I've written many times in this blog on the abominable practice of "civil forfeiture," a legal procedure in which prosecutors can seize your property without accusing you—much less convicting you—of any crime.
The civil forfeiture racket raises billions of dollars for federal, state, and local governments. Most of the time, the seizing agency gets to keep the money it confiscates, creating a bounty hunter mentality throughout the law enforcement system.
But that's not enough, according to the U.S. Department of Justice. The DOJ is now implementing its first-ever National Asset Forfeiture Strategic Plan, with the goal of ensuring that prosecutors recover every last dollar of potentially forfeitable assets. That's a big job, because more than 300 federal laws authorize civil and/or criminal asset forfeiture. Not to mention tens of thousands of state, local, and county asset forfeiture laws and ordinances.
According to former assistant Attorney General Alice S. Fisher:
"Today, there is legal authority to forfeit the proceeds of virtually all serious offenses including terrorism, drug trafficking, organized crime, child pornography, alien smuggling, human trafficking, white collar crime, and money laundering. The National Asset Forfeiture Strategic Plan seeks to develop and implement policies and procedures to ensure that asset forfeiture is an integral part of every investigation and prosecution."
In other words, the government wants to make absolutely sure that no forfeitable assets slip through the proverbial cracks.
How might this affect you? Well to begin with, consider what might happen if you have undeclared monies outside the United States and have used a structure such as an offshore trust or international business company (IBC) to hold those funds.
It would be difficult for prosecutors to claim that mere failure to disclose a foreign account constitutes money laundering. However, what if prosecutors discover you've formed a bearer share IBC, and you've used it to operate a bank account that has generated hundreds of thousands of dollars in untaxed profits?
Under that scenario, prosecutors could argue that you're using "sophisticated means" to defraud the government. This elevates a relatively mundane reporting violation into a tax fraud case involving money laundering. And in a money laundering prosecution, the government can confiscate not only the proceeds of a crime, but all assets "facilitating" that crime.
A jury might or might not agree that your domestic bank accounts, your home, your vehicle, and your business "facilitated" a money laundering violation, but that doesn't prevent a prosecutor hunting for scalps from alleging that they did. And in many cases, prosecutors can freeze your assets pending trial.
There's no question that the Obama administration and is determined to go after tax evaders who move their money offshore. Nor is there any question that the Department of Justice wants to maximize forfeiture revenues by any means necessary. That makes it more important than ever to be 100% compliant in your offshore dealings—or face the consequences.
Copyright © 2009 by Mark Nestmann
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