A Day Late Is $99,500 Short Says U.S. Magistrate Judge

U.S. Magistrate Judge Laurel Beeler has denied a forfeiture claimant, Mr. Chike Okafor, opportunity to contest the forfeiture of $99,500, seized from Mr. Okafor’s luggage, because his claim was received one day after the deadline for filing a referral of his case for judicial forfeiture, despite a declaration, from his attorney, under oath, that the attorney FedExed the claim for timely delivery.

Mr. Okafor’s troubles began when DEA agents seized $99,500 from his carry-on luggage at San Francisco’s International Airport. The DEA then sent a letter of notice informing Mr. Okafor that the DEA intended to administratively forfeit his currency under the theory that the currency was suspected of having been used in or acquired from a violation of the Controlled Substances Act.

The DEA’s letter continued by providing Mr. Okafor with three options.

The first option was to do nothing, in which case the DEA would administratively forfeit his money

Option two was to file a “Petition for Remission and/or Mitigation.” Apart from requiring more paperwork, the second option rarely results in anything different from the first option. A Petition for Remission and/or Mitigation asks the agency that has declared intent to forfeit the property to either not forfeit the property or reduce the forfeiture. It is essentially a beg for mercy in the form of asking an agency to conduct an internal review of the forfeiture. Sole discretion to decide Petitions for Remission and/or Mitigation resides with the agency who wants to forfeit the property. Moreover, the agency is partially funded from the forfeitures it perfects.

The Government tends to favor options one and two, obviously.

The third option was to file a claim contesting the forfeiture.

In general, timely filing of a claim stops all administrative forfeiture proceedings.The claim, in a federal civil asset forfeiture action, if timely, is transferred to the Office of a U.S. Attorney who (usually) has 90 days to either initiate a judicial forfeiture action in a federal district court or return the seized property. The Government usually prevails with option three, too. The Government, nonetheless, usually disfavors option three. Removing a forfeiture action to federal court means that someone from outside of the Executive branch (a judge) reviews arguments at each stage of the forfeiture proceedings. It creates a public record for journalists and activists to criticize Government behaviour. It guarantees the availability of an appeal process. It means that a judge or jury could rule against the Government.  And it is significantly more expensive to fight a claim than to deny a Petition for Remission and/or Mitigation or to simply administratively forfeit the property. The Government has its own legal expenses in fighting a judicial forfeiture and, if the claimant prevails on the merits of the forfeiture, the Government can be ordered to retroactively pay the legal expenses of the claimant. Indeed, it may not be worth it, depending on the value of the forfeiture, and the likelihood of the Government prevailing, for the Government to pursue a judicial forfeiture, once a timely claim is filed.

On the other hand, claimants usually disfavor option three, too. For most, the laws governing forfeitures are too Byzantine and too unforgiving to navigate without a lawyer who specializes in fighting forfeitures. Such lawyers are rare. They also tend to be expensive. Fighting a judicial forfeiture also exposes the claimant to expansive discovery requests that could lead to criminal liability. Factoring the improbability of prevailing against the Government, the potential liability, and the substantial legal expenses of fighting a forfeiture, then, usually points the potential claimant towards conceding the forfeiture, pleading for mercy, or filing a claim without a lawyer (which seldom goes well). Moreover, the potential claimant may not even be able to hire a lawyer, if he cannot find one who will take the case on contingency, or for potential fee awards, or pro bono, because the Government has seized (and moved to forfeit) the very funds that the claimant would use to hire a lawyer.

Mr. Okafor chose option three, filing a claim. Well, he thought he filed a claim.

Mr. Okafor, at least, appears to have taken all of the steps that one could reasonably conclude were required for filing a claim. After having his currency seized, he retained a lawyer. Through his attorney, he filled out the paperwork for option three, the claim, and entrusted the mailing of the claim to his attorney, David M. Michael.

The claim “need not be made in any particular form," it need only make clear that it is a claim and “identify, under oath, the property being claimed and the claimant's interest in that property.” Volpe v. United States, 543 F.Supp.2d 113 (D. Mass. 2008) citing 18 U.S.C. § 983(a)(2)(C),(D).

The claim is, though, required to be filed in a timely manner. To be timely, it must be received by the due date that the agency sets for filing a claim. The agency, however, cannot set the due date for “earlier than 35 days after the date the letter is mailed.” Id.§ 983(a)(2)(B).

In Mr. Okafor’s case, the DEA sent out a letter of notice bearing a mailing date of May 1st, 2013. The earliest deadline that the DEA could demand, then, was June 5th, 2013, which is the deadline the DEA set.

According to court records, Mr. Okafor’s claim, or attempted claim, arrived at the DEA’s office on June 6, 2013, at 9:03 a.m--or 3 minutes into the business day of the first day after the DEA’s deadline.

A week later, the DEA sent a letter to Mr. Okafor’s counselor, Mr. Michael, stating that the claim was untimely and offering to construe the claim as a Petition for Remission and/or Mitigation.

Michael responded with a series of letters arguing that the claim was sent in a timely manner and requesting that, even if the DEA thought the claim untimely, it exercise its discretion to consider the claim to be timely because the untimely receipt was not due to inadvertence or error on the part of Mr. Okafor. Indeed, Mr. Michael eventually provided a sworn declaration declaring that, on June 4th, Mr. Michael personally delivered a FedEx envelope containing Okafor’s claim to a Berkeley, CA FedEx office and paid for overnight delivery to arrive at the DEA before 10:30 a.m. on June 5th, 2013.

The DEA maintained its position that the claim was untimely and ultimately construed Mr. Okafor’s day late attempt at a claim as a Petition for Remission or Mitigation. The DEA then denied the Petition for Remission or Mitigation that it unilaterally created on behalf of Mr. Okafor.

Mr. Michael, on behalf of Mr. Okafor, subsequently filed a motion requesting that the Court order the return of Mr. Okafor’s currency or, alternatively, deem Mr. Okafor’s attempted claim as timely and direct the DEA to file a judicial complaint for forfeiture within 90 days or return Mr. Okafor’s currency.

The Government, for its part, argued that the Court lacked jurisdiction to deem Mr. Okafor’s attempted claim as timely.

Magistrate Judge Laurel Beeler, while rejecting the most ludicrous arguments of the Government, nonetheless declined to deem Mr. Okafor’s attempted claim as timely. Magistrate Judge Laurel Beeler reasoned that the facts of Mr. Okafor’s case failed to support a finding of extraordinary circumstances and equitable tolling that would merit remand to the DEA to consider the claim as timely.

Barring successful appeal, then, Mr. Okafor appears to be precluded from even challenging the forfeiture of his currency--which just seems crazy. Whether one finds a place for civil asset forfeiture in our criminal justice system or not, individuals who have their property seized for forfeiture should at least have an opportunity to challenge the merits of the forfeiture. Procedural guidelines should neither trump nor displace bedrock principles of due process, basic fairness, or the rights of property owners to have independent review of Government actions before they are deprived of private property--particularly where the claimant is not at obvious fault and where bending the deadline causes no significant harm.

Moreover, the DEA itself should welcome judicial hearing in such a case. For one, the Government stands to lose little in allowing a hearing because Mr. Okafor seems unlikely to prevail if the case gets heard on the merits. Secondly, and more importantly, the DEA's position is petty and alien to any cognizable sense of fair play. Over the long run, that is dangerous for the DEA and its continued use of forfeiture. As Stefan D. Casella, one of the chief architects of modern asset forfeiture law, has noted, "...no system, no program, no tool of law enforcement, however effective at fighting crime, can survive for long if the public thinks that it violates the basic principles of fairness and due process that lie at the core of the American system of justice..." Stefan D. Casella, U.S. Senate Subcommittee on Criminal Justice Oversight. Oversight of federal asset forfeiture: its role in fighting crime: hearing before the Subcommittee on Criminal Justice Oversight of the Committee on the Judiciary, United States Senate, One Hundred Sixth Congress, first session... July 21, 1999. Vol. 4. USGPO, 2000.

Read U.S. Magistrate Judge Laurel Beeler's opinion here.

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