Court grants new hearing on suspected money laundering assets
Thursday, Sept. 1, 2016
WASHINGTON – A federal appeals court ordered a new hearing Thursday for two Mexican men seeking to get back more than $800,000 that U.S. authorities seized in the belief the men were laundering drug money.
The ruling by a three-judge panel of the 9th U.S. Circuit Court of Appeals reversed a district court’s dismissal of a claim by Ladislao Samaniego and Manuel Castro, who said they were merely holding the money for a grocer with whom they had a longstanding, but informal, agreement.
The district court had rejected their claim, finding that the men did not prove they had a sufficient interest in the money. But the appeals court, without commenting on the merit of the men’s claims, said they had shown enough of an interest in the money to at least get their day in court.
Calls seeking comment from attorneys for the two men were not immediately returned Thursday. A spokesman for the U.S. Attorney’s Office said the office would not comment on the case.
Samaniego ran a Mexican currency exchange service known as Centro Cambiario Sonorense, formerly Casa de Servicios de California, or CSC. For about 17 years, CSC had an agreement with Fruteria Welton to “count, record and deposit the currency” that the grocery took in at its several locations along the U.S.-Mexico border.
Samaniego said he had a verbal agreement with Jorge Alvarez, a part-owner of Fruteria Welton whom he considers a close “compadre,” according to the court opinion. As part of that agreement, CSC was allowed to use the Welton money for its own purposes, until the grocery did not need the money for its own use.
Under that arrangement, Samaniego said he accrued “a debt of roughly $1 million to Welton, which required eventual repayment.” Because of its location near the border, the Welton money was in both pesos and dollars, the court said.
But when the Mexican government instituted tighter controls on the amount of U.S. currency that could be deposited in Mexican banks, Samaniego tried to move the money into a U.S. bank. He called it a favor to Alvarez to “avoid having (his) compadre’s daughter from being robbed along the way.”
Samaniego enlisted Castro to help him move the money to Arizona, where the men opened two accounts at a J.P. Morgan Bank – an account with $361,070.25 in Castro’s name was opened May 31, 2011, and a $446,377.36 account in Samaniego’s name was opened June 7.
The government seized both accounts Aug. 22 and sought to have the money forfeited on charges that it was being used to launder drug money. Samaniego and Castro subsequently filed a claim to keep the money.
But a district court judge threw out the men’s claims, saying they had not shown a sufficient “property interest” in the money to have standing to claim it back.
The appellate court agreed with the lower court that the men’s conflicting accounts of the money made it hard to support their interest in it.
At various times, the court wrote, the men said the money belonged to them, that it “belongs to … Welton and we need to pay it back,” that they intended to change the names on the accounts from theirs to Welton’s, and that they were bringing the funds into the U.S. “on behalf of Welton or, at times, CSC.”
“In light of claimants’ self-contradictory claims and jumble of shifting legal theories – alternatively alleging ownership on the part of Welton or CSC or claimants – the district court did not err” by ruling that the men had not shown they had an interest in the funds, said the opinion by Circuit Judge Milan D. Smith Jr.
But the appeals court said the men had shown a “possessory interest” in the funds that is short of ownership but still enough to press a claim in court. That claim, supported by “declarations, deposition testimony, bank records and other evidence” raised factual issues that should be determined at trial, Smith wrote.