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United States v. $23

United States District Court, C.D. California

July 15, 2019

UNITED STATES
v.
$23, 100 IN U.S. CURRENCY

          Present: The Honorable CHRISTINA A. SNYDER

          CIVIL MINUTES - GENERAL

         Proceedings: MOTION FOR DEFAULT JUDGMENT AGAINST THE INTERESTS OF WEIPENG YAN, NIEVES ZEFERINA BRAVO, AND ALL OTHER POTENTIAL CLAIMANTS (Dkt. [ 19 ], filed on June 13, 2019)

         I. INTRODUCTION

         On January 9, 2019, plaintiff, the United States of America (the “government”) initiated this civil forfeiture action by filing a verified complaint against defendant $23, 100.00 in U.S. currency (the “defendant currency”), pursuant to 21 U.S.C. § 881(a)(6). Dkt. 1. On March 25, 2019, the government filed the operative amended complaint. Dkt. 9 (“Compl.”). On June 10, 2019, the Clerk of the Court entered default against the interests of Weipeng Yan (“Yan”), Nieves Zeferina Bravo (“Bravo”), and all other potential claimants to the defendant currency. Dkt. 15; Dkt. 17. On June 13, 2019, the government filed the instant motion for default judgment. Dkt. 19 (“Mot.”). The motion is unopposed.

         The Court held a hearing on July 15, 2019. No. potential claimants to the defendan currency appeared. Having carefully reviewed the motion, and the government's supporting declaration and exhibits, the Court finds and concludes as follows.

         II. BACKGROUND

         On July 18, 2018, while conducting surveillance as part of a drug trafficking investigation at the residence of Meiyan Chen (“Chen”), officers observed an unknown male approach the residence in a Chevrolet Malibu and exit the vehicle carrying a large, white, and weighted grocery bag. Compl. ¶ 8. The driver gave the bag to an individual later identified as Hongwu Zhan (“Zhan”), who had been standing in Chen's driveway. Id. The driver then returned to his car and drove away. Id. Zhan briefly entered the residence, then re-emerged, still holding the bag. Id. Officers report that he then “looked in all directions as if he was checking for the presence of law enforcement, ” id., and then walked to meet an individual later identified as Weipeng Yan (“Yan”), who had just arrived at the residence in a Ford Mustang, id. ¶ 9. Zhan gave the white bag to Yan, who drove away. Id.

         Moments later, another group of officers initiated a traffic stop after observing Yan commit unspecified California Vehicle Code violations. Compl. ¶ 10. Officers observed the white bag sitting under Yan's driver's seat and examined its contents. Id. Inside, they found bundled, rubber-banded currency in denominations of 103 one-hundred dollar bills, 36 fifty-dollar bills, and 550 twenty-dollar bills. Id. ¶¶ 11, 14. When asked by the officers, Yan estimated that the cash totaled $1, 000 in profits. Id. ¶ 12. In fact, the cash totaled $23, 100.00. Id. ¶ 14.

         Yan also told officers he had retrieved the funds from a friend at a location that they noted was near the Chen residence address, and that the money constituted profits “from selling shoes.” Id. ¶ 12. However, Yan produced no documentation to support this claim. Id. Highway patrol officers relayed this information to the officers who continued to surveil the Chen residence, and those officers confronted Chen, questioning her about the cash discovered in Yan's vehicle. Id. ¶ 14. Chen also reported that it was money she had made while selling shoes for Yan. Id. Officers also returned to the Chen house with Yan, who they continued to question about the seized funds. Id. According to the government, Yan then provided them with “various [conflicting] accounts of how much money was in the bag, how he had obtained it, and to whom it belonged.” Id.

         The government does not specify whether anyone was arrested as a result of this seizure, or if this seizure led to further investigation of the persons involved. However, on about September 11, 2018, Chen and Zhan submitted claims to the defendant currency in an administrative forfeiture proceeding, held by the Drug Enforcement Agency (“DEA”), seeking the return of the cash and asserting that the funds “constituted savings generated by Chen and her husband.” Id. ¶15. The government does not specify the results of this hearing. However, on June 6, 2019, Chen and Zhan, through their counsel, entered into a Consent Judgment of Forfeiture (“consent judgment”) with the government to settle the action relative to their own respective interests in the defendant currency. See Dkt. 16. As part of the consent judgment, the government agreed to return $3, 465.00 to Chen and Zhan, id. ¶ 4, and Chen and Zhan waived their rights to contest the forfeiture of the remaining $19, 635.00 of the defendant Currency, id. ¶ 6.

         The government alleges that the remainder of the defendant currency is subject to forfeiture pursuant to 21 U.S.C. § 881(a)(6) because it represents or is traceable to proceeds of illegal narcotics trafficking, or was intended to be used in one or more exchanges for a controlled substance or listed chemical, in violation of 21 U.S.C. § 841 et seq. Id. ¶ 16.

         III. LEGAL STANDARDS

         Pursuant to Rule 55(b) of the Federal Rules of Civil Procedure, a court may order default judgment following the entry of default by the Clerk of Court. PepsiCo, Inc. v. California Security Cans., 238 F.Supp.2d 1172, 1174 (C.D. Cal. 2002). Upon entry of default, the factual allegations in the plaintiff's complaint, except those relating to damages, are deemed admitted. Id. at 1175. Although the court has discretion to grant or deny a motion for default judgment, id. at 1174, the Ninth Circuit has directed that courts consider the following factors (collectively, the Eitel factors) in exercising this discretion: (1) the possibility of prejudice to plaintiff, (2) the merits of plaintiff's substantive claims, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action, (5) the possibility of a dispute concerning the material facts, (6) whether defendant's default was the product of excusable neglect, and (7) the strong policy favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).

         IV. ...


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