In re U.S. Currency ($39,500.00 Dollars) – 11/29/2022

December 5, 2022

Arizona Court of Appeals Division One holds that in a forfeiture action, a court cannot consider evidence of probable cause for the forfeiture when evaluating whether the claimant has met his burden of demonstrating ownership of the seized property.

Agents from the Drug Enforcement Bureau of the Phoenix Police Department were investigating a man with prior drug-related arrests who booked a flight into Phoenix less than 24 hours before departure and flew with a checked bag, even though he would be staying in Phoenix for less than 48 hours.  The agents confronted the man in the baggage claim area, where they discovered $39,500 in cash during a consensual search of his luggage.  The man was never charged with a crime, but the state began forfeiture proceedings.  The man filed an objection, and the state then filed a complaint alleging the money was connected to transactions involving prohibited drugs and racketeering.  The man filed an answer and requested a probable cause hearing.

At the hearing, the man gave testimony about how he received the money, and the superior court twice acknowledged that he had established that the cash was his.  The court permitted the state to present its probable cause evidence, which included testimony that the man fit the drug courier profile, but the state did not offer evidence that the money belonged to any other individual.  The court found that the man failed to prove that he owned the money because it did not find his testimony credible and it was “more likely” that the man was carrying drug proceeds than that he was carrying the cash to purchase a truck, as he had claimed.  On the state’s motion, the court granted a judgment of forfeiture.

The man appealed, and the court of appeals reversed the superior court’s orders denying the man’s claim and entering a judgment of forfeiture and remanded the matter for further proceedings. 

To contest a forfeiture action, a claimant may request a hearing on the sole issue of whether probable cause for the forfeiture exists.  At that hearing, the claimant must prove by a preponderance of the evidence that he owns the property before any other evidence is taken.  If the claimant proves ownership by a preponderance of the evidence, the court then collects evidence and determines whether the state has probable cause for the forfeiture.  If the state fails to prove probable cause for forfeiture of the property, the property must be returned to the claimant pending a final hearing on whether the property is subject to forfeiture.  If the state proves probable cause for the forfeiture, the property remains in the state’s possession until the forfeiture hearing.  At the forfeiture hearing, the state has the burden of proving by clear and convincing evidence that the property is connected to criminal activity and subject to forfeiture. 

Here, when conducting the first step (whether the claimant owns the property), the superior court improperly relied on evidence of probable cause for the forfeiture.  This error effectively transformed evidence of probable cause into a substitute for the clear and convincing proof of criminal activity that the state is required to prove.

Judge Swann authored this opinion, in which Judges Weinzweig and McMurdie concurred.

Posted by: Heather Robles