Court Opinion

ID: 4569220
Source: CourtListenerOpinion
Date Created: 2020-09-24 15:05:43.660654+00
Date Added: 2024-06-11T13:29:28.483898
License: Public Domain

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),                                              FILED
this Memorandum Decision shall not be                                         Sep 24 2020, 8:42 am
regarded as precedent or cited before any                                           CLERK
court except for the purpose of establishing                                   Indiana Supreme Court
                                                                                  Court of Appeals
the defense of res judicata, collateral                                             and Tax Court

estoppel, or the law of the case.

ATTORNEY FOR APPELLANT                                   ATTORNEYS FOR APPELLEE
Bryan L. Cook                                            Curtis T. Hill, Jr.
Carmel, Indiana                                          Attorney General of Indiana
                                                         Myriam Serrano
                                                         Deputy Attorney General
                                                         Indianapolis, Indiana

                                           IN THE
    COURT OF APPEALS OF INDIANA

Michael Krulewitch,                                      September 24, 2020
Appellant-Defendant,                                     Court of Appeals Case No.
                                                         20A-MI-823
        v.                                               Appeal from the Marion Superior
                                                         Court
State of Indiana,                                        The Honorable Carol J. Orbison,
Appellee-Plaintiff                                       Senior Judge
                                                         Trial Court Cause No.
                                                         49D10-2001-MI-2431

Baker, Senior Judge.

Court of Appeals of Indiana | Memorandum Decision 20A-MI-823 | September 24, 2020                 Page 1 of 9
[1]   Michael Krulewitch appeals the trial court’s order finding that the State had

      probable cause to seize currency found in a safety deposit box and turn that

      currency over to the federal government. Krulewitch argues that the State did

      not have probable cause to seize the funds. Finding that probable cause existed,

      we affirm and remand for further proceedings.

                                                     Facts
[2]   In July 2019, law enforcement discovered large quantities of marijuana and

      products containing THC in a residence. The suspect told Plainfield Detective

      Corporal Brian Stewart that he got the contraband from “Hot Dog” and been

      getting those products from Hot Dog for about a year. The suspect allowed

      Detective Stewart to examine his cell phone records to obtain Hot Dog’s cell

      phone number and review conversations between the two men. Eventually,

      this information led police to Krulewitch.

[3]   In September 2019, law enforcement began surveilling Krulewitch and

      investigating his financial statements to determine whether he had a source of

      legitimate income. Detective Stewart learned that Krulewitch had multiple

      bank accounts and safe deposit boxes with Indiana Members Credit Union.

[4]   In 2016, Krulewitch applied for a bank loan and stated that his monthly income

      was $1,000; in 2018, he applied for another loan and stated that his monthly

      income was $4,166.67. Krulewitch was listed as the owner of Lunch Box

      Catering, which reported the following sales:

          • $0 in 2014;
      Court of Appeals of Indiana | Memorandum Decision 20A-MI-823 | September 24, 2020   Page 2 of 9
          •   $0 in 2015;
          •   $17,211 in 2016;
          •   $18,220 in 2017; and
          •   $19,422 in 2018.

      The State also examined five years of Krulewitch’s individual tax returns, on

      which he reported the following income:

          •   $19,564 in 2014;
          •   $18,913 in 2015;
          •   $19,735 in 2016;
          •   $29,411 in 2017; and
          •   no tax return filed in 2018.

      Detective Stewart concluded, based on his professional training and experience,

      that this financial information indicated that Krulewitch had illegitimate

      income from illegal narcotics sales.

[5]   The detective obtained a search warrant for Krulewitch’s residence, which was

      executed on January 21, 2020, by detectives with the Indianapolis Metropolitan

      Drug Task Force. Inside the home, the detectives found multiple bags of raw

      marijuana, four blocks of THC gummy candies waiting to be cut and cubed for

      packaging, sixteen sealed shipping boxes containing THC gummy cubes,

      thirteen open shipping boxes filled with THC gummy cubes, seventeen vacuum-

      sealed bags of marijuana, twenty-four jars of THC wax, and five boxes of THC

      vape cartridges. The detectives also found $846 in cash, and most of the cash

      was bound together with a gold clip.

      Court of Appeals of Indiana | Memorandum Decision 20A-MI-823 | September 24, 2020   Page 3 of 9
[6]   Following the search of the residence, Detective Stewart executed a search

      warrant at the Indiana Members Credit Union. Inside one of Krulewitch’s safe

      deposit boxes was cash totaling $287,536. Most of the cash “was bundles of

      $100 bills that were rubber banded together in groups of 100 bills.” Appellant’s

      App. Vol. II p. 23. Some of the money was bound together with a gold clip like

      the one found in Krulewitch’s residence. The State charged Krulewitch with

      multiple crimes, including dealing in marijuana, fraud on a financial institution,

      failure to maintain tax records, and possession of marijuana.

[7]   On January 27, 2020, the State filed a complaint for forfeiture, naming

      Krulewitch as a defendant. It also filed a motion for a probable cause finding

      for forfeiture purposes and a motion to transfer seized property to the United

      States. The trial court held a probable cause hearing on March 9, 2020, and

      determined that law enforcement had probable cause to investigate

      Krulewitch’s financial records, including the safe deposit boxes.1 Krulewitch

      now appeals.

      1
        There is no evidence in the record on appeal, including the Chronological Case Summary, that the trial
      court granted or otherwise ruled on the State’s motion to transfer the money to the United States. We will
      infer from the fact that the State does not raise the argument that the money has, indeed, been turned over
      and that the appeal is therefore ripe.

      Court of Appeals of Indiana | Memorandum Decision 20A-MI-823 | September 24, 2020                  Page 4 of 9
                                    Discussion and Decision
[8]    Krulewitch argues that there was insufficient evidence showing that the

       currency was the proceeds of criminal activity, meaning that there was not

       probable cause to conclude that the cash was subject to seizure.

[9]    The turnover statute provides as follows:

               Upon motion of the prosecuting attorney, the court shall order
               property seized under IC 34-24-1 transferred, subject to the
               perfected liens or other security interests of any person in the
               property, to the appropriate federal authority for disposition
               under 18 U.S.C. 981(e), 19 U.S.C. 1616a, or 21 U.S.C. 881(e)
               and any related regulations adopted by the United States
               Department of Justice.

       I.C. § 35-33-5-5(j). Therefore, to be turned over to the federal government, the

       State must show that the property was properly seized pursuant to Indiana

       Code chapter 34-24-1—the forfeiture statutes.

[10]   Relevant to this case is Indiana Code section 34-24-1-1(a)(2), which provides

       that money may be seized by the State if it was:

               (A)      furnished or intended to be furnished by any person in
                        exchange for an act that is in violation of a criminal
                        statute;

               (B)      used to facilitate any violation of a criminal statute; or

               (C)      traceable as proceeds of the violation of a criminal statute.

       Court of Appeals of Indiana | Memorandum Decision 20A-MI-823 | September 24, 2020   Page 5 of 9
       In other words, the General Assembly has reasonably decreed that for the State

       to seize cash and seek its forfeiture—or turnover—it must show a nexus

       between the cash and some sort of criminal activity.

[11]   What we are tasked with determining here, therefore, is whether the cash was

       properly seized by the State. Put another way, we must determine whether the

       State had probable cause to believe the cash was linked to criminal activity. As

       our Supreme Court has explained, “[p]robable cause is not a high bar, and is

       cleared when the totality of the circumstances establishes a fair probability—not

       proof or a prima facie showing—of criminal activity, contraband, or evidence of

       a crime[.]” Hodges v. State, 125 N.E.3d 578, 581-82 (Ind. 2019) (internal

       quotation marks and citations omitted). Indeed, the Hodges Court explicitly

       noted that “innocent activity will often supply a basis for showing probable

       cause.” Id. at 582. Probable cause is a fluid concept that turns on the particular

       factual context and “depends on the totality of the circumstances, viewed as a

       whole.” Id. We must “view the circumstances from the standpoint of an

       objectively reasonable police officer” and “keep[] in mind that both inferences

       based on the officer’s own experience and common-sense conclusions about

       human behavior may affect whether the officer had probable cause[.]” Id.

       (internal quotation marks and citations omitted).

[12]   In this case, the totality of the circumstances supports the trial court’s

       conclusion that there was probable cause to seize the cash. Specifically, in

       2016, Krulewitch applied for a bank loan and stated that his monthly income

       was $1,000; in 2018, he applied for another loan and stated that his monthly

       Court of Appeals of Indiana | Memorandum Decision 20A-MI-823 | September 24, 2020   Page 6 of 9
       income was $4,166.67—a fourfold increase. Krulewitch was listed as the owner

       of Lunch Box Catering, which reported the following sales: $0 in 2014; $0 in

       2015; $17,211 in 2016; $18,220 in 2017; and $19,422 in 2018—nothing

       approaching a fourfold increase. The State also examined five years of

       Krulewitch’s individual tax returns, on which he reported the following income:

       $19,564 in 2014; $18,913 in 2015; $19,735 in 2016; $29,411 in 2017; and no tax

       return filed in 2018—again, nothing approaching a fourfold increase.

[13]   Detective Stewart concluded, based on his professional training and experience,

       that this financial information indicated that Krulewitch had illegitimate

       income from illegal narcotics sales. When executing a search warrant at

       Krulewitch’s home, law enforcement officials found multiple bags of raw

       marijuana, four blocks of THC gummy candies waiting to be cut and cubed for

       packaging, sixteen sealed shipping boxes containing THC gummy cubes,

       thirteen open shipping boxes filled with THC gummy cubes, seventeen vacuum-

       sealed bags of marijuana, twenty-four jars of THC wax, and five boxes of THC

       vape cartridges. The detectives also found $846 in cash, and most of the cash

       was bound together with a gold clip. Later, when the detectives searched

       Krulewitch’s safe deposit boxes, they found cash totaling $287,536. Most of the

       cash “was bundles of $100 bills that were rubber banded together in groups of

       100 bills.” Appellant’s App. Vol. II p. 23. Some of the money was bound

       together with a gold clip like the one found in Krulewitch’s residence.

[14]   Krulewitch points out, among other things, that no illegal contraband was

       found with the cash; no controlled buys directly linked the cash to drug

       Court of Appeals of Indiana | Memorandum Decision 20A-MI-823 | September 24, 2020   Page 7 of 9
       trafficking activity; only five years of his tax returns were analyzed; the cash

       was located in a third safe deposit box not described in Detective Stewart’s

       probable cause affidavit; the cash was found with benign personal items such as

       savings bonds, a ring, and birth certificates; and the detectives did not

       determine whether Krulewitch had received any inheritances at any point in his

       life.2 The defendant in Hodges made similar arguments, which our Supreme

       Court found unpersuasive:

                Might each of these circumstances be the result of innocent
                behavior? Yes. It may well be that the cash is not proceeds of
                drug trafficking. It may be as Hodges asserts—that he mailed the
                $60,990.00 to a World Series ticket holder in a lawful exchange
                for expensive tickets.

                But the existence of a post hoc innocent explanation does not
                preclude probable cause from forming. Here, the combination of
                circumstances gave [the detective] reason to believe that the cash
                was proceeds of drug trafficking. That is enough to meet the
                probable-cause standard, making the seizure lawful and the
                turnover proper.

       Hodges, 125 N.E.3d at 583 (internal footnote omitted).

[15]   When looking at the totality of the circumstances at the time the cash was

       seized, we can only conclude that those circumstances established a fair

       2
         In his reply brief, Krulewitch directs our attention to proceedings that have occurred following the filing of
       this appeal. We decline to examine that portion of the record, though if we did so, it would not change the
       result. That a post hoc innocent explanation may exist does not preclude probable cause from forming—
       though it may, of course, ultimately affect the forfeiture proceedings, should they take place.

       Court of Appeals of Indiana | Memorandum Decision 20A-MI-823 | September 24, 2020                     Page 8 of 9
       probability that the cash was linked to criminal activity. In other words, the

       trial court did not err by finding that the State had probable cause to seize the

       currency or by (presumably) ordering that currency turned over to the United

       States.

[16]   As the Hodges Court noted, this conclusion does not mean that the money is

       unquestionably lost to Krulewitch:

               This [finding of probable cause] does not mean, however, that
               the cash will be forfeited. Once the money is turned over, the
               government may either return the property or seek forfeiture. If
               it seeks forfeiture, the court overseeing that proceeding may
               assess any innocent explanations for the circumstances and
               determine who is entitled to the property. We decide only that
               the turnover from state to federal authorities is proper.
Id. at 584. Here, likewise, we find only that the seizure was lawful and the

       transfer to the federal government was proper.

[17]   The judgment of the trial court is affirmed and remanded for further

       proceedings.

       Bailey, J., and Vaidik, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 20A-MI-823 | September 24, 2020   Page 9 of 9