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U.S. v. CONTENTS OF ACCOUNT NUMBER 68108021

October 25, 2002

UNITED STATES OF AMERICA, PLAINTIFF,
V.
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 defendant-in-rem account.

BACKGROUND

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 BankAtlantic.

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.

DISCUSSION

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:

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 specified activity."*fn3

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 CAFRA.

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 States;
(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 person; and
(2) is not confined or held in custody in any other jurisdiction for commission of criminal conduct in that jurisdiction.

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 dismissed.

As noted, the Court must initially address the question of whether the forfeiture action is related to a pending criminal proceeding. Although ยง 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 ...


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