96 Cal. Daily Op. Ser v. 9440, 96 Daily Journald.a.r. 15,493united States of America, Plaintiff-appellee, v. $46,588.00 in U.S. Currency and $20.00 in Canadian Currency,more or Less, and All Proceeds Therefrom, Defendant,juliana Miriam Steernberg, Claimant-appellant, 103 F.3d 902 (9th Cir. 1996)

Juliana Miriam Steernberg ("Steernberg") appeals a summary judgment forfeiting currency to the United States. The U.S. Border Patrol seized the currency from Steernberg and handed it over to the Drug Enforcement Agency ("DEA"). The DEA replaced the currency with a cashier's check, and delivered the check to the U.S. Marshal who deposited it in the Seized Asset Deposit Fund. The government then filed this judicial forfeiture action. The question to be decided is whether the substitution of the cashier's check for the currency by a DEA agent before delivery to the Marshal prevented the district court from gaining in rem jurisdiction. We have jurisdiction under 28 U.S.C. § 1291, and we hold that the district court had in rem jurisdiction. We affirm.

FACTS

On April 8, 1992, U.S. Border Patrol agents arrested Steernberg, a Canadian citizen, for drug and currency violations while she was waiting outside the terminal at the Bellingham, Washington, airport. The agents seized $46,588 in U.S. currency and $20 in Canadian currency from Steernberg, who had entered the United States that morning and had not filed a report declaring the currency as required by 31 U.S.C. § 5316.¹ 

The Border Patrol agents notified the DEA and the U.S. Customs Service ("Customs") of Steernberg's arrest. The Border Patrol agents took Steernberg and the currency to their office where they handed the currency over to a DEA agent. The DEA agent, either that same day or the following day, photographed the currency, then exchanged it for a cashier's check at a local bank. The DEA sent the check to the U.S. Marshal's Service for deposit in the Seized Asset Deposit Fund.

A Customs agent talked to Steernberg while she was at the Border Patrol Office, but Customs had no further involvement.

On May 4, 1992, the DEA initiated an administrative forfeiture proceeding.²  Steernberg was advised that she could request remission or mitigation of the forfeiture, and that she could contest the forfeiture.³  Steernberg submitted a claim of ownership and cost bond, thereby requiring the DEA to refer the seizure to the U.S. Attorney's office for a contested judicial forfeiture proceeding.⁴  Steernberg also submitted a petition for remission or mitigation to the DEA. On October 19, 1992, the U.S. Attorney received the DEA's recommendation that the petition for remission be denied.

The government filed this civil forfeiture action on February 22, 1993, under both the drug forfeiture provision, 21 U.S.C. § 881(a) (6), and the currency forfeiture provisions, 31 U.S.C. §§ 5316 and 5317(c). A warrant of arrest in rem was issued directing the U.S. Marshal to arrest the defendant currency and all proceeds therefrom. The warrant was executed by the transfer of $46,604.62 from the Marshal's Seized Asset Deposit Fund to the Marshal's Judicial Seizure Fund. Thereafter, the district court granted the government's motion for summary judgment for civil forfeiture, based upon a violation of the currency laws, 31 U.S.C. § 5317(c). Steernberg timely appealed.

Standard of Review

We review the district court's interpretation of federal forfeiture law de novo. United States v.1980 Lear Jet, Model 35A Serial No. 277, 38 F.3d 398, 400 (9th Cir. 1994).Discussion

A civil forfeiture proceeding is an action in rem, and the court must have actual or constructive control of the res when a forfeiture proceeding is initiated. Republic Nat'l Bank of Miami v. United States, 506 U.S. 80, 84, 87, 113 S. Ct. 554, 558-59, 121 L. Ed. 2d 474 (1992).

The Attorney General has issued a directive to government agents instructing that "all currency" seized is "to be delivered to the United States Marshals Service for deposit into the Marshal's Seized Asset Deposit Fund."⁵  The Attorney General cited the security, budgetary, and accounting problems caused by retention of large amounts of seized currency.

The Seized Asset Deposit Fund was authorized by 28 U.S.C. § 544(c) for the purpose of holding seized cash pending forfeiture. See United States v. $277,000 U.S. Currency, 69 F.3d 1491, 1494 (9th Cir. 1995) ("This account is authorized by 28 U.S.C. § 524(c), which establishes a fund to hold assets after they have been forfeited [the Asset Forfeiture Fund, § 524(c) (1) ], and 'holding accounts' for assets before forfeiture, § 524(c) (5).").⁶ 

In this case, the DEA agent took the seized currency to a local bank and exchanged it for a cashier's check. The check, instead of the seized currency, was sent to the U.S. Marshal's Service for deposit into the Seized Asset Deposit Fund. The government therefore followed policy directive, with the exception of delivering a cashier's check, instead of the currency, to the Marshal for deposit.

Steernberg argues that when the currency was exchanged for a cashier's check, the currency, which is the res, "disappeared into the banking system and is no longer identifiable." We reject that argument because, in this case, the cashier's check was an appropriate, fungible surrogate for the seized currency. See United States v. $57,480.05 U.S. Currency and Other Coins, 722 F.2d 1457, 1459 (9th Cir. 1984) ("The bank credit of fungible dollars constituted an appropriate substitute for the original res."); Madewell v. Downs, 68 F.3d 1030, 1042, n. 14 (8th Cir. 1995) (" [c]urrency, cashier's checks, and bank deposits are simply surrogates for each other, and in modern society are certainly regarded as 'fungible' "). The res remained identifiable and within the court's jurisdiction. The funds in the Seized Asset Deposit Fund were properly arrested.

The government filed this forfeiture action under both the drug forfeiture provision, 21 U.S.C. § 881(a) (6), and the currency forfeiture provisions, 31 U.S.C. §§ 5316 and 5317(c). Steernberg argues that the district court erred in granting the government's motion for summary judgment based solely on the currency violations because Customs did not provide the remission proceedings. She asserts that Customs administers the currency forfeiture provisions in 31 U.S.C. § 5317(c), therefore, Customs, rather than the DEA, must offer the remission proceedings which she requested.

We reject Steernberg's argument. The Border Patrol seized Steernberg's currency and immediately notified both Customs and the DEA. Customs talked to Steernberg, but had no further involvement. The DEA took possession of the currency. Because Customs did not seize or take possession of the currency, it had no authority or obligation to offer remission proceedings.⁷  Moreover, the drug forfeiture statute, 21 U.S.C. § 881, incorporates all of the provisions of law relating to customs seizures and forfeitures, including remission or mitigation procedures, to seizures and forfeitures made pursuant to the drug forfeiture statute. That statute further directs that these duties shall be performed by such persons as may be designated for that purpose by the Attorney General, except seizures "effected" by customs officers. See 21 U.S.C. § 881(d).⁸ 

Finally, we reject Steernberg's argument that the currency forfeiture statute, 31 U.S.C. § 5317(c), can be invoked only pursuant to a customs seizure.⁹  Nothing in the language of that statute supports this argument.

For the reasons stated above, the judgment is AFFIRMED.