U.S. v. Musson

• Decision Date: 26 September 1986
• Docket Number: 85-2707,Nos. 85-2706,s. 85-2706
• Citation: 802 F.2d 384
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. William Compton MUSSON and Gary E. Mintz, Defendants-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 384

802 F.2d 384

UNITED STATES of America, Plaintiff-Appellee, v. William Compton MUSSON and Gary E. Mintz, Defendants-Appellants.

Nos. 85-2706, 85-2707.

United States Court of Appeals Tenth Circuit.

Sept. 26, 1986.

Robert W. Cook, Victor L. Abbo, Boulder, Colo., for defendant-appellant William Compton Musson.

Joseph Saint-Veltri, Denver, Colo., for defendant-appellant Gary E. Mintz.

Robert N. Miller, U.S. Atty., F. Joseph Mackey III, Asst. U.S. Atty., Denver, Colo., for plaintiff-appellee.

Before BARRETT, SETH and ANDERSON, Circuit Judges.

SETH, Circuit Judge.

This appeal is from the district court's granting of a restraining order prohibiting alienation of certain property of appellants which may be subject to forfeiture under 18 U.S.C. Sec. 1963 and 21 U.S.C. Sec. 853 except under certain conditions. This court has jurisdiction to review such an interlocutory order where, as here, the disputed issues are collateral to and separate from the issue of the defendants' guilt or innocence. United States v. Ferrantino, 738 F.2d 109, 110 (6th Cir.); United States v. Spilotro, 680 F.2d 612, 615 (9th Cir.).

The restraining order arises out of an indictment returned against defendants-appellants, Gary E. Mintz and William Compton Musson. The indictment was returned on October 25, 1985 and charged the appellants with drug racketeering and tax offenses under 18 U.S.C. Sec. 1961 and 21 U.S.C. Sec. 848. On October 28 the United States moved for a restraining order under 18 U.S.C. Sec. 1963(e)(1)(A) and 21 U.S.C. Sec. 853(e)(1)(A) to protect the government's interest in property alleged to be subject to forfeiture in the event of criminal convictions. On the basis of the criminal indictment, which alleged that the defendants' interests in certain real and personal property are subject to forfeiture, the district court issued a restraining order. The order requires notice to the government and an opportunity for hearing as well as court approval before any sale or transfer of the described property. At the hearing at which the motion for the restraining order was granted the defendants raised several objections including potential adverse impact to interests of third parties, failure to describe a nexus between the alleged unlawful acts and the subject property, and a claimed exemption from forfeiture for securities purchased on the open market. The appellants renew these objections in their appeal to this court.

The appellants contend that before a restraining order can issue an evidentiary hearing is required at which the government should be required to demonstrate through factual submissions a reasonable probability that forfeiture will be ultimately obtained, and that such a restraining order can only be issued after meeting the requirements of Rule 65 of the Federal Rules of Civil Procedure. The appellants specifically ask this court to adopt the reasoning of the Ninth Circuit in United States v. Crozier, 777 F.2d 1376 (9th Cir.), claiming that such an evidentiary hearing is necessary to comport with due process.

Our consideration of this issue must begin with the statutory language of the sections in question and the apparent intention of Congress in creating such remedies. The statutory provisions here concerned are portions of the Comprehensive Forfeiture Act of 1984. 18 U.S.C. Sec. 1963(e)(1) provides that:

"Upon application of the United States, the court may enter a restraining order or injunction, require the execution of a satisfactory performance bond, or take any other action to preserve the availability of property described in subsection (a) for forfeiture under this section--

"(A) upon the filing of an indictment or information charging a violation of section 1962 of this chapter and alleging that the property with respect to which the order is sought would, in the event of conviction, be subject to forfeiture under this section; or

"(B) prior to the filing of such an indictment or information, if, after notice to persons appearing to have an interest in the property and opportunity for a hearing, the court determines that--...."

It appears that Congress intended that a hearing of the nature proposed by appellants be required only when a restraining order is sought prior to an indictment. The language indicates that it was intended by Congress that the return of an indictment charging a violation of Sec. 1962 and alleging that the subject property would be subject to forfeiture should suffice, without more, as a finding of probable cause. We are not prepared to hold that any Congressional statement of what constitutes probable cause is a final determination. However, the probable cause determination by a grand jury has obviously been long recognized by the courts as sufficient at least for an immediate arrest on the charge in the indictment. The statute seeks to add another element into the determination of cause by the grand jury--that the described property is subject to forfeiture if certain statutory provisions are applicable. We see no serious objection to such a determination within the traditional functions of a grand jury. On the assumption which we must make, that there has been submitted evidence to support it, we also see no fundamental defect in such a determination which would impair its use to support the restraining order here concerned. Under the statutory provisions, and within the general powers of the court the restraining order may be re-examined from time...