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Department of Justice Seeks Forfeiture of $20 Million in Assets Illegally Laundered by Alaska Man

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viacheslav-bublyk-6WXbPWhT8c8-unsplash-300x200An Alaska man accused of laundering $1 billion held in South Korea on behalf Iranian nationals has had a forfeiture complaint filed against him by the U.S. Department of Justice (DOJ), according to federal court documents released last Thursday.

The U.S. District Court for the District of Alaska has filed a civil forfeiture complaint accusing Kenneth Zong, a U.S. citizen, of conspiring with three Iranian nationals to evade the prohibitions of the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSR). The complaint alleges Zong engaged in “false, fictitious and fraudulent transactions” designed to illegally convert and remove Iranian-owned funds equivalent to approximately $1 billion from a Korean bank.

Zong purportedly created fake invoices to help the Iranian nationals withdraw cash held in South Korean bank accounts in lieu of payment for oil shipments. He used the invoices to convince a Korean bank and financial regulators to release the funds, which he allegedly converted into more easily tradable currencies, such as U.S. dollars (USD), in contravention of the IEEPA and the ITSR.

The money was laundered into and through a host of shell company accounts in multiple jurisdictions, including the United States, the United Arab Emirates (UAE), and South Korea. The Korean bank that facilitated the transfer has reportedly agreed to pay $86 million in fines for its failure to prevent the laundering, federal prosecutors said.

The complaint claims assets equivalent to more than $20 million are subject to asset forfeiture based on violations of IEEPA and federal money laundering laws. The $20 million was allegedly used by Zong’s Iranian co-conspirators to attempt to buy a hotel in Tbilisi, Georgia in 2011 and 2012 before they were sanctioned by the U.S. Treasury. The funds are currently being held in a sovereign wealth fund owned by the UAE, according to the complaint.

Civil asset forfeiture is a process used by prosecutors and law enforcement agencies to seize property—real estate, vehicles, cash—that is suspected of being tied to criminal activity, even if the property owner hasn’t been arrested or convicted of a crime.

Zong was convicted and sentenced to two years imprisonment in Korea in 2013. He remains in Korea, sources indicate, but federal prosecutors want to have him extradited to the U.S. to stand trial. No attorney was listed for Zong in the court filings.

The investigation is being handled by the FBI and the Internal Revenue Service, Criminal Investigation (IRS-CI), which is responsible for investigating potential criminal violations of the U.S. Internal Revenue Code. The DOJ’s press release noted that a complaint is only an allegation, and the accused is presumed innocent until proven guilty beyond a reasonable doubt in court.

South Florida Civil Asset Forfeiture Attorney 

Has your lawful property been seized using asset forfeiture? Contact Brian Silber, P.A. to set up a free initial consultation and work with one of South Florida’s most experienced civil asset forfeiture attorneys.

Source: 6.3.20 justice department seeks forfeiture of more than $20 million in assets relating to unlawful use of financial systems to evade sanctions.pdf

Lancaster County Drug Task Force ‘Missing’ $150,000 from Asset Forfeiture Fund

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pepi-stojanovski-MJSFNZ8BAXw-unsplash-300x188A drug task force in Lancaster County, Pennsylvania, is missing roughly $150,000 from a civil asset forfeiture fund in what “appears to be an internal theft,” District Attorney Heather Adams told the press Monday.

Adams announced June 1 that an internal audit of the Lancaster County Drug Task Force revealed that someone has stolen up to $150,000 from the task force’s asset forfeiture fund. She didn’t name any potential suspects, but she did indicate that it was likely someone with access to and knowledge of the drug task force.

Under civil asset forfeiture laws, prosecutors and police can seize property—cash, cars, real estate—suspected of being connected to criminal activity, regardless of whether the owner is charged or convicted of a crime. Proponents of the practice say it is a vital tool for disrupting drug trafficking and other organized crime. However, civil liberties groups like the Institute for Justice argue that it creates perverse profit incentives for police.

Sources indicate that Adams’ predecessor, former Lancaster County District Attorney Craig Stedman, was improperly using asset forfeiture funds intended for drug enforcement on unrelated expenses, such as leasing and maintaining a 2016 Toyota Highlander for $21,000.

After Stedman’s alleged impropriety came to light, Lancaster news outlet LNP filed a public records request with his office for its civil asset forfeiture records in September 2018. The DA’s office denied the request, forcing LNP to take the case to Pennsylvania’s Office of Open Records, which made a determination in the newspaper’s favor.

The DA’s office appealed to the Court of Common Pleas of Lancaster County, but with help from the Institute for Justice and the Cornell Law School First Amendment Clinic, LNP was ultimately able to gain access to the documents. Most of the records it sought have since been turned over to the public, but litigation is ongoing over certain other records involving forfeiture auctions.

“One has to wonder whether that $150,000 discrepancy contributed to the former DA’s willingness to comply with LNP’s requests for the task force’s detailed forfeiture records,” said Jennifer McDonald, a senior research analyst at the Institute for Justice (IJ), a libertarian-leaning non-profit public interest law firm. “Behavior like this is exactly why forfeiture transparency practices are so important.”

Stedman was elected to county judgeship in November 2019 and joined the county bench in January 2020. Adams took over the DA’s office in January after running on a platform that included more transparency around Lancaster’s asset forfeiture practices.

During Monday’s press conference, Adams announced that she was transferring the case to the Pennsylvania Attorney General to avoid any potential conflicts of interest. She outlined the steps her office is taking to improve civil asset forfeiture procedures as a result of the audit and her previous commitments to add transparency to the process.

South Florida Civil Asset Forfeiture Attorney 

Has your lawful property been seized using asset forfeiture? Contact Brian Silber, P.A. to set up a free initial consultation and work with one of South Florida’s most experienced civil asset forfeiture attorneys.

Source: 6.1.20 lancaster county da: $150,000 missing in alleged theft.pdf

Arizona House of Representatives Eliminates Bill Which Would End Civil Asset Forfeiture

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christoph-von-gellhorn-kjA82leKmJc-unsplash-300x200The Arizona House of Representatives voted down a measure which would have significantly reformed how civil asset forfeiture is legally handled in the state of Arizona. Just three years ago, reforms were made to the criminal justice system which would have been bolstered by this new bill. However, given its passage in the Arizona Senate and defeat in the Arizona House of Representatives, proponents will have to wait until the next session to get it heard and passed. It is unknown if the bill’s sponsors and supporters plan to re-introduce it at the next appropriate and available opportunity.

Civil asset forfeiture is a legal mechanism in which law enforcement – either federal, state, or local officers – can seize property which was involved in or related to the commission of a crime a person has been charged with. For example, if a person is charged with money laundering, their bank accounts can be frozen and any assets that they used in the commission of the crime, such as their computer or other means of communication. In other crimes, the assets being able to be seized by law enforcement in the name of civil asset forfeiture would necessarily be different.

For some, the surprising component of civil asset forfeiture is not that one must be proven guilty of the crime through a trial or a guilty plea, but that a charge alone is sufficient. Law enforcement can seize your car, house, funds, and other things even without a finding by any judicial arbiter that you actually committed the crime you are accused of. For some Americans, this surprising turn of events is usually only realized when they themselves are the subject of civil asset forfeiture.

In the past, Arizona law enforcement officials have claimed such broad powers in the realm of civil asset forfeiture are needed to effectively combat white collar criminals and drug kingpins who in theory have assets that total a significant amount of money or property which could be effectively deployed to stymie prosecutors and law enforcement officials by ‘outmatching’ them with resources. However, according to the Tenth Amendment Center, around three quarters, or 75% of cases, involve $10,000 or less of property under civil asset forfeiture. Once in possession of property, law enforcement is able to use the property for just about any purpose either entering it into service or selling it and keeping the profits. Unsurprisingly, this has become a revenue center for law enforcement officials and property is rarely recovered due to the time and expense involved in petitioning for its return.

While civil asset forfeiture in the Arizona legislature may be an issue tabled for another day, proponents of reform will no doubt work to help ensure that it does indeed pass. It remains to be seen if Arizona law enforcement officials will work to engage on civil asset forfeiture reform or if they will continue to stymie efforts to make it more difficult to seize assets in criminal cases.

South Florida Civil Asset Forfeiture Attorney

Has your property been seized using asset forfeiture? Contact Brian Silber, P.A. to set up a free initial consultation and work with one of South Florida’s most experienced civil asset forfeiture attorneys.

Land Rover Involved in Indiana Civil Asset Forfeiture Case Returned to Owner for Now, Final Fate Uncertain

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aleks-marinkovic-jiG6OVvVidg-unsplash-300x201A $40,000 Land Rover seized by the state of Indiana in connection with a drug crime has been returned to its owner, Tyson Timbs, pending final determination by judicial authorities as to the appropriateness of the seizure of the vehicle by law enforcement under civil asset forfeiture. This long legal battle has made it to the United States Supreme Court and twice to the Indiana Supreme Court. Mr. Timbs is represented by counsel from the Institute for Justice, which is a law firm that works on prominent public interest cases.

Civil asset forfeiture is a method used by law enforcement to impound the ill-gotten gains as the result of a crime from being used to continue to symie law enforcement, such as a white collar criminal using millions fraudulently obtained from insider trading to work against the government as they make their case regarding the pending charges and allegations. Importantly, only being charged with a crime, not convicted, is enough for civil asset forfeiture to be legally enforceable. There are likely many Americans who are unaware of this.

However, civil asset forfeiture only applies to the money, property, or other assets which has been illegally obtained. It does not apply to those things which were purchased or obtained legally. For example, if Defendant A is a doctor by day but a drug dealer by night, there are some funds and property where his legitimate, legal income makes them unable to be seized. Defendant A’s speedboat purchased with money from the drug operation would certainly be fair game as would any other funds that come directly from the illegal operation. However, his home purchased before he began his illegal activities and his 401k which he has been contributing to would not be eligible for civil asset forfeiture.

In Mr. Timbs’ case, he was charged with and pleaded guilty to the crime of selling heroin. As part of the charges, the police seized his Land Rover believing it to have been acquired as part of the drug scheme. However, Mr. Timbs was able to show that the Land Rover was acquired as part of a life insurance payout he received following the death of his father. After various legal rulings at the appellate level, the return of the vehicle to Timbs was found to be proper due to the fact it’s seizure constituted an ‘excessive’ fine for the crime. Timbs’ case is legally significant because it led the US Supreme Court to instruct the Indiana Supreme Court to determine what constituted an excessive fine in their state, leading to the creation of a three prong test.

While this case may not be settled yet, it has given direction regarding civil asset forfeiture for future cases in the state of Indiana and may be instructive to other states and jurisdictions grappling with this important issue. No matter what the direct outcome is for Mr. Timbs, we can see that this area of the law is beginning to be clarified at least in Indiana.

South Florida Civil Asset Forfeiture Attorney

Has your property been seized using asset forfeiture? Contact Brian Silber, P.A. to set up a free initial consultation and work with one of South Florida’s most experienced civil asset forfeiture attorneys.

Georgia Revenue Department Returns $2.1 Million in Disputed Civil Asset Forfeiture Funds to State Treasury

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sebastian-pichler-bAQH53VquTc-unsplash-300x200The Georgia Department of Revenue has reportedly ended its practice of using funds seized in criminal investigations through civil asset forfeiture and returned $2.1 million to the Office of the State Treasurer.

According to The Atlanta Journal-Constitution, the department made the change after the publication reported that the Revenue Department’s Office of Special Investigations had spent millions of dollars seized in criminal investigations on frivolous purchases, including expensive gym equipment, engraved firearms, clothings, and personal items. By its own accounting, the office spent $2.9 million of this money over the past four years.

A day after the story was published in March, the agency quietly returned $2,165,796 to the state treasury, sources indicate. The payment accounts for almost all of the remaining money collected by the department since 2016. All that remains is $5,005 which will be sent to the treasury in the coming months, a department spokesperson told the press. The spokesperson added that the agency will no longer retain or spend civil asset forfeiture funds in the future.

Records show the Revenue Department took in more than $5.1 million in asset forfeiture funds from 2016 to 2019. Some critics of asset forfeiture are suggesting the Attorney General recoup the millions that were already spent.

“They still spent a ton of money on things like commemorative badges that have no meaning and trinkets,” said State Rep. Scot Turner, R-Holly Springs. “I believe they still owe the taxpayers $3 million, and the Attorney General’s office should go after the people who took it from the taxpayers.”

The seizing was reportedly orchestrated by former Office of Special Investigations Director Joshua Waites, whose office obtained most of the funds from criminal investigations involving the alleged illegal use of video gambling machines often found in convenience stores.

State statutes allow stores to have video gambling machines as long as winnings aren’t paid out in cash. That didn’t stop Waites’ office, which reportedly filed simultaneous criminal and civil charges against operators and seized their assets, including homes, cars, and sometimes even the college savings funds.

Under state law, money seized by state agencies is “subject to appropriation from the general fund,” meaning forfeiture funds should first be deposited into the general fund and then dispersed via the state government’s annual appropriations process. Other state agencies, like the Georgia Bureau of Investigation (GBI), don’t keep money seized as part of criminal investigations. GBI instead turns over its funds to the treasury to fund the state budget.

Waites resigned in March after it was discovered that he falsely stated in his job application that he had a degree from a college that doesn’t exist.

Civil asset forfeiture is a legal process that allows law enforcement to seize property—cash, property, cars, and the like—that are suspected of being connected to crime. It is meant to disrupt criminal activity by targeting illicit proceeds, but critics argue that there are too many incentives for abuse and not enough protections for innocent citizens who have their private property seized.

South Florida Civil Asset Forfeiture Attorney

Has your lawful property been seized using asset forfeiture? Contact Brian Silber, P.A. to set up a free initial consultation and work with one of South Florida’s most experienced civil asset forfeiture attorneys.

Source: 5.18.20 Georgia revenue agency give state $2.1 million in disputed funds.pdf