IV. Applying the Law
As mentioned above, to the extent that the government premises its forfeiture upon 21 U.S.C. § 881(a)(6), Banco Cafetero is still good law, and this court therefore must apply the lowest intermediate balance test to the subject accounts. For the purposes of this motion, claimants concede that money orders seized in the search of the Remendon premises and connected with illegal behavior were negotiated into the defendant accounts in March of 1991. The government concedes that the balances in the defendant accounts plunged between the date of the Remendon search (March of 1991) and the date of forfeiture (November of 1992). Therefore, of the approximately $ 1,200,000 in Cambidex funds seized by the government on November 12, 1992 only $ 24,000.00 -- the account's lowest intermediate balance -- is available for forfeiture as narcotics proceeds under 21 U.S.C. 881(a)(6); since Cambitur failed to include any specific facts in its motion papers, it is not clear at this time what if any portion of the funds in its American Express account similarly remain subject to forfeiture under the narcotics statute.
With respect to the fungible property statute, the government alleges that money laundering and structuring violations occurred as to each account within the limitations period of Section 984, thereby raising a genuine issue of fact as to whether the seized funds should be forfeited under this statute. Any illegal money laundering or structuring activity alleged to have occurred between November 12, 1991 and November 12, 1992 is a permissible basis for forfeiture under Section 984, even if the government discovered the violations as a result of some earlier, pre-limitations period activity -- the March 1991 Remendon search and the June 1991 Gomez arrest. It is worth emphasizing that as to any funds seized in a timely fashion, the government need not establish probable cause for that forfeiture at any time prior to trial. See Banco Cafetero, 797 F.2d at 1163; United States v. All Funds Presently on Deposit, et al., CV-92-5310, Memorandum and Order, at 11. However, if all of the illegal activity occurred outside the limitations period, granting summary judgment for the claimants is appropriate. See generally United States v. $ 116,000 in United States Currency, 721 F. Supp. 701 (D.N.J. 1989) (granting motion for summary judgment on limitations grounds in forfeiture action).
Applying these rules to the facts of this case, this court finds that Cambitur is not entitled to summary judgment at this juncture. During the period from December 1991 through September 1992 -- within the one year time frame -- the government alleges that approximately $ 1,900,000 in the form of postal money orders which had been purchased to avoid identification were deposited into Cambitur's American Express accounts. (Callery Decl., dated May 28, 1993, at PP 13-14). In addition, the government alleges that on occasions between February of 1991 and November of 1992, Cambitur issued money orders to an account that investigation has revealed is involved with narcotics trafficking. (Arrivillaga Decl. dated May 28, 1993, at P 23). Therefore, Cambitur has failed to carry its burden of demonstrating the absence of triable factual issues concerning the funds deposited in or attempted to be deposited in the American Express bank and seized by the government as involved in or traceable to money laundering and structuring violations.
With respect to Cambidex, however, the government alleges only that "suspicious" deposits -- totalling $ 51,000.00 -- were made into Cambidex's Citibank account on August 14, August 19, and November 13 of 1992. (Callery Decl., dated May 7, 1993, at PP 18-20). The remainder of the specific allegations concerning the illegal activity associated with the Cambidex account appears to relate directly to money orders discovered in the Remendon search. (Callery Decl., dated May 7, 1993, at PP 9-11). Further, when questioned at oral argument, the government offered no post-November 1991 illegal activities which would justify the seizure, although a declaration of Agent Arrivillaga supplies the following general allegations:
Further corroboration of the information furnished by confidential sources is found in the bank records of the defendant accounts produced by Citibank in New York City to the government. These bank records, including those for the Cambidex account, clearly demonstrate that the bulk of the deposits into the Cambidex Account are in the form of even denominations in the sum of $ 1,000 or less in United States dollars. These money orders were purchased from banks, postal facilities and other institutions in the New York metropolitan area in a manner to avoid identification and reporting requirements of Title 31, United States Code.
(Arrivillaga Decl., dated May 7, 1993, at P 29). As the nonmoving party, the government is entitled to have all reasonable inferences construed in its favor. However, given Cambidex's role as a money exchange house and the concern, voiced in cases cited above, that a court not allow contamination to spread among the funds "like a contagious disease," Certain Accounts in Florida, 795 F. Supp. at 397-98, this court finds the government's general allegations concerning the Cambidex account alone do not rise above "mere suspicion." See United States v. All Right, Title & Interest in Real Property, etc., 983 F.2d 396, 403 (2d Cir.), cert. denied, U.S. , 113 S. Ct. 2349 (1993); Banco Cafetero, 797 F.2d at 1160. Accordingly, Cambidex's motion for summary judgment as to the funds in its Citibank account -- less the $ 75,000.00 which is still subject to forfeiture -- is hereby granted.
V. Innocent Owner Defense
Claimants allege that they are "innocent owners" of the seized funds and therefore are entitled to summary judgment on this basis as well. Under the innocent owner theory, once the government has established probable cause, the burden shifts to a claimant to demonstrate that it is an innocent owner of the seized property. See United States v. 228 Acres of Land, 916 F.2d 808, 814 (2d Cir. 1990), cert. denied, 498 U.S. 1091 (1991). A claimant must demonstrate by a preponderance of the evidence that it did not consent or have knowledge of the illegal activities and was not willfully blind to those activities. United States v. One Parcel of Property, 985 F.2d 70 (2d Cir. 1993). A claimant also must prove that it took all reasonable steps to prevent the alleged illegal activity from occurring. United States v. 141st Street Corp., 911 F.2d 870, 879 (2d Cir. 1990), cert. denied, 498 U.S. 1109 (1991).
The submissions by Cambidex and Cambitur -- affidavits of various shareholders attesting to the corporations' business practices -- are insufficient to demonstrate innocent ownership at this stage in the case. The government contends and this court agrees that claimants have not submitted proof -- other than vague statements -- showing the legitimate sources of these funds. Nor have claimants documented their business practices other than stating that Cedulas are required to exchange money, a fact which is not confirmed by the submissions. In sum, neither Cambidex nor Cambitur has established its innocent owner defense by a preponderance of the evidence.
For the reasons provided above, Cambitur's motion for summary judgment is hereby denied. Cambidex's motion is granted insofar as funds in the seized account were connected with illegal activity which occurred outside of the limitations period imposed by 18 U.S.C. § 984(c). Therefore, Cambidex is entitled to return of all seized funds save $ 75,000 which remains subject to forfeiture.
Dated: Brooklyn, New York
August 31, 1993
I. LEO GLASSER, U.S.D.J.