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United States v. Gardenhire

United States District Court, W.D. Pennsylvania

December 13, 2017



          Nora Barry Fischer, U.S. District Judge.


         This matter is before the Court on a dispute involving the Government's requested forfeiture of 405 Zara Street, which is the residence of husband/wife codefendants Lance and Lasean Gardenhire. (Docket Nos. 2667; 2706). The Government seeks complete forfeiture of the residence; while Defendants maintain that the property should be partially forfeited. (Id.). The parties submitted briefs and exhibits on August 14, 2017, the Government filed its response on August 17, 2017 and Defendants' response was filed on August 18, 2017. (Docket Nos. 2568; 2569; 2578; 2584). The Court held a hearing on August 21, 2017 at which time it heard witness testimony and accepted documentary evidence; the transcript of such proceedings was filed of record on August 31, 2017. (Docket Nos. 2585; 2617). The parties subsequently filed proposed findings of fact and conclusions of law on October 2, 2017 and October 20, 2017. (Docket Nos. 2667; 2706). After careful consideration of the parties' arguments in light of the credible evidence of record, the Court will enter an in personam forfeiture order against the Gardenhires, forfeiting the entirety of both of their respective rights, title and interests in 405 Zara Street to the Government.


         a. Guilty Pleas/Admitted Criminal Conduct/Undisputed Forfeitures

         On the day set for jury selection and trial of this matter, April 24, 2017, Lance pled guilty to Count One of the Superseding Indictment at Criminal Number 15-87, i.e., one count of conspiracy to distribute and possess with intent to distribute 1 kilogram or more of heroin, contrary to the provisions of 21 U.S.C. §§ 841(a)(1), and 841(b)(1)(A)(i), and in violation of 21 U.S.C. § 846, from March 2012 through May 21, 2015 and to Count Three of the Superseding Indictment, i.e., one count of conspiracy to commit money laundering, in violation of 18 U.S.C. §§ 1956(h) and (a)(1)(B)(i), also from March 2012 through May 21, 2015. (Docket No. 2272). Lasean likewise pled guilty to the money laundering conspiracy charge at Count Three. (Docket No. 2263). Both had plea agreements with the Government which enabled them to bring the instant challenge to the forfeiture of their interests in 405 Zara Street.

         On August 30, 2017, Lance was sentenced to 240 months' incarceration and 10 years' supervised release pursuant to his Rule 11(c)(1)(C) plea agreement with the Government. (Docket No. 2609). He was also ordered to pay a $200 special assessment and to forfeit five vehicles, i.e., a 2008 Infinity QX56; a 2008 Mercedes Benz GL450; a 2005 Mercedes Benz C230; a 2009 Mercedes Benz S550; and a 2007 Nissan Titan. (Docket Nos. 2609; 2652). Lasean was sentenced to 8 months' incarceration, to be followed by three years of supervised release. (Docket Nos. 2611; 2634). She was ordered to pay a $100 special assessment and to forfeit her interest in four vehicles, which were all of the vehicles her husband agreed to forfeit except for the 2009 Mercedes Benz S550. (Docket Nos. 2611; 2634; 2652). It appears that Mrs. Gardenhire has retained the 2009 Mercedes Benz S550. In addition, a subsequent Order was entered authorizing the U.S. Marshal Service to sell the 2008 Mercedes Benz GL450 and to disburse the gross proceeds from the sale up to $3, 503.05 to Team Rahal of Steel City, Inc. (Docket No. 2710).

         It is undisputed that Lance Gardenhire was the leader of the Lance Gardenhire Drug Trafficking Organization (“Organization”) and served as the main wholesale supplier of heroin which he imported from his New Jersey source of supply to be further distributed by other members of the Organization throughout the Pittsburgh area. (Docket No. 2499 at ¶¶ 9-13). The parties stipulated that Lance was criminally responsible for the distribution of between 30 and 90 kilograms of heroin for guidelines purposes. (Id.). The factual basis of the offense conduct set forth in Lance's Presentence Investigation Report, (“PIR”) to which no objections were lodged by the parties, makes clear that this was a cash operation:

11. Lance Gardenhire and Corey Cheatom worked together to secure multi-kilogram shipments of heroin from New Jersey. They received the heroin shipments on a regular basis, sometimes as often as every week or two. They paid drivers to transport hundreds of thousands of dollars of heroin trafficking proceeds to their source of supply in New Jersey, and then the drivers returned to Pittsburgh with multiple kilogram quantities of heroin. On August 2, 2014, one of the Organization's drivers was apprehended on his way back from New Jersey with 2, 400 bricks of the Organization's heroin. The quantity of heroin in the bricks exceeded 2 kilograms.
12. After the heroin arrived in Pittsburgh from out-of-state, Lance Gardenhire and Cheatom relied upon the other distributors for the Organization to turn the bricks of heroin into cash. They provided hundreds of bricks of heroin at a time to their distributors on credit and received payment after the heroin was further distributed throughout Western Pennsylvania.

(Docket No. 2499 at ¶¶ 11-12). With respect to his money laundering activities, Lance admitted to conspiring with his wife and “filter[ing] thousands of dollars of [his] heroin trafficking proceeds through Lasean Gardenhire's bank accounts at federally insured banks that were engaged in interstate commerce.” (Id. at ¶ 13). Lasean similarly admitted to conspiring with her husband to commit money laundering and that drug proceeds generated by Lance's heroin dealing were funneled through her various bank accounts, with such funds being used to pay their various expenses. (Docket No. 2501 at ¶¶ 6-9).

         b. Summary of Evidence Presented at Hearing

         At the August 21, 2017 hearing, the Government presented the testimony of codefendant Juan Wysong and Special Agent Sean Currie of the Drug Enforcement Administration, both of whom the Court found to be credible witnesses. (Docket Nos. 2585; 2617). To this end, Wysong generally detailed his heroin trafficking activities with Lance and other members of the Organization from 2012-2015. (Docket No. 2617 at 12-77). Special Agent Currie, who reported having 18 years of law enforcement experience, and was one of the case agents for this prosecution, explained his investigation of the Gardenhires' finances and other activities. (Id. at 79-155). The Government also admitted a number of exhibits supporting its position in this matter. (Govt. Exs. G2; J8; J36-J42; G43-G44; J45-J50; G51; J52; Govt. Demos 1-3). In opposition, the Defendants called Lasean's mother, Leslie Nunley; Lance's father, R. Gardenhire Bey; and a friend, Charles Edward Whitehead Timbers, III and also admitted a few photographs as exhibits. (Docket No. 2617 at 156-214; Def. Exs. 1-2). The Court found these witnesses to be generally credible to the extent that they explained the renovations conducted at 405 Zara Street; however, it does not credit certain of Nunley's testimony concerning the source of funds which were allegedly gifted to the Gardenhires as such testimony was not credibly supported by the other evidence of record and for other reasons more fully described herein. See e.g., United States v. Smith, 751 F.3d 107, 116-17 (3d Cir. 2014) (reliable hearsay statements from a credible third party declarant may be relied upon by court at sentencing). Finally, the Government now moves to admit Nunley's bank records as exhibits in this proceeding. (See Nunley Bank Statements July-December 2012; Docket Nos. 2617 at 182-83; 2667; 2706). No opposition to same having been lodged by Defendants, the Court will admit these records into these proceedings, and consider them.

         c. The Gardenhires' Income and Expenditures During 2011-2012

         Lance and Lasean have been in a romantic relationship since 1998 and were married on July 14, 2012. (Docket Nos. 2499; 2501). At the time of their marriage, the couple had two children; they subsequently had two additional children for a total of four children.[1] (Docket No. 2706). In 2010, Lance and Lasean were indicted together in this district at Criminal Number 10-47. See United States v. Lance Gardenhire and Lasean Nunley, Crim. No. 10-47 (W.D. Pa. Mar. 23, 2010). That case was dismissed after the Hon. David S. Cercone issued an Opinion suppressing evidence. (Crim. No. 10-47 at Docket Nos. 90; 95).

         Starting in September of 2011, Lasean worked as a customer service representative for Duquesne Light. (Docket No. 2617 at 92). She was terminated from this position after she pled guilty to conspiracy to commit money laundering in April of 2017 in this case. (Id.). Special Agent Currie's financial investigation revealed that Duquesne Light paid Lasean her wages via direct deposit into one of her bank accounts. (Id. at 92-3). Lasean earned W2 income from Duquesne Light in the following amounts: $23, 323 in 2012; $37, 678 in 2013; and $57, 619 in 2014. (Id.). Special Agent Currie found no evidence that Lasean was paid cash by Duquesne Light for her work. (Id. at 92).

         During 2011-2015, Lasean maintained at least four bank accounts at two different financial institutions, PNC and Allegheny Valley Bank. (Docket No. 2617 at 85). She also owned a three-bedroom home at 2326 Vodeli Street, which was subject to a mortgage held by Wells Fargo Bank. (Id. at 98-99, 169). Lasean fell behind on said payments and in late 2011, she entered into an emergency home loan program for homeowners who could not make their mortgage payments with the Pennsylvania Housing Finance Authority, (“PHFA”).[2] (Id. at 98-99; Govt. Ex. G44). Through this program, the PHFA paid Lasean's arrears of nearly $3, 000 to Wells Fargo and made future payments totaling approximately $8, 000 which included paying the mortgage on 2326 Vodeli Street throughout 2012. (Id.). Her mother, Nunley, testified that she was neither aware that Lasean was involved in this program nor that her mortgage was being paid by PHFA. (Id. at 169-70). Nunley acknowledged, however, that the Gardenhires were in a difficult position financially in 2011-2012. (Id. at 170).

         Lance was in pretrial custody during the proceedings at Criminal Number 10-47 and ultimately released in May of 2012. (Docket No. 2617 at 82). Lance had no legitimate income while he was incarcerated. He also did not file a tax return for the 2011 tax year. (Id. at 86). As is noted in further detail below, there is no credible evidence in the record demonstrating that Lance generated income through legitimate employment during 2012 through 2015.

         To the contrary, the evidence presented to the Court establishes that starting in July of 2012, Lance generated significant amounts of cash through heroin trafficking. In this regard, Wysong explained that he and Lance had been friends since 2006, at which time they sold cocaine together, among other things. (Docket No. 2617 at 65). Wysong testified that when Lance was released from custody, he was “completely broke” and had an outstanding debt of $30, 000 to his New Jersey-based heroin supplier from past dealings. (Id. at 14-16). Wysong and Lance agreed to start a “business venture” selling heroin together using Lance's source starting in July of 2012. (Id. at 13). Since Lance had no money, Wysong provided $10, 000 to pay off the outstanding debt to the supplier and paid an additional $12, 000 to buy the first 100 bricks of heroin which they then sold together. (Id. at 13-14). They drove to New Jersey to close this deal around the 2012 Fourth of July holiday. (Id. at 14-15). Wysong noted that he and Lance started out making these types of heroin supply trips to New Jersey a few times a month and then others would join in and they would make these trips more often. (Id. at 43-44). He explained that their operation started out slow and then picked up toward the end of 2012. (Id. at 44). Lance, Wysong and/or others continued to make similar trips several times a month until the conspiracy ended in 2015. (Id. at 16-17). For example, he provided details of a supply trip taken in January of 2015 at which time he was present in a hotel room with Lance, Lasean and Cheatom and observed at least a few hundred thousand dollars being counted which was later used to purchase heroin. (Id. at 17-24). Naturally, these narcotics trafficking activities generated substantial amounts of cash for the participants, including Lance.

         In contrast, there was no credible evidence introduced at the hearing demonstrating that Lance earned income from legitimate employment during the period of 2012-2015. To this end, Special Agent Currie testified that he was unable to find any legal sources of income for Lance during that timeframe. (Docket No. 2617 at 30, 94). At most, Lance's individual tax return filed for tax year 2012 and his joint return filed with Lasean for tax year 2013 denote income Lance allegedly earned for work at Headlinz Male Grooming Lounge and Freelance Entertainment and claimed expenses related to the operation of those entities.[3] (Id. at 85-86; Govt. Ex. J39). However, Special Agent Currie was not able to verify this income or that these were legitimate businesses. (Docket No. 2617 at 30, 94). He told the Court that the tax preparer, Jonnet Solomon, did not produce any receipts or any other documents in support of the claimed income or expenses in response to a subpoena. (Id. at 87-88; 131-33). Further, the search warrants executed at the Gardenhires' properties did not result in the seizures of any records related to these businesses. (Id.). Moreover, Lance also did not file a tax return for the 2014 tax year. (Id. at 87).

         With respect to the alleged barber business, Special Agent Currie determined that Lance's barber license had expired in 2008, (Id. at 94-95); he found no evidence of barber equipment at the residences, (id. at 95-96); and his review of the bank records showed only $200 in total charges to a beauty supply store from 2012-2015, (id.). In addition, Wysong and Lance's father, Bey, testified that they did not observe Lance cutting hair for profit and each acknowledged that Lance had cut their own hair for free on occasion. (Id. at 30-31; 201). Similarly, the alleged concert promotion income could not be verified by Special Agent Currie because the owner of Groove Productions advised that Lance had done only “pro bono” work to promote an event and the financial investigation located one check to Lance for a few thousand dollars, which Special Agent Currie noted was “unremarkable” relative to the amount of cash deposits and cash transactions that were made by the Gardenhires. (Id. at 96-97). Special Agent Currie also investigated other potential sources of income for Lance and found that he was accepted for an apprenticeship program with Local Carpenters Union 213 but was terminated in 2009 due to excessive absences from work. (Id. at 98). In response, Defendants offered no additional evidence showing that Lance worked legitimately.

         d. The ...

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