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Justice News

Department of Justice
U.S. Attorney’s Office
District of Vermont

FOR IMMEDIATE RELEASE
Monday, October 31, 2016

Innovative Public-Private Agreement Will Convert Drug Properties To Renovated Housing Stock In Rutland, VT

The United States Attorney’s Office announced today that the government and its public and private partners have completed an agreement to convert forfeited Rutland drug houses to safe, renovated housing. The government had previously filed suit to forfeit the drug houses, located at 114, 116 and 117 Park Avenue in Rutland, because those properties were used to distribute crack and heroin. The settlement of that lawsuit, announced today, was made possible by an innovative partnership among the federal government, the City of Rutland, Neighbor Works of Western Vermont (“NWWVT”), and other private parties. The settlement agreement will result in the conversion of the blighted properties to high-quality, renovated, owner-occupied single-family residences, duplexes or condominium residential units that will benefit the residents of Rutland.

The United States’ forfeiture lawsuit was brought pursuant to 21 U.S.C. § 881(a)(7), which, under certain circumstances, allows for forfeiture of property used to commit or facilitate the commission of felony drug offenses. The federal forfeiture law also requires owners of such rental properties to take reasonable and safe steps to discourage or prevent drug dealing on the property, such as contacting law enforcement and seeking to evict the tenants involved. In its lawsuit, the government alleged the owners of the Park Avenue properties had failed to take such reasonable steps.

The settlement was made possible by the cooperation of multiple governmental, non-profit, and for-profit parties, including: (1) the United States, which is the plaintiff in the lawsuit; (2) Ericob Vermont Realty Corp, the former owner of the property; (3) the City of Rutland, which was owed property taxes and other fees on the properties; (4) the mortgagee for the property; and (5) NWWVT, which will renovate and resell the properties.

Under the terms of the settlement, the owners of the properties agreed to forfeit them to the United States. After forfeiture to the United States, the United States Marshals Service (“USMS”) agreed to transfer the properties to the City of Rutland. The City of Rutland, in turn, agreed to cancel all of its outstanding taxes, fines, and fees and transfer the properties to NWWVT. NWWVT agreed to rehabilitate the properties and sell them for owner-occupied housing. Under the terms of the City of Rutland’s deed to NWWVT, the three properties may only be used for owner-occupied, single family residences, duplexes, or condominium residential units. Finally, NWWVT agreed to pay $82,500 (minus the USMS’ costs) to the mortgage holder on the properties in return for the mortgage holder discharging its mortgage liens. The USMS agreed to cap its costs at $5,000 and, in fact, kept its costs to approximately $750.

Describing the settlement agreement, United States Attorney Eric Miller said, "This innovative agreement is a 'Win-Win-Win.' Law enforcement has stopped the pervasive drug dealing that once plagued these properties; Rutland has taken yet another step toward reclaiming a beautiful neighborhood; and the non-profit housing community has increased the stock of safe and refreshed housing available to the community it serves."

NWWVT Executive Director Ludy Biddle stated “NeighborWorks is thrilled to have a part in turning these beautiful historic houses into family homes so more children can carve pumpkins and watch movies outdoors together and ride bikes along the creek as part of living in this wonderful neighborhood.”

The forfeited properties are located in the northwest neighborhood of the City of Rutland, where a 2014 housing study found that only about 32% of the residences were owner-occupied. The settlement ensures that these three residential properties will be transformed from ownership by an absentee landlord into owner-occupied, single family residence, duplexes, or condominium residential units, thereby reducing the risk that the properties will again provide shelter for drug dealers. U.S. Attorney Eric Miller noted that this forfeiture case, and the related criminal prosecutions, represent a concerted effort by the federal, state, and local governments to improve the quality of life in this neighborhood and to make it safer for families. U.S. Attorney Miller also praised NWWVT for investing in the renovation and resale of the properties and the U.S. Marshals for their contributions to the resolution of this matter.

The original complaint and the accompanying affidavit show that there were multiple heroin and crack cocaine dealers living in and using the apartments in the Park Avenue buildings starting at least in 2011 and 2012 and continuing into 2015. The documents also show that law enforcement searched several of the apartments in 2013. Law enforcement made six controlled drug purchases from dealers in the apartments and arrested several persons who had been living there. Many former tenants have been convicted and sentenced to significant time in federal prison. They include, among others: Eric Dixon, now serving 87 months in federal prison; Ernest Murray, now serving 60 months in federal prison; Andrew Harris, now serving 60 months in federal prison; Terrance Chenault, now serving 87 months in federal prison; and Joshua Minix, now serving 87 months in federal prison.

The United States Attorney’s Office’s efforts to combat drug trafficking in Rutland have been made possible by the enforcement work of the Vermont State Police Drug Task Force, the Federal Bureau of Investigation, the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Rutland Police Department.

The United States is represented in this matter by Assistant U.S. Attorneys James Gelber and Joseph Perella. The former owners of the property are represented by Matthew Shagam, Esq., of Burlington. NWWVT is represented by Gary Kupferer, Esq., and the City of Rutland is represented by City Attorney Charles Romeo.

Topic: 
Community Outreach
Updated October 31, 2016