United States v. $144,780.00 in US Currency ( 2019 )

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT October 17, 2019
_________________________________
Elisabeth A. Shumaker
Clerk of Court
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v. No. 18-3201
(D.C. No. 6:15-CV-01230-JWB)
$144,780.00 IN UNITED STATES (D. Kan.)
CURRENCY, more or less,
Defendant.
------------------------------
NATHAN L. DUCKWORTH,
Claimant - Appellant.
_________________________________
ORDER AND JUDGMENT *
_________________________________
Before TYMKOVICH, Chief Judge, BALDOCK and HOLMES, Circuit Judges.
_________________________________
This is a civil forfeiture case brought under the Controlled Substances Act, 21
U.S.C. § 881(a)(6), seeking forfeiture of $144,780 in United States currency. After a
bench trial, the district court concluded the Government established by a
preponderance of the evidence that Claimant–Appellant Nathan Duckworth intended
to exchange the $144,780 seized from him during a traffic stop for controlled
*
This order and judgment is not binding precedent, except under the doctrines
of law of the case, res judicata, and collateral estoppel. It may be cited, however, for
its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
substances. Accordingly, the district court entered a judgment forfeiting the currency
to the United States. Claimant appeals. Exercising jurisdiction under 28 U.S.C.
§ 1291, we affirm.
I.
On May 12, 2015, Trooper James McCord of the Kansas Highway Patrol
stopped a rented 2015 Chevrolet Tahoe traveling westbound on Interstate 70 in Ellis
County, Kansas, after he observed the vehicle exceeding the speed limit. Claimant was
driving the vehicle, and his companion, Walter Weathers, Jr., was in the front
passenger seat. When Trooper McCord approached the Tahoe, he smelled the odor of
burnt marijuana emanating from the vehicle. Trooper McCord asked Claimant and
Weathers about their travel plans, and Claimant responded they were traveling to
Denver for a week-long family vacation. Trooper McCord found this suspicious
because the rental agreement indicated the Tahoe was due back in Kansas City at noon
that same day and because there was no luggage in the vehicle—only two shirts and a
pair of pants were hanging in the backseat. Both Claimant and Weathers denied
smoking marijuana in the Tahoe, and they told Trooper McCord there were not any
drugs in the vehicle.
Based on the smell of marijuana, Trooper McCord searched the Tahoe. The
search revealed a backpack between the driver and passenger seat containing $144,780
rubber-banded together in two clear, vacuum-sealed plastic bags. When Trooper
McCord asked Claimant why he was carrying such a large sum of currency, Claimant
said it was none of his business. During the search, Trooper McCord also found
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marijuana “gleanings”—small particles of marijuana—and tobacco gleanings in the
Tahoe. The marijuana gleanings were photographed but never collected or tested.
Trooper McCord did not find any burnt marijuana, cigars, rolling papers, or other drug
paraphernalia in the Tahoe. A criminal background check revealed Claimant had two
prior arrests for drug trafficking. Trooper McCord then moved the Tahoe to Kansas
Patrol Troop D Headquarters. While at Troop D Headquarters, Kansas Highway Patrol
Trooper William Gray conducted a canine sniff of the currency. Jaxx, a certified patrol
dog, alerted to the presence of a narcotic odor on the currency.
The Government filed a complaint asserting the $144,780 seized from Claimant
was subject to forfeiture under 21 U.S.C. § 881(a)(6) because the currency was
intended to be furnished in exchange for controlled substances or was proceeds of an
illegal drug transaction. Claimant filed a notice of claim and an answer to the
complaint in which he asserted ownership of the currency, alleging the currency was
legitimately derived and not connected to illegal drug activity. Claimant also moved
to suppress the currency and other evidence discovered during the traffic stop, arguing
the search violated the Fourth Amendment. Following a suppression hearing, the
district court concluded Trooper McCord lawfully stopped Claimant’s vehicle and
probable cause existed to search the vehicle based on Trooper McCord’s credible
testimony that he smelled marijuana. Accordingly, the district court denied Claimant’s
motion to suppress.
At the bench trial, the Government introduced the testimony of Trooper Ryan
Wolting of the Kansas Highway Patrol over Claimant’s objection. Trooper Wolting
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testified that on October 12, 2014, Claimant was a passenger in a rental vehicle heading
eastbound on I-70 in Ellsworth County, Kansas. Claimant and his wife, who was
driving the vehicle, told Trooper Wolting they were unemployed and traveling back to
Kansas City from Hays, Kansas, where they spent a one-night get away from home.
Trooper Wolting searched the vehicle and discovered “approximately nine pounds of
vacuum-sealed marijuana in one-pound individual packages, a loaded pistol in the
center console, and approximately $5,320 in [Claimant’s] pants pocket[,]” all of which
Claimant claimed as his property. In the instant proceeding, Claimant admitted the
2014 stop occurred, but he denied ownership of the marijuana and testified he was
neither charged nor convicted of marijuana possession or illegal possession of a
firearm.
Claimant objected to Trooper Wolting’s testimony on relevance grounds. While
the district court allowed Trooper Wolting to testify over Claimant’s objection, it also
recognized Federal Rule of Evidence 404(b) places limitations on prior criminal acts.
The court indicated it would examine the issue further and possibly disregard the
evidence in making its ultimate rulings. In its order granting forfeiture, the district
court stated it did not consider Trooper Wolting’s testimony in reaching its decision.
The district court found Claimant’s testimony regarding the purpose of his trip
to Denver not credible. Claimant testified he was traveling to Denver to drop off
$144,780 with Ruben Romero, a social media acquaintance he had never met in person,
as an investment in a twelve-city music tour. Based on the evidence presented at trial,
the district court found the “tour idea was little more than a concept (or perhaps more
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accurately, a pretext), with no artists, venues, dates, locations (aside from Kansas City)
or other details agreed to between Romero and Claimant.” As to where the $144,780
came from, Claimant testified its sources included: (1) income from his event
promotion business and (2) a $40,000 loan from Mustafa Ali, a business associate.
While the district court questioned Claimant’s alleged sources of the $144,780 due to
discrepancies in his tax returns, it found his explanation “at least plausible.”
Ultimately, the district court concluded the Government failed to show by a
preponderance of evidence the $144,780 constituted proceeds traceable to an illegal
drug exchange. The court held, however, Claimant more likely than not intended to
exchange the currency for controlled substances. Accordingly, the district court
entered a judgment forfeiting the $144,780 to the United States.
II.
Claimant raises three issues on appeal. First, he argues the district court erred
in denying his motion to suppress evidence discovered during the traffic stop resulting
in the seizure of the $144,780. Second, Claimant contends the district court abused its
discretion in allowing Trooper Wolting to testify concerning the 2014 traffic stop.
Third, Claimant argues the Government presented insufficient evidence to support the
district court’s order of forfeiture. We address each issue in turn. 1
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Claimant also argues the district court erred in denying his motion for summary
judgment and his motion for judgment as a matter of law. The denial of summary
judgment, as is the case here, ordinarily is not appealable. Castillo v. Day, 790 F.3d
1013, 1017 (10th Cir. 2015). Nonetheless, Claimant’s basis for both these arguments
is that the Government failed to present sufficient evidence to support forfeiture of the
5
A.
First, Claimant contends the district court erred in denying his motion to
suppress the $144,780 and other evidence discovered during the traffic stop. Claimant
does not question the validity of the initial stop on appeal, so we need not review its
legality here. Nor does Claimant dispute the well-established law that “the odor of
marijuana by itself is sufficient to establish probable cause.” See United States v.
Johnson, 630 F.3d 970, 974 (10th Cir. 2010). Rather, he argues the district court erred
in relying on evidence seized during the search—namely, the $144,780—to support its
finding of probable cause.
Before we turn to the merits of Claimant’s argument, we must address the
appropriate standard of review. As Claimant acknowledges, he did not make this
argument before the district court and has thus forfeited the argument. Accordingly,
we review for plain error. Richison v. Ernest Group, Inc., 634 F.3d 1123, 1128 (10th
Cir. 2011). To establish plain error, Claimant must show “(1) error, (2) that is plain,
which (3) affects substantial rights, and which (4) seriously affects the fairness,
integrity, or public reputation of judicial proceedings.” Id.Although this is a civil case, “the government will be barred from introducing
evidence illegally seized in violation of the [F]ourth [A]mendment to prove a claim of
forfeiture.” United States v. $149,442.43, 965 F.2d 868, 872 (10th Cir. 1992). “In
reviewing a district court’s denial of a motion to suppress, we view the evidence in the
$144,780. As noted above, whether the Government presented sufficient evidence in
this case is the third and final issue we address.
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light most favorable to the Government and accept the district court’s factual findings
unless clearly erroneous.” United States v. Gilmore, 776 F.3d 765, 768 (10th Cir.
2015). “We review de novo the ultimate determination of the reasonableness of a
search . . . under the Fourth Amendment.” Id. But we can, of course, “affirm a lower
court’s ruling on any grounds adequately supported by the record, even grounds not
relied upon by the district court.” United States v. Fager, 811 F.3d 381, 385 (10th Cir.
2016) (quoting United States v. Mabry, 728 F.3d 1163, 1166 (10th Cir. 2013)).
“[W]hen . . . officers have probable cause to believe that an automobile contains
contraband, the Fourth Amendment does not require them to obtain a warrant prior to
searching the car for and seizing the contraband.” Florida v. White, 526 U.S. 559,
563–64 (1999). “Probable cause to search a vehicle is established if, under the totality
of the circumstances, there is a fair probability that the car contains contraband or
evidence.” United States v. Chavez, 534 F.3d 1338, 1344 (10th Cir. 2008) (quoting
United States v. Vasquez-Castillo, 258 F.3d 1207, 1212 (10th Cir. 2001)). Our cases
provide the smell of marijuana alone establishes probable cause to search a vehicle.
United States v. Snyder, 793 F.3d 1241, 1244 (10th Cir. 2015) (collecting cases).
The record clearly establishes Trooper McCord had probable cause to search the
Tahoe based on the odor of marijuana he smelled coming from the vehicle. At the
suppression hearing, Trooper McCord testified he is trained to detect marijuana and is
familiar with the smell of marijuana. Trooper McCord also testified he detected an
odor of marijuana coming from the Tahoe and told Claimant someone had smoked
marijuana in the vehicle. The district court found this testimony credible and
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concluded Trooper McCord had probable cause to conduct the search. Finding no clear
error in the district court’s factual findings, the smell of marijuana emanating from the
Tahoe supplied Trooper McCord with probable cause to search the vehicle.
We further conclude the district court did not erroneously rely on evidence
seized during the search as a basis for finding probable cause existed. In its probable
cause ruling, the district court focused exclusively on Trooper McCord’s testimony
concerning the smell of marijuana coming from the Tahoe. As the court explained:
I cannot conclude from what I’ve heard today that the trooper’s testimony
that he believed that he smelled the smoking of marijuana was
deliberately untruthful, and because I can’t conclude that I must conclude
that he had probable cause to conduct the search.
Based on that probable cause finding, I’m going to deny the Motion to
Suppress.
Appellant’s App. at 269–70 (emphasis added). Nowhere in its ruling does the district
court mention the $144,780 or any other evidence discovered during the search. We
are not persuaded by Claimant’s attempt to paint the record as otherwise. The district
court, therefore, did not err in its probable cause determination and in denying
Claimant’s motion to suppress. Because Claimant fails to show the district court erred
in denying his motion to suppress, he cannot establish plain error.
B.
We next turn to Claimant’s argument that the district court abused its discretion
in permitting Trooper Wolting to testify regarding the prior traffic stop and drug-
related arrest of Claimant on October 12, 2014. Specifically, Claimant contends the
8
evidence is inadmissible under Federal Rule of Evidence 404(b) because it constituted
improper character evidence used to demonstrate action in conformity therewith.
We need not address whether Trooper’s Wolting testimony constituted
inadmissible character evidence under Rule 404(b) because even if the district court
erred in allowing such testimony, the error was harmless. “An erroneous admission of
evidence is harmless unless it had a substantial influence on the outcome or leaves one
in grave doubt as to whether it had such effect.” United States v. Yeley-Davis, 632
F.3d 673, 685 (10th Cir. 2011) (quoting United States v. Bornfield, 145 F.3d 1123,
1131 (10th Cir. 1998)). The district court is presumed to have disregarded improperly
admitted evidence during a bench trial. Tosco Corp. v. Koch Indus., Inc., 216 F.3d
886, 896 (10th Cir. 2000).
Claimant fails to show Trooper Wolting’s testimony influenced the outcome in
this case. Although the district court permitted Trooper Wolting to testify regarding
the 2014 stop, the court explicitly stated in its order granting forfeiture it did not
consider this evidence in reaching its decision. We have no reason to doubt the district
court’s exhortation. As we explain below, ample evidence existed—without
considering evidence of the 2014 stop—for the district court to conclude the $144,780
was subject to forfeiture. Thus, Trooper Wolting’s testimony did not substantially
prejudice Claimant, and any error was harmless.
C.
Finally, we address Claimant’s argument that the Government presented
insufficient evidence to support forfeiture under 21 U.S.C. § 881(a)(6). “In an appeal
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from a bench trial, we review the district court’s factual findings for clear error and its
legal conclusions de novo.” United States v. $252,300.00 in United States Currency,
484 F.3d 1271, 1273 (10th Cir. 2007) (quoting Holdeman v. Devine, 474 F.3d 770, 775
(10th Cir. 2007)). Sufficiency of the evidence is a legal question we review de novo.
Douglas v. Workman, 560 F.3d 1156, 1172 (10th Cir. 2009).
Section 881(a)(6) provides for the forfeiture of “[a]ll moneys . . . furnished or
intended to be furnished by any person in exchange for a controlled substance . . . all
proceeds traceable to such an exchange, and all moneys . . . used or intended to be used
to facilitate any violation of this subchapter.” 21 U.S.C. § 881(a)(6). The burden of
proof lies with the Government to show, by a preponderance of the evidence, the
defendant property is subject to forfeiture. 18 U.S.C. § 983(c)(1). In evaluating
whether the Government has met its burden of proof, we employ a common-sense
approach and look to the totality of the circumstances. $252,300.00, 484 F.3d at 1274.
As a preliminary matter, we are not convinced the Government must establish
“a substantial connection between the property and the offense” where, as here, it
employs a proceeds or intended-for-exchange theory. See 18 U.S.C. § 983(c)(3).
Section 983(c)(3) provides: “[I]f the Government’s theory of forfeiture is that the
property was used to commit or facilitate the commission of a criminal offense, or was
involved in the commission of a criminal offense, the Government shall establish that
there was a substantial connection between the property and the offense.” 18 U.S.C.
§ 983(c)(3) (emphasis added). The plain text of the statute indicates the substantial
connection requirement only applies when the Government is basing forfeiture on a
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facilitation theory. Moreover, in $252,300.00, we stated: “The government’s theory
of forfeiture is that the currency ‘was furnished or intended to be furnished in exchange
for a controlled substance, or constitutes proceeds traceable to such an exchange, or
was used or intended to be used to facilitate’ criminal acts.” 484 F.3d at 1273(emphasis added). Because, however, we find the evidence in this case sufficient to
conclude a substantial connection exists between the $144,780 and illegal drug
trafficking, and because the parties did not fully brief the issue, we decline to address
whether such a showing is required here.
Considered in their totality, the facts of this case demonstrate the Government
presented sufficient evidence to support the district court’s order of forfeiture. 2 This
evidence is as follows. Claimant rented a Tahoe on May 8, 2015, which was due back
on May 12, 2015—the day of the stop. When Trooper McCord pulled the Tahoe over,
Claimant stated he was traveling to Denver for a week-long family vacation, but the
Tahoe contained no luggage; only two shirts and a pair of pants were hanging in the
rear of the vehicle. At trial, Claimant admitted he lied to Trooper McCord about the
purpose of his trip to Denver. Trooper McCord smelled the odor of burnt marijuana
coming from the Tahoe, conducted a search of the Tahoe, and found $144,780 bundled
with rubber bands inside two vacuum-sealed plastic bags. During the search, Trooper
McCord also discovered marijuana gleanings in the third-row seating area of the
2
In finding the Government presented sufficient evidence to support forfeiture,
we do not consider the fact Jaxx, a certified narcotics detection dog, alerted to the
presence of controlled substances on the $144,780.
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Tahoe. After Trooper McCord discovered the currency, Claimant explained neither
the source of the currency nor why he was traveling with such a large amount of cash.
Claimant later explained he planned to drop off the $144,780 with Romero, a
Denver resident Claimant knew through Facebook but had never met in person, as an
investment in a twelve-city music tour. No written agreement between Claimant and
Romero or any documentation outlining the details of the tour existed at the time of
the stop. Nor did Claimant produce any evidence to show he was investing the
$144,780 in a music tour Romero was already putting together.
Claimant challenges the district court’s finding that his explanation for his trip
to Denver was implausible. Specifically, Claimant contends he produced evidence
showing he had a successful event promotion business and had arranged a meeting with
Romero to invest in a music tour; thus, the district court should have found his story
credible. The district court found Claimant’s explanation for transporting the
currency—to leave $144,780 with a social media acquaintance as an investment in a
music tour—either unsubstantiated or wholly lacking in credibility. We are required
to give district court determinations of fact and assessments of witness credibility
special deference. Anderson v. City of Bessemer, 470 U.S. 564, 573–74 (1985). The
district court gave several reasons supported by the record for finding Claimant’s story
implausible, and we need not restate them here. Our review of the record simply
provides no basis upon which to conclude the district court’s assessments of credibility
or other findings of fact were clearly erroneous.
12
The discovery of large quantities of cash alone, of course, is not sufficient to
establish Claimant intended to furnish the $144,780 in exchange for a controlled
substance or to prove the currency constituted proceeds of illegal drug transactions.
We have, nonetheless, recognized such discovery is “strong evidence” of a connection
to illegal drug trafficking. $252,3000.00, 484 F.3d at 1274–75. Additionally,
legitimate businesses do not transport large quantities of cash wrapped in cellophane-
type material—this is a technique drug traffickers use in an effort to prevent detection
by drug-sniffing dogs. Id. Such evidence has “significant probative value.” Id. The
presence of a substantial amount of vacuum-sealed currency combined with the district
court’s finding—which is not clearly erroneous—that Claimant failed to credibly
explain the purpose for his trip to Denver weigh strongly in favor of concluding the
currency is subject to forfeiture.
Inconsistent statements as to the purpose of traveling with seized currency are
also of probative value. See $252,3000.00, 484 F.3d at 1274. Claimant informed
Trooper McCord he was going to Colorado for a family vacation, and he conceded at
trial this was a lie. As to the purported music tour, Claimant’s testimony contradicted
Romero’s testimony. Claimant testified he planned to merely invest the $144,780 in a
music tour Romero had already been putting together. Romero, on the other hand,
testified he only planned to handle the artists, the twelve-city tour was Claimant’s idea,
and Claimant would have lined up the venue in each city. The inconsistencies in
Claimant’s story weigh in favor of finding Claimant intended to exchange the $144,780
for a controlled substance and the $144,780 was connected to illegal drug activity.
13
Claimant’s criminal history involving drugs is not coincidental; rather, it
suggests the subject currency was connected to illegal drug activity. See United States
v. $67,220.00 in U.S. Currency, 957 F.2d 280, 286 (6th Cir. 1992) (explaining a
“claimant’s record of drug activity is a highly probative factor in the forfeiture
calculus”); United States v. U.S. Currency $83,310.78, 851 F.2d 1231, 1236 (9th Cir.
1988) (noting a claimant’s prior arrests and convictions on drug charges “are
circumstances demonstrating more than mere suspicion of his connection with an
illegal drug transaction”). Claimant’s prior drug-related arrests and convictions
provide a nexus to illegal drug activity. 3 Where this evidence is accompanied by other
persuasive evidence such as the odor of marijuana coming from his vehicle, the
presence of drugs in his vehicle, and lying to a law enforcement officer, we conclude
it supports the reasonable inference Claimant intended to exchange the $144,780 for
controlled substances and the currency is connected to drug trafficking.
As to the sources of the currency, Claimant contends he established the
legitimacy of the $144,780 by presenting evidence of substantial income through his
event promotion business and a loan from a business associate. Evidentiary support,
or lack thereof, establishing a legitimate source of the currency is “entitled to
considerable weight” in the forfeiture calculus. See $252,3000.00, 484 F.3d at 1275.
To support his claim, Claimant proffered evidence of a $40,000 loan he received from
Mustafa Ali in exchange for a promissory note under which Claimant agreed to repay
3
Like the district court, we did not consider evidence of Claimant’s October
2014 traffic stop and arrest in reaching our decision.
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the loan in two months at 50% interest. Claimant also testified about his successful
event promotion business and proffered invoices showing his company profited more
than $150,000 in the first half of 2015 before the seizure of the $144,780. Eric Union,
the manager of Encore Nightclub, testified these contracts were legitimate and the
invoices were accurate based on a headcount of how many people entered the club
during each event.
But Union also testified neither he nor his employees handled the cash because
Claimant controlled the cash during these events. Notably, Encore Nightclub closed
on May 17, 2015, supposedly after it lost its liquor license. John Masha, Claimant’s
business associate, also testified that his full-time event booking company’s annual
gross income is approximately $50,000. Although Claimant had a personal checking
account, savings account, and business bank account for his company, none of the
seized $144,780 came from a bank. Claimant declared bankruptcy in 2011, and he
never reported making more than $19,000 per year prior to the traffic stop giving rise
to this case. Claimant initially reported about $17,000 as income on his 2014 tax return
but subsequently amended this tax return to show about $95,000 in income after the
seizure of the $144,780. The district court found Claimant generally lacked credibility
due to, inter alia, his evasive and non-responsive answers at trial concerning his taxes.
Based on this evidence, the district court concluded the Government failed to
establish by a preponderance of the evidence the $144,780 constituted proceeds of an
illegal drug exchange. We are less convinced Claimant’s proffer of possible innocent
sources of income vitiates the Government’s showing of a strong probability the
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$144,780 was in fact proceeds of illegal drug transactions. But it is not this appellate
court’s place to weigh conflicting testimony or evaluate the credibility of the witnesses.
See Anderson, 470 U.S. at 573–74. Although we may have weighed the evidence
differently had we sat as the trier of fact, we cannot conclude the district court’s
account of the evidence is implausible in light of the record.
Nonetheless, the Government plainly carried its burden in this case to prove the
$144,780 is subject to forfeiture under 18 U.S.C. § 881(a)(6). Given the implausibility
of Claimant’s explanation for his trip, Claimant’s false statement to Trooper McCord
about the purpose of his trip, the large amount of cash involved, the method in which
the currency was bundled and vacuum sealed, Claimant’s borrowing $40,000 from a
business associate with a promise to repay the loan with 50% interest in two months,
the marijuana gleanings found in his rental vehicle, his drug-related criminal history,
and the discrepancies between his alleged income and his tax returns, the Government
presented sufficient evidence showing Claimant intended to exchange the $144,780 for
a controlled substance and the $144,780 is substantially connected to illegal drug
trafficking. Thus, the district court properly forfeited the currency to the Government.
***
For the foregoing reasons, the judgment of the district court is AFFIRMED.
Entered for the Court
Bobby R. Baldock
Circuit Judge
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