From: [c--r--n] at [ux4.cso.uiuc.edu] (Christopher J Burian) Newsgroups: alt.activism,alt.society.civil-liberty,talk.politics.misc Subject: Forfeiture alert Date: 19 Feb 1994 17:34:37 GMT =========================== =========================== Forfeiture Alert MAKING FALSE STATEMENTS ON MORTGAGE LOAN APPLICATION TRIGGERS FEDERAL FORFEITURE PROVISIONS For more information or to help us fight these laws, contact F.E.A.R. Forfeiture Endangers American Rights P.O. Box 5424 Somerset, NJ 08875-5424 [j paff 1] at [genie.geis.com] Synopsis: On August 20, 1992, the United States District Court for the Central District of California ordered forfeiture of a residential property because the owner had made false statements on a mortgage loan application. Additionally, the court held that the forfeiture could be applied retroactively. For the full text of this case, see _U.S. v. 403 1/2 Skyline Dr, La Habra, Heights, CA_ which can be found at any sizable library at 797 F.Supp 796 (i.e. volume 797 of Federal Supplement, at page 796. Verbatim quotes from the opinion are in quotation marks. "On or about July 28, 1986, claimant Anthony Feher, submitted a residential loan application for a home loan to Great Western Savings, a federally insured financial institution, to purchase the defendant property. On this application, Feher represented that he was employed as an installer for Action Garage Door, in Hacienda Heights, California. Feher also represented that he had been so employed for two years, and that his gross monthly income was approximately $5,500.00." "On the basis of this application, Feher was granted a loan from Great Western Savings in the amount of $195,000 to fund the purchase of the defendant property." "The government contends that Feher was never employed at Action Garage Door." "Section 963(a) of the Financial Institutions Reform, Recovery and Enforcement Act ("FIRREA") provides for the forfeiture to the United States of '[a]ny property, real or personal, which constitutes or is derived from proceeds traceable to a violation of section . . 1014 of this title.'" "18 U.S.C. Sec. 1014 prohibits 'knowingly mak[ing] any false statement . . . for the purpose of influencing in any way the action of . . . any institution the accounts of which are insured by the Federal Deposit Insurance Corporation, upon any application [for a] loan.'" "As in narcotics forfeiture cases, the government need only to establish probable cause for the forfeiture pursuant to the FIRREA." The burden then shifts to the property owner to prove, by a preponderance of the evidence, that the property is not subject to forfeiture. Note that the government did not allege, nor does it need to, that Feher failed to make any of the mortgage payments. "The Declaration of Tony Marino establishes that between 1984-1986, Action Garage Door never employed Feher." Tony Marino is the owner of Action Garage Door. "Claimant Feher has failed to present any evidence contradicting these facts. Accordingly, this Court finds that the government has established probable cause to forfeiture defendant property." "Claimant Feher made false statements on his loan form on July 28, 1986. FIRREA was enacted in 1989. Because the false statements occurred prior to FIRREA's enactment, Feher contends that the retroactive application of FIRREA is improper." "FIRREA's civil forfeiture provisions do not focus on the individual but rather on the property." "This Court finds that such a legislative scheme is remedial in nature and not substantive." Thus, retroactive application of FIRREA's forfeiture provisions are proper. "Accordingly, this Court grants plaintiff United States of America's Motion for Summary Judgment." Title to property is forfeited to the United States of America. Note that the case was decided on the government's motion for summary judgment. In other words, the case never went to trial. The judge, named Tevrizian, decided the case on the strength of the government's affidavits. =========================== =========================== =========================== =========================== Civil Forfeiture How it Actually Works For more information or to help us fight these laws, contact F.E.A.R. Forfeiture Endangers American Rights P.O. Box 5424 Somerset, NJ 08875-5424 [j paff 1] at [genie.geis.com] The following is based on the case, _U.S. v. One Parcel of Property Known as 4.14 Acres in the 19th G.M. District of Bryan County, Georgia_, 801 F.Supp. 737, (S.D. Ga, 1992). This opinion clearly shows how abusive the federal forfeiture statute is. Direct quotes from the court are shown in quotation marks. The non-quoted text are my comments. This case involves the federal government seeking forfeiture of a widow's (Easter Mae Jenkins) principal residence due to her daughters' (Sharon and Jennifer Jenkins) involvement in drug dealing out of the house. The facts of the case clearly establish that drug sales were regularly carried out at the house. The government easily showed probable cause, which is their burden of proof in a federal forfeiture case. "The burden of proof then shifted to the claimant, Easter Mae Jenkins, to prove a defense to the forfeiture by a preponderance of the evidence." "To establish an innocent owner defense under 21 U.S.C. Sec 881(a)(7), a claimant must prove more than mere innocence. A claimant may avoid forfeiture of her property by proving EITHER ignorance of the illegal activity occurring on her premises or a lack of consent to that activity. While this Court believes that Easter Mae Jenkins was not personally involved in the drug transactions occurring in her home, the evidence adduced at trial indicates that she cannot take advantage of either aspect of the innocent owner defense." In order for Easter Mae Jenkins to prove her ignorance of the illegal activity, "the Court does not need to find that the claimant had actual knowledge; instead, the claimant must prove the absence of actual knowledge." Imagine yourself having to convincingly prove that you did not know something. Continues the court: "In light of the number of regular visitors at her residence, Ms. Jenkins presented little evidence at trial that proved her ignorance. Although Ms. Jenkins worked from 9:00 a.m. to 4:00 p.m. and from 11:00 p.m. to 4:00 a.m. six days per week, the drug activities at her home occurred primarily during the evening hours." Note that Easter Mae Jenkins worked 72 hours per week. The court noted that the fact that there were five guns found in the house undercut Ms. Jenkins' claim of ignorance. Quoth the court: "Although the remote area may justify the desire to own a single weapon, Ms. Jenkins' testimony did not demonstrate that there had been any violence or criminal acts in the area to explain the need for approximately five guns scattered around the house." Once guns are found in your home, it appears, the inference is that your house must be the site of illegal activity unless you can explain why you need so many. Since her attempt to prove her ignorance failed, the court next examined whether or not she proved her lack of consent. In order to prove her lack of consent, Jenkins would need to prove that she took "all reasonable steps to prevent the illicit use" of her house. According to the court, this means that she should have thrown out her drug dealing daughters or turned them into the police. Since she didn't do this, she "consented" to the illegal activity. As the court put it: "Easter Mae Jenkins 'fussed' at her daughter Jennifer for using drugs and told her daughters the she did not want any drugs in the house. Despite her belief that her pleas would be sufficient, she should have called the police department or the Drug Enforcement Agency for help with her children. She did not throw her daughters out of the house because she was concerned about providing shelter for their young children. Although Ms. Jenkins' maternal love and concern for her grandchildren are certainly commendable, her actions do not constitute reasonable efforts to prevent the use of her property in drug transactions." After knocking the legs out from under her "innocent owner defense," the court assumed a sympathetic posture as it lowered the boom. "It is with great regret that this Court orders the forfeiture of the defendant property to the United States. Congress had two aims in enacting 21 U.S.C. Sec. 881(a)(7): 'to punish criminals while insuring that innocent persons are not penalized for their unwitting association with wrongdoers.' In light of these purposes, it seems unduly harsh to order the forfeiture of Easter Mae Jenkins' home. Although the loss of the family dwelling will somewhat punish Sharon, the perpetrator of the Title 21 offenses, Easter May Jenkins will bear the full effect of the forfeiture. She loses the home that she prudently purchased with the proceeds from her husband's wrongful death settlement because she continued to provide for her daughters through hard work even when their treatment of her was reprehensible and their respect for her minimal. Unfortunately, the law requires this result."