The opinion of the court was delivered by: Richard Mills, District Judge:
The claimant says she is an innocent owner.
The facts say she is not an owner at all.
At bench trial, the government sought to forfeit the
defendant property as being purchased with the proceeds of
drug sales and for being used to facilitate drug transactions.
21 U.S.C. § 881(a)(6) and 881(a)(7). The claimant said she was
an innocent owner as defined in §§ 881(a)(6) and (a)(7). The
government argued claimant has no standing to challenge the
forfeiture or (in the alternative) claimant knew the defendant
property was purchased with drug money and used to facilitate
Because the Court finds claimant does not have standing to
contest the forfeiture, her innocent owner argument will not
be addressed. Accordingly, the following discussion focuses
solely on the issue of claimant's standing.
On June 3, 1993, Willis Gragg pled guilty to one count of
conspiring to distribute cocaine and one count of attempting
to possess cocaine with intent to distribute. On July 13, 1993
the United States filed a verified in rem Complaint against
2030 East Monroe seeking forfeiture of the property pursuant to
21 U.S.C. § 881(a)(6) and 881(a)(7). The Complaint alleged the
property had been used to commit or to facilitate the
commission of a violation of Title II of the Controlled
Substance Act, 21 U.S.C. § 801 et seq., punishable by more than
one year of imprisonment and the property represented proceeds
traceable to an illegal drug transaction punishable by more
than one year of imprisonment.
Also on July 13, 1993, United States Magistrate Judge
Charles H. Evans issued an Order finding probable cause for
the seizure and forfeiture of 2030 East Monroe. Judge Evans'
Order instructed the Clerk's office to issue a Warrant of
Arrest in rem for the seizure of 2030 East Monroe. On July 19,
1993, Defendant 2030 East Monroe was seized by the United
Notice of the seizure and Complaint was given to Willis
Gragg, Dorothy Gragg (Willis' wife), and Bernice Gragg
(Willis' mother). Notice of the seizure was also published in
The State Journal-Register, Springfield, Illinois, once a week
for three consecutive weeks.
On July 26, 1993, Bernice Gragg and Richard Gragg (Willis'
brother) filed verified claims to 2030 East Monroe. On the
same day, Bernice and Richard filed answers to the
government's verified Complaint.
The case was set for bench trial and discovery ensued. On
August 15, 1994, Richard Gragg withdrew his claim to 2030 East
Monroe. On September 9, 1994, the bench trial commenced. The
parties stipulated there was probable cause to believe 2030
East Monroe was used to facilitate a drug transaction and that
the property represented the proceeds of drug transactions.
Bernice Gragg proceeded to attempt to establish herself as
an innocent owner pursuant to 21 U.S.C. § 881(a)(6) and
881(a)(7). To support her claim, Bernice called two witnesses,
her son, Richard, and herself.
Richard Gragg testified that on October 17, 1988, he entered
into a contract for deed with Hattie Horton to purchase three
pieces of property, one of which was 2030 East Monroe. The
purchase price was $18,000. Richard paid $6,000 down and agreed
to make monthly installments of $500. The deed was executed the
same day and placed in escrow. Richard took immediate
possession of the real estate.
Richard began extensive renovation of the house located at
2030 East Monroe. No improvements were made to the other
pieces of real estate. Richard presented receipts indicating
he spent approximately $7,500 on materials to improve 2030
East Monroe. Richard completed the remodeling about four to
six months after taking possession of 2030 East Monroe. It was
Richard's intent to rent the premises after completing his
renovations. The premises was never rented, however, and
remained vacant until Willis and Dorothy moved into the house
in August of 1989.
Richard also produced receipts from Hattie Horton showing he
made his monthly payments from October 1988 until August 1989.
In fact, the receipts indicate that as of August 28, 1989
Richard was six months ahead on his payments with the total
balance due on the contract of $4,500. Richard testified that
in the spring of 1989 he began to experience financial
problems due to his addiction to crack cocaine. According to
Richard, he asked his mother to help him with the monthly
payments and to purchase materials needed to complete the
renovation. On October 19, 1990, Richard quitclaimed his
interest in 2030 East Monroe to his mother Bernice. Richard
testified he deeded the property to his mother because she had
taken over the payments on the contract for deed.
On cross-examination Richard was unable to explain why
Hattie Horton was threatening to foreclose on him in the
spring of 1989 when according to his records he was at least
three months ahead on his payments. Furthermore, Richard had
difficulty explaining how he could afford his own mortgage
payment, the $500 monthly installment on 2030 East Monroe, and
pay for the materials to renovate 2030 East ...