United States District Court, D. Massachusetts
MEMORANDUM AND ORDER ON MOTION TO DISMISS
ALLISON D. BURROUGHS U.S. DISTRICT JUDGE.
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.
FACTUAL AND PROCEDURAL BACKGROUND
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).
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.
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. ¶
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.
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].
Subject Matter Jurisdiction
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.
Sufficiency of the Complaint
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