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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
COMMONWEALTH OF PENNSYLVANIA IN THE SUPERIOR COURT OF PENNSYLVANIA Appellee
V.
SUK CHUL CHANG, M.D.
Appellant No. 3242 EDA 2012
Appeal from the Order Dated October 26, 2012 In the Court of Common Pleas of Montgomery County Criminal Division at No(s): CP-46-MD-0000950-2012
BEFORE: FORD ELLIOTT, P.J.E., OTT, J., and STRASSBURGER, J.*
MEMORANDUM BY OTT, J. FILED JULY 30, 2014
Suk Chul Chang, M.D., appeals from the order, dated October 26,
2012, in the Court of Common Pleas of Montgomery County, denying the
Petition for Return of Property,1 pursuant to Pa.R.Crim.P. 588.2 Pursuant to
a search warrant, the Delaware County District Attorney seized, inter alia, an ____________________________________________
* Retired Senior Judge assigned to the Superior Court. 1 Dr. Chang filed this timely appeal prior to his death. On March 13, 2013,
substituting Kyoung Sook Chang, M.D., in her capacity as personal representative of the Estate of Suk Chul Chang, M.D., as appellant in this appeal. 2
an appeal involving a motion for the return of property filed pursuant to Commonwealth v. Durham, 9 A.3d 641, 642 n.1 (Pa. Super. 2010), appeal denied, 19 A.3d 1050 (Pa. 2011). J-A02016-14
annuity account owned by Dr. Chang, and valued at approximately
$389,893.00.3 Dr. Chang contends the trial court erred in denying Dr.
of property, seeking return of the annuity account.
Based upon the following, we affirm.
opinion, as follows:
On April 16, 2012, Suk Chul Chang, M.D., commenced this miscellaneous court action [in the Court of Common Pleas of Montgomery County] by filing an application for relief styled as a
Dr. Chang resides in Wynnewood, Montgomery County.
indexed at no. 3824-2009, based on a criminal complaint filed by Detective Daniel Leicht, an officer of the Collingdale Borough Police Department and member of the Delaware County C.I.D. Drug Task Force. Dr. Chang was originally charged with 180 counts of illegal delivery of controlled substances between 2005 and 2007. All but eleven of the charges were dismissed at the preliminary hearing.
Acting on search warrants issued by two magisterial district judges in Delaware County, the District Attorney seized three investment accounts and a bank account, which together three investment accounts were annuity contracts with Fidelity Investment Life Insurance Company (FILI), and the other was a Fidelity Brokerage Services LLC brokerage account.
____________________________________________
3 See Property at 3, ¶6.B.
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According to Dr. Chang, the two annuity accounts were seized pursuant to a warrant issued by a magisterial district justice on November 18, 2008. The warrant listed the place to be
served on November 18th at the Philadelphia office of Fidelity Brokerage Services, wh office. The affidavit of probable cause implied that authority for seizing the accounts was based on the Forfeiture Act, 42 Pa.C.S.
proceeds collected by Suk C. Chang through his illegal practices
accounts.
Although the motion sought the return of all three accounts, this appeal pertains to only one of the annuity accounts, as the District Attorney returned the other two accounts to Dr. Chang shortly before this court heard the motion. With regard to the annuity account retained by the Commonwealth at the time of the hearing, the motion claimed
annuities and Fidelity Brokerage Services account to [Dr.
The undersigned judge held an evidentiary hearing on the motion on Thursday, October 25, 2012. At the beginning of the
Commonwealth had sought and obtained leave from Judge George A. Pagano of the Delaware County Court of Common Pleas to return the brokerage account and one of the annuity accounts to Dr. Chang. They stated that those two accounts were worth approximately $2.2 million, and the account the Commonwealth retained was worth approximately $389,893.00. They also placed into evidence a letter from a vice president of FILI that stated that Dr. Chang had not deposited money into the annuity account in question since January 17, 2006. The Assistant District Attorney stipulated that the information in the letter was correct. In view of that stipulation, defense counsel refrained from placing account balance records into evidence, as those records would merely have been cumulative proof of the deposit history of the account in question.
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The Assistant District Attorney produced Detective Leicht as a witness. Detective Leicht testified that he received information in 2007 from an informant, Gary Krobath, that Dr. e
that several years before then, Dr. Chang had relinquished his legal privilege to prescribe schedule two narcotics after an investigation by the federal Drug Enforcement Agency in which no criminal charges had been filed.
Krobath told Detective Leicht that Dr. Chang had been giving him prescription slips made out to others, including his girlfriend, Deana Miccio. Detective Leicht interviewed Ms. Miccio, who told him that she did not know Dr. Chang and had never met him. She did not appear to be under the influence of
a file under her name. Detective Leicht had Krobath make a
Leicht had learned that a person could not make an appointment
current client, so at the time of the controlled buy, he also had
the pseudonym Danny Krobath. Krobath returned from the controlled buy with prescription slips for narcotics in the names of Gary Krobath and Danny Krobath.
Two or three weeks later, Detective Leicht went to Dr.
saw a man dressed in street clothes holding medical files and taking cash from the six or seven other persons there. Two of the other persons in the waiting room were drinking beer. Although there was a sign-in sheet in the room, nobody signed
only two minutes later with prescription slips. After approximately two hours, Detective Leight saw Dr. Chang, who
contained no medical data other than fictional values for Danny
regarding previous office visits. Dr. Chang prescribed narcotics without asking Detective Leicht any medical questions or otherwise conducting a medical examination.
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Still posing as Danny Krobath, Detective Leicht returned on a later date as a member of a law enforcement team that executed a search warrant on Dr. team executed the warrant, the clients in the waiting room were handing prescription slips to each other and making plans to fill the prescriptions and then transfer possession of the prescribed narcotics. Detective Leicht asked several of them how he could get Dr. Chang to write him prescription slips made out to other persons, and they answered that he would be willing to do so after he had seen Leicht several times.
Following the execution of the search warrant on Dr. Chan persons who had been receiving prescription slips from him for several years to obtain narcotics for their own use or resale. For one such client, Paul Griffiths, the Commonwealth seized a file from Dr. Chang in which he had recorded the narcotics prescriptions given to Mr. Griffiths since 2003. Detective Leicht concluded his testimony without any objection or cross-
demeanor, the undersigned judge found his testimony credible, and because defense counsel made no timely objections, all of his testimony was admissible.
The Commonwealth then produced the testimony of Zachary Marks, a forensic accountant employed by the District Attorney. Mr. Marks testified that between 2005 and 2006, [Dr. Chang] deposited a total $250,000 principal into the annuity account at issue. Of that amount, $50,000 came from a Citizens Bank account into which [Dr. Chang] had not deposited funds between 2002 and 2009, but $200,000 came from a Citizens Bank account into which [Dr. Chang] had deposited funds between 2002 and 2008. The funds from the latter account came
annuity account at issue was interest on those deposits of principal.
Mr. Marks concluded his testimony without timely objection by defense counsel. Other than the letter from FILI, Dr. Chang's lawyers produced no evidence. The parties then presented argument and the hearing ended.
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Trial Court Opinion, 1/15/2013, at 1 7 (footnotes omitted).4
As is evident from this appeal, Dr. Chang filed his Motion for Return of
Property in Montgomery County, seeking the return of his annuity. See
Pa.R.Crim.P. 588 (providing motion for return of property shall be filed in the
court of common pleas for the judicial district where the property is located
at the time of seizure).5 Subsequently, on August 17, 2012, the Delaware ____________________________________________
4 We note that the record for the Delaware County criminal prosecution against Dr. Chang is not part of the certified record in this case, nor does it appear that it was available to the trial court. 5 Rule 588 provides in pertinent part:
(A) A person aggrieved by a search and seizure, whether or not executed pursuant to a warrant, may move for the return of the property on the ground that he or she is entitled to lawful possession thereof. Such motion shall be filed in the court of common pleas for the judicial district in which the property was seized.
(B) The judge hearing such motion shall receive evidence on any issue of fact necessary to the decision thereon. If the motion is granted, the property shall be restored unless the court determines that such property is contraband, in which case the court may order the property to be forfeited.
Pa.R.Crim.P. 588 (A),(B).
The annuity at issue here is intangible property, and therefore its situs follows the domicile of the owner. See Laird v. Laird, 421 A.2d 319, 320 (Pa. Super. 1980), citing Selig v. Selig, 268 A.2d 215, 218 (Pa. Super. res here involved is a bank account in which defendant has an intangible interest. That interest being merely an intangible legal concept, incapable of an actual physical situs, its situs is the domicile of the person
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County District Attorney filed a forfeiture petition pursuant to the Controlled
Substan
Court of Common Pleas of Delaware County. See
10/11/2012, at 4, ¶20.
relevant part:
[T]he Commonwealth has produced sufficient evidence to establish a specific nexus between annuity contract no. 323349137 and criminal conduct by Dr. Chang, hence the Motion for Return of Property is denied. This Court makes no determination as to the claims raised by Dr. Chang in sub- paragraphs 40.1, 40.2, 40.3, 40.5 and 40.6, and those claims are denied without prejudice to whatever rights Dr. Chang may have to raise t the Forfeiture Act, which is pending in the Delaware County Court of Common Pleas. The claims raised in sub-paragraphs 39.1-39.6 and 41.1-41.6 are dismissed as moot.
Order, dated 10/26/2012, docketed 10/31/2012. This appeal followed.6
6 The Commonwealth maintains the appeal is from an interlocutory order, Commonwealth v. Lewis, 431 A.2d 357 (Pa. Super. 1981). The Commonwealth points out the denial of a motion for return of property does not result in automatic forfeiture, and the Commonwealth is required to seek forfeiture under the Forfeiture Act. See Commonwealth Brief at 12, citing Commonwealth v. Mosley, 702 A.2d 857 (Pa. 1997); Boniella v. Commonwealth, 958 A.2d 1069, 1073 (Pa. Cmwlth. 2008). The Commonwealth claims the forfeiture action would have been unnecessary if the Montgomery County order was a final order. We do not find the C
(Footnote Continued Next Page)
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_______________________ (Footnote Continued)
In Lewis, supra, this Court quashed an appeal taken from a denial of a petition for the return of property. The Lewis Court found the appeal was interlocutory, reasoning:
[G]iven the criminal proceeding in esse against appellant, we
opportunity to secure relief from the court below, in the form of pre-trial motions and/or post-trial motions if conviction occurs, and if unsuccessful a review by this Court exists, our holding
Id., 431 A.2d at 360 (citations omitted).
Lewis is distinguishable, however, since in Lewis, it was possible for
return of property in a pre-trial or post-trial motion. The same is not true in this case. Here, there is no criminal action against Dr. Chang in Montgomery County. Rather, the only action in Montgomery County is Dr.
return of property is distinct from a forfeiture proceeding, and, although the two types of actions may commonly be heard together, to file one type of action does not in itself Mosley, supra, 702 A.2d at 859. Given the distinct and separate nature of a motion for return of property and a forfeiture action, and, as well, the procedural posture of this case, we conclude that the order denying the return of property in this case is final, despite the pending forfeiture proceeding. In this regard, we are guided by the rationale set forth by this Court in In re New 12th Ward Republican Club, 603 A.2d 205 (Pa. Super. 1992):
property is final. While there may be further litigation
quite clear that appellant now has no right to return of the property. The lower court has effectively decided that appellant has no rights in the property, and, therefore, the litigation is final as to appellant. Accordingly, we proceed to the merits of this appeal. (Footnote Continued Next Page)
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On appeal, Dr. Chang raises seven issues, which we have reordered
for purposes of this discussion:
1. Whether the [trial] court erred in considering the underlying merits of the forfeiture claim and finding that [the Commonwealth] established a nexus between the annuity and alleged criminal wrongdoing?
2. Whether the [trial] court erred in finding that the Court of Common Pleas of Delaware County has jurisdiction over the forfeiture petition?
3. Whether the [trial] court erred in failing to consider [Dr.
forfeiture action?
4. Whether the [trial] court erred in failing to consider [Dr.
violations with regard to the seizure of his annuity?
5. Whether the [trial] court erred in failing to consider the value of the property seized in conjunction with the parameters of the excessive fines clause of the Eighth Amendment?
6. Whether the forfeiture action should be dismissed as a result of the death of Dr. Chang? _______________________ (Footnote Continued)
Id. at 207 (citations and footnote omitted).
question of a nexus between the annuity account ordered certain defenses deferred to the pending forfeiture proceeding in the Delaware County Court of Common Pleas. Trial Court Opinion, supra at 15. See Order, 10/26/2012. However, under the Montgomery County order at issue here, Dr. Chang has no rights in the annuity, and, therefore, the order is final and appealable. Accordingly, we will proceed to the merits of this appeal.
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7. from presenting the testimony of witnesses adverse to the interests of [Dr. Chang] and his Estate? 7
The
review applied in cases involving motions for the return of property is an
Commonwealth v. Durham, 9 A.3d 641, 645 (Pa.
Super. 2010) (citation omitted), appeal denied, 19 A.3d 1050 (Pa. 2011).
Pennsylvania Rule of Criminal Procedure 588 provides, in pertinent part, that
pursuant to a warrant, may move for the return of the property on the
ground t
preponderance of
Under [Rule 588], on any motion for return of property, the moving party must establish by a preponderance of the evidence entitlement to lawful possession. Once that is established, unless there is countervailing evidence to defeat the claim, the moving party is entitled to the return of the identified property. A claim for return of property can be defeated in two ways: an opposing party can establish that it, not the moving party, is entitled to lawful possession to the property or the Commonwealth can seek forfeiture claiming that property for which return is sought is derivative contraband. To meet its burden to defeat the motion for return of property, the ____________________________________________
7 Dr. Chang timely complied with the order of the trial court to file a statement of errors complained of on appeal pursuant to Pa.R.A.P. 1925(b).
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Commonwealth must make out more than simply demonstrating that the property was in the possession of someone who has engaged in criminal conduct. It must establish a specific nexus between the property and the criminal activity.
The law is well settled that:
[o]n a motion for return of property, the moving party has the burden of proving ownership or lawful possession of the items. The burden then shifts to the Commonwealth to prove, by a preponderance of the evidence, that the property is contraband.
[D]erivative contraband is property which is innocent in itself but which has been used in the perpetration of an unlawful act. Property is not derivative contraband, however, 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.
Durham, supra at 645 646 (citations and footnote omitted).8
court erred in considering the underlying merits of the forfeiture claim, and
(B) The trial court erred in finding that the Commonwealth established a
nexus between the annuity and alleged criminal wrongdoing because there
were no deposits into the annuity during the time of the criminal wrongdoing
all
Commonwealth v. $6,425.00 Seized from Richard Esquilin, 880 A.2d 523, 529 (Pa. 2005) (citations omitted).
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underlying merits of the forfeiture claim, may be summarily dismissed as
follows. First, the trial judge acceded to Dr. Cha -trial
averment that Dr. Chang needed the seized accounts to pay for his legal
defense.9 See Trial Court Opinion, supra at 15; See also N.T.,
10/25/2012, at 82; Dr.
court took particular care to hear only evidence relevant to the question of
nexus between the annuity account and illegal activity, so that Dr. Chang
would be protected from making incriminating statements prior to trial, and
so that he could assert his legal defenses post trial in the forfeiture action.
See id. at 14-15. See also N.T., supra
issu
issues raised in [the Rule 588] hearing could be relevant to the hearing on
the forfeiture petition, and took that into account when deciding what
supra
motion for return of property, did return two seized accounts, the brokerage account and one of the annuity accounts, together worth approximately $2.2 million. See N.T., 10/25/2012, at 4 5.
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erred in considering the underlying forfeiture claim.
The second part
finding a nexus between the annuity and alleged criminal wrongdoing.
Commonwealth] did not establish that there were deposits into [
annuity in April and May of 2007, the time when [Dr. Chang] was charged 10
44.
Pursuant to Rule 588, Dr. Chang had the initial burden of proving
lawful entitlement to possession of the property. See Durham, supra at
645 646. The trial court, in its opinion, stated that Dr. Chang did not
sustain his initial burden of proof.11 See Trial Court Opinion, supra at 22.
l argued
and introduced a letter, which was stipulated to by the Commonwealth,12
violating 35 P.S. § 780-113(a)(14) on April 10, 2007, April 26, 2007, and May 17, 2007. See 11 The trial court did not s Motion for Return of Property. See Order, 10/26/2012, supra. 12 See N.T., 10/25/2012, at 9 (stipulation that the last deposit into the annuity account was on January 17, 2006).
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from the vice president of FILI, stating that Dr. Chang had not deposited
money into the annuity account in question since January 17, 2006. N.T.,
10/25/2012, at 6, 7 -1. We are satisfied that this
attached to his motion for return of property, established by a
See
See Commonwealth v. Johnson, 931 A.2d
t a minimum, our rules and case law
mandate [movant] properly allege, under oath, lawful possession of the
the Commonwealth to prove by a preponderance of the evidence that the
property is contraband by showing a specific nexus between the property
and the criminal activity. See Durham, supra. The trial court found that
the Commonwealth satisfied this burden. See Trial Court Opinion, supra, at
22 26. We turn, then, to the Commonw
The testimony of Commonwealth witness, Detective Daniel Leicht,
established, inter alia, that, based on information from an informant, he
arranged a controlled buy of prescription slips for narcotics from Dr. Chang,
from Dr. Chang two or
three weeks later, without a medical examination, or any medical
questioning. Moreover, following execution of the search warrant, he talked
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to other individuals who either had a chart at the office or were present on
the day of the execution of the search warrant. Leicht stated these
such individual was named Paul Griffiths, and Griffi
C-
chart showed visits approximately every thirty days from 2004 to 2007, with
controlled substance prescriptions issued at each visit. In addition, through
Detective Leicht, the Commonwealth introduced Exhibit C-3, prepared by
Agent Josh Gill based upon certain charts and records seized pursuant to the
search warrants, showing a monthly breakdown of cash received by Dr.
Chang for prescriptions, from November, 2001, to May, 2007, in the total
amount of $296,820. Exhibit C-3 was also admitted into evidence without
objection. In addition, Detective Leicht testified that Citizens Bank
statements and an investment account statement were seized from Dr.
s office. See N.T., 10/25/2012, at 16 41.
The Commonwealth also presented Zachary Marks, a forensic
Bank, a Id. at 59. Marks stated there
were five checks written from the Citizens Bank accounts that went into the
annuity between 2005 and 2007, totaling $250,000.00. Id. at 60. The first
deposit came from a Citizens Bank account that had no incoming deposits
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Id. at 61. However, the
remaining deposits, totaling $200,000.00, came from another Citizens Bank
account that was active and was receiving deposits from 2002 through 2008.
Id. at 61 62. The deposits into that Citizens Bank account came in large
Id. at 65. Marks testified the
current value of the annuity account was $402,971.13, with $282,322.16
related to the $200,000.00 that was deposited initially. Id. at 62. On cross
money in the Citizens Bank account came from an inheritance, and Marks
answered he did not. Id. at 64.
ed with any criminal wrongdoing in 13 Specifically, Dr.
Leicht, presented unsubstantiated hearsay about alleged criminal
wrongdoing prior to April and May of 2007, in fact there [was] no evidence
13 otion for Return of Property states that the Criminal Complaint alleges that he issued prescriptions in violation of 35 P.S. § 780-113(a)(14) on April 10, 2007, April 26, 2007, and May 17, 2007, we have already noted the record for the Delaware County criminal action is not
criminal proceeding in a footnote in his brief does not equate to the record. See ief at 8 n.3.
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to substantiate that hearsay and there were no criminal charges to support
Id.
t
conclude on the record presently before this Court that the trial court
committed an abuse of discretion in finding that the Commonwealth showed
a nexus between the annuity and criminal conduct. Our review of the record
oncluded his testimony without any
objection or cross-
included Exhibits C-2 and C-
counsel did cross-examine Marks, and asked whether any money in the
Citizens Bank account came from an inheritance, Marks said he did not
The trial court, in determining that the Commonwealth established a
nexus between the annuity and the criminal wrongdoing, reasoned:
In this case, Dr. Chang was illegally prescribing narcotics when
was in control of the [annuity] at the time of his arrest and the
$250,000 deposited into the annuity account at issue came from his medical practice during the period when he was selling prescriptions for narcotics. nce in this case does not enable one to correlate the funds in the seized annuity account to specific illegal prescriptions, but Singleton [v. Johnson, 929 A.2d 1224, 1227 (Pa. Cmwlth. 2007) (en banc) (discussing inferences based upon circumstantial evidence)] nevertheless allowed the undersigned judge to infer a specific nexus between
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and the illegal prescriptions that he had been writing as far back as 2003. Therefore this court did not commit reversible error by finding that the Commonwealth proved a specific nexus between the account and criminal activity by a preponderance of the evidence.
Trial Court Opinion, supra at 25 26.
In light of the evidence discussed above, we conclude that the trial
argument fails to warrant relief.
Turning to the remaining arguments presented by Dr. Chang, we find
that these claims do not pertain to the motion for return of property, but
rather are issues that remain to be litigated in the forfeiture action.
Therefore, no further discussion is warranted on these claims. Accordingly,
we affirm.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq. Prothonotary
Date: 7/30/2014
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