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United States v. Sum of $185

United States Court of Appeals, Second Circuit

September 25, 2013

UNITED STATES of America, Plaintiff-Appellee,
The SUM OF $185,336.07 UNITED STATES CURRENCY SEIZED FROM CITIZEN'S BANK ACCOUNT L7N01967, Defendant, Dominic Pellegrino, Claimant-Appellant.

Argued: June 19, 2013.

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[Copyrighted Material Omitted]

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Donald M. Thompson, Easton Thompson Kasperek Shiffrin, LLP, Rochester, NY, for Dominic Pellegrino.

Grace M. Carducci, Assistant United States Attorney, for William J. Hochul, Jr., United States Attorney for the Western District of New York, Rochester, NY, for the United States of America.

Before: CALABRESI, CABRANES, and PARKER, Circuit Judges.

JOSÉ A. CABRANES, Circuit Judge:

In this appeal, we must decide whether to recognize, nostra sponte, " plain error" [1] in the legal standards applied by the District Court in concluding that certain funds of the appellant seized by the government were the product of illegal activities and therefore subject to forfeiture.

Our review of the record leads us to conclude that, although the several claims of error asserted by the appellant are without merit, the District Court's application of legal standards antedating adoption of the Civil Asset Forfeiture Reform Act of 2000 (" CAFRA" ), Pub.L. No. 106-185, 114 Stat. 202 (codified principally at 18 U.S.C. § 983) constituted plain error and affected appellant's substantial rights. Consequently, we vacate the judgment of the United States District Court for the Western District of New York (David G. Larimer, Judge ) and remand the cause for further proceedings consistent with this opinion.


On April 27, 2007, Dominic Pellegrino (" Pellegrino" or " appellant" ), now a 66-year-old retired deputy sheriff, was caught selling prescription drugs illegally to a confidential informant. Based on this information, law enforcement obtained a search warrant for Pellegrino's residence, where, upon executing the warrant on May 3, 2007, they found additional prescription pills— some of which contained controlled substances— and empty prescription bottles. Pellegrino was arrested on May 16, 2007 and charged in state court with having violated New York's narcotics laws. On July 11, 2008, he pleaded guilty in state court to one count of criminal possession of a controlled substance in the seventh degree, in violation of N.Y. Penal Law § 220.03. [2] Pellegrino was sentenced on September 11, 2008 to a " conditional discharge." [3]

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During the search of Pellegrino's home, law enforcement also found bank statements identifying Pellegrino as the owner of a Citizens Bank brokerage account. The ensuing investigation revealed that between May 25, 2004 and April 5, 2007— the three-year period immediately preceding his arrest— Pellegrino deposited $169,000 and transferred $17,000 into the brokerage account. The documents Pellegrino had completed to open the account, however, stated that his sole source of income during this period was a Social Security disability payment of $12,000 per year. He also had not filed federal tax returns for the six-year period from 2001 through 2006. On the basis of this information, on June 20, 2007, law enforcement seized the brokerage account, which had a balance at that time of $185,336.07.

On June 30, 2008, the federal government (the " government" ) commenced the instant civil forfeiture action in the District Court pursuant to 21 U.S.C. § 881(a)(6) (" § 881(a)(6)" ),[4] seeking forfeiture of the assets held in the brokerage account. The government alleged in its complaint and supporting affidavit that the entire sum of $185,336.07 constituted proceeds of illegal drug sales. That same day the District Court issued a warrant of arrest in rem. On October 23, 2009, Pellegrino filed a verified claim requesting that the currency be returned to him because it was the product of lawful activity. On August 1, 2011, following the completion of discovery, the government moved for summary judgment in the civil forfeiture proceeding, which the District Court granted in a decision and order dated May 2, 2012. See United States v. Sum of $185,336.07 U.S. Currency Seized from Citizen's Bank Account L7N-01967, 858 F.Supp.2d 246, 250 (W.D.N.Y.2012) (" Sum of $185,336.07 " ).

This appeal followed.


" We review an order granting summary judgment de novo, drawing all factual inferences in favor of the non-moving party." Viacom Int'l, Inc. v. YouTube, Inc., 676 F.3d 19, 30 (2d Cir.2012). Summary judgment is required if " there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); see also Lyons v. Lancer Ins. Co., 681 F.3d 50, 56 (2d Cir.2012).


On appeal, Pellegrino raises three arguments: (1) the District Court " abused its discretion" by failing to " accommodate" his invocation of the Fifth Amendment; (2) the District Court improperly " sanctioned" him for discovery violations by granting summary judgment; and (3) the District

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Court's decision allowing the seizure of the $185,336.07 violated the Eighth Amendment's ban on disproportionate punishment. We do not find these arguments persuasive, but we briefly discuss them before turning to the question of the correct ...

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