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United States of America v. Brandon C. Haleamau

August 1, 2012

UNITED STATES OF AMERICA,
PLAINTIFF,
v.
BRANDON C. HALEAMAU,
DEFENDANT.



The opinion of the court was delivered by: Helen Gillmor United States District Judge

AMENDED ORDER REGARDING THE FORFEITURE OF DEFENDANT BRANDON C. HALEAMAU'S INTEREST IN: 1) $354,421.70 SEIZED FROM HAWAII STATE FEDERAL CREDIT UNION ACCOUNT; 2) ONE SILVER 2009 ACURA TSX 4-DOOR SEDAN; 3)ONE GREY 2009 NISSAN GT-R 2-DOOR SEDAN; AND 4) ONE GREY 2008 LEXUS IS F 4-DOOR SEDAN

Defendant Brandon C. Haleamau pled guilty to five counts of illegally importing Class B 1.3G fireworks, fraudulently mislabeling a shipping container, and structuring cash deposits to avoid currency reporting requirements. The Government seeks the forfeiture of property alleged to constitute the direct or indirect proceeds of the Defendant's illegal conduct or property that was involved in and traceable to the Defendant's structuring. The Defendant contests the forfeiture and argues that forfeiture of the subject property would violate the Eighth Amendment's Excessive Fines Clause.

The Government has proved by a preponderance of the evidence that the property in question was involved in or traceable to the Defendant's structuring offenses. The property in question, therefore, is subject to forfeiture. The Government, however, failed to prove that a portion of the funds seized from the Defendant's account were the direct or indirect proceeds of the sale of illegal Class B 1.3G fireworks. The property sized by the Government, however, is nonetheless subject to forfeiture based on the Defendant's structuring offense.

Forfeiture here does not violate the Eighth Amendment's Excessive Fines Clause because the amount forfeited is not grossly disproportional to the gravity of the Defendant's offenses.

PROCEDURAL HISTORY

On August 25, 2010, the Grand Jury returned a five count indictment against the Defendant (Doc. 1).

On March 2, 2011, the Defendant plead guilty to all counts of the Indictment. (Minutes of Hearing, March 3, 2011 (Doc. 21).)

On May 19, 2011, the Government filed "UNITED STATES' MEMORANDUM IN SUPPORT OF ENTRY OF FORFEITURE FOR: 1) $345,421.70 SEIZED FROM HALEAMAU'S HAWAII STATE FEDERAL CREDIT UNION, 2) ONE SILVER 2009 ACURA TSX 4-DOOR SEDAN, 3) ONE GREY 2009 NISSAN GT-R 2-DOOR COUPE, AND 4) ONE GREY 2008 LEXUS IS F 4-DOOR SEDAN" (Doc. 28).

On June 6, 2011, the Defendant filed a "MEMORANDUM IN OPPOSITION TO UNITED STATES' MEMORANDUM IN SUPPORT OF ENTRY OF FORFEITURE" (Doc. 32).

On June 14, 2011, the Government filed the "UNITED STATES' REPLY TO DEFENDANT'S MEMORANDUM IN OPPOSITION" (Doc. 38).

On June 15, 2011 and June 16, 2011, a hearing on the forfeiture allegations was held.

On July 14, 2011, the Government filed the "UNITED STATES' CLOSING ARGUMENT IN SUPPORT OF ENTRY OF FORFEITURE FOR: 1) $345,421.70 SEIZED FROM HALEAMAU'S HAWAII STATE FEDERAL CREDIT UNION, 2) ONE SILVER 2009 ACURA TSX 4-DOOR SEDAN, 3) ONE GREY 2009 NISSAN GT-R 2-DOOR COUPE, AND 4) ONE GREY 2008 LEXUS IS F 4-DOOR SEDAN" (Doc. 49).

On August 11, 2011, the Defendant filed "DEFENDANT'S CLOSING MEMORANDUM IN OPPOSITION TO FORFEITURE" (Doc. 52).

On August 25, 2011, the Government filed the "UNITED STATES' REPLY TO DEFENDANT'S CLOSING MEMORANDUM IN OPPOSITION TO FORFEITURE" (Doc. 60).

BACKGROUND

In December 2008, U.S. Immigration and Customs Enforcement discovered a container from China of Class B 1.3G fireworks mislabeled as Class C 1.4G fireworks. The container belonged to Defendant Brandon C. Haleamau (hereafter "Defendant"). An investigation of the Defendant revealed evidence that the Defendant had previously imported Class B 1.3G fireworks without a license, intentionally mislabeled the December 2008 shipment of fireworks, and had been evading the reporting requirements of the Bank Secrecy Act of 1970 by structuring cash deposits.

On January 25, 2010, the Government obtained a warrant to seize $345,421.70 from the Defendant's Hawaii State Federal Credit Union Account No. XX842-1 account, a silver 2009 Acura TSX 4-door sedan bearing vehicle identification number JH4CU26619C016789 and Hawaii License Plate Number PYP 034 (hereafter "Acura"), and a grey 2009 Nissan GT-R 2-door coupe bearing vehicle identification number JN1AR54M19M220020 and Hawaii License Plate Number PWP 795 (hereafter "Nissan"). The Government's investigation of the Defendant identified the seized property as being directly or indirectly traceable to proceeds of the Defendant's illegal conduct. The Government executed the warrant on January 28, 2010.

In August 2010, the Government's investigation revealed that an additional vehicle was subject to seizure. On August 25, 2010, the Government obtained a warrant to seize a grey 2008 Lexus IS F 4-door sedan bearing vehicle identification number JTHBP262985003310 and Hawaii License Plate Number PWY 719 pursuant to a second warrant (hereafter "Lexus"). On the same day, an indictment was returned against the Defendant containing five counts:

Count 1: Illegally transporting approximately 50 cases of

Class B 1.3G fireworks on or about July 30, 2007 through on or about September 25, 2007 in violation of 18 U.S.C. § 842(a)(3)(A).

Count 2: Illegally transporting approximately 25 cases of

Class B 1.3G fireworks on or about July 30, 2007 through on or about October 15, 2007 in violation of 18 U.S.C. § 842(a)(3)(A).

Count 3: Illegally transporting approximately 203 cases of

Class B 1.3G fireworks on or about July 30, 2007 through on or about November 14, 2007 in violation of 18 U.S.C. § 842(a)(3)(A).

Count 4: In December 2008 intentionally mislabeling a shipment of Class B 1.3G fireworks as Class C 1.4G fireworks for the purposes of importing goods by means of a fraudulent declaration in violation of 18 U.S.C. § 542.

Count 5: Intentionally evading the reporting requirements of 31 U.S.C. § 5313(a) by deliberately structuring $1,110,809.00 in cash deposits between June 10, 2008 and December 28, 2009 in violation of 31 U.S.C. § 5324(a)(3) and 31 C.F.R. § 103.11.

On August 26, 2010, the Government seized the Lexus pursuant to a warrant.

In the Indictment, the Government requested forfeiture of the $345,421.70, the Acura, the Nissan, and the Lexus (hereafter "Seized Property").

On March 2, 2011, the Defendant plead guilty to all counts of the Indictment. The Defendant contests the forfeiture of the Seized Property.

On June 15, 2011 and June 16, 2011, a hearing on the forfeiture allegations was conducted.

STANDARD OF REVIEW

Federal Rule of Criminal Procedure 32.2 and 21 U.S.C. § 853 govern criminal forfeiture proceedings. See Fed. R. Crim. P.

32.2; 31 U.S.C. § 5317(c)(1)(B); 18 U.S.C. § 982(b)(1). Pursuant to Rule 32.2(b), following a finding of guilt, the Court must "determine what property is subject to forfeiture under the applicable statute." Fed. R. Crim. P. 32.2(b)(1)(A).

A forfeiture proceeding is part of sentencing. See e.g., United States v. Lazarenko, 469 F.3d 815, 820 (9th Cir. 2006); United States v. Garcia-Guizar, 160 F.3d 511, 518 (9th Cir. 1998). The preponderance of the evidence standard, therefore, applies to the proceedings. Fed. R. Civ. P. 32.2.(b)(1)(A); see Fed. R. Crim. P. 32.2 advisory committee's note; United States v. Howard, 894 F.2d 1085, 1090 (9th Cir. 1990) (preponderance of evidence standard used in sentencing). In addition, hearsay is admissible in a forfeiture proceeding as long as "the testimony [is] accompanied by some minimal indicia of reliability." United States v. Littlesun, 444 F.3d 1196, 1199 (9th Cir. 2006) (quotations omitted) (quoting United States v. Berry, 258 F.3d 971, 976 (9th Cir. 2001)).

ANALYSIS

The purpose of the forfeiture law is to ensure that the defendant does not profit from his criminal conduct. See United States v. Monsanto, 491 U.S. 600, 607 (1989); United States v. Johnston, 199 F.3d 1015, 1023 (9th Cir. 1999). When the defendant contests the forfeiture, as here, the Court must conduct a hearing and receive evidence. Fed. R. Civ. P. 32.2.(b)(1)(B). The Court must determine, by a preponderance of the evidence, if the Government has established a nexus between the forfeited property and the offense. Fed. R. Civ. P. 32.2.(b)(1)(A); see Fed. R. Crim. P. 32.2 advisory committee's note; Howard, 894 F.2d at 1090. Pursuant to Rule 32.2 and 21 U.S.C. § 853 the Court must first enter a preliminary order of forfeiture. Fed. R. Crim. P. 32.2(b)(2). Unless it is impractical, the preliminary order must be entered "sufficiently in advance of sentencing to allow the parties to suggest revisions or modifications before the order becomes final as to the defendant." Fed. R. Crim. P. 32.2(b)(2)(B). The preliminary order becomes final as to the defendant at sentencing. Fed. R. Crim. P. 32.2(b)(3).

The Defendant pled guilty to violations of 18 U.S.C. § 842(a)(3)(A)- causing to be transported and receiving explosive materials without a licence (Counts 1, 2, and 3), 18 U.S.C. § 542 - entry of goods by means of false statement (Count 4), and 31 U.S.C. § 5324(a)(3) - structuring transactions to evade reporting requirements (Count 5). The Government moves to forfeit the Seized Property pursuant to the Defendant's guilty plea.

I. GOVERNMENT PROVED BY A PREPONDERANCE OF THE EVIDENCE THAT THE SEIZED PROPERTY WAS INVOLVED IN AND TRACEABLE TO THE DEFENDANT'S ILLEGAL STRUCTURING OF FUNDS (COUNT 5)

In sentencing the Defendant for his structuring offenses,

the Court must "order the defendant to forfeit all property, real or personal, involved in the offense and any property traceable thereto." 31 U.S.C. § 5317(c)(1)(A).

A. The 282 Structured Cash Deposits

Pursuant to the Bank Secrecy Act of 1970 (hereafter, "BSA"), 31 U.S.C. § 5311 et seq., any time an individual makes a cash deposit in excess of $10,000, they are required to file a Currency Transaction Report (hereafter "CTR"). Structuring funds involves making smaller cash deposits over time in an effort to avoid filing a CTR as required by the BSA. There is no dispute that the Defendant knowingly structured cash deposits as alleged in Count 5 of the Indictment. During the Defendant's plea, he admitted to structuring funds for the purpose of avoiding federal reporting requirements. (Government's Exhibit 11 at p.15 ln.22-24.)

Special Agent Craig Wyly of the Internal Revenue Service, Criminal Investigation Unit, testified about his investigation into the Defendant's illegal structuring of funds. S.A. Wyly has special training and experience in conducting money-laundering and structuring investigations. S.A. Wyly testified that he examined every deposit made into the Defendant's various bank accounts. (June 15 Transcripts at p.84 ln.22 - p.85 ln.2.) S.A. Wyly identified cash deposits made on the same day, consecutive days, or within a few days of each other that would have exceeded $10,000 and would have required the filing of a CTR. (Id. at p.87 ln.21 - p.88 ln.14.) S.A. Wyly testified that typically structured deposits are repetitive and are made in rounded amounts between $2,000 and $5,000. (Id.) The cash deposits made into the Defendant's accounts reflect repetitive and rounded cash deposits. S.A. Wyly testified that between June 10, 2008 and December 28, 2009, the Defendant made 282 cash deposits totaling $1,105,644.*fn1 (Id. at p.82 ln.12-16.) S.A. Wyly testified that the Defendant specifically admitted during several interviews that he was structuring his deposits to avoid filing a CTR. (Id. at p.93 ln.9-13, p.94 ln. 20 - p.p5. Ln.3.) At the forfeiture hearing, the Defendant offered no evidence to call into question any of the 282 cash deposits made into his bank accounts.

The Court finds that the Government proved by a preponderance of the evidence that the Defendant structured 282 cash deposits between June 10, 2008 and ...


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