In a series of raids around Portland this spring, the FBI seized nearly $849,000 worth of bank funds, cash and luxury watches which it says are tied to alleged violations of a federal law against running an illegal gambling business.
Under federal forfeiture laws that allow the government to take property that it believes to be linked to a crime, the FBI on April 7 seized the money and goods from four Portlanders, pulling hundreds of thousands of dollars out of a safety deposit box, home safes, filing cabinets and desk drawers, according to a legal notice of forfeiture that the FBI posted on July 6.
The federal government has also initiated legal proceedings to seize millions of dollars worth of local real estate from one of the people involved, through the controversial practice known as civil forfeiture.
Civil forfeiture allows law enforcement agencies to take money, cars and even homes from people who haven’t been charged with a crime and then requires that they prove their innocence to get the property back.
The money and watches were seized from area landlord Stephen Mardigan, his girlfriend Patricia Nixon, as well as local men Steven DePaolo and William Flynn. But it is not clear that any of the four have been charged with a crime.
The notice of seizure states the goods were taken “for violation of federal law” and cites a legal provision that allows for the seizure of property used in running illegal gambling businesses. But no criminal cases or indictments against any of the four could be found in the U.S. District Court in Portland or in the Cumberland County Superior Court. They could not be reached for comment.
Federal criminal indictments are sealed unless the defendant is already in custody on a complaint. But the FBI’s notice of seizure appears to be consistent with civil forfeiture, which would require no charges, according to Darpana Sheth, a senior attorney with the Institute for Justice, a Washington D.C.-based public interest law firm.
Civil forfeiture “completely reverses the presumption of innocence,” said Sheth, who heads the group’s program focused on forfeiture abuse. “No one in America should lose their property without being convicted of a crime.”
The FBI declined to comment, citing an ongoing investigation, and referred questions to the U.S. Attorney’s Office. Assistant U.S. Attorney Jonathan Chapman, who heads the criminal division for Maine, declined to comment.
The majority of the feds’ April haul was taken from Mardigan and Nixon, with $500,000 in cash seized from her safety deposit box, more than $104,000 taken from his business bank account, and $143,000 in cash and ten watches valued at more than $19,000 confiscated from their home, according to the forfeiture notice.
The seized watches included a woman’s Rolex Submariner, valued at $5,500, and two Rolex Presidentials valued at $3,500 and $6,500.
Flynn had more than $74,000 seized, mostly from a series of safes, according to the forfeiture notice. The FBI also allegedly seized $540 from Flynn found on a table and $600 found in a “red cup.”
Nearly $8,000 was seized from DePaolo, mostly from desk and bureau drawers.
On the same day that the FBI was pulling cash from the four people’s homes, the federal government filed a civil lawsuit against more than two dozen properties owned by Mardigan, according to a document filed in the Cumberland County Registry of Deeds that gives notice of the suit.
In the suit — which is sealed, according to a federal court clerk — the U.S. government names 30 of Mardigan’s properties in Portland, Westbrook, Cape Elizabeth and Gorham as defendants, according to the the property record.
“Notice is hereby given of the pendency of a civil forfeiture action against” the properties, states the document signed by then Assistant U.S. Attorney Donald Clark. “The property is forfeitable pursuant to” laws against money laundering, transferring funds derived from illegal activities, and running a business that engages in the unlicensed transfer of funds, it states.
In civil forfeiture cases the government sues a property rather than its owner “based on this legal fiction that the property itself is guilty,” Sheth said.
The suit against Mardigan’s properties and seizure of his and Nixon’s money were first reported by The Bollard, a monthly magazine based in Portland.
It is unclear what the status of the civil suit is, but Mardigan, Nixon, DePaolo and Flynn have the opportunity to fight to retrieve the property seized in April. Sheth said that if they do not contest the forfeiture within 30 days the FBI gets to keep the property, but if the owners choose to fight it they enter a legal process through which they must prove the property was not obtained through crime.
“This [is the] upside-down world of civil forfeiture,” she said.
Both phone numbers on record with the city of Portland for Mardigan appear to have been disconnected and a lawyer who represents him in real estate matters did not respond to repeated requests for comment.
Flynn could not be reached for comment. A woman who answered the phone at a number listed for DePaolo said he was unavailable and hung up. Subsequent calls were not answered.
In city property records, Mardigan lists his business address as a home on Baxter Boulevard in Portland. A woman getting out of a Mercedes Benz SUV parked at what appeared to be that home said she was not Nixon and denied knowing where the address was.