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United States v. $49

United States District Court, D. Massachusetts

March 19, 2019

UNITED STATES OF AMERICA, Plaintiff,
v.
$49, 400 IN UNITED STATES CURRENCY SEIZED AT LOGAN AIRPORT, Defendant.

          MEMORANDUM AND ORDER ON MOTION TO DISMISS

          ALLISON D. BURROUGHS U.S. DISTRICT JUDGE.

         This case was brought by the United States seeking in rem forfeiture of $49, 400 in United States currency seized from Robert N. Kenny at Logan International Airport. The United States alleges that the currency is subject to forfeiture pursuant to 21 U.S.C. § 881(a)(6) because it was furnished or intended to be furnished in exchange for a controlled substance. [ECF No. 1]. Currently pending before the Court is CLK Global, LLC, d/b/a Royal Supply's (“Claimant”) motion to dismiss. [ECF No. 6]. Claimant contends that the Court lacks subject matter jurisdiction to hear this complaint and that the complaint fails to state sufficiently detailed facts to support a reasonable belief that the Government will be able to meet its burden of proof at trial. [Id.]. For the reasons stated herein, Claimant's motion to dismiss is denied.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         The following facts are drawn from the complaint, [ECF No. 1], and the affidavit of David X. O'Neill, Special Agent with the United States Drug Enforcement Agency (“DEA”), [ECF No. 1-3], the well-pleaded allegations of which are taken as true for the purposes of evaluating the motion to dismiss. See, e.g., United States v. One Check in the Amount of $47, 000, No. 14-cv-14261, 2016 WL 7197372, at *6 (D. Mass. Dec. 9, 2016).

         On May 1, 2018, at approximately 4:00 pm, the Massachusetts State Police (“MSP”) stopped Mr. Kenny at a Transportation Security Administration (“TSA”) checkpoint in Logan International Airport after a routine TSA screening revealed that he was traveling with a large amount of bundled cash in his backpack. [ECF No. 1-3 ¶¶ 7-10]. The currency was packaged in several separate bundles bound by rubber bands and emanated a scent of marijuana. [Id.]. During questioning by MSP, Mr. Kenny readily revealed that he had flown into Boston that morning, had met with a business contact in Bellingham, MA to collect payment for services rendered, and now planned to fly back to San Francisco with the currency on a same day flight. [Id. ¶¶ 11-12]. Mr. Kenny identified himself as the Chief Executive Officer of a San Francisco-based company called Royal Supply, which he said specializes in “products packaging and marketing . . . focusing on food and other items.” [Id. ¶ 11]. He furnished a business card to this effect. [Id.].

         Mr. Kenny informed the officers that he had met with a man named “Chris” in what he believed was Bellingham, MA, but could not provide further information on the location or the business “Chris” runs that had required Royal Supply's services. [Id. ¶¶ 12-13]. When probed further, Mr. Kenny stated, “I'm not sure if [Chris] even has a company.” [Id.]. Mr. Kenny did not explain why he had been paid in cash but did state that he was unable to deposit the currency because Royal Supply uses Chase Bank, which has no branches in Massachusetts. [Id. ¶ 14]. The Government later subpoenaed Verizon Wireless for information on calls made to and from Mr. Kenny's cell phone leading up to the transaction in Bellingham. [Id. ¶ 20]. The records indicated that Mr. Kenny had recently been in contact with a man named “Chris” who resides in Franklin, MA and is known to the DEA as a suspected marijuana trafficker. [Id.]. The subpoenaed cell phone records also indicated that Mr. Kenny had been in contact with a second individual in the Bellingham area who has a record of arrests for marijuana-related charges. [Id. ¶ 21].

         While MSP questioned Mr. Kenny, Special Agent O'Neill reviewed Royal Supply's website, www.RoyalSupplyWholesale.com. [Id. ¶ 16]. The website revealed that the company “specializes in packaging for marijuana related items” and contained references to the marijuana trade, including the motto, “We've got what you need, except for the weed, ” and a telephone number of 1-888-PACK-420. [Id. ¶ 16]. Law enforcement then brought the currency to a secured location where there was a police dog trained to detect the scent of controlled substances. [Id. ¶¶ 18-19]. The dog proceeded to locate the currency in the room, which indicated the presence of narcotics odor. [Id.]. Additional investigation into Royal Supply cast doubt upon whether the business has a storefront, warehouse or other physical address, and a review of the company's Chase Bank account indicated that it had made 29 cash deposits totaling $159, 852 in a period of less than five months. [Id. ¶¶ 22-23].

         On October 25, 2018, the United States instituted this in rem action for forfeiture of the seized currency. [ECF No. 1]. On November 26, 2018, Claimant filed its verified statement of interest asserting its claim to the currency, [ECF No. 3], and on December 17, 2018, Claimant filed the pending motion to dismiss alleging (1) a lack of in rem jurisdiction because no arrest warrant in rem had been issued and (2) a failure to “state sufficiently detailed facts to support a reasonable belief that the Government will be able to meet its burden of proof at trial, ” [ECF No. 6 at 1]. On February 6, 2019, the Government filed its opposition. [ECF No. 8]. On February 6, 2019, the Court issued a warrant in rem for the arrest of the currency. [ECF No. 9].

         II. DISCUSSION

         A. Subject Matter Jurisdiction

         At the time Claimant filed its motion to dismiss, the Court had not issued a Warrant and Monition in rem for the arrest of the currency. [ECF No. 6 at 1-2]. Pursuant to Rule G(3)(b) of the Federal Rules of Civil Procedure, Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture, the Court issued a warrant on February 6, 2019. [ECF No. 9]. Claimant's argument that the Court lacks subject matter jurisdiction to hear this forfeiture action, [ECF No. 6 at 2], is therefore moot.

         B. Sufficiency of the Complaint

         Claimant argues that the complaint should be dismissed because it fails to state “sufficiently detailed facts to support a reasonable belief” that the Government will prevail at trial. [Id. at 1]. He further contends that the conclusion that the currency is traceable to an instance of drug trafficking is unfounded because it (1) does not account for Mr. Kenny's candor regarding his identity and travel plans; (2) relies on evidence that may not be conclusive proof of illegal activity; and (3) fails to allege a substantial connection between the seized currency and a particular incidence of criminal activity. See [Id. at 6-8]. The Government responds broadly to these arguments by stating that an attack on the sufficiency of the evidence is not appropriate at the pleading stage when the Court is ...


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