United States v. Roberto Hernandez-Escobar , 911 F.3d 952 ( 2018 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 17-50134
Plaintiff-Appellee,
D.C. No.
v. 3:15-cr-01826-JM-1
ROBERTO HERNANDEZ-
ESCOBAR, OPINION
Movant-Appellant,
ROBERTO HERNANDEZ,
Defendant.
Appeal from the United States District Court
for the Southern District of California
Jeffrey T. Miller, Senior District Judge, Presiding
Argued and Submitted July 12, 2018
Pasadena, California
Filed December 20, 2018
2 UNITED STATES V. HERNANDEZ-ESCOBAR
Before: Marsha S. Berzon, D. Michael Fisher, *
and Paul J. Watford, Circuit Judges.
Opinion by Judge Fisher
SUMMARY **
Forfeiture
The panel affirmed the district court’s order denying
Roberto Hernandez-Escobar’s petition under 21 U.S.C.
§ 853(n) to set aside an order forfeiting $73,000 in cash in
connection with Hernandez-Escobar’s son’s guilty plea to
drug crimes, and the district court’s denial of Hernandez-
Escobar’s motion for relief from the order denying the
petition.
Hernandez-Escobar argued that he is a bailor whose title
to the cash is superior to the Government’s. Explaining that
the district court did not need to determine whether
Hernandez-Escobar had actually given cash to his son or
how much, the panel held that the evidence as a whole
supports the district court’s finding that the cash found in the
son’s bedroom was proceeds from the son’s narcotics
trafficking. The panel rejected Hernandez-Escobar’s
contention that the Government violated his due process
rights by interfering with his ability to call his son as a
*
The Honorable D. Michael Fisher, United States Circuit Judge for
the U.S. Court of Appeals for the Third Circuit, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
UNITED STATES V. HERNANDEZ-ESCOBAR 3
witness. The panel held that even if Hernandez-Escobar was
entitled to due process protections in forfeiture proceedings
coextensive with those afforded to criminal defendants, the
Assistant U.S. Attorney’s communications with the son were
mere warnings of the consequences of perjury that did not
violate due process.
COUNSEL
Richard Mark Barnett (argued), San Diego, California;
Devin Burstein (argued), Warren & Burstein, San Diego,
California; for Movant-Appellant.
Ajay Krishnamurthy (argued), Assistant United States
Attorney; Helen H. Hong, Chief, Appellate Section,
Criminal Division; Adam L. Braverman, United States
Attorney; United States Attorney’s Office, San Diego,
California; for Plaintiff-Appellee.
OPINION
FISHER, Circuit Judge:
Roberto Hernandez pled guilty to drug crimes and
forfeited $73,000 in cash to the Government. His father, who
claims ownership of the cash, petitioned the District Court
to set aside the forfeiture order. The court denied the petition
after holding an evidentiary hearing, and also denied the
father’s motion for relief from judgment. The father now
appeals. He argues that he is a bailor whose title to the cash
is superior to the Government’s, and also that his due process
rights were violated because his son did not testify at the
hearing. We affirm.
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I. Background
Federal agents executed a search warrant at the home of
Roberto Hernandez. In his bedroom, they found cash, guns,
more than six kilograms (thirteen pounds) of
methamphetamine, and “pay-owe” sheets, i.e., the ledgers
associated with a drug distribution enterprise. Roberto and
his girlfriend told agents that $2,400 in his girlfriend’s
nightstand belonged to her, but they asserted nothing about
the ownership of the remaining $73,390. Roberto later pled
guilty to charges arising from methamphetamine trafficking.
He signed both a plea agreement and a forfeiture agreement,
which stated that he “is the owner of the $73,390,” that “it
represents property constituting and derived from proceeds
he obtained directly from narcotics trafficking,” and that he
“understands and agrees that it is subject to forfeiture to the
United States” under 21 U.S.C. § 853(a)(1). Under the terms
of the forfeiture agreement, Roberto agreed “not to contest
or to assist any other person or entity in contesting the
forfeiture of the property[] seized.”
The District Court entered a forfeiture order, and
Roberto’s father, Roberto Hernandez-Escobar, filed a
petition under 21 U.S.C. § 853(n) asserting ownership of the
cash. 1 The Assistant U.S. Attorney (AUSA) then
interviewed Roberto. Roberto met with his attorney, Ricardo
Gonzalez, before the interview. Gonzalez advised Roberto
that if he said anything about the cash that contradicted the
plea agreement, he might violate the agreement.
In the interview with the AUSA, Roberto stated that the
money was his father’s and that he knew his father would
1
For clarity, we refer to the son as “Roberto” and the father as “Mr.
Hernandez.”
UNITED STATES V. HERNANDEZ-ESCOBAR 5
contest the forfeiture. Over the course of a year, whenever
his father got a paycheck, he would give Roberto some cash.
Roberto’s mother and father were not getting along, and
Roberto and his father feared that his mother would take the
money if Mr. Hernandez continued to keep it in his home.
Roberto claimed that when the cash was seized, he didn’t say
anything about who owned it because he had been “smoking
for a few days” and wasn’t in the right “mind set.” He told
the officers about the $2,400 that belonged to his girlfriend
only because she reminded him. Finally, Roberto told the
AUSA that he would not contest the seizure of the cash, but
added that he had no control over his father’s actions.
Also during the interview, the AUSA “told [Roberto] he
had an obligation to tell the truth and that any lie” could lead
to criminal liability for “making a false statement.” The
AUSA said he believed that Roberto was lying, and pointed
out that Roberto’s interview statements differed from what
he had said in his plea agreement.
The District Court held a two-day hearing without a jury
to hear evidence and argument on Mr. Hernandez’s petition.
Roberto was present at the courthouse, but he invoked his
Fifth Amendment right against self-incrimination and did
not testify.
Mr. Hernandez did testify. In some respects, his
testimony matched his son’s statements in the interview with
the AUSA. In other respects, the father’s and son’s stories
diverged. Mr. Hernandez testified that over the course of
seventeen years, he saved money by putting away a portion
of each of his paychecks in cash. He also withdrew money
from his retirement account and received income from the
sale of a home. Mr. Hernandez hid the cash, which at its
highest point totaled more than $76,000, in shoe boxes under
the bed he shared with his wife. Mr. Hernandez began
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experiencing marital difficulties a few years before the
events at issue in this appeal and became concerned that his
wife would take the cash. So, a few thousand dollars at a
time, he gave the cash to Roberto for safekeeping. He did not
keep any records, but he testified that he gave Roberto a total
of $76,000. Mr. Hernandez did not know where his son kept
the cash.
The District Court considered the evidence presented at
the hearing and denied Mr. Hernandez’s petition, concluding
that he did not establish that the seized cash was his. Instead,
the evidence showed that the cash “constituted proceeds
from [Roberto’s] narcotics trafficking and, thus, was
properly subject to forfeiture.”
II. Jurisdiction and Standard of Review
The District Court had jurisdiction under 21 U.S.C.
§ 853(l). We have appellate jurisdiction under 28 U.S.C.
§ 1291. “We review the district court’s interpretation of
federal forfeiture law de novo. However, we review the
district court’s findings of fact for clear error.” United States
v. Alcaraz-Garcia, 79 F.3d 769, 772 (9th Cir. 1996) (citation
omitted). We review a ruling on a Rule 60(b) motion for
relief from judgment for abuse of discretion. Casey v.
Albertson’s Inc., 362 F.3d 1254, 1257 (9th Cir. 2004).
III. Analysis
The federal criminal forfeiture statute provides that a
person convicted of a drug offense “shall forfeit to the
United States . . . any property constituting, or derived from,
any proceeds the person obtained, directly or indirectly, as
the result of such violation.” 21 U.S.C. § 853(a); see also
United States v. Nava, 404 F.3d 1119, 1124 (9th Cir. 2005)
(“At sentencing, the district court must order forfeiture of the
UNITED STATES V. HERNANDEZ-ESCOBAR 7
property in addition to imposing any other sentence.”).
Although the property is not forfeited until after conviction,
“[a]ll right, title, and interest in [the] property . . . vests in the
United States upon the commission of the act giving rise to
forfeiture.” 21 U.S.C. § 853(c).
Because § 853 “acts in personam, it permits the
forfeiture of the defendant’s interests only, not the property
of innocent parties.” Nava, 404 F.3d at 1124. Section 853
allows a petitioner like Mr. Hernandez to request a non-jury
hearing “to adjudicate the validity of his alleged interest in
the property.” 21 U.S.C. § 853(n)(2). “[T]he petitioner may
testify and present evidence and witnesses on his own behalf,
and cross-examine witnesses who appear at the hearing.” Id.§ 853(n)(5).
The petitioner prevails if he “establishe[s] by a
preponderance of the evidence” that he has “a legal right,
title, or interest in the property” that “was superior to any
right, title, or interest of the defendant at the time of the
commission of the acts which gave rise to the forfeiture of
the property.” Id. § 853(n)(6). “[S]tate law determines
whether [the petitioner has] a property interest, but federal
law determines whether or not that interest can be forfeited.”
Nava, 404 F.3d at 1127 (quoting United States v. Hooper,
229 F.3d 818, 820 (9th Cir. 2000)).
A. Denial of Petition to Set Aside Forfeiture Order
Mr. Hernandez argues that he is the bailor of the cash,
and that the District Court therefore erred in denying his
petition to set aside the forfeiture order. Under California
law, “[a] bailment is the deposit of personal property with
another, usually for a particular purpose.” Alcaraz-Garcia,
79 F.3d at 774 n.11. “[A] bailment does not alter the bailor’s
title interest in the bailed property,” and “a bailor may assert
8 UNITED STATES V. HERNANDEZ-ESCOBAR
title against any third person to whom the property has been
transferred.” Id. at 775 (citation omitted). Mr. Hernandez’s
legal arguments about bailments are cogent, as far as they
go. His petition fails for factual reasons, not legal ones.
The District Court concluded that Mr. Hernandez “failed
to meet his burden of establishing by a preponderance of the
evidence that . . . he held any interest in the cash that was
superior to [Roberto’s].” Instead, the court ruled, the
evidence “establishe[d], beyond any reasonable doubt,” that
the cash “constituted proceeds from [Roberto’s] narcotics
trafficking.” 2 We may reverse this finding only if it is clearly
erroneous—that is, not “plausible in light of the record
viewed in its entirety.” Guam Soc’y of Obstetricians &
Gynecologists v. Ada, 100 F.3d 691, 696 (9th Cir. 1996)
(quoting Serv. Emps. Int’l Union v. Fair Political Practice
Comm’n, 955 F.2d 1312, 1317 n.7 (9th Cir. 1992)).
The District Court’s finding is plausible in light of the
entire record. Indeed, it is well supported. The money was
found in Roberto’s bedroom along with ten-plus pounds of
methamphetamine, guns, and pay-owe sheets showing that
Roberto bought and sold methamphetamine in large
amounts. When federal agents searched his house, Roberto
said the money in his girlfriend’s nightstand was hers, but he
did not tell the agents anything about the ownership of the
rest of the cash. Roberto signed a forfeiture agreement
stating that the money constituted proceeds of narcotics
2
The District Court’s use of the phrase “beyond any reasonable
doubt” did not misconstrue Mr. Hernandez’s burden, which was to show
that his title was superior to Roberto’s by a preponderance of the
evidence. 21 U.S.C. § 853(n)(6). The District Court correctly articulated
and applied this standard, using the familiar “reasonable doubt” language
to emphasize how clearly and convincingly the evidence showed that the
cash constituted drug proceeds.
UNITED STATES V. HERNANDEZ-ESCOBAR 9
trafficking, and he also signed a plea agreement
incorporating the forfeiture agreement. Roberto confirmed at
the plea hearing that those agreements were true. In light of
all of this evidence, the District Court was entitled to accord
no evidentiary weight to Roberto’s later statements in his
interview with the AUSA, where he claimed for the first time
that the money was his father’s. The court plausibly found
Roberto’s interview statements “qualified and
disingenuous” and “clearly calculated to ‘support’ his
father’s claim without risking criminal liability or his own
credit for cooperation.” In sum, the District Court’s finding
that the cash constituted drug proceeds was not clearly
erroneous.
Mr. Hernandez faults the District Court for (in his words)
ruling that “Roberto’s crime extinguished Mr. Hernandez’s
legitimate ownership interest” in the bailed money. This
argument is based on two flawed premises: speculation
about the facts and a mischaracterization of the District
Court’s ruling.
Mr. Hernandez’s argument is speculative because it rests
on the assumption that Roberto used his father’s cash to
capitalize his drug business. However, there is no evidence
that Roberto did so. Furthermore, if he did, that would mean
Roberto was a faithless bailee, but it would not necessarily
mean that the drug proceeds recovered from Roberto’s
bedroom were not forfeitable.
Mr. Hernandez’s argument mischaracterizes the District
Court’s ruling because the court did not extinguish any
property rights he possessed. Following the directives of the
forfeiture statute, the District Court ruled only on “the
validity of the petitioner’s alleged interest in the property,”
i.e., the “property which has been ordered forfeited to the
United States.” 21 U.S.C. § 853(n)(2). The court considered
10 UNITED STATES V. HERNANDEZ-ESCOBAR
what the evidence showed about the money in Roberto’s
bedroom and ruled that it was forfeitable drug proceeds.
Should other cash that Mr. Hernandez gave to Roberto ever
be located, the District Court’s ruling will not have
extinguished any property rights Mr. Hernandez may have
in that cash. To rule on Mr. Hernandez’s petition, the District
Court did not need to determine whether Mr. Hernandez had
actually given cash to Roberto, or how much. The answers
to those questions have no bearing on the forfeitability of the
cash that was found in Roberto’s bedroom and that the
District Court concluded was drug proceeds.
Mr. Hernandez analogizes this case to Alcaraz-Garcia.
There, the defendant was caught at the border with more than
$35,000 in his boots. 79 F.3d at 772. After the defendant was
convicted of failing to file a currency report and making a
false statement to a border official, most of the cash was
ordered to be forfeited. Id. Three individuals filed petitions
under § 853, averring that they had given the defendant cash
to take to their families in Mexico. Id. We concluded that the
petitioners were bailors who “retained legal title to the bailed
funds” and therefore “were entitled to . . . obtain an
amendment to the forfeiture order under § 853(n).” Id. at
776.
Mr. Hernandez argues that as in Alcaraz-Garcia, he
retained title to the forfeited cash. However, the ruling in
Alcaraz-Garcia—that the cash was a bailment to which the
petitioners retained superior title—was based not only on the
law of bailments, but also on the facts of the case, id. at 772,
which are distinguishable. The Alcaraz-Garcia petitioners
stated that they had given the defendant money to take to
their families in Mexico, and the defendant was caught
attempting to cross the border into Mexico with the money.
Id. at 772 & n.1, 776. Thus, the petitioners’ factual
UNITED STATES V. HERNANDEZ-ESCOBAR 11
statements were supported by the circumstances under
which the money was seized.
Here, by contrast, Mr. Hernandez’s factual statements
are neither supported nor undermined by the circumstances
under which the cash was seized. Mr. Hernandez may have
given money to Roberto for safekeeping, but what has
become of that money is unknown. The money that was
forfeited, on the other hand—the money whose ownership
the District Court was required to decide, 21 U.S.C.
§ 853(n)(2)—was found together with drugs, guns, and pay-
owe sheets, and Roberto stated in his plea and forfeiture
agreements that the money constituted drug proceeds.
Therefore, Alcaraz-Garcia does not provide a basis for
reversal.
Mr. Hernandez also contends that the District Court
erred by denying his petition on the basis that he was unable
to prove that the exact currency he gave to Roberto was the
same currency that was forfeited. Mr. Hernandez argues,
correctly, that a bailor need not trace the exact currency that
was bailed. Bank of Am. Nat’l Trust & Sav. Ass’n v. Cal. Sav.
& Commercial Bank, 218 Cal. 261, 273 (1933) (“it is not
required, that the identity of the [bailed] money . . . be
preserved in specie, as by setting it aside in a marked bag or
package”); see also Niiya v. Goto, 181 Cal. App. 2d 682, 687
(1960) (bailee must return “the identical thing bailed or the
product of, or substitute for, that thing” (emphasis added)).
But we do not affirm because the bills were not traced.
Rather, we affirm because the evidence as a whole supports
12 UNITED STATES V. HERNANDEZ-ESCOBAR
the District Court’s finding that the forfeited money was, in
fact, drug proceeds. 3
The text of § 853 reinforces that the bill tracing question
is a non-issue. The statute requires forfeiture of “any
property constituting, or derived from, any proceeds . . .
obtained, directly or indirectly, as the result of [a drug]
violation.” 21 U.S.C. § 853(a). The statutory language
expresses no concern with tracing particular currency.
Instead, it is concerned with whether forfeited money was
“derived from” a drug transaction, “directly or indirectly,”
in the sense that a drug sale resulted in the receipt of that
amount of money.
Finally, Mr. Hernandez relies on Bank of America’s
holding that “[t]he bank [as bailee] is under a duty to retain
in cash at all times . . . an amount equal to” the bailments it
has accepted. 218 Cal. at 276. Mr. Hernandez posits that
because “[t]he last cash to remain” in an insolvent bank’s
coffers is presumed to be bailments, not account deposits,
id., the last cash remaining in Roberto’s possession (i.e., the
money found in his bedroom) similarly must be presumed to
be Mr. Hernandez’s bailment. This analysis is ultimately
unpersuasive. Bank of America involved two pools of
money: bailments and general deposits by bank account
holders. It is not too much of a stretch to analogize the
bailments in Bank of America to the alleged bailment here.
But it is too great a leap to analogize the bank deposits in
Bank of America with the drug money here. If Bank of
3
Mr. Hernandez’s tracing argument highlights another way this case
is distinguishable from Alcaraz-Garcia. There, the cash in the
defendant’s boots may have been the same cash the petitioners gave him;
the opinion does not mention any intervening exchanges of bills. See
79 F.3d at 772. But that distinction makes no difference. The traceability
of the bills is beside the point.
UNITED STATES V. HERNANDEZ-ESCOBAR 13
America had dealt with bailments and drug money, instead
of bailments and general deposits, the result may very well
have been different.
Moreover, Bank of America stops short of ruling that a
bailor is entitled to any money in the bailee’s possession.
The opinion explains, “It is not the doctrine of the law that
special depositors [i.e., bailors] have a prior lien on all
general assets of the bank in preference to other depositors
and creditors . . . .” Id. If the bank’s “cash balance . . . falls
below the amount [of the bailment], the identity of the
[bailment] is lost, and it is held that the preference of the
[bailors] does not extend to general assets.” Id. Instead, the
bailors find themselves “on a par with general depositors.”
Id. In other words, they lose their preference in the bank’s
remaining cash and are no different than other parties
(including account holders) to whom the insolvent bank
owes money. That is what happened here: Mr. Hernandez
testified that he gave Roberto a total of $76,000, but $73,390
was found in Roberto’s bedroom. 4 Under Bank of America,
because the full amount of the bailment was no longer in
Roberto’s possession, Mr. Hernandez would have become
Roberto’s general creditor, not a bailor. And as a general
creditor, Mr. Hernandez would not be entitled to the
forfeited cash. See 21 U.S.C. § 853(n)(6) (providing that
petitioner must establish either that he has an interest in the
forfeited property or that he is a bona fide purchaser for
value); see also Alcaraz-Garcia, 79 F.3d at 773 & n.8
(analyzing whether petitioners met the specific requirements
of § 853(n)(6) and rejecting their attempt to characterize
themselves as “innocent owners”).
4
The initial amount seized was $75,790, but $2,400 belonged to Mr.
Hernandez’s girlfriend and was immediately returned to her.
14 UNITED STATES V. HERNANDEZ-ESCOBAR
For these reasons, the District Court did not err in
denying Mr. Hernandez’s petition.
B. Due Process
After Mr. Hernandez lost on his § 853 petition, he filed
a motion to vacate. He argued that the Government had
violated his due process rights because it interfered with his
ability to call witnesses at the forfeiture hearing—
specifically, that it “draft[ed] a plea agreement that
prohibited his son from testifying” and “fail[ed] to release
[Roberto] from that provision.” The District Court construed
the motion as one for relief from an order under Rule
60(b)(6) and denied it, concluding that while Mr. Hernandez
had the right to present witnesses, that did not encompass the
right to compel someone else to waive the Fifth Amendment
privilege against self-incrimination.
On appeal, Mr. Hernandez presents a new version of his
due process argument: that the Government interfered with
his ability to call Roberto as a witness because of the
AUSA’s statements before the petition hearing. Mr.
Hernandez points to the AUSA’s assertion that lying in the
presence of an agent would subject Roberto to prosecution
for making false statements; his reminder of what was in the
plea agreement; and his comment that Roberto was changing
his story and that the AUSA did not believe him.
Mr. Hernandez relies solely on criminal due process
cases. While the Government criticizes Mr. Hernandez on
this score, arguing that forfeiture proceedings are civil, the
Government does not take any position on what due process
standard does apply. In Alcaraz-Garcia, we ruled that for the
purpose of calculating the time to appeal, a criminal
forfeiture proceeding is “civil in nature.” 79 F.3d at 772 n.4.
We need not determine whether this reasoning in Alcaraz-
UNITED STATES V. HERNANDEZ-ESCOBAR 15
Garcia extends to due process questions, because even if Mr.
Hernandez was entitled to due process protections
coextensive with those afforded to criminal defendants, he
has not shown a violation.
In criminal proceedings, only “[u]nnecessarily strong
admonitions against perjury aimed at discouraging defense
witnesses from testifying have been held to deprive a
criminal defendant of his [constitutional rights].” United
States v. Juan, 704 F.3d 1137, 1141 (9th Cir. 2013) (quoting
United States v. Vavages, 151 F.3d 1185, 1188 (9th Cir.
1998)). For example, it violates due process to “‘gratuitously
single[] out’ the defense’s sole witness for a ‘lengthy
admonition on the dangers of perjury,’ including assuring
the witness that if he lied on the stand, ‘he would be
prosecuted and probably convicted for perjury.’” Id.(quoting Vavages, 151 F.3d at 1188–89). However, “in many
circumstances, warning a witness about the possibility and
consequences of perjury charges is warranted.” Id. at 1142.
“[M]erely warning a witness of the consequences of perjury
does not unduly pressure the witness’s choice to testify or
violate the defendant’s right to due process.” Id. (quoting
Williams v. Woodford, 384 F.3d 567, 603 (9th Cir. 2004)).
In other circumstances, a prosecutor’s stated belief that a
potential witness is lying might be an “[u]nnecessarily strong
admonition[],” id. at 1141—but not on these facts. During
the plea proceedings, Roberto represented that the money
constituted drug proceeds. After his father filed a petition to
set aside the forfeiture, Roberto changed his story and said
the money was his father’s. If a potential witness makes two
irreconcilable statements, it does not violate due process for
the prosecutor to point out that both statements cannot be
true. The AUSA’s comments were “mere[] warning[s] . . . of
16 UNITED STATES V. HERNANDEZ-ESCOBAR
the consequences of perjury” that did not violate due
process. Id.Mr. Hernandez compares this case to United States v.
Henricksen, 564 F.2d 197 (5th Cir. 1977). There, the Fifth
Circuit concluded that the Government had hampered a
witness’s choice to testify, and therefore violated the
defendant’s due process rights, because the witness’s plea
agreement barred him from testifying in the criminal
proceedings against the defendant. Id. at 198. Notably,
however, the Government “confessed error” and requested
reversal and remand for a new trial. Id. The Government in
Henricksen had tried to subvert the truth-finding process by
making relevant testimony unavailable. See id. The
Government here, by contrast, was effectuating the
forfeiture of the drug money. If Roberto’s agreements had
not included a provision that he would not contest the
forfeiture and would not help anyone else to do so, Roberto
could have simply forfeited the money and then embarked
on litigation to get it back (either for himself or for someone
else). His agreement that he would not try to undo his own
criminal forfeiture is distinguishable from the impermissible
agreement in Henricksen not to provide testimony in
someone else’s criminal trial.
IV. Conclusion
The District Court did not clearly err when it found as a
factual matter that the cash in the bedroom was drug
proceeds, and therefore its denial of Mr. Hernandez’s § 853
petition was not erroneous. In addition, there was no due
process violation in the AUSA’s communications with
Roberto.
Accordingly, we AFFIRM.