United States of America v. $5,684.00 in U.S. Currency et al

MOTION for Judgment on the Pleadings ,Motion for Summary Judgment, with Brief In Support

N.D. Ga.May 31, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION UNITED STATES OF AMERICA, : : Plaintiff, : : v. : CIVIL ACTION NO. : 1:17-CV-1136-CAP $5,684.00 IN U.S.CURRENCY; $1,470.00 : IN U.S. CURRENCY; and $850.00 IN : U.S. CURRENCY; : : Defendants. : CLAIMANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS, MOTION FOR SUMMARY JUDGMENT, AND BRIEF IN SUPPORT Claimant HUGO TENG (“Claimant” or “Teng”), respectfully moves the Court for a judgment on the pleadings in his favor on all or a substantial portion of Plaintiff’s forfeiture claim pursuant to Federal Rule of Civil Procedure 12(c) and the other authorities cited herein. In the alternative, Claimant moves for a summary judgment if the Court relies on matters outside the pleadings pursuant to Federal Rule of Civil Procedure 12(d). This motion is based on the issues and exhibits presented in Claimant’s Motion for Partial Dismissal of Action and Brief in Support (Doc. 18) and Claimant’s Second Motion for Dismissal of Action and Brief in Support (Doc. 19). Case 1:17-cv-01136-CAP Document 21 Filed 05/31/17 Page 1 of 14 2 A. The Verified Complaint for Forfeiture (Doc. 1, the “Complaint”) fails to state a claim upon which relief can be granted as to the majority of the seized U.S. currency. Plaintiff failed to meet a statutory prerequisite for filing a civil forfeiture action as to $7,154 by failing to provide notice of a forfeiture claim within 60 days after the seizure. B. The Complaint is based entirely on vague, conclusory allegations that fail to state a plausible claim to relief that is plausible on its face. Claimant cannot reasonably respond to factual allegations that are substantially based on the misconduct of an unidentified “associate.” Although the Complaint alleges that Claimant participated in the resale of stolen goods, it does not provide any factual allegations that show any portion of the Defendant Funds were derived from, or traceable to, the alleged scheme or any other illegal activity. DEFINITION OF TERMS The terms and definitions stated in the Complaint are used in this motion. Plaintiff UNITED STATES OF AMERICA, the United States Postal Service, and the United States Postal Inspection Service (USPIS) are individually and collectively referred to herein as “the Government.” The residence located at 5501 Boyer Trail, Norcross, Georgia 30071 that was searched by the Government on October 14, 2016 is referred to herein as the “Teng residence.” Case 1:17-cv-01136-CAP Document 21 Filed 05/31/17 Page 2 of 14 3 All of the U.S. Currency identified as Defendants in this action is collectively referred to herein as “the Defendant Funds.” Defendant $5,684.00 IN U.S. CURRENCY and Defendant $1,470.00 IN U.S. CURRENCY are jointly referred herein to as “the $7,154”. Defendant $850.00 IN U.S. CURRENCY is referred to herein as “the $850.” The Affidavit of Hugo Teng is attached to this motion as Exhibit 1. Plaintiff’s administrative Notice of Seizure for the $850 is attached as Exhibit 2. Plaintiff’s administrative Notice of Seizure for unspecified property seized is attached as Exhibit 3. Claimant Hugo Teng’s administrative Claim of Seized Assets as to all property seized from the Teng residence is attached as Exhibit 4. SUMMARY OF RELEVANT, UNDISPUTED FACTS 1. At all times material hereto, Claimant, his wife (Sylvia Kim), and his minor daughter (Lia Teng) all resided at the Teng residence. Doc. 1, ¶ 17; Exhibit 1, ¶ 2. 2. On October 14, 2016, USPIS inspectors executed a federal search warrant at the Teng residence. During the search, the Government seized the Defendant Funds and other personal property from the Teng residence. Doc. 1, ¶¶ 18, 22, 26, 27; Exhibit 1, ¶ 3. Case 1:17-cv-01136-CAP Document 21 Filed 05/31/17 Page 3 of 14 4 3. Property that the Government seized from the Teng residence was listed in 26 categories on a Search Warrant Inventory form. Exhibit 1, ¶ 3; Exhibit 4. 4. The Government identified Teng, his wife (Sylvia Kim), and his daughter (Lia Teng) as potential claimants to property seized from the Teng residence. 5. In December 2016, the Government sent a Notice of Seizure of Property and Initiation of Administrative Forfeiture Proceedings to Teng and other members of his family. The Notice of Seizure described the $850 as the “seized property.” The Notice also verified that the $850 was seized by the USPIS in Norcross, Georgia on October 14, 2016. The Notice of Seizure also cited legal authority for the seizure. Exhibit 1, ¶ 4; Exhibit 2. 6. In December 2016, the Government also sent another Notice of Seizure of Property and Initiation of Administrative Forfeiture Proceedings to Teng and other members of his family. This Notice of Seizure failed to describe any “seized property.” This Notice of Seizure also failed to identify where the unspecified property was seized, when the property was seized, the entity or personnel that Case 1:17-cv-01136-CAP Document 21 Filed 05/31/17 Page 4 of 14 5 seized the property, or any legal authority for the seizure. Exhibit 1, ¶¶ 5-7; Exhibit 3. 7. On December 29, 2016, Teng and his wife, Sylvia Kim, jointly delivered a Claim of Seized Assets to USPIS. In this administrative claim, Teng asserted a claim to the $850 and all of the other property taken from Teng’s residence on October 14, 2016, including the $7,154. Exhibit 1, ¶ 6; Exhibit 4. 8. Teng’s Claim of Seized Assets (Exhibit 4) specifically claimed the $850 because it was identified in a Notice of Seizure (i.e. Exhibit 2). Teng’s Claim of Seized Assets also verified that “no list of seized items was attached to” the separate Notice of Seizure that was delivered to Teng and his wife (i.e. Exhibit 3). 9. Teng and his wife asserted a claim to “all property seized during the execution of a search warrant on” October 14, 2016 at the Teng residence. “The Search Warrant Inventory (was) submitted with this Claim” to identify all of the property that was seized from the Teng residence. Exhibit 1, ¶ 6; Exhibit 4. 10. Claimant’s Claim of Seized Assets included the $7,154 because these funds Case 1:17-cv-01136-CAP Document 21 Filed 05/31/17 Page 5 of 14 6 were seized during the execution of a search warrant on October 14, 2106 at the Teng residence and included on the Search Warrant Inventory that was submitted with Teng’s Claim. Exhibit 4. 11. On March 29, 2017, the Government filed this civil forfeiture action (Doc. 1) without ever amending or sending a Notice of Seizure that included or identified the $7,154 to Teng or any member of his family. Exhibit 1, ¶¶ 5-7. ARGUMENT & CITATION OF AUTHORITY A. THE GOVERNMENT FAILED TO PROVIDE THE REQUIRED 60-DAY NOTICE THAT IT INTENDED TO FORFEIT THE $7,154 The Government may initiate administrative and civil forfeiture proceedings to claim property that the Government has already seized during a criminal investigation. Federal forfeiture proceedings are based on a theory that the property is “constituting, derived from, or traceable to, any proceeds obtained directly or indirectly from” specified criminal activity. 18 U.S.C. § 981. However, “(t)he Due Process Clause of the Fifth Amendment prohibits the United States…from depriving any person of property without ‘due process of law.’ From these ‘cryptic and abstract words,’ (cit.), we have determined that individuals whose property interests are at stake are entitled to “notice and an Case 1:17-cv-01136-CAP Document 21 Filed 05/31/17 Page 6 of 14 7 opportunity to be heard.” Dusenbery v. United States, 534 U.S. 161, 168 (2002), quoting United States v. James Daniel Good Real Property, 510 U.S. 43, 48 (1993) and Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950). When the Government seizes personal property, it must provide a prompt and adequate notice that it is pursuing a forfeiture of the property. The Government must provide this notice by filing a civil judicial forfeiture action, obtaining a criminal indictment, or sending a formal notice of a nonjudicial civil (i.e. administrative) forfeiture proceeding to all known potential claimants within “60 days after the date of the seizure.” 18 U.S.C § 983(a)(1)(A). The statutes do not specify the contents of a notice for administrative, nonjudicial forfeiture proceedings. When U.S. currency (i.e. cash) is seized, however, the notice must be “‘reasonably calculated under all the circumstances’ to apprise” a known, potential claimant “of the pendency of the cash forfeiture.” Dusenbery, supra, 534 U.S. at 168, quoting Mullane, supra, 339 U.S. at 314. “Any person claiming property seized in a nonjudicial civil forfeiture proceeding under a civil forfeiture statute may file a claim with the appropriate official after the seizure.” 18 U.S.C.A. § 983(a)(2)(A). The Government must then Return the property or file a judicial complaint for forfeiture within “90 days after a claim has been filed.” 18 U.S.C.A. § 983(a)(3)(A). Case 1:17-cv-01136-CAP Document 21 Filed 05/31/17 Page 7 of 14 8 A judicial complaint for forfeiture is filed in rem (i.e. against the property). The Government must file a civil forfeiture action within 60 days after the property is seized, or within 90 days after an administrative claim is submitted. Either way, an initial 60-day notice is required before the Government is authorized to pursue administrative or judicial forfeiture proceedings. 18 U.S.C § 983(a)(1)(A); Supplemental Admiralty and Maritime Claims Rule G(4)(b)(i). To summarize, the Government must send notice of an administrative forfeiture proceeding to known claimants, obtain an indictment, or file a judicial complaint for forfeiture within “60 days after the date of the seizure.” 18 U.S.C § 983(a)(1)(A). This deadline for filing a judicial complaint for forfeiture is extended for another 90 days only if the Government previously sent potential claimants a proper 60-day notice of the administrative forfeiture. 18 U.S.C.A. § 983(a)(3)(A); Dusenbery, supra, 534 U.S. at 168; Mullane, supra, 339 U.S. at 314. “Forfeitures are not favored in the law; strict compliance with the letter of the law by those seeking forfeiture must be required.” United States v. $38,000.00 Dollars in U.S. Currency, 816 F.2d 1538, 1547 (11th Cir. 1987). 1 1 Citing United States v. One 1936 Model Ford V-8 De Luxe Coach, 307 U.S. 219, 226 (1939); United States v. One 1976 Ford F-150 Pick-Up, 769 F.2d 525, 527 (8th Cir. 1985); United States v. One 1957 Rockwell Aero Commander 680 Aircraft, 671 F.2d 414, 417 (10th Cir.1982); United States v. One 1977 Cadillac Coupe DeVille, 644 F.2d 500, 501 (5th Cir. 1981). Case 1:17-cv-01136-CAP Document 21 Filed 05/31/17 Page 8 of 14 9 In United States v. Davenport, 668 F.3d 1316 (11th Cir. 2012), the claimant (Davenport) filed an untimely claim to the seized U.S. currency because her attorney misinterpreted the appropriate deadline for filing the claim. The Eleventh Circuit concluded that the Government’s notice of the forfeiture proceeding “was not ambiguous with respect to the governing deadline,” so “the district court did not error in dismissing Davenport’s claim as untimely.” Id. at 1323. The Eleventh Circuit previously found “no reason to apply a less stringent standard to the government when it seeks forfeiture. If anything, the burden on the government to adhere to the procedural rules should be heavier than on claimants.” $38,000, supra, 816 F.2d at 1547. 2 In the case at bar, the Government failed to provide any notice that it was seeking a forfeiture of the $7,154 within 60 days after the seizure. While the Government provided a specific notice that was initiating an administrative forfeiture of the $850 (Exhibit 2), it did not provide notice of its intent to forfeit any other identifiable property. The only other notice of an administrative forfeiture failed to identify any seized property, where the property was seized, when the property was seized, the entity that seized the property, or any legal 2 See authorities cited in footnote 1. Case 1:17-cv-01136-CAP Document 21 Filed 05/31/17 Page 9 of 14 10 authority for the seizure. Exhibit 1, ¶¶ 5-7; Exhibit 3. Teng had the foresight to file a claim to all of the property that was seized from his residence on October, 14, 2016. Exhibit 1, ¶ 6; Exhibit 4. While Teng’s claim was broad enough to include the $7,154, he never waived his due process and statutory right to a notice of the forfeiture within “60 days after the date of the seizure.” 3 18 U.S.C § 983(a)(1)(A); Dusenbery, supra, 534 U.S. at 168; James Daniel Good, supra, 510 U.S. at 48; Mullane, supra, 339 U.S. at 314. Teng was obviously a known potential claimant, since the Government claims that Teng owned the $7,154 that was seized from Teng’s residence. Doc. 1. The Government failed to meet its obligation to send Teng a notice within 60 days that was “reasonably calculated under all the circumstances to apprise” Teng “of the pendency of the cash forfeiture.” 18 U.S.C § 983(a)(1)(A); Dusenbery, supra, 534 U.S. at 168; Mullane, supra, 339 U.S. at 314. A complaint filed in federal court must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). In reviewing a Rule 12(b)(6) motion to dismiss the complaint, the Court must construe all well-pled facts and any attendant, reasonable inferences as true. The 3 The notice of an administrative forfeiture was absolutely required because the Government also failed to file a civil forfeiture action or to obtain a criminal indictment within 60 days after it seized the $7,154. 18 U.S.C § 983(a)(1)(A). Case 1:17-cv-01136-CAP Document 21 Filed 05/31/17 Page 10 of 14 11 complaint must only contain a short, plain statement of a claim showing that the plaintiff is entitled to relief. Ashcroft v. Iqbal, 556 U.S. 662 (2009). B. THE COMPLAINT IS DEFECTIVE BECAUSE IT IS BASED ON VAGUE, CONCLUSORY ALLEGATIONS THAT FAIL TO STATE A VIABLE CLAIM A complaint need not contain detailed factual allegations to survive a Rule 12(b)(6) motion to dismiss. However, more than labels, legal conclusions, and a recitation of the elements of a statute or cause of action are required to satisfy a plaintiff’s burden to provide grounds for entitlement to relief. A plaintiff must plead enough specific facts to state the basis for a claim “and a formulaic recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007); Vignoli v. Clifton Apartments, Inc., 930 F.Supp.2d 1342, 1345 (S.D.Fla. 2013). A plaintiff’s “conclusory allegations ... are not entitled to an assumption of truth-legal conclusions must be supported by factual allegations.” (Cit.) To survive a motion to dismiss, a complaint must “state a claim to relief that is plausible on its face,” meaning it must contain “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Bishop v. Ross Earle & Bonan, P.A., 817 F.3d 1268, 1270 (11th Cir. 2016); quoting Ashcroft, supra, 556 U.S. at 678; Bell Atlantic, supra, Case 1:17-cv-01136-CAP Document 21 Filed 05/31/17 Page 11 of 14 12 550 U.S. at 570; Randall v. Scott, 610 F.3d 701, 709-10 (11th Cir. 2010). In the case at bar, Plaintiff seeks a forfeiture of Defendants $5,684.00 IN U.S.CURRENCY, $1,470.00 IN U.S. CURRENCY, and $850.00 IN U.S. CURRENCY (collectively referred to as “the Defendant Funds”). However, the Verified Complaint for Forfeiture (Doc. 1, the “Complaint”) fails to state a claim upon which this relief can be granted. First, the Complaint fails to assert a viable claim because it is substantially based on the alleged conduct of an unidentified “associate” of Teng. Doc. 1, ¶¶ 9- 16. Claimant cannot even respond to vague allegations that fail to even identify the person who committed the alleged acts. The Complaint also fails to connect any portion of the Defendant Funds to the alleged illegal activity. The Complaint broadly alleges that “Teng operated as a fence, receiver and reseller, of stolen goods” (Doc. 1, ¶ 8), but the Complaint fails to allege how “the Defendant Funds were derived directly from, or are traceable to” the alleged scheme or any other illegal activity. (Doc. 1, ¶ 26). Property is not subject to forfeiture simply because it belongs to a person who allegedly committed a crime. A civil forfeiture complaint must articulate some manner in which the specific property is “subject to forfeiture to the United States” because it is directly associated with the illegal activity. 18 U.S.C. § 981. Case 1:17-cv-01136-CAP Document 21 Filed 05/31/17 Page 12 of 14 13 CONCLUSION Pursuant to Federal Rule of Civil Procedure 12(c), Claimant HUGO TENG prays the Court for a judgment on the pleadings as to the $7,154 as a portion of the Defendant Funds. The Government failed to send Claimant a notice of forfeiture within 60 days as a statutory prerequisite for filing this civil forfeiture action. Claimant is also entitled to a judgment on the pleadings as to the entire Complaint because it is based on conclusory allegations without identifying a critical “associate” or connecting the Defendant Funds to any illegal activity. In the alternative, Claimant prays for a summary judgment if the Court relies on undisputed “matters outside the pleadings” pursuant to Rule 12(d). Respectfully submitted, /s/ James W. Howard James W. Howard Attorney for Claimant Georgia Bar No. 370925 THE HOWARD LAW FIRM, P.C. Suite 200, Kyleif Center 1479 Brockett Road Tucker, Georgia 30084 (770) 270-5080 jhoward@howardfirm.com Case 1:17-cv-01136-CAP Document 21 Filed 05/31/17 Page 13 of 14 14 CERTIFICATE OF SERVICE I hereby certify that on this date I electronically filed the foregoing Claimant’s Motion for Judgment on the Pleadings, Motion for Summary Judgment, and Brief in Support with the Clerk of Court for filing and uploading to the CM/ECF system, which will automatically send e-mail notification of such filing to appropriate parties, including the following attorney of record: Sekret T. Sneed, Esq. Assistant United States Attorney 600 United States Courthouse 75 Ted Turner Drive, S.W. Atlanta, Georgia 30303 This 31st day of May, 2017. /s/ James W. Howard James W. Howard Attorney for Claimant Georgia Bar No. 370925 THE HOWARD LAW FIRM, P.C. Suite 200, Kyleif Center 1479 Brockett Road Tucker, Georgia 30084 (770) 270-5080 jhoward@howardfirm.com Case 1:17-cv-01136-CAP Document 21 Filed 05/31/17 Page 14 of 14 Case 1:17-cv-01136-CAP Document 21-1 Filed 05/31/17 Page 1 of 3 Case 1:17-cv-01136-CAP Document 21-1 Filed 05/31/17 Page 2 of 3 Case 1:17-cv-01136-CAP Document 21-1 Filed 05/31/17 Page 3 of 3 Case 1:17-cv-01136-CAP Document 21-2 Filed 05/31/17 Page 1 of 3 Case 1:17-cv-01136-CAP Document 21-2 Filed 05/31/17 Page 2 of 3 Case 1:17-cv-01136-CAP Document 21-2 Filed 05/31/17 Page 3 of 3 Case 1:17-cv-01136-CAP Document 21-3 Filed 05/31/17 Page 1 of 2 Case 1:17-cv-01136-CAP Document 21-3 Filed 05/31/17 Page 2 of 2 Case 1:17-cv-01136-CAP Document 21-4 Filed 05/31/17 Page 1 of 5 Case 1:17-cv-01136-CAP Document 21-4 Filed 05/31/17 Page 2 of 5 Case 1:17-cv-01136-CAP Document 21-4 Filed 05/31/17 Page 3 of 5 Case 1:17-cv-01136-CAP Document 21-4 Filed 05/31/17 Page 4 of 5 Case 1:17-cv-01136-CAP Document 21-4 Filed 05/31/17 Page 5 of 5