United States v. $110,000.00 in U.S. Currency

601 F.Supp.3d 476

UNITED STATES of America, Plaintiff,

v. $110,000.00 IN UNITED STATES CURRENCY, Defendant,andJulio Martinez, Claimant.

8:19-CV-531

United States District Court, D. Nebraska.

Signed May 3, 2022

Amy B. Blackburn, Kimberly C. Bunjer, U.S. Attorney's Office, Omaha, NE, for Plaintiff.

Carlos A. Monzon, David V. Chipman, Monzon, Guerra Law Firm, Lincoln, NE, for Claimant.

MEMORANDUM AND ORDER

John M. Gerrard, United States District Judge

This matter is before the Court on the government's motion for summary judgment (filing 95) in this action for forfeiture in rem. Julio Martinez, the claimant in this action, opposes the government's motion, asserting he is the legitimate owner of the currency. For the following reasons, the Court will deny the government's motion.

BACKGROUND

On June 18, 2019, Sergeant Pelster of the Nebraska State Patrol stopped a vehicle on Interstate I-80 in Lancaster County, Nebraska, for speeding. Filing 96 at 1. The driver, Alil (Ali) Abbasi, provided a rental agreement for the vehicle and said that he and his passenger—who he identified as both "Pito" and Martinez Hernandez, but who law enforcement identified as the claimant Julio Martinez—were coming from Chicago and heading to Las Vegas. Filing 96 at 2-5; filing 99 at 2.¹

According to the government, during the stop, Abbasi and Martinez gave Pelster inconsistent and suspicious statements about their trip, including how long it had been planned, why they did not fly, and how long they planned to stay. Filing 96 at 3-4. For example, Abbasi claimed the pair did not fly because the trip was "last minute" and he liked being on the road. Filing 96 at 3. As for their accommodations, he told Pelster that they were planning to stay as long as they could survive and would probably "catch the Venetian." Filing 96 at 3. Conversely, Martinez said the trip had been planned for a while, and that they drove because as a "big guy" he doesn't like to fly. Filing 96 at 4.

Because of these perceived inconsistencies, Pelster further questioned the men about the timeline of their trip. And after considering the time of the stop and the length of the trip, it was determined that if Abbasi and Martinez intended to return the rental vehicle to Chicago by 2:00 p.m. on June 21, 2019, as listed on the rental agreement, they would have just over 24 hours in Las Vegas. Filing 96 at 4-5. When confronted about the timeline, Abbasi explained that he could renew the rental agreement if needed, and that booking the car this way allowed him to avoid paying the entire cost up front. Filing 97-2 at 9:30-9:50. Pelster also asked both men if there were any large amounts of currency in the vehicle. Abbasi said he had "a little cash" on him, but that there were no large amounts of currency in the vehicle. Filing 96 at 4-5; filing 97-2 at 20:50-20:56. In fact, he said that he only had a couple hundred bucks on him because "nobody carries cash nowadays." Filing 97-2 at 21:18-21:26.

According to Pelster, Martinez also denied that there were large amounts of cash in the vehicle. Filing 96 at 6. And on the video footage of the traffic stop, after Pelster asked Martinez the question, Pelster can be heard saying "no, are you sure," implying that Martinez said there was not any currency in the vehicle, filing 97-2 at 42:14-42:30. In reviewing the video footage of the traffic stop, however, the Court was unable to hear Martinez's response itself over the noise of traffic in the background. See filing 97-2 at 42:14-42:30. And at his deposition, Martinez testified, "I just didn't say nothing" when asked about his response to Pelster's question. Filing 96 at 41; filing 97-10 at 35.

Based on the information gathered during the stop, Pelster believed reasonable suspicion of criminal activity existed, so he requested a K9 unit. Filing 96 at 5. After the dog gave a positive alert, the vehicle was searched, revealing "large, heat-sealed plastic packaging [containing] ... U.S. currency in the rear quarter panel on the driver's side." Filing 96 at 6. This was later determined to be $100,000, some of which was rubber-banded and some which was in paper bank bands from Byline Bank. See filing 96 at 6; filing 98 at 6. In addition, six cell phones were found. Filing 97-1 at 9-10.

According to the government, law enforcement also found several items in Martinez's backpack: an additional $10,000, personal use marijuana products, a cell phone, and receipts from previous travel. Filing 96 at 7. The government also provided a statement from Pelster indicating that marijuana products were found, filing 96 at 7; filing 97-1 at 9, and photos documenting the contents of Martinez's backpack. Filing 97-7. But, in reviewing the photos, the Court did not see any marijuana or items that could be considered marijuana products. Additionally, a Nebraska State Patrol report summarizing what occurred on the day of the stop states that Martinez described the products as "CBD/oil products" used "for his knees." Filing 97-16 at 11. And Martinez averred that no narcotics were found in the vehicle, emphasizing that no criminal ticket was issued in relation to the stop, implying he was not charged for being in possession of any controlled substances. Filing 98 at 5.

After the currency was found, both Abbasi and Martinez were taken to the Nebraska State Patrol headquarters for questioning. Filing 96 at 7. Before requesting an attorney, Abbasi indicated to investigators that he was completely unaware of the money in the vehicle. Filing 96 at 8; filing 97-15 at 23:40-23:45. Conversely, Martinez claims that during his interview at the headquarters he never disclaimed the $110,000, but instead, "simply asked for a lawyer." Filing 99 at 5. However, video evidence shows that when Martinez was asked specifically about the money, he claimed the only things he had were "in his bag." Filing 97-15 at 44:30-44:47. And later in the interview, when Martinez was told that the $100,000 would be seized, he again said that he did not know anything about that money, but did affirmatively state that the $10,000 found in his backpack was from his Chase Bank account. Filing 96 at 8; filing 97-15 at 1:13:19-1:13:55. After both men refused to answer further questions without an attorney present, they were released without criminal charges; however, the $110,000 was seized at that time.

In October 2020, Martinez was deposed about the matters in this case and claimed, for the first time, that the $100,000 was also his money, which he had secured through a private loan from his business associate, William Madden, in order to purchase a home. Filing 97-10 at 20-21; see filing 99 at 2. Martinez's deposition statements about the $10,000 located in his backpack were not as clear, as he claimed at one point that it was his money, filing 97-10 at 45-46, and later that it "came out of the big bundle of the $100,000." Filing 97-10 at 57. But in his subsequent answers to the government's special interrogatories, Martinez claimed, as he does now, that he received "$100,000 of these monies from William Madden through a loan" while "[t]he remaining $10,000 were taken from [his] earnings [as a chauffeur] and was from [his] Chase banking account." Filing 97-17 at 2; see filing 99 at 4.

Records from Martinez's Chase Bank account do show a $21,000 deposit with a description of "St Fire" made in March 2019, which he allegedly received after a fire at his rental home. Filing 97-20 at 6. And according to Martinez, the $100,000 loan arose after he and Madden had already "had a business relationship ... for many years, including handling limo service for Mr. Madden's clients and serving as a driver for Mr. Madden." Filing 99 at 2. In reference to this business relationship, Martinez noted that the $15,000 deposit to his Chase Bank account in April 2019 was from Madden for "services rendered." Filing 97-10 at 40; see filing 96 at 14, 41; filing 97-20 at 14-15. When Martinez was unable to secure traditional financing to purchase a home, he allegedly turned to Madden. Filing 99 at 3. And to support his claim that Madden agreed to loan him the money, Martinez provided an alleged loan agreement between him and Madden for $100,000, filing 97-31, and copies of emails allegedly between him and mortgage consultant Patrick McClain in January 2019, in which the pair discussed getting Martinez pre-qualified for financing to purchase a property. Filing 98 at 36-44; filing 99 at 3.²

Additionally, employees of a Byline Bank branch in Chicago said that on June 10, 2019, "William Madden entered the bank with a duffel bag containing U.S. currency bills in denominations of $20s, $10s, $5s and $1s [and] Madden requested larger bills in exchange for the smaller denominations totaling $100,000." Filing 96 at 18. Madden allegedly said that the "currency was from a commercial food event and on occasions his business primarily gets paid in cash, which they hold on to." Filing 96 at 18. Ultimately, Madden proceeded with the transaction even though the bank was only able to exchange $50,000 of his currency for larger bills. Filing 96 at 18-19.

At that time, Madden allegedly refused to explain why he wanted to exchange the money. Filing 96 at 18. However, when the bank called him three days later to inform him they received the currency necessary to exchange his additional $50,000—a service which he refused—Madden allegedly explained to the employee that he "earns over $2.2 million a year and over the years, has accumulated money that he keeps in a safe," some of which he was exchanging for a " ‘friend’ who asked for larger bills." Filing 96 at 18-19. But tax information produced by Madden shows that his 2019 adjusted gross income was $189,435, while his 2018 adjusted gross income was $105,866. Filing 96 at 23. When the government attempted to depose Madden about the loan agreement with Martinez, he invoked his rights under the Fifth Amendment, stating that "answering the question[s] may...