U.S. v. Pole No. 3172, Hopkinton, No. 87-1600

CourtU.S. Court of Appeals — First Circuit
Writing for the CourtBefore BOWNES, BREYER and TORRUELLA; TORRUELLA
Citation852 F.2d 636
PartiesUNITED STATES of America, Plaintiff, Appellee, v. POLE NO. 3172, HOPKINTON, etc., Defendant, Appellee. Appeal of Alice GAZDA, Ida Ambrosio and Charles Fogarty, Claimants.
Docket NumberNo. 87-1600
Decision Date29 July 1988

Page 636

852 F.2d 636
11 Fed.R.Serv.3d 999
UNITED STATES of America, Plaintiff, Appellee,
v.
POLE NO. 3172, HOPKINTON, etc., Defendant, Appellee.
Appeal of Alice GAZDA, Ida Ambrosio and Charles Fogarty, Claimants.
No. 87-1600.
United States Court of Appeals,
First Circuit.
Argued April 8, 1988.
Decided July 29, 1988.

Page 638

John F. Cicilline, Providence, R.I., for claimants, appellants.

Michael P. Iannotti, Asst. U.S. Atty., with whom Lincoln C. Almond, U.S. Atty., Providence, R.I., was on brief for plaintiff, appellee U.S.

Before BOWNES, BREYER and TORRUELLA, Circuit Judges.

TORRUELLA, Circuit Judge.

In this case the defendant is a piece of real estate, while the real party in interest, Charles Fogarty, has disappeared, and his mother and aunt, who have been found by a jury to have no interest in the defendant, are prosecuting Fogarty's case in his absence. On May 30, 1986, the government filed a complaint against the named property, seeking to forfeit the same on the basis that it was purchased with the proceeds of drug trafficking. 21 U.S.C. Sec. 881(a)(6). The record owner of the property is Fogarty, but the other two claimants, Ida Ambrosio and Alice Gazda, argued that they provided the money for its purchase pursuant to a family joint venture. Fogarty, through a power of attorney he gave his mother (Gazda), appeals from an order of the district court granting the government's motion for summary judgment against him. Gazda and Ambrosio, on their own behalf, appeal after a jury found that they did not have an ownership interest in the property.

The issues raised on appeal are several. All three appellants argue that the government's complaint was inadequate as a matter of law, for lack of particularity. Fogarty challenges the dismissal of his claim both as a result of the application of the fugitive from justice doctrine to this case, see Molinaro v. New Jersey, 396 U.S. 365, 90 S.Ct. 498, 24 L.Ed.2d 586 (1970), and as a Rule 37(d) sanction for failure to comply with a deposition subpoena. Finally, Gazda and Ambrosio assert that the district court improperly limited the issues presented to the jury. 1 After careful consideration of these issues we reverse and remand the claims for further proceedings.

I. The Adequacy of the Complaint

The threshold issue concerns the adequacy of the complaint in terms of particularity. Forfeiture complaints are governed by the Supplemental Rules for Certain Admiralty and Maritime Claims. See 21 U.S.C. Sec. 881(b). Supplemental Rule E(2)(a) requires that "the complaint shall state the circumstances from which the claim arises with such particularity that the defendant or claimant will be able, without moving for a more definite statement, to commence an investigation of the facts and to frame a responsive pleading." As the Eleventh Circuit has stated, "a section 881(a) forfeiture complaint must allege sufficient facts to provide a reasonable belief that the property is subject to forfeiture." United States v. $38,000 in United States Currency, 816 F.2d 1538, 1548 (11th Cir.1987). See also United States v. $39,000 in Canadian Currency, 801 F.2d 1210, 1219 (10th Cir.1986) ("specific facts sufficient to support an inference that the property is subject to forfeiture ...").

The peculiar stringency of the particularity requirement in these cases is based on a concern for due process which arises by reason of the "drastic nature" of these remedies. See $39,000 in Canadian Currency, at 1217-18, and cases cited therein. The requirement is not merely a procedural technicality, but a way of ensuring that the government does not seize and hold, for a substantial period of time, property to which, in reality, it has no legitimate claim. The failure to meet the standard set forth above requires dismissal of the complaint, albeit without prejudice. See $38,000, 816 F.2d at 1549; $39,000, 801 F.2d at 1222.

There is no question that the complaint in this case fails to meet the standard. The government merely described the property, and, parroting the language of the statute, stated that it was forfeitable

Page 639

as proceeds of a drug transaction. 2 The government, in effect, provided no facts whatsoever to support its claim.

The government argues, however, that dismissal is inappropriate under the facts of this case. The government seized the property pursuant to a seizure warrant issued by a magistrate. The magistrate found probable cause to seize the property on the basis of an affidavit, signed by Special Agent McCarthy and filed by the federal agents. The government argues that (a) due process concerns are allayed by the magistrate's determination of probable cause, and (b) the affidavit should be deemed incorporated by reference into the complaint, to supply the requisite particularity, because the claimants were on notice that it existed. We reject both arguments.

As to the due process problems, the affidavit upon which the probable cause determination was based does little to set us at ease. 3 If anything, it provides a striking illustration of the need to strictly enforce the requirements of Rule E(6). The affidavit was described by the district court here in less than complimentary terms: "even a cursory examination ... reveals it to be riddled with hearsay on virtually all its constitutive assertions." The fact that parts of the affidavit consist of third-hand allegations that Fogarty was arrested in connection with an unsuccessful drug run in 1978, although charges against him were subsequently dropped, makes the affidavit even less reassuring. While a probable cause determination may be based on otherwise inadmissible evidence, the evidence must still be found reliable. United States v. $250,000 in United States Currency, 808 F.2d 895, 899 (1st Cir.1987). In this case, the district court made no such determination. In addition, the probable cause determination of the magistrate and that in the complaint address two different questions: the first, whether the government has probable cause to hold the property until it can file a complaint against it, includes considerations of the need to protect the government's interest, and comes at an earlier stage in the proceedings; the second, whether the facts in the government's possession support an inference that the property is subject to forfeiture, must be more narrowly tailored to precisely identify the portion of the property the government can keep. We cannot say, therefore, that this affidavit alone provides all the due process to which Fogarty is entitled.

The second argument also meets insurmountable obstacles. Even taking its allegations at face value, the affidavit itself falls far short of supplying facts sufficient to support a belief that the entire property is forfeitable. The very earliest indication of Fogarty's involvement with drugs is his arrest, described above, for an operation which, since it was unsuccessful, could not have generated any revenue. Furthermore, it took place two years after the purchase of the property. The property was purchased with a downpayment constituting 20.8% of its value. Since that 20.8% interest was acquired two years before the earliest indication of drug activity there is absolutely no reason to believe it is forfeitable.

The government, however, tells us the property is forfeitable in any event because Fogarty has continued making mortgage payments over periods of time for which there are indications of drug dealing. We agree that the interest acquired as a result of mortgage payments made with the proceeds of drug transactions should be forfeitable. We do not believe, however, that forfeitability spreads like a disease from one infected mortgage payment to the entire interest in the property acquired prior to the payment. After all, only the actual proceeds of drug transactions are forfeitable.

Page 640

Unless section 881(a)(6) deprives persons accused of dealing drugs of the right to own any property, the existence of an undivided interest in a felon's property which constitutes proceeds cannot mean that his entire property is proceeds.

It appears, therefore, that the government may have an interest equal only to the portion of the property acquired by Fogarty as a result of mortgage payments (if, of course, the government can demonstrate probable cause to believe those payments were made with proceeds of drug transactions). In consequence, at the pleadings stage, the government must allege facts from which one could infer that the payments claimed to be proceeds actually were tainted; the fact finder can then later determine the percentage interest acquired as a result of tainted payments. 4

The McCarthy affidavit fails to allege the requisite facts. We find it completely devoid of any allegations of lucrative drug dealing until July 14, 1981. On that date an anonymous "reliable informant" stated that Fogarty "travelled from Rhode Island to Miami, Florida on a weekly basis to purchase not less than a kilogram of cocaine." Only sheer speculation could provide an earlier starting date for this activity. Further information from anonymous tipsters, however, indicates Fogarty may have been profiting from the sale of cocaine on February 17, 1982, and September 19, 1983. 5 These three allegations of ongoing cocaine dealing, coupled with the lack of legitimate income, may well support a reasonable belief that the government could demonstrate probable cause for mortgage payments made between July 14, 1981, and September 19, 1983 or even thereafter, given the profits to be had from such extensive dealing.

It also appears, however, from documents in the record, that Alice Gazda took over responsibility for the mortgage payments in 1986. Appendix 8, at 30. The government has not argued that her income is the result of drug transactions, so, unless it has more facts that it does not disclose in the affidavit, any interest acquired during and after 1986 is...

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  • In re 650 Fifth Ave., 08 Civ. 10934 (KBF)
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • April 18, 2014
    ...Premises Known as 7725 Unity Ave. N., Brooklyn Park, Minn., 294 F.3d 954, 958 (8th Cir. 2002); United States v. Pole No. 3172, Hopkinton, 852 F.2d 636, 639 (1st Cir. 1988).Page 49 Alavi argues that the relevant proceeds are not all of its partnership distributions from the 650 Fifth Ave. Co......
  • US v. $80,760.00 IN US CURRENCY, Civ. A. No. 4-91-228-K.
    • United States
    • U.S. District Court — Northern District of Texas
    • December 16, 1991
    ...See generally United States v. $84,740.00 U.S. Currency, 900 F.2d 1402 (9th Cir.1990); United States v. Pole No. 3172, Hopkinton, 852 F.2d 636, 638 (1st Cir.1988); $39,000 in Canadian Currency, 801 F.2d at 1219; United States v. $31,000 in United States Currency, 740 F.Supp. 803 (D.N.M.1990......
  • U.S. v. Daccarett, No. 044000804961700114433
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • September 10, 1993
    ...to which, in reality, it has no legitimate claim." Livonia Rd., 889 F.2d at 1266 (quoting United States v. Pole No. 3172, Hopkinton, 852 F.2d 636, 638 (1st The complaint does not have to meet the ultimate trial burden of showing probable cause for forfeiture; it simply needs to establish a ......
  • US v. Eleven Vehicles, Civ. A. No. 91-6779.
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • October 21, 1993
    ...in a felon's property which constitutes proceeds cannot mean that his entire property is proceeds. United States v. Pole No. 3172, 852 F.2d 636, 639-40 (1st Cir.1988) (emphasis added); see United States v. One 1990 Porsche Carrera, 807 F.Supp. 371, 373 (D.Md.1992) (citing Pole No. 3172 in a......
  • Request a trial to view additional results
91 cases
  • In re 650 Fifth Ave., 08 Civ. 10934 (KBF)
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • April 18, 2014
    ...Premises Known as 7725 Unity Ave. N., Brooklyn Park, Minn., 294 F.3d 954, 958 (8th Cir. 2002); United States v. Pole No. 3172, Hopkinton, 852 F.2d 636, 639 (1st Cir. 1988).Page 49 Alavi argues that the relevant proceeds are not all of its partnership distributions from the 650 Fifth Ave. Co......
  • US v. $80,760.00 IN US CURRENCY, Civ. A. No. 4-91-228-K.
    • United States
    • U.S. District Court — Northern District of Texas
    • December 16, 1991
    ...See generally United States v. $84,740.00 U.S. Currency, 900 F.2d 1402 (9th Cir.1990); United States v. Pole No. 3172, Hopkinton, 852 F.2d 636, 638 (1st Cir.1988); $39,000 in Canadian Currency, 801 F.2d at 1219; United States v. $31,000 in United States Currency, 740 F.Supp. 803 (D.N.M.1990......
  • U.S. v. Daccarett, No. 044000804961700114433
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • September 10, 1993
    ...to which, in reality, it has no legitimate claim." Livonia Rd., 889 F.2d at 1266 (quoting United States v. Pole No. 3172, Hopkinton, 852 F.2d 636, 638 (1st The complaint does not have to meet the ultimate trial burden of showing probable cause for forfeiture; it simply needs to establish a ......
  • US v. Eleven Vehicles, Civ. A. No. 91-6779.
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • October 21, 1993
    ...in a felon's property which constitutes proceeds cannot mean that his entire property is proceeds. United States v. Pole No. 3172, 852 F.2d 636, 639-40 (1st Cir.1988) (emphasis added); see United States v. One 1990 Porsche Carrera, 807 F.Supp. 371, 373 (D.Md.1992) (citing Pole No. 3172 in a......
  • Request a trial to view additional results

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