From: owner-fear-list@mapinc.org on behalf of Brenda Grantland [bgrantland1@comcast.net] Sent: Saturday, August 30, 2008 11:59 AM To: fear-list@mapinc.org Subject: FEAR: PA: FBI probes Luzerne County's forfeiture money trail This Pennsylvania case sounds a little like the opening scenes of the Muncie Indiana DTF scandal we reported on recently. "...questions arose after it was discovered the process by which money is forfeited to the court had not been followed in some cases. That negated a checks-and-balance system, raising questions as to whether the money was deposited into county accounts." Sources: Forfeited cash eyed Wilkes Barre Times-Leader - Wilkes Barre,PA,USA By Terrie Morgan-Besecker tmorgan@timesleader.com WILKES-BARRE - The latest FBI probe into Luzerne County finances is focusing on whether money forfeited by ... See all stories on this topic --------------------------------------------------------------------------- Attachment: http://mapinc.org/temp/32fZ9E7BXCIHc.html ****************************************************** FEAR also offers an unmoderated discussion list and digests for all lists List unsubscribe: mailto:fear-list-request@mapinc.org?Body=unsubscribe Swap to digest: mailto:owner-fear-list@mapinc.org?subject=digest ******************************************************From: owner-fear-list@mapinc.org on behalf of Brenda Grantland [bgrantland1@comcast.net] Sent: Tuesday, August 26, 2008 10:32 AM To: fear-list@mapinc.org Subject: FEAR: Fifth Circuit reverses summary judgment Affidavit wasn't ground for forfeiture of $92,000 National Law Journal 8/11/08 http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202423633702 A trial judge improperly relied on inadmissible hearsay in ordering a criminal defendant to forfeit more than $92,000, the 5th U.S. Circuit Court of Appeals ruled on July 28, reversing a summary judgment forfeiture order. U.S. v. $92,203, No. 06-51033. Roberto Garcia-Baeza was convicted of concealing the cash to evade currency reporting requirements upon leaving the country. The government filed a civil suit seeking forfeiture of the money, relying exclusively on an affidavit by a federal immigration officer. It said that Texas police pulled over Garcia for speeding and found the money, and that Garcia admitted that he intended to drive to Mexico without declaring the cash. A federal district court judge accepted the affidavit and granted the government summary judgment. Garcia appealed. The 5th Circuit reversed. The Civil Asset Forfeiture Reform Act of 2000 (CAFRA) heightened the government's burden of proof from probable cause to preponderance of the evidence. Since then, numerous lower courts have held that hearsay evidence is no longer permissible, and the government has conceded as much in a Michigan case. "We therefore . . . hold that courts may no longer rely on hearsay (absent an exception to the hearsay rule) when deciding the merits of a civil forfeiture proceeding brought under CAFRA," the court said. Here, the affidavit was inadmissible because it was not based on personal knowledge. The government has not proved that it is entitled to a judgment of forfeiture as a matter of law. ****************************************************** FEAR also offers an unmoderated discussion list and digests for all lists List unsubscribe: mailto:fear-list-request@mapinc.org?Body=unsubscribe Swap to digest: mailto:owner-fear-list@mapinc.org?subject=digest ******************************************************From: owner-fear-list@mapinc.org on behalf of Judy Osburn [4beatgait@gmail.com] Sent: Sunday, August 24, 2008 7:36 PM To: FEAR-list Subject: FEAR: Claimants entitled to CAFRA attorney fees incurred in underlying criminal proceeding because acquittal caused US to dismiss civil forfeiture A well reasoned district court opinion: Observing that "a comparison of CAFRA fee provisions to EAJA fee provisions reveals that CAFRA not only broadened the class of persons entitled to recover attorneys' fees, but also provided for a greater award," a U.S. District Court in Alabama held that, under CAFRA's 28 U.S.C.S. § 2465(b), claimant corporation and its owner were entitled to attorneys' fees incurred in the underlying criminal proceeding because acquittal in that proceeding directly resulted in dismissal of the civil forfeiture case. United States v. Certain Real Prop., CV 06-J-1102-NE, UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA, NORTHEASTERN DIVISION, 2008 U.S. Dist. LEXIS 46710, Decided, May 29, 2008. ...[page 13]... I. Whether hours that were spent litigating the criminal case are recoverable. CAFRA allows claimants to recover all fees which were "reasonably incurred" in any "civil proceeding to forfeit property." 28 U.S.C. § 2465(b)(1). [*14] Other courts have interpreted the attorneys' fee provision of CAFRA broadly noting that when CAFRA's language is compared to that of its predecessor, it suggests that "Congress intended to liberalize the award of attorneys' fees rather than restrict them." $ 23,400.00 in United States Currency, 2007 U.S. Dist. LEXIS 26042, 2007 WL 1080292 at * 2. Prior to 2000, claimants in civil forfeiture actions typically based petitions for attorneys' fees on the Equal Access to Justice Act ("EAJA"). Under EAJA, the "prevailing party" in a case is entitled to recover attorneys' fees. 28 U.S.C. § 2412(b). CAFRA, however, "broadens the class that can receive fees in forfeiture actions to claimants who 'substantially prevail.'" $ 23,400.00 in United States Currency, 2007 U.S. Dist. LEXIS 26042, 2007 WL 1080292 at * 2. In addition, HN8unlike EAJA, CAFRA also does not have a statutory cap on the hourly attorney rates upon which the award may be based. See, e.g., United States v. United States Currency in the Sum of Six Hundred and Sixty Thousand, Two Hundred Dollars, 438 F.Supp.2d 67, 72 (E.D.N.Y. 2006) ("CAFRA clarified that in circumstances where claimants were eligible for attorneys' fees and costs, the EAJA cap no longer applied, yielding to the lodestar analysis [*15] instead"). Moreover, courts have held that an award granted pursuant to CAFRA should be determined by an examination of the rates and fees under the lodestar method. See id.; see also $ 23,400.00 in United States Currency, 2007 U.S. Dist. LEXIS 26042, 2007 WL 1080292 at * 3. Thus, a comparison of CAFRA fee provisions to EAJA fee provisions reveals that CAFRA not only broadened the class of persons entitled to recover attorneys' fees, but also provided for a greater award. HN9The broad interpretation that other courts have given to CAFRA's fee provisions is justified given the stated purpose of CAFRA is "to make federal civil forfeiture procedures fair to property owners and to give owners innocent of any wrongdoing the means to recover their property and make themselves whole after wrongful government seizures." P.L. 106-185, Civil Asset Forfeiture Reform Act, H.R. REP. NO. 106-192, at 11 (1999). Here, the only way the claimants can be made whole is to award them the attorneys' fees that were incurred in defending the criminal case because the claimants could only recover the seized property in the civil forfeiture case by obtaining an acquittal in the criminal case. The Supreme Court has held HN10in the context of section 1983 [*16] lawsuits, that work done in a separate administrative proceeding is recoverable if it was "useful and of a type ordinarily necessary to secure the final result obtained from the litigation." Webb v. Board of Education of Dyer County, Tennessee, 471 U.S. 234, 243, 105 S. Ct. 1923, 85 L. Ed. 2d 233 (1985). In Webb, the plaintiff was represented by counsel in local administrative proceedings and in a subsequent section 1983 action challenging the termination of his employment as a public school teacher. Id. at 236. The plaintiff ultimately prevailed and was awarded attorneys' fees for the time spent on the judicial proceedings, but denied fees for the time spent in proceedings before the local school board. Id. The Supreme Court affirmed holding that the attorney's work in front of the local school board would not be compensable unless the entire work or any discrete portion of it was "'useful and of a type ordinarily necessary' to secure the final result obtained from the litigation." Id. at 243; see also Pennsylvannia v. Delaware Valley Citizens' Council for Clean Air, 478 U.S. 546, 561, 106 S. Ct. 3088, 92 L. Ed. 2d 439 (1986). Thus, HN11attorneys' fees incurred in a related proceeding are recoverable if the work is "useful and of a type ordinarily necessary [*17] to secure the final result obtained from the litigation." See Webb, 471 U.S. at 243. Here, the work done by the claimants' attorneys in the criminal case was clearly useful as it directly resulted in the dismissal of the civil forfeiture case. In fact, the claimants were required to litigate the civil forfeiture' case through the criminal case because of the stay imposed on the civil forfeiture case. If Latifi and Axion had been convicted in the criminal case, then the property would have been immediately subject to forfeiture. HN1228 U.S.C. § 2461(c) ("If a person is charged in a criminal case with a violation of an Act of Congress for which the civil or criminal forfeiture of property is authorized, the Government may include notice of the forfeiture in the indictment or information pursuant to the Federal Rules of Criminal Procedure. If the defendant is convicted of the offense giving rise to the forfeiture, the court shall order the forfeiture of the property as part of the sentence in the criminal case pursuant to the Federal Rules of Criminal Procedure and section 3554 of title 18, United States Code."). If the defendants were acquitted, as they were, then that result would not have [*18] had res judicata effect on this civil forfeiture case. However, in this case the court found that the evidence in the criminal case was insufficient to sustain a conviction (Case no. 07-CV-98-NE, doc. 61.) As the government's subsequent motion to dismiss the civil forfeiture case demonstrates, the government had no intention of pursuing the civil forfeiture case after Latifi and Axion were acquitted. Thus, the acquittal in the criminal case directly led to the dismissal of the civil forfeiture case. Indeed, the only way for the claimants to obtain a dismissal of the civil forfeiture case was by obtaining an acquittal in the criminal case. The work was also of a type ordinarily necessary to secure the final result obtained from the litigation since the civil proceeding was stayed pursuant to CAFRA and, as discussed above, the only way for the claimants to succeed was to gain an acquittal in the criminal trial. Therefore, the requirements of Webb are satisfied and the claimants are entitled to recover fees incurred in defending the related criminal case. Awarding the claimants fees for work done in the criminal case clearly allows the claimants to avoid the stricter requirements for recovering [*19] attorneys' fees under the Hyde Amendment, 18 U.S.C. § 3006A statutory notes. HN13The Hyde Amendment allows for the defendant to recover fees only if he can show that "the position of the United States was vexatious, frivolous, or in bad faith." 18 U.S.C. § 3006A statutory notes. Thus, any award in this case which includes fees incurred in the criminal case would allow the claimants to recover those fees without proving "that the position of the United States was vexatious, frivolous, or in bad faith." See id. However, if the court were to find that fees incurred defending the criminal case were not recoverable under CAFRA, then the government would be allowed to avoid CAFRA, as it has tried to do in this case, by moving for a stay in the civil case and prosecuting the criminal case. In this case, the less objectionable of the two options is to HN14allow the claimants to recover the fees incurred defending the criminal case. To find otherwise would provide the government with a roadmap to avoiding liability under CAFRA in every instance by staying the civil case and prosecuting the criminal case. The potential for abuse of this scenario is illustrated by the facts of this case. The verified [*20] complaint for forfeiture in rem was filed on June 7, 2006 (Case no. 06-CV-1102-VEH, doc. 1). The criminal indictment was not filed until March 27, 2007, more than nine months later (Case no. 07-CV-98-IPJ, doc. 1). For those nine plus months, Axion was effectively shut down as all of its assets were frozen. For eight of those months, the civil forfeiture case was under a stay so the claimants were unable to conduct discovery or file potentially dispositive motions. Thus, the claimants were forced to wait an indeterminate amount of time until the government completed its investigation and pursued an indictment before the claimants could even litigate the civil forfeiture case. In criminal cases, the Speedy Trial Act ensures that once a defendant is indicted, he will be tried promptly. See 18 U.S.C. § 3161 et seq. There is no such equivalent on the civil side. Therefore, the government is free, as long as it has reasonable cause, to initiate a civil forfeiture action long before it intends to indict someone for the underlying offenses. n7 This framework allows the government to effectively shut down an accused business regardless of whether that business is later acquitted in a criminal [*21] trial. This result is unfair to potential defendants and in this case, as a practical matter, ruined Axion's business. The court will not stand aside and allow the government to abuse the provisions of CAFRA as has been done in this case. FOOTNOTES n7 For at least part of the investigation of Latifi and Axion, the government was under the impression that Latifi and Axion were violating the Buy American Act, 41 U.S.C. 10a. See, e.g., doc. 97 at 25-28 (Mills' testimony at trial). In fact, the original search warrant authorizing the raid of Axion was premised on an affidavit prepared by the lead investigator Marcus Mills which stated that the Buy American Act had been violated (doc. 97 at 26). The Buy American Act, with certain exceptions, requires that articles, materials, and supplies that have been mined, produced, or manufactured in the United States be utilized in fulfilling federal government procurement and construction contracts. 41 U.S.C. § 10a(a). It was not until after the investigation was underway that the government realized that Latifi and Axion were not in violation of the Buy American Act (doc. 97 at 26). For the foregoing reasons the court finds that the claimants are entitled to [*22] recover the fees from the criminal case which total $ 292,929.50 for 1327.7 hours of work, subject to the deductions discussed below. Thus, at this stage of the analysis, the claimants are entitled to recover $ 414,198.50. See Appendix A. United States v. Certain Real Prop., 2008 U.S. Dist. LEXIS 46710, 13-22 (N.D. Ala. May 29, 2008) ****************************************************** FEAR also offers an unmoderated discussion list and digests for all lists List unsubscribe: mailto:fear-list-request@mapinc.org?Body=unsubscribe Swap to digest: mailto:owner-fear-list@mapinc.org?subject=digest ******************************************************From: owner-fear-list@mapinc.org on behalf of Brenda Grantland [bgrantland1@comcast.net] Sent: Thursday, August 21, 2008 6:47 PM To: fear-list@mapinc.org Subject: FEAR: IN: Judge Dailey's report now available on FEAR website In recent weeks I've sent out several bulletins over FEAR-List about breaking news articles on the unfolding D.A. McKinney & Muncie DTF Forfeiture scandal. Today I sent out a bulletin with links to three articles from today's Muncie Star Journal. Judge Dailey -- who conducted an investigation of the forfeiture practices used in the past few years in Delaware County when Muncie Drug Task Force seizes property -- issued his scathing report on August 18. Today we got a pdf copy of Judge Dailey's report from the Muncie Star website and posted it on the FEAR website. You can download it by clicking this link (or entering this URL into your browser) http://www.fear.org/JudgeDaileyReport.pdf. Sorry, it's a huge file -- we reduced the size as much as we could! You'll need Adobe Acrobat Reader 8.0 to open it (it's free from Adobe). Brenda Grantland ****************************************************** FEAR also offers an unmoderated discussion list and digests for all lists List unsubscribe: mailto:fear-list-request@mapinc.org?Body=unsubscribe Swap to digest: mailto:owner-fear-list@mapinc.org?subject=digest ******************************************************From: owner-fear-list@mapinc.org on behalf of Brenda Grantland [bgrantland1@comcast.net] Sent: Wednesday, August 20, 2008 10:50 AM To: fear-list@mapinc.org Subject: FEAR: IN:Prosecutor used abandoned property procedures instead of forfeiture Judge Dailey examines seizures of 'abandoned' property Muncie Star Press - Muncie,IN,USA There were instances where property was declared abandoned while forfeiture cases were pending and owners of the property and their counsel were present and ... See all stories on this topic --------------------------------------------------------------------------- Attachment: http://mapinc.org/temp/686wZYc8XWdik.html ****************************************************** FEAR also offers an unmoderated discussion list and digests for all lists List unsubscribe: mailto:fear-list-request@mapinc.org?Body=unsubscribe Swap to digest: mailto:owner-fear-list@mapinc.org?subject=digest ******************************************************From: owner-fear-list@mapinc.org on behalf of Brenda Grantland [bgrantland1@comcast.net] Sent: Wednesday, August 20, 2008 10:09 AM To: fear-list@mapinc.org Subject: FEAR: IN: Judge Dailey report calls McKinney deceitful Dailey says prosecutor 'deceitful' Muncie Star Press - Muncie,IN,USA The judge also found that McKinney, while as full-time prosecutor in 2007, handled three civil drug forfeiture cases as private counsel for the DTF and ... See all stories on this topic --------------------------------------------------------------------------- Attachment: http://mapinc.org/temp/257fFLjzK1dJg.html ****************************************************** FEAR also offers an unmoderated discussion list and digests for all lists List unsubscribe: mailto:fear-list-request@mapinc.org?Body=unsubscribe Swap to digest: mailto:owner-fear-list@mapinc.org?subject=digest ******************************************************From: owner-fear-list@mapinc.org on behalf of Judy Osburn [4beatgait@gmail.com] Sent: Saturday, August 09, 2008 9:22 AM To: FEAR-list Subject: FEAR: 11th Cir.: US v. $125,938.62 -- proceeds traceable to funds stolen from Nicaraguan treasury affirmed in part; reversed in part for lack of connection U.S. 11th Circuit Court of Appeals, August 06, 2008 US v. $125,938.62, No. 07-10380 In a civil forfeiture action under the Civil Asset Forfeiture Reform Act of 2000 (CAFRA), court's order of forfeiture is affirmed in part and reversed in part where: 1) the government met its burden of proving that two of the certificates of deposit were subject to forfeiture because they were derived from funds stolen from the Nicaraguan treasury; but 2) with respect to five other certificates, the government failed to meet its burden to present evidence of a connection between those funds and funds stolen from the Nicaraguan treasury. Read more... --------------------------------------------------------------------------- Attachment: http://mapinc.org/temp/85fizyGl6aCSg.html ****************************************************** FEAR also offers an unmoderated discussion list and digests for all lists List unsubscribe: mailto:fear-list-request@mapinc.org?Body=unsubscribe Swap to digest: mailto:owner-fear-list@mapinc.org?subject=digest ******************************************************From: owner-fear-list@mapinc.org on behalf of Brenda Grantland [bgrantland1@comcast.net] Sent: Tuesday, August 05, 2008 11:38 AM To: fear-list@mapinc.org Subject: FEAR: IN: Testimony reveals conflicts, secret settlements in Delaware County forfeitures Former prosecutor, officials over saw drug forfeitures, spending Muncie Star Press - Muncie,IN,USA By RICK YENCER . ryencer@muncie.gannett.com . August 4, 2008 MUNCIE -- Former Delaware County Prosecutor Richard Reed oversaw drug forfeiture cases for more ... See all stories on this topic --------------------------------------------------------------------------- Attachment: http://mapinc.org/temp/28t4MiQx5lFaY.html ****************************************************** FEAR also offers an unmoderated discussion list and digests for all lists List unsubscribe: mailto:fear-list-request@mapinc.org?Body=unsubscribe Swap to digest: mailto:owner-fear-list@mapinc.org?subject=digest ****************************************************** From: owner-fear-list@mapinc.org on behalf of Judy Osburn [4beatgait@gmail.com] Sent: Monday, August 04, 2008 11:50 AM To: FEAR-list Subject: FEAR: At long last, we now have a process for appointing counsel to represent homeowners who can't afford an attorney! For links to the APPLICATION FOR APPOINTMENT OF COUNSEL AND ORDER, along with links to other related documents, see the article below by clicking on the "What's New at FEAR" button or link at www.fear.org At long last, we now have a process for appointing counsel to represent homeowners who can't afford an attorney! Nearly eight years after CAFRA's right to counsel provisions took effect, Attorney John Balazs and his clients Rollie and Scharlynn Trout blaze the first trail establishing an appointment of counsel process for owners whose primary residence has been seized. Congress responded to numerous horror stories of abusive forfeiture actions across the nation by enacting our nation's first and only federal forfeiture reform, the Civil Asset Forfeiture Reform Act of 2000 (CAFRA). One of CAFRA's key provisions requires courts to appoint counsel to represent owners of seized homes who cannot afford a lawyer - upon request of the forfeiture victim. But sadly, in the eight years since Congress enacted CAFRA only a small handful - out of tens of thousands of forfeiture cases - have received court-appointed counsel now required by law. (For more information, and how we are working to save CAFRA's right to counsel provisions, see FEAR's Gideon Project.) Congress charged the Legal Services Corporation with the job of providing attorneys for homeowners whose property has been seized and cannot afford a lawyer, and estimated that it would reimburse LSC $5 million for representation of eligible property owners over the 2001-2005 period. However, LSC reported to Congress that LSC received only "one request from court personnel" for representation mandated by CAFRA prior to 2003, plus "several additional requests for cases in Washington DC and California" during the year ending March, 2004. Then, during their 2004-2005 reporting period, "LSC obtained representation for a claimant in California."1 And in February 2008, LSC said that appointments for claimants defending their residences "are approaching one a month" - nationwide. Until now, even on the rare occasion when someone in the courtroom knew to request appointment of counsel, no process existed by which to do so. On July 29, 2008, United States District Court Judge Garland E. Burrell, Jr. granted pro se Claimants Rollie and Scharlynn Trout's Application for Appointment of Counsel and Order, appointing Sacramento attorney John Balazs to represent the Garden Valley, California couple. Mr. Balazs sought appointment to represent the Trouts pursuant to 18 U.S.C. § 983 (b)(2)(A), which provides that, upon request by an owner who "is financially unable to obtain representation," and whose primary residence has been seized, "the court shall insure that the person is represented by an attorney for the Legal Services Corporation." The Trouts supported the Application with financial affidavits (CJA financial affidavit form here), and attorney Balazs additionally attached a letter from Legal Services Corporation consenting to his appointment under the statute. LSC Vice President and General Counsel Victor Fortuno pointed out that payment for the Trouts' counsel will come from the government's asset forfeiture fund: "... Payment for counsel is handled through court order at CJA [Criminal Justice Act] rates regardless of the outcome of the case. After the Court issues an order for fees, the U.S. Attorney's office submits that order to the Department of Treasury for payment from the forfeiture fund. ... " LSC also provided a sample order for appointment of counsel for homeowners (MS Word or Rich Text Format). Upon request of the forfeiture victim CAFRA requires judges to appoint counsel to represent owners of seized homes who cannot afford a lawyer.2 Also upon request, CAFRA allows appointment of counsel in civil forfeiture cases that do not involve a primary residence whenever the claimant has appointed counsel in a related criminal case.3 Endnotes: 1. Legal Services Corporation Semiannual Report to the Congress for the Period October 1, 2003 - March 31, 2004, page 11; and LSC Semi-Annual Report to Congress for the Period October 1, 2004 - March 31, 2005, page 17. 2. 18 U.S.C. § 983(b)(2). 3. 18 U.S.C. § 983(b)(1). ****************************************************** FEAR also offers an unmoderated discussion list and digests for all lists List unsubscribe: mailto:fear-list-request@mapinc.org?Body=unsubscribe Swap to digest: mailto:owner-fear-list@mapinc.org?subject=digest ******************************************************