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United States v. Funds in Amount of $271

United States District Court, N.D. Illinois, Eastern Division

June 29, 2015



Joan B. Gottschall United States District Judge

This case is an in rem civil forfeiture action about cash seized from a safe in a minivan parked in the driveway of a North Chicago residence. Contending that the funds were used in narcotics trafficking, the government seeks forfeiture pursuant to 21 U.S.C. § 881(a)(6). The court previously denied the government’s motion for summary judgment but issued a rule to show cause why the court should not grant the government’s motion that required claimants Pedro Cruz-Hernandez and Abraham Pedro Cruz-Hernandez to identify any additional evidence that supported their claim of ownership.[1] The court construes the claimants’ memorandum as a motion to revisit portions of the summary judgment opinion. As such, it is denied. In addition, the government’s motion for summary judgment is granted.

I. Background

The latest round of filings does not challenge the court’s prior summary of the facts relating to the discovery of the safe containing the money at issue in this case. The court previously summarized those facts as follows:

At about 1:00 a.m. on June 9, 2012, North Chicago Police Department (NCPD) officers responded to a 911 call reporting an apparent home invasion at 2124 Kemble Avenue in North Chicago, Illinois. Upon their entry into the residence, NCPD officers discovered that the apparent intruders were not present. While inside the residence, NCPD officers say they observed in plain view a 9mm handgun, plastic bags, canna residue, a knife, and zip-tie plastic fasteners.
The officers observed three vehicles parked in the driveway behind the residence, including a red Chevrolet minivan. A Lake County Deputy Sheriff, who is also a K-9 handler, and a canine owned by the Lake County Sheriff’s Department, conducted a narcotic-odor investigation of the exterior of the three vehicles. The canine alerted to the presence of narcotics on the van.
Within the rear of the minivan, NCPD officers observed a black safe in plain view through the windows. A circuit-court judge in Lake County issued a warrant to search the residence and minivan and seize evidence, including cash and safes. In addition to the search warrant, claimant Pedro Cruz-Hernandez and a co-resident of 2124 Kemble signed a consent form for NCPD officers to search the residence.
Officers conducted a search of the residence, minivan, and safe. The officers found $271, 080 in cash in the safe, bundled together with elastic ponytail rubber bands in increments labeled “$5, 000.” NCPD officers found a handwritten ledger inside the safe that appears to contain dollar amounts, dates, and names.

(Dkt. 51 at 2-3.)

In their supplemental memorandum, the claimants challenge portions of the following additional facts set forth in the court’s prior summary judgment opinion:

When questioned by North Chicago police on June 9, 2012 about the safe, Pedro Cruz- Hernandez said: “I honestly don’t know what is inside.” (Tr. of Interview 16, ECF No. 43-5). The police inquired: “[Y]ou didn’t know that there was money inside? It’s not yours?” and Pedro Cruz-Hernandez replied, “It is not mine, no, it isn’t.” In a deposition taken in conjunction with this case, Pedro Cruz-Hernandez confirmed under oath that his answers on June 9, 2012 “were truthful and complete.” (Dep. of Pedro Cruz-Hernandez 43, ECF No. 43-9.)
Claimant Abraham Cruz-Hernandez has also made statements indicating that the money in the safe was not his. He filed an Application for Cancellation of Removal in removal proceedings before the Immigration Court for the U.S. Department of Justice, Executive Office of Immigration Review. That application states that from December 2004 to August 2012, Abraham Cruz-Hernandez resided at 2124 Kemble. The application states that Abraham Cruz-Hernandez’s only assets are $2, 000 in cash, stocks, or bonds that he owns jointly with his spouse. In a deposition, Abraham Cruz-Hernandez stated under oath that the information he provided in his application was true, accurate, and complete. (Dep. of Abraham Cruz-Hernandez 19, ECF No. 43-10.)

(Id. at 3).

When the court previously considered the government’s motion for summary judgment, the claimants’ evidence supporting their claim of ownership consisted of their affidavits asserting ownership and their claim for the seized $271, 080 that was filed in this case. The claim states that the claimants “are the lawful, legitimate and rightful owners of all $271, 080.00 U.S. Currency seized” and that the “[c]laimants were not involved in any criminal activity whatsoever. If any criminal activity occurred, claimants were innocent owners and did not know of the conduct giving rise to the forfeiture.” (Claim ¶¶ 1, 3, Dkt. 7.) Both claimants signed the claim “[u]nder oath and being subject to the penalties of perjury.” (Id. at 2.)

The claimants’ supplemental memorandum attaches two new affidavits from Pedro and Abraham. Pedro’s latest affidavit focuses on the deposition testimony that the court previously found contradicted multiple other statements disavowing an interest in the seized funds. He challenges the government’s characterization of a portion of his deposition testimony regarding his statement to the police denying that he owned the funds. He also asserts that he gave money to his brother Abraham for safekeeping and that “throughout this litigation” he did not know where Abraham placed the money. (Dkt. 50-2 at 4.) He thus concludes that he did not knowingly disavow an interest in the money on June 9, 2012, when he told the police that the money in the safe was not his.

In Abraham’s latest affidavit, he states that he disavowed any interest in the seized funds to immigration officials in 2012 (both before and after the money was seized) because, “as a non-English speaker with a limited education, ” he did not physically possess funds that had been seized and thus did not know that he needed to disclose his claim of ownership in his immigration documents. (Dkt. 60-3, at 3-4.) Abraham also asserts that his language challenges prevented him from understanding the terms “assets” and “equities” so he did not realize that the funds at issue in this case were “assets” that needed to be disclosed. (Id. at 4.)

II. Legal Standard

The court will, in an exercise of its discretion, evaluate the new submissions de novo using the legal standard applicable to summary judgment motions, rather than the more restrictive standard applicable to motions to reconsider. Summary judgment is appropriate when the movant shows there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56; Smith v. Hope Sch., 560 F.3d 694, 699 (7th Cir. 2009). “[A] factual dispute is ‘genuine’ only if a reasonable jury could find for either party.” SMS Demag Aktiengesellschaft v. Material Scis.Corp., 565 F.3d 365, 368 (7th Cir. 2009). The court ruling on the motion construes all facts and makes all reasonable inferences in the light most favorable to the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Summary judgment is warranted when the nonmoving party cannot establish an essential element of its case on which it will bear the burden of proof at trial. Kidwell v. Eisenhauer, 679 F.3d 957, 964 (7th Cir. 2012).

When claimants file a claim of ownership under Supplemental Rule G(5)(a)(i) of the Federal Rules of Civil Procedure, their claim is evidence; “[i]t must be signed under penalty of perjury and identify the claimant and the nature of his interest.” United States v. Funds in the Amount of $574, 840, 719 F.3d 648, 653 (7th Cir. 2013). Under Supplemental Rule G of the Federal Rules of Civil Procedure, “the government may move to strike a claim . . . because the claimant lacks standing.” Fed.R.Civ.P. Supp. G(8)(c)(i).[2] The government may present a standing-based challenge in the form of a motion for summary judgment challenging the claimants’ interest in the property. Fed.R.Civ.P. Supp. G(8)(c)(ii)(B); Funds in the Amount of $574, 840, 719 F.3d at 653. To be entitled to forfeiture, the government must demonstrate, by a preponderance of the evidence, that the defendant funds are subject to forfeiture. United States v. Funds in the Amount of $239, 400, __ F.Supp.2d ___, No. 11 C 4448, 2014 WL 5023453, at *4 Id. at *6. If the government contends that the property is subject to forfeiture because it “was used to commit or facilitate the commission of a criminal offense, or was involved in the commission of a criminal offense, ” the government must establish that there was a substantial connection between the property and the offense. Id. (citing 18 U.S.C. § 983(c)(3)).

“[W]hen a plaintiff/claimant is confronted with a valid challenge to his standing . . . it is no longer sufficient to simply rest on the facial validity of his standing claim.” United States v. Funds in the Amount of $239, 400, __ F.Supp.2d ___, No. 11 C 4448, 2014 WL 5023453, at *4 (N.D. Ill. Oct. 7, 2014). Instead, he must point to evidence establishing the validity of his claim using a preponderance of the evidence standard. Id.; Fed.R.Civ.P. Supp. G(8)(c)(ii)(B).

III. Discussion

The claimants take issue with the court’s finding that they previously disclaimed ownership of the funds, both under oath in their depositions and elsewhere. If so, the claimants’ sworn testimony would contradict their affidavits asserting that they own the funds at issue. This would mean that the affidavits are not enough to withstand the government’s motion for summary judgment.

A. Pedro

In the affidavit submitted with the claimants’ response to the rule to show cause, Pedro denies telling police that he did not own the money recovered from the safe or know who owned the money. He also argues that his deposition testimony does not contradict any alleged statement to the police. Instead, he contends that his testimony shows that he was “confused, ” that the government’s questions were open-ended and thus were unanswerable, and that he “never provided sworn testimony that he disclaimed ownership.” (Dkt. 60 at 2.)

As noted by the government, the record contains a transcript of Pedro’s interview with a North Chicago Police officer on June 9, 2012, shortly after the defendant currency was seized. The transcript contradicts Pedro’s current position regarding his statements to law enforcement:

Officer: And your car is the red one, right? The ...

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