The U.S. attorney's office in Alexandria is trying to seize the unpaid balance of a $60,000 loan to two Alexandria lawyers that federal prosecutors allege was part of the proceeds of one of the largest drug-smuggling rings uncovered in the Washington area.
The U.S. attorney's office alleges in a civil lawsuit filed in U.S. District Court that the two attorneys, William B. Moffitt and John Flowers Mark, obtained the loan through a Liechtenstein corporation that the government contends was established with money provided by a convicted drug dealer whom both attorneys now represent.
According to the lawsuit, the loan was applied to the purchase of a $295,000 town house west of Old Town Alexandria that the attorneys once used for their law offices and are now trying to sell for $435,000.
U.S. District Judge Richard L. Williams ordered Moffitt and Mark to appear before the court on July 22 in connection with the lawsuit, which was filed Wednesday in the Alexandria federal court.
Moffitt and Mark were out of town yesterday and unavailable for comment. The suit does not claim that the lawyers knew the alleged source of the loan money.
First Assistant U.S. Attorney Thomas K. Berger said the government is not accusing the two lawyers of wrongdoing. "We want to step into the shoes of the corporation and have the indebtedness paid back to the United States," Berger said.
The suit alleges that Mark and Moffitt took out the loan in 1980 from RealCon Investments Inc., a Liechtenstein corporation that the government alleges was funded exclusively with proceeds from illegal drug transactions.
RealCon was established on Oct. 31, 1980, with about $800,000 in proceeds traceable to alleged drug sales by Leon Durwood Harvey and others, according to a sworn statement filed with the lawsuit and signed by Patrick L. Lydon, a special agent with the criminal investigation division of the Internal Revenue Service.
Harvey, twice convicted on drug charges, is being sought by authorities. A warrant for Harvey's arrest was issued on Feb. 4, 1982, after his indictment in connection with an alleged $30 million hashish and marijuana smuggling ring.
Berger said the suit was brought under a federal statute that says that the government can seize any property that is obtained through illegal drug transactions.
Prosecutors in Alexandria also have seized a $400,000 Fairfax County estate that they alleged Harvey had purchased with profits from marijuana sales. Northern Virginia prosecutors also successfully moved in federal court in North Carolina for forfeiture of $1.8 million that was also described as profits from an East Coast drug ring.
In December 1980, Moffitt and Mark used the loan to help purchase a $295,000 three-story brick colonial-style town house at 1001 Duke St., Alexandria, where Mark's law office is now located, the suit alleges. Moffitt now practices with another law firm.
Berger said he doesn't know how much has been repaid on the debt, but the promissory note was for a seven-year term at 10 percent interest per year with monthly payments of $1,000. Berger said Moffitt and Mark have been repaying the loan since they took it out in the fall of 1980.