Com. v. Misc. Papers, $5,443.00 US Currency

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
COMMONWEALTH OF PENNSYLVANIA IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
MISCELLANEOUS PAPERS, $5443.00
U.S. CURRENCY, ET AL.
Appellee No. 242 MDA 2014
Appeal from the Order January 17, 2014
In the Court of Common Pleas of Snyder County
Criminal Division at No(s): CP-55-MD-0000031-2013
BEFORE: BOWES, J., MUNDY, J., and JENKINS, J.
MEMORANDUM BY MUNDY, J.: FILED DECEMBER 22, 2014
The Commonwealth appeals from the January 17, 2014 order denying
its petition for forfeiture of derivative contraband. After careful review, we
reverse and remand for further proceedings consistent with this
memorandum.
A summary of the factual and procedural history of this case, as
disclosed by a review of the certified record, follows. On November 9 and
10, 2011, Brian Bartholomew, on behalf of Blackthorn Estate Buyers, Inc.,
was engaged in purchasing precious metals and jewelry out of rented rooms
at the Hampton Inn in the Borough of Shamokin Dam, Snyder County,
Pennsylvania. N.T., 1/13/14, at 7-8, 16-17. Bartholomew had secured the
proper license for this activity from the Snyder County Sheriff’s Department
in accordance with the regulations enabling the license provision of the
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Precious Metals Act.1 Corinne and David Sievert, who locally operated a
similar business, expressed concerns to the Snyder County District
Attorney’s Office that Bartholomew was not complying with various
requirements of the Precious Metals Act, as made enforceable through
appropriate Pennsylvania Code regulations.2 The Seiverts agreed to act as
confidential informants in performing controlled sales of items of gold
jewelry. On November 10, 2011, based on the Seiverts’ representations
that Bartholomew was not in compliance with portions of the Act, the
Commonwealth charged him with two counts of failure to keep required
records, and three counts of failure to post prices in connection with those
controlled sales.3 Based on additional information gathered by investigators
during the execution of the arrest warrant, the criminal complaint was
amended to include 21 additional counts of failure to keep required records.
On March 19, 2012, Bartholomew entered a negotiated guilty plea to
one count of failure to keep required records.4 The trial court immediately
sentenced Bartholomew in accordance with the plea agreement to 12
months’ probation. At that time, certain items that had been seized by the
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1
37 Pa. Code § 501.3.
2
73 P.S. §§ 1931-1942; 37 Pa. Code §§ 501.1-501.11.
3
73 P.S. §§ 1933 and 1936; 37 Pa. Code §§501.6, 501.9, and 501.11.
4
The certified record does not contain a copy of the guilty plea transcript,
and there is no indication in the record of the facts admitted to by
Bartholomew in support of the plea.
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Commonwealth were returned to Bartholomew by agreement of the parties.
Some papers, an amount of cash, several coins, and numerous items of
jewelry were not returned.
On February 27, 2013, the Commonwealth filed a petition for forfeiture
of derivative contraband, seeking forfeiture of the papers, cash, coins and
jewelry that had been seized at the time of Bartholomew’s arrest and
retained by the Commonwealth.5 A hearing on the Commonwealth’s petition
was held on January 13, 2014. Bartholomew did not respond to the
Commonwealth’s petition or participate in the hearing. On January 17,
2014, the trial court entered an order, together with its findings of fact,
conclusions of law and opinion, denying the Commonwealth’s petition. On
February 6, 2014, the Commonwealth filed a timely notice of appeal.6
On appeal, the Commonwealth raises the following issue for our
review.
Whether the trial court erred and/or abused its
discretion when it denied the Commonwealth’s
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5
In the meantime, according to the trial court opinion, Susan Peroff-Bagon,
as purported owner of Blackthorn Estate Buyers, Inc., headquartered in
Florida, filed a petition for return of the seized property. The petition is not
contained in the certified record or reflected in the trial court docket.
Nevertheless, the trial court denied the petition for failure of Peroff-Bagon to
appear or present any evidence at the hearing on her petition, scheduled in
conjunction with the Commonwealth’s petition.
6
The Commonwealth and the trial court have complied with Pennsylvania
Rule of Appellate Procedure 1925. The trial court referenced its January 17,
2014 findings of fact, conclusions of law and opinion as containing the
reasons for its decision. Trial Court Opinion, 3/12/14, at 1.
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petition to forfeit the proceeds of and the items used
to facilitate violations of Pennsylvania’s Precious
Metals Act, where 1) the Commonwealth proved a
nexus between the property and the violations, and
2) the forfeiture was proportional to those violations.
Commonwealth’s Brief at 8.
We are guided by the following principles in our consideration of the
Commonwealth’s issue. “Our standard of review in assessing the propriety
of a forfeiture order is limited to whether the trial court’s findings of fact are
supported by substantial evidence, and whether the trial court abused its
discretion or committed an error of law.” Commonwealth v. Salamone,
897 A.2d 1209, 1215 (Pa. Super. 2006), citing Commonwealth v. Real
Property & Improvements, 832 A.2d 396, 398 (Pa. 2003), appeal denied,
923 A.2d 1173 (Pa. 2007). “Analysis of whether property should be forfeited
to the Commonwealth is dependent upon whether the property is
contraband; the burden of proving that the property is contraband rests
upon the Commonwealth.” In re Firearms, Eleven, 922 A.2d 906, 910
(Pa. Super. 2007) (citations omitted), appeal denied, 932 A.2d 1289 (Pa.
2007). “[T]he Commonwealth’s burden in forfeiture proceedings is a
preponderance of evidence standard. Despite the lesser standard, the
quasi-criminal nature of forfeiture proceedings is undisputed.”
Commonwealth v. Anthony, 613 A.2d 581, 583 (Pa. Super. 1992)
(citations omitted).
[T]wo distinct classifications of contraband have
been developed: contraband per se, and derivative
contraband. Contraband per se is property the mere
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possession of which is unlawful …. Heroin and
‘moonshine’ whiskey are examples of contraband per
se. Derivative contraband is property innocent by
itself, but used in the perpetration of an unlawful act.
An example of derivative contraband is a truck used
to transport illicit goods.
Commonwealth v. Howard, 713 A.2d 89, 92 (Pa. 1998), quoting
Commonwealth v. Fassnacht, 369 A.2d 800, 802 (Pa. Super. 1977), cert.
denied, 439 U.S. 911 (1979).
Property is not derivative contraband merely because
it is owned or used by someone who has been
engaged in criminal conduct. Rather, the
Commonwealth must establish a specific nexus
between the property and the alleged criminal
activity.
Objects do not acquire “guilt by association”
merely because they are owned by a person who has
been engaged in criminal conduct. The requirement
that a sufficient nexus exist between the property
and the prohibited criminal activity serves to
mitigate the potentially harsh results of permitting
the Commonwealth to penalize a citizen by a civil
action against his property rather than a criminal
action against his person.
In re Firearms, Eleven, supra at 910 (internal quotation marks and
citations omitted). “This is not to say, however, that the Commonwealth’s
right to seek forfeiture is contingent upon the result in a criminal
prosecution. Regardless of whether a conviction can be gained from the
evidence, the Commonwealth may seek to forfeit property as long as it
establishes that the property constitutes contraband.” Anthony, supra at
583-584 (internal quotation marks, citation, and footnote omitted); but see
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Commonwealth v. 2010 Buick Enclave, 99 A.3d 163 (Pa. Cmwlth. 2014)
(holding a criminal conviction is required to proceed with a forfeiture of
derivative contraband).7 In addition to establishing a nexus between
derivative contraband and illegal activity, the Commonwealth must show
that the proposed forfeiture is proportional to the offense. Commonwealth
v. Maglisco, 491 A.2d 1381, 1385 (Pa. Super. 1985). In evaluating
proportionality, our Supreme “Court and the U.S. Supreme Court have… held
that in the context of excessive fines challenges, forfeitures are ‘fines.’”
Commonwealth v. Carela-Tolentino, 48 A.3d 1221, 1223 n.3 (Pa. 2012),
citing United States v. Bajakajian, 524 U.S. 321, 334 (1998), and
Commonwealth v. Real Property and Improvements Commonly
Known As 5444 Spruce Street, Philadelphia, 832 A.2d 396, 399 (Pa.
2003).
Bajakajian[] requires that, in cases where a
punitive forfeiture is involved, the court “compare
the amount of the forfeiture to the gravity of the
defendant’s offense. If the amount of the forfeiture
is grossly disproportional to the gravity of the
defendant’s offense, it is unconstitutional.”
Bajakajian, [supra] at 336–37[].
The Court enumerated factors by which a court
may measure the gravity of the offense, each of
which is limited to the conduct of the defendant: the
penalty imposed as compared to the maximum
penalty available; whether the violation was isolated
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7
“[D]ecisions rendered by the Commonwealth Court are not binding on this
Court.” Beaston v. Ebersole, 986 A.2d 876, 881 (Pa. Super. 2009) (en
banc) (citation omitted).
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or part of a pattern of misbehavior; and, the harm
resulting from the crime charged. Id. at 338–39[].
5444 Spruce Street, Philadelphia, supra at 402 (footnote omitted).
Instantly, it is undisputed that the property subject to the
Commonwealth’s forfeiture petition is not contraband per se. Therefore, the
issue before the trial court was whether the Commonwealth proved, by a
preponderance of the evidence, a sufficient nexus between the items seized
and Bartholomew’s illegal activity, and, if so, whether the proposed
forfeiture was proportionate to that illegal activity. See In re Firearms,
Eleven, supra; 5444 Spruce Street, Philadelphia, supra. At the
January 13, 2014 hearing on its motion, the Commonwealth offered the
testimony of Detective William Neitz, Jr., an investigator for the Snyder
County District Attorney’s Office, and the Seiverts. Detective Neitz testified
about his investigation and arrest of Bartholomew. The Seiverts testified
about their respective controlled sales of jewelry to Bartholomew and their
personal observation of numerous instances of his non-compliance with the
Precious Metals Act.
The trial court found that Bartholomew’s “offense, as proven by the
Commonwealth, was a failure to follow several specific legal requirements
associated with the Precious Metals Act.” Trial Court Opinion, 1/17/14, at 8.
Nevertheless, the trial court concluded, “[e]ven though the Commonwealth
can establish a nexus through circumstantial evidence, we cannot find that
the jewelry and money seized was necessarily used in or derived from the
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illegal activity of Barthololmew [sic].” Id. “There is no evidence to point to
[the items seized as] having originated from transactions at the Hampton
Inn location.” Id. Additionally, the trial court found “[t]he proposed
forfeiture, particularly of the various items of jewelry, and the cash, is
disproportionate to the nature of the crime involved.” Id. at 7. We
disagree.
In its analysis, the trial court focused on the instances described by
the Seiverts of the infractions they observed during their respective sales on
November 9 and 10, 2011. It further noted that no evidence linked the
remaining items of jewelry and cash received to the infractions observed on
those occasions. The trial court failed to appreciate that the lack of
documentation accompanying those items was itself evidence of ongoing
violations of the Act. Detective Neitz testified on direct examination as
follows.
Q Were -- did law enforcement seize any items
from the location involved with the sales by
Bartholomew and Blackthorn?
A Yes. There was a large cash sum that was set
-- or that was seized that night. And there was a
number of items that there was no identification
on. Part of the requirements are that the individuals
fill out the slips and give a copy to the individual
they’ve purchased it from and also have that slip
with the property that they purchase. We
found a number of items that had no -- no
information on, you know, for us to go back on
and comply with the legislation. And there was
[sic] cash sales. There was a large amount of cash
that was taken that night or that we actually seized.
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N.T., 1/13/14, at 12 (emphasis added).
To sustain its burden, it was not necessary for the Commonwealth to
link the items seized to the specific controlled sales performed by the
Seiverts. It was undisputed that Bartholomew was at the Hampton Inn to
engage in an advertised licensed event to purchase precious metal items. In
such circumstances, the Act required Bartholomew to generate and maintain
certain records.
§ 1933. Records of transactions
(a) Dealers to keep record.--Every dealer in
precious metals shall keep a record of every
transaction upon a form approved by the Attorney
General. The record shall include as a minimum:
(1) The name, age and address of the seller
which must be verified by said dealer,
requiring proof of identity from the seller
sufficient to insure the accuracy of the
represented name and address of the seller.
(2) An accurate description of the property
purchased, including any serial number or
other identifying marks or symbols and the
date and hour of the transaction.
(b) Record to be maintained.--Said record shall
be maintained by the dealer in precious metals for a
period of one year from the date of the transaction
and shall be available for inspection by any law
enforcement official of the Federal Government, the
Commonwealth or any of its municipalities.
(c) Copy of record to district attorney.--A copy
of every record of transaction shall be delivered or
mailed to the district attorney of the county in which
a purchase of precious metals is made by the close
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of the next working day after the day on which the
metal was purchased.
(d) Copy of record to police department in lieu
of district attorney.--The district attorney may
authorize such records to be delivered or mailed to
the police department of the municipality in which
the precious metal was purchased in lieu of delivery
or mailing to the district attorney.
73 P.S. § 1933.
§ 501.6. Records of transactions.
The dealer shall completely, accurately and legibly
record every transaction on a form provided by and
prepared by the dealer. Forms that meet all of the
requirements for information as set forth in this
section are deemed approved by the Office of
Attorney General. The record of every transaction
shall include:
(1) The name, address, age, sex, race and
driver’s license number, if any, of the seller
shall be entered.
(2) The identity of the seller shall be
established by requiring the seller to produce
an identification issued by a governmental
agency with a photo of the seller thereon, if
available, and at least one other corroborating
means of identification. Otherwise,
identification sufficient to reliably establish the
person’s true identity shall be required.
(3) The seller shall be required to sign the form
on which is recorded the information required
by this section.
(4) An accurate description of the property
purchased shall include all names, initials,
serial numbers or other identifying marks or
monograms on each item purchased.
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(5) The time and date of the transaction shall
be recorded at the time of the transaction.
Records of transactions shall be maintained by
the dealer in precious metals for a period of 1
year and shall be available for inspection by
any law enforcement official of the Federal
Government, the Commonwealth or its
municipalities. A copy of every record of
transaction shall be delivered or mailed to the
district attorney of the county in which a
purchase of precious metals is made by the
close of the next working day after the day on
which the metal is purchased. The district
attorney may authorize records to be delivered
or mailed to the police department of the
municipality in which the precious metal is
purchased in lieu of delivery or mailing to the
district attorney. Each item of precious metal
purchased by a dealer in precious metals shall
be retained in unaltered condition for 5 full
working days after report of its purchase has
been filed with the proper district attorney or
his designee.
37 Pa. Code § 501.6.
We conclude it is reasonable to infer, from the absence of such records
attendant to any of the jewelry items seized, that Bartholomew’s
recordkeeping infractions observed on November 9 and 10, 2011 were
ongoing and involved the transactions pertaining to the seized items
wherever and whenever they occurred. Thus, we deem the trial court’s
conclusion that the Commonwealth failed to establish a nexus between the
items seized and Bartholomew’s illegal activity to be erroneous. The
Commonwealth was not required to tie the items for which it sought
forfeiture to the violations observed during the specific transactions
performed by the Sieverts, if it could link the evidence with illegal activity
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generally. See Anthony, supra. Its evidence of a wholesale absence of
required recordkeeping was sufficient to meet its initial burden of proof.
Absent any rebuttal or contrary proof offered by a respondent, we conclude
the trial court erred in denying the Commonwealth’s forfeiture petition. See
Commonwealth v. Assorted Consumer Fireworks, 16 A.3d 554, 558-
559 (Pa. Cmwlth. 2011) (holding fireworks inventory was forfeitable where
defendant was engaged in unlicensed sales of fireworks even though
evidence of specific sales was lacking), appeal denied, 27 A.3d 225 (Pa.
2011).
Additionally, we disagree with the trial court that the proposed
forfeiture is disproportionate to the subject illegal activity. Again, the trial
court focuses too narrowly on the single violation to which Bartholomew
pleaded guilty. The evidence points to multiple violations and a pattern of
noncompliance with the Act. The statute and regulations are designed to
protect the public from uninformed sales of valuable assets and to provide
law enforcement with checks against the fencing of stolen property. Given
these concerns and the ongoing nature of the violations, we conclude the
proposed forfeiture is indeed proportionate with the illegal activity attributed
to Bartholomew. See 5444 Spruce Street, Philadelphia, supra.
In light of the foregoing, we conclude the trial court abused its
discretion by denying the Commonwealth’s petition for forfeiture in this case.
Accordingly, we reverse the trial court’s January 17, 2014 order and remand
for further proceedings consistent with this memorandum.
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Order reversed. Case remanded. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 12/22/2014
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