From: Robert Hettinga <rah@shipwright.com>
Date: Sat, 19 Sep 1998 08:26:26 +0800
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Subject: IP: Tougher laws are sought to seize cash
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Source:  Bergen (New Jersey) Record
http://www.bergen.com/news/njmone199809154.htm

Tougher laws are sought to seize cash

Tuesday, September 15, 1998

By ADAM PIORE
Washington Correspondent

WASHINGTON -- Federal law enforcement
officials on Monday unveiled a plan they say will
help stop the flow of billions of dollars in drug money
across the nation's borders every year.

Hailed as a "major step forward" in the fight against
money laundering, the Justice Department proposal
would broaden the government's ability to seize the
profits of such illicit activity as drug dealing.

It now is illegal to try to leave the country with more
than $10,000 in currency without reporting it to U.S.
Customs officials. Violations are punishable by up to
five years in prison and seizure of the money. But in
June, the U.S. Supreme Court dealt a serious blow
to efforts to seize the unreported cash, ruling in a
precedent-setting case that such seizures often
violate constitutional protections against "excessive
fines."

The new proposal is aimed at correcting the
loopholes opened up in the June court decision. It
would for the first time allow law enforcement
officials to arrest people concealing currency before
they even reach the border.

It would allow the seizure of $10,000 or more at the
nation's ports and highways -- hundreds of miles
from any crossing -- if agents can prove that there is
intent to smuggle the concealed money out of the
country.

But it goes beyond that, giving agencies tools they
have not had in the fight to stop the flow of illegal
drug profits out of the country, said Stefan D.
Cassella, the assistant chief of the money-laundering
and forfeiture section of the U.S. Department of
Justice.

"This is a major step forward to address a new
problem," Cassella said. "We know that the covert
movement of currency across borders is indicative
and inherently related to criminal activity."

Civil libertarians condemned the proposed law,
which the Justice Department sent to Congress on
Monday, because they said it would expand the
ability of law enforcement agencies to seize currency
and keep it.

A series published in The Record this year revealed
how New Jersey, with its sprawling seaport,
international airport, lax laws, and proximity to New
York and Philadelphia, had emerged as a hub for
money laundering and currency smuggling over the
past 15 years. Cassella said the decision to push for
the more stringent laws was inspired in part by The
Record's stories.

In its letter to Congress, the Justice Department
cited the series as evidence of the growing problem
in currency smuggling.

The proposed law would give officials the ability to
go after a wider range of smuggling that has been
difficult for them to stop. Every year, for instance,
billions of dollars in illegal drug profits is smuggled
across the border unchecked, crammed into washing
machines, refrigerators, or hidden under false
bottoms in suitcases and trucks bound for the
border.

Over the past nine months, customs inspectors have
seized more than $11 million at the border that
stretches from Texas to California.

And at Port Newark, Customs agents seized $5.5
million in fiscal year 1997, the fourth-highest amount
seized among all U.S. ports.

Cassella said the Justice Department hopes its
proposal will be offered as an amendment to
money-laundering legislation being considered by the
House. But several congressional staffers were
skeptical that the proposal would be considered by
this Congress, because of the controversy over civil
forfeiture. Congress is slated to adjourn is less than a
month.

In addition, the new regulations, if passed, would
likely face immediate legal challenges.

In June, the U.S. Supreme Court overturned the
seizure of $357,144 from a Hollywood, Calif., gas
station owner. Federal officials seized Hosep Krikor
Bajakajian's money after the Syrian immigrant tried
to carry it out of the country without reporting it --
even though he was told of the federal reporting
requirements by customs agents. A divided court
ruled the fine was excessive because the only impact
of Bajakajian's crime was to deprive the government
of "information on a piece of paper."

By creating a category of crime called "bulk cash
smuggling," law enforcement officials hope to
convince the Supreme Court that efforts to evade
detection could have a direct impact on the "security
and integrity" of the nation's borders, Cassella said.
The crime would be punishable by up to five years in
prison and forfeiture of the money involved.

"Bulk cash smuggling is an inherently more serious
offense than simply failing to file a customs report,"
Justice Department officials wrote in an explanation
of the bill provided to Congress. "Because the
constitutionality of forfeiture is dependent on the
'gravity of the offense' . . . it is anticipated that the full
forfeiture of smuggled money will withstand
constitutional scrutiny in most cases."

Local prosecutors hailed the proposed change.

"Clearly, it's an effort to convince the Supreme
Court that Congress did view this as more than a
mere reporting violation and that forfeiture of the
smuggled money is appropriate," said Marion
Percell, an assistant U.S. Attorney in Newark who
specializes in money-laundering cases.

Critics attacked the bill, calling it just another effort
by overzealous law enforcement officials to expand
seizure powers that deprive citizens of due process.

Roger Pilon, director of the Center for Constitutional
Studies at the Cato Institute, warned that civil asset
forfeiture is subject to abuse by law enforcement
authorities.

"This is unbelievable," he said. "Everything that
Justice does in this area is characterized as a 'major
step.' But that's no justification. Since when is it a
crime to take money out of the country? After all,
whose money is it?"

Rachel King, legislative counsel of the American
Civil Liberties Union, agreed. "The problem is they
have too much power to seize property," she said.
"The laws need to go the other way. What they can
do already is scary."

Staff Writers Julie Fields and Thomas Zambito
contributed to this article.

Copyright (c) 1998 Bergen Record Corp.
-----------------------
NOTE: In accordance with Title 17 U.S.C. section 107, this material is
distributed without profit or payment to those who have expressed a prior
interest in receiving this information for non-profit research and
educational purposes only. For more information go to:
http://www.law.cornell.edu/uscode/17/107.shtml
-----------------------




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-----------------
Robert A. Hettinga <mailto: rah@philodox.com>
Philodox Financial Technology Evangelism <http://www.philodox.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'