On February 17, 2006, State police officers arrested Bruce Kneller and charged him with possession of a class E substance with intent to distribute, G. L. c. 94C, § 32D (a). At the time of arrest, the police seized Kneller’s 2004 Audi Sedan automobile and $4,359 in United States currency. The following day the police obtained and executed a search warrant at a Bank of America branch in Randolph, where Kneller had an account. As a result of the search, funds held in Kneller’s account, which had a balance of $226,511.92, were temporarily frozen. On February 24, 2006, the Commonwealth brought this civil forfeiture action under G. L. c. 94C, § 47 (a) (3), (5), and (d), alleging that the Audi sedan, currency, and frozen bank account funds were related to Kneller’s Internet-based illegal steroid distribution operation. At the same time, the Commonwealth also moved ex parte under G. L. c. 94C, § 47 (f) (1), for a preliminary order to secure the frozen funds pending final adjudication. This order was granted on February 27, 2006.
On March 21, 2006, the judge allowed Kneller’s motion to intervene; Kneller filed an answer to the Commonwealth’s complaint and moved to stay the proceedings. The motion to stay was allowed on May 16, 2006. On February 14, 2007, Kneller moved to dismiss the complaint only as to forfeiture of the bank account funds. After a hearing, the judge on May 1, 2007, allowed the motion to dismiss, concluding that, “[ajccepting all of the factual allegations as trac and construing all reasonable inferences in the Commonwealth’s favor ... the complaint and supporting affidavits fail to aver sufficient facts to support a nexus between the funds in the bank account and Kneller’s illegal drug activity, and thus fail to meet the probable cause standard.” The Commonwealth petitioned a single justice of the Appeals Court for relief pursuant to G. L. c. 231, § 118, first par. The single justice allowed the Commonwealth’s application for leave to pursue an
We now vacate the allowance of the motion to dismiss and remand the case to the Superior Court for further proceedings consistent with this opinion. We also declare that, where the Commonwealth under G. L. c. 94C, § 47 (f) (1), has obtained an ex parte preliminary order to seize or secure property pending final adjudication of the forfeiture proceeding, a person claiming ownership of the property, after filing a motion and memorandum, supported by affidavits, is entitled to an adversary hearing to challenge the issuance of the preliminary order.
1. The first issue we confront is the standard to be applied to a motion to dismiss an action brought under our civil forfeiture statute, G. L. c. 94C, § 47, an issue we have not previously addressed. The Commonwealth contends that the standard under Mass. R. Civ. P. 12 (b) (6),
Prior to its amendment in 1989, see St. 1989, c. 653, §§ 73-80, the civil forfeiture statute provided that the Commonwealth at trial had “the burden of proving all material facts by a preponderance of the evidence.” G. L. c. 94C, § 47, inserted by St. 1971, c. 1071, § 1. With the 1989 amendment, the Legislature imposed a burden of proof on the Commonwealth that was virtually identical to the burden of proof imposed on the Federal government in Federal forfeiture actions. Compare G. L. c. 94C, § 47 (d), as appearing in St. 1989, c. 653, § 79 (“the commonwealth shall have the burden of proving to the court the existence of probable cause to institute the action”) with 19 U.S.C. § 1615 (1994) (“probable cause shall be first shown [by the government] for the institution of such suit or action, to be judged of by the court”). As a result, we have concluded that it is “reasonable to think that the Legislature revised [G. L. c. 94C,] § 47 (d), to achieve the result reached by the Federal statutes as construed by the Federal courts.” Commonwealth v. Fourteen Thousand Two Hundred Dollars,
We note initially that under G. L. c. 94C, § 47 (d), as under 19 U.S.C. § 1615, the government’s burden is not to prove probable cause but to prove “the existence of probable cause to institute the action.” See Bankers Life & Cas. Co. v. Commissioner of Ins.,
Ironically, the likely origin of this focus in G. L. c. 94C, § 47 (d), on “the existence of probable cause to institute the action” derives from provisions of pre-CAFRA Federal civil forfeiture law that differ markedly from our civil forfeiture statute (emphasis added). Under 21 U.S.C. § 881(b) (1994), there were two avenues by which the United States Attorney General could seize property pending final adjudication of forfeiture without a judicial finding of probable cause. The first avenue was to file a complaint in any Federal District Court having jurisdiction over the property. Once the complaint was filed, Rule C(3) of the Supplemental Rules for Certain Admiralty and Maritime Claims, 28 U.S.C. opp. 840 (1994) (Supplemental Rules) provided that “if the conditions for an action in rem appear to exist, an order so stating and authorizing a warrant for the arrest of the . . . property that is the subject of the action shall issue and be delivered to the clerk who shall prepare the warrant.” Perhaps because the complaint sufficed to justify the preliminary seizure of the property, the complaint had to comply with Supplemental Rules C(2) and E(2)(a), which imposed a heightened pleading standard. See United States v. Daccarett,
The second avenue by which the United States Attorney General
“(1) the seizure is incident to an arrest or a search under a search warrant or an inspection under an administrative inspection warrant;
“(2) the property subject to seizure has been the subject of a prior judgment in favor of the United States in a criminal injunction or forfeiture proceeding under this sub-chapter;
“(3) the Attorney General has probable cause to believe that the property is directly or indirectly dangerous to health or safety; or
“(4) the Attorney General has probable cause to believe that the property is subject to civil forfeiture under this subchapter.”
In the event of a seizure without judicial process under § 881(b)(3) or (4), the government had to institute forfeiture proceedings under § 881(d) promptly. 21 U.S.C. § 881(b).
Kneller relies on the unusual language of G. L. c. 94C, § 47 (d), in arguing that, to defeat a motion to dismiss a civil forfeiture complaint, the Commonwealth must demonstrate “the existence of probable cause to institute the action.” The Federal courts that have interpreted the pre-CAFRA language of 19 U.S.C. § 1615, however, have uniformly concluded that, while the Attorney General must have probable cause to institute the forfeiture action, he did not have to prove probable cause until trial. See United States v. Daccarett, supra (“complaint does not have to meet the ultimate trial burden of showing probable cause for forfeiture”); United States v. U.S. Currency in the Amount of $150,660.00,
Under pre-CAFRA Federal law, to survive a motion to dismiss, the government’s burden was two-fold. First, the allegations in the forfeiture complaint had to satisfy the heightened pleading requirement imposed by the Supplemental Rules. See, e.g., United States v. Two Parcels of Real Prop.,
We believe that this pre-CAFRA Federal standard for a motion to dismiss also applies to a complaint brought under our own civil forfeiture statute, G. L. c. 94C, § 47 (d). Thus, we hold that a civil forfeiture complaint under G. L. c. 94C, § 47 (d), will survive a motion to dismiss if the Commonwealth pleads facts sufficient to support a reasonable belief that, at trial, the Commonwealth can show probable cause to believe the property is subject to forfeiture. As with any motion to dismiss alleging failure to state a claim under Mass. R. Civ. P. 12 (b) (6), the facts alleged in the forfeiture complaint are assumed to be true, and all reasonable inferences from those facts are to be granted to the plaintiff. Cf. Welch v. Sudbury Youth Soccer Ass’n,
2. Kneller contends that this variant of the motion to dismiss standard, while more demanding than the usual standard under Mass. R. Civ. P. 12 (b) (6), is inadequate in civil forfeiture actions because a motion to dismiss is the only means by which the owner of the property at issue may challenge the preliminary seizure of the property under G. L. c. 94C, § 47 (f) (1). That
In the criminal context, when property has been seized, the defendant may bring a motion to suppress and, if the property is found to have been unlawfully seized, may move for its return. See Commonwealth v. Sacco,
3. We turn now to consider whether the Commonwealth’s complaint was sufficient under the standard we announce today to survive a motion to dismiss. We summarize the relevant facts found in the Commonwealth’s complaint for civil forfeiture and the attached affidavits of State Trooper Timothy J. Curtin and State police Sergeant Mark W. Kiley, which are incorporated in the complaint.
In December, 2004, Special Agent Kevin Tidwell of the San Diego, California, office of the Drug Enforcement Administration learned from an informant about an electronic mail (e-mail) account through which customers could begin the process of
After executing a search warrant for the third e-mail address, Special Agent Tidwell learned from e-mails that Kneller, along with a partner, Gary Somerville of Los Angeles, California, operated Red Star Laboratories (Red Star). Kneller used his e-mail address to send out price lists and advise customers of “special buys”; Somerville used his e-mail address to receive steroid orders from customers and issue instructions on where and how to send money. The operation only accepted cash wrapped in aluminum foil that was mailed to commercial “mail-drop” locations in the area where Somerville resided. After receiving payment for an order, Somerville would tell Kneller what to ship and to whom, and would send Kneller’s share of the profits in cash to a mail-drop in Randolph. In October, 2005, Special Agent Tidwell placed an order for steroids to Somerville’s e-mail address, and received a parcel, bearing a Randolph postmark and a fictitious post office box return address, that contained three vials of liquid and one bottle of pills, all of which were found to be steroids. This parcel was one of thirteen parcels that Kneller had mailed on October 19, 2005, each with the same fictitious return address. A review of postal records revealed more than one hundred suspect packages thought to contain steroids that were mailed by Kneller from the Randolph post office since October, 2004.
On October 14, 2005, Kneller participated in an interview that was broadcast live on the Internet Web site “bodybuilding.com.” In the interview, Kneller indicated that he manufactured per
On November 29, 2005, Kneller was observed carrying a large plastic trash bag into the Randolph post office, where he mailed twelve parcels, each with a false return address, to different persons in eleven different States. One parcel was addressed to a person who had ordered $704 worth of steroids in April, 2005; another was addressed to a person who had ordered $900 worth of steroids in April, 2005.
Also in late November, 2005, Special Agent Tidwell received an e-mail message from Kneller’s e-mail address advising of a “holiday sale,” which stated that Red Star had filled 15,000 orders in seven years of business and had never had one package intercepted. The promotion also advertised Red Star’s products as “the classiest and safest steroids being sold anywhere by anyone.”
In November, 2005, and again in early February, 2006, Kneller received parcels (collectively weighing ninety-four pounds) from a distributor that, among other things, sells pharmaceutical packaging. Tidwell believed that Kneller received steroid packaging supplies from this distributor.
On February 14, 2006, Kneller mailed fifteen packages from the Randolph post office, each with a fictitious return address. Federal search warrants were obtained to search these packages. When executed, each package contained anabolic steroids and Cialis, both class E controlled substances under G. L. c. 94C.
On February 17, a search warrant was obtained by Sergeant Kiley authorizing the search of Kneller’s apartment in Canton. In executing that search warrant, the State police seized, among other things, $4,359 in United States currency; $1,055 in Chinese currency; seven handguns; two rifles and one shotgun; 1,664 bottles of powder-filled capsules, believed to contain anabolic steroids, all but a few of which bore no label; four two and one-half gallon containers containing suspected liquid anabolic steroids; and a box with numerous preprinted Red Star labels. Kneller admitted that the steroids belonged to him. Based on the Red Star price list Special Agent Tidwell had obtained, the
On February 18, the State police obtained a search warrant to “freeze” Kneller’s checking account at Bank of America. This account on December 15, 2005, had a balance of $147,806.92; the balance when the account was frozen was $226,511.92. During this two-month period, Kneller had made seven outgoing wire transfers, totaling $275,314, to locations outside the United States, including China and Hong Kong. Also during this time, Kneller received three incoming wire transfers, totaling $375,500. One of these incoming wire transfers, in the amount of $215,500, originated from Gaspari Nutrition, Inc. There was also a check deposited in the amount of $60,000 with the notation “Re: Peak Performance Labs.” Another deposit in the amount of $11,500 appeared to be the proceeds from the sale of Kneller’s 2004 Harley Davidson motorcycle.
In their affidavits, both Trooper Curtin and Sergeant Kiley noted the typical practice among drug distributors to commingle illegal drug proceeds with legitimate funds. They also stated that drug distributors tend to associate with cash businesses or persons involved in cash businesses to establish the appearance of a lawful source of income. Finally, Trooper Curtin stated that dealers of steroids often obtain illegal substances or the steroids themselves from outside the United States in bulk or large quantities for manufacture or resale here.
We conclude that the Commonwealth’s complaint, with the particularized allegations incorporated from Trooper Curtin and Sergeant Kiley’s affidavits, was sufficient as a matter of law to support a reasonable belief that the Commonwealth had probable cause to institute the action. In the civil forfeiture context, we have equated probable cause with “sound reason to believe that the money-drug nexus exists.” Commonwealth v. Fourteen Thousand Two Hundred Dollars,
Here, the Commonwealth alleged facts that support a reasonable belief that the Commonwealth had probable cause to believe that a nexus existed between Kneller’s Bank of America account and his illegal drug operation. Assuming the alleged facts to be true, Kneller helped manage a business that arranged for the manufacture, sale, and distribution of large quantities of illegal steroids. When the search of his home was conducted, he admitted to the possession of illegal steroids whose retail value was estimated to be $124,800. Kneller declared in his Internet interview that he manufactured performance enhancing products, and frequently traveled to China to inspect the factories from which he purchased these products. Because Kneller, with Somerville, operated Red Star, a business that had operated for seven years and filled 15,000 orders, and because Kneller was responsible for shipping the orders that Somerville had obtained, it is reasonable to infer that Kneller obtained the substantial quantity of steroids that he shipped from the factories in China of which he spoke in his interview. It is equally reasonable to infer that the wire transfers he made from his Bank of America account to locations in China and Hong Kong paid for the illegal steroids he had purchased, perhaps including the substantial quantity of steroids found in his apartment. While the judge correctly noted that the largest incoming wire transfer was from Gaspari Nutrition, Inc., and that there is no allegation that Gaspari’s products were unlawful, both Trooper Curtin and Sergeant Kiley remarked on the known practice among drug distributors to conceal the proceeds of their illegal drug sales by commingling them with legitimately earned funds. Taken together, with all reasonable inferences drawn in the Commonwealth’s favor, these allegations support a reasonable belief that the Commonwealth had probable cause to initiate this forfeiture action against the Bank of America account based on the claim that the funds in this account either were the proceeds of illegal steroid transactions, were intended to be used to purchase illegal steroids, or were intended to be used to facilitate the
4. We vacate the order of the Superior Court judge granting Kneller’s motion to dismiss, and remand the case to the Superior Court for further proceedings consistent with this opinion.
So ordered.
Notes
The motion to dismiss was decided before our decision in Iannacchino v. Ford Motor Co.,
General Laws c. 94C, § 47 (d), as appearing in St. 1989, c. 653, § 79, does not specify the standard that the claimant’s evidence must meet in order to prevail on the merits. Because this issue is not before us now, we decline to address it.
The Civil Asset Forfeiture Reform Act of 2000, Pub. L. 106-185, 114 Stat. 202 (2000) (CAFRA) (codified principally at 18 U.S.C. § 983 [2006]), changed the government’s burden of proof at trial to proof by a preponderance of the evidence. 18 U.S.C. § 983(c)(1) (“the burden of proof is on the Government to establish, by a preponderance of the evidence, that the property is subject to forfeiture”).
Under 21 U.S.C. § 881(b) (1994), complaints filed prior to arrest and seizure of the property clearly had to comply with the Supplemental Rules for Certain Admiralty and Maritime Claims, 28 U.S.C. opp. 837 (1994) (Supplemental Rules). However, the statute was ambiguous whether complaints filed after a seizure had occurred were also subject to the Supplemental Rules. The United States Court of Appeals for the Eleventh Circuit referred to the lack of clarity surrounding the applicability of the Supplemental Rules to a forfeiture action filed after arrest and seizure of the property under 21 U.S.C. § 881(a) as a “procedural morass.” United States v. $38,000.00 in U.S. Currency,
In United States v. Banco Cafetero Panama,
Kneller correctly notes that, while the Circuit Courts of the United States Court of Appeals are divided, the majority have concluded that, in proving “probable cause ... for the institution of such suit or action,” the government was limited to the evidence that was in its possession at the time it filed the forfeiture complaint, and could not offer evidence acquired later. Compare, e.g., United States v. One Lot of U.S. Currency ($36,634),
In determining whether the allegations in the complaint are sufficiently particularized to survive a motion to dismiss, the judge may consider any affidavits filed with the complaint and incorporated by reference. See United. States v. U.S. Currency, in the Amount of $150,660.00,
We speak here only of procedural due process under art. 12 of the Massachusetts Declaration of Rights. We decline to decide whether the same result arises under the due process clause of the Fourteenth Amendment to the United States Constitution, because the United States Supreme Court recently vacated a decision holding that, “given the length of time . . . between the seizure of property and the opportunity for an owner to contest the seizure under the [Illinois Drug Asset Forfeiture Procedure Act], some sort of mechanism to test the validity of the retention of the property is required.” Smith v. Chicago,
By so declaring, we do not suggest that an adversary hearing was previously unavailable to a property owner whose property had been preliminarily
We need not decide here whether this adversary hearing on the issue of probable cause must also be evidentiary if requested by the claimant.
The complaint incorporates by reference only the February 18, 2006, affidavit of State Trooper Timothy J. Curtin. However, that affidavit incorporates by reference Sergeant Mark W. Kiley’s affidavit, which therefore is incorporated in the complaint. See note 8, supra.