Check Casher Seeks Return of Seized Funds



It’s bad enough to be stung for nearly $22,000 in bad checks, but it is even worse to see the money paid out taken by the government under its asset forfeiture powers. A New Jersey check casher found out how hard and costly it can be to successfully navigate a claim made against forfeited assets.

On Feb. 9, 2010, a man whose first name was Amaury presented three checks that collectively totaled $21,965.00 to a check cashing service located in New Jersey. The check casher paid Amaury the face value of the checks in cash.

Several hours later, Amaury was arrested, and his property, including approximately $29,000, was seized by the United States government.

Amaury was subsequently indicted on conspiracy and cocaine related drug charges. On Feb. 16, 2010, the Drug Enforcement Administration issued a report that stated, “Amaury said that he acquired his approximately $29,000 by writing and cashing bad checks earlier that day. …”

There was no dispute that part of the property the government seized from Amaury included the $21,965.00 in cash that the check casher paid Amaury earlier that day.

Because the checks Amaury negotiated were worthless, upon learning of his arrest, the check casher wrote to Amaury, the assistant United States attorney in charge of Amaury’s case, and the DEA seeking the return of the funds.

On June 10, 2010, the DEA responded to the check casher’s letter, stating that the “time period to file a claim expired on May 6, 2010, as published in the Wall Street Journal.” The DEA also advised the check casher to file a petition for the return of the money, also knows as a petition for remission or mitigation.

On July 6, 2010, the check casher filed a petition with the DEA seeking the return of the seized money. The DEA sent “written notice of the seizure of the seized funds” to the check casher on Aug. 4, 2010, and advised the check casher to petition the DEA for the return of the property or to timely contest the forfeiture proceeding in federal court.

On Oct. 6, 2010, the DEA administratively forfeited the seized funds. The DEA’s official declaration of forfeiture stated, in pertinent part:
Notice of the seizure and intent to forfeit was published on the following dates 03/22/2010, 03/29/2010, 04/05/2010 and was sent to each party who appeared to have an interest in this/these properties. Because there were no claims filed for the property within thirty (30) days from the date of the last publication of the Notice of Seizure or thirty five (35) days from the date the Personal Seizure Notices were mailed, it is hereby declared that the property has been forfeited to the United States Government under the forfeiture law.

The government didn’t dispute that the actual notice was not sent to the check casher on the dates listed on the declaration of forfeiture; the government appeared to have viewed the check casher as a general unsecured creditor who did not have a legal interest in the forfeited property.

The DEA subsequently denied the check casher’s petition for the return of the funds on Nov. 29, 2010, and held fast to that conclusion after a petition for reconsideration was filed on March 29, 2011. That the check casher did not exercise its option to contest the forfeiture proceeding in federal court was also undisputed.

Amaury was sentenced on May 16, 2011. During the sentencing, the United States District Court for the Southern District of New York expressed concern regarding the government’s retention of funds that belonged to the check casher and recommended that the government release the $21,965.00 to the check casher.

As a result, on May 18, 2011, the court entered an Order of Restitution, which ordered Amaury to pay a total amount of $21,965.00 “less any award released to the check casher by the United States.”

Hires Lawyer

In June 2011, the check casher retained an attorney to assist it in securing the funds. As of April 2012, the check casher had still not received the funds and submitted a petition to the United States Attorney’s Office for the Southern District of New York for remission of $21,965.00.

Because the funds had since been forfeited and shared with local law enforcement, the USAO had to request that the Department of Justice invoke its “restoration procedures” to release the funds.

It was during this stage that the check casher filed a third-party claim seeking an order:
(1) releasing the sum of $21,965.00, plus interest, which was seized by the government from Amaury, and
(2) granting the check casher attorneys’ fees incurred in connection with the filing of its motion, under the Civil Asset Forfeiture Reform Act or, in the alternative, under the Equal Access to Justice Act.

Magistrate Judge

The dispute then went before a magistrate judge for the U.S. District Court for his report and recommendation.

Posted in Spring 2014.