US v. South Side Finance, Inc.

• Citation: 755 F. Supp. 791
• Decision Date: 29 January 1991
• Docket Number: No. 90 C 6203.,90 C 6203.
• Parties: UNITED STATES of America, Plaintiff, v. SOUTH SIDE FINANCE, INC., also known as South Side Credit, Inc., and All Assets Thereof, Including, But Not Limited to: 6801-05 South Western Avenue, Chicago, Illinois, All Bank Accounts, Including Checking Accounts 0056962 and 0070869 at the Marquette National Bank, the Contents of All Safe Deposit Boxes, Including Box 2786 and 3254 at the Marquette National Bank, All Motor Vehicles and Equipment, A Condominium at 11110 South 84th Avenue, Unit 3B, Palos Hills, Illinois, and $107,000.00 in United States Currency, Defendants.
• Court: U.S. District Court — Northern District of Illinois

755 F. Supp. 791

UNITED STATES of America, Plaintiff, v. SOUTH SIDE FINANCE, INC., also known as South Side Credit, Inc., and All Assets Thereof, Including, But Not Limited to: 6801-05 South Western Avenue, Chicago, Illinois, All Bank Accounts, Including Checking Accounts 0056962 and 0070869 at the Marquette National Bank, the Contents of All Safe Deposit Boxes, Including Box 2786 and 3254 at the Marquette National Bank, All Motor Vehicles and Equipment, A Condominium at 11110 South 84th Avenue, Unit 3B, Palos Hills, Illinois, and $107,000.00 in United States Currency, Defendants.

No. 90 C 6203.

United States District Court, N.D. Illinois, E.D.

January 29, 1991.

COPYRIGHT MATERIAL OMITTED

Fred Foreman, U.S. Atty., Craig A. Oswald, Asst. U.S. Atty., Chicago, Ill., for plaintiff.

Edward M. Genson, Marc W. Martin, Genson, Steinback & Gillespie, Chicago, Ill., for defendants.

AMENDED MEMORANDUM OPINION AND ORDER

CONLON, District Judge.

In this civil forfeiture action, the government seeks forfeiture of the defendant property South Side Finance, Inc. ("South Side Finance") and all of its assets, a condominium in Palos Hills, Illinois, and $107,000 in United States currency, pursuant to 21 U.S.C. § 881 and 18 U.S.C. § 981. Claimants Mohammed Bustami, Fakher Bustami, Mustafa Bustami, Kamal Bustami, and Zainab Bustami (collectively, "the claimants") move to dismiss the complaint on several grounds.

BACKGROUND

According to the complaint, South Side Finance is a used car dealership located on Chicago's south side.¹ Mustafa Bustami is South Side Finance's sole stockholder. According to two government confidential informants, South Side Finance operates as a cocaine supplier. One of the informants reported to Kevin Moss, a special agent with the Internal Revenue Service ("IRS"), that on several occasions during 1988, he delivered cash in excess of $100,000 to Mustafa Bustami at South Side Finance in exchange for more than six kilograms of cocaine. Complaint ¶ 8; affidavit of Kevin Moss, attached as exhibit A to government's first amended verified complaint ("Moss aff.") ¶ 7. After giving the money to Mustafa Bustami, the informant received the cocaine from an individual driving a vehicle bearing dealer license plates. Moss aff. ¶ 8. On one occasion, the informant received cocaine directly from Mustafa Bustami while in the South Side Finance office. Id.

According to both confidential informants, the cocaine dealers for whom they worked purchased cars from South Side Finance with cash. Complaint ¶ 9. Telephone records from June through August 1990 show four calls from South Side Finance to one of the cocaine dealer's pager, and five additional calls to his residences. Id. Drug Enforcement Administration ("DEA") agents established other contacts between South Side Finance and a cocaine supplier through two additional confidential informants. Id. at ¶ 10. Telephone records from February through September 1990 evidence 80 calls from South Side Finance to this cocaine supplier's pager, place of business, and residences. Moss aff. ¶ 12.

From August through October 1990, law enforcement agents conducted surveillance of Mustafa and Mohammed Bustami at South Side Finance and at other locations. According to the complaint,

The surveillance revealed a pattern of suspicious activity which includes meetings with convicted drug dealers, constant activity at the car lot with few cars being driven or sold, and the transporting of black canvas gym bags by Mustafa and Mohammed Bustami to and from South Side Finance. Mustafa and Mohammed Bustami have been repeatedly seen carrying the black canvas gym bags between the office of South Side Finance and the trunks of cars which they are driving. The Bustamis then drive the cars containing the black canvas gym bags to several residences and other locations in the area.

Complaint ¶ 11.

On August 6, 1990, the Marquette National Bank alerted IRS agents to a series of financial transactions conducted by South Side Finance. Id. at ¶ 12. Bank records for 1989 and 1990 reveal 354 separate deposits of amounts between $9,000 and $9,999, just below the $10,000 limit needed before a Currency Transaction Report is required by law. In addition, numerous deposits just below the $10,000 limit were made on the same day at different branches of the same bank. Id.; Moss aff. ¶¶ 14-15. On October 22, 1990, three cash deposits made by South Side Finance to the Marquette National Bank were tested under controlled conditions by narcotics trained dogs. Complaint ¶ 13. The dogs reacted positively to all three cash deposits, indicating the presence of narcotics residue or odor on the money. Id.

Finally, on October 25, 1990, a search warrant was executed at a condominium located in Palos Hills, Illinois. The warrant was based on surveillance establishing that the Bustamis transported black canvas gym bags between South Side Finance and the condominium. Id. at ¶ 16, Count IV. During the search, agents recovered three packages of United States currency, and "traces of a white powdered substance believed to be cocaine at various locations in the condominium." Id. at ¶ 17.

DISCUSSION

On a motion to dismiss, the court is not required to accept the plaintiff's legal conclusions. Capalbo v. PaineWebber, Inc., 694 F.Supp. 1315, 1318 (N.D.Ill.1988). Dismissal is proper if it appears beyond doubt that the government can prove no set of facts in support of its claim that would entitle it to the relief requested. Illinois Health Care Ass'n v. Illinois Dep't of Public Health, 879 F.2d 286, 288 (7th Cir.1989), citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957). In addition, if the complaint fails to allege a necessary element required to obtain relief, dismissal is in order. R.J.R. Service, Inc. v. Aetna Cas. and Sur. Co., 895 F.2d 279, 281 (7th Cir. 1989). The claimants have the burden of establishing the legal insufficiency of the complaint. Yeksigian v. Nappi, 900 F.2d 101, 104-05 (7th Cir.1990).

I. Adequacy of complaint

Ordinarily, the degree of specificity required of a civil complaint is governed by the liberal notice pleading standards of the Federal Rules of Civil Procedure. Fed.R. Civ.P. 8; Strauss v. City of Chicago, 760 F.2d 765, 767 (7th Cir.1985). However, civil forfeiture complaints are in rem and are governed by 28 U.S.C., Supplemental Rules for Certain Admiralty and Maritime Claims ("Supplemental Rules"). 21 U.S.C. § 881(b). The Supplemental Rules are part of the Federal Rules of Civil Procedure. Under Supplemental Rule E(2)(a),

In actions to which this rule is applicable the complaint shall state the circumstances from which the claim arises with such particularity that the defendant or claimant will be able, without moving for a more definite statement, to commence an investigation of the facts and to frame a responsive pleading.

The government's forfeiture action is based on 21 U.S.C. § 881(a)(7), authorizing forfeiture of property used to facilitate federal narcotics violations, and 18 U.S.C. § 981(a)(1)(A), authorizing forfeiture of property involved in prohibited financial transactions. In order to satisfy the pleading requirements of Supplemental Rule E(2)(a), the government need only allege facts tending to support the statutory forfeiture requirements. United States v. A Parcel of Real Property Commonly Known As: 3400-3410 West 16th Street, Chicago, Illinois, 636 F.Supp. 142, 146 (N.D.Ill.1986). The allegations must set forth a reasonable basis for believing that the property is subject to forfeiture. Id.

The authorities relied upon by the claimants are clearly distinguishable from the present case. For example, in United States v. Pole No. 3172, Hopkinton, 852 F.2d 636, 638-39 (1988), the court dismissed the government's complaint, finding that it merely described the property, recited the statutory language, and concluded that the property was forfeitable. Likewise, in United States v. $38,000.00 in United States Currency, 816 F.2d 1538, 1547-1549 (11th Cir.1987), the court dismissed the complaint, concluding that it was completely devoid of factual support for the government's allegations, and contained "not even a whiff of evidence to suggest that the currency is in any way linked to the exchange of a controlled substance." In United States v. $39,000 in Canadian Currency, 801 F.2d 1210 (10th Cir.1986), the government brought civil forfeiture proceedings against $39,000 in Canadian currency and two cars. Regarding the currency, the court held that the complaint failed to assert any facts to support a reasonable inference that the money was involved in a drug transaction. $39,000, 801 F.2d at 1220. "It specifies no date or location or any purported or intended exchange, no specific type or quantity of controlled substance, and no identified participant." Id. As to the cars, the complaint contained only vague, incomplete, and disjointed accusations; the court concluded that it was impossible for the claimant to file a meaningful response or conduct a thorough investigation. Id. The claimants' remaining authorities, United States v. Certain Real Property Located at 2323 Charms Road, Milford Township, 726 F.Supp. 164 (E.D.Mich.1989), and United States v. Banco Cafetero Intern., 608 F.Supp. 1394 (S.D.N.Y.1985), also involve complaints that were dismissed because they were wholly devoid of factual support and specificity.

In this case, the government's complaint satisfies the pleading requirements of Supplemental Rule E(2). The complaint contains specific information about the date and location of drug transactions and the amount of money and cocaine exchanged. The complaint identifies the participants and their connection to the property sought to be forfeited. The complaint describes in sufficient detail the illegal bank transactions that were allegedly accomplished through the use of the defendant property. Finally, Agent Moss' affidavit, attached...