I’ve got a new Cato at Liberty post pulling together three outrageous forfeiture stories that have been in the news the past few days. Many more cases at our forfeiture tag.
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Posts tagged as:
forfeiture
Another infuriating extension of asset forfeiture law. [Radley Balko, Huffington Post]
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Nice $22,000 you’re carrying, Mister Motorist, but I think it would look nicer in the police department’s bank account [News Channel 5 Nashville via Radley Balko]. Driver George Reby, a professional insurance adjuster from New Jersey, was then permitted to go on his way since he “hadn’t committed a criminal law [violation],” as the police officer later explained to a reporter. It happened in Monterey, Tenn., not Monterrey, Mexico.
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- NY lawyer sanctioned $10K for behavior at deposition [Debra Cassens Weiss, ABA Journal]
- Obvious dangers and the W.V. frat-house rear-launched bottle rocket case [Popehat, earlier here, here]
- Review of Liberty’s Refuge, new book on freedom of assembly by Washington U. lawprof John Inazu [Anthony Deardurff, Liberty Law]
- If forfeiture and asset freeze can be deployed in a copyright enforcement case, where will they strike next? [Timothy Lee, Cato]
- Hard-hitting Kim Strassel column on Al “Crucify Them” Armendariz [WSJ, earlier] Exxon CEO Rex Tillerson: “If you want to live by the precautionary principle, then crawl up in a ball and live in a cave.” [Coyote] Washington Post on the case for the Keystone pipeline [Adler]
- Losing two looks like carelessness: second Durham County D.A. removed from office for misconduct [Volokh, KC Johnson]
- Why won’t the Eighth Circuit recognize fraudulent misjoinder? [Beck]
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Van Smith with the City Paper in Baltimore (where South Mountain Creamery is a farmer’s-market fixture) reported on Wednesday and again on Friday on the “structuring” charges and forfeiture action against dairy farmers Randy and Karen Sowers (see yesterday’s post). A few highlights:
- On Wednesday, Smith reported that Sowers said in an interview that “he deposited the cash he’d made in the increments in which it had been earned. If the deposited amounts often ended up being a little under $10,001, he explained, that’s just the way it worked out and he [had] no intention of breaking the law.”
On the other hand, according to Smith’s summary of the federal complaint yesterday, Sowers is said to have told federal investigators during a February 29 interview “that ‘during the farmers’ market “season,” his weekly cash receipts were on the order of $12,000 to $14,000,’ yet ‘he kept his cash deposits under $10,000 intentionally so as not to “throw up red flags.”‘ He also told the agents that ‘he was advised by a teller at the bank that the deposit of more than $10,000 in cash would lead to the filing of a form, and that he decided from that point forward not to make deposits in excess of $10,000,’ according to the complaint.”
- “Historically, the anti-structuring statute has been used by prosecutors as an ancillary charge with other accusations of nefarious behavior, such as drug dealing or terrorism. And it still is. But over the last few years, prosecutors have started to use it more regularly as a standalone charge — an observation noted by defense attorneys that Maryland U.S. Attorney Rod Rosenstein confirms. Syracuse University’s Transactional Records Access Clearinghouse, a data center about federal court cases, reports that in fiscal year 2011 Maryland brought 14 of the nation’s 99 structuring cases, making it the top state for such prosecutions. Nationally, the numbers have been rising; the 2011 figures are up 8.8 percent from the year before and up 57.1 percent from five years ago.”
- Targets in Bank Secrecy Act forfeiture cases — which, to repeat, need not be premised on any suspicion of tax evasion or other criminality unrelated to the Act — have included Maryland “gas stations, liquor stores, and used-car dealerships.” “South Mountain is not the first seasonal-produce market to find itself targeted for structuring recently. Taylor’s Produce Stand, on the Eastern Shore, was stung last year after the feds seized about $90,000 from its bank accounts. In December, pursuant to a civil-forfeiture settlement agreement after no criminal charges were filed, the stand’s owners got back about half of the seized money.”
- And this clue as to why the U.S. Attorney’s office in Maryland might be outperforming its colleagues nationwide in pushing BSA forfeitures: the forfeiture complaint against the Sowerses was “signed by assistant U.S. attorney Stefan Cassella – who literally wrote the book on federal forfeiture law.”
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“Structuring,” as readers may recall, is the federal criminal offense of splitting up bank deposits so as to keep them under a threshold such as $10,000 above which banks have to report transactions to the government. Structuring is unlawful whether or not it occurs in conjunction with any other legal offense, as opposed to being motivated by, say, a desire to keep a low profile in general or a sentiment that the government already keeps tabs on too many innocent activities. Nor is there any requirement that the person be aware that there is a law banning structuring; someone who gets wind that transactions over $10,000 are reportable, and decides “What’s up with that? I’ll just make $9,000 deposits”), has broken the Bank Secrecy Act. Indeed, the federal government instructs banks to report suspicious patterns of sub-threshold deposits, and not to warn customers that it is doing so.
So who can engage in structuring and get by with it? Well, it might have a bit to do with who you are:
* On the one hand, as Courtney Mabeus reports in today’s edition of the Frederick News-Post, federal prosecutors yesterday filed a six-page complaint against dairy farmers Randy and Karen Sowers, who own the successful South Mountain Creamery in Middletown, Md. On February 29 Treasury officials showed up at their farm to question them about bank deposits; 45 minutes into that interview, according to the Sowerses, they learned that the federal government had just seized their bank account and the $70,000 in it. The family does a lot of business at farmer’s markets and its cash receipts over a ten-month period exceeded $320,000, the feds say. The News-Post account includes no mention of the family being under suspicion of any offenses other than what U.S. Attorney Rod Rosenstein describes as follows: “The holding back of cash receipts in excess of $10,000 indicates a knowledge of the Currency Transaction Reporting requirement and an attempt to evade it.” The couple is now speaking out about their plight to a wider public; they have hired attorney David Watt, though how they intend to pay him given the seizure of their bank account is not clear from the article. (Update Apr. 21: see also Apr. 18 coverage in Baltimore City Paper; & welcome Radley Balko readers)
* On the other hand, if you are former New York Attorney General Eliot Spitzer, you might not find the federal structuring laws so intimidating. Spitzer had good reason to be intimately familiar with the bank reports system since he had relied on its output in conducting white-collar investigations, and he was “smurfing” deposits in furtherance of conduct that was itself illegal, as he knew well, having crusaded in favor of longer sentences for “johns” as part of his appeal to New York City feminist and legal-services groups. But as Harvey Silverglate points out, “Spitzer, with the help of a high-powered legal team, was able to convince the Justice Department’s lawyers to drop the charges.” Now he goes on TV to denounce the federal government’s failure to prosecute persons in high places.
Maybe they’re too busy going after the dairy farmers.
P.S. The Supreme Court, in a majority opinion by Justice Ruth Ginsburg [Ratslaf v. U.S., 1994], admirably “interpreted the ‘willfully’ element for a currency structuring violation under 31 U.S.C. Sec. 5324 to require proof that the defendant knew the structuring was illegal. Congress responded rather promptly to the Court’s holding by dropping willfulness from the statute.” [White Collar Crime Prof, h/t Sam Bagenstos] (& welcome Prof. Bainbridge, Amy Alkon, Hans Bader readers; & see update.)
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- Mortgage robo-signing settlement not actually as punitive toward the banks as you might think, succeeds in sticking costs onto various parties not at table [FT, more (US taxpayers could wind up covering much of write-down costs through HAMP program); Felix Salmon (write-downs of underwater mortgages should not be assessed at face value); Mark Calabria, Cato and more, Bloomberg (banks managing to offload much of the cramdown onto investors such as pension funds); Daniel Fisher/Forbes one, two, three (banks get covert benefits, politicos get social engineering and fees -- shades of the collusive tobacco settlement!); Above the Law (Schneiderman steers money to legal services programs); Linette Lopez, BI (banks still exposed on many issues). More: Hans Bader, John Steele Gordon.
- "Burned at mediation by my own Facebook post" [Stuart Mauney, Abnormal Use]
- As anti-discrimination law advances, religious liberty retreats [Roger Pilon, Cato] Two views on the birth control mandate [Cathy Young, David Henderson] More: Adler, Frum.
- Caswell Motel case from Tewksbury, Mass. heads to court, could test forfeiture law [Balko] More: Washington Post editorial.
- Which is more unreasonable, OSHA regulation or FAA’s? Open to dispute [John Cochrane, Grumpy Economist]
- Indiana becomes a right to work state. On to Michigan next? [Shikha Dalmia, Reason]
- Warning! Tale of trial psychologists in wizard garb comes from a sinister source, namely me ["In the News," forensic psychologist Karen Franklin, handsome illustration swiped from Cato site]
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- Pre-terror-attack antibiotic availability? HHS doesn’t think you’re sophisticated enough to handle that freedom [Stewart Baker]
- Uh-oh: some New York lawmakers want “a more refined First Amendment” [Slashdot, Lucy Steigerwald]
- Wal-Mart v. Dukes decision could curb certification of some wage and hour class actions [Fox]
- “Miss. Supreme Court Removes Judge from $322M Asbestos Case Because of Dad’s Lawsuits” [ABA Journal]
- Mass. town wants to seize family motel under forfeiture law, IJ objects [Jacob Sullum, Mark Perry]
- Will FDA use its new tobacco-regulatory power to stub out cigars? [DC]
- “Dole settles pesticide litigation” [WSJ Law Blog, background]
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- Ninth Circuit: Holland America cruise line not responsible for customer’s swimming mishap at Mexican beach [Metropolitan News-Enterprise]
- “President Perry would mean high noon for trial lawyers” [Kurt Schlichter, Washington Examiner; Politico; Prof. Bainbridge ("If the trial lawyers hate Rick Perry, maybe I should reconsider him")] Christie praises Perry’s “laudable” record on liability reform [PolitickerNJ] “Perry’s ‘loser pays’ is an economic winner” [Patrick Gleason and Jason Russell, Washington Times; Mass Tort Prof; background] Missing the point on the Texas med-mal experience [Coyote, earlier here, here, etc.] A bad sign: Gov. Perry reaches out to Maricopa County sheriff Joe Arpaio [NRO, background] Another: courting social conservative vote, he pledges interference in state marriage law Houston Chronicle.
- Alan Lange and Tom Dawson discuss their Dickie Scruggs book [Above the Law, background]
- Hospital pays $25M to settle lawsuit charging lack of Katrina preparedness [White Coat]
- Democratic majority on CPSC plans to ram through burdensome CPSIA testing and certification rule next month [Commissioner Nancy Nord, more]
- For matching willing buyers with sellers through Canadian pharmacy ads, Google agrees to pay fine of $500 million, a forfeiture geared to the revenue the pharmacies (not it) took in from the ads [Atlantic Wire, Chris Fountain]
- “Woman Won’t Have to Pay for Her Own Cavity Search” [Lowering the Bar]
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The WSJ has been doing a series on asset seizures and Tim Lynch at Cato sums up some of the highlights.
A near encounter with forfeiture madness in the Pelican State [The Newspaper]:
Under the legislation, impounded vehicles [of third-conviction litterers] would be sold at auction with the revenue split 10 percent to the towing company, 30 percent to the local police or investigative agency, 10 percent to the indigent defender board, 20 percent to the prosecutor and 30 percent to the state. The vehicle would be seized regardless of whether the offender was also the owner of the car. A bank or other lien holder on a leased car would have to pay “all towing and storage fees” before recovering their property.
According to The Newspaper, the bill passed the Louisiana state senate by a vote of 34 to 1 before its defeat 49-46 in the state House.
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- EU imposes unisex insurance rates [BBC, Wright]
- Law blog on the offense? TechnoLawyer asserts trademark claim against Lawyerist over “Small Law” [Lawyerist]
- “Pro-business Supreme Court” meme strikes out yet again as SCOTUS backs “cat’s-paw” bias suit theory by 8-0-2 margin [Josh Blackman, Schwartz, Fox; Lithwick locus classicus]
- Subprime CDO manager sues financial writer Michael Lewis over statements in his book The Big Short [AW, Salmon, Kennerly]
- Police in Surrey, England, deny advising garden shed owners not to use wire mesh against burglars [Volokh, earlier]
- Patterns of intimidation: protesters swarm Speaker Boehner’s private residence [Hollingsworth, Examiner] Unions fighting Wal-Mart in NYC plan actions at board members’ homes [Stoll] Report: GOP lawmakers in Wisconsin fear for personal safety [Nordlinger, NRO] White House pushing street protests [Welch, Nordlinger] Age of Civility short lived [Badger Blogger, Althouse, Sullivan]
- In clash with trial lawyers, Cuomo proposes pain and suffering limits in med-mal suits [NYDN, more: NYT] “Bloomberg looks to Texas for ideas on changing medical malpractice laws” [City Hall News]
- Hey, should we seize his drum set? Infuriating video on cop raids and forfeiture laws [Institute for Justice, Michigan]
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“The owners of property seized as evidence in theft cases often have to sue to get it back, even if all charges are dismissed.” [John Eligon, New York Times]
- Will they get group discounts on lawyers? Groupon vs. MobGob patent brawl [TechCrunch]
- Why American courts should sometimes recognize Islamic law [series of Eugene Volokh posts]
- No, it’s not a “public health issue”: “The Case Against Motorcycle Helmet Laws” [Steve Chapman, syndicated/RCP]
- Failed system of justice on some Indian reservations [McClelland, Mother Jones]
- Ten years ago: Morgan Lewis & Bockius handed mlb.com domain over to its client Major League Baseball [Ross Davies, SSRN]
- City of Boston adds insult to injury after employee runs into building [TJIC, Popehat]
- Citing fans’ drug use, feds seek forfeiture of farm used for Grateful Dead tribute concerts [Greenfield]
- Johann Sebastian Bach, serial copyright violator [Cavanaugh, Reason]
- I’ve got a new post at Cato at Liberty tying together prosecutors’ demands for business forfeiture for immigration violations with proposals to criminalize employee misclassification;
- I can’t believe it’s not a lawsuit: margarine class action melts away [Cal Biz Lit]
- Guess what, your asbestos trial is scheduled in 11 days [Korris, MC Record]
- “This website has to be removed”: mayor of Bordentown, N.J. wants to shut down online critic [Citizen Media Law]
- What is a think tank and what does it do? I and others contribute answers at Allen McDuffee’s Think Tanked blog;
- No surprise here: Insurer offers policy to cover things that go wrong in medical tourism, but won’t cover USA residents or facilities [Treatment Abroad via White Coat]
- Pennsylvania law curbing med-mal forum-shopping disappoints lawyers who used to head for Philly or Wilkes-Barre [Sunbury, Pa. Daily Item via, again, White Coat]
- New Haven pizzeria busted: owners let their kids work at restaurant [Amy Alkon]
“While the Government does not have experience running a French bakery, they are getting very serious about enforcing I-9 regulations.” [Greg Berk, California Labor and Employment Law Blog]
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