2007 October FEAR-list bulletins

By Jennifer Abel

<http://www.hartfordadvocate.com/sortable/image/HT41DrugSeizure_2015.jpg
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A mural in Willimantic says it all.

Even if you're a law-abiding citizen who's never been convicted of a
crime, local police are allowed to confiscate your property and money
and keep up to 80 percent of it for themselves, with the legal
stipulation that this windfall be spent only on programs likely to
result in additional confiscations where the police can keep up to 80
percent of the booty for themselves.

That's addressed to you. And it's no joke.

"The money can only be used for the police department ... it gets
recycled back into drug work [and] it can't supplant normally budgeted
items," says Detective Tom Gameli, who handles these confiscations for
the West Hartford police department.

The police in West Hartford had a profitable year; at the last council
meeting on Sept. 25, a resolution passed that moved close to $180,000 in
money made from property taken in forfeiture cases in West Hartford,
into the local drug enforcement fund.

But the cops can't just sit back and wait for fate to shower them with
such largess, Gameli said. "For us to get the money, we have to seize
the stuff."

He's talking about asset forfeiture, one of the more devastating weapons
in the government's drug war arsenal. The rationale behind it sounds
sensible enough: if you make money from criminal activities, you
shouldn't get to keep your ill-gotten gains. And whether you agree with
the law or not, intoxicants other than alcohol are illegal, so money
made from the sale of such is (legally) fair game for confiscation.

But so is anything else that has any involvement with drug activity. If
you want to buy a joint, you can lose the car you drove to make the
deal. The same holds true if a friend or spouse borrows your car for the
same purpose. The confiscated car is sold at auction, and the police
force that nabbed it gets to keep 70 or 80 percent of the proceeds,
depending upon the car's value.

"Most of the money we get from state asset forfeiture, because the feds
have higher [monetary] standards," Gameli said. "If you're gonna take a
house, you go through the feds, if you take $250 from a knucklehead on
the street, you go state ... the federal threshold is $2,000 for cash,
$5,000 for cars." If it's a federal case the town police get to keep 80
percent of the proceeds, but they only get 70 percent on the state
level.

"We've done polls," said Ethan Nadelmann, executive director of the Drug
Policy Alliance. "Two things about asset forfeiture the public dislikes:
first, that when cops and prosecutors seize property they get to keep it
for their own departments, the public finds that corrupting ... and
second, that you could lose your property without a criminal
conviction."

How can the government take your money or property if you haven't been
convicted of a crime? "These are civil cases," Gameli said, and they
differ from criminal ones. "It bolsters the case if he's convicted [of a
crime]," Gameli said, but "a civil case has a lower standard of proof
... I know of cases where the guy walked on the charges, but still lost
his car or his money."

Bruce Mirken of the Marijuana Policy Project finds that disturbing.
"What he's saying, it sounds like, is that he thinks it's just fine for
the government to take property from people who have been found innocent
of the alleged crime ... In what parallel universe is that fair, just or
reasonable?"

Calling these "civil" cases implies that they are reviewed by the
courts, but that's not necessarily true.

"Generally speaking ... approximately 80 percent or more of civil
forfeiture cases are not contested," says Allen St. Pierre, executive
director of NORML (National Organization for the Reform of Marijuana
Laws). This is in part because contesting the process can cost more than
the value of what's been confiscated.

"The average vehicle seized is worth about $4,000," said Brenda
Grantland, president of FEAR (Forfeiture Endangers American Rights). "To
defend a case, especially when you're out of state, they've pretty much
made it cost prohibitive. I don't take cases of less than $20,000 ...
it'll cost more than that to defend it." Neither Gameli nor the DEA
could say what percentage of their confiscations came from people
actually convicted of a crime, or from folks who lost in-court civil
cases.

*

Remember Gameli's hypothetical "knucklehead" who enriched the local
constabulary? Chances are he had drugs on him too. But not necessarily —
under asset forfeiture laws, the simple possession of cash, with no
drugs or other contraband, can be considered evidence of criminal
activity.

You'll find no shortage of examples throughout the country. Two recent
examples, chosen only because they're so unremarkable, are as follows:
in October 2006, two men driving through Davidson County, North
Carolina, were stopped by sheriff's deputies and found to have $88,000
hidden in their car. The men told the sheriffs they were on their way to
buy a house in Atlanta. Although no drugs were found, the sheriffs
confiscated the money anyway. And just last August, a truck driver at a
weigh station in El Paso had $23,700 confiscated; once again, no drugs
or contraband were found, but the cash led to an assumption of guilt.

Naturally, police and the DEA insist they're not infringing upon the
rights of innocent people. "The police won't take [the money] if they
have a good excuse," says Steve Robertson, a DEA spokesman down in D.C.,
when asked about cases like the one in El Paso. "I would assume he was
listed in a database where he might be drug-related."

"Databases contain errors," said Mirken. "Just look at the TSA's no-fly
list, which at one point almost kept Sen. Edward Kennedy off a flight as
a suspected terrorist ... the idea that government should be able to
simply take a person's money, house or car without having to prove the
person did anything wrong is obscene."

*

Allen St. Pierre says that in such cases, "the onus and total burden is
entirely on the citizen/business to disprove the government's case" in
such situations.

Robertson of the DEA agrees. If you can prove the money wasn't acquired
illegally, then the police won't take it.

But that leads to a problem. Say that every week when you cash your
paycheck you stick a $100 bill in a coffee can. If the police want to
confiscate this cash years later, the onus should be on them to prove
the money is illegal, because you might not be able to prove it isn't.

"Property rights are not considered as important as personal liberty, so
due process is often reduced," Grantland said. "We've been fighting for
years to get [asset forfeiture] under control, but there's no way it'll
go away because the government gets too much money doing it."

Even proving where you got the money might not save you, Grantland said.
"Some victims called us a few years ago ... he'd just won a medical
malpractice settlement ... he and his friends, low-income black guys,
decided to go to Las Vegas [and] got as far as Plano, Texas. It got
confiscated. They even showed them the settlement ... I don't know if
they ever got their money back."

West Hartford probably has a few residents who like to smoke the
occasional unlicensed cigarette behind closed doors. And from the cops'
perspective, there's a lot of money to be made cracking down on these
criminals. So one of the items on the agenda at last week's town council
meeting said this: "Resolution appropriating drug asset forfeiture money
in the Drug Enforcement Fund."

The measure passed unanimously. Deputy Mayor Art Spada was not in
attendance, but Mayor Scott Slifka and all seven members of the council
were.

Do the council members know that some of that windfall money could have
been confiscated from folks who were not found guilty of any crimes? We
sent an e-mail asking "do you, as elected officials, have any
Constitutional and/or ethical qualms about the police confiscating
property from town residents who were not convicted of a crime?"

As of press time, four days later, none had responded.

******************************************************

From:   owner-fear-list@mapinc.org on behalf of Judy Osburn [4beatgait@gmail.com]
Sent:   Friday, October 05, 2007 5:32 PM
To:   FEAR-list
Subject:   FEAR: Court rules sailboat formerly owned by President J. F. Kennedy is not subject to forfeiture

Fully formatted article available at www.fear.org

Congratulations to FEAR president Brenda Grantland for another victory
in United States versus One Star Class Sloop named Flash II. On
October 1, 2007, the U.S. District Court of Massachusetts ruled that
her client's Star Class sloop "Flash II" (formerly owned by the late
President John F. Kennedy) is not subject to forfeiture at all.

First the government obtained a forfeiture judgment against the Star
Class sloop "Flash II" without bothering to notify Dr. Kerry Lane, a
successful anesthesiologist and principle owner of the prized
sailboat. The Flash II was formerly owned by the young future
president J.F. Kennedy when he triumphed by an unprecedented four and
a half minute margin in the 1936 Atlantic Coast Championships.

Attorney Brenda Grantland achieved Dr. Lane's first victory in this
case in August 2006, when the First Circuit Court of Appeals vacated
the default judgment that had been obtained in Dr. Lane's absence. The
appeals court held that due process requires the government to at
least attempt to locate innocent owners with an interest in seized
property. The First Circuit remanded U.S. v. One Star Class Sloop
Sailboat Built in 1930 Named Flash II to the district court in
Massachusetts for further proceedings in which Dr. Lane had an
opportunity to be heard. In the meantime, however, the government
sold the boat at auction without a minimum reserve, causing the boat
to be sold at only about one tenth of it's appraised value.

At trial the government conceded that Dr. Lane was totally innocent of
any wrongdoing or negligence. Nevertheless, the government argued that
Flash II was subject to forfeiture as proceeds traceable to drug money
pursuant to 18U.S.C. § 981(a)(1). Boat restorer Ole Anderson had
organized the consortium of investors who provided funding to purchase
and restore the Flash II. The government attempted to support its
theory that drug money could be traced to the Flash II through its
cooperative witness, Gary Milo, who had pleaded guilty to trafficking
11,000 pounds of marijuana, for which he received a mere 18 days'
imprisonment due to his cooperation in building a forfeiture case
against the Flash II. Milo testified that during the course of his
lengthy illegal career he had hired Ole Anderson on a couple of
occasions and that he paid him $16,000.

Ms. Grantland argued that the government offered no more than mere
suspicion that any of the funds used by Ole Anderson to pay for
maintenance of the Flash II included any portion whatsoever of Gary
Milo's $16,000 in tainted currency. If Gary Milo's drug proceeds
became commingled with Ole Anderson's untainted funds, "whether in a
bank account or in a tattered suitcase," argued Grantland, "the
government's burden of showing that money in the account or an item
purchased with cash withdrawn therefrom is 'traceable to' illegal
activity will be difficult, if not impossible, to satisfy."1 The
forfeiture statute's term "traceable to" means exactly what it says,
Grantland continued in a post-trial memorandum, and the government's
theory of forfeitability fades away without a trace once Gary Milo's
drug money is transferred to Ole Anderson.

On October 1, 2007, the district court ruled that, although the
government's contention that some of the funds used to refurbish the
Flash II are traceable to the drug proceeds of the government's
cooperating witness Gary Milo is "theoretically possible," the
government failed to carry its burden of proof under the Civil Asset
Forfeiture Reform Act of 2000 (CAFRA).

Not only was Dr. Lane a completely innocent owner, but no portion
whatsoever of the sailboat seized and sold by the government had been
subject to forfeiture. "Accordingly," District Judge William G. Young
ruled, "the sloop was not forfeitable. Because the sloop was not
forfeitable, the government had no interest in the sloop and therefore
no right to dispose of the sloop."

The district court's Memorandum of Decision held that some portion of
the Flash II would have been forfeitable if any funds from the
government's cooperating witness Gary Milo "were actually put into
refurbishing or maintaining the boat." The court found that Lane and
other investors in the Flash II, as well as the government's
cooperating witness Gary Milo, all gave Ole Anderson money, and that
Ole Anderson "drew indiscriminately from these funds in refurbishing
the sloop."

Therefore, wrote Judge Young, this case "is analogous to cases
concerning withdrawals from bank accounts that commingle drug proceeds
and clean money" as in the Second Circuit case Untied States v. Banco
Cafetero Panama2:
For example, if a depositor placed a $175 check from his automobile
insurer in payment of a damage claim into an account that contained
$100 from a drug sale and the next day paid a $175 bill for car
repairs, a fact-finder would be entitled to conclude that the $175
withdrawal did not contain "traceable proceeds" of the drug
transaction but solely the "traceable proceeds" of the insurance
payment, with the tainted deposit remaining in the account. Obviously,
few cases will present facts that neatly match untainted deposits with
withdrawals, and the real question therefore becomes which side bears
the risk of the inevitable uncertainty that will arise in most cases.3

Judge Young also used a example from Grantland's post-trial
memorandum, stating that his "conclusion is bolstered by United States
v. Voigt,"4 a case where the government bore the burden of proving by
a fair preponderance of the evidence that jewelry was "traceable to"
the proceeds of money laundering activity:
While we can envision a situation where $500,000 is added to an
account containing only $500, such that one might argue that the
probability of seizing "tainted" funds is far greater than the
government's preponderance burden (50.1%), such an approach is
ultimately unworkable. … [T]he presence of one illegal dollar in an
account does not taint the rest–as if the dollar obtained from money
laundering activity were like a drop of ink falling into a glass of
water.5
The court ruled that in light of numerous intervening bank deposits
and withdrawals, it could not "say that, more probably than not, the
jewelry [was] 'traceable to' money laundering activity."6

"What now?" asked Judge Young:
Simply ruling that the vessel is not forfeitable puts no money in
Lane's pockets. …
It is deeply troubling indeed, and perhaps unconstitutional, for the
government to seize real and personal property with multiple owners
upon probable cause, sell and property, and finally, when the sale is
adjudicated improper, to say to an innocent claimant, "Prove the
extent of you interest and we'll give that proportion back," and for
the government to pocket the difference. This is topping it very high
indeed."
The simple fact is this: the government had no right to sell the
sloop. Nor does it have any right to the proceeds.

The court found that the government had no right to sell the sloop,
nor any right to the proceeds of that sale. It also found that Dr.
Lane is at least a part owner of the proceeds of the government's
auction. "As between the two, Lane has the superior claim." Thus, a
claimant may obtain the return of defendant property in a forfeiture
proceeding by demonstrating that it was wrongfully seized.7 When the
government has sold that defendant property in the interim, the
proceeds from the sale constitute the substitute property that is
returned to the claimant. "It is not often that a claimant overcomes
an initial default and has the chance to contest the forfeiture
proceeding after the [defendant property] has long since been sold,"
Judge Young wrote for the district court.

However, Judge Young let the government off the hook for violating its
own policies in auctioning the sailboat with no minimum reserve over
Dr. Lane's objections by ruling that "the price that the sloop sold
for at auction reflected its fair market value at the time of its
seizure," rather than its $800,000 to one million dollar value
appraised just prior to the auction. Therefore, concluded the court,
Lane is entitled to recover from the government the $100,000 received
at auction, less the sum paid by the government to another co-owner in
a previous settlement agreement "should the government successfully
prove" that its previous settlement amount was no larger than that
co-owner's proportional share of ownership interest.

Accordingly, a "prompt evidentiary hearing will be scheduled at which
the government shall bear the burden of justifying" a deduction from
the return of Lane's $100,000 of whichever is lesser of: 1) the sum
already paid pursuant to the settlement agreement with the other
co-owner; or 2) the amount of the other co-owner's share of the
$100,000 government auction sale.

Just a few months before the auction Guernsey's Auction House owner,
Arlan Ettinger, performed an appraisal for the U.S. Government. He
appraised Flash II at $800,000 - $1 million. The government and the
auction house spent $1,000 insuring the sailboat for the few days that
Flash II was in Guernsey's hands. The insurance contract valued the
sailboat at $800,000.

In ruling the market value at the time of seizure did not exceed the
auction proceeds, the court completely avoided any decision on the
complex and extensively briefed issues surrounding the government's
liability for allegedly auctioning the boat at a fraction of its value
prior to a final judgment of forfeiture.

Upon the First Circuit's remand of the case to provide Dr. Lane an
opportunity to be heard, the government moved for a partial summary
judgment. After reading Ms. Grantland's response to that summary
judgment motion the prosecutor feared the government might be held
liable under CAFRA for the difference between the $800,000 appraised
value of the sailboat and the $100,000 received by the government at
auction.8

"Fearing this result," Judge Young wrote for the court, "the
government then began to cast out anchors to windward … to foreclose
such recovery," by raising an argument of sovereign immunity in its
reply brief for partial summary judgment. Later at oral argument the
government raised for the first time its further argument that it
could hide behind its "discretionary function" exception to CAFRA's
waiver of sovereign immunity regarding loss of value of seized
property held in government custody.

This prompted further waves of pleadings involving claimants' right to
compensation for loss of the value of property held in government
custody under CAFRA, sovereign immunity and exemptions to exemptions
thereof, plus government negligence under the Federal Torts Claim
Act--all of which Judge Young converted to "the spillage of a great
deal of ink" by ruling the Flash II was worth no more than the
$100,000 that it sold for at auction.

Among other violations of federal statutes as well as the government's
own policies for auctioning property pending litigation over the
opposing party's objections, the government falsely warranted that it
had title free and clear of all liens and claims–despite the fact that
it was involved in pending litigation over title to the sailboat. The
government backed up these warranties of clear title by a hold
harmless agreement in which the it agreed to indemnify Guernsey's
Auction House and/or the buyer, including attorneys fees, if they had
to undergo litigation over title to the sailboat. Amazingly, the
government also warranted that the sailboat was "not 'confiscated
property' within the meaning of any United States federal or state
laws." After the government needed to avoid liability for its actions
by arguing a value of not more than $100,000, Guernsey's owner Arlan
Ettinger testified in a deposition that he now estimated the value of
the Flash II to be $100,000, rather than his government contracted
auction appraisal of at least $800,000.

Why the government targeted this asset and abused its forfeiture
powers to take Flash II away from an innocent citizen remains an
unsolved mystery. We will explore the astounding depth of corruption
by a cynical Department of Justice turned thief, fencing stolen
property, and laundering the proceeds to prevent Dr. Lane from undoing
the sale in a forthcoming article,. "One brief shining moment and
innocence lost: a cynical corrupt government shatters the great myth
of American decency and hope."

In the meantime, members of FEAR's Brief Bank can get a preview of the
full story of Dr. Lane's fight for justice, rule of law and government
accountability. FEAR's Brief Bank II already contains 15 pleadings
and orders from United States v. One Star Class Sloop Named "Flash II"
–even before we add the post-trial pleadings later this week.

Endnotes:
1. Citing United States v. Voigt, 89 F.3d 1050, 1087-1088 (3d Cir. 1996).
2. 797.2d 1154 (1986).
3. One Star Class Sloop Named "Flash II," Memorandum of Decision,
quoting Untied States v. Banco Cafetero Panama, 797.2d 1154 (2nd Cir.,
1986) (emphasis added by Flash II Court).
4. 89 F.3d 1050 (3rd Cir. 1996).
5. Id. at 1087 (brackets and citation omitted).
6. Id. at 1088.
7. 28 U.S.C. § 2465(a)(1).
8. CAFRA amended the Federal Tort Claims Act, 28 U.S.C. §2680(c), to
allow successful forfeiture claimants to sue the government and obtain
money damages for injury or loss to property while held by the
government pending forfeiture.

******************************************************

October 2007, FEAR bulletins with associated articles

Drug Money?

Welcome to the world of civil asset forfeiture: enriching the local police at your expense

<>Court rules sailboat formerly owned by the late President J. F. Kennedy is not subject to forfeiture:

<>Government had no right to sell the sloop, nor does it have any right to pocket proceeds from that sale.