U.S. v. McCorkle
| Decision Date | 11 January 2001 |
| Docket Number | No. 6:98CR52ORL19C.,6:98CR52ORL19C. |
| Parties | UNITED STATES of America, Plaintiff, v. William J. McCORKLE, a/k/a William T. McCokle, Chantal McCorkle, Brian Higgins, Sammy Smith, American Empire Management & Development Company, Central Florida Real Estate Guide, Inc., Fortunes in Foreclosures, Inc., Francis Leichman Corporation, MTI Investment, Inc, a/k/a MTI, Inc., Cashflow System, Inc., Cashflow, Inc., Amazing Cashflow, Inc., Pre-Foreclosure Bank Owned Properties, Inc., Synchronol, Inc., Herman Venske, Defendants, Animal Welfare Foundation, Inc., United Parcel Services, Charter Pacific Bank, and C.V. Butler Farms, Inc., Claimants. |
| Court | U.S. District Court — Middle District of Florida |
This cause comes before the Court on the following matters:
(1) Notice of Lorrie Nassofer for Forfeiture of 1996 Black Lexus as to William J. McCorkle, Chantal McCorkle (Doc. No. 593, filed March 15, 1999); the Government's Response to Notice of Forfeiture of 1996 Black Lexus (Doc. No. 595, filed March 15, 1999); Claimant Lorrie Nassofer's Response to Notice of Forfeiture (Doc. No. 838, filed November 22, 1999);
(2) Claimant Charter Pacific Bank's Petition for Hearing to Determine Rights and for an Order Granting Charter Pacific Bank the Amount of $260,583.41 Plus Attorneys' Fees and Expenses as to William J. McCorkle, Chantal McCorkle (Doc. No. 594, filed March 15, 1999); Claimant Charter Pacific Bank's Memorandum of Law as to William J. McCorkle, Chantal McCorkle in Support of Charter Pacific's Petition for Hearing to Determine Rights and for an Order Granting Charter Pacific Bank the Amount of $260,583.41, Attorney's Fees, and Expenses (Doc. No. 832, filed November 19, 2000); the Government's Response as to William J. McCorkle and Chantal McCorkle Regarding Motion for an Order Granting Charter Pacific Bank's Verified Claim to the Amount of $260,583.41 Plus Attorney's Fees and Expenses (Doc. No. 605, filed March 24, 1999);
(3) Claimant United Parcel Services' Motion for a Hearing to Determine Rights and for an Order Granting Claimant United Parcel Services the Amount of $264,096.90 Plus Fees, Costs and Interest as to William J. McCorkle and Chantal McCorkle (Doc. No. 820, filed November 17, 1999);
(4) Claimant C.V. Butler Farms, Inc.'s Petition for Ancillary Hearing as to William J. McCorkle, Chantal McCorkle (Doc. No. 596, filed March 17, 1999); the Government's Response as to C.V. Butler Farm, Inc.'s Petition for Ancillary Hearing (Doc. No. 639, filed April 13, 1999); the Government's Amended Response to Claimant C.V. Butler Farms, Inc.'s Petition for Ancillary Hearing (Doc. No. 732, filed July 21, 1999);
(5) Claimant C.V. Butler Farms, Inc.'s Motion for Relief from Order of Forfeiture Dated February 5, 1999 as to William J. McCorkle and Chantal McCorkle (Doc. No. 848, filed December 2, 1999); the Government's Memorandum of Law in Opposition to Claimant C.V. Butler Farms, Inc.'s Motion for Relief from Order of Forfeiture Dated February 5, 1999 (Doc. No. 850, filed December 7, 1999);
(6) The Report and Recommendation of Magistrate Judge James G. Glazebrook Recommending that the Third Party Petitions Filed by Animal Welfare Foundation, Inc., United Parcel Service and Charter Pacific Bank Be Denied, and C.V. Butler Farm, Inc.'s Petition For Relief From the 2/5/99 Amended Forfeiture Order Be Granted (Doc. No. 889, filed June 22, 2000); and
(7) Claimant Charter Pacific Bank's Objections to the Report and Recommendation Dated June 22, 2000, Recommending Its Third Party Petitions Be Denied (Doc. No. 896, filed July 7, 2000).
Claimants, Animal Welfare Foundation, Inc. ("AWF"), Charter Pacific Bank ("Charter"), United Parcel Service ("UPS"), and C.V. Butler Farms, Inc. ("Butler"), filed Petitions asserting their respective interests in the following property which was listed in an Order of forfeiture dated February 9, 1999:(1) a 1996 black Lexus, VIN JT6HJ88J9T0142709; (2) the contents of certain bank accounts at Charter Pacific Bank, Agoura Hills, California; (3) real property located at 2419 Willie N. Mays Parkway, Orlando, Florida; and (4) cash. See (Doc. No. 552).
The Petitions were referred to Magistrate Judge James G. Glazebrook for Report and Recommendation. A hearing was held before Magistrate Judge Glazebrook on November 22, 1999 regarding the Claimants' Petitions (the "November Hearing"). (Doc. No. 835); (Doc. No. 849, 900 & 920) (Transcripts of November Hearing). Based on the parties' written submissions and the evidentiary hearing on the matter, the Magistrate Judge issued a Report and Recommendation ("Report") recommending that the Petitions of AWF, UPS, and Charter be denied and recommending that Butler's Petition be granted. See (Doc. No. 889).
Claimant Charter was the only party to file an objection to the Report.1 See (Doc. No. 896). Consequently, the Court will review the portions of the Report to which Charter objected de novo. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72. In this regard, the Court "may accept, reject, or modify, in whole or in part, the findings or recommendations made" in the Report. See id.
On March 15, 1999, Charter filed a Petition asserting an interest in "$260,583.41 plus additional expenses in United States currency from a total of $1,134,123.94 formerly held in Account Nos. 060-508380, 060-207674, 060-301018, 060-301015, 060-301025, 060-508534, AND 060-207763, located at Charter (the "Accounts")." See (Doc. No. 594, at 1). In its Petition, Charter claimed that it "was an innocent lienholder" when the Government seized the funds held in the Accounts, and that it "still has a perfected security interest in the funds." Id. Charter further stated that "[a]s a result of the United States' seizure of funds related to Cashflow Systems held [in the Accounts], Charter incurred liabilities of $260,583.41 to cover responsibilities of Cashflow Systems." Id. at 2-3 (). Finally, Charter requested compensation for the "incurred losses in the form of attorneys' fees and additional expenses which were specifically agreed by contract to be the responsibility of Cashflow Systems." Id. at 3. As stated above, Magistrate Judge Glazebrook recommended that Charter's Petition be denied.
Charter objects to the following findings of fact in the Report: (1) the finding that its "decision to continue doing business with the McCorkles after the seizure caused it to use its own funds to pay chargebacks in the amount of $260,583.41;"2 (2) the finding that Charter "knew that Old Kent Bank had terminated Cashflow Systems, Inc.'s merchant account because of excessive chargebacks;" and (3) the suggestion that Charter was "eager to help" the McCorkles continue their fraud. See (Doc. No. 896, at 8-11).
Charter also objects to legal conclusions reached in the Report. First, Charter argues that the Report's conclusion that Charter had not "perfect[ed] its security interest in the account" is incorrect under California law.3 See id. at 12-13. Second Charter objects to the conclusion in the Report that, "under the relation-back doctrine," the Government's interest in the seized funds vested on July 26, 1996. Id. at 15. Charter's third objection is to the Court's reliance on Charter's due diligence in finding that Charter had not met its burden under section 853(n)(6)(B).4 Id. at 18.
After considering the record before the Court and the applicable law, the Court finds that the Magistrate Judge's thorough, well-reasoned opinion correctly states the law applicable in this case. Furthermore, any error in the findings of fact set forth in the Report did not alter the proper result.5 As a result, the Court adopts, affirms, and approves the Report, including its conclusion that Charter's Petition should be denied.6 The Court finds that the Report is correct with regard to the remaining parties as well.
In light of the Court's ruling regarding claimant Butler, the February 9, 1999 Order of Forfeiture must be amended. See 21 U.S.C. §§ 853(n)(6)(A) & (B). The February 9, 1999 Order of Forfeiture will be amended to reflect Butler's mortgage lien of $8,267.99 plus interest on the 2419 Willie N. Mays property.
Based upon the foregoing, the Court rules that:
(1) The Report and Recommendation Dated June 22, 2000 Recommending that the Third Party Petitions Filed by Animal Welfare Foundation, Inc., United Parcel Service and Charter Pacific Bank Be Denied, and C.V. Butler Farm, Inc.'s Petition For Relief From the 2/5/99 Amended Forfeiture Order Be Granted (Doc. No. 889) is ADOPTED, AFFIRMED, AND APPROVED.
(2) Notice of Lorrie Nassofer for Forfeiture of 1996 Black Lexus as to William J. McCorkle, Chantal McCorkle (Doc. No. 593) is DENIED.
(3) Claimant Charter Pacific Bank's Petition for Hearing to Determine Rights and for an Order Granting Charter Pacific Bank the Amount of $260,583.41 Plus Attorneys' Fees and Expenses as to William J. McCorkle, Chantal McCorkle (Doc. No. 594) is DENIED.
(4) Claimant United Parcel Services' Motion for a Hearing to Determine Rights and for an Order Granting Claimant United Parcel Services the Amount of $264,096.90 Plus Fees, Costs and Interest as to William J. McCorkle and Chantal McCorkle (Doc. No. 820) is DENIED.
(5) Claimant C.V. Butler Farms, Inc.'s Petitions (Doc. No. 596 and 848) are GRANTED.
This cause came on for an evidentiary hearing on November 22, 1999 on the following third party petitions, claiming property that was ordered forfeited in this criminal case:
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