A SUNNY STREET'S SHADY SIDE

U.S. Officials Have Tried, With Mixed Results, To Seize Four Zumirez Drive
Homes In Malibu From Residents Accused Of Narcotics Trafficking, Marijuana
Cultivation And Credit Card Fraud.

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.

"We really have to look at these cases in terms of potential liabilities
for the government," said Dennis McKenzie, an analyst at the Treasury
Department's asset forfeiture section. "One of the things we're not into is
cleaning up the bad guy's personal liabilities," such as expensive
mortgages or contaminants buried on the property.

When criminals begin to profit from their work, "they see themselves as
part of that elite class where they can party with the stars and the
politicos," McKenzie said. "There are certain ZIP Codes that give them
status, and these guys tend to migrate to that."

But until whispers about indictments and warrants spilled into the street,
the law-abiding residents of Zumirez Drive were none the wiser. In
retrospect, however, they say, this much was clear: Folks living in the
targeted houses made for lousy neighbors.

One man's kid became a paparazzo who still pursues the street's more famous
residents. Another allegedly cut down his neighbor's trees without asking.
And a third violated basic Malibu etiquette by letting his lawn sprout weeds.

Of course, some of Zumirez's more notorious residents--four men with
criminal pasts--have their own stories to tell. Federal officials have so
far settled one case, lost another and have two pending:

* Gene Wall moved to the street in 1971, when the Malibu area called Point
Dume was known less for its star-studded hideaways than its wild open
space. The land "was just stark. Just brown, no trees, no nothing," he said.

He changed all that. On the 1 1/2 acres he purchased for $59,000, he
planted sycamore trees, corn and marijuana--which resulted in a conviction,
and probation, on cultivation charges in the early 1980s.

But the real trouble started a decade later. After a second raid--in which
deputies shot his older son's pit bull and seized 152 grams of cocaine and
other drugs--U.S. officials moved to seize his property. Prosecutors filed
the claim on the basis that Wall hadn't prevented the son from selling drugs.

A U.S. district judge found that forfeiture would be too harsh a penalty.
Wall not only stayed, he also sued the county over the deputies' conduct
and settled for $650,000. Now a silver-haired devotee of yoga, he still
resides on the property with several tenants, six Rottweilers and a
peacock. A man-sized replica of the Statue of Liberty stands atop the carport.

And Wall's younger son now finds his father's Zumirez Drive address
helpful--he's a paparazzo who takes pictures of the neighbors, including
Streisand.

Wall's explanation for the number of seizure cases on his street: "I just
think a bunch of bad eggs ended up here at the same time."

Prosecutors agree, and have taken action to seize three other properties
down the street.

* U.S. prosecutors say the owner of one house is Marc Johnson, also known
in drug circles as "Prophet," according to an indictment in U.S. District
Court in Brooklyn, N.Y. He stands accused of carrying out a conspiracy to
import more than 60 tons of hashish on a tanker from Pakistan.

Johnson couldn't be reached for comment. But Zumirez residents angrily
recall how he allowed unsightly weeds to grow on the property while he was
fighting extradition from Canada for three years.

Assistant U.S. Atty. Burton Ryan contends Johnson funneled drug profits
into a firm called Dume Properties--which owned the Zumirez house.
Prosecutors who temporarily froze the property--with plans to pursue it
later--didn't have to wait long for it to yield potential profit.

Dume Properties found an interested home buyer following Johnson's capture,
and prosecutors agreed to let it be sold on the condition that the proceeds
be placed in an escrow account that could be forfeited later.

The house sold for $650,000 to Dick Sittig, the former TBWA/Chiat Day
advertising executive who developed spots for Jack in the Box restaurants
and provides the voice for the Jack character.

Despite its shadowy history, "we really wanted the property," said Sittig,
who now runs his own Santa Monica ad agency and never met the previous
owner. He said the house was "uninhabitable" when he first found it, with
no plumbing or heat.

"We don't care," he said. "It's all going to get bulldozed anyway."

* A few mailboxes away lives Jack Stanley, who purchased a vacant lot on
Zumirez five years ago for $536,759. A seasoned carpenter, he set out to
erect a 4,100-square-foot home, a detached guest house and garage and a pool.

But he never made it past the garage. Ventura County sheriff's
deputies--following an informant's tip--appeared in July 1997, searched the
property and seized Stanley's tax returns.

Marijuana Profits Were Allegedly Used

Authorities said Stanley had paid another man to run an indoor marijuana
farm at a second home he owned, where deputies found 163 cannabis plants,
vapor lights and other equipment. Stanley pleaded guilty to one count of
cultivation and lost an appeal.

Stanley's property easily met the government's 20% equity threshold--it had
nearly doubled in value since he bought it, according to the U.S. estimate.

Federal prosecutors filed a civil claim to seize the property, saying
Stanley must have used marijuana profits to purchase it.

Meanwhile, his wife was placed on the county's witness list in its case
against a paparazzo pilot who buzzed too low over Streisand's wedding last
year.

Last month, Stanley settled the government's case by agreeing to pay
$240,000 instead of losing his property. But his neighbor down the street
may not be so lucky.

* The Satmax Family Limited Partnership plunked down $2.4 million last fall
for a cushy pad a few doors over from Streisand.

Authorities now say the buyer behind Satmax is Kenneth H. Taves, who stands
accused of one of the largest credit card scams in history. Regulators say
Taves' companies billed up to 900,000 credit card holders for Internet
services they didn't order, yielding him $45.5 million.

A court-appointed receiver alleges that Taves tried to conceal the property
by transferring the deed to a Canadian shell corporation shortly after
regulators swooped down on him. Taves remains in custody in Los Angeles on
related criminal charges.

Jana Meek, the retiree who lives next door, said Taves first appeared in
her driveway wearing a red leather motorcycle suit and offered to pay
$10,000 if she'd let his children play on her tennis court. She declined.
Later, she said, he sent a work crew to "butcher" at least half a dozen
eucalyptus trees in her backyard in order to improve the view from his back
window.

Such encounters are more frequent, she said, "now that the Point has become
well-known as the place to be." Some Zumirez Drive residents figure their
street's quirks are ready-made for television. And they should know.

"I almost wrote a sitcom called 'Zumirez Drive,' " said Eileen Penn, who
has lived on the street for about 30 years and raised her actor sons, Sean
and Christopher, there.

"More people with more money are coming in now. That doesn't necessarily
make it better."