United States v. $43,646.00 (Verners)

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
JUN 4 1999
TENTH CIRCUIT
PATRICK FISHER
Clerk
UNITED STATES OF AMERICA,
Plaintiff - Appellee, No. 97-5241
v. (N.D. Oklahoma)
$43,646.00 (FORTY-THREE (D.C. No. 96-CV-505-B)
THOUSAND SIX HUNDRED
FORTY-SIX) DOLLARS IN U.S.
CURRENCY,
Defendant.
_____________________________
LAROAN F. VERNERS,
Claimant - Appellant.
ORDER AND JUDGMENT *
Before ANDERSON , KELLY , and BRISCOE , Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument.
Claimant Laroan Verners appeals from the district court’s judgment
ordering the forfeiture of $43,646 in United States currency, pursuant to 21
U.S.C. § 881(a)(6). He contends that the district court erred by: (1) refusing to
appoint an attorney to represent him; (2) allowing the case to go forward despite
inadequate service; and (3) allowing the matter to go to the jury without requiring
the government to establish a nexus between the $43,646 and illegal activity. We
affirm.
On January 5, 1993, police executed a search warrant at the home of
Verners’ mother. At that time, the officers found a large “cookie” of crack
cocaine in the kitchen. They also found large amounts of cash in proximity to
drugs in Verners’ bedroom. Specifically, the police found a cup with a razor
blade and some loose crack cocaine, a plastic baggy with ten grams of crack
cocaine, and $491 in two bundles in the bottom drawer of a file cabinet.
Appellee’s App. Vol. II at 33. In the file cabinet’s top drawer, police found
approximately $5,000 loose in the front part of the drawer. Id. at 92. In the back
portion of the drawer they found two bundles—one wrapped in gray duct tape
containing $19,990, and another bundle banded with rubber bands containing
$17,020. Id. at 91. The top drawer also contained hanging file folders, in which
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the officers found three receipts for record sales. 1
Id. at 93. Finally, the officers
found $1000 on a stand next to a TV in the laundry room. Id. at 62.
On April 30, 1993, the government entered a Declaration of Forfeiture
respecting the money. In October 1993, Verners was tried by a jury and convicted
of possession of cocaine base with intent to distribute, maintaining an
establishment for manufacturing drugs, aiding and abetting his codefendant in the
commission of those crimes, and using a firearm during and in relation to the drug
crimes. After three separate direct appeals and one related motion pursuant to 28
U.S.C. § 2255, his convictions for aiding and abetting his codefendant and for
using a firearm have been vacated. See United States v. Verners , 53 F.3d 291(10th Cir. 1995); United States v. Verners , No. 95-5194, 1997 WL 183510 (10th
Cir. Apr. 15, 1997); United States v. Verners , No. 98-5044, slip op. (10th Cir.
May 26, 1999).
The present action results from a Fed. R. Crim. P. 41(e) motion which
Verners made in the district court. 2
Alleging his lack of notice of the 1993
administrative forfeiture as grounds, Verners’ motion sought the return of the
money. R. Vol. II, Tab 87. The district court agreed that notice had been
1
Verners had produced two “gangsta rap” albums. Appellee’s App. Vol. II
at 60, 230.
At the time Verners made the Rule 41(e) motion, the case was on its first
2
remand for resentencing.
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inadequate. Therefore, it vacated the forfeiture without prejudice to the
government’s bringing a new proceeding. Id. , Tab 106. Thereafter, the
government instituted a new administrative action. When Verners filed his claim,
the government filed a complaint for forfeiture in rem, thereby instituting the
instant judicial proceedings.
As his first claim of error, Verners complains that he “was not allowed to
have an attorney appointed to [his] case.” Appellant’s Br. at 1. However, the
record contains no indication that he requested the district court to appoint
counsel. In the absence of any showing that he raised the matter before the
district court, we will not consider this claim on appeal. 3
See Roberts v. Roadway
Express, Inc. , 149 F.3d 1098, 1104 (10th Cir. 1998).
As his second claim of error, Verners argues that he received inadequate
notice of the forfeiture proceedings. Verners complains that the government sent
notice of the original 1993 administrative forfeiture to his mother’s house, despite
the government’s knowledge that he was incarcerated in the county jail and
represented by counsel. As noted previously, the district court vacated the 1993
administrative forfeiture. Thereafter, he was personally served with a civil
complaint in this action, and he answered without raising any issue as to service.
3
In any event, there is no Sixth Amendment right to counsel in a civil
forfeiture case. United States v. Deninno, 103 F.3d 82, 86 (10th Cir. 1996).
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As the government correctly notes, because the original forfeiture was vacated,
and judicial forfeiture proceedings were subsequently commenced within the
statute of limitations, 4
any alleged failure to provide proper notice for the vacated
proceeding is harmless error. Cf. Clymore v. United States , 164 F.3d 569, 573
(10th Cir. 1999); United States v. Deninno , 103 F.3d 82, 85-86 (10th Cir. 1996).
As his third claim of error, Verners complains that the government did not
establish probable cause to support its seizure of, or forfeiture claim to, the
money. We review factual findings in a forfeiture case for clear error, and we
review legal conclusions de novo. United States v.$149,442.43 in U.S. Currency ,
965 F.2d 868, 876 (10th Cir. 1992). Whether facts produced at a forfeiture
proceeding constitute probable cause is a legal conclusion which we review de
novo. Id.Based upon the legal fiction that the property itself is guilty of a crime or is
proceeds of a crime, a forfeiture proceeding is an in rem action against the
property. Id. ; see also Calero-Toledo v. Pearson Yacht Leasing Co. , 416 U.S.
663, 680-84 (1974). The government bears the initial burden to show probable
4
Pursuant to 21 U.S.C. § 881(d), “[t]he forfeiture procedures relating to the
customs laws apply to forfeitures occasioned by violation of the drug laws.”
United States v. Clymore, 164 F.3d 569, 572 n.3 (10th Cir. 1999). The customs
statutes provide that “[n]o suit or action to recover . . . any pecuniary penalty or
forfeiture of property . . . shall be instituted unless such suit or action is
commenced within five years after the time when the alleged offense was
discovered.” 19 U.S.C. § 1621.
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cause for instituting the forfeiture action, i.e., probable cause that the property
was used to commit or facilitate a felony violation of Title 21, United States
Code. See United States v. 9844 South Titan Court, Unit 9, Littleton, Colo. , 75
F.3d 1470, 1477 (10th Cir. 1996), overruled in part on other grounds by United
States v. Ursery , 518 U.S. 267 (1996). The standard for establishing probable
cause for a forfeiture is similar to the standard applied to arrests, searches and
seizures. $149,442.43 , 965 F.2d at 876. Thus, the government must demonstrate
reasonable grounds for belief of guilt. Id. This showing requires more than mere
suspicion, but less than prima facie proof. Id. Once the government makes its
showing, the burden shifts to the claimant to demonstrate by a preponderance of
the evidence that the property is not subject to forfeiture or that a defense to
forfeiture exists. Id. at 877. If the claimant fails to rebut the showing of probable
cause, the government’s showing of probable cause is sufficient to support a
judgment of forfeiture. See id.In this case, the government presented witnesses who testified to finding
the money in the file cabinet where drugs and drug paraphernalia were located.
Because the majority of the money was not in the same drawer as the drugs,
Verners argues the government failed to establish a nexus with the drugs. Rather,
since most of the money was in the top drawer where he kept hanging files
concerning his record business, Verners contends that the money can be
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connected only with the record business. We disagree. Given the close proximity
of the money to the drugs, as well as the way the money was bundled, 5
the district
court did not err in finding probable cause.
Accordingly, the burden shifted to Verners to establish a defense to the
forfeiture. In this case, Verners’ only defense consisted of various receipts dating
from 1991 and 1992 which purported to reflect proceeds from car and record
sales, as well as almost $1600 in insurance payments for car repairs. 6
Thus,
Verners argued that the seized funds represented his income from legal
businesses. However, Verners never established the authenticity of the receipts. 7
Moreover, in his own earlier deposition, Verners had stated that he never made
any profit on the record or car sales, because he put all monies he earned back
into the record business. 8
This testimony obviously contradicted his court room
The government presented evidence that one of the bundles represented the
5
approximate cost of a kilogram of drugs. Appellee’s App. Vol. II at 270.
6
The government witness testified that only three of the receipts had been
in the file cabinet. Appellee’s App. Vol. II at 93. Verners offered no testimony
to establish where the remaining receipts had been kept.
Verners did not testify. Instead, during the government’s case in chief, he
7
presented the receipts to the government’s witnesses, who duly noted what they
purported to be. Thus, although the receipts were admitted in evidence, no
foundation was established.
8
On direct and redirect, the government asked one of its witnesses who was
present at Verners’ deposition to describe Verners’ testimony. Appellee’s App.
Vol. II at 39-41, 78-79, 108-11. On cross examination, Verners also asked the
(continued...)
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argument. Thus, the jury was presented with witnesses who supported the
government’s claims. By contrast, Verners presented no witnesses, and he failed
to establish the authenticity of the evidence he sought to introduce. Under the
circumstances, the jury obviously did not believe Verners’ defense. On review,
we cannot assess credibility of witnesses or substitute our judgment for that of the
jury. See Roberts , 149 F.3d at 1103.
AFFIRMED.
ENTERED FOR THE COURT
Stephen H. Anderson
Circuit Judge
8
(...continued)
witness about the deposition. Id. at 81.
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