US v. PROPERTY, KNOWN AS 6 PATRICIA DR., ETC.

• Citation: 705 F. Supp. 710
• Decision Date: 20 January 1989
• Docket Number: Civ. A. No. 88-0444 p.
• Parties: UNITED STATES of America v. ONE PARCEL OF REAL PROPERTY WITH BUILDINGS, APPURTENANCES AND IMPROVEMENTS KNOWN AS 6 PATRICIA DRIVE IN the TOWN OF NORTH PROVIDENCE, RHODE ISLAND.
• Court: U.S. District Court — District of Rhode Island

705 F. Supp. 710

UNITED STATES of America v. ONE PARCEL OF REAL PROPERTY WITH BUILDINGS, APPURTENANCES AND IMPROVEMENTS KNOWN AS 6 PATRICIA DRIVE IN the TOWN OF NORTH PROVIDENCE, RHODE ISLAND.

Civ. A. No. 88-0444 p.

United States District Court, D. Rhode Island.

January 20, 1989.

Michael P. Iannotti, Asst. U.S. Atty., Providence, R.I., for plaintiff.

John F. Cicilline, Providence, R.I., for defendant.

OPINION AND ORDER

PETTINE, Senior District Judge.

This case is before the Court on claimants' motion to dismiss a complaint for forfeiture in rem brought by the government pursuant to 21 U.S.C. sec. 881(a)(6) against real property located in North Providence, Rhode Island and known as 6 Patricia Drive. The sole issue to be decided is whether the complaint states a claim with sufficient particularity to provide a reasonable belief that the property is forfeitable under the statute as traceable to a drug transaction and thus survives claimants' motion to dismiss. This Court thinks that, in light of the principles enunciated by the First Circuit Court of Appeals in United States v. Pole No. 3172, Hopkinton, 852 F.2d 636 (1988), it does not and orders dismissal of the government's complaint without prejudice.

I. The Complaint

The complaint is in six counts and of such brevity that it can be recited in its entirety:

1. That this Court has jurisdiction of this action pursuant to 28 U.S.C. 1345 and 1355, 1356, and 1395; 21 U.S.C. 881(a)(6); and 19 U.S.C. 1608.

2. That the defendant real property with buildings, appurtenances, and improvements is more fully described as follows:

That certain tract or parcel of land with all the buildings and improvements thereon, situated in the Town of North Providence, County of Providence and State of Rhode Island, laid out and designated as Lot # 35 (thirty-five) on that plat entitled, "LEE'S FARM — SECTION "L" BELONGING TO PATRICIA LETT IN NORTH PROVIDENCE, RHODE ISLAND." which plat is recorded with the Land Evidence Records in said Town of North Providence on Plat Card 249. Being the same premises conveyed to Humberto Rua, et ux, Idacira Rua, by deed from Gashy Dowlatshahi of Gashy's Construction, Incorporated, dated October 3, 1986, and recorded in the Registry of Deeds of the Town of North Providence, in Deed Book 153, Page 178.

Said premises is also known as Assessor's Plat 22C Lot 1510 in the records of the Tax Assessor for the Town of North Providence, Rhode Island.

3. That on or about July 12, 1988, the defendant real property was seized by duly authorized agents of the Drug Enforcement Administration of the United States Department of Justice pursuant to the execution of a federal seizure warrant. (See seizure warrant and supporting affidavit attached hereto and made a part hereof.)

4. That the defendant real property with buildings, appurtenances, and improvements is now and during the pendency of this action will remain within the jurisdiction of this Court, namely, the District of Rhode Island.

5. That on or about October 30, 1986, the defendant real property was purchased with proceeds from the sale of cocaine, and other illegal narcotics and is therefore subject to seizure and forfeiture pursuant to Title 21, U.S.C. 881(a)(6). (See attached seizure warrant and supporting affidavit.)

6. That by reason of the foregoing, the defendant real property, with buildings, appurtenances, and improvements is forfeited to the United States pursuant to the provisions of 21 U.S.C. 881(a)(6).

WHEREFORE, plaintiff, the United States of America, prays that due process issue to enforce the forfeiture and to give notice to the interested parties to appear and show cause why forfeiture should not be decreed; that the defendant real property with buildings, appaurtenances, and improvements be condemned as forfeited to the United States of America and thereafter be disposed of according to law; and for such other and further relief as this court may deem just and proper.

To this complaint is attached the affidavit of Detective Henry Roy of the Providence Police Department, assigned as a Task Force Agent to the federal Drug Enforcement Administration. This is the same supporting affidavit that accompanied the seizure warrant previously filed in this case by the government and executed on or about July 12, 1988.

According to Agent Roy, Jaime Rua, whom the government alleges is the actual owner of the 6 Patricia Drive premises despite the fact that Rua's parents are listed as the title owners of the property (Seizure Affidavit para. 7), is a convicted drug dealer who has admitted to federal authorities that he has been dealing cocaine since 1983. Although Rua has said that he began by selling small quantities of the drug, "over the past couple of years" he has been selling approximately two kilos of cocaine per week to various customers, a quantity of drugs which Agent Roy estimates costs between $20,000.00 and $30,000.00 per kilo on the open market. (Seizure Affidavit para. 3.)

Agent Roy further states, based on documents subpoenaed from Comfed Mortgage Company and an involved attorney, that Humberto and Idacira Rua, the parents of Jaime Rua, entered into a purchase and sale agreement for the suspect property on March 24, 1986, and subsequently, on August 6, 1986, signed a loan application to obtain the funds necessary to finance the real estate purchase, listing Jaime Rua as the borrower. On September 18, 1986, the resulting loan commitment for $65,000.00 in mortgage monies was signed by all three Ruas, and the 6 Patricia Drive property was closed on on October 3, 1986, with the Ruas themselves paying $25,000.00 toward the $90,000.00 total purchase price plus closing costs of $4,736.39. (Seizure Warrant para. 5.)

Finally, Agent Roy rounds out this attempt to portray the target property as having been purchased entirely with monies derived from drug transactions by claiming without explanation that $24,261.39 was due at closing and was provided personally by the Ruas.¹ Of these monies, $6,261.39 came from Jaime Rua himself, $15,000.00 from a bank account in the name of both senior Ruas, and the final $3,000.00 from Rua's mother. In addition, Agent Roy, referencing bank verifications of deposits, stated that several deposits, in amounts ranging from $500.00 to $3,054.23, were made between April 18, 1986 and August 8, 1986 to the senior Ruas' joint account. Finally, Agent Roy asserts that his investigations have shown that income derived from other rental properties owned by the senior Ruas is completely offset by mortgage payments on those properties and that tenants listed by the Ruas as living at these premises are not listed with the telephone company, the Registry of Motor Vehicles or utilities companies. (Seizure Affidavit paras. 5 and 6.)

II. The Law Governing Civil Forfeiture in Rem of Proceeds Traceable to a Drug Transaction

Among the increasingly powerful weapons in the federal government's arsenal for waging its escalating war on drug trafficking in the United States are the mechanisms of civil and criminal forfeiture. Civil forfeiture, which is governed by 21 U.S.C. sec. 881,² is a proceeding in rem brought against property either used to facilitate drug transactions or acquired as the proceeds of such criminal activity. Property found to fit the definition of forfeitable property, codified at 21 U.S.C. sec. 881(a)(1)-(8), is "treated as being guilty of wrongdoing" under the statute and subject to seizure as the tainted fruit of a criminal venture. United States v. One 1976 Mercedes Benz 280S, Serial No. 11602012072193, 618 F.2d 453, 454 (7th Cir. 1980). See also, e.g., United States v. Premises Known As 2639 Meetinghouse Rd., Jamison, Pa., 633 F.Supp. 979, 987 (E.D.Pa.1986) (the defendants in a civil forfeiture action in rem are the properties and the government need only establish that the properties are corrupt in that they incorporate proceeds traceable to an exchange of controlled substances in violation of law). Criminal forfeiture is, in contrast, an in personam proceeding brought under 21 U.S.C. sec. 853³ to sanction personally felons convicted of dealing in drugs by forcing them to disgorge their ill-gotten gains. Thus civil forfeiture seeks to brand the property as forfeitable, while criminal forfeiture subjects a convicted defendant to the personal punishment of forfeiture. See generally United States of America v. Kingsley, 851 F.2d 16 at 18, n. 2 (1st Cir. 1988); United States v. $39,000 in Canadian Currency, 801 F.2d 1210, 1218-19 (10th Cir.1986). See also Calero-Toledo v. Pearson Yacht, 416 U.S. 663, 680-86, 94 S.Ct. 2080, 2090-93, 40 L.Ed.2d 452 (1974) (recounting the evolution of civil forfeiture doctrine from pre-Judeo-Christian to modern times); 1984 U.S.Code Cong. & Admin. News 3182, 3264-66, 3374-3404 (legislative history of criminal forfeiture statute).⁴

Although the government filed the complaint in question here two months after the conviction of Jaime Rua, a real party in interest in this action, for the distribution of cocaine in violation of 21 U.S.C. sec. 841, it has elected to proceed in rem against the premises at 6 Patricia Drive allegedly owned by Rua rather than against Rua himself. It is settled law in federal courts that have had occasion to rule on the issue that such real property fits the definition of property forfeitable under 21 U.S.C. sec. 881(a)(6)⁵ if shown to be "proceeds traceable" to a drug transaction. See, e.g., United States v. Premises Known as 8584 Old Brownsville Rd., Shelby County, Tenn., 736 F.2d 1129, 1131 (6th Cir.1984) (interpreting 21 U.S.C. sec. 881(a)(6), providing for forfeiture of "all proceeds" traceable to exchange of monies, negotiable instruments, securities or other things of value for controlled substance, as encompassing forfeiture of all types of property, both real and personal); cited with approval in Application of Kingsley, 614 F.Supp. 219, 222 n. 2 (D.Mass.1985) ("The Court believes that...