United States District Court, E.D. Arkansas, Western Division
OPINION AND ORDER
J. LEON HOLMES, District Judge.
This is a civil forfeiture action brought by the United States under 18 U.S.C. § 981(a)(1)(A) and 21 U.S.C. § 881(a)(6) against three parcels of real estate in the city of Blytheville, Arkansas, located at 5012 North 6th Street, 1105 Golf Links, and 925 East Main, and two vehicles, a 2011 Nissan GT-R and a 2004 Ford F-150. Robert Allen has filed affidavits of claims to the 2011 Nissan GT-R and the three parcels of real property, and he has moved to dismiss the forfeiture complaint. In response, the government argues that the motion to dismiss is premature because Allen has not fully responded to its discovery requests seeking information to verify his standing to contest the forfeiture and that, in any event, the complaint is sufficient. In the alternative, the government has requested an opportunity to amend, should the Court determine that Allen has standing and that the complaint is insufficient. For the reasons explained below, Allen's motion to dismiss is granted.
On August 26, 2013, the United States filed a civil forfeiture complaint against the three parcels of real property. On August 28, 2013, the United States amended the complaint to add the two vehicles. Document #3. The amended complaint contains the following allegations. Cedric Jackson and Allen are involved in the distribution of controlled substances, and Jackson launders drug proceeds through Allen and others. Jackson provides drug proceeds in cash to Allen, who uses the cash to purchase vehicles and real estate, which are used by Jackson and Allen. Agents of unidentified federal and state law enforcement agencies have interviewed persons who have implicated Jackson and Allen as members of a drug-trafficking conspiracy. These persons have purchased drugs from Jackson, witnessed Jackson and Allen selling drugs, and observed cash transfers from Jackson to Allen. State officers have witnessed Jackson and Allen meeting with persons whom the officers suspect to be involved in drug activity. State officers have made controlled purchases of narcotics from persons who are suspected of being members of Jackson's drug-trafficking organization. State authorities who executed a search warrant against a residence rented by Jackson located ammunition and five cellular telephones. Officers located four unidentified vehicles at Jackson's residence, two of which were titled in Allen's name. A person or persons saw Jackson driving unidentified vehicles titled in Allen's name, and a person or persons told authorities that Jackson is the true owner of those vehicles. From 2008 to 2012, Allen spent several hundreds of thousands of dollars more on the payments of various real estate and personal loans and deposits into savings and checking accounts than he reported as gross income. Id. at 2-3 ¶¶ 6-15.
Regarding the particular properties to be forfeited here, the complaint alleges, first, that Allen purchased 5012 North 6th Street in June 2012, that "[a] substantial amount of the mortgage payments have been made in the form of cash, " and that "[t]his cash represents proceeds of drug trafficking." Id. at 3 ¶¶ 16-18.
Second, the complaint alleges that Allen purchased 1105 Golf Links in April 2009, that "[a]ll of the mortgage payments for this property were made in the form of cash, " that "[t]his cash represents proceeds of drug trafficking, that "[a]lthough titled in Allen's name, Jackson has held out to various individuals that he is the owner of the residence, " that it "was the location of several large cash payments from Jackson to Allen, " and that "on several occasions, witnesses saw at this location large amounts of cash believed to be drug proceeds." Id. at 4 ¶¶ 20-24.
Third, the complaint alleges that Allen purchased 925 East Main in March 2005, that "[a] substantial amount of the payments of this property were made in the form of cash, " that "this cash represents proceeds of drug trafficking, " that "[t]his property was used to prepare drugs for distribution, [to] conceal at least one payment from Jackson to Allen, and [to] provide an air of legitimacy to the drug related funds Allen spent on various real and personal property." Id. at 4 ¶¶ 26-29.
Finally, the complaint alleges that Allen received a loan for the purchase of the 2011 Nissan GT-R in August 2010, that "Allen paid off the loan in approximately one month, and the loan payments were in the form of cash and transfers from other accounts, " that "[t]he account transfers and cash represent proceeds of drug trafficking and money laundering." Id. at 5 ¶¶ 31-33.
The complaint further alleges that each of these properties is subject to forfeiture as proceeds of drug trafficking, as items used to facilitate drug trafficking, or as property that was involved in money laundering. Id. at 3-5 ¶¶ 19, 25, 30, 34.
On September 27, 2013, Robert Allen filed affidavits of claims to the 2011 Nissan GT-R and the three parcels of real property. See Documents #4, #5, #6, and #7. In each affidavit, Allen asserted ownership of the asset and identified the date on which he purchased it.
On May 13, 2014, the government served Allen's counsel with a set of 13 special interrogatories. Allen's original counsel withdrew in July 2014, and Allen obtained new counsel, who submitted responses to the interrogatories on August 15, 2014. Allen declined to answer portions of the interrogatories requesting tax information, asserting his rights under the Fifth Amendment. On September 18, 2014, the United States sent a letter to Allen, objecting that his answers to interrogatories 3, 5, 6, and 7 were deficient. The United States requested that Allen supplement his responses to those interrogatories by October 10, 2014. On October 10, 2014, Allen supplemented his responses to interrogatories 3 and 7, but objected to the United States's request that he supplement his responses to interrogatories 5 and 6, again asserting his rights under the Fifth Amendment. Allen's October 10 letter describes the responses he previously provided to the United States. It states, in pertinent part:
To support standing for the limited scope of special interrogatories, Claimant responded to Special Interrogatory Nos. 1 and 2 with the following:
a) Exhibit A, No. 1. 925 E. Main St: 1) warranty deed evidencing a legal transfer of ownership from First National Bank of Blytheville to Claimant; 2) an Entergy bill and Columbia Insurance Group Policy Declarations page evidencing Claimant's dominion and control over defendant property; and 3) Mississippi County Real Property record evidencing Claimant's ownership and a history of title transfers dating back to 1996[.]
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c) Exhibit A. No. 3. 1105 Golf Links: 1) warranty deed evidencing a legal transfer of ownership from Carla J. Nelson to Claimant; 2) a SourceGas Arkansas Inc, bill, an Entergy bill, and a Shelter Insurance Companies Evidence of Insurance evidencing Claimant's dominion and control over defendant property; and 3) Mississippi County real Property records evidencing Claimant's ownership and a history [of] title transfers dating back to 1979.
d) Exhibit A. No. 4. 5012 N. 6th St: 1) warranty deed evidencing a legal transfer of ownership from Matthew R. Mosley and Whitney R. Mosley to Claimant; 2) a Scrivenor's [sic] Error Affidavit correcting part of the legal description; 3) an Entergy bill evidencing utilities in Claimant's name, American Modern Select Insurance Company Dwelling Policy Declarations, a SourceGas Arkansas Inc., bill evidencing Claimant's dominion and control over defendant property; and 4) ...