Why the U.S. Government Wants to Seize Assets of Innocent Americans
The evil use of the U.S. government’s civil forfeiture powers is back in the news.Most Americans don't realize that civil forfeiture powers allow the U.S. government to confiscate your home and land, grab your cars, money and other assets without charging you with a crime. And the burden of recovery is on you as the property owner! State and local governments also seize property in this way.
The ancient common law legal doctrine underlying forfeiture holds that property implicated in crime can be seized, even if its owner is never charged or tried. In 80% of such cases in America, the property owner is never charged.
That is because civil forfeiture laws let government and police take property that is only suspected of being used in a crime. Unlike criminal asset forfeiture, in civil forfeiture a property owner doesn’t need to be charged or found guilty of a crime to permanently lose his or her cash, car, home or other property.
Several months ago, I warned my blog readers, “The U.S. government has been trying to export its forfeiture techniques worldwide, encouraging police in other countries to join the American property confiscation frenzy.”
Now it appears the U.S. Justice Department wants to help foreign governments grab assets located in the U.S. based on highly questionable, even corrupt, foreign preliminary court orders.
So far, federal judges have ruled against the government’s efforts to increase forfeiture powers … citing concerns that these laws could turn against U.S. citizens.
While federal judges are still keeping the Justice Department in check, asset protection advisors in the U.S. recommend placing your assets offshore to protect them from forfeiture laws.
Justice Wants More Power
After two recent losses in court, the U.S. Justice Department is pushing the U.S. Congress to broaden a provision of the PATRIOT Act that it claims allows U.S. judges to freeze assets linked to foreign crimes. In recent cases in New York and Washington, D.C., federal judges ruled the Justice Department acted prematurely on requests by foreign governments for restraining orders against hundreds of millions of dollars in assets allegedly controlled by a Russian businessman and a Brazilian banker, both involved in criminal investigations in their native countries.
The cases turned on language in a provision of the 2001 PATRIOT Act that permits U.S. courts to "preserve the availability of property subject to a foreign forfeiture or confiscation judgment."
The courts ruled the department may seek to have assets frozen based on a final judgment from a foreign court after trial, but not merely on accusations or alleged violations of foreign law or temporary orders by foreign courts.
The cases have raised serious questions about the extent to which U.S. prosecutors and courts should rely on the legal processes of foreign governments, especially in countries with unproven or uneven criminal justice systems.
Bruce Zagaris, a partner with Berliner Corcoran & Rowe LLP in Washington and an expert in forfeiture law, pointed to allegations of police misconduct in the Brazilian banker investigation and documented corruption in Russia's judicial system.
"If the U.S. government is freezing and tying up assets for third parties on the basis of evidence that is not solid, that doesn't help their efforts against corruption," Mr. Zagaris said. The justice department is taking a calculated risk, he said.
But You Could Also Be a Target
Federal judges, meanwhile, have raised concerns about the law being turned against U.S. citizens. "So under the government's interpretation, a U.S. citizen's assets could be frozen for years – without any meaningful substantive judicial review in a U.S. court," wrote Judge Brett Kavanaugh, of the U.S. Court of Appeals for the D.C. Circuit, in the July decision related to the Brazilian businessman.
The ruling followed the July 16 decision – authored by Judge Kavanaugh – in which the D.C. Circuit Court held that a U.S. district judge couldn't freeze assets linked to a prominent Brazilian financier, Daniel Valente Dantas, and others under investigation by Brazilian authorities for financial fraud because the PATRIOT Act gave the government no such power.Your Rights Could Be in Danger...
What Can You Do?
As I mentioned moments ago, asset protection advisors in the U.S. still recommend placing your assets offshore to protect them from U.S. forfeiture laws. That said, if you are planning to take advantage of offshore asset protection, it’s important for you to check to see how safe your money is in a particular country under local forfeiture laws or mutual legal assistance treaties (MLATs) with the U.S. Under a few treaties, the U.S. government has broad powers to seize and forfeit property located in other countries. And those countries are becoming more willing to comply with U.S. forfeiture requests now that the U.S. government could soon be adhering to legal orders issued by foreign courts.
I and others involved in civil forfeiture reform, such as the leading reform organization, Forfeiture Endangers American Rights (FEAR), are well aware that the Obama administration is continuing this unfair policy of looting the property of innocent Americans, and now they are asking for power to grab assets owned by foreigners based on questionable charges.
In this era of Obama’s multiyear, trillion-dollar deficits and a $13-trillion-plus national debt, it appears that the government has again turned to civil forfeiture as a major cash cow – along with deficit spending and higher taxes.
As part of your offshore financial planning, be certain to discuss local forfeiture laws with your in-country attorney in order to plan accordingly.
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