United States v. Schmitz

153 F.R.D. 136, 1994 U.S. Dist. LEXIS 1812, 1994 WL 51504
CourtDistrict Court, E.D. Wisconsin
DecidedFebruary 18, 1994
DocketNo. 93-Cr-186
StatusPublished
Cited by6 cases

This text of 153 F.R.D. 136 (United States v. Schmitz) is published on Counsel Stack Legal Research, covering District Court, E.D. Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Schmitz, 153 F.R.D. 136, 1994 U.S. Dist. LEXIS 1812, 1994 WL 51504 (E.D. Wis. 1994).

Opinion

ORDER

GOODSTEIN, United States Magistrate Judge.

Currently pending before the court are two motions for the return of property. In one, the defendants seek the return of approximately $86,500 in funds and securities which were seized by the United States Marshal pursuant to seizure warrants issued on October 19, 1993; in the other, they request the return of four vehicles initially seized by law enforcement officers for the City of Wau-watosa on August 1, 1993.

A federal grand jury sitting for the Eastern District of Wisconsin issued a six count indictment on October 19,1993, charging Eugene and Elaine Schmitz in count one and Eugene Schmitz alone in count two with structuring financial transactions in violation of 31 U.S.C. §§ 5322(a) and 5324(a)(3); charging Eugene Schmitz alone in count three with conspiring to distribute marijuana, in violation of 21 U.S.C. § 846, and alone in count four with distributing marijuana, in violation of 21 U.S.C. § 841(a)(1) and alone in count five with the possession of cocaine with the intent to distribute, in violation of 21 U.S.C. § 841(a)(1); and charging Elaine Schmitz alone in count six with the possession of marijuana, in violation of 21 U.S.C. § 844. The indictment also includes a forfeiture provision identifying, for forfeiture at the conclusion of the criminal proceedings, the property which is the subject of the pending motions. The defendants were arraigned before this court on November 10, 1993 and pleaded not guilty. A jury trial will be scheduled to commence before the Honorable Thomas J. Curran following the resolution of all pretrial motions.

Motion for the Return of Approximately $86,500 in Funds

Turning first to the motion for the return of the funds and securities, the defendants move for the return of their assets under the authority of Fed.R.Crim.P. 41(e), challenging the legality of the seizure warrants. The defendants also contend that the continued restraint of the assets is a hardship, and [138]*138impedes their ability to retain counsel of their choice. Thus, the initial question raised by the defendants’ motion is whether the seizures were authorized by statute, and, if the initial seizures were lawful, has the government demonstrated an interest in the continued restraint of the assets.

The government contends that the court can only examine the lawfulness of the seizure and not the propriety of forfeiture, which is necessarily intertwined with the government’s interest in the continued restraint of the assets. The government’s position fails to take note of the 1989 amendments to Rule 41(e) which added the following italicized language and now provide that “[a] person aggrieved by an unlawful search and seizure or by the deprivation of property may move the district court ... for the return of the property on the ground that such person is entitled to lawful possession of the property.” Therefore, a “person whose property has been lawfully seized may seek return of property when aggrieved by the continued possession of it.” See Notes of Advisory Committee accompanying the 1989 Amendment to Fed.R.Crim.P. 41. See also, In re Seizure of Four (4) DC-3 Aircraft, 134 F.R.D. 251 (E.D.Wis.1991); In re 4330 North 35th St., 142 F.R.D. 161 (E.D.Wis.1992).

The court is thus satisfied that, regardless of whether the initial seizure was lawful or unlawful, the court is empowered under Fed. R.Crim.P. 41(e) to reach both issues; the lawfulness of the initial seizure and the continued retention of the property. The court notes that a motion for the return of property which is filed after an indictment is filed shall also be treated also as a motion to suppress under Fed.R.Crim.P. 12. See Fed. R.Crim.P. 41(e). However, it is clear from the parties’ submissions, including the defendants’ separate suppression motion, that the present motion is to be treated solely as a motion for the return of the assets under Rule 41(e).

Lawfulness of the Initial Seizure

The government is seeking forfeiture of the assets named in the indictment under the authority of 21 U.S.C. § 853. The government may seek the forfeiture of drug trafficking proceeds under 21 U.S.C. § 853(a), or of substitute property under the authority of § 853(p) if property which would be subject to forfeiture under § 853(a) is not available for any of the reasons enumerated in § 853(p). The defendants contend that the $86,500 in assets which the defendants want returned are solely substitute assets, subject to forfeiture only under § 853(p). Although the government argues that it has authority under the statute to have substitute assets restrained and forfeited, it does not specifically state whether, or to what extent, it is proceeding in forfeiture entirely under § 853(p). In other words, are all of the assets in question substitute assets? Since the parties focus on the restraint of substitute assets, the court will similarly focus solely upon the restraint of substitute assets forfeitable under § 853(p).

On October 19, 1993, acting upon an application and affidavit by IRS Special Agent Richard Arkenberg, Magistrate Judge Robert Bittner issued a warrant authorizing the seizure of approximately $86,500 in funds and securities held in a variety of bank and investment accounts owned by the defendants. That same day, October 19, 1993, a grand jury for the Eastern District of Wisconsin returned an indictment which included a forfeiture provision specifically identifying the seized assets for forfeiture. The criminal forfeiture statute, 21 U.S.C. § 853, contains two sections which deal with the preconvietion restraint or seizure of assets. Section 853(e)(1) provides in pertinent part, that:

Upon application of the United States, the court may enter a restraining order or injunction, require the execution of a satisfactory performance bond, or take any other action to preserve the availability of property described in subsection (a) of this section for forfeiture under this section—

Section 853(f) provides that the government may request a seizure warrant for property subject to forfeiture upon conviction if the court determines “that an order under subsection (e) ...

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Cite This Page — Counsel Stack

Bluebook (online)
153 F.R.D. 136, 1994 U.S. Dist. LEXIS 1812, 1994 WL 51504, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-schmitz-wied-1994.