US v. All Funds Presently on Deposit, No. CV-92-5310.
| Court | United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York) |
| Citation | 832 F. Supp. 542 |
| Decision Date | 31 August 1993 |
| Parties | UNITED STATES of America, Plaintiff, v. ALL FUNDS PRESENTLY ON DEPOSIT OR ATTEMPTED TO BE DEPOSITED IN ANY ACCOUNTS MAINTAINED AT AMERICAN EXPRESS BANK, American Express Bank, Ltd., Citibank International, Citibank, N.A., Delta National Bank, and Capitol Bank in the Names of Cambitur, S.A., Casa de Cambios, Cambidex, Multicambio, S.A., Michel Duchamp, JCJ, Inc., and all Related Entities and Individuals (Collectively Referred to as the Claimants), Including, but not Limited to, American Express Bank Account No. 00800045, American Express Bank, Ltd. Account No. XXXXXXXXX, Citibank N.A. Account No. 36964602, Citibank, N.A. Account No. 36994895, Delta National Bank Account No. 602187, and Capitol Bank Account No. XXXXXXXXX, and all Property Traceable Thereto, Defendants. |
| Docket Number | No. CV-92-5310. |
832 F. Supp. 542
UNITED STATES of America, Plaintiff,
v.
ALL FUNDS PRESENTLY ON DEPOSIT OR ATTEMPTED TO BE DEPOSITED IN ANY ACCOUNTS MAINTAINED AT AMERICAN EXPRESS BANK, American Express Bank, Ltd., Citibank International, Citibank, N.A., Delta National Bank, and Capitol Bank in the Names of Cambitur, S.A., Casa de Cambios, Cambidex, Multicambio, S.A., Michel Duchamp, JCJ, Inc., and all Related Entities and Individuals (Collectively Referred to as the Claimants), Including,
No. CV-92-5310.
United States District Court, E.D. New York.
August 31, 1993.
Alan S. Ross, Robbins, Tunkey, Ross, Amsel & Raben, Miami, FL, for defendant Casa de Cambios, Cambidex.
Mario Malerba, Malerba, Carbone & LaSale, Kew Gardens, NY, for defendant Cambitur.
MEMORANDUM AND ORDER
GLASSER, District Judge:
On November 12, 1992, the United States commenced this action to seize and forfeit monies on deposit at various designated bank accounts and all property traceable thereto, pursuant to 18 U.S.C. §§ 981, 984, 1956 and 1957 and 21 U.S.C. § 841 et seq. and 881(a)(6). On the same day that the government filed its verified complaint in rem, the Clerk of this Court issued a warrant of arrest, pursuant to Rule C(3) of the Supplemental Rules for Certain Admiralty and Maritime Claims (the "Supplemental Rules"), for the seizure of the defendant funds and all property traceable thereto. Subsequent amendments to the complaint allege violations of 31 U.S.C. §§ 5313 and 5324.
Among the accounts that the government seized were the following:
American Express Bank accounts numbered 00800045 and XXXXXXXXX, containing a total of approximately $1,562,994.42, both of which were held by the Bank in the name of Cambitur, S.A. ("Cambitur");
Citibank, N.A. account numbered 36964602 containing approximately $1,200,000, held in the name of Casa de Cambios, Cambidex ("Cambidex").1
The United States alleges that the funds contained in these accounts are proceeds traceable to the sale of narcotics, have been used to facilitate the laundering of narcotics proceeds, and were obtained in violation of various reporting requirements. Claimants Cambitur and Cambidex now move this court for a grant of summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure.2 For the reasons described below,
FACTS
I. The Herrera Narcotics Connection
The original impetus for the government's seizure of the funds in this action appears to be evidence uncovered during a criminal investigation of Helmer Herrera and specifically through a search of the residence of an individual named Jesus Linier Morales Maya, a.k.a. Remendon ("Remendon"), a known narcotics trafficker. Helmer Herrera controls an organization (the "Herrera Organization") which, as part of the cocaine cartel headquartered in Cali, Columbia, engages in narcotics trafficking and money laundering activities. (Declarations of Special Agent Juan Arrivillaga at ¶ 1). The Herrera Organization has been involved in distributing cocaine and laundering the proceeds of its narcotics trade in the New York City area. (Arrivillaga Decls. at ¶ 2).
The government contends that several confidential sources of information, previously proven to be reliable, have described the money laundering methods used by the Herrera Organization. (Arrivillaga Decls. at ¶ 3). Specifically, the Organization uses individuals called "smurfs" to purchase money orders in a manner calculated to avoid the threshold reporting requirement of $10,000 and/or the threshold identification requirement of $3,000. The smurfs are told to purchase large volumes of small, even denominations of money orders which are then smuggled out of the United States to foreign countries, one of which is Ecuador. (Arrivillaga Decls. at ¶¶ 3-4). In Ecuador, individuals working for the Herrera Organization present the money orders to banks or money exchange houses to be cashed; the proceeds are allegedly given to representatives of the Herrera Organization in Ecuador or Columbia. (Arrivillaga Decls. at ¶ 4). The money exchange houses profit from the purchase of money orders through a favorable exchange rate for Ecuadoran currency, and they maintain American bank accounts as repositories for the dollars that they use in exchange for Ecuadoran sucres.
On or about March 26, 1991, law enforcement officers executed a search of the premises located at 1135-18 94th Street, Queens, New York, where Remendon then resided (the "Remendon premises"). (Arrivillaga Decls. at ¶ 5). During this search, the government recovered approximately two million dollars ($2,000,000) in United States currency and approximately six million dollars ($6,000,000) in the form of carbon copy receipts of blank money orders (the "Remendon money orders"). (Arrivillaga Decls. at ¶ 6). The Remendon money orders were in small, even denominations, and therefore appeared to the government to have been purchased in a manner calculated to avoid the $3,000 reporting requirement of 31 U.S.C. § 5325 and the $10,000 reporting requirement of 31 U.S.C. § 5313. (Arrivillaga Decl., dated May 7, 1993, at ¶ 10). Remendon subsequently pled guilty before Judge Raggi to violations of 31 U.S.C. § 5316(b) in connection with the Herrera Organization's money laundering activities; he is currently incarcerated and serving his eight-year sentence. (Arrivillaga Decls. at ¶ 7).
At Remendon's premises, law enforcement officers also discovered documents and written records containing several specific names in connection with codes and substantial
As further corroboration of the money laundering scheme, the government points to the arrest of Sandra Lorena Gomez in late June of 1991 at John F. Kennedy International Airport in Queens, New York. At the time of Gomez's arrest for violations of 31 U.S.C. §§ 5313 et seq., law enforcement officers discovered approximately $250,000 in the form of small, even denominations of money orders (the "Gomez money orders") hidden in the false bottom of Gomez's suitcase. (Arrivillaga Decl., dated May 7, 1993, at ¶ 17; Arrivillaga Decl., dated June 17, 1993, at ¶ 14). Gomez was attempting to transport the suitcase from the United States to Ecuador. (Arrivillaga Decl., dated May 7, 1993, at ¶ 17; Arrivillaga Decl., dated June 17, 1993, at ¶ 15). The Gomez money orders bore similarities to the Remendon money orders: both sets were blank; both sets were in even hundred dollar denominations; and both had been purchased at substantially the same facilities. (Arrivillaga Decl., dated May 7, 1993, at ¶ 19; Arrivillaga Decl., dated June 17, 1993, at ¶ 16). According to Special Agent Arrivillaga, the government subsequently learned that Gomez was working for the Herrera Organization and was assisting in their money laundering activities by carrying money orders to Ecuador. (Arrivillaga Decl., dated May 7, 1993, at ¶ 18). Her arrest also confirms prior information that the Herrera organization used small appliances and luggage to smuggle money orders and cash outside the United States. (Arrivillaga Decl., dated May 7, 1993, at ¶ 16; Arrivillaga Decl., dated June 17, 1993, at ¶ 13).
II. Tracing the Money Orders to the Defendant Accounts
After recovering the carbon copy receipts of the Remendon money orders in 1991, law enforcement officers discovered that approximately $1,250,000 of these money orders had been deposited into the Cambidex account at Citibank, a fact that Cambidex does not dispute. (Arrivillaga Decl., dated May 7, 1993, at ¶ 8; Cambidex 3(g) Statement at ¶ 2). Similarly, approximately $639,000 of the Remendon money orders had been deposited in the Cambitur account at American Express Bank in New York City. (Arrivillaga Decl., dated May 28, 1993, at ¶ 18).
All of the Remendon money orders were purchased at various post offices, banks, and other institutions licensed to sell money orders in the metropolitan New York area. (Arrivillaga Decls., dated May 7 & 28, 1993 at ¶¶ 9-10; Arrivillaga Decl., dated June 17, 1993 at ¶¶ 9, 24). In the majority of cases, the money orders were purchased in small, even denominations and in sequential series the aggregate value of which fell just below the $3,000 identification requirement and/or the $10,000 reporting requirement of Title 31. (Arrivillaga Decls. at ¶¶ 8-10; Callery Decl., dated May 7, 1993, at ¶¶ 9-11; Callery Decl., dated May 28, 1993, at ¶¶ 11-12; Callery Decl., dated June 17, 1993, at ¶¶ 10-11). None of the Remendon money orders which were deposited into the accounts of Cambitur or Cambidex listed any street address for the alleged remitters or purchasers; a few of those orders...
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