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United States v. $198

United States District Court, N.D. New York

March 5, 2014

$198, 573.85 in U.S. CURRENCY in lieu of Bank of America, Account Number XXXXXXXX6421, Defendant. ELITE DISTRIBUTING, LLC, Claimant.

GWENDOLYN E. CARROLL, ESQ., Ass't United States Attorney, HON. RICHARD S. HARTUNIAN, United States Attorney for the, Northern District of New York, Syracuse, NY.

H. DANA VANHEE, ESQ., LAW OFFICE OF H. DANA VANHEE, Attorneys for Claimant, Syracuse, NY.


DAVID N. HURD, District Judge.


Plaintiff United States of America (the "Government") brought this in rem civil forfeiture action against $198, 573.85 in funds (the "defendant currency") seized from a Bank of America account held in the name of Elite Distributing, L.L.C. ("Elite Distributing" or "claimant"). The Government alleges defendant currency is subject to forfeiture pursuant to two federal statutes.[1] Claimant has moved to dismiss the complaint pursuant to Federal Rule of Civil Procedure ("Rule") 12(b) for lack of jurisdiction. The motion was fully briefed and decided on its submissions without oral argument.


This action arises from an ongoing Drug Enforcement Agency ("DEA") investigation into the sale and distribution of synthetic drugs[2] by Tyson Jones ("Jones"), Donnie Armstrong ("Armstrong"), AK Distributing, L.L.C. ("AK Distributing"), Elite Distributing, and other co-conspirators. Compl. ¶¶ 10, 13. The complaint alleges that Elite Distributing, a limited liability corporation opened by Jones on September 12, 2012, in Las Vegas, Nevada, is involved in this conspiracy by virtue of wire transfers and other financial activity associated with a Bank of America Account, held in claimant's name, ending in "6421" (the "Bank of America Account"). Id . ¶¶ 2, 13. On September 23, 2013, a warrant for arrest in rem was issued and the Government seized defendant currency from the Bank of America Account at the bank's Utica, New York, branch. Id . ¶ 2.

1. Government's Investigation

In January 2013, a confidential source ("Doe") contacted DEA Special Agent Stephen Overend ("SA Overend"). Compl. ¶ 14. Doe informed Special Agent Overend that Armstrong, one of the alleged conspirators, had directed him to wire $7, 200 into a Wells Fargo account ending in "7518" (the "Wells Fargo Account") in exchange for two kilograms of synthetic drugs that Armstrong agreed to ship to Doe in the Northern District of New York. Id . ¶¶ 14-15.

In February 2013, Doe contacted Armstrong to purchase additional synthetic drugs for distribution. Id . ¶ 16. Armstrong told Doe to deposit $3, 600 into the Wells Fargo Account in exchange for one kilogram of synthetic drugs that Armstrong again agreed to ship to the Northern District of New York. Id . ¶ 17. Doe and SA Overend went to First Niagara National Bank in Syracuse, New York, and wired $3, 600 in "official advanced funds" into Armstrong's Wells Fargo Account. Compl. ¶ 18. That afternoon, Doe telephoned Armstrong and informed him that he had transferred the money into the Wells Fargo Account as instructed. Id . Armstrong became upset and told Doe to cancel the wire transfer because he was concerned the DEA would detect the transaction. Id . ¶ 19. Doe cancelled the wire transaction before it was completed. Id . ¶ 20.

On February 26, 2013, Armstrong telephoned Doe and instructed him to come to Fort Lauderdale, Florida, to purchase a large quantity of synthetic drugs using cash. Id . ¶ 22. Doe agreed, and two days later, Doe and SA Overend met Armstrong in Fort Lauderdale to discuss the purchase of approximately thirty kilograms of various synthetic drugs. Id . ¶ 23. During the negotiations, Armstrong explained that he avoided making wire transfers because he believed they could be intercepted by the DEA. Compl. ¶ 23. Therefore, he typically instructed his customers to deposit cash directly into several different bank accounts, including the Wells Fargo Account. Id.

Eventually, the parties agreed to exchange $97, 500 cash for thirty kilograms of synthetic drugs. Id . ¶ 24. Armstrong drove to a storage facility in Miami, collected two suitcases, drove to a pre-arranged location, and exchanged them with Doe and SA Overend. Id . ¶ 25. After this exchange was completed, law enforcement stopped both parties and seized the suitcases, which contained synthetic drugs. Id . ¶ 26. Based on this transaction, Armstrong pleaded guilty in the Northern District of New York to two counts of an information charging him with the intent to distribute a controlled substance analogue with the intent that it be used for human consumption. Id . ¶ 17.

2. Claimant's Alleged Involvement

Following his guilty plea, Armstrong was interviewed by SA ...

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