throbber
Case 4:16-cv-00037-ALM-CAN Document 17 Filed 09/29/16 Page 1 of 11 PageID #: 114
`
`United States District Court
`EASTERN DISTRICT OF TEXAS
`SHERMAN DIVISION
`
`Civil Action No. 4:16-CV-37
`(Judge Mazzant/Judge Nowak)
`
`§§§§§§§
`
`JOHNNY LEE READER,
`
`v.
`
`UNITED STATES OF AMERICA
`
`MEMORANDUM ADOPTING REPORT AND
`RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
`
`Came on for consideration the report of the United States Magistrate Judge in this action,
`
`this matter having been heretofore referred to the Magistrate Judge pursuant to 28 U.S.C. § 636.
`
`On September 8, 2016, the report of the Magistrate Judge (Dkt. #12) was entered containing
`
`proposed findings of fact and recommendations that Johnny Lee Reader’s (“Petitioner”) pro se
`
`Motion Pursuant to Federal Rules of Criminal Procedure, Rule 41(g) Requesting Return of
`
`Property (“Motion for Return of Property”) (Dkt. #1) be granted in part and denied in part.
`
`Having received the report and recommendation of the Magistrate Judge (Dkt. #12), having
`
`considered each of Petitioner’s objections (Dkt. #15) and the Government’s Response to
`
`Petitioner’s timely filed objections (Dkt. #16), and having conducted a de novo review, the Court
`
`is of the opinion that the findings and conclusions of the Magistrate Judge are correct, and the
`
`Court hereby adopts the Magistrate Judge’s report (Dkt. #12) as the findings and conclusions of
`
`the Court.
`
`BACKGROUND
`
`Petitioner was indicted and arrested for a violation of 21 U.S.C. § 846, Conspiracy to
`
`Possess with Intent to Distribute Cocaine in mid-2010 (Dkt. #3 at 1; Dkt. #1, Exhibit 2 at 1).
`
`

`
`Case 4:16-cv-00037-ALM-CAN Document 17 Filed 09/29/16 Page 2 of 11 PageID #: 115
`
`During Petitioner’s arrest on August 3, 2010, the Government seized $26,000 in United States
`
`currency1 from Petitioner’s home and another $1,700 from Petitioner’s person; in total, the
`
`Government seized $27,700 at the time of Petitioner’s arrest (Dkt. #3 at 1). The Mesquite,
`
`Texas, Police Department also seized a rifle from Petitioner’s home during the arrest
`
`(Dkt. #3 at 4). Subsequent to Petitioner’s arrest, the Government further seized $2,691.56 from
`
`Bank of America account number 488078658231 (“Account x8231”), $830.30 from Bank of
`
`America account number 488008309419 (“Account x9419”), and $1,165.97 from a bank account
`
`ending in x3678 (“Account x3678”) (Dkt. #3 at 2-3).
`
`Following Petitioner’s arrest, from August 6, 2010 to October 27, 2010, Petitioner was on
`
`pre-trial release (Dkt. #3 at 2). During Petitioner’s pre-trial release, the United States Drug
`
`Enforcement Administration (“DEA”)—an agency of the United States Department of Justice—
`
`initiated civil administrative (nonjudicial) forfeiture proceedings against Petitioner and notified
`
`Petitioner of its intent to seize and forfeit the aforementioned funds (Dkt. #3 at 2-4). The
`
`Magistrate Judge summarizes the DEA’s timeline regarding these notices specifically as follows:
`
`On September 20, 2010, the Drug Enforcement Administration (“DEA”) sent
`written notice of the seizure and intent to administratively forfeit $27,700 in
`United States currency to Petitioner (at two known addresses), Petitioner’s
`attorney, and Ms. Lopez (at two known addresses). . . . Return receipts were
`received from the addresses related to Petitioner, Ms. Lopez, and Petitioner’s
`attorney. . . . Notice was also published in the Wall Street Journal. . . . The
`Government contends that no claims were filed regarding the $27,700 in United
`States currency, resulting in an administrative forfeiture to the DEA.
`
`On September 27, 2010, the DEA sent a separate written notice of the seizure and
`intent to forfeit funds in bank account x9419 ($830.30) to Petitioner (at two
`known addresses), and his attorney. . . . Return receipts were received from
`addresses related to both Petitioner and his attorney. . . . Notice was also
`published in the Wall Street Journal. . . . The Government contends no claims
`were filed regarding the $830.30 seized from account x9419, and, thus, the funds
`were administratively forfeited.
`
`1 All references to dollar amounts hereinafter refer to dollars in United States currency.
`
`2
`
`

`
`Case 4:16-cv-00037-ALM-CAN Document 17 Filed 09/29/16 Page 3 of 11 PageID #: 116
`
`On October 1, 2010, the DEA sent a written notice of the seizure and intent to
`forfeit funds in bank account x8231 ($2,691.56) to Petitioner (at two known
`addresses), his attorney, and Ms. Lopez (at two known addresses). . . . Return
`receipts were received from addresses related to Petitioner, Ms. Lopez, and
`Petitioner’s attorney. . . . Notice was also published
`in
`the Wall Street
`Journal. . . . The Government contends that no claims were filed regarding the
`$2,691.56 seized from account x8231, resulting again in an administrative
`forfeiture.
`
`Also on October 1, 2010, DEA sent written notice of the seizure and intent to
`forfeit funds in bank account x3678 ($1,165.97) to Petitioner (at two addresses),
`his attorney, and Ms. Lopez (at two known addresses). . . . Return receipts were
`received
`from addresses
`related
`to Petitioner, his attorney, and Ms.
`Lopez. . . . Notice was also published in the Wall Street Journal. . . . The
`Government contends no claims were filed regarding the $1,165.97 seized from
`account x3678, and the funds were administratively forfeited by the DEA.
`
`
`(Dkt. #12 at 3-4). Petitioner’s pre-trial release terminated when Petitioner was arrested on
`
`October 28, 2010 for violation of his pre-trial release terms (Dkt. #3 at 4). Petitioner thereafter
`
`entered a guilty plea in his underlying criminal proceedings and, as part of his plea agreement,
`
`agreed to forfeit “[a]ny and all funds located within [Account x3678] in the name of Wendy
`
`Lopez” (Dkt. #1, Exhibit 2 at 1, 4).
`
`
`
`On November 14, 2014, Petitioner filed his Motion for Return of Property in the
`
`underlying criminal proceedings (Dkt. #206 in Cause No. 4:10-CR-139-2). The Government
`
`filed its Response to Motion for Return of Property Pursuant to Fed. R. Crim. P. 41(g)
`
`(Dkt. #210 in Cause No. 4:10-CR-139-2) on January 7, 2015, and Petitioner filed his Reply to
`
`the Government’s Response on January 27, 2015 (Dkt. #211 in Cause No. 4:10-CR-139-2). On
`
`January 11, 2016, the Court construed Petitioner’s Motion for Return of Property as a civil
`
`action, directing the Clerk of Court to open the present matter (Dkt. #220 in Cause No. 4:10-CR-
`
`139-2). The Court thereafter ordered that Petitioner’s Motion for Return of Property be treated
`
`as a civil suit invoking the Court’s 28 U.S.C. § 1331 equity jurisdiction (Dkt. #2).
`
`
`
`3
`
`

`
`Case 4:16-cv-00037-ALM-CAN Document 17 Filed 09/29/16 Page 4 of 11 PageID #: 117
`
`Petitioner seeks through his Motion for Return of Property return of (1) $27,000 in
`
`United States currency seized from Bank of America account numbers 488018658231 and
`
`48800839419, (2) $1,800 in United States currency seized from Petitioner at the time of his
`
`arrest, and (3) a 308 rifle seized from Petitioner’s residence (Dkt. #1 at 2). As the Magistrate
`
`Judge observed, Petitioner misidentifies in his Motion for Return of Property the pre-arrest
`
`location (and amount) of the United States currency seized:
`
`the Government seized $27,700.00 from
`The forfeiture receipts reflect
`Petitioner’s home and person upon Petitioner’s arrest on August 3, 2010 . . . .
`$26,000 of that amount was seized from the home, and $1,700—not $1,800—was
`seized from Petitioner’s person. . . . Subsequently,
`the Government seized
`additional
`funds
`from bank accounts 488018658231
`($2,691.56) and
`488008309419 ($830.30), as well as $1,165.97 from a bank account ending in
`x3678.
`
`(Dkt. #12 at 2 n.1). In any case, Petitioner argues that all of the identified property should be
`
`returned to him under Federal Rule of Criminal Procedure 41(g) because, as he claims, he never
`
`was informed during his criminal proceedings of the forfeiture of his property and never
`
`agreed—pursuant to his plea agreement—to such forfeiture (Dkt. #1 at 1). In particular,
`
`Petitioner asserts that his plea agreement described neither the $27,000 he claims the
`
`Government seized from Accounts x8231 and x9419 nor the rifle seized from Petitioner’s
`
`residence (Dkt. #1 at 2, Exhibit 2 at 4). Petitioner further argues that he would have been unable
`
`to agree to forfeiture of the funds located in Account x3678, for that account was “in the name of
`
`Wendy Lopez” and not of Petitioner (Dkt. #1, Exhibit 2 at 4).
`
`The Magistrate Judge entered a report and recommendation on September 8, 2016,
`
`recommending Petitioner’s Motion for Return of Property be granted in part and denied in part
`
`(Dkt. #12). Specifically, the Magistrate Judge recommended that the Court find as follows:
`
`Petitioner is not entitled to the return of and has forfeited any right, title, and
`interest in the following: (1) $27,700 in United States currency seized at the time
`
`4
`
`

`
`Case 4:16-cv-00037-ALM-CAN Document 17 Filed 09/29/16 Page 5 of 11 PageID #: 118
`
`of Petitioner’s arrest, (2) $2,691.56 in United States currency seized from account
`x8231, (3) $830.30 in United States currency seized from account x9419, or
`(4) $1,165.97 in United States currency seized from account x3678. Petitioner is
`entitled to the return of the 308 rifle, but only to an appropriate designee of his
`choosing and only upon filing a petition with the Court for such relief.
`
`
`(Dkt. #12 at 11). Subsequently, on September 26, 2016, Petitioner filed his objections to the
`
`Magistrate Judge’s report and recommendation (Dkt. #15), and on September 27, 2016, the
`
`Government filed its Response to Petitioner’s objections (Dkt. #16).
`
`ANALYSIS
`
`
`
`A party who files timely written objections to a magistrate judge’s report and
`
`recommendation is entitled to a de novo review of those findings or recommendations to which
`
`the party specifically objects. 28 U.S.C. § 636(b)(1)(C); Fed. R. Civ. P. 72(b)(2)-(3).
`
`Petitioner’s objections assert that the Magistrate Judge erred in denying his request for “return of
`
`the $27,000 as well as the other funds taken from hi[m] when he was arrested” (Dkt. #15 at 6).
`
`Petitioner essentially reurges in his objections the arguments he made in his Reply to the
`
`Government’s Response, namely that the Government should have been unable to pursue both
`
`criminal and civil forfeiture proceedings against either him and/or any of the funds seized from
`
`his home, his person, or Accounts x8231, x9419, or x3678 (compare Dkt. #11, with Dkt. #15).
`
`Petitioner raises no objection to the Magistrate Judge’s recommendation regarding Petitioner’s
`
`rifle (Dkt. #15). Accordingly, the Court holds this finding is correct and adopts that portion of
`
`the Magistrate Judge’s report and recommendation as the finding of the Court, before turning to
`
`address Petitioner’s objections.
`
`
`
`Construing pro se Petitioner’s objections liberally, Haines v. Kerner, 404 U.S. 519, 520
`
`(1972) (per curiam), the Court finds that Petitioner objects specifically to the Magistrate Judge’s
`
`finding that the Government (through the DEA) could seek forfeiture of the funds seized from
`
`
`
`5
`
`

`
`Case 4:16-cv-00037-ALM-CAN Document 17 Filed 09/29/16 Page 6 of 11 PageID #: 119
`
`Petitioner’s home, person, and Accounts x8231, x9419, and x3678 under the civil administrative
`
`forfeiture provisions in 21 U.S.C. § 881 and 19 U.S.C. § 1607 rather than under the criminal
`
`forfeiture provisions of 21 U.S.C. § 853, given that Petitioner’s underlying criminal proceedings
`
`were ongoing (see Dkt. #15; see also Dkt. #16 at 2-3 (The Petitioner’s objections “appear[] to be
`
`borne out of . . . Petitioner’s belief that the Government could not pursue forfeiture of the
`
`property contained in his motion through a nonjudicial forfeiture while the Petitioner was
`
`indicted.”)). The Government argues in response that, “[h]ad [it] chosen to specifically list the
`
`seized property in its forfeiture allegation contained in the indictment,” it would have had the
`
`options “of continuing with a parallel nonjudicial administrative forfeiture proceeding or
`
`pursuing a judicial forfeiture in the criminal process” (Dkt. #16 at 3). In any case, the
`
`Government continues, “[it] simply initiated a nonjudicial forfeiture proceeding within the
`
`required notice deadlines without listing the specific items in the forfeiture allegation in the
`
`indictment” and then “sent the required notice of the nonjudicial forfeiture proceedings to the
`
`proper parties, including Petitioner” (Dkt. #16 at 3). Because “no claim was ever filed[,]” the
`
`Government concludes, “the funds in question had already been properly forfeited through the
`
`nonjudicial process” when Petitioner later entered his plea agreement (Dkt. #16 at 3). The Court
`
`considers each of Petitioner’s objections and the Government’s responses herein.
`
`Objection: Magistrate Judge’s Finding that the DEA’s Forfeiture Was Permissible
`
`The government may seize and seek forfeiture of property used or acquired as a result of
`
`violation of the Controlled Substances Act, 21 U.S.C. §§ 801 et seq., under 21 U.S.C. § 881.
`
`See, e.g., United States v. Robinson, 434 F.3d 357, 362 (5th Cir. 2005); JPMorgan Chase Bank,
`
`N.A. v. United States, No. 4:09-cv-150, 2010 WL 890230, at *3 (E.D. Tex. Mar. 9, 2010); cf.
`
`Rankin v. United States, 556 F. App’x 305, 309 (5th Cir. 2014) (per curiam) (recognizing that,
`
`although property may be subject to criminal forfeiture under 21 U.S.C. § 853, the government
`
`6
`
`

`
`Case 4:16-cv-00037-ALM-CAN Document 17 Filed 09/29/16 Page 7 of 11 PageID #: 120
`
`may choose to seek forfeiture under 21 U.S.C. § 881 in certain circumstances). Where the
`
`property seized pursuant to section 881 has a value of less than $500,000, the government may
`
`initiate civil administrative forfeiture proceedings to forfeit the property. Robinson, 434 F.3d at
`
`362. Additionally, where “the [g]overnment does not file a civil judicial forfeiture action, but
`
`does obtain a criminal indictment containing an allegation that the property is subject to
`
`forfeiture, [it] shall either” (1) rest on its notice “and continue the nonjudicial civil forfeiture
`
`proceeding” or (2) “terminate the nonjudicial civil forfeiture proceeding, and take the steps
`
`necessary to preserve its right to maintain custody of the property as provided in the applicable
`
`criminal forfeiture statute.” 18 U.S.C. § 983(a)(1)(A)(iii) (emphasis added).
`
`
`
`To initiate nonjudicial civil forfeiture proceedings, the government must (1) publish
`
`notice of the seizure “for at least three successive weeks in such manner as the Secretary of the
`
`Treasury may direct” and (2) send “[w]ritten notice of seizure together with information on the
`
`applicable procedures . . . to each party who appears to have an interest in the seized article[s].”
`
`19 U.S.C. § 1607(a); 18 U.S.C. § 983(a). The government must send the notice “in a manner to
`
`achieve proper notice as soon as practicable, and in no case more than 60 days after the date of
`
`seizure.” 18 U.S.C. § 983(a). Once the government sends this notice, any party who wishes to
`
`claim an interest in the seized property may file the claim with the relevant government entity on
`
`or before the deadline indicated in the notice. 18 U.S.C. § 983(a)(2)(b). If the government
`
`receives a timely claim to the seized property, it must cease the administrative proceedings and
`
`initiate judicial forfeiture proceedings. Id. § 983(a)(3)(A); see also Robinson, 434 F.3d at 362.
`
`If the government receives no claims, however, it may summarily declare the property forfeited.
`
`19 U.S.C. § 1609. This declaration has “the same force and effect as a final decree and order of
`
`
`
`7
`
`

`
`Case 4:16-cv-00037-ALM-CAN Document 17 Filed 09/29/16 Page 8 of 11 PageID #: 121
`
`forfeiture in a judicial forfeiture proceeding in a district court of the United States.”
`
`Id. § 1609(b).
`
`
`
`Only the question of “whether the forfeiture comported with constitutional due process
`
`guarantees” remains open after the government completes an administrative forfeiture. See
`
`Taylor v. United States, 483 F.3d 385, 388 (5th Cir. 2007). The forfeiture will be “void and must
`
`be vacated” where a party “with an interest in forfeited funds [did not] receive constitutionally
`
`adequate notice[.]” Robinson, 434 F.3d at 362. Constitutionally adequate notice is that which is
`
`“reasonably calculated, under all circumstances, to apprise interested parties of the pendency of
`
`the action and afford them an opportunity to present their objections.’” Taylor, 483 F.3d at 388
`
`(quoting Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950)). Even if not
`
`received, notice is constitutionally adequate if it meets the requirements of Mullane. Dusenberry
`
`v. United States, 534 U.S. 161, 170 (2002).
`
`
`
`In the present case, the funds seized from Petitioner’s home, Petitioner’s person, and
`
`Accounts x8231, x9419, and x3678 have an aggregate value of $32,387.83 (Dkt. #3 at 2-3). This
`
`amount falls below the $500,000 limit for civil, administrative forfeiture. See Robinson, 434
`
`F.3d at 362. Further, the Government alleged that it seized these funds “because [the funds
`
`were] used or acquired as a result of a violation of the Controlled Substances Act”
`
`(Dkt. #3, Exhibits 1-4). The Government seized $26,000 from Petitioner’s home and $1,700
`
`from Petitioner’s person on August 3, 2010 (Dkt. #3 at 1). The Government sent written notice
`
`to Petitioner and other parties of its intent to seek forfeiture of those funds—a total amount of
`
`$27,700—on September 20, 2010, or forty-eight (48) days later (Dkt. #3, Exhibit 1). On
`
`August 5, 2010, the Government seized $2,691.56 from Account x8231, $830.30 from Account
`
`x9419, and $1,165.97 from Account x3678 (Dkt. #3 at 2-3). On September 27, 2010, or fifty-
`
`
`
`8
`
`

`
`Case 4:16-cv-00037-ALM-CAN Document 17 Filed 09/29/16 Page 9 of 11 PageID #: 122
`
`three (53) days later, the Government sent written notice to Petitioner and other parties of its
`
`intent to seek forfeiture of the $830.30 from Account x9419 (Dkt. #3, Exhibit 3). On October 1,
`
`2010, or fifty-seven (57) days later, the Government sent written notice to Petitioner and other
`
`parties of its intent to seek forfeiture of the $1,165.97 from Account x9419 as well as the
`
`$2,691.56 from Account x8231 (Dkt. #3, Exhibits 2, 4). The Government also published notice
`
`of the seizure of all of these funds and intent to seek their forfeiture in the Wall Street Journal
`
`(Dkt. #3 at 2-3). The Government received return receipts bearing Petitioner’s name and
`
`signature for each of the written notices (Dkt. #3, Exhibits 1-4). These facts demonstrate that the
`
`Government complied with the statutory and constitutional notice requirements in seeking civil
`
`administrative forfeiture of these funds. See 19 U.S.C. § 1607(a); 18 U.S.C. § 983(a).2
`
`
`
`Moreover, the Government had the option of seeking forfeiture of these funds through
`
`civil administrative forfeiture and had no obligation to also or alternatively seek forfeiture in
`
`Petitioner’s underlying criminal proceedings. 21 U.S.C. § 881; see, e.g., Robinson, 434 F.3d at
`
`362; JPMorgan Chase Bank, 2010 WL 890230, at *3. As the Government indicates in its
`
`Response to Petitioner’s objections, the Government retained the option to seek civil
`
`administrative foreclosure even in the event it had begun the process of seeking forfeiture in
`
`Petitioner’s underlying criminal proceedings. See 18 U.S.C. § 983(a)(1)(A)(iii). Petitioner’s
`
`argument to the contrary, namely that the Government had an obligation to pursue criminal
`
`forfeiture proceedings prior to or in lieu of civil administrative forfeiture proceedings,
`
`misconstrues the rules governing forfeiture of property seized incident to drug prosecution.
`
`Although 21 U.S.C. § 853 provided the Government an avenue of seeking forfeiture of such
`
`
`2 It appears that Petitioner does not object to the Magistrate Judge’s finding that the Government’s written notices
`were constitutionally sufficient (see Dkt. #15). Nevertheless, the Court has conducted a de novo review of the
`record and, in light of the facts recited supra, agrees with the Magistrate Judge’s finding that these notices were
`constitutionally sufficient.
`
`
`
`9
`
`

`
`Case 4:16-cv-00037-ALM-CAN Document 17 Filed 09/29/16 Page 10 of 11 PageID #: 123
`
`seized property—through the criminal proceeding itself—the Government could have sought
`
`(and here did seek) forfeiture through civil administrative (nonjudicial) proceedings vis-à-vis 21
`
`U.S.C. § 881 and related provisions. See Rubio v. United States, No. C.A. C-05-355, 2006 WL
`
`1292129, at *2-3 (S.D. Tex. May 8, 2006) (explaining the difference between criminal and civil
`
`forfeiture provisions and dismissing plaintiff’s action for wrongful forfeiture where plaintiff
`
`argued for return of property on the basis that the “property was seized pursuant to a non-judicial
`
`forfeiture proceeding rather than a criminal forfeiture proceeding”); cf. Rankin, 556 F. App’x at
`
`309. Accordingly, Petitioner’s objection to the Magistrate Judge’s finding that the Government
`
`could seek forfeiture of the funds seized from Petitioner’s home, Petitioner’s person, and
`
`Accounts x8231, x9419, and x3678 under the civil administrative forfeiture provisions of
`
`21 U.S.C. § 881 and 19 U.S.C. § 1607 rather than under the criminal forfeiture provisions of
`
`21 U.S.C. § 853 lacks merit. The Court, therefore, overrules this objection.
`
`10
`
`

`
`Case 4:16-cv-00037-ALM-CAN Document 17 Filed 09/29/16 Page 11 of 11 PageID #: 124
`
`CONCLUSION
`
`Having considered each of Petitioner’s timely filed objections (Dkt. #15) and the
`
`Government’s Response (Dkt. #16), and having conducted a de novo review, the Court is of the
`
`opinion that the findings and conclusions of the Magistrate Judge are correct and adopts the
`
`Magistrate Judge’s report (Dkt. #12) as the findings and conclusions of the Court.
`
`Accordingly, it is ORDERED that Petitioner’s Motion Pursuant to Federal Rules of
`
`Criminal Procedure, Rule 41(g) Requesting Return of Property (Dkt. #1) be GRANTED IN
`
`PART AND DENIED IN PART.
`
`It is further ORDERED that Petitioner is not entitled to the return of and has forfeited
`
`any right, title, and interest in the following: (1) $27,700 in United States currency seized at the
`
`time of Petitioner’s arrest, (2) $2,691.56 in United States currency seized from account x8231,
`
`(3) $830.30 in United States currency seized from account x9419, or (4) $1,165.97 in United
`
`States currency seized from account x3678. Petitioner is entitled to the return of the 308 rifle,
`
`but only to an appropriate designee of his choosing and only upon filing a petition with the Court
`
`for such relief.
`
`All relief not previously granted is DENIED.
`
`The Clerk is directed to CLOSE this civil action
`
`IT IS SO ORDERED.
`
`11

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