The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge*fn1
Gustavo Bermudez ("Plaintiff") filed a complaint on October 24, 2007 against the City of New York Police Department ("NYPD") and the United States Drug Enforcement Administration ("DEA") ("Defendants") seeking recovery of $123,565 in United States currency, which was seized from him and subsequently forfeited. The NYPD was dismissed by stipulation on March 27, 2008. Plaintiff has now moved to set aside the forfeiture pursuant to 18 U.S.C. § 983(e), claiming that the DEA did not provide him with proper notice of the forfeiture, and that he did not know or have reason to know of the seizure within sufficient time to file a timely claim. For the following reasons, Plaintiff's motion to set aside the forfeiture is GRANTED.
On July 18, 2006, Gustavo Bermudez was in possession of $123,565 in U.S. currency, which he had earned from his work in the Dominican Republic. (Compl. ¶ 7(a).) On this date, Plaintiff was passing through the Bronx, NY, when he was stopped and searched by Sergeant ("Sgt.") Crawley of the NYPD. (Compl. ¶ 7(c).) After searching Plaintiff, Sgt. Crawley seized the sum of $123,565. Plaintiff alleges that he was searched without reason or cause, and that his property was seized without justification or cause. (Compl. ¶ 7(c)-(d).) He states that he is the owner of said U.S. Currency and that until the incident on July 18, 2006, he had never been questioned about this money. (Compl. ¶ 7(b).)
Though the funds were confiscated, Plaintiff was not arrested and no charges were ever filed against him. (Compl. ¶ 7(e).) Sgt. Crawley issued a Property Clerk's Invoice to Plaintiff, which detailed the quantity of each type of U.S. Currency totaling $123,565, and indicated that the money had been seized by the Bronx 50th Precinct. (Compl. ¶ 7(d); see also Pl. Mem.; Ex. A to Compl.)
With the assistance of counsel, Plaintiff began his efforts to recover the seized funds. Between October 25, 2006, and February 23, 2007, Plaintiff made several inquiries to the NYPD Bronx 50th Precinct and One Police Plaza.*fn2 His messages for Sgt. Crawley went unreturned, but other officers told Plaintiff that they were unable to provide information about his money without an invoice number. Because the invoice Plaintiff received from Sgt. Crawley did not have an invoice number on it, the NYPD officers he spoke with were unable to locate information regarding the seized funds. (J. Castaneda Aff.; J. Soffayer Aff.; J. Stewart Aff.)
Meanwhile, the DEA was in possession of documents related to the seizure, including a "receipt for cash" indicating that $122,985 had been seized from Gustavo Bermudez in New York, NY by DEA Special Agents on July 18, 2006. (J. McNicholas Aff. ¶ 12. See also Hieronymus Decl. ¶ 3, 4(a); Ex. B to Compl.) The amount on the receipt represents a $580.00 discrepancy from the original NYPD Property Clerk's Invoice that Plaintiff received. (Compl. ¶ 7(h); see also Ex. B. to Compl.). On September 6, 2006, following a decision by the DEA's Forfeiture Counsel that there was adequate information to support administrative forfeiture proceedings against the property, the DEA, pursuant to 19 U.S.C. § 1607(a)*fn3 and 18 U.S.C. § 983(a)*fn4 , sent written notice of the seizure by certified mail, return receipt requested. The notice was sent to Gustavo Bermudez at 11 Market St., Fitchburg, MA 01420-8117. Shortly thereafter the notice was returned to the DEA, stamped undeliverable. On October 9, 2006 the seizure of the property was published in The Wall Street Journal. It was published once each week for three consecutive weeks on October 9, 16, and 23. (Hieronymus Decl. ¶¶ 4(a)-(b), (d); Ex. 1, 2.)
On October 24, 2006, the DEA New York Field Division attempted to verify Plaintiff's address upon request of DEA Headquarters. After researching the address on two national databases, ATXPChoicePoint and Lexis, the DEA sent written notice to an address for a Gustavo Bermudez in Puerto Rico on November 8, 2006. (Id. ¶ 4(e).) The letter, sent certified mail, was returned to the DEA and stamped "Return to Sender, Insufficient Address." (Id. ¶ 4(e); Ex. 5.) On December 6, 2006, the DEA New York Field Division researched again on the same databases and verified that the Puerto Rico address was the most current one for Gustavo Bermudez. (Id. ¶ 4(f).) On January 10, 2007, after there had not been any properly executed claim received and after the time limit for filing said claim had expired, the DEA forfeited the $122,985 to the U.S. pursuant to 19 U.S.C. § 1609.*fn5 (Id. ¶ 4(g); Ex. 6.)
On March 9, 2007, after lodging a formal complaint with the NYPD Internal Affairs Unit through Licensed Private Investigator John McNicholas, Plaintiff learned that it was the DEA, and not the NYPD, who was in possession of his funds. (J. McNicholas Aff. ¶¶ 6-8, 10-11). Captain Miller of the NYPD Internal Affairs Department informed McNicholas that the funds were seized not by an NYPD Officer, but instead by DEA Agents with members of the New York City Police Department assigned to them. Miller indicated that he did not know the identities of the task force members who had performed the seizure. He said the invoice did not bear any official chronological number because the DEA agents needed to "white out" the number, since they did not have an invoice of their own to give to Plaintiff at the time. (Id. ¶ 11-12.) Miller then faxed McNicholas a copy of the DEA receipt for cash dated July 18, 2006. The receipt "designates that currency in Yellow Tag No. 0003617 in a blue money bag to the overnight vault under file no. C1-06-0121" with signatures of two special agents at the bottom.
(J. McNicholas Aff. ¶ 13; see also Ex. B to Compl.)
On May 3, 2007, Plaintiff made written demand for return of the seized funds from the DEA. The DEA denied this request on May 22, 2007. (Compl. ¶ 7(j)-(l).) The letter informed Plaintiff that the time to file a claim had expired and that the property had been forfeited. (See Hieronymus Decl.¶ 4(i); Ex. 8, 9.)
Plaintiff alleges that he never received any official notice of forfeiture from the DEA and that he was given no "opportunity to be heard or recover the currency." (Compl. ¶ 7(k).) Since the money was seized he had "continued to demand redress from the NYPD, whose name the defendants prominently displayed on all paperwork furnished to him." (Id. ¶¶ 7(k), 8(d).)
On October 29, 2007, Plaintiff filed suit in the Southern District of New York. On February 6, 2008, Defendants moved to dismiss the complaint pursuant to 12(b)(1) and 12(b)(6). The parties subsequently realized that this action should be treated as a forfeiture proceeding pursuant to 18 U.S.C. § 983(e).*fn6 Plaintiff responded accordingly and on March 26, 2008, filed a motion to set aside the forfeiture pursuant to § 983(e). Because we treat this motion as one pursuant to § 983(e) and not as a motion to dismiss, we ...