Introduction

• Library: Asset Forfeiture: Practice and Procedure in State and Federal Courts (ABA) (2014 Ed.)

Introduction

Follow the Money

On June 17, 1972, the world paid little notice when it was reported that five men had broken into the offices of the Democratic National Committee at the Watergate Hotel in Washington, D.C.¹ However, when it was later discovered that a $25,000 cashier's check earmarked for President Nixon's reelection campaign had been deposited into the bank account of one of the five men arrested in the Watergate break-in, the case took a new direction.²Additionally, it was determined that a large number of hundred-dollar bills had been withdrawn from the same account and that several of these bills were found on the five men when they were arrested. A full-scale criminal and congressional investigation was launched in an effort to determine whether the Nixon administration was connected to the illegal break-in.

In their 1974 book, All the President's Men, Washington Postreporters Bob Woodward and Carl Bernstein describe a key informant who provided critical information concerning their investigation and was given the code name of Deep Throat. These meetings between Woodward and Deep Throat were later dramatized in the 1976 film, which depicted Woodward meeting with Deep Throat in an underground garage uttering the famous words: "Follow the money."

By following the money, investigators were able to connect a bungled commercial burglary to the Committee for the Re-election of the President by uncovering a secret slush fund that was being used to fund covert political operations and was managed by high-ranking officials in the White House. This culminated in the eventual resignation of the President of the United States. Following the money was a key development in the investigation and underscored the essential role of money in the underlying criminal activity.

The impact of financial crime on American society is staggering. In 2006, Americans spent $100.4 billion on illegal drugs³ and illegal drug trafficking costs our society $110 billion per year in expenses and lost revenue.⁴ White-collar crime, including health care, bank, government, contract, and telemarketing fraud, exacts an even higher cost. The National Fraud Information Center estimates losses of $5.6 million in telemarketing fraud alone.⁵Cybercrime costs the U.S. taxpayer an additional $110 billion annually.⁶ On the international front, the Association of Certified Fraud Examiners projects that global fraud totaled $3.5 trillion in 2011.⁷ Canadian authorities estimate that organized economic crime costs Canadians $5 billion to $9 billion each year, illegal drugs another $7 billion to $10 billion, and another $5 billion to $17 billion per year is involved in money laundering.⁸

Realizing the impact of financial crime on society and the limited success of conventional law enforcement strategies of arrest and incarceration, in 1993 the National District Attorneys Association (NDAA) issued the following statement:

Crime in America is a multi-billion dollar industry that has a devastating effect on legitimate economic enterprise by diverting money from lawful commerce while rewarding and financing ongoing illegal activity. Asset forfeiture destroys the money base necessary for the continuation of illegal enterprises and attacks the economic incentive to engage in and to facilitate criminal activity. Asset forfeiture programs then rededicate the money from illegal activity to the public good. The National District Attorneys Association strongly believes that law enforcement and prosecutors should aggressively pursue forfeiture actions to eliminate the instrumentalities of crime and to confiscate the proceeds from criminal acts.⁹

Hence, law enforcement realized that, to stem the mounting societal costs associated with financially motivated crime and to take the financial incentive out of criminal activity, new strategies needed to be developed. This included the freezing, seizing, and confiscation of assets, better known as asset forfeiture.

As detailed in the NDAA proclamation, asset forfeiture has four main goals:

1. Destroy the money base of illegal enterprises;
2. Deter individuals from using their property to facilitate criminal activity;
3. Confiscate the proceeds of criminal activity;
4. Rededicate the money to the public good.

The importance of financial remedies, including asset forfeiture, was clearly demonstrated in the aftermath of the terrorist attacks of September 11, 2001. One of the first steps taken by President George W. Bush in response to the unprecedented terrorist attacks on American soil was the issuance of an Executive Order freezing any assets belonging to Osama bin Laden and other groups suspected of funding terrorism.¹⁰ President Bush emphasized...