Court Opinion

ID: 4023351
Source: CourtListenerOpinion
Date Created: 2016-08-10 20:00:35.750905+00
Date Added: 2024-06-11T07:45:03.034090
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 14-1175

                    UNITED STATES OF AMERICA,

                            Appellee,

                               v.

      ASSORTED JEWELRY APPROXIMATELY VALUED OF $44,328.00,

                        Defendant In Rem,

                  ANGEL ABNER BETANCOURT-PÉREZ,

                      Claimant, Appellant.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                 FOR THE DISTRICT OF PUERTO RICO

       [Hon. Camille L. Vélez-Rivé, U.S. Magistrate Judge]

                             Before

                   Lynch, Selya, and Thompson,
                         Circuit Judges.

     Joshua L. Gordon on brief for appellant.
     Mainon A. Schwartz, Assistant United States Attorney, Nelson
Pérez-Sosa, Assistant United States Attorney, Chief, Appellate
Division, and Rosa Emilia Rodríguez-Vélez, United States Attorney,
on brief for appellee.

                         August 10, 2016
            THOMPSON,    Circuit    Judge.        While      executing      a    search

warrant on Angel Abner Betancourt-Pérez's apartment, government

agents found drugs in various quantities, a gun, and assorted

jewelry   valued   at   $44,328.00.      This        civil     forfeiture       action

concerns the jewelry, which Betancourt-Pérez claims belonged to

him lawfully and was unrelated to the illegal drug activities that

are the subject of his criminal case.                Unconvinced, the district

court granted summary judgment to the government and ordered the

jewelry forfeited.      Betancourt-Pérez now appeals.              For the reasons

we explain, we vacate and remand for further proceedings.

                                 BACKGROUND

            For over a year after the government filed a 70-defendant

indictment for the activities of the drug trafficking organization

"El   Castillo,"   Betancourt-Pérez,         a   member      of   the   conspiracy,

remained a fugitive.

            On the day of Betancourt-Pérez's eventual arrest, law

enforcement surveilling his apartment on a tip observed him loading

boxes (in which large quantities of marijuana were later found)

into a vehicle in the parking lot.               After arresting Betancourt-

Pérez,    government    agents     executed      a    search      warrant       in   his

apartment, where it appears Betancourt-Pérez lived solo.                             In

Betancourt-Pérez's kitchen, they found cocaine and marijuana in

various quantities ("behind the refrigerator kitchen cabinet,"

under the sink, in the oven, and in the kitchen closet), a pistol

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(on top of the washer/dryer machine), and a collection of jewelry

(also       "hidden   behind      the    kitchen    cabinet      on   top    of     the

refrigerator").          The jewelry, which is the topic of the present

appeal, consisted of two men's watches, several men's chains and

bracelets, a man's ring, several women's bracelets, and various

other ornaments, together valued at approximately $44,328.

               A second indictment was filed charging Betancourt-Pérez

with drug and firearm counts related to his activities on the day

of his arrest, and then a third charging him for his role in

another unrelated conspiracy to source marijuana from Mexico,

California, and Florida, and distribute it throughout Puerto Rico.

Eventually, Betancourt-Pérez pled guilty to one count from each of

the three criminal cases for conspiracy to possess with intent to

distribute, as well as to one count of possession of a firearm in

furtherance of a drug trafficking crime.1

               On November 1, 2011, the government filed a verified

complaint      for    forfeiture    in    rem    against   the   seized      jewelry,

alleging that the jewelry was subject to civil forfeiture because

it    was    linked    to    Betancourt-Pérez's       illegal     drug      activity.

Betancourt-Pérez intervened in the forfeiture action, averring

that the jewelry was "not related in any way to illegal activity,"

and     that    "[a]ll      of   said    property   belong[ed]        to    Angel    A.

        1
       Betancourt-Pérez's appeal of his criminal sentence is the
subject of a related opinion that we issue today separately.

                                         - 3 -
Betancour[t]-Pérez."        During a brief discovery period, Betancourt-

Pérez responded to the government's interrogatories by asserting

again that all of the jewelry was "either bought by me with the

fruits of my work, a gift, or my mother's belongings which I was

storing for her."

                The government subsequently moved for summary judgment,

which     the    district   court    granted.2      Betancourt-Pérez      timely

appeals.

                                    DISCUSSION

                We review a grant of summary judgment de novo.            Ortiz-

Cameron v. Drug Enf't Admin., 139 F.3d 4, 5 (1st Cir. 1998).

Summary judgment is appropriate where there are no genuine issues

as to any material facts and the moving party is entitled to

judgment as a matter of law.          Fed. R. Civ. P. 56(c).

                The forfeiture provision of the Controlled Substances

Act provides that all money or "other things of value" that are

furnished "in exchange for a controlled substance," and "all

proceeds traceable" to such an exchange are subject to forfeiture.

21   U.S.C.      §   881(a)(6).     Where   the   government's   theory    in   a

forfeiture action is, as it is here, "that the property . . . was

involved in the commission of a criminal offense," the Civil Asset

      2The government alternatively moved to dismiss Betancourt-
Pérez's claim for lack of standing, which the district court
denied.

                                      - 4 -
Forfeiture Reform Act of 2000 ("CAFRA") puts the burden on the

government to prove, by a preponderance of the evidence, that there

is "a substantial connection between the property and the offense."

18 U.S.C. § 983(c)(3).             Although the government must show that

"the property was connected with illegal drug transactions," it

need not "link[] the property to a particular transaction." United

States v. 1933 Commonwealth Ave., 913 F.2d 1, 3 (1st Cir. 1990).

                 The government argues that it has met its burden here

based       on   the   following   facts:   (1)     the   jewelry   was    found   in

Betancourt-Pérez's         kitchen    in    close     proximity     to    controlled

substances,        (2)   Betancourt-Pérez      pled   guilty   to    various    drug

conspiracy counts in his related criminal case, and (3) Betancourt-

Pérez's legitimate earnings were so meager that he could not have

bought the jewelry with his legal income.                  The problem with the

government's case is that only the first two of these facts are

supported by the record, and without the third, the government

falls short of clearing the preponderance-of-the-evidence hurdle.

                 First, a few words about the location of the jewelry and

Betancourt-Pérez's guilty pleas.             As the government has stated,

the jewelry was found hidden in a refrigerator cabinet near a

1,056-gram brick of cocaine.3          Additional drugs and a firearm were

        3
       The Drug Enforcement Administration's investigation report
stated that the jewelry was "behind the kitchen cabinet on top of
the refrigerator," and that the brick of cocaine was found "behind
the refrigerator kitchen cabinet."     Thus, even if the report

                                       - 5 -
also found hidden throughout the kitchen, all facts that support

a possible connection between the jewelry and the illegal drug

activity.   See United States v. $58,422.00 in U.S. Currency, 154
F. App'x 20, 22 (9th Cir. 2005) (noting that the fact that "both

drugs and drug paraphernalia were found in close proximity to some

of the [seized] assets" is persuasive evidence that the assets

were acquired from drug trafficking); see also United States v.

$149,442.43 in U.S. Currency, 965 F.2d 868, 877 (10th Cir. 1992)

(coming to a similar conclusion).4

referred to two different refrigerator cabinets, it is clear that
the jewelry and drugs were found in close proximity to each other.
     4 Betancourt-Pérez argues for the first time on appeal that
we may not consider the fact that the jewelry was found in close
proximity to the cocaine because, he claims, the government lacked
sufficient probable cause for a warrant.     But Betancourt-Pérez
gives this unpreserved argument short shrift, and so shall we. To
prevail on this argument, Betancourt-Pérez would first need to
establish that the warrant was unlawful, which Betancourt-Pérez
fails to do.    He perfunctorily claims: "Nothing in the record
discloses any probable cause for the government to believe the
boxes [that Betancourt-Pérez was loading in the van on the day of
his arrest] contained contraband or anything suspicious that might
create probable cause to search." But he develops this argument
no further (and has failed to include the search warrant itself in
the record, we might add).         What's more, Betancourt-Pérez
stipulated in his plea agreement to the contradictory fact that
the search warrant had been issued not on the basis of agents
observing him loading boxes into the van, but upon the discovery
during a search incident to arrest that those boxes contained
marijuana. We thus cannot tell what Betancourt-Pérez's illegal
search argument is, or whether it has any merit.        In short,
Betancourt-Pérez did not properly preserve the argument below and
we cannot make sense of it now -- both are grounds for us to
consider the argument waived. See Poloquin v. Garden Way, Inc.,
989 F.2d 527, 531 (1st Cir. 1993); United States v. Zannino, 895
F.2d 1, 17 (1st Cir. 1990).

                              - 6 -
             Likewise, it is also true that Betancourt-Pérez pled

guilty to participating in two large-scale drug conspiracies, as

well as to conspiring to possess drugs with intent to distribute

on the day of his arrest, and "[a] claimant's record of drug

activity is a highly probative factor in the forfeiture calculus."

United States v. $21,510.00 in U.S. Currency, 144 F. App'x 888,

889 (1st Cir. 2005) (quoting United States v. $67,220.00 in U.S.

Currency, 957 F.2d 280, 286 (6th Cir. 1992)).              But we think these

two facts alone -- Betancourt-Pérez's admitted participation in

drug conspiracies and the close proximity of the jewelry to the

drugs -- do not establish by a preponderance of the evidence that

the jewelry was purchased with proceeds from Betancourt-Pérez's

illegal drug activity.

             To put it another way, the undisputed facts give rise to

two possible stories: either Betancourt-Pérez was a drug dealer

who   kept   his   valuables   in   his   kitchen,   and    this   included   a

collection of jewelry that he had amassed through legitimate means,

potentially over the span of his life; or Betancourt-Pérez was a

drug dealer who kept his valuables in his kitchen, and this

included a collection of jewelry that he had purchased with drug

money.   Because the record does not compel a conclusion that the

                                    - 7 -
second scenario is more likely than not, the government has failed

to meet its summary judgment burden.5

              We add that meeting the preponderance-of-the-evidence

standard is not an exacting exercise, but it is also not a

meaningless one.        It is, moreover, an exercise that Congress, in

passing CAFRA, deliberately chose to require of the government,

heightening      the   standard   of     proof   from   the    less-burdensome

probable      cause    standard   that   formerly   applied.        18   U.S.C.

§ 983(c)(1); see also United States v. Funds in the Amount of

$3,670.00, 403 F.3d 448, 454 (7th Cir. 2005).                 Thus, it was the

government's congressionally-imposed burden to put together a

summary judgment record that would tip the scale toward connecting

the jewelry to the drug activity, and it failed to do so here.

              It bears mention that we would likely have been persuaded

of a substantial link between the jewelry and drug activity if the

record bore out the government's additional claim that Betancourt-

Pérez lacked the means to purchase the jewelry with legal income

because, aside from drug dealing, he had only limited, part-time

work.       In fact, in other civil forfeiture cases, a defendant's

inability to purchase the seized property through legitimate means

        5
       Indeed, the first scenario may be the more likely one.
After all, far from a collection of costly investment pieces bought
for purposes of laundering drug money, the jewelry appears to be
a random assortment that includes several trinkets worth less than
$100 and a "sweet fifteen" ring.

                                       - 8 -
appears to be a core factor considered by the court in determining

whether the property should be forfeited.             See United States v. 6

Fox St., 480 F.3d 38, 43-44 (1st Cir. 2007) (upholding forfeiture

based, in part, on "evidence that [the claimant's] legitimate

employment as a car salesperson," from which he earned only a few

thousand dollars of taxable income, "could not support his lavish

spending"    on     expensive   vehicles      and   money   market    accounts);

$58,422.00     in   U.S.   Currency,    154    F.   App'x   at   22   (upholding

forfeiture on the basis of the property being found in "close

proximity" to drugs and drug paraphernalia and the claimant's "lack

of legitimate income sources").

            Here, it appears that the government did have access to

information regarding Betancourt-Pérez's employment and income:

the government told the district court during a pretrial conference

that Betancourt-Pérez earned only "a couple thousand dollars a

year,"   and   pretrial     documents    suggest     that   during     discovery

Betancourt-Pérez provided the government with letters from prior

employers and his 2010 tax returns.             The record itself, however,

contains none of this evidence.            Nor is there any evidence that

the jewelry was part of a lifestyle so lavish that it, on its own,

would strongly support the inference that it could not have been

purchased through above-board means.

            The     government's    brief,      perhaps     recognizing     this

omission, attempts belatedly to cure the defect by referring us to

                                    - 9 -
the employment history section of the pre-sentence investigation

("PSI") report in Betancourt-Pérez's criminal case.     But the PSI

report (which was prepared several months after the district court

had ruled on the summary judgment motion) was never in the record

in this civil case, and thus we may not consider it now.       Without

it, the government has not done enough to establish a link between

the   jewelry   and   Betancourt-Pérez's   drug   activities    by   a

preponderance of the evidence.6

          The district court was thus incorrect to grant summary

judgment for the government.      We vacate and remand for further

proceedings in accordance with this decision.7

      6We do not mean to suggest that proof of a defendant's
legitimate income is required in every civil forfeiture case. The
government could have established a connection between the jewelry
and drugs by means of other evidence, as well. For example, in
United States v. $21,510.00 in U.S. Currency, 144 F. App'x 888,
889 (1st Cir. 2005), we found the government's burden met where
large amounts of cash were found hidden in the claimant's house,
the claimant had pled guilty to conspiracy to distribute narcotics
and admitted to discussing a drug deal with his co-conspirator
less than four months before the seizure, and a canine search
revealed traces of controlled substances on the cash itself.
      7
      Although our decision followed the parties' lead in treating
the jewelry as a collection and made no distinction among the
different items, on remand, the parties will have an opportunity
to make their respective cases as to each item.

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