Opposition Brief — Turner v. Jones

Pm Snprerte Dour, U.S

No. 90-895 Jan 1 1991

pee wRe

CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1990

G. MURRAY TURNER, MULHALL,

TURNER & HOFFMAN, formerly

known as MULHALL, TURNER,

HOFFMAN, CLAY & TRIPLETT - - Petitioner

versus

LEON E. JONES, SR. . . - Respondent

ON PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

BRIEF FOR RESPONDENT IN OPPOSITION

TO PETITION FOR WRIT OF CERTIORARI

WILLIAM T. WARNER

CONLIFFE, SANDMANN, GORMAN

& SULLIVAN

621 West Main Street

Louisville, KY 40202

(502) 587-7711

[Counsel of Record)

N. SCOTT LILLY

First Assistant Jefferson

County Attorney

1001 Fiseal Court Building

Louisville, KY 40202

(502) 625-6336

Co-Counsel for Respondent

WESTERFIELO-BONTE CO., 619 W. KENTUCKY~-?.O. BOX 3251, LOVISVILLE, KY.

QUESTION PRESENTED FOR REVIEW

Has the Petitioner advanced any special or compelling

reason for granting his Petition?

The Respondent respectfully answers and argues “no.”

li

LIST OF PARTIES

Leon E. Jones, Sr., Chief

Jefferson County Kentucky Police Department

Louisville, Kentucky

One hundred ninety-three thousand, three hundred eighty-

seven dollars and sixty-seven cents [In rem]

G. Murray Turner, Mulhall, Turner & Hoffman; formerly

known as Mulhall, Turner, Hoffman, Clay, and Triplett

iil

TABLE OF CONTENTS

PAGE

iden dias slncesoersetesvetonss i

eco nstsevcceccececaccsévccceses ii

eek Uicccbivocecscsscavece iii

CE, oc vce rccsccctessesceseescoces iv

eS ccs ctcccnccecescvssrsvcces 1- 2

Constitutional Provisions and Statutes ............. 2

IE I ono ccc cece cc ccccevcsccece 3-7

I, ooo ccc sce tescsecccsescccces 7

TUR CG RG Gh a Wbndstecescccsccccecesescecees 7-11

I. An appellate court should not consider an issue

not passed upon below. ................00000. 7- 8

II. Petitioner is estopped from claiming prejudice

through any delay in the institution of forfeiture

i aGenGabedersscbceenssecéseere S$

III. Title to subsequently forfeited property is vested

in the government at the time the property is

found to have been used illegally, ............ 9-10

IV. Petitioner was afforded due process of law in

the denial of his claims insofar as he received

notice and an opportunity to be heard ........ 10-11

ras ow wey iio. 6045 O04 055.600 rs 0 11-12

-

-

iv

TABLE OF AUTHORITIES

SS

Cases: PAGE

Hammond v. Baldwin [6th Cir. 1989] 866 F. 2d 172,

2g ee eee eee ee er pe 8

Hormel v. Helvering, 312 U.S. 552 (1940) ........ 8

In re: Henderson Distilled Spirits, 81 U.S. (14

MUGS PE UMRD eS bie ee ki ceseeeercsces 9

Sigmon Fuel Company v. Tennessee Valley Author-

ity, [6th Cir. 1985] 754 F.2d 162, 164 .......... 7- 8

Singleton v. Wulff, 428 U.S. 106 (1976) .......... 7

Texas v. Donohue, 302 U.S. 284 (1937) ........... i)

United States v. Baker, {6th Cir. 1986] 807 F. 2d

EE ED eh dvp Sev bab 0465s baw be eb ss 0¥-6 bos 8

United States v. Stowell, 133 U.S. 1, 10 S.Ct. 244,

a bac Snes wes se ee shen tWinbeeaes bine Ys 10

Constitution, Statutes and Rules Cited—Federal:

U.S. Constitution, Fifth Amendment ............. 2

U.S. Constitution, Fourteenth Amendment ....... 2

Title 21 United States Code, Section 881(a) ....... 4

Title 21 United States Code, Section 881l(e) ....... 4

Constitution and Statutes Cited—Kentucky

Kentucky Constitution, Section 2 ................ 2,11

KRS 218A.270 (Repealed 1984) ................. 2, 10

KRS 218A.410-440 (Effective 1984) ........... .2, 4, 10

INDEX TO APPENDICES

PAGE

KRS 218A.270 [Repealed effective July 13, 1984,

Acts of the 1984 Kentucky General Assembly,

2 8 re rr ere ree er re ee la— 4a

KRS 218A.410 to 440 [Effective 7/13/84] ........ 5a-l7a

21 U.S.C. § 881 [1985 version: Note: Amendments

through 1989 are included] .................. 18a—24a

Memorandum and Order entered January 21, 1985,

in the U.S. District Court, W.D. Ky., in U.S. v.

75,900, No. C84-0735-L(B) .........-ccccecee 25a—27a

Memorandum and Order entered in the District

Court September 16, 1986, U.S. v. $75,900 ..... 28a-32a

Unpublished Opinion filed December 14, 1987, in the

United States Court of Appeals for the Sixth

Circuit, Nos. 86-6063 and 86-6064, styled U.S. v.

STONE finan 444.5) havea RO des Joke secs kee aes 33a—38a

Order of Jefferson Circuit Court entered March 14,

NE nie cpadeuestasessebandtessbkantns s4eeee

Amended Order of Jefferson Cireuit Court en-

ee er rr er ree 44a

Order of the United States District Court for the

Western District of Kentucky entered June 7,

SE 5 5s c 5 nS Ss Cakes oder ak ee 45a

Memorandum and Order entered June 7, 1988 in the

United States District for the Western District

Oe bd cao ebro bn does sas cayeusasees 46a—50a

No. 90-895

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1990

G. Murray Turner, MuLuaLi, Turner &

Horrman, formerly known as MULHALL,

Turner, Horrman, Ctay & Triptetr - - Petitioner

Vv.

Leon E. Jones, Sz, - - - - - Respondent

ON PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

RESPONDENT'S BRIEF IN OPPOSITION

To the Honorable, the Chief Justice and Associate Justices

of the Supreme Court of the United States:

The Respondent herein, Leon EK. Jones, Sr., respectfully

prays that this Court deny the Petition for a Writ of

Certiorari to review the order of the United States Court

of Appeals for the Sixth Circuit entered in this matter on

August 23, 1990.

OPINIONS BELOW

The August 23, 1990 order of the Court of Appeals for

the Sixth Circuit, which is sought to be reviewed herein, is

unreported and is reprinted in the Appendix to the Petition

at pages 31 and 32. The June 7, 1988 Order and Memo-

randum Opinion of the United States District Court for

2

the Western District of Kentucky, is unreported and is

reprinted in the Appendix to this Brief at pages 46a to 50a.

The March 14, 1984 Opinion of the Jefferson County, Ken-

tucky Cireuit Court, and subsequent Amended Order en-

tered May 8, 1984, adopted by the District Court, are both

reprinted in the Appendix to this Brief at pages 39a to 43a.

CONSTITUTIONAL PROVISIONS AND STATUTES

The following are the constitutional provisions and

statutes involved in the case:

The applicable portion of the Fifth Amendment to the

Constitution of the United States provides that “No person

shall be . . . deprived of life, liberty, or property,

without due process of law;”

The applicable portion of the Fourteenth Amendment

to the United States Constitution is set forth at page 7 of

the Petition.

Section 2 of the Constitution of the Commonwealth of

Kentucky provides that “Absolute and arbitrary power

over the lives, liberty and property of freemen exists

nowhere in a republic, not even in the largest majority.”

Title 21, United States Code, Section 881 [as amended

1989], is reprinted in full at pages 18a to 24a of the Ap-

pendix to this Brief.

Section 218A.270, Kentucky Revised Statutes, [repealed

effective July 13, 1984] is reprinted at pages 1-5 of the

Appendix to the Petition and at pages la to 4a of the Ap-

pendix to this Brief. Section 218A.410 through .440, Ken-

tucky Revised Statutes [effective July 13, 1984] are re-

printed at pages 5a to 18a of the Appendix to this Brief.

3

STATEMENT OF THE CASE

This civil forfeiture action was commenced January 17,

1984 in the Jefferson County, Kentucky Circuit Court by

Respondent’s predecessor in office, E. G. Helm, Jr., in his

official capacity as Chief of the Jefferson County Police

Department. The Chief’s Petition sought forfeiture of

$193,387.67 seized on March 1, 1982 by Jefferson County

Police Department Detectives in the course of executing

State Court search warrants on premises occupied or leased

by James William Ragland, his wife Mona Ragland, Robin

Ragland, and Larry Suddeth. All four were arrested, and

large quantities of illegal drugs found on the premises

were seized, together with the money which is the subject

of this action, and other evidence ultimately used to prose-

cute the Raglands and Mr. Suddeth.

A federal indictment was subsequently handed down

naming some thirty defendants, including the Raglands and

Mr. Suddeth, No. 82-0057-L, United States v. James Wil-

liam Ragland, et al. A summary of those criminal pro-

ceedings is set forth in Two District Court Memoranda and

Orders dated January 21, 1985 and September 16, 1986,

entered in a companion federal civil forfeiture case, No.

(84-0735-L(B), United States v. $75,900.00.

The $193,387.67, which is the subject of this case now

before the Court on Petition for Writ of Certiorari, was

held initially for use as evidence in the federal criminal

prosecution but was subsequently released to an interest-

bearing escrow account pending resolution of the case.

The Respondent Chief’s Forfeiture Petition was filed in

the Jefferson Circuit Court pursuant to Section 218A.270,

Kentucky Revised Statutes (“KRS”)? which declares for-

‘Reprinted in the Appendix to this Brief at pages 25a to 32a.

?Included in the Appendix to this Brief, pages la to 4a.

4

feit to his Department money“. : . found upon the person

or premise of [a] defendant, and which is involved in

transactions in violation of Kentucky law regulating con-

trolled substances.”* It is undisputed that the offenses

charged to the Defendants in the federal indictment also

constituted violations of Kentucky law.

Before rendering judgment, the Jefferson Circuit Court

directed that actual notice be given to all persons who could

have any interest in the funds, and set a hearing on the

forfeiture for March 12, 1984. After actually receiving

that notice and in response thereto, the Petitioner here,

G. Murray Turner, filed his Answer March 2, 1984 in the

Jefferson Circuit Court action claiming an interest in and

to the money by reason of a written assignment, appended

to the Answer as an exhibit. Petitioner had been retained

by the Raglands to represent them in the pending criminal

actions, and he claimed that the assignment represented

partial payment for his services. This assignment showed,

on its face, that it was executed [and supposedly delivered]

March 4, 1982 by the Raglands.

A plenary evidentiary hearing was convened in the

Jefferson Circuit Court March 12, 1984, on the Merits of

Respondent’s Petition, and the claims of Turner. Peti-

tioner Turner appeared by counsel, as did a representative

Assembly effective July 13, 1984, but was re-enacted on the same

date as KRS 218A.410 to 440 [included in the Appendix to this

Brief, pages 5a to 17a]. The 1984 revisions essentially brought the

Kentucky statute into virtual identity with the Federal drug for-

feiture statute, 21 U.S.C. § 881(a) [included in the Appendix to

this Brief, pages 18a to 24a]. After the 1984 revision, the Ken-

tucky and United States statutes differ (in any substantial sense)

only with regard to their respective provisions relating to required

disposition following forfeiture; compare 21 U.S.C. § 881(e) and

KRS 218A.420.

5

of the United States Internal Revenue Service [“IRS”],

both asserting an interest in the money.‘

With the consent of all the parties, including the repre-

sentatives of Turner and the IRS who were present at the

hearing, Jefferson Circuit Judge Edwin Schroering pro-

ceeded to take extensive proof on the issue of whether or

not the funds at issue should be forfeited from the Rag-

lands and Mr. Suddeth, reserving for later determination

the claims or interests, if any, of Turner and the IRS in or

to‘the money. Following that hearing, on March 14, 1984,

Judge Schroering entered extensive Findings of Fact, Con-

clusions of Law, and an Order, declaring the money for-

feited to Respondent’s Department subject only to the

claims of Turner and the IRS.*

After several continuances, a hearing concerning the

claims of Turner and the IRS was finally scheduled and

commenced by the State Court on December 3, 1984. The

hearing was not concluded that day, and was passed by the

Court to February 8, 1985 to complete the presentation of

proof and arguments pending on these two claims.

That hearing was never concluded, because on December

27, 1984, the IRS filed a formal intervention and simultane-

ously removed the case to the United States District Court

for the Western District of Kentucky.

Following discovery after removal, the District Court

convened a status conference in the case to delineate the

issues remaining to be litigated. At the conclusion of the

*The IRS had levied various liens and assessments against the

assignors Ragland, et al., but had not at this point formally inter-

vened in the case.

5An amended Order was entered May 8, 1984, making technical

corrections to the March 14 Order. Both Orders are included in

the Appendix to this Brief, pages 39a to 44a.

Ny

6

conference, the Court entered an Order October 16, 1987

directing counsel to attempt a stipulation of the issues to

be decided by the Court.

The parties were not able to agree, and the District

Court entered an Order March 2, 1988 setting forth the

issues to be briefed by the parties. Neither of the Ques-

tions Petitioner presents for review in this Court were

included among those issues and Petitioner did not move

or request the District Court at any point to consider the

issues he has presented to this Court.

In response to the District Court’s Briefing order, the

claimant IRS and the Respondent Chief of Police filed

briefs on all issues as directed by the D istrict Court.’

The Petitioner failed to file any brief on the merits in the

District Court, nor, as noted, did he ever file any exception

or protest to the substance of the District Court Order

directing the issues to be briefed and presented, either

before or after judgment.’

On June 7, 1988, the District Court entered its Memo-

randum Opinion and Order dismissing the claims of the

IRS and of Petitioner Turner and directing that the funds

at issue in the case be forfeited to the Respondent. (See

Appendix to this Brief, pages 5la to 56a.)

The Petitioner Turner took his appeal to the Sixth Cir-

cuit Court of Appeals on June 28, 1988. On August 23,

“In its Memorandum Brief filed in the Distriet Court, the IRS

conceded the priority and superiority of the Chief’s claim over

that of the United States.

*The Respondent has previously argued that in view of the

agreed method of litigation of this case in the District Court, to

which the Petitioner never took exception, to Petitioner’s failure

to file a brief in the trial was tantamount to not appéaring for

trial; see Argument in this Brief, below, at pages 10-12.

7

1990, that court entered an order affirming the judgment

of the District Court

SUMMARY OF ARGUMENT

1. The issues raised on appeal were never presented

to, or decided by the District Court and they are not prop-

erly before this Court.

2. The purported 22 month delay in institution of for-

feiture proceedings worked no prejudice on Petitioner, and

he is in any case estopped from raising this issue by the

judgment in a companion case,

3. Respondent’s title to the disputed funds was per-

fected as of March 1, 1982, the funds having been law-

fully seized on that date, and Petitioner’s assignment hav-

ing not been executed until March 4, 1982.

4. Petitioner was given full opportunity to present

evidence and arguments in one full and one partial hear-

ing held in the Jefferson Circuit Court, and following re-

moval, in the U.S. District Court, and was thereby afforded

due process of law.

ARGUMENT

I. An Appellate Court Should Not Consider an Issue

Not Passed Upon Below.

At the outset, Respondent points out to the Court that

the two Questions presented by the Petitioner in his Pe-

tition for Writ of Certiorari involve issues which were

never presented to, or decided by the District Court. By

failing to bring these issues before the District Court, Pe-

titioner effectively waived his arguments and has no basis

to assign as error that Court’s failure to address the issues.

They are, therefore, not properly before this Court on

Petition for Writ; Singleton v. Wulff, 428 U.S. 106 (1976),

a

*

8

Sigmon Fuel Company v. Tennessee Valley Authority, [6th

Cir. 1985] 754 F.2d 162, 164, and Hammond v. Baldwin

[6th Cir. 1989] 866 F.2d 172, 175 n.1°

Without in any way waiving his argument in this re-

gard, the Respondent will proceed to address the arguments

in Petitioner’s Petition as part of his own argument.®

II. Petitioner Is Estopped From Claiming Prejudice

Through any Delay in the Institution of Forfeiture

Proceedings.

Petitioner claims that the District Court failed to assess

the impact of delay in the institution of forfeiture proceed-

ings by Respondent’s predecessor. As noted above, the

Petitioner never raised this argument at any stage of the

proceedings in either the state or federal trial courts.

Further, and conclusively, the same issues were raised

by the same Petitioner against the United States in col-

lateral forfeiture proceedings brought by the United States

as to funds which were siezed by the United States at the

same time and in the same criminal proceedings as the

$193,387.67 involved in this case; see Order and Opinion

of the United States District Court for the Western Dis-

trict of Kentucky, and the United States Court of Appeals

for the Sixth Cireuit in the case of U.S. v. $75,900 included

in the Appendix to this Brief at pages 34a to 44a.

®Compare Hormel v. Helvering, 312 U.S. 552 (1940) and United

States v. Baker [6th Cir. 1986] 807 F.2d 1315, 1321, holding that

this general principle may not be applicable in situations where

‘*manifest injustice would result’’

*Both these questions, however, were presented by Petitioner

to the Court of Appeals, together with a third argument—likewise

not litigated in the District Court, but apparently abandoned

here—to the effect that the forfeiture impermissibly involved at-

torney 'S fees.

III. Title to Subsequently Forfeited Property Is Vested in

the Government at the Time the Property Is Found

to Have Been Used Illegally.

Petitioner’s second argument, alleging the unconstitu-

tionality of former KRS 218A.270, the statute in effect at

the time the money ultimately forfeited was seized, is dif-

ficult to understand, but nevertheless appears to be in-

substantial.

The Petitioner argues that the Kentucky Statute does

not incorporate a so-called “relation back” provision. The

“relation-back” doctrine—universally recognized to have

its origin in the very early history of our common law—

provides that unless a legislature indicates otherwise, title

to subsequently forfeited property is vested in the gov-

ernment at the time the property is found to have been

used illegally; see e.g., In re: Henderson Distilled Spirits,

81 U.S. (14 Wall.) 44, 56-57 (1871); Texas v. Donoghue,

302 U.S. 284 (1937).

The importance of this point to the case is that the

money at issue here was lawfully seized by the Respond-

ent’s officers March 1, 1982. Petitioner Turner’s “assign-

ment” was not even dated until March 4, 1982. Thus, the

Order subsequently entered by Judge Schroering in the

Jefferson Circuit Court action, adopted by the District

Court in this case, perfected the Respondent’s title in and

to the disputed funds as of March 1, 1982. There was

simply nothing to assign to Petitioner Turner as of March

4, 1984, and the District Court go concluded. The Court

observed: = «

“It is undisputed that the assignment, or security

interest, whichever it may be determined to be, oc-

curred afier the seizure of the property while the

10

criminal defendants were incarcerated. The leading

ease of United States v. Stowell, 133 U.S. 1, 10 S.Ct.

244, 247 (1890), is dispositive:

‘The next question to be determined is from what

time the forfeiture takes effect. By the settled doc-

trine of this court, whenever a statute enacts that

upon the commission of a certain act specifie prop-

erty used in or connected with that act shall be for-

feited, the forfeiture takes effect immediately upon

the commission of the act; the right to the property

then vests in the United States, although their title

is not perfected until judicial condemnation; the for-

feiture constitutes a statutory transfer of the right

to the United States at the time the offense is com-

mitted; and the condemnation, when obtained, relates

back to that time, and avoids all intermediate sales

and alienations, even to purchasers in good faith.’ ”

There are no reported Kentucky decisions construing

either KRS 218A.270, or its successor statute KRS 218A.410

in this regard, but the general rationale underlying the

well-established relationback doctrine is compelling in its

obvious analogy and application to the case at bar, and the

District Court so found in its June 7, 1988 Memorandum

Opinion.

IV. Petitioner Was Afforded Due Process of Law in the

Denial of His Claims Insofar as he Received Notice and

an Opportunity to be Heard.

The Petitioner has consistently attempted to fashion an

alternate underpinning to his arguments as to the uncon-

stitutionality of KRS 218.270, by pointing out that the

Kentucky statute contains no provision for notice and

hearing.

Whatever the applicable Kentucky statute or statutes

may or may not provide, the record in this case clearly in-

11

dicates that one full, and one partial hearing was held in

the Jefferson Circuit Court, and the Petitioner was given

full opportunity to present evidence and arguments in the

District Court, following removal. He declined to do so.

Further, the Petitioner, in his Petition, omits to point

out the elemental principle that the operation of any stat-

ute, particularly a forfeiture statute, is subject to consti-

tutional provisions relating to due process of law, whether

or not explicitly recited in the statute; see e.g. Section 2

of the Kentucky Constitution, and the Fifth and Fourteenth

Amendments to the United States Constitution. The ree-

ord in this case clearly reflects that notice and hearing,

together with every other clement of due process, was ac-

corded to the Petitioner {and all other actual or potential

claimants], in fact and in law.

The forfeiture orders entered in the Jefferson Circuit

Court, as adopted by the United States District Court fol-

lowing remand were suported by ample evidence of record,

and were correct as a matter of law. The Petitioner, in his

Petition, has offered no fact or argument or reference to

the Record in this case which would even suggest, much

less compel a contrary conclusion. The Sixth Cireuit Court

of Appeals was therefore correct in affirming the judgment

of the District Court.

CONCLUSION

Both the District Court and the Court of Appeals were

correct in ruling that all interest in the disputed funds were

vested in the Respondent prior to the execution of the as-

signment to Petitioner. Petitioner had ample opportunity

to assert his claim in hearings held in both state and federal

courts. Accordingly, Respondent requests that the Petition

be denied.

Resjgeetfully submi

Wiituiam T. Warner

CoNnLIFFE, SANDMANN, GORMAN

& SULLIVAN

621 West Main Street

Louisville, KY 40202

(502) 587-7711

(Counsel of Record)

N. Scott Litiy

First Assistant Jefferson

County Attorney

1001 Fiscal Court Building

Louisville, KY 40202

(502) 625-6336

Counsel for Respondent

APPENDIX

ea)

‘

ie)

D

%

la

KRS 218A.270

218A.270. Substances and property, subject to forfei-

ture — Procedure and exemptions. —(1) The following are

subject to forfeiture:

(a) All controlled substances which have been manu-

factured, distributed, dispensed, possessed, being held or

acquired in violation of this chapter;

(b) All raw materials, products and equipment of any

kind which are used, or intended for use, in manufactur-

ing, compounding, processing, delivering, importing, or

exporting any controlled substance in violation of this

chapter;

(c) All property which is used, or intended for use, as

a container for property described in paragraph (a) or (b)

of this subsection;

(d) All conveyances, including aircraft, vehicles or ves-

sels, which are used, or intended for use, to transport, or in

any manner to facilitate the transportation, for the purpose

of sale or receipt of property described in paragraph (a)

or (b) of this subsection, but:

1. No conveyance used by any person as a common car-

rier in the transaction of business as a common earrier is

subject to forfeiture under this section unless it appears

that the owner or other person in charge of the conveyance

is a consenting party or privy to a violation of this chapter;

2. No conveyance is subject to forfeiture under this

section by reason of any act or omission established by the

owner thereof to have been committed or omitted without

his knowledge or consent; °

3. <A forfeiture of a conveyance encumbered by a bona

fide security interest is subject to the interest of the se-

cured party if he neither had knowledge of nor conse sted

to the act or omission:

2a

4. The forfeiture provisions of this paragraph shall

not apply to any offense relating to marijuana.

(e) All books, records, and research products and ma-

terials, including formulas, microfilm, tapes, and data

which are used, or intended for use, in violation of this

chapter.

(f) All moneys acquired from transactions involving

property as described in paragraphs (a) and (b) of this

subsection and found upon the person or premises of the

defendant.

(2) Property subject to forfeiture under this chapter

may be seized by any law enforcement agency upon process

issued by any court having jurisdiction over the property.

Seizure without process may be made if:

(a) The seizure is incident to an arrest or a search

under a search warrant;

(b) The property subject to seizure has been the sub-

ject of a prior judgment in favor of the state in a criminal]

injunction or forfeiture proceeding based upon this chapter ;

(c) The law enforcement agency has probable cause to

believe that the property is directly or indirectly dangerous

to health or safety; or

(d) The law enforcement agency has probable cause

to believe that the property was used or is intended to be

used in violation of this chapter,

(3) Property taken or detained under this section shall

not be subject to replevin, but is deemed to be in the cus-

tody of the law enforcement agency subject only to the

orders and decrees of the court having jurisdiction over

the forfeiture proceedings. When property is seized under

this chapter, the law enforcement agency may:

(a) Remove the property to a place designated by it; or

3a

(b) Take custody of the property and remove it to an

appropriate location for disposition in accordance with the

law.

(4) When property is forfeited under this chapter the

law enforcement agency may:

(a) Retain it for official use;

(b) Sell that which is not required to be destroyed by

law and which is not harmful to the public. The proceeds

shall be used for payment of all proper expenses of the

proceedings for forfeiture and sale, including expenses of

seizure, maintenance of custody, advertising and court

costs. The balance shall be paid to the state treasurer for

deposit to the general fund.

(5) Controlled substances listed in Schedule I that are

possessed, transferred, sold, or offered for sale in violation

of this chapter are contraband and shall be seized and sum-

marily forfeited to the state. Controlled substances listed

in Schedule 1, which are seized or come into the possession

of the state, the owners of which are unknown, are contra-

band and shall be summarily forfeited to the state.

(6) Species of plants from which controlled substances

in Schedules I and II may be derived which have been

planted or cultivated in violation of this chapter, or of

which the owners or cultivators are unknown, or which are

wild growths, may be seized and summarily destroyed or

forfeited to the state.

(7) The failure, upon demand by the law enforcement

agency or its authorized agent, of the person in oceupancy

or in control of land or premises upon which the species

of plants are growing or being stored, to produce an ap-

propriate registration, or proof that he is the holder there-

of, constitutes authority for the seizure and forfeiture of

the plants.

da

(8) All substances, machinery or devices used for the

manufacture, packaging, repackaging, or marking, and

books, papers and records, and all vehicles owned and used

by the seller or distributor for the manufacture, distribu-

tion, sale or transfer of substances in violation of KRS

218A.350 shall be seized and forfeited to the state. Sub-

stances manufactured, held, or distributed in violation of

KRS 218A.350 shall be deemed contraband. (Enact. Acts

1972, ch. 226, § 29; 1978, ch. 124, § 1, effective June 17, 1978;

1982, ch, 419, § 3, effective July 15, 1982.)

da

KRS 218A.410 TO 440

218A.410. Property subject to forfeiture. —(1) The fol-

lowing are subject to forfeiture:

(a) Controlled substances listed in Schedule I that are

possessed, transferred, sold, or offered for sale in violation

of this chapter are contraband and shall be seized and

summarily forfeited to the state.

(b) Controlled substances listed in Schedule I, which

are seized or come into the possession of the state, the

owners of which are unknown, are contraband and shall be

summarily forfeited to the state.

(c) Species of plants from which controlled substances

in Schedules I and II may be derived which have been

planted or cultivated in violation of this chapter, or of

which the owners or cultivators are unknown, or which are

wild growths, may be seized and summarily destroyed or

forfeited to the state. The failure, upon demand by the law

enforcement agency or its authorized agent, of the person

in occupancy or in control of land or premises upon which

the species of plants are growing or being stored, to pro-

duce an appropriate registration, or proof that he is the

holder thereof, constitutes authority for the seizure, and

forfeiture of the plants.

(d) All substances, machinery or devices used for the

manufacture, packaging, repackaging, or marking, and

books, papers and records, and all vehicles owned and used

by the seller or distributor for the manufacture, distribu-

tion, sale or transfer of substances in violation of KRS

218A.350 shall be seized and forfeited to the state. Sub-

stances manufactured, held, or distributed in violation of

KRS 218A.350 shall be deemed contraband.

(e) All controlled substances which have been manu-

factured, distributed, dispensed, possessed, being held or

acquired in violation of this chapter.

6a

(f) All raw materials, products and equipment of any

kind which are used, or intended for use, in manufactur-

ing, compounding, processing, delivering, importing, or

exporting any controlled substance in violation of this

chapter.

(g) All property which is used, or intended for use, as

a container for property described in paragraph (e) or (f)

of this subsection.

(h) All conveyances, including aircraft, vehicles or ves-

sels, which are used or intended for use, to transport, or

in any manner to facilitate the transportation, for the pur-

pose of sale or receipt of property described in paragraph

(e) or (f) of this subsection, but:

1. No conveyance used by any person as a common car-

rier in the transaction of business as a common carrier is

subject to forfeiture under this section unless it is proven

beyond a reasonable doubt that the owner or other person

in charge of the conveyance is a consenting party or privy

to a violation of this chapter;

2. No conveyance is subject to forfeiture under this

section by reason of any act or omission established by the

owner thereof to have been committed or omitted without

his knowledge or consent;

3. <A forfeiture of a conveyance encumbered by a bona

fide security interest is subject to the interest of the secured

party if he neither had knowledge of nor consented to the

act or omission;

4. The forfeiture provisions of this paragraph shall

not apply to any misdemeanor offense relating to mari-

juana.

(i) All books, records, and research products and ma-

terials, including formulas, microfilm, tapes and data which

are used, or intended for use, in violation of this chapter.

7a

(j) Everything of value furnished, or intended to be

furnished, in exchange for a controlled substance in viola-

tion of this chapter, all proceeds, including real and per-

sonal property, traceable to such an exchange, and all mon-

eys, negotiable instruments, and securities used, or intended

to be used, to facilitate any violation of this chapter; ex-

cept that no property shall be forfeited under this para-

graph, to the extent of the interest of an owner, by reason

of any act or omission established by him to have been

committed or omitted without his knowledge or consent.

It shall be a rebuttable presumption that all moneys, coin

and currency found in close proximity to forfeitable con-

trolled substances, to forfeitable drug manufacturing or

distributing paraphernalia, or to forfeitable records of the

importation, manufacture or distribution of controlled sub-

stances, are presumed to be forfeitable under this para-

graph. The burden of proof is upon claimants of personal

property to rebut this presumption by clear and convine-

ing evidence. The burden of proof is upon the law enforce-

ment agency to prove by clear and convincing evidence

that real property is forfeitable under this paragraph.

(Enact. Acts 1984, ch. 101, § 1, effective July 13, 1984.)

218A.415. Procedure for seizure of property. — (1)

Property subject to forfeiture under this chapter may be

seized by any law enforcement agency upon process issued

by any court having jurisdiction over the property. Seiz-

ure without process may be made if:

(a) The seizure is incident to an arrest or a search

under a search warrant;

(b) The property subject to seizure has been the sub-

ject of a prior judgment in favor of the state in a criminal

injunction or forfeiture proceeding based upon this chapter;

8a

(c) The law enforcement agency has probable cause

to believe that the property is directly or indirectly dan-

gerous to health or safety; or

(d) The law enforcement agency has probable cause

to believe that the property was used or is intended to be

used in violation of this chapter.

(2) Property taken or detained under this section shall

not be subject to replevin, but is deemed to be in the cus-

tody of the law enforcement agency subject only to the

orders and decrees of the court having jurisdiction over

the forfeiture proceedings. When property is siezed un-

der this chapter, the law enforcement agency may:

(a) Remove the property to a place designated by it;

or

(b) Take custody of the property and remove it to an

appropriate location for disposition in accordance with law,

(Enact. Acts 1984, ch. 101, § 2, effective July 15, 1954.)

218A.420. Procedure for disposal of seized and forfeited

property —- Distribution of proceeds.— (1) All property

which is subject to forfeiture under this chapter shall be

disposed of in aecordance with this section.

(2) All controlled substances which are seized and for-

feited under this chapter shall be ordered destroyed by the

order of the trial court. Property other than controlled

substances may be destroyed on order of the trial court.

(3) When property other than controlled substances is

forfeited under this chapier the law enforcement agency

may with the approval of the trial court and subject to the

provisions of KRS 218A.430:

(a) Retain it for official use;

(b) Sell that which is not required to be destroyed by

law and which is not harmful to the public. The proceeds

9a

shall be used for payment of all proper expenses of the

proceedings for forfeiture and sale, including expenses of

seizure, maintenance of custody, advertising and court

costs. The balance, except as provided in KRS 218A.430,

shall be paid to:

1. The county if the property was seized by the law

enforcement agency of the county;

2. The city if the property was seized by the law en-

forcement agency of the city;

3. The state treasurer for the benefit of the Kentucky

state police, except as provided in KRS 218A.430, if the

property was seized by the Kentucky state police;

4. When money or property is siezed in a joint opera-

tion involving more than one (1) law enforcement agency

the division of the money and property among the seizing

agencies shall be made by the trial court. (Enact. Acts

1984, ch. 101, § 3, effective July 13, 1984.)

218A.425. Valuation of property retained for official

use.— When seized property is retained for official use

by law enforcement agencies under this chapter the value

of the property shall be determined as follows:

(1) Vehicles shall be valued at their tax value;

(2) All other property shall be valued at its fair cash

value by the property valuation administrator ;

(3) Property shall be valued as of the time of sale by

the law enforcement agency. (Enact. Acts 1984, ch. 101,

) 4, effective July 13, 1984.)

218A.430, Maximum ceilings on proceeds. — (1) The

first one hundred thousand dollars ($100,000) of money

from forfeitures and property, including amounts paid

pursuant to paragraph (3)(b)2 of KRS 2184.420, retained

by law enforcement agencies of a city of the first class or

10a

of an urban-county government shall be retained by the

city or urban-county government and used solely for po-

lice purposes related to controlled substances. Any for-

feitures in excess of this amount shall revert to the fund

created in KRS 218A.435.

(2) The first one hundred thousand dollars ($100,000)

of money from forfeitures and property including amounts

paid pursuant to paragraph (3)(b)2 of KRS 218A.420, re-

tained by county law enforcement agencies in counties con-

taining a city of the first class shaii be retained by the

county and used solely for police purposes related to con-

trolled substances. Any forfeitures in excess of this a-

mount shall revert to the fund created in KRS 218A.435.

(3) The first one hundred thousand dollars ($100,000)

of money from forfeitures and property including amounts

paid pursuant to paragraph (3)(b)3 of KRS 218A.420, re-

tained by the Kentucky state police shall be retained by

the state police and used solely for police purposes related

to controlled substances. Any forfeitures in excess of this

amount shall revert to the fund created in KRS 218A.435.

(4) The first fifty thousand dollars ($50,000) of money

from forfeitures and property, including amounts paid

pursuant to paragraph (3)(b)1 or 2 of KRS 218A.420, re-

tained by law enforcement agencies other than those

specified in subsections (1) through (3) of this section

shall be retained by the unit of government seizing such

property and used solely for police purposes related to

controlled substances. Any forfeitures in excess of this

amount shall revert to the fund created in KRS 218A.435.

(5) Money seized and money for all property sold by

any other seizing law enforcement agency pursuant to KRS

218.4.420 shall be deposited in the fund created by KRS

218A.435,

lla

(6) In calculating the forfeitures to be retained in sub-

sections (1) through (4) of this section, the first forfeit-

ures in any calendar year up to the amount specified in the

applicable subsection shall be retained as provided in that

subsection. (Enact. Acts 1984, ch. 101, 4 5, effective July

13, 1984.)

218A.435. Trust and revolving fund.— (1) There is

hereby created a trust and revolving fund in the executive

branch of state government.

(2) The eabinet for human resources shall, in each fiscal

year, receive the moneys deposited in the fund under KRS

218A.430, with such moneys to be used solely for the pur-

pose of drug and alcohol abuse education, prevention and

treatment. The moneys in this fund are intended to sup-

plement any funds appropriated by the general assembly

to the cabinet for human resources for drug and alcohol

abuse education, prevention, and treatment efforts. (Enact.

Acts 1984, ch. 101, § 6, effective July 13, 1984.)

218A.440. Statement with auditor of public accounts

listing property seized. — (1) Each law enforcement agency

seizing money or property pursuant to KRS 218A.415

shall, at the close of each fiscal year, file a statement with

the anditor of public accounts, a detailed listing of all

money and property seized and the disposition thereof.

The listing shall identify all property so seized.

(2) Any agency failing to report as required by this

section shall be liable to the state for the full value of all

property and money so seized. The attorney general shall

institute civil actions for recovery of money or property

obtained or retained in violation of this section. (Enact.

Acts 1984, ch. 101, § 7, effective July 13, 1984.)

TITLE 21, UNITED STATES CODE § 881

§ 881. Forfeitures

Property Subject

(a) The following shall be subject to forfeiture to the

United States and no property right shall exist in them:

(1) All controlled substances which have been manu-

factured, distributed, dispensed, or acquired in violation of

this subchapter.

(2) All raw materials, products, and equipment of any

kind which are used, or intended for use, in manufacturing,

compounding, processing, delivering, importing, or export-

ing any controlled substance in violation of this subchapter.

(3) All property which is used, or intended for use, as a

container for property described in paragraph (1) or (2).

(4) All conveyances, including aircraft, vehicles, or

vessels, which are used, or are intended for use, to trans-

port, or in any manner to facilitate the transportation, sale,

receipt, possession, or concealment of property described in

paragraph (1) or (2), except that—

(A) no conveyance used by any person as a common

carrier in the transaction of business as a common

carrier shall be forfeited under the provisions of this

section unless it shall appear that the owner or other

person in charge of such conveyance was a consenting

party or privy to a violation of this subchapter or sub-

chapter II of this chapter; and

(B) no conveyance shall be forfeited under the pro-

visions of this section by reason of any act cr omission

established by the owner thereof to have been com-

mitted or omitted by any person other than such

owner while such con *yance was unlawfully in the

possession of a person other than the owner in violation

of the criminal laws of the United States, or of any

State.

13a

(5) All books, records, and research, including formu-

las, microfilm, tapes, and data which are used, or intended

for use, in violation of this subchapter.

(6) All moneys, negotiable instruments, securities, o1

other things of value furnished or intended to be furnished

by any person in exchange for a controlled substance in

violation of this subchapter, all proceeds traceable to such

an exchange, and all moneys, negotiable instruments, and

securities used or intended to be used to facilitate any vio-

lation of this subchapter, except that no property shall be

forfeited under this paragraph, to the extent of the interest

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.

(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 pinishable by

more than one year’s imprisonment, except that no property

shall be forfeited under this paragraph, tothe extent of an

interest of an owner, by reason of any act or omission estab-

lished by that owner to have been committed or omitted

without the knowledge or consent of that owner.

(8) All controlled substances which have been possessed

in violation of this subchapter.

Seizure Pursuant to Supplemental Rules for

Certain Admiralty and Maritime Claims

(b) Any property subject to civil or criminal forfeiture

to the United States under this subchapter may be seized

by the Attorney General upon process issued pursuant to

the Supplemental Rules for Certain Admiralty and Mari-

time Claims by any district court of the United States

having jurisdiction over the property, except that seizure

without such process may be made when—

—.

l4a

(1) the seizure is incident to an arrest or a search

under a search warrant or an inspection under an ad-

ministrative inspection warrant;

(2) the property subject to seizure has been the

subject of a prior judgment in favor of the United

States in a criminal injunction or forfeiture proceeding

under this subchapter;

(3) the Attorney General has probable cause to

believe that the property is directly or indirectly dan-

gerous to health or safety; or

(4) the Attorney General has probable cause to

velieve that the property is subject to civil or criminal

forfeiture under this subchapter.

In the event of seizure pursuant to paragraph (3) or (4)

of this subsection, proceedings under subsection (d) of this

section shall be instituted promptly.

Custody of Attorney General

(ce) Property taken or detained under this section shall

not be repleviable, but shall be deemed to be in the custody

of the Attorney General, subject only to the orders and

decrees of the court or the official having jurisdiction

thereof. Whenever property is seized under any of the

provisions of this subchapter, the Attorney General may—

(1) place the property under seal;

(2) remove the property to a place designated by

him; or

(3) require that the General Services Administra-

tion take custody of the property and remove it, if

practicable, to an appropriate location for disposition

in accordance with law.

Other Laws and Proceedings Applicable

!

(d) The provisions of law relating to the seizure, sum-

mary and judicial forfeiture, and condemnation of property

for violation of the customs laws; the disposition of such

15a

property or the proceeds from the sz: thereof; the remis.

sion or mitigation of such forfeitures; and the compromise

of claims shall a ply to seizures and forfeitures incurred, or

alleged to have been incurred, under any of the provisions

of this subchapter, insofar as applicable and not inconsis-

tent with the provisions hereof; except that such cuties as

are imposed upon the customs officer or any other person

with respect to the seizure and forfeiture of property under

the customs laws shall be performed with respect to seizures

and forfeitures of property under this subchapter by such

officers, agents, or other persons as may be authorized or

designated for that purpose by the Attorney General, except

to the extent that such duties arise from seizures and for-

feitures effected by any customs officer.

Disposition of Forfeited Property

(e) Whenever property is civilly or criminally for-

feited or under this subchapter the Attorney General may—

(1) retain the property for official use or transfer

the custody or ownership of any forfeited property to

any Federal, State, or local agency pursuant to section

616 of Title 19;

(2) sell any forfeited property which is not re-

quired to be destroyed by law and which is not harmful

to the public;

(3) require that the General Services Administra-

tion take custody of the property and dispose of it in

accordance with law; or

(4) forward it to the Drug Enforcement Adminis-

tration for disposition (including delivery for medical

or scientific use to any Federal or State agency under

regulations of the Attorney General).

The Attorney General shall ensure the equitable transfer

pursuant to paragraph (1) of any forfeited property to the

appropriate State or locai law enforcement agency so as to

l6a

reflect generally the contribution of any such agency par-

ticipating directly in any of the acts which led to the

seizure or forfeiture of such property. A decision by the

Attorney General pursuant to paragraph (1) shall not be

subject to review. The proceeds from any sale under para-

graph (2) any any moneys forfeited under this subchapter

shall be used to pay all proper expenses of the proceedings

for forfeiture and sale including expenses of seizure, main-

tenance of custody, advertising, and court costs. The

Attorney General shall forward to the Treasurer of the

United States for deposit in accordance with section 524(c)

of Title 28 any amounts of such moneys and proceeds re-

maining after payment of such expenses.

Forfeiture of Schedule I Substances

(f) All controlled substances in schedule I that are

possessed, transferred, sold, or offered for sale in violation

of the provisions of this subchapter shall be deemed contra-

band and seized and summarily forfeited to the United

States. Similarly, all substances in schedule 1, which are

seized or come into the possession of the United States, the

owners of which are unknown, shall be deemed contraband

and summarily forfeited to the United States.

Plants

(g)(1) All species of plants from which controlled sub-

stances in schedules I and IL may be derived which have

been planted or cultivated in violation of this subchapter,

or of which the owners or cultivators are unknown, or

which are wild growths, may be seized and summarily

forfeited to the United States.

(2) The failure, upon demand by the Attorney General

or his duly authorized agent, of the person in occupancy or

in control of land or premises upon which such species of

17a

plants are growing or being stored, to produce an appro-

priate registration, or proof that he is the holder thereof,

shall constitute authority for the seizure and forfeiture.

(3) The Attorney General, or his duly authorized agent,

shall have authority to enter upon any lands, or into any

dwelling pursuant to a search warrant, to cut, harvest,

earry off, or destroy such plants.

(h) All right, title, and interest in property described

in subsection (a) of this section shall vest in the United

States upon commission of the act giving rise to forfeiture

under this section.

(i) The filing of an indictment or information alleging

a violation of this subchapter or subchapter II of this

chapter which is also related to a civil forfeiture proceeding

under this section shall, upon motion of the United States

and for good cause shown, stay the civil forfeiture pro-

ceeding.

(j) In addition to the venue provided for in section

1395 of Title 28 or any other provision of law, in the case of

porperty of a defendant charged with a violation that is the

basis for forfeiture of the property under this section, a

proceeding for forfeiture under this section may be brought

in the judicial district in which the defendant owning such

property is found or in the judicial district in which the

criminal prosecution is brought.

(Pub. L. 91-513, Title II, § 511, Oct. 27, 1970, 84 Stat. 1276;

Pub. L. 95-633, Title II, § 301(a), Nov. 10, 1978, 92 Stat.

3777; Pub. L. 96-132, § 14, Nov. 30, 1979, 93 Stat. 1048;

Pub. L. 98-473, Title II, §§ 306, 309, 518, Oct. 12, 1984,

98 Stat. 2050, 2051, 2075.)

18a

1989 AMENDMENTS

§ 881. Forfeitures

(a) Subject property. [Introductory matter unchanged |

(1), (2) [Unchanged]

(3) All property which is used, or intended for use, as a

container for property described in paragraph (1), (2),

or (9).

(4) All conveyances, including aircraft, vehicles, or

vessels, which are used, or are intended for use, to

transport, or in any manner to facilitate the transpor-

tation, sale, receipt, possession, or concealment of

property described in paragraph (1), ( 2),or (9), except

that—

(A) no conveyance used by any person as a common

carrier in the transaction of business as a common

carrier shall be forfeited under the provisions of this

section unless it shall appear that the owner or other

person in charge of such conveyance was a consent-

ing party or privy to a violation of this title or title

Ill;

(B) no conveyance shall be forfeited under the pro-

visions of this section by reason of any act or omis-

sion established by the owner thereof to have been

committed or omitted by any person other than such

owner while such conveyance was unlawfully in the

possession of a person other than the owner in viola-

tion of the criminal laws of the United States, or of

any State; and

(C) no conveyance shall be forfeited under this

paragraph to the extent of an interest of an owner,

by reason of any act or omission established by that

owner to have been committed or omitted without

the knowledge, consent, or willful blindness of the

owner.

19a

(5), (6) [Unchanged]

(7) All real property, including any right, title, and

interest (including any leasehold 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 interest 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.

(8) All controlled substances which have been possessed

in violation of this title.

(9) All listed chemicals, all drug manufacturing equip-

ment, all tableting machines, all encapsulating ma-

chines, and all gelatin capsules, which have been im-

ported, exported, manufactured, possessed, distributed,

or intended to be distributed, imported, or exported, in

violation of a felony provision of this title or title ITI.

(b) Seizure pursuant to Supplemental Rules for Certain

Admiralty and Maritime Claims. Any property subject to

civil forfeiture to the United “tates under this title may be

seized by the Attorney General upon process issued pur-

suant to the Supplemental Rules for Certain Admiralty and

Maritime Claims by any district court of the United States

having jurisdiction over the property, except that seizure

without such process may be made when—

(1)-(3) [Unchanged]

(4) the Attorney General has probable cause to believe

that the property is subject to civil forfeiture under

this title.

20a

In the event of seizure pursuant to paragraph (3) or (4) of

this subsection, proceedings under subsection (d) of this

section shall be instituted promptly.

The Government may request the issuance of a warrant

authorizing the seizure of property subject to forfeiture

under this section in the same manner as provided for a

search warrant under the Federal Rules of Criminal Pro-

cedure.

(c) Custody of Attorney General. Property taken or de-

tained under this section shall not be repleviable, but shall

be deemed to be in the custody of the Attorney General,

subject only to the orders and decrees of the court or the

official having jurisdiction thereof. Whenever property is

seized under any of the provisions of this title, the Attorney

General may—

(1), (2) [Unchanged]

(3) require that the General Services Administration

take custody of the property and remove it, if prac-

ticable, to an appropriate location for disposition in

accordance with law.

(d) Other laws and proceedings applicable. The provisions

of law relating to the seizure, summary and judicial for-

feiture, and condemnation of property for violation of the

customs laws; the disposition of such property or the pro-

ceeds from the sale thereof; the remission or mitigation of

such forfeitures; and the compromise of claims shall apply

to seizures and forfeitures incurred, or alleged to have been

incurred, under any of the provisions of this title, insofar as

applicable and not inconsistent with the provisions hereof;

except that such duties as are imposed upon the customs

officer or any other person with respect to the seizure and

forfeiture of property under the customs laws shall be

performed with respect to seizures and forfeitures of prop-

erty under this title by such officers, agents, or other

2la

persons as may be authorized or designated for that pur-

pose by the Attorney General, except to the extent that

such duties arise from seizures and forfeitures effected by

any customs officer.

(e)(1) Disposition of forfeited property. Whenever prop-

erty is civilly or criminally forfeited under this title the

Attorney General may—

(A) retain the property for official use or, in the

manner provided with respect to transfers under sec-

tion 616 of the Tariff Act of 1930, transfer the property

to any Federal agency or to any State or local law

enforcement agency which participated directly in the

seizure or forfeiture of the property;

(B) sell any forfeited property which is not required to

be destroyed by law and which is not harmful to the

public;

(C) require that the General Services Administration

take custody of the property and dispose of it in ac-

cordance with law;

(D) forward it to the Bureau of Narcotics and Danger-

ous Drugs for disposition (including delivery for

medical or scientific use to any Federal or State agency

under regulations of the Attorney General) ; or

(KE) transfer the forfeited personal property or the

proceeds of the sale of any forfeited personal or real

property to any foreign country which participated

directly or indirectly in the seizure or forfeiture of the

property, if such a transfer—

(i) has been agreed to by the Secretary of State;

(ii) is authorized in an international agreement be-

tween the United States and the foreign country; and

(iii) is made to a country which, if applicable, has

been certified under section 481(h) of the Foreign

Assistance Act of 1961 [22 USCS § 2291(h)}.

ame

22a

(2)(A) The proceeds from any sale under subparagraph

(B) of paragraph (1) and any moneys forfeited under this

title shall be used to pay—

(i) all property expenses of the proceedings for for-

feiture and sale including expenses of seizure, main-

tenance of custody, advertising, and court costs; and

(ii) awards of up to $100,000 to any individual who

provides original information which leads to the

arrest and conviction of a person who kills or kid-

naps a Federal drug law enforcement agent. Any

award paid for information concerning the killing or

kidnapping of a Federal drug law enforcement agent,

as provided in clause (ii), shall be paid at the discre-

tion of the Attorney General.

(B) The Attorney General shall forward to the

Treasurer of the United States for deposit in accordance

with section 524(c) of title 28, United States Code, any

amounts of such moneys and proceeds remaining after

payment of the expenses provided in subparagraph (A),

except that, with respect to forfeitures conducted by the

Postal Service, the Postal Service shall deposit in the

Postal Service Fund, under section 2003(b)(7) of title 39,

United States Code, such moneys and proceeds.

(3) The Attorney General shall assure that any prop-

erty transferred to a State or local law enforcement agency

under paragraph (1)(A)—

(A) has a value that bears a reasonable relationship

to the degree of direct participation of the State or local

agency in the law enforcement effort resulting in the for-

feiture, taking into account the total value of all property

forfeited and the total law enforcement effort with respect

to the violation of law on which the forfeiture is based; and

(B) is not so transferred to cireumvent any require-

ment of State law that prohibits forfeiture or limits use or

23a

disposition of property forfeited to State or local agencies.

(f) Forfeiture of schedule I or II substances. (1) All eon-

trolled substances in schedule I or IT that are possessed,

transferred, sold, or offered for sale in violation of the

provisions of this title shall be deemed contraband and

seized and summarily forfeited to the United States. Sim-

ilarly, all substances in schedule I or II, which are seized

or come into the possession of the United States, the owners

of which are unknown, shall be deemed contraband and

summarily forfeited to the United States.

(2) The Attorney General may direct the destruction of

all controlled substances in schedule I or II seized for vio-

lation of this title under such circumstances as the Attorney

General may deem necessary.

(g) [Unchanged]

(h) Property title, ete. vested in United States. All right,

title, and interest in property described in subsection (a)

shall vest in the United States upon commission of the act

giving rise to forfeiture under this section.

(i) Stay of civil proceeding. The filing of an indictment

or information alleging a violation of this title or title ITI,

or a violation of State or local law that could have been

charged under this title or title II, which is also related to

a civil forfeiture proceeding under this section shail, upon

motion of the United States and for good cause shown, stay

the civil forfeiture proceeding.

(j) Venue. In addition to the venue provided for in section

1395 of title 28, United States Code [28 USCS § 1395], or

any other provision of law, in the case of property of a

defendant charged with a violation that is the basis for

forfeiture of the property under this section, a proceeding

for forfeiture under this section may be brought in the

judicial district in which the defendant owning such prop-

erty is found or in the judicial district in which the criminal

prosecution is brought.

24a

[k](1) Functions. The functions of the Attorney General

under this section shall be carried out by the Postal Service

pursuant to such agreement as may be entered into between

the Attorney General and the Postal Service.

(As amended Oct. 12, 1984, P. L. 98-473, Title I, Ch. II,

Part B, § 306 Part C, § 309, Ch V, § 518, 98 Stat. 2050, 2051,

2075; Oct. 27, 1986, P. L. 99-570, Title I, Subtitle A,

§ 1006(c), Subtitle Q, § 1865, Subtitle U. § 1992, 100 Stat.

3207-7, 3207-54, 3207-59; Nov. 10, 1986, P. L. 99-646, § 74,

100 Sat. 3618; Nov. 18, 1988, P. L. 100-690, Title V, Subtitle

C, Ch 1, § 5105, Title VI, Subtitle A, § 6059, Subtitle B,

§§ 6074, 6075, 6077(a), (b), Subtitle H, § 6253, 102 Stat.

4301, 4320, 4323, 4324, 4363.)

25a

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF KENTUCKY

AT LOUISVILLE

No. C 84-0735-L(B)

Unirep Srates or AMERICA - - - . Plaintiff

v.

$790,900 In U.S. Currency - - - - Defendant

MEMORANDUM AND ORDER—Entered January 21, 1985

This complaint for forfeiture, Title 28 U.S.C. Section

1355, is before the Court on the motion of certain parties

in interest to dismiss or, in the alternative, for summary

judgment.

The claimants were named as defendants in a multi-

count indictment charging them and numerous other per-

sons with drug-related offenses.

On or about March 1, 1982, a search warrant was exe-

cuted on a lock box at First National Bank’s Middletown

branch. The box was leased to James and Mona Ragland,

who were among the defendants named in the indictment.

In the box was a number of envelopes with the names Larry

Suddeth, Carson Lackhart, Royce Dossey, Steve Phillips

and Robin Ragland on them. The envelopes contained a

total of $75,900.00 which is the subject of this forfeiture

action.

The thrust of claimants’ motions is aimed at what they

term is the “inordinate and unjustified” delay of 29 months

between the seizure of the money and the commencement

of this action.

26a

In United States v. $8,850.00, __ U.S. —, 103 S.Ct. 2005

(1983), the Court utilized the test developed in Barker v.

Wingo, 407 U.S. 514, 92 S.Ct. 2182 (1972), to determine the

reasonableness of a delay in instituting forefeiture pro-

ceedings: “The Barker test involves a weighing of four

factors: length of delay, the reason for the delay, the de-

fendant’s assertion of his right, and prejudice to the de-

fendant.” —_ U.S. at —, 103 S.Ct. at 2012.

In the case before this Court there were 30 defendants.

As trial time approached those defendants before the

Court, with two exceptions, changed their pleas of not

guilty to pleas of guilty. The two exceptions were John

Atnip and Jerry Tosh.

Atnip was tried and found guilty by the jury. After

exhausting he appeals, he commenced the service of his

sentence. At his trial the currency in question was intro-

duced as evidence.

Tosh has managed to avoid his day of reckoning by

delaying tactics involving his repeated changes of counsel.

His case is presently set for trial February 26, 1985, and

the Court is informed that the currency will be introduced |

as evidence at the trial.

This action was filed July 12, 1984, a week before one

of Tosh’s counsel changes. The United States argues that

delay alone is not sufficient ground for dismissal, and the

Court agrees.

The $8,850 court! established flexible requirements for

satisfying due process. It rejected the argument that de-

lays alone mandated dismissal.

Applying the standards quoted above compels the con-

clusion that the reason for delay—the pending trials of

1An unfortunate appellation to give to the Supreme Court of

the United States. By analogy, this Court becomes a $75,900.00

court.

ae

27a

Atnip and Tosh as well as the possibility, however remote,

of the apprehension of other defendants — satisfies the

second test.

Whether claimants asserted their rights is arguable.

There was a motion to suppress the evidence and return

it to defendants in the criminal action. In denying the

suppression motion, the Court failed to address specifi-

cally that portion of the motion seeking to have the money

returned to the defendants. It would strain logic beyond

limits to argue that the Court on the one hand would deny

a suppression motion and on the other hand direct that the

evidence be returned to defendants. We further note that

claimants did not file an equitable action seeking an order

compelling the filling of the forfeiture action for return

of the seized property. The failure to use this remedy

can be taken as some indication that claimants did not de-

sire an early judicial hearing. $8,850, supra, __ U.S. —_,

103 S.Ct. at 2014.

Finally, we note that claimants have made no showing

of prejudice, such as the loss of witnesses or other impor-

tant evidence.

The Court concludes that the United States has satis-

fied the criteria of $8,850 and the motion to dismiss and the

motion for summary judgment will be denied.

Ir Is So Orperep this 21st day of January, 1985.

(s) Thomas A. Ballantine, Jr.

THOMAS A. BALLANTINE, JR.

United States District Judge

Copies to counsel

28a

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF KENTUCKY

AT LOUISVILLE

No. C 84-0735-L(B)

Unirep States or AMERICA - - - - Plaintiff

v.

$75,900 In U.S. Currency - - - - Defendant

—Consolidated with—

No. C 84-1060-L(B)

Unitep States or AMERICA - - . - Plaintiff

v.

$8,000 In U. S. Currency - - - - Defendant

MEMORANDUM AND ORDER—

Entered September 16, 1986

MEMORANDUM CONTAINING FINDINGS OF FACT

AND CONCLUSIONS OF LAW

Following an undercover investigation of drug viola-

tions by a number of individuals, Jefferson County Police

and Drug Enforcement Agents procurred search warrants

for a house at 9110 Linn Station Road, the residence of

James W. and Mona Ragland, and for a house at 8905

Thelma Lane, the residence of Larry Suddeth and Robin

Ragland. The search warrants were executed simultan-

eously on March 1, 1982.

Among the items seized at Linn Station was over

$13,000 in currency. At Thelma Lane currency in excess

of $177,000 was seized.

29a

On March 2, 1982, Special Agent Clifford Best of DEA

procured and execuied two search warrants for the search

of safety deposit boxes at Middletown branch of the First

National Bank and the Oxmoor branch of Citizens Fidelity

Bank. At the First National Bank Special Agent Best

seized $75,900 from the box rented to James Ragland and

Mona Ragland. At Citizens Fidelity Bank Special Agent

Best seized $8,000 from the box rented to Suddeth and

Robin Ragland.

The grand jury returned a 27-count indictment against

30 defendants, charging a drug-related conspiracy and a

number of substantive counts. Some of the defendants

absconded and remain at large. A number of defendants

entered pleas of guilty and two defendants, John Atnip and

Jerry Tosh, were found guilty by a jury.’

On August 30, 1982, the Court denied Suddeth’s motion

to suppress and to return the property seized.

On May 3, 1984, the Court denied a renewed motion

by the defendants for a return of the property seized.

On July 12, 1984, a complaint for the forfeiture of the

$75,900 was filed by the United States and on October 12,

1984, a complaint for the forfeiture of the $8,000 was filed.

The actions were later consolidated.

Movants appealed the order denying their motion for

return of the property and the United States Court of

Appeals for the Sixth Circuit remanded the case with di-

rections to this Court to make findings of fact and con-

clusions of law in light of Buker v. Wingo, 407 U.S. 514,

92 §.Ct. 2182 (1972), as applied to United States v. $8,850,

461 U.S. 555, 108 S.Ct. 2005 (1983).

While the appeal was pending and before the issuance

of a mandate by the Court of Appeals, this Court, by

memorandum and order dated January 15, 1985, addressed

'Tosh fled after his conviction and remaius at large.

30a

the Barker and $8,850 issues. That memorandum and

order is incorporated herein by reference.”

The $8,850 court addressed the factors to be considered

in applying the Barker test:

“In applying the Barker balancing test to this sit-

uation, the overreaching factor is the length of the

delay. As we said in Barker, the length of the delay

_“$. 48 to some extent a triggering mechanism.’ [407 U.S.,

ee at 530, 92 S.Ct. at 2192]. Little can be said on when

- a delay becomes presumptively improper, for the de-

termination necessarily depends on the facts of the

particular case. Our inquiry is the constitutional one

of due process; we are not establishing a statute of

limitations. Obviously, short delays—of perhaps a

month or so—need less justification than longer delays.

We regard the delay here—some 18 months—as quite

significant. Being deprived of this substantial sum of

money for a year and a half is undoubtedly a signifi-

cant burden.

* * * a

Pending criminal proceedings present similar justi-

fications for delay in instituting civil forfeiture pro-

ceedings. A prior or contemporaneous civil proceed-

ing could « ~ tantially hamper the criminal proceed-

ing, whic.—as here—may often include forfeiture as

part of the sentence. A prior civil suit might serve to

estop later criminal proceedings and may provide im-

proper opportunities for the claimant to discover the

details of a contemplated or pending criminal prose-

cution. Compare Federal Rule of Civil Procedure

26(b) with Federal Rule of Criminal Procedure 16. In

“For reasons not entirely clear, that memorandum and order

was not brought to the attention of the Court of Appeals.

3la

some circumstances, a civil forfeiture proceeding would

prejudice the claimant’s ability to raise an inconsistent

defense in a contemporaneous criminal proceeding.”

461 U.S. at 565, 567, 103 S.Ct. at 2012, 2013.

Applying this language to the matter sub judice the

Court notes that at the time the forfeiture action was filed

Tosh’s trial had not been held. Other defendants were still

at large,* and while the chances of apprehending some of

the South American defendants seemed remote, defendants

who were citizens of the United States may very well yet

be apprehended.

The Court concludes that the delay in commencing the

forfeiture action is justified by the complexities of this

case. As we have noted elsewhere, defendant Tosh em-

barked on a course of dilatory tactics to avoid trial. He

repeatedly changed counsel on the eve of trial and made

repeated efforts to retain counsel whom the Court had dis-

qualified following a Flanagan hearing* at which Tosh re-

fused to waive any possible conflict of interest. F.R.Cr.P

44(c).

The Court therefore finds that the motion of the de-

fendants for return of the seized property should be

denied and that the currency should be forfeited to the

United States.

The foregoing memorandum constitutes the Court’s

findings of fact and conclusions of law. F.R.Civ.P. 52(a).

‘The Court understands that one fugitive defendant, Joseph

Tucker Webb, III, a/k/a ‘‘ Mike’’, has recently been apprehended

in Florida.

‘United States v. Flanagan, 527 F. Supp. 902 (E.D. Pa. 1981),

aff’d, 679 F.2d 107 (38rd Cir. 1982), rev’d, __ U.S. __, 104 S.Ct.

1051 (1984).

32a

An appropriate order has been entered this 16th day of

September, 1986.

(s) Thomas A. Ballantine, Jr.

THOMAS A. BALLANTINE, JR.

United States District Judge

Copies to counsel

33a

NOT POR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

No. 86-6063

No. 86-6064

Unitep States or America, - - Plaintiff-Appellee,

v.

$75,900 In Unitrep States CurRENcY;

$8,000 In Unitrep States Currency;

and Joun Dogz,” - oa * - Defendants,

James W. Ractanp; Mona Racuianp;

Larry SupvetH, and MuHa tt,

Turner, HorrmMan and TRIPLett, - - Defendants,

Non-Party Appellants.

On Appeal from the United States District Court

For the Western District of Kentucky

OPINION—Filed December 14, 1987

Berore: Keitu, Jones and Mitpurn, Circuit Judges.

Per Curtam. Appellants James W. Ragland, Mona

Ragland, and Larry Suddeth appeal from the district court

ordering forfeiture of currency seized during the course

of a narcotics investigation. For the reasons that follow,

we affirm,

1.

On March 1, 1982, two state search warrants were exe-

cuted on the homes of James and Mona Ragland on Lynn

34a

Station Road and Larry Suddeth on Thelma Lane in

Louisville, Kentucky. A safety deposit box key numbered

509 was seized from the Ragland residence, and a key

numbered 386 was seized from the Suddeth residence.

On March 3, 1982, federal search warrants were exe-

cuted on the safety deposit boxes. Box number 509 con-

tained $75,900.00 in United States cureney; box number

389 contained $8,000.00 in United States currency.

On April 27, 1982, appellants and twenty-seven other

defendants were indicted on charges of conspiracy to dis-

tribute cocaine and marijuana. Appellants pleaded guilty

on May 16, 1983. Nevertheless, the seized currency played

a role in the trials of several other defendants. It was

admitted at the trial of codefendant John Atnip in May

1983. At the trial, a government witness testified that

money generated by the conspiracy was packaged in stacks

and stored in safety deposit boxes. The currency was also

expected to be used at the trial of defendant Jerry Tosh,

which did not occur until May 1985.

State and federal forfeiture proceedings have been ini-

tiated as a result of the searches. Currency found in

various briefcases during the execution of the state war-

rants are the subject of state forfeiture proceedings. Civil

forfeiture proceedings against the currency found in safety

deposit boxes numbered 386 and 509 are the product of a

tortured procedural history.

On July 7, 1982, Larry Suddeth filed a motion to sup-

press and for return of evidence pursuant to Rule 41, Fed-

eral Rules of Criminal Procedure. He sought return of

property seized from his residence and from safety deposit

box number 386.

On August 30, 1982, the district court ruled that all

motions would be treated as thongh made on behalf of all

defendants. On the same date, Suddeth’s motion to sup-

press was denied.

35a

On May 3, 1984, appellants filed a renewed motion for

returns of the seized property and a request for hearing.

The motion was denied by order entered June 4, 1984.

On July 12, 1984, the United States filed a complaint

for forfeiture of the $75,900.00 found in safety deposit box

number 509. United States v. $75,900 in United States Cur-

rency, No. C-84-0735-L(B) (W.D. Ky. 1984). Forfeiture

proceedings against the $8,000.00 found in safety deposit

box number 386 were initiated on October 12, 1984. United

States v. $8,000.00 in United States Currency, No. C-84-

1660-L(A) (W.D. Ky. 1984).

In United States v. $75,000.00, appellants filed a motion.

to dismiss on the ground that the government had unrea-

sonably delayed in prosecuting the forfeiture action. The

motion was denied by the district court on January 21, 1985.

On October 10, 1985, this court considered appellant’s

appeal from the district court’s order of June 4, 1984, de-

nying their motion for return of property under Rule 41(e),

Federal Rules of Criminal Procedure. We directed a re-

mand for consideration of appellants’ claim in light of the

Supreme Court’s decision in United States v. Eight Thou-

sand Eight Hundred & Fifty Dollars ($5,850) in United

States Currency, 461 U.S. 555 (1983).

On October 16, 1985, the district court granted the gov-

ernment’s motion for summary judgment in both civil for-

feiture proceedings. On September 16, 1986, the district

court, acting pursuant to the remand, entered orders in the

civil forfeiture proceedings and the criminal proceeding in

which is concluded that the government had not delayed

unreasonably in initiating forfeiture proceedings. Defend-

ants now appeal, alleging that the judgment of the district

court is in error.’

'Defendants argue that the judgment of the district court ecan-

not be upheld because the court failed to comply with this court’s

(Continued on next page.)

36a

Il.

In United States v. Eight Thousand Eight Hundred &

Fifty Dollars ($8,850) in United States Currency, 461 U.S.

555 (1983), the Court held that a claimant’s right to due

process may be violated by unreasonable delay in the initia-

tion of civil forfeiture proceedings. Id.; see generally D.

Smith, Prosecution & Defense of Forfeiture Cases para-

graph 12.01, at 12-2 (1986). Four factors are relevant in

making this determination:

(1) the length of delay;

(2) the reason for the delay;

(3) the claimant’s assertion of a right to a judicial

determination of his interest in the property; and

(4) prejudice to the claimant.

In the present case, approximately twenty-nine months

elapsed between the seizure and the initiation of forfeiture

proceedings. We conclude that delay of this length is suf-

ficient to trigger inquiry into the remaining factors. See

$8,850, 461 U.S. at 565 (eighteen-month delay sufficient to

trigger inquiry into remaining factors); United States v.

Forty-Seven Thousand Nine Hundred Eighty Dollars ($47,-

980) in Canadian Currency, 804 F.2d 1085, 1088-89 (9th Cir.

1986) (fourteen-month delay sufficient to trigger inquiry

into remaining factors), cert. denied, 107 S.Ct. 2469 (1987).

The second relevant factor is the reason for delay.

Cases decided in the aftermath of $8,850 have consistently

recognized that pending criminal proceedings may justify

(Continued from preceding page.)

order to precisely delineate the property that was subject to for-

feiture. On remand, the district court ordered forfeiture only of

the currency found in the safety deposit boxes. Thus, we reject

defendants’ argument that a remand for clarification is in order.

Be i i i sae

iad

37a

delay in the initiation of civil forfeiture proceedings. For

example, in United States v. United States Treasury Bills

Totaling $160,916.25, 750 F.2d 900 (11th Cir. 1985) (per

curiam), Georgia Bureau of Investigation officials seized

currency from an airplane crash on November 7, 1980.

Following the crash, Georgia and federal officials began a

narcotics investigation which culminated in December 1981

with the conviction of eleven defendants.

In January 1982, the government initiated forfeiture

proceedings against the currency. Claimant Sun Bank of

Miami, as representative of the estate of one of the pas-

sengers killed iu the crash, argued that the government

unreasonably delayed initiation of the forfeiture proceed-

ing. The court rejected this argument.

In United States v. $8,850, the Supreme Court held that

diligent pursuit of pending criminal proceedings pre-

sents strong reasons for delay in instituting civil for-

feiture proceedings,

The district court determined that these considera-

tions were significant in this case. The court noted

the period between November 1980 and January 1982

was consumed with conducting a massive criminal in-

vestigation and prosecution of the very criminal ac-

tivity that generated the funds. Moreover, there is

nothing to indicate that the Government’s investigation

and subsequent criminal case was not pursued with

diligence.

750 F.2d at 902. In the present case, as in Treasury Bills,

the delay was caused by “a massive criminal investigation

and prosecution of the very criminal activity that gener-

ated the funds.” Jd. Accordingly, we agree with the dis-

trict court that the delay in the present case was justified.

The third factor, which focuses on the claimant’s asser-

tion of a right to the property, weighs against the govern-

38a

ment in the present case. Appellants filed motions for

return of the seized property. This constitutes an asser-

tion of a right to a judicial determination within the mean-

ing of $8,850. 461 U.S. at 568-69

The final factor in the analysis is prejudice to the

claimant. In $8,850, the Court noted that “[t]he primary

inquiry here is whether the delay has hampered the claim-

ant in presenting a defense on the merits, through, for ex-

ample, the loss of witnesses or other important evidence.

Such prejudice could be a weighty factor indicating that

the delay was unreasonable.” 461 U.S. at 569. In the pres-

ent case, no such prejudice has been shown. Thus, evalua-

tion of this factor supports the decision of the district

court. See $8,850, 461 U.S. at 569-70; Treasury Bills, 750

F.2d at 902; United States v. Gne 1954 Rolls Royce Silver

Dawn, 777 F.2d 1358, 1362 (9th Cir. 1985).

In the final analysis, we conclude that claimants’ asser-

tion of their rights in the seized currency is outweighed by

the justification for delay occasioned by the ongoing crim-

inal investigation and the absence of prejudice to the claim-

ants. Thus, we find no error in the judgment of forfeiture.

ITT.

The judgment of the district court ordering forfeiture

of the $75,900.00 found in safety deposit box number 509

and the $8,000.00 found in box number 389 is AFFIRMED.

39a

JEFFERSON CIRCUIT COURT

TWELFTH DIVISION

No. 84CI 00406

Kk. G. Heim, Jr., in his official capacity as

Chief of the Jefferson County, Ken-

tucky Police Department - - - - Plaintiff

Vv.

One Hunprep Ninety-THREE THOUSAND

Turee Hunprep Eicuty-Seven Dotuars

AND Srxry-Seven Cents ($197,387.67) - Defendant

ORDER—Entered March 14, 1984

This case came on for a trial March 12, 1984 on plain-

tiff’s action to forfeit certain cash pursuant to KRS

218A.270. The plaintiff was represented by the Honorable

William T. Warner. The only defendant who answered or

appeared was the Honorable Charles Turner appearing for

G. Murray Turner, assignee of James W. Ragland, and the

Honorable Michael Spalding, Assistant U. S. Attorney,

who appeared on behalf of the Internal Revenue Service.

The plaintiff announced ready but the defendant,

Turner, advised the Court that he desired to have the case

reassigned in order that G. Murray Turner could appear;

the latter being in trial in another case. All parties present

then agreed thet this case may proceed to hearing reserving

ruling on any interest in the money, if any, claimed by

G. Murray Turner, assignee of James Ragland and the

United States of America (Internal Revenue Service). All

parties being in agreement, the Court sustained the Motion

to proceed with the hearing.

40a

FINDINGS OF FACT

On March 1, 1982, Jefferson County Detective, Gary

Epperson, executed a search warrant on real estate located

at 8105 Thelma Lane and also at 9110 Linn Station Road,

also of Jefferson County, Kentucky. This search was the

culmination of an investigative effort conducted by the

Kentucky State Police, the Jefferson County Police Depart-

ment and other authorities which had begun in the latter

part of 1981.

The investigation, conducted by Gary Epperson, dis-

closed that there was a drug operation which worked inter-

state. Drugs (cocaine and marijuana) were sent to Ken-

tucky on consignment from Florida to Mr. James Ragland

and his friends. These drugs would be distributed by Mr.

Ragland to others who would retail them to persons on the

street. When the drugs were purchased, the money would

then flow back through the retailers to Mr. Ragland, who in

turn would forward the money to his contacts in Florida.

The investigation showed that Ragland used several brief-

eases to carry the money. The money would be a bundle

in $1,000 packages and then the $1,000 packages would in

turn be bundled together to make a package of $5,000. This

money was wrapped in this fashion apparently to facilitate

transfer. The investigation showed that Mr. Ragland’s

operation was conducted out of the residences located on

Thelma Lane and Linn Station Road.

The investigation further showed that the operation had

been conducted over a period of two (2) years and had

grossed somewhere in the neighborhood of $3,000,000 or

$4,000,000.

On the morning of the search, the police made entry by

warrant to the address at 8105 Thelma Lane. At that loca-

tion, the officers found the following:

dla

1. A briefcase containing $115,000. Packages were

wrapped first in $1,000 bundles and then in $5,000 packages.

The briefcase had a combination lock and it was found

underneath a bed in the bedroom occupied by Ragland’s

sister and her boyfriend, Larry Suddeth. Underneath the

same bed, there was another identical briefcase which con-

tained $39,480. This was wrapped similarly to the money

wrapped in the first briefcase.

2. An additional $21,876 was found in a dresser drawer

in the same room. Mixed with this money, there were

receipts for a gun and travel receipts indicating travel

from Jefferson County to Florida.

3. In the same dresser, the police found $215.00 in

loose cash; $464 in Mr. Suddeth’s wallet and $24.67 (coins)

in a bank bag located in an adjacent room.

The total sum found at this address was $220,579.67.

In an adjacent room, the police discovered six (6)

pounds of 99% pure cocaine and five-hundred (500) pounds

of marijuana. There were plastic bags and also a large box

of manitol which is commonly used to dilute cocaine.

On the same day, a search warrant was executed by

Detective Gary Epperson and others on the premises known

as 9110 Linn Station Road which was occupied by one Billy

Ragland and Mona Ragland, his wife. In the execution of

the search warrant, many records concerning the drug

operation were seized and also the following cash:

1. In Mona Ragland’s purse, the sum of $1,292.

2. On a nightstand in the bedroom, numerous bills in

denominations of 20’s, 10’s, 5’s and others totaling $8,600.

3. In the chest of drawers in the bedroom which con-

tained a blue book and powder identified as cocaine together

with cash in the sum of $986.

4. In Ragland’s blue jeans in the bedroom, the sum of

$2,500.

42a

The total sum found at this address was $13,588.00.

On the same day of the searches as set out above, the

Jefferson County Police had under surveillance a vehicle

that was operated by one Robert Lyon. This automobile

had been seen at the Thelma Lane address, had come out of

the garage where certain drugs were found and was stopped

by the police pursuant to the search warrant. Upon search-

ing the vehicle, 150 pounds of marijuana was found in the

trunk of the car together with one-quarter ounce of cocaine

and the sum of $2,740 in cash. This sum is a subject of the

forfeiture action.

The Court finds that on March 1, 1982, the Jefferson

County Police Department seized monies acquired from

transactions involving control substances, including co-

caine, which were being dispensed and distributed through

the locations known as 8105 Thelma Lane and 9110 Linn

Station Road located in Jefferson County, Kentucky.

The Court further finds tnat these monies were found

upon the person and premises of the defendants, James W.

Ragland, Billy Ragland, Mona Ragland, Larry Suddeth,

Robin Ragland and Robert Lyons, all persons involved in

transactions with controlled substances proscribed per

KRS 218A.270.

CONCLUSIONS OF LAW

1. The Court has jurisdiction over the persons and

property including the $197,387.67 herein. (KRS 218A.-

270) (F)

2. That the $197,387.67 was seized by the Jefferson

County Police Department, a law enforcement agency, upon

process issued by this Court having jurisdiction over the

property. (KRS 218A.270)

3. That the total sum of $197,387.67 seized by the

Jefferson County Police from the premises at 8105 Thelma

Lane and 9110 Linn Station Road and from the person of

Robert Lyon should be forfeited pursuant to KRS 218A.270

43a

subject however, to any interest if any therein by G. Murray

Turner, as assignee of James William Ragland and Mona

F. Ragland, and any interest claimed in said money by the

United States of America.

ORDER

1. The sum of $197,387.67 seized by the Jefferson

County Police on March 1, 1982, be and the same is hereby

forfeited to the Commonwealth of Kentucky pursuant to

KRS 218A.270, subject to any interest in said property as

may be held by G. Murray Turner, assignee of James

William and Mona F. Ragland, and by the United States

of America (Internal Revenue Service).

2. This matter is set down for a hearing before the

Court, without a jury, on May 17, 1984, at 10:00 a.m. to

determine what interest, if any, that G. Murray Turner

and/or the United States of America may have in the

$197,387.67.

(s) Edwin A. Schroering

EDWIN A. SCHROERING, JR., Judge

Jefferson Cireuit Court, 12th Division

Copy To:

William T. Warner

Charles Turner/G. Murray Turner

Michael Spalding

dha

AMENDED ORDER—FEntered May 8, 1984

The Order entered March 14, 1984 herein is hereby set

aside, and the following entered and substituted for the

same :

1. The sum of $193,387.67 seized by the Jefferson

County Police on March 1, 1982, be and the same is hereby

forfeited to the Jefferson County, Kentucky Police Depart-

ment pursuant to KRS 218A.270, subject to any interest

in said property as may be held by G. Murray Turner,

assignee of James William and Mona F. Ragland, and by

the United States of America (Internal Revenue Service).

2. This matter is set down for a hearing before the

Court, without a jury, on May 17, 1984, at 10:00 a.m. to

determine what interest, if any, that G. Murray Turner

and/or the United States of America may have in the

$193,387.67.

3. This Order shall have no effect upon the rights of

the United States of America (Internal Revenue Service)

or G. Murray Turner, assignee of James William Ragland

and Mona F’. Ragland, his wife, and Larry Suddeth.

(s) Edwin A. Schroering

EDWIN A. SCHROERING, JR., Judge

Copy To:

William T. Warner

Michael Spa'ding

G. Murray Turner

Ha

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF KENTUCKY

AT LOUISVILLE

No. C 84-1271-L(B)

Bossy Crovecn, Et Al. - - - - - Plaintiff s

Vv.

One Hunprep Ninety-Turee THovsanp

Turee Hunpvrep Eicuty-Seven Doivars

AND Srxty-Seven Cents, Et Al. - - Defendants

ORDER—Fntered June 7, 1988

For the reasons set forth in the memorandum filed this

date,

Ir Is Onverep that the title to $193,387.67, properly

seized by the Jefferson County Police on March 1, 1982, is

vested in Bobby Crouch, Chief of the Jefferson County

Police, and the claims of the United States (IRS) and

G. Murray Turner be and they hereby are dismissed with

prejudice.

There is no just reason for delay, and this is a final and

appealable order.

This 7th day of June, 1988.

(s) Thomas A. Ballantine, Jr.

THOMAS A. BALLANTINE, JR.

United States District Judge

Copies to counsel

doa

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF KENTUCKY

AT LOUISVILLE

No. C 84-1271-L(B)

Bossy Crovcu et al. - : - - : Plaintiffs

v.

One Hunprep Ninety-Turee THousanp

Turee Hunprep Eicuty-Seven Doivars

AND Sixty-Seven Cents, et al. - - Defendants

MEMORANDUM—Fntered June 7, 1988

On January 17, 1984, E.G. Helm, Jr.,’ formerly the

Chief of the Jefferson County Police Department, filed this

action in Jefferson Circuit Court for forfeiture under KRS

218A.270.2. The sum of $195,387.67 was seized when the

criminal defendants were arrested on March 1, 1982, on

drug trafficking charges. Shortly thereafter while the de-

fendants were incarcerated, the defendants William and

Mona Ragland signed a document entitled “assignment,”

purportedly assigning all of their rights, title and interest

to funds totalling $306,278.00 to the law firm of G. Murray

Turner.

In March, 1984, the Internal Revenue Service inter-

vened, and on March 12, 1984, after a bench trial, Jefferson

'Bobby Crouch, the present Chief of Police, has been substi-

tuted as plaintiff.

*Repealed effective July 13, 1954. KRS 215A.410, with similar

provisions, was enacted in its place.

47a

Cireuit Judge Edwin Schroering, Jr., entered findings of

fact and concluded that the sum of $197,387.67 had been

forfeited to the Jefferson County Police, “subject to any

interest in said property as may be held by G. Murray

Turner, assignee of James William and Mona F. Ragland,

and by the United States of America (Internal Revenue

Service).” The matter was set for a hearing to determine

what interest, if any, that Turner or the IRS may have.

That hearing was never concluded, however, as the case

was removed to this Court by the United States (I.R.S.)

on December 27, 1984.

On April 1, 1988, after holding a conference with the

parties, the Court issued a memorandum and order direct-

ing the parties to address the following issues:

1. Whether the Kentucky forfeiture statute, KRS

218A.270(1)(f), or the federal forfeiture statute, Title 21

U.S.C § 881(a)(6), is applicable.

2. Whether any order or judgment of the Jefferson

Circuit Court prior to removal is res judicata.

3. The order of priority of the claims of Turner and

the Jefferson County Police Chief.

4. The order of priority of the claims of Turner and

the Internal Revenue Service.

5. The validity of the assignment by James W. Rag-

land to Turner.

Turner is the only party who has not filed a memoran-

dum. The IRS concedes that Title 26 U.S.C. 6 6323(1) (3)

of the Internal Revenue Code creates an absolute priority

in favor of the County Police Chief, Bobby Crouch, as

against the federal tax lien.

“(3) Forfeitures.—-For purposes of this subchapter,

a forfeiture under local law of property seized by a

law enforcement agency of a State, county, or other

48a

local government subdivision shall relate back to the

time of seizure, except that this paragraph shall not

apply to the extent that under local law the holder of

an intervening claim or interest would have priority

over the interest of the State, county or other local

government subdivision in the property.”

The IRS concedes that “should the Court hold that the

funds were properly forfeited to the Jefferson County

Police Chief under Kentucky law, and that the Jefferson

County Police Chief has priority over Turner in those

funds, the case is over. The United States claims no pri-

ority in these funds as against the plaintiff [Crouch].”

(Memorandum of United States, p. 2.)

An assignee takes only the interest of his assignor.

Whayne Supply Co. Inc. v. Morgan Construction Co., Inc.,

Ky., 440 S.W. 2d 779 (1969) ; United States v. $11,580.00 in

U.S. Currency, 454 F.Supp. 376 (M.D. Fla. 1978). It is

undisputed that the assignment, or security interest, which-

ever it may be determined to be, occurred after the seizure

of the property while the criminal defendants were incar-

cerated. The leading case of United States v. Stowell, 133

U.S. 1, 10 S.Ct. 244, 247 (1980), is dispositive:

“The next question to be determined is from what

time the forfeiture takes effect. By the settled doc-

trine of this court, whenever a statute enacts that upon

the commission of a certain act specific property used

in or connected with that act shall be forfeited, the for-

feiture takes effect immediately upon the commission

of the act; the right to the property then vests in the

United States, although their title is not perfected un-

til judicial condemnation; the forfeiture constitutes a

statutory transfer of the right to the United States at

the time the offense is committed; and the condemna-

tion, when obtained, relates back to that time, and

49a

avoids all intermediate sales and alienations, even to

purchasers in good faith.”

In United States v. One 1975 Chevrolet, Etc., 495 F.

Supp. 737 (W.D. Mich. 1980), Stowell was cited with ap-

proval. That case involved facts similar to the one be-

fore this Court, in that the criminal defendant attempted

to make an assignment of his previously seized Blazer truck

to his attorney after his arrest, for “past legal services and

future legal services.” The Court quoted Stowell and held

the Blazer to have been forfeited at the time it was im-

properly used. See also Calero-Toledo v. Pearson Yacht

Leasmg Co., 416 U.S. 663, 94 S.Ct. 2080 (1974); Simons

v. United States, 541 F.2d 1351 (9th Cir. 1976); State of

Texas v. Donoghue, 302 U.S. 284, 290 58 S.Ct. 192, 195

(1937) (Cardozo, J. dissenting).

Forfeiture of conveyances that have been used—and

may be used again—in violation of the narcotics laws

fosters the purposes served by the underlying criminal

statutes, both by preventing further illicit use of the

conveyance and by imposing an economic penalty,

thereby rendering illegal behavior unprofitable.

Calero-Toledo, 418 U.S. at 686, 94 S.Ct. at 2093-2094.*

It is apparent, therefore, that the money had been prop-

erly forfeited and seized prior to the “assignment” to Tur-

ner, and that the criminal defendant then had no funds to

assign, under Stowell, supra.

‘There is some authority which mitigates the harshness of the

Stowell rule by holding that title is transferred to the government

at the time of seizure instead of the time of forfeiture. State of

Idaho v. One 1974 Green Targa Porsche Automobile, 112 Idaho

432, 732 P. 2d 670 (1986).

:

ae

50a

As for the issue suggested by Turner, dealing with the

res judicata effect of Judge Schroering’s opinion on March

14, 1984, and May 8, 1984, Title 28 U.S.C. § 1450 provides,

in pertinent part, that “{A]ll injunctions, orders, and other

proceedings had in such action prior to removal shall re-

main in full force and effect until dissolved or modified

by the district court.” The federal court “takes the case

up where the state court left off.” Granny Goose Foods,

Inc. v. Brotherhood of Teamsters and Auto TruckDrwers,

415 U.S. 423, 94 S.Ct. 1113, 1122 (1974), quoting from Dun-

can v. Gegan, 101 U.S. 810, 812, 25 L.Ed. 875 (1880). Once

a case has been removed, federal law governs the future

proceedings. Granny Goose, supra.

Because the IRS concedes that it has no interest in the

money as against a valid state forfeiture, it is unneces-

sary to resolve the 3-way dispute by discussing priorities,

filing, and notice requirements, which the United States

and Bobby Crouch have addressed briefly in their mem-

oranda.

It is the holding of this Court that all interest in the

funds were vested in the Chief of the Jefferson County

Police prior to the execution of the agreement between

Turner and the Raglands.

An appropriate order has been entered this 7th day of

June, 1988.

(s) Thomas A. Ballantine, Jr.

THOMAS A. BALLANTINE, JR.

United States District Judge

Copies to counsel