The opinion of the court was delivered by: ALFRED M. WOLIN
This is a civil forfeiture action in which the government alleges that a certain partially assembled drag racer (the "Property") is forfeitable as proceeds of criminal activity pursuant to 18 U.S.C. § 981(a)(1)(A) and 21 U.S.C. § 881(a)(6). The case is before the Court on the motion of claimant Mac Arthur Crudup (1) for return of the property, (2) for release of a $ 5,000 bond claimant filed for return of the Property, and (3) to dismiss the complaint on grounds that the government failed to initiate this action within the required time period and that the complaint fails to state a claim with requisite particularity under Federal Rule of Civil Procedure E(2)(a). For the reasons that follow, the Court will dismiss the complaint without prejudice for failure to comply with Rule E(2)(a), order the government to return the $ 5,000 bond to claimant with interest at the statutory rate, and deny claimant's motion for return of the Property pending the government's filing of an amended complaint.
Before outlining the factual background of this case, a brief explication of applicable civil forfeiture procedures may be useful.
Basically, property may be subject to civil forfeiture on two different grounds: (1) that the property itself played a part in a criminal act; and (2) that the purchase of the property was somehow tainted, either because it was designed to conceal assets derived from criminal activity or because the funds used for the purchase were direct or indirect proceeds of criminal activity.
The complaint in this action asserts two counts, each based on a statute which authorizes seizure of "proceeds" of illegal activity. Eighteen U.S.C. § 981(a)(1)(A) subjects proceeds of certain customs law violations to forfeiture -- specifically "any property, real or personal, involved in a transaction or attempted transaction in violation of [ 31 U.S.C. §§ 5313(a) or 5324(a), or of 18 U.S.C. §§ 1956-1957], or any property traceable to such property. . . ." Similarly, section 881(a)(6) of the Controlled Substances Act provides for forfeiture of "all moneys, negotiable instruments, securities, or other things of value furnished or intended to be furnished by any person in exchange for a controlled substance in violation of this subchapter, [and] all proceeds traceable to such an exchange . . . ." 21 U.S.C. § 881(a)(6).
The first step in a civil forfeiture is seizure of the subject property, either following a hearing to determine probable cause or, in certain circumstances, without one. See Schrob v. Catterson, 948 F.2d 1402, 1416 n.13 (3d Cir. 1991). The seized property is subject to administrative forfeiture if its value does not exceed $ 500,000. Id.; see also 19 U.S.C. § 1607; 18 U.S.C. § 981(d). The administrative forfeiture process requires the government to provide potential claimants with certain forms of notice of the seizure and of the remedies available to them. Id.
Upon receiving such notice, a claimant has three options. The first is to "do nothing, in which case the property forfeits to the government." Schrob, 948 F.2d at 1413 n.9. Second, a claimant may file a claim and a cost bond, "thereby requiring the government to seek judicial forfeiture in a court hearing." Id. Where a claimant has filed a claim and cost bond in a "drug-related" action "relating to the seizure of a conveyance," Congress has enacted additional expedited procedures. These require the government to initiate judicial proceedings within sixty days of the filing of the claim and cost bond; they also allow a claimant to petition for expedited release and, after that, to file a substitute res bond which, if accepted, allows the claimant to get his property back. See 21 U.S.C. § 888; 21 C.F.R. §§ 1316.96, 1316.98. A claimant's third option is to petition the government for remission and return of his property, keeping the matter on the administrative forfeiture track. Schrob, 948 F.2d at 1413 n.9. "Generally, once a government has made an administrative determination on the petition, courts have no power to review that decision." Id., citing United States v. Von Neumann, 474 U.S. 242, 245-46, 106 S. Ct. 610, 612-13, 88 L. Ed. 2d 587 (1986).
This action arises out of claimant's April 1992 arrest and subsequent indictment on charges that he illegally imported and distributed anabolic steroids during a time period beginning in 1990. In February 1993, claimant was convicted on two counts under the Controlled Substances Act: conspiracy to distribute and possess with intent to distribute a controlled substance, and distribution and possession with intent to distribute anabolic steroids. He was acquitted on the importation charges.
Meanwhile, during claimant's trial, the DEA seized the Property pursuant to a warrant issued by Magistrate Judge Ronald J. Hedges and sent claimant the Notice of Seizure of a Conveyance for a Drug-Related Offense dated January 27, 1993 (the "Notice") attached as Exhibit B to claimant's motion papers.
The Notice states: "Upon the filing of a claim and the posting of a cost bond, the merits of the claim and the determination of forfeiture will be conducted through a judicial proceeding." It further provides that claimants "may, subsequent to the filing of a claim and the posting of a cost bond, file a Petition for Expedited Release." The Notice cites statutory authority for each of these statements and reiterates, in bold type (emphasis in original), that the information regarding expedited review proceedings "only applies to cases where the Government proceeds with forfeiture and the owner(s) or other interested parties decide to contest the forfeiture in court, by filing a claim and posting a cost bond."
When the Petition reached the U.S. Attorney's office, however, it was confused with papers from another file. In a letter to claimant's attorney dated April 8, 1993, the U.S. Attorney purported to deny the petition; however, the letter referenced a vehicle other than the property, based its denial on grounds that differed from the government's grounds for forfeiture of the Property, and stated that claimant was entitled to file a substitute res bond in the amount of $ 5,000 in exchange for the Property, which bond would be forfeited "should the vehicle be judicially forfeited." Again, according to the Notice, since claimant had not yet filed a claim and cost bond, a substitute res bond filing would have been premature.
Nevertheless, claimant's attorney remitted the suggested bond to the DEA under cover letter dated June 14, 1993.
The cover letter refers to the bond as a "res bond." The DEA, however, did not release the res but rather "treated it as a cost bond" and sent it to the U.S. Attorney's office on or about August 13, 1993 for litigation.
On August 18, 1993, claimant filed a civil rights action in this Court against various federal actors based upon the seizure of the Property. On October 29, 1993, after moving to dismiss the civil rights action, the government filed the instant forfeiture action, which was subsequently consolidated with the civil ...