United States v. $358,613.00, United States Currency

703 F. Supp. 452, 1989 U.S. Dist. LEXIS 757, 1989 WL 5200
CourtDistrict Court, W.D. North Carolina
DecidedJanuary 12, 1989
DocketNo. C-C-88-35-P
StatusPublished
Cited by3 cases

This text of 703 F. Supp. 452 (United States v. $358,613.00, United States Currency) is published on Counsel Stack Legal Research, covering District Court, W.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. $358,613.00, United States Currency, 703 F. Supp. 452, 1989 U.S. Dist. LEXIS 757, 1989 WL 5200 (W.D.N.C. 1989).

Opinion

ORDER

ROBERT D. POTTER, Chief Judge.

THIS MATTER is before the Court on (1) Plaintiffs Motion for Change of Venue, filed September 28, 1988, and (2) “Defendant's” Motion to Dismiss, filed October 12, 1988, pursuant to Rule 12(b) of the Federal Rules of Civil Procedure.1

This is an action in rem brought by the United States government (“the Government”), pursuant to Section 881 of Title 21, United States Code, against three hundred fifty-eight thousand, six hundred thirteen dollars ($358,613.00) in United States currency. On January 22, 1988, the Government filed its Complaint for Forfeiture In Rem. In the Complaint, the Government alleges that two batches of seized currency — which total $358,613.00 — are proceeds traceable to exchanges for controlled substances or were intended to be used to facilitate exchanges of controlled substances.

The first batch of currency — equaling $16,062.00 — was seized on March 30, 1987 when Vice Officers of the Charlotte Police Department executed a search warrant on the Charlotte, North Carolina, residence of Carroll Lee Morrow (“Morrow”). Along with the currency, (1) three hundred and forty-eight dollars ($348.00) in United States Department of Agriculture food stamps, (2) precision weight scales, and (3) certain controlled substances, including 6.49 grams of cocaine, 334 dosage units of amytal sodium, and 150 dosage units of Percodan II, were allegedly discovered and seized.

The second batch of currency — equaling $342,551.00 — was seized on April 9, 1987 when a warrant for Morrow’s arrest was executed; Morrow was arrested while he was staying in Room 313 of the Heritage Lodge — formerly the Econo Lodge — in Fort Mill, South Carolina. Along with this second batch of currency, (1) drug paraphernalia and (2) more controlled substances, including 14.68 grams of cocaine, [453]*45340V2 tablets of dialudid, 30 capsules of amobarbital, 3 capsules and 1 tablet of codeine, and 22 tablets of valium, allegedly were discovered and seized.

On July 6, 1987, a five count superseding indictment was filed in this District charging Morrow with various offenses, including possession of cocaine, oxycodene (Percodan), and Amobarbital with intent to distribute in violation of Section 841(a)(1) of Title 21, United States Code.2 The superseding indictment only charged Morrow with offenses related to the search of his Charlotte, North Carolina, residence; Morrow could not be, and was not, prosecuted in this District for offenses related to the South Carolina search and seizure. After a jury trial conducted in Statesville, North Carolina, the undersigned presiding, Morrow was convicted of simple possession of cocaine — a lesser included offense — and was sentenced to a one-year term of imprisonment.

On January 22, 1988 — the day the Government’s forfeiture Complaint was filed — United States Magistrate Barbara H. DeLaney issued a warrant for arrest in rem of the Defendant currency. On February 2,1988, the United States Marshal filed a process receipt and return indicating that the Defendant currency is now in the custody of the United States Marshal pending disposition of this case.3

On February 11, 1988, Morrow filed a claim asserting his property rights in the Defendant currency and demanding its return. On March 15, 1988, Morrow timely filed an answer to the Government’s Complaint. Morrow has specifically denied many of the Government’s allegations, and he has also raised eight affirmative defenses, including an assertion that this Court lacks subject-matter jurisdiction over the second batch of currency because it was seized in South Carolina.4

On September 28, 1988, the Government filed a Motion for Change of Venue seeking to transfer this case to the District of South Carolina, pursuant to Sections 1404 and 1406 of Title 28, United States Code. In support of its motion, the Government notes that it is at least arguable that Section 1395(b) of Title 28, United States Code, requires forfeiture actions to be prosecuted in the district where the property is first found or seized. 28 U.S.C.A. § 1395(b) (West 1976); see United States v. One 1974 Cessna Model 310R Aircraft, 432 F.Supp. 364 (D.S.C.1977) (if property is seized outside of any district, then pursuant to § 1395(c) the forfeiture proceeding may be held in any district into which the property is brought, but § 1395(c) does not apply to seizures occurring within a district); cf. United States v. One(1) Caribou Aircraft Reg. No. N-1017-H, 557 F.Supp. 379 (D.P.R.1983). Therefore, the Government urges this Court to transfer this action to the [454]*454District of South Carolina, where the second batch of currency was seized, to avoid any future disputes on the issue of where this action should be properly prosecuted.

The Government has stipulated that the first batch of currency — the $16,062.00 seized in Charlotte, North Carolina — will constitute that much of the twenty thousand dollars ($20,000.00) paid to attorney Edward T. Hinson, Jr., who agreed to represent Morrow in United States v. Morrow, C-CR-87-37 (Morrow’s criminal case in this District on the superseding indictment).5 The Government has also represented to this Court that it will not seek to recover the monies paid to Hinson. Thus, it appears that the Government will not need to present any evidence concerning the first batch of currency — the $16,062.00 —since that money is not in controversy any longer.

This Court is of the opinion that the Government’s stipulation concerning the first batch of currency removes one barrier preventing this Court from transferring this action to South Carolina. The first batch of currency was found in this District, and, therefore, any forfeiture prosecution relating to that first batch would necessarily have to be conducted in this District, pursuant to Section 1395(b). The Government has indicated, however, that it will not be seeking forfeiture of the first batch of currency, which has been already paid to Hinson as compensation for his professional services. Therefore, this Court holds that Section 1395(b) does not require the Government to prosecute in this District what effectively remains in controversy — the second batch of currency, which was seized in South Carolina. On the contrary, it appears that Section 1395(b) requires the Government to prosecute in the District of South Carolina its forfeiture action against the second batch of currency. United States v. One 1974 Cessna Model 310R Aircraft, 432 F.Supp. at 367-369.

Claimant Morrow in his Motion to Dismiss, filed October 12, 1988, argues that Section 1395(b) not only requires the Government to prosecute in the District of South Carolina its forfeiture action against the second batch of currency. Morrow contends that Section 1395(b) also limits the subject-matter jurisdiction of the district courts in forfeiture proceedings; Morrow concludes that this Court has no subject-matter jurisdiction over the case and, therefore, cannot transfer anything to the District of South Carolina because “there is nothing to transfer.”

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703 F. Supp. 452, 1989 U.S. Dist. LEXIS 757, 1989 WL 5200, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-35861300-united-states-currency-ncwd-1989.