United States v. Newman

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UNITED STATES OF AMERICA, Plaintiff, v. JOVAN NEWMAN, MARCUS THOMPSON, ANDRELL WESLEY, and MARZELL FULLILOVE, Defendants.

No. 21-CR-51-JPS

United States District Court, E.D. Wisconsin

September 4, 2024

ORDER

J. P Stadtmueller U.S. District Judge

1. INTRODUCTION AND PROCEDURAL HISTORY

On May 25, 2022, in connection with Defendant Jovan Newman's (“Newman”) plea of guilty to Counts Eight and Nine of the Indictment, the Court issued a preliminary order of forfeiture as to certain properties seized on or about December 21, 2020 in Milwaukee, Wisconsin, including approximately $56,719.00 in U.S. currency. ECF No. 107. In his plea agreement, Newman agreed that these properties constituted “the proceeds of the offenses to which he [was] pleading guilty.” ECF No. 96 at 8. The Government filed a notice of forfeiture on June 6, 2022 and served all potential owners by certified mail with a copy of the notice. ECF Nos. 112, 113. Newman was sentenced in September 2022. ECF Nos. 130, 131.

On May 11, 2023, in connection with Defendant Andrell Wesley's (“Wesley”) plea of guilty to Counts One and Nine of the Indictment, the Court issued a preliminary order of forfeiture as to certain properties seized on or about December 21, 2020 in Milwaukee, Wisconsin, including approximately $56,719.00 in U.S. currency. ECF No. 180. In his plea agreement, Wesley agreed that these properties constituted “the proceeds of the offenses to which he [was] pleading guilty.” ECF No. 175 at 8. The Government filed a notice of forfeiture on May 22, 2023 and appears to have served all potential owners by certified mail with a copy of the notice. ECF No. 181. Wesley was sentenced in July 2023. ECF Nos. 190, 191.

On July 11, 2022, Gloria Piphus (“Piphus”) hand delivered to the U.S. Attorney's Office and, on July 18, 2022, filed with the Clerk's Office, a statement that on or about December 18, 2020, she gave her grandson, Wesley, “$35,000 in U.S. currency to go and purchase some more cars.” ECF No. 117.

The Government construed Piphus's statement as a third-party petition “asserting an interest in the property to be forfeited” under Federal Rule of Criminal Procedure 32.2(c). ECF No. 184 at 2. Based on the timing of the statement and the Government's motion, the Court agreed, although it observed that the statement “lacks many of the requirements set forth in 21 U.S.C. § 853(n)(3) for such a petition, as warned in the Government's notices of forfeiture.” ECF No. 186 at 2 (citing ECF Nos. 112, 181); see also United States v. Cowan, No. 3:11-CR-00053-RLY, 2015 WL 1824110, at *2 (S.D. Ind. Apr. 21, 2015) (denying purported petition for failure to comply with requirements set forth in § 853(n)(3)). Accepting the Government's reading of the statement as a petition, the Court determined that an ancillary proceeding was necessary and authorized the parties to conduct discovery “concerning whether Piphus has an ownership interest in approximately $35,000.00 of the approximately $56,719.00 seized and, if so, the extent of that interest.” Id. at 2-3 (citing ECF No. 184 at 3); see also Fed. R. Crim. P. 32.2(c)(1); 21 U.S.C. § 853(n)(2).

Following several status reports and extensions of time to conduct settlement negotiations and complete written discovery, the Government informed the Court that the parties were at an impasse and that it sought to take Piphus's deposition in February 2024. ECF Nos. 194, 196, 197, 199, 201. The Court permitted an additional extension for that purpose. ECF No. 202. In March 2024, the Government reported that it had completed Piphus's deposition and “believes that there are no triable issues.” ECF No. 206 at 2. The Government therefore requested to file a motion for summary judgment under Rule 32.2(c)(1)(B). Id.; Fed. R. Crim. P. 32.2(c)(1)(B) (“When discovery ends, a party may move for summary judgment under Federal Rule of Civil Procedure 56.”). The Court granted that request and ordered the Government to file a motion for summary judgment within 90 days, with such submission to include a proposed order in accordance with Rule 32.2(c)(2) and a statement regarding the necessity of a hearing on the matter. ECF No. 207 at 1-2. The Court allowed Piphus 45 days from the filing of the Government's motion to file a response. Id. at 2.

Now before the Court is the Government's June 21, 2024 motion for summary judgment. ECF No. 217. Piphus did not file a response within the time set by the Court, nor has she filed one since. Pursuant to Federal Rule of Civil Procedure 56(e)(2) and Civil Local Rule 56(a)(1)(A), the Court therefore considers the facts proffered by the Government, and set forth below, as undisputed for purposes of the motion. Id. (Government's provision of rules required by Civil Local Rule 56(a) to Piphus with the motion for summary judgment). For the reasons set forth below, the Court will grant the motion.^[1]

2. UNDISPUTED FACTS^[2]

On December 21, 2020, the North Central High Intensity Drug Trafficking Area executed a search warrant at an apartment shared by Wesley and Newman. Wesley and Newman were present at the time.

Directly under the living room window, officers found two clear knotted sandwich bags that tested positive for fentanyl and weighed approximately 96.9 grams. In the bedroom, officers found a loaded Glock firearm, a loaded black Ruger firearm, and multiple gold necklaces. Also found were a black 50-round drug magazine and three bottles of lactose, a common drug cutting agent. In the hallway, officers found approximately $50,000.00 in U.S. currency concealed in a black duffle bag in the washing machine.

In the kitchen, officers found two digital scales, sandwich bags, and cups. An officer found a Duralast narcotics press on the stove, which was consistent with the square substance found on the sidewalk outside the living room described above. On the counter, an officer found an electronic money counter. On top of the refrigerator, an officer found over 100 rounds of ammunition. An officer also found five more bottles of lactose. In the top kitchen drawer, an officer found a black Smith & Wesson pistol and a loaded Llama handgun. Inside of a paper bag, an officer found a knotted sandwich bag containing a light gray, chunky substance weight 26.6 grams, which tested positive for fentanyl. An officer also found a cake pan with residue and a red ceramic plate containing suspected fentanyl residue.

Piphus contends that she loaned Wesley the claimed $35,000.00 in U.S. currency so that he could use it to obtain a vehicle at a car auction. Piphus did not execute a written agreement with Wesley memorializing the terms of the loan. Piphus previously purchased vehicles at the car auction in 2019 and 2020 for $300.00, $500.00, $612.00, $800.00, $2,645.00, and $900.00.

Piphus testified that she was not in possession of her claimed $35,000.00 in U.S. currency when it was recovered from the apartment. Piphus did not know that Wesley lived at the apartment. She did not have keys to the apartment. Piphus testified that the currency was divided into “hundreds, fifties, and twenties” and that there were no other denominations. She stated that the money came from her “stash.” She stated that the currency measured approximately seven inches in size.

The correct denominations of the money recovered were $100, $20, $10, $5, $2, and $1 bills. There were no $50 bills. On December 18, 2020, Wesley posted a photograph on social media of himself holding a stack of currency that spanned the length of his arm. When law enforcement officers recovered the $56,719.00 in U.S. currency, they had to use two evidence bags to store it.

3. LEGAL STANDARD

Under Federal Rule of Civil Procedure 56, the “court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56; Boss v. Castro, 816 F.3d 910, 916 (7th Cir. 2016). A “genuine” dispute of material fact exists when “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

Where, as here, “the non-movant does not come forward with evidence that would reasonably permit the finder of fact to find in her favor on a material question, then the court must enter summary judgment against her.” Waldridge v. Am. Hoechst Corp., 24 F.3d 918, 920 (7th Cir. 1994) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-87 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322-24 (1986); Anderson, 477 U.S. at 249-52); see also Fed.R.Civ.P. 56(e)(3) (“If a party fails . . . to properly address another party's assertion of fact as required by Rule 56(c), the court may . . . grant summary judgment if the motion and supporting materials- including the facts considered undisputed-show that the movant is entitled to it.”).

4. ANALYSIS

“Section 853(n)(6) states in plain terms that a third party claimant must make one of two showings in order to successfully assert an interest in property that is subject to criminal forfeiture.” United States v. Watkins, 320 F.3d 1279, 1282 (11th Cir. 2003). Specifically, it provides that:

(6) If, after the [ancillary proceeding], the court determines that the petitioner has established by a preponderance of the evidence that- (A) the petitioner has a legal right, title, or interest in the property, and such right, title, or interest renders the order of forfeiture invalid in whole or in part because the right, title, or interest was vested in the petitioner rather than the defendant or was superior to any right, title, or interest of the defendant at the time of the commission of the acts which gave rise to the forfeiture of the

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