United States v. $150,000 in U.S. Currency

Background

The United States filed a judicial civil-forfeiture action involving $150,000 and $190,000 in cash seized from two safe-deposit boxes in Wisconsin. The complaint alleged that Jing Chen and others used money from an illicit massage business involving commercial sex acts to promote the businesses and conceal the ownership and source of the funds.

The government alleged that Jing Chen and Ying Chen moved the money from Minnesota to Wisconsin, where Fenglan Wu placed it in safe-deposit boxes. The Internal Revenue Service Criminal Investigation Division did not begin administrative forfeiture proceedings for the Wisconsin currency; instead, the government held the money for judicial forfeiture. Jing Chen, Ying Chen, and Fenglan Wu filed verified claims asserting ownership interests in portions of the money. Jing Chen and Ying Chen were later criminally indicted, and the indictment included forfeiture allegations involving the Wisconsin currency and part of other currency.

Motion to Dismiss

Jing Chen moved to dismiss, and Ying Chen moved to join that motion. The court granted the motion to join. The claimants argued that the Civil Asset Forfeiture Reform Act, a federal law known as CAFRA, required the government to provide notice of the seizure and its intent to forfeit the money within 60 days. They argued that the government’s failure to meet that deadline required the money’s return. They also relied on CAFRA’s provision requiring the government to release property and take no further action toward civil forfeiture when certain deadlines are missed.

The claimants noted that the money was seized in May 2018, while this action was filed in September 2021 and the indictment was obtained in November 2021. They also relied on the Department of Justice’s Asset Forfeiture Policy Manual.

Court’s Analysis

The court held that CAFRA’s general rules at 18 U.S.C. § 983 apply only to administrative, or nonjudicial, forfeiture proceedings. Because the government did not begin an administrative forfeiture proceeding for the Wisconsin currency and instead filed a judicial forfeiture action, the court held that neither the 60-day notice deadline nor the provision requiring release of property applied.

The court also held that the Department of Justice policy manual did not create enforceable legal rights for the claimants. In addition, the court found that the manual’s cited deadline applied only when an administrative forfeiture proceeding had been started and was therefore consistent with the court’s analysis.

Disposition

The court denied the Claimants’ Motion to Dismiss. The order did not determine the ultimate ownership of the currency or whether the money was subject to forfeiture. It resolved only the claimants’ argument that CAFRA’s administrative-forfeiture deadlines required dismissal or return of the property.