U.S. v. Tanner

• Decision Date: 11 August 1995
• Docket Number: No. 94-5382,94-5382
• Citation: 61 F.3d 231
• Parties: 42 Fed. R. Evid. Serv. 1105 UNITED STATES of America, Plaintiff-Appellee, v. William Bennett TANNER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 231

61 F.3d 231

42 Fed. R. Evid. Serv. 1105

UNITED STATES of America, Plaintiff-Appellee, v. William Bennett TANNER, Defendant-Appellant.

No. 94-5382.

United States Court of Appeals, Fourth Circuit.

Argued July 13, 1995.

Decided Aug. 11, 1995.

ARGUED: Marvin David Miller, Alexandria, VA, for appellant. Stephen Urban Baer, Charlottesville, VA, for appellee. ON BRIEF: Robert P. Crouch, Jr., U.S. Atty., Ray B. Fitzgerald, Jr., Asst. U.S. Atty., Gwen Carpenter, Law Intern, Jeff Ross, Law Intern, University of Virginia School of Law, Roanoke, VA, for appellee.

Before WILKINSON and LUTTIG, Circuit Judges, and GEORGE ROSS ANDERSON, Jr., United States District Judge for the District of South Carolina, sitting by designation.

Affirmed by published opinion. Judge WILKINSON wrote the opinion, in which Judge LUTTIG and Judge GEORGE ROSS ANDERSON, Jr. joined.

OPINION

WILKINSON, Circuit Judge:

William Bennett Tanner was convicted by a jury of selling controlled substances from his drugstore without a prescription, in violation of 21 U.S.C. Secs. 841 and 843. In addition to the penalties specified in those sections, the government also sought forfeiture of the properties used in Tanner's illegal enterprise under 21 U.S.C. Sec. 853(a). The main issue raised by Tanner's appeal is whether the elements of criminal forfeitures under Sec. 853 are subject to a "preponderance of the evidence" or a "beyond a reasonable doubt" standard of proof. We find that the preponderance standard governs and was correctly applied by the district court here. Tanner raises a number of additional objections to his conviction and sentence, but there is no merit to any of these challenges, and so we affirm the judgment of the district court.

I.

William Tanner owned and operated the T-Mart drugstore in Staunton, Virginia from 1965 until 1991, where he practiced as a licensed pharmacist. In late 1988 and early 1989, the Virginia State Police received several tips that Tanner was involved in illegal distribution of controlled drugs using forged or nonexistent prescriptions. Undercover officers from the Pharmaceutical Division of the State Police investigated, making several buys of controlled medications at Tanner's store. The police then executed a search warrant at the store and recovered a number of prescription and inventory records. On June 21, 1991 an indictment was filed against Tanner and "T-Mart Drug Store," charging twenty-four counts of distribution and false reporting in violation of 21 U.S.C. Sec. 841 and Sec. 843. The indictment also included a forfeiture count under 21 U.S.C. Sec. 853, listing the holdings subject to forfeiture as the property at 1310 Churchville Avenue in Staunton, Virginia, where the store was located, as well as all the business assets of T-Mart Drug Store.

A jury trial was held in January of 1993. The government presented testimony from a number of witnesses. The undercover officers involved in the investigation testified that they had been able to purchase several different kinds of drugs at T-Mart without any identification or valid prescriptions. Police investigators also testified that they analyzed the prescription records at the T-Mart store and concluded that many of them were forged or otherwise invalid. Several area doctors were also called to the stand, and they confirmed that the drug orders in the records had been filled by Tanner without any authorization from the doctors or patients listed on the forms. Likewise, T-Mart customers testified that they had received illegal refills from Tanner for a number of years.

At the close of evidence, the jury returned a verdict of guilty on all 24 counts of illegal distribution and record-keeping. Through a subsequent special verdict, the jury also found that Tanner's property was subject to forfeiture under Sec. 853. The defendant's post-trial motions were denied. Then, in late January of 1993, the district court issued a preliminary order of forfeiture for the property listed in the indictment. Tanner was ordered stripped of all his interests in the T-Mart drugstore, including the eight parcels of land at 1310 Churchville Avenue, and all the stock, furnishings, and other assets of the business.

A sentencing hearing was held on January 6, 1994. The Presentence Report (PSR) issued by the U.S. Probation Officer listed the illegally sold drugs as PPPN 100, Phenaphen, ASA, ASAP, Diazepane, PPP, and Tylox, and calculated the total converted weight as 14.662 kilograms. This resulted in a base offense level of 16, which together with a Sec. 3B1.3 enhancement for abuse of a special skill, produced a total offense level of 18. Tanner was sentenced under the United States Sentencing Guidelines to 27 months, the sentences on each count to run concurrently. In March of 1994, a post-verdict forfeiture hearing was held. Tanner and his wife (who held a separate property interest) each argued at the hearing that the pharmacy was not subject to forfeiture because it was listed as a sole proprietorship in the indictment instead of as its actual status as a corporation. The court rejected this contention, and the forfeiture proceeded as scheduled. Defendant now appeals.

II.

The bulk of appellant's allegations of error revolve around the forfeiture of the T-Mart Drug Store property under 21 U.S.C. Sec. 853. Section 853 is a criminal forfeiture provision that was enacted by Congress to require, inter alia, the surrender of any property derived from the proceeds of illegal drug activities, or any property used in any way to facilitate the commission of such violations. 21 U.S.C. Sec. 853(a). Property subject to forfeiture includes all real property and all "tangible and intangible personal property, including rights, privileges, interests, claims, and securities." 21 U.S.C. Sec. 853(b).

A.

Tanner's primary argument is that the district court erred when it instructed the jury that application of the forfeiture provision, including whether the property was used to "facilitate" the crime, had to be proven by only a preponderance of the evidence. The correct standard, he argues, is proof beyond a reasonable doubt. This question of the standard of proof turns on whether a Sec. 853 in personam forfeiture is a substantive offense or a punishment. If, as appellant maintains, criminal forfeiture under Sec. 853 is an element of the underlying violation or is a separate substantive offense, it must be proven beyond a reasonable doubt. See In re Winship, 397 U.S. 358, 364, 90 S.Ct. 1068, 1072-73, 25 L.Ed.2d 368 (1970). On the other hand, if forfeiture is a question of sentencing, then the elements of Sec. 853 need only be proven by a preponderance of evidence. United States v. Johnson, 54 F.3d 1150, 1156 (4th Cir.1995).

It is clear that forfeiture under Sec. 853 is in fact punishment. First, the language of the statute plainly indicates that Sec. 853 forfeitures are intended as punishment for substantive offenses laid out elsewhere in the section. ¹ In particular, the statutory language provides that forfeitures apply to "[a]ny person convicted of a violation" of the drug laws, which presupposes that the defendant has already been tried and convicted of the substantive offense. See 21 U.S.C. Sec. 853(a) (emphasis added). The section goes on to state that "[t]he court, in imposing sentence on such person, shall order in addition to any other sentence imposed pursuant to this subchapter ... that the person forfeit to the United States all property described in this subsection." Id. (emphasis added). This clearly assumes that forfeitures are a penalty, and are to be imposed just like any other penalty. Thus, the statute leads directly and inexorably to the conclusion that the preponderance standard should govern forfeiture questions. ²

The Supreme Court has also concluded that forfeitures are punishment. In Alexander v. United States, --- U.S. ----, 113 S.Ct. 2766, 125 L.Ed.2d 441 (1993), for example, the Court considered whether a criminal forfeiture under RICO was subject to the Eighth Amendment prohibition of "excessive fines." --- U.S. at ----, 113 S.Ct. at 2775. The Court held that because an "in personam criminal forfeiture ... is clearly a form of monetary punishment," it was indeed subject to the Excessive Fines Clause. Id. at ---- - ----, 113 S.Ct. at 2775-76. Likewise, in Austin v. United States, --- U.S. ----, 113 S.Ct. 2801, 125 L.Ed.2d 488 (1993), the Court discussed forfeitures at length, and again noted that they are essentially punitive in nature. --- U.S. at ----, 113 S.Ct. at 2808. It stated that "[o]ur cases also have recognized that statutory in rem forfeiture imposes punishment." Id. The Court then held that drug offense forfeitures under 21 U.S.C. Sec. 881 are penalties, and thus also subject to the Eighth Amendment Excessive Fines Clause. ³ Id. at ----, 113 S.Ct. at 2810. In light of this precedent, it is impossible to view a Sec. 853 forfeiture as a substantive offense.

Several of our decisions have followed the Supreme Court and specifically referred to Sec. 853 criminal forfeitures as penalties rather than as elements of a substantive offense. In United States v. Wild, 47 F.3d 669 (4th Cir.1995), we stated in the context of Sec. 853(a) that "an in personam criminal forfeiture is a form of monetary punishment assessed against a criminal defendant...." 47 F.3d at 674. See also, e.g., United States v. Chandler, 36 F.3d 358, 363 (4th Cir.1994) (noting "a forfeiture of property effects punishment on its owner"), cert. denied, --- U.S. ----, 115 S.Ct. 1792, 131 L.Ed.2d 721 (1995).

Finally, most other circuits that have considered this issue have concluded that forfeitures under Sec. 853 are punishment, and thus provable under the preponderance standard. See, e.g., United States v. Bieri, 21 F.3d 819, 822 (8th Cir.1994); United States v. Elgersma, 971 F.2d 690, 694 (11th Cir.1992); United States v. Smith, 966 F.2d 1045, 1052 (6th Cir.1992); United...