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U.S. v. STRUBE

July 19, 1999

UNITED STATES OF AMERICA
v.
WILLIAM MICHAEL STRUBE



The opinion of the court was delivered by: Rambo, Chief Judge.

MEMORANDUM

Before the court are the United States of America's motions to dismiss third-party claims of interest in: (1) certain real property forfeited pursuant to Defendant William Michael Strube's September 2, 1997 conviction; and (2) certain substitute assets forfeited pursuant to Defendant's conviction. The parties have briefed the issues, and the motions are ripe for disposition.*fn1

I. Background

On April 29, 1997, The United States of America ("Government") filed a five-count indictment, charging Defendant and others with conspiracy to distribute cocaine, two counts of distribution of cocaine, conspiracy to launder proceeds of unlawful activities, and criminal forfeiture. Specifically, the criminal forfeiture count sought forfeiture of Defendant's interest, pursuant to 21 U.S.C. § 853(p), in the following: (1) real property located at 4578 Klinesville Road, West Hempfield Township, Lancaster County, Pennsylvania ("Klinesville Road Property");*fn2 (2) $1,081,400 in United States currency; and (3) substitute assets.

The case proceeded to trial, and on September 2, 1997, a jury found Defendant guilty on, inter alia, the criminal forfeiture count. On September 3, 1997, the court entered an order, molding the verdicts to reflect that Defendant and co-Defendant Richard Lyman Pitt were jointly and severally liable for the forfeited sum of $1,081,400 and that Defendant was subject to forfeiture of the Klinesville Road Property.

On September 22, 1997, the Government filed a motion for a preliminary order of forfeiture as to Defendant's interest in the Klinesville Road Property and the $1,081,400, pursuant to 21 U.S.C. § 853(a) and 18 U.S.C. § 982(a)(1). On May 20, 1998, the Court granted the Government's motion. On July 9, 1998, the Government filed a motion to forfeit the following substitute assets, pursuant to 21 U.S.C. § 853(p): (1) real property located in West Hempfield Township, Lancaster County, Pennsylvania, consisting of 30,173 square feet ("Lot 1"); (2) real property located in West Hempfield Township, Lancaster County, Pennsylvania consisting of 39.504 acres ("Lot 2"); and (3) a boat named the "M/V Mistress" (hereinafter referred to collectively as the "Substitute Assets").*fn3

On July 13, 1998, Defendant's wife, Star Nada Strube ("Star"), and his grandmother, Dorothy Strube ("Dorothy"), filed third-party claims of interest in the Klinesville Road Property. Defendant's mother, Irene Strube ("Irene"), filed a third-party claim of interest in the Klinesville Road Property on July 16, 1998. On July 30, 1998, the Government filed a motion to dismiss the third-party claims to the Klinesville Road Property filed by Irene and Dorothy.*fn4 By order dated July 31, 1998, the court deferred consideration of the third-party claims pending disposition of the Government's July 9, 1998 request for an order preliminarily forfeiting the Substitute Assets.

On August 27, 1998, the court granted the Government's July 9, 1998 motion and entered a preliminary order of forfeiture of the Substitute Assets and a final order as to Defendant's interest in the Substitute Assets. On September 29, 1998, Irene, Dorothy and Star (collectively "the Strubes") filed verified claims of interest in the Substitute Assets. The Government filed a motion to dismiss the Strubes' third-party claims to the Substitute Assets on November 4, 1998. On November 27, 1998, the Strubes responded to the Government's July 30, 1998 and November 4, 1998 motions to dismiss, and on December 28, 1998, the Strubes filed a supplement to their November 27, 1998 response.

II. Legal Standard: Third-Party Claims to Forfeited Property

When property is ordered forfeited pursuant to the criminal forfeiture provisions of the United States Code, 21 U.S.C. § 853, third parties, i.e., persons other than the defendant, who claim to have legal interests in the forfeited property may petition the court for a hearing to adjudicate the validity of their claimed interests. 21 U.S.C. § 853(n)(2). Section 853(n)(6) provides two alternative methods by which third party claimants may prevail, i.e., successfully establish their rights, at a hearing. First, a third-party claimant may prevail by proving, by a preponderance of the evidence, that she:

  [(1)] has legal right, title, or interest in the
  property . . . [which] was vested in [her] rather
  than the defendant[;] or [(2)] 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.

Id., § 853(n)(6)(A). Alternatively, a third-party claimant may prevail by proving, by a preponderance of the evidence, that she:

  is a bona fide purchaser for value of the right,
  title or interest in the property and was at the time
  of purchase reasonably without cause to believe that
  the property was subject to forfeiture.

Id., § 853(n)(6)(B).

When it is clear from a third-party claimant's petition that she cannot, as a matter of law, prevail under Section 853(n)(6)(A) or (B), the court may dismiss the petition for lack of standing without conducting a hearing on that claim. See United States v. Lavin, 942 F.2d 177, 189 (3d Cir. 1991) (affirming district court's dismissal of third-party petition challenging criminal forfeiture due to claimant's lack of standing under 21 U.S.C. § 853(n)(6)).

III. Discussion

The Court will first summarize each of the third-party claims to the Klinesville Road Property and the Substitute Assets. The court will then address the Government's motions as they pertain to each claimant separately.

A. Summary of the Third-Party Claims*fn5

1. Irene Strube

Irene asserts that she has an ownership interest and/or possessory interest in the Klinesville Road Property and the Substitute Assets pursuant to a judgment lien against Defendant in the amount of $141,000 entered by the Court of Common Pleas for Lancaster County, Pennsylvania on October 14, 1997. According to Irene, the lien resulted from Defendant's failure to repay loans which Irene made to him. Irene further asserts that the loans were made for: (1) improvements and repairs to the Klinesville Road Property; (2) equipment used by Defendant in his excavating business; and (3) the purchase of the M/V Mistress.

2. Dorothy Strube

Dorothy asserts that she has an ownership and/or possessory interest in the Klinesville Road Property and the Substitute Assets*fn6 pursuant to a judgment lien against Defendant in the amount of $300,000 entered by the Court of Common Pleas for Lancaster County, Pennsylvania on October 14, 1997. According to Dorothy, the lien resulted from Defendant's failure to repay several loans which she made to him. Dorothy further asserts that the loans were for ...


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