Opinion
No. 3:02-CV-0947-BF
May 30, 2003
MEMORANDUM OPINION AND ORDER
"United States' Motion for Summary Judgment," filed April 9, 2003, and Claimant's "Motion to Dismiss," filed April 10, 2003, are before this Court. Having considered the evidence and the arguments of the parties in connection with the pleadings, the motion to dismiss is hereby DENIED, and the motion for summary judgment is hereby GRANTED.
I. Background
On May 6, 2002, the United States filed the instant forfeiture action against the respondent in rem, One (1) 1996 Lexus LS 400, VIN JT8BH22F8T0036858 ("Lexus"), alleging that the Lexus was subject to forfeiture pursuant to 18 U.S.C. § 981 (a)(1)(C) as deriving from the proceeds of uttering a counterfeit and forged security, of bank fraud, and of mail theft. (P.'s App. at 1, 3.) Increase Ebong Isang ("Isang") challenges the instant forfeiture action as the only claimant to the Lexus. ( Id. at 25-29.)
Isang purchased the Lexus on or about October 5, 2001, under the name "Olajunbofun Olanrewaju." ( Id. at 47, 115, 116-17, 342-47.) He paid for the Lexus in full in three installments: $4,000 in cash and money orders on September 24, 2001; $7,000 in cash on September 27, 2001; and $6,706.26 in cash on October 4, 2001. ( Id. at 47, 115, 344-47.) Isang informed the seller that he was going to deliver the Lexus to his uncle in New York, so the seller did not collect the sales tax amount of $1100. ( Id. at 346.)
In November 2001, Mary Elizabeth Hampton ("Hampton"), with whom Isang had been living since August 2001, discovered suspicious documents in their apartment, including various forms of identification bearing Isang's photograph, a "different" driver's license, and some bank statements. ( Id. at 45, 47-48.) Believing that Isang could be engaged in criminal activity, Hampton, at a friend's urging, notified law enforcement of her discovery. ( Id. at 48, 69-70.) On November 26, 2001, agents from the Immigration and Naturalization Service ("INS") arrested Isang at the apartment. ( Id. at 48-49, 69-70.)
The United States had deported Isang on two previous occasions-once 1997 an once in approximately 1993 after he had served a ten-month sentence for possession of stolen mail. (P.'s App. at 30-34, 37-39.) Isang returned to the United States through Mexico in June or July 2000 without the permission of the United States. ( Id. at 37-38.)
The day after Isang's arrest, Hampton contacted Postal Inspector Rodney Francois ("Francois") to report that mail with different names had been arriving at the apartment. ( Id. at 49, 70.) On November 30, 2001, pursuant to Francois investigation into possible mail theft on the part of Isang, Hampton gave Francois a blue gym bag that belonged to Isang and, according to Francois, contained a "virtual `fraud kit.'" ( Id. at 70-78.) Hampton also gave Francois the keys and title to the Lexus, which Francois seized for forfeiture. ( Id. at 73.)
An examination of the contents of the blue gym bag revealed documents that connected Isang to the alias "Olajunbofun Olanrewaju," the purchaser of the Lexus. ( Id. at 97-115.) For example, the blue gym bag contained a Missouri non-driver identification card in the name of "Olajunbofun Olanrewaju" with a photograph of Isang. ( Id. at 97.) The blue gym bag also contained documents that connected Isang to the alias "Gary Eugene Caldwell, Jr.," and to the business "Dachik Ventures." ( Id. at 79-91.) For example, the blue gym bag contained a Missouri non-driver identification card in the name of "Gary Eugene Caldwell, Jr.," with a photograph of Isang, as well as a "Certificate of Ownership for Unincorporated Business or Profession" for "Dachik Ventures" with "Gary Eugene Caldwell, Jr.," listed as the owner of "Dachik Ventures." ( Id. at 82-83.) Further investigation revealed that Isang had opened two accounts at Compass Bank, one under the name of "Gary Eugene Caldwell, Jr.," and one under the name of "Dachik Ventures." ( Id. at 167, 194.) The investigation also revealed that Isang had altered a check in the amount of $22,404.23 to reflect "Gary Eugene Caldwell, Jr.," as the payee and had deposited the altered check into the Compass Bank account for "Gary Eugene Caldwell, Jr." ( Id. at 169, 174, 184-85, 190-92.) The investigation further revealed that Isang had altered three other checks totaling $12,617.19 to reflect "Dachik Ventures" as the payee and had deposited the altered checks into the Compass Bank account for "Dachik Ventures." ( Id. at 196, 201-03, 211-12, 214, 217-20, 223-26, 227-32, 234.) The investigation finally revealed the Isang had withdrawn a total of $22,000.00 from the Compass Bank account for "Gary Eugene Caldwell, Jr.," in July 2001, as well as a total of $8,000.00 from the Compass Bank account for "Dachik Ventures" in July 2001. ( Id. at 169, 175-79, 196.) Finally, the blue gym bag contained documents that connected Isang to the alias "Olufumisho A. Anibijuwon" and to the business "Zobo-Robo Investments." ( Id. at 92-97.) For example, the blue gym bag contained a North Carolina driver license in the name of "Olufumisho Ayotunde Anibijuwon," as well as a "Certificate of Ownership for Unincorporated Business or Profession" for "Zobo-Robo Investments" with "Olufumisho A. Anibijuwon" listed as the owner of "Zobo-Robo Investments." ( Id. at 92-93.) Further investigation revealed that Isang had opened a checking account at Wells Fargo Bank under the name "Zobo-Robo Investments." ( Id. at 237-42.) The investigation also revealed that Isang had altered four checks totaling $173,422.14 to reflect "Zobo-Robo Investments" as the payee and had deposited the altered checks into the Wells Fargo Bank checking account for "Zobo-Robo Investments." ( Id. at 245, 247, 253-56, 263-66, 272-75, 279-83, 286-92, 296-300, 305-08, 310-13, 318-21, 323-30.) The investigation finally revealed that Isang had withdrawn a total of $56,220.00 from the Wells Fargo Bank checking account for "Zobo-Robo Investments" in August and September 2001. ( Id. at 245-48, 257-62, 267.) All of Isang's above withdrawals from Compass Bank and Wells Fargo Bank occurred in July, August, or September 2001, and Isang paid for the Lexus with cash and money orders in September and October 2001. ( Id. at 47, 115, 169, 196, 245-48, 344-47.)
On March 19, 2002, a jury found Isang guilty of two counts of making, possessing, and uttering a counterfeit security of an organization pursuant to 18 U.S.C. § 513 and of one count of illegal reentry after deportation pursuant to 8 U.S.C. § 1326 (a) (b)(1). ( Id. at 350.) As part of his sentence, and in addition to incarceration, the District Court ordered Isang to pay restitution in the amount of $29,944.19 to Compass Bank and $55,631.85 to Wells Fargo Bank. ( Id. at 353-54.)
Isang's convictions for making, possessing, and uttering a counterfeit security of an organization related to Isang's deposits of altered checks into Washington Mutual Bank accounts in the names of "Zobo-Robo Investments" and "Dachik Ventures." (P.'s App. at 350, 355-57.)
The United States now moves for summary judgment against the Lexus pursuant to Rule 56(c) of the Federal Rules of Civil Procedure. (P.'s Mot. at 1-2; P.'s Br. at 13-15.) Rather than responding to the motion for summary judgment, Isang moves to dismiss the instant forfeiture proceeding under a variety of theories. (Clint's Mot. at 1-3.) The Court will address the motion to dismiss before proceeding, if necessary, to the motion for summary judgment.
II. Isang's Motion to Dismiss
Isang moves to dismiss the instant forfeiture action on the following grounds: (1) that the United States confiscated the Lexus without affording Isang a pre-deprivation notice or hearing in violation of the Due Process Clause of the United States Constitution; (2) that the United States seized the Lexus without a proper and valid search warrant in violation of the Fourth Amendment to the United States Constitution; (3) that the United States improperly alleges violations of 18 U.S.C. § 513, 1344, 1708, where the underlying criminal indictment alleged only a violation of 18 U.S.C. § 513; (4) that there are no proceeds traceable to a criminal indictment or conviction; and (5) that there is no nexus or connection between the Lexus and Isang's criminal convictions. ( Id.) The United States opposes each of Isang's proffered grounds for dismissal. (P.'s Resp. at 1-6.) For the following reasons, Isang's motion to dismiss is DENIED.
With respect to pre-deprivation notice and hearing, Isang principally relies on the case of United States v. James Daniel Good Real Property, 510 U.S. 43 (1993), for the principle that Isang was entitled to pre-deprivation notice and hearing prior to the seizure of the Lexus. (Clmt.'s Mot. at 1.) However, that case held that pre-deprivation notice and hearing were required before the government could seize real property. United States v. James Daniel Good Real Property, 510 U.S. 43, 62 (1993). The courts of this circuit do not appear to recognize a right to pre-deprivation notice and hearing prior to seizures of personal property connected to criminal activity. See Hawkins v. Henderson County, 22 F. Supp.2d 573, 579 (E.D. Tex. 1998) (concluding that there is no right to pre-deprivation notice and hearing "before a federal agency may seize personal property subject to forfeiture for violation of federal drug laws"). Thus, Isang's first argument is without merit.
The United States does not dispute that Isang never received a pre-deprivation notice and hearing. (P's Resp. at 1-2.)
With respect to seizure without a search warrant, Isang contends that the United States did not seize the Lexus pursuant to a proper and valid search warrant. (Clmt.'s Mot. at 2.) The Court notes that a search warrant was not required under the facts of the instant case. The United States has presented competent summary judgment evidence that Hampton, who had been living with Isang during the period of August 2001 to November 2001, gave Francois the keys and title to the Lexus after Isang had been arrested. (P.'s App. at 2-3.) Thus, the Lexus was not seized pursuant to a search. However, even if a search warrant were required, the proper remedy for an invalid search is the exclusion of evidence obtained pursuant to the invalid search. See United States v. $9,041,598.68, 163 F.3d 238, 250 (5th Cir. 1998). In this case, the United States has not submitted the Lexus itself as evidence, and the United States has not submitted any evidence in support of its motion for summary judgment that was obtained as a result of the seizure of the Lexus. (P.'s App. at 3.) Thus, Isang's second argument is without merit.
Because Isang's remaining contentions are addressed in the forthcoming summary judgment analysis, the Court need not delve into them further. In sum, Isang has failed to raise a valid basis for the dismissal of the instant forfeiture action.
III. The United States' Motion for Summary Judgment
The United States moves for summary judgment on the grounds that: (1) it has presented competent summary judgment evidence to prove, by a preponderance of the evidence, each of the required elements for forfeiture of the Lexus, and (2) Isang has offered no competent summary judgment evidence to show a legitimate source of the funds that purchased the Lexus. (P's Br. at 1, 17, 21.) As noted above, Isang failed to respond to the motion for summary judgment. For the following reasons, the United States' motion for summary is GRANTED.
The Court now turns to the legal standards that will guide its analysis.
A. Legal Standards
Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is appropriate when the pleadings and the record evidence show that no genuine issue of material fact exists and that, as a matter of law, the movant is entitled to judgment. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). An issue of material fact is genuine if the evidence could lead a reasonable jury to find for the non-moving party. Hanks v. Transcontinental Gas Pipe Line Corp., 953 F.2d 996 (5th Cir. 1992) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). In determining whether a genuine issue for trial exists, the court must view all of the evidence in the light most favorable to the non-movant. Anderson, 477 U.S. at 248.
The moving party "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of `the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavit, if any,' which it believes demonstrates the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (quoting Fed.R.Civ.P. 56(c)). Once the movant makes this showing, the burden shifts to the non-movant to show that summary judgment is not appropriate. Little, 37 F.3d at 1075 ( citing Celotex, 477 U.S. at 325). This burden is not satisfied by some metaphysical doubt as to the material facts, by conclusory allegations, by unsubstantiated assertions, or by only a scintilla of evidence. Little, 37 F.3d at 1075 ( citing Celotex, 477 U.S. at 325). Rather, the non-moving party must come forward with competent summary judgment evidence showing that there is a genuine issue for trial. Fed.R.Civ.P. 56(e).
The Court now turns to the merits of the motion.
B. Analysis
As noted above, the United States moves for summary judgment on the basis that it has presented competent summary judgment evidence to prove, by a preponderance of the evidence, each of the required elements for forfeiture of the Lexus. (P.'s Br. at 1, 17.) The Court agrees.
The following property is subject to forfeiture to the United States pursuant to 18 U.S.C. § 981 (a)(1)(C):
Any property, real or personal, which constitutes or is derived from proceeds traceable to a violation of section . . . 1344 [bank fraud] of this title or any offense constituting a "specified unlawful activity" (as defined in section 1956(c)(7) of this title). . . .18 U.S.C. § 981 (a)(1)(C). A "specified unlawful activity," as defined in 18 U.S.C. § 1956 (c)(7), includes violations of 18 U.S.C. § 513 [making, uttering, or possessing a forged security] and 18 U.S.C. § 1708 [theft from the mail]. 18 U.S.C. § 1956 (c)(7)(D).
With respect to establishing an entitlement to forfeiture due to a violation of 18 U.S.C. § 513 (a), the United States must prove, by a preponderance of the evidence, that Isang: "(1) made, uttered, or possessed (2) a [forged] security (3) of an organization (4) with intent to deceive another person, organization, or government." United States v. Chappell, 6 F.3d 1095, 1098 (5th Cir. 1993). See also United States v. Gasanova, No. 02-50566, 2003 WL 21202828, at *3, ___ F.3d ___, (5th Cir. May 22, 2003) (holding that "statutorily-prescribed forfeiture is warranted upon a showing of a preponderance of the evidence"). To that end, the United States has presented competent summary judgment evidence that Isang intercepted multiple checks from legitimate companies; forged each check to reflect one of his aliases as the payee, in some cases changing the payment amount as well; opened three bank accounts, each in the name of one of his aliases; deposited at least one of the forged checks into each bank account; and withdrew funds from all three of the bank accounts. (P.'s App. at 79-91, 92-93, 82-83, 167, 174, 175-79, 184-85, 190-92, 194, 196, 201-03, 211-12, 214, 217-20, 223-26, 227-32, 234, 237-42, 245-48, 253-56, 257-62, 263-66, 267, 272-75, 279-83, 286-92, 296-300, 305-08, 310-13, 318-21, 323-30.) The Court also notes that a jury found Isang guilty of two counts of making, possessing, and uttering a counterfeit security for criminal activities relating to the criminal activity at issue in this case. ( Id. at 350.) Furthermore, as part of Isang's sentence, the District Court ordered Isang to pay restitution to Compass Bank and to Wells Fargo Bank for the criminal activity at issue in this case. ( Id. at 353-54.) Accordingly, the Court concludes that the United States has met its burden of proving, by a preponderance of the evidence, that Isang engaged in the criminal activity described in 18 U.S.C. § 513 (a). As such, the Court need not address whether Isang also engaged in the criminal activities described in 18 U.S.C. § 1344 and 18 U.S.C. § 1708.
In addition, the United States must prove, by a preponderance of the evidence, that the Lexus derived from the proceeds of the criminal activity described in 18 U.S.C. § 513 (a). To that end, the United States presents competent summary judgment evidence that Isang purchased the Lexus with cash and money orders for $17,706.26 at the end of a two and a half month period during which Isang withdrew a total of $86,220.00 from the three bank accounts into which Isang had deposited the forged checks. ( Id. at 47, 97-115, 116-17, 169, 196, 245-48, 342-47.) The United States also submits the trial testimony of Hampton, with whom Isang had lived for the period of August 2001 to November 2001, that Isang never disclosed the nature of his employment other than to say that he was in "finance." ( Id. at 56.) Finally, Hampton testified that she never knew Isang to go to an office or to have any employees. (Id. at 46.) The Court concludes that the United States has met its burden of proving, by a preponderance of the evidence, that Isang purchased the Lexus with the proceeds of the criminal activity described in 18 U.S.C. § 513 (a). See Matter of Placid Oil Co., 932 F.2d 394, 398 (5th Cir. 1991) (recognizing that, in a non-jury trial, a district court may draw inferences from evidence submitted on summary judgment, so long as those inferences do not involve issues of witness credibility or disputed material facts).
At various points in this litigation, Isang has argued that he purchased the Lexus for his uncle, who lives in Nigeria, with money Isang received from his uncle for that purpose. However, Isang presents no competent summary judgment evidence to support his contention. Isang cannot avoid summary judgment with conclusory allegations or with unsubstantiated assertions. Little, 37 F.3d at 1075 ( citing Celotex, 477 U.S. at 325). The record also contains an affidavit, in which Isang claims, under penalty of perjury, to be "the true and rightful owner of the [Lexus]." However, Isang cannot avoid summary judgment by presenting a mere scintilla of evidence. Id.
In sum, the Court concludes that the United States has met its burden of proving, by a preponderance of the evidence, each of the required elements for forfeiture of the Lexus. The Court further concludes that Isang, the only claimant to the Lexus, has failed to show the existence of a genuine issue of material fact such as would preclude summary judgment. Finally, the Court concludes that a review of the record as a whole fails to show the existence of a genuine issue of material fact such as would preclude summary judgment.
IV. Conclusion
For the foregoing reasons, Claimant's "Motion to Dismiss," filed April 10, 2003, is hereby DENIED, and "United States' Motion for Summary Judgment," filed April 9, 2003, is hereby GRANTED.