District Attorney of Suffolk County, Claiming Authority-Plaintiff, v. Anthony Grazio a/k/a THE ROCK, VITO FRAGOLA, CAESAR BERMEO a/k/a CESAR BERMEO, CARLOS MELGAR, MILAN PARIK, THOMAS ST. CLAIR, MICHAEL HEINRICHS, FRANCO ROTUNDO a/k/a FRANCO ROTONDO a/k/a FRANK ROTONDO, NYTAC CORP., NEW YORK TRUCKING AND CARTING LLC, KRIS TRUCKING CORP., IEV TRUCKING CORP., DUMP MASTERS SERVICES INC., MODERN LEASING INC., DJCI ENTERPRISES LLC, CLAIRCO INDUSTRIES INC. a/k/a ST. CLAIR TRUCKING INC., STARFIRE INDUSTRIES INC. and DURANTE BROS. CONSTRUCTION CORP., Criminal Defendants, and JOANNE GRAZIO, LINDA GRAZIO, DANIELLE FRAGOLA a/k/a DANIELLE DAURIO and VIVIAN PANICCI, Non-Criminal Defendants.
Upon the following papers numbered 1 to18read on these motionsTO CONFIRM EX PARTE ORDERS OF ATTACHMENT, TO VACATE EX PARTE ORDERS OFATTACHMENT, AND FOR RELIEF PURSUANT TO CPLR 1329 Order to Show Cause and supporting papers 1-3 ; Affirmation in Opposition and supporting papers4, 5; Notice of Cross-motion and supporting papers6-8; Reply Affidavit and supporting papers9, 10 ; Plaintiff's Reply Memorandum of Law11; Order to Show Cause and supporting papers 12-14 ; Plaintiff's Combined Memorandum of Law in Support15; Affirmation in Opposition and supporting papers16, 17; Supplemental Affirmation in Reply 18; it is,
ORDERED that this motion (seq. #004) by plaintiff for an Order: (1) pursuant to CPLR 1317, confirming the Ex Parte Order of Attachment heretofore granted by this Court on July 16, 2018, and the Supplemental Ex Parte Order of Attachment heretofore granted on July 17, 2018, and levied upon the garnishees beginning on July 17, 2018, is hereby DENIED for the reasons set forth hereinafter; and it is further
ORDERED that this cross-motion (seq. #005) by criminal defendants THOMAS ST. CLAIR and CLAIRCO INDUSTRIES INC. a/k/a ST. CLAIR TRUCKING INC. for an Order vacating the Ex Parte Orders of Attachment or, in the alternative, modifying the Orders to release portions of the attached property, has been withdrawn by Settlement Agreement and Consent to Forfeiture with Order dated May 31, 2019, which also settled this action with respect to defendants THOMAS ST. CLAIR and CLAIRCO INDUSTRIES INC. a/k/a ST. CLAIR TRUCKING INC. only; and it is further
ORDERED that this motion (seq. #006) by plaintiff for an Order: (1) pursuant to CPLR 1329, permitting plaintiff the reasonable opportunity to correct any defect in the attachment application or, in the alternative; (2) pursuant to CPLR 1312 and 1316, for a Second Supplemental Order of Attachment on notice of property, to wit: (a) any assets owned by criminal defendants ANTHONY GRAZIO a/k/a THE ROCK, VITO FRAGOLA, CAESAR BERMEO a/k/a CESAR BERMEO, CARLOS MELGAR, MILAN PARIK, THOMAS ST. CLAIR, MICHAEL HEINRICHS, FRANCO ROTUNDO a/k/a FRANCO ROTONDO a/k/a FRANK ROTONDO, NYTAC CORP., NEW YORK TRUCKING AND CARTING LLC, KRIS TRUCKING CORP., IEV TRUCKING CORP., DUMP MASTERS SERVICES INC., MODERN LEASING INC., DJCI ENTERPRISES LLC, CLAIRCO INDUSTRIES INC. a/k/a ST. CLAIR TRUCKING INC., STARFIRE INDUSTRIES INC. and DURANTE BROS. CONSTRUCTION CORP., and non-criminal defendants JOANNE GRAZIO, LINDA GRAZIO, DANIELLE FRAGOLA a/k/a DANIELLE DAURIO and VIVIAN PANICCI in an amount up to but not more than the sum of ten million two hundred thirty thousand dollars ($10,230,000.00), as assets that can satisfy a money judgment against criminal defendants ANTHONY GRAZIO a/k/a THE ROCK, VITO FRAGOLA, CAESAR BERMEO a/k/a CESAR BERMEO, CARLOS MELGAR, MILAN PARIK, THOMAS ST. CLAIR, MICHAEL HEINRICHS, FRANCO ROTUNDO a/k/a FRANCO ROTONDO a/k/a FRANK ROTONDO, NYTAC CORP., NEW YORK TRUCKING AND CARTING LLC, KRIS TRUCKING CORP., IEV TRUCKING CORP., DUMP MASTERS SERVICES INC., MODERN LEASING INC., DJCI ENTERPRISES LLC, CLAIRCO INDUSTRIES INC. a/k/a ST. CLAIR TRUCKING INC., STARFIRE INDUSTRIES INC. and DURANTE BROS. CONSTRUCTION CORP., and non-criminal defendants JOANNE GRAZIO, LINDA GRAZIO, DANIELLE FRAGOLA a/k/a DANIELLE DAURIO and VIVIAN PANICCI, that amount being the value of the criminal proceeds obtained by the defendants in this alleged common scheme or plan, is hereby DENIED for the reasons set forth hereinafter.
All defendants, including all individuals and entities, except criminal defendant DURANTE BROS. CONSTRUCTION CORP. ("Durante"), have resolved their criminal charges and forfeiture issues with the Suffolk County District Attorney's Office, and have withdrawn any opposition filed in response to plaintiff's motions. As such, the only remaining opposition considered by the Court was interposed by Durante.
Plaintiff, as "claiming authority" (CPLR 1310  ), has commenced this civil forfeiture action, pursuant to CPLR Article 13-A, against certain defendants, including ANTHONY GRAZIO (a/k/a The Rock), VITO FRAGOLA, CAESAR BERMEO (a/k/a Cesar Bermeo), CARLOS MELGAR, MILAN PARIK, THOMAS ST. CLAIR, MICHAEL HEINRICHS, FRANCO ROTUNDO (a/k/a Franco Rotondo, a/k/a Frank Rotondo), NYTAC CORP., NEW YORK TRUCKING AND CARTING, LLC, KRIS TRUCKING CORP., IEV TRUCKING CORP., DUMP MASTERS SERVICES, INC., MODERN LEASING, INC., DJCI ENTERPRISES, LLC, CLAIRCO INDUSTRIES, INC. (a/k/a St. Clair Trucking Inc.), STARFIRE INDUSTRIES, INC. and Durante as "criminal defendants" (CPLR 1310  ), and against defendants JOANNE GRAZIO, LINDA GRAZIO, DANIELLE FRAGOLA a/k/a DANIELLE DAURIO, and VIVIAN PANICCI as "non-criminal defendants" (CPLR 1310  ), jointly and severally, for forfeiture of proceeds, substituted proceeds and instrumentalities of the crimes seeking to recover over $10 million. This action was brought after an investigation by law enforcement officials of an alleged illegal dumping scheme. It is undisputed that the criminal defendants have been indicted for various "post conviction forfeiture crimes" (CPLR 1310 ; 1310  ).
By Order to Show Cause dated July 20, 2018, the Suffolk County District Attorney seeks to confirm an Ex Parte Order of Attachment dated July 16, 2018, and a Supplemental Ex Parte Order of Attachment dated July 17, 2018, and further seeks leave of court to amend the caption of the proceeding in the form of additional spellings of certain of the defendants' names. The claiming authority-plaintiff also seeks to unseal the Orders of July 16, 2018 and July 17, 2018, and the supporting papers attendant to each of the Orders above- mentioned, pursuant to CPLR 1311 (6).
Plaintiff's intention at the time of the application was to commence a forfeiture action pursuant to Article 13-A for the purpose of preserving the proceeds, substituted proceeds, and instrumentalities either derived from or used in the commission of the crimes and offenses charged against the various criminal and non-criminal defendants.
The crimes charged are comprised of both Penal Law and Environmental Conservation Law crimes and offenses of Criminal Mischief in the 2nd degree, a class "D" felony; Criminal Mischief in the 3rd degree, a class "E" felony; Endangering the Public Health, Safety and Environment in the 2nd degree, a class "D" felony; and, Endangering Public Health Safety and Environment in the 3rd degree, a class "E" felony. Claiming Authority-Plaintiff also charges conspiracy to commit these offenses between and among eight individuals and ten entities and further seeks to secure by Article 13-A alleged proceeds, substituted proceeds, and instrumentalities in the possession and/or control of the four non-criminal defendants. The spelling amendments concern defendants Bermeo and Rotondo and variations of those two surnames. Plaintiff contends that the confirmation is required to continue the levy for the purpose of avoiding the dissipation and/or removal of the proceeds, substituted proceeds, and instrumentalities either realized from or used in the commission of the alleged offenses.
Detective Investigator Paul Rauseo, by affidavit dated 16 July 2018, avers that many of the assets are mobile in nature and easily transferable (see ¶ 12, Rauseo Aff.). Plaintiff states that confirmation of the Ex Parte Orders will serve to preserve the assets while simultaneously taking the profit out of the alleged crimes committed. Plaintiff also suggests that any defendant may move to modify any allegedly onerous Ex Parte Order in order to provide for any defendant's reasonable living expenses and attorney's fees.
The supplemental aspect of the plaintiff's application is for the purpose of adding and including Durante as a criminal defendant. A search warrant was executed at the Durante premise and DI Rauseo contends that said corporation may well be involved in laundering illegal proceeds through other entities and financial institutions and dealing in large amounts of cash. It is not clear from the affidavit what the basis of that statement may be. DI Rauseo alleges that defendant Grazio orchestrated the advertising and distribution of the materials alleged to be either hazardous or other than environmentally clean fill material and recycled aggregates. DI Rauseo also suggests that the materials distributed were obtained from stock piles at the Durante yard and picked up and distributed by the various defendants through the arrangements made by Grazio with certain individuals and entities who and which distributed and dumped the materials at various job sites.
There are specific allegations of conduct set forth by DI Rauseo as against the various defendants. As noted, all defendants, including all individuals and entities, except Durante, have resolved their criminal charges and forfeiture issues with the Suffolk County District Attorney's Office.
In opposition to the relief requested by plaintiff, Durante sets forth both legal and equitable arguments against confirmation of the original and/or amended and/or supplemental applications to confirm. Durante characterizes the plaintiff's inclusion of the company as unsustainable due to the vague nature of the allegations describing Durante's alleged conduct in connection with the allegations of the crime's allegedly committed by the other named criminal defendants. Durante avers that the plaintiff, through the Rauseo affidavit, offers conclusory statements such as the materials involved "originated at Durante"; that the materials contained "hazardous waste"; and that Durante was "part of the scheme."
Durante's point is well-taken. There is no description of any affirmative action or step taken by Durante ownership or any responsible entity whose conduct would be attributable to Durante. The plaintiff offers a theory of how a scheme that takes in sub-standard material and then finds methods of disposal that avoid the high cost customarily associated with the disposition of such materials would benefit those involved. Simply stated, treating allegedly contaminated material as clean fill or other acceptable aggregate by mixing it and combining it with non-hazardous materials results in significantly lower disposal costs. The transaction points between the receipt, separation, storage and disposal of such materials results in significant savings and significant profits to those involved. Even if the removal of sub-standard materials is done without charge to the possessor of such materials the savings are significant, free versus costly.
The cash flow generated by such savings and resultant profits which would not exist but for the illegal activity is the plaintiff's fundamental theory of cash flow resulting in proceeds and substituted proceeds of illegal activity which plaintiff seeks to secure and obtain. In addition, plaintiff's pursuit of instrumentalities associated with this scheme which allegedly made the processing of such materials possible has resulted in Settlement Agreements and Consent to Forfeiture Orders with all but the criminal defendant Durante. These Orders resolving the matters for all but the Durante defendant were presented to this Court for the purpose of resolving the forfeiture issues pertaining to all other defendants, both criminal and non-criminal.
Plaintiff supported its original application by alleging an incident that occurred on May 16, 2018, at Greenport, New York, consisting of contaminated materials which "originated" at Durante. How long the materials were allegedly at the Durante facility or what actions were taken to aggregate or separate such materials at Durante is unclear; however, plaintiff alleges that the materials were for some period of time at the Durante facility. Whether the materials were delivered to Durante and unloaded, separated or combined with other materials at Durante or remained on vehicles at Durante in the condition and composition in which they arrived or any combination thereof is unknown. Plaintiff's original application does not answer these questions.
Durante argues that plaintiff changed its mind and the theory of the case by substituting allegations in the amended/supplemental application that were not contained in the original. An alleged transaction from Calverton which occurred in 2017 was substituted for the original allegation of the May 2018 incident in Greenport. The plaintiff seems to have abandoned the Greenport transaction for the purpose of this confirmation proceeding. The "originated" claim for Greenport cannot be used to support the Calverton incident.
The underpinning of any forfeiture action is the allegation that a felony crime was committed. Durante claims that the application is not specific as to its conduct which constitutes the elements of any crime. Durante's theory seems to be that it is incumbent upon the plaintiff in this confirmation context to allege conduct on the part of a defendant in a form customarily found in an accusatory instrument or indictment supported by sufficient grand jury proceedings.
Durante cites to 6 NYCRR § 375-6.8, which is a section of the Department of Environmental Conservation Solid Waste Remedial Program Soil Cleanup Objectives tables developed pursuant to ECL 27-1415 (6). Durante's argument is that the mere presence of certain hazardous materials is not prohibited, rather it is the amount or concentration of the material and the context, type and character of the location in which it is found. Durante alleges that the failure to provide the necessary concentrations is fatal to the application and fails to allege a violation of the law. This has a direct impact upon satisfying the requirement under Article 13-A as to whether there is a substantial probability of a conviction for the crime alleged. These are the standards used by the DEC for determining whether a property is contaminated.
In substituting the June 11, 2017 Calverton allegations against Durante for the May 16, 2018 Greenport allegations, the plaintiff is attempting to satisfy the testing and concentration requirements by submission of a report and test findings for the Calverton material which allegedly originated at the Durante facility.
Durante further alleges that the internal procedures concerning "dump tickets" insulates it against any allegation of an intervening failure to comply with or deviation from the non-employee drivers' representation of ultimate destination as contained within the tickets. Durante concedes that they were aware as of November 2017 that the DEC enacted regulations prohibiting the transport of construction aggregates into either Nassau County or Suffolk County. The implication seems intended to support the argument that the "dump tickets" in conjunction with the prohibition against transport to Suffolk County insulates Durante from any culpable knowledge of the ultimate destination or disposal.
It would seem the structure of the system in place and the communication between and among the originating customer, the jobber, the originating source driver, the transfer station facility owner, the facility employees, the departing driver and the end user customer, among others, would certainly be relevant. The supervision and control of each of those participants as well as the communication between and among them would certainly shed light upon who knew what was being transported, what the original source was, what happened to it at the facility and where it was eventually delivered and dumped.
Durante asserts that the inclusion of the delivery location intended as stated on the dump tickets and the driver's signature on the dump tickets per se absolves Durante from any intentional or reckless conduct. Were it so simple. The statement by the driver does not determine all factual considerations vis-à-vis Durante's knowledge and participation in an alleged conspiracy to unlawfully dispose of hazardous materials.
However, in the absence of additional proof of the Durante's awareness or participation in loads going to other than the locations listed on the tickets, sustaining a conviction and the likelihood of a guilty verdict against Durante in a criminal forum is questionable. Whether or not there is sufficient proof likely to convince a fact finder, either a judge or jury, beyond a reasonable doubt of the necessary elements is difficult to determine at this juncture. The burden of proof at this juncture is whether there is likelihood of success of the plaintiff-claiming authority's prosecution of the underlying criminal charges by a fair preponderance of the credible evidence.
Durante also avers that in connection with other municipal fulfillment contracts that Durante's facility is inspected every two weeks and that there has never been any finding by the inspectors of hazardous or other non-compliant materials stored at Durante's facility. Durante cites to two particular contracts involving J.P. Morgan and the Village of Sleepy Hollow, New York.
Durante asserts that the transfer station is subject to the sampling, analyzing and testing of aggregates and materials by the New York City Department of Environmental Protection. There has never, according to Durante, been an adverse finding as a result of this process.
Durante further challenges the method of calculation of the magnitude of the alleged proceeds derived from the allegations of Durante's participation in this alleged scheme to unlawfully dispose of hazardous materials and contaminated fill and aggregates. This Court is mindful of the current state of the law concerning the methods and formulae for calculations including the most recent statutory enactments scheduled to take effect in October of 2019.
Durante submits an affidavit setting forth the nature of its business as a manufacturer of recycled construction aggregates that accepts fill from contractors separates and aggregates certain materials and then sells the products which may be lawfully sold. Durante further alleges that its management is aware of what products cannot be sold and must be disposed of in accordance with State and Federal regulations and requirements. The method of acquisition and distribution of these materials varies in that Durante hires its own trucks in some instances and customers, third-parties, hire their own trucks for the purpose of acquisition and distribution of the raw fill and the aggregates which result from Durante's processes.
The disposal of the undesirable residue or of mixed aggregates containing hazardous or questionable components is the crux of the matter before the Court. The plaintiff's theory appears to be that Durante actively participates or recklessly permits the disposal of the hazardous or undesirable materials. Certainly, Durante is aware that the materials exist at their site, they themselves separate the good from the bad. What happens to the material after it is separated can be no mystery to an entity as experienced as Durante.
For product that cannot be sold, Durante claims it is either taken for free or Durante pays the trucker. The dump ticket contains the name of the driver and the driver's assertion of the final dumping destination of the load. There are no further documents or other efforts undertaken to determine where the load may actually be going. The unsellable materials once segregated by Durante must be disposed of legally at designated facilities licensed to accept and dispose of such materials. The Plaintiff alleges these materials are mixed with non-hazardous materials and then hauled away and dumped at job sites where unsuspecting customers are unaware of the hazardous content.
Durante acknowledges that the DEC has attempted by regulation to put the onus on transfer stations by proposing that notarized signatures would be required as to where the material is going once it leaves the transfer station. That regulatory requirement according to Durante has yet to be enacted. Regulatory requirements versus the norms of the industry as to disposition of materials and what constitutes acceptable construction aggregates has long been a source of friction between the industry and regulators.
In examining the content of the loads leaving Durante's facility, the plaintiff/claiming authority alleges that Durante knowingly schemed and permitted "hazardous materials to leave their facility for locations that are not authorized to accept such materials." Durante affirmatively states that it does not traffic in hazardous materials. Durante claims that for the period March 14, 2018 through May of 2018, the DEC's own records will show that the facility was in full compliance and without any violations.
Durante further states that the New Jersey Department of Environmental Protection has documentary evidence in the form of lab reports that have found no violations. Also, Durante seems to assert that their lab reports may be in conflict with the DEC testing performed on the loads which were followed and tested. It is difficult to ascertain whether the same sourced materials are the subject of testing by separate labs. The points at which and the source locations of samples taken and tested is also a matter of proof at trial. The testing methodologies and the questions concerning the sources, segregation, separation, aggregation and the ongoing processes, as well as the controls and methods of testing and testing parameters, will be a matter of proof at trial.
Durante further claims that since November of 2017 when the DEC enacted a regulation prohibiting the transport of materials into Nassau County or Suffolk County, they have "demanded" of all truckers who picked up product that they were prohibited from traveling east with any load. Durante seems to imply that it was its belief that loads were only going to New Jersey and Brooklyn and were otherwise being properly placed or disposed. The Calverton incident of June 2017 predates that regulation.
By affirmation dated November 14, 2018, the Claiming Authority-Plaintiff seeks relief pursuant to CPLR 1329, and/or a Second Supplemental Order of Attachment with Temporary Restraining Order, combined with a Reply to Durante's opposition. Claiming Authority-Plaintiff seems to be in a procedural quandary as to the efficacy of the two original applications on July 16, 2018 and July 17, 2018. Its third attempt at forfeiture is a stand-alone, separate application which they make in the alternative perhaps sensing the insufficiency of their two prior attempts. For whatever reason, the remaining defendant herein, Durante, has made no motion to vacate or modify the attachment attempts of the plaintiff.
CPLR 1329. Vacating or modifying attachment
1. Motion to vacate or modify. Prior to the application of property or debt to the satisfaction of a judgment, the defendant, the garnishee or any person having an interest in the property or debt may move, on notice to each party and the claiming agent, for an order vacating or modifying the order of attachment. Upon the motion, the court may give the claiming authority a reasonable opportunity to correct any defect. If, after the defendant has appeared in the action, the court determines that the attachment is unnecessary to the security of the claiming authority, it shall vacate the order of attachment. Such a motion shall not of itself constitute an appearance in the action.
2. Burden of proof. Upon a motion to vacate or modify an order of attachment the claiming authority shall have the burden of establishing the grounds for the attachment, the need for continuing the levy and the probability that he or she will succeed on the merits
Plaintiff seems to rely on the provision of CPLR 1329 that permits the claiming authority "to correct any defect." Given the dearth of procedural guidance in the case law, the plaintiff is relegated to analogous provisions of CPLR Article 62.
CPLR 1329 is identical to CPLR 6223 except for terminology (4 New York Civil Practice: CPLR P 1329.00  ). The plaintiff alleges that new facts exist to support the confirmation of the Order.
An Order of Attachment without notice is a statutory creation. CPLR 1317, entitled "Order of attachment without notice," provides:
1. When granted; contents. An order of attachment may be granted without notice, before or after service of summons and at any time prior to judgment. It shall specify the amount to be secured by the order of attachment including any interest, costs and any claiming agent's fees and expenses, be endorsed with the name and address of the claiming authority and shall be directed to a claiming agent in any county or in the city of New York where any property in which the defendant has an interest is located or where a garnishee may be served. The order shall direct the claiming agent to levy within his or her jurisdiction, at any time before final judgment, upon such property in which the defendant has an interest and upon such debts owing to the defendant as will satisfy the amount specified in the order of attachment.
2. Confirmation of order. An order of attachment granted without notice shall provide that within a period not to exceed five days after levy, the claiming authority shall move, on such notice as the court shall direct to the defendant, the garnishee, if any, and the claiming agent, for an order confirming the order of attachment. If the claiming authority fails to make such motion within the required period, the order of attachment and levy thereunder shall have no further effect and shall be vacated upon motion. Upon the motion to confirm, the provisions of subdivision two of section one thousand three hundred twenty-nine of this article shall apply. An order of attachment granted without notice may provide that the claiming agent refrain from taking any property levied upon into his actual custody, pending further order of the court
The Second Department has made it clear, "[b]ecause attachment is a harsh remedy, courts have strictly construed the statute in favor of those against whom it may be employed" (Brown v Ryvkin, 78 AD3d 981, 983 [2d Dept 2010], citing Kornblum v Kornblum, 34 AD3d 748, 749 [2d Dept 2006]).
In the case before the Court, Durante has availed itself of an undertaking for the purpose of meeting the requirement of securing the amount sought by plaintiff. The procedural question now posed is whether or not the statutory provisions of CPLR 1329 are broad and inclusive enough to allow the type of amendment and supplementation plaintiff seeks to implement herein while preserving the efficacy of the original application to confirm. This Court holds that it does not.
The original applications of July 16, 2018 and July17, 2018 do not meet the statutory standards for confirmation. The motion to confirm those applications is therefore DENIED.
Plaintiff, as a third attempt at forfeiture, now files what can only be characterized as a new standalone attempt at attachment. In clarifying the CPLR 1329 language of curing a defect, plaintiff looks to CPLR 6223 (a) and the related case law. The defect is characterized by plaintiff as "missed detailed information pertaining to dumping activity by the defendants."
Plaintiff characterizes the information as newly acquired evidence now known and available to the plaintiff's Asset Forfeiture Bureau. The new information appears to focus on a criminal co-defendant, "Grazio." All of the new information seems to pertain to other co-defendants. It raises the specter of an alleged term of art, namely "blend," now characterized by law enforcement as contaminated. These allegations while implicating others does nothing to add to the application as it concerns Durante.
There is significant new evidence in the form of samples taken, certified lab test results and physical examinations and reports as to the content of certain loads on specific vehicles and material found at certain sites. Plaintiff reveals for the first time in this application previous court-authorized eavesdropping warrants involving several defendants, including Durante. The termination orders concerning the eavesdropping activity extended beyond the filing of the original forfeiture confirmation applications herein. Apparently, the plaintiff had the information at the time of the original application and chose not to include it so as to avoid disclosure of the ongoing eavesdropping. That was a legal impediment of which they were aware. That was not an oversight or the correction of any type of error. The eavesdropping termination dates on various telephone devices were staggered. The last order of postponement expired on October 26, 2018, and the plaintiff states that it prevented disclosure of eavesdropping evidence until "very recently."
Any prohibition against disclosure is of no moment. The information contained in the original ex-parte application and any information permitted to correct an error pursuant to CPLR 1329 is the universe of information upon which this Court must base its decision.
Plaintiff's calculations as to Durante is in no way particularized to Durante. The nexus between the alleged activity of the defendants and the sums claimed to be proceeds over time are vague. It is the plaintiff's premise that the defendants herein comprised an "underworld of unscrupulous dirt brokers, solid waste management facilities and trucking companies that worked together on a regular basis."
The theory is that proper disposal is expensive at designated facilities. An operation like Durante would save thousands per load by disposing of the tainted or unsaleable material for a few hundred dollars or for no fee at all. Grazio provided the opportunity. Plaintiff alleges that Durante was a willing and active participant. There is some indication that it was known to the truckers that Durante wanted to "know where it's going," referring to the materials being transported. The conversation between David Goldfarb and Louis Durante shows an awareness that what was being shipped and dumped was not the greatest quality. The context of that statement seems to be the quality was not suited for the intended purpose for which it was ordered, namely drainage. Later the same day, a conversation between Lou Durante and Goldfarb admitted it was not A-1 material and could be "taken for free." This does not mean it was contaminated or hazardous material that could only be disposed of at designated sites.
There is also a conversation between Lou Durante and Michael Durante stating, "would you rather get rid of it for free or have to pay to get rid of it." Lou Durante states, "so I just want to make it disappear."
The key to plaintiff's success on the motion to confirm is the specific allegations against Durante for specific crimes as to materials in Durante's possession, which were then blended with other materials to disguise their nature, then loaded onto trailers and taken to unauthorized dumping destinations and either confiscated and tested before dumping or tested once dumped. The only evidence before the Court consists of dump tickets from Durante with fictitious destinations or destinations not corresponding to where the loads were taken or dumped.
PLAINTIFF'S COMBINED MEMORANDUM OF LAW:
A substantial portion of the plaintiff's Combined Memorandum of Law is devoted to the similarities between Article 62 of the CPLR and Article 13-A regarding attachment and preservation of assets which would be available to satisfy a future judgment. Plaintiff's position seems to be that multiple supplements to the record are permitted to render the original insufficient application for confirmation sufficient by supplement. In the alternative, plaintiff argues that a separate and distinct "new" application is precluded by neither statute nor legal decisional precedent. Parsing what information was newly acquired, what was existing but not able to be disclosed due to the expiration dates of certain surveillance sealing orders presents this Court with a myriad of scenarios of combination and permutation for which little to no guidance may be found in the current case law.
A troubling question develops where, as here, a claiming authority-plaintiff chooses to act while a case is developing and before a case may be supported by the record existing at the time of ex-parte attachment application or within the five days immediately following the initial ex-parte filing.
The question is twofold, may a factually insufficient application be made sufficient by supplement which goes well beyond correction and, secondly, may an application be made upon notice which then includes all which has been obtained up to the point of the attachment application on notice? Does this stringing out or expansion of the legislative window withstand judicial scrutiny? Can a deficient application mature into a viable one by adding newly acquired as well as previously known information such as lab reports, transcripts of audio surveillance and a subsequent indictment?
Plaintiff alleges Durante participated in the disposal of hazardous materials at no cost to itself avoiding the expense of proper disposal. Being spared the cost of lawful disposition of the material was an economic benefit which reduced the expenses of the company, making Durante more profitable.
The statute requires the commission of a felony or participation in a common scheme which engaged in activity constituting a felony to satisfy the predicate for attachment. Plaintiff alleges that the hazardous waste was in the possession of Durante having been taken in and then disposed of after separation and then mixing with other materials. The accumulation, segregation, separation and re-mixing for disposal at other than proper sites was undertaken at the Durante premises. Having separated and aggregated the hazardous material with knowledge of the true cost of proper disposal undermines the argument that Durante was unaware that the property was not being disposed of properly. While the dump tickets may have contained inaccurate or deliberately false destinations allegedly supplied by the drivers, unless those destinations were authorized to accept the hazardous materials Durante could be charged with the knowledge that those destinations were unlawful. The materials being taken away for no charge only further supports the claiming authority-plaintiff's case.
Durante argues that in the first application there were zero allegations made against itself. The first application was supported by the Rauseo affidavit with no mention of Durante. The allegations against Durante are referred to in plaintiff's Memorandum of Law.
At least as concerns Durante, there is no evidence or assertion concerning any participation by Durante in an event alleged to have taken place in Greenport, New York in July of 2018. It was the original theory of the case that Grazio and others were engaged in a common scheme or plan to unlawfully dump and dispose of hazardous materials that could only be disposed of at certain authorized facilities. The assertion and substitution of a dumping incident in Calverton, New York in 2017 involving Durante and others is a new theory of the case and not merely a correction or supplement to the original theory. There is no mention of Grazio in the incident involving Calverton.
It is unclear from the papers submitted by the claiming authority-plaintiff who the actors were collectively during the 2017 Calverton incident and the 2018 Greenport incident. Each of those alleged incidents must stand on their own merit and each incident must be supported by law enforcement allegations and the sources of those allegations. The affidavits of the investigators may be read in conjunction with each other but must collectively contain sufficient support for the theory of the case.
Given the nature of the proofs and the statutory requirements, the claiming authority plaintiff's subsequent application to confirm, amend or supplement is DENIED. If the strict construction of the statute as set forth in Kornblum, supra, is to be relaxed, that is a matter for the legislature and not the courts (see Nestor v New York State Div. of Hous. & Cmty. Renewal, 257 AD2d 395 [1st Dept 1999]).
The foregoing constitutes the decision and Order of this Court.
Dated: August 12, 2019
HON. JOSEPH FARNETI
Acting Justice Supreme Court
Joseph Farneti, J.