Court Opinion

ID: 4253289
Source: CourtListenerOpinion
Date Created: 2018-03-09 18:22:41.295024+00
Date Added: 2024-06-11T14:44:05.582670
License: Public Domain

[Cite as In re $18,823.06, 2018-Ohio-876.]
              IN THE COURT OF APPEALS
          FIRST APPELLATE DISTRICT OF OHIO
               HAMILTON COUNTY, OHIO

IN RE: $18,823.06 U.S. CURRENCY                :   APPEAL NO. C-160775
AND A DELL LAPTOP AND HP                           TRIAL NO. M-1401112
SEIZED FROM HOLLY GALVEZ.                      :

                                               :      O P I N I O N.

Civil Appeal From: Hamilton County Court of Common Pleas

Judgment Appealed From Is: Affirmed in Part, Reversed in Part, and Cause
                           Remanded

Date of Judgment Entry on Appeal: March 9, 2018

Joseph T. Deters, Hamilton County Prosecuting Attorney, and Jeremiah Seebohm,
Assistant Prosecuting Attorney, for Appellee State of Ohio,

Santen & Hughes and Louis H. Sirkin, for Appellant Holly Galvez.
                       OHIO FIRST DISTRICT COURT OF APPEALS

M ILLER , Judge.

       {¶1}    Holly Galvez appeals from the judgment of the Hamilton County Court

of Common Pleas, which overruled her objections to the magistrate’s decision and

granted the state’s petition for forfeiture of currency. The trial court ordered that

$18,823.06 be forfeited under R.C. Chapter 2981. For the following reasons, the trial

court’s judgment is affirmed in part, reversed in part, and remanded for an entry of

forfeiture consistent with this opinion.

                             I. Facts and Procedural History

       {¶2}    On June 25, 2014, the Cincinnati Police Department, in conjunction

with other police agencies, executed a warrant to search Galvez’s residence as part of

an ongoing investigation into a drug-trafficking ring operating in the Northern

Kentucky and Greater Cincinnati area. During the search, officers seized two sets of

digital scales with heroin and cocaine residue from a drawer in Galvez’s bedroom

dresser, a small amount of marijuana, Xanax, a Dell laptop, an HP all-in-one

computer, $137 located in a box in Galvez’s bedroom, $1,778 located in her purse, and

some paperwork. Immediately after conducting the search, Cincinnati police officers

questioned Galvez. Based on this conversation and the paperwork they recovered

during their search, officers seized $16,638.06 from four bank accounts at U.S. Bank

belonging to Galvez.

       {¶3}    In state court, Galvez was initially charged with possession of drug

paraphernalia in violation of R.C. 2925.14, a fourth-degree misdemeanor. The state

amended the charge, and Galvez pleaded guilty to the offense as a minor

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                       OHIO FIRST DISTRICT COURT OF APPEALS

misdemeanor. The state next filed this action under former R.C. 2981.051 seeking to

civilly forfeit the $18,823.06 in currency and bank account funds, the Dell laptop, and

the HP all-in-one computer as either contraband, proceeds of, and/or an

instrumentality used in the commission of a criminal offense.

        {¶4}    The civil forfeiture action was tried to a magistrate. The state presented

testimony from Cincinnati Police Officers Steve Batsch and Matthew Waters. Officer

Batsch testified that for several months he investigated a narcotics ring, which mainly

trafficked in heroin in Cincinnati, Ohio and Northern Kentucky.                   Officer Batsch

discovered that Michael Williams, the leader of the drug ring, was involved in a

relationship with Galvez.       Two vehicles registered to Galvez were parked outside

Williams’s residence in Kentucky, and individuals in the drug ring were operating

vehicles registered in Galvez’s name on a daily basis.

        {¶5}     Search warrants were executed at three locations; two in Cincinnati and

one in Kentucky.       Police recovered heroin from the Kentucky location and one

Cincinnati location, and packaging material at the second Cincinnati location. Police

arrested Williams and four other individuals. When Williams was arrested, he was

driving a vehicle that had been rented in Galvez’s name. Williams, Galvez, and the

other individuals were also subject to a federal indictment for drug-trafficking and

conspiring to traffic drugs. See United States v. Williams, S.D.Ohio No. 1:2014-CR-

00118 (Dec. 13, 2004).2

1 R.C. Chapter 2981 was amended in 2017 by H.B. 347, and the current version became effective
April 6, 2017. Under the former version of R.C. 2981.05, the state had to prove its case by a
preponderance of the evidence. See former R.C. 2981.05(D)(3). The current version requires the
state to meet a higher “clear and convincing evidence” burden of proof. We apply the former
version here.
2 The federal criminal complaint against Galvez was dismissed on August 5, 2016, pursuant to
Fed.R.Crim.P. 48(a), but the dismissal does not affect the government’s pursuit of forfeiture here,
as it is required to prove that the money belonging to Galvez constituted proceeds of “an offense,”
not necessarily proceeds of the offense at issue in her criminal case. See Dayton Police Dept. v.
Thompson, 2d Dist. Montgomery No. 24790, 2012-Ohio-2660, ¶ 11-12.

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                      OHIO FIRST DISTRICT COURT OF APPEALS

         {¶6}   Shortly after his arrest, Williams directed someone via a monitored

jailhouse phone call to remove items from Galvez’s residence and tell Galvez to empty

one of her bank accounts. The police then conducted a trash-pull at Galvez’s residence,

determined there were indicia of drugs in the home, and executed the search warrant

on Galvez’s home.

         {¶7}   During questioning at her home, Galvez admitted that Williams was her

boyfriend, he had a key to her residence, and he would visit her one to two times a

week.    Officer Batsch testified that Galvez told him that Williams had paid her rent

money, and $500 to $1,000 a week to rent and use the vehicles titled in her name.

Galvez also said that Williams directed her to close a credit card account. Batsch

reviewed Galvez’s bank records for an account that showed approximately $23,000 in

deposits between February 2014 and the end of June 2014, when Galvez was arrested.

         {¶8}   Batsch seized the bank accounts based on his review of the bank

statements and Galvez’s admissions.          Batsch believed that Williams was indeed

providing Galvez money in exchange for renting cars for the drug-trafficking ring and

that part, if not all funds were related to the drug-trafficking ring.

         {¶9}   Batsch obtained certified copies of Galvez’s Ohio tax returns for the years

2011, 2012, and 2013, wherein Galvez had reported an adjusted gross income of $11,316

in 2011, $14,384 in 2012, and $9,659 in 2013. Batsch testified that police found

paperwork relating to Galvez’s occupation as an exotic dancer. He testified that he

believed the money Galvez earned from her dancing had been commingled with money

she earned from illegal sources.       Batsch also reasoned that had Galvez not been

receiving money from Williams, she would have had to use her own money to pay her

bills.

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                     OHIO FIRST DISTRICT COURT OF APPEALS

       {¶10} On cross-examination, Batsch admitted that what police recovered in the

trash-pull was indicative of personal drug use and that Galvez had a prescription for the

Xanax they found in the home. He further testified that it was his belief that Williams

sent someone to collect money or drugs from Galvez’s home, but that he had no proof

to support this belief, and the police found no illegal drugs or guns in Galvez’s

residence.

       {¶11} When asked if he had any evidence tying the money seized to the two

main defendants in the federal indictment, Batsch said that the police had Galvez’s

admission that Williams had given her money and had access to her room and a key to

her home. When asked if he had any way of knowing if the money had been given to

Galvez by Williams, he responded, “I guess specifically not.”

       {¶12} Officer Waters testified that Galvez owned three vehicles that were being

driven daily by members of the drug-trafficking ring. Galvez told police that the

vehicles were supposed to be titled in another woman’s name, but that at the time of

Galvez’s arrest, the vehicles remained titled in her name.        After Galvez’s arrest,

however, she transferred the title to two of the vehicles to two other women who were

associated with men that had been indicted as coconspirators in the federal action.

       {¶13} Galvez testified on her own behalf, admitting that she dated Williams for

ten to 15 months—from the end of 2012 to June 2014. She said that Williams was very

secretive and she was concerned he was cheating on her, but she did not know he was

trafficking in drugs. She said she had given Williams money and helped him obtain

employment. She acknowledged that she had rented a vehicle one or two times for

Williams to use because he did not have good credit, and could not rent one for himself,

but said that Williams was listed as the driver on the rental forms. Galvez admitted that

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                     OHIO FIRST DISTRICT COURT OF APPEALS

she had let Williams use her vehicle, but she denied ever receiving any money from

Williams or putting any money in the bank for him.

       {¶14} Galvez owned one vehicle, a Honda Civic, when she met Williams in late

2012, and bought a second vehicle in 2013. Galvez admitted that she signed over the

title of a Honda Civic to a woman who had been living with Williams at the time of his

arrest, but said the woman never put the title in her name, so the tags and title to the

car remained in Galvez’s name. Galvez testified that the car was old and she received

no money for signing over the title.

       {¶15} Galvez testified that she had worked as an exotic dancer since age 18, and

that her profession was a lucrative one. At the time of her arrest, she was working for

an agency called Cincinnati Seductions. She was paid in cash, and she stored the

wadded bills in boxes and bags in her home prior to depositing them in the bank.

Galvez testified that her goal was to deposit a minimum of $1,000 a week into her bank

account. She paid most of her expenses with a debit card, but some with cash.

       {¶16} Galvez testified that she claims a lot of itemized deductions on her tax

returns, so she keeps her receipts from her employment logged in a book that she

provides to her tax preparer. The police took this receipt book during their search of

her residence.

       {¶17} Galvez’s four bank accounts with U.S. Bank included a savings account, a

checking account, a business account for Jayda Promotions, a small company she

created for her dancing jobs, and an account for her minor daughter. She claimed all

the money in the accounts had been earned through her lawful activities as a dancer

and she had no other source of income.

       {¶18} Galvez admitted that after she had been processed and released from jail,

she went to the bank and tried to withdraw money from her accounts, but she was

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                       OHIO FIRST DISTRICT COURT OF APPEALS

unable to do so. As a result, on June 26, 2014, she transferred money from her

checking account, Jayda Promotions account, and savings account to the bank account

in her daughter’s name.3

                                 Magistrate's Decision

        {¶19} The magistrate ordered the two computers and all the money seized

from Galvez forfeited to the state.         The magistrate gave the following detailed

reasoning for his decision via a lengthy oral pronouncement. Galvez admitted to

police that she was Williams’s girlfriend. She acknowledged renting cars for him,

and she told the police that Williams had paid her $1300 a month. She testified that

she earned between $500 and $1000 a week as an exotic dancer, which would put

her income in the range of $26,000 to $52,000 a year. Yet she only reported income

of $11,316 in 2011, $14,384 in 2012, and $9659 in 2013. Although two scales with

cocaine and heroin residue were found in her bedroom, she testified she had no idea

the scales were in her bedroom drawer. Two cars registered in her name were being

used in heroin trafficking. Williams was arrested in a vehicle that Galvez had rented

for him. Although Galvez had testified her goal was to deposit $1,000 weekly into

her bank account, the bank records did not reflect these deposits. Galvez “knew

things were going wrong” because someone had come to her home to remove

property and she had moved all the money in her accounts to her daughter’s account

after Williams’s arrest.

        {¶20} The magistrate stated that Galvez acknowledged her rent was $950 a

month or $11,940 a year, but that she only reported gross income of, at most,

3Galvez transferred $11,030.19 from her checking account, $3,481.40 from her Jayda Promotions
account, and an unknown amount from her savings account. The record only shows the ending
balance of $1,877.16 in her savings account through May 9, 2014. Thus, we assume the transfer was
approximately $1,877.16 in June 2014.

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                        OHIO FIRST DISTRICT COURT OF APPEALS

$14,384. Galvez testified that her rent was $995 a month, but the bank records did

not reflect that Galvez paid any rent out of her checking account until April 2014.

The magistrate stated that the Hamilton County Auditor’s website showed that

Galvez’s residence was purchased by Monterey LLC in June 2013, and that three

payments of $997 were made from Galvez’s checking account to Monterey LLC in

April, May, and June 2014, but the payments were credited back to Galvez’s checking

account.

        {¶21} The magistrate then discussed the bank statements for each of Galvez’s

bank accounts.4       For the account Galvez shared with her minor daughter, the

magistrate stated that Galvez produced four statements that showed the account had

a balance of $67 on June 25, 2012, and a balance of $149.16 on March 25, 2014. The

statements showed a single deposit of $62.16 on January 15, 2013.

        {¶22} For the Jayda Promotions account, the magistrate stated that Galvez

introduced eleven statements showing that the account had a balance of $8,485.40

on October 31, 2012. With the exception of one $500 deposit in January 2014, the

statement showed only withdrawals from the account. The account had a balance of

$3,485.40 in May 2014.

        {¶23} For the savings account, Galvez produced six bank statements that

showed the account had a balance of $975.22 in May 2011 and a balance of $1,877.16

in May 2014. The bank statements showed a monthly $25 deposit into the account.

        {¶24} Galvez produced statements for her checking account that showed a

balance of $6,467 in May 2012 and a balance of $7,193 on June 10, 2014. The

statements showed deposits of $6,995 in April 2012, $2,580.73 in October 2012,

4 Neither the magistrate’s discussion of the account balances, nor the bank statements submitted
as part of the record, reflect an accurate total amount ($16,338.06) seized by the Cincinnati Police
Department at the end of June 2014.

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                      OHIO FIRST DISTRICT COURT OF APPEALS

$3,620 in March 2013, $4,401.57 in October 2013, $2,315 in January 2014, $6,809

in March 2014, $4,647 in April 2014, $997 in May 2014, and $6,995 in June 2014.

The statements showed expenditures for ordinary activities, bills, and a car rental.

       {¶25} The magistrate concluded that the bank statements did not support

Galvez’s testimony, and found that “there was a commingling of funds from the drug

dealer into Galvez’s account to pay for her necessities.” The magistrate reasoned that

if Galvez’s adjusted gross income, as reported to the IRS, had been accurate, then she

had used drug proceeds to pay for her living expenses. Thus, the state was entitled to

the $18,823.06 that had been seized from Galvez’s home and her bank accounts. He

further reasoned that because Galvez lacked any documentation for the Dell laptop

and the HP all-in-one desktop computers, the state was entitled to forfeiture of the

computers.
                                    Galvez’s Objections

       {¶26} Galvez filed objections to the magistrate’s decision, asserting that the

state failed to meet its burden of proof to support the forfeiture of the funds in her bank

accounts and the computers.        Galvez argued that the magistrate’s reasoning for

ordering the forfeiture of the funds in her bank accounts was erroneous because the

magistrate had reasoned that Galvez’s failure to report all the earnings from her

occupation as an exotic dancer on her income tax returns demonstrated that the money

had been obtained through illegal activity.

       {¶27} Galvez argued that she had produced bank statements demonstrating

that the four bank accounts existed prior to her relationship with Williams and that

money had been regularly deposited and withdrawn from the accounts prior to and

during her relationship with Williams, and the state did not present evidence

connecting the money in the accounts to Williams or any illegal activity. She also

argued that the state failed to present any testimony connecting the computers to illegal

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                     OHIO FIRST DISTRICT COURT OF APPEALS

activity. She asserted that the magistrate applied the flawed reasoning that because she

could not demonstrate paperwork showing an arms-length transaction, the computer

had been purchased with illegal or unclaimed income.

                                  Trial Court’s Decision

       {¶28} The trial court sustained Galvez’s objections as to the forfeiture of the

Dell laptop and HP all-in-one computer, and ordered their return to Galvez. The trial

court, however, overruled Galvez’s objections with respect to the forfeiture of the funds

in the four bank accounts, adopted the magistrate’s decision in part, and ordered that

all $18,823.06 in currency and funds be forfeited, with 80 percent being forfeited to the

Cincinnati Police and the remaining 20 percent being forfeited to the Hamilton County

Prosecuting Attorney’s Office.

                                   II. Order of Forfeiture

       {¶29} In a single assignment of error, Galvez argues that the trial court’s order

of forfeiture of $18,823.06 was against the manifest weight of the evidence. However,

in the trial court Galvez objected only to that part of the magistrate’s decision ordering

the forfeiture of funds in her bank accounts, but not the cash found in her residence or

her purse. Galvez’s failure to object to the magistrate’s decision regarding her cash has

forfeited all but plain error. See Civ.R. 53(D)(3)(b)(iv) (the “waiver rule”); Bench

Billboard Co. v. Cincinnati, 2016-Ohio-1040, 62 N.E.3d 603, ¶ 19 (1st Dist.).

       {¶30} Based upon our review of the record and the case law, we cannot

conclude that the magistrate’s decision as to Galvez’s cash rises to the level

of plain error. See Goldfuss v. Davidson, 79 Ohio St. 3d 116, 679 N.E.2d 1099

(1997) (holding that plain error is limited to “those extremely rare cases where

exceptional circumstances require its application to prevent a manifest miscarriage of

justice and where the error, if uncorrected would have a material adverse effect upon on

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                      OHIO FIRST DISTRICT COURT OF APPEALS

the character of, and public confidence in judicial proceedings”).         Therefore, her

argument on appeal, and our review, is limited to the trial court’s forfeiture of the funds

in her four bank accounts—approximately $16,638.06.

       {¶31} The appropriate standard of review for a challenge to a judgment as

against the manifest weight of the evidence is set forth in State v. Thompkins, 78 Ohio

St.3d 380, 678 N.E.2d 541 (1997). Thompkins states that “[w]eight of the evidence

concerns the inclination of the greater amount of credible evidence, offered in a trial, to

support one side of the issue rather than the other.” Id. at 387, quoting Black’s Law

Dictionary 1594 (6th Ed.1990). “Weight is not a question of mathematics, but depends

on its effect in inducing belief.” Id. Thus, “[w]hen a court of appeals reverses a

judgment of a trial court on the basis that the [judgment] is against the weight of the

evidence, the appellate court * * * disagrees with the factfinder’s resolution of the

conflicting testimony.” Id. In weighing the evidence, however, the court of appeals

must always be mindful of the presumption in favor of the finder of fact, with every

reasonable presumption made in favor of the judgment and the findings of fact.

Eastley v. Volkman, 132 Ohio St. 3d 328, 2012-Ohio-2179, 972 N.E.2d 517, ¶ 21.

       {¶32} “Forfeitures are not favored in law or equity.          Thus, the forfeiture

statutes, which operate in derogation of private property rights, must be strictly

construed * * * so as to avoid a forfeiture of property.”     State v. North, 2012-Ohio-

5200, 980 N.E.2d 566, ¶ 6 (1st Dist.). But the state needed to prove its case only by a

preponderance of the evidence. See former R.C. 2981.05(D)(3).

       {¶33} Here, the forfeiture was initiated by the state’s allegation that the

money seized from Galvez was subject to civil forfeiture under former R.C. 2981.05,

because the money was contraband; proceeds derived or acquired from the

commission of an offense; or an instrumentality that was used or intended to be used

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                       OHIO FIRST DISTRICT COURT OF APPEALS

in any manner to commit or facilitate the commission of a felony criminal offense—

specifically, trafficking in heroin. See R.C. 2981.02(A)(2) and (3).5

        {¶34} Generally, the term “proceeds” refers to the profit gained directly or

indirectly from an offense. R.C. 2981.01(B)(11). “’Proceeds’ may include, but is not

limited to, money or any other means of exchange.”                 Id.   For purposes of the

forfeiture statute, an “offense” is defined as “any act or omission that could be

charged as a criminal offense or a delinquent act, whether or not a formal criminal

prosecution * * * began at the time the forfeiture is initiated.” R.C. 2981.01(B)(10).

        {¶35} R.C. 2981.03(F) provides that “[a] civil action to obtain civil forfeiture

may be commenced as described in section 2981.05 of the Revised Code regardless of

whether the offender * * * has pleaded guilty to [or] been convicted of * * * the act that

is the basis of the order.” Dayton Police Dept. v. Thompson, 2d Dist. Montgomery No.

24790, 2012-Ohio-2660, ¶ 11-12; see State v. Moss, 5th Dist. Fairfield No. 14-CA-3,

2014-Ohio-5411, ¶ 9 (following Dayton Police Dept.); State v. Bustamante, 3d Dist.

Seneca Nos. 13-12-26 and 13-13-04, 2013-Ohio-4975, ¶ 31; Marmet Drug Task Force v.

Paz, 3d Dist. Marion No. 9-11-60, 2012-Ohio-4882, ¶ 23.

        {¶36} The burden is on the state to show that the money has a connection to

the underlying criminal offense.         Former R.C. 2981.05(D)(3).           The state “must

demonstrate that it is more probable than not, from all the circumstances, that the

defendant used [the money] in the commission of [a] criminal offense[].” State v. Ali,

119 Ohio App. 3d 766, 769, 696 N.E.2d 285 (8th Dist.1997). “The same logic applies

regarding sufficient proof that the money was proceeds of the criminal offense.”

5 On appeal, however, the state seems to have abandoned its claims that the money is contraband
or an instrumentality, as they were not argued in its brief. The state only posits that the seized
money was proceeds from drug trafficking.

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                    OHIO FIRST DISTRICT COURT OF APPEALS

Dayton Police Dept. v. Byrd, 189 Ohio App. 3d 461, 2010-Ohio-4529, 938 N.E.2d 1110,

¶ 10 (2d Dist.).

       {¶37} In the case before us, the state failed to demonstrate that it was more

probable than not that all of the money in Galvez’s bank accounts constituted

proceeds from a criminal offense. The magistrate’s decision, which the trial court

adopted in part, relied on six items of evidence to support an order of forfeiture—

Galvez’s tax returns, selective bank statements for Galvez’s bank accounts, testimony

of Officer Batsch, testimony of Holly Galvez, a federal indictment of a suspected

drug-trafficking operation, which included Galvez, and cash and drug paraphernalia

seized from Galvez’s home.     These items basically established that: Galvez was

suspected of trafficking drugs by the Cincinnati police and of conspiring to traffic

drugs by the federal authorities; Galvez had drug paraphernalia and cash in her

possession on the day she was arrested; Galvez’s explanation for the money was

dubious; Williams paid all or part of Galvez’s rent; Williams directed Galvez through

an associate to empty one of her bank accounts; and rental cars titled in Galvez’s

name for Williams’s use, for which she was paid between $500 to $1,000 per week, is

typical of drug-trafficking operations looking to avoid detection or traffic stops.

Based on prevailing case law, these items are insufficient to show by a

preponderance of the evidence that all of Galvez’s seized funds constitute proceeds

from drug trafficking.

       {¶38} The state focuses much of its efforts on deficiencies in Galvez’s

explanation for the funds in her bank accounts as compared to her tax returns. The

magistrate found her version to be highly suspect. But the central question is not

whether Galvez has developed a credible explanation of the discrepancy, which may

go more to underreporting taxable income than to showing drug-trafficking

proceeds. The burden rests on the state to show how the seized funds constitute

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                    OHIO FIRST DISTRICT COURT OF APPEALS

proceeds from drug trafficking, and discrepancies in Galvez’s story do not help the

state’s case. See, e.g., State v. $765 in United States Currency, 181 Ohio App. 3d 162,

2009-Ohio-711, 908 N.E.2d 486, ¶ 28 (reversing trial court’s forfeiture order even

though authorities were unable to corroborate owner’s explanation for his possession

of money); State v. Roberts, 102 Ohio App. 3d 514, 519, 657 N.E.2d 547 (9th

Dist.1995) (affirming denial of forfeiture even though the defendant’s alibi that he

was driving to Cleveland late at night to purchase a car was “implausible”). The state

failed to make a sufficient showing that all of the funds in Galvez’s bank accounts

were the result of drug trafficking, which renders Galvez’s strained explanations

immaterial.

       {¶39} A key oversight in the state’s case is that it does not distinguish

between the four bank accounts belonging to Galvez and treats all commingled

money as subject to forfeiture.      However, the forfeiture statute instructs the

prosecutor to forfeit only proceeds which can be proven as “derived from or acquired

through the commission of an offense.” R.C. 2981.02(A)(2). See Byrd, 189 Ohio

App.3d 461, 2010-Ohio-4529, 938 N.E.3d 1110, at ¶ 10 (holding that the state bears

the burden to show the money is connected to a criminal offense); State v. Ihrabi,

2017-Ohio-8373, 87 N.E.3d 267, ¶ 52-59 (2d Dist.) (same); State v. Golston, 66 Ohio

App.3d 423, 434, 584 N.E.2d 1336 (8th Dist.1990) (same).

       {¶40} Surprisingly, there is no Ohio Supreme Court authority detailing what

money may be seized when lawfully-obtained currency is commingled with currency

that constitutes proceeds from drug trafficking.      The Second District recently

followed a United States First Circuit Court of Appeals decision, finding that “the

commingling of cash proceeds of drug transactions with funds derived from

legitimate sources does not render the entire amount of money subject to forfeiture

as proceeds.” Ihrabi, at ¶ 55 (citing U.S. v. Pole No. 3172, Hopkinton, 852 F.2d 636

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                      OHIO FIRST DISTRICT COURT OF APPEALS

(1st Cir.1988)).   “Rather, the State is entitled to obtain forfeiture only of those

amounts which constituted proceeds and/or an instrumentality of the illegal

activity.” Id. Ihrabi ultimately held that it was for the trial court on remand to

determine whether all, some, or none of the commingled money was subject to

forfeiture. Id. at ¶ 66.

       {¶41} Like the First Circuit, the United States Fifth Circuit Court of Appeals

rejected the notion that commingling allows “forfeitability [to spread] like a disease”

to encompass legitimate portions of property. United States v. One 1980 Rolls

Royce, VIN No. SRL 39955, 905 F.2d 89, 90 (5th Cir.1990). Instead, the court held

that only the actual proceeds of drug transactions are forfeitable. Id. Likewise, the

United States Second Circuit Court of Appeals reasoned that “if $100 from the sale of

drugs is deposited in an account funded with untainted money, $100 in the account

and each $100 withdrawal are all vulnerable to forfeiture, but the Government can

obtain only a single forfeiture of $100.” United States v. Banco Cafetero Panama,

797 F.2d 1154, 1162 (2d Cir.1986), fn. 9.

       {¶42} We agree with these courts. Only funds that the state can prove to be

the actual proceeds of drug trafficking are subject to forfeiture.      A court must

determine the amount of illicit funds in each account and forfeit only that amount

from that account.

       {¶43} At the very least, the state should have provided evidence for why the

funds in each account represent proceeds from the drug-trafficking operation. After

all, each account has specific bank records showing the history of the account’s

creation and monthly statements showing deposits and withdrawals. And, the state

has a timeline for when Galvez became involved with Williams, the suspected drug-

trafficking ring leader. So, the state could have offered evidence regarding which

deposits along the timeline were derived from the drug-trafficking operation.

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                     OHIO FIRST DISTRICT COURT OF APPEALS

        {¶44} With respect to the account titled in Galvez’s daughter’s name, the

state did not present any testimony or documentary evidence that the money in this

bank account was comprised of proceeds from the drug-trafficking ring as that term

is defined in R.C. 2981.01(11). The bank statements for this account indicate that the

money in the account preexisted Galvez’s relationship with Williams, and the state

did not present evidence tying the money that had been deposited into the account

during the time period that Galvez was involved with Williams to the drug-trafficking

ring.

        {¶45} The state has the same problem with Galvez’s savings account. The

account preexisted Galvez’s relationship with Williams, and the state presented no

evidence tying the money in the account or the small monthly $25 deposits to the

drug-trafficking ring.

        {¶46} The Jayda Promotions account also preexisted Galvez’s relationship

with Williams, and the magistrate noted that the account had a balance of $8,485.40

on October 2012, and was spent down to $3,485.40 by May 2014. During the

relevant time period, there was only one deposit of $500 in January 2014. No

evidence tied this deposit to drug trafficking. Yet the state claims the authority to

seize the entire contents of the account.

        {¶47} The accounts discussed above were seized based on an impermissible

theory of commingling. Galvez’s checking account, on the other hand, is directly tied

to illicit activity. Large amounts of cash were deposited into the checking account

both prior to and during the time of Galvez’s relationship with Williams. Officer

Batsch testified that he believed the $23,000 in deposits made between February 2014

and the end of June 2014 were proceeds of the drug-trafficking ring; that the amount of

money being deposited was inconsistent with the adjusted gross income that Galvez

had reported on her income tax returns; and that he believed “part, if not all” of the

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                      OHIO FIRST DISTRICT COURT OF APPEALS

money in the account represented payments from Williams to Galvez for titling cars in

her name for the drug-trafficking ring, for which she admitted being paid $500 to

$1,000 per week. Moreover, Williams directed Galvez to empty this account. Based

upon our standard of review, a reasonable presumption must be made in favor of the

judgment and the finding of fact that the funds in this account were proceeds from

drug trafficking.

       {¶48} Accordingly, we affirm the judgment in part, reverse it in part, and

remand the cause for further proceedings. The trial court’s judgment is affirmed to

the extent that it determined that the cash from Galvez’s home and purse was subject

to forfeiture, as this error was itself forfeited by the failure to object. The trial court’s

order of forfeiture regarding the funds from Galvez’s checking account is affirmed.

The trial court’s orders of forfeiture of Galvez’s savings account, Jayda Promotions

account, and amounts in her minor daughter’s account—prior to the bank transfer of

money into her daughter’s account on June 26, 2014—are reversed. There is no

evidence of drug proceeds being deposited into these accounts prior to the bank

transfer. The money in those accounts shall be returned. This matter is remanded

for the trial court to order forfeiture of the $11,030.19 transferred from Galvez’s

checking account to Galvez’s daughter’s account as proceeds derived from a criminal

offense, and to order the return of the money seized from the other accounts—

approximately $5,607.87.

                     Judgment affirmed in part, reversed in part and cause remanded.

MOCK, P.J., concurs.
DETERS, J., concurs in part and dissents in part.

DETERS, J., concurring in part and dissenting in part.

       {¶49} I concur with the majority that the funds in Galvez’s home and

residence are subject to forfeiture based on Galvez’s failure to object to the

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                     OHIO FIRST DISTRICT COURT OF APPEALS

magistrate’s decision and her failure to challenge on appeal that portion of the trial

court’s order forfeiting the funds. I also agree with the majority’s conclusion that the

state failed to demonstrate that it was more probable than not that the funds in

Galvez’s savings account, the Jayda Promotions account, and the account titled in

her daughter’s name constituted proceeds from the commission of a criminal

offense.

       {¶50} I disagree, however, with the majority’s conclusion that the state met

its burden to show that the funds in Galvez’s checking account were proceeds of a

criminal offense. The state presented no evidence tying the funds in that account to

Williams or the drug-trafficking ring. Instead, it maintained that Galvez’s admission

that Williams had paid her $1000 a month and her rent when coupled with the

disparity in income between her tax returns and the money in her bank accounts was

sufficient to render the entire amount in her checking account forfeitable.

       {¶51} The trial court agreed, concluding that because it was impossible to

distinguish those funds from the ones that Galvez had legitimately earned, the state

should be entitled to the entirety of the funds in the account.        As the majority

acknowledges, the state’s theory of recovery has been rejected by both federal and

Ohio courts because it negates the statutory requirement that the state must connect

the seized money to illegal activity. The majority’s decision to forfeit the entirety of

the funds in Galvez’s checking account is not supported by the record and is contrary

to the law. As a result, I respectfully dissent from that portion of the majority’s

opinion.

Please note:

       The court has recorded its own entry this date.

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