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United States v. Tovar

United States District Court, E.D. Kentucky, Central Division, Lexington

August 13, 2019

UNITED STATES OF AMERICA, Plaintiff,
v.
BENITO SEGURA TOVAR, Defendant LORENA LINARES-SANCHEZ, Claimant

          OPINION AND ORDER

          KAREN K. CALDWELL, CHIEF JUDGE UNITED STATES DISTRICT COURT

         This matter is before the Court on the Statement of Claim and Petition for Adjudication of Claim to certain real property (DE 870) filed by claimant Lorena Linares-Sanchez.

         After defendant Benito Segura Tovar pleaded guilty to conspiring to distribute cocaine and marijuana and to commit money laundering, this Court sentenced him to a 188-month term of imprisonment (DE 869, Judgment). Any person convicted of such a crime must forfeit to the United States any property derived from the proceeds of the crime and any property used to commit the crime. 21 U.S.C. § 853(a). Further, title to such property vests in the United States at the time of the commission of the acts giving rise to the forfeiture. 21 U.S.C. § 853(c).

         In his plea agreement, Tovar agreed to forfeit all his interest in the property listed in the forfeiture allegation of his indictment. Among the property in the forfeiture allegation were three pieces of real property: 4436 Damas Rd., Knoxville, Tennessee; 4224 Van Dyke Drive in Knoxville, Tennessee; and 3904 W. Beaver Creek Dr. in Powell, Tennessee.

         Prior to his sentencing, the Court entered a preliminary judgment of forfeiture, ordering that the three pieces of real property were forfeited to the United States. Pursuant to 21 U.S.C. § 853(n)(2), Linares-Sanchez filed a petition asserting that she owns 15 percent of the Damas Rd. property; 100 percent of the Beaver Creek property; and 100 percent of the Van Dyke Drive property.

         A third-party claimant can prove her entitlement to forfeited property in a few ways. If the claimant's interest in the property arose prior to the commission of the criminal acts giving rise to the forfeiture (and, thus, before title to the property vested in the United States), she must prove by a preponderance of the evidence that she currently has a legal interest in the property and that, at the time of the commission of the criminal acts (when the United States acquired its interest in the property), 1) she was the one that had an interest in the property, not the defendant; or 2) her interest was superior to the defendant's interest. 21 U.S.C. § 853(n)(6)(A).

         If the claimant's interest in the property arose after the commission of the criminal acts (and, thus, after the United States acquired its interest in the property), then the she must prove that she was a “bona fide purchaser for value” of her asserted interest in the property “and was, at the time of purchase, reasonably without cause to believe that the property was subject to forfeiture….” 21 U.S.C. § 853(n)(6)(B).

         As to evidence that Linares-Sanchez has a legal interest in the properties and when that interest arose, she testified that she is not on the title or deed to the Damas Road property. For this reason, the Court cannot find that Linares-Sanchez has proved by a preponderance of the evidence that she has a legal right, title, or interest in the Damas Road property.

         At the forfeiture hearing, Linares-Sanchez did produce a deed, however, showing that she is the record owner of the Beaver Creek property. No. party produced evidence at the hearing that Linares-Sanchez holds title to the Van Dyke property, but the Assistant U.S. Attorney stated that the government did not contest that Linares-Sanchez is the record owner of the Van Dyke property. The AUSA stated that Linares-Sanchez had provided the government titles and deeds to both the Beaver Creek and Van Dyke properties.

         As to when Linares-Sanchez acquired title to the properties, the quitclaim deed offered into evidence establishes that Honorio Sanchez quitclaimed the Beaver Creek property to Linares-Sanchez on March 23, 2014. Linares-Sanchez testified that Honorio Sanchez is her uncle. She testified that her uncle also quitclaimed the Van Dyke property to her on June 9, 2014. That testimony was uncontradicted.

         Again, the evidence before the Court shows that the criminal activity underlying Tovar's conviction in this case began in September 2014. Thus, Linares-Sanchez asserts that she acquired ownership of both the Van Dyke and Beaver Creek properties before Tovar's criminal activity began and, therefore, before title vested in the United States. There is no evidence that Tovar ever had title to the Beaver Creek or Van Dyke property. Thus, Linares-Sanchez is attempting to prove that she is entitled to the properties under the first method discussed above. She asserts that 1) she has a legal interest in the properties and 2) that, at the time of the commission of the criminal acts, she had title to the properties, and Tovar did not.

         While Linares-Sanchez has sufficiently established that she has legal title to the properties, “bare legal title, in the absence of assertions of dominion, control or some other indicia of ownership of or interest in the seized property, is insufficient to confer standing to challenge a forfeiture.” United States v. $515, 060.42, 152 F.3d 491, 498 n. 6 (6th Cir.1998) “The mere assertion of legal title to property may not be sufficient to establish standing, for issues of actual possession, control, and financial stake must also be considered.” Id. (quoting United States v. 2511 E. Fairmount Ave., 722 F.Supp. 1273, 1279 (D. Md. 1989)).

         As to dominion and control over the properties, Linares-Sanchez testified that she lives in the Beaver Creek property with her three children and Tovar's nephew. She testified that she has never lived in the Van Dyke property, but that she began renting it out about two years ago. There is no evidence to the contrary. Thus, Linares-Sanchez has established that she has dominion and control over the Van Dyke and Beaver Creek properties.

         In addition to legal title and dominion and control over the properties, the Court must also determine whether Linares-Sanchez purchased the property with the proceeds of the criminal activity that gave rise to the forfeiture. “[C]ourts look behind the formal title to determine whether the record title owner is a ‘strawman' set up to conceal the financial affairs of illegal dealings of someone else.” United States v. Carrell, 252 F.3d 1193, 1204 (11th Cir.2001) (citation omitted). “It has been recognized that people engaged in illegal activities, especially when needing to conceal illegitimate funds and being aware of forfeiture statutes, often attempt to disguise their interests in property by not placing title in their own names.” Id. (citing United States v. One 1982 Porsche 928, 732 F.Supp. 447, 451 (S.D.N.Y.1990)). “A failure to look beyond bare legal title would foster manipulation of nominal ownership . . . . ” United States v. Henry, No. 94-6188, 1995 WL 478635, at *2 (6th Cir.1995) (citing 526 Liscum Drive, 866 F.2d at 217). “The rationale for the rule that bare legal title may be insufficient [for standing] is based on a candid determination that things are often not what they appear to be, especially in the world of drug trafficking.” United States v. A Single Family Residence & Real Prop. Located at 900 Rio Vista ...


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