State of New Jersey v. Amboy National Bank Account , 447 N.J. Super. 142 ( 2016 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0703-14T2
STATE OF NEW JERSEY,
Plaintiff-Respondent,
APPROVED FOR PUBLICATION
v.
August 26, 2016
AMBOY NATIONAL BANK
ACCOUNT NUMBER APPELLATE DIVISION
XXX-XXXX-2 VALUED AT FOUR
HUNDRED THIRTY-SIX THOUSAND
EIGHT HUNDRED FORTY-FIVE
DOLLARS and EIGHTY-SIX CENTS
IN UNITED STATES CURRENCY,
AMBOY NATIONAL BANK ACCOUNT
NUMBER XXX-XXXX-4 VALUED AT
THREE HUNDRED EIGHTY-TWO
THOUSAND THREE HUNDRED
NINETY-EIGHT DOLLARS AND
FOURTEEN CENTS IN UNITED
STATES CURRENCY, AMBOY NATIONAL
BANK ACCOUNT XXX-XXXX-5 VALUED
AT SEVENTEEN THOUSAND NINE HUNDRED
FIFTY DOLLARS AND FOURTEEN CENTS
IN UNITED STATES CURRENCY, and
EIGHT THOUSAND EIGHT HUNDRED
FORTY-FIVE DOLLARS IN UNITED
STATES CURRENCY,
Defendants.
_______________________________________________________________
Argued September 22, 2015 – Decided August 26, 2016
Before Judges Fisher, Espinosa and
Rothstadt.
On appeal from Superior Court of New Jersey,
Law Division, Monmouth County, Docket No. L-
5279-10.
Ralph P. Ferrara argued the cause for
appellants John R. Bovery, Jr. and Mary
Bovery (Ferrara Law Group, P.C., attorneys;
Mr. Ferrara and Joshua H. Beisler, on the
brief).
Carey J. Huff, Special Deputy Attorney
General/Acting Assistant Prosecutor argued
the cause for respondent (Christopher J.
Gramiccioni, Acting Monmouth County
Prosecutor, attorney; Ms. Huff and David M.
Fritch, Special Deputy Attorney General/
Acting Assistant Prosecutor, of counsel and
on the brief).
The opinion of this court is delivered by
Espinosa, J.A.D.
This is an appeal from a civil forfeiture action. John R.
Bovery, Jr. (Bovery) organized sports pools for approximately
twenty years before he came under scrutiny by investigators. In
September 2010, the State obtained an order to restrain and
seize the contents of three bank accounts at Amboy National Bank
and a search warrant for Bovery's residence. Approximately
$846,000 was seized following execution of the order, search
warrant and Bovery's arrest. In challenging the forfeiture
action, Bovery admitted operating the sports pools and that
$722,000 of the money seized represented "entry fees" he
received from players but denied the pools were illegal.
Bovery and his wife, Mary Bovery (collectively, claimants),
appeal from orders that granted the State's motion for summary
2 A-0703-14T2
judgment affirming the seizure, and denied their motion to
segregate players' money.1 We affirm.
I.
The facts are largely undisputed. Bovery became the target
of a criminal investigation after admitting his activities to
detectives of the Monmouth County Prosecutor's Office in May
2010. Primarily, Bovery organized football survival pools but
he also organized baseball, golf, and basketball pools. There
were from one hundred to several thousand participants in the
pools who paid entry fees ranging from $20 to $100. During the
2009 to 2010 "pool cycle," Bovery collected just over $1.7
million in pool entry fees.
Initially, Bovery deposited the entry fees into his own
bank accounts. As the operation grew, Bovery opened joint
1
Claimants' case information statement identifies the denial of
their motion for reconsideration as an issue raised on appeal.
However, this issue was addressed for the first time in their
reply brief. Because this issue was not presented in claimants'
merits brief, it is deemed waived. See Gormley v. Wood-El, 218
N.J. 72, 95 n.8 (2014); Drinker Biddle & Reath LLP v. N.J. Dept.
of Law & Public Safety, 421 N.J. Super. 489, 496 n.5 (App. Div.
2011) (claims not addressed in merits brief deemed abandoned,
and could not properly be raised in a reply brief); see also
Pressler and Verniero, Current N.J. Court Rules, comment 4 on R.
2:6-2 (2016).
3 A-0703-14T2
accounts with his father2 because he believed his children would
be unable to obtain financial aid for college if he had to
disclose the value of his pool-related assets. Bovery testified
he always put the entry fees into the two accounts he held
jointly with his father because he "didn't want any lunatic to
think [he] had cash under the mattress."
Bovery stated the money he obtained from running the pools
was "the money I live on now actually," amounting to
approximately $110,000 per year. He described the funds he
received from pool participants as "'optional' gifts, . . .
sometimes from the winners and sometimes from the players in
general." He emphasized that these gifts were "always at the
discretion of the players and/or winners."
In 2009, Bovery began using a third-party website to
organize the pools. On his own website, he discussed at some
length the topic of gift pledges and how players were to make
such pledges. In one posting from August 2009,3 he described
changes he made to the procedures and explained he imposed a 10%
2
Bovery's father was not involved in the sports pools and had
requested that his name be removed from the bank accounts. He
was dismissed from the case by consent order in April 2014.
3
In a posting from August 2010, Bovery referred players to this
August 2009 post and one from August 2007 to describe the manner
in which he operated the pools.
4 A-0703-14T2
maximum on the gifts he would accept.4 He noted,
"[h]istorically, the winners of my pools have been very generous
with their gifts to me and my family and I have no complaints;
if I did, I would have stopped running these pools years ago."
He said he had "just 4 problems over 19 years who gifted less
than 10%." After instructing players on how to fill in the
fields on the website to make their pledges, he stated, "if you
put a number lower than 10[%] it will be your way of showing me
that you do not share my view on compensating pool managers."
He also told players that if they disagreed with gifting him
10%, "I strongly suggest you not participate in any of my pools,
it will simply help us both to avoid a very ugly situation
somewhere down the road." In an email, Bovery described his
contingency plan for dealing with winners who failed to "gift"
the 10%, that he would advise them they would receive a 1099,
which would result in their winnings being taxed.
Bovery did not report the "gifts" he received as income to
federal or state taxing authorities during the decades he
4
During the course of his testimony, Bovery stated that he
"understood the ten percent" from growing up in Jersey City,
where he knew "which shoemaker or which butcher was taking the
numbers." He said, "That's the way I grew up. I understood
bookkeeping, betting. I understood how it worked, right, you
know and take care of people with ten percent."
5 A-0703-14T2
operated the pools and did not report any of the payments made
to pool winners to state or federal taxing authorities.
After the detectives' initial interviews, two of the bank
accounts were subpoenaed and periodically checked. The accounts
were seized on the first day of the football season before the
start of any game. A detective testified the prosecutor's
office waited to obtain and execute the search warrants because
they "wanted to have as much evidence as possible."
Accounts number XXX-XXXX-2 (Account -2) and XXX-XXXX-4
(Account -4) were joint accounts in the names of Bovery and his
father. Account number XXX-XXXX-5 (Account -5) was a joint
account with Bovery's wife. According to Bovery, "[a]ll [three]
accounts were used to varying degrees for pool-related
purposes." Account -2 and Account -4 were "primarily used for
pool-related purposes," while Account -5 was "primarily used for
personal purposes."
The deadlines for pool participants to remit entry fees to
participate in his sports pools for the 2010/11 National
Football League season ranged from September 4 to 19, 2010. It
is undisputed5 that in August and September 2010, Bovery
5
The facts regarding these deposits were set forth in the
Statement of Undisputed Facts submitted by the State in support
of its motion for summary judgment and were not disputed by
claimants pursuant to Rule 4:46-2(b).
6 A-0703-14T2
deposited checks and money orders payable to him as entry fees
and totaling over $617,000 as follows:
Deposits to Account -2
8/24/10 $28,205
$28,765
$18,345
8/25/10 $28,350
$22,240
8/26/10 $17,420
8/27/10 $27,955
8/30/10 $36,220
9/7/10 $36,800
$47,190
$43,165
Deposits to Account -4
8/24/10 $22,210
$32,275
$16,800
8/25/10 $21,930
$39,255
8/26/10 $18,640
$25,535
8/30/10 $27,985
9/7/10 $29,630
$48,105 (96 checks and money orders)
At the time of the seizure the accounts from which the
money was seized were the only bank accounts held by claimants.
As Bovery admitted, Account -5 was also used for the deposit of
7 A-0703-14T2
entry fees, although to a lesser degree. By way of example, he
testified that eight checks totaling $1500 deposited into that
account in February 2009 were entry fees from "late payers."
When the warrants were executed on September 9, 2010,
$837,194.14 was seized from the bank accounts: $436,845.86 from
Account -2; $382,398.14 from Account -4; and $17,950.14 from
Account -5. In addition, $8510 in cash was seized from Bovery's
home and $335 was seized from Bovery's wallet incident to his
arrest. It is undisputed that the cash seized from Bovery's
home was withdrawn from Account -5. Of the $846,000 seized,
players' entry fees accounted for $722,000; $124,000 were the
Boverys' personal funds.
On October 20, 2010, the State commenced an action pursuant
to N.J.S.A. 2C:64-1 for forfeiture of the contents of the three
bank accounts as well as the cash seized from the Bovery
residence, alleging that all the money was used or intended to
be used in the commission of criminal activity.6 Claimants were
served with copies of the verified complaint.
6
Bovery was indicted for: third-degree promotion of gambling,
N.J.S.A. 2C:37-2 and N.J.S.A. 2C:2-6; and first-degree financial
facilitation of a crime, N.J.S.A. 2C:21-25 and N.J.S.A. 2C:2-6.
A motion to dismiss the indictment was denied in February 2012.
According to Promis/Gavel, Bovery was subsequently admitted to
the pretrial intervention program.
8 A-0703-14T2
Claimants moved to separate player money, arguing the
State's failure to notify any players of the seizure violated
the notice provision of the forfeiture statute, N.J.S.A. 2C:64-
3(c), and therefore, the players' money should have been
separated from Bovery's personal money. Following oral
argument, the trial judge denied claimants' motion, citing a
lack of standing.7
The State moved for summary judgment, contending the funds
seized were subject to forfeiture pursuant to N.J.S.A. 2C:64-
1(a) because Bovery illegally operated and accepted proceeds
from various sports pools. Claimants cross-moved for summary
judgment. Claimants did not deny Bovery's role in the pool
organization or that he accepted remuneration from players.
They argued the seized money was not used in furtherance of
unlawful activity because the pools did not constitute illegal
gambling. The trial judge granted the State's motion and denied
claimants' motion, setting forth his reasons in a written
opinion. Claimants' motion for reconsideration was denied.
In their appeal, claimants argue the trial judge erred in
granting summary judgment to the State because there were
7
No written order memorializing the oral decision is included
in the record on appeal, and claimants state "[u]pon information
and belief, no written [o]rder was prepared denying the
[m]otion."
9 A-0703-14T2
material issues of fact (Point I). Specifically, as to the
$124,000 described as Bovery's personal funds, claimants argue
that a material issue of fact existed because in determining
these funds were subject to forfeiture, the trial court failed
to account for W-2 money deposited into the account. Claimants
further argue a material issue of fact barred summary judgment
because the State failed to establish the requirements of
N.J.S.A. 2C:37-2(b)(1). Claimants also contend Bovery's
acceptance of "gifts" from the players did not amount to
accepting bets from them and that the trial court erred in
holding Bovery materially aided an unlawful gambling enterprise
because he never accepted a bet. Claimants argue further that
the trial court erred in "ruling the State's seizure of player
money did not violate the notice provision of the civil
forfeiture statute" (Point II). Finally, claimants argue
summary judgment should not have been granted because the
seizure of accounts here exemplifies the potential for abuse in
the forfeiture statute. (Point III). We are unpersuaded by
these arguments and, further, find the argument raised in Point
III lacks sufficient merit to warrant discussion in a written
opinion. R. 2:11-3(e)(1)(E).
10 A-0703-14T2
II.
In reviewing the summary judgment order, we view the facts
"in the light most favorable to" the claimants to determine "if
there is a genuine issue as to any material fact or whether the
moving party is entitled to judgment as a matter of law." Rowe
v. Mazel Thirty, LLC, 209 N.J. 35, 38, 41 (2012) (citing Brill
v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 529 (1995)). We
review questions of law de novo, State v. Gandhi, 201 N.J. 161,
176 (2010), and need not accept the trial court's conclusions of
law. Davis v. Devereux Found., 209 N.J. 269, 286 (2012).
To defeat a motion for summary judgment, the opponent must
"'come forward with evidence' that creates a genuine issue of
material fact." Horizon Blue Cross Blue Shield of N.J. v.
State, 425 N.J. Super. 1, 32 (App. Div.) (quoting Brill, supra,142 N.J. at 529), certif. denied, 211 N.J. 608 (2012); see R.
4:46-2(c). "An issue of fact is genuine only if, considering
the burden of persuasion at trial, the evidence submitted by the
parties on the motion, together with all legitimate inferences
therefrom favoring the non-moving party, would require
submission of the issue to the trier of fact." R. 4:46-2(c).
"Competent opposition requires 'competent evidential
material' beyond mere 'speculation' and 'fanciful arguments.'"
Hoffman v. Asseenontv.Com, Inc., 404 N.J. Super. 415, 426 (App.
11 A-0703-14T2
Div. 2009) (citation omitted). "[B]are conclusions in the
pleadings without factual support in tendered affidavits, will
not defeat a meritorious application for summary judgment."
Brae Asset Fund, L.P. v. Newman, 327 N.J. Super. 129, 134 (App.
Div. 1999) (citation omitted); see also Puder v. Buechel, 183
N.J. 428, 440-41 (2005) ("[C]onclusory and self-serving
assertions by one of the parties are insufficient to overcome
the motion."); Cortez v. Gindhart, 435 N.J. Super. 589, 605-06
(App. Div. 2014), certif. denied, 220 N.J. 269 (2015).
III.
We begin by reviewing the forfeiture statute, acknowledging
that "[f]orfeiture statutes are generally disfavored in the
law," State v. Seven Thousand Dollars, 136 N.J. 223, 238 (1994),
and are "strictly construed against the State." State v. One
House, 346 N.J. Super. 247, 252 (App. Div. 2001); see also State
v. 1979 Pontiac Trans Am, 98 N.J. 474, 481 (1985). "The theory
of forfeiture is based on the misuse of the property rather than
resulting from the commission of an offense by its owner or
user." Seven Thousand Dollars, supra, 136 N.J. at 233 (citation
omitted). Accordingly, a civil forfeiture action is brought as
an in rem proceeding against the property rather than as an
action against the owner of the property. Id. at 232-33.
12 A-0703-14T2
N.J.S.A. 2C:64-1 to -9 authorizes civil forfeiture for two
categories of property.
The first category is designated prima facie contraband and
consists of "[c]ontrolled dangerous substances, firearms which
are unlawfully possessed, carried, acquired or used, illegally
possessed gambling devices, untaxed . . . cigarettes . . . [and]
untaxed special fuel." N.J.S.A. 2C:64-1(a)(1). Prima facie
contraband is automatically forfeited once seized by the State.
Seven Thousand Dollars, supra, 136 N.J. at 233 (citing N.J.S.A.
2C:64-2).
The money seized here falls into the second category of
property, known as derivative or non-prima facie contraband.
The property seized is innocent and is only subject to
forfeiture as a result of its association with unlawful
activity. Ibid. The statute authorizes forfeiture of
"[p]roperty which has become or is intended to become an
integral part of illegal activity, including, but not limited
to, money which is earmarked for use as financing for an illegal
gambling enterprise." N.J.S.A. 2C:64-1(a)(3). Unlike the first
category of property, the forfeiture of this property is not
accomplished upon seizure. To enforce forfeiture of derivative
contraband, "the State must bring a civil action within ninety
days of the seizure against the property sought to be
13 A-0703-14T2
forfeited," Seven Thousand Dollars, supra, 136 N.J. at 233
(citing N.J.S.A. 2C:64-3(a)), and prove a direct, causal
connection between the seized property and the unlawful activity
by a preponderance of the evidence. Id. at 234-35.
The court then conducts a fact-specific analysis to
determine whether the State has established a direct, causal
connection between the seized property and unlawful activity by
a preponderance of the evidence. Id. at 238; State v. One (1)
1979 Chevrolet Camaro Z-28, 202 N.J. Super. 222, 230 (App. Div.
1985). Once the State satisfies this evidentiary threshold,
"the burden shifts to the person challenging the forfeiture, the
'owner,' to show what portion of the money, if any, the court
should ascribe to legitimate uses." Seven Thousand Dollars,
supra, 136 N.J. at 238. "If the owner presents sufficient
credible evidence to allocate the funds between illegal and
legal purposes, the court must limit forfeiture to only those
funds connected with the illegal activity." Ibid.Although the "unlawful activity" relied upon must be an
indictable crime rather than a disorderly persons offense, Seven
Thousand Dollars, supra, 136 N.J. at 233 (citing One (1) 1979
Chevrolet Camaro Z-28, supra, 202 N.J. Super. at 229-30), the
statute does not require that someone be convicted or even
charged with an indictable offense as a prerequisite to
14 A-0703-14T2
forfeiture. Id. at 233-34; see also N.J.S.A. 2C:64-4(b) ("The
fact that a prosecution involving seized property terminates
without a conviction does not preclude forfeiture proceedings
against the property. . . ."). "The absence of a requirement
that a person be charged with a crime before forfeiture is
allowed is consistent with the underlying nature of civil
forfeiture actions as being directed at the property itself and
not at any person." Seven Thousand Dollars, supra, 136 N.J. at
234. Moreover, the unlawful activity may only be "an intended
but not-yet-committed offense" or one committed in the past.
Ibid.IV.
Claimants admit that Bovery "operated sports pools" but
deny that such pools were "illegal." We disagree.
A.
N.J.S.A. 2C:37-1(b) defines gambling as "staking or risking
something of value upon the outcome of a contest of chance or a
future contingent event not under the actor's control or
influence, upon an agreement or understanding that he will
receive something of value in the event of a certain outcome."
The definition of a "contest of chance" includes "any . . . game
[or] pool . . . in which the outcome depends in a material
degree upon an element of chance, notwithstanding that skill of
15 A-0703-14T2
the contestants or some other persons may also be a factor
therein." N.J.S.A. 2C:37-1(a).
Bovery's own statements regarding how the pools operated
establish that the pools fall within the statutory definition of
gambling. Players risked money, "something of value," on the
outcome of various sports games which qualify as "future
contingent events not under the actor's control," with the
understanding that the player who makes the most correct picks
will "receive something of value," money, at the conclusion of
the season or when all other participants have been eliminated
from the pool. See N.J.S.A. 2C:37-1(b). As the definition of a
"contest of chance" makes clear, the fact that the skill of the
athletes is a factor in the outcomes of the games or that the
pool participants' acumen in predicting outcomes may play a role
in the success of their picks is of no consequence.
New Jersey has a "clear and longstanding" "comprehensive
policy against gambling (except where specifically authorized by
the people)." Carll & Ramagosa, Inc. v. Ash, 23 N.J. 436, 445
(1957); Boardwalk Regency Corp. v. Attorney Gen. of N.J., 188
N.J. Super. 372, 376 (Law Div. 1982). The New Jersey
Constitution prohibits the Legislature from authorizing gambling
except through referendum and several constitutionally-
established exceptions, which include the State lottery, casinos
16 A-0703-14T2
in Atlantic City, horse racing, and certain raffles conducted by
charities and religious organizations. N.J. Const. art. IV, §
VII, ¶ 2.
Although sports pools may be popular and even considered
blameless activities by the general population, it is clear
those operated by Bovery do not fall within any of these
exceptions. Because these sports pools are a form of gambling
that is not sanctioned by the New Jersey Constitution, they are
illegal.
B.
We next review the evidence to determine whether the State
met its initial burden of showing by a preponderance of the
evidence that (1) there was a direct causal connection between
the money seized and the promotion of gambling and (2) the
promotion of gambling involved constituted an indictable offense
under N.J.S.A. 2C:37-2.
N.J.S.A. 2C:37-2(a) defines the offense of promoting
gambling and states in pertinent part:
A person is guilty of promoting gambling
when he knowingly:
(1) Accepts or receives money or other
property, pursuant to an agreement or
understanding with any person whereby he
participates or will participate in the
proceeds of gambling activity; or
17 A-0703-14T2
(2) Engages in conduct, which
materially aids any form of gambling
activity. Such conduct includes but is not
limited to conduct directed toward the
creation or establishment of the particular
game, contest, scheme, device or activity
involved, toward the acquisition or
maintenance of premises, paraphernalia,
equipment or apparatus therefor, toward the
solicitation or inducement of persons to
participate therein, toward the actual
conduct of the playing phases thereof,
toward the arrangement of any of its
financial or recording phases, or toward any
other phase of its operation.
The required connection to illegal activity may be
established by "admitted past or planned illegal activity."
Seven Thousand Dollars, supra, 136 N.J. at 235. Bovery's
admissions regarding his past activity and what was planned for
the money seized from the bank accounts provide the required
connection to the offense of promoting gambling under both
subsections.
First, it is undisputed that Bovery received entry fees
from the players and "sometimes received optional gifts from the
participants of the pools" of approximately ten percent of the
entry fees or winnings. He received the money pursuant to an
agreement with the players that he would pool the funds received
and distribute winnings according to the procedures he
identified on his website. These admitted acts amounted to
participation in the proceeds of gambling activity, in violation
18 A-0703-14T2
of N.J.S.A. 2C:37-2(a)(1). Bovery's contention that the gifts
were "optional" does not immunize his conduct. In determining
whether conduct constitutes promotion of gambling, "it matters
not whether [a defendant] was compensated by a stipulated
percentage of the wager, or whether he received . . . 'voluntary
contributions' from the players." Chomatopoulos v. Roma DeNotte
Soc. Club, 212 N.J. Super. 447, 450 (Law Div. 1985).
Second, it is undisputed that Bovery organized a number of
different types of sports survival pools using both his own
website and a third-party website. He induced participation in
his pools by posting messages on his website and by sending
emails to prospective participants. This conduct materially
aided the sports pool, a form of gambling activity, in violation
of N.J.S.A. 2C:37-2(a)(2).
The next question is whether Bovery's activities rose to
the level of an indictable offense. N.J.S.A. 2C:37-2(b)
establishes the grading for this offense. Promoting gambling is
a disorderly persons offense unless certain criteria are met.
By "[e]ngaging in bookmaking to the extent he receives or
accepts in any one day more than five bets totaling more than
$1,000.00," a person is guilty of a third-degree offense.
19 A-0703-14T2
N.J.S.A. 2C:37-2(b)(1).8 One who "engag[es] in bookmaking to the
extent he receives or accepts three or more bets in any two-week
period" is guilty of a fourth-degree offense. N.J.S.A. 2C:37-
2(b). Bookmaking is defined as "advancing gambling activity by
unlawfully accepting bets[9] from members of the public upon the
outcome of future contingent events as a business." N.J.S.A.
2C:37-1(g).
Claimants argue that Bovery "did not accept a bet because
he had no financial stake in the outcome of any pools he
managed." This argument seeks to superimpose a requirement not
present in the plain language of the statute — that to be guilty
of promoting gambling, one must have a personal stake in whether
a specific bet wins or loses. We reject this argument.
Claimants cite no legal authority to support their
interpretation and, in fact, the factual premise for the
argument is substantially undermined by Bovery's testimony that
8
N.J.S.A. 2C:37-2(b)(2) provides an alternative basis for
promoting gambling to constitute a third-degree offense that is
inapplicable here.
9
Because "bet" is not defined in the statute, we give the word
its "ordinary meaning and significance." State v. Tate, 220
N.J. 393, 409 (2015) (citation omitted). Black's Law Dictionary
defines a bet as "[s]omething of value (esp. money) staked or
pledged as a wager," Black's Law Dictionary 144 (9th ed. 2010),
and wager as "[m]oney or other consideration risked on an
uncertain event." Id. at 1355.
20 A-0703-14T2
he accepted responsibility for covering the bets or entry fees
for persons who did not pay them. He stated he lost $3000 to
$5000 per year in collections because it was not his practice to
reduce the pot won by the amount of the entry fees players
failed to pay; that he would "eat the losses" and write off
"deadbeats."10
Alternatively, claimants seek to define a bet as "where a
player selected what they believed would be a winning team" and
argue that here, because the money was seized prior to the
commencement of the football season – no bets had yet been
placed. Claimants maintain that "for a bet to take place, an
amount must be staked on a particular outcome and the player
must also select a side of an event." According to claimants,
at the time the funds were seized, players had either not chosen
a team, had chosen a team but could change their team choice, or
could "decide not to play and request and receive a refund."
This argument also fails to create a factual issue that will
withstand summary judgment.
As we have noted, to establish the required nexus to
illegal activity, the State does not have to establish that the
seized funds constitute evidence that a crime has been
10
A balance sheet seized from claimants' residence during the
execution of the search warrant included an entry for "deadbeats
cushion" of $4000.
21 A-0703-14T2
committed. The connection to illegal activity may be satisfied
by showing the funds' relationship to prior offenses or activity
that is planned and never comes to fruition. Seven Thousand
Dollars, supra, 136 N.J. at 234. Proof that the money seized
was "intended to become an integral part of . . . an illegal
gambling enterprise" was sufficient. N.J.S.A. 2C:64-1(a)(3).
That standard was met here. The identification of over
$700,000 of the money seized as the entry fees for the 2010
football pool provided ample proof of a connection to an illegal
gambling enterprise and Bovery's admissions regarding his prior,
longstanding involvement in sports pools provided that
connection for the seized funds that were described as personal.
The record provides ample proof that the promoting gambling
conduct here rose to the level of an indictable offense. During
the 2009 to 2010 "pool cycle," Bovery collected over $1.7
million in pool entry fees ranging from $20 to $100. By way of
example, on September 7, 2010, Bovery made three deposits of
$36,800, $47,190 and $43,165 into Account -2. The $36,800
deposit consisted of eleven checks or money orders representing
player "entry fees." On the same date, he made two deposits to
Account -4, of $29,630 and $48,105, the latter deposit
consisting of ninety-six checks and money orders. These entry
fees constituted the "something of value" each player "stak[ed]
22 A-0703-14T2
or risk[ed] . . . upon the outcome of a contest of chance or a
future contingent event not under the actor's control or
influence," within the definition of gambling in N.J.S.A. 2C:37-
1(b). These admitted transactions are ample proof of an
indictable offense.
We therefore conclude the State met its initial burden of
proving by a preponderance of the evidence that there was a
direct causal connection between the seized funds and an
indictable offense.
V.
We next turn to whether the court erred in failing to
allocate the funds between illegal and legal purposes. As we
have noted, forfeiture will be limited to those funds connected
with the illegal activity "[i]f the owner presents sufficient
credible evidence to allocate the funds between illegal and
legal purposes." Seven Thousand Dollars, supra, 136 N.J. at
238. The record includes a copy of claimants' W-2s for 2010,
which report income of approximately $47,000 from their
employment. Claimants argue the State was required to conduct
"a forensic accounting of the entire $846,000 going in and out
of these accounts" to segregate the funds obtained through their
employment. However, it was claimants' burden to present this
argument and supporting evidence if they were to withstand
23 A-0703-14T2
summary judgment. Once the State made the initial requisite
showing, the burden shifted to claimants "to show what portion
of the money, if any, the court should ascribe to legitimate
uses." Ibid. They failed to do so and did not raise this
argument until they filed their motion for reconsideration.
As the State argues, claimants did not dispute that
Bovery's bank records and deposition testimony reveal that from
October 5, 2009 through January 4, 2010, he transferred at least
$43,679 of proceeds or "gifts" from his sports pools from
Account -2 and Account -4 to the "personal account." The State
reasons that because the amount in claimants' "personal" account
at the time of the seizure, $17,950.14, was less than the
$43,679 in pool proceeds Bovery transferred into that account,
claimants are foreclosed from arguing that any of the $17,950.14
seized constituted legitimate W-2 income, not linked to illegal
activity. Therefore, it is argued, the seizure of the contents
of the entire account was proper. See State v. Sparano, 249
N.J. Super. 411, 427 (App. Div. 1991) ("[T]here need not be a
'direct' connection between racketeering profits and the
acquired property sought to be forfeited, so long as the State
proves that the property was acquired by funds equivalent to the
fruits of the criminal activity.").
24 A-0703-14T2
Our review of the record reveals that claimants failed to
present a genuine issue of fact that an identifiable amount of
the money seized was attributable to a legitimate source.
Pursuant to Rule 4:46-2(a), the State prepared a Statement of
Undisputed Facts in support of its motion for summary judgment.
As required by the rule, the state's factual assertions were
supported by citations to the record, which included Bovery's
testimony, claimants' discovery responses and other
documentation.
Paragraph 155 asserted that all the funds retained in
Account -2 and Account -4 "represent[ed] either funds collected
by [Bovery] as entry fees . . . or funds received/retained by
[Bovery] in the form of 'gifts' from pools participants."
Because claimants offered no response to this paragraph, the
facts contained therein were deemed admitted pursuant to Rule
4:46-2(b).
Paragraph 189 asserted that "at least $43,679" in sports
pool "gifts" was transferred from the "pool" accounts into
claimants' "personal" account. Claimants also failed to refute
the facts contained in this paragraph, thereby admitting the
assertions pursuant to Rule 4:46-2(b).
Claimants also presented no response to paragraphs in the
State's Statement of Undisputed Facts that asserted checks from
25 A-0703-14T2
Account -2 and Account -4, the accounts used primarily for the
pools, were used to pay personal expenses such as their
mortgage, their daughters' college tuition and Bovery's credit
card, that checks were drawn made payable to "cash" or to
Bovery, and at least one check drawn on a "pool" account was
deposited into Account -5.
Paragraph 186 of the State's Statement of Undisputed Facts
asserts that at the time of seizure, Account -2 and Account -4
held "$760,055 in funds derived as entry fees collected from
pool participants." Paragraph 189 asserted Bovery's "records,
prior statements, and sworn testimony and admissions discussed
supra show that [Bovery] also transferred at least $43,679 of
the 'gifts' . . . from Accounts Nos. []-2 and []-4 into Account
No. []-5, the account [Bovery] held jointly with" Mary Bovery.
Claimants offered no response to Paragraph 189 and, in
response to Paragraph 186, merely supported their denial by
saying, "The calculations are incorrect. See balance sheet
attached to the State's Motion for Summary Judgment as Exhibit
3." That "balance sheet," bearing a date of August 21, 2010,
was seized from claimants' home pursuant to the search warrant
and appears to be prepared by Bovery. It lists the assets in
"our checking" as $19,452.27 and "john pay 10/11 school year
pending bank deposit" as $1200.
26 A-0703-14T2
In short, claimants' responses to the State's Statement of
Undisputed Facts were inadequate to create a genuine issue of
fact, see R. 4:46-2(b), much less satisfy claimants' burden to
present "sufficient credible evidence to allocate the funds
between illegal and legal purposes." Seven Thousand Dollars,
supra, 136 N.J. at 238.
VI.
In Point II, claimants argue the State violated the notice
provision of N.J.S.A. 2C:64-3 because it failed to provide
notice to the players whose entry fees were seized and that, as
a result, the trial court erred in ruling to the contrary. They
argue the players had an affirmative defense to the forfeiture
of their funds because N.J.S.A. 2C:37-2(c) excludes players from
prosecution for promoting gambling. They contend that, because
the players committed no crime, the seizure of the money they
paid as entry fees "violates notions of fundamental fairness."
This argument merits only limited comment. R. 2:11-3(e)(1)(E).11
The State was required to provide notice of the forfeiture
action "to any person known to have a property interest in the"
property sought to be forfeited. N.J.S.A. 2C:64-3(c) (emphasis
added). The persons known to have a property interest in the
11
We therefore need not address the standing issue raised by
the State and decided by the trial court.
27 A-0703-14T2
accounts that were seized were the account holders: Bovery, his
wife and his father. Each was given notice. The entry fees
were not segregated into separate accounts for each player; no
player was an account holder. Therefore, the notice provided by
the State adequately complied with the statutory provision.
We note further that claimants' argument rests upon a
faulty premise — that the State's right to forfeiture depends
upon the players' guilt of an offense. As we have noted, a
forfeiture action is brought against the property itself, and
not its owner or possessor because the theory of forfeiture is
based on "the misuse of the property." See Seven Thousand
Dollars, supra, 136 N.J. at 232-33 (citation omitted). Civil
forfeiture is permitted for property that is intended to become
part of illegal activity and requires neither criminal conduct
nor a conviction. See id. at 234.12 The fact that the players
committed no crime is therefore of no import. See id. at 233-
34.
12
In interpreting a prior forfeiture statute, the Supreme Court
stated "all property used for gambling was contraband, and such
property was construed to include all money earmarked and
segregated as part of a gambling operation." Spagnuolo v.
Bonnet, 16 N.J. 546, 558 (1954). The Court stated further that
the statute "could not be intended to have the effect of leaving
the legal title to such money in the gambler or player." Ibid.Claimants contend the trial court's reliance upon Spagnuolo was
flawed because the earlier statute did not include a notice
provision like that in the present statute. We are unpersuaded
by this argument.
28 A-0703-14T2
Even if the players could be considered owners of the funds
held in the accounts under others' names, the players' defense
to the criminal offense does not equate with a defense to the
forfeiture of the funds they paid to Bovery. N.J.S.A. 2C:64-
5(b) provides an "innocent owner" defense and states that
property seized pursuant to the civil forfeiture statute will
not be subject to forfeiture "if the owner of the property
establishes by a preponderance of the evidence that the owner
was not involved in or aware of the unlawful activity and that
the owner had done all that could reasonably be expected to
prevent the proscribed use of the property by an agent." See
also State v. One (1) Ford Van, Econoline, 154 N.J. Super. 326,
329-30 (App. Div. 1977), certif. denied, 77 N.J. 474 (1978). It
is beyond cavil that the players who paid entry fees to
participate in Bovery's sports pools were aware of the unlawful
activity that provided the basis for forfeiture.
Affirmed.
29 A-0703-14T2