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Being out of the U.S. does not automatically prevent challenging asset forfeiture action

Jan 29, 2009 Being out of the U.S. does not automatically prevent challenging asset forfeiture action

Image from Bureau of Engraving and Printing’s website.

Doesn’t the United States government have better things to do than to be prosecuting gambling? Would the government be chasing after gambling operations if the prospect did not exist to obtain forfeiture of the alleged gambling operations’ money and to obtain unpaid taxes? Greed clearly is not limited to the private sector, particularly when one includes greed for power in the mix. Moreover, government officials and cops gain more job security when they increase government revenue through seizing assets for forfeiture and obtaining fines from private citizens.

Praised be a unanimous panel of the D.C. Circuit for at least holding that the government is ineligible to win a civil asset forfeiture challenge at the summary judgment stage on the mere claim that the asset owner is disentitled to the funds by having intentionally evaded the parallel criminal prosecution by remaining outside the United States. U.S. v. $6,976,934.65 Plus Interest, ___ F.3d ___ (D.C. Cir., Jan. 27, 2009). (What an intriguing case name, which will be referenced hereonin as U.S.v.$PI.) That is to say, the trial court must make its own careful factual finding about such evasion.

U.S. v. $PI  interprets 28 U.S.C. § 2466, which provides as follows:  

"§ 2466.  Fugitive disentitlement.

(a) A judicial officer may disallow a person from using the resources of the courts of the United States in furtherance of a claim in any related civil forfeiture action or a claim in third party proceedings in any related criminal forfeiture action upon a finding that such person–

   (1) after notice or knowledge of the fact that a warrant or process has been issued for his apprehension, in order to avoid criminal prosecution–

      (A) purposely leaves the jurisdiction of the United States;

      (B) declines to enter or reenter the United States to submit to its jurisdiction; or

      (C) otherwise evades the jurisdiction of the court in which a criminal case is pending against the person; and

   (2) is not confined or held in custody in any other jurisdiction for commission of criminal conduct in that jurisdiction.

(b) Subsection (a) may be applied to a claim filed by a corporation if any majority shareholder, or individual filing the claim on behalf of the corporation is a person to whom subsection (a) applies.

   (Added April 25, 2000, P.L. 106-185, § 14(a), 114 Stat. 219; Oct. 26, 2001, P.L. 107-56, Title III, Subtitle A, § 322, 115 Stat. 315.)

   (As amended Jan. 5, 2006, P.L. 109-162, Title XI, Subtitle C, § 1171(c), 119 Stat. 3123; March 9, 2006, P.L. 109-177, Title IV, § 406(a)(1), 120 Stat. 244.)

Here, the United States government, sought the forfeiture of nearly $7 million allegedly laundered from money "earned through an unlawful offshore Internet gambling enterprise." U.S. v. $PI. (And what type of detergent was used for the alleged laundering? Tide? Wisk? Seventh Generation?) The corporation that filed suit to recover the money was principally owned by former United States citizen William Scott, who the government alleged to have been evading prosecution in his related criminal case.

The D.C. Circuit foreclosed summary judgment on the disentitlement statute, based on its following language in U.S. v. $PI:

"But as Soulbury [the corporation whose assets were seized by the U.S. government] points out, the video [of William Scott, that is in evidence] also suggests that Scott did not wish to reenter the United States regardless of  any pending criminal charges. Scott told the reporter interviewing him: ‘I don’t mind not going back to the States. There are a few of us that are . . . that are under the same restrictions that would like to go back to the States. Myself, that’s fine.’  the fifth estate: The Big Gamble, supra. The district court made no finding as to what, if anything, this comment reveals about Scott’s reasons for remaining outside the United States. But a court considering summary judgment must draw ‘all reasonable evidentiary inferences’ in favor of the nonmoving party. Toney v. Bergland, 645 F.2d 1063, 1066 (D.C. Cir. 1981). Under this standard, Scott’s statement is sufficient to raise a genuine issue of fact whether he declined to reenter the country in order to avoid criminal prosecution under the 1998 or 2005 charges."

Congratulations to William Scott for this victory against summary judgment. Stay tuned to whether he ever gets brought to court for prosecution on his pending federal criminal charges. Jon Katz.

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