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United States District Court, Eastern District of New York

March 19, 2003


The opinion of the court was delivered by: I. Leo Glasser, United States District Judge


Plaintiff United States of America (the "government") moves for summary judgment on its civil forfeiture claim pursuant to 21 U.S.C. § 881 regarding the real property located at 464 Myrtle Avenue and 181 Washington Avenue in Brooklyn, New York (the "defendant property"). Claimant and owner of the defendant property Sofia Collado opposes the forfeiture on the grounds that she is an innocent owner and that the proposed forfeiture would be unconstitutional under the Excessive Fines Clause. The undisputed evidence establishes that the defendant property is subject to forfeiture. Further, as explained below, even if Mrs. Collado's denial of actual knowledge of her son's criminal activity is credited, her admissions that she had suspicions and the actions she took on those suspicions show that at best she willfully blinded and consciously avoided that which was otherwise painfully apparent to her. Summary judgment is awarded to the government.


Mrs. Collado is the title owner of the defendant property. (Rule 56.1 Statement, ¶ 1.) Mrs. Collado was born in the Dominican Republic on September 6, 1939, and moved to the United States more than thirty years ago. (Collado Aff. ¶ 4.) Mrs. Collado and her husband Rafael Collado Sr. purchased the defendant property on March 16, 1983. (Id., ¶ 2.) Mr. Collado died during the pendency of this action, and his interest in the property passed to Mrs. Collado. (Id., ¶ 2.) The property includes a three story building with one residential apartment on each of the second and third floors, which are accessible through a common entrance at 181 Washington Avenue (the "apartment entrance"). (O'Neill Dec., ¶ 4.) The first floor is occupied by a grocery store called Collado and Son the entrance to which faces Myrtle Avenue at 464 Myrtle Avenue (the "grocery store entrance"). (Id.) Mr. and Mrs. Collado owned and operated the grocery store. (Id.) Mrs. Collado did not live at the defendant property. but at the relevant times, her son Rafael Collado Jr. and his girlfriend Angela Lorenzo lived in the second floor apartment on the defendant property. (O'Neill Dec. ¶ 4.) The fair market value of the defendant property is $385,000. (See Rule 56.1 Statement ¶ 31; Gay Dec., ¶ 3.)

The Undisputed Evidence of Narcotics Trafficking on and around the Defendant Property

The government does not claim that Mrs. Collado actually observed any of the events that occurred outside of the grocery store. Even excluding the events that occurred wholly in the vicinity of the apartment entrance (and therefore were likely invisible to Mrs. Collado since she could only see what transpired in the store and just outside its entrance), the government can point to eleven events over the course of one year that Mrs. Collado more likely than not saw or overheard.

On June 13, 1997, Rafael Collado Jr. exited the grocery store and entered a vehicle parked outside in which he sold one ounce of heroin to an undercover officer in exchange for three hundred dollars. (Rule 56.1 Statement. ¶¶ 2-3; O'Neill Dec. ¶ 8.)

On July 11, 1997, an associate and fellow employee of Rafael Collado Jr., Hector Sanchez, met an undercover officer in the grocery store. (Id., ¶ 6.) They went outside where Sanchez sold thirty grams of heroin to the undercover officer for three thousand dollars. (Id.)

On January 2, 1998, Rafael Collado Jr. spoke by telephone from the grocery store with David Rodriguez and ordered two kilograms of cocaine for a price of thirty seven thousand dollars using coded terms.*fn1 (Id., ¶ 8.) Shortly thereafter, Rodriguez entered the defendant property carrying a black shoulder bag but left without it, using the apartment entrance both times. (Id., ¶ 9-10; see O'Neill Dec. ¶ 10.) Later that night, or rather in the early hours of the morning of January 3, Rafael Collado Jr. spoke by telephone from the grocery store to Angela Lorenzo who was in the apartment on the second floor, and told her to give "the two presents" to "Louie." (Id., ¶ 11.) Not long thereafter, Lorenzo distributed two kilograms of heroin to Louis Morales. (Id., ¶ 12.)

On January 4, 1998, Rafael Collado Jr. spoke by telephone from the grocery store to an unidentified person and asked if "you bringing me some loot from that little boy?" (Id., ¶ 13-14.) According to Sergeant O'Neill, "little boy" is a street term for heroin. (O'Neill Dec. ¶ 18.)

On January 7, 1998, Rafael Collado Jr. spoke by telephone from the grocery store and offered, by using coded phrases, to sell another person cocaine for the price of $18,500 per kilogram. (Id., ¶ 15.) Specifically, they referred to cocaine by using the term "women", a street term for cocaine, and negotiated the price by asking "Where are they gonna live" to which Rafael Collado Jr. responded, "oh . . . eighteen and a half." (O'Neill Dec. ¶ 20, Gov't Ex. 11. at 1.)

On January 25, 1998, Reginald Velez spoke by telephone to Rafael Collado Jr., who was at the grocery store. Velez said that he had shot another person believed to have stolen drugs from Rafael Collado Jr., and that Velez had recovered some drugs and given them to his brother for resale. (Id., ¶ 16-17.)

On February 18, 1998, Velez again spoke by telephone with Rafael Collado Jr., who was at the grocery store. Velez asked Rafael Collado Jr. if he was interested in selling heroin to a customer. (Id., ¶ 21.)

On February 19, 1998, an unidentified woman entered the grocery store and approached Rafael Collado Jr., who exited the grocery store with her and spoke briefly. (Id., ¶ 22; O'Neill Dec. ¶ 39.) Rafael Collado Jr. then entered through the apartment entrance and returned shortly thereafter with a paper bag that contained four pounds of marijuana, which he gave to her outside of the apartment entrance.

Mrs. Collado thus observed her son or his friend Sanchez leaving the store with people coming to the grocery store looking for them on three occasions, and otherwise overheard her son speaking on the phone using common words like "she," "women." "two presents," and "little boy." The government does not dispute Mrs. Collado's sworn statement that she did not understand that those terms were coded references to cocaine and heroin. (See Collado Aff. ¶¶ 21, 23, 25-31.)

Finally, on June 3, 1998, Police officers executed a search warrant of the defendant property and found in the grocery store a .357 magnum handgun and $8,686 in cash kept in a tool box. (Rule 56.1 Statement, ¶ 25.) The police also discovered in the second-floor apartment belonging to Rafael Collado Jr. and his girlfriend Angela Lorenzo an Ohaus scale (typically used by drug traffickers to weigh narcotics) and almost $20,000 in cash secreted around the apartment. (Id.; O'Neill Dec. ¶ 48.)

Mrs. Collado does not deny knowing about the cash or the handgun, but she claims that the cash on hand was to pay beer distributors who serviced their grocery store, some of whom demanded payment in cash only. (Collado Dep. at 39.) One invoice from a beer distributor clearly indicates that only cash was accepted for payment, but the other invoices on their face do not restrict payments to cash. (Wilentz Aff., Ex. H.) No narcotics were found anywhere in the building.

Statements by or to Mrs. Collado

There is no dispute over the fact that on five occasions, Mrs. Collado received phone calls and made certain inculpatory statements as described below.

On January 26, 1998, a person named "Vejin" called and asked to speak to Rafael Collado Jr. According to the government's translation, Mrs. Collado told the caller:

Look, sir. Boss of intrusion. You want to report to talk with Ralphy, good. Report here to talk. I don't want blah blah over the phone and nothing from nothing. You guys know that its something serious. You guys know what I am trying to say. I want to talk personally to all. To all I am giving advice. . . . But you I give it more like this. It's that I'm going to put him on but without talking of anything. Because the thing is hot. . . . Okay that's all I'll say because now I don't want more phone calls at my business.
(Gov't Ex. 13, at 1).

Four days later, on January 30, 1998, an unidentified male called and asked to speak to Rafael Collado Jr. Mrs. Collado warned the caller to "be very, very careful talking over the phone." (Rule 56.1 Statement ¶ 19; Gov't Ex. 14, at 1.)

On February 10, 1998, an unidentified male called and asked to speak to her son. Mrs. Collado lied and told the caller that he was not around and that "he will call you in a little while because on this telephone I don't want to talk for nothing." (Rule 56.1 Statement ¶ 20; Gov't Ex. 15, at 1.) In fact, Rafael Collado Jr. was present in the store. (Gov't Ex. 15, at 1.)

Mrs. Collado explains these statement by arguing that she did not like people calling her son at work, and that she sought to scare off his associates by demanding that if they wanted to speak with her son in the future they would need to do so in her presence and not on the phone. (Collado Mem. at 15-16.) For example, Mrs. Collado claims that when she said "You guys know that its something serious. You guys know what I am trying to say. I want to talk personally to all. To all I am giving advice," this was her attempt to "scare them so they would stop calling." (Collado Aff. ¶ 13.) Similarly, Mrs. Collado states that she lied to one caller because she did not want the caller to be speaking with her son. (Id.) On the other hand, Mrs. Collado admits that she sought to scare off her son's associates because. although she did not know that her "son was selling drugs again," she "had [her] suspicions, because of his associates from the jail calling and stopping by frequently. . . ." (Id., ¶ 3.)

The government also points to two other events. On February 28, 1998, Mrs. Collado called Angela Lorenzo (who lived on the second floor of the defendant property) from the grocery store to ask her to track down her son because a woman had stopped by the store looking for him. (Rule 56.1 Statement, ¶ 23.) Mrs. Collado believed that this woman was bringing him some money. (Id.) Mrs. Collado states that her belief was based on the claim of the woman (who lived in the neighborhood) that she sought to repay a loan her son made. (Collado Aff. ¶ 14.)

Finally, on March 19, 1998, Mrs. Collado's husband called her to tell her (a) not to use the telephone "because they are catching people on the phones and those who are caught, get five (5) to ten (10)"; (b) "they caught a group over there"; (c) "they say the losses . . . I don't know how many millions"; and (d) "it's the FBI that's behind all this." (Rule 56.1 Statement, ¶ 24.) Mrs. Collado states that this phone call had nothing to do with her son or any suspicions about wiretapping. and instead involved her husband warning her away from dealing with people offering certain phone numbers that purportedly allowed people to call the Dominican Republic for free. (Collado Aff. ¶ 15.)


I. Standard for Summary Judgment

Summary judgment "shall be rendered forthwith if the pleadings, depositions . . . together with the affidavits . . . show that there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A "moving party is entitled to judgment as a matter of law [if] the nonmoving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof." Celotex Corp. v. Catrell, 477 U.S. 317, 323 (1985) (internal quotation marks and citations omitted). In deciding a summary judgment motion, a court should not resolve disputed issues of fact; rather, it simply must decide whether there is any genuine issue to be tried. Eastman Mach. Co. v. United States, 841 F.2d 469, 473 (2d Cir. 1988). A disputed fact is material only if it might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine factual issue exists if there is sufficient evidence favoring the nonmovant such that a reasonable jury could return a verdict in her favor. Id., at 248-49. The motion "will not be defeated merely . . . on the basis of conjecture or surmise." Bryant v. Maffucci, 923 F.2d 979, 982 (2d Cir. 1991). "In assessing the record to determine whether there is a genuine issue of fact, the court is required to draw all inferences in favor of the party against whom summary judgment is sought." Ramseur v. Chase Manhattan Bank, 865 F.2d 460, 465 (2d Cir. 1989).

II. The Government Has Established Probable Cause for Forfeiture

The government's basis for seizure of real property used to facilitate violations of the federal drug trafficking laws is limited by statute to exclude property interests "to the extent of an interest of an owner, by reason of any act or omission established by that owner to have been committed or omitted without the knowledge or consent of the owner." 21 U.S.C. § 881(a)(7) (1999). To support a forfeiture pursuant to 18 U.S.C. § 881, the government need only establish probable cause, or "reasonable grounds, rising above the level of mere suspicion, to believe that the property is subject to forfeiture." United States v. 15 Black Ledge Drive, 897 F.2d 97, 102 (2d Cir. 1990). Although the Civil Asset Forfeiture Reform Act of 2000 (CAFRA), see Pub. L. 106-185 (2000), imposed a higher standard of proof upon the government, CAFRA does not apply retroactively to actions filed before its effective date such as this one. Id., § 21; see United States v. $557,933.89, 287 F.3d 66, 76 n. 5 (2d Cir. 2002). Accordingly. the government needs only to show probable cause.

Mrs. Collado does not contest that the government has met its burden to establish probable cause "to believe that certain property is subject to forfeiture." United States v. 4492 Livonia Rd., 889 F.2d 1258, 1267 (2d Cir. 1989). In any event, as detailed above, the government has more than met its burden and presented facts that establish probable cause to believe that the defendant property was used to facilitate both the distribution of narcotics such as cocaine and heroin contrary to 21 U.S.C. § 841 and also the maintenance of property for the use of narcotics distribution contrary to 21 U.S.C. § 856(a)(2).

III. The Innocent Owner Defense

Once probable cause is established, the burden shifts to Mrs. Collado to establish that she is an innocent owner. 4492 Livonia Rd., 889 F.2d at 1267. In order to establish the "innocent owner" affirmative defense, Mrs. Collado "must prove by a preponderance of the evidence that . . . the illegal use of the property was without [her] knowledge or consent." United States v. 19 and 25 Castle Street, 31 F.3d 35, 39 (2d Cir. 1994). At the summary judgment stage, normally "caution must be exercised in granting summary judgment where state of mind is at issue." Bryant, 923 F.2d at 985. However, "when the government supplies facts which give rise to a reasonable inference that the claimant was aware of narcotics activity, the claimant opposing summary judgment bears a correspondingly greater burden to come forward with evidence which meets that inference." United States v. 8848 South Commercial Street, 757 F. Supp. 871, 881 (N.D.Ill. 1990). Evidence that drug trafficking was occurring but that the claimant chose to ignore it is sufficient to give rise to the inference that she was aware of it. United States v. 755 Forest Road, 985 F.2d 70, 72 (2d Cir. 1993) ("where an owner has engaged in `willful blindness' as to activities occurring on her property, her ignorance will not entitle her to avoid forfeiture"). If a claimant has knowledge or remained willfully blind to the narcotics trafficking, then to avoid forfeiture the claimant must "take all reasonable steps to prevent illicit use of premises once [she] acquires knowledge of that use. . . ." United States v. 141st Street Corp., 911 F.2d 870, 879 (2d Cir. 1990).

In this case, setting aside the evidence of drug trafficking that only occurred via the apartment entrance (and therefore wholly out of sight of Mrs. Collado working in the grocery store), the undisputed evidence shows (i) buyers walking into the grocery store and then following Rafael Collado Jr. or one of his accomplices out of the building to conduct their drug transactions, (ii) Rafael Collado Jr. placing and receiving numerous phone calls at the grocery store to conduct narcotics-related business, and (iii) Mrs. Collado herself speaking to associates of her son and warning them not to use the grocery store phone and to speak to her son in person.

Further, although Mrs. Collado denies knowing that "my son was selling drugs again," (Collado Aff., ¶ 3), she candidly admits, "I had my suspicions. because of his associates from the jail calling and stopping by frequently." (Id.) She further admitted that her suspicions were strong enough to act upon by telling his associates to stop calling her son on the phone in the grocery store "in order to protect my son and to protect my Grocery Store." (Id.) In response to this admission, the government argues that Mrs. Collado's admissions that she had suspicions about her son means that at the very least she chose to remain "willfully blind." (Gov't Reply Mem. at 9-12.) In order to find that someone acted with willful blindness, the evidence must show that she "was aware of a high probability of the fact in dispute and consciously avoided confirming that fact." United States v. Pascarella, 84 F.3d 61-70 (2d Cir. 1996) (quotations omitted). Despite the able efforts of her counsel to finesse the distinction between her suspicion and her actual knowledge, it is undisputed that Mrs. Collado was at least aware of facts from which a reasonable person would infer a high probability that illicit activity was taking place.

Mrs. Collado's suspicions therefore imposed upon her the duty to "take all reasonable steps" to prevent illicit use of the property. 141 Street Corp., 911 F.2d at 879. However, rather than "ask[ing] the police to take some action in regard to the narcotics activity at their dwelling," 19 and 25 Castle Street, 31 F.3d at 40, or issuing an ultimatum to her son to stay away from these associates, id. the undisputed evidence shows that Mrs. Collado in fact invited these persons she assumed to be her son's jail associates to come to the defendant property and indeed to the grocery store itself if they wanted to speak to him. For example, in that same phone call where she meant to say "things are not good," she explicitly told this associate: "You want to report to talk with Ralphy, good. Report here to talk." She further said, "I don't want more phone calls at my business." Mrs. Collado told another associate, "he will call you in a little while because on this telephone I don't want to talk for nothing," and told a third associate, "be very, very careful talking over the phone." Although these statements may have discouraged her son and his associates from using the grocery store phone to conduct their business, to argue that encouraging Rafael Collado Jr.'s associates to come to the defendant property to meet with him was a reasonable step in reaction to her suspicions is not persuasive.

Since both sides dispute whether Mrs. Collado's statements on the phone show that she knew or suspected the presence of a wiretap. the issue merits brief mention. The government argues that these phone conversations are proof that Mrs. Collado knew that illicit activity was going on, and was warning her son's associates that the phone might be tapped and to speak in person only. (Gov't Mem. at 8, 22-23.) In contrast, Mrs. Collado denies any knowledge of the wiretaps or her son's activities until after the arrests in June 1998, and argues that her statements are being misconstrued. (Collado Aff. ¶ 10.)*fn2 For example, she states that the phrase "la cosa esta caliente" used in the January 26 phone call literally translates as "the thing is hot" but idiomatically means that "things are not good." (Id.) In other words, Mrs. Collado claims that the phrase does not mean that she had any knowledge of the wiretap, but rather that she did not like the idea of the caller speaking to her son. Similarly, Mrs. Collado claims that her husband's warning in the March 19 phone call had nothing to do with narcotics investigations or wiretaps. but instead referred to an occasion earlier when someone came to the grocery store offering fraudulent phone numbers that allowed a person to phone the Dominican Republic without being charged. (Id., ¶ 15.) The phrase "catching people on the phones" and "they caught a group over there" referred to arrests of people in the Dominican Republic who were administering the fraudulent scheme, and the reference to "millions" meant the losses suffered by the phone company. (Id.)

If the only evidence that tended to show Mrs. Collado knew or suspected that her son was involved in illegal activity were these references to using the phones, then the dispute over the proper translation of her expressions in a foreign language might preclude summary judgment. See Buxbaum v. Deutsche Bank AG, 196 F. Supp.2d 367, 373 (S.D.N.Y. 2002). Given her admitted suspicions, however, this dispute is not material. If Mrs. Collado is correct, then her statements confirm that she was very worried that her son and his associates might be engaged in criminal activity. If the government is correct, then this evidence would be further proof of her knowledge. The existence of a dispute over translation or interpretation in this case does not create a genuine issue of a material fact, and therefore cannot preclude summary judgment.

IV. The Excessive Fines Clause

Mrs. Collado argues that forfeiture of the defendant property would be an excessive fine prohibited by the Constitution. The Bill of Rights provides: "Excessive bail shall not be required. nor excessive fines imposed, nor cruel and unusual punishments inflicted." U.S. Const. Amend. 8. This protection is applicable to forfeitures sought under 21 U.S.C. § 881(a)(7), because even though they are termed "civil forfeitures" they are punitive in fact. See Austin v. United States, 509 U.S. 602. 621-22 (1993). "[A] punitive forfeiture violates the Excessive Fines Clause if it is grossly disproportionate to the gravity of a defendant's offense." United States v. Bajakajian, 524 U.S. 321, 334 (1998). In order to determine whether a forfeiture is "grossly disproportionate," the amount of the forfeiture is compared to the gravity of a claimant's conduct. Id. at 336-37. In Bajakajian, the government sought to forfeit the entire amount of currency ($357,144) that the defendant carried as he left the country but failed to report. Id. at 325. The Court found this forfeiture was grossly disproportionate after examining a number of factors, including: (a) "the essence of respondent's crime" and its relation to other criminal activity, (b) whether the respondent fit into the class of persons for whom the statute was principally designed. (c) the maximum sentence and fine that could have been imposed, and (d) the nature of the harm caused by the claimant's conduct. Id. at 337-39.

In this case, the government claims that Mrs. Collado violated 21 U.S.C. § 856(a)(2) by deliberately ignoring Rafael Collado Jr.'s actions and making the defendant property available for drug distribution. See United States v. Chen, 913 F.2d 183, 191 (5th Cir. 1990) (holding that "deliberate ignorance" may support § 856(a)(2) claim); United States v. Bilis, 170 F.3d 88, 92-93 (1st Cir. 1999) (holding "willful blindness" instruction appropriate in § 856(a)(2) charge); see also United States v. 143-147 E.23rd, 888 F. Supp. 580, 585 (S.D.N.Y. 1995) (noting that a "colorable criminal case" existed against hotel owner claimant contesting forfeiture of SRO hotel under § 856(a)(2)), aff'd, 77 F.3d 648 (2d Cir. 1996). In other words, as Mrs. Collado essentially conceded at oral argument (Tr. at 27), the Excessive Fines analysis in this case collapses into the determination of her innocent owner defense.

The evidence regarding her innocent owner defense similarly establishes the § 856(a)(2) violation. Given her suspicions, only by remaining willfully blind to what her son and his associates were in fact doing in and around the defendant property could Mrs. Collado deny knowledge of the drug trafficking. All of the Bajakajian factors are satisfied here.*fn3 The § 856(a)(2) violation would have a high degree of relation to the other criminal activity (namely the extensive drug trafficking), Mrs. Collado would fit within the class for whom 21 U.S.C. § 881 was designed, the statutory fine allowed (up to $500,000 per claimant)*fn4 would be significantly in excess of the $385,000 value of the defendant property, and the harm to the public caused by the drug trafficking is great.

Accordingly, summary judgment is not precluded by the Excessive Fines defense.


For the foregoing reasons, the government's motion for summary judgment pursuant to Federal Rule of Civil Procedure 56 is granted.


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