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United States v. Real Property Known and Numbered as 10338 Marcy Road Northwest

United States District Court, S.D. Ohio, Eastern Division

March 30, 2018




         Plaintiff, the United States of America (the “United States”), brings this civil action in rem for forfeiture of the real property known and numbered as 10338 Marcy Road Northwest, Canal Winchester, Ohio (the “Property”) under the Civil Asset Forfeiture Reform Act of 2000 (“CAFRA”), 21 U.S.C. § 881. Specifically, the United States alleges the Property was used or intended to be used in exchange for controlled substances, or represents proceeds of trafficking in controlled substances, or was used or intended to be used to facilitate the trafficking of a controlled substance and is therefore forfeitable. This Court has original jurisdiction over this matter pursuant to 28 U.S.C. §§ 1345 and 1355. Venue is proper in this district under 28 U.S.C. §§ 1355(b)(1)(A) and 1395. This matter came before the Court for a bench trial in March 2017. The Court, via this Opinion and Order, issues its findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a). For the reasons set forth below, the Court concludes that the government has successfully shown by a preponderance of evidence that the Property is subject to forfeiture.

         I. BACKGROUND

         On April 11, 2013, Claimant Levi H. Winston (“Winston”) was charged by Information in this Court in criminal case number 2:13-cr-92 with one count of conspiracy to possess with intent to distribute 1, 000 kilograms of marijuana, in violation of 21 U.S.C. § 856, and one count of money laundering concealment, in violation of 18 U.S.C. § 1956(a)(1)(B)(i). (Joint Exhibit (“JE”)-I.) Winston subsequently entered a guilty plea to both counts of the Information. (JE-J.) At Winston's plea hearing on May 2, 2013, the statement of facts read into the record. Winston acknowledged under oath that the statement of facts was correct.[1] The facts established that between May 2010 and March 8, 2013, Winston arranged for multiple shipments of marijuana to Columbus. (JE-M, at 27-28.) Winston and an associate, Steven Johnson (“Johnson”), rented warehouses where the marijuana shipments were delivered and stored. Winston also purchased a van with $6, 875 of narcotics trafficking proceeds in September 2013. Thus, Winston knowingly, willfully, and unlawfully conspired to possess with intent to distribute at least 1, 000 kilograms of marijuana throughout Central Ohio. On October 31, 2013, this Court entered judgment against Winston for both counts contained in the Information and sentenced him to 135 months of incarceration. (JE-L, JE-N.)

         On October 24, 2013, the United States filed the instant forfeiture action. (ECF No. 1; the “Complaint” or “Compl.”) Specifically, the Complaint alleges that Winston purchased the Property from Robin Adams (“Adams”), the record owner, who had not yet transferred the deed. (Id. ¶ 5.) The Property is mortgage free and is valued approximately at $53, 000. (Id. ¶¶ 6-7.) The United States further alleged that the Property is forfeitable because it was “used or intended to be used in exchange for controlled substances, or represents proceeds of trafficking in controlled substances, or was used or intended to be used to facilitate the trafficking of a controlled substance, ” in violation of 21 C.F.R. § 1300.01. (Id. ¶ 9.) As a result, the United States claimed that the Property is forfeitable under 21 U.S.C. § 881(a)(6). (Id. at 5.) On January 8, 2014, Winston filed a Verified Claim and Answer, asserting that he had an interest in the Property and denied the allegations in the Complaint that it had been purchased with money connected to illegal activity. (ECF Nos. 7, 8.) Adams did not file a claim or answer and the Court accordingly entered an Entry of Default against him on January 22, 2014. (ECF No. 13.)

         The United States filed a motion for summary judgment on November 21, 2014, in which the United States argued that the record reflected no genuine issue of material fact with respect to the Property having been purchased from drug sale proceeds (a “proceeds theory”). This Court subsequently granted summary judgment in favor of the United States on May 27, 2015. (ECF Nos. 27, 38.) On June 19, 2015, Winston filed a timely notice of appeal. (ECF No. 40.) On August 9, 2016, the United States Court of Appeals for the Sixth Circuit reversed the Court's grant of summary judgment and remanded the case for further proceedings. United States v. Real Property 10338 Marcy Road, 659 Fed.Appx. 212 (6th Cir. 2016) (hereinafter “Marcy Road”). Specifically, the Sixth Circuit held that, where the government seeks forfeiture under a “proceeds theory, ” the government must show a “substantial connection” between the property to be forfeited and illegal drug-trafficking activity. Id. at 216. The Sixth Circuit found that the evidence proffered by the government at the summary judgment phase tying the money Winston used to purchase the Property to prior illegal activity was merely speculative. Id. at 218. As a result, “Winston [had] adduced sufficient facts to create a genuine dispute over whether the cash payments to Robin Adams for the property were connected to the sale of any controlled substance.” Id. at 219.

         Following additional discovery, this case came before the Court for a bench trial on March 1-2, 2017. (ECF Nos. 62-63.) The parties subsequently submitted post-trial briefing. (ECF Nos. 64 and 65.)

         II. WITNESSES

         A. United States

         The government presented seven witnesses at trial. Each testified on March 1, 2017. The following is an ad seriatim summation of testimony relevant to the determination of the claim at issue, as well as general credibility determinations.

         1. Ryan Marvich

         Special Agent Ryan Marvich (“Agent Marvich”) of the United States Department of Homeland Security, Investigations, testified that he has been with various federal law enforcement agencies for approximately 19 years and is currently assigned to a federal narcotics task force. (Tr. Vol. 1, 11:1-10.) Agent Marvich testified that, in November 2012, during the course of an investigation of marijuana being trafficked from Brownsville, Texas to Columbus, Ohio, a warehouse of marijuana was discovered in Columbus, Ohio. Several individuals were arrested who were at the warehouse and the property was found to have been rented by Winston. (Id. at 12:13-22.)

         Agent Marvich further testified that he personally learned Winston “was involved with other individuals who were a part of a conspiracy to distribute a large amount of marijuana that was being brought into the United States from Mexico and being brought to the Columbus area and being distributed in the Columbus, Ohio, area.” (Id. at 15:8-12.) Agent Marvich also learned that Winston, “through himself and through other individuals, rented warehouses in the Columbus area for the purpose of unloading marijuana, and that Mr. Winston also personally distributed some of the marijuana that was delivered in the Columbus area.” (Id. at 15:13-17.) Winston was subsequently charged in a criminal complaint with conspiracy to possess with the intent to distribute over 1, 000 kilograms of marijuana. (Id. at 15:22-23.)[2]

         After Winston's guilty plea and resulting criminal conviction in relation to the marijuana investigation, Agent Marvich continued to stay involved in further investigatory efforts. (Id. at 20:4-6.) At that time, he testified, he learned that “Winston purchased the Defendant Property in this case for - I think it was $36, 500 that was paid in cash to Mr. Robin Adams, and this property was purchased during the time that Mr. Winston was involved with the conspiracy to distribute the marijuana which he pled guilty to.” (Id. at 20:15-20.)[3] Agent Marvich also testified that the investigation “never obtained any information or saw any evidence that Mr. Winston had any source of legitimate income.” (Id. at 20:20-22.)

         Under cross-examination, Agent Marvich testified that he participated in the execution of a search warrant in March 2013 for documents pertaining to the criminal investigation of Winston with respect to “any properties he may have purchased, any other warehouses he may have rented, any storage lockers he may have rented, any paper document that would lead us to other locations where any other crimes would have been committed, as well as any cash.” (Id. at 23:15-19.) Agent Marvich testified that Special Agent Barney Clark (“Agent Clark”) from the Internal Revenue Service (“IRS”) participated in the search in order to seize documents related to legitimate or illegitimate income. (Id. at 23:20-24:7.)

         The Court finds the testimony of Agent Marvich credible and accords it appropriate weight.

         2. Lisa Brown

         Detective Lisa Brown (“Detective Brown”) testified that she has been employed by the Franklin County Sheriff's Office since 1994. Additionally, she has worked for the Special Investigations Unit, the HIDTA Task Force and, from 2014 to present, the FBI Violent Crimes Task Force. (Id. at 29:23-30:8.)

         Detective Brown further testified that, in mid-October 2011, she was assigned to surveil a warehouse in Columbus in connection with an investigation into a controlled delivery of approximately 17 to 18 hundred pounds of marijuana. (Id. at 30:21-31:3.) Several individuals were arrested as a result of the investigation at the warehouse, which, Detective Brown learned, was leased to Winston. Detective Brown was subsequently tasked with interviewing Winston. (Id. at 31:17-24.) Detective Brown also observed Winston driving a white cargo van in the course of her investigation. (Id. at 4-8.)

         Through continuing investigation, Detective Brown testified, she learned that Winston had recently purchased a property at 999 Cummington. (Id. at 32:9-10.) Detective Brown visited the 999 Cummington property where she learned that Winston had hired individuals to help refurbish portions of that and other properties, and paid for the work in cash. (Id. at 32:25-33:5.) Detective Brown testified that the remodel was “done very nicely. It was a higher-end . . . remodel. It was nice cabinets, had a very nice closet, California closet system, in it, some very nice fixtures.” (Id. at 42:12-17.)

         Finally, Detective Brown also learned, in the course of her investigation, that Winston was involved in renting multiple other warehouses, such as, Centerpoint Drive, Grove City in early 2012, Groveport Road, in the fall of 2012, and Westbelt Avenue or Road. (Id. at 37:16-38:2.) Detective Brown testified that she believes Winston rented the warehouses-or had someone else rent them for him-to utilize them in the delivery of marijuana. (Id. at 40:13-22.)

         The Court finds the testimony of Detective Brown generally credible. The Court, however, discounts her opinion testimony regarding the remodel of the 999 Cummington property as it is highly subjective and, therefore, accords it little weight.

         3. Steven Johnson

         Steven Johnson (“Johnson”) testified that, after he met Winston through mutual friends at a car lot, they pursued a business relationship. (Id. at 52:8; 22-24; 55:6-9.) The business relationship consisted of Johnson renting forklifts, a crane, warehouses and unloading a box off a truck with the forklifts for Winston. (Id. at 52:10; 19-20; 53:1-2.) Johnson testified that he rented the warehouses under his business' name, entitled JF Industries, for Winston with money Winston gave to him. (Id. at 53:3-15.) Johnson further testified that Winston paid him to rent the warehouses in cash, erratically, in amounts that totaled about $25, 000 in a year's time. (Id. at 54:5-10; 57:22.) Johnson testified that he would take the cash given to him by Winston and use it to pay the warehouse rental fees via a cashier's check drawn in JF Industries' name. (Id. at 58:2-4.) Johnson testified that he rented three warehouses in total for Winston-one on Westbelt in Groveport, one on Centerpoint Drive, and one on Groveport Road. (Id. at 61:17-18; 65:1-3; 71:14-15.)

         Johnson also testified that he was pulled over and arrested while driving a truck in February 2013 from Texas to Columbus. Johnson testified that law enforcement found 600 pounds of marijuana in the truck upon inspection. (Id. at 82:23; 83:16-23.) As a result of the incident, Johnson was charged and convicted of distribution of marijuana. (Id. at 84:23-85:2.) Johnson finally testified that the purchase price for marijuana from Texas is about $500 per pound, while the street resale value would be $800-1000 per pound. (Id. at 85:11-12; 86:9-12.)

         The Court finds the testimony of Johnson credible and accords it appropriate weight.

         4. Robin L. Adams

         Robin L. Adams (“Adams”) testified that he is currently a dump truck driver. (Id. at 92:17.) In 2009, Adams testified, he was charged with and pleaded guilty to conspiracy and drug trafficking. (Id. at 93:25-93:3.) Adams testified that he has completed his sentence. (Id. at 93:9-11.)

         Adams testified that he is the prior owner of the Property, which he purchased sometime around 2004. (Id. at 93:12-17.) Adams described meeting Winston in 2012 through mutual contacts after Adams decided to try to sell the Property. (94:23-95:7.) On November 29, 2012, Adams and Winston executed a Contract for Deed (the “Contract”), under the terms of which Winston agreed to purchase the Property for a price of $36, 500. (Id. at 96:13-15; JE-A.) Winston paid Adams a down payment of $14, 500, and Adams subsequently created a payment ledger in order to record amounts paid and due. (Id. at 97:16-23; JE-A; JE-B.) In addition to the $14, 500 down payment, the ledger indicates that Winston paid Adams $1, 000 on December 11, 2012; $1000 on December 12, 2012; and $10, 000 on January 2, 2012. Despite the reflection on the payment ledger of $10, 000 still outstanding, Adams testified that he and Winston agreed Winston had paid in full for the Property. Specifically, when Winston “got into this trouble that he was in, this case here he was in” Adams told him he owed nothing more.[4] (Id. at 99:17-25.) Adams testified that he considered the sale of the Property to be complete to which end, he would be willing to sign a quitclaim deed over to Winston in order to complete the transaction. (Id. at 100:2-4, 16-17.)

         The Court finds the testimony of Adams generally credible and accords it appropriate weight.

         5. Floyd Sims

         Floyd Sims (“Sims”) testified that he met Winston when both men were serving prison sentences in McKean Federal Prison in Pennsylvania (“McKean”). (Id. at 103:17-18.) Sims testified that he next saw Winston after the latter was released from prison around 2009. (Id. at 103:25-104:2.) Sims recalled that Winston said he was working at a call center while he was in the halfway house. (Id. at 105:5-8.) Over the next few years, Sims testified, he and Winston bought and sold each other drugs three or four times. (Id. at 105:19-22.)

         Sims testified that when he was released from prison in 2009, Winston approached him and asked “to borrow $15, 000 so that [Winston] could hire a lawyer to fight to keep his land.” (Id. at 106:9-12.) Sims testified that he did not make the loan to Winston because he did not have any money. (Id. at 106:13-14.) Sims acknowledged that he was not sure what land Winston ...

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