United States v. $124,700.00 ( 2006 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 05-3295
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United States of America, *
*
Plaintiff/Appellant, *
*
v. *
* Appeal from the United States
$124,700, in U.S. Currency, * District Court for the
* District of Nebraska.
Defendant/Appellee, *
*
Manuel Gomez; Andres Madrigal *
Morgan; Emiliano Gomez Gonzolez, *
*
Claimants/Appellees. *
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Submitted: April 19, 2006
Filed: August 18, 2006
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Before ARNOLD, LAY, and COLLOTON, Circuit Judges.
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COLLOTON, Circuit Judge.
The United States initiated civil forfeiture proceedings against $124,700 in
United States currency, alleging that the money was subject to forfeiture as the
proceeds of a drug transaction or as property used to facilitate the possession,
transportation, sale, concealment, receipt, or distribution of a controlled substance.
See 21 U.S.C. § 881(a)(6). Three individuals filed claims opposing the forfeiture, and
after a bench trial, the district court entered judgment in favor of the claimants. The
government appeals, and we reverse and remand for further proceedings.
I.
The defendant currency was seized on May 28, 2003, from one of the
claimants, Emiliano Gomez Gonzolez. According to testimony adduced at trial,
Gonzolez was driving west on Interstate 80 in a rented Ford Taurus when a Nebraska
State Patrol Trooper, Chris Bigsby, stopped Gonzolez for exceeding the posted speed
limit. Trooper Bigsby testified that he asked Gonzolez to sit in the front passenger
side of his patrol vehicle during the stop. At Bigsby’s request, Gonzolez presented
a Nevada driver’s license and a rental contract for the car, but the rental contract was
not in Gonzolez’s name and did not list Gonzolez as an additional driver.
Trooper Bigsby did not speak fluent Spanish, but he testified that Gonzolez
responded to his questions, which were mostly in English, in a combination of
English and Spanish. Bigsby asked Gonzolez where he was going, and Gonzolez
responded that he had been in Chicago for three days. Gonzolez indicated that a
person named “Luis” had rented the car for him, but the name “Luis” did not match
the name on the rental agreement that he presented to Trooper Bigsby. Trooper
Bigsby also twice inquired whether Gonzolez had ever been arrested or placed on
probation or parole, and Gonzolez said that he had not.
Before Trooper Bigsby had completed the traffic stop, another officer, Jason
Brownell, stopped to ask if Bigsby needed any assistance. When Trooper Bigsby
found out that Trooper Brownell had some Spanish-speaking ability, Bigsby asked
if Brownell would stay and assist. Trooper Bigsby testified that with Brownell’s
assistance, he completed a warning citation and returned Gonzolez’s license and
paperwork. Having learned through his dispatcher that Gonzolez had been arrested
in 2003 for driving while intoxicated, Bigsby then asked, through Trooper Brownell,
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if he could “ask a few more questions,” and Gonzolez answered yes. Again through
Trooper Brownell, Bigsby asked if Gonzolez had ever been arrested for driving while
intoxicated, and Gonzolez answered that he had. Bigsby and Brownell also inquired
whether any alcohol, guns, marijuana, methamphetamine, heroin, or large amounts
of cash were in the car, and Gonzolez answered no. Brownell then asked for, and
received, consent to search the car. Trooper Bigsby went directly to the rear
passenger side of the vehicle and opened a cooler that was in the back seat, where he
found a large plastic bag that contained seven bundles wrapped in rubber bands inside
aluminum foil packaging. These bundles contained a total of $124,700 in currency.
Gonzolez and the vehicle were then taken to the Nebraska State Patrol office in
Lincoln.
In Lincoln, Trooper Bigsby continued his investigation with the help of another
trooper, Sean Caradori, and Trooper Caradori’s police canine, Rico. Rico was
deployed to sniff the exterior of the car, and the dog alerted to the rear passenger side
of the vehicle. Trooper Caradori testified that he conducted a test of the money that
was found within the vehicle by hiding both the currency taken from Gonzolez’s car
and a separate stack of seven bills borrowed from other troopers in the troopers’ break
room. Caradori testified that Rico alerted to the defendant currency but not to the
money borrowed from the troopers.
At trial, the government argued that the dog’s alert, along with the large
amount of cash that was seized, the circumstances of Gonzolez’s travel, and
Gonzolez’s initial false denials that he was carrying cash or that he had a criminal
history, showed that the currency was substantially connected to a drug transaction.
The claimants, however, argued that the cash was acquired legitimately. Manuel
Gomez testified that he had given Gonzolez $65,000 in cash, which was a
combination of money that he had borrowed from his father-in-law and his own
personal cash savings, with the expectation that Gonzolez would help him buy a
refrigerated truck for the produce business. Gonzolez testified that he gave $40,000
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of his own money, plus $20,000 from a friend, Andres Madrigal Morgan, as an
investment in Gomez’s truck. Consistent with Gonzolez’s account, Andres Madrigal
Morgan testified that he contributed $20,000 in proceeds from a vehicle sale to
Gonzolez’s investment in the truck.
Gonzolez testified that after he had pooled the cash from Madrigal Morgan and
Gomez with his own cash, he heard from a friend in Chicago that a truck might be
available there from a friend of the friend, and he set out for Chicago by plane, taking
the cash with him in a small carry-on bag. Gonzolez said, however, that when he
arrived in Chicago and his friend picked him up from the airport, he learned that the
truck had been sold. In addition, the unidentified friend alerted Gonzolez that it was
“bad” to carry more than $10,000 in cash on your person. Newly fearful of carrying
his cash back to California by plane, Gonzolez testified that he decided to rent a car
rather than fly, but because neither he nor his friend had a credit card, a third
individual rented the car for him.
Gonzolez also testified that he hid the money in a cooler because he was afraid
that he might be assaulted or have the money stolen if it was readily observable. He
also explained that he was “scared” when the troopers began questioning him about
whether he was carrying drugs or currency. He said that he lied about the money and
about the names of other parties involved, because he believed that carrying large
amounts of cash might be illegal, and he did not want to get his friends in trouble.
With respect to Trooper Bigsby’s question about whether he had ever been arrested,
Gonzolez testified that Bigsby asked whether he “had any crimes” or “had been a
prisoner.” Gonzolez said he answered “no,” despite his arrest for driving under the
influence, because he “didn’t think that that was a crime.” (Tr. at 400).
The district court concluded that the government had not established, by a
preponderance of the evidence, that there was a substantial connection between the
money and a drug trafficking offense. The court noted that large sums of unexplained
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currency can be evidence of drug trafficking, and that in this case the money was
bundled in an unusual manner. The court also concluded, however, that the
claimants had given a “plausible and consistent explanation for [the money’s] origin
and intended use,” (Add. at 12), and that “the bundling is consistent with an attempt
to sort the currency by contributor and conceal the currency from would-be thieves,”
and not just to evade law enforcement. (Id. at 13). In addition, the court observed
that the government had not presented any expert testimony about “whether the
manner the bundles were wrapped either increased or decreased the likelihood of the
currency’s use or connection with a drug trafficking offense.” (Id.).
With respect to the canine alert, the court agreed that the alert provided some,
but only slight, evidence that the money was connected to drug trafficking. The court
also considered the circumstances and route of Gonzolez’s travel, and the fact that
Gonzolez had lied about the names of his friends and other details, but did not believe
that this evidence taken together with the other circumstances, including all the
claimants’ lack of significant criminal history, established a substantial connection
to drug activity. Because the court determined that the money was not subject to
forfeiture, it did not reach the question whether the claimants were innocent owners.
II.
Since the enactment of the Civil Asset Forfeiture Reform Act of 2000, the
burden is on the government to establish, by a preponderance of the evidence, that
seized property is subject to forfeiture. 18 U.S.C. § 983(c)(1). Forfeiture is
warranted under 21 U.S.C. § 881 when the government establishes a “‘substantial
connection’ between the property” and a controlled substance offense. 18 U.S.C.
§ 983(c)(3). We review any predicate factual findings for clear error, but the ultimate
conclusion as to whether those facts establish a “substantial connection” between
seized currency and a narcotics transaction is a mixed question of law and fact that
we review de novo. See United States v. Dodge Caravan Grand SE/Sport Van, 387
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F.3d 758, 761 (8th Cir. 2004); United States v. $84,615 in U.S. Currency, 379 F.3d
496, 501 (8th Cir. 2004); see also United States v. $117,920.00 in U.S. Currency, 413
F.3d 826, 829 (8th Cir. 2005).
The district court’s opinion includes no finding as to the credibility of
Gonzolez and the other two claimants. The court did observe that the explanations
of the claimants were “plausible and consistent,” but this is different from a finding
that the court actually believed the testimony. “Plausible” means “apparently
acceptable or trustworthy (sometimes with the implication of mere appearance),” see
Shorter Oxford English Dictionary 2238 (5th ed. 2002), and we thus read the district
court’s opinion to hold that given a “plausible and consistent” explanation from the
claimants on one side of the balance, the government’s countervailing proof was not
strong enough to meet its burden of showing a substantial connection by a
preponderance of the evidence.
On de novo review, we respectfully disagree and reach a different conclusion.
We believe that the evidence as a whole demonstrates by a preponderance of the
evidence that there was a substantial connection between the currency and a drug
trafficking offense. Possession of a large sum of cash is “strong evidence” of a
connection to drug activity, $84,615 in U.S. Currency, 379 F.3d at 501-02, and
Gonzolez was carrying the very large sum of $124,700. The currency was concealed
in aluminum foil inside a cooler, and while an innocent traveler might theoretically
carry more than $100,000 in cash across country and seek to conceal funds from
would-be thieves on the highway, we have adopted the common-sense view that
bundling and concealment of large amounts of currency, combined with other
suspicious circumstances, supports a connection between money and drug trafficking.
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$117,920.00 in U.S. Currency, 413 F.3d at 829. The canine alert also supports the
connection. Id.1
The route and circumstances of Gonzolez’s travel were highly suspicious.
Gonzolez had flown on a one-way ticket, which we have previously acknowledged
is evidence in favor of forfeiture, see United States v. U.S. Currency in the Amount
of $150,660.00, 980 F.2d 1200, 1206 (8th Cir. 1992), and he gave a vague
explanation, attributed to advice from an unidentified third person, about why he
elected to return by car. Gonzolez purportedly carried $125,000 in cash with him on
his flight, for the purpose of buying a truck that he had never seen, from a third party
whom he had never met, with the help of a friend whose name he could not recall at
trial. This testimony does not inspire confidence in the innocence of the conduct.
When he was stopped by the Nebraska State Patrol, Gonzolez was driving a rental car
that was leased in the name of another person who was not present, another
circumstance that gives rise to suspicion. Then, when Gonzolez was questioned by
officers, he lied about having money in the car and about the names of his friends,
thus giving further reason to question the legitimacy of the currency’s presence. See
$117,920.00 in U.S. Currency, 413 F.3d at 829. The totality of these circumstances
– the large amount of concealed currency, the strange travel pattern, the inability to
identify a key party in the purported innocent transaction, the unusual rental car
papers, the canine alert, and the false statements to law enforcement officers – leads
1
The government argues that the district court erred by according only “slight”
probative value to the canine alert. That precise language, however, was drawn from
one of our decisions, see $84,615 in U.S. Currency, 379 F.3d at 502, and the
government in this case presented no expert testimony or other scientific evidence
that might warrant a stronger inference. Cf. United States v. Funds in the Amount of
$30,670, 403 F.3d 448, 457-59 (7th Cir. 2005). The significance of canine alerts is
largely a scientific question, and absent a developed record, we decline to expand on
our previous pronouncements in this area.
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most naturally to the inference that Gonzolez was involved in illegal drug activity,
and that the currency was substantially connected to it.
While the claimants’ explanation for these circumstances may be “plausible,”
we think it is unlikely. We therefore conclude that the government proved by a
preponderance of the evidence that the defendant currency was substantially
connected to a narcotics offense. Accordingly, we reverse the judgment of the district
court and remand for further proceedings.
LAY, Circuit Judge, dissenting.
I respectfully dissent. Although the circumstantial evidence offered by the
government provides some indication that the money seized in this case may be
related to criminal activity, I cannot agree that the government has proven, by a
preponderance of the evidence, the requisite substantial connection between the
currency and a controlled substance offense.
Notwithstanding the fact that claimants seemingly suspicious activities were
reasoned away with plausible, and thus presumptively trustworthy, explanations
which the government failed to contradict or rebut, I note that no drugs, drug
paraphernalia, or drug records were recovered in connection with the seized money.
There is no evidence claimants were ever convicted of any drug-related crime, nor is
there any indication the manner in which the currency was bundled was indicative of
drug use or distribution. At most, the evidence presented suggests the money seized
may have been involved in some illegal activity – activity that is incapable of being
ascertained on the record before us. See United States v. U.S. Currency, $30,060.00,
39 F.3d 1039, 1044 (9th Cir. 1994) (“[A] mere suspicion of illegal activity is not
enough to establish . . . that the money was connected to drugs.”).
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The law of our circuit makes clear that the possession of a large amount of cash
provides strong evidence of a connection between the res and illegal drug activity.
Yet this fact is not dispositive. A faithful reading of the cases cited by the majority
from our court reveal that we have required some additional nexus between the
property seized and drug activity to support forfeiture. In United States v. U.S.
Currency, in the Amount of $150,660.00, 980 F.2d 1200 (8th Cir. 1992), we
recognized such a nexus where the investigating officer immediately smelled
marijuana upon inspecting the currency.2 Id. at 1203, 1206. In United States v.
$84,615 in U.S. Currency, 379 F.3d 496 (8th Cir. 2004), we concluded forfeiture was
proper where the owner of the seized currency “undisputedly possessed illegal drugs
at the time” the currency was discovered. Id. at 502. Most recently, in United States
v. $117,920.00 in United States Currency, 413 F.3d 826 (8th Cir. 2005), we
determined that forfeiture was warranted where materials known to be used to
package and conceal drugs were recovered in close physical proximity to the seized
currency, and where the investigating officer detected the smell of marijuana on some
of these materials. Id. at 829.
Here, the only evidence linking the seized money to illegal drug activity is a
canine sniff that alerted officers to the presence of narcotics on the currency itself and
the exterior of the rear passenger side of the rental car where the currency was
discovered. However, as Justice Souter recently recognized, a large percentage of
currency presently in circulation contains trace amounts of narcotics. See Illinois v.
Caballes, 543 U.S. 405, 410-12 (2005) (Souter, J. dissenting). As a result, this fact
is virtually “meaningless and likely quite prejudicial.” United States v. Carr, 25 F.3d
1194, 1216 (3d Cir. 1994) (Becker, J., concurring). Our decision in $84,615 in U.S.
2
Unlike our decision in U.S. Currency, in the Amount of $150,660.00, the odor
of narcotics on the currency seized in this case was not apparent upon inspection, and
thus there was no immediate relationship between drugs and the currency which
would suggest the currency had recently been involved in a controlled substance
offense.
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Currency to afford this evidence only “slight” weight is thus well-founded, and this
factor, taken in conjunction with the large amount of currency seized, does not favor
forfeiture. Finally, the mere fact that the canine alerted officers to the presence of
drug residue in a rental car, no doubt driven by dozens, perhaps scores, of patrons
during the course of a given year, coupled with the fact that the alert came from the
same location where the currency was discovered, does little to connect the money
to a controlled substance offense. Therefore, I respectfully dissent.
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