United States v. White

Decision Date07 August 2014
Docket NumberCRIMINAL NO. PWG-13-0436
PartiesUNITED STATES OF AMERICA v. SAUNDRA L. WHITE, Defendant.
CourtUnited States District Courts. 4th Circuit. United States District Court (Maryland)

UNITED STATES OF AMERICA
v.
SAUNDRA L. WHITE, Defendant.

CRIMINAL NO. PWG-13-0436

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND Southern Division

August 7, 2014


MEMORANDUM OPINION

Defendant Saundra White brings this Motion for Hearing and Prompt Return of Seized Property, pursuant to either 18 U.S.C. §§ 981-83 or Fed R. Crim. P. 41(g). Defendant, purportedly joined by her non-party daughter, Britney White, seeks the return of three vehicles seized during the search of Defendant's home and requests an evidentiary hearing on this motion.1 The Government, which currently is holding the vehicles pending trial as assets allegedly subject to criminal forfeiture, opposes both the motion and the request for a hearing, arguing that the motion can be resolved on the papers because the Government has statutory authority to hold the vehicles pre-trial. The Government further argues that Britney White does not have standing in this case. Because the Government has failed to obtain an appropriate court order or warrant authorizing its continued pretrial possession of the automobiles despite the existence of sufficient grounds for doing so, Defendant's motion will be granted unless the Government perfects its seizure of the vehicles within twenty-one days.

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I. Background

On May 15, 2013, the United States filed a Criminal Complaint and Application for Search and Seizure Warrants against Defendant Saundra White, alleging that she had committed Wire Fraud and Aggravated Identity Theft as defined in 18 U.S.C. §§ 1343 & 1028A. Crim. Compl., ECF No. 1. Magistrate Judge Jillyn K. Schulze issued an arrest warrant for White that same day, Arrest Warrant, ECF No. 3, and Defendant was arrested and placed on pretrial release two days later, Order Setting Conditions of Release, ECF No. 8; Arrest Warrant Returned Executed, ECF No. 9. At the time of Saundra White's arrest, the Government also executed a search warrant for her residence and office. Gov't Opp'n 1.2 During the search of Defendant's residence, the Government found and seized three vehicles (the "Vehicles") that are the subject of this motion: a 2008 Ford Escape (the "Ford"), a 2010 Lexus RX450H (the "Lexus"), and a 2011 Volvo C70 (the "Volvo"). Id. at 2.

Defendant was indicted for wire fraud and aggravated identity theft on August 19, 2013. Indictment, ECF No. 12. The Indictment included forfeiture allegations, pursuant to 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c), specifically listing the Vehicles3 as property constituting or traceable to the proceeds of the offense and giving notice that Defendant would forfeit the listed property if convicted of the wire fraud charge. Indictment 5. Between Defendant's indictment on August 19, 2013 and the filing of this motion on M arch 31, 2014, neither party appears to have taken any further steps to perfect possession of or seek the return of the Vehicles.

Saundra White's motion seeks the release and return of the Vehicles pre-trial. Def.'s

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Mot. 1. Signed by defense counsel as well as by separate counsel representing Defendant's non-party daughter, Britney White, the motion argues that the Vehicles must be released because the Government has not commenced an administrative forfeiture against them within the time period required by 18 U.S.C. § 983. Id. Additionally, the motion asserts that the Ford and the Lexus are owned by Britney White, and therefore they are not subject to forfeiture in this case. Id. Saundra White requests a prompt evidentiary hearing on this matter prior to the pre-trial motions hearing currently scheduled for September 8, 2014. Id.; Request for Prompt Hr'g 3; Paperless Order Confirming Mot. Hr'g, ECF No. 31.

II. Applicable Forfeiture Law

A. Civil and Criminal Forfeitures

When the United States seizes property it believes constitutes or is derived from the proceeds of criminal activity, that property may be subject to forfeiture under several statutory schemes and by several legal mechanisms. Among them is the Civil Asset Forfeiture Reform Act ("CAFRA"), Pub. L. 160-185 (2000), codified at 18 U.S.C. § 981 et seq., which authorizes and regulates both administrative and civil forfeitures. 18 U.S.C. §§ 981, 983. If the United States seeks administrative forfeiture, which is a non-judicial proceeding, CAFRA requires it to send notice to any interested parties within sixty days of the seizure of forfeit property, or ninety days if the property was turned over by State or local law enforcement. 18 U.S.C. § 983(a)(1)(A). That notice requirement allows a party to file a claim with the administrative agency demanding judicial resolution of the forfeiture instead. 18 U.S.C. § 983(a)(2)(A); United States v. Martin, 460 F. Supp 2d 669, 673 (D. Md. 2006) ("Martin I"). If such a claim is filed, the United States must file a judicial action to proceed with judicial forfeiture. 18 U.S.C. § 983(a)(3).

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One such judicial forfeiture action is an in rem civil forfeiture claim against the property under a civil forfeiture statute such as 18 U.S.C. § 981. An in rem forfeiture is brought directly against the property itself, and, if the Government succeeds in its claim, it takes possession of the entire property regardless of any interests claimed by third parties. See United States v. Cherry, 330 F.3d 658, 669 n.16 (4th Cir. 2003). An in rem claim does not depend on the culpability of the property owner, so there is no threshold liability or guilt determination to be made prior to forfeiture. See id. Because a third-party can lose her interest in a property that is forfeited in rem, the law allows for her to intervene and assert her interest in the property. 18 U.S.C. § 983(a)(2)(A); see also id.

A civil in rem claim is not the only option the Government has under CAFRA; it also may include forfeiture allegations in an indictment to begin a criminal forfeiture proceeding. 18 U.S.C. § 983(a)(3)(B)(ii)(I). Congress created criminal forfeiture as an alternative to civil forfeiture to avoid having to bring a separate civil proceeding with or after every criminal case. United States v. McHan, 345 F.3d 262, 267 (4th Cir. 2003). While several statutes provide directly for criminal forfeiture when a specific crime is committed, see, e.g., 18 U.S.C. § 982; 18 U.S.C. § 1963; 21 U.S.C § 853, the "'bridge' or 'gap-filler' between civil and criminal forfeiture" is 28 U.S.C. § 2461. United States v. Blackman, 746 F.3d 137, 143 (4th Cir. 2014) (quoting United States v. Vampire Nation, 451 F.3d 189, 199 (3rd Cir. 2006)). 28 U.S.C. § 2461(c) provides for the criminal forfeiture of any property that otherwise is subject to civil forfeiture if it is related to a criminal charge with which the defendant has been charged.

Criminal forfeiture serves a different purpose than civil forfeiture. Criminal forfeiture, although "not a separate conviction," nonetheless "constitutes part of the sentence, in that it is utilized to enhance the punishment of a defendant who has already been convicted of a particular

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offense." Cherry, 330 F.3d at 669. Consequently, criminal forfeiture is an in personam penalty against the defendant, id. at 668 n.16, and, if the defendant is convicted, the district court must order the forfeiture of any property derived from or traceable to the offense, Blackman, 746 F.3d at 143. Because a criminal forfeiture is in personam against the defendant, and not in rem against the property, a third party may not intervene in the criminal proceedings to assert any rights to the property.

The different types of forfeiture are governed by different rules. While civil forfeiture largely is governed by CAFRA, criminal forfeiture, whether sought under 28 U.S.C. § 2461 or under 18 U.S.C. § 982, is governed by the rules outlined in 21 U.S.C. § 853. Pursuant to 21 U.S.C § 853(e)(1)(A), the United States may apply for an order restraining or otherwise protecting property subjected to forfeiture in an indictment. This is an ex parte application, see United States v. Monsanto, 491 U.S. 600, 603-04 (1989), which requires the Government show probable cause (1) that the defendant committed the crime, and (2) that the property has the requisite connection to the crime, Kaley v. United States, --- U.S. ---, 134 S. Ct. 1090, 1094-95 (2014). The only significant exception to a pre-trial asset restraining order is when the defendant needs access to seized assets to hire counsel of his choice and can show that the property in question is untainted by the crime alleged. United States v. Farmer, 156 F.3d 784, 805-06 (4th Cir. 2001).

A final distinction also is significant. Civil forfeiture, whether sought under 18 U.S.C. § 981 or another civil forfeiture statute, is permissive; the Government has discretion whether or not to bring an in rem proceeding against property, and a criminal conviction does not control a separate in rem proceeding. But a court is required to enter a preliminary criminal forfeiture order at the time of sentencing if the indictment alleges the property is subject to forfeiture, the

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Defendant is convicted of the associated offense, and the Government establishes the requisite nexus between the property and the offense. Fed. R. Crim. P. 32.2(a), (b)(1); see also 18 U.S.C. § 981(a)(1)(D)-(E) (defining the property forfeitable in a wire fraud case as property which represents or is traceable to any property obtained, directly or indirectly, by way of the offense). A court...

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