U.S. v. Funds Held in the Name or for Wetterer

• Decision Date: 15 January 1998
• Docket Number: No. CV 91-0234(ADS).,CV 91-0234(ADS).
• Citation: 991 F.Supp. 112
• Parties: UNITED STATES of America, Plaintiff, v. FUNDS HELD IN THE NAME OR FOR THE BENEFIT OF JOHN HUGH WETTERER, and/ or Asociacion Amigos Del Los Ninos Hogar Mi Casa, a/k/a Mi Casa, at Bank of America International, Lloyds Bank International and Sterling Bank, including but not limited to Bank of America Account Numbers if 1119-9984, 162232 IBF, 10201-01-1, and 6-58-05616, Lloyds Bank International Bank Number 00070891 (Nassau Branch) and Sterling Bank Account Numbers 907-103 and CD 15590 and all Related Accounts and Funds, Defendants.
• Court: U.S. District Court — Eastern District of New York

991 F.Supp. 112

UNITED STATES of America, Plaintiff, v. FUNDS HELD IN THE NAME OR FOR THE BENEFIT OF JOHN HUGH WETTERER, and/ or Asociacion Amigos Del Los Ninos Hogar Mi Casa, a/k/a Mi Casa, at Bank of America International, Lloyds Bank International and Sterling Bank, including but not limited to Bank of America Account Numbers if 1119-9984, 162232 IBF, 10201-01-1, and 6-58-05616, Lloyds Bank International Bank Number 00070891 (Nassau Branch) and Sterling Bank Account Numbers 907-103 and CD 15590 and all Related Accounts and Funds, Defendants.

No. CV 91-0234(ADS).

United States District Court, E.D. New York.

January 15, 1998.

Zachary W. Carter, Office of the U.S. Atty. for the Eastern District of New York by Arthur P. Hui and Susan L. Riley, Asst, U.S. Attys., Brooklyn, NY, for plaintiff.

June Resnick German, Huntington, NY, Stanley L. Shapiro, Miller Place, NY, for defendant.

AMENDED MEMORANDUM OF DECISION AND ORDER

SPATT, District Judge.

I. BACKGROUND

The "Asociacion Amigos Del Los Ninos Hogar Mi Casa," (the "Asociacion") is a not-for-profit corporation incorporated under the laws of Guatemala on July 10, 1984, with its main offices located in Guatemala City. According to its By-Laws, the objective of the Asociacion is to promote the welfare of orphaned or abandoned children in Guatemala by providing them with food, shelter, education and other support services. Among the facilities for children run by the Asociacion is a residential orphanage for boys in Guatemala City, named "Mi Casa." Until 1991, John Hugh Wetterer, a United States citizen and decorated Vietnam war hero, served as President of the Asociacion's Board and as Director General of Mi Casa. In those capacities, he directed the daily operations of the orphanage. By 1988, Mi Casa housed approximately 250 Guatemalan boys who either had been living on the streets, or with their impoverished families who were unable to care for them.

The Asociacion maintains a Texas Board of Directors ("Texas Board"), whose purpose is to allow donations from the United States to receive tax exempt status. Until November 1988, funds for Mi Casa were solicited in the United States and elsewhere under the auspices of the American Friends of Children ("AFC"). AFC is the successor organization to American Friends of Vietnamese Children, founded in 1970 by Wetterer and Dan Mackey ("Mackey"), a Long Island resident and former New York City Police Officer. According to Mackey, who served as AFC's treasurer, Wetterer solicited donations by sending a monthly letter on AFC stationary to sponsors and potential donors informing and updating them of events and occurrences at Mi Casa. Donations were made to AFC, and sent in a return envelope provided by it to AFC's post office box number in Massapequa, New York. AFC would then deposit the donations in Bank of America Account No. 05616, located in Florida and held in the name of the Asociacion. Subsequent to deposit, Wetterer would arrange a transfer of the funds to Guatemala. From 1977 through 1988, Mackey estimates that AFC collected and disbursed over one million dollars to Wetterer.

In October 1988, "60 Minutes," the well-known television news program broadcast by CBS, was preparing to air a segment favorably showcasing Mi Casa and Wetterer's successful fund-raising efforts on its behalf. When Mary Tyre, one of Mi Casa's many American benefactors, learned of the planned episode, she contacted the show and reported that a former resident of Mi Casa, Leonel Piedrasanta, was living with her in the United States, and that Wetterer had sexually abused him and several other Mi Casa orphans.

In response, "60 Minutes" retained Dr. Simon Miranda, a psychologist, to investigate the claims of sexual abuse and to possibly report his findings on the program. An expert in forensics, Dr. Miranda has evaluated more than 3,000 claims of sexual abuse, and testified as an expert in judicial proceedings on at least one hundred occasions. At the request of CBS, Dr. Miranda eventually interviewed more than a half-dozen individuals who had resided at Mi Casa, and concluded that Wetterer was sexually abusing the Mi Casa orphans. The doctor announced his findings during a televised episode of "60 Minutes."

"60 Minutes" relayed Dr. Miranda's conclusions to the AFC Board. The Board attempted to conduct its own inquiry, but allegedly was stymied when Wetterer prevented AFC's investigator from conducting any meaningful interviews of the alleged victims. Consequently, AFC barred Wetterer from using its letterhead to raise funds for Mi Casa, and stopped sending donations to him.

In 1989, the United States Postal Service ("Postal Service") began its own investigation into the allegations of sexual abuse. According to the Government, the investigation, led by Postal Inspector John McDermott ("McDermott"), allegedly revealed that Wetterer was a pedophile who regularly molested the young boys residing at Mi Casa. McDermott's investigation further uncovered information leading the Postal Service to conclude that at the time Wetterer was abusing the orphans, his monthly letters to sponsors and donors in the United States falsely represented that the donations were helping to provide a healthy and stable environment for them. McDermott also discovered that on several occasions, Wetterer brought some of the orphans to Disney World in Florida, allegedly to sexually molest them, or to reward them for such activity. Finally, McDermott learned that Wetterer was continuing to solicit donations for Mi Casa through the United States mail. According to McDermott, beginning in early 1989, Wetterer started using a letterhead that resembled AFC's to solicit donations, and listed a Texas post office box as the place to forward the donations.

On September 14, 1990, the Government filed a criminal complaint against Wetterer, resulting in two indictments and a warrant for his arrest. The first indictment charged a violation of the mail fraud statute, 18 U.S.C. § 1341, based on Wetterer's alleged fraudulent representations in the solicitation letters that Mi Casa offered a healthy environment for its residents. The second indictment was for theft and conversion of funds, based on certain transfers of funds Wetterer made to his brother. Wetterer was notified of the arrest warrant but refused to appear and answer the charges filed against him. He was, and remains, a fugitive in Guatemala, a country with which the United States does not have an extradition treaty covering these offenses.

On January 22, 1991, the United States commenced this civil action, seeking the forfeiture of certain bank accounts held in the name of the Asociacion or Wetterer pursuant to 18 U.S.C. § 981. The in rem complaint listed as the alleged crimes underlying the basis for the seizure mail fraud, 18 U.S.C. § 1341, and inducing a person to travel in interstate or foreign commerce for the purpose of engaging in criminal sexual activity, 18 U.S.C. § 2422. An arrest warrant in rem authorizing the seizure of the bank accounts was issued that same day.

In a decision rendered on September 15, 1995, this Court adopted the Report and Recommendation of United States Magistrate Judge A. Simon Chrein, which found that Wetterer controlled the Asociacion's financial transactions, that he used the bank accounts in Florida and Texas to further his own ends, that he remained president of the corporation, and that civil forfeiture was not independent of the criminal case pending against Wetterer, but was based on the same underlying crimes. Accordingly, this Court concluded that the Asociacion was Wetterer's "alter ego," and that the corporation was disentitled from pursuing its claims as to forfeiture of the bank accounts in the name of the corporation or allegedly for the use and benefit of the corporation. United States v. Funds Held in the Name or for the Benefit of John Hugh Wetterer, 899 F.Supp. 1013 (E.D.N.Y.1995).

Presently before the Court are the defendants' motion to strike the following evidence from the trial record: (1) the transcript and tape-recording of Dr. Miranda's interview of Leonel Piedrasanta, the former Mi Casa orphan who alleged that Wetterer sexually molested him; (2) Dr. Miranda's testimony regarding the allegations of sexual abuse by Piedrasanta and five other victims, told to the doctor during "interviews," "evaluations" and "conversations;" (3) the expert testimony of Dr. Miranda explaining why victims of sexual abuse sometimes recant; and (4) the expert testimony of Dr. Miranda and FBI Supervisory Special Agent Kenneth V. Lanning regarding the reasons why victims sometimes delay reporting the sexual abuse.

The Court begins by outlining the testimony and evidence offered at trial, limited to the issues at hand. The Court notes the Government's position that Dr. Miranda conducted "evaluations" of some alleged victims, and in other cases, merely "interviewed" them. The Government never explains the distinction between an "evaluation" and an "interview." Nevertheless, it is the Court's understanding that, in this case, an "evaluation" connotes a comprehensive meeting with, and questioning of, the victim, whereas an "interview" indicates an informal, less thorough conversation with the victim.

A. Dr. Miranda's Testimony Regarding his "Evaluation" of Leonel Piedrasanta

At the request of "60 Minutes," Dr. Miranda conducted a tape-recorded "evaluation" of Leonel Piedrasanta in the doctor's Miami office in November 1988 (Miranda: Tr. 677, 1138, 1165, 1339-41). At the time, Leonel was "19 or 20, in that age range" and living with Tyre, his American sponsor, in the United States (Miranda: Tr. 677, 1217). The doctor met with Leonel two more times: once in November, 1988, when Leonel accompanied the doctor and "60 Minutes" staff to Guatemala, and again in March, 1989, in the doctor's office (Miranda: Tr. 1138-39, 1166). A New York Newsday reporter, Richard Firstman, attended the ...