US v. Schmalfeldt

• Decision Date: 03 April 1987
• Docket Number: No. G86-86.,G86-86.
• Citation: 657 F. Supp. 385
• Parties: UNITED STATES of America, Plaintiff, v. Frederick Robert SCHMALFELDT, Ronald Dwayne Schmalfeldt, Ivan Tibbs, Jorge Armando Clavijo-Sanchez, Luis Humberto Angarita Garzon, Jaime Gaviria, Hector Rios, a/k/a Erick Rivas, Fabio Henao-Buitrago, a/k/a Ignacio Gonzalez, Defendants.
• Court: U.S. District Court — Western District of Michigan

657 F. Supp. 385

UNITED STATES of America, Plaintiff, v. Frederick Robert SCHMALFELDT, Ronald Dwayne Schmalfeldt, Ivan Tibbs, Jorge Armando Clavijo-Sanchez, Luis Humberto Angarita Garzon, Jaime Gaviria, Hector Rios, a/k/a Erick Rivas, Fabio Henao-Buitrago, a/k/a Ignacio Gonzalez, Defendants.

No. G86-86.

United States District Court, W.D. Michigan, S.D.

April 3, 1987.

John A. Smietanka, U.S. Atty., Richard S. Murray, Asst. U.S. Atty., Grand Rapids, Mich., for plaintiff U.S.

John A. Field, III, Alexandria, Va., Kevin P. Burch, Kalamazoo, Mich., Anthony J. Valentine, Grand Rapids, Mich., Thomas W. McCoy, St. Joseph, Mich., Akhtar Hussain, Miami, Fla., Robert F. Mirque, Deno Fotieo, Grand Rapids, Mich., Michael R. Kien, Chicago, Ill., Rodolfo Sorondo, Jr., Coral Gables, Fla., for defendants.

OPINION

ENSLEN, District Judge.

Defendant Frederick Robert Schmalfeldt was indicted on July 31, 1986, in a single count indictment without forfeiture language. On October 23, 1986, the grand jury returned a superseding indictment against him alleging that two parcels of real estate known as the "front farm" and the "back farm" (legal descriptions omitted) were forfeitable under 21 U.S.C. § 853(a)(2) which provides in relevant part that:

(a) Any person convicted of a violation of this subchapter or subchapter II of this chapter punishable by imprisonment for more than one year shall forfeit to the United States, irrespective of any provision of State law—

. . . . .

(2) any of the person's property used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of, such violation....

The Government states that about the same time as the above steps were taken by the grand jury in the Western District of Michigan, the Drug Enforcement Administration (DEA) in Washington began administrative civil forfeiture proceedings under 21 U.S.C. § 881(a)(7) against the front and back farms. (Defendant states that the superseding indictment was returned after the initiation of the civil forfeiture action and that on October 27, 1986, the DEA advised the movant and other defendants that the civil forfeiture action was underway). In either event, Section 881(a)(7) provides in relevant part:

(a) The following shall be subject to forfeiture to the United States and no property right shall exist in them:

. . . . .

(7) All real property, including any right, title and interest in the whole of any lot or tract of land and any appurtenances or improvements, which is used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of, a violation of this title punishable by more than one year's imprisonment, except that no property shall be forfeited under this paragraph, to the extent of an owner, by reason of any act or omission established by that owner to have been committed or omitted without the knowledge or consent of that owner.

On February 17, 1987, the federal jury in this matter returned a verdict of guilty as to the conspiracy charges (Count 1 of the indictment) against the movant, defendant Frederick Robert Schmalfeldt, and acquitted him on the charges relating to Counts 2 and 3 of the indictment.

The matter is before the Court on defendant Frederick Robert Schmalfeldt's motion to dismiss the criminal forfeiture pursuant to 21 U.S.C. § 853 of certain property (the front and back farms) on two grounds. First, the defendant argues that civil forfeiture proceedings previously initiated by the Government under 21 U.S.C. § 881 bar criminal forfeiture proceedings under 21 U.S.C. § 853 in that such concurrent "duplicative" proceedings are violative of due process and fundamental fairness. Second, defendant argues that the failure of the jury to find him guilty of Counts 2 and 3 of the indictment bars the criminal forfeiture of the property in question under 21 U.S.C. § 853.

The Court observes at the outset that Congress enacted 21 U.S.C. § 881 in the same year as it enacted the Racketeer Influenced and Corrupt Organization's Act (RICO) and Continuing Criminal Enterprise (CCE) statutes, and for essentially the same purpose: "to deal in a comprehensive fashion with the growing menace of drug abuse in the United States." 1970 U.S. Code Cong. & Ad.News 4567.

However, while RICO, CCE, § 853 are basically criminal in nature and proceed in personam, section 881 is civil in nature and proceeds in rem. Significantly, the burden of proof for the Government under section 881 is merely "to demonstrate probable cause that a substantial connection exists between the property in question and the relevant criminal activity." United States v. One 1979 Porsche Coupe, 709 F.2d 1424 (11th Cir.1983). Once the Government has established probable cause for the "substantial connection," the burden shifts to the claimant to show by a preponderance of the evidence that no nexus exists between the property and a violation of the law. United States v. $2,500.00 in United States Currency, 689 F.2d 10 (2d Cir.1982).

The theory of criminal forfeiture is completely different from that of civil forfeiture in that because a criminal forfeiture is "in personam", its provisions operate as an additional penalty against the defendant. The distinguishing characteristic of criminal forfeiture is that, unlike the in rem character of civil forfeiture, the personal guilt of a defendant is at issue. See United States v. Long, 654 F.2d 911 (3d Cir.1981).

The Court notes that prior to the enactment of the recent RICO, CCE, and § 853 statutes, criminal forfeiture statutes have been virtually unknown in this country. In fact, prior to RICO, et al., since 1790 criminal forfeiture had actually been prohibited in the United States. See Act of April 30, 1790, Section 24, 1 Stat. 112, 117; see also United States v. Rubin, 559 F.2d 975, 991 n. 15 (5th Cir.1977), cert. denied, 444 U.S. 864, 100 S.Ct. 133, 62 L.Ed.2d 87 (1979). The only exception was the Confiscation Act passed by the Radical Republican Congress in 1862 which authorized President Lincoln to forfeit the property of Confederate sympathizers. While the President doubted its constitutionality, the statute was ultimately upheld by the Supreme Court, not on the basis that criminal forfeitures were generally constitutional, but rather because the statute had been passed by virtue of Congress's War Powers. See United States v. Veon, 538 F.Supp. 237 (E.D.Calif.1982). Significantly, Article III, § 3 of the Constitution prohibits forfeiture of estates resulting from a conviction for treason, although "forfeitures of estates for the lifetime of a traitor have been sanctioned, see Wallach v. Van Riswick, 92 U.S. 2 Otto 202, 23 L.Ed. 473 (1876)." See Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 683, 94 S.Ct. 2080, 2091, 40 L.Ed.2d 452 (1974).

To date, both the RICO and CCE statutes have survived constitutional challenges in the Second, Third, Fifth, and Ninth Circuits. See United States v. Boylan, 620 F.2d 359, 360-361 (2d Cir.), cert. denied, 450 U.S. 980, 101 S.Ct. 103, 66 L.Ed.2d 38 (1981); United States v. Long, 654 F.2d 911, 914-915 (3d Cir.1981); United States v. Hawkins, 658 F.2d 279, 285-288 (5th Cir.1981); United States v. Brooklier, 637 F.2d 620, 621 (9th Cir.1980).

The Court notes, in passing, that civil statutes which allow the Government to proceed in rem against some illicit inanimate object appear to have their historical roots in the concept of the deodand. "Deodand (L. Latin Deo dandum, a thing to be given to God.) In English Law, any personal chattel which was the immediate occasion of the death of any reasonable creature, and which was forfeited to the crown to be applied to pious uses, and distributed in alms by the higher almoner." Black's Law Dictionary 392 (5th ed. 1979).

Oliver Wendell Holmes observed that "as long ago as Bracton, in case a man was slain, the coroner was to value the object causing the death, and that was to be forfeited as deodand `pro rege.' It was to be given to God, that it is to say the Church, for the king, to be expended for the good of his soul. A man's death had ceased to be the private affair of his friends as in the time of the barbarian folk-laws. The king, who furnished the court, now sued for the penalty. He supplanted the family in the claim on the guilty thing, and the Church supplanted him." O.W. Holmes, The Common Law at 24 (47th Printing of Little, Brown, and Company, 1923).

The deodand was, of course, an "accused thing." Holmes tells us that in its most rudimentary form, "vengeance, not compensation, and vengeance on the offending thing, was the original object of the use of the deodand. The ox in Exodus was to be stoned. The axe in the Athenian law was to be banished. The tree ... from which a man fell ... was to be chopped to pieces." Id. at 34.

The concept of the deodand has been transformed by the historical process. A more secular society has substituted another sovereign, the government—in a democratic society an expression of the will of the people—for the Church and the Crown. Thus forfeited property is no longer "applied to pious uses, and distributed in alms by the high almoner," but rather it may, under appropriate circumstances, be either sold, destroyed, or retained for official use by the Attorney General. See 21 U.S.C. § 881(e). (The Court also notes—as a commentary on the rise of the bureaucratic state—that the statute also requires that the proceeds of any forfeiture be used to pay all proper expenses of the forfeiture proceedings themselves.) Id.

Moreover, modern notions of responsibility and liability have expanded the concept of forfeiture beyond the province of homicide —and as the RICO, CCE, and even the § 881 forfeiture provisions seem to attest —conflated the fundamental impulses of vengeance and compensation. See e.g., United States v. Lot No. 50, as Shown on Map of Kingsbury Village, Unit 5, etc., 557 F.Supp 72 (D.Nev.1982) (noting that although § 881 is civil in...