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UNITED STATES v. FUNDS HELD IN THE NAME EX REL. WE

September 30, 1998

UNITED STATES OF AMERICA, Plaintiff, against FUNDS HELD IN THE NAME OR FOR THE BENEFIT OF JOHN HUGH WETTERER, AND/OR ASOCIACION AMIGOS DEL LOS NINOS HOGAR MI CASA, A/K/A MI CASA, AT BANK INTERNATIONAL AND STERLING BANK, INCLUDING BUT NOT LIMITED TO BANK OF AMERICA ACCOUNT NUMBERS IF 1119-9984, 162232 IBF, 10201-01-1, AND B-58-05616, LLOYDS BANK INTERNATIONAL BANK NUMBER 00070891 (NASSAU BRANCH) AND STERLING BANK ACCOUNT NUMBERS 907-103 AND CD 15590 AND ALL RELATED ACCOUNTS AND FUNDS, Defendants.


The opinion of the court was delivered by: SPATT

MEMORANDUM DECISION AND ORDER

 SPATT, District Judge.

 This may be the final chapter -- at least at the trial level -- of the continuing Wetterer saga, which has gone on for almost ten years and traversed two continents.

 It is a disturbing tale. In the 1970's, Wetterer, a United States citizen and veteran of the Vietnam War, settled -- permanently, as it turned out -- in Guatemala, where he founded an orphanage for homeless boys called "Mi Casa." From then to the present, Wetterer has been Mi Casa's director, organizer and policy-maker. In this capacity, Wetterer mailed newsletters to potential donors in the United States and abroad in an effort to raise funds for the Mi Casa orphanage. These newsletters painted a glowing portrait of Mi Casa as a wholesome, safe and secure environment for the boys in Wetterer's care. In reality, however, Wetterer physically abused and humiliated many of these boys by ordering them to strip naked in front of their peers and striking them on their bare buttocks with a paddle. Wetterer's "favorites" among these homeless children fared even worse: he sexually molested them.

 When the United States was frustrated in its efforts to extradite Wetterer for the crime of mail fraud stemming from his fund-raising efforts, the Government initiated this civil forfeiture action against his American bank accounts. This opinion embodies the Court's findings of fact and conclusions of law after a non-jury trial.

 I. BACKGROUND

 John Hugh Wetterer, a former Long Island resident, is a Vietnam War veteran who founded an orphanage in Guatemala City in 1976 called Mi Casa. Wetterer was assisted in financing the operation of the orphanage by the American Friends of Children ("AFC"), an organization he and several others founded on Long Island to raise money to serve the needs of children.

 From 1976, when Wetterer opened Mi Casa, to 1988, AFC's treasurer, Daniel Mackey, sent Wetterer over one million dollars in donations to assist him in housing, clothing, feeding and educating the boys of Mi Casa. Mackey received these donations by mail at a Post Office box he set up and maintained for that express purpose in Massapequa, New York. He deposited the donations in the Chase Manhattan Bank of New York, and then, pursuant to Wetterer's instructions, made out checks payable to "John Wetterer" that were forwarded to Bank of America account no. 05616 in Miami, Florida. Wetterer made arrangements to transfer the money from Miami to Guatemala. Although the Bank of America account was maintained in the name of Mi Casa, Wetterer was the sole signatory on the account.

 Wetterer sent newsletters about Mi Casa to his supporters in the United States and elsewhere, including France. These newsletters portrayed Mi Casa as a normal, well-run orphanage, where abandoned, impoverished and neglected boys were given a chance for a better life by receiving shelter, clothing, food, medical care and education. Included in these newsletters were envelopes for supporters to send donations to the Post Office box Dan Mackey maintained. Mackey received donations to Mi Casa in these envelopes as a result of the newsletters. In the newsletters, Wetter openly discussed the use of the mails to send financial or other support, repeatedly thanked donors for the financial support he received from them, and from time to time, mentioned the need for financial support.

 In late 1987, one of the boys who lived at Mi Casa, Manuel Bravo, revealed to his American sponsor, Mary Tyre, that Wetterer had sexually molested him. A similar revelation was made several months later by another boy from Mi Casa, Leonel Piedrasanta, who also was staying with Mary Tyre. Mary Tyre, in turn, contacted the television news program Sixty Minutes, which, in the Fall of 1988, was preparing to air a complimentary segment on Mi Casa and the work of John Wetterer. Sixty Minutes hired its own expert, Dr. Simon Miranda, to evaluate these claims of sexual abuse. In late November 1988, Sixty Minutes journalist Diane Sawyer confronted Wetterer with the allegations of sexual abuse. Shortly thereafter, AFC stopped depositing donations in the Bank of America account and ended its financial support of Mi Casa. Wetterer then arranged to receive donations for Mi Casa through a Post Office box in Spring, Texas.

 On February 19, 1989, Sixty Minutes aired its segment on Mi Casa, including Sawyer's interview with Wetterer and the allegations of sexual abuse. Wetterer denied the allegations of sexual abuse orally and in his newsletters. According to Mi Casa's records introduced into evidence as Def. Ex. W, during the period from January 4, 1989 through November 12, 1990, a total of approximately $ 1,111,073.69 in donations were sent to Wetterer and Mi Casa.

 On September 14, 1990, a criminal complaint charging Wetterer with, among other crimes, mail fraud, was filed in the Eastern District of New York. On the same date, a warrant was issued for Wetterer's arrest. Wetterer was accused of knowingly devising a scheme or artifice to obtain money or property by false pretenses and representations and in using the U.S. mails to execute his scheme, in violation of 18 U.S.C. § 1341. On February 12, 1991, Wetter was indicted and charged with mail fraud and a related crime.

 On January 22, 1991, the United States commenced this civil action, seeking the forfeiture of certain bank accounts held in the name of the Asociacion or Wetterer pursuant to 18 U.S.C. § 981. The in rem complaint listed as the alleged crimes underlying the basis for the seizure mail fraud, 18 U.S.C. 1341, and inducing a person to travel in interstate or foreign commerce for the purpose of engaging in criminal sexual activity, 18 U.S.C. § 2422. An arrest warrant in rem authorizing the seizure of the bank accounts was issued that same day.

 On February 6, 1991, the Asociacion that allegedly operates Mi Casa filed a claim to the defendant funds, stating that these funds were deposited for the use and benefit of the Asociacion. On September 19, 1995, this Court found that the Asociacion is the alter ego of Wetterer and struck its claim. United States v. Funds Held In ...


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