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United States v. $11

United States District Court, N.D. New York

August 25, 2014

UNITED STATES OF AMERICA, Plaintiff,
v.
$11, 640.00 in U.S. Currency, Defendant, ERVIN J. BEST, Claimant.

GEOFFREY J. L. BROWN, ESQ., Assistant United States Attorney, HON. RICHARD S. HARTUNIAN, United States Attorney, Syracuse, NY.

ERVIN J. BEST, Claimant pro se, Watertown, NY.

DECISION AND ORDER

THÉRÈ WILEY DANCKS, Magistrate Judge.

I. INTRODUCTION

The United States of America ("Government") seized $11, 640.00 from Gerald A. Lacey, Claimant Ervin Best's ("Claimant" or "Best") business associate, at the Jefferson County Metro Drug Task Force. (Dkt. No. 1 ¶ 14.) The Government, contending that the currency represents proceeds from Claimant's sale of controlled substances, commenced this civil forfeiture action by verified complaint under 21 U.S.C. § 881(a)(6). (Dkt. No. 1.) The Claimant filed a claim and an answer asserting an interest in the currency. (Dkt. No. 4.) Both the Government and the Claimant move for Summary Judgment. (Dkt. Nos. 35, 38.) For the following reasons, the Government's Motion is granted and Claimant's Motion is denied.

II. BACKGROUND

On September 5, 2012, detectives of the Jefferson County Metro Drug Task Force orchestrated a controlled buy of crack-cocaine from Claimant at 122 Court Street, 24 Empsall Plaza, in Watertown, New York using marked bills. (Dkt. No. 1¶ 9.) Prior to the purchase of crack-cocaine from Claimant, the buyer, an individual known to Claimant, was searched with no contraband found, issued $250.00 in marked bills, and fitted with a wire. Id. This individual was able to purchase a knotted plastic baggie of crack-cocaine from Claimant, weighing, in aggregate, 3.33 grams, in exchange for the $250.00. Id. After leaving the transaction with Claimant, the buyer was immediately picked up by detectives, debriefed, and the narcotics and recording of the purchase were placed into police custody as evidence. Id. The substance in the baggie tested positive to the presence of cocaine. See Dkt. No. 35-8 at 2.[1]

On September 12, 2012, members of the Jefferson County Metro Drug Task Force executed a search warrant at 122 Court Street, 24 Empsall Plaza, Watertown, New York. (Dkt. No. 1 ¶ 10.) This site is the location of Claimant's alleged music studio business, "Strong Productions." Id. As a result of the search warrant, approximately twenty-eight (28) grams of cocaine, ten (10) grams of marijuana, $903.00 in U.S. Currency, and assorted drug paraphernalia were seized. Id .; see also Dkt. No. 35-9 at 2.

After the execution of the search warrant on September 12, 2012, Claimant was indicted, arrested and committed to the Jefferson County Correctional Facility. (Dkt. No. 1 ¶ 11.) On September 18, 2012, Claimant placed a phone call from the jail to a female individual named Sarah Roy ("Roy"). (Dkt. No. 1 ¶ 12.) The call was recorded by the police. Id. Claimant's call to Roy was opened up to include Gerald A. Lacey ("Lacey"), Claimant's associate. Id. During this three-way phone call, also recorded by the police, Claimant told Lacey that the police had missed some of the items at his studio, and said that he needed Lacey to go to the studio and retrieve approximately $12, 000.00 in cash located in the ceiling above the couch. Id.

After the conclusion of the phone conversation with Claimant on September 18, 2012, Lacey went to Claimant's studio, located at 24 Empsall Plaza, in Watertown, New York, and recovered $11, 690.00 in U.S. Currency from the ceiling above a couch in a room across from the studio. (Dkt. No. 1 ¶ 13.) This room had been included in the parameters of the search warrant executed on September 12, 2012. Id.

On that same date, Lacey contacted the Jefferson County Metro Drug Task Force, located at 735 Waterman Drive in Watertown, New York, and turned over the money. (Dkt. No. 1 ¶ 14.) Lacey also provided officers with a written statement of the events leading to his recovery of the currency. Id. In his written statement, Lacey said that he had met Claimant a few months prior to Claimant's arrest on September 12, 2012, and that they had decided to partner together to run a small club in the Empsall Building in Watertown, New York. Id. He stated that they had filed a "DBA" for "Strong Productions, " but had not yet opened their business. Id.

In his written statement, Lacey confirmed the details of the three-way phone call with Claimant, Roy, and himself on September 18, 2012. (Dkt. No. 1 ¶ 15.) He stated that he had received a phone call from a female, and that Claimant was on the other end of the call. Id. He also said that it was difficult for him to hear Claimant, so the female repeated everything Claimant said to him. Id. Lacey stated that Claimant said that the police had missed some stuff in the police's search of the studio, and told Lacey where he should look for the currency, which Claimant stated was approximately $12, 000.00 in U.S. Currency. Id. Lacey stated that after he found the money at the studio, he brought it to the police station, and turned it over to detectives. Id.

Of the $11, 690.00 in U.S. Currency seized from Lacey on September 18, 2013, by the Jefferson County Metro Drug Task Force, $50.00 was found to be a marked bill used as buy money in the controlled buy of September 5, 2012. (Dkt. No. 1 ¶ 16.)

As noted, on September 12, 2012, Claimant was arrested and charged with Criminal Possession of a Controlled Substance/Narcotic, a Class B Felony in the 3rd Degree. (Dkt. No. 1 ¶ 17.) On November 5, 2012, Claimant was arraigned and charged with the following offenses: (1) Criminal Possession of a Controlled Substance/Narcotic, a Class B Felony in the 3rd Degree; (2) Criminal Sale of a Controlled Substance/Narcotic, a Class B Felony in the 3rd Degree; (3) Criminal Possession of a Controlled Substance/Narcotic with Intent to Sell, a Class B Felony in the 3rd Degree; (4) Criminal Contempt, First Refusal to Testify Before a Grand Jury, a Class E Felony; (5) Criminal Use of Drug Paraphernalia/Scales, a Class A Misdemeanor in the 2nd Degree; (6) Criminal Use of Drug Paraphernalia/Package, a Class A Misdemeanor in the 2nd Degree; and (7) Unlawful Possession of Marijuana. Id .; see also Dkt. No. 35-10 at 2.

On March 4, 2013, Claimant entered a plea of guilty to the offense of Attempted Criminal Possession of a Controlled Substance 3rd and was sentenced on March 27, 2013, to a prison term of two (2) years with two (2) years post release supervision. See Dkt. No. 35-10 at 2.

Claimant disputes that he sold drugs under a controlled buy. (Dkt. No. 46 at 5, 6.) He asserts that he had two phone calls with Lacey and "Lacey stated on the Phone Conversation that he never found any U.S. Currency to the Claimant on the prison phone in Jefferson County...." Id. at 6. Claimant alleges he was kept in his cell on a "so called smuggling charge" because the United States sent a letter to the prison. Id. at 3. He claims that the seizure of the currency at issue violated his Fourth and Fourteenth Amendment rights. Id. at 4. He also asserts that the currency came from his recording studio business and the sale of related items. Id. at 9.

III. PROCEEDINGS TO DATE

Plaintiff filed a Verified Complaint of Forfeiture in Rem for the forfeiture of the defendant currency on February 15, 2013, pursuant to 21 U.S.C. § 881(a)(6). (Dkt. No. 1.) A Warrant of Arrest for Articles in Rem was issued for the arrest of the defendant currency subject to forfeiture in this action, which was executed on March 11, 2013. (Dkt. Nos. 2, 3.) On March 22, 2013, Claimant Best filed a claim to the defendant currency and an Answer to the Verified Complaint for Forfeiture in Rem. (Dkt. No. 4.) On May 23, 2013, a hearing on the return of the Warrant of Arrest for Articles in Rem was held before the Hon. Gary L. Sharpe, Chief District Judge for the Northern District of New York, in Albany, New York. (Text Minute Entry 5/23/2013.) An appearance was made by AUSA Richard Beliss on behalf of the Government, and an Affidavit of Non-Military Service, Non-Infancy, and Non-Incompetency signed by AUSA Geoffrey J. L. Brown was submitted to the Court. (Dkt. No. 13.) After the conclusion of the hearing on the return of the Warrant of Arrest for Articles in Rem on May 23, 2013, the Court issued an Order barring all further claims, other than the claim of Best, in this action. (Dkt. No. 14.)

On June 25, 2013, Chief Judge Sharpe issued an Order, based upon a stipulation of the parties to the action, providing that the undersigned Magistrate Judge for the Northern District of New York would have jurisdiction over all aspects of this action including the trial, orders and entry of judgments, and any post-judgment proceedings. (Dkt. No. 17.) On June 28, 2013, this Court issued an Order, pursuant to a Rule 16 Scheduling Stipulation submitted by the parties, setting forth the discovery and trial deadlines. (Dkt. Nos. 18 and 19.)

On July 9, 2013, the Government sent Claimant Plaintiff's First Set of Interrogatories, Plaintiff's First Request for Production of Documents, and Internal Revenue Service Tax Information Authorization, Form 8821, via certified mail/return receipt, which was delivered to Claimant's address of record at Five Points Correctional Facility in Romulus, New York, on July 11, 2013. See Dkt. No. 35-4. The Government voluntarily provided Claimant with 40, rather than 30 days in which to respond, which set the date for Claimant's response for Tuesday, August 20, 2013. Id. Claimant responded to the Government's initial discovery requests and Best's Interrogatory Responses were received by the Government on August 22, 2013. (Dkt. No. 35-13.) The Government also apparently received a signed authorization for the Claimant's tax returns because the returns for the tax years 2008 through and including 2012 were obtained by the Government. (Dkt. Nos. 35-11 and 35-12.)

On August 26, 2013, the Government sent Claimant Plaintiff's First Set of Requests for Admissions via FedEx Overnight Delivery at his address of record at Five Points Correctional Facility in Romulus, New York. See Dkt. No. 35-5. This letter advised Claimant that his response was due within 30 days of his receipt of these requests. Id. The Requests for Admissions were delivered on Tuesday, August 27, 2013, setting Claimant's deadline for response for Thursday, September 26, 2013. See Dkt. No. 35-6. On August 28, 2013, the Government submitted a letter motion requesting an extension of discovery deadlines. (Dkt. No. 20.) This request was granted by Order of the Court on August 29, 2013. (Dkt. No. 22.) That same day, the Government mailed out its Second Set of Interrogatories and Plaintiff's Second Request for Production of Documents to Claimant. (Dkt. No. 35-7.)

Pursuant to a status report from Claimant entered on the Docket on October 3, 2013, the Court granted another extension of discovery deadlines to allow Claimant the opportunity to complete discovery upon the return of his original documents. (Dkt. Nos. 23, 24.) The Government responded on October 4, 2013, advising the Court that all original documents had been returned to Claimant via certified mail, return receipt. (Dkt. No. 25.) On November 12, 2013, Claimant filed a letter motion requesting that the Court determine why the original documents Claimant had submitted to the Government with his discovery responses had not yet been returned to him. (Dkt. No. 27.) In response, the Court issued an Order for the Government to address the issues submitted by Claimant in that letter motion of November 12, 2013. (Dkt. Nos. 27 and 28.) The Government submitted its response on November 18, 2013, advising the Court and Claimant that the original documents Claimant had requested had, in fact, been delivered to Claimant at the Five Points Correctional Facility on October 9, 2013, via certified mail/return receipt. (Dkt. No. 29.) The Government also notified the Court that in light of Claimant's renewed request for originals, the Government would retain only a photocopy of Claimant's discovery submissions, and original release forms, and would return all remaining letters from his discovery submissions to him. Id. The Court denied Claimant's letter motion of November 12, 2013, because the documents Claimant sought had been returned to him by the Government. (Dkt. No. 31.) No other requests for extensions of the discovery deadlines were sought by either party and discovery closed November 29, 2013. (Dkt. No. 24.) Claimant failed to respond to the Government's First Set of Requests for Admissions, the Second Set of Interrogatories, and the Second Request for Production of Documents.

IV. LEGAL STANDARD AND SUBSTANTIVE LAW

A. Legal Standard

A motion for summary judgment may not be granted unless the court determines that there is no genuine issue of material fact to be tried. Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-52 (1986). The moving party has the burden of demonstrating the absence of any genuine issue of material fact. See Adickes v. S. H. Kress & Co., 398 U.S. 144, 157 (1970). A fact is material "if it might affect the outcome of the suit under governing law, " while an issue of fact is genuine "where the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Giordano v. City of New York, 274 F.3d 740, 746-47 (2d Cir. 2001) (quoting Anderson, 477 U.S. at 248). Furthermore, "the court is required to resolve all ambiguities and draw all factual inferences in favor of the party against whom summary judgment is sought." Cronin v. Aetna Life Ins. Co., 46 F.3d 196, 202 (2d Cir. 1995) ...


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