The opinion of the court was delivered by: ANITA B. BRODY
The legal issues before me in this civil forfeiture action pursuant to the drug forfeiture statute, 21 U.S.C. § 881, are:
(1) whether ownership of a vehicle evidenced by a valid claim to ownership under applicable state law is sufficient to assert the so-called innocent ownership defense under 21 U.S.C. § 881(a)(4)(C). I find sufficient ownership;
(2) whether in his effort to prevail as an innocent owner under 21 U.S.C. § 881(a)(4)(C) an attorney-claimant meets his burden of proof that he owned the vehicle without "willful blindness" to the fact that the vehicle had been used to facilitate drug trafficking when at the time he acquired title he knew that the vehicle had been owned and used by persons indicted (albeit acquitted) as members of an organization involved in the trafficking of illegal drugs and further had himself elicited testimony at a previous racketeering trial regarding the organization's trafficking of illegal drugs. I find that the claimant fails to meet his burden of establishing lack of willful blindness; and
(3) Whether a claimant can prevail as an innocent owner under 21 U.S.C. § 881(a)(4)(C) if he fails to establish lack of willful blindness but is arguably able to show lack of knowledge and lack of consent. I find that the claimant's failure to establish lack of willful blindness alone is sufficient to defeat his claim of innocent ownership.
Following a bench trial held February 17, 1993 on the United States' complaint for civil forfeiture filed March 2, 1990,
and claimant's verified claim of interest filed March 15, 1990, I make the following findings of fact.
In September 1989, the Federal Bureau of Investigations ("F.B.I.") seized in Philadelphia a 1973 Rolls Royce, vehicle identification number SRH-16266 ("the Rolls Royce"), registered in Florida to Anthony "Spike" Gregorio ("Gregorio") of Fort Lauderdale, Florida. (See Complaint, at P 5). The Rolls Royce has been impounded in Philadelphia for the duration of this civil forfeiture proceeding. (See id. at P 6).
The government's evidence is comprised largely of information provided to it by three former members of the La Costa Nostra ("L.C.N.") organized crime family -- Philip Leonetti ("Leonetti"), Thomas DelGiorno ("DelGiorno"), and Nicholas "Nicky the Crow" Caramandi ("Caramandi") -- who are now cooperating government witnesses who have on several occasions testified about the illegal activities of members of the L.C.N. crime family. (N.T. at 30-34).
The Rolls Royce was purchased in January 1986 by Nicodemo Scarfo, Sr. ("Scarfo"), boss of the L.C.N. family.
(N.T. at 49). Mr. Scarfo purchased the car from Cream Puff Motors in Florida for approximately $ 25,000. The majority of the purchase price was paid in cash, with the remainder of the price credited for a Lincoln Continental trade-in. (N.T. at 49, 63). Mr. Scarfo had the Rolls Royce registered in Florida to Mr. Gregorio, an associate who maintained a Florida residence which Mr. Scarfo often occupied. (Exh. G-2; N.T. at 50).
In late 1985 or early 1986, Mr. Gregorio drove Mr. Scarfo, Mr. Leonetti and others in the Rolls Royce to a meeting at a Fort Lauderdale nightclub with John DiSalvo ("DiSalvo"), a drug trafficker from the Philadelphia area. At that meeting, Mr. DiSalvo told Mr. Scarfo that he would pay Mr. Scarfo $ 200,000 from the trafficking of phenyl-2-propanane, a methamphetamine precursor commonly known as P2P. (See Complaint at P 11; N.T. at 45-46, 53-54).
In August 1986, Mr. Scarfo called a meeting of L.C.N. family members at the Florida residence maintained by Mr. Gregorio. One of persons who attended that meeting was Francis "Faffie" Iannarella ("Iannarella"), a "made-member" of the L.C.N. organization.
Mr. Iannarella flew from Philadelphia to Florida carrying $ 50,000 in cash collected as "street taxes" from drug traffickers.
In preparation for the Florida meeting, Mr. Gregorio met Mr. Iannarella at a Florida airport and transported Mr. Iannarella and the drug proceeds
to a Fort Lauderdale hotel in the Rolls Royce. The cash was ultimately given to Mr. Scarfo. (N.T. at 54-56).
Between 1987 and 1988, the claimant in this case, Oscar B. Goodman ("Goodman"), a criminal defense attorney from Las Vegas, Nevada, represented Mr. Leonetti in three separate criminal trials in Philadelphia. At the first trial, in December 1987, United States v. Nicodemo Scarfo, et al, 87-CR-00258, Mr. Scarfo, Mr. Leonetti and others were acquitted of federal drug charges (Exhs. G-6, G-7, G-8; N.T. at 38, 91-93, 115-16); at the second trial, in May 1988, Mr. Scarfo, Mr. Leonetti and others were acquitted in state court of murdering L.C.N. member Salvatore Testa ("Testa") (Exh. D-4; N.T. 91-94, 116-17). At the third trial, in September 1988,
United States v. Nicodemo Scarfo, et al, 88-00003, Mr. Scarfo, Mr. Leonetti and others were found guilty in federal court of violating the Racketeer Influenced Corrupt Organizations ("RICO") statute as well as federal drug laws. (Exhs. G-5A, G-5B, G-5C, G-9; N.T. at 28-29, 38, 117-118). The RICO and drug trafficking convictions were affirmed by the Third Circuit, see United States v. Pungitore, 910 F.2d 1084 (3d Cir. 1990), certiorari denied, 111 S. Ct. 2009 (1991), and the defendants are currently serving prison sentences.
Following the jury's unexpected verdict in favor of the defendants in the Testa murder trial on May 10, 1988, the defendants' attorneys, friends, family and followers gathered at the Four Seasons Hotel in Philadelphia, where a spontaneous celebration erupted.
Mr. Goodman testified that "nothing was spared as far as expense," that for several hours "Cognac that . . . was $ 800 a bottle [was] imbibed by everyone there" and "$ 100 bottles of champagne were being shaken like it was a World Series victory and splattered all over the wall."
(Exhs. D-2, D-3, D-4; N.T. at 94-102).
At the end of the evening Mr. Goodman was approached by Mr. Scarfo's son, Nicodemo Scarfo, Jr., concerning the bill for the festivities. The cost of the party exceeded $ 16,000, and Mr. Goodman testified that no one present at the party had sufficient funds to pay the bill. The younger Scarfo and others requested that Mr. Goodman sign for the bill, and Mr. Goodman did so.
(Exh. D-5,; N.T. at 97-99). All liabilities of Mr. Goodman to the Four Seasons Hotel were ultimately satisfied.
(N.T. at 153-165).
At some point shortly after the Four Seasons party, the younger Scarfo offered Mr. Goodman the Rolls Royce in return for Mr. Goodman's paying the Four Seasons bill. A deal was struck whereby Mr. Goodman was to receive, in return for his paying the Four Seasons bill, title to the Rolls Royce and $ 1,500 contributions from each of three other attorneys present at the party. (Exhs. D-6, D-7; N.T. at 99-101).
When the Rolls Royce was seized by the F.B.I in Philadelphia on September 15, 1989, Mr. Goodman had not yet taken physical possession of the vehicle. (N.T. at 107). In response to the government's claim for civil forfeiture of the Rolls Royce pursuant to 21 U.S.C. § 881, Mr. Goodman filed a verified claim in interest asserting innocent ownership of the Rolls Royce pursuant to 21 U.S.C. §§ 881(a)(4)(C) and 881(a)(6).
I make the following conclusions of law:
1. The government has established probable cause that the Rolls Royce was used to facilitate illegal drug transactions under 21 U.S.C. § 881(a)(4).
2. The claimant has sufficient standing to contest forfeiture of the Rolls Royce.
3. When title was transferred to the claimant on October 5, 1988, the claimant received sufficient ownership of the Rolls Royce to assert an innocent ownership defense under 21 U.S.C. § 881(a)(4)(C).
4. The claimant had sufficient notice to signal that Mr. Scarfo and his L.C.N. associates were involved in illegal drug trafficking and that the Rolls Royce was connected to such activity to require inquiry.
5. The claimant has failed to establish that he was not willfully blind to the fact that the Rolls Royce was used to facilitate the trafficking of illegal drugs.
6. Failure to prove lack of willful blindness alone is sufficient to defeat the claimant's contention of innocent ownership under 21 U.S.C. § 881(a)(4)(C).
7. The Rolls Royce is forfeited to the United States pursuant to 21 U.S.C. § 881(a)(4).
I. PROBABLE CAUSE FOR ...