United States v. $610, 210 In United States Currency
| Decision Date | 15 April 2022 |
| Docket Number | 21 Civ. 4854 (KPF) |
| Parties | UNITED STATES OF AMERICA, Plaintiff, v. $610, 210 IN UNITED STATES CURRENCY, Defendant-in-rem. |
| Court | U.S. District Court — Southern District of New York |
The United States of America (the “Government”) commenced this civil in rem forfeiture action pursuant to 21 U.S.C. § 881(a)(6), seeking to forfeit $610, 210 of funds seized from the apartment of Johnny De Los Santos (“Claimant”) as proceeds of narcotics trafficking. Despite receiving notice of the deadline to challenge the forfeiture, Claimant did not timely file a claim as to the funds, and on August 24, 2021, the Court entered a judgment of forfeiture in the Government's favor.
Claimant now moves to vacate the judgment of forfeiture pursuant to Federal Rule of Civil Procedure 60(b), on the basis that his former attorney's failure to file a timely claim for the seized currency was the product of excusable neglect. Relatedly, Claimant seeks the Court's leave to file a belated claim and answer to the Government's complaint. Because an attorney's mere inattention to a clear deadline does not constitute excusable neglect, the Court denies Claimant's motion.
BACKGROUND[1]
A. Claimant's Criminal Case
On or about October 16, 2020, Claimant Johnny De Los Santos, who has a prior felony conviction for a drug trafficking offense was involved in an altercation involving a firearm at a store in the Bronx, New York. (Compl. ¶¶ 5 8).[2] Following an NYPD investigation of the incident, on or about December 4, 2020, the Government swore out a Sealed Complaint before Magistrate Judge Katharine H. Parker, charging Claimant with being a felon in possession of a firearm. (Id. at ¶¶ 5-9). That same day, Judge Parker issued a warrant for Claimant's arrest. (Id. at ¶ 9).
Approximately three weeks later, on December 28, 2020, law enforcement officers arrived at Claimant's residence to execute the arrest warrant. (Compl. ¶ 10). Upon entering the apartment, the officers performed a protective sweep, which revealed multiple bricks of United States currency wrapped in cellophane plastic, totaling approximately $600, 000. (Id.). Also in plain view in the apartment was a bottle of “L427 Super Blu Industrial Grease, ” a substance known to be used by drug traffickers to coat packages to mask the scent of narcotics from drug sniffing dogs. (Id. at ¶¶ 12-13). Subsequent testing of the seized currency revealed cocaine residue. (Id. at ¶ 11).
The same day Claimant was arrested, law enforcement agents obtained a search and seizure warrant, signed by Magistrate Judge Sarah L. Cave, permitting them to search Claimant's apartment and seize any evidence of narcotics violations. (Compl. ¶ 15). While executing this warrant, the agents located an additional approximately $10, 000 of United States currency in a locked compartment behind a cabinet, as well as a bundle of a white substance containing heroin, a ledger containing entries consistent with narcotics trafficking, and a money counting device. (Id. at ¶¶ 16, 17).
Following his arrest, on February 25, 2021, a grand jury sitting in the Southern District of New York indicted Claimant for being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1). See United States v. De Los Santos, No. 21 Cr. 130 (PGG), Dkt. #7.[3] B. The Instant Forfeiture Action
On or about January 26, 2021, Claimant received a “Notice of Seizure and Information to Claimants - JF Form” from United States Customs and Border Protection (“CBP”), notifying him that the Government had initiated administrative proceedings to forfeit the currency seized from his apartment. (De Los Santos Aff. ¶ 2; Def. Ex. 1 (“JF Form”)). This form advised Claimant that, among other options, he could elect to have this forfeiture matter “referred to the U.S. Attorney for institution of judicial forfeiture proceedings[.]” (JF Form at 4).[4] With the help of Lorraine Belostock, his retained counsel at the Law Offices of Robert Tsigler, Claimant completed the paperwork indicating his decision to institute judicial forfeiture proceedings and mailed it to CBP on or about February 23, 2021. (Id. at 6-8; De Los Santos Aff. ¶ 4).
The Government commenced this forfeiture action on June 1, 2021, seeking forfeiture of the $610, 210 that was seized from Claimant's apartment. (Dkt. #1). By letter dated June 10, 2021, the U.S. Attorney's Office for the Southern District of New York sent Claimant notice that it had instituted a civil action seeking forfeiture in rem of the currency seized from his apartment, and that he had 35 days from the date of the letter - until July 15, 2021 - to file a claim to contest the forfeiture. (Def. Ex. 2 (“June 10 Notice”); De Los Santos Aff. ¶ 5). Thereafter, on or about June 21, 2021, Claimant met with Ms. Belostock to discuss the forfeiture notice, who assured him that she would “take care of it.” (De Los Santos Aff. ¶ 6; Caldarera Aff. ¶¶ 11, 15). Notwithstanding her assurances, Ms. Belostock neglected to file a notice of claim by the deadline set forth in the June 10 Notice. (Caldarera Aff. ¶ 16).
On or about July 23, 2021, Ms. Belostock resigned from the Tsigler firm. (Caldarera Aff. ¶ 13). Prior to her departure, Ms. Belostock had left attorneys at the firm with the impression that she had obtained the Government's verbal consent to extend the time to file a claim beyond that stated in the June 10 Notice. (Id. at ¶ 17). On July 26, 2021, a paralegal at the Tsigler firm emailed the Assistant United States Attorney assigned to Claimant's criminal and civil forfeiture matters to confirm the firm's understanding that the Government had consented to an extension of time for Claimant to file a claim for the assets at issue in this forfeiture matter. (Def. Ex. 3). Shortly thereafter, the Government responded that it had not, in fact, consented to such an extension. (Id.; Caldarera Aff. ¶ 17).
On August 20, 2021, the Government moved for entry of a judgment of forfeiture regarding the currency seized from Claimant's apartment. (Dkt. #6-7). The Court held a conference on August 24, 2021, at which Joseph Matthew Caldarera, another attorney at the Tsigler firm, appeared on behalf of Claimant and consented to the entry of a judgment of forfeiture. (Minute Entry for Aug. 24, 2021). Mr. Caldarera also indicated at this conference his intent to file a motion to vacate the judgment of forfeiture, along with a proposed claim and answer to the forfeiture complaint. (Id.). Following the conference, the Court set a briefing schedule for Claimant's anticipated motion and entered the Government's proposed judgment of forfeiture. (Dkt. #8).
On September 10, 2021, Claimant moved to vacate the judgment of forfeiture and simultaneously filed a proposed claim and Answer to the Complaint. (Dkt. #10).[5] The Government filed its opposition brief on October 1, 2021. (Dkt. #18). The briefing schedule permitted until October 8, 2021, for Claimant's reply brief, which has not been filed. Accordingly, the Court deems Claimant's motion to be fully briefed and ripe for consideration.
Claimant seeks to vacate the forfeiture order on grounds of “excusable neglect” pursuant to Federal Rule of Civil Procedure 60(b)(1), so that he may belatedly file both a claim for the subject res and an answer to the Complaint. (Claim. Br. 1). The Government's principal argument in opposition to Claimant's request is that vacatur of the judgment would be futile because Claimant has failed to demonstrate “good cause” necessary to extend the deadline to file a claim contained in the applicable rules. (Gov't Opp. 5, 8-11).
Shorn of the ability to file a claim, Claimant would lack statutory standing to challenge the forfeiture, regardless of whether the judgment is vacated. The Government further contends that even if Claimant could establish statutory standing, the balance of relevant factors weighs against vacatur of the judgment of forfeiture. (Id. at 11-14).
The Court first analyzes the Government's primary argument i.e., whether Claimant has demonstrated “good cause” to file an untimely claim. Despite finding that Claimant is not entitled to an extension of this deadline, the Court also addresses, for completeness, whether Claimant's circumstances warrant vacatur of the judgment of forfeiture. Here too, Claimant falls short.
The Supplemental Rules for Certain Admiralty or Maritime Claims and Asset Forfeiture Actions govern civil forfeiture actions. See United States v. Vazquez-Alvarez, 760 F.3d 193, 197 (2d Cir. 2014). Pursuant to Supplemental Federal Rule of Civil Procedure G, after commencing a civil forfeiture action, “[t]he government must send notice of the action and a copy of the complaint to any person who reasonably appears to be a potential claimant[.]” Fed.R.Civ.P. G(4)(b)(i). This notice must provide certain information, including, among other things, “the date when the notice is sent, ” “a deadline for filing a claim, at least 35 days after the notice is sent”; and “that an answer or motion under Rule 12 must be filed no later than 21 days after filing the claim[.]” Id., G(4)(b)(ii).
“In order to contest a governmental forfeiture action, claimants must have both standing under the statute or statutes governing their claims and standing under Article III of the Constitution as required for any action brought in federal court.” Vazquez-Alvarez, 760 F.3d at 197 (quoting United States v. Cambio Exacto, S.A., 166 F.3d 522, 526 (2d Cir. 1999)). Under Rule G(5), any “person who asserts an interest” in the property that is the subject of a forfeiture action “may contest the...
To continue reading
Request your trial