U.S. v. Long, 80-2645

• Decision Date: 30 June 1981
• Docket Number: No. 80-2645,80-2645
• Parties: UNITED STATES of America, Appellee, v. Thomas E. LONG, Richard Wolfe, David Aiken, Joseph Colucci a/k/a Jose, Joseph Siegal, William Tignelia a/k/a Billy T., Carl Trop a/k/a Carly, Tim Dale Shafer a/k/a Timmy, David Lantanzio a/k/a Jaime, Charles Stalnaker, Joseph Stellmack, Homer Montoya Ospina, Thomas Miller a/k/a Tucker, Michael Medjuck, Wayne Arrandale, Babriel Rodriguez Capa, Jimmy Lnu, Anthony F. Bowe, Thomas J. George a/k/a T. J., a/k/a Thomas Quinn Appeal of Movant LICHTER AND ARNKOFF, P. A.
• Court: U.S. Court of Appeals — Third Circuit

Page 911

654 F.2d 911

UNITED STATES of America, Appellee, v. Thomas E. LONG, Richard Wolfe, David Aiken, Joseph Colucci a/k/a Jose, Joseph Siegal, William Tignelia a/k/a Billy T Carl Trop a/k/a Carly, Tim Dale Shafer a/k/a Timmy, David Lantanzio a/k/a Jaime, Charles Stalnaker, Joseph Stellmack Homer Montoya Ospina, Thomas Miller a/k/a Tucker, Michael Medjuck, Wayne Arrandale, Babriel Rodriguez Capa, Jimmy Lnu Anthony F. Bowe, Thomas J. George a/k/a T. J., a/k/a Thomas Quinn Appeal of Movant LICHTER AND ARNKOFF, P. A.

No. 80-2645.

United States Court of Appeals Third Circuit.

Argued March 24, 1981.

Decided June 30, 1981.

Richard H. Martin (Argued), Baskin & Sears, Pittsburgh, Pa., for appellants Lichter and Arnkoff, P. A.

Sandra D. Jordan (Argued), Robert J. Cindrich, Paul J. Brysh, Pittsburgh, Pa., for appellee.

Before HUNTER, SLOVITER and WISDOM, ^* Circuit Judges.

OPINION OF THE COURT

HUNTER, Circuit Judge:

Thomas E. Long was indicted on May 25, 1980 for organizing and managing an illicit drug enterprise in violation of the Continuing Criminal Enterprise (CCE) statute. 21 U.S.C. §§ 848(a)-(d) (1976). Pursuant to the criminal forfeiture provisions contained in the CCE statute, the government moved for a restraining order to enjoin the transfer of an airplane owned allegedly by defendant Long. In addition, the government sought to establish an interim bond of $400,000 to secure the performance of the restraining order. These motions were granted ex parte and the case held over for a preliminary injunction hearing. The law firm of Lichter and Arnkoff, P. A., as registered title holders of the aircraft, contested the issuance of the restraining order and the bond. They argued that because Long transferred all his interest in the plane to them prior to his indictment, the plane was not subject to forfeiture and hence the restraining order should not be issued. After the preliminary injunction hearing the district court for the Western District of Pennsylvania upheld the bond and denied Lichter and Arnkoff's motion to dissolve the restraining order. Because the plane may well represent the profits of a continuing criminal enterprise and is therefore subject to criminal forfeiture under 21 U.S.C. § 848(a)(2)(A) (1976), we affirm the issuance of the restraining order.

FACTS

The Drug Enforcement Agency (DEA) investigated defendant Thomas Long and his illicit drug ring for over two years. At the preliminary injunction hearing, DEA agent Chase testified that Long was a manager of an international drug smuggling enterprise that involved five or more individuals from late 1975 to the fall of 1979; that during this period, Long was not involved in any legitimate business, but rather obtained substantial profits from his illicit enterprise; and that with these proceeds Long purchased, among other things, the plane that is the subject of this proceeding: one Beechcraft Baron aircraft, 58 T.C., Serial No. T.K.-44. ¹

In the spring of 1979, Long became aware of a pending indictment against him in the Western District of Pennsylvania. He contacted his counsel, Irwin G. Lichter, about negotiating a surrender with the Justice Department. Lichter had represented Long on prior occasions and was a partner in the law firm of Lichter and Arnkoff, P. A., movants in this appeal. In these discussions, Lichter refused to represent Long unless he paid several debts for prior services. In addition, Lichter demanded a retainer for future expenses if he was to continue Long's representation. Long then offered to transfer title to his aircraft as consideration for past debts with the balance to serve as Lichter's retainer. Lichter accepted this payment plan in August of 1979.

The terms of their oral contract set the sale price of the plane at $140,000. In exchange for the plane, Lichter gave $31,000 in cash, via an unknown messenger, to Long. In addition, $30,000 of Long's unpaid legal debts were offset by Lichter and Arnkoff, P. A. Finally, $79,000 was credited to Long by Lichter as a retainer for his services in Long's upcoming criminal prosecution. This retainer included Lichter's fee, $50,000, and $29,000 to cover his future personal expenses.

On August 24, 1979, defendant Long executed a power of attorney in favor of Lichter and Arnkoff, P. A., for the express purpose of transferring title to the aircraft. In October of 1979, Lichter's partner, James Arnkoff, traveled to the Bahamas to transfer the plane's title. ² On his first trip Arnkoff met with an individual named "Tony" at the Columbia Trust in the Bahamas. This individual purported to represent Long but refused to transfer title to the aircraft because Arnkoff had left the power of attorney in Florida. Arnkoff returned to Florida, picked up the power of attorney, and on the following day flew back to the Bahamas. He then presented the power of attorney to Tony and received the aircraft's bill of sale. On October 22, 1979, Lichter and Arnkoff, P. A. submitted the bill of sale to the Federal Aviation Administration and on January 8, 1980, registered the plane in the name of the law firm. Prior to the issuance of the restraining order, the law firm placed the plane for sale in several trade magazines.

A twenty-four count indictment was filed against Long and eighteen others on May 13, 1980. Count twenty-four of the indictment charged Long with intentional violation of the Continuing Criminal Enterprise statute, 21 U.S.C. § 848(a). ³

On June 27, 1980, the government filed a motion for a restraining order, seeking to enjoin the defendant Long, and his attorneys, from assigning or transferring any rights in the subject aircraft. The government recommended that a $400,000 bond be set pursuant to the restraining order. The district court granted this motion ex parte and later denied Lichter and Arnkoff's motion to dissolve the preliminary injunction. Lichter and Arnkoff appeal.

DISCUSSION

The district court's power to issue a restraining order in support of a criminal forfeiture is derived from the Continuing Criminal Enterprise statute which states in pertinent part:

The district courts of the United States (including courts in the territories or possessions of the United States having jurisdiction under subsection (a) of this section) shall have jurisdiction to enter such restraining orders or prohibitions, or to take such other actions, including the acceptance of satisfactory performance bonds, in connection with any property or other interest subject to forfeiture under this section, as they shall deem proper.

21 U.S.C. § 848(d) (1976). ⁴

As a criminal statute, section 848 "must be strictly construed, and any ambiguity must be resolved in favor of lenity." United States v. Enmons, 410 U.S. 396, 411, 93 S.Ct. 1007, 1015, 35 L.Ed.2d 379 (1973); See Bifulco v. United States, 447 U.S. 381, 387, 100 S.Ct. 2247, 2252, 65 L.Ed.2d 205 (1980) (Principle of statutory construction known as the "rule of lenity" applies not only to the substantive ambit of criminal prohibitions, but also to the penalties they impose). This canon of statutory construction applies to forfeiture provisions and specifically those of section 848. Cf. United States v. Rubin, 559 F.2d 975, 991 (5th Cir. 1977), vacated and remanded on other grounds, 439 U.S. 810, 99 S.Ct. 67, 58 L.Ed.2d 102 (1978), 591 F.2d 278 (5th Cir.), cert. denied, 444 U.S. 864, 100 S.Ct. 133, 62 L.Ed.2d 87 (1979) (in personam forfeiture provisions of RICO subject to strict scrutiny). Even in light of this close scrutiny however, we hold the restraining order enjoining the transfer or sale of the plane to be valid.

Unlike the traditional in rem forfeiture proceedings against contraband or articles put to use in criminal activities, see, e. g., 21 U.S.C. § 881 (1976), the criminal forfeiture proceedings of sections 848(a)(2) are in personam. Cf. 18 U.S.C. § 1963 (1976) (the in personam criminal forfeiture provisions of RICO). As such, these provisions operate as an additional penalty against the defendant, requiring the forfeiture of all profits produced by the illegal enterprise along with any interest, property, claim or contractual rights that afford the defendant a source of influence over the enterprise. ⁵ See United States v. Grammatikos, 633 F.2d 1013, 1025 (2d Cir. 1980); United States v. Jeffers, 532 F.2d 1101, 1111 (7th Cir. 1976), aff'd in part and vacated in part on other grounds, 432 U.S. 137, 97 S.Ct. 2207, 53 L.Ed.2d 168 (1977). By creating such a forfeiture procedure Congress intended to strip illicit drug rings of all profits and property, and thereby provide an additional deterrent to such activity. ⁶ See H.R.Rep.No.1444, 91st Cong., 2d Sess. reprinted in (1970) U.S.Code Cong. & Ad.News 4566, 4575-76; Jeffers, 532 F.2d at 1110-11.

To effectuate in personam forfeiture section 848(d) gives the district court the power to set appropriate bonds and to enter pre-conviction restraining orders that prohibit transfer of the property. These steps preserve the court's jurisdiction over the property and prevent the defendant from frustrating the effectiveness of the entire forfeiture procedure by disposing of the property before conviction. See L'Hoste, 609 F.2d at 811. Before a court can issue such a restraining order, however, the government must demonstrate that it is likely to convince a jury, beyond a reasonable doubt, of two things: one, that the defendant is guilty of violating the Continuing Criminal Enterprise statute and two, that the profits or properties at issue are subject to forfeiture under the provisions of section 848(a)(2). See 21 U.S.C. § 848(d). United States v. Mandel, 408 F.Supp. 679, 683 (D.Md.1976), aff'd in part and vacated on other grounds, 591 F.2d 1347 (4th Cir.), aff'd, 602 F.2d 653 (4th Cir. 1979) (en banc). In addition, these determinations must be made on the basis of a full hearing; the government cannot rely on indictments alone.

At the hearing below, Agent Chase testified...