United States v. Stewart

Opinion

IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

No. 99-41436 Summary Calendar

UNITED STATES OF AMERICA,

Plaintiff,

versus

WILLIAM EDWARD STEWART; ET AL,

Defendants,

JAMES L. EMERSON; ASSOCIATED MORTGAGE INVESTORS; OSAGE CORPORATION,

Claimants-Appellants,

KURT BECKER; WARREN DECKARD; ARBOR HOLDINGS,

Claimants-Appellees.

-------------------- Appeal from the United States District Court for the Eastern District of Texas USDC No. 1:99-CR-26-1 -------------------- June 28, 2001 Before DAVIS, JONES, and DeMOSS, Circuit Judges.

PER CURIAM:*

James L. Emerson, Associated Mortgage Investors, and Osage

Corporation (collectively, “the Emerson claimants”) appeal the

district court’s final order of forfeiture in connection with

criminal proceedings against William Edward Stewart for money

laundering. The Emerson claimants contend that the district

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. No. 99-41436 -2-

court erred in conveying to Kurt Becker, Warren Deckard, and

Arbor Holdings (“the Arbor Holdings claimants”) title to 2722

Heatherbend Drive in Pearland, Texas (“the Heatherbend

property”), free of any claims by the Government or the Emerson

claimants.

In imposing sentence on a person convicted of a money

laundering offense, the district court “shall order that the

person forfeit to the United States any property, real or

personal, involved in such offense, or any property traceable to

such property.” 18 U.S.C. § 982(a)(1). If, after publication of

notice of the forfeiture order and a hearing, a petitioner

establishes by a preponderance of the evidence that:

(A) the petitioner has a legal right, title, or interest in the property, and such right, title, or interest renders the order of forfeiture invalid in whole or in part because the right, title, or interest was vested in the petitioner rather than the defendant or was superior to any right, title, or interest of the defendant at the time of the commission of the acts which gave rise to the forfeiture of the property under this section; or

(B) the petitioner is a bona fide purchaser for value of the right, title, or interest in the property and was at the time of purchase reasonably without cause to believe that the property was subject to forfeiture under this section;

the court shall amend the order of forfeiture in accordance with its determination.

21 U.S.C. § 853(n); see 18 U.S.C. § 982(b)(1).

The district court found that the Arbor Holdings claimants

obtained a constructive trust on the Heatherbend property when

Stewart purchased it with funds fraudulently obtained from them

and that the Arbor Holdings claimants therefore had an interest No. 99-41436 -3-

in the property that was superior to the Government’s interest.

Since neither party has challenged this determination on appeal,

it is undisputed that the Arbor Holdings claimants have a 21

U.S.C. § 853(n)(6)(A) interest in the Heatherbend property.

The Emerson claimants contend that they have a 21 U.S.C.

§ 853(n)(6)(B) interest in the Heatherbend property because

Emerson was a bona fide mortgagee of the property who, at the

time of the mortgage, was reasonably without cause to believe

that the property was subject to forfeiture. The Emerson

claimants assert that Emerson was not notified that the property

was subject to forfeiture, as the Government’s notice of lis

pendens had identified the Heatherbend property as being located

in the wrong Texas county.

Despite that error, the Government’s notice of lis pendens

was filed in the county in which the Heatherbend property is

located; warned of the forfeiture of real property having the

Heatherbend property’s street address; and contained a property

description identical to that contained in the seller’s deed to

the Heatherbend property. Thus, at the time that Emerson took

his mortgage interest in the Heatherbend property, he was not

reasonably without cause to believe that the property was subject

to forfeiture. The Emerson claimants do not have a 21 U.S.C.

§ 853(n)(6)(B) interest in the Heatherbend property.

In light of the foregoing, the district court did not err in

granting the Arbor Holdings claimants title to the Heatherbend

property free of any claims by the Government or the Emerson No. 99-41436 -4-

claimants. See 21 U.S.C. § 853(n). The district court’s

judgment is AFFIRMED.