Court Opinion

ID: 6933789
Source: CourtListenerOpinion
Date Created: 2022-07-24 00:19:34.712124+00
Date Added: 2024-06-11T16:07:20.688117
License: Public Domain

BOGGS, Circuit Judge,
dissenting.
I believe that the majority has misper-ceived the holding of the Supreme Court in United States v. James Daniel Good Real Property, — U.S.-, 114 S.Ct. 492, 126 L.Ed.2d 490 (1993) and, in doing so, has wrongly overruled the clear precedent of this Circuit. I therefore dissent.
This case asks us to address a narrow, but nonetheless important, question. Does Raymond Durr have standing to contest the forfeiture of two pieces of real property? To have standing to contest a civil forfeiture of real property Durr must show two things. First, he must demonstrate statutory standing. Durr has done this by filing a timely verified claim. Second, Durr must have Article III standing, as he must in every action brought in a federal court.
As the court correctly notes, standing is a threshold issue in this Circuit. Not only do the cases cited in United States v. 37.29 Pounds of Semi-Precious Stones, 7 F.3d 480, 483 (6th Cir.1993), clearly state that standing is a threshold issue, but this court held in Semi-Precious Stones that “[a] person must have standing to become a claimant in a forfeiture action brought by the United States. A claimant must prove that it possessed an interest in the seized property sufficient to satisfy standing requirements in order to permit a federal court to jurisdic-*1473tionally recognize its entitlement to contest forfeiture.” Semi-Precious Stones, 7 F.3d at 483. This is the result reached in every Circuit that has addressed the issue. See, e.g., United States v. $191,910.00 U.S. Currency, 16 F.3d 1051 (9th Cir.1994); United States v. $38,570 United States Currency, 950 F.2d 1108, 1111 (5th Cir.1992); United States v. Real Property at 5000 Palmetto Dr., 928 F.2d 373, 375 (11th Cir.1991). See also David B. Smith, Prosecution and Defense of Forfeiture Cases ¶ 9.04, 9-62.7 (1994) (If the contrary were the law, “then persons with no interest whatsoever in seized property could make a handsome living filing claims”).
The issue, then, is whether Durr has standing to contest the seizure of the property. Absent standing, Durr cannot contest the government’s probable cause. The effect of Durr’s possession of bare legal title on his standing is clear. It is not enough. The Sixth Circuit’s prior holdings are unambiguous:
We hold that when the government establishes probable cause to believe that a claimant is merely a nominal or straw owner, as it has done here, a claimant cannot meet its burden of establishing standing to challenge a forfeiture by presenting proof of legal title alone. The claimant also must present evidence of dominion and control or other indicia of true ownership.
United States v. 526 Liscum Drive, 866 F.2d 213, 217 (6th Cir.1988). Therefore, under current Sixth Circuit jurisprudence we must determine whether there is probable cause to believe that Raymond Durr is a straw man.1 Clearly there is.
Does the purported transferor of the property, Solomon Israel a/k/a Marcus Richards, have a motive to seek a straw man? An Ohio court convicted Israel of felonious assault and discharge of an automatic pistol in 1978. Israel was convicted of possession of a controlled substance in 1985. He has also been arrested on three other occasions for narcotics violations. Informants implicated Israel in a drug conspiracy involving John Journe and Basim El-Amin. A jury convicted El-Amin of conspiracy to possess with intent to distribute five or more kilograms of cocaine. This conviction was the result of a controlled delivery of cocaine to El-Amin by the DEA. This Circuit dismissed his appeal. United States v. El-Amin, 979 F.2d 852 (6th Cir.1992). Journe was murdered, his body found in the trunk of a car in the parking lot at the Detroit Metropolitan Airport.2 A search warrant executed at Journe’s residence revealed financial records implicating Israel in a scheme designed to launder the proceeds from drug transactions. A search warrant executed at Israel’s home revealed an ability to spend a great deal of money with very little taxable income.
Durr claims that Israel owned a tailoring shop that, in certain seasons, made $4,000 a day. His federal tax returns list negative income of $1,727 in 1986, $15,000 in 1987 (Israel filed a new tax return in 1992 claiming $20,000 in additional income), and $2,000 in 1988 (Israel filed a new tax return in 1992 claiming $14,000 in additional income). Israel never filed any federal tax returns after 1988.
Israel’s lifestyle was commensurate with income far higher than this. A few examples will suffice. In 1987 he purchased the Detroit home at issue here with a down payment of $31,000 and a $419 per month mortgage. In 1989 he installed a swimming pool at his house. The government alleges that this pool cost approximately $32,000. The government also alleges that he had monthly expenses of approximately $20,000. Furthermore, Israel owned, in his name or under a known alias, at least seventeen automobiles. The inventory included a 1929 Buick, two Mercedeses, two BMWs, two Rolls Royces, a Porsche, and a Bentley. At a minimum, it is *1474clear there is some manner of financial chicanery afoot here.3
Finally, the search of Israel’s home uncovered money wrappers used to bundle cash in $5,000 units. The investigating officers also found approximately one thousand small glassine bags, which the government and the district court classified as drug paraphernalia. Also found was a photograph of an apparently armed Solomon Israel holding a hoard of cash in front of him. There can be no reasonable argument made that Israel did not have a motive to seek out a straw man to hold title for his property.
Equally relevant is Durr’s behavior. Did he behave like straw man? Durr received the properties by quitclaim deed. Durr never paid anything for either parcel nor did he bother to record the deeds until after the government searched the premises.4 Furthermore, Durr admitted he had no financial stake in the properties and that he never made any payments on the mortgages or land contracts. Durr admitted that he did not know whether the payments on the mortgage or land contract were delinquent. In fact, Israel made all of the payments and handled all of the financial obligations. Durr never contacted the mortgage holder or the land contract holder to tell them he was the new owner. Durr admittedly did not have the resources to pay the utilities, taxes, repairs or any other expenses associated with the property, and he never did so. Durr never lived in either property or exercised any control over them. In fact, he never even visited the properties after Israel quit-claimed them to him. Finally, even after Israel quitclaimed the property to Durr, Israel listed the property for sale with a broker, purporting to be the owner. Durr knew nothing of this.
Clearly, Israel has a motive to seek out a straw man and Durr has behaved like one. The government has demonstrated that there is probable cause to believe that Durr is a straw man. The issue, then, is whether Durr has provided any facts that either put the government’s version in doubt, or that show that he has exercised dominion and control over the property. Durr argues that he held the property in trust for the benefit of his niece. None of the deeds purporting to convey the property to Durr contain any mention of a trust. Furthermore, his conduct regarding the property is not consistent with that of a trustee.5 Finally, calling him a “trustee” does not alter any of the facts that make the district court’s finding of no standing correct.
The court dismisses the clear teaching of Liscum Drive and Precious Stones by stating that the recent Supreme Court case, United States v. James Daniel Good Real Property, -U.S. -, 114 S.Ct. 492, 126 L.Ed.2d 490 (1993), alters the required analysis. There is no evidence in Good for this statement. Good is not a case about standing, about straw men, or about nominal ownership. This Circuit and other Circuits have a well-developed body of law on standing (at least until this case) in civil forfeiture actions, and there is no indication that Good worked any change in that law. In Good, the claimant held legal title for the house, resided in the house before, during, and after the crimi*1475nal activity, paid for the upkeep of the house, and generally acted as would any other owner of real property. The government never attacked his standing to contest the forfeiture. Finally, the Court never raised the issue of standing in Good, either explicitly or implicitly.
This sweeping change in our Circuit’s law of standing in civil forfeiture cases stems, according to the court, from the statement in Good that “in the absence of exigent circumstances, the Due Process Clause of the Fifth Amendment prohibits the [United States] in a civil forfeiture from seizing real property without first affording the owner notice and opportunity to be heard.” (emphasis added). This quotation, however, blatantly begs the question at the heart of this case. The very issue here is not whether the owner gets notice and an opportunity for a predeprivation hearing. Of course he does. The question is whether Durr has demonstrated that he is, in fact, the owner, rather than merely a straw man fronting for Solomon Israel. This Circuit and others have made a “candid determination that things are often not what they appear to be, especially in the world of drug trafficking and other illegal operations. In brief, people engaged in illegal activities often attempt to disguise their interests in property by placing title in someone else’s name.” United States v. One 1977 36 Foot Cigarette Ocean Racer, 624 F.Supp. 290, 292 (S.D.Fla.1985). We, like every other circuit, look beyond formal title to the conduct of the parties.
A strong motivation behind the court’s opinion appears to be a concern that the government never criminally prosecuted Israel.6 Of course, the law is clear that there is no requirement that the government indict, prosecute, or convict anyone before pursuing civil forfeiture.7
Because the court’s opinion causes a wholesale change in the law of standing in forfeiture cases, and because it does so by relying on an opinion that has nothing to do with standing, I DISSENT.8

. This is different from a determination of whether there is probable cause to support the forfeiture, an issue not before the court.

. The testimony of both Anita and Raymond Durr is difficult to decipher. However, it appears that Journe and El-Amin were brothers. Joume's live-in girlfriend was June Durr, Anita Durr’s cousin, and the claimant's daughter. A third property, 19318 West Ten Mile Road, was also part of this forfeiture action in the district court. The property, the forfeiture of which was apparently uncontested, was Joume’s place of business.

.Durr explains the presence of these items by stating that Israel operated an automobile consignment business. Why it was necessary to hold the title of some of these cars under an alias is not explained. A similar explanation is given for the expensive jewelry found in the house, and for the $90,000 in jewelry in Israel’s possession when he was stopped at a local airport. Furthermore, the lavish lifestyle lived by Israel is explained by these "businesses" and the claim that his tailoring business would make upwards of $4,000 a day. Durr makes no attempt to explain how these apparently prosperous businesses yielded no taxable income. Naturally, Israel has not provided a deposition or an affidavit to support Durr's statements.

. The evidence supporting Durr's representations that he received the deeds in February or March, see op. at page 1467, is contradictory at best.

. The operation of this "trust” agreement is difficult to understand. On the one hand, both Anita and Raymond Durr state that they were concerned that Israel would leave without providing support for Anita and the children. On the other hand, after he allegedly secured title to the homes Durr did nothing to help his niece secure financial independence. Notably, he failed to record the deeds, though he knew enough to do so immediately after the search. Instead, he merely relied on Israel to continue paying the mortgages and providing money for the upkeep.

. The court's comment that in Good drugs were found in the house and none were found here is irrelevant. The government can seek forfeiture for property which is used to facilitate a drug transaction, as in Good, or properly which is purchased with the proceeds of drug transactions. Both accusations are clearly stated in the government’s forfeiture complaint.

. Furthermore, in at least one circuit the decision to pursue criminal prosecution precludes a later civil forfeiture action on double jeopardy grounds. United States v. $405,089.23 U.S. Currency, 33 F.3d 1210 (9th Cir.1994). In fact, the government often chooses to pursue civil remedies rather than criminal sanction in many areas of the law including, most obviously, the tax laws, and the Sherman Act. The fact that the government has chosen to pursue a civil action and not a criminal complaint is completely irrelevant.

. The reasoning of the concurrence adds little to the court's opinion. Our standard of review is not whether Durr’s story is "capable of at least prima facie belief because it makes sense” or whether "the allegations have a sufficient ring of truth.” It is whether Durr has offered facts buttressing his claim of being a trustee for Anita Durr. He has not offered a single one. The relation of Anita Durr and Israel might give Anita Durr standing; it does nothing to explain away all of the facts showing that Raymond Durr never had any interest beyond naked title.