of the act giving rise to forfeiture under this section.
21 U.S.C. § 881(h) (1990).
As a result of this "relation back" of the forfeiture to the date of the illegal act, no third party can acquire a legally cognizable interest in a piece of property at any time after the date of the illegal act which serves as the basis of the forfeiture. United States v. One Parcel of Real Estate Property known as Rod and Reel Fish Camp, 660 F. Supp. 483 (S.D. Miss. 1987); aff'd, 831 F.2d 566 (5th Cir. 1987); United States v. One Piece of Real Estate, etc., 571 F. Supp. 723, 725 (W.D. Tex. 1983); United States v. Stowell, 133 U.S. 1, 16-17, 10 S. Ct. 244, 247, 33 L. Ed. 555, 3 A.F.T.R. (P-H) 2516 (1890); United States v. Miscellaneous Jewelry, 667 F. Supp. 232, 247 (D. Md. 1987) (individual must establish that he had an ownership interest in the property before the illegal act occurred). In the instant case, the attempted transfer of the defendant property occurred not only long after the date of the illegal acts upon which forfeiture was based, but also after the United States had filed its complaint for forfeiture and the Lis Pendens notice had been recorded. Therefore, even if the trust had been created, title would still vest in the Cole Taylor trust.
Claimants make the additional argument that even if they cannot claim an interest in the defendant property as beneficiaries of the OLB trust, they are entitled to maintain individual interests based on their respective contributions to the property. Gwendolyn Petrozza, John Petrozza's wife, claims that she obtained an individual interest in the defendant property by assuming an obligation under a new mortgage executed on November 4, 1989. However, as with the trust, this new mortgage was executed several days after the complaint for forfeiture was filed. Therefore, Gwendolyn Petrozza cannot claim any interest in the property based on this transaction.
John Petrozza's wife and children also argue that they are entitled to an interest in the defendant property based on some alleged prior consideration which they gave John for the transfer of the property. The case of U.S. v. One Parcel of Real Property with Buildings, 743 F. Supp. 103 (D. R.I. 1990), is instructive on this point. In that case, a husband and wife were charged with possession of marijuana after their home was searched pursuant to a warrant. One month later, the couple executed a quitclaim deed conveying title to the property to the husband's brother. When the property was ultimately seized, the brother filed a claim averring that he is the lawful owner of the premises and that therefore, his interest was exempt from forfeiture. The court held that the language of the analogous criminal forfeiture statute, 21 U.S.C. § 853(c), which protects only the subsequent property owners who can prove that they were a "bona fide purchaser for value," should be extended to apply to civil forfeitures as well. Otherwise, the court reasoned, a criminal defendant could easily circumvent forfeiture by making a sham conveyance of the property to a friend or relative who was not involved in the illegal activity which serves as the basis for the forfeiture. 743 F. Supp. at 106.
Although John Petrozza's wife and children allege that they were made beneficiaries of the trust in consideration of prior funds that they had loaned to their father, they have presented no documentation of this arrangement. The Illinois Statute of Frauds requires that all contracts involving an interest in land for a term longer than one year be in writing. Ill.Rev.Stat. Ch. 59, para.2 (1985). Since the Statute of Frauds applies to the transfer of a beneficial interest in a land trust, IMM Acceptance Corp. v. First National Bank and Trust Co., 148 Ill. App. 3d 949, 102 Ill. Dec. 232, 235, 499 N.E.2d 1012, 1015 (2d Dist. 1986), any such agreement which John Petrozza may have had with his wife and children to transfer an interest in the defendant property is unenforceable.
We agree with the United States' assertion that the evidence indicates that John Petrozza attempted to create the OLB trust, naming his wife and children as beneficiaries, to escape the impending forfeiture of their home. If these sham transactions were allowed to stand, it would open the floodgates to allowing claimants to come up with creative ways to dispose of their interest in the seized property so as to suffer no adverse consequences from the forfeiture proceeding. Since we find that claimants Gwendolyn Petrozza, Vincent Petrozza, and Theresa Petrozza have no legitimate interest in the defendant property, the motion to amend the judgment of forfeiture is denied.
Charles P. Kocoras
United States District Judge
Dated: December 5, 1991
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