U.S. v. McKeithen, 666

• Decision Date: 30 June 1987
• Docket Number: D,No. 666,666
• Parties: UNITED STATES of America, Appellee, v. Alvin D. McKEITHEN, Sr., Defendant-Appellant. ocket 86-1384.
• Court: U.S. Court of Appeals — Second Circuit

Page 310

822 F.2d 310

56 USLW 2046

UNITED STATES of America, Appellee, v. Alvin D. McKEITHEN, Sr., Defendant-Appellant.

No. 666, Docket 86-1384.

United States Court of Appeals, Second Circuit.

Argued Jan. 12, 1987.

Decided June 30, 1987.

John R. Williams (Williams and Wise, New Haven, Conn., of counsel), for defendant-appellant.

James T. Cowdery, Asst. U.S. Atty., Bridgeport, Conn. (Stanley A. Twardy, Jr., U.S. Atty. for the District of Connecticut, of counsel), for appellee.

Before PRATT, MINER and MAHONEY, Circuit Judges.

MAHONEY, Circuit Judge:

Following a jury trial in the United States District Court for the District of Connecticut (Warren W. Eginton, Judge ), a judgment was entered forfeiting to the United States all of defendant McKeithen's interest in certain real property. Defendant appeals. We reverse and remand.

BACKGROUND

In September, 1985, defendant was indicted with ten others for conspiring to distribute cocaine and heroin. Defendant was further charged with conducting a "continuing criminal enterprise" ("CCE") in violation of 21 U.S.C. Sec. 848(a)(1) (1982). At all times relevant to this proceeding, section 848(a)(2) provided that a person convicted of engaging in a CCE "shall forfeit to the United States ... any of his interest in, claim against, or property or contractual rights of any kind affording a source of influence over, such enterprise." ¹

Pursuant to Fed.R.Crim.P. 7(c)(2), McKeithen's indictment specified three parcels of realty, all located in Stamford, Connecticut, as being subject to forfeiture. Defendant pleaded guilty to the CCE charge; the forfeiture case was tried to the Over the government's objection, Judge Eginton then submitted additional interrogatories to the jury which asked, with respect to each of the three parcels, "What portion of the defendant's interest in [the particular parcel] has the government proved beyond a reasonable doubt afforded Mr. McKeithen a source of influence over the continuing criminal enterprise?" The jury found that 100% of each of two parcels afforded defendant a source of influence over his criminal enterprise. With respect to the third (the "Greenwich Avenue property"), however, the jury found that only 43% of the parcel afforded defendant such an influence. This allocation was undoubtedly based on evidence showing that the Greenwich Avenue property contained two buildings, one a two-family house and the other a six-family apartment dwelling. The government's case established that defendant's narcotics enterprise operated out of the two-family house; the six-apartment unit, on the other hand, was not engaged in the narcotics enterprise.

                jury in June, 1986.  At its conclusion, Judge Eginton charged the jury, submitting special verdict forms pursuant to Fed.R.Crim.P. 31(e). 2   The jury found that McKeithen had an interest in each of the properties specified in his indictment, and that his interest in each "afforded a source of influence over" his criminal enterprise
                

The government thereupon moved for an order forfeiting all of McKeithen's interest in the Greenwich Avenue property notwithstanding the jury's supplemental special verdict. Judge Eginton granted the government's motion and entered a judgment forfeiting McKeithen's entire interest in all three properties. The district court was influenced by the testimony of an expert in real estate conveyancing, who stated that subdivision of the Greenwich Avenue parcel was legally impossible.

Defendant appeals the forfeiture of his entire interest in his Greenwich Avenue property. We reverse and remand for entry of judgment in accordance with the jury verdict.

DISCUSSION

Criminal forfeiture proceedings are actions in personam. United States v. Amend, 791 F.2d 1120, 1128 (4th Cir.), cert. denied, --- U.S. ----, 107 S.Ct. 399, 93 L.Ed.2d 353 (1986); United States v. Garrett, 727 F.2d 1003, 1012 (11th Cir.1984) (quoting United States v. Long, 654 F.2d 911, 914 (3d Cir.1981)), aff'd, 471 U.S. 773, 105 S.Ct. 2407, 85 L.Ed.2d 764 (1985). Thus, forfeiture is imposed "directly on an individual as part of a criminal prosecution rather than in a separate proceeding in rem against the property subject to forfeiture." United States v. Huber, 603 F.2d 387, 396 (2d Cir.1979), cert. denied, 445 U.S. 927, 100 S.Ct. 1312, 63 L.Ed.2d 759 (1980). The government must allege forfeiture in the information or indictment, ³ and carries the burden of proof beyond a reasonable doubt. Special verdicts must be returned regarding the forfeiture allegations. ⁴

Here, McKeithen argues that the district court impermissibly interfered with his right to have the jury decide the issue of forfeiture when it upset the jury's allocation of taint in favor of the government's motion to forfeit defendant's entire interest in the Greenwich Avenue property. The government contends that neither the governing statute, its legislative history, nor interpretive case law permits proportional forfeiture--that is, once it is found that a defendant owns property which has furnished a "source of influence" over a CCE The basis of the district court's displacement of the jury's allocation is not entirely clear. In ruling on the government's motion to set aside the supplemental verdict, the court stated:

                all such property is forfeit, "not just that portion that was used in or 'tainted by' the enterprise."    Brief for Appellee at 13.  Therefore, while it was perfectly proper--indeed required--for the jury to find that McKeithen had an ownership interest in the Greenwich Avenue parcel and that that parcel afforded him a source of influence over his illegal activities, the government maintains that a jury may not "allocate the taint" as it did here
                

After careful review of all papers filed in connection with this motion, and review of the transcript of the testimony of [an expert in Connecticut real estate conveyancing] ..., this court reluctantly concludes that the non-conforming nature of [the Greenwich Avenue property] makes subdivision legally impossible under any conceivable set of circumstances. The property is therefore indivisible and the fact that the front building was never remotely involved in drug transactions is of no avail to the defendant under the case law cited in the supporting memorandum of the government and the opposing memorandum of the defendant. Motion GRANTED.

Joint Appendix at 202.

The district court's ruling cannot stand on the legal impossibility of subdividing defendant's property. As McKeithen points out, there is no reason why the Greenwich Avenue parcel could not be sold with an appropriate division of the proceeds (i.e., the government receiving that portion of the proceeds representing that portion of defendant's property which afforded him a source of control over the CCE). Nor do we think it appropriate that a question of criminal forfeiture under federal law should turn upon the nuances and niceties of local real property law. The question then becomes whether the CCE provision involved here permits proportional forfeiture. We are persuaded that it does.

The starting point in our analysis of the statute is its language. United States v. Turkette, 452 U.S. 576, 580, 101 S.Ct. 2524, 2527, 69 L.Ed.2d 246 (1981). 21 U.S.C. Sec. 848(a)(2)(B) (1982) provides in part that

[a]ny person who is convicted ... of engaging in a continuing criminal enterprise shall forfeit to the United States ... any of his interest in, claim against, or property or contractual rights of any kind affording a source of influence over, such enterprise.

The statute calls for forfeiture of "any" of defendant's "property ... affording a source of influence over" a CCE. McKeithen argues that the statute's plain language calls for proportional forfeiture. Since it is not disputed that the six-family dwelling on the Greenwich Avenue parcel had no connection with McKeithen's enterprise, he argues that it is not subject to forfeiture as it plainly did not afford him a source of influence over his illegal operation. The government argues that the plain language of section 848 does not authorize an allocation of taint.

The statute's language is not free from ambiguity, and our examination of its legislative history has not clarified it. The legislative history supports the government's position--with which we fully agree--that in introducing forfeiture into federal criminal law, ⁵ Congress sought to dissuade individuals from pursuing criminal gain and to eradicate the economic power bases making possible organized criminal and drug-related activities. See Russello v. United States, 464 U.S. 16, 26-29, 104 S.Ct. 296, 302-04, 78 L.Ed.2d 17 (1983) (interpreting RICO forfeiture provision); Brief for Appellee at 17-19 (reviewing legislative history); see also Note, A Proposal to Reform Criminal Forfeiture under RICO and CCE, 97 Harv.L.Rev. 1929, 1930 (1984). The avowed legislative purpose behind section The government candidly concedes that it has been unable to locate any decisions construing section 848(a)(2)(B). It points out, however, that there are numerous extant decisions which interpret 18 U.S.C. Sec. 1963(a)(2), a similar provision of RICO.

848 furnishes us little basis, however, upon which to choose between the two conflicting interpretations urged upon us.

The first case cited by the government, United States v. Walsh, 700 F.2d 846 (2d Cir.), cert. denied, 464 U.S. 825, 104 S.Ct. 96, 78 L.Ed.2d 102 (1983), is distinguishable. Walsh construed that part of section 1963(a)(2) which requires forfeiture of a defendant's "interest in" an enterprise conducted in violation of 18 U.S.C. Sec. 1962. See 700 F.2d at 857. It had no occasion to consider the meaning of the phrase "property ... affording a source of influence over[ ] any enterprise" conducted in violation of section 1962. United States v. Cauble, 706 F.2d 1322 (5th Cir.1983), cert. denied, 465 U.S. 1005, 104 S.Ct. 996, 79 L.Ed.2d 229 (1984), and United States v....