United States v. Bond

UNITED STATES OF AMERICA, Plaintiff, v. SEAN BOND, Defendant.

Case No. 6:13-cr-03103-MDH-2

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF MISSOURI SOUTHERN DIVISION

January 28, 2015

ORDER

Defendant Sean Bond pleaded guilty to Conspiracy to Distribute 1000 Kilograms or More of Marijuana and Conspiracy to Commit Money Laundering (Docs. 70-71). He agreed to forfeit to the United States certain property either used in furtherance of his drug trafficking activities or derived therefrom. The Court accepted Defendant's plea (Doc. 78) and entered a preliminary order of forfeiture (Doc. 79).¹ The government thereafter caused to be published on the website www.forfeiture.org notice of the Court's order and of the government's intent to dispose of the property in such a manner as directed by the Attorney General (Doc. 86). Pursuant to 21 U.S.C. § 853(n)(2), three persons filed petitions asserting interests in the property ordered forfeited to the United States (Docs. 82-84).

The Court reviewed the third-party petitions and set an ancillary hearing pursuant to 21 U.S.C. § 853(n)(4) (Doc. 87). Prior to the hearing, the government filed a motion to dismiss the ancillary claims (Doc. 88). At the hearing, the Court heard arguments and evidence concerningthe third-party claims and the government's motion to dismiss. Following the hearing and an opportunity for post-hearing briefs,² the matter is now ripe for review.

STANDARD

"Any person, other than the defendant, asserting a legal interest in property which has been ordered forfeited to the United States pursuant to this section may . . . petition the court for a hearing to adjudicate the validity of his alleged interest in the property." 21 U.S.C. § 853(n)(2). The petition must be signed by the petitioner and shall set forth "the nature and extent of the petitioner's right, title, or interest in the property, the time and circumstances of the petitioner's acquisition of the right, title, or interest in the property, any additional facts supporting the petitioner's claim, and the relief sought." Id. at § 853(n)(3). A third-party forfeiture petition may be dismissed for lack of standing, failure to state a claim, or any other lawful reason. United States v. White, 675 F.3d 1073, 1077 (8th Cir. 2012) (citing Fed. R. Crim. P. 32.2(c)(1)(A)).

In order to have standing to proceed with an ancillary proceeding, the petitioner must make an initial showing of a "legal interest" in specific property. United States v. Timley, 507 F.3d 1125, 1130 n.2 (8th Cir. 2007). This has "both constitutional and statutory aspects." Id. at 1129. To establish constitutional standing, a party must demonstrate an ownership or possessory interest in the seized property - "[a]n ownership interest sufficient for Article III standing can be shown by actual possession, control, title, and financial stake." White, 675 F.3d at 1078 (internal quotations omitted). To establish statutory standing, the court must "look to the law of the jurisdiction that created the property right" to determine whether the claimant has a valid "legal" interest. Timley, 507 F.3d at 1129-1130. For example, if the property right arises under statelaw, the federal court must first look to state law to determine whether the claimant has a legal interest in the property. Id. at 1130.

"If a court determines the claimant has an interest in the property under the law of the jurisdiction that created the property right, then at the ancillary hearing, it must next look to federal law, i.e., to 21 U.S.C. § 853(n)(6), to determine if the claimant will prevail[.]" Id. To determine whether a claimant will prevail in the ancillary hearing, the court must ascertain whether the claimant qualifies for relief under one of the two prongs of 21 U.S.C. § 853(n)(6). White, 675 F.3d at 1081. Under those prongs, a successful claimant must demonstrate, by a preponderance of the evidence, that she either has priority of ownership in the forfeited property under subsection (A) or that she was a bona fide purchaser for value of the property under subsection (B). See 21 U.S.C. § 853(n)(6)(A)-(B).

The priority-of-ownership ground under subsection (A) is satisfied where the petitioner's legal right, title, or interest in the property was either "vested in the petitioner rather than the defendant or was superior to any right, title, or interest of the defendant at the time of the commission of the acts which gave rise to the forfeiture of the property under this section." Id. at § 853(n)(6)(A). The priority-of-ownership ground embodies the relation-back doctrine, which states that "title to the forfeited property vests in the United States at the time of the defendant's criminal act." Timley, 507 F.3d at 1130. The bona-fide-purchaser ground under subsection (B) is an exception to the relation-back doctrine and allows a person who acquired an interest in property after the government to nonetheless prevail in an ancillary proceeding. Id. To establish status as a bona-fide-purchaser under § 853(n)(6)(B), a claimant must show: "(1) the claimant has a legal interest in the forfeited property; (2) the interest was acquired as a bona fidepurchaser for value; and (3) the interest was acquired at a time when the claimant was reasonably without cause to believe that the property was subject to forfeiture." Id. at 1130-31.

ANALYSIS

In the present matter, James Bond, Ashley Bond, and Rick Ducusin each filed a petition asserting an interest in property forfeited by Defendant Sean Bond to the government. Each claimant's alleged interest relates to a separate piece of property; therefore, the Court will address each claimant's interest in turn.

A. Claim of James Bond

James Bond (hereinafter "Mr. Bond") is the father of Defendant Sean Bond. Mr. Bond filed a third-party forfeiture petition claiming an interest in the Wellcraft Martinique Boat seized on June 19, 2013 and forfeited to the government. The petition asserts that Mr. Bond is the "sole owner" of the boat and states that he did not know of the conduct giving rise to the forfeiture. Mr. Bond attached to his petition a copy of the Marine Certificate of Title for the boat at issue. The Certificate of Title shows the owner as "Bond James TOD Bond Sean" and shows a purchase date of July 3, 2009.

The government moved to dismiss Mr. Bond's petition. The government argues that Mr. Bond's "bald assertion of ownership is not sufficient" because he failed to assert a legal basis for his interest and he failed to provide the time and circumstances surrounding his acquisition of the property. The government further argues that Mr. Bond lacks standing to assert any interest in the boat because the evidence shows that Mr. Bond exercised no dominion or control over the property and acted a mere nominee rather than an owner. Finally, the government noted its intention to present evidence showing that Mr. Bond did have reason to believe that the boat wassubject to forfeiture because he was aware that his son put the boat in his name to hide the asset from law enforcement and he knew his son was a drug dealer.

The government is correct that Mr. Bond's petition fails to state a claim. Under Missouri law, a certificate of title to a motor vehicle is prima facie evidence of ownership, capable of being rebutted by other evidence. See Landshire Food Serv., Inc. v. Coghill, 709 S.W.2d 509, 512-13 (Mo. Ct. App. 1986). Thus, contrary to the government's position, Mr. Bond's petition presented a sufficient legal basis to state an interest in the boat because he attached the boat's certificate of title showing himself as the sole owner. Nonetheless, the government is correct that Mr. Bond failed to describe the time and circumstances of his acquisition of the property, as required by 21 U.S.C. § 853(n)(3). Thus, Mr. Bond's petition fails to adequately plead a third-party forfeiture claim. The Court need not decide whether this failure alone is sufficient to warrant dismissal because, even assuming that Mr. Bond presented sufficient facts in his petition as to his acquisition of the alleged interest, Mr. Bond's petition fails for lack of standing.

The evidence presented at the hearing shows that Mr. Bond was a mere nominal owner of the Wellcraft Martinique Boat and therefore lacks standing to assert a legal interest in that property.³ United States v. One 1990 Chevrolet Corvette, VIN No. 1G1YY3384L5104361, with All Appurtenances & Attachments thereon, 37 F.3d 421, 422 (8th Cir. 1994) ("A nominal owner who lacks possession of the defendant property and did not exercise dominion and control over it does not have an interest sufficient to have standing to challenge forfeiture."); see also United States v. Ford 250 Pickup, 980 F.2d 1242, 1246 (8th Cir. 1992) ("bare legal title by one who does not exercise dominion and control over the property is insufficient to establish ownership"). The evidence adduced at the ancillary hearing revealed that Defendant Sean Bond was in thepractice of titling his vehicles in other person's names in order to retain his Social Security disability benefits; that Defendant told Brian Hanson he was going to buy a boat to put on Table Rock Lake and he was going to put it in his father's name; that Defendant paid the insurance and marina fees for the boat; that Defendant referred to the boat as "my boat"; that Defendant loaned the boat out for others to use; that Defendant decided when to sell the boat and at what price; and that Defendant referred to the boat as "my boat" even when speaking with his father, Mr. Bond. Defendant's Plea Agreement (Doc. 70) further reveals that "on or about July 3, 2009, the defendant, Sean Bond, purchased a Well Craft 3200 Martinique, in part with drug proceeds, which he registered in his father's name."

Thus, because Mr. Bond held bare legal title to the boat and did not exercise dominion and control over the boat, he lacks standing to assert a third-party interest in the forfeited...