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.
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.
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.
Because five years had not past, the district court ruled that the limitations period did not run.
In affirming the district court, the Third Circuit provided a discussion concerning the determination of whether proceeds sought to be forfeited are traceable to drug transactions. See Buena Vista Ave., 937 F.2d at 104. The court stated that "there is no need to tie the [property] to proceeds of a particular identifiable illicit drug transaction." Id. (citation omitted) (internal quotation marks omitted) (alterations in original). "All that is required is that a court be able to look at the 'aggregate' of the facts and find reasonable grounds to believe that the property probably was derived from drug transactions." Id. In finding that the limitation period had not tolled, it can be inferred through the Third Circuit's decision that the "alleged violation" was the transaction occurring on the premises in 1986. See id. at 105. This is when the government knew or should have known of the alleged offense and the availability of forfeiture.
The matter was appealed to the Supreme Court on the limited issue concerning the "innocent owner" defense.
See United States v. A Parcel of Land, Buildings, Appurtenances and Improvements, Known as 92 Buena Vista Avenue, 507 U.S. 111 (1993). The court affirmed the Third Circuit's decision.
Another informative case is one deriving from the Eighth Circuit. See United States v. Premises Known as 318 So. Third St., 988 F.2d 822 (8th Cir. 1993). In determining when the statutory limitation period codified at Section 1621 commenced running, the court focused on when the government can be imputed with notice or knowledge of an alleged violation of federal criminal law which allows for forfeiture.
Finally, we find that the district court's decision in United States v. $ 116,000 in U.S. Currency, is instructive. See 721 F. Supp. 701 (D.N.J. 1989). In that case, the government effectuated a raid, which resulted in the seizure of the currency, in September of 1983. The claimant was indicted in August of 1985. The government filed its forfeiture action in December of 1988. In that case, the claimant contended that the limitations period commenced on the date of the raid which was over five years prior to the filing of the forfeiture action. The government countered stating that the period commenced running on the date it had uncovered sufficient evidence of a nexus between the currency seized and the illegal activity. The court, in ruling in the claimant's favor, consulted custom decisions because Section 1621 primarily relates to custom proceedings. The court adopted custom rulings suggesting that the period commences when the government possesses the knowledge as to the underlying violation. See id. at 703. The court stated:
It is certainly consistent with ordinary and usual sense of the language "alleged offense was discovered" to conclude that seizure of property is either contemporaneous evidence of an alleged offense, or the result of prior discovery of an offense. It is also consistent with the common meaning of the language to conclude that in the absence of seizure, an offense is "discovered" when knowledge of the alleged wrong is received.
Id. at 703.
In dismissing the government's nexus argument, the court concluded:
Under 19 U.S.C. § 1615 the government must have probable cause to institute the forfeiture proceedings. The government need not trace the cash to a specific transaction, or actually prove by a preponderance of the evidence a substantial connection to illegal gambling. The government must merely furnish probable cause, i.e. reasonable grounds to believe that a substantial connection exists between the money seized and the gambling operation.