1. Did the District Court err in requiring the claimants to prove standing
-- at a pretrial "show cause" hearing on the government's motion for summary
judgment -- without requiring the government to first show probable cause
to believe the property was forfeitable?
2. Did the court apply the wrong standard for determining standing on
a government motion for summary judgment, when it placed the burden of
proof on claimants, at a show cause hearing, to establish standing by a
preponderance of the evidence?
PUPPOLO FAMILY TRUST, PLUSCUAM FAMILY TRUST,
Petitioners/Claimants,
$36,333.50 IN U.S. CURRENCY, ONE BLACK MERCURY ZEPHYR VIN: 1MEBP71B1CK627651, ONE MONEY ORDER No. 04-443,512,526, PURCHASED AT FIRST STATE BANK, ALBANY, GEORGIA, AND CASHIER'S CHECKS, Nos. 1590924, 039032, 09101243, 78596, 0390, 005922,
462-542-0504, 36336, 1572163, 106713998, 12030, 30871,
and 70128,
Petitioners/Defendants,
TABLE OF CONTENTS
Questions Presented i
Full Listing of Petitioners ii
Table of Authorities vi
PETITION FOR CERTIORARI
Opinions 1
Jurisdiction 1
Statutes Involved 2
Statement of the Case 5
The Property Seized 5
The Trusts 6
The Forfeiture Case 8
The Appeal to the Eleventh Circuit 9
REASONS FOR GRANTING THE PETITION
1. The District Court erred in requiring the claimants to prove "standing" before requiring the government to prove probable cause 10
a. Probable cause must be determined before a claimant can be required to show standing 10
b. Only a factual dispute is required for a threshold showing of standing 12
c. Had the court forced the government to show probable cause first, some of the property seized would not have been forfeited 15
2. When the District Court required the claimants to prove standing by a preponderance of the evidence, it applied the wrong standard for determining standing on a motion for summary judgment 16
a. The proper standard for determining whether to grant summary judgment is whether there are material facts in dispute 17
b. The court acted as if the hearing were the trial on the merits rather than the government's motion for summary judgment on the issue of standing 18
1. The court indicated that credibility of the claimants' witness was at issue 18
2. The judge made comments indicating he was weighing claimants' evidence against the government's 18
3. The judge discussed the burden of proof at the hearing 19
4. In granting summary judgment, the court impermissibly placed the burden of proving ownership on the claimants, without first requiring the government to show probable cause 20
c. The trust introduced sufficient evidence of standing to withstand summary judgment 21
CONCLUSION 23
STATUTES
18 U.S.C. § 981 5, 10
19 U.S.C. § 1615 10
31 U.S.C. § 5313 5, 14
31 U.S.C. § 5324 5, 14
CASES
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513 (1986) 17, 18
Austin v. United States, ___ U.S. ___, 113 S.Ct. 2801 (1993) 23
United States v. A Fee Simple Parcel, Bal Harbour, Fla., 650 F.Supp. 1534 (E.D. La. 1987) 12
United States v. A Single Family Residence ... Located at 900 Rio Vista Blvd., 803 F.2d 625 (11th Cir. 1986) 11
United States v. $15,500, 558 F.2d 1359 (9th Cir. 1977) 11
United States v. $47,875, 746 F.2d 291, 298 (5th Cir. 1984) 13
United States v. Four Parcels of Property, 941 F.2d 1428 (11th Cir. 1991) 17
United States v. One 1982 Porsche 928, 732 F.Supp. 447, 452 (S.D.N.Y. 1990) 12
United States v. One 1976 Cessna Model 210L Aircraft, 890 F.2d 77, 80 (8th Cir. 1989) 11, 13
United States v. One Parcel... Known As 116 Emerson Street, 942 F.2d 74, 78 (1st Cir. 1991) 12
United States v. Premises Known as 526 Liscum Drive, 866 F.2d 213 (6th Cir. 1988) 11
United States v. $321,470, 874 F.2d 298 (5th Cir. 1989) 13
United States v. $38,000, 816 F.2d 1538 (11th Cir. 1987) 10, 12, 21, 22
United States v. $38,570, 950 F.2d 1108, 1111-12 (5th Cir. 1992) 11, 13, 15, 16, 21
United States v. $30,800, 555 F.Supp. 280 (E.D.N.Y. 1983) 11
United States v. 2511 E. Fairmont Ave., 722 F.Supp. 1273 (D.Md. 1989) 11
United States v. $280,505, 655 F.Supp. 1487, 1495 (S.D. Fla. 1986) 14
OTHER AUTHORITIES
David B. Smith, Prosecution and Defense of Forfeiture Cases, (June 1993 ed.) 14
Petitioner-Claimants, Puppolo Family Trust and Pluscuam Family Trust, respectfully pray that a writ of certiorari issue to review the decision of the Eleventh Circuit, entered on June 2, 1993, affirming the judgment of the Honorable Wilbur D. Owens, Jr., District Judge, Middle District of Georgia.
The Eleventh Circuit Court of Appeals' order affirmed the judgment below, without opinion, on June 2, 1993. The order, which is not to be published, is set out at Appendix A.
The memorandum opinion of the District Court for the Middle District of Georgia (Wilbur D. Owens, Jr., J), entered on June 8, 1992, also unpublished, appears in Appendix B.
The decision of the U.S. Court of Appeals for the Eleventh Circuit was entered June 2, 1993. Petitioners' Application for Extension of Time to File Petition For Writ of Certiorari, filed August 31, 1993, was granted by the Honorable Justice Kennedy on September 2, 1993, extending time for filing the certiorari petition until October 29, 1993.
This Court has jurisdiction to review the judgment under 28 U.S.C. § 1254(1).
Part V of Title IV of the Tariff Act of 1930, as amended, provides:
The Bank Secrecy Act of 1970, as amended, provides in pertinent part:
31 U.S.C. § 5313. Reports on domestic coins and currency transactions
18 U.S.C. § 981. Civil forfeiture
(A) Any property, real or personal, involved in a transaction or attempted transaction in violation of section 5313(a) or 5324(a) of title 31....
(a)(2) No property shall be forfeited under this section to the extent of the interest of an owner or lienholder by reason of any act or omission established by that owner or lienholder to have been committed without the knowledge of that owner or lienholder....
(d) For purposes of this section, the provisions of the customs laws relating to the seizure, summary and judicial forfeiture, condemnation of property for violation of the customs laws, the disposition of such property or the proceeds from the sale of this section, the remission or mitigation of such forfeitures, and the compromise of claims (19 U.S.C. 1602 et seq.), insofar as they are applicable and not inconsistent with the provisions of this section, shall apply to seizures and forfeitures incurred, or alleged to have been incurred, under this section....
(3) structure or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions.
STATEMENT OF THE CASE
This civil forfeiture case was brought under 18 U.S.C. § 981 ("money laundering"), for "structuring" monetary transactions in violation of 18 U.S.C. §§ 5313 and 5324.
The cash transactions which led to this seizure involved trustee Buck Klang's purchase, with trust funds, of numerous certified checks and money orders, in amounts of less than $10,000, to avoid the cash transaction filing requirement. The other trustees and the beneficiary did not know of the structuring.
The Property Seized
It is undisputed that the cash and monetary instruments seized in this case were "clean money," except for any involvement in "structuring." All of the cash and monetary instruments were the proceeds of U.S. savings bonds, which Lenora Klang (now in 79) had purchased regularly throughout the 1960's and 1970's, with earnings from employment. It is undisputed that Lenora Klang gifted the savings bonds to the Puppolo Family Trust shortly after the formation of that trust, and that the trustees decided, at a telephonic meeting, to cash the bonds and invest the proceeds in semi-numismatic gold coins purchased from International Collector's Association, Denver Colorado, (hereafter "ICA"). This was corroborated by the monetary instruments themselves, which listed Puppolo Family Trust as remitter, and ICA as payee. The cashiers checks and money orders were sent to ICA. The government seized them from ICA's possession.
The automobile seized, an older Mercury Zephyr, was titled in the name of Pluscuam Family Trust. It was seized on a "facilitation" theory, on the grounds that it had been driven to the various banks to purchase the "structured" money orders and certified checks. Buck Klang, trustee for both trusts, was driving the automobile at the time it was seized.
When Buck Klang was arrested and the Mercury automobile seized, $36,333.50 in cash was seized from the automobile or from Buck Klang's person. Puppolo Family Trust filed a claim for the cash, alleging it was the balance of the proceeds from sales of the savings bonds. The cash was never involved in any structured transaction or attempted transaction.
The Trusts
The claimants in this case are two family trusts, Puppolo Family Trust and Pluscuam Family Trust, which together owned all the property seized.
It is undisputed that both trusts were legally formed, and acquired the seized assets, as follows:
Pluscuam Family Trust was formed in Rusk County, Wisconsin on October 5, 1986, with an ounce of silver as the original trust res. Buck Klang and Sanford Knapp were named as trustees in the Declaration of Trust. Rebecca Klang was listed as the sole beneficiary. Later, other funds were gifted to the family trust. The trust purchased an older Mercury Zephyr automobile, which was immediately titled in the name of the trust. The Mercury is one of the assets seized in this case.
Puppolo Family Trust was formed on December 18, 1990. The Declaration of Trust lists Buck Klang and Lenora Klang as trustees, and Rebecca Klang as sole beneficiary. Sanford Knapp was later added as a trustee of the Puppolo Family Trust. The initial trust res was an ounce of silver, but shortly after formation of the trust, Lenora Klang gifted to the trust over $100,000 worth of U.S. savings bonds which Lenora Klang had purchased in the 1960's and 1970's with her earnings from employment.
At the time the Puppolo Family Trust was formed, Lenora Klang was 76 years old. Buck Klang is her only son, and Rebecca Klang is his wife. Lenora wanted to provide a trust fund for her only daughter-in-law. Puppolo Family Trust was set up to receive the U.S. Savings Bonds Lenora had purchased in increments throughout the 1960's and 1970's. At the time she purchased each of the bonds, Lenora had listed her son Buck as her beneficiary/co-owner. The bonds remained in Lenora's possession until she gifted them to the Puppolo Family Trust in December 1990.
At a telephonic meeting of the trustees of the Puppolo Family Trust, the trustees decided to cash in the savings bonds and invest the proceeds in semi-numismatic gold coins, through International Collectors Association ("ICA"), a coin dealer in Denver, Colorado. Trustee Sanford Knapp had recommended that the trust invest in numismatic gold coins, and that it purchase the coins from ICA. In the telephonic meeting, Buck Klang was authorized by the trustees to cash in the savings bonds and use the proceeds to purchase rare gold coins from ICA.
After the telephonic meeting, Lenora delivered the bonds to Buck Klang, in his capacity as trustee. The savings bonds were cashed in by Buck Klang, as instructed, and they netted over $100,000. When Buck Klang called International Collectors Association to make arrangements with ICA to purchase the gold coins, ICA refused to accept such a large amount of cash and instructed Klang to obtain cashier's checks for the purchase.
On or about January 3, 1991, Buck Klang went to a bank to purchase the cashier's check and learned he would have to fill out an IRS cash transaction report in order to purchase cashier's checks of an amount over $10,000.
Without consulting the other trustees, Buck decided to avoid the IRS paperwork by purchasing the monetary instruments in amounts of less than $10,000. On January 3 and 4, 1991, he purchased over $88,000 in cashier's checks and a money order, with the Puppolo Family Trust's funds. As Buck Klang purchased the checks, he sent them to ICA for the pre-arranged purchase of gold coins.
On January 4, 1991, Buck Klang was arrested for structuring transactions to avoid the cash transaction reporting requirements. At the time of his arrest, federal agents seized: the automobile he was driving (belonging to Pluscuam Family Trust), $33,315.29 in cash, seized from the car, and $2,907.21 in cash, seized from Buck Klang's person.
When he learned of Buck Klang's arrest, Puppolo trustee Sanford Knapp contacted ICA and learned they had received the cashier's checks from Puppolo Family Trust, but that they were under subpoena to the U.S. Attorney's office, and could not be cashed until legal action was over.
Buck Klang went to trial in his criminal case and, on August 12, 1991, was convicted of committing "structured transactions." In October 1991, he was sentenced to 18 months imprisonment, three years of supervised release, and over $60,000 in fines, including the cost of his imprisonment.
The Forfeiture Case
The civil forfeiture complaint was filed on January 14, 1991. The trusts filed verified claims on March 15, 1991, after obtaining an extension of time to do so. Also on March 15, 1991, Sanford Knapp, as trustee for claimants, filed a motion to dismiss the forfeiture complaint. That motion was never ruled on.
On January 22, 1992, the government filed a motion for summary judgment alleging that the claimant trusts lacked standing to defend the forfeiture case. Claimants filed their opposition to the motion on March 9, 1992, and the government filed a reply on March 26, 1992.
On March 31, 1992, the government filed an application for order directing the claimants to show cause why the government's motion for summary judgment should not be granted. The judge signed the order that same day. The Show Cause Order specifically ordered Sanford Knapp, a trustee for both trusts, and Gregory Pieper, attorney for the trusts, to appear at a hearing on June 2, 1992 to show cause why summary judgment should not be granted to the government. No one else was ordered to appear.
On June 2, 1992, Gregg Pieper, and Sanford Knapp appeared, as ordered, for the show cause hearing on the government's motion for summary judgment on the issue of standing.
At the show cause hearing, the court placed the burden of proof on the claimants to show "standing" -- by a preponderance of the evidence -- without ever requiring the government to show probable cause for forfeiture. Based on his findings at the evidentiary hearing, the District Court Judge held that the trusts had failed to prove Article III standing to defend the forfeiture case. The judge then granted the government's motion for summary judgment, holding that the claimant trusts lacked Article III standing to defend the forfeiture case.
The Appeal to the Eleventh Circuit
Claimants timely appealed to the Eleventh Circuit. The case was thoroughly briefed, and was argued on May 18, 1993. On June 2, 1993, the Eleventh Circuit affirmed, without opinion, the District Court's order granting summary judgment. The Eleventh Circuit's order was unpublished and marked "not for publication." A copy appears at Appendix A.
Claimants filed a petition for extension of time to file a petition for certiorari, which was granted, extending the time for filing a petition for certiorari until October 29, 1993.
1. The District Court erred in requiring the claimants to prove "standing" before requiring the government to prove probable cause
a. Probable cause must be determined before a claimant can be required to show standing
It is clear from the plain language of the federal civil forfeiture statutes that the government, which has disturbed the status quo by seizing property, has the first burden of going forward at any evidentiary hearing.
The money laundering forfeiture statute at issue here, 18 U.S.C. § 981(d), incorporates by reference the provisions of the Customs laws, including 19 U.S. Code § 1615, which provides that, in any forfeiture case:
The concept of a "threshold requirement" that the claimant demonstrate "Article III standing" -- before the government has to demonstrate probable cause to believe the property is forfeitable -- is being relied on more and more by federal courts to summarily dismiss property owners' claims, preventing them from defending their property against forfeiture. See, e.g. United States v. $38,000, 816 F.2d 1538 (11th Cir. 1987):
There are two different forms of standing at issue in this case. Article III standing and statutory standing. It is well established that a claimant first must demonstrate a sufficient interest in the property to give him Article III standing; otherwise, there is no "case or controversy," in the constitutional sense, capable of adjudication in the federal courts.... Thus, contrary to appellants' argument, unless they have Article III standing, federal courts lack jurisdiction to consider their claims, including their claim that the government did not have the requisite probable cause to seize the defendant property. 816 F.2d at 1543 (citations and footnotes omitted).
Other courts including the Sixth Circuit,(1) require the government to establish probable cause before the issue of standing arises, on a motion for summary judgment.
To add to the confusion, other cases use the term "standing" to refer to the claimant's burden of showing ownership at trial, after probable cause is found and the burden of proof has shifted to the claimant to prove innocent ownership.(2) Moreover, the language quoted from many of the older cases relied upon as establishing the standards for the "threshold standing requirements" actually involved the standards for demonstrating ownership at trial -- after a finding of probable cause.
b. Only a factual dispute is required for a threshold showing of standing
An even wider disparity exists among the Circuits in the standards of proof for determining the "threshold issue" of standing on a motion for summary judgment.
In United States v. One Parcel... Known As 116 Emerson Street, 942 F.2d 74, 78 (1st Cir. 1991), the court held that the threshold showing of standing is a very low standard, demonstrating any ownership or possessory interest in the property:
At this preliminary juncture, however, the claimant need not prove the full merits of her underlying claim. All that needs to be shown is a "facially colorable interest in the proceedings sufficient to satisfy the case-or-controversy requirement and `prudential considerations defining and limiting the role of the court.'"
The Eleventh Circuit held in $38,000 that the claimant need not own the property to have sufficient standing to withstand a motion for summary judgment; a possessory interest, or even constructive possession was held to be enough.
At the opposite extreme sits the Fifth Circuit, which has evolved increasingly more burdensome standing requirements, culminating in the anomolous case of United States v. $38,570, 950 F.2d 1108, 1111-12 (5th Cir. 1992), which held:
"Standing ... is literally a threshold question for entry into a federal court."(3) ... To contest a forfeiture action, an individual bears the burden of "demonstrat[ing] an interest in the seized item sufficient to satisfy the court of his standing" as a claimant.(4)
We recognize that Flores need not prove his case to establish standing to bring suit.... This court has held that, to establish standing, "[a] claimant need not prove the merit of his underlying claim, but he must be able to show at least a facially colorable interest in the proceedings sufficient to satisfy the case-or-controversy requirements...." We must therefore address how much, if any, evidence Flores must produce in order to meet the threshold requirements of standing....
c. Had the court forced the government to show probable cause first, some of the property seized would not have been forfeited
Had the government been forced to prove probable cause before the court shifted the burden of proof to claimants, it is doubtful the court could have found probable cause as to at least some of the property.
The seizure of the car would probably not withstand a probable cause determination. The money laundering forfeiture statute does not include property used to "facilitate" a transaction in violation of the structuring laws, but only property "involved in a transaction or attempted transaction in violation of section 5313(a) or 5324(a) of title 31...."
In addition, the $36,333.50 in cash seized was never "structured," nor was there any evidence that it was involved in an "attempted transaction" in violation of the structuring law.
2. When the District Court required the claimants to prove standing by a preponderance of the evidence, it applied the wrong standard for determining standing on a motion for summary judgment
Even if the court below did not specifically cite the Fifth Circuit's anomolous opinion in $38,570, it is clear that the judge's reasoning rested on the same theory, only taken a step further.
The District Court forced the claimant trusts to prove standing by a preponderance of the evidence, when the government never refuted any of the evidence claimants presented in establishing standing.
The Order to Show Cause, which ordered Gregg Pieper, attorney for the trusts, and Sanford Knapp, one of the trustees for the trusts -- but no one else -- to appear at the hearing, did not indicate that it would be a hearing on the merits, or that the claimant would have the burden of proof -- as opposed to the burden of showing facts in dispute.
Despite the clear indications that the hearing was, at the most, a hearing on the pending motion for summary judgment(6) and possibly on the motion to dismiss,(7) but not on the merits, the District court acted as if it were a trial on the merits.
This was improper and clearly irregular under the rules.
a. The proper standard for determining whether to grant summary judgment is whether there are material facts in dispute
Summary judgment is not proper if there are any genuine disputes of material fact. A factual dispute is genuine if a reasonable jury could return a verdict for the non-moving party. United States v. Four Parcels of Property, 941 F.2d 1428 (11th Cir. 1991):
b. The court acted as if the hearing were the trial on the merits rather than the government's motion for summary judgment on the issue of standing
1. The judge indicated that credibility of the claimants' witness was at issue
During cross-examination, the attorney for the government asked Knapp what other trusts he is a trustee for. Knapp objected on Fifth Amendment grounds. The District Court judge responded:
2. The judge made comments indicating he was weighing claimants' evidence against the governments'
At the hearing, the judge commented on missing evidence he felt the claimant should have produced. The judge said he did not understand why the trust hadn't taken the testimony of Lenora Klang or produced the books and records of the trust at the hearing.(8) However, the Order to Show Cause ordered only Sanford Knapp and Gregory Pieper to appear. The order to show cause did not give claimants any notice that they would have to "prove" standing, at the show cause hearing, by a preponderance of the evidence.
3. The judge discussed the burden of proof at the hearing
The transcript of the hearing shows that the District judge did not understand the "burden of proof" on a claimant to withstand summary judgment on the issue of standing. Instead of using the proper standard of "a genuine dispute of material fact", the judge made it clear he expected the claimant to prove innocent ownership by a preponderance of the evidence -- at the pretrial hearing on the government's motion for summary judgment on the issue of standing.
Court: "Whose burden is it to establish innocent ownership?"
Pieper: "It's ours."
Court: "Well there's no evidence about these matters."(9)
Attorney Pieper then tried to explain to the judge the difference between the burden of proof at trial on the ultimate issue of innocent ownership and the preliminary determination of standing sufficient to survive a motion for summary judgment. Pieper pointed out that to avoid summary judgment, all the trusts had to prove was a genuine dispute of fact about a material issue.(10) But the judge never seemed to comprehend the difference.
Court: "You're trying to argue that you've established innocent ownership; is that what you're saying?"
Pieper: "Yes Your Honor, among other things."
Court: "Well in the second breath, you tell me there's a dispute of fact about it."(11)
4. In granting summary judgment, the court impermissibly placed the burden of proving ownership on the claimants, without first requiring the government to show probable cause
On its face, the court order shows that the judge weighed the evidence and found it not to be enough to meet some unspecified burden of proof -- and then granted summary judgment. Again this is improper. Summary judgment is not permissible if there are any disputes as to issues of material fact.
After hearing the testimony of the claimants' sole witness, Sanford Knapp, the court commented that there was no documentary evidence submitted to corroborate the witness's testimony. Yet Knapp's testimony went totally unrefuted, since the government put on no evidence to dispute the witness's testimony.
Furthermore, the forfeiture statutes make it clear that the government must show probable cause for the institution of the forfeiture case before the claimant has the burden of going forward.
There is no indication that the parties agreed to submit the case on cross-motions for summary judgment rather than go to trial.
The "Order to Show Cause" contained no indication that the parties were being summoned to this "show cause" hearing to put on a trial on the merits, yet that is what the court effectively did.
Although the anomalous Fifth Circuit case of $38,570 seems to require a pretrial evidentiary hearing on standing -- at which the claimant bears the burden of proof by a preponderance of the evidence -- that ruling does not apply in the Eleventh Circuit, where this case was brought.
Furthermore, $38,570 itself holds that claimants need not present additional evidence of ownership when the claimant's relationship to the seized property appears on the face of the government's verified complaint. In this case, Puppolo Family Trust's relationship to the seized property appears in the complaint itself, which lists Puppolo Family Trust as the remitter on each of the monetary instruments seized.
C. The trust introduced sufficient evidence of standing to withstand summary judgment
Under the standard set out in $38,000, supra, claimant trusts would have standing to defend this forfeiture case. In $38,000, the Eleventh Circuit held that a possessory interest, or even constructive possession was enough to establish standing:
Moreover, although David [the claimant] was not in actual possession of the currency, he was in constructive possession of the currency when it was seized, in that the currency was seized from David's employee, Woods, while Woods was transporting it to Miami at David's request.
Constructive possession such as this is sufficient to confer Article III standing.(12)
The facts of $38,000 are virtually identical to those here, and the cases were in the same Circuit, yet the court below ignored this precedent. It is difficult to see how the court could distinguish these two cases, when, in both cases, the property was seized from the possession of an agent of the claimant, while the agent was performing business on behalf of the claimant.
Additionally, claimants in this case produced substantial, and undisputed, evidence of trust ownership of the property.
Both trusts were formed with duly executed Declarations of Trust, prior to any alleged illegal activity. The Mercury Zephyr seized in this case was titled in the name of Pluscuam Family Trust, and was being driven by a Pluscuam trustee at the time of seizure.
The Puppolo Family Trust, shortly after its formation, was gifted over $100,000 worth of savings bonds by trustee Lenora Klang, then 76, who had purchased them in increments throughout the 1960's and 1970's, naming her only son Buck as co-owner/beneficiary. The transfer of the bonds to the trust by gift had been authorized by telephonic meeting of the Board of Trustees, at which it was agreed the trust would cash in the savings bonds and purchase semi-numismatic gold coins for the trust. It was also mutually agreed that Buck Klang would perform the transaction of cashing in the savings bonds and purchasing the gold coins, from International Collectors Association, a coin dealer in Denver, Colorado.
Lenora Klang, who had always had the savings bonds in her possession, completed the gift to the trust by delivering the bonds to another trustee, Buck Klang.
The trust's ownership of the proceeds of the bonds continued uninterrupted. Because cash cannot be titled, its ownership was manifest by its continuous possession by a trustee. Puppolo Family Trust's ownership of the monetary instruments is demonstrated on the face of each monetary instrument, which lists Puppolo Family Trust as the remitter and International Collector's Association as payee. Furthermore, the monetary instruments were immediately sent to ICA, and the government seized them from ICA's possession.
The $36,333.50 in cash seized in this case was in the possession of trustee Buck Klang when it was seized.
The trusts' mutual trustee, Buck Klang, was acting as agent of the trusts when he cashed in the savings bonds and obtained the checks. As trustee, Klang acted within the scope of his duties to the trust in conducting the transaction to purchase the gold, until he broke the law by structuring the transactions in order to avoid filling out IRS paperwork. The Declaration of Trust specificially prohibited the trustees from acting unlawfully in the performance of their duties.
This unrebutted evidence shows the claimants have satisfied any "burden of proof" they might have on the threshold issue of standing to defend the forfeiture of their property.
This case involves issues on which the Circuits are widely divided. Extremely important Constitional rights are at stake.
This Court has recently recognized that civil forfeiture is "punishment." Austin v. United States, ___ U.S. ___, 113 S.Ct. 2801 (1993). However, the implications of that ruling have yet to be reflected in any improvement of the procedural safeguards afforded property owners in civil forfeiture cases.
Because of the lasting remnants of the legal fiction that the property -- not the property owner is on trial -- civil forfeiture procedures provide even less Due Process than the ordinary civil case. Since civil forfeiture is punishment, property owners should be afforded more, not less, Due Process than in other civil cases.
When the already thin fabric of Due Process in civil forfeiture is stretched further, by artificial rules of standing that require the property owner to come forward and prove innocent ownership -- before the government ever has to prove anything -- then the level of Process afforded falls pitifully below the standards acceptable under our Constitution.
It is inconceivable that the Founding Fathers intended that Article III of the Constitution could be used to deprive property owners of the right to defend their property from summary forfeiture to the government. Such a construction is a perversion of Due Process.
Accordingly, this Court should grant certiorari.
Respectfully submitted,
Brenda Grantland
Attorney for Petitioners
265 Miller Avenue,
Mill Valley, CA 94941
(415) 380-9108
October 29, 1993
FOOTNOTES:
1 United States v. Premises Known As 526 Liscum Drive, 866 F.2d 213 (6th Cir. 1988) ("[O]nce the government has met its burden of showing probable cause to institute the forfeiture action, the burden then shifts to the claimant to show by a preponderance of the evidence that the property is not subject to forfeiture.... As an element of this burden, claimant has the burden of proving an interest in the property sufficient to establish her standing...") See also, United States v. 2511 E. Fairmont Ave., 722 F.Supp. 1273 (D.Md. 1989); United States v. A Fee Simple Parcel, Bal Harbour, Fla., 650 F.Supp. 1534 (E.D. La. 1987); United States v. $30,800, 555 F.Supp. 280 (E.D.N.Y. 1983).
2 See, e.g., United States
v. A Single Family Residence... Located at 900 Rio Vista Blvd., 803
F.2d 625, 630 (11th Cir. 1986); United States v. One 1982 Porsche 928,
732 F.Supp. 447, 452 (S.D.N.Y. 1990).