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U.S. v. $175

February 4, 1991

UNITED STATES OF AMERICA, PLAINTIFF,
v.
$175,918.00 IN UNITED STATES CURRENCY, DEFENDANT-IN-REM.



The opinion of the court was delivered by: Sprizzo, District Judge:

MEMORANDUM OPINION AND ORDER

The United States of America brings this forfeiture action pursuant to 21 U.S.C. § 881(a)(6) (1988) to forfeit monies that the government alleges were received through narcotics trafficking. Presently pending before the Court is the government's motion for summary judgment pursuant to Fed.R.Civ.P. 56. For the reasons that follow, the motion is granted in part and denied in part.

BACKGROUND

On September 8, 1988, Blas Monterrey, the claimant to the defendant-in-rem currency, was arrested following an investigation by the United States Drug Enforcement Administration ("DEA") into reports which indicated that he and his wife, Lazara Hernandez, were distributing multi-kilogram quantities of cocaine from an apartment located at 559 West 172nd Street in New York City. See Affidavit of Special Agent Cynthia Jovanelly at ¶¶ 5-6 ("Jovanelly Aff.").*fn1 The Complaint, which was verified by Agent Jovanelly and incorporated by reference into her affidavit, alleged that on September 6, 1988, Monterrey sold one-eighth of a kilogram of cocaine to an undercover agent and agreed to sell a full kilogram to the agent at a later time. See Complaint at ¶¶ 4-7 (annexed to Jovanelly Aff. at Ex. 1). Two days later, on September 8, 1988, the undercover agent returned to the apartment to complete the purchase of the kilogram of cocaine but was unable to do so because he was told that Monterrey was not there. See id. at ¶ 8.

After the undercover agent left the premises, a team of DEA agents, including Agent Jovanelly, executed a warrant for a search of the apartment and arrested Monterrey and Hernandez. The agents recovered approximately eight kilograms of cocaine, several weapons, narcotics related items including a scale and packaging materials, and the defendant-in-rem currency. See id. at ¶¶ 9-10; Jovanelly Aff. at ¶ 5 & Ex. 2. Agent Jovanelly further states in her affidavit that the currency was packaged in a manner consistent with funds seized in other narcotics investigations in which she has participated. See Jovanelly Aff. at ¶ 5.

At the time of his arrest, Monterrey was on probation for a previous state narcotics violation. See Jovanelly Aff. at ¶ 8. Moreover, following his arrest, Monterrey admitted to DEA agents that he was responsible for the drugs and money in the apartment and that he was involved in distributing cocaine for a Colombian cocaine distributing organization. See Jovanelly Aff. at ¶ 6 & Ex. 3.

Monterrey and Hernandez were indicted on state narcotics charges. On November 16, 1988, Monterrey pleaded guilty to those charges. He was sentenced to eight years-to-life imprisonment and is presently incarcerated. See id. at ¶ 7. His wife, Hernandez, also pleaded guilty on February 1, 1989 and was sentenced to four years-to-life imprisonment. See id.

The government commenced this forfeiture action on May 23, 1989, alleging that the defendant-in-rem currency was furnished or intended to be furnished in exchange for a controlled substance, constituted proceeds traceable to an exchange of a controlled substance and/or was intended to be used to facilitate a violation of title 21 of the United States Code and was therefore subject to forfeiture. See Complaint at ¶¶ 11-12; 21 U.S.C. § 881(a)(6) (1988). The Government mailed a notice that the action had been commenced and copies of the complaint to both Monterrey and Hernandez which advised them that they had the right to contest the forfeiture. See Declaration of AUSA Bart G. Van De Weghe at Ex. 1.

By letter dated June 6, 1989, Monterrey wrote to the Court requesting an extension of time to file a notice of claim on the ground that he was attempting to obtain counsel. The government objected to this request stating that Monterrey's defenses were meritless but failed to specify how it would be prejudiced by the request. See Letter of AUSA Van De Weghe to Blas Monterrey (June 14, 1988). Moreover, Monterrey's letter clearly stated that he intended to contest forfeiture of the funds.

In addition, on July 13, 1989, Monterrey filed a sworn document entitled "Opposition to U.S. Attorney's Action for Forfeiture of U.S. Currency" ("Opposition") which conceded forfeiture of $100,000 but maintained that $75,918 was not subject to forfeiture. Monterrey's Opposition set forth both the legal and factual basis for that claim. Since Monterrey conceded forfeiture of a portion of the funds, the Court entered a default judgment as to $100,918 and the government filed the instant motion as to the balance.*fn2

DISCUSSION

The government raises three arguments: (1) that the claimant's defense is barred because he has not filed a notice of claim as required by Rule C(6) of the Supplemental Rules for Certain Admiralty and Maritime Claims; (2) that it has demonstrated probable cause for forfeiture thereby shifting the burden of proving that the funds are not subject to forfeiture to the claimant; and (3) that Monterrey cannot raise any genuine issues of material fact on his defense that the funds were acquired from a legitimate source.

The Timeliness Claim

The government argues that Monterrey lacks standing to contest the forfeiture because he has not complied with Rule C(6) of the Supplemental Rules For Certain Admiralty and Maritime Claims which requires that a claimant in a forfeiture proceeding file a sworn notice of claim within ten days after service of the complaint and an answer within twenty days after the filing of the notice of claim.*fn3 The government is correct insofar as it argues that the filing of a sworn claim is essential to confer statutory standing upon a claimant in a forfeiture action. See United States v. United States Currency in the amount of $103,387.27, 863 F.2d 555, 560 (7th Cir. 1988); United States v. United States Currency in the amount of $2,857.00, 754 F.2d 208, 213 (7th Cir. 1985). This rule is designed to provide the government with timely notice of ...


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