United States v. Holmes

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

UNITED STATES OF AMERICA,
Plaintiff-Appellee,

v.

PATRICIA HOLMES,
Claimant-Appellant, No. 96-1690

and

KENNETH HAWKINS, a/k/a Kenny,
a/k/a January,
Defendant.

Appeal from the United States District Court
for the District of South Carolina, at Greenville.
G. Ross Anderson, Jr., District Judge.
(CR-94-32-8-33)

Submitted: October 7, 1997

Decided: January 15, 1998

Before WILKINS, WILLIAMS, and MICHAEL, Circuit Judges.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

C. Rauch Wise, WISE & TUNSTALL, Greenwood, South Carolina,
for Appellant. J. Rene Josey, United States Attorney, Marvin J.
Caughman, Assistant United States Attorney, Columbia, South Caro-
lina, for Appellee.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Kenneth Hawkins pled guilty to his involvement in a massive drug
conspiracy under 21 U.S.C. § 846 (1994), which spanned five years
and amassed approximately five million dollars in illegal proceeds.
As part of his plea agreement, Hawkins agreed to voluntarily forfeit
his interest in numerous vehicles and real property under 21 U.S.C.
§ 853 (1994), as listed in his indictment.

Patricia Holmes, Hawkins' girlfriend, filed a third-party claim
under 21 U.S.C. § 853 (1994), alleging that she was the actual owner
of a 1987 convertible BMW and 1939 and 1985 Cadillacs subject to
forfeiture. A magistrate judge held a § 853 hearing regarding Holmes'
claim to the vehicles. The relevant facts adduced at the hearing are
not in dispute. Holmes testified that she met Hawkins in 1987 and
started seeing him in 1989 and that he was the father of her daughter
born in 1991. She testified that he was a mechanic and that she had
no knowledge of his illegal drug activities.

With respect to the 1987 convertible BMW, Holmes purchased the
vehicle in September 1991 for $18,000 in cash from a car dealer. She
alleged that she saved the money from various jobs beginning when
she was age fourteen. At the time of the hearing she was age thirty-
two. During that time period she stated that her highest annual salary
was between $17,000 and $25,000--which she had earned only in the
past several years. She produced a receipt for the BMW and title, tax,
insurance, and repair bill documents indicating that she owned the
car.

The salesman who sold the BMW testified that Hawkins had
accompanied Holmes to purchase the car and that he had negotiated
the price, although he told the salesman to title the vehicle in Holmes'
name. The salesman further testified that the $18,000 in cash was

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contained in an old wrinkled bag, with the money bundled by rubber
bands, and was damp and gave off a strong odor. Holmes testified that
she had first kept the cash under a rug and then later placed it in a
fireproof safe. She also stated that she had received an unspecified
lump sum payment after she stopped working for the state. Holmes
affirmed that the BMW was maintained at Hawkins' sister's house
because her cat had damaged the convertible top while it was parked
at her house.

As for the Cadillacs, Holmes' testimony was as follows. She pur-
chased the 1939 model from a man in Asheville, North Carolina, for
$300 or $400, at which point it was a rusty shell with no tires. There-
after, Hawkins restored the car for her, free of charge, with parts she
had purchased. The personalized license tag reads"HAWK," which
indicated that she was proud of how well Hawkins had restored the
car. Holmes could not, however, explain the Government's affidavit
which reflected that the vehicle was purchased from a man in Florida
for zero dollars. With regard to the 1985 Cadillac, Holmes testified
that she bought it for her mother because her mother was having prob-
lems with her car. She stated that she and her mother each paid $2500
toward the car and that because her mother was forgetful the car was
titled in her name to ensure the taxes and insurance were paid.
Holmes' testimony was corroborated by testimony from her mother
and sister, which was received by stipulation.

The magistrate judge entered a final order of forfeiture finding
Holmes "to be less than credible" and that she was merely a "`straw
owner' of the vehicles, as she allowed Kenneth Hawkins to title the
vehicles in her name in order to conceal his assets obtained with the
profits of the drug trade."* The magistrate judge denied Holmes'
motion for reconsideration, and the district court upheld the final
order of forfeiture and the denial of the motion for reconsideration.
In her appeal, Holmes attacks the criminal forfeiture statute as uncon-
stitutional and alleges that the district court erred in finding that the
three vehicles were properly forfeited to the Government. For the rea-
sons that follow, we affirm.
_________________________________________________________________

*(Joint Appendix "J.A." at 186).

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Holmes alleges that 21 U.S.C. § 853 is unconstitutional as applied
to a third-party claimant because it: (1) deprives the third party of a
jury trial, in violation of the Sixth Amendment; (2) requires a third
party to prove that the property should not be forfeited, and
(3) provides greater protection to the indicted criminal defendant than
to the third party, in violation of the Fifth Amendment.

Holmes' constitutional arguments are misplaced. A criminal forfei-
ture involves an in personam proceeding against a defendant charged
with a specific crime. When a forfeiture provision is embodied in a
plea agreement, the forfeiture is an element of the sentence imposed
following conviction, or as here, a guilty plea. See Libretti v. United
States, ___ U.S. ___, 64 U.S.L.W. 4005, 4008-09 (U.S. Nov. 7, 1995)
(No. 94-7427) (holding that because a forfeiture provision contained
in a plea agreement only is part of a criminal defendant's sentence,
Fed. R. Crim. P. 11(f), requiring a district court to determine that
there is a factual basis before accepting the plea, is inapplicable). The
text of the criminal forfeiture statutes makes clear that Congress con-
ceived of forfeiture as punishment for the commission of various drug
and racketeering crimes. Id. (citing 21 U.S.C. § 853(a)). In this con-
text, the criminal forfeiture is simply an aspect of the punishment
imposed following conviction of a substantive criminal offense. Id.
The Court in Libretti also noted that third-party claimants' rights were
adequately protected under a § 853(n) hearing even though such hear-
ing "deprives third-party claimants of the right to a jury trial and
reverses the burden of proof." Id. at 4009. Thus, Libretti forecloses
Holmes' constitutional attacks.

In her remaining issues, Holmes alleges that the district court erred
in denying her claims to the vehicles because it allowed the Govern-
ment to forfeit the 1939 Cadillac as illegal proceeds, when the indict-
ment alleged that the car had been used to facilitate illegal activity,
and because the evidence at the hearing was insufficient to defeat
Holmes' claim to the 1985 Cadillac and 1987 BMW. Factual findings
of the district court are overturned only if clearly erroneous. See
Anderson v. City of Bessemer City, 470 U.S. 564, 573-74 (1985).
When factual findings are based upon the credibility determinations
of the trial court, an appellate court should allow even greater defer-
ence "for only the trial judge can be aware of the variations in demea-

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nor and tone of voice that bear so heavily on the listener's
understanding of and belief in what is said." Id. at 575.

Holmes is correct that the indictment sought forfeiture of the 1939
Cadillac on the ground that it was used to facilitate Hawkins' drug
trafficking. See 21 U.S.C. § 853(a)(2). The statute, however, provides
for forfeiture of any property derived from or used to facilitate crimi-
nal activity upon a defendant's conviction. See 21 U.S.C. § 853(a);
United States v. Moffitt, Zwerling & Kemler, 83 F.3d 660, 668-69 (4th
Cir. 1996), cert. denied, ___ U.S. ___, 65 U.S.L.W. 3501 (U.S. Jan.
21, 1997) (No. 96-356). Further, the statute "is to be liberally con-
strued to effectuate its remedial purposes," i.e."to ease the govern-
ment's ability to track down the proceeds of crime," and to "prevent[ ]
defendants from shielding their assets from forfeiture simply by trans-
ferring an asset to a third party." Moffitt, Zwerling & Kemler, 83 F.3d
at 669 (citations and internal quotations omitted). Therefore, whether
the property was forfeited because it facilitated Hawkins' drug activi-
ties or was purchased from drug proceeds is irrelevant, as either prong
justifies the forfeiture. See 21 U.S.C.§ 853(a).

We review the district court's determination that Holmes failed to
meet her statutory burden and that the property was subject to forfei-
ture, for clear error. See United States v. Reckmeyer, 836 F.2d 200,
204 (4th Cir. 1987) (rejecting government's argument that the district
court clearly erred in determining that third-party purchaser was rea-
sonably without cause to believe that property was subject to forfei-
ture). Once the government has secured a stipulation as to
forfeitability from a defendant, third-party claimants may establish
their entitlement to return of the assets only by means of a § 853(n)
hearing. Libretti, 64 U.S.L.W. at 4009. When a forfeiture order is
entered, the government's title dates back in time to the criminal
activity giving rise to the forfeiture. See Moffitt, Zwerling & Kemler,
83 F.3d at 670. Such property, if not in the hands of an "innocent
transferee," is forfeitable. Id. Only two classes of third-party claim-
ants are protected: those whose legal interests in the property were
superior to the defendant's at the time the interest of the United States
vested and "bona fide purchasers for value without knowledge of the
forfeitability of the defendant's assets." Reckmeyer, 836 F.2d at 204
(citing § 853(n)(6)). These claimants are required to demonstrate their

5
status "by a preponderance of the evidence." See 21 U.S.C.
§ 853(n)(6).

We do not find that the district court clearly erred in determining
that Holmes failed to demonstrate, by a preponderance of the evi-
dence, that her interests were superior to the Government's or that she
was a bona fide purchaser for value. See 21 U.S.C. § 853(n)(6);
Reckmeyer, 836 F.2d at 204. Holmes' testimony that she purchased
and maintained the BMW and 1939 Cadillac was not supported by the
evidence. This, in turn, led the magistrate judge to conclude that with
respect to the 1985 Cadillac, that Holmes' "testimony could arguably
support her claim" but that "when viewed in conjunction with her
incredulous testimony relating to the 1939 Cadillac and 1987 BMW,
I find her testimony unbelievable." (J.A. at 186). To the extent we
may review this conclusion, we do not find that the magistrate judge
clearly erred. See Anderson, 470 U.S. at 575 (noting that appellate
courts must give great deference to the trial judge's credibility deter-
minations).

Accordingly, we affirm the orders of the district court. We dispense
with oral argument because the facts and legal contentions are ade-
quately presented in the materials before the court and argument
would not aid the decisional process.

AFFIRMED

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