Court Opinion

ID: 2763680
Source: CourtListenerOpinion
Date Created: 2014-12-22 22:06:42.604707+00
Date Added: 2024-06-11T11:27:16.586678
License: Public Domain

J-A26027-14

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

COMMONWEALTH OF PENNSYLVANIA                     IN THE SUPERIOR COURT OF
                                                       PENNSYLVANIA
                         Appellant

                   v.

MISCELLANEOUS PAPERS, $5443.00
U.S. CURRENCY, ET AL.

                         Appellee                        No. 242 MDA 2014

                 Appeal from the Order January 17, 2014
             In the Court of Common Pleas of Snyder County
           Criminal Division at No(s): CP-55-MD-0000031-2013

BEFORE: BOWES, J., MUNDY, J., and JENKINS, J.

MEMORANDUM BY MUNDY, J.:                         FILED DECEMBER 22, 2014

      The Commonwealth appeals from the January 17, 2014 order denying

its petition for forfeiture of derivative contraband. After careful review, we

reverse   and   remand     for   further   proceedings    consistent   with   this

memorandum.

      A summary of the factual and procedural history of this case, as

disclosed by a review of the certified record, follows. On November 9 and

10, 2011, Brian Bartholomew, on behalf of Blackthorn Estate Buyers, Inc.,

was engaged in purchasing precious metals and jewelry out of rented rooms

at the Hampton Inn in the Borough of Shamokin Dam, Snyder County,

Pennsylvania. N.T., 1/13/14, at 7-8, 16-17. Bartholomew had secured the

proper license for this activity from the Snyder County Sheriff’s Department

in accordance with the regulations enabling the license provision of the
J-A26027-14

Precious Metals Act.1       Corinne and David Sievert, who locally operated a

similar    business,   expressed      concerns   to   the   Snyder   County   District

Attorney’s Office that Bartholomew was not complying with various

requirements of the Precious Metals Act, as made enforceable through

appropriate Pennsylvania Code regulations.2 The Seiverts agreed to act as

confidential informants in performing controlled sales of items of gold

jewelry.    On November 10, 2011, based on the Seiverts’ representations

that Bartholomew was not in compliance with portions of the Act, the

Commonwealth charged him with two counts of failure to keep required

records, and three counts of failure to post prices in connection with those

controlled sales.3 Based on additional information gathered by investigators

during the execution of the arrest warrant, the criminal complaint was

amended to include 21 additional counts of failure to keep required records.

        On March 19, 2012, Bartholomew entered a negotiated guilty plea to

one count of failure to keep required records.4 The trial court immediately

sentenced Bartholomew in accordance with the plea agreement to 12

months’ probation. At that time, certain items that had been seized by the

____________________________________________
1
    37 Pa. Code § 501.3.
2
    73 P.S. §§ 1931-1942; 37 Pa. Code §§ 501.1-501.11.
3
    73 P.S. §§ 1933 and 1936; 37 Pa. Code §§501.6, 501.9, and 501.11.
4
 The certified record does not contain a copy of the guilty plea transcript,
and there is no indication in the record of the facts admitted to by
Bartholomew in support of the plea.

                                           -2-
J-A26027-14

Commonwealth were returned to Bartholomew by agreement of the parties.

Some papers, an amount of cash, several coins, and numerous items of

jewelry were not returned.

       On February 27, 2013, the Commonwealth filed a petition for forfeiture

of derivative contraband, seeking forfeiture of the papers, cash, coins and

jewelry that had been seized at the time of Bartholomew’s arrest and

retained by the Commonwealth.5 A hearing on the Commonwealth’s petition

was held on January 13, 2014.                  Bartholomew did not respond to the

Commonwealth’s petition or participate in the hearing.            On January 17,

2014, the trial court entered an order, together with its findings of fact,

conclusions of law and opinion, denying the Commonwealth’s petition. On

February 6, 2014, the Commonwealth filed a timely notice of appeal.6

       On appeal, the Commonwealth raises the following issue for our

review.

              Whether the trial court erred and/or abused its
              discretion when it denied the Commonwealth’s
____________________________________________
5
  In the meantime, according to the trial court opinion, Susan Peroff-Bagon,
as purported owner of Blackthorn Estate Buyers, Inc., headquartered in
Florida, filed a petition for return of the seized property. The petition is not
contained in the certified record or reflected in the trial court docket.
Nevertheless, the trial court denied the petition for failure of Peroff-Bagon to
appear or present any evidence at the hearing on her petition, scheduled in
conjunction with the Commonwealth’s petition.
6
  The Commonwealth and the trial court have complied with Pennsylvania
Rule of Appellate Procedure 1925. The trial court referenced its January 17,
2014 findings of fact, conclusions of law and opinion as containing the
reasons for its decision. Trial Court Opinion, 3/12/14, at 1.

                                           -3-
J-A26027-14

             petition to forfeit the proceeds of and the items used
             to facilitate violations of Pennsylvania’s Precious
             Metals Act, where 1) the Commonwealth proved a
             nexus between the property and the violations, and
             2) the forfeiture was proportional to those violations.

Commonwealth’s Brief at 8.

      We are guided by the following principles in our consideration of the

Commonwealth’s issue. “Our standard of review in assessing the propriety

of a forfeiture order is limited to whether the trial court’s findings of fact are

supported by substantial evidence, and whether the trial court abused its

discretion or committed an error of law.”        Commonwealth v. Salamone,

897 A.2d 1209, 1215 (Pa. Super. 2006), citing Commonwealth v. Real

Property & Improvements, 832 A.2d 396, 398 (Pa. 2003), appeal denied,

923 A.2d 1173 (Pa. 2007). “Analysis of whether property should be forfeited

to   the   Commonwealth     is   dependent      upon   whether   the   property   is

contraband; the burden of proving that the property is contraband rests

upon the Commonwealth.”          In re Firearms, Eleven, 922 A.2d 906, 910

(Pa. Super. 2007) (citations omitted), appeal denied, 932 A.2d 1289 (Pa.

2007).     “[T]he Commonwealth’s burden in forfeiture proceedings is a

preponderance of evidence standard.             Despite the lesser standard, the

quasi-criminal    nature    of     forfeiture     proceedings    is    undisputed.”

Commonwealth v. Anthony, 613 A.2d 581, 583 (Pa. Super. 1992)

(citations omitted).

             [T]wo distinct classifications of contraband have
             been developed: contraband per se, and derivative
             contraband. Contraband per se is property the mere

                                       -4-
J-A26027-14

           possession of which is unlawful ….          Heroin and
           ‘moonshine’ whiskey are examples of contraband per
           se. Derivative contraband is property innocent by
           itself, but used in the perpetration of an unlawful act.
           An example of derivative contraband is a truck used
           to transport illicit goods.

Commonwealth v. Howard, 713 A.2d 89, 92 (Pa. 1998), quoting

Commonwealth v. Fassnacht, 369 A.2d 800, 802 (Pa. Super. 1977), cert.

denied, 439 U.S. 911 (1979).

           Property is not derivative contraband merely because
           it is owned or used by someone who has been
           engaged     in   criminal    conduct.  Rather,   the
           Commonwealth must establish a specific nexus
           between the property and the alleged criminal
           activity.

                 Objects do not acquire “guilt by association”
           merely because they are owned by a person who has
           been engaged in criminal conduct. The requirement
           that a sufficient nexus exist between the property
           and the prohibited criminal activity serves to
           mitigate the potentially harsh results of permitting
           the Commonwealth to penalize a citizen by a civil
           action against his property rather than a criminal
           action against his person.

In re Firearms, Eleven, supra at 910 (internal quotation marks and

citations omitted). “This is not to say, however, that the Commonwealth’s

right to seek forfeiture is contingent upon the result in a criminal

prosecution.   Regardless of whether a conviction can be gained from the

evidence, the Commonwealth may seek to forfeit property as long as it

establishes that the property constitutes contraband.” Anthony, supra at

583-584 (internal quotation marks, citation, and footnote omitted); but see

                                    -5-
J-A26027-14

Commonwealth v. 2010 Buick Enclave, 99 A.3d 163 (Pa. Cmwlth. 2014)

(holding a criminal conviction is required to proceed with a forfeiture of

derivative contraband).7         In addition to establishing a nexus between

derivative contraband and illegal activity, the Commonwealth must show

that the proposed forfeiture is proportional to the offense. Commonwealth

v. Maglisco, 491 A.2d 1381, 1385 (Pa. Super. 1985).              In evaluating

proportionality, our Supreme “Court and the U.S. Supreme Court have… held

that in the context of excessive fines challenges, forfeitures are ‘fines.’”

Commonwealth v. Carela-Tolentino, 48 A.3d 1221, 1223 n.3 (Pa. 2012),

citing United States v. Bajakajian, 524 U.S. 321, 334 (1998), and

Commonwealth v. Real Property and Improvements Commonly

Known As 5444 Spruce Street, Philadelphia, 832 A.2d 396, 399 (Pa.

2003).

                    Bajakajian[] requires that, in cases where a
              punitive forfeiture is involved, the court “compare
              the amount of the forfeiture to the gravity of the
              defendant’s offense. If the amount of the forfeiture
              is grossly disproportional to the gravity of the
              defendant’s     offense,   it  is   unconstitutional.”
              Bajakajian, [supra] at 336–37[].

                    The Court enumerated factors by which a court
              may measure the gravity of the offense, each of
              which is limited to the conduct of the defendant: the
              penalty imposed as compared to the maximum
              penalty available; whether the violation was isolated
____________________________________________
7
 “[D]ecisions rendered by the Commonwealth Court are not binding on this
Court.” Beaston v. Ebersole, 986 A.2d 876, 881 (Pa. Super. 2009) (en
banc) (citation omitted).

                                           -6-
J-A26027-14

            or part of a pattern of misbehavior; and, the harm
            resulting from the crime charged. Id. at 338–39[].

5444 Spruce Street, Philadelphia, supra at 402 (footnote omitted).

      Instantly,   it   is   undisputed    that   the   property   subject   to   the

Commonwealth’s forfeiture petition is not contraband per se. Therefore, the

issue before the trial court was whether the Commonwealth proved, by a

preponderance of the evidence, a sufficient nexus between the items seized

and Bartholomew’s illegal activity, and, if so, whether the proposed

forfeiture was proportionate to that illegal activity.      See In re Firearms,

Eleven, supra; 5444 Spruce Street, Philadelphia, supra.                      At the

January 13, 2014 hearing on its motion, the Commonwealth offered the

testimony of Detective William Neitz, Jr., an investigator for the Snyder

County District Attorney’s Office, and the Seiverts. Detective Neitz testified

about his investigation and arrest of Bartholomew.           The Seiverts testified

about their respective controlled sales of jewelry to Bartholomew and their

personal observation of numerous instances of his non-compliance with the

Precious Metals Act.

      The trial court found that Bartholomew’s “offense, as proven by the

Commonwealth, was a failure to follow several specific legal requirements

associated with the Precious Metals Act.” Trial Court Opinion, 1/17/14, at 8.

Nevertheless, the trial court concluded, “[e]ven though the Commonwealth

can establish a nexus through circumstantial evidence, we cannot find that

the jewelry and money seized was necessarily used in or derived from the

                                          -7-
J-A26027-14

illegal activity of Barthololmew [sic].” Id. “There is no evidence to point to

[the items seized as] having originated from transactions at the Hampton

Inn location.”   Id.     Additionally, the trial court found “[t]he proposed

forfeiture, particularly of the various items of jewelry, and the cash, is

disproportionate to the nature of the crime involved.”       Id. at 7.    We

disagree.

      In its analysis, the trial court focused on the instances described by

the Seiverts of the infractions they observed during their respective sales on

November 9 and 10, 2011.        It further noted that no evidence linked the

remaining items of jewelry and cash received to the infractions observed on

those occasions.    The trial court failed to appreciate that the lack of

documentation accompanying those items was itself evidence of ongoing

violations of the Act.    Detective Neitz testified on direct examination as

follows.

            Q    Were -- did law enforcement seize any items
            from the location involved with the sales by
            Bartholomew and Blackthorn?

            A      Yes. There was a large cash sum that was set
            -- or that was seized that night. And there was a
            number of items that there was no identification
            on. Part of the requirements are that the individuals
            fill out the slips and give a copy to the individual
            they’ve purchased it from and also have that slip
            with the property that they purchase.              We
            found a number of items that had no -- no
            information on, you know, for us to go back on
            and comply with the legislation. And there was
            [sic] cash sales. There was a large amount of cash
            that was taken that night or that we actually seized.

                                     -8-
J-A26027-14

N.T., 1/13/14, at 12 (emphasis added).

      To sustain its burden, it was not necessary for the Commonwealth to

link the items seized to the specific controlled sales performed by the

Seiverts. It was undisputed that Bartholomew was at the Hampton Inn to

engage in an advertised licensed event to purchase precious metal items. In

such circumstances, the Act required Bartholomew to generate and maintain

certain records.

            § 1933. Records of transactions

            (a) Dealers to keep record.--Every dealer in
            precious metals shall keep a record of every
            transaction upon a form approved by the Attorney
            General. The record shall include as a minimum:

                   (1) The name, age and address of the seller
                   which must be verified by said dealer,
                   requiring proof of identity from the seller
                   sufficient to insure the accuracy of the
                   represented name and address of the seller.

                   (2) An accurate description of the property
                   purchased, including any serial number or
                   other identifying marks or symbols and the
                   date and hour of the transaction.

            (b) Record to be maintained.--Said record shall
            be maintained by the dealer in precious metals for a
            period of one year from the date of the transaction
            and shall be available for inspection by any law
            enforcement official of the Federal Government, the
            Commonwealth or any of its municipalities.

            (c) Copy of record to district attorney.--A copy
            of every record of transaction shall be delivered or
            mailed to the district attorney of the county in which
            a purchase of precious metals is made by the close

                                    -9-
J-A26027-14

           of the next working day after the day on which the
           metal was purchased.

           (d) Copy of record to police department in lieu
           of district attorney.--The district attorney may
           authorize such records to be delivered or mailed to
           the police department of the municipality in which
           the precious metal was purchased in lieu of delivery
           or mailing to the district attorney.

73 P.S. § 1933.

           § 501.6. Records of transactions.

           The dealer shall completely, accurately and legibly
           record every transaction on a form provided by and
           prepared by the dealer. Forms that meet all of the
           requirements for information as set forth in this
           section are deemed approved by the Office of
           Attorney General. The record of every transaction
           shall include:

                  (1) The name, address, age, sex, race and
                  driver’s license number, if any, of the seller
                  shall be entered.

                  (2) The identity of the seller shall be
                  established by requiring the seller to produce
                  an identification issued by a governmental
                  agency with a photo of the seller thereon, if
                  available, and at least one other corroborating
                  means        of     identification.     Otherwise,
                  identification sufficient to reliably establish the
                  person’s true identity shall be required.

                  (3) The seller shall be required to sign the form
                  on which is recorded the information required
                  by this section.

                  (4) An accurate description of the property
                  purchased shall include all names, initials,
                  serial numbers or other identifying marks or
                  monograms on each item purchased.

                                     - 10 -
J-A26027-14

                  (5) The time and date of the transaction shall
                  be recorded at the time of the transaction.
                  Records of transactions shall be maintained by
                  the dealer in precious metals for a period of 1
                  year and shall be available for inspection by
                  any law enforcement official of the Federal
                  Government, the Commonwealth or its
                  municipalities.   A copy of every record of
                  transaction shall be delivered or mailed to the
                  district attorney of the county in which a
                  purchase of precious metals is made by the
                  close of the next working day after the day on
                  which the metal is purchased. The district
                  attorney may authorize records to be delivered
                  or mailed to the police department of the
                  municipality in which the precious metal is
                  purchased in lieu of delivery or mailing to the
                  district attorney. Each item of precious metal
                  purchased by a dealer in precious metals shall
                  be retained in unaltered condition for 5 full
                  working days after report of its purchase has
                  been filed with the proper district attorney or
                  his designee.

37 Pa. Code § 501.6.

      We conclude it is reasonable to infer, from the absence of such records

attendant   to   any   of   the   jewelry   items   seized,   that   Bartholomew’s

recordkeeping infractions observed on November 9 and 10, 2011 were

ongoing and involved the transactions pertaining to the seized items

wherever and whenever they occurred.           Thus, we deem the trial court’s

conclusion that the Commonwealth failed to establish a nexus between the

items seized and Bartholomew’s illegal activity to be erroneous.              The

Commonwealth was not required to tie the items for which it sought

forfeiture to the violations observed during the specific transactions

performed by the Sieverts, if it could link the evidence with illegal activity

                                      - 11 -
J-A26027-14

generally.   See Anthony, supra.      Its evidence of a wholesale absence of

required recordkeeping was sufficient to meet its initial burden of proof.

Absent any rebuttal or contrary proof offered by a respondent, we conclude

the trial court erred in denying the Commonwealth’s forfeiture petition. See

Commonwealth v. Assorted Consumer Fireworks, 16 A.3d 554, 558-

559 (Pa. Cmwlth. 2011) (holding fireworks inventory was forfeitable where

defendant was engaged in unlicensed sales of fireworks even though

evidence of specific sales was lacking), appeal denied, 27 A.3d 225 (Pa.

2011).

      Additionally, we disagree with the trial court that the proposed

forfeiture is disproportionate to the subject illegal activity. Again, the trial

court focuses too narrowly on the single violation to which Bartholomew

pleaded guilty. The evidence points to multiple violations and a pattern of

noncompliance with the Act.     The statute and regulations are designed to

protect the public from uninformed sales of valuable assets and to provide

law enforcement with checks against the fencing of stolen property. Given

these concerns and the ongoing nature of the violations, we conclude the

proposed forfeiture is indeed proportionate with the illegal activity attributed

to Bartholomew. See 5444 Spruce Street, Philadelphia, supra.

      In light of the foregoing, we conclude the trial court abused its

discretion by denying the Commonwealth’s petition for forfeiture in this case.

Accordingly, we reverse the trial court’s January 17, 2014 order and remand

for further proceedings consistent with this memorandum.

                                     - 12 -
J-A26027-14

     Order reversed. Case remanded. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 12/22/2014

                                 - 13 -