However, numerous courts have held that "where putative
claimants have placed the court and the government on notice of
their interest in the property and their intent to contest the
forfeiture, courts will grant extensions of time, recognizing
both the good-faith effort put forth and the lack of prejudice
to the government under such circumstances." $103,387.27,
supra, 863 F.2d at 562; accord United States v. One Urban Lot
located at 1 Street A-1, 885 F.2d 994, 999-1001 (1st Cir.
1989); 1982 Yukon Delta Houseboat, supra, 774 F.2d at 1435-36;
United States v. One 1979 Mercedes 450SE, 651 F. Supp. 351, 353
(S.D.Fla. 1987) (citing other cases); see also United States v.
Property located at 4492 S. Livonia Road, 889 F.2d 1258, 1262
(2d Cir. 1989) (stating that where a claimant has shown a
sufficient interest in the property through a motion and
affidavits, technical noncompliance with the rules governing
the filing of claims may be excused). Thus, in One Urban Lot,
supra, the First Circuit held that a default judgment must be
vacated because a verified answer, which was filed less than a
month after the action commenced and which contained all of the
information necessary for a claim, should have been considered
as a claim under the Rule and the deadline for its filing
extended so it satisfied the time requirements of Rule C(6).
See 885 F.2d at 1001. Similarly, in $103,387.27, supra, the
Seventh Circuit held that a district court abused its
discretion in striking a claimant's answer and refusing to
grant a request for an extension of time to file an amended
claim because the court failed to consider the absence of
prejudice to the government in view of the timely, albeit
unverified, notice of the claim that it received and the fact
that there was no serious dispute that the claimant was an
owner of the property. See 863 F.2d at 562-63.
This case presents a clear situation in which the Court
should exercise its discretion to grant claimant an extension
of time to correct the defects in his claim and answer.
Monterrey is incarcerated and is proceeding pro se.*fn4
Despite these obstacles, he has been diligent in pursuing his
rights throughout the litigation, has communicated his interest
in the currency to the court and the government, and has done
all that he could reasonably be expected to do toward that end.
Cf. United States v. United States Currency in the amount of
$7,531, 716 F. Supp. 92, 93 (E.D. N.Y. 1989) (citing Ortiz v.
Cornetta, 867 F.2d 146, 148 (2d Cir. 1989)). Moreover, since
the government had notice of Monterrey's intent to contest the
forfeiture from his June 6, 1988 letter and does not seriously
dispute that he has a sufficient ownership interest in the
property to be a proper claimant, the government will not be
prejudiced by this extension nor will the policies that
underlay Rule C(6) be impaired in any way. See One Urban Lot,
supra, 885 F.2d at 1001; $103,387.27, supra, 863 F.2d at 562;
1982 Yukon Delta, supra, 774 F.2d at 1436.
Accordingly, the Court construes Monterrey's sworn
opposition, filed on July 13, 1989, as a notice of claim under
Rule C(6) and, nunc pro tunc, extends the time for filing such
notice of claim to July 13, 1989, the date when it was filed.
However, Rule C(6) requires both a verified claim and an
answer. The Court will therefore direct that Monterrey file a
verified Answer within 60 days of the date of this Order.
In order to forfeit narcotics proceeds, the government must
sustain its initial burden of showing that it had probable
cause for the forfeiture. See United States v. Banco Cafetero
Panema, 797 F.2d 1154, 1160 (2d Cir. 1986); United States v.
$2500.00 in United States Currency, 689 F.2d 10, 12 (2d Cir.
1982), cert. denied, 465 U.S. 1099, 104 S.Ct. 1591, 80 L.Ed.2d
123 (1984); 19 U.S.C. § 1615 (1988); see also 21 U.S.C. § 881(d)
(incorporating procedures for customs forfeitures into
forfeiture proceedings under title 21). To satisfy this
requirement, the government
must have reasonable grounds, which rise above the level of
mere suspicion, to believe that certain property is subject to
forfeiture. See 4492 S. Livonia Road, supra, 889 F.2d at 1267;
Banco Cafetero, supra, 797 F.2d at 1160. In this case, probable
cause may be shown by evidence which links the funds to
narcotics transactions, but there need not be a demonstrable
connection to any particular transaction.*fn5 See id.
Probable cause is clearly present on the record here, which
includes evidence of Monterrey's involvement in large-scale
narcotics trafficking. Indeed, the circumstances surrounding
the seizure of the money found in Monterrey's apartment in
connection with a large quantity of narcotics, drug
paraphernalia, and weapons; the DEA agent's statement that the
money was packaged in a manner consistent with other narcotics
investigations in which she has participated; the evidence that
Monterrey had sold narcotics to an undercover agent and agreed
to sell a larger amount to the agent at a later time;
Monterrey's incriminating statements and his guilty plea; and
the fact that Monterrey was on probation for narcotics related
crimes at the time of his arrest are more than sufficient to
establish probable cause. Cf. United States v. $93,685.61 in
U.S. Currency, 730 F.2d 571, 572 (9th Cir.), cert. denied,
469 U.S. 831, 105 S.Ct. 119, 83 L.Ed.2d 61 (1984); $2,500, supra,
689 F.2d at 16.
Since the government has demonstrated that there is probable
cause for the forfeiture, the burden shifts to the claimant to
prove by a preponderance of the evidence that the funds are not
subject to forfeiture under § 881(a)(6). See Banco Cafetero,
supra, 797 F.2d at 1160; $2,500, supra, 689 F.2d at 12; United
States v. One 1982 Porsche 928, 732 F. Supp. 447, 452 (S.D.N Y
1990); 19 U.S.C. § 1615.
In his sworn opposition, Monterrey asserts that the contested
portion of the funds, $75,000.00, was acquired from a
legitimate source and therefore is not subject to forfeiture.
Specifically, he claims that $50,000 results from his life
savings from 30 years of continuous employment, and an
additional $25,000 came from the sale of a business. Monterrey
further states that over the years he held several positions in
building maintenance and as a rental agent and therefore lived
rent-free and that he did not trust banks and therefore kept
all his money in the house.*fn6 These claims, if believed by
the trier of fact, would constitute a defense to forfeiture of
Whether the contested funds came from a legitimate source, as
Monterrey claims, is a question of fact. Therefore, summary
judgment is denied because Monterrey's defense raises
credibility issues as to a material issue of fact, which cannot
be resolved on a motion for summary judgment.*fn7 See Herman
v. Provident Mut. Life Ins. Co., 886 F.2d 529, 536 (2d Cir.
1989); Knight v. U.S. Fire Ins. Co.,
804 F.2d 9, 11 (2d Cir. 1986), cert. denied, 480 U.S. 932, 107
S.Ct. 1570, 94 L.Ed.2d 762 (1987).
For the reasons set forth above, the government's motion for
summary judgment is granted in part and denied in part.
Monterrey shall file a verified answer within 60 days of the
date of this Memorandum Opinion and Order. Counsel for the
government shall appear at a Pre-Trial Conference on March 22,
1991 in Courtroom 129 at 10:30 AM in order to schedule a Trial
date. Since Monterrey is incarcerated he will not have to
appear at that Conference.
IT IS SO ORDERED.