Appealed from No. MD-3447-2012. Common Pleas Court of the County of Lehigh. Anthony, J.
Everett Cook, Whitehall, for appellant.
Heather F. Gallagher, Senior Deputy District Attorney, and Kevin P. McCloskey, Deputy District Attorney, Allentown, for appellee.
BEFORE: HONORABLE BONNIE
BRIGANCE LEADBETTER, Judge, HONORABLE P. KEVIN BROBSON, Judge, HONORABLE JAMES
GARDNER COLINS, Senior Judge.
P. KEVIN BROBSON, Judge
Andys O. Rodriguez (Rodriguez) appeals from an order of the Court of Common Pleas of Lehigh County (trial court), dated May 31, 2013, ordering the forfeiture of a 2010 Buick Enclave VIN# GALRBED8J122029, $36,900.00 in U.S. Currency, one Springfield 9mm Pistol, Serial #972758, and a magazine and ammunition related to the pistol. For the reasons set forth, we reverse the trial court and remand for further proceedings.
As part of a criminal investigation into a fraudulent income tax scheme in Allentown, police conducted surveillance on America Araujo Santos, the owner of Rodriguez Check Cashing located in the 500 block of North 7th Street in Allentown, Pennsylvania. (Reproduced Record (R.R.) 9.) Santos was observed going to a residence at 1028 West Tilghman Street on several occasions, which was the home of Rodriguez, his wife, and their son, similarly named Andy Rodriguez (Andy). (R.R. 10.) Detective Pedro Cruz, of the Allentown Police Department's Criminal Investigation Unit, discovered that the Internal Revenue Service (IRS) had an ongoing investigation involving 1028 West Tilghman Street, which began after Andy reported a laptop stolen. (R.R. 11-12.) The police contacted the IRS after recovering the laptop and discovering stolen identities and tax returns saved on one of the computer's drives. (R.R. 12, 20.) Andy denied that the laptop was his, but requested permission to take it nonetheless, which the police denied. (R.R. 12-13.)
In conjunction with the IRS investigation, it was discovered that the tax returns contained on the computer drive, along with many others, were filed electronically with the IRS from several internet protocol, or IP, addresses associated with 1028 West Tilghman Street. (R.R. 12-13; Ex. C-1 at 4-17.) Those IP addresses were tied to almost six million dollars in fraudulent tax returns for the years 2010-2012. (R.R. 15.) Based upon this information, law enforcement officers obtained and executed a federal search warrant at 1028 West Tilghman Street. (R.R. 13-14; see Ex. C-1 (search warrant and affidavit).) During the search, multiple items were seized by both the IRS and Commonwealth. (R.R. 15-16.) Among the property seized by the Commonwealth were the following items owned by Rodriguez: a 2010 Buick Enclave, VIN# GALRBED8J122029; $36,900.00 in U.S. Currency; one Springfield 9mm pistol, serial #972758; and a magazine and ammunition for the pistol. (R.R. 16.) The cash was discovered in a hole in the wall behind the refrigerator. (R.R. 16.) Rodriguez denied there were any large sums of cash in the house until police found the $36,900 behind the refrigerator, at which time he claimed ownership of the cash and explained that it was from his money lending business and disability payments. (R.R. 16-17.)
The Commonwealth filed a motion for forfeiture and condemnation, seeking the common law forfeiture of derivative contraband, and a hearing on the motion was held February 28, 2013 and May 31, 2013. At the hearing Detective Cruz testified about the investigation (R.R. 3-23), and the trial court admitted the affidavit and search warrant into evidence as Exhibit C-1 without objection (R.R. 14). Rodriguez testified that the money came from his ongoing loan business. (R.R. 48.) He testified that he is unemployed, but he runs a personal loan business out of his house and charges between one and five percent simple interest. (R.R. 26, 44-46.) He testified that he funds this business using cash advances from his credit cards, his disability payments, and an insurance payment. (R.R. 27-28.) He introduced a variety of documents into evidence, including loan statements, disability payment statements, credit card statements, and records from his personal loan business. ( See Exs. D-1 through D-6.) Additionally, Rodriguez testified about his tax returns for the years 2009-2012, which show reported disability payments of only $14,310 for each year, with no income. (R.R. 68.) The 2010 return also shows a 401K distribution of $20,595, and 2012's shows an additional taxable interest of $14,870. (R.R. 68.) His expenses include rent, electric, cable, car insurance, cell phone, and interest on his children's college loans. (R.R. 71-72.) He also testified that he purchased the Buick for $30,000, of which he paid $15,000 in cash up front (R.R. 71), and paid $569 for the pistol (R.R. 75). Rodriguez testified that his wife works and helps with expenses, such as the children's clothes and health insurance, but he did not testify to or introduce evidence concerning how much she contributed. (R.R. 75.) He also testified that he and his wife were " practically separated," and living in separate residences from 2005-2013. (R.R. 72, 77.)
Following the hearing, the trial court issued an order granting the Commonwealth's forfeiture motion. On appeal, Rodriguez raises two issues: first, whether the Commonwealth failed to establish the requisite nexus between the property seized and criminal activity. Specifically, Rodriguez argues that there can be no nexus because he was neither charged with nor convicted of a crime. The second issue on appeal is whether the trial court failed to weigh properly the evidence he introduced about the source of the money.
The grant or denial of a forfeiture petition rests within the sound discretion of the trial court. Commonwealth v. One 2001 Toyota Camry, 894 A.2d 207, 209 n.1 (Pa. Cmwlth.) (en banc), appeal denied sub nom. Commonwealth v. One 2001 Toyota Camry (Sanders), 588 Pa. 766, 903 A.2d 1234 (Pa. 2006). In an appeal from a forfeiture proceeding, this Court's review is limited to determining whether the findings of fact are supported by substantial evidence, and whether the trial court committed an error of law or abused its discretion. Commonwealth v. $6,425.00 Seized from Esquilin, 583 Pa. 544, 880 A.2d 523, 529 (Pa. 2005).
This case presents an opportunity for the Court to clarify an important distinction between the oft-encountered statutory civil forfeiture and its less common cousin, " common law" forfeiture of ...