U.S. v. Thomas
| Decision Date | 23 May 1983 |
| Docket Number | C-9,G-43,U-65 |
| Court | U.S. Court of Appeals — Fourth Circuit |
| Parties | UNITED STATES of America, Plaintiff-Appellant, v. Amaryllis THOMAS; Zenworth Thomas, Claimants-Appellees, and One Lot in Pawley's Island, South Carolina, Being Lot 2, Block B, Pawley's Island,(TM# 4-181-81); Four Lots on Prince Road, Georgetown, South Carolina, Being Lots 2, 3, 4, and 5, M.M. West Subdivision,(TM# 5-18-217, 5-18-218, 5-18-219, 5-18-220); One Lot on Church Street, Georgetown, South Carolina, Being Lot 9, Block C, Hazard Addition Company,(TM# 5-13-151); Two Lots on Front Street, Georgetown, South Carolina, Being Lots 496 and 497 on Plan of City of Georgetown (TM# |
John Harris Douglas, Asst. U.S. Atty. (E. Bart Daniel, U.S. Atty., on brief), Charleston, S.C., for plaintiff-appellant.
Ellerby Delance Poston, Johnsonville, S.C., for claimants-appellees.
Before SPROUSE and WILKINSON, Circuit Judges, and TILLEY, District Judge for the Middle District of North Carolina, sitting by designation.
This is a consolidated appeal of two civil actions filed pursuant to 21 U.S.C. Sec. 881(a)(6) to obtain forfeiture of a $25,000 cash bond and certain real and personal property. The district court held that the government failed to demonstrate probable cause that the properties listed in the complaints were the proceeds of illegal drug transactions.
We reverse.
Zenworth Thomas, a thirty-eight year old native of Antigua, British West Indies, claims ownership of the property the government seeks to forfeit. Thomas came to the United States in 1969 and settled in New York City where he owned and operated a small grocery store. In 1976, he moved to Georgetown, South Carolina, with his wife Amaryllis Thomas. While in Georgetown, Thomas took odd jobs, and owned and operated a number of small businesses. Thomas later became the owner/operator of Rasta International, a grocery store, bar, and restaurant.
In the course of an undercover drug investigation in 1986, the Georgetown Police Department began to focus on the activities of Mr. Thomas. Thomas was known by police to have a history of involvement in drug-related activities. His criminal record included three convictions for possession of marijuana in 1976, 1978, and 1986. The arrests in connection with the 1976 and 1986 convictions occurred in Georgetown.
Pursuant to the investigation, Officer Jerome Howard of the Georgetown Police Department made three undercover drug buys at or near the business premises of Rasta International. On November 29, 1986, Howard met with an individual identified to him as Alfonso Andrews. Andrews drove Howard to Rasta International, entered the establishment, and emerged with an amount of cocaine known as an "8-Ball" which he sold to Howard for $235. On December 4, 1986, Howard purchased an eighth of an ounce of cocaine for $120 from Gregg Deas, an employee of Rasta International, at or near Rasta. On that occasion Howard also inquired whether Deas could procure a half ounce of cocaine for him. Deas indicated that only "Mr. T" could do that, and took Howard into Rasta International to speak with him. "Mr. T" declined to deal with Howard because he "did not know" him. Finally, on December 6, 1986, Howard purchased $100 worth of cocaine from Deas outside Rasta International.
Also in connection with the undercover investigation, Detective Kenneth Arthur of the Georgetown Police Department participated in an inspection of Rasta International by the South Carolina Alcohol Beverage Control Commission in 1986 and a search of the same establishment on January 29, 1987. He observed what appeared to be a large quantity of drug packaging material, but no drugs were actually found. Detective Arthur was also able to document that between June 1986 and March 1987, Thomas spent approximately $137,000 in cash on items other than necessities. Thomas admitted to some $105,000 of these expenditures.
In addition, police found evidence of unusual travel habits on the part of Thomas. According to the testimony of a Piedmont Airlines employee, Thomas on numerous occasions appeared without luggage at the Charleston, South Carolina, terminal a few minutes before the plane to Miami, Florida, was to depart and paid cash for a one-way ticket. Records from the National Car Rental System, Inc. during the period from April 1986 to February 1987 showed that on ten separate occasions, Thomas rented cars for trips from Miami to Charleston.
In 1986, following Thomas' latest conviction for possession of marijuana, the Immigration and Naturalization Service initiated deportation proceedings against him. Thomas had been an illegal alien in this country for some seventeen years. On March 17, 1987, Thomas was deported to Antigua.
On May 11, 1987, the government filed a complaint in the United States District Court for the District of South Carolina for the forfeiture of certain real and personal property. On August 21, 1987, a second complaint was filed in the Northern District of Georgia for forfeiture of a $25,000 bond posted by Thomas after he was arrested by the Immigration and Naturalization Service. The district court in each case permitted the government to seize the properties and bond. Zenworth Thomas and his wife then filed claims seeking the return of the properties and bond.
The district court held a bench trial on both cases. After the close of the government's case on probable cause, the judge, with the consent of the parties, deferred a ruling on that issue and required claimants to present evidence that the property was not connected to illegal drug transactions. At the close of the evidence the district court ruled that the government had not shown probable cause for its belief that there was a substantial connection between the property to be forfeited and illegal, drug-related activities. The court ordered the return to Thomas of the confiscated property and the $25,000 cash bond.
The government appeals.
Title 21 U.S.C. Sec. 881(a)(6) provides for forfeiture to the United States of
[a]ll moneys, negotiable instruments, securities, or other things of value furnished or intended to be furnished by any person in exchange for a controlled substance in violation of this subchapter, all proceeds traceable to such an exchange, and all moneys, negotiable instruments, and securities used or intended to be used to facilitate any violation of this subchapter.
In forfeiture proceedings pursuant to this section, the government has the initial burden of demonstrating "probable cause for the belief that a substantial connection exists between the property to be forfeited and the criminal activity defined by statute." Boas v. Smith, 786 F.2d 605, 609 (4th Cir.1986) (quoting United States v. $364,960 in United States Currency, 661 F.2d 319, 323 (5th Cir.1981)). See 21 U.S.C. Sec. 881(d); 19 U.S.C. Sec. 1615. The burden then shifts to the claimant to establish, by a preponderance of the evidence, that the property was not acquired in violation of the law or otherwise linked to illegal drug activity. See Boas, 786 F.2d at 609. If upon rebuttal the claimant is unable to demonstrate that the property was not involved with drug activity, "a showing of probable cause alone will support a judgment of forfeiture." United States v. One 1980 Red Ferrari, 875 F.2d 186, 188 (8th Cir.1989).
"Probable cause" for the purpose of forfeiture proceedings is the same standard used in search and seizure cases. See id.; United States v. One 1975 Mercedes 280S, 590 F.2d 196, 199 (6th Cir.1978). It requires the court to "make a practical, common-sense decision whether, given all the circumstances set forth ... including the 'veracity' and 'basis of knowledge' of persons supplying hearsay information, there is a fair probability" that the properties to be forfeited are proceeds of illegal drug transactions. Illinois v. Gates, 462 U.S. 213, 238, 103 S.Ct. 2317, 2332, 76 L.Ed.2d 527 (1983). "[D]irect connection between the property subject to seizure and the illegal activity that renders the items forfeitable need not be shown in order to establish probable cause." United States v. Edwards, 885 F.2d 377, 390 (7th Cir.1989). Rather, "where a defendant's verifiable income cannot possibly account for the level of wealth displayed and where there is strong evidence that the defendant is a drug trafficker, then there is probable cause to believe that the wealth is either a direct product of the illicit activity or that it is traceable to the activity as proceeds." Id. at 390.
Despite findings of fact as to Thomas' criminal record, the presence of circumstances suggesting illegal drug activity on his part, and the documentation of expenditures far exceeding Thomas' legitimate income, the district court concluded that the government had not met its burden of showing probable cause. We think the district court took too stringent a view of the legal standard involved in establishing probable cause and too dismissive a view of its own factual findings.
For example, the district court found that during a nine-month stretch from June 1986 to March 1987 Thomas made cash expenditures totalling $137,000, including the $25,000 cash bond. It is uncontroverted that Thomas purchased the six lots at issue with cash or with borrowed money that was...
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