of a previous sale; or that it in any way facilitated a violation of the drug laws." Id. (emphasis in Original). See also United States v. $ 93,685.61, supra (presence of a large amount of money in combination with other persuasive circumstantial evidence, "particularly the presence of the drug paraphernalia" was sufficient to establish probable cause).
In the present case, unlike the proceeding cases, all that the government has is money. Where the money came from and for what use it was intended is a matter of pure speculation, and the evidence in this case simply does not provide probable cause to believe that any connection, let alone a substantial one, exists between the money and drugs.
The government argues that the amount of money seized and "after-acquired" evidence linking claimant to a marijuana distribution chain establish probable cause to believe that the seized currency is "tainted drug money." United State's Memorandum of Law in Opposition to Claimant's Motion for Summary Judgment at 5. These arguments are basically attempts to establish probable cause by taking issue with the requirements of the forfeiture rules themselves.
Initially, the government asserts that the res, the seized currency, is admissible as evidence to establish probable cause and to support forfeiture. This is simply not true. An object illegally seized cannot in any way be used as evidence in a forfeiture case. One 1958 Plymouth Sedan v. Pennsylvania, 380 U.S. 693, 85 S. Ct. 1246, 1251, 14 L. Ed. 2d 170 (1965); United States v. One c1977 Mercedes Benz 450 SEL, 708 F.2d 444, 450 (9th Cir. 1983).
The government confuses jurisdiction over the currency with the admissibility of the currency. The cases cited by the government in support of its position merely stand for the proposition that "the mere fact of the illegal seizure, standing alone, does not immunize the goods from forfeiture." One 1977 Mercedes Benz, supra at 450-1. The fact that the illegally seized object remains forfeitable, and that the court retains jurisdiction over it, does not mean that the object is admissible as evidence in the forfeiture proceeding. The cases are clear on this point, and all but $ 15,000 of the $ 191,910 seized is inadmissible as evidence of illegal conduct. Therefore, any inference that can be drawn from the possession of a large amount of cash must be drawn from the possession of $ 15,000, not $ 191,910. Obviously, that inference is substantially smaller.
Next, the government proposes to introduce a declaration by Agent Buckwalter detailing his investigation of a criminal drug organization known as "The Company" and allegedly linking claimant with The Company. The information in this declaration was not possessed by the government at the seizure or at the initiation of the forfeiture proceeding in May, 1991, but was in fact obtained only this past October. This attempt fails for two reasons.
Initially, as claimant correctly notes, probable cause must be shown to have existed at the time the forfeiture proceeding was instituted. The statute itself states that "probable cause shall be first shown for the institution of such suit or action. . . ." 19 U.S.C. § 1615. The government must have had probable cause at the time it brought the forfeiture proceeding. U.S. v. One 1985 Cadillac Seville, 866 F.2d 1142, 1146 (9th Cir. 1989); Dickerson, supra at 445-6 (9th Cir.). Therefore, the proposed Buckwalter evidence, gathered as it was over 17 months after the government instituted this suit, cannot act as the basis for probable cause for instituting this suit.
The government cites one case from the Second Circuit, United States v. Property at 4492 S. Livonia Rd., Livonia, 889 F.2d 1258 (1989), which expressly held that after-acquired evidence is admissible to prove probable cause. However, that case is anomalous even within the Second Circuit (where post-Livonia cases have expressly stated that probable cause must be shown to have existed at the time the proceedings were instituted), and is in conflict with the majority of cases which hold that the government must prove that it had probable cause to institute the forfeiture proceeding. See United States v. Banco Cafetero Panama, 608 F. Supp. 1394, 1405 (D.C.N.Y. 1985), aff'd 797 F.2d 1154, 1160 (2nd Cir. 1986) ("Ultimately, the government must show that it had probable cause at the time of the commencement of the action."); U.S. v. One 1985 Cadillac Seville, supra (the government must have had probable cause at the time of the seizure); United States v. Dickerson, supra at 445-6.
The other cases cited by the government (e.g., United States v. Thirteen Thousand Dollars, 718 F. Supp. 1441, 1442 (E.D. Mo. 1989) and United States v. Banco Cafetero Panama, 797 F.2d 1154, 1162 (2nd Cir. 1986)) simply hold that the government is not required to prove that it had probable cause until trial (ie, no post-seizure evidentiary hearing is required to determine probable cause early on). At trial, however (or on summary judgment, if all parties agree upon the material facts), the government is required to prove that it had probable cause at the time that it brought the forfeiture proceeding. The Buckwalter evidence cannot be used to establish this element.
The second reason that this evidence must be rejected is that even if the declaration were timely, the statements contained in the declaration simply do not establish probable cause. The declaration is basically a narrative discussing the existence of The Company and making conclusory allegations that, in the past, Morgan was involved with drug transactions with The Company. No specific facts are given to establish probable cause to believe that the money seized in the present case was derived from or intended for use in a drug transaction with The Company, and conclusory statements about Morgan's criminal acquaintances are insufficient to oppose this summary judgment motion. Falls Riverway Realty, Inc. v. Niagara Falls, 754 F.2d 49 (2nd Cir. 1985).
Furthermore, none of Agent Buckwalter's assertions in the declaration concerning Morgan are based upon personal knowledge, but are instead hearsay statements in which the declarant is usually unidentified. Although hearsay is admissible to prove probable cause in civil forfeiture proceedings, United States v. $ 5,644,540 in U.S. Currency, 799 F.2d 1357, 1362 (9th Cir. 1986), such hearsay statements must provide a factual basis to explain the circumstances from which the declarant drew his conclusions. Tahuna, supra at 1284. Agent Buckwalter's declaration provides no factual basis to support any of the hearsay statements offered, and often does not even identify who is making the assertions. As noted above, mere conclusory statements, even hearsay ones, are not sufficient to oppose a motion for summary judgment.
Finally, the government argues that, contrary to claimant's assertion, it is not required to prove a substantial connection between the seized money and drugs. It cites United States v. $ 5,644,540, 799 F.2d 1357, 1362-63 (9th Cir. 1986) as rejecting the "substantial connection" test.
Although the government is correct in this contention, the argument is irrelevant because the government misunderstands the case's holding. US v. $ 5,644,540 held that the government, at trial, is not required to prove a substantial connection between the money seized and drugs in order to prevail on the forfeiture. It is required, however, to prove that at the time it brought the forfeiture proceeding it had probable cause to believe that there was a substantial connection between the money and drugs. This semantic distinction is recognized throughout the circuits and merely provides that the government has a tougher showing on the probable cause issue than it has on the actual proof issue at trial. See United States v. $ 364,960 in U.S. Currency, 661 F.2d 319, 323 (5th Cir. 1981) and United States v. $ 4,255,000, 762 F.2d 895, 902-3 (11th Cir. 1985), cert denied sub nom, $ 4,255,625.39 v. United States, 474 U.S. 1056, 106 S. Ct. 795, 88 L. Ed. 2d 772 (1986). In the present case, the burden is on the government to demonstrate that it had probable cause when it brought this suit to believe that a substantial connection existed between the currency and drugs. It has failed to do so, and claimant's motion for summary judgment is therefore GRANTED.
III. REMAINING MOTIONS
Because we grant claimant's summary judgment motion, the remaining motions before the court (claimant's Motion for Deposit of Seized Currency and Motion for Protective Order, and the government's Motion to Re-Open Discovery) are moot. These motions are therefore DENIED AS MOOT.
Therefore, and good cause appearing, IT IS HEREBY ORDERED that:
1. The government's Motion for Reconsideration is DENIED.
2. Claimant's Motion for Substitution of Named Defendant is DENIED.
3. Claimant's Motion for Summary Judgment is GRANTED.
4. Claimant's Motion for Deposit of Seized Currency, Claimant's Motion for Protective Order and The government's Motion to Re-Open Discovery are DENIED AS MOOT.
IT IS SO ORDERED.
THELTON HENDERSON, CHIEF JUDGE
UNITED STATES DISTRICT COURT