United States District Court, N.D. Iowa, Western Division
For U.S. Probation, Interested Party: usp Notify, LEAD ATTORNEY.
For Juan Carlos Hernandez-Morales, Defendant: Matthew Reed Metzgar, LEAD ATTORNEY, Rhinehart Law, Sioux City, IA.
For USA, Plaintiff: Shawn Stephen Wehde, LEAD ATTORNEY, U.S. Attorney's Office, Sioux City, IA.
REPORT AND RECOMMENDATION ON PETITION FOR RETURN OF MONEY
LEONARD T. STRAND, UNITED STATES MAGISTRATE JUDGE.
This case is before me on a petition (Doc. No. 56) for return of money filed by Rafael E. Chavez Lujan on February 11, 2014. The Honorable Mark W. Bennett, United States District Judge, has referred the petition to me for the filing of a report and recommended disposition.
I conducted an evidentiary hearing on October 15, 2014. Lujan filed a pre-hearing brief (Doc. No. 99) in support of his petition. Lujan and his attorney, William Baker, then appeared at the hearing telephonically, by consent. Assistant United States Attorney Martin McLaughlin appeared in person for respondent the United States of America (the Government). Lujan testified on his own behalf and offered Petitioner's Exhibits 1 through 17, which were admitted. The Government called one witness, Benjamin Gill, and offered Government's Exhibit 1, which was admitted. I then took the petition under advisement and invited both parties to file post-hearing briefs. Because Lujan had filed a brief in advance of the hearing, the parties agreed that the Government would file the next brief, with Lujan then having the option of filing a reply.
The Government filed its post-hearing brief (Doc. No. 116) on November 12, 2014. Lujan elected not to file a reply. The matter is now fully submitted and ready for decision.
II. RELEVANT PROCEDURAL AND FACTUAL BACKGROUND
The named defendant in this case, Juan Carlos Hernandez-Morales, was indicted (Doc. No. 2) on July 17, 2013. A superseding indictment (Doc. No. 23) was returned on September 19, 2013, in which Hernandez-Morales was charged with conspiracy to distribute methamphetamine (Count 1), distribution of methamphetamine (Count 2) and conspiracy to commit money laundering (Count 3). On December 30, 2013, he appeared before me and plead guilty to Counts 1 and 3 pursuant to a plea agreement (Doc. No. 46).
In his plea agreement, Hernandez-Morales admitted he was sent to Iowa by Salvador Gomez-Tinajero to collect drug money and deposit it into certain bank accounts. Doc. No 46 at P15f-k. He further admitted that he conspired with Gomez-Tinajero to launder the proceeds of Gomez-Tinajero's drug transactions. Id. at P15e-f. Gomez-Tinajero instructed Hernandez-Morales to pick up money from drug transactions and deposit certain amounts of money, all less than $10, 000 to avoid detection, into specific bank accounts for which Gomez-Tinajero had provided account numbers. Id. at P15f. As it turns out, one of these accounts, a Wells Fargo account with a number ending in 3951 (the Lujan Account), was in Lujan's name. Money was also deposited into at least three other Wells Fargo accounts, including one in the name of Bertha E. Castillo. Government Exhibit 1; Doc. No. 46 at P15i.
Judge Bennett accepted Hernandez-Morales's guilty pleas by order (Doc. No. 48) entered December 31, 2013. Hernandez-Morales was later sentenced (Doc. No. 81) to 60 months imprisonment and ordered to forfeit property described in a preliminary order (Doc. No. 52) of forfeiture entered January 10, 2014. That order itemized funds previously seized from three Wells Fargo accounts, including $22, 091.75 seized from the Lujan Account, $35, 330.09 seized from the Castillo account and $3, 069.22 seized from an account in the name of Cecilio Gomez Rios. Doc. No. 52 at P 2.
Lujan received notice of the forfeiture on January 16, 2014. On February 11, 2014, within the period prescribed in 21 U.S.C. § 853(n)(2),  Lujan filed his petition (Doc. No. 56) for the return of forfeited property, which included a request for a change of venue. At the Government's request, I established deadlines for depositions and other discovery relating to the petition. Ultimately, after various continuances were granted at the request of the parties, the evidentiary hearing took place on October 15, 2014.
III. SUMMARY OF EVIDENCE AND (SOME) FINDINGS OF FACT
Lujan testified that he operates an import/export business in California through which, among other things, he assists clients in the export of vehicles and textiles to Mexico. He explained, with the aid of various exhibits, the standard practices that take place during the export process. See, e.g., Petitioner's Exs. 1-3.
Lujan testified that Castillo was a client of his business in 2012 and 2013, and that the business relationship started four or five years earlier. He indicated that her business involved exporting textiles from Los Angeles to Mexico. Lujan's exhibits include documents that, according to Lujan, reflect an export transaction for Castillo in December 2012. Petitioner's Ex. 3. He stated that his business records contain a packet similar to his Exhibit 3 for each such transaction. He testified that he handled approximately fifty shipments for Castillo and charged her a flat fee of $5, 000 per shipment. He further testified that she sometimes paid in cash but other times paid by check or by making deposits to his bank accounts in California or Mexico.
Lujan stated that during his business relationship with Castillo, she was married to Gomez-Tinajero -- the same Gomez-Tinajero discussed in the Hernandez-Morales plea agreement. Moreover, Lujan testified that Gomez-Tinajero worked with Castillo and often came to his warehouse, sometimes multiple times during a week, to check on the textile shipments. However, Lujan stated that about eighteen months ago Gomez-Tinajero told him he was divorcing Castillo and moving to Guadalajara. Lujan testified that he has not since spoken with Gomez-Tinajero.
With regard to bank accounts, Lujan testified that he maintained a checking account for his business with Wells Fargo in California. He opened a second account, the Lujan Account, with Wells Fargo in April 2013. He stated that he opened the Lujan Account on the advice of a bank teller, who allegedly told him that he had too much money in his checking account and that having all his money in one account was risky. He further testified that he hoped to use the new account for savings. When pressed as to why ...