United States v. Sum of $185,336.07 United States Currency
858 F. Supp. 2d 246
W.D.N.Y.2012Background
- The Government filed an in rem forfeiture action seeking $185,336.07 in U.S. currency under 21 U.S.C. § 881(a)(6).
- The currency was seized from Dominic Pellegrino on June 20, 2007 for alleged involvement in illegal drug transactions.
- Claimant filed a verifyed claim on October 23, 2009 requesting return of the funds as proceeds of lawful activity.
- The Government moved for summary judgment after discovery, contending the funds are forfeitable by a preponderance of the evidence.
- The Government presented evidence of drug trafficking activity, a May 3, 2007 search, and substantial unexplained deposits totaling $169,000 over three years.
- Claimant argued the funds derive from legitimate sources (personal injury settlement, insurance, retirement) but failed to provide admissible, timely corroborated evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Government proved probable cause for forfeiture. | Pellegrino | United States | Yes; Government showed nexus via drug trafficking activity and unexplained wealth |
| Whether claimant established legitimate sources for the funds to defeat forfeiture. | Pellegrino | United States | No; lack of credible, timely evidence and failure to disclose undermined legitimacy assertion |
| Whether claimant’s Fifth Amendment silence during discovery precluded consideration of evidence. | Pellegrino | United States | Yes; negative inference allowed and evidence not timely disclosed could not be considered |
Key Cases Cited
- United States v. Fischl, 128 F.3d 50 (2d Cir. 1997) (burden shifting in forfeiture cases; preponderance standard)
- United States v. $8,880 in United States Currency, 945 F. Supp. 521 (W.D.N.Y. 1996) (government need not prove transaction-level nexus, only a nexus to drug activity)
- United States v. Daccarett, 6 F.3d 37 (2d Cir. 1993) (circumstantial nexus suffices for forfeiture)
- United States v. One Parcel of Property Located at 15 Black Ledge Drive, 897 F.2d 97 (2d Cir. 1990) (burden shifts to claimant after probable cause is shown)
- United States v. Hinton, 543 F.2d 1002 (2d Cir. 1976) (failure to file tax returns can negate legitimate income source)
- United States v. St. Prix, 672 F.2d 1077 (2d Cir. 1982) (non-filing can affect legitimacy of income source)
- United States v. 4,003-4005 5th Ave., 55 F.3d 78 (2d Cir. 1995) (consideration of tax-related and income-source evidence in forfeiture)
- Randell v. United States, 64 F.3d 101 (2d Cir. 1995) (evidence in opposition to summary judgment must be admissible and properly disclosed)