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SANTANA v. UNITED STATES CUSTOMS SERV.

June 19, 1997

RAFAEL SANTANA, Plaintiff,
v.
UNITED STATES CUSTOMS SERVICE, Defendant.



The opinion of the court was delivered by: KOSIK

 This matter derives from the consolidation of Santana's action seeking the return of government forfeited bonds totaling $ 300,000, and Government's forfeiture action seeking to have this court deem such bonds as forfeitable as a result of Santana's conviction for controlled substance offenses. See Document 1 (No. 96-1448) (Complaint to Compel Return of Property Seized); Document 1 (No. 97-433) (Verified Complaint of Forfeiture in Rem). The issue before this court is whether Government's action for forfeiture was filed prior to the expiration of the statute of limitations for such actions. In forfeiture proceedings, 19 U.S.C. § 1621 prescribes a limitation period of five years from "the time when the alleged offense was discovered" for the commencement of a forfeiture action. We find that the alleged offense was discovered at the latest in 1989, and, furthermore, that Government had knowledge as to the bonds connection to the forfeitable offense no later than 1990. Accordingly, Government's forfeiture action filed on March 18, 1997, was not within the five year limitation period and should be dismissed.

 I. BACKGROUND

 Government began investigating Santana in the late 1980s suspecting him of participation in an illegal narcotics operation. This investigation resulted in the arrest of Santana in 1989. On October 12, 1989, Santana entered a guilty plea to one count of manufacturing, distributing, dispensing, or possessing with intent to manufacture cocaine and one count of criminal conspiracy. Subsequently, Santana was sentenced by this court to life imprisonment.

 During the investigation of Santana, a member of the alleged conspiracy, Castagnola, turned government informant. Castagnola reported in 1989/1990 to federal agents that he physically viewed bonds that were delivered to Santana in the. mid-eighties. See Document 1 (No. 97-433), Affidavit of Robert Craven. Castagnola also reported during that time that Santana had informed him that in order to hide assets from federal investigators it was wise to invest in tax free bonds. See id. Castagnola also reported that the business was a front to Santana's illegal activity. See id.

 Government seized the bonds on May 28, 1992, pursuant to a grand jury subpoena, from a relative of Santana. Government failed to provide notice of this seizure to Santana for a period of over three years. On August 2, 1996, Santana filed a complaint to compel the return of the property seized. See Document 1 (No. 96-1448). Government's forfeiture action was filed on March 18, 1997. See Document 1 (No. 97-433).

 The issue that the parties ask this court to resolve is whether Section 1621's statute of limitations period commenced on the date the bonds were seized or at the time Government became aware of the narcotics violations, i.e. in the 1980s.

 II. DISCUSSION

 It is undisputed by the parties that 19 U.S.C. § 1621 governs the limitations period for this action. Section 1621 provides that an action for forfeiture must be commenced within five years after the time when the alleged offense was discovered. *fn1" Government contends that the limitations period commenced in May of 1992 when the bonds were seized. Accordingly, Government contends that its filing of the forfeiture action in March of 1997 was within the limitations period. Santana contends that such a period commenced running when the alleged narcotics offense was discovered. Therefore, Santana requests this court to consider the limitations period as commencing sometime in the 1980s when Santana was investigated and subsequently arrested on narcotics violations.

 As evident in the parties briefing and this court's own independent research, there is a dearth of precedence concerning the issue of when the limitation period commences. We will consider such precedence in turn.

 A matter originating from the District of New Jersey and proceeding to the Supreme Court addressing this matter provides some guidance as to when the limitation period commences. See United States v. A Parcel of Land, Buildings, Appurtenances and Improvements, Known as 92 Buena Vista Avenue, 738 F. Supp. 854 (D.N.J. 1990), aff'd in part, 937 F.2d 98 (3d Cir. 1991), aff'd 507 U.S. 111 (1993). In 92 Buena Vista Avenue, the courts were concerned with the forfeiture of a house that allegedly was connected to a drug conspiracy. The homeowner was attempting to defeat the forfeiture primarily under the "innocent owner" defense. However, the statute of limitations issue was initially raised. The facts are that the house was bought in 1982 in the name of the homeowner. It was alleged by the government that the purchase money for the house was secured by a third party through the operation of a narcotics ring. The forfeiture action was premised on the alleged purchase of the home with drug proceeds and an alleged illegal transaction that occurred on the actual premises in 1986.

 The forfeiture action was filed in April 1989, and the district court found that, in accordance with Section 1621, the government became aware of the actionable violation in 1986. *fn2" Because five years had not past, the district court ruled that the limitations period did not run.

 The matter was appealed to the Supreme Court on the limited issue concerning the "innocent owner" defense. *fn3" See United States v. A Parcel of Land, Buildings, Appurtenances and Improvements, Known as 92 Buena Vista ...


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