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United States v. Zilch

March 24, 2010

UNITED STATES OF AMERICA, PLAINTIFF,
v.
JERROD J. ZILCH, DEFENDANT.



The opinion of the court was delivered by: Michael M. Mihm United States District Judge

ORDER

Now before the Court is Joseph Zilch's ("Zilch's") Motion to Stay Sale, Open Summary Judgment and for Specific Performance [#66], which the Court construes as a Motion to Vacate the Order of Default and Summary Judgment entered on December 1, 2009. For the reasons set forth below, Zilch's motion is DENIED.

FACTUAL BACKGROUND

On May 21, 2004, Jerrod J. Zilch was indicted by a federal grand jury for the Central District of Illinois. He was charged with conspiracy to distribute cocaine and marijuana starting in about 1995 and continuing to his indictment date, in violation of 21 U.S.C. §§ 846, 841(a)(1), and 841(b)(1)(A).

The Indictment sought the forfeiture of certain property of Jerrod Zilch, namely: (a) a parcel of real estate commonly known as 1501 Highland Avenue, Pekin, Illinois, and all improvements and appurtenances thereon. The real estate is legally described as, Lot Twenty-three (23) in Mineral Springs Addition No. 3 in the City of Pekin, Tazwell County, Illinois; (b) $1,000,000.00 representing a sum which was involved in, traceable to, or proceeds of Jerrod J. Zilch's illegal drug trafficking; and (c) for substitute assets in the event some act or omission on the part of Jerrod J. Zilch affected the location, availability, or value of the property sought to be forfeited.

On October 14, 2005, Jerrod J. Zilch pled guilty to the Indictment pursuant to a written plea agreement in which, (a) he agreed to forfeit to the government all his right, title and interest to the property sought to be forfeited; (b) admitted he had been involved in distributing cocaine, marijuana, and methamphetamine in the Pekin, Illinois area since 1994 until May 2004, and (c) the property known as 1501 Highland Avenue, Pekin was used to store money, cocaine and marijuana during the period of time he was involved in the charged drug conspiracy.

On August 1, 2006, Jerrod J. Zilch was sentenced to 235 months imprisonment. His sentence included the forfeiture all his interest in the property located at 1501 Highland Avenue, Pekin, Illinois, and to at least $1,000,000.00 of illegal drug proceeds to the United States of America. A Preliminary Order of Forfeiture was entered that same day. The Order authorized the U. S. Marshals to seize the property at 1501 Highland Avenue for further disposition according to the provisions of 21 U.S.C. § 853(n)(1), which provides for procedures to notify and adjudicate any third party interests in criminally forfeited property. The Order also provided for a money judgment in the amount of $1,000,000.00 against Jerrod J. Zilch in favor of the United States of America in the event said sum could not be located for forfeiture.

The government subsequently asked the Court to amend the Preliminary Order of Forfeiture to include certain property of Jerrod J. Zilch as substitute assets to be applied to the money judgment previously entered against him, namely, a 1961 Chevrolet Corvette, VIN # 108B7S110457 automobile; a 1995 Chevrolet Flatbed Pickup Truck, VIN # 1GBJC34F8SE230018; a 1996 Kenworth Semi-Tractor, VIN # 1XKWDB9X7TJ726953, a 1981 Chevrolet Pickup Truck, VIN # 1GCEK14H3BJ115192, a 2000 Skidoo GT Snow Mobile, VIN # 2BPS16483YV000304, a 2000 Seadoo GT Millennium Jet Ski, VIN # ZZN37253D101, and a 2000 Lincoln Navigator, VIN # 5LMPU28A2YLJ11857.

The Court entered an Amended Preliminary Order of Forfeiture and pursuant to Rule 32.2 of the Federal Rules of Criminal Procedure and Title 21 United States Code, Section 853(p) ordered forfeiture of the afore-described properties as substitute assets to be applied to the unavailable $1,000,000.00 illegal proceeds. The Amended Order directed the United States Marshals to seize and retain the property for further proceedings in accordance with Rule 32.2 of the Federal Rules of Criminal Procedure and Title 21, United States Code, Section 853(n). The Order directed the government to commence proceedings to notify and adjudicate any third party interest in the property.

The government commenced proceedings consistent with the Court's directions and with the statutory requirements concerning ancillary hearings and third parties. Specifically, the government published notice of forfeiture in newspapers of general circulation. The government also sent direct written notice to all persons the government knew to have an alleged interest in the property subject to forfeiture.

PROCEDURAL BACKGROUND

Forfeiture proceedings are governed, in part, by 21 U.S.C. § 881(b), the Supplemental Rules of Certain Admiralty and Maritime Claims of the Federal Rules of Civil Procedure. Pursuant to Rule C(6)(a)(i)(A) of the Supplemental Rules:

[A] person who asserts an interest in or right against the property that is the subject of the action must file a verified statement identifying the interest or right . . . within 30 days after the earlier of (1) the date of service of the Government's complaint or (2) completed publication of notice under Rule C(4).

The verified claim states the claimant's interest in the property, by virtue of which the claimant demands restitution and the right to defend the action. United States v. United States Currency in the amount of $2,857.00, 754 F.2d 208, 212-13 (7th Cir. 1984). If the procedural requirements of Rule C(6)(a)(i)(A) are not met, the claimant lacks standing to defend and contest the forfeiture. Id.; United States v Commodity Account No. 549 54930 at Saul Stone & ...


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