United States v. Garcia, Civ. No. 78-1005.

• Decision Date: 30 November 1981
• Docket Number: Civ. No. 78-1005.
• Citation: 532 F. Supp. 325
• Parties: UNITED STATES of America, Plaintiff, v. Angeles Ramonita GARCIA, et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

532 F. Supp. 325

UNITED STATES of America, Plaintiff, v. Angeles Ramonita GARCIA, et al., Defendants.

Civ. No. 78-1005.

United States District Court, D. Puerto Rico.

November 30, 1981.

J. Rodger Edgar, Raymond E. Hopkins, Paul A. Blaine, Civ. Div., Dept. of Justice, Washington, D. C., for plaintiff.

Luis F. Abréu Elías, Río Piedras, P. R., for defendants.

DECISION AND ORDER

TORRUELLA, District Judge.

This case is the aftermath of two other proceedings before this Court.

In United States v. Angeles Ramonita García, Cr.No. 76-153, Defendant Angeles Ramonita García (hereinafter "Defendant García"), plead guilty and was convicted of conspiring to defraud the United States while engaged in a scheme involving tuitions paid by the Veteran's Administration (hereinafter "VA") to a school owned and operated by her. Subsequently, in United States v. Angeles Ramonita García, Civil Number 76-1417, Defendant García was adjudged indebted to the United States in the amount of $1.2 million by reason of the aforementioned scheme.

The present case reflects efforts by the United States to collect on said civil judgment by challenging the title to two condominium apartments which Plaintiff claims should rightfully be in Defendant García's name. As to the first of these apartments, Apartment 10-A, located at Condominium Laguna Terrace, # 6 Joffre St., Condado, Santurce, Puerto Rico (hereinafter "Apartment 10-A"), it is claimed by Plaintiff that Defendant García transferred title to the same to her son, Defendant Frank E. Pineiro (hereinafter "Defendant Pineiro"), during the period of time in which the fraudulent enterprise was in operation,¹ said transfer being without any consideration ("causa") and thus in fraud of Defendant García's creditors, namely the United States. The allegation regarding the second apartment, Apartment 12-E of the same Condominium building (hereinafter "Apartment 12-E"), is to the effect that Defendant García purchased said apartment acting as attorney-in-fact for her son and daughter, Defendants Pineiro and Goepp² respectively, in whose names Defendant García caused title to be placed, with funds fraudulently obtained from Plaintiff as a result of the aforementioned scheme. The United States claims that said actions create an equitable interest on its behalf in Apartment 12-E which may be enforced by resort to the principles of a constructive trust.

After a full trial, and upon consideration of the record as a whole, this Court makes the following

FINDINGS OF FACT

1. This is a civil action brought by the United States of America as Plaintiff.

2. Defendant has carried out business transactions within Puerto Rico, and was the named title holder of real property located in Puerto Rico which is the subject of this action.

3. Defendants Pineiro and Goepp are named title holders of real property located in Puerto Rico which is the subject of this action.

4. Defendants Angel Rivera Colón, Sandel Felipe García, Aracelis Martínez, Flor María García, Tomás del Carmen García González, and John Doe are persons having a security interest in real property located in Puerto Rico which is the subject of this action.

5. Defendant García was, at the commencement of this action on June 2, 1978, incarcerated at the Federal Correctional Institution, Alderson, West Virginia, where she was serving a sentence imposed by this Court on November 18, 1977, following her conviction in the case of United States v. Angeles Ramonita García, Criminal Number 76-153 (D.P.R.).

6. Defendant García was engaged in business as the owner of Academia Puertorriquena de Belleza (hereinafter, Academia) from approximately June 1974 until the commencement of this action on June 2, 1978.

7. Plaintiff commenced a civil action against Defendant García on November 9, 1976 under Civil Number 76-1417 of the docket of this Court to recover double its damages under the False Claims Act, 31 U.S.C. §§ 231-235, based on the allegations contained in the complaint filed in said case.

8. As a consequence of a summary judgment entered against Defendant García in Civil Number 76-1417, Defendant García is indebted to Plaintiff as explained below.

9. On January 18, 1978, Plaintiff recovered a partial judgment against Defendant García in that action in the amount of $1,200,000.00 of which Defendant García has satisfied $494,862.55.

10. Defendant García has no economic means and is otherwise indigent.

A â APARTMENT 10-A

11. Prior to her imprisonment, Defendant García resided at Apartment 10-A.

12. Defendant García was the registered owner of Apartment 10-A from June 6, 1963 until February 24, 1976.

13. On February 24, 1976, Defendant García conveyed title to Apartment 10-A to Defendant Pineiro, her son, by deed No. 14, executed on the same date in Bayamón, which deed is recorded with the Registrar of Real Estate of Puerto Rico, First Section of San Juan, at folio 24, volume 483 of Santurce North.

14. The deed of conveyance from Defendant García to Defendant Pineiro does not recite that the consideration therefor (i.e., $50,000) was paid by Defendant Pineiro to Defendant García in the presence of the attesting notary, Rafael Pacheco Rivera.

15. In fact, consideration for the conveyance of Apartment 10-A was not paid by Defendant Pineiro to Defendant García in the presence of the attesting notary, Rafael Pacheco Rivera.

16. Furthermore, as admitted by Defendant Pineiro, during the course of an interview on October 5, 1976 between Defendant Pineiro and Special Agent B. Gene Wyatt of the Federal Bureau of Investigation, Defendant Pineiro did not pay Defendant García any of the stipulated $50,000 consideration in return for the conveyance of title to Apartment 10-A to him by Defendant García.

17. Defendant García, by her own admission, and from the evidence adduced in Criminal Number 76-153 and Civil Number 76-1417, was indebted to Plaintiff at the time of the conveyance of Apartment 10-A to her son, Defendant Pineiro.

18. On June 28, 1976 Defendant Pineiro executed three bearer notes, affidavit numbers 4976, 4977 and 4978, in the amount of $25,000.00 each, with interest at 8%, maturing consecutively on June 28, 1982, 1984 and 1986, which notes were secured by a mortgage deed, number 32, also executed on June 28, 1976, against Apartment 10-A, which deed is recorded with the Registrar of Real Estate of Puerto Rico at folio 24, volume 483 of Santurce North, Farm 17779, third inscription.

19. Mortgage deed number 32 was received for recording by the Registrar of Real Estate on January 31, 1977.

20. Bearer note number 4976 was cancelled on November 7, 1978, by Defendant Pineiro acting as the executor and sole beneficiary of the estate of Norman G. Long, the original owner of that note.

21. Neither bearer notes 4976, 4977 and 4978, nor mortgage deed number 32, recite that consideration in return for the creation and tendering of any of them was paid by anyone in the presence of the attesting notary, Luis A. Maldonado Soto.

22. Defendant García was the owner of one of the remaining bearer notes, 4977 or 4978.

23. Defendant John Doe, against whom default was entered herein on September 10, 1981, was the owner of the other remaining bearer note.

B â APARTMENT 12-E

24. On September 17, 1975, Defendant García entered an agreement to purchase Apartment 12-E from Milton and Estella Webb de Toppel for the purchase amount of $120,000.

25. The agreement to purchase Apartment 12-E was signed by Defendant García, acting with separate powers of attorney given her by Defendants Goepp and Pineiro, to act on their behalf.

26. Defendant García provided a deposit on September 17, 1975, towards the purchase of Apartment 12-E by a personal check in the amount of $6,000 which was returned to her unnegotiated on September 24, 1975, by Trans Indies Realty & Investment Corp. (hereinafter, TIRI), the broker transacting the sale of Apartment 12-E.

27. On September 24, 1975, Defendant Pineiro provided TIRI with a cashier's check, number 187204, issued by the First Federal Savings & Loan Association of Puerto Rico (hereinafter First Federal) to Defendant Pineiro on that date, in the amount of $25,000, which was utilized to provide the deposit towards the purchase of Apartment 12-E.

28. The above cashier's check was deposited to the credit of TIRI's escrow account (number 110891) maintained at First Federal, on September 25, 1975.

29. The source of most of the funds for the purchase of the above cashier's check was 27 checks issued by the United States Treasury, totalling $24,076.87, to payees receiving V.A. education benefits, who were at that time represented by Defendant García to V.A. as then being students enrolled at the Academia receiving educational training.

30. Each of those 27 Treasury checks bears the purported endorsement of the payee, and the actual endorsements of Defendants García and Pineiro.

31. On November 15, 1975, First Federal issued cashier's check number 188786, payable to "Mr. Topper" (sic) in the amount of $95,000.

32. Cashier's check number 188786 was purchased in the names of Defendants Goepp and Pineiro, utilizing as the source of the funds for such purchase, 151 checks issued by the United States Treasury, totalling $95,382.16, to payees receiving V.A. education benefits who were at that time represented by Defendant García to the V.A. as then being students enrolled at the Academia receiving educational training.

33. Each of the Treasury checks referred to in the preceding paragraph bears the purported endorsement of the payee, and the actual endorsement of Defendant García.

34. Title to Apartment 12-E was conveyed on December 1, 1975 by Milton and Estella Webb de Toppel to Defendants Pineiro and Goepp.

35. On December 1, 1975, First Federal issued cashier's check number 189160, payable to Security National Life Insurance in the amount of $16,199.42.

36. Cashier's check number 189160 was purchased by TIRI utilizing as the...