189 F.3d 28 (1st Cir. 1999), 98-1839, United States v. United States Currency
|Citation:||189 F.3d 28|
|Party Name:||UNITED STATES, Plaintiff, Appellee, v. U.S. CURRENCY, $81,000.00, ETC., ET AL., Defendants, Appellees. JOHN P. BULGER, Claimant, Appellant.|
|Case Date:||August 19, 1999|
|Court:||United States Courts of Appeals, Court of Appeals for the First Circuit|
Heard June 10, 1999.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS
George F. Gormley, with whom George F. Gormley, P.C. was on brief, for appellant.
Richard L. Hoffman, Assistant United States Attorney, with whom Donald K. Stern, United States Attorney, was on brief, for appellee United States.
Before Torruella, Chief Judge, Campbell, Senior Circuit Judge, and Selya, Circuit Judge.
TORRUELLA, Chief Judge.
This is an in rem action, brought by the United States for forfeiture of money owned, at least in part, by James "Whitey" Bulger. The United States seeks forfeiture of approximately $200,000 that it claims was derived from Whitey Bulger's illegal extortion, racketeering, and money laundering activities. Whitey Bulger, a fugitive since January 1995, has not appeared to file a claim to the property. The only claimant is his brother, John Bulger. The United States moved to dismiss John Bulger's claim, arguing that he has no actual ownership interest in the defendant property. The district court allowed the motion to dismiss, and subsequently ordered forfeiture of the property at issue. For the reasons stated below, we VACATE the judgment entered by the district court.
In its pleadings and other papers, the government alleges that Whitey Bulger, together with others, had been actively involved in criminal activity for a period of some thirty years preceding the filing of the verified complaint in this action. The government asserts that, over this extended
period of time, Whitey Bulger "directly or indirectly received and amassed hundreds of thousands, and probably millions, of dollars . . . from . . . illegal revenue."
Details were given regarding two alleged criminal episodes, one involving Whitey Bulger's purportedly extortionate purchase and subsequent sale of a liquor store, the other involving his purchase, together with others, of a share in a winning Massachusetts lottery ticket.
The government contends that between January and May of 1984, Whitey Bulger, together with others and by threats of violence, purchased at a favorable price a retail liquor store then known as Stippo's Liquor Mart and the real property on which it was situated, at 295 Old Colony Avenue in South Boston. Public documents show that the property was purchased by Kevin Weeks, said to be an associate of Whitey Bulger. Two years later, in May of 1986, the real property was resold to Weeks, Whitey Bulger, and another person. A few days after that, South Boston Liquor Mart, Inc., was established to do business at that location.
At some point between 1988 and 1990, Whitey Bulger approached his brother John and asked whether he would be a cosignatory with him on a bank account that he proposed to establish. John agreed, signed some papers, and the account was opened as South Boston Savings Bank Account ("SBSB"), No. 02-44-255305, in the names of James J. Bulger and John P. Bulger. Thereafter, statements began arriving at John Bulger's home address. John Bulger did not make deposits to the account, does not claim any knowledge of the source of or reason for deposits to the account, and has treated its contents as property of his brother James. Nonetheless, the checkbook was kept at John Bulger's house.
On December 9, 1989, Whitey Bulger, Kevin Weeks, and the other record owner of the real property at 295 Old Colony Avenue sold their interests to Whitey Bulger for a total of $40,000. That same day, an organization known as Shamrock Realty Trust was established, with Weeks and another person named as trustees. Shamrock Realty Trust promptly purchased the Old Colony Avenue property from Whitey Bulger for $400,000, granting a mortgage to Whitey Bulger, with the property as collateral, to secure the purchase price. Shamrock Realty Trust was to make monthly payments to Whitey Bulger in the amount of $4,672.90.
In December 1990 or January 1991, a "Mass Millions" state lottery entry was purchased by Michael Linskey and registered in his name. Under this arrangement, the registrant automatically participates in drawings over the course of the following year. Michael Linskey's entry won in July 1991, and was worth approximately $14.3 million (prior to taxes), payable in annual installments over a twenty-year period beginning in July 1991 and continuing through July 2010. Michael Linskey's brother, Patrick Linskey, is also alleged to be an associate of Whitey Bulger. Within a few days, and before the first disbursement of winnings, papers were provided to the state lottery commission indicating that Whitey Bulger, Patrick Linskey, and Kevin Weeks were by prior agreement entitled to equal parts of a one-half interest in the winnings (i.e., one-sixth each), the other half belonging to the previously registered winner, Michael Linskey. At the same time, arrangements were made with the South Boston Savings Bank to assist in apportioning and distributing the winnings among the several individuals mentioned.
According to information provided by the government, shares of the winning entry had been purchased by Whitey Bulger, Patrick Linskey, and Kevin Weeks only after the winning drawing. For a lump-sum payment of $700,000, Whitey Bulger is said to have purchased his one-sixth interest in the winnings, amounting to annual payments of $119,408 (prior to taxes) over a period of twenty years. In July of
each year from 1991 through 1994, the total winnings, less taxes, were paid to Michael Linskey. Michael Linskey deposited the winnings in his account at South Boston Savings Bank, whereupon the bank, pursuant to the above agreement, apportioned and distributed the funds, depositing Whitey Bulger's share into the joint checking account he held along with John Bulger. Whitey Bulger's lottery share for 1995 and after has been seized and forfeited in separate proceedings, and is not at issue here.
At some point in 1993, John Bulger withdrew about $13,000 from the joint checking account to purchase a car. He says that he considered this a loan, and that some repayment of this loan had been made by November 1996, primarily by John Bulger periodically placing his own cash into an envelope at his home containing funds intended for Whitey Bulger. John Bulger would also from time to time pay bills for Whitey Bulger using money including cash from this envelope. The envelope and notations on it had apparently been thrown out some time before John Bulger's grand jury testimony in November 1996.
On August 24, August 30, and September 10, 1993, John Bulger made cash withdrawals in the respective amounts of $25,000, $75,000, and $90,000 from the joint checking account. He says that these withdrawals were made at Whitey Bulger's request, and the money was given to Whitey Bulger without any further explanation being given to or requested by John Bulger.
In July 1994, deposits to the joint checking account of after-tax lottery proceeds amounted to $80,003.36. On September 16, 1994, Whitey Bulger wrote a check for $100,000 against the joint checking account described above and deposited it into South Boston Savings Bank Account No. 2-18-17712 in the joint names of James J. Bulger and John Bulger. Prior to its seizure in November 1996, it does not appear that there were any further deposits to the latter account, other than interest in the amount of $7,851.76 earned on the original deposit, nor were there any withdrawals from it. It thus appears that the joint checking account is the sole source of the defendant funds seized from the latter joint passbook savings account. A bank statement dated September 18, 1993, indicates that as of that date the balance in the original joint checking account was $8,572.58.
During the thirty-six months from September 1993 through August 1996, at least twenty-seven deposits of $4,672.90, the amount due monthly under the Old Colony Avenue real estate sale agreement, were made to the original joint checking account.1 The twenty-seven known deposits would total $126,168.30. If similar deposits were made in each of the five months for which statements were unavailable, an additional $23,364.50 would also have been deposited in amounts suggesting a relationship to the Old Colony Avenue sale.
It appears that neither the government nor John Bulger have been in contact with Whitey Bulger since about December 1994 or January 1995. Whitey Bulger's whereabouts are unknown, and the government regards him as a fugitive from justice. Criminal proceedings are now pending in which Whitey Bulger is a named co-defendant in matters including an alleged RICO conspiracy dating from 1969 to 1995. See United States v. Salemme, No. 94-10287-MLW (D. Mass.).
Both before Whitey Bulger's disappearance and after, John Bulger used funds from the joint checking account to pay bills for Whitey Bulger. It does not appear that Whitey Bulger had to make a specific request for John Bulger to take such actions, and in fact no such instructions appear to have been received...
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