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United States v. One Hundred and Three Thousand Seven Hundred and Ten Dollars and No Cents $103

United States District Court, E.D. New York

February 19, 2015

UNITED STATES OF AMERICA, Plaintiff,
v.
ONE HUNDRED and THREE THOUSAND SEVEN HUNDRED and TEN DOLLARS and NO CENTS ($103, 710.00) et al., Defendants in rem.

MEMORANDUM AND ORDER

CHERYL POLLAK, Magistrate Judge.

On September 6, 2013, the United States (the "government") commenced this Civil Forfeiture action in rem, pursuant to 21 U.S.C. § 881(a), seeking to forfeit to the government approximately $103, 710.00 in United States currency, and 49 assorted money orders with a combined value of approximately $35, 900.00 (collectively, the "Defendant Funds"), which were seized from the person and luggage of Alvin Mulero-Rosario ("Mulero") on February 4, 2013. Currently pending before this Court is the government's motion to amend the Complaint to add an additional asset to this forfeiture action - namely, approximately $61, 894.00 in United States currency seized from Roberto Oliveras-Calderon ("Oliveras") on the same date, February 4, 2013.[1]

For the reasons set forth below, the Court grants the government's motion to amend.

FACTUAL BACKGROUND

A. The Seizures

According to the Complaint and the proposed Amended Complaint, on February 4, 2013, agents of the Drug Enforcement Agency ("DEA") approached Roberto Oliveras-Calderon as he was attempting to board JetBlue Flight 703 bound from John F. Kennedy International Airport to San Juan, Puerto Rico. (Compl.[2] ¶ 4; Am. Compl.[3] ¶ 14). When questioned by the agents as to who he visited and where he stayed while in New York, Oliveras was unable to provide any information. (Compl. ¶ 15; Am. Compl. ¶ 15). When asked if he possessed a substantial amount of money, Oliveras denied that he did. (Compl. ¶ 15; Am. Compl. ¶ 15).

Pursuant to Oliveras' consent, the agents searched his carry-on luggage and discovered large amounts of United States currency hidden throughout his clothes, secreted in a pair of shoes, and contained in white envelopes secured by rubber bands. (Compl. ¶¶ 15-16; Am. Compl. ¶¶ 15-16). During a consent search of his person, agents also discovered additional currency in Oliveras' jacket and fanny pack. (Compl. ¶ 16; Am. Compl. ¶ 16). When asked about the source of the currency, Oliveras could not provide an explanation (Compl. ¶ 17; Am. Compl. ¶ 16), but at one point claimed to have found the money on the street in New York City. (Am. Compl. ¶ 17).

Oliveras informed the agents that there were additional monies concealed in his checked luggage and he consented to a search. (Compl. ¶ 17; Am. Compl. ¶ 18). While in the process of obtaining Oliveras' checked luggage, the agents learned that Oliveras, together with his travel companion, Mulero, had checked five pieces of luggage. (Compl. ¶ 18; Am. Compl. ¶ 19). During the search of Oliveras' two pieces of checked luggage, [4] agents discovered additional currency hidden inside the pockets and between several pairs of jeans, and in white envelopes similar to the ones found in Oliveras' carry-on luggage. (Compl. ¶ 19; Am. Compl. 20). In total, the currency seized from Oliveras' luggage and person amounted to $61, 894.00. (Compl. ¶ 20; Am. Compl. ¶ 22).

After checking Oliveras' bags, the agents boarded JetBlue Flight 703 to speak to Mulero, who had been in the bathroom of the plane for approximately 10 to 15 minutes. (Compl. ¶ 22; Am. Compl. ¶ 24). When asked if he had any carry-on luggage, Mulero denied having any bags on the plane, but the flight attendants identified a computer bag and suitcase in the overhead compartment as belonging to Mulero. (Compl. 23; Am. Compl. ¶ 25). Mulero thereafter admitted these were his bags and consented to a search. (Compl. ¶ 23; Am. Compl. ¶ 25). During the search, the agents discovered United States currency concealed throughout Mulero's clothes and in white envelopes similar to those found hidden in Oliveras' luggage. (Compl. ¶ 24; Am. Compl. ¶ 26). The agents also found 49 blank money orders in various denominations with a cumulative value of approximately $35, 900.00 in Mulero's computer bag. (Compl. ¶ 25; Am. Compl. ¶ 27).

Pursuant to Mulero's consent, the agents also searched Mulero's two checked bags, finding additional currency hidden in clothes and white envelopes, which the government alleges is consistent with the packaging of narcotics proceeds. (Compl. ¶ 26; Am. Compl. ¶ 28). Agents found additional currency in Mulero's pants pockets, also enclosed in white envelopes, and secured with rubber bands. (Compl. ¶ 26; Am. Compl. ¶ 30). A Nassau County narcotics detection K-9, "Sammy, " positively alerted to the odor of narcotics on the currency seized from Mulero's carry-on luggage and person. (Compl. ¶ 31; Am. Compl. ¶ 32). Sammy also alerted positively to the currency taken from Oliveras' checked luggage.[5] (Compl. ¶ 31; Am. Compl. 32).

Mulero had no documents with him indicating the source of the currency, but told the agents that the currency "was from Pennsylvania." (Compl. ¶ 27; Am. Compl. ¶ 29). He also stated that he was unaware of the amount of the currency. (Compl. ¶ 27; Am. Compl. ¶ 29). Mulero told the agents that he was a co-owner of a company called "CMR Contracting, " located in Puerto Rico, but he refused to provide any information about the nature of its business, and he made no claim that the money was related to CMR Contracting's business. (Compl. ¶ 29; Am. Compl. ¶ 31). In total, the funds seized from Mulero consisted of $103, 710.00 in currency, and $35, 900.00 in money orders. (Compl. ¶ 30; Am. Compl. ¶ 33).

B. The Complaint and Proposed Amended Complaint

On September 6, 2013, the government filed a Verified Complaint in Rem, seeking to forfeit the $103, 710.00 in United States currency and the 49 money orders with a combined value of $35, 900.00 which had been seized from Mulero. (Compl. ¶¶ 1, 30, 33). The First Claim for Relief sought forfeiture of the currency in Mulero's possession based on alleged violations of 21 U.S.C. § 881(a)(6), as monies "furnished or intended to be furnished in exchange for a controlled substance... [and] proceeds traceable to such an exchange" used or intended to be used to facilitate a violation of the Controlled Substances Act ("CSA"), 21 U.S.C. §§ 801 et seq. (Id. ¶¶ 46-47; see also id. ¶¶ 38, 42).

The Second Claim for Relief in the initial Complaint sought to forfeit the money orders in Mulero's possession as property "involved in violations of, or attempts to violate, 31 U.S.C. § 5324." (Id. ¶¶ 49-50). Under 31 U.S.C. § 5325(a) and 31 C.F.R. § 1010.415, a financial institution is required to obtain and record certain information from the purchaser of a money order. Among other things, domestic financial institutions are required to file currency transaction reports ("CTRs") for cash transactions over $10, 000; these CTRs include the identity of the individual who conducted the transaction. (Id. ¶¶ 8, 9, 38). According to the Complaint, individuals engaged in illegal activities, such as narcotics trafficking and money laundering, often "structure" their purchase of money orders in amounts less than $3, 000 to avoid the filing of a CTR and the requirement that the purchaser provide identification. (Id. ¶ 7). Often individuals aware of the reporting requirements make multiple cash transactions in less than $10, 000 on the ...


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