Feds nix plan to sell Detroit houses tied to drugs

[December 04, 2008]  DETROIT (AP) -- Federal prosecutors twice pursued a former autoworker suspected of running a multimillion-dollar drug operation. The first attempt fizzled when Clarence Carson died shortly after an indictment. The second? Blame it on the collapse of Detroit's real-estate market.

The government recently abandoned a plan to sell nearly three dozen properties -- land, houses and strip malls -- believed to have been acquired by Carson through heroin, marijuana and cocaine sales.

"The market tanked," Assistant U.S. Attorney Peter Ziedas said. "If we were able to effectively market these and come up with some kind of return, we would have done it."

Like any seller, the U.S. Marshals Service, which is in charge of getting rid of assets grabbed by the Justice Department, is finding that location is the key to real estate these days.

"We are dealing with markets that have either declined slightly or tanked in different regions," said Dave Turner, a Marshals Service spokesman in Washington.

"Clearly the market in Los Angeles comes to mind, the market in southern Florida and Las Vegas," he said. "It's really unfortunate when we find a neighborhood or a city facing that situation."

Michigan is in the top 10 states for home foreclosures; a recent list of Wayne County properties inserted in the Sunday newspaper was as thick as the paper. The state's unemployment rate rose to 9.3 percent in October, well above the national figure, as the auto industry sheds jobs.

Against this gloomy background, the government tried to dismantle Carson's real-estate holdings, mostly rentals, a miniature empire alleged to have been the tainted fruit of two decades of drug trafficking. Investigators claim his commercial buildings were large enough to conceal truckloads of marijuana from Mexico.

Carson died of cancer at age 54 in January 2004, two months after he was charged with financial crimes. His demise, however, did not stop federal authorities from returning in 2007 with a civil lawsuit to seize his properties.

Carson "drove an associate around the city of Detroit on several occasions and showed the associate all of the properties he owned," the government alleged. "Carson bragged about the fact that he had purchased the ... properties with narcotics proceeds."

Defense lawyer David DuMouchel said his client denied any involvement in drugs.

"Seemed like a nice guy who worked hard," DuMouchel said. "The government apparently had a different view."

Rodney Carson, 35, said the family was stunned by the government's decision to pursue the real estate after his father's death.

"I'm not going to say I spent 24/7 with my father, but I never knew of a drug investigation," he said.

Unlike a criminal case, where guilt must be established beyond a reasonable doubt, the threshold in a forfeiture case is much lower. The government must show a "substantial" connection between certain assets and a crime, not necessarily a direct link.

Carson's widow, Ida, "screamed at the top of her lungs, `This is not true!' She's denied it completely," Rodney Carson said of the government's allegation. "But our lawyer told us to settle or they'll bottle you up. I believe we were bullied. That's the only polite way to classify it."

By November 2007, the U.S. attorney's office reached an agreement with the Carson family: Thirty-one properties, most in Detroit, would be sold, with the government keeping 55 percent of the money after debts were paid.

But nearly a year later, a judge threw out the deal at the request of both sides. Some properties had thousands of dollars in unpaid taxes, and many were in poor condition even for people willing to bet on a fixer-upper. Nothing had moved.

A low-rise apartment complex next to a Roman Catholic seminary has no tenants. Front doors are missing or damaged, and the alley has become a drive-by dump for mattresses and trash. A notice for more than $50,000 in back taxes and penalties is nailed to a window frame.

"The Marshals said this is not doable," said Ziedas, the government lawyer. "Should we have understood a year-and-a-half ago that it wasn't doable? I don't know how to answer that. There was supposedly value."

Rodney Carson blames the government. He said the properties withered because tenants fled when authorities claimed the homes were tied to drugs.

"Rental income dried up. Plumbing was getting stolen," Carson said. "We got them back now, but unless we can sell them in these horrible conditions -- it's just more debt."

Any hope? "Not at all," he replied.

Real-estate agents elsewhere also say the market has forced sellers, including the government, to lower expectations.

Robert Cusmano of Miami said he's close to selling a duplex in the Liberty City area for $175,000, more than a year after the Marshals Service got the property. Earlier listing prices exceeded $250,000, which he called "ridiculous."

"Vandalism is a big problem," Cusmano said. "This needs a new kitchen, new bathroom, new floor, paint inside and out."

But he's grateful for a deal.

"When I go to conferences," Cusmano said, "they say inner-city stuff can't be given away."

[Associated Press; By ED WHITE]

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