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UNITED STATES v. ALL ASSETS OF STATEWIDE AUTO PART

March 19, 1992

UNITED STATES OF AMERICA, Plaintiff, against ALL ASSETS OF STATEWIDE AUTO PARTS, INC. AND PROCEEDS TRACEABLE THERETO; REAL PROPERTY AND PREMISES KNOWN AS 1256 GRAND STREET, BROOKLYN, NEW YORK; ALL ASSETS OF CITIWIDE AUTO PARTS, INC. AND PROCEED TRACEABLE THERETO; REAL PROPERTY AND PREMISES KNOWN AS 651 FOUNTAIN AVENUE, BROOKLYN, NEW YORK; ALL ASSETS OF EMPIRE STATE AUTO WRECKERS, INC. AND PROCEEDS TRACEABLE THERETO; REAL PROPERTY AND PREMISES KNOWN AS 1489 MONTAUK HIGHWAY, BELLPORT, NEW YORK; ALL ASSETS OF BEST AUTO SCHOOL, INC. AND PROCEEDS TRACEABLE THERETO; REAL PROPERTY AND PREMISES KNOWN AS 492 EAST 98th STREET, BROOKLYN, NEW YORK; REAL PROPERTY AND PREMISES KNOWN AS 29 PURITAN LANE, FARMINGDALE, NEW YORK; REAL PROPERTY AND PREMISES KNOWN AS 8 TOWNSEND LANE, HICKSVILLE, NEW YORK; AND REAL PROPERTY AND PREMISES KNOWN AS 19 ANNANDALE DRIVE, COMMACK, NEW YORK, Defendants.


The opinion of the court was delivered by: EUGENE H. NICKERSON

MEMORANDUM AND ORDER

 NICKERSON, District Judge

 This court's Memorandum and Order dated December 16, 1991, familiarity with which is assumed, outlined the basic facts of this case. The United States brought this action by verified complaint in rem for forfeiture of seven parcels of real property in Brooklyn (including defendant 651 Fountain Avenue), Nassau County, and Suffolk County; and for forfeiture of the assets of four corporations, namely, Statewide Auto Parts, Inc. (Statewide), Citiwide Auto Parts, Inc. (Citiwide) also known as Citywide Auto Parts, Inc., Empire Auto Records, Inc. (Empire), and Best Auto School, Inc. (Best).

 Pursuant to a seizure warrant issued ex parte by the court, the United States seized the various properties on November 19, 1991. Citiwide and the claimants who are the alleged owners of defendant 651 Fountain Avenue, a lot in Brooklyn on which Citiwide operates, move to vacate the seizure of their properties.

 The complaint alleges a scheme whereby Citiwide and other defendants bought wrecked vehicles from insurance companies, illegally transferred the vehicle identification (VIN) numbers to stolen cars, bribed a New York Department of Motor Vehicles Inspector to pass the "retagged cars," arranged for the sale of those vehicles to fictitious persons, and then caused New York State titles to be issued in those fictitious names.

 In its previous Memorandum and Order, the court reviewed the legal authority on which the government relied to seize the defendant vehicle dismantling (junk yard) businesses.

 I.

 The only present issue of substance relevant to defendant Citiwide is whether that seizure pursuant to a warrant issued ex parte violated the Fifth Amendment rights to due process.

 The Court of Appeals for the Second Circuit in United States v. 141 St. Corp. by Hersh, 911 F.2d 870, 874-76 (2d Cir. 1990), cert. denied, 111 S. Ct. 1017, 112 L. Ed. 2d 1099 (1991), set forth the criteria this court should use in determining whether a seizure warrant should be issued ex parte. Applying those criteria, this court concludes that the warrant was validly issued ex parte.

 Incorporated by reference in the complaint was the declaration of Thomas Keteltas, a detective in the Nassau County Police Department. That declaration, along with supplemental declarations by Keteltas, detail a lengthy Nassau County Police Department's investigation that resulted in arrests of the principals of Statewide, Citiwide, Empire and Best, the recovery of numerous retagged automobiles, the identification of matching stolen automobiles, the uncovering of a large mail fraud operation used to conceal the criminal activity, and the arrest of a corrupt public official who facilitated the scheme.

 None of the papers submitted by Citiwide refutes the substance of the statements made by Detective Keteltas in his declaration in support of the warrant or in his supplemental declaration. Thus there seems to be only a slight risk of erroneous deprivation of the movants' interest by reason of the issuance of the warrant. The allegations in the declarations by Detective Keteltas more than satisfy this court that there was probable cause to believe that the property to be seized was involved in transactions in violation of 18 U.S.C. § 1956.

 The United States had an interest in stopping the trafficking in stolen motor vehicles and motor vehicle parts with vehicle identification numbers removed or altered. The United States also had an interest in stopping the fraudulent conveyance of those vehicles to fictitious persons.

 The United States had a reasonable concern that the property would continue to be used as an instrumentality of crime. In fact the supplemental declaration of Detective Keteltas shows that the property was continuing to be ...


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