United States v. $610,210 in United States Currency

Background

The United States brought a civil forfeiture action against $610,210 seized from Johnny De Los Santos’s apartment. A civil forfeiture action seeks to take property allegedly connected to criminal activity; the property itself is named as the defendant. The Government alleged that the money was proceeds of narcotics trafficking. The opinion also describes the discovery of currency, cocaine residue, a substance containing heroin, a ledger consistent with narcotics trafficking, and a money-counting device.

De Los Santos received a June 10, 2021 notice stating that he had until July 15, 2021, to file a claim contesting the forfeiture. He had retained Lorraine Belostock as counsel. She did not file a claim by the deadline. After Belostock left her firm, another lawyer learned that the Government had not agreed to the extension that Belostock had apparently led the firm to expect. On August 24, 2021, the court entered a judgment of forfeiture in the Government’s favor. De Los Santos then moved under Federal Rule of Civil Procedure 60(b)(1), which permits relief from a judgment in certain circumstances including excusable neglect, and submitted a proposed late claim and answer.

Claim-filing deadline

The court held that De Los Santos had not shown good cause to extend the deadline under Supplemental Rule G, the procedural rule governing civil forfeiture actions. A person seeking to contest a forfeiture generally must file a claim asserting an interest in the property. The court explained that missing a clear deadline because of a lawyer’s inattention ordinarily is not excusable neglect. Clients generally remain responsible for their lawyers’ acts and omissions in civil litigation.

The court found that the notice clearly stated the filing deadline and that De Los Santos offered no legally sufficient explanation for his former lawyer’s failure to meet it. The court therefore ruled that De Los Santos could not file an untimely claim or answer. Without a timely claim, he lacked the statutory standing—the legal ability provided by the forfeiture statute to contest the property’s forfeiture—needed to challenge the action.

Request to vacate the judgment

The court separately considered the request to vacate the forfeiture judgment under Rule 60(b)(1). Applying the factors used for this type of request, the court found that De Los Santos’s default was willful because he had no satisfactory explanation for missing the deadline. The court also found that he had not shown a meritorious defense. His proposed answer asserted, among other things, that officers lacked probable cause, that the seizure warrant was invalid, and that he was an innocent owner, but he supplied no evidence supporting those defenses. The Government did not argue that vacating the judgment would cause prejudice, but the court said that the lack of prejudice did not overcome the other factors.

Disposition

The court denied De Los Santos’s motion to vacate the judgment of forfeiture. It also ruled that he could not file a late claim or answer. The opinion did not decide, after a trial on the merits, whether the currency was actually proceeds of narcotics trafficking; the judgment remained in place because De Los Santos failed to meet the procedural requirements for contesting the forfeiture and did not qualify for relief from the judgment.