Recently by Mark Nestmann: No ‘Right to Silence’ To Avoid Disclosing Information About Offshore Accounts
“A man’s home may be his castle, but that does not keep the government from taking it.”
~ U.S. v. Hendler
More than two centuries ago, when the United States first became a country, customs duties on goods entering through the nation’s ports were a primary source of revenue. Naturally, shipowners didn’t want to pay the duties. But if they didn’t pay, customs officials could confiscate their ship and all of its cargo.
Until the mid-1980s, revenues from such “civil forfeitures” were low. Nearly all civil forfeitures resulted from seizures of vehicles and boats used to smuggle illegal drugs or other contraband across U.S. borders.
That changed in 1984, when Congress enacted a tough anti-drug law with greatly enhanced civil forfeiture provisions. The law permitted state, local, and federal agencies to keep most or even all of the property they confiscate, or sell it to generate revenue. Congress also decreed that the government was entitled not only to the proceeds of a drug trafficking offense, but also to all property derived from, connected to or facilitating drug-related offenses.
Two years later, in 1986, Congress enacted a strict anti-money-laundering law. The act authorized civil forfeiture of all property representing the proceeds of, involved in, or facilitating a “specified unlawful activity.” The 1986 act, in effect, expands the scope of civil forfeiture from customs and narcotics violations to violations of virtually any criminal or regulatory infraction. Violations of nearly 400 federal laws and tens of thousands of state or local laws are now considered “specified unlawful activity.”
The legal theory behind civil forfeiture is that property – not its owner – is guilty of a crime. And, if the government alleges that your property somehow was involved in or facilitated a crime, you can lose it. Because civil forfeiture is a civil procedure, none of the protections that would apply to a criminal proceeding are in place. Your property is presumed guilty. If you can’t prove that it’s “innocent,” you can lose it. If you don’t have $20,000 or so to hire an attorney who specializes in civil forfeiture cases, you’re unlikely to ever get it back.
The results of these legal incentives to seize property were predictable. In 2010, the Department of Justice’s “Asset Forfeiture Fund” generated more than $2.5 billion in “net forfeiture revenues.” And that figure doesn’t include billions more in civil forfeitures by state and local police authorities.
Consider the plight of James Lieto. He hired an armored car service to transport money for his check-cashing company. Problem is, the FBI raided the armored car service and seized $19 million – including $392,000 belonging to Mr. Lieto – from vaults owned by its parent company. Basically, his money was in the wrong place at the wrong time. And he’s still trying to get it back.
The plague of civil forfeiture is one of the main reasons I’ve long recommended that our clients keep a generous portion of their wealth outside the USA. Most countries won’t honor U.S. civil forfeiture awards unless there’s an accompanying criminal proceeding. Yet, in the vast majority of civil forfeitures, the property owner is never accused of any crime. The civil forfeiture suffered by James Lieto simply wouldn’t be enforced in virtually any other country.
Fortunately, if you’re a victim of civil forfeiture, or an attorney representing a victim, help is available. The non-profit organization Forfeiture Endangers American Rights (FEAR) has some outstanding resources for forfeiture victims and their attorneys.
- Forfeiture 101 is a Continuing Legal Education course that enables defense attorneys to represent civil forfeiture victims competently. It’s an important resource, because most attorneys aren’t familiar with the arcane legal rules of civil forfeiture.
- FEAR’s Brief Bank is another unique product. It contains more than 200 motions and briefs that you – or attorney – can draw from to reclaim seized property.
To order Forfeiture 101 or FEAR Brief Bank, see http://fear.org/ordform.html.
Even if you’re not a forfeiture victim, FEAR’s Web site is a great source of hard-to-find information on civil forfeiture – and an effective antidote to the avalanche of pro-forfeiture propaganda on the Internet. To learn more go to http:///www.fear.org.
Reprinted with permission from The Nestmann Group, Ltd.
Mark Nestmann [send him mail] is a journalist with more than 20 years of investigative experience and is a charter member of The Sovereign Society's Council of Experts. He has authored over a dozen books and many additional reports on wealth preservation, privacy and offshore investing. Mark serves as president of his own international consulting firm, The Nestmann Group, Ltd. The Nestmann Group provides international wealth preservation services for high-net worth individuals. Mark is an Associate Member of the American Bar Association (member of subcommittee on Foreign Activities of U.S. Taxpayers, Committee on Taxation) and member of the Society of Professional Journalists. In 2005, he was awarded a Masters of Laws (LL.M) degree in international tax law at the Vienna (Austria) University of Economics and Business Administration.