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Failing to Follow the Strict Rules for Filing a Verified Claim to Forfeited Money Results in Forfeiture

U.S. v. $14,250 U.S. Currency
No. CCB-12-1252 (D. Md. Dec. 21, 2012)
by Kevin M. Cox, Associate
Semmes, Bowen & Semmes (www.semmes.com)

On April 24, 2012, the United States of America filed a “Verified Complaint for Forfeiture” as to $14,250.00 in U.S. Currency. The action was a civil, in rem proceeding to forfeit money seized pursuant to a property search connected to violations of the Controlled Substance Act, 21 U.S.C. § 841, by Eric Coley (“Mr. Coley”), and were subject to forfeiture under 21 U.S.C. § 881(a)(6).

On May 2, 2012, the government sent copies of the complaint to Mr. Coley’s attorney. The notice indicated that Mr. Coley was required to file a verified claim within 35 days of the date of the notice, i.e. by June 6, 2012. On June 7, 2012, Mr. Coley filed an “Answer” to the government’s complaint, explaining the ground for his claim to the currency. He did not file a verified claim.

On July 20, 2012, the government sent Mr. Coley interrogatories and a request for production, along with a letter requesting that Mr. Coley file a verified claim within an additional 35 days. Once again, Mr. Coley did not file a verified claim. Instead, he filed a motion to stay discovery pending resolution of the criminal case against him.

On September 19, 2012, Mr. Coley pled guilty to conspiracy to distribute and possess with intent to distribute 100 grams or more of heroin and possession of a firearm in furtherance of drug trafficking. On November 29, 2012, the United States filed a motion to strike Mr. Coley’s answer, arguing that Mr. Coley lacked statutory standing because he did not file a verified claim within 35 days of receiving notice, as required by RULE G(5) of the SUPPLEMENTAL RULES FOR ADMIRALTY OR MARITIME CLAIMS AND ASSET FORFEITURE ACTIONS. Mr. Coley filed an opposition, but still no verified claim.

SUPPLEMENTAL RULE G governs a forfeiture action in rem arising from a federal statute. Under SUPPLEMENTAL RULE G(5)(a)(i),“[a] person who asserts an interest in the defendant property may contest the forfeiture by filing a claim in the court where the action is pending.” See also 18 U.S.C. § 983(a)(4)(A) (stating a person may claim an interest in seized property in a “manner set forth in the [SUPPLEMENTAL RULES]”). The government may set the deadline for filing a verified claim at 35 days from the date it sends notice of the proceeding to a potential claimant. A verified claim contesting forfeiture must accomplish the following: (1) identify the specific property claimed; (2) identify the claimant and state the claimant's interest in the property; (3) be signed by the claimant under penalty of perjury; and (4) be served on the government's attorney. SUPP. R. G(5)(a). After filing a claim, a person asserting an interest in seized property has 21 days to serve and file an answer to the complaint for forfeiture. SUPP. R. G(5)(b).

The Supplemental Rules must be strictly enforced and courts consistently have required claimants to follow the language of the SUPPLEMENTAL RULES to the letter. Of the RULE G(5) requirements, the verified claim is the most significant. It serves two purposes: (1) it ensures that all potential claimants come forward quickly; and (2) it minimizes the danger of false claims.

A claimant who fails to file a verified claim has no standing to contest a forfeiture. Thus, if a claimant has failed to file a qualifying claim within the time limits allowed by law, the district court should strike the answer on the pleadings and enter a default judgment for the government. Here, Mr. Coley did not file a verified claim. Though the answer he filed on June 7, 2012, took the form of a verified claim – instead of admitting or denying the statements in the government’s complaint, it included the identity of the property, the identity of the claimant, and the claimant’s interest. Nonetheless, it was not signed by Mr. Coley under penalty of perjury. As a result, the document was not a verified claim.

Because of the important interests served by requiring a verified claim, courts are entitled to insist upon procedural regularity. Here, Mr. Coley failed to file a verified claim, despite multiple requests by the government that he do so. Accordingly, the court granted the government’s motion to strike Mr. Coley’s answer and enter default judgment for the government.