Today Attorney General Eric Holder issued new guidelines to federal prosecutors tightening the rules for seizing assets for so-called “structuring” offenses.
Under the Bank Secrecy Act, structuring occurs when someone is suspected of arranging their financial transactions as to avoid triggering a report to the federal government by the financial institution. Some of civil asset forfeiture’s most egregious abuses are the result of federal prosecutors utilizing this nebulous statute to empty the bank accounts of unwitting citizens and small businesses who are never charged with any crime or even aware that their transactions are considered illegal.
The new rules require:
1. That structuring seizures against people for whom there is no criminal charge be based upon probable cause that the funds were either generated by unlawful activity or intended for use in anticipated unlawful activity. Alternatively, prosecutors must procure a warrant from a court and with the approval of either the U.S. Attorney (for Assistant U.S. Attorneys) or the Chief of the Asset Forfeiture and Money Laundering Section (AFMLS) (for Criminal Division trial attorneys).
2. That when the prosecutor determines subsequent to a structuring seizure that the government lacks the necessary evidence to succeed at either a civil or criminal trial, the seizing agency must return the full amount.
3. That when a prosecutor seizes property pursuant to suspicion of structuring, the prosecutor must file either a criminal indictment or a civil complaint, or receive an exception from either a U.S. Attorney or Chief of AFMLS within 150 days or else return the seized assets.
4. That all settlements must be complete and in writing. Informal settlements are expressly prohibited.
Time will tell how impactful these reforms are, and they certainly stop well short of the abolition of civil forfeiture advocated by civil liberties advocates like Cato and the Institute for Justice. The reforms are also limited to seizures made under suspicion of structuring, which represent only a portion of civil asset forfeiture abuses.
However, much like Eric Holder’s previous reforms to the federal government’s equitable sharing program, this memo can be taken as yet another signal that even the federal government is concerned about the increasingly publicized abusive nature of the government’s asset forfeiture regime. In that sense, these common sense reforms represent another step in the right direction, toward a legal system that respects due process and property rights.