On a quiet cul-de-sac overlooking the Pacific where personal paradises sell for millions, homeowners are digesting an unsettling lesson: Fat wallets make for strange bedfellows. And moneyed neighborhoods don't get much stranger than Malibu's tree-lined Zumirez Drive.
On the upside, sunsets and city lights sparkle across the water on summer evenings. Homeowners can ride golf carts down to their private beach. Barbra Streisand, "X-Files" creator Chris Carter and film score composer Hans Zimmer reside here, just a few gated driveways apart.
But they aren't the only ones with a hunger for oceanfront property.
Since 1991, U.S. officials have tried--with mixed results--to seize four Zumirez Drive homes from residents accused of narcotics trafficking, marijuana cultivation and credit card fraud.
Under forfeiture laws, prosecutors can confiscate cars, real estate and other property if they can show the assets are linked to a criminal enterprise. But so many property cases in such close proximity appear to have set a precedent in law enforcement. And it leaves Zumirez Drive at the bizarre junction of stardom, sleaze and wealth.
"If you're writing about what a weird street this is, you're on the right track," said Jana Meek, a 73-year-old retiree who has lived there for a quarter of a century. "This is a cultural comedy."
Justice Department officials assure that the cluster of seizure cases on Zumirez is just serendipity. In fact, it may have arisen from a chance collision of two trends in law enforcement: a scramble by criminals to launder their money with smart investments, and pressure on prosecutors to limit their zeal for real estate seizures to property that can be sold at a profit.
"These are the houses they're going after--they're not interested in the '60 Nova, they're interested in the new Mercedes," said Richard Troberman, a Seattle attorney and co-chair of the National Assn. of Criminal Defense Lawyers' task force on forfeitures. "They're going to go after the ones that [will] bring them the most money."
The government has long used its forfeiture power to seize all manner of ill-gotten property--from smuggled cargo in the 1780s to bootleg distilleries during Prohibition.
After Congress expanded the power in 1984 to aid the war on drugs, seizures skyrocketed. Proceeds from the sale of forfeited assets routinely flow back to the agency that seized them, making the program popular with law enforcement. Proceeds to the Justice and Treasury departments exceeded $490 million last year alone.
Federal seizures peaked in 1992, when the United States initiated action against more than 2,280 pieces of real estate in civil and criminal cases.
But evidence of waste and mismanagement quickly mounted. Authorities took over homes, businesses and land that proved worthless or hard to maintain.
A 78-acre Los Angeles-area horse ranch seized in 1989 was allowed to deteriorate for five years while under U.S. control, so that its appraised value slipped from $4.7 million to $523,000, according to government reports.
And in perhaps the most notorious case, the government seized the Bicycle Club casino in Bell Gardens and held it for nine years, raking in profit even as the club's employees engaged in loan sharking and tax crimes.
Amid a raft of abysmal audits, congressional criticism and bad press, leaders at the Justice and Treasury departments have redoubled their efforts to choose seizure targets more carefully and sell forfeited assets more quickly. Partly as a result, real estate seizures declined from about 2,075 in fiscal 1993 to 745 last year, documents show.
Prosecutors also established a little-known set of guidelines to ensure they don't pursue properties that will ultimately lose money. With a few exceptions, prosecutors in Los Angeles won't pursue real estate unless the owner's equity is at least $40,000, or 20% of the property's value.
'Just a Bunch of Bad Eggs'
By that measure, the elegant homes on Zumirez Drive made for near-perfect targets. Malibu's blazing real estate market has added equity to virtually every home, and rising demand means the U.S. could likely sell any house it seized there immediately--at a maximum profit.
At the same time, Justice Department officials say, criminals increasingly tried to conceal their profits by pouring the money into legitimate purchases, such as real estate in a hot market.
"If you're a criminal and you want to launder the proceeds, you . . . invest in a nice property that's going to appreciate," said a senior Justice Department official who spoke on condition of anonymity. "It's not a coincidence all these are in Southern California. It's a coincidence they're all on the same block."
In January, the U.S. Customs Service auctioned off three 1,200-square-foot homes on the same street in Kissimmee, Fla., all seized from a Dutch national arrested for selling the hallucinogen ecstasy. But the four cases on Zumirez all arose from different investigations.
