IN THE SUPREME COURT OF THE UNITED STATES

October Term 1995

WILLIAM BENNETT TANNER

vs.

UNITED STATES OF AMERICA

Petition for a Writ of Certiorari to the United States Court of AppealsFor the Fourth Circuit

Filed January 5, 1996

Petitioner William Bennett Tanner, respectfully prays that a writ of certiorari issue to review the judgment of the United State Court of Appeals for the Fourth Circuit sustaining a criminal forfeiture where the trial court failed to instruct the jury that a forfeiture count in a criminal indictment required proof beyond a reasonable doubt and, instead, impermissibly lowered the standard of proof to a preponderance of the evidence.

STATUTORY PROVISIONS INVOLVED

The statutory provisions pertinent to this petition are 21 U.S.C. #853(a) and (d) and which state as follows:

Property subject to criminal forfeiture

(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 -

(1) any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as the result of such violation;

(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; and

(3) in the case of a person convicted of engaging in a continuing criminal enterprise in violation of section 848 of this title, the person shall forfeit, in addition to any property described in paragraph (1) or (2), any of his interest in, claims against, and property or contractual rights affording a source of control over, the continuing criminal enterprise.

The court, in imposing sentence on such person, shall order, in addition to any other sentence imposed pursuant to this subchapter or subchapter II of this chapter, that the person forfeit to the United States all property described in this subsection. In lieu of a fine otherwise authorized by this part, a defendant who derives profits or other proceeds from an offense may be fined not more than twice the gross profits or other proceeds.

Rebuttable presumption

(d) There is a rebuttable presumption at trial that any property of a person convicted of a felony under this subchapter or subchapter II of this chapter is subject to forfeiture under this section if the United States establishes by a preponderance of evidence that -

(1) such property was acquired by such person during the period of the violation of this subchapter or subchapter II of this chapter or within a reasonable time after such period; and

(2) there was no likely source for such property other than the violation of this subchapter or subchapter II of this chapter.

STATEMENT OF THE CASE

In January 1988, complaints were lodged against Petitioner, William Bennett Tanner, regarding the manner in which he conducted himself as the pharmacist at T-Mart Drug Corp., located in Staunton, Virginia. By the end of February 1989, investigators had conducted an undercover operation which led them to believe that Mr. Tanner, the sole pharmacist at T-Mart Drug Corp., was improperly dispensing Schedule II and Schedule IV medications. Nine months later, on November 15, 1989, two search warrants were executed at the T-Mart Drug Corp. Pharmacy, Numerous corporate and pharmaceutical records were seized and examined.

On June 21, 1991, an indictment was returned against Petitioner in the Western District of Virginia, charging him with unlawfully dispensing various Schedule III and IV controlled substances and failure to maintain the records required of pharmacists. Count Twenty-Five (25) of the indictment sought criminal forfeiture of Petitioner's property, pursuant to 21 U.S.C. #853, alleging that it had been used to facilitate the charged violations. Specifically, the government sought forfeiture of the pharmacy, the office building in which it was located, and various parcels of land around that building.

The forfeiture proceedings against Petitioner were fraught with error. The indictment presented to the grand jury named "T-Mart Drug Store" as a sole proprietorship, even though the government knew or should have known from the records they seized that it was a duly licensed corporation. The prosecution chose to act as though this separate legal entity, T-Mart Drug Corp., did not exist. Mr. Tanner was not the only shareholder in T-Mart Drug Corp.; however, because the government decided to pretend, for forfeiture purposes, that it was a sole proprietorship, he was the only shareholder given notice of the forfeiture. In addition, the extent of his interest in the corporation subject to forfeiture was not alleged in the indictment, as mandated by Federal Rule of Criminal procedure 7(c)(2).

Immediately following verdicts on the other counts of the indictment, the criminal forfeiture count was the subject of separate proceedings and instructions. The district court, when charging the jury regarding forfeitures under Count 25, instructed them that the standard of proof was by a preponderance of the evidence. When explaining this erroneous standard to the jury, the court instructed them to weigh the prosecutions's evidence against the evidence presented by the defense to determine whether or not the prosecution had met the preponderance standard. Thus, the error of a standard of proof lower than proof beyond a reasonable doubt, required for criminal facilitation forfeitures, was compounded by also placing the burden of producing evidence on the defendant. The trial court never told the jury that the burden of proof rests solely on the prosecution, that the applicable standard was proof beyond a reasonable doubt, and that Mr. Tanner need not produce any evidence.

The verdict form provided to the jury did not require them to return a special verdict as to the extent of Petitioner's interest in the corporation. A special verdict establishing the extent of a defendant's forfeiture interest is specifically mandated by Federal Rule of Criminal procedure 31(e).

Even though the jury did not find Petitioner's property subject to forfeiture beyond a reasonable doubt, and did not render the required special verdict as to the extent of his interest in the property, the trial court entered an order of forfeiture for the property listed in Count 25.

Petitioner argued before the court of appeals that the proper standard of proof for criminal "facilitation" forfeitures is proof beyond a reasonable doubt and that the burden of producing evidence regarding the criminal forfeiture was impermissibly placed on him. In addition, Petitioner argued that the government and the trial court failed to follow the mandates of Federal Rules of Criminal Procedure 7(c) and 31(e).

The Fourth Circuit held that the proper standard of proof for criminal forfeiture cases under 21 U.S.C. #853(a) is proof by a preponderance of the evidence. Completely ignoring the legislative history of #853, which clearly shows that Congress intended to require proof beyond a reasonable doubt, the court of appeals stated that the question turns solely on whether a #853 forfeiture is a substantive offense (or an element of an offense) or a punishment. Concluding that forfeiture under #853 is a penalty and a part of the sentence, rather than an element of a substantive offense, the court of appeals thought it necessarily followed that the preponderance of the evidence standard must apply.

The court's opinion did not address the issue of shifting the burden to the defendant to produce evidence under this standard; nor did it address the failure to follow Federal Rules of Criminal Procedure 7(c) and 31(e). The opinion noted only that the government "produced ample records" showing the extent of Mr. Tanner's interest. At trial, the only records produced by the prosecution in the forfeiture proceedings established that Mr. Tanner owned the real estate on which the building containing the pharmacy was located and other real estate surrounding the building. No records regarding the corporation or Mr. Tanner's share of corporate stock were introduced at trial. At a hearing nearly fourteen (14) months after the jury verdict, in a separate proceeding not part of the trial, the prosecution introduced into evidence a CPA report prepared two or more months after the jury verdict which showed that T-Mart Drug Corp. was just that, a corporation, and not a sole proprietorship. This government report also showed that Mr. Tanner was not the sole shareholder. The records on which the court of appeals relied when it determined that there was ample evidence for the jury forfeiture verdict were never presented as evidence to be considered by the trial jury as required under the Federal Rules of Criminal Procedure.....

There is great confusion among the lower courts as to the proper standard of proof in a criminal forfeiture case under #853(a). Section 853 is the most frequently used criminal forfeiture statute and the government is now seeking criminal forfeiture in far more cases than in the past because of double jeopardy concerns arising out of parallel civil forfeitures. Thus, it should be a matter of grave concern that most courts are erroneously denying defendants the benefit of the beyond a reasonable doubt standard intended by Congress in these forfeiture cases. Moreover, the "logic" of the Fourth Circuit's decision can be expected to lead that Court to lower the congressionally mandated burden of proof with respect to other criminal forfeiture statutes as well.

CONCLUSION

For the reasons set forth above, a writ of certiorari should issueto review the judgment and opinion of the Court of Appeals in this matter.

NOTE: The case is still on appeal with the U.S. Supreme Court.