The burden of proof under 21 U.S.C. § 853(n)(6) falls on petitioners. The absence of receipts, logs or other records, which would normally be maintained in such a business, places petitioners at a considerable disadvantage in satisfying their burden. Jessup cannot counter the government's evidence with anything but oral testimony consisting of rough and inconsistent estimates and self serving denials. Whether the absence of documentation is due to stupidity, neglect or an intentional effort to mislead, the burden falls on petitioners and they fail to satisfy it.
There is also considerable question concerning Jessup's credibility and his good faith in this matter. Jessup dealt with Rockwell exclusively in large amounts of cash delivered in brown paper bags, yet kept no records and claims that his suspicions were never aroused. It is inconceivable that even the most trusting and naive business partner (neither adjective by the way being applicable to Jessup) would incur considerable expenses and receive varying amounts of cash, all with business and tax repercussions, without maintaining any records. It is also incredible that anyone could participate in transactions involving unholy amounts of cash, the largest by Jessup's description being $ 90,000, without having some doubts or suspicions. Jessup's professed innocence in this unusual course of dealing is not credible and casts serious doubt on his veracity on all other matters.
We also note on the issue of credibility that Jessup has been convicted of income tax evasion on two occasions. The studied avoidance of any paper trail in his dealing with Rockwell evidences an intention to continue such practices. It is also undisputed that Jessup purchased several cashier's checks with Rockwell's money in such a manner and for no other purpose than to avoid IRS reporting requirements. It is also clear that Jessup has been unable to produce any business or financial records concerning the Society, although subject to a subpoena for such documents.
For the reasons stated, we conclude that Jessup's testimony is not worthy of credence. While Rockwell is no altar boy, he has little to gain at this point since his property is forfeit and he has already cooperated extensively. Furthermore, the figure of $ 328,100 is the only figure supported by a credible document, the running tabulation in Rockwell's binder, and we therefore conclude that Rockwell's investment in Indian Lake Park totals $ 328,100.
The second question is the scope of Rockwell's interest in the park. Rockwell claims he was investing in the park as a whole and was to be a 50/50 partner in the entire venture. Jessup on the other hand contends that Rockwell's investment and interest were limited to the one acre waterslide site, and therefore the only property subject to forfeiture is Rockwell's 10 year leasehold interest in that one acre site.
Petitioners rely most heavily on the lease. Its terms specifically limit the lessee's interest to a 10 year lease of the one acre waterslide site, and the accompanying memorandum limits the lessee to a 50/50 interest in the profits from the waterslide alone, and not the park as a whole.
But there are considerable questions concerning this lease. First of all, Rockwell is not identified in the lease. The lessee is Linda Hineman, one of the several names by which Rockwell's female companion is known. Jessup executed the lease on behalf of the Society knowing that the lease concealed the identity of the true investor. Also critical to an understanding of the circumstances is the timing of the lease. Although the lease itself is undated, the accompanying memorandum and the time records of counsel who drafted the documents indicate the date to be July, 1984. This was long after Rockwell's investment had begun in earnest and less than 2 months before Rockwell's first federal indictment. Most importantly, the terms of the lease did not comport with the parties' course of dealings in those prior 10 months.
Petitioners make much of the fact that most of Rockwell's money had gone to improvements for the one acre waterslide site. But significant and costly improvements had been made to other parts of the park and paid for with Rockwell's money. Most notable is a fence which surrounds the entire 16 acre site. While not necessary to the waterslide, which was enclosed by its own fence, it was critical to the function of a park which was to charge for admission. It is also undisputed that Rockwell paid for concrete floors in 1 or 2 buildings, outside the waterslide site, which had previously been mere shells with dirt floors. Rockwell also claims, and Jessup denies, that he paid for a train, a backhoe, air-conditioning for the bar and excavation and fill for the railroad's roadbed.
More important than the allocation of dollars to particular sites is the relation of the waterslide to the park as a whole. The waterslide was to be the park's focal attraction. Without the slide, Indian Lake was just another picnic ground and fishing hole. With it, it would become an attraction to draw paying customers. It is impossible then to divorce the waterslide site from the park as a whole because the value of the two are inextricably intertwined and this economic reality is consistent with Rockwell's understanding that he was to be an equal partner in the entire venture. It is the only rational explanation for why Rockwell would expend even one unnecessary dollar outside the purported one acre leasehold, as he undeniably did with the large perimeter fence and the concrete floors. It is the only rational explanation for why Rockwell would invest in the park in one year 3 times as much cash as Jessup had invested in eight.
The discrepancy between events and the terms of the lease, the circumstances of its tardy drafting and execution on the eve of Rockwell's indictment, the continuation of the efforts to avoid a paper trail identifying the investor, and the simple fact that we do not believe Jessup's testimony to be worthy of credence, compel the conclusion that the lease was a sham designed to minimize the apparent scope of Rockwell's involvement. Rockwell was, by virtue of his paying for items not limited to the waterslide site, and by the interdependent character of the park and slide, an investor in the entire venture and not in some discrete portion of it.
Therefore, the entire parcel known as Indian Lake Park, that is roughly that portion circumscribed by the perimeter fence, and all attachments and improvements thereto, is subject to forced sale to recover the amount of drug proceeds invested in the property, and the costs incurred by the United States Marshal in maintaining it. As we concluded above, Rockwell's total investment was $ 328,100. This figure must be reduced by $ 105,000, the approximate amount invested in unassembled waterslide parts which were independently seized. Therefore, the United States is entitled to the forfeiture of $ 223,100 of the proceeds of the sale of Indian Lake Park, plus Marshal's costs.
Petitioners do not come to this proceeding with clean hands. The nature of Jessup's dealings with Rockwell, the extensive use of large amounts of cash, the studied efforts to avoid a paper trail and to conceal Rockwell's involvement all compel the conclusion that to permit petitioners to participate equally in the sale proceeds would permit Jessup to profit unjustly from the influx of money he must have known was tainted. Therefore, the United States is to recover first the full sum of $ 223,100 and Marshal's costs from the sale proceeds, with the balance remaining, if any, to be paid to the petitioner Society.
AND NOW in accord with the accompanying Opinion it is hereby ORDERED:
1) That the parcel known as Indian Lake Park, that is that area circumscribed by the perimeter fence, is subject to forced sale to permit the United States to recover the sums described below.
2) That the United States is to recover from the proceeds of said sale the amount of $ 223,100 being the investment of Ernest Rockwell which was forfeited pursuant to 21 U.S.C. § 848(a) and § 853.