Allegations of trade-based money laundering on the rise
by Peter Quinter, guest columnist
This past year has seen an explosion of seizures of bank accounts by the Drug Enforcement Administration (DEA) and the US Immigration and Customs Enforcement (ICE) or Homeland Security Investigations (HSI) for alleged trade-based money laundering or “structuring.” In 2011, I handled these cases in Miami, New York, San Diego, Boston, Phoenix, San Juan, and Norfolk.
The funds in bank accounts are taken when the bank is served with a seizure warrant signed by a United States Magistrate Judge, based upon an affidavit prepared by a DEA or ICE agent. Typically, neither the bank nor its customer gets to see this affidavit because the criminal proceeding is ongoing and the affidavit is sealed. The seizure warrant itself typically alleges that the money is subject to seizure because it is the proceeds of drug activity in violation of 21 U.S.C. 881 and 18 U.S.C. 1956.
Another, related legal basis for the seizure of bank accounts is “structuring” – that is, the deposit of $10,000 or less in cash repeatedly in a bank account to avoid the filing by the bank of a Currency Transaction Report (CTR) with the Financial Crimes Enforcement Network (FinCen), US Department of the Treasury. [See 31 CFR 1010.314.]
A CTR is made using FinCen Form 104. A CTR is required to be filed by all banks whenever a deposit of cash over $10,000 is made in a single day into a single account, or by a customer into different accounts. Be aware that deposits of cash into multiple branches of a bank or in multiple transactions are still considered structuring. [See 31 CFR 1010.313.] When a bank suspects that its depositor or customer is making deposits of $10,000 or less to avoid the requirement that the bank file a CTR, the bank will often file instead a Suspicious Activity Report (SAR). SAR reports are analyzed by FinCen, and often referred to the DEA or ICE for investigation. Some of these investigations result in seizures of bank accounts as mentioned above.
Bank account holders absolutely have the right to challenge the taking of their money by the DEA or ICE. If your money has been seized, you have a right to know the legal basis for the seizure, and should, through your attorney, contact the DEA or ICE agent, or the Assistant US Attorney. In civil forfeiture cases, there is an administrative process to follow once a notice of seizure is issued to the bank account holder by the Fines, Penalties, and Forfeitures Office of US Customs and Border Protection (CBP) or a notice of seizure by the DEA. If the notice of seizure is from CBP, file a petition; if the notice of seizure is issued by the DEA, file a sworn claim with the Asset Forfeiture Section located in Quantico, Virginia. The procedures of both agencies are very specific, and must be followed carefully, otherwise your right to challenge the seizure will be lost forever.
Please call or email me with any questions or comments.
Copyright © 2011, Becker & Poliakoff
About Peter Quinter
10 May 2012: Peter Quinter is now a Shareholder in the law firm of GrayRobinson and Chair of the firm’s Customs & International Trade Law Group. Based in the firm’s Miami and Ft. Lauderdale offices, Quinter principally represents persons and companies involved in international trade and transport. Editor of the GrayRobinson Customs and International Law Blog, Quinter is widely recognized for his expertise in international and trade law.
You can contact Peter Quinter at [email protected] or at (954) 270-1864.
The opinions expressed in this article are those of its author and do not purport to reflect the opinions or views or Descartes Datamyne. In addition, this article is for general information purposes only and it’s not intended to provide legal advice or opinions of any kind and my not be used for professional or commercial purposes. No one should act, or refrain from acting, based solely on this article without first seeking appropriate legal or other professional advice.