that he was driving back to New Jersey and could talk more once he returned. Id.
On April 30, 2013, the FHP transferred custody of the seized currency to the FBI, and the FBI initiated administrative forfeiture proceedings against it. Id. ¶ 23-24. On August 29, 2013, Estevez filed a claim of ownership with the FBI contesting the forfeiture. Id. Since then, this Court has granted the Government's requests for ex parte extensions for commencing a judicialforfeiture proceeding based on the Government's large-scale criminal investigation into the DTO, which occurred between November 2013 and November 2018. Id. ¶ 25.
On May 23, 2019, the Government commenced this civil action for the forfeiture of the Defendant Property by timely filing a Verified Complaint for Forfeiture in Rem. ECF No. 1; see Compl. ¶ 25. That same day, a Warrant for Arrest in Rem issued for the Defendant Property (the "Arrest Warrant."). ECF No. 2. On May 28, 2019, the Government filed a Notice of Complaint for Forfeiture in Rem with this Court (the "Notice of Complaint"). ECF No. 3. The Notice of Complaint identified the Defendant Property and stated that any person who asserts an interest in the Defendant Property must file a verified claim with the Clerk of the Court conforming to the requirements of Rule G of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions (the "Supplemental Rules"). See id. The Notice of Complaint also indicated that failure to follow the requirements set forth therein could result in default judgment, forfeiture, or other relief demanded in the Verified Complaint. Id. at 3.
The Government sent copies of the Verified Complaint and the Notice of Complaint to Michael A. Robbins, Esq., in his capacity as counsel for Estevez, and Estevez, in his individual capacity. Gaeta Decl. ¶ 5, ECF No. 5.1. It also posted notice of the instant forfeiture action on its official website, http://www.forfeiture.gov, to alert potential claimants to the Defendant Property for thirty consecutive days after filing its Verified Complaint. Id. ¶ 7 & Ex. B. No claims or answers were filed in this action, no parties have appeared to contest the action date, and the time period to do so has expired. Id. ¶ 8. The Government requested the Clerk enter default on the Defendant Property on August 12, 2019, ECF No. 4, which the Clerk entered on March 5, 2020. On August 12, 2019, the Government filed the instant Motion for Default Judgment. ECF No. 5.
Under Federal Rule of Civil Procedure 55(b)(2), the Court may enter "default judgment against a properly served defendant who fails to file a timely responsive pleading." Chanel v. Gordashevsky, 558 F. Supp. 2d 532, 535 (D.N.J. 2008). While entering default judgment is within the Court's discretion, "entry of default judgment is disfavored as decisions on the merits are preferred." Animal Sci. Prods., Inc. v. China Nat'l Metals & Minerals Imp. & Exp. Corp., 596 F. Supp. 2d 842, 847 (D.N.J. 2008) (internal quotation marks and citation omitted). In deciding whether entry of default is warranted, the Court treats "the factual allegations in the complaint, other than those as to damages . . . as conceded by [the] defendant," DIRECTV, Inc. v. Pepe, 431 F.3d 162, 165 (3d Cir. 2005), and must decide whether such allegations "constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law." Chanel, 558 F. Supp. 2d at 535.
Several prerequisites must be met before entry of default is appropriate. First, the Court must determine whether it has jurisdiction over the action and the parties, Animal Sci. Prods., Inc., 596 F. Supp. 2d at 848, and whether the moving party properly served the defendant with notice of default, see E.A. Sween Co., Inc. v. Deli Express of Tenafly, LLC, 19 F. Supp. 3d 560, 567 (D.N.J. 2014). Next, the Court must assess whether the moving party has stated a sufficient cause of action and has proven damages. Chanel, 558 F. Supp. 2d at 536, 538. Finally, after finding that those prerequisites are met, the Court must consider three additional factors: (1) whether the party subject to default has a meritorious defense; (2) the prejudice suffered by the party seeking default judgment; and (3) the culpability of the party subject to default. Walker v. Pennsylvania, 580 F. App'x 75, 78 (3d Cir. 2014).
Pursuant to 21 U.S.C. § 881(a)(6), "[a]ll moneys, negotiable instruments, securities, or other things of value intended to be furnished by any person in exchange for a controlled substance" are subject to forfeiture by the United States. In addition to Rule 55's requirements, in rem forfeiture cases brought under Section 881(a)(6), like the instant matter, are governed by the...
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