United States District Court, Southern District of New York
October 25, 2002
UNITED STATES OF AMERICA, PLAINTIFF,
CONTENTS OF ACCOUNT NUMBER 68108021 HELD IN THE NAME OF STELLA COLLAZOS LOCATED AT PRUDENTIAL SECURITIES, INC., 199 WATER STREET, NEW YORK, NEW YORK, DEFENDANT-IN-REM.
The opinion of the court was delivered by: John E. Sprizzo, District Judge
MEMORANDUM OPINION AND ORDER
The United States of America ("the Government") brings this action
seeking judicial forfeiture of the defendant-in-rem account, currently
held in the name of Stella Collazos ("Collazos" or "claimant") at
Prudential Securities, Inc. in New York City. Specifically, the
Government's instant motion seeks to dismiss the claim of the account's
sole claimant, Ms. Collazos, pursuant to 28 U.S.C. § 2466, the
fugitive disentitlement provision. For the reasons set forth below, the
Government's motion to dismiss is granted and judgment is entered in
favor of the Government in an amount equal to that contained in the
The Government commenced this action on March 22, 1999 pursuant to
18 U.S.C. § 981(a)(1)(A) and 21 U.S.C. § 881(a)(6). The
Government seeks the judicial forfeiture of the contents of account
number 68108021, held in the name of Collazos at Prudential Securities,
Inc., 199 Water Street, New York, New York, 10292 (the "defendant-in-rem
account"). The Court has jurisdiction over this action pursuant to
28 U.S.C. § 1345 and 1355.
The Government maintains that the defendant-in-rem account contains
funds derived from narcotics trafficking that were subsequently laundered
through Collazos' United States-based money remitting businesses in
Texas, Florida and New Jersey and her Columbian-based exchange house
business. For example, according to the Government, the evidence shows
that Collazos owned and operated a Texas money remitting business known
as UFF from her place of business in Cali, Columbia even though the
business was registered and licensed under another individual's name. A
state audit of UFF uncovered evidence of illegal activity, including
false paperwork purporting to represent the receipt of millions of
dollars in cash from various individuals wanting to remit money abroad.
The currency deposited by UFF also tested positive for the presence of
cocaine. Through money remitting businesses such as UFF, the Government
asserts, Collazos wired millions of dollars into a host of nominee back
accounts at BankAtlantic in Florida and later moved this money out of the
country. most commonly to Collazos' Columbia exchange houses. From
January 1995 through April 1996, in fact, ninety-five percent (95%) of
UFF's total wire volume was directed towards various bank accounts at
The movement of the funds at issue in this case immediately followed
the execution of a search warrant at UFF in May 1996. In subsequent
telephone conversations and faximile transmissions — which were
intercepted pursuant to a federal court-ordered wire tap — Collazos
acknowledged the fictitious nominee accounts at BankAtlantic and the need
to change the names on the accounts to avoid detection. As part of her
efforts to conceal funds from law enforcement. the Government maintains
that Collazos attempted to wire $650,000 from two of her nominee accounts
at BankAtlantic to a personal brokerage account held a her name in New
York. She similarly wired an additional $450,000 directly from her money
remitting businesses in Florida and New Jersey.
Based on the above, a seizure warrant for the defendant-in-rem account
was issued on June 10, 1996 by the Criminal Court for the City of New
York. Thereafter, on October 11, 1996, the United States Customs
Service, New York Identification Removal Group, adopted the forfeiture of
the seized $1.1 million dollars from the Office of the Attorney General
of the State of New York based on a turnover order issued by the Criminal
Court of New York on September 24, 1996. Collazos was notified of the
seizure and her right to petition for relief from forfeiture by letter
dated October 23, 1996. On December 12, 1996 she filed a cash bond and
requested that the case be referred for judicial forfeiture. The
Government filed this action for forfeiture in March, 1999. To date.
Collazos has not appeared in the civil forfeiture action; on the
contrary, she has directly disobeyed the Court by refusing to appear for
a court-ordered deposition.
Subsequent to the filing of the instant action and based upon the same
underlying activity, Collazos was indicted by a federal grand jury in the
Southern District of Florida. The Indictment, which was unsealed on
August 13, 2001, alleges violations of the federal money laundering
statutes.*fn1 In October, 2001. in connection with the Florida action,
Collazos' defense attorney, Peter Raben, contacted Russell Killinger, the
Assistant United States Attorney in the Southern District of Florida
("AUSA Killinger"), stating that Collazos would consider entering the
United States and voluntarily submitting to the jurisdiction of the
federal court in Florida so long as she was granted pre-trial release in
exchange. AUSA Killinger denied the request, pointing to Collazos'
fugitive status and status as a flight risk, generally.
The federal civil forfeiture statute subjects to forfeiture, inter
alia, "[a]ny property, real or personal, involved in a transaction or
attempted transaction in violation of . . . section 1956 or 1957 of this
title, or any property traceable to such property." 18 U.S.C. § 981
(2002). Section 1956(a), commonly known as the "money laundering
statute." in turn imposes criminal penalty upon:
Whoever knowing that the property involved in a
financial transaction represents the proceeds of some
unlawful activity, conducts or attempts to
conduct such a financial transaction which in fact
involves the proceeds of specified unlawful activity
. . . with the intent to promote the carrying on of
specified unlawful activity; or . . . knowing that the
transaction is designed in whole or in part . . . to
conceal or disguise the nature, the location, the
source. the ownership. or the control of the proceeds
of specified unlawful activity . . . .
18 U.S.C. § 1956(a)(1)(A)(i), (B)(i) (2002).*fn2 Moreover, §
1957 imposes a criminal penalty on any person who. "knowingly engages in
or attempts to engage in a monetary transaction in criminally derived
property that is of a value greater than $10,000 and is derived from
Ordinarily, an individual claimant has the right to petition a court to
prevent the civil forfeiture of assets. Pursuant to the fugitive
disentitlement provision of the recently-enacted Civil Asset Forfeiture
Reform Act ("CAFRA"), courts have the authority to dismiss such a claim
if the claimant is a "fugitive" as the statute defines the term. See
28 U.S.C.A. § 2466 (West Supp. 2002). Prior to CAFRA, courts routinely
utilized a judicially-created fugitive disentitlement doctrine to prevent
fugitives from litigating civil forfeiture and other claims, see e.g.,
Molinaro v. New Jersey, 396 U.S. 395 (1970) (refusing to hear criminal
appeal); Smith v. United States, 94 U.S. 97 (1876) (same); United States
v. Real Property at Incline Village, 47 F.3d 1511 (9th Cir. 1995)
(affirming district court's dismissal of civil forfeiture action); United
States v. Eng, 951 F.2d 461 (2d Cir. 1991) (same), based on the concept
that a "fugitive from justice has demonstrated such disrespect for the
legal profession that he has no right to call upon the court to
adjudicate his claim." United States v. Oretega-Rodriquez, 507 U.S. 234,
246 (1993). This history notwithstanding, the Supreme Court signaled the
need for the codification of this doctrine with its decision in Degen v.
United States, 517 U.S. 820 (1996).
In Degen, the Supreme Court concluded that although "the spectacle of a
criminal defendant residing in Switzerland. beyond the reach of our
criminal courts, while at the same time mailing papers to the court in
related civil matter" is not one to be encouraged, courts cannot employ
their inherent judicial authority to preclude a fugitive from
participating in a civil forfeiture action absent specific statutory
authority. In response, Congress granted the courts such explicit
authority by incorporating the fugitive disentitlement doctrine into
The fugitive disentitlement provision provides that:
(a) A judicial officer may disallow a person from
using the resources of the courts of the United States
in furtherance of a claim in any related civil
forfeiture action or a claim in a third party
proceeding in any related criminal forfeiture action
upon a finding that such person —
(1) after notice or knowledge of the fact that a
warrant or process has been issued for his
apprehension, in order to avoid criminal prosecution
(A) purposely leaves the jurisdiction of the United
(B) declines to enter or reenter the United States
or submit to its jurisdiction; or
(C) otherwise evades the jurisdiction of the court
in which a criminal case is pending against the
(2) is not confined or held in custody in any other
jurisdiction for commission of criminal conduct in
28 U.S.C. § 2466.
Although there are, to date, no federal court opinions applying §
2466, it is clear from the language of the statute that in applying the
law to a case such as this one, the Court must first determine whether
the instant civil forfeiture action is, in fact, related to a pending
criminal prosecution and whether the claimant has had appropriate notice
of such prosecution. If both questions can be answered in the
affirmative, the Court must then turn to the question of whether the
claimant purposefully left, declined to enter or reenter. or otherwise
evaded the jurisdiction of the United States and/or the court in which a
criminal prosecution is pending.*fn4 In this case, the Court finds that
the instant forfeiture action is substantially related to the criminal
proceeding pending in the Southern District of Florida, that the claimant
had knowledge of the Florida action, and that the claimant has
consciously declined to enter the United States to avoid criminal
prosecution in connection with such proceeding. Moreover, the Court holds
that the claimant's past conduct is of the precise sort Congress intended
to prevent with the passing of the fugitive disentitlement provision.
Accordingly. as discussed more thoroughly below. Collazos's claim is
As noted, the Court must initially address the question of whether the
forfeiture action is related to a pending criminal proceeding. Although
§ 2466 does not define the term "related" as used in subsection (a)
of that section, the term is defined in a separate subsection under the
same title that authorizes the Government to move for a stay of discovery
in a civil forfeiture action when such discovery would impede the
prosecution of a "related" criminal case or investigation. That subsection
(4) [I]n determining whether a criminal case or
investigation is `related' to a civil forfeiture
proceeding, the court shall consider the degree of
similarity between the parties. witnesses, facts, and
circumstances involved in the two proceedings. without
requiring an identity with respect to any one or more
18 U.S.C. § 981(g)(4).
Here, the Government's instant civil forfeiture action is clearly
related to the pending federal criminal proceeding in Florida. The
Florida Indictment — which is the basis for a pending arrest
warrant against Collazos — seeks exactly the same funds at issue in
this case. See United States v. Ortiz, et al., No. 01-0539 (S.D. Fla.
Aug. 2, 2001). Moreover, the Florida criminal action and the instant
forfeiture action are based on the same facts and circumstances —
namely, the laundering of proceeds from narcotics transactions through
money remitting and exchange house businesses within and without the
United States. See id. Indeed, numerous
times throughout the trial of
Collazos' co-defendant, Blanca Piedad Ortiz, witnesses testified to
Collazos' role in the illegal activity at issue — the same illegal
activity upon which the Government rests its forfeiture application.
For example, during the direct examination of government witness David
White, a former special agent for the United States Customs Service, the
following colloquy took place:
Q. At some point during your investigation up to and
include [sic] December of `95. did an individual by
the name of Stella Collazos become a target of your
Q. And who was Stella Collazos?
A. Stella Collazos is an owner of several
enterprises in Columbia that she utilizes to
facilitate the movement of the dollar/peso exchange.
She's an unregulated, unlicenced black-market peso
Q. In Columbia?
A. In Columbia.
Q. [W]ere you able to, during your investigation,
uncover any businesses or establishments or
enterprises that Ms. Collazos was associated with in
the United States?
Q. What was that?
A. [W]e uncovered that Stella Collazos owned and
operated five casas de cambios, exchanges houses here
in the United States: one in Houston, Texas, two here
in Miami, and two in New Jersey.
Q. What was the name of the establishment in Houston?
A. UFF . . . .
Trans. of Tr. at 313-14, United States v. Ortiz, No. 01-539-CR (Trans. of
Tr."). This same money remitting business, UFF, as well as those in
Florida and New Jersey, are at the heart of the Government's complaint in
the instant forfeiture action.
Similarly, Ruben Dario Riascos-Mendez, an incarcerated government
witness who at one time worked for Collazos, testified on direct
examination to the following regarding the mechanics of Collazos'
Q. When you would talk to Stella Collazos, how would
you refer to her?
A. La Dona.
Q. Okay. Did you ever have any conversations with
Stella . . . regarding the commissions or the amount of
money that Stella was charging to launder money?
A. I had to.
Q. Okay. And were there different commissions that
were charged for different methods of money
A. Yes, sir.
Q. Would you tell the jury about that, the different
methods and different commissions.
A. It depended. If it was done through an exchange
office here in the United States and she provided the
name of the people. The list of the names of people
who were to receive the wire transfer, the percentage
would be different. If the person who was going to
make the wire transfer was coma to do it through her
offices to Columbia, then the percentage changed.
Trans. of Tr. at 352.
The Government also called David Boatright, chief investigator in
charge of crimes of money laundering for the Office of Attorney General
in Texas. Boatright, similar to the above two witnesses, would likely be
called by the Government to testify in the instant civil forfeiture
action were it to proceed because he is able to corroborate facts central
to the Government's
theory of the case. Specifically, Boatright testified
that despite her efforts to conceal it, Collazos was the true owner and
controller of UFF, Texas, as well as other domestic money exchange and
remitting businesses. Indeed, Boatright's testimony included the
Q. [W]as [UFF Money & Exchange] one of the
several that you focused your attention on?
A. Yes, sir. We investigated about 15 different
giros houses in the Houston area that were responsible
for multi-million dollar [sic] of money transfers; and
UFF Money . . . was one of those 15 we investigated.
Q. And were you able to determine who the owner of
UFF, Houston, Texas was at the time of your
A. Yes, sir. But that was part of the problem
— that was part of the evidence in the
investigation. The owner on paper said one thing, but
we developed evidence that the actual owner was
Q. On paper. who did you determine the owner to be?
A. A lady by the name of Alba Arias.
Q. And who did you determine the true owner to be,
or the one that was actually controlling the
A. Stella Collazos. In fact, in Texas, we indicted
Ms. Collazos and Ms. Arias for that . . . licensure
Trans. of Tr. 550-52.
Lastly, testimony elicited at the Florida trial related specifically to
the funds currently held in New York and at issue in the instant action.
As Lucia Ramirez, a government witness, testified, referring to the
actions taken by Collazos in response to the Government's efforts to
seize her bank accounts in May, 1996:
Q: [D]id you and Piedad Ortiz or you under her
direction or together wire transfer out of
BankAtlantic $657,000 first to Europe, then back to
the bank, and then to New York?
A: Yes, sir, I did.
Q: [W]hen you did that, on May 31st, when you sent
that money out of the bank, you did it to assist
Stella Collazos to conceal that money from any
investigators, didn't you?
A: Yes, sir.
Q: To get it out of the bank?
Q: Before it could be seized?
A: Yes, sir.
Trans. of Tr. at 1059-60.
In sum, the trial transcript is replete with testimony establishing,
inter alia, that Collazos laundered narcotics proceeds through her money
remitting businesses and through accounts she and Piedad Ortiz managed at
BankAtlantic. Furthermore, it is clear that the defendant-in-rem funds
are directly traceable to that same money laundering scheme.
There similarly can be no dispute that Collazos had notice of the
Florida proceeding. Indeed. as noted above. AUSA Killinger represented at
a pre-trial conference in the Florida action on October 18, 2001, that
Collazos' defense attorney, Peter Raben, contacted AUSA Killinger the
week prior, seeking to negotiate an arrangement with respect to Collazos'
Florida criminal prosecution. See Trans. of Status Conf. at 4-6. United
States v. Ortiz, No. 01-539-CR (S.D. Fla. Oct. 18, 2001). Specifically,
Raben stated that he had been in contact with Collazos who was not
currently within the boundaries of the United States but might agree to
voluntarily submit to the jurisdiction of the Florida court were the
government to agree to the condition of pre-trial release. Id. at 5. AUSA
Killinger denied Raben's request, noting that in light of the
long-pending civil forfeiture action in this Court — during which
Collazos has refused to submit herself to the Court's jurisdiction for
deposition or otherwise — he would not only deny the defense's a
request but would vigorously press for pre-trial detention if Collazos
Having determined that the instant forfeiture action is indeed related
to the federal criminal action pending in Florida, and that claimant had
knowledge of such action, the Court need only determine whether in light
of the pending criminal action, Collazos either (1) purposely left the
jurisdiction of the United States; (2) declined to enter, reenter, or
otherwise submit to the jurisdiction of the United States; or (3)
otherwise evaded the jurisdiction of the court in which a criminal case
is pending against her. § 2466(a)(1)(A)-(C). Following an extensive
review of the record and as discussed below, the Court concludes that
Collazos has intentionally evaded and refused to submit to the
jurisdiction of both federal and state courts in which criminal
prosecutions are pending against her. Section 2466, therefore, is
applicable to Collazos' claim. The Court concludes therefore that
Collazos' claim as to the defendant-in-rem account should be dismissed.
Indeed, Collazos knew about the Florida Indictment as early as August
14, 2001, when her attorney received a copy of the theretofore sealed
document. Despite this knowledge, Collazos declined to face the charges
against her; rather, Collazos had her attorney contact the United States
Attorney's Office while she remained in Columbia and insist on pre-trial
release as a condition of her reentering the country and voluntarily
submitting to the court's jurisdiction. Since the Office's understandable
denial of this request, Collazos has continued to evade the federal
courts, thereby frustrating the exercise of justice in the Florida
criminal action and, consequently, the civil action before this Court.
The above requirement is further satisfied in this case by Collazos'
refusal to submit to the jurisdiction of the state of Texas where she is
subject to an arrest warrant, relating to her control of illegal money
remitting businesses.*fn5 Similar to the Florida action, Collazos has
long had knowledge of the Texas warrant; in fact, it served as the
primary reason given by her prior counsel, Martin Auerbach, for being
unable to attend her noticed deposition in the instant case in July of
Notwithstanding these facts and the plain language of the statute,
Collazos argues — relying solely on case law that pre-dates the
codification of CAFRA — that she is not a "fugitive" in the legal
sense because she was not present in the relevant jurisdictions when the
illegal activities were conducted. According to Collazos, she has not
been in the United States since 1977.
Even if the Court accepted Collazos' representation regarding the last
time she was present in the country, the argument that she is,
therefore, not covered under the fugitive disentitlement provision is
fallacious and contradicts the plain language of the statute. Subsection
(B) states explicitly that a fugitive for the purposes of the statute is
anyone who "decline[s] to enter or reenter the United States." §
2466(a)(1)(B) (emphasis added). By including the word "enter" in addition
to "reenter." Congress must have intended the statute to cover not only
claimants that decline to come back to the United States,
but also those that never entered the United States in the first place.
Collazos' interpretation is thus contrary to the statute's clear
language. See Duncan v. Walker, 533 U.S. 167 (2001) (stating that when
construing statutes, courts have duty to give effect to every word and
not construe any words to be superfluous). The Court's interpretation is
also consistent with the fact that many of the laws. which, if violated,
give rise to forfeiture under CAFRA, similarly extend to defendants who
may never have been present in the United States. Cf. Moncrief v.
Anderson, 342 F.2d 902, 904 n. 2 (D.C. Cir. 1964) (stating exception to
general rule of fugitivity that person be physically present in state
where crime was committed for crimes such as conspiracy that can be
committed from outside jurisdiction).
Lastly, Collazos argues that even if the Court determines that §
2466 is applicable to the facts of this case, the Court should
nonetheless deny the Government's request to dismiss her claim because
the fugitive disentitlement provision is unconstitutional as violative of
the Due Process Clause of the Fifth Amendment. In so arguing, Collazos
relies primarily on the Supreme Court's decision in Degan and the cases
cited therein. Collazos is correct that the Court in Degan expressed
hesitation regarding the constitutionality of a court-enforced fugitive
disentitlement doctrine; however, that feeling was based on the idea that
"a court-made [disentitlement] rule . . . would be an arbitrary response
to the conduct that it is supposed to redress or discourage." Degan, 517
U.S. at 828 (emphasis added). The Court was most concerned with the
appropriate exercise of the inherant powers vested in the courts of the
United States. Addressing the risk associated with these powers. the
Court stated: "[T]here is a danger of overreaching when one branch of the
Government, without the benefit of cooperation or correction from the
others, undertakes to define its own authority." Id. at 822-23. Then
suggesting how Congress could reign in this power, the Court noted that
"[i]n many instances the courts may be controlled or overridden by
statute or rule." Id. at 823. Section 2466 was clearly the next step
envisioned by the Court.
However, the Court in Degan opted to not opine on the issue of whether
a statutory fugitive disentitlement rule would violate due process. As a
result, this Court must look to Second Circuit precedent on this separate
and distinct issue. Although it is true that "[i]n the ordinary case a
citizen has a right to a hearing to contest the forfeiture of his
property," United States v. Good Real Property, 510 U.S. 43 (1993), the
Second Circuit has stated that "[t]he [fugitive disentitlement] doctrine
operates as a waiver by a fugitive of his due process rights in related
civil forfeiture proceedings." Eng, 951 F.2d at 466, citing, United
States v. Forty-Five Thousand Nine Hundred Forty Dollars, 739 F.2d 792,
797 (2d Cir. 1984) (claimant "waive[s] his right to due process in [a]
civil forfeiture proceeding by remaining a fugitive").*fn6 The Court
concludes, therefore, that the implementation of § 2466 does not
violate Collazos' right to due process.*fn7
For the foregoing reasons, the Government's motion to dismiss pursuant
to 28 U.S.C. § 2466 is hereby granted and judgment is hereby entered
in favor of the Government in an amount equal to that contained in the
defendant-in-rem account. The Clerk of Court is hereby directed to close
the above-captioned action.