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U.S. v. ALL FUNDS ON DEPOSIT

June 17, 1991

UNITED STATES OF AMERICA, PLAINTIFF,
v.
ALL FUNDS ON DEPOSIT IN ANY ACCOUNT AT CERTAIN FINANCIAL INSTITUTIONS HELD IN THE NAMES OF CERTAIN INDIVIDUALS, ET AL., DEFENDANTS.



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

OPINION AND ORDER

In United States v. Monsanto, 924 F.2d 1186 (2d Cir. 1991) (en banc) ("Monsanto IV"), the Second Circuit held that in the context of a criminal forfeiture proceeding the Fifth and Sixth Amendments require an adversary, post-restraint, pretrial hearing as to probable cause to continue the restraint of assets needed to retain counsel of choice. Less than six months later, this Court is faced with the issue of whether the Monsanto IV safeguards are equally applicable in a civil forfeiture proceeding when the claimant is also the defendant in the related criminal action. For the reasons that follow, this Court is of the view that under the circumstances presented here, the rule enunciated in Monsanto IV applies equally in this case.

I. PRELIMINARY STATEMENT

Claimant Francisco A. Murillo ("Murillo"), moves pursuant to Rule 12 of the Admiralty Rules of the United States District Courts for the Southern and Eastern Districts of New York, as well as the Fifth and Sixth Amendments of the Constitution, for the release of $100,000 of funds previously attached by an ex parte order, so he can retain private counsel of his choice to defend him in the related ongoing criminal action.

The plaintiff United States of America ("the Government"), cross-moves pursuant to Fed.R.Civ.P. 56(a), for summary judgment, and also for a stay of this civil forfeiture proceeding pending a disposition of the criminal action, pursuant to 18 U.S.C. § 981(g) and 21 U.S.C. § 881(i). In addition, Murillo cross-moves to dismiss the action as to four of the six seized bank accounts, on the ground that they are located outside of the Eastern District of New York, and therefore the Court lacks subject matter jurisdiction over the res.

Oral argument was held by the Court on June 7, 1991 and June 14, 1991. On June 14, 1991, the Government waived any objection to the conceded untimeliness of Murillo's cross-motion to dismiss, relying solely on oral argument as to that issue.

II. FACTUAL BACKGROUND

By criminal complaint dated October 19, 1990, Murillo was charged in the Eastern District of New York (CR-90-1336-M) with knowingly and intentionally structuring financial transactions with a domestic financial institution (see 31 U.S.C. § 5324; 18 U.S.C. § 3551). Specifically, Murillo is charged with breaking down the amount of cash in excess of $10,000 and making cash deposits in the Bank of New York, Garden City, and other banks, such as Chemical Bank, of less than $10,000 with the purpose of causing the bank not to file a currency transaction report ("CTR") with respect to the deposits.

On or about May 16, 1991, a Grand Jury returned a 111-count indictment charging Murillo with conspiracy to illegally transfer funds out of the United States through structuring financial transactions to avoid CTR requirements in violation of 31 U.S.C. § 5313(a) and 5324(3). Murillo was arraigned by this Court on the indictment on June 7, 1991, entering a plea of not guilty.

In the interim, on December 3, 1990, the Government commenced this civil action pursuant to 18 U.S.C. § 981 and 31 U.S.C. § 5324, by filing a verified complaint in rem seeking the forfeiture of all funds contained in numerous bank accounts in the names of Murillo, his wife and his daughter. The Government alleges that these funds have been involved in or are the proceeds of Murillo's alleged criminal activities. On that same day, this Court issued, ex parte, a warrant for the arrest of the funds in rem, which attached all funds on deposit in the banks, including the following six accounts to which Murillo now asserts a claim:*fn1

  (1) Chemical Bank, 52 Broadway, New York, New
  York, Account No. 06311264,

  in the name of Francisco and Minerva Murillo, in
  the amount of $7,780.51;*fn2
  (2) Chemical Bank, 52 Broadway, New York, New
  York, Account No. 016592387, in the name of
  Francisco Murillo, in the amount of $8,409.87;
  (3) Chemical Bank, 52 Broadway, New York, New
  York, Account No. 001375814, in the name of
  Francisco and Minerva Murillo, in the amount of
  $17,442.87;
  (4) Bank of New York, Stewart Avenue, Garden City,
  New York, Account No. 403201552, in the name of
  Francisco Murillo, in the amount of $3,829.21;
  (5) Long Island Savings Bank, 1150 Franklin
  Avenue, Garden City, New York, Account No.
  02180413727, in the name of Francisco Murillo, in
  the amount of $10,575.34; and,
  (6) Merrill Lynch, 2 Broadway, New York, New York,
  Account No. 84031253, in the name of Francisco and
  Minerva Murillo, in the amount of $290,731.20.

Murillo now seeks to have the restraining order vacated to the extent that he requests that $100,000 be released from the seizure to enable him to retain private counsel of his ...


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