HARRISBURG — Somewhere in the bowels of the state attorney general's office nearly $1.8 million of seized money sat in storage for nearly two years as questions swirled about how it was confiscated.
The Morning Call could find no incident reports of the June 24, 2014, seizure. No search warrants. No arrest affidavits. Not until the state attorney general's office filed a forfeiture petition for the money in Cumberland County Court on June 16, did its existence become public.
According to the petition, the federal Drug Enforcement Administration used the seizure to indict a Florida man in November on charges he ran a $10 million, cross-country marijuana ring.
For 10 months, state officials had refused to discuss the seizure with The Morning Call and denied public records requests for information about it. Federal authorities were equally silent. A federal judge sealed part of the Florida man's court file from public view.
Asked why the attorney general's office waited to release the information, Bruce Beemer, first deputy attorney general, referred questions Friday to his supervisor, Solicitor General Bruce Castor. Castor did not return calls for comment.
The Morning Call pieced together the facts about the seizure through interviews with more than a dozen current and former employees of the attorney general's office and other government officials. Those who spoke to the newspaper requested anonymity out of fear for their personal safety, professional reprisals, or because they were not authorized to speak publicly. One source called the seizure by the state's Mobile Street Crimes Unit "screwed up from the get-go" in part because it broke a rule against using relatives as informants.
"This was the premier unit that was not permitted to fail and then something like this goes down," said another source. "If you speak to anyone they'll tell you it was shaky operationally, tactically and whatever else."
Attorney General Kathleen Kane created the unit when she took office in 2013 and it fell under the command of her top narcotics officer/chief of staff Jonathan Duecker. In an agreement between law enforcement agencies, the unit is touted as a "highly trained and specialized group of law enforcement agents, prosecutors and civilian technicians" who work in unison with local police and county district attorneys to battle "highly organized criminal enterprises and corrupt organizations."
Some of the unit's agents split from its Harrisburg deployment with no advance warning to their agency superiors or local authorities to pull off the seizure, according to two sources in the attorney general's office. The unit then was allowed to walk away from the aftermath, sources said, as questions were raised inside the agency on whether the seizure was done correctly.
Concerns may go beyond the halls of the attorney general's office.
In the fall of 2015, the DEA sent a letter to the Pennsylvania attorney general's office detailing the contents of a federal wiretap, according to two other sources. In the letter, the sources said, DEA warned that its wiretap picked up a conversation in which someone claimed that the seized truck should have been carrying more than had been recorded and processed.
It could not be determined whether the attorney general's office or any other law enforcement agency has investigated the claim. Authorities are officially mum.
On Nov. 16, 2015, the attorney general's office denied The Morning Call's right-to-know request for copies of police, court and legislative records detailing search warrants, arrests and confiscation of assets. In rejecting the request, the agency said it was not confirming or denying the seizure took place but that if it did, the records could not be publicly released because they could contain "covert law enforcement investigations, including intelligence gathering and analysis."
Using similar reasoning, the DEA in the fall rejected a similar request for information on the seizure under the federal Freedom of Information Act.
In a brief Capitol hallway interview on Jan. 12, Duecker declined to comment on the seizure, except to say: "I will talk about this case in one aspect alone. It is a federal case. It is being driven by the U.S. Department of Justice and the Drug Enforcement Administration. And any involved threats to defendants, witnesses or informants or agents will be taken up by the U.S. Department of Justice. It's outside the office of the attorney general's hands."
Break in routine
The Mobile Streets Crime Unit got to work in Harrisburg, its second deployment since its founding, with the April 1, 2014, signing of a memorandum of understanding among Kane, Dauphin County District Attorney Ed Marsico and Harrisburg Police Chief Thomas C. Carter. The unit's goal: Help city police crimp, at least temporarily, the violence and drug trade that flourishes blocks from the state Capitol and in the rest of the Susquehanna River city that is home to about 49,000 people.
The following narrative about the unit's largest confiscation of money is based on the petition and separate interviews with 10 current and former employees of the state attorney general's office and two outside law enforcement officials:
On the morning of June 24, 2014, the mobile unit of state agents gathered, as they always did, in the city's old 911 call center that had become their unofficial headquarters in the Harrisburg Police Department, 123 Walnut St. The plan, once the two sides got down to tactics, was for state agents and city vice to jointly surveil a neighborhood that hosts an open-air drug market and make arrests.
"Same old, same old," a Harrisburg police officer said.
Then something happened to change the routine. An agent got a call from a relative that caused four of his fellow agents to leave with him.
"Some broke loose, some stayed with us," said the Harrisburg police officer. Those agents who left "told us they got this other thing going on with some money."
They went westward across a Susquehanna River bridge, to the Petro Stopping Center, one of several truck stops near the interchanges of the Pennsylvania Turnpike, Interstate 81 and other highways outside Carlisle, Cumberland County. There inside a moving van were seven boxes. Inside the boxes were envelopes, concealed in bubble wrap and vacuum-sealed to condense their bulk.
The petition does not mention the use of search warrants, though it says "agents legally searched the vehicle." It also does not spell out what probable cause agents had to enter the vehicle, saying only that agents "approached a vehicle that was suspected to contain a significant amount of drug proceeds."
The forfeiture petition says Michael Sean Riley was in possession of seven boxes containing the $1.77 million. The petition says Riley was acting on behalf of Frederick Goldberg, of Plantation, Fla.
According to sources, the seven boxes were taken back to the attorney general's Harrisburg regional narcotics bureau at 106 Lowther St., in Lemoyne, Cumberland County.
"They were big cardboard boxes," a source said.
Duecker was called and drove over to the Lemoyne office to be debriefed, several sources said. Later that day, some agents involved in the seizure drove to the agency's Harrisburg headquarters in the Strawberry Square building and bragged to front-office staff.
"Guys from the Mobile Streets Crime Unit were at the office in Strawberry Square and talked to multiple people about this," a former employee said.
Goldberg was transporting large amounts of high grade marijuana from California to Maryland for distribution in Pennsylvania, Maryland, New Jersey, Virgina and Washington, D.C., according to the forfeiture petition, which was signed by Deputy Attorney General Danielle A. Graham and Chris Juba, an agent with the attorney general's office. Castor's and Beemer's names also appear on the petition.
Goldberg was charged in federal court in Baltimore with conspiracy and possession with intent to distribute marijuana. Court records show he has been in negotiations for a plea agreement.
The Morning Call could not find any charges filed against Riley in Cumberland County Court or federal courts. Sources said he was not arrested.
Asset forfeiture attorneys with the attorney general's office were notified of the seizure about a day after it happened, according to sources.
When the money was unpackaged and counted at the Lemoyne office, agents saw envelopes marked "$80" and "$110," which turned out to be shorthand for $80,000 and $110,000, a source said, and one box, not yet counted, looked as if it had already been opened.
The agent's use of a relative as a confidential informant also concerned agency personnel.
The agency's 2002 directive on informant procedures states, "no member of this agency shall maintain a social, financial or business relationship with an informant while on or off duty or otherwise become socially or romantically involved with an informant."
That directive is not legally binding in a court of law and is meant only to establish best practices for dealing with long-term informants who sign contracts that allow them to get paid for cooperation. It's unclear if the relative who tipped off the agent in the Cumberland County seizure was a longtime informant or was more of a tipster.
Regardless, the relationship was bothersome, a source said, adding, "it was one of those jobs that once it happened, no one wanted to be part of it."
A day after the seizure, $1.77 million would be counted. An ion scan on 10 samples found cocaine residue above what would be expected from casual contact, the petition noted.
At some point, four sources said, Duecker ordered the Lemoyne office's regular narcotics agents to take over the investigation. Juba, the agent who signed the forfeiture petition, is assigned to the Lemoyne office, according to the state government phone directory.
Duecker also directed the agency's front-office staff to not allow the press office to publicize the haul as part of the overall seizure of assets the Mobile Street Crimes Unit and Harrisburg police would announce when the deployment ended, according to numerous sources.
That non-publication order was followed.
On Nov. 24, 2014, Kane's office issued a news release. It said the Mobile Street Crimes Unit's Harrisburg deployment "yielded 239 arrests including drug dealers, and violent and repeat offenders; $300,000 worth of heroin that is now off the streets; and the identification of seven gangs and seven drug-trafficking organizations operating in the region."
The Cumberland County truck stop seizure was not mentioned.
Harrisburg police spokesman Capt. Gabe Olivera said his department learned about the seizure a couple days after it occurred.
But Dauphin County's Marsico said he did not know about the seizure until contacted this year by The Morning Call, despite the 2014 memorandum of understanding pledging that state and local law enforcement must "maximize the cooperation, information sharing and manpower necessary to effectively combat the criminal enterprises and organizations that will be faced in the Harrisburg area."
Without knowing details about the seizure, Marsico said, he is not sure if his county or city police are entitled to a cut of the money per the memorandum, which says seized assets would be split "based upon the principal of equitable sharing of resources and proceeds."
Cumberland County District Attorney David Freed also said he did not know about the seizure until contacted by the newspaper.
In years past, Freed said, the attorney general's office likely would have given him a courtesy call to let him know that such a large seizure, with unknown safety ramifications for the public and law enforcement, would be taking place. But Kane's office tends not to share information, he said.
"Drug enforcement work can suffer greatly from territoriality and in Pennsylvania we have local police, state police, the attorney general, DEA … doing drug work at the street level," Freed said.
The forfeiture petition says the attorney general's office and the Baltimore office of the DEA conducted a joint investigation of the seized money "shortly after" it was confiscated. Goldberg's federal indictment says DEA did not learn about Goldberg until sometime in 2015, through other unnamed law enforcement and a confidential source. DEA put him under surveillance and allegedly discovered he was hauling 17 pounds of marijuana and thousands of dollars in cash during a Nov. 6 car stop in Odenton, Md., the indictment says. He was formally indicted three days later.
DEA confiscated $2,747 in cash from him and another $40,000 that was inside his car during a car stop, according to online legal notices. The U.S. attorney's office also moved to seize more than a dozen properties he owns in Florida, court records show.
Under the county forfeiture petition, Goldberg has 30 days to make any claim to the $1.77 million.
In a vault
Pennsylvania's Controlled Substances Forfeiture Act requires the attorney general to annually report to the Legislature "forfeited property or proceeds" that the agency confiscates unless it's part of an active investigation. The $1.77 million was not noted in the agency's most recent report, which is from 2013-14 and was submitted to the House's and Senate's Judiciary and Appropriations committees on July 15, 2015.
Under the law, a civil court petition is needed to allow the state to take ownership of the money and allow an owner to challenge the government's claim. When no warrant is used in a seizure, the government must file the petition "forthwith," but the law does not define "forthwith." In such cases, prosecutors apply the statute of limitations for civil lawsuits, giving them two years from the date of seizure to file the civil petition in the county in which it occurred, said Louis S. Rulli, an expert on forfeiture laws at the University of Pennsylvania Law School.
The attorney general then had until Friday to petition for forfeiture.
The petition makes no note of where the money had been housed since it was seized two years ago.
Before his resignation in May as Kane's spokesman, Chuck Ardo declined to disclose its whereabouts.
"The money is safely stored in a vault of a company that transported money as its primary focus," Ardo said.
Generally speaking, Ardo said, the attorney general's office has no internal policies that set firm timelines for when it files civil court petitions on seized physical or financial assets. Rather, the agency allows the pace of the investigation or the statute of limitations to dictate when court petitions are filed, he said.
A source told The Morning Call state officials hadn't filed the ownership petition sooner because federal authorities asked them to wait until it finished its investigation.
That did not stop DEA from publicizing the assets it seized from Goldberg when he was arrested in November in Maryland. DEA posted the information online per U.S. Department of Justice requirements that say federal law enforcement agencies must publicly disclose seized assets within 30 to 60 days of the confiscation.
It makes no sense for the attorney general's office to sit on $1.77 million for two years, Rulli said.
It is not safe from an operational standpoint for a government agency to have large sums of money sitting in a safe for extended periods of time, he said.
In his career, Rulli said, he has seen government agencies hold on to seized property for a fairly long time. But $1.77 million, he said, "is such a huge amount it raises serious questions" as to why it had not been recorded sooner. "It leads to an appearance of impropriety, and even if there is no actual impropriety, that undermines the confidence of citizens in our own government," Rulli said.
In storage, the money could not have collected interest for the state coffers as it would have in a bank.