Montgomery County prosecutors helped recover more than $11,000 in an eBay scam involving farm equipment and the Russian Mafia. Just another day at the office!
I must admit, I didn’t know exactly what to do after my conversation with Detective Scott Davis of the Montgomery County Sheriff’s Department. Our phone call started as many of my conversations with police officers normally do: “I need to talk to you about seizing some money,” he said. I head up the division of the DA’s office that handles asset and bond forfeiture cases, and I assumed the money in question was associated with narcotics. Detective Davis’ story was quite to the contrary.
He explained how the victim, Kelly Noack, a resident of the city of Willis in our county, had transferred over $11,000 to a Bank of America account in California to purchase some farming equipment listed for sale on eBay, but she never received the equipment. Kelly found through her inquiries with eBay that the seller and posting were fraudulent, and Detective Davis was calling me to recover her money.
While I had on prior occasions successfully helped officers seize money from bank accounts, I had always done so to commence forfeiture proceedings. This situation was different; I had never helped an officer seize money from a bank account to return it to its rightful owner. I asked Detective Davis to email me his probable cause statement and all of the pertinent information.
The CCP to the rescue
In the meantime, I figured that someone in my office must be assigned to handle this type of a situation. Hoping to find such a person, I took a stroll around our office to inquire. No luck. Certain that the buck stopped with me, I looked for my answer in the Code of Criminal Procedure. Article 18.02(12) is my normal stomping ground; it allows for issuance of a search warrant to seize contraband as defined by Chapter 59 to commence forfeiture to the state. Scanning the article from the beginning yielded the answer for the dilemma at hand: Article 18.02(1) allows for issuance of a search warrant to seize “property acquired by theft or in any other manner which makes its acquisition a penal offense.” It was relatively easy to revise the warrant form I typically use for forfeiture seizures to fit the requisites of Article 18.02(1).
More about the crime
True to his word, Detective Davis quickly emailed a probable cause statement and Kelly Noack’s written statement. Kelly and her husband, Ralph, had been searching for a Bobcat front-end loader on eBay and found one in California. Kelly contacted the seller, “Teresa Huler,” via email and told her they wanted to buy the equipment but needed a day or two to come up with all of the money. The next day, on February 24, 2010, the Noacks had the funds and emailed Ms. Huler to say so. Kelly then received an email from “eBay” with a description of the item and instructions to bank-wire transfer $11,200 to a Verified Safety Agent. She sent the money on the 25th and then emailed Teresa Huler to let her know the wire transfer was done. The two women exchanged several emails before Teresa said she would “come next Friday” to deliver the equipment. The next Friday came and went without a delivery.
Kelly emailed Teresa to ask where the equipment was, only to be met with excuses and further delay, which eventually led her to file a complaint with eBay. She then found out that the transaction was fraudulent. Kelly Noack had not actually purchased the equipment through the eBay site; she had initiated a wire transfer outside the eBay platform (in response to emails from Teresa Huler)—these emails were designed to look as if they were from eBay, but they were not. Being a first-time eBay user, Kelly did not know that she had not actually purchased the equipment through the eBay site, thus nullifying any buyer protection the site might’ve afforded her. A representative at eBay directed her to file a complaint with law enforcement, and she reported the incident to the Montgomery County Sheriff’s Department on March 10.
Mrs. Noack’s statement was disturbing, but the probable cause statement was even more so. Detective Davis had done some additional investigation after his initial conversation with me, contacting Bank of America to ask about the account to which Mrs. Noack had transferred her money. Bank of America’s fraud team told him that they were aware that the funds in the account were obtained fraudulently, that the account had been frozen, and that a court order was required to refund any money. According to the bank, the account had an undisclosed amount of money from various victims across America; both the bank and the FBI believed it was linked to the Russian Mafia, and any names associated with the account were from stolen passports. Clearly (and sadly), the fraud extended far past the boundaries of Montgomery County.
Seizing the funds
My initial fear that the theft’s perpetrator would remove the funds before we could execute our warrant was quelled, but I immediately considered that there were likely other people drafting warrants to seize the funds for other victims or for federal or state seizure. My next procedural question was answered by Joni Vollman, Chief of the Special Prosecutions Bureau at the Harris County District Attorney’s Office, who verified that it was appropriate to deposit any recovered funds into our pending asset forfeiture account once they were seized from the bank to await the court order directing their disbursement. On March 18, Judge Fred Edwards of the 9th Judicial District Court of Montgomery County signed the warrant allowing seizure of the stolen money. Luckily we were able to regain Kelly Noack’s funds before other interested parties drained all the money from the account.
Article 47.01(a) of the Code of Criminal Procedure provides the procedure for filing a petition to determine the right to possession of stolen property when no criminal prosecution is pending. Although no notice requirement was set forth, I still felt obligated to send notice to the individual named as the Bank of America accountholder. I subpoenaed this person’s address from the bank and sent copies of the pleadings and hearing notice to the address in San Jose, California. The notice was returned as undeliverable, which was not a surprise as Detective Davis’ report had concluded that the criminals were likely outside the United States.
The victims are restored
On May 21, I met Kelly Noack in court for the hearing on our petition. It was apparent after talking to her that she did not have $11,200 to throw away on an Internet scam. She told me details that were not in her written statement: She and her husband own a fence-building business. They were on a project for a client who wanted them to do additional work. That client fronted most of the $11,200 to purchase the equipment for the job, and in partial exchange for the additional work, the Noacks would own the equipment, which they could then use to expand their business. Not being able to secure the equipment meant that they couldn’t complete the job as promised, resulting in lots of worry for the Noacks.
With appropriate testimony, the judge could remand the funds to the State, Mrs. Noack, or any other party appearing before the court and claiming them. Once he heard the testimony, Judge Edwards briskly exclaimed, “Well, give this woman her money back!” Those in the courtroom applauded. It is not often that I get to leave court with everyone smiling. The Noacks were thankful to recover the funds, and I was so happy have helped in the process. A check was quickly cut from the asset forfeiture account, where the seized funds had been deposited, and presented to the Noacks.
The Noacks’ advice for anyone making a large purchase is to make sure you are geographically close enough to the seller to view the item and to talk with the seller in person. Mr. Noack’s practice from now on, he assured me, would be to look people in the eye and shake their hand before conducting any business. With the advent of Internet sales, this practice is quickly fading.
My advice for prosecutors who have not seized stolen funds before is not to be intimidated by the process and not to waste time. The longer the stolen money is in an account, the more likely it is to be removed, and the time required for an investigation already puts a prosecutor behind. I now realize that had I understood the law and procedure to accomplish this type of seizure, we could have obtained the money much more quickly—and though it didn’t make a difference in this case, it might in future situations. Prosecutors would benefit from doing some things, such as reading the relevant article in the CCP and drafting a warrant form, in advance. The wording in our warrant states that the bank may comply by tendering a check payable to our office; it also commands the officer to bring before the judge any person failing to cooperate in the warrant’s execution. In this case, as most, the latter clause was not useful, but in two asset forfeiture warrant executions it was invaluable. In one it gave us a hold on the account while the bank’s legal department looked at the warrant over the next day, and in the other, the bank had informed officers it would take 30 to 60 days to determine if the bank would allow access to a safe deposit box. Once the officers politely directed the bank manager’s attention to this clause, access was immediately granted, thus giving us access to the more than $200,000 in cash in the defendant’s safe deposit box. The defendant would’ve surely removed it after he made bond.
If it looks as if someone other than the victim will show up at the hearing to state a claim to the funds, follow up the seizure warrant with a subpoena for the bank’s records. Always remember to ask for all signature cards as well as the statements and underlying check and deposit copies. Gather all the documentation to show the judge the proof that the victim is the funds’ rightful owner, and make sure the victim and officer attend the hearing.
Seizing such funds is easier than you might think, and the satisfaction from returning property to a victim is unusual and gratifying to say the least.
Editor’s note: The author wishes to thank Karen Morris from the Harris County District Attorney’s Office for her assistance with the warrant form when she first started prosecuting asset forfeiture cases.