Opinion
Civil Action No: SA-03-CA-328-XR
January 5, 2004
ORDER GRANTING DEFAULT JUDGMENT OF FORFEITURE
On this date, the Court considered the United States of America's Motion to Strike Claim of Fredrick Ray Cortez for failure to comply with Supplemental Rule C(6) and Title 18 U.S.C. § 983(a)(4)(A), filed July 30, 2003 (docket no. 12), and the United States' Motion for Default Judgment of Forfeiture, filed July 11, 2003 (docket no. 10). After considering the motions, the applicable statutes and rules, and the relevant case law, the Court GRANTS both motions (docket nos. 10 and 12).
This is a civil forfeiture action in rem brought to enforce the provisions of 21 U.S.C. § 881 and 18 U.S.C. § 981. Title 21 U.S.C. § 881(a) subjects to forfeiture any property that the government has probable cause to believe was purchased with proceeds traceable to the exchange of a controlled substance or used to facilitate the commission of a drug-related crime. United States v. One Parcel of Property Located at Tracts 10 and 11 of Lakeview Heights, 51 F.3d 117, 120 (5th Cir. 1995). Title 18 U.S.C. § 981 subjects to forfeiture any property involved in a transaction or attempted transaction in violation of section 1956 (regarding money laundering).
Drug Enforcement Agency agents seized a 2002 Harley Davidson FXDX Super Glide Sport Motorcycle in November 2002 during execution of federal search warrants at the residence and business of Jesse Salazar Ramirez. State motor vehicle records reflect that claimant Fredrick Cortez is the titled owner of the motorcycle. Cortez filed a claim to the motorcycle with the DEA, which referred the matter to the office of the United States Attorney for the Western District of Texas to proceed with judicial forfeiture.
On April 25, 2003, the United States filed its verified complaint for civil forfeiture, alleging that Jesse Salazar Ramirez was indicted by a federal grand jury on charges of conspiracy to distribute and to possess with intent to distribute cocaine, a controlled substance, in violation of 21 U.S.C. § 841(a)(1) and 846 and of conspiracy to launder money, in violation of 18 U.S.C. § 1956(h). The motorcycle and the original title were found in the possession and control of Jesse Salazar Ramirez during the execution of a search warrant. According to the complaint, the original title was signed by Fredrick Cortez, the titled owner. The United States alleges that Ramirez acquired the motorcycle with unlawful narcotics proceeds, and thus the motorcycle was used or intended to be used in exchange for controlled substances and is subject to forfeiture under 21 U.S.C. § 881(a)(6). The United States further alleges that the motorcycle represents the proceeds of some form of unlawful activity involved in a financial transaction, which was conducted with the intent to promote the carrying on of specified unlawful activity and/or was designed in whole or in part to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity in violation of 18 U.S.C. § 1956(a)(1)(A)(i) and/or 1956(a)(1)(B)(i) and shall be forfeited to the United States pursuant to 18 U.S.C. § 981(a)(1)(A).
This forfeiture action is governed by the Supplemental Rules for Certain Admiralty and Maritime Claims. Under Rule C(3), when the United States files a complaint demanding a forfeiture for violation of a federal statute, the clerk must promptly issue a summons and a warrant for the arrest of the property and deliver it to the marshal for service. Service of the warrant on the res constitutes execution of process. United States v. $38,570 U.S. Currency, 950 F.2d 1108, 1113 (5th Cir. 1992). On or about May 9, 2003, a warrant for arrest was served on the motorcycle. Notice of seizure was published on May 18, 2003, May 25, 2003, and June 1, 2003 in the San Antonio Express News, Fredrick Ray Cortez received personal service of the notice of forfeiture action on or about June 8, 2003, and his attorney received personal service on or about May 14, 2003. The notice states that "[a] claim may be filed with the clerk . . . not later than thirty (30) days after service of process or thirty (30) days after the date of final publication, and an answer to the complaint shall be filed not later than twenty (20) days after the date of the filing of the claim, pursuant to Title 28, U.S.C. Rule C(6) of the Supplemental Rules for Certain Maritime Claims, Fed.R.Civ.P., and Title 18 U.S.C. § 983(a)(4)(A) and (B)." In addition, this Court's predecessor issued an order on April 29, 2003 stating that any individual personally served with notice of the complaint of forfeiture shall file a claim within thirty days after service was executed and shall serve an answer within twenty days after the filing of the claim. These dates reflect the requirements of Local Rule C(6), which states that a claimant "must file a verified statement" identifying his interest within thirty days of the earlier of (1) the date of service of the Government's complaint or (2) completed publication of notice under Rule C(4), or within the time that the court allows. A person who files a claim "must serve and file an answer within 20 days after filing the statement." The United States brings it motion to strike based on Claimant Fredrick Ray Cortez's failure to comply with supplemental rule C(6).
On July 11, 2003, the United States filed a Motion for Default Judgment of Forfeiture, supported by the verified complaint for forfeiture, the warrant for arrest of property and for notice, and the notice of complaint for forfeiture and arrest of property. At the time, no claims or answers had been filed with regard to the motorcycle. On July 17, 2003, Fredrick Ray Cortez filed a claim to the motorcycle, alleging that a third party, Frank Rios, had placed the motorcycle with Ramirez for "detail work" to prepare it for sale, and that the motorcycle was not subject to forfeiture.
In response to Cortez's claim, the United States filed a Motion to Strike the claim for failure to comply with the timeliness requirements of Rule C(6). Under Rule C(6), Cortez's claim should have been filed June 15 (if service upon Cortez's attorney begins the thirty-day deadline) or at the latest July 2, 2003. Even counting thirty days from the date of service upon Cortez (resulting in a due date of July 8), Cortez's July 17 claim was not timely filed. Cortez did not file a motion for extension of time with his claim, nor did he provide any explanation for the late filing. Moreover, Rule C(6) requires that the answer be filed within twenty days after filing of the claim. To date, no answer has been filed.
The Fifth Circuit has "required strict compliance with the provisions of Rule C(6)." United States v. Real Property Located at 14301 Gateway Boulevard West, 123 F.3d 312, 313 (5th Cir. 1997) (citing United States v. $38,750 U.S. Currency, 950 F.2d 1108, 1105 (5th Cir. 1992) (finding that district court did not abuse its discretion in striking claim and answer as untimely under Rule C(6))). In this case, although Rule C(6) permits the Court to allow additional time to file the complaint, the Court set the thirty-day Rule C(6) deadline, as reflected in the April 29, 2003 order. No motion for extension of time has been filed and Cortez presents no facts justifying an extension. Thus, the claim is untimely and there is no basis for extending the deadline. Accordingly, the Court GRANTS the United States' motion to strike (docket no. 12) and STRIKES the Claim of Fredrick Ray Cortez (docket no. 11). As noted, Cortez has not filed an answer. Thus, the Court now turns to the United States' Motion for Default Judgment.
The burden of proof is on the Government to establish, by a preponderance of the evidence, that the property is subject to forfeiture and that there was a substantial connection between the property to be forfeited and the criminal activity. 18U.S.C. § 983. The Government alleges that the motorcycle was used or intended to be used in exchange for controlled substances or represents the proceeds of trafficking in controlled substances and is thus subject to forfeiture under 21 U.S.C. § 881(a)(6). The Government further alleges that the motorcycle was involved in a financial transaction in violation of 18 U.S.C. § 1956(a)(1)(A)(i) and/or 1956(a)(1)(B)(i) and is subject to forfeiture under 18 U.S.C. § 981. After reviewing the Government's verified complaint, the Court finds that the Government has met its burden of proof. The Court further finds that the Government has satisfied the requirements of Rule C(6) by filing the verified complaint of forfeiture on April 25, 2003, that Fredrick Ray Cortez, Jesse Salazar Ramirez, Richard D. Woods (attorney for Cortez), and Melvin Blumberg (Ramirez's criminal attorney) have been personally served, and that the Government properly conducted service by publication of notice. There being no timely claim to the property, the Court GRANTS the United States' motion for default judgment (docket no. 10).
Therefore, IT IS HEREBY
ORDERED that a Default Judgment of Forfeiture is entered against respondent property, One 2002 Harley Davidson FXDX Super Glide Sport Motorcycle, VIN: 1HD1GJV162Y311331, and it is further
ORDERED that any and all right, title, and interest of Fredrick Ray Cortez and Jesse Salazar Ramirez in the respondent property is forfeited to the United States of America, and it is further
ORDERED that any and all right, title, and interest of all other potential claimants in the respondent property is forfeited to the United States of America, and it is therefore further
ORDERED that the respondent property is forfeited to the United States of America and that the United States Marshals Service and/or its designated substitute custodian shall dispose of the Respondent Property in accordance with the law.
All costs and expenses regarding seizure, maintenance, custody, and control of the respondent property, including, but not limited to, any litigation costs and attorney's fees, shall be borne by the party incurring them.