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United States v. United States Currency in the Amount of Nineteen Thousand

June 5, 2007

UNITED STATES OF AMERICA, PLAINTIFF,
v.
UNITED STATES CURRENCY IN THE AMOUNT OF NINETEEN THOUSAND, SEVEN HUNDRED EIGHTY DOLLARS ($19,780.00), MORE OR LESS, AND ALL PROCEEDS TRACEABLE THERETO, DEFENDANT.



The opinion of the court was delivered by: Hurley, Senior District Judge

MEMORANDUM AND ORDER on Motion to Strike and for Default Judgment (doc. #7)

Presently before the Court is the Government's dual request for the striking of the Verified Answer of claimant Maria Cruz filed in this case and for default judgment. These requests stem from the Government's application for a final decree of forfeiture of the Defendant United States currency in the amount of nineteen thousand, seven hundred eighty dollars ($19,780.00), more or less, and all proceeds traceable thereto (the "Defendant $19,780"). For the reasons stated herein, both requests are GRANTED.

I. BACKGROUND

As the result of a 2001 criminal investigation conducted by the Suffolk County Police Department ("Police Department"), a state court search warrant was issued on or about December 15, 2001 authorizing detectives of the Police Department ("Detectives") to search 332 Crooked Hill Road (the "Premises") in Brentwood, New York. In executing the search warrant, the Detectives found the Premises occupied by Maria Cruz and Jessica Pineiro. "[L]aw enforcement officers [also] located and seized a small quantity of crack/cocaine in the bedroom dresser, $580.00 in U.S. currency inside Cruz's pocketbook, and $19,200.00 in U.S. currency inside a locked safe in Cruz's bedroom. Cruz supplied detectives with the key to open the safe." (Pl.'s Mem. Law. Supp. Mot. Strike at 2 (citing V. Compl. at ¶11).) Soon thereafter, "[o]n or about January 10, 2002, the Honorable Madeleine A. Fitzgibbon, District Court Judge, First District Court, State of New York, Suffolk County, issued an order authorizing the turn-over of the defendant funds to the federal government for purposes of instituting a forfeiture proceeding." (V. Compl. at ¶15.)

Subsequently, Ms. Cruz was indicted in the New York State Supreme Court, County of Suffolk, on various charges including possession of a controlled substance in the third degree. (See id. at ¶18.) Ultimately, she pled guilty to criminal possession of a controlled substance in the seventh degree and was sentenced to three years' probation. (See "Individual Arrest Report" for Maria M. Cruz, attached as Ex. J. to Decl. Asst. U.S. Atty Merchant.)

Thereafter, the U.S. Department of Justice, Department of Drug Enforcement Administration ("DEA") advised Ms. Cruz--as a potential claimant--that it intended to forfeit the Defendant $19,780. "Cruz filed an administrative claim with the DEA, and the DEA referred the matter to the United States Attorney's Office for the Eastern District of New York for judicial forfeiture as is required by 18 U.S.C. § 983." (Pl.'s Mem. Law. Supp. Mot. Strike at 3.) No other party filed a claim.

The record in this case shows that the United States filed a Verified Complaint seeking forfeiture of the Defendant $19,780 on June 28, 2002, and that shortly thereafter, on July 2, 2002, the Court issued a warrant authorizing the arrest of the same. Both Ms. Cruz and her then-counsel were each served with the warrant and the Verified Complaint.*fn1 Notably to the Government's request under consideration, the warrant specifically stated, inter alia:

IT IS FURTHER ORDERED that all persons claiming an interest in or right against the defendant property shall file their verified claim within thirty (30) days after service of the complaint or final publication of notice of the filing of the complaint, whichever is earlier, or within such additional time as the court may allow, pursuant to 18 U.S.C. § 983(a)(4) and Rule C(6) of the Supplemental Rules of Certain Admiralty and Maritime Claims, and shall serve and file their answers to the verified complaint within twenty (20) days after the filing of the verified claim with the Office of the Clerk, United States District Court for the Eastern District of New York, with a copy thereof sent to Assistant United States Attorney Orelia E. Merchant, United States Attorney's Office for the Eastern District of New York, One Pierrepont Plaza, 14th Floor, Brooklyn, New York 11201. (United States v. United States Currency in the Amount of Nineteen Thousand, Seven Hundred Eighty Dollars ($19,780.00), more or less, and All Proceeds Traceable Thereto, No. 02-cv-3793, Warrant of Arrest at 3 (E.D.N.Y. July 2, 2002) (emphasis added), attached as Ex. B. to Decl. of Asst. U.S. Atty Merchant.)

While having filed an administrative claim with the DEA, the record shows that Ms. Cruz never filed the required verified claim in this case. Indeed, the Court takes judicial notice of the fact that despite other warrants being served and despite public notification of the warrant being made, no claims for the Defendant $19, 780 were filed in the case. Maria Cruz did, however, file a Verified Answer to the Verified Complaint on April 7, 2003, together with a counterclaim alleging "[that the seizure of the CURRENCY was an unlawful deprivation of Maria Cruz's right to possess property against unreasonable search and seizure said right being secured by the 4th Amendment." (See V. Answer and Counteract. at ¶15 (doc. # 5), attached as Ex. G. to Decl. of Asst. U.S. Atty Merchant.)

Thereafter, there was no docket activity in the case until over two-and-one-half years later when, on November 1, 2005, Assistant U.S. Attorney Merchant filed her present request that the Court strike Ms. Cruz's Answer and grant default judgment. Four-and-one-half months earlier, Assistant U.S. Attorney Merchant had sent a letter to Mr. Cruz's attorney, Mr. Collado, informing him that she "intends to move to strike the answer and enter a default judgment in favor of the plaintiff if Ms. Cruz does not seek leave of Court to file a verified claim by July 15, 2005." (Letter from Asst. U.S. Atty Merchant, Office of United States Attorney, Eastern District of New York, to William J. Collado, Esq., Collado, Collado & Fiore (June 16, 2005), attached as Ex. H. to Decl. of Asst. U.S. Atty Merchant.) When no such motion was made on behalf of Ms. Cruz, the Government proceeded, as it indicated, by filing the instant motion.

II. DISCUSSION

A. The Procedural Requirements of Civil Forfeiture

According to18 U.S.C. § 983--the statute under which the Government proceeds in this action--where the Government commences a civil forfeiture action by filing a complaint, "any person claiming an interest in the seized property may file a claim asserting such person's interest in the property in the manner set forth in the Supplemental Rules for Certain Admiralty and Maritime Claims . . ." 18 U.S.C. § 983(a)(4)(A) (emphasis added). In turn, Supplemental Rule C of the Supplemental Admiralty and Maritime Claims Rules requires, inter alia, that "a person who asserts a right of possession or any ownership interest in property that is the subject of the action must file a verified statement of right or interest," Supplemental Rule C(6)(i) (emphasis added), in addition to filing an answer, see id. at subsec. (6)(iv).

The Second Circuit has held that "[s]trict compliance with Supplemental Rule C(6) is typically required." United States v. Amiel, 995 F.2d 367, 371 (2d Cir. 1993) (citing United States v. Beechcraft Queen Airplane serial Number LD-24, 789 F.2d 627, 630 (8th Cir. 1986) (further citations omitted)). "However, a court has discretion in appropriate circumstances to depart from the strict compliance standard." Id. (citations omitted); see also Amiel, 995 F.2d at 371 (citing cases). Typically, though, discretion is warranted only in those cases where a claimant has demonstrated reliance on some representation by the Government that the filed claim was sufficient. See, e.g., ...


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