At the recent FALA meeting, the obscenity panel discussed the appellate court’s affirming of Max Hardcore’s conviction. Not much was made about the forfeiture component of the case because that was not an issue on appeal. But forfeiture is lurking out there in materially every federal obscenity case. And that means—contrary to popular belief—the DOJ may have Big Video in its crosshairs. Evil Angel is pending; investigations are under way!
Detail: FALA, the First Amendment Lawyers Association, is a national organization of attorneys involved in defending erotic expression against detractors: federal, state and local governmental entities, not the least of which is the Department of Justice (DOJ)—although local governments wreak havoc on brick-and-mortar businesses, and greedy plaintiffs’ attorneys are constantly inventing ways to fatten their practices by suing adult entertainment businesses. FALA—of which the author of this column is currently a chair emeritus, as well as a past president and national chair—consists of about 150 attorneys from all over the country who are at least partly in the same line of work. If your attorney is not an active FALA member, perhaps rethink your choice of counsel!
At the FALA’s recent three-day meeting—they occur twice a year—one of the update topics was the opinion from the federal court of appeals in Atlanta upholding Max Hardcore’s conviction. Several of Max’s attorneys were there, and they and others had quite a bit to say about it. (Click here for the most recent AVN.com coverage.)
However, a significant component of Max’s case was the government’s attempt to forfeit Max’s mansion-style home in California, where much of his production took place; where his office was; and where one of the FBI’s shotguns blew a hole in one of his hardwood floors during the execution of the search warrant. They were trying to take away his house? Yup! How so? Read on!
A little background about forfeiture is warranted here to facilitate understanding.
You will recall that, during the first two-thirds of the 20th century, organized crime made great headway at turning criminal enterprises into profitable business empires. The ones on television and in the movies—The Godfather, Goodfellas, Casino (favorite!), The Sopranos and the like—were Italians, but there were comparable, though less notorious, scoundrels of other ethnicities as well. The problem was that functionaries of these groups would be sent to prison with some regularity, but temporary or permanent replacements would be installed, so the criminal activities would continue in a seamless way.
A professor from the law school at Notre Dame, one Robert Blakey—indisputably a brilliant guy—came up with an idea called the RICO (Racketeer and Corrupt Influenced Organizations) Act. In its essence, RICO created a new crime of using an organization to carry out a series of criminal activities. It is way more complicated than that, but that’s all you need to know. What RICO did was to soup up conspiracy laws in a sense, raising the punishment where an organization was involved along with a “pattern” of crimes that were listed in RICO.
However, there was a profoundly more important component of RICO, which was forfeiture—a relatively novel concept of forfeiture of property from the criminals. It allowed the forfeiture of all of the assets of the organization that engaged in the pattern of criminal activity, and two crimes would suffice. The crimes that could trigger RICO included typical Mafia tools: interstate theft, prostitution, illegal gambling, extortion, loan sharking, etc.—the ones that were featured in the motion pictures listed above.
In 1994, Jesse Helms, a seasoned, ultra-conservative senator from North Carolina and outspoken opponent of porn, proposed adding obscenity (state and federal) offenses to RICO. That meant the government could cobble together a few obscenity offenses into an indictment and seek to forfeit an entire company. After all, the government had been successful in forfeiting traditional criminal enterprises.
The rub for the obscenity prosecutors at the DOJ was that they had a policy manual requiring that RICO prosecutions could be brought only with the approval of the High Mucky Mucks at the DOJ. The idea was that RICO was a very powerful statute, susceptible to abuse. And the last thing the DOJ wanted was to lose this important tool against serious criminal organizations by being accused of abuse by use against lesser criminals.
In fact, the only two early and significant obscenity-RICO prosecutions brought were against people who also were also charged with massive tax-evasion counts. The first was against Dennis Pryba (along with his wife), who allegedly owned a chain of porn shops on the Atlantic seaboard. Ironically, the Prybas were acquitted of tax evasion. The second was against Ferris Alexander, alleged to have evaded taxes plus obscenity violations, all in connection with his Minnesota bookstore chain. He was convicted of both, resulting in forfeiture of his entire chain of shops, corporations, inventory, bank accounts, property—the entire “enterprise,” in RICO parlance. More about him later.
In the meantime, owing to the High Mucky Muck problem, the DOJ’s Porn Squad lobbied Congress to enact a forfeiture statute for obscenity offenses, like the longstanding one applicable to drug offenses. No High Mucky Muck problem! And, like Senator Helms’ RICO amendment, it was tacked onto a huge bill having little relationship to the topic. Importantly, neither obscenity forfeiture law was ever debated.
So, the law allowed forfeiture of all of the instrumentalities of an obscenity offense. And “instrumentalities” includes the building from where the material was shipped, the business assets used, the bank accounts accepting the payments, and on and on. It is not as sweeping as RICO, which can forfeit an entire enterprise—but it’s close.
The constitutional objection to all of this was that the forfeiture created a prior restraint of speech. That is, for example, if you take away the entirety of motion picture company’s assets because of an obscene movie, you are restraining the publication of future movies. That violated a First Amendment principle that had been in place since the Depression—or so everyone thought.
Return to Ferris Alexander: The government had forfeited materially all of his assets. The government sold everything except the inventory, which was burned in a Minneapolis incinerator. However, they hit a little speed bump when the “poppers” all exploded and broke the incinerator.
Wanting everything back, Alexander appealed to the Supreme Court. And to the shock of everyone, the Court approved forfeiture of an entire media enterprise arising from just a handful of obscenity convictions—six convictions; an eight-figure forfeiture!
Fast forward to the present: Max Hardcore’s house/studio/business property was not forfeited because the jury just said no—remember, this was a criminal forfeiture; so the Max was entitled to a jury trial. Parenthetically, the Prybas’ house was saved by the jury, too.
The point of all of this comes to the fact that there are some juicy targets out there that DOJ just might take a shot at because of the money prize at the end of the rainbow. And after the mega-porn companies, might the mainstream media giants and hotel chains be next? Scary!
Clyde DeWitt is a Las Vegas and Los Angeles attorney, whose practice has been focused on adult entertainment since 1980. He can be reached at [email protected]. More information can be found at ClydeDeWitt.com. This column is not a substitute for personal legal advice. Rather, it is to alert readers to legal issues warranting advice from your personal attorney.
This article originally ran in the April 2010 issue of AVN.
