Gov’t makes more bizarre arguments in effort to capture the Motel Caswell

by Scott Alexander Meiner

Our Government’s imaginative prosecution of the Motel Caswell continues…

Assistant United States Attorney Sonya Rao argues all property on which a drug crime has occurred is subject to forfeiture, regardless of the owner’s knowledge or consent. The prosecution’s theory would make continued private ownership of publicly-used property contingent on the discretion of prosecutors and mere happenstance. Successful use of the theory would also gut the protection that the government must first show property is subject to forfeiture. To support this preposterous conclusion, AUSA Rao cuts-and-pastes largely distinguishable non-controlling out-of-circuit decisions–nearly all of which were decided before the Civil Asset Forfeiture Reform Act of 2000 and its attendant protections became law:

It is important to note, however, that whether the property’s role is integral, essential or indispensable to the crime is irrelevant in determining the property’s substantial connection to the crime. Schifferli, 895 F.2d at 990 (“[T]he language of §887(a)(7) makes clear that it is irrelevant whether the property is even used at all in the commission of a crime, so long as it is intended to be used…It is also irrelevant whether the property’s role in the crime is integral, essential or indispensable. The term ‘facilitate’ implies that the property need only make the prohibited conduct less difficult or more or less free from obstruction or hinderance.”)(internal citations and quotations omitted). Under First Circuit law, the fact that the illegal activities could have occurred elsewhere is not a defense against forfeiture. United States v. Heldeman, 402 F.3d 220, 222 (1st Cir. 2005). Moreover, while establishing a pattern of activity is one method by which the Government can demonstrate a substantial connection between a defendant property and illegal drug activity,2 “[j]ust one use of the property may be enough, given that a single violation is sufficient under § 881(a)(7).” United States v. One Parcel of Real Estate Commonly Known as 916 Douglas Ave., 903 F.2d 490, 494 (7th Cir. 1990).

The evidence adduced at trial establishes that over a period of at least fourteen years, from at approximately September 1994 through November 2008 (i.e., the period covered by the Findings of Fact in Section II, infra), the Defendant Property was the scene of continual illegal drug activity; at trial, the Government presented specific examples of the drug activity that occurred at the Defendant Property (hereinafter referred to as the “Drug Crimes”). The uncontroverted evidence at trial revealed the Motel Caswell, which is located on the Defendant Property, was the common dominator [sic] across all of the Drug Crimes, uniting the illegal drugs and dealers and users. Through lax oversight by the Claimant and no security at the Defendant Property, the Motel Caswell, in effect, invited [sic] the Drug Crimes and made [sic] detection of the Drug Crimes, as well as deterrence of future drug activity, less likely. For example, drug trafficking, drug possession, and even drug manufacturing, were less detectable because those activities occurred in the rooms of the Motel Caswell. The lack of security measures at the Motel Caswell also made it easier to complete a drug transaction. Quite simply, as long as a drug dealer or a drug user paid for a room, the Claimant and its Motel Caswell staff would turn a blind eye to drug activity.

In addition, some of the Drug Crimes that the Motel Caswell helped [sic] to facilitate resulted in individuals receiving a sentence of imprisonment of more than one year. Thus, the United States clearly carried its forfeitability burden at trial.

Claimant, however, incorrectly argued at trial that the United States did not establish forfeitability of the Defendant Property because the Government did not tie the Drug Crimes to the Claimant. Neither Congress, when it enacted CAFRA, nor the relevant caselaw impose such a requirement.1

Civil forfeitures are in rem proceedings, with the issue of forfeitability dependent on the property and the property’s (not an individual’s) connection to crime. In contrast to criminal forfeiture, civil in rem forfeiture, is not limited to forfeiture of property belonging to principals or conspirators in the underlying illegal activity; civil judicial forfeiture can be ordered even if there is no criminal violation by a claimant. See United States v. All Right, Title and Interest…143-147 East 23rd Street (Kenmore Hotel), 77 F.3d 648 (2d Cir. 1996)(forfeiture of hotel where claimants were not personally involved in underlying drug conduct that was the basis for forfeiture); United States v. One Parcel of Real Estate at 1012 Germantown Road, Palm Beach County, Fla., 963 F.2d 1496 (11th Cir. 1992)(finding forfeiture of convenience store that was site of numerous drug offenses where claimant was not personally involved in underlying conduct, but remanding for new trial based on improper jury instruction regarding “reasonable efforts”); United States v. All Monies in Account No. 90-3617-3, Israel Disc. Bank, 754 F.Supp. 1467, 1476 (D. Haw. 1991)(citing United States v. Leong Chinese Merchants Assn. Building, 918 F.2d 1289, 1293 (7th Cir. 1990))(court rejected claimant’s argument that the facilitation theory should be confined to property belonging to principals or conspirators in the underlying criminal activity and noted that, while many cases may have applied the facilitation theory in such instances, nothing suggests that the limitation was intended by Congress).

This is not to say that an owner’s participation in (or knowledge of) the crimes is irrelevant to civil forfeitures. This information is clearly relevant to any innocent owner defense. The role of the owner in the relevant crimes, however, is irrelevant to the first inquiry into forfeitability. UNITED STATES’ POST-TRIAL BRIEF, UNITED STATES OF AMERICA v. 434 MAIN STREET, TEWKSBURY, MASSACHUSETTS

After arguing that all property is subject to forfeiture if incidental non-consensual third-party drug use took place on the property, AUSA Rao denies that it is sufficient, when invoking the innocent owner defense, to notify the police of suspected drug activity and to make a good faith effort to deny permission to the specific individuals using the property for the specified illegal acts, as Caswell did, despite the text of 18 U.S.C. § 983(d):

Innocent Owner Defense.— (1) An innocent owner’s interest in property shall not be forfeited under any civil forfeiture statute. The claimant shall have the burden of proving that the claimant is an innocent owner by a preponderance of the evidence.

(2) (A) With respect to a property interest in existence at the time the illegal conduct giving rise to forfeiture took place, the term “innocent owner” means an owner who—

(i) did not know of the conduct giving rise to forfeiture; or (ii) upon learning of the conduct giving rise to the forfeiture, did all that reasonably could be expected under the circumstances to terminate such use of the property. (B) (i) For the purposes of this paragraph, ways in which a person may show that such person did all that reasonably could be expected may include demonstrating that such person, to the extent permitted by law— (I) gave timely notice to an appropriate law enforcement agency of information that led the person to know the conduct giving rise to a forfeiture would occur or has occurred; and (II) in a timely fashion revoked or made a good faith attempt to revoke permission for those engaging in such conduct to use the property or took reasonable actions in consultation with a law enforcement agency to discourage or prevent the illegal use of the property.

(ii) A person is not required by this subparagraph to take steps that the person reasonably believes would be likely to subject any person (other than the person whose conduct gave rise to the forfeiture) to physical danger.

The text plainly provides affirmative defenses to those that did not know that their property was being used illegally AND to those that, upon learning that their property was being used illegally, took all reasonable steps to terminate such illegal use of the property. The codified text provides two examples of what could constitute reasonable steps:

1. notifying police and, in a timely fashion, revoking or making a good faith attempt to revoke permission from those illegally using the property; OR
2. notifying police and taking reasonable actions, in consultation with a law enforcement agency, to discourage or prevent the illegal use of the property.

The examples are distinct and not necessarily exhaustive. Assuming one notifies the police, either sufficient evidence of good faith attempts to revoke permission OR sufficient evidence of preventative steps should suffice–of course, neither would suffice in AUSA Rao’s fevered characterization: “In the instant case, the evidence at trial makes clear that….[Caswell] failed at any time during that period to take any reasonable or meaningful action to terminate or reduce such use of the Defendant Property.”

AUSA Rao’s account seems to be contradicted by the record. Caswell clearly demonstrated good faith attempts to revoke permission AND took self-initiated steps to prevent illegal use:

“[C]ontrary to the Government’s claim that Mr. Caswell did nothing to curtail drug activity at the Motel, the evidence demonstrates that he both fully cooperated with the police in their investigations while also proactively taking steps to address criminal activity. Mr. Caswell and his employees called the police to report suspicious activity, including drug activity. He always opened his registration records to the police and made keys to room available to them upon request. Mr. Caswell provided full and open access to all areas of the Motel. And, as noted previously, he even provided free rooms upon request to law enforcement while they conducted sting operations and surveillance of guests suspected of drug activity.

The Government claims that those are examples of Mr. Caswell just complying with the law. Not so. Neither Mr. Caswell nor his employees were under any legal obligation to call the police to report suspicious activity, but they consistently did so. Mr. Caswell could have challenged the government on access to the property and for keys to the room by asking questions or demanding search warrants. He could have denied access or charged the police if they wanted to use rooms for drug investigations. But instead he fully cooperated with law enforcement at every turn. Indeed, when the police asked him to improve the method by which he registers guests to ensure that the names are legibly written and to make copies of driver licenses, he responded and did what the police asked of him. The Government also claims that Mr. Caswell took no affirmative steps to attempt to reduce criminal activity at the Motel. . Again, that is simply not the case.

In addition to reporting suspicious activity and cooperating with the police, Mr. Caswell also put in security cameras, one in the office before the instant action was filed and additional security cameras in the parking lots a few years later. He has lighting in the front and the back of the Motel to enhance security. He posts a sign in the lobby of the Motel, which has been there for at least ten years, asking patrons to call the police if they see any suspicious activity. He established a do-not-rent list for individuals that have caused problems at the Motel. And, perhaps most significantly, he has a desk clerk on-site 24 hours a day, seven days a week, to help with security and to report any problems to the police. As Mr. Caswell testified, it is not particularly economical to do this, since it is relatively rare for a guest to check in after midnight, but he keeps one there “[f]or security sake, just to keep an eye on things, . . . just call the police if anything crops up, that sort of thing.” [Citations omitted] Claimant Caswell’s Post-Trial Brief, UNITED STATES OF AMERICA v. 434 MAIN STREET, TEWKSBURY, MASSACHUSETTS

Unsurprisingly, the prosecution’s case also ignores what lawmakers and policy makers said about the uniform innocent owner defense when passing the Civil Asset Forfeiture Reform Act of 2000 (CAFRA). An animating controversy was the attempt to forfeit the Red Carpet Inn, a motel similarly confronted with illegal drug usage and preposterous prosecutorial overreach. Lawmakers thought it important to protect future property owners who, upon learning that individuals were using their property to engage in illicit acts, notified police and took reasonable steps to stop those individuals from further using the property to commit the illegal acts. The notion that owners must assume the responsibilities of police to stop crime was rejected.

“Thus, a safe harbor is created for an owner who notifies police and revokes or attempts to revoke (to the extent permitted by law) permission to use the property by those who are using it in the course of criminal activity. The owner’s obligations end right there—property owners should not have to assume the responsibilities of police to stop crime. In the Red Carpet Motel incident described earlier, the hotel owner could have taken advantage of the bill’s safe harbor by (as he did) notifying police of drug sales taking place at the motel and making a good faith attempt to evict the responsible motel guests from their rooms.” – Representative Henry Hyde, Chairman of the House Judiciary Committee, H.R. Rep. No. 106-192, June 18, 1999.

“There were no allegations that the hotel owners participated in any crimes. Indeed, motel personnel called the police to the establishment dozens of times to report suspected drug-related activity. U.S. Attorney James DeAtley readily bragged to the press that he envisioned using current civil asset forfeiture laws in the same fashion against similar types of legitimate commercial enterprises, such as apartment complexes.
The government claimed the hotel deserved to be seized and forfeited because it had “failed” to implement all of the “security measures” dictated by law enforcement officials. This failure to agree with law enforcement about what security measures were affordable and wise from a legitimate business-operating standpoint was deemed to be the “tacit approval” of illegality cited by the prosecutors, subjecting the motel to forfeiture action.” –Samuel J. Buffone, National Association of Criminal Defense Lawyers (NACDL), S. HRG. 106-673, July 21st, 1999.


It provides a uniform innocent owner defense, and that was involved in the case Senator Biden talked about where this motel in a very tough neighborhood, a crime-ridden neighborhood, had drug transactions going on. And the owners repeatedly reported it to the police, withheld permission. You try to evict some drug dealers sometime; I wish you a lot of luck. But the police couldn’t do it, and the police took his property, and he finally got it back after the Houston newspapers raised hell and wrote editorials, and I have them here. So an innocent owner defense is where you do everything you can. You report it to the police, you withhold permission for these illegal transactions, and that gives you a safe harbor. -Representative Henry Hyde, Chairman of the House Judiciary Committee, S. HRG. 106-673, July 21st, 1999.

In the past year, Americans have had firsthand experience with what can happen when a prosecutor with all the powers of his office throws judgment to the wind and succumbs to zealotry. There is one example of a motel that was being used by drug dealers.There was no allegation that hotel owners participated in any crimes. Indeed, the motel people had called the police dozens of times to report suspected drug-related activity in the motel’s rooms by some of its overnight guests. I mean, they were doing what an honest citizen should do; they called and reported it.But the government said they didn’t do all the security measures suggested. What did they suggest? Well, among other things, they said, well, you have got to raise your room rates. And because they didn’t, they were giving tacit consent to the drug activity, and so they seized the motel.- Senator Patrick Leahy, Member of the Senate Judiciary Committee, S. HRG. 106-673, July 21st, 1999

1. Members of Congress have indicated otherwise: “H.R. 1658 provides that the substantial connection test should be used whenever facilitating property is subject to civil forfeiture under the U.S. Code. And the test is intended to mean something, it is intended to require that facilitating property have a connection to the underlying crime significantly greater than just ‘‘incidental or fortuitous.’’” Rep. Henry Hyde, Cong. R. H2050, April 11th, 2000. ↩