United States v. $11,500.00 in U.S. Currency

Dismissal of civil forfeiture action under 21. U.S.C. § 881 for failure to identify the bailor was an abuse of discretion, predominantly because the omission did not appear to be calculated, did not delay or extend the proceedings, and did not prejudice the government.

Charles Guerrero used $11,500 to post bail for his wife. Suspicious of the money, law enforcement agents arrested Guerrero and found him in possession of heroin and $2,971. The government started civil forfeiture proceedings, and Guerrero filed a claim indicating possessory interest in the money. The district court granted summary judgment in favor of the government, holding that Guerrero failed to comply with Supplemental Admiralty and Maritime Claims Rule G(5)(a)(iii), which requires that a claim form filed by a bailee must identify the bailor. The panel held that the district court’s dismissal of the claim was an abuse of discretion because it failed to consider the factors relevant to the exercise of its discretion. First, the panel held that even though the requirement to identify the bailor in the claim applied to Guerrero, courts have “discretion to overlook the failure to conform to the requirements of forfeiture claim rules” depending on (1) whether it prejudices the government and (2) whether it is an strategic attempt to gain some advantage. The failure did not prejudice the government because the government was aware of Guerrero’s wife’s identity and took her deposition, had a chance at proper investigation, and was aware of underlying facts in the possession of the currency. There was also no advantage gained, and it would not have been clear to Guerrero that it would be fatal to fail to accurately identify the bailor. The panel disagreed with the district court that the evidence of the source of the $11,500 was so conclusive as to eliminate any genuine issue of fact and enough to grant summary judgment. Finally, the panel held that failure to provide timely notice did not require the government to return property after the forfeiture proceedings had commenced. AFFIRMED in part, VACATED and REMANDED in part.