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United States v. Franco

United States District Court, W.D. Virginia, Harrisonburg Division

July 26, 2017



          Michael F. Urbanski Chief United States District Judge

         This matter is before the court on the government's motions for final forfeiture of Franco's interest in certain real estate located at 7393 Orkney Grade, Mount Jackson, Virginia 24482 (the "Orkney Grade Residence" or the "Property"). ECF Nos. 432, 468. The court held hearings on this matter on March 28, 2017 and June 28, 2017. For the reasons articulated herein, the government's motions for final forfeiture are GRANTED, and Michael Franco's ownership interest is forfeited to the government, subject to the conditions described below.


         The court entered a preliminary order of forfeiture on June 30, 2015, finding that "the 7393 Orkney Grade real estate was used by Franco and co-defendant Luther Martin on multiple occasions to break up bulk marijuana into distribution quantities." ECF Nos. 403, 404. Pursuant to that order, the government was required to publish notice of the forfeiture, and provide opportunity for innocent parties claiming a legal interest in the Orkney Grade Residence to file a petition with the court. ECF No. 404, at 1. The order also provided that "this Order of Forfeiture shall become final as to the defendant upon entry." Id. at 2.

         The government published notice as required, and several parties came forward to claim legal interests. Anthony and Vincent D'Amico each claimed a 1/12 interest in the Property on July 23, 2015. ECF No. 432, at 1-2. Franco's wife, Darlene Franco, also came forward to claim an interest in the property. Id. at 2. The government characterized her as claiming a 5/12 interest. Id. It arrived at this number by subtracting Anthony and Vincent D Amico's interests, and then halving the remainder to account for Michael Franco's forfeited interest. Id. at 2 n.1. Finally, Seneca Mortgage Servicing asserted a lienholder interest in the Orkney Grade Residence.[1] Id. at 2.

         Darlene Franco also filed objections to the preliminary order of forfeiture. ECF No. 410. In her objections, she clarified the nature of her interest in the Property: she owns a 1/6 interest as a tenant in common, and owns a 2/3 undivided interest with Michael Franco as tenants by the entirety. Id. Thus, the ownership status of the Orkney Grade Residence is as follows:

• Vincent D'Amico: 1/12
• Anthony D'Amico: 1/12
• Darlene Franco: 2/12
• Darlene and Michael Franco, as tenants by the entirety: 8/12
• NationStar Mortgage, LLC: Lienholder interest The United States does not dispute the validity of these ownership interests. See ECF No. 473, at 1 (incorporating by reference Seneca Mortgage Servicing, LLC's articulation of the ownership and title history of the Property). The United States also agrees to recognize the tenancy-in-common interests of Vincent D'Amico, Anthony D Amico, and Darlene Franco, and NationStar Mortgage's lienholder interest, and has suggested a forfeiture scheme whereby these parties are compensated for their interests. See ECF No. 473-1. Furthermore, the government does not attempt to argue that Darlene Franco's tenancy by the entirety ownership interest does not qualify for any protection under § 853(n)(6). See ECF No. 473, at 1 ("It is the government's position that upon entry of the Preliminary Order, . . . the United States assumed the status of a tenant in common with Darlene as to the 2/3 interest she owned with [Franco].").

         Thus, the sole remaining issue to be resolved is how the court should treat Darlene Franco's tenancy by the entirety interest. "|T]he United States requests that the court sever the tenancy by the entirety estate and hold that the United States and Darlene [Franco] each hold a 1/3 interest in the subject property as tenants in common." ECF No. 473, at 11. Franco, on the other hand, suggests that the court decline to order forfeiture, and instead enter an order "giving a lien on the property in favor of the government in the amount set by the [c]ourt." ECF No. 474, at 9.


         21 U.S.C. § 853(a) provides, in relevant part, that a person convicted of certain crimes "shall forfeit to the United States, irrespective of any provision of state law . . . any of the person's property used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of" the offense of conviction. Property is later defined as including "real property" and "tangible and intangible personal property, including rights, privileges, interests, claims, and securities." Id. § 853(b). This statute protects the interests of the innocent, however, by providing that the court should hold a hearing upon the allegation of an innocent owner's interest in the forfeited property. Id. § 853(n)(1). The court is directed to modify the forfeiture order if an innocent petitioner can demonstrate that:

(A) the petitioner has a legal right, title, or interest in the property, and such right, title, or interest renders the order of forfeiture invalid in whole or in part because the right, title, or interest was vested in the petitioner rather than the defendant or was superior to any right, title, or interest of the defendant at the time of the commission of the acts which gave rise to the forfeiture of the property under this section; or
(B) the petitioner is a bona fide purchaser for value of the right, title, or interest in the property and was at the time of purchase reasonably without cause to believe that the property ...

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