United States District Court, E.D. Kentucky, Central Division, Lexington
OPINION AND ORDER
K. CALDWELL, CHIEF JUDGE UNITED STATES DISTRICT COURT
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.
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).
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.
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.
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).
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).
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.
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.
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.
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.
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)).
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.
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 ...