United States v. $21,510.00 in U.S. Currency

Not for Publication in West's Federal Reporter
Citation Limited Pursuant to 1st Cir. Loc. R. 32.3
United States Court of Appeals
For the First Circuit
No. 04-1366
UNITED STATES,
Plaintiff, Appellee,
v.
$21,510.00 IN U.S. CURRENCY, ET AL.,
Defendants,
____________________
JORGE L. ROSADO-SIERRA,
Claimant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Gustavo A. Gelpi, U.S. Magistrate Judge]
Before
Boudin, Chief Judge,
Torruella and Howard, Circuit Judges.
Lorenzo J. Palomares, Lorenzo Palomares, P.A., on brief for
appellant.
H.S. Garcia, United States Attorney, Miguel A. Fernandez,
Assistant U.S. Attorney, and Isabel Munoz-Acosta, Assistant U.S.
Attorney, on brief for appellee.
July 20, 2005
Per Curiam. Claimant Jorge L. Rosado-Sierra appeals from
the district court's decision to grant the motion of the United
States for entry of summary judgment in this in rem action for
forfeiture of approximately $31,000 in U.S. currency. He seeks
reversal on the grounds that there is a genuine issue of material
fact which remains controverted and that the magistrate judge to
whom the case was referred should have recused himself because he
represented Rosado-Sierra in an earlier action pursuant to 28
U.S.C. § 2255. For the reasons we stated in our November 16, 2004
order, we reject the government's argument that this appeal is
untimely.
I. Recusal
With respect to Rosado-Sierra's claim that the magistrate
judge should have recused himself from presiding over this case
because of his prior representation of Rosado-Sierra, that argument
was not raised in the district court. To the contrary, Rosado-
Sierra submitted a statement expressly consenting to the referral
of the case to the Magistrate Judge.1 "Our law is clear that a
party ordinarily may not raise on appeal issues that were not
seasonably advanced (and, hence, preserved) below." Daigle v. Maine
Medical Center, Inc., 14 F.3d 684, 687 (1st Cir. 1994). Appellant
1
Because it was not presented to the district court, we do
not consider Appellant's claim that his attorney filed the consent
form without Rosado-Sierra's knowledge or consent.
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has forfeited that issue and we see no sufficient basis warranting
excusing the forfeiture.
II. Summary Judgment
The Civil Asset Forfeiture Reform Act (CAFRA) applies
to civil forfeiture cases which, like this one, were commenced on
or after August 23, 2000. "CAFRA heightens the government's
evidentiary burden in civil forfeitures." United States v. Funds
in Amount of $30,670.00, 403 F.3d 448, 454 (7th Cir. 2005). The
government has the burden of proving by a preponderance of the
evidence that the property is subject to forfeiture. § 983(c).
(Formerly the standard was probable cause.) To meet this burden,
the government may rely on evidence obtained after the filing of
the complaint for forfeiture. Furthermore, where (as in this
case) 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.
§ 938(c)(3).
To satisfy its burden, the government relied upon the
following uncontested facts:
the $21,510.00 in cash found inside a black
duffle bag and the $10,240.00 in cash found
inside a beige safety deposit box were found
in the same area of the [claimant's] house
where the diazepam and lactose were found,
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and all items were seized pursuant to a
federal search warrant. Moreover, the
claimant pled guilty to the drug conspiracy
charge arising from the execution of that
search warrant, and which gave rise to the
present action.
United States v. $21,510 in U.S. Currency, 292 F. Supp. 2d 318,
322 (D. Puerto Rico 2003). The record also reveals that a canine
search indicated the presence of controlled substances on the
seized currency. As part of his guilty plea, Rosado-Sierra
specifically admitted to discussing the purchase of narcotics
with a co-conspirator in February, 2002, less than four months
before the seizure of the currency.
These facts are probative of a connection between the
seized currency and drug trafficking. "A claimant's record of
drug activity is a highly probative factor in the forfeiture
calculus." United States v. $67,220.00 in U.S. Currency, 957 F.2d
280, 286 (6th Cir. 1992). See United States v. $87,118.00 in U.S.
Currency, 95 F.3d 511, 519 (7th Cir. 1996); United States v.
$19,960.00, 897 F.2d 1457, 1462-63 (8th Cir. 1990). A large
amount of hidden currency "is strong evidence of . . . an illicit
connection to drug trafficking." United States v. $149,442.43 in
U.S. Currency, 965 F.2d 868, 877 (10th Cir. 1992). The fact that
drugs were not found on the scene when the cash was seized "is
not fatal to the government's case." United States v. One Lot of
U.S. Currency($36,634), 103 F.3d 1048, 1055 (1st Cir. 1997). The
dog's alert to the presence of controlled substances on the
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seized currency "weighs some, but not a great deal on the scale."
Id. at 1056.2
To demonstrate that the currency was not connected to
drug trafficking, Rosado-Sierra relied upon his declaration that
the currency was "the proceeds and working capital of [his]
legitimate business Rosado Construction." In his answer to
interrogatories, Rosada-Sierra stated that Rosado Construction
"operated on a cash-payment basis with its clients." He
submitted copies of his tax returns for 1999-2001. The 2001
return reported gross income from Rosado Construction of $126,476
and expenses of $89,528, resulting in net income of $36,948.
Rosado-Sierra points out that the expenses included depreciation
of capital equal to $16,511, so that the total after tax proceeds
from the business were $52,733.
Even if the information from the 2001 tax return is
accepted as true, Rosado-Sierra still has not created a genuine
issue of material fact. As explanation for the presence of the
large quantity of cash at his apartment, Rosado-Sierra maintains
that Rosado Construction was operated on a "cash payment basis"
2
It is appropriate to rely upon forfeiture case law decided
before the enactment of CAFRA. Although those cases applied the
less-burdensome probable cause standard, "[f]actors that weighed in
favor of forfeiture in the past continue to do so now - with the
obvious caveat that the government must show more or stronger
evidence establishing a link between forfeited property and illegal
activity." United States v. Funds in Amount of $30,670.00, 403 F.3d
448, 469 (7th Cir. 2005).
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but has provided no receipts or other documentation of that fact
and no explanation for the absence of documentation. See United
States v. Funds in Amount of $30,670.00, 403 F.3d 448, 468 (7th
Cir. 2005)(affirming summary judgment in government's favor where
claimant "provided no receipts or other proof regarding origins
of the cash"). Moreover, "the government introduced much more to
show [a substantial connection between currency and drug
trafficking] than simply a comparison of [Rosado-Sierra's] income
with his expenditures." United States v. Parcels of Land, 903
F.2d 36, 42 (1st Cir. 1990). In these circumstances, we conclude
that no rational factfinder could permissibly credit Rosado-
Sierra's undocumented assertion.
Rosado-Sierra argued in his opposition to summary
judgment that the fact that "alleged cutting agents were found in
Mr. Rosado-Sierra's residence the day of the search proves
nothing in the absence of any evidence of recent criminal
activity." Dkt No. 32, p. 7 (emphasis added). He further argued
that his indictment based on intercepted conversations that
occurred two years prior to the search could not establish the
requisite substantial connection between the seized currency and
drug trafficking. However, as part of his guilty plea, Rosado-
Sierra admitted to having discussed with other indicted co-
conspirators the purchase of narcotics in February 2002, less
than four months before the seizure.
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Based on the totality of circumstances, and reviewing
the district court's determination de novo, we conclude that
Rosado-Sierra has not created a genuine issue of material fact.
Therefore, the district court order granting the government's
motion for summary judgment is affirmed. See 1st Cir. R. 27(c).
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