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UNITED STATES v. BLOCK 879

June 12, 1995

UNITED STATES OF AMERICA, Plaintiff,
v.
ALL RIGHT, TITLE AND INTEREST IN REAL PROPERTY AND APPURTENANCES THERETO KNOWN AS 143-147 EAST 23RD STREET, NEW YORK, NEW YORK, LISTED AS BLOCK 879, LOT 27 WHICH INCLUDES THE KENMORE HOTEL, Defendant-in-rem.


Milton Pollack, Senior United States District Judge


The opinion of the court was delivered by: MILTON POLLACK

MILTON POLLACK, Senior District Judge:

 This is an in rem civil forfeiture action pursuant to 21 U.S.C. § 881(a)(7). The government has moved for summary judgment under Fed.R.Civ.P. 56. The claimant-owner's sole argument against the proposed forfeiture is that it would violate the Excessive Fines Clause of the Eighth Amendment.

 The motion will be granted for the reasons stated below.

 Background1

 The defendant-in-rem, 143-147 East 23rd Street, New York, New York, consists of the Kenmore Hotel, a single room occupancy apartment building mainly occupied by poor or elderly tenants, four street-level commercial leaseholds, and a basement swimming pool. The building is across the street from Baruch College, two blocks away from a school for disabled children, and diagonally across from the headquarters of United Cerebral Palsy. Claimant Jude Hotel Corporation ("the claimant" or "Jude Hotel") owns the property. Jude Hotel's majority shareholder, Truong Dinh Tran, purchased the property for $ 7.9 million in November 1985, in order to generate losses that would shelter income from other hotels owned by Truong. Under Jude Hotel's management, the building has fallen into serious disrepair and accumulated numerous citations for housing code violations. Taking into consideration outstanding mortgages and liens and the costs to bring the building into conformity with the housing code, Jude Hotel's equity in the building is somewhere between $ 0 and $ 500,000, based on an appraisal conducted in September 1994, and on two offers to purchase the building made in mid-1995. *fn2"

 A brisk trade in crack cocaine developed at the Kenmore Hotel, the transactions being conducted in unoccupied apartments and in the common areas throughout the building. Between January 1991, and June 6, 1994, there were numerous narcotics arrests and reported incidents of narcotics-related activity in and around the Kenmore Hotel. New York police officers also seized drugs and drug paraphrenalia, including hundreds of vials used to package crack cocaine, from vacant rooms and common areas of the building.

 Despite the extensive nature of the drug trafficking conducted at the Kenmore Hotel, complaints from tenants, and media coverage of the hotel's drug problem, Jude Hotel did virtually nothing to improve conditions. This was not for lack of notice. In November 1992, the Manhattan District Attorney's Office requested a meeting with Truong to discuss a strategy to combat drug trafficking at the Kenmore. In February 1993, La Tran, one of Truong's associates, met with Assistant District Attorney Anne Rudman, who advised him that the Kenmore Hotel was being used to facilitate drug trafficking and urged him to take reasonable steps to try to stop the drug activity, such as hiring full-time uniformed security guards, screening prospective tenants, using a surveillance camera, providing a photo identification card for tenants, and considering hiring a temporary Management team to take over the hotel and clean it up. ADA Rudman also asked Tran to sign a form affidavit authorizing the NYPD to patrol all the floors and arrest trespassers, which Tran did not sign. These recommendations were subsequently memorialized in a letter to Tran dated February 25, 1993, which also informed Tran that officials would seek assistance from the federal government in bringing an action pursuant to the federal forfeiture laws in the event that his cooperation was not forthcoming.

 In spite of the warnings, the claimant did not take any significant steps along the lines suggested by ADA Rudman, even though drug trafficking continued and even increased at the Kenmore Hotel after the meeting with Rudman. Although the claimant did install a buzzer on the front door, that buzzer broke within one week of its installation and was never fixed. Even though a surveillance camera was placed in the lobby of the Kenmore, the monitor was placed in the bedroom of one of Truong's associates and went largely unwatched. The claimant continued to employ tenants as security guards and failed to provide tenants with photo identification so that these guards, were they so inclined, could distinguish the hundreds of tenants that lived at the Kenmore at any given time from the numerous visitors to the Ken more. The claimant also accepted over 100 tenants placed by a real estate company that regularly placed individuals who had come from prison or had criminal records, and the claimant did so without asking to see application forms that these tenants had completed for the real estate company. The claimant rented to these tenants even though some of them had already been rejected as tenants by the Carter Hotel.

 On June 6, 1994, the government filed under seal a verified complaint against the property that sought forfeiture under 21 U.S.C. § 881(a)(7) based on distribution of cocaine at the Kenmore Hotel in violation of 21 U.S.C. § 841(a)(1). On the same day, the Honorable John E. Sprizzo, United States District Judge for the Southern District of New York, issued a seizure warrant pursuant to 21 U.S.C. § 881(b), permitting the Government to seize the Kenmore from Claimant Jude Hotel Corporation and to manage it pending the resolution of the Government's forfeiture action. In authorizing the seizure of the defendant-in-rem property, Judge Sprizzo found that there existed exigent circumstances that excused the Government from providing pre-seizure notice to the Claimant Jude Hotel Corporation and from attending a pre-seizure hearing. *fn3" Under the authority of the seizure warrant issued by Judge Sprizzo, the Government seized the Kenmore Hotel on June 8, 1994.

 Discussion

 I. The property is subject to forfeiture.

 The basis for the proposed forfeiture is 21 U.S.C. § 881(a)(7), ...


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