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Nature of Suit Code: 625
Nature of Suit: Drug Related Seizure of Property
Cause of Action: 

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In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 15-2857

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

FUNDS IN THE AMOUNT OF $271,080,

Defendant.

Appeal of:

PEDRO CRUZ-HERNANDEZ and

ABRAHAM CRUZ-HERNANDEZ,

Claimants.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 13 C 126 — Joan B. Gottschall, Judge.

____________________

ARGUED JANUARY 26, 2016 — DECIDED MARCH 17, 2016

____________________

Before WOOD, Chief Judge, and BAUER and POSNER, Circuit 

Judges.

WOOD, Chief Judge. When Chicago police officers 

searched a van registered to Pedro Cruz-Hernandez, they 

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found $271,080 in currency. They had a warrant that was 

based on a drug dog’s alerting to the presence of drugs in the 

van, but they found no drugs. The government nonetheless 

initiated a civil forfeiture action against the money, contending that it was derived from, or had been used to facilitate, 

drug trafficking. Pedro and his brother, Abraham CruzHernandez, contested the forfeiture, maintaining that they 

had lawfully earned the money. The district court entered 

summary judgment in favor of the government, and the 

brothers have appealed. We conclude that a jury reasonably 

could find that the government’s evidence fails to establish, 

even by a preponderance, that the money is substantially 

connected to drug trafficking. We thus vacate the judgment 

and remand for further proceedings.

I

Our story begins when Chicago police officers responded 

to an emergency call concerning a home invasion at the 

house where Pedro and Abraham lived with six others. In a 

bedroom of the house the police saw a handgun, a digital 

scale, and a small amount of marijuana in a baggie. A police 

drug dog signaled the presence of drugs in Pedro’s van, 

which was parked outside the house. After obtaining a

search warrant, the police discovered in the van a safe containing $271,080 in currency and two pages of handwritten 

notes including dates and numbers. The cash was bundled 

with rubber bands in stacks of $5,000. A second dog alerted 

to the safe. No drugs, however, were found in either the van 

or the safe. 

The police interviewed Pedro after they found the money; Abraham was not present at the house that night. Pedro 

told them that armed intruders had broken into the house, 

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No. 15-2857 3

tied up the occupants, and demanded money and drugs. After the intruders had left, Pedro decided to move his brother’s safe from the basement to the van in case they returned. 

He said that he did not know what was inside the safe but 

that his brother had told him it contained “important papers.” Pedro maintained that the money was not his and that 

he did not know whose it was. 

II

The government apparently brought no criminal charges 

against the brothers or anyone else in the house, but it 

sought forfeiture of the money, see 21 U.S.C. § 881(a)(6), contending that it was proceeds of, or had been used or was intended to be used to facilitate, drug trafficking. Pedro and 

Abraham contested the forfeiture, see 18 U.S.C. § 983(a), and 

submitted affidavits attesting that the money is their joint 

savings from years of working and that they had not been 

involved in any criminal activity.

The government moved for summary judgment on two 

grounds. First, it argued that Pedro and Abraham lack the 

necessary ownership interest to establish standing to contest 

the forfeiture. See United States v. Funds in the Amount of 

$239,400, 795 F.3d 639, 645 (7th Cir. 2015). The government 

reasoned that the claimants had disavowed ownership of the 

money and thus had lost the ability to demonstrate standing. 

In support of this contention, the government pointed to 

Pedro’s assertion to the police that he did not know whose 

money it was. The government also pointed to two alleged 

disavowals of ownership by Abraham: (1) a record created 

by U.S. Immigration and Customs Enforcement (ICE) six 

weeks before the police seized the safe, in which Abraham 

had said that he did not have any “equities” in the United 

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States, and (2) Abraham’s application for cancellation of removal, filed with the assistance of immigration counsel six 

months after the seizure, in which he lists only $2,000 in 

“cash assets.” The government represented that Pedro and 

Abraham, when deposed, had testified that they told the 

truth to the police and to immigration officials. 

Second, the government maintained that even if the 

brothers have standing to challenge the forfeiture, a jury 

could not reasonably conclude that the evidence does not 

establish by a preponderance that the money is substantially 

connected to drug trafficking. That convoluted phrasing is 

necessary because in a civil-forfeiture action it is the government, as plaintiff, that bears the burden of proving the 

money’s connection to drug trafficking; claimants must establish standing but are not required to prove “legitimate” 

ownership. See $239,400, 795 F.3d at 646. The government 

pointed to the circumstances in which the currency was 

found—in a safe to which a drug dog had alerted, bundled 

in stacks, along with the handwritten notes the government’s 

lawyer called a “drug ledger,” and near a house containing 

apparent drug paraphernalia. It also relied on tax records 

and the brothers’ disclosures about their income, which the 

government argued was too low to permit the accumulation 

of such a large sum. 

The brothers responded that their testimony of ownership is enough to establish standing. On the merits, they argued that the government was not entitled to summary 

judgment because a genuine dispute of fact exists about the 

connection of the money to drug trafficking. The government’s attempt to base the necessary connection on the paraphernalia found in the house, they said, was undermined by 

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the facts that three other adults (and three minors whose ages we do not know) lived in the house and that no drugs or 

drug paraphernalia were found in the van or the safe. They 

further contended that the government had no evidence to 

show that the drug dog’s alert to the safe was reliable. Nor 

did the government have any evidence that the supposed 

“ledger” had anything to do with drugs. And in any event, 

they said, the facts are contested: they testified that the 

handwritten notes relate to money sent to Mexico to build a 

home there, and they pointed to evidence that they earned 

the money legally and were not drug traffickers. 

The district court initially denied the government’s motion for summary judgment. It found that the brothers had 

standing to oppose the forfeiture. On the merits, it thought 

that their affidavits stating that they had not used or intended to use the money in drug trafficking but had earned it

through work over many years created a genuine dispute 

about a connection between the currency and drug trafficking. Yet, in some tension with those observations, the court 

also opined that the brothers probably lacked sufficient evidentiary support to overcome summary judgment on “the 

merits of their claim of ownership” because of what the 

court characterized as their previous disavowals of ownership. It ordered the brothers to show cause why summary 

judgment should not be entered for the government because 

of a “lack of evidentiary support for their ownership claim.”

In response the brothers submitted a memo supported by 

two additional affidavits. Pedro explained his disavowal of 

ownership to the police by adding that he had given his cash 

savings to Abraham and had not known exactly where 

Abraham kept the money. Abraham swore that when he 

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listed his “cash assets” on the application for cancellation of 

removal the police were in possession of the money and he 

did not realize that his legal claim to money he did not physically possess counted as a “cash asset.” 

Based on this record, the district court granted summary 

judgment for the government. It found that the additional 

affidavits submitted by the brothers were inconsistent with

their prior sworn testimony. Pedro’s second affidavit contradicted, in the court’s view, his deposition testimony indicating that he had learned from Abraham on the night of the 

seizure that his money was in the safe. And because Abraham had been represented by counsel when he applied for 

cancellation of removal, the court discredited his affidavit 

testimony that when completing the application he had not 

understood his legal claim to the money to be a “cash asset.” 

Invoking the “sham-affidavit” rule, see United States v. Funds 

in Amount of One Hundred Thousand One Hundred & Twenty 

Dollars ($100,120.00), 730 F.3d 711, 718 (7th Cir. 2013), the 

court concluded that the affidavits did not create a genuine 

dispute of fact regarding the brothers’ ownership. The court 

ended by concluding that the government had “pointed to 

substantial circumstantial evidence indicating that the 

claimants’ interest in the money is not legitimate and that the 

money is connected to criminal activity.”

III

On appeal the brothers first argue that it was error for the 

district court to invoke the sham-affidavit rule to discredit 

their second affidavits explaining their earlier statements. 

Relying on McCann v. Iroquois Mem'l Hosp., 622 F.3d 745, 

750–51 (7th Cir. 2010), they argue that the sham-affidavit rule 

applies only when a change in testimony is “incredible and 

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No. 15-2857 7

unexplained.” We agree with the brothers that the shamaffidavit rule was misapplied here. We have emphasized 

that, in light of the jury’s role in weighing credibility, this 

rule is to be used with “great caution.” Bank of Ill. v. Allied 

Signal Safety Restraint Sys., 75 F.3d 1162, 1169 (7th Cir. 1996). 

The rule “is designed to avoid sham factual issues and prevent parties from taking back concessions that later prove illadvised.” McCann, 622 F.3d at 751. Changes in testimony 

normally affect the witness’s credibility rather than the admissibility of the testimony, and thus the sham-affidavit rule 

applies only when a change in testimony “is incredible and 

unexplained,” not when the change is “plausible and the 

party offers a suitable explanation such as confusion, mistake, or lapse in memory.” Id. (quotation marks and citation 

omitted); accord Cook v. O'Neill, 803 F.3d 296, 298 (7th Cir. 

2015); Patton v. MFS/Sun Life Fin. Distribs., Inc., 480 F.3d 478, 

488 (7th Cir. 2007); Commercial Underwriters Ins. Co. v. Aires 

Envtl. Servs., Ltd., 259 F.3d 792, 799 (7th Cir. 2001). 

Abraham’s explanation for his answer on the immigration form is not only plausible, but is correct. We suspect that 

many people—in particular immigrants completing a form 

for ICE—would not be aware that a legal claim is an asset. 

But whether they would or not, a legal claim—even a claim 

to money—is not itself a “cash asset.” See CASH, Black's 

Law Dictionary (10th ed. 2014) (defining cash as “1. Money 

or its equivalent; 2. Currency or coins, negotiable checks, and 

balances in bank accounts.”). Moreover, when deposing 

Abraham the government’s lawyer did not ask about his understanding of a “cash asset” or whether his attorney had 

explained the definition of that term. There is no reason, 

therefore, to reject out-of-hand Abraham’s deposition testimony that he had been truthful in his immigration filings. 

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Pedro’s explanation for any perceived contradictions in 

his testimony also is plausible. Contrary to the district 

court’s conclusion, Pedro’s affidavit testimony that he did 

not know where Abraham kept his money does not necessarily contradict his deposition testimony that he learned the 

night of the seizure that his money was in the safe. His affidavit may mean only that he was unaware of the money’s 

location until Abraham informed him that it was in the safe. 

Pedro’s affidavit testimony can be read as a plausible explanation of his denial of ownership to the police. Pedro testified at his deposition that before the police arrived Abraham 

had spoken to him on the phone and said there were “important papers” in the safe. The government later asked if 

Pedro had learned from his brother that night that it was his 

money in the safe and Pedro answered yes. The government 

never clarified, however, whether Pedro learned that it was 

his money during that same conversation with Abraham (before the police came) or in a second conversation later that 

night (after Pedro’s interview with the police). If it was later 

that night, then Pedro never knowingly disavowed ownership to the police and thus made no contradictory statements 

in any sworn testimony. In any event, the currency was 

found in Pedro’s possession, and in his various statements 

there are no “contradictions so clear that the only reasonable 

inference was that the affidavit was a sham designed to 

thwart the purposes of summary judgment.” Castro v. DeVry 

Univ., Inc., 786 F.3d 559, 571 (7th Cir. 2015). 

The second issue on appeal is whether the district court 

erred in requiring the brothers to prove ownership beyond 

what is necessary for standing. Relying on Funds in the 

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No. 15-2857 9

Amount of $239,400, 795 F.3d at 645, they argue that the district court impermissibly shifted the burden of proof from 

the government to them by requiring them to prove legitimate ownership and granting summary judgment to the 

government when it concluded that they could not. 

Again we agree with the brothers. Once a claimant has 

submitted evidence establishing standing, the burden shifts 

to the government as plaintiff to prove by a preponderance 

of the evidence that seized assets are subject to forfeiture. 

See Funds in the Amount of $239,400, 795 F.3d at 645–47. Requiring a claimant to demonstrate legitimate ownership is 

“tantamount to demonstrating that property is not subject to 

forfeiture,” and is an impermissible shifting of the burden of 

proof. Id. at 646 (internal quotation marks and citation omitted); see also United States v. $557,933.89, More or Less, in U.S. 

Funds, 287 F.3d 66, 77, 79 (2d Cir. 2002); United States v. Borromeo, 995 F.2d 23, 26 (4th Cir.), modified in unrelated part on 

pet. for reh’g, 1 F.3d 219 (4th Cir. 1993). We do not dispute that 

there are situations in which claimants must prove ownership beyond the requirements of standing. For example, 

once the government has met its burden of proving the 

property is subject to forfeiture, a claimant may raise the defense of being an innocent owner (in other words, that he 

did not know about the illegal use of his property), and in 

that case the burden shifts to the claimant to prove legitimate ownership. See United States v. 5 S 351 Tuthill Rd., Naperville, Ill., 233 F.3d 1017, 1026 (7th Cir. 2000). But this is not 

such a case. 

Finally, we think a jury reasonably could find that the 

government failed to meet its burden of proving by a preponderance of the evidence that this money is substantially 

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connected to drug trafficking. There is evidence in the record 

that supports the brothers’ testimony that they earned the 

money legally. They documented income since 2000 that between them totaled just over $680,000. After subtracting the 

money found in the safe and all other expenses described in 

their depositions and other records, the brothers had approximately $320,214—roughly $1,026 each per month—left 

to cover living expenses. The government pointed to no evidence suggesting that any of the brothers’ evidence of income is fabricated or that they have lavish spending habits. 

Because the brothers realistically could have saved the 

$271,080 at issue, there is a genuine dispute of fact that precludes summary judgment for the government. 

See $100,120.00, 730 F.3d at 718–19; United States v. $11,500.00 

in U.S. Currency, 710 F.3d 1006, 1013–15 (9th Cir. 2013); cf. 

United States v. Funds in Amount of Thirty Thousand Six Hundred Seventy Dollars ($30,670.00), 403 F.3d 448, 455–70 (7th 

Cir. 2005) (affirming grant of summary judgment largely because seized funds plus claimant’s documented expenditures 

exceeded his stated income).

It is also telling that the government has presented virtually no evidence that the brothers are involved in drug trafficking. There was nothing to indicate past or current drug

dealing by the brothers or anyone else living with them in 

the house, nor was there any suggestion that either brother 

used the bedroom where the apparent drug paraphernalia 

was found. Though drug dogs had alerted to the safe and 

currency, the government did not submit to the court any 

evidence of the dogs’ training, methodology, or field performance. See United States v. Ten Thousand Seven Hundred Dollars & No Cents ($10,700.00) in U.S. Currency, 258 F.3d 215, 

230 (3d Cir. 2001) (deciding that because government preCase: 15-2857 Document: 25 Filed: 03/17/2016 Pages: 12
No. 15-2857 11

sented no evidence of particular dog’s training and accuracy 

there was no record basis for concluding that drug dog’s 

alert bolsters the government’s case). Neither did the government point to evidence (e.g., an experienced drug investigator’s opinion) to substantiate its assumptions that the 

notes found in the safe were a “drug ledger” or that counting and bundling currency is something that only drug dealers would do. “Absent other evidence connecting the money 

to drugs, the existence of money or its method of storage are 

not enough to establish probable cause for forfeiture,” much 

less enough to meet the now-heightened standard of a preponderance of the evidence. United States v. $506,231 in U.S. 

Currency, 125 F.3d 442, 452–54 (7th Cir. 1997); $10,700, 258 

F.3d at 232–33. 

Courts have concluded that the government failed to 

meet its burden in cases with better evidence than this of alleged drug connections. See $506,231, 125 F.3d at 52–54 

(overturning grant of summary judgment for government 

where large amount of currency was “unusually” stored at 

pizzeria, drug dog had alerted to currency, and informant 

had reported that cocaine was delivered to pizzeria because, 

taken together, this evidence could not establish probable 

cause to believe that money was connected to drug trafficking); $10,700, 258 F.3d at 227–33 (concluding that government had not met burden where drug dog had alerted to, 

and chemical tests showed, drug residue on large amounts 

of currency found in bundled stacks in car rented by men 

with drug convictions because no drugs were found in car, 

government had submitted no evidence that men currently 

were involved in drug trafficking, and government had not 

submitted comparative evidence of drug dog and chemical 

test reactions to currency in general); United States v. 

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$5000.00 in U.S. Currency, 40 F.3d 846, 848–49 (6th Cir. 1994) 

(concluding that government had not met burden when two 

men, one matching informant’s description of drug dealer 

and the other having prior convictions for drug trafficking, 

were found with large amount of bundled currency, drug 

dog had alerted to currency, and men had flown to New 

York for single day). 

There is a genuine dispute over whether the money in 

this case is substantially connected to drug trafficking; a jury 

reasonably could believe that the government has failed to 

meet its burden to prove that connection. Accordingly, we 

VACATE the judgment and REMAND for further proceedings.

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