United States District Court, D. Colorado
ORDER
SCOTT
T. VARHOLAK, UNITED STATES MAGISTRATE JUDGE.
This
matter comes before the Court on the United States'
Motion for Default and Final Order of Forfeiture As to
Certain Defendant Assets (the “Motion”). [#64]
The Motion is before the Court on the parties' consent to
have a United States magistrate judge conduct all proceedings
in this action and to order the entry of a final judgment.
[##37, 48, 61] This Court has carefully considered the
Motion, the entire case file, and the applicable case law,
and has determined that oral argument would not materially
assist in the disposition of the Motion. For the following
reason, the Motion is GRANTED and default
judgment and forfeiture of defendant assets 2014 Dodge Viper
SRT, 2014 Porsche Cayenne Turbo, $14, 800 in United States
currency, $4, 000 in United States currency, and $5, 711 in
United States currency, shall enter in favor of the United
States.
I.
BACKGROUND[1]
Plaintiff,
the United States, commenced this civil forfeiture action,
pursuant to 21 U.S.C. § 881 and Rule G(2) of the
Supplemental Rules for Admiralty or Maritime Claims and Asset
Forfeiture Actions, seeking forfeiture of various assets,
including real property, vehicles, and monetary property.
[##3, 30] This action arises out of a criminal investigation
of a Drug Trafficking Organization (“DTO”) that
was involved in money laundering and tax evasion as part of
an illegal marijuana growing operation. [#30 at ¶ 3] The
investigation was prompted by a criminal analyst from the
Colorado Department of Revenue records, who examined records
for Michael Schook and determined that he had failed to file
tax returns in 2012, 2013, and 2014. [Id. at ¶
4]
Schook
purchased real property located at 17035 West 53rd Avenue in
Golden, Colorado [id. at ¶ 27], where law
enforcement agents observed Schook and his associates
involved in marijuana growing activity throughout 2017, and
power records indicative of a large illegal marijuana growing
operation. [Id. at ¶¶ 28-36]. Schook
purchased the defendant 2014 Porsche Cayenne in January 2018.
[Id. at ¶ 48] On February 1, 2018, agents
observed the Porsche Cayenne pulling a trailer which was
dropped off at a barn at 17035 West 53rd Avenue.
[Id. at ¶ 47] The next morning, Schook opened
the garage door and workers began to move about the trailer.
[Id.] Investigators executed a search warrant on
17035 West 53rd Avenue on February 21, 2018, discovering over
400 marijuana plants, 35 pounds of finished marijuana, and
several firearms. [Id. at ¶ 37] The Porsche
Cayenne was seized during execution of the search warrant.
[Id. at ¶ 49] A FedEx package containing
defendant $14, 800 in United States currency, which arrived
to 17035 West 53rd Avenue addressed to Schook during the
execution of the warrant, was also seized as proceeds of the
marijuana grow operation. [Id. at ¶ 50]
During
the execution of the search warrant at 17035 West 53rd
Avenue, investigators also discovered documents that appeared
to constitute an agreement between Schook and Vernon Abila,
under which Schook paid Abila for the defendant 2014 Dodge
Viper through cash payments from marijuana sales.
[Id. at ¶¶ 42, 44] The Dodge Viper was
seized on February 21, 2018 during an execution of a search
warrant at a different residence. [Id. at ¶ 46]
As part
of the DTO investigation, law enforcement officers also
conducted surveillance on 2541 West 52nd Avenue in Denver,
Colorado. [Id. at ¶¶ 62, 64] Officers
performed trash pulls, discovering Ziploc bags smelling of
marijuana with a residue of green leafy substances, empty
containers of nutrients commonly used in marijuana
cultivation, and marijuana trimmings. [Id. at
¶¶ 65-67] Agents executed a search warrant on 2541
West 52nd Avenue on February 21, 2018, seizing defendant $4,
000 in United States currency, in addition to 125 marijuana
plants, approximately one pound of Hash oil, approximately
one ounce of mushrooms, and a firearm. [Id. at
¶ 68]
Finally,
the investigation revealed that Schook's daughter, Leslie
Schook, was also involved in a marijuana grow at her rental
residence at 740 Carr Street[2] in Lakewood, Colorado.
[Id. at ¶ 70] After observing marijuana odor
emitting from the residence, and reviewing power records
indicative of a marijuana grow, officers executed a search
warrant of the Carr Street property, seizing defendant $5,
711 in United States currency, in addition to 95 marijuana
plants, 37 clones, and numerous firearms. [Id. at
¶¶ 71-76]
The
United States alleges that defendants Dodge Viper and $14,
800 in United States currency constitute, or were derived
from, proceeds traceable to an exchange of controlled
substance in violation of 21 U.S.C. § 801, et
seq. [Id. at ¶¶ 86, 90] The United
States further alleges that defendants Porsche Cayenne, $4,
000 in United States currency, and $5, 711 in United States
currency, constitute property being used, or intended to be
used, to commit or facilitate the commission of violations of
21 U.S.C. § 801, et seq. [Id. at
¶¶ 88, 94, 96]
II.
Analysis
The
United States originally commenced this action in February
2018. [#3] All known interested parties have been provided an
opportunity to respond to the forfeiture, and that
publication has been effected as required by Rule G(4) of the
Supplemental Rules for Admiralty or Maritime Claims and Asset
Forfeiture Actions. [##14, 34, 43, 52] The time to contest
the forfeiture and assert an interest in the defendant assets
has now expired. [See id.] No. claim, answer, or
other responsive pleading has been filed as to the following
defendant assets: 2014 Dodge Viper SRT, 2014 Porsche Cayenne
Turbo, $14, 8000 in United States currency, $4, 000 in United
States currency, and $5, 711 in United States Currency (the
“Defaulted Assets”). [See #56] The
United States moved for entry of default as to those assets
[id.], and the Clerk of Court entered default on
February 11, 2019 [##57, 58].
“For
the Court to now enter default judgment, the Court must
conclude, based on a preponderance of the evidence, that
reasonable cause existed for the seizure” of the
Defaulted Assets. See United States v. $3, 795.00 in U.S.
Currency, No. 07-cv-01893-MSK-KMT, 2008 WL 4722712, at
*3 (D. Colo. Oct. 23, 2008) (citing United States v.
[$149, 442.43] in U.S. Currency, 965 F.2d 868, 876 (10th
Cir. 1992) (holding that absent a defense, “a showing
of probable cause alone will support a judgment of
forfeiture”)).
Here,
the facts set forth in the Verified Amended Complaint provide
probable cause for the seizure of the Defaulted Assets based
on a preponderance of the evidence. As discussed above,
Schook's 2014 Porsche Cayenne was seized during the
execution of a search warrant on 17035 West 53rd Avenue,
after the vehicle was observed pulling a trailer used in
conjunction with an illegal marijuana grow operation. [#30 at
¶¶ 28-33, 47-48] During execution of that search
warrant, officers also seized defendant $14, 800 in United
States currency, which had been addressed to Schook in a
FedEx envelope and was seized as proceeds of the operation.
[Id. at ¶ 50] The defendant Dodge Viper was
seized on February 21, 2018 during execution of a search
warrant at another residence. [Id. at ¶ 46]
Officers had discovered documents indicating that Schook paid
for the Dodge Viper through cash payments from marijuana
sales. [Id. at ¶¶ 42, 44]
After
conducting surveillance on 2541 West 52nd Avenue indicating
DTO activity, law enforcement officers also executed a search
warrant on that property, where agents seized defendant $4,
000 in United States currency, along with 125 marijuana
plants, approximately a pound of hash oil and an ounce of
mushrooms, and a firearm. [Id. at ΒΆ 68]
Finally, law enforcement officers executed a search warrant
at the residence of Schook's daughter, where they had
observed marijuana odor and power usage records indicating
marijuana growing activity, where defendant $5, 711 in United
States currency was seized, in conjunction with 95 marijuana
plants, 37 ...