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UNITED STATES v. UNITED STATES CURRENCY IN THE AMO

August 12, 1992

UNITED STATES OF AMERICA against UNITED STATES CURRENCY IN THE AMOUNT OF ONE HUNDRED FORTY-FIVE THOUSAND, ONE HUNDRED THIRTY-FIVE DOLLARS ($ 145,139) AND ONE HUNDRED FIFTY DOLLARS ($ 150) IN TRAVELERS CHECKS, MORE OR LESS, Defendants.


The opinion of the court was delivered by: JACK B. WEINSTEIN

 WEINSTEIN, J.:

 Based on intimations in Supreme Court and Court of Appeals decisions, claimant moves to dismiss this civil forfeiture proceeding on the grounds of double jeopardy and excessive punishment. He has already been convicted and punished for failing to declare over $ 10,000 in cash he was taking from the country. The government now seeks to keep all the cash claimant was then carrying -- some $ 145,000. The motion must be denied. The cash must be forfeited.

 I. FACTS

 Customs inspectors handed him a Customs Publications Form 503, which states that persons leaving the United States with more than $ 10,000 in monetary instruments must file a separate report with Customs. It warns travelers that failure to file that report may result in criminal and civil penalties and "may lead to forfeiture of the monetary instruments." Cust. Pub. Form 503. Customs officers discovered $ 145,139 in cash and $ 150 in travelers checks secreted in Etim's luggage in boxes of flour.

 On April 2, 1990, Etim pleaded guilty to the offense of willfully failing to file a report while knowingly transporting currency outside the United States. He was sentenced by another judge of this court to five months' imprisonment, three years' supervised release, a $ 5,000 fine, and a $ 50 special assessment.

 On December 13, 1991, the United States served a warrant for arrest of articles in rem and filed a complaint for forfeiture of the defendant currency. Etim filed a verified notice of claim on April 22, 1992.

 Claimant Etim now moves to dismiss the forfeiture action under Rule 12 for failure to state a claim. In the alternative he moves under Rule 12 of the Supplemental Rules for Admiralty and Maritime Claims for an order releasing the res. His grounds are: forfeiture would violate the double jeopardy clause and the eighth amendment prohibition of cruel and unusual punishment and excessive fines; and the action was unreasonably delayed -- presumably in violation of due process.

 II. LAW

 Forfeiture of property is authorized by federal statute for a vast array of drug crimes, racketeering, wildlife, tax, pornography, currency, and other violations. The contraband itself, and frequently the vehicles and equipment used in the commission of the violation, are subject to forfeiture. See generally, e.g., 16 U.S.C. § 670j (hunting, trapping, and fishing on public lands); 16 U.S.C. § 3374 (importation of fish and wildlife); 18 U.S.C. § 924 (traffic in weapons); 18 U.S.C. § 2252 (pornography); 18 U.S.C. § 2342 (contraband cigarettes); 18 U.S.C. § 2513 (electronic surveillance devices); 19 U.S.C. § 1527 (wild mammals and birds); 21 U.S.C. § 848 (racketeering); 21 U.S.C. 881 (narcotics); 25 U.S.C. § 264 (trading on Indian lands); 26 U.S.C. § 7301 et seq. (taxes); 31 U.S.C. § 5111 (counterfeit coins and currency); 50 U.S.C. § 192 (vessels in territorial waters in wartime).

 Forfeiture provisions can be criminal or civil, or both criminal and civil in nature. The instant civil forfeiture action is predicated on the Currency and Foreign Transactions Reporting Act of 1970. 31 U.S.C. § 5317(c) provides that monetary instruments for which a report has not been filed pursuant to 31 U.S.C. § 5316 are subject to forfeiture.

 In order to contest a forfeiture, a claimant must have standing, which consists of an ownership or a possessory interest in the property. Mercado v. United States Customs Serv., 873 F.2d 641, 644 (2d Cir. 1989). Claimant Etim, who had physical possession of the cash when it was seized and who filed a verified claim under oath, has standing.

 A. DOUBLE JEOPARDY

 Where a civil proceeding which is not criminal in nature follows a criminal one, there is no double jeopardy. See Murphy v. United States, 272 U.S. 630, 632, 71 L. Ed. 446, 47 S. Ct. 218 (1926) (acquittal on criminal nuisance charge does not preclude injunction to abate nuisance); Berdick v. United States, 222 Ct. Cl. 94, 612 F.2d 533, 537-38 (Ct. Cl. 1979) (conviction may be followed by forfeiture and damage action); United States v. United States Fishing Vessel Maylin, 725 F. Supp. 1222, 1223 (S.D. Fla. 1989) (forfeiture of $ 55,000 boat after prosecution for fish and game violations); United States v. Kates, 419 F. Supp. 846, 850-55 (E.D. Pa. 1976) (forfeiture following criminal action). A civil forfeiture proceeding is not criminal in nature for double jeopardy purposes even though it may arise out of criminal conduct. See One Lot Emerald Cut Stones & One Ring v. United States, 409 U.S. 232, 235-36, 34 L. Ed. 2d 438, 93 S. Ct. 489 (1972) (forfeiture proceeding is neither criminal nor a punishment).

 Even where the criminal and the civil proceedings are related forfeiture actions, the former action does not preclude the latter. The government's failure to meet its burden beyond a reasonable doubt in the criminal case does not prevent it from sustaining a burden of a preponderance in the civil proceeding. For example, in United States v. Dunn, 802 F.2d 646 (2d Cir. 1986), cert. denied, 480 U.S. 931, 94 L. Ed. 2d 760, 107 S. Ct. 1568 (1987), the defendant was convicted after a jury trial, but the jury found that only one of two sums was forfeitable in that criminal forfeiture trial. Subsequently, the government brought a civil forfeiture proceeding for the sum the criminal jury had refused to find forfeitable. The Second Circuit approved the sequence. Id. at 647-48. But see United States v. All Assets of Statewide Auto Parts, Inc., 971 F.2d. 896 (2d Cir. 1992) ("We have some fears that the forfeiture statute is being used here as a substitute -- or perhaps as a dry run -- for a criminal prosecution.").

 The Supreme Court wrote in United States v. One Assortment of 89 Firearms, 465 U.S. 354 (1984), that a subsequent civil forfeiture action could violate the double jeopardy clause if it "was intended as punishment, so that the proceeding is essentially criminal in character." Id. at 362. To determine whether a penalty is civil or criminal in nature a court must ask whether Congress, in setting up the statutory scheme, "indicated either expressly or impliedly a preference for one label or the other." United States v. Ward, 448 U.S. 242, 249, 65 L. Ed. 2d 742, 100 S. Ct. 2636 (1980).

 Even where Congress has characterized the penalty as civil, a court must inquire whether the scheme is so punitive in either its purpose or effect that the expressed intention is negated. See id. In 89 Firearms, the Court determined that Congress had classified the gun forfeiture provision as civil, and that appellant had not established that the sanction was so punitive as to "transform what was clearly intended as a civil remedy into a criminal penalty." 89 Firearms, 465 U.S. at 366 (quotation omitted).

 The provisions of the Currency and Foreign Transactions Reporting Act are designed to allow the government to regulate and gather information on the flow of currency into and out of the United States. The provisions requiring passengers to declare that they are carrying more than $ 10,000 in cash assists the government in investigating regulatory violations as well as tax and other crimes. See S. Rep. No. 1139, 91st Cong., 2d Sess. 7 (1970); H. Rep. No. 975, 91st Cong., 2d Sess. 19-20, reprinted at 1970 U.S. Code Cong. & Admin. News 4404-05. The forfeiture provision is civil: whether the person has committed any criminal wrongdoing is irrelevant for purposes of the action to forfeit the funds. United States v. $ 5393 in United States Currency, 583 F. Supp. 1447, 1449 (E.D.N.Y. 1984) (forfeiture proper even where claimant asserts that he is innocent of any crime).

 Notwithstanding the civil nature of the currency reporting provision, claimant urges that the court consider it in the nature of a criminal penalty. As the defendant in the earlier criminal case, claimant served a five-month sentence and paid a $ 5,000 fine. Forfeiting some thirty times that amount in addition is an extremely harsh result. Since in the instant case the same sovereign has prosecuted both actions, a double jeopardy argument can plausibly be made.

 There have been some suggestions by the Second Circuit that it might be receptive to the double jeopardy argument. In United States v. 38 Whalers Cove Dr., Babylon, N.Y., 954 F.2d 29 (2d Cir.), cert. denied, 113 S. Ct. 55, 121 L. Ed. 2d 24, 60 U.S.L.W. 3755 (1992), the court addressed a convicted defendant's claim that a subsequent civil forfeiture would violate the double jeopardy clause. Claimant was convicted and sentenced in a state court for selling $ 250 worth of cocaine. He objected to the forfeiture of his $ 68,000 equity interest in the condominium ...


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