United States v. Harry

831 F. Supp. 679, 1993 U.S. Dist. LEXIS 11992, 1993 WL 326546
CourtDistrict Court, N.D. Iowa
DecidedMay 6, 1993
DocketNo. CR 90-1007
StatusPublished
Cited by2 cases

This text of 831 F. Supp. 679 (United States v. Harry) is published on Counsel Stack Legal Research, covering District Court, N.D. Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Harry, 831 F. Supp. 679, 1993 U.S. Dist. LEXIS 11992, 1993 WL 326546 (N.D. Iowa 1993).

Opinion

ORDER

DONALD E. O’BRIEN, Senior District Judge.

This forfeiture matter comes before the Court on the third-party petition of Eddie and Elizabeth Farrey.

I. BACKGROUND.

On September 19, 1990, the United States filed a two-count indictment against Earl and Juanita Harry. In Count 1 of the indictment, the Federal Grand Jury for the Northern District of Iowa charged Earl and Juanita Harry with conspiracy to distribute illegal narcotics. Count 2 of the indictment requested the forfeiture of property suspected of facilitating illegal narcotics transactions charged in the first count or that said property had been obtained with proceeds of those transactions. Upon a plea of guilty by defendant Earl Harry, the United States District Court ordered the property forfeited on April 12,1991. Also on April 12,1991, the co-defendant, Juanita Harry, consented to forfeiture of the property. One of those properties, specifically the property listed in paragraph six of the forfeiture count,1 is [681]*681claimed by Eddie and Elizabeth Farrey. It is their contention that the property’is their home and always has been, and has no connection to the drug transactions of the defendants.

Eddie R. (Bob) Farrey and Elizabeth A. Farrey purchased the property located at 243 East High Street in Shullsburg, Wisconsin, in 1972 for the purchase price of $14,-000.00. At that time, the Farreys put $400.00 down, and began making mortgage payments of $90.00 per month through the Farmers Home Administration. Since 1972, the Farreys have used 243 East High Street property as their sole residence and home and have been the sole owners of the 243 East High Street property. The only party to have a lien interest in the property was the mortgagor, the Farmers Home Administration. Bob Farrey testified that neither Mike Woodward, the Farreys’ son, nor the Harrys, the defendants here, ever owned or possessed any right, title, or interest in the property.

The Farreys were parents to two boys during the last twenty years. One of the sons, Mike Woodward, was the biological son of Elizabeth Farrey from a previous marriage. Mike was raised in the house at 243 East High Street and was close to his stepfather, Bob Farrey. Mike left home in 1982, before he graduated from high school, and married Lynn Woodward. Mike and Lynn bought a trailer in Shullsburg, where they lived until Mike was injured in a motorcycle accident in March of 1989. Mike never moved back in with his parents and Mrs. Farrey testified that he was seldom around. Undisputed testimony shows that during the time Mike lived at home, there was no indication of illegal drug use; Mike was never charged with any criminal offenses nor was the house ever used for illegal drug transactions.

Bob Farrey claims that he was very frugal with the family finances, never spending money nor taking vacations and that he saved money in cash in a metal box he kept in the basement. He testified that he began saving in the mid-70’s for the purpose of paying off his mortgage. He did not tell his wife where he kept the money nor the amount saved, out of fear that she would spend it. Elizabeth Farrey testified that she found cash hidden in the house on two occasions; once she found approximately $1,500.00 and the other time she found approximately $350.00.

In 1988, during a time when Bob and Elizabeth Farrey were separated, Mike Woodward asked his father’ to open a safety deposit box in the name of Bob Farrey for the purpose of holding Mike’s cash. When asked, Mike told his stepfather that the money came from gambling, which Mike was known to do. In addition to Mike’s money, Bob Farrey put some of his own personal papers in the box for safekeeping. Bob Farrey opened the safety deposit box (# 449) at the Farmers and Merchant’s Bank, the same bank where Mr. Farrey kept his personal cheeking account. The Farreys had a joint checking account at the Benton Bank in Shullsburg, which was used primarily by Mrs. Farrey. Mrs. Farrey was not aware of this safety deposit box at that time.

In the fall of 1988, Mr. Farrey agreed to purchase a garage for Mike Woodward in his name. Though Bob Farrey’s name is on the title to the garage, he testified that he owned the garage in name only. Mike Woodward gave him $6,000.00 for this transaction. The money likely came from the safety deposit box. Mr. Farrey testified that he still had no knowledge of Mike Woodward’s drug activities. Mrs. Farrey had no knowledge of this transaction.

In February of 1989, Mr. Farrey paid off the remaining balance of the mortgage on the Farreys’ home at 243 East High Street. The balance was $10,399.52. Just prior to this payoff, Mr. Farrey deposited $9,600.00 into his checking account. Mr. Farrey ad[682]*682mitted that on the same day as the deposit he made an entry into the safety deposit box. At the time of the payoff, the Farreys were current on their mortgage payments. Frank Goff, an FHA administrator, agreed on cross-examination that at the time the mortgage was paid off the Farreys were current on their mortgage and further testified that he would have encouraged them to pay off the mortgage early. Mrs. Farrey had no knowledge that Mr. Farrey paid off the mortgage until later.

FBI Agent David Weisman testified that the records of the bank confirm that Bob Farrey made a visit to the safety deposit box the same day he deposited $9,600.00 into his checking account. Agent Weisman also testified, however, that after Bob Farrey paid off the mortgage he still had approximately $4,000.00 left in his checking account. Because of this, Agent Weisman figured that Mr. Farrey could have gotten by with a deposit of only $6,000.00 or $7,000.00 and still paid off the $10,399.52 remaining on the mortgage.

In March of 1989, after learning how much interest increases costs, Mr. Farrey asked Mrs. Farrey if she wanted to pay off the lien on her automobile (1988 Pontiac LeMans). Mrs. Farrey agreed and the balance of $8,134.59 was paid. The balance was paid by a loan from Mike Woodward, who authorized Mr. Farrey to use money from the safe deposit box.

Later in March of 1989, Mike Woodward was involved in a serious motorcycle accident that left him in a coma. He never recovered. Mike Woodward died in November of 1990.

In July of 1989, Mr. and Mrs. Farrey offered to help Lynn Woodward, Mike’s wife, purchase a house at 252 E. High Street. They used money from Mike’s safety deposit box to make a down payment of $5,000.00. The Farreys borrowed $13,000.00 from Benton Bank to pay the balance. Later, after Lynn Woodward received insurance money from the accident, she paid the Farreys $20,-000.00. The Farreys paid off the $13,000.00 loan from Benton Bank, and conveyed title to Lynn Woodward. The remaining $7,000.00 was kept in trust for Lynn Woodward and was disbursed in the following months. The Farreys did these things to provide their pregnant daughter-in-law and her child with a place to live at a time when Mike Woodward was in a coma. The use of money from Mike Woodward’s safety deposit box to make the down payment was the first time Mrs. Farrey learned of the existence of the safety deposit box.

In June of 1990, when FBI agents first interviewed Mr. Farrey, he gave inconsistent and inaccurate statements concerning the source of money used to pay off the lien on Mrs. Farrey’s car and to make the down payment on Lynn Woodward’s house. Mr. Farrey testified that he did it to protect his stepson. Later, Mr.

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831 F. Supp. 679, 1993 U.S. Dist. LEXIS 11992, 1993 WL 326546, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-harry-iand-1993.