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finding the Government was not "entitled to forfeiture where . . . the drugs that were the subject of the conspiracy as defined in the Indictment were seized prior to it generating any income or proceeds"
Summary of this case from United States v. TaylorOpinion
02-CR-116
November 26, 2002
DECISION ORDER
Defendant Nancy Jean Thompson (Thompson) pleaded guilty on September 11, 2002 to all counts of the Indictment charging her with violations of 21 U.S.C. § 846, Narcotics Conspiracy, and 21 U.S.C. § 841(a) and 846, Possession With Intent to Distribute Marihuana. On September 19, 2002, a bench trial on the forfeiture allegations of the Indictment was held before the undersigned. The parties have been afforded the opportunity for additional briefing. The following constitute the Court's findings of fact and conclusions of law.
I. Background
The facts of this matter are not significantly in dispute. An undercover agent posing as a corrupt truck driver infiltrated a drug ring in the southern United States. He then delivered approximately 1,800 pounds of marihuana to Nancy Jean Thompson at a garage located in upstate New York. Thompson was negotiating to resell the marihuana to someone known to the Court only as "the little man." Prior to her reselling the marihuana, federal agents seized it and arrested her and her codefendant. The weight of the marihuana seized is not in dispute. There was credible testimony that the resale value of the marihuana would be between $750 and $1000 a pound. Further, Thompson's codefendant testified that she overhead the price being set at $750 a pound. Consequently, the Government contends it is entitled to forfeiture of one million dollars as proceeds intended to be furnished in this drug conspiracy. The Government reaches this amount because it is approximately what "the little man" would have paid Thompson had he been able to buy the marihuana from her. Thompson argues that the government is improperly attempting to use the civil forfeiture statute to gain an in personam judgment against her in order to seek substitute assets.
II Forfeiture
This Court is faced with the seemingly novel issue of whether the Government is entitled to forfeiture where, as here, the drugs that were the subject of the conspiracy as defined in the Indictment were seized prior to it generating any income or proceeds. The Government argues that pursuant to 28 U.S.C. § 2461(c), it is entitled to invoke 21 U.S.C. § 881(a)(6) of the Drug Abuse Act and recover any monies "furnished or intended to be furnished by any person in exchange for a controlled substance" under the procedures set out in the criminal forfeiture portion of the statute, including by an in personam money judgment. See 28 U.S.C. § 2461(c); 21 U.S.C. § 881(a)(6); and 21 U.S.C. § 853. The Government further contends that once it has acquired the in personam judgment it may use the provisions of the Drug Abuse Prevention and Control Act (hereinafter "Drug Abuse Act") relating to criminal forfeiture to obtain substitute assets from the defendant. See 21 U.S.C. § 853(p). The defendant argues that the Government is confusing civil forfeiture under § 881 with criminal forfeiture under § 853; that the Government has not, in any event, proven that there were proceeds involved in this conspiracy; and that the Government has failed to follow the proper procedures. 28 U.S.C. § 2461(c) provides:
Neither party has cited a case that addresses the issue present here; nor has the Court been able to find another federal court that has addressed this legal issue.
The indictment alleges that the conspiracy took place between September 2001 and April 3, 2002. The only testimony regarding a drug transaction that took place during this time was the marihuana seized from the tractor trailer. Although there was evidence that this was not Thompson's first drug transaction, the Government here seeks forfeiture of the money intended to be furnished in this particular drug transaction.
If a forfeiture of property is authorized in connection with a violation of an Act of Congress, and any person is charged in an indictment or information with such violation but no specific statutory provision is made for criminal forfeiture upon conviction, the Government may include the forfeiture in the indictment or information in accordance with the Federal Rules of Criminal Procedure, and upon conviction, the court shall order the forfeiture of the property in accordance with the procedures set forth in section 413 of the Controlled Substances Act ( 21 U.S.C. § 853), other than subsection (d) of that section.21 U.S.C. § 881 provides in relevant part that:
The following property shall be subject to forfeiture to the United States and no property right shall exist in them: . . . .
All moneys, negotiable instruments, securities, or things of value furnished or intended to be furnished by any person in exchange for a controlled substance or listed chemical in violation of this subchapter . . .
The Government argues that because 21 U.S.C. § 853, the criminal forfeiture portion of the Drug Abuse Act, does not allow forfeiture of all money "intended to be furnished" it should be allowed to apply § 881 of the civil forfeiture portion of the Drug Abuse Act to hold Thompson personally responsible for this amount. The Court cannot agree.
The plain language of 28 U.S.C. § 2461(c) allows the Government to seek criminal forfeiture, including an in personam judgment, when a criminal statute, such as the Drug Abuse Act, contains a provision for civil forfeiture "but no specific statutory provision is made for criminal forfeiture upon conviction." See 28 U.S.C. § 2461(c). That is not the case here. Section 853 is a statutory provision for criminal forfeiture on conviction of a violation of the Drug Abuse Act. Moreover, section 853(a) contains specific descriptions of the property that may be sought in a criminal forfeiture. The provisions of section 853(a) do not allow the Government to seek a personal money judgment against the defendant for amounts that someone else intended to furnish to her in exchange for illegal narcotics.
Section 853(a) allows forfeiture of:
(1) any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as the result of such violation;
(2) any of the person's property used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of, such violation . . .21 U.S.C. § 853(a)(1) and (2).
The cases cited by the Government each involved the civil forfeiture of funds that were intended to be used in a drug transaction. In each of those cases, the Government was actually in possession of the funds it was seeking to forfeit. See, e.g., U.S. v. $557,933.89, 287 F.3d 66, 74 (2d Cir. 2002) (finding civil forfeiture of money in suitcase reasonable where laundered money was going to be used to purchase drugs); U.S. v. $40,000, 1999 WL 1011938 (E.D.N.Y. Sept. 22, 1999) (money found in back of car subject to civil forfeiture as money intended to be used to pay for drugs after officers heard driver discussing payment with seller through wire tap); Castillo v. United States, 2001 WL 1646176, *1 (S.D.N.Y. Dec. 21, 2001) (administrative forfeiture pursuant to 21 U.S.C. § 881(a)(6)). Consequently, the Court can find no authority for the proposition that the Government may obtain an in personam judgment against the defendant for sums intended to be furnished but not actually recovered by the Government, and then seek substitute assets of the defendant to fulfill that forfeiture.
The Court notes that in a civil forfeiture action pursuant to Section 881, the government would, in effect, be proceeding against the funds, not against the individual defendant. See United States v. Certain Funds, 96 F.3d 20, 26 (2d Cir. 1996) (citing United States v. Ursey, 518 U.S. 267, 289 (1996)).
Further, the Court notes that while section 2461(c) does not have any legislative explanation attached to it, Section 2461(a) does. Section 2461(a) provides:
[w]henever a civil fine, penalty or pecuniary forfeiture is prescribed for the violation of an Act of Congress without specifying the mode of recovery or enforcement thereof, it may be recovered in a civil action.28 U.S.C. § 2461(a). The legislative history for this provision explains that numerous provision of the United States Code provide for civil penalties without specifying "the mode of recovery or enforcement." See 28 U.S.C.A. § 2461, Historical and Statutory Notes. Consequently, the provision was drafted to provide a mode of enforcement for these statutes. Applying the same logic to section 2461(c), the Court concludes that Congress was merely filling a gap in the current law by providing that where a criminal forfeiture provision existed, but no mechanism for enforcement of that forfeiture was found in the statute, the provisions of 21 U.S.C. § 853 would fill the gap. This further strengthens the Court's decision that the Government may not use section 881 as a criminal forfeiture provision.
C. Lexus and Cash
The Court has no difficulty finding that the Lexus Sport Utility Vehicle(S.U.V.) and the cash found on Thompson at the time of her arrest are forfeitable pursuant to 21 U.S.C. § 853(a)(2) as property "used, or intended to be used . . . to commit, or to facilitate the commission of, such violation. . . ." At the time of her arrest, Thompson was transporting approximately ten pounds of marihuana in the Lexus S.U.V. Further, the undercover agent identified Thompson's S.U.V. as the one he followed to the unloading spot. Consequently, there has been proof that Thompson used the S.U.V. to transport drugs and facilitate her illegal drug trade.
Moreover, The cash seized by the Government was being used to buy gas, to pay codefendant Nall to help her with unloading the truck, and various other incidents of this drug conspiracy.
Consequently, there was proof that the cash belonged to Thompson and was being used or was intended to be used to facilitate the commission of a crime.
IV. Conclusion
For the foregoing reasons, IT IS ORDERED THAT a preliminary order of forfeiture is hereby entered as to the Lexus S.U.V. belonging to Nancy Jean Thompson as more fully described in the Indictment; and a preliminary order of forfeiture is hereby entered as to the $2,023 and $785.97 cash amounts found on the defendant and her codefendant. The request for a preliminary order of forfeiture as to the $1,000,000 in proceeds is denied.
IT IS SO ORDERED