Free Motion for Summary Judgment - District Court of Arizona - Arizona

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PAUL K. CHARLTON United States Attorney District of Arizona REID C. PIXLER Assistant U.S. Attorney Arizona State Bar. No. 12850 Two Renaissance Square 40 North Central Avenue, Suite 1200 Phoenix, Arizona 85004-4408 Telephone: (602) 514-7500 [email protected]

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA

United States of America, Plaintiff, v. 1) $493,850.00 in U.S. Currency, and 2) One 1993 Ford F350 Truck, Defendants, And Regarding the Interest of Roy F. Bruno and Miguel Camacho, Claimants.
CIV 03-2345-PHX-VAM AMENDED SECOND MOTION FOR SUMMARY JUDGMENT

NOW COMES Plaintiff, United States of America, by and through its attorney, PAUL K. CHARLTON, United States Attorney for the District of Arizona, and Reid Pixler, Assistant United States Attorney, pursuant to Fed.R.Civ.P. 56, and respectfully moves the Court for summary judgment regarding the interest of Roy F. Bruno (BRUNO) and Miguel Camacho (CAMACHO) for the reasons stated below. Factual details are set out in the complaint filed in this action and further addressed in detail in the attached Statement of Facts. I. FACTUAL SUMMARY On June 3, 2003, Arizona Department of Public Safety (DPS) Highway Patrol Officer J. McFarland, (Officer McFarland) traveling Southbound on Interstate 17 near Camp Verde, Arizona, contacted claimants BRUNO and CAMACHO, while they were traveling in defendant number two, the 1993 Ford F350 Truck. SOF 1-7. Officer McFarland initiated a traffic stop at milepost 287, believing that the driver might be fatigued. SOF 8-9. The driver provided a

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Florida driver's license which identified him as Miguel CAMACHO, (CAMACHO), 5701 SW 82nd Avenue, Miami, Florida. The registration reflected CAMACHO was the registered owner of the vehicle, defendant #2 in this forfeiture action. SOF 10-12. The passenger did not have any identification, however, identified himself as Roy Frederick BRUNO (BRUNO). SOF 13. While speaking with CAMACHO and BRUNO, Officer McFarland noticed a strong odor of air freshener coming from the interior of the vehicle. Investigators know that traffickers in controlled substances, often try to mask the odor of controlled substances with the use of a strong air freshener. SOF 14. The officer asked questions related to the traffic stop, issued a warning ticket and indicated CAMACHO was free to go. SOF 15-21. Based upon Officer McFarland's experience, the following were indicators consistent with the transportation of proceeds of drug trafficking: SOF 56. a. The driver in a rigid posture, refusing to acknowledge the patrol unit as it passed the truck, coupled with inattentive driving such as weaving. b. Despite receiving only a warning, CAMACHO remained nervous throughout the traffic stop i.e., pacing, constantly moving his hands in and out of his pockets. c. CAMACHO was from Miami, a known source/destination city for drugs, and was traveling to Phoenix and then on to Tucson, both known source/destination cities. d. The strong odor of air freshener coming from the cab area of a 10 year old general purpose truck. e. Inconsistent statements between BRUNO and CAMACHO.

On September 29, 2003, through their attorney, Richard B. Jones, Roy F. BRUNO, filed a Claim and Request for Judicial Forfeiture for the $493,850.00 in U.S. currency, SOF 54, and Miguel CAMACHO filed a Claim and Request for Judicial Forfeiture for the 1993 Ford F350 Pick-Up Truck. SOF 55. Plaintiff has served discovery regarding the claims filed by BRUNO and CAMACHO. Claimants refused to answer all discovery on the basis such requests for production of evidence are a violation of their 5th Amendment rights. SOF 57-76. Jairo Hernandez admitted in June, 2002 he was sent by Colombian cocaine trafficker Roberto Guillo of Baranquilla, Colombia, to Miami, Florida, to visit CAMACHO to negotiate
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regarding the transportation and sale of cocaine. Hernandez discussed cocaine distribution plans and prices while in the home of CAMACHO. This home had a concealed storage area which could accommodate 1000 kilos of cocaine and had an extensive surveillance system. While at the house, Hernandez saw a kilogram of cocaine. SOF 77-80. CAMACHO advised Hernandez he wanted a supplier who could provide 1000 kilos of cocaine every 15 to 20 days to be smuggled into Florida by hollow boats or fast boats, for which he would be paid 30% to 35% of the cocaine so transported. The details of the proposal were communicated to Guillo. According to a statement by CAMACHO to Hernandez, a deal was eventually consummated with payment of a price by CAMACHO to Guillo. SOF 77-86. Hernandez visited CAMACHO in May of 2003 and learned how well CAMACHO had done with his distribution enterprise. CAMACHO advised he bought cocaine in Mexico for $9,000 per kilo and sold it for between $19,000 and $20,000 per kilo. From May 9, 2003, to June 4, 2003, Hernandez was monitored on many telephone calls attempting to contact CAMACHO. There appeared to be at least two meetings between Hernandez and CAMACHO, one of which was monitored by law enforcement. The purpose of the meeting was related to trafficking negotiations. During this time Hernandez had no employment other than trafficking in controlled substances. On June 4, 2003, the day after the seizure in this action, Hernandez called the home of CAMACHO. Speaking in code Hernandez inquired whether CAMACHO had successfully negotiated the purchase of cocaine. SOF 87-89; 92. Hernandez would not have spoken in code but for the criminal nature of these acts. Hernandez identified a photograph of Roy F. Bruno as the person to whom he was introduced by CAMACHO, as the husband of his niece and the father of her child. This is a photo of BRUNO obtained by law enforcement, SOF 90. Hernandez also identified a photograph of Miguel CAMACHO as the person he knows as Miguel CAMACHO. SOF 91. During the period of the wire intercepts, Hernandez lived with the Maya Martinez family, who were also solely engaged in drug trafficking. Hernandez and Leonardo Maya Martinez, Sr., and his two sons, Julio and Leonardo, Jr., were never gainfully employed and were all arrested for their participation in cocaine trafficking activity in Miami, Florida. SOF 77; 93.
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Leonardo Maya Martinez, Sr., first met CAMACHO when he was introduced by Alfredo Navarro. Navarro and CAMACHO had previously been partners in a cocaine smuggling enterprise which moved cocaine from Colombia to the U.S. by "go fast" boats. The purpose of the meeting was to discuss joint activities in smuggling Colombian cocaine into the U.S. Both Maya Martinez and CAMACHO were engaged in trafficking cocaine in the Miami, Florida area. Maya Martinez met with CAMACHO between three and five times. The last meeting was in February or March, 2003. SOF 94-96. CAMACHO described his current distribution network as involving the purchase of cocaine in Mexico for $8,000 per kilogram. The cocaine was transported from a ranch in Mexico, near Tijuana Maya Martinez believed, into the U.S. for resale in New York City for $26,000 per kilo, or Miami for $20,000 per kilo. CAMACHO estimated he moved between 2,000 and 3,000 kilos of cocaine every three months. The cocaine and money are transported in different load vehicles which includes cars, pickup trucks and small box vans, outfitted with hidden storage areas. CAMACHO mentioned one specific vehicle which used a false gas tank. According to CAMACHO, he personally drove large amounts of cash to Mexico to make payments to the Mexican transportation organizations. CAMACHO also paid funds directly to Colombian trafficking organizations responsible for getting the cocaine to Mexico. SOF 97-100. Based upon the figures stated by CAMACHO, the minimum gross profit of this criminal enterprise is $1,860,000 per week. Using the maximum figures, the gross profit would be $4,140,000 per week. The operation described by CAMACHO would easily have generated the sum of $493,850 in less than a week's time, which would represent the purchase price of approximately 60 kilos of cocaine. At the stated purchase price of $8,000 per kilo of cocaine in Mexico, 155 kilos would cost $1,240,000. The operation of such a large trafficking organization requires the movement of substantial amounts of currency to Mexico. SOF 103 Maya Martinez identified a photo of CAMACHO as the person to whom he referred as CAMACHO. Maya Martinez did not recognize BRUNO as a person he knew. Maya was also involved in the telephone conversations with CAMACHO as monitored by the wire tap. SOF 101-102.
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II.

ARGUMENT SUMMARY JUDGMENT SHOULD BE GRANTED BECAUSE THERE IS NO GENUINE ISSUE OF MATERIAL FACT

A.

The Standard for Granting Summary Judgment Rule 56(c) of the Federal Rules of Civil Procedure provides that a court should render

summary judgment if it concludes that "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." The party seeking summary judgment bears the initial burden of establishing "the basis for its motion, and identifying those portions of `the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553 (1986) (quoting Rule 56(c)). The "mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-8, 106 S.Ct. 2505, 2510 (1986) (emphasis in original); See also Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 585-86, 106 S.Ct. 1348, 1355-56 (1986). Summary judgment is appropriate in civil forfeitures where this standard is met. See, e.g., United States v. One 1987 Mercedes Benz 300E, 820 F. Supp. 248 (E.D.Va. 1993) (granting summary judgment to government where there was no material issue of fact). Indeed, summary judgment may also be granted where claimant has asserted an innocent owner defense. See, e.g., United States v. One Parcel of Property Located at 755 Forest Road, 985 F.2d 70 (2d Cir. 1993) (rejecting innocent owner defense and affirming summary judgment granted against wife of target of narcotics investigation where narcotics and drug paraphernalia had been found in their shared bedroom); United States v. Property Located at 15 Black Ledge Drive, 897 F.2d 97, 103 (2d Cir. 1990) (rejecting a wife's claim of no knowledge and affirming summary judgment); see also United States v. Premises Known as 717 South Woodward Street, 2 F.3d 529, 533 (3d Cir. 19993) ("It is clear that a claimant's bare denial of knowledge or consent may be insufficient to withstand summary judgment in a forfeiture case.").

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Whether there is a genuine issue of fact for trial depends on the substantive law of the underlying case and the evidentiary burdens that law places on each party. See Anderson v. Liberty Lobby, Inc., 477 U.S. at 252-56 (noting that "the judge must view the evidence presented through the prism of the substantive evidentiary burden"); United States v. One Parcel of Real Property, 904 F.2d 487, 490 (9th Cir. 1990); Richards v. Neilsen Freight Lines, 810 F.2d 898, 902 (9th Cir. 1987). Thus, in the instant case, the summary judgment rules must be "`construed in the light of the statutory law of forfeitures, and particularly the procedural requirements set forth therein.'" United States v. One 56-Foot Motor Yacht Named Tahuna, 702 F.2d 1276, 1281 (9th Cir. 1983) (quoting United States v. One 1975 Mercedes 280S, 590 F.2d 196, 199 (6th Cir. 1978)). B. The Burden of Proof With the passage of the Civil Asset Forfeiture Reform Act of 2000 ("CAFRA"), Pub. L. No. 106-185, 114 Stat. 202 (2000), Congress mandated a fundamental change in the government's initial burden of proof in civil forfeiture actions. CAFRA applies to all forfeiture proceedings commenced on or after August 23, 2000. Prior to CAFRA, the government had the initial burden of showing probable cause for the forfeiture. Once the government established probable cause, the burden shifted to the claimant to prove, by a preponderance of the evidence, either that there was no probable cause or that he/she was an "innocent owner." See United States v. All Assets of GPS Automotive Corp., 66 F.3d 483, 487 (2d Cir. 1995); United States v. Daccarett, 6 F.3d 37, 57 (2d Cir. 1993), cert. denied, 114 S. Ct. 1294 (1994). Under CAFRA, however, the government has the burden of first establishing, by a preponderance of the evidence, that the Defendant Property is forfeitable. CAFRA applies to this action because it was commenced after August 23, 2000. CAFRA does not, however, in any way limit the right of either party to seek summary judgment. See House Passage of H.R. 1658, Floor Statements, 146 Cong. Rec. H2040-01, 2000 WL 368969 (Cong. Rec.), Proceedings and Debates of the 106th Congress, Second Session, Tuesday, April 11, 2000) ("The bill is not intended to limit the right of either party to bring a motion for summary judgment after the filing of the complaint pursuant to Fed. R. Civ. P. 56(a) or 56(b).").

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C.

There Is A Substantial Connection Between Defendants And Illegal Controlled Substances Even prior to CAFRA's enactment, many courts applied the "substantial connection" test

to civil forfeitures of facilitating property. See, e.g., United States v. One 1986 Ford Pickup, 56 F.3d 1181 (9th Cir. 1995); United States v. Borromeo, 995 F.2d 23 (4th Cir. 1993); United States v. Real Property and Residence at 3097 S.W. 111th Avenue, 921 F.2d 1551 (11th Cir. 1991); United States v. Parcel of Land & Residence at 28 Emery St., 914 F.2d 1 (1st Cir. 1990); United States v. Twelve Thousand Five Hundred and Eighty Five Dollars, 869 F.2d 1093 (8th Cir. 1989). However, as the Fourth Circuit has explained, "The hurdle posed by the `substantial connection' requirement is not . . . a particularly high one." Borromeo, 995 F.2d at 26. Under this test: the property either must be used or intended to be used to commit a crime, or must facilitate the commission of a crime. At minimum, the property must have more than an incidental or fortuitous connection to criminal activity. United States v. Schifferli, 895 F.2d 987, 990 (4th Cir. 1990); see also United States v. One Parcel Property Located at 7079 Chilton County Road, 123 F.Supp.2d 602, 608 (M.D. Ala. 2000) (finding no requirement that the United States present evidence of a "continuing" illegal activity or "ongoing operation" to show substantial connection). Plaintiff has alleged the basis for the forfeiture of defendant truck related to the activity of concealing and transporting the proceeds of illegal proceeds of a drug trafficking criminal enterprise. The supplemental evidence from Florida, which has recently been made available certainly establishes that CAMACHO is the head of a substantial international drug trafficking enterprise based in Florida which moves substantial quantities of cocaine from Mexico, through Arizona, for sale in locations such as New York and Miami. SOF 77-102. This enterprise produces a huge gross profit or cash flow each week. SOF 103. CAMACHO has been engaged in this criminal activity for a substantial period of time, based upon the personal experience of both Jairo Hernandez and Leonardo Maya Martinez, Sr., co-conspirators and fellow cocaine traffickers with whom CAMACHO frequently conversed about opportunities available for continued criminal activities. SOF 77-82; 86-89; 94-98. Based upon this recently acquired

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evidence it is absolutely clear that BRUNO is nothing more than a family member, by virtue of the pregnancy of a niece of CAMACHO, assigned to aid and support the criminal enterprise by driving specially altered vehicles to conceal cocaine and currency used to acquire the illegal controlled substances. SOF 90; 99. As such, BRUNO is nothing more than a courier/baillee with no ownership interest in the currency, lacking standing to make a claim to the res, pursuant to the terms of the statute, 18 U.S.C. §983d(6)(B)(ii). CAMACHO is the true owner of the currency and the truck, but has made a claim only to the truck, defendant #2, which was also identified as a vehicle present at the compound in Miami used as a base of operations and communication center for the criminal enterprise. Defendant #2 is exactly the type of vehicle described by CAMACHO as employed to further his criminal enterprise, i.e. one altered to provide space to conceal controlled substances or currency. SOF 99. The evidence from the Florida investigation, the evidence in this matter which has not been suppressed by the Court, coupled with the adverse inferences drawn as the result of the assertion of a blanket Fifth Amendment privilege, as described below, supports the conclusion that there is a substantial connection between the defendant property and the illegal trafficking of controlled substances. Based upon the totality of the circumstances, the defendant truck is subject to forfeiture pursuant to 21 U.S.C. §881(a)(4) as a vehicle used and intended to be used to transport, or in any manner to facilitate the transportation, sale, receipt, possession, or concealment of controlled substances or proceeds of the illegal exchanges for controlled substances. Apart from the currency found as the result of the alert by the canine, an inspection of the physical condition of the truck revealed an altered fuel line, which lead to the discovery of an altered or dummy fuel tank which concealed the bulk of the defendant currency. The defendant currency in the approximate amount of $493,850 is the proceeds of drug trafficking and is subject to forfeiture pursuant to 21 U.S.C. §881(a)(6). In determining whether property is forfeitable, the government is entitled to rely on evidence gathered after the complaint was filed. 18 U.S.C. § 983(c)(2) ("the Government may use evidence gathered after the filing of a complaint for forfeiture to establish, by a preponderance of the evidence, that property is subject to forfeiture").
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While the Markarians assert that the complaint was not supported at the time of filing by evidence sufficient to meet the preponderance standard, the government is not required to prove its case simply to get in the courthouse door. It is true that CAFRA imposes upon the government the ultimate burden of establishing forfeiture by a preponderance of the evidence, but the statute also provides expressly that the government may use evidence gathered after the filing of a forfeiture complaint to meet this burden. See 18 U.S.C. §983(c)(2). This provision would be meaningless if the government were required to meet the preponderance standard merely to commence an action. United States V. Real Property Located at 5208 Los Franciscos Way, 385 F.3d 1187, 1193 (9th Cir. 2004). Since the new standard of CAFRA has altered the burden of proof and created the after acquired evidence provision for forfeiture cases, the issue of adverse inference has not been squarely addressed by any Court, at least based upon the research conducted by plaintiff. Congress increased the burden of proof upon plaintiff to prove its case from mere "probable cause" to "by the preponderance of the evidence." However, Congress also created the additional benefit for plaintiff to rely upon evidence acquired after the point of time of the seizure, which most assuredly includes civil discovery conducted after suit is filed. The point of the amendments was to even the playing field, facilitate the search for truth, and to provide an opportunity to claimants to test the evidence of the government in the regular context of litigation. Regular civil litigation includes the obligation to submit to a deposition, to produce documents and evidence, and to respond to requests for admissions, i.e. comply with the Federal Rules of Civil Procedure. This burden is upon every litigant who elects to participate in litigation. Congress knew this simple fact when it enacted CAFRA. The obligation of any litigant is to respond to the burden of production of evidence in response to the discovery requests of another party. Every plaintiff has the ability to call the defendant as a witness and produce evidence from the defendant as part of the plaintiff's case in chief. The defendant is never permitted to simply refuse to participate in discovery until such time as plaintiff proves a prima facie case, and then elect to produce evidence. It is this refusal to respond to all

discovery requests which is at issue in this case. A civil litigant alleged to have participated in activities which lead to the seizure of property for violations of federal law, should not be immune from discovery obligations merely by asserting a blanket Fifth Amendment claim.
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D.

The Court May Draw Adverse Inference From 5th Amendment Assertion One significant issue before the Court contained in this motion relates to the above

referenced Requests for Admissions. Plaintiff served the discovery demands on December 9, 2003. SOF 58. Claimants asked for additional time to prepare responses. SOF 59. On the basis of a blanket assertion of a Fifth Amendment privilege, claimants refused to answer any of the discovery requests. SOF 60. No discovery has been provided. SOF 61. Plaintiff on three occasions advised counsel for claimants that a blanket assertion of the Fifth Amendment to all questions asked in the discovery was not acceptable, citing cases. SOF 62. In order to consider whether a Fifth Amendment privilege is properly asserted, claimants were required to respond to each question and were prohibited from asserting a blanket or universal refusal to answer all questions of every nature. A proper application of this standard requires that the Fifth Amendment claim be raised in response to specific questions propounded by the investigating body. This permits the reviewing court to determine whether a responsive answer might lead to injurious disclosures. United States v. Malnik, 489 F.2d 682, 685 (5th Cir.), cert. denied, 419 U.S. 826, 95 S.Ct. 44, 42 L.Ed.2d 50 (1974). Thus a blanket refusal to answer any question is unacceptable. (Citing cases). In this regard, we approve the analysis of the Fifth Circuit in United States v. Malnik: It is simply impossible to anticipate every question that might be asked and conclude that each would present a distinct possibility of self-incrimination if answered by the witness. This is not to say that if (the witness) testifies and produces documents, he may not object to every question. It is just that we cannot speculate and say that any response to all possible questions would or would not tend to incriminate the witness. 489 F.2d at 686. Because Pierce, in his role as a witness, made a blanket refusal to answer any questions, we are unable to evaluate his Fifth Amendment claim. Therefore, we need proceed no further in determining the extent of Pierce's Fifth Amendment rights in the circumstances of this case. U.S. v. Pierce, 561 F.2d 735,741-42 (9th Cir. 1977). Plaintiff has taken the position that claimants may not assert a blanket Fifth Amendment claim to all of the discovery requests, specifically including the Requests for Admissions. Fed.R.Civ.P. Rule 36 (a) requires that an objection be specific, individual, and presented in good faith. If objection is made, the reasons therefore shall be stated. The Answer shall specifically deny the matter or set forth in detail the reasons why the answering party cannot truthfully admit or deny the matter. A denial shall fairly meet the substance of the requested admission, and when good faith requires that a party
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qualify an answer or deny only a part of the matter of which an admission is requested, the party shall specify so much of it as is true and qualify or deny the remainder. In order to adequately review an assertion of a Fifth Amendment claim, it is incumbent upon claimants to provide some basis for the refusal to respond to each question. Absent a good faith presentation to the Court, claimants have failed to provide any basis for the Court to evaluate the legitimacy of the assertion of the claim. The standard for determining whether a claim of privilege is justified is "`whether the claimant is confronted by substantial and "real," and not merely trifling or imaginary, hazards of incrimination.'" United States v. Apfelbaum, 445 U.S. 115, 128, 100 S.Ct. 948, 956, 63 L.Ed.2d 250 (1980)(citations omitted); United States v. Paris, 827 F.2d 395, 398 (9th Cir. 1987). United States v. Rubio-Topete, 999 F.2d 1334, 1338 (9th Cir. 1993). The blanket assertion of the Fifth Amendment privilege by claimants is not in compliance with both the Civil Rules and Ninth Circuit case law, which prohibits the blanket assertion of a Fifth Amendment privilege, and which requires specific answers to the extent a party can provide them. As the result of the intentional acts of counsel and his clients, this Court is prohibited from evaluating the legitimacy of the assertion of the claims. The consequence of such action should be either the sanction provided under Rule 36, the admission of the Requests for Admission, or the drawing of adverse inferences from the assertion of such a claim. The United States Supreme Court long ago made it clear that in civil proceedings, even one involving inmates of a correctional institution, there is no constitutional obstacle to drawing adverse inferences from either the assertion of a Fifth Amendment claim, or silence in the face of an accusation. Our conclusion is consistent with the prevailing rule that the Fifth Amendment does not forbid adverse inferences against parties to civil actions when they refuse to testify in response to probative evidence offered against them: the Amendment "does not preclude the inference where the privilege is claimed by a party to a Civil cause." 8 J. Wigmore, Evidence 439 (McNaughton rev. 1961)... It is important to note here that the position adopted by the Court of Appeals is rooted in the Fifth Amendment and the policies which it serves. It has little to do with a fair trial and derogates rather than improves the chances for accurate decisions. Thus, aside from the privilege against compelled selfincrimination, the Court has consistently recognized that in proper circumstances silence in the face of accusation is a relevant fact not barred from evidence by the Due Process Clause. (Citing cases) Indeed, as Mr. Justice Brandeis declared,
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speaking for a unanimous court in the Tod case, supra, which involved a deportation: "Silence is often evidence of the most persuasive character." 263 U.S., at 153-154, 44 S.Ct., at 56, 68 L.Ed., at 224. And just last Term in Hale, supra, the Court recognized that "(f)ailure to contest an assertion ... is considered evidence of acquiescence ... if it would have been natural under the circumstances to object to the assertion in question." 422 U.S., at 176, 95 S.Ct., at 2136, 45 L.Ed.2d, at 104. Baxter v. Palmigiano, 425 U.S. 308, 318-19, 96 S.Ct. 1551, 1558 (1976). Silence in the face of plaintiff's discovery requests in the context of a verified complaint containing substantial probative evidence against claimants is just such "evidence of the most persuasive character," and should be considered by this Court as "evidence of acquiescence," in the form of adverse inferences. The Supreme Court has also applied the same standard to a situation where the person asserting the Fifth Amendment Claim is required to produce evidence to support his position. But while the assertion of the Fifth Amendment privilege against compulsory selfincrimination may be a valid ground upon which a witness such as Rylander declines to answer questions, it has never been thought to be in itself a substitute for evidence that would assist in meeting a burden of production. We think the view of the Court of Appeals would convert the privilege from the shield against compulsory self-incrimination which it was intended to be into a sword whereby a claimant asserting the privilege would be freed from adducing proof in support of a burden which would otherwise have been his. None of our cases support this view. We have squarely rejected the notion, apparently subscribed to by the Court of Appeals, that a possible failure of proof on an issue where the defendant had the burden of proof is a form of "compulsion" which requires that the burden be shifted from the defendant's shoulders to that of the government. (Citing cases). United States v. Rylander, 460 U.S. 752, 758, 103 S.Ct. 1548, 1553 (1983). In the context of this forfeiture case, claimants have the burden of producing evidence during the discovery portion of this matter to support their position, expressed in their answer. With respect to their burden of proof, claimants the must establish that they are innocent owners to win the forfeiture matter, once plaintiff has established the res is subject to forfeiture. Claimants seek to recover the res by refusing to produce any evidence, even after acquired evidence to which plaintiff would otherwise be entitled. It is hard to imagine a more clear example which, "... has little to do with a fair trial and derogates rather than improves the chances for accurate decisions." Baxter v. Palmigiano, supra.

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May the Court consider adverse inferences from the refusal of claimants to answer the discovery? The clear answer provided by the Supreme Court in Baxter v. Palmigiano, supra. is absolutely yes. The ability is not limited to an issue where claimants carry the burden of proof, as specifically addressed in Rylander, but is more broadly cast. Although claimants may be required to choose between convicting themselves and forfeiting the res, the search for the truth and obligation to assist the Court in arriving at accurate decisions, requires claimants to truthfully answer the questions presented, or suffer the consequences. Any other solution to this question, particularly those presented by claimants which prevent the government from obtaining evidence from claimants after the date of the seizure, simply rewards those who refuse to comply with the rules of discovery contrary to the statute permitting the use of evidence acquired after the filing of the complaint, and further enables the recovery of resources and instrumentalities of crime by criminal enterprise which operate in the dim light of the nether world where confirmation of financial acts used to fuel criminal enterprise intentionally disappear. Absent cooperation in the discovery effort, claimants hope to conceal probative evidence of their connection to criminal enterprise. No civil litigant can refuse to give testimony regarding their side of a civil dispute which would be relevant to the determination of the truth, merely on the basis that it might harm their case. Why excuse claimants from this discovery burden simply because they know that truthful answers will prove the criminal source of the funds? What would happen if the Attorney General could be prevailed upon to grant use immunity to claimants and compel their testimony? Would claimants still refuse to answer the discovery? Absent a huge investment of judicial resources and discovery effort, that evidence cannot be identified. In the context of the claimants in this litigation, proving that neither has a legitimate source for the huge sum of currency would be difficult. Attempting to prove a negative, that no legitimate source for the currency exists, requires the elimination of all possible sources. The availability of the discovery process in a civil forfeiture case is not barred simply because some evidence is suppressed. No case cited by claimant makes this novel assertion. Rather, one case has held that discovery is not fruit of the suppressed evidence. United States

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v. 47 West 644 Route 38, 962 F.Supp. 1081 (N.D. Ill. 1997) (statements made at the time of the illegal search must be suppressed as fruits, but responses to discovery requests are not fruits). In this case where the court stayed the civil forfeiture case until the state criminal charges were resolved, the court found that the subsequent responses to the discovery were not and could not be suppressed as the result of earlier statements. The discovery process cannot be simply ignored solely on the basis that evidence was suppressed. If this were a legitimate concern by claimants and their counsel, they would have moved for either a stay until the statute of limitations has run, or requested use immunity for the truthful answers to the discovery. They have done neither, seeking to avoid participating in discovery and thereby attempt to reclaim the res which is clearly deeply involved in trafficking in controlled substances. On the other hand, if claimants are not involved in criminal enterprise, they merely need to produce a legitimate and verifiable source of the currency. Absent such a source for the funds, society and the law demand the funds not be returned to those who operate the criminal enterprise which generated them. This proposition is consistent with the reach of the Due Process Clause, as stated in Baxter v. Palmigiano, as well as the "after acquired evidence" provisions of CAFRA, and is the only way in which to insure that "crime does not pay." Failure to consider the adverse inference in plaintiff's case in chief simply works a nullity of the after acquired evidence provisions of CAFRA and the discovery rules of civil procedure contemplated by Congress, creating the ultimate shield of property seized as part of proceeds of criminal enterprise. While claimants have a right not to send themselves to prison, in the context of a civil forfeiture action, the right does not extend to the protection of the proceeds of that very criminal conduct. Only innocent owners are intended, by Congress in the words of its statute, to receive the return of property, not those criminal co-conspirators who seek advantage by refusing to follow the rules of the Court and the laws of our society. The significance of the question about after acquired evidence is less an issue about whether such evidence may be considered by the Court, it clearly is allowed by the statute. Rather, the issue regards whether the refusal of claimants to answer discovery, required of a litigant in any civil case, on the basis of the assertion of a Fifth Amendment privilege, may be

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relied upon by the Court as a basis for either a discovery sanction or an adverse inference. Claimants cannot argue that the Court is prevented from drawing an adverse inference when it considers the assertion of their innocent owner defense. Claimants cannot assert both that they are innocent owners and that they cannot answer discovery questions without convicting themselves. In short, the logic is inescapable. If claimants cannot answer without convicting themselves, then they are not innocent owners. The res is forfeited to plaintiff. D. Claimants Cannot Establish That They Are Innocent Owners In order for the Court to consider whether claimants have established that they are innocent owners, the Court must find that plaintiff has established its proof that there exists a substantial connection between the res and trafficking in controlled substances. The following analysis presumes that the Court will draw an adverse inference as the result of the failure of claimants to comply with the discovery requests, specifically including plaintiff's Requests for Admissions, as a result of the assertion of a blanket Fifth Amendment privilege. While it is a closer question whether adverse inferences may be drawn in plaintiff's case in chief, there is no question that claimants have the burden of proving their status as an innocent owner under the provisions of CAFRA. There is also no question that, faced with a burden of proof, claimants cannot assert competing propositions that they are both "innocent owners" and incapable of providing discovery based upon the assertion of the Fifth Amendment. Based upon this presumption, it is apparent that BRUNO and CAMACHO are at best couriers for a substantial drug trafficking enterprise which has prepared a sophisticated load vehicle and dispatched trusted couriers with a substantial sum of criminal proceeds. The Ninth Circuit has recently considered the factual setting in which possession of property was placed with an agent or bailee who then failed and refused to identify the real party in interest for whom she acted. The claimant in the action was a courier of cash for delivery to an associate of the unidentified bailor. The mere possession of the cash, without the disclosure of the hidden owner, was insufficient to establish standing. A similar set of facts and circumstances caused the Fifth Circuit to hold that an alleged bailee who withholds identification of the bailor lacks standing to attack th forfeiture. United States v. $321, 470, U.S. Currency, 874 F.2d 298, the 304 (5 Cir. 1989). ...
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From the facts and circumstances of this case including Hysell's steadfast refusal to identify her alleged principal, we conclude, as did the district court, that the government has shown convincing probable cause to initiate forfeiture proceedings. United States v. Currency, U.S. $42,500.00, 283 F.3d 977, 983 (9th Cir. 2002). Due to the posture of this case, the standard applied by the Ninth Circuit was probable cause. However, at footnote number 1 on page 984 the Court noted the outcome would have been the same if the heightened standard of preponderance of the evidence was applied. Possession by an agent of bailee on behalf of an undisclosed bailor does not create standing. Under CAFRA, a claimant may defeat a forfeiture by showing that he/she is an "innocent owner." Section 983(d) sets forth the requirements of the innocent owner defense, which must be proven by a preponderance of the evidence. 18 U.S.C. § 983(d)(1). A threshold question is whether the claimant even qualifies as an owner. Subsection 983(d)(6)(A) defines "owner" as "a person with an ownership interest in the specific property sought to be forfeited, including a leasehold, lien, mortgage, recorded security interest, or valid assignment of an ownership interest." Subsection 983(d)(6)(B) identifies three specific categories which are not owners: (i) a person with only a general unsecured interest in, or claim against, the property or estate of another; (ii) a bailee unless the bailor is identified and the bailee shows a colorable legitimate interest in the property seized; (iii) a nominee who exercises no dominion or control over the property. The definition therefore excludes, "... (ii) a bailee unless the bailor is identified and the bailee shows a colorable legitimate interest in the property seized. In the context of this case, BRUNO has admitted that the funds were proceeds of the drug trafficking activity of CAMACHO. BRUNO is therefore no more than a bailee who did not identify the person for whom he held the currency. Further, BRUNO has refused to show any colorable legitimate interest in nearly one half million dollars concealed in the defendant pickup truck. CAMACHO has made no claim to the currency. However, CAMACHO has admitted that the funds were used and intended to be used to illegally purchase controlled substances, that he had altered or caused to be altered the defendant truck to conceal controlled substances and proceeds of the sale of controlled substances, and that he knew the funds were contained in the defendant truck at the time the funds were seized. However, these admissions and the facts observed by Officer
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McFarland pursuant to the totality of the circumstances, establish that the defendant currency is subject to forfeiture pursuant to 21 U.S.C. §881(a)(6). See United States v. Arvizu, 534 U.S. 266, 274-77, 122 S.Ct. 744, 751­52 (2002); United States v. $22,474, 246 F.2d 1212 (9th Cir. 2001); and United States v. $42,500, 283 F.3d 977 (9th Cir. 2002). In the context of this case, and based upon the discovery provided, neither claimant can ever establish that he is an innocent owner of either the funds or the truck, based upon the totality of the evidence contained in this case, including the adverse inferences drawn by plaintiff. The defendant property should be ordered forfeited to plaintiff. III. SUMMARY For the reasons stated herein plaintiff has established that the res is substantially connected to the Miami based trafficking enterprise headed by CAMACHO, based upon the affidavits of his associates in Miami. This showing is sufficient for the government to prevail and require claimants to meet the burden of proof to establish they are "innocent owners," regardless of whether the Court draws adverse inferences from the assertion of the Fifth Amendment privilege. Claimants have failed to allege and prove any basis upon which this Court could determine a legitimate interest exists in the res. Plaintiff's motion for summary judgment should be granted. Respectfully submitted this 22nd day of August, 2005. PAUL K. CHARLTON United States Attorney District of Arizona S/ REID C. PIXLER Assistant U.S. Attorney

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CERTIFICATE OF SERVICE
X I hereby certify that on August 24, 2005, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: ____________________________________________________________________________________________ ____________________________________________________________________________________________ X I hereby certify that on August 24, 2005, I served the attached document by U.S. Mail on the following, who are not registered participants of the CM/ECF System: Richard B. Jones 273 South Scott Avenue Tucson, Arizona 85701

S/ Victoria Tiffany

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