SUPERIOR COURT OF NEW JERSEY
$569,950 IN UNITED STATES
July 13, 2012
Submitted May 30, 2012 - Decided
Before Judges Baxter and Carchman.
On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-9370-08.
Jeffrey S. Chiesa, Attorney General, attorney for appellant/cross-respondent (Michael T. McCormick, Deputy Attorney General, on the brief).
Robert J. DeGroot, attorney for respondent/cross-appellant Alexei Gonzalez.
This is an appeal from the dismissal of the State of New Jersey's forfeiture complaint to recover $569,950, a 1996 Freightliner Tractor and a 2000 Wabash National Trailer. Defendant Alexei Gonzalez1 cross-appeals, challenging the trial judge's decision to deny defendant's motion for summary judgment. We affirm.
This forfeiture action arose as a result of a State Police investigation of defendant based on information provided by a confidential informant. The underlying allegations were that defendant had participated in a drug transaction and was in possession of substantial funds as a result. In addition, the informant purportedly reported that there was a robbery threat to defendant as a result of his possession of the funds.
Based on the information, the State Police confronted defendant and searched his room at a Hampton Inn in Woodbridge. At that location, the police recovered the property subject to the forfeiture, namely, the funds, as well as the tractor and the trailer, which were parked outside.
Critical to the judge's dismissal of the forfeiture complaint in the Law Division was an earlier decision related to criminal charges lodged against defendant for money laundering, N.J.S.A. 2C:21-5a, involving the funds in dispute here. In the criminal proceeding, the trial judge, on defendant's motion to suppress evidence, concluded that the hotel room search violated defendant's constitutional rights and found "the motion to suppress the currency, the suitcase2 and other items that were seized in the room must be granted." He added that evidence obtained by the police as a consequence of the unconstitutional search would also be suppressed as "fruit of the poisonous tree." He found that defendant's alleged "consent" was not valid. He noted that
the temporal proximity between the illegal search and the challenged evidence is great. The fact that the defendant was confronted with the suitcase having been seized and asked, therefore, consent, all of that surely could never have happened and was derived from the initial unlawful entry into the room and the unlawful conduct of the police in conducting the so called protective sweep . . . . [I]t's not really possible to separate out the subsequent search of the suitcase or statements made by defendant because were it not for the initial unreasonable conduct there would have been nothing to confront the defendant with there would have been nothing to ask him to consent to the search.
The suppression of this evidence led to the dismissal of the indictment. Nevertheless, the State pressed forward with the forfeiture.
Following the completion of discovery in this proceeding, which included defendant's deposition, the parties cross-moved for summary judgment. The motions were denied, and the judge conducted a plenary hearing on the forfeiture complaint.
At the hearing, defendant indicated that he owned a trucking company and owned two trailers and tractors. Defendant's tax returns were produced, indicating that he earned $2,493 in income in 2006 and $442,830 in 2007, based on revenues exceeding $600,000 from the trucking company, with additional partial year earnings for 2008 of $43,928.66 based on revenues of $266,484.66. When asked to produce business records, defendant explained that he had "lost everything," including his home and all of his records while he was incarcerated for a period of one and one-half years.
Defendant explained that his purpose in coming to New Jersey was to buy another trucking business from an individual only identified as "Anna." The new business had seven trucks and tractors. He intended to pay approximately $250,000 to $300,000 and to use the balance of the cash for, in essence, "working capital."
The State's presentation in support of the forfeiture was limited. The State produced a witness to discuss a conversation she had with a Florida official regarding the administration of the road test in English in Florida as well as administration of the written test both in English and Spanish. Notwithstanding the obvious hearsay nature of the testimony, it was admitted in evidence.
Despite the limited amounts of evidence untainted by the unlawful search, the court heard the State's proffer as to the seized truck's odometer reading, along with a State Police detective's testimony questioning whether defendant drove sufficient miles to generate the revenue reported on his tax return.
After the State's submission of its proofs at the forfeiture hearing, the judge noted that defendant engaged in "unorthodox" business practices, but stated that one engaging in money laundering generally does not file a tax return. In conclusion, the judge stated:
The State again has the burden of proving that an illegal activity existed or was planned with respect to the property which is the subject of the forfeiture action and in that -- in that connection, this Court finds that based on the testimony that was provided to this Court during the course of the hearing, and again taking into account the [unorthodox] manner in which the defendant engages in his business. Without -- the Court finds that the burden simply had not been met and accordingly the application to forfeit -- [is] denied.
On appeal, the State asserts that the judge erred in failing to grant the State's motion for summary judgment and dismissing the forfeiture action.
We have carefully considered the State's arguments. We are satisfied that they are without merit and do not require further discussion. R. 2:11-3(e)(1)(E). We add the following observations.
The State's attempt to secure a forfeiture judgment here was substantially hampered by the granting of the motion to suppress in the criminal proceeding, which the State concedes precluded it from utilizing probative evidence that might have advanced its position in the forfeiture action. Nevertheless, the burden of proof to establish that the property was used in furtherance of or to facilitate an illegal act, N.J.S.A.
2C:64-1a, remains with the State. State v. Seven Thousand Dollars, 136 N.J. 223, 234 (1994). To meet this burden, the proponent must show that the connection and dependency between the property and the illegal activity is proximate and substantial. Id. at 234-35. The inquiry is fact-specific. Id. at 235.
Here, the alleged offense was money laundering. Because of the limitations imposed by the suppression order, the proof presented by the State was that defendant was in possession of large amount of cash. At that point, defendant presented an explanation, and despite the State's reliance on the inference provisions of N.J.S.A.2C:21-26, the trial judge accepted his explanation, characterizing defendant's business practices as merely "unorthodox." The State failed to satisfy its burden.
Since we affirm the dismissal of the complaint, we need not address the issues raised in the cross-appeal.
1 This is a civil in rem proceeding wherein the "defendants" are the forfeited property. For ease of reference, however, we refer to Alexei Gonzalez, who was the defendant in the underlying criminal proceedings, as defendant.
2 The suitcase contained the cash that is one of the subjects of the forfeiture.