US settles dispute with Bulger kin

A four-year battle between the government and the brother of fugitive South Boston crime boss James "Whitey" Bulger over $198,000 the gangster left in local banks ended yesterday in a split, with each side getting half the money.

In an out-of-court settlement approved by US District Judge Nancy Gertner, prosecutors agreed to hand over $99,335, plus three year's worth of interest, to John "Jackie" Bulger, clerk magistrate of Boston Juvenile Court.

In return, John Bulger agreed to give up his claim to the rest of the money, which had been seized by the government in 1996 from a safe deposit box and two bank accounts listed to him and his gangster brother.

The agreement marks the end of the civil forfeiture case, with one caveat: The government reserved the right to reclaim the money returned to John Bulger if any of it is funneled to Whitey Bulger in the future "or to anyone for the benefit of James Bulger."

Attorney George Gormley, who represents John Bulger, said, "He's going to accept the money with a smile. We're very happy that this is over on the terms that it is."

After Whitey Bulger fled to evade a January 1995 federal racketeering indictment, federal prosecutors began seizing his assets in an effort to cut off his money supply and make it more difficult for him to live as a fugitive.

In November 1996, the government seized $81,000 from a safe deposit box held by John Bulger and another $117,000 from checking and savings accounts held jointly by John and James Bulger. Prosecutors argued the fugitive gangster obtained the money through extortion, racketeering, and money laundering.

Gertner ruled that John Bulger had no standing to contest the forfeiture since the money essentially belonged to his brother. But her order was overturned last August by the US Court of Appeals for the First Circuit, which found that John Bulger served as a joint owner of the accounts because he wrote checks and withdrew money.

The case was returned to Gertner, who was weighing whether the seizure was legal when the settlement was reached yesterday.

Assistant US Attorney Richard Hoffman, who was handling the case, declined to comment on the settlement.

But Gormley called the settlement a "vindication" of John Bulger's contention that he had an interest in the money.

The government is continuing to battle with Bulger's sister, Jean Holland, for the gangster's $1.9 million lottery winnings - his share of a $14 million 1991 Mass Millions jackpot he split with five friends.

A Norfolk probate judge is weighing Holland's request to appoint her as legal receiver of Whitey Bulger's property, including the lottery money.