Summary
This Report and Recommendation addresses the Government’s motion for default judgment and final forfeiture of $98,723.00 in United States currency. The magistrate judge concludes that the Government satisfied the pleading, notice, jurisdictional, and default-judgment requirements for a civil forfeiture action under Federal Rule of Civil Procedure 55, Supplemental Rule G, and 21 U.S.C. § 881(a)(6). The magistrate judge recommends granting the motion and forfeiting the currency to the United States.
Topics
Practice areas
Questions Presented
- Whether the Government satisfied the pleading, verification, jurisdiction, venue, description, and notice requirements applicable to an asset-forfeiture action under Federal Rule of Civil Procedure 55 and Supplemental Rule G.
- Whether the amended complaint established a valid forfeiture cause of action under 21 U.S.C. § 881(a)(6), including a substantial connection between the currency and an offense under the Controlled Substances Act.
- Whether default judgment was appropriate under the Lindsey factors.
- Whether forfeiture of the full $98,723.00 was an appropriate form of relief and complied with Federal Rule of Civil Procedure 54(c).
Holdings
- The Government complied with the applicable pleading and notice requirements of Federal Rule of Civil Procedure 55 and Supplemental Rule G.
- The amended complaint and admitted allegations established a sufficient basis to forfeit the currency under 21 U.S.C. § 881(a)(6).
- Default judgment was proper because none of the Lindsey factors favored denial.
- Forfeiture of the full $98,723.00 was appropriate and did not violate Rule 54(c) because it matched the relief demanded in the amended complaint.
Key quotations
“The Government has complied with the relevant procedural requirements found in Federal Rule of Civil Procedure 55 and Rule G of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions (“Rule G”).” (Procedural Requirements section)
“Accordingly, the undersigned finds that Mr. Velasco admitted that the $29,910.00 seized from his vehicle were the direct proceeds of a narcotics sale.” (Valid Cause of Action section)
“For the foregoing reasons, the undersigned respectfully requests that the District Court ACCEPT the findings in this report and RECOMMENDS that the Government’s Motion for Default Judgment, Dkt. No. 19, be GRANTED.” (Conclusion)
Factual background
Law enforcement seized $29,910.00 from Kristofer Velasco's vehicle after he admitted that the money was exchanged for delivering cocaine. Agents later found $28,823.00 in a bag containing cocaine in his bedroom and $39,990.00 in a safe in his father's room; the father stated that some of the money had been given to him by Velasco. The Government alleged that the combined currency was subject to forfeiture, properly amended and verified its complaint, and provided direct and published notice, but no claimant responded.
Procedural history
The Government filed an original forfeiture complaint concerning $98,723.00 in currency, but the court denied its initial motion for default judgment because part of the complaint was unverified and a known potential claimant was not properly served. The Government filed an amended complaint, verified the relevant factual allegations, directly served known potential claimants, and published notice. No claimant filed a claim or otherwise responded; the clerk entered default, and the Government moved again for default judgment. The magistrate judge recommended that the district court accept the findings and grant the motion.
Remand instructions
The district court should accept the report and recommendation and grant the Government's motion for default judgment and entry of a final order of forfeiture. The recommendation remained subject to objections and district-court review.