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HUGH B. STUHLER ET AL. v. STATE NEW YORK (02/21/85)
SUPREME COURT OF NEW YORK, SPECIAL TERM, NEW YORK COUNTY
1985.NY.41413 <http://www.versuslaw.com>; 485 N.Y.S.2d 957; 127 Misc. 2d 390
February 21, 1985
HUGH B. STUHLER ET AL., PETITIONERS,v.STATE OF NEW YORK, RESPONDENT
Liddle & O'Connor (Jeffrey L. Liddle of counsel), for petitioners.
Robert Abrams, Attorney-General (Sheldon Walker of counsel), for respondent.
Herman Cahn, J.
Petitioners, by this turnover proceeding, challenge the forfeiture of moneys seized by the Attorney-General. The moneys were seized from a firm convicted of scheme to defraud, in connection with the fraudulent sales of a commodity. The moneys were seized from the firm's bank account, and represent the proceeds of the firm's activities over a four-month period.
In this turnover proceeding brought pursuant to CPLR 5225 (b) petitioners seek a judgment directing respondent to pay over certain sums of money to them on the ground that respondent possesses such sums which are either: (1) the property of the judgment debtor; (2) sums to which petitioners have title; or (3) sums to which petitioners' possessory interest is superior to that of respondent.
Respondent is the State of New York. The judgment debtor is Mineral Resources Corporation (MRC). Petitioners apparently obtained a default judgment against MRC. In an action in this court entitled People v Mineral Resources Corp. (indictment No. /81), over which I presided, MRC and 29 of its officers and employees were convicted of the crimes of scheme to defraud, conspiracy, and related crimes.
The State investigation of the affairs of MRC which led to the prosecution was conducted by the Attorney-General. During the course of the investigation, the Attorney-General obtained a search warrant, permitting the search of MRC's premises and the seizure of various documents and business records. When the warrant was executed, records relating to a bank account of MRC were seized, and the account itself was effectively frozen. It contained approximately $250,000.
During the trial, the Attorney-General proved that MRC had defrauded 144 individuals who had been its customers of approximately $1,140,000. At the time of sentence, several of the individual defendants agreed to make some payments toward restitution. The bulk of the money available for restitution is the sum of approximately $250,000 seized from MRC as aforesaid. The Attorney-General has been directed to formulate a written equitable restitution program.
Petitioners brought an action for money damages against MRC subsequent to the criminal action. A default judgment was entered in favor of petitioner Stuhler for $40,504.17 and petitioner Reardin for $11,596.32, against MRC. By the instant petition, turnover of ...