order of seizure as well as judgment on the pleadings, the government relies on its verified complaint and the affidavit of IRS Agent William Coughlin to establish probable cause.
The affidavit indicates that agent Coughlin was involved in an investigation of George Thurman and had been in contact with the builder from whom the defendant realty was purchased. Based on photographs, the builder identified Thurman as the man to whom he initially showed the house. According to the builder, Thurman returned several weeks later with a woman who was introduced to the builder as Yohann Thurman. This woman appeared at the October 16, 1987, house closing and paid for the house with seventy-six separate money orders, each in an amount under $ 10,000.
The affiant personally examined the record of the transaction and has photocopies of the seventy-six money orders. Based on this knowledge, he recites that the money orders were dated from October 5 through October 16, 1987, and were purchased from 22 different currency exchanges. The substantial majority of the money orders were purchased in amounts of exactly $ 9,000, although several were in amounts of $ 4,000 or $ 5,000. Many of the money orders bore sequential numbers, indicating the proximity of their purchase in terms of time. Some of the money orders show sequential numbers but the dates apparently had been falsified to give the impression that they were not purchased in sequence. Additionally, the affiant notes that there is no record of Thurman having ever filed a tax return and that based on the affiant's experience, this money laundering transaction is typical of those in the business of selling controlled substances.
This Court previously found that this proffer of evidence was sufficient to establish probable cause. United States v. 15824 West 143rd St., 89 C 8896 (N.D.Ill. Dec. 14, 1989). Thus, while we need not address this question a second time, see United States v. $ 53,661.50 in U.S. Currency, 613 F. Supp. 180 (S.D.Fla. 1985) (once court determines that plaintiff has probable cause to seize defendant property, burden shifts and forfeiture is proper unless party proves defense by preponderance of evidence); May v. United States, 519 F. Supp. 649 (S.D. Ohio 1981) (probable cause necessary to validate search and seizure is sufficient probable cause to legitimize filing of forfeiture action); United States v. One 1976 Lincoln Mark IV, (W.D.Penn. 1979) (once government establishes probable cause, seizure is proper and forfeiture established, burden then shifts to owner to prove forfeiture was not within forfeiture statutes), we briefly will delineate the manner in which this affidavit establishes probable cause.
The plaintiff's affidavit establishes a reasonable basis for the belief that the money orders used in purchasing the defendant realty were obtained in violation of 31 U.S.C. § 5324. Initially, the affiant indicates that he spoke with the builder who identified the Thurmans as the purchasers of the house. Specifically, the builder indicated to the affiant that Yohann Thurman was present at the closing and paid for the house with over seventy money orders. Although this portion of the affidavit is based on hearsay, this does not defeat a finding of probable cause. See United States v. A Single Family Residence, 803 F.2d 625 (11th Cir. 1986) (hearsay testimony may be used to establish probable cause for forfeiture action). Indeed, the affidavit need not be admissible evidence. United States v. One 56-Foot Motor Yacht Named the Tahuna, 702 F.2d 1276 (9th Cir. 1983).
Nonetheless, the affiant, an experienced IRS agent, set forth the majority of the critical facts from personal knowledge. The affiant reviewed the bank records of the transaction and found that over seventy money orders, purchased from twenty-two different currency exchanges in an eleven day period were used to pay for the property. The affiant testified that almost every money order was for the exact amount of $ 9,000, with a few in the amount of $ 4,000 or $ 5,000. Many of the orders bore sequential numbers indicating the proximity of their purchase in terms of time. Some of the dates on the money orders were apparently falsified.
It is well-settled that circumstantial evidence and inferences drawn therefrom are good grounds for a finding of probable cause in a forfeiture proceeding. United States v. Brock, 241 U.S. App. D.C. 324, 747 F.2d 761 (D.C.Cir. 1984). Given the use to which the money orders were put, the uniform amounts in which the money orders were drawn, the fact that the amounts for the most part were just under the reporting limit, the proximity of purchase in terms of time, the number of different currency exchanges used and the attempt to falsify the dates of purchase, it is reasonable to infer that this was a single transaction structured to evade federal reporting requirements. Indeed, it is inconceivable that anyone would inadvertently go to an average of two different currency exchanges and purchase approximately seven separate money orders a day, for eleven days in a row. Probable cause to believe the transaction was structured to evade reporting requirements has been established.
Once probable cause has been established, the burden shifts to the claimant to make out her defense by a preponderance of the evidence. United States v. Fleming, 677 F.2d 602, 609 (7th Cir. 1982). Here, the claimant has failed to present any evidence which supports her defense or rebuts the plaintiff's affidavit. The claimant merely invokes her fifth amendment privilege and argues that forcing her to meet her burden given her reliance on the privilege or drawing any adverse inference therefrom would be error. We disagree.
While it is true that the claimant is entitled to invoke the fifth amendment, this does not relieve her of satisfying her burden on this motion. See United States v. One 1985 Plymouth Colt Vista, 644 F. Supp. 1546, 1550-53 (N.D.Ill. 1986) (fifth amendment privilege against self-incrimination is not a substitute for evidence in forfeiture case); see also United States v. Rylander, 460 U.S. 752, 759, 75 L. Ed. 2d 521, 103 S. Ct. 1548 (1983) (fifth amendment cannot be converted from a shield against self-incrimination to a sword freeing claimant from his burden of proof). The claimant must either establish herself as an innocent purchaser or rebut the plaintiff's showing of probable cause. If doing so would incriminate her in some way, claimant must make a choice. Referred to as the "Fifth Amendment Dilemma," the choice faced by a forfeiture claimant is "no different from that faced by every criminal defendant forced to choose between complete silence and presenting a defense. By choosing silence the defendant incurs the risk the government, if it satisfies its burden of proof, will prevail." One 1985 Plymouth Colt Vista, 644 F. Supp. at 1522 (citing United States v. Rylander, 460 U.S. 752, 75 L. Ed. 2d 521, 103 S. Ct. 1548 (1983)). The Fifth Amendment privilege against compulsory self-incrimination was never intended to be used as a "sword whereby a claimant asserting the privilege would be freed from adducing proof in support of a burden which would otherwise have been his." Rylander, 460 U.S. at 758.
Here, the claimant has made no attempt to rebut the plaintiff's showing of probable cause. She has presented neither arguments nor evidence to meet plaintiff's supported allegations. Accordingly, because the claimant is not entitled to hide behind the Fifth Amendment privilege and has failed to rebut the plaintiff's showing of probable cause, the plaintiff is entitled to forfeiture. See United States v. Little Al, 712 F.2d 133 (5th Cir. 1983) (unrebutted showing of probable cause will support forfeiture).
Finally, we address the claimant's assertion that she is entitled to a trial on the question of probable cause. The claimant refers us to two sources in support of this proposition. First, the claimant cites the treatise Smith, The Prosecution and Defense of Forfeiture Cases, para. 11.03 , for the proposition that the government must prove probable cause at trial. In context, however, the treatise states:
The government has never been required to show that the facts known to it at the time the complaint for forfeiture was filed were sufficient to establish probable cause. Rather, probable cause is tested as of the time of trial. Thus, even though the government did not have probable cause at the time the action was filed it may prevail if, through further investigation and/or civil discovery, it obtains sufficient evidence to be able to show probable cause for forfeiture by the time of trial.
Smith, The Prosecution and Defense of Forfeiture Cases, para. 11.03 . The treatise merely concerns when (at the latest) the United States must come forward with proof of probable cause, or at what time in the proceedings the United States must have probable cause. It does not say that the United States can only prove probable cause at trial. If that were true, the United States could never prevail in a forfeiture case on a motion for summary judgment as in One 1985 Plymouth Colt Vista or on any other pretrial motion. Such a result would thwart efficient judicial administration.
Similarly, the claimant's reliance on United States v. One 1978 Mercedes Benz, 711 F.2d 1297 (5th Cir. 1983), is misplaced. In that case, the government's initial seizure was challenged as improper. The court held that "even if the initial seizure were illegal, it would not bar the government's right to claim the vehicle through forfeiture proceedings." One 1978 Mercedes Benz, 711 F.2d at 1302-03. The court concluded that improper seizure does not undermine the government's right to forfeiture if the government can provide untainted evidence sufficient to support a probable cause finding. Id. at 1303.
Essentially, the government has two opportunities to establish probable cause. First, the government may demonstrate probable cause for purposes of seizure and if that determination proves improper, the government may submit new evidence pursuant to the forfeiture proceeding. Thus, One 1978 Mercedes Benz does not support claimant's assertion that she is entitled to a trial but instead, points out that the government is entitled to a second opportunity to establish probable cause if its initial showing proves improper.
The government has made a sufficient showing to establish probable cause to believe claimant purchased the defendant property with money orders obtained in violation of 31 U.S.C. §§ 5313 and 5324. The claimant has submitted no evidence to support her defense of innocent ownership or to rebut the government's proffer, but instead attempts to use her Fifth Amendment privilege as a sword to defeat the government's case. This is insufficient and, consequently, the government is entitled to judgment in its favor. We hereby order forfeiture.
Dated: April 27, 1990
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