I. Introduction
The United States does not have a specific agency that deals with Asset Recovery. Numerous agencies are engaged in the attempt to repatriate assets abroad through civil and criminal forfeiture procedures. These activities are normally coordinated by one of more divisions of the Department of Justice such as the Asset Forfeiture and Money Laundering Section.
II. Criminal Asset Recovery
1. Tracing
The Bank Secrecy Act, passed in 1970 and amended by various acts during the past 37 years, contains provisions that require financial institutions and individuals to report certain transactions and to maintain records. Some of the significant provision are as follows:
- Financial institutions are required to maintain records for 5 years (31 CFR 103.34)
- Financial Institutions must file Currency Transaction Reports for currency transactions that exceed $10,000 (FinCEN Form 104 - this form and each of the forms noted below are available at http://www.fincen.gov, then click on "Regulatory / BSA Guidance" then click on "BSA forms and filing information" then select the form you desire)
- Individuals must report international currency movements in excess of $10,000 (FinCEN Form 105)
- Trades or business must report currency and certain monetary instrument transactions in excess of $10,000 (FinCEN Form 8300)
- Financial Institutions are required to report suspicious transactions (various forms, see FinCEN website)
Prosecutors and administrative agencies have the power to issue subpoenas and summons to financial institutions, businesses and individuals to compel the production of evidence and testimony.
The United States has a complex bank regulatory process. There are a number of bank regulatory agencies that supervise financial institutions depending on their type of banking charter. A bank's primary federal regulator could be the Federal Deposit Insurance Corporation, the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision. Credit Unions in the United States are subject to certain similar bank-like regulations and are supervised by the National Credit Union Administration, State-chartered banks are also subject to the regulation and supervision of the state regulatory agency of the state in which they were chartered. State regulation of state-chartered banks applies in addition to federal regulation. For example, a California state bank that is not a member of the Federal Reserve System would be regulated by both the California Department of Financial Institutions and the FDIC. Likewise, a Nevada state bank that is a member of the Federal Reserve System would be jointly regulated by the Nevada Division of Financial Institutions and the Federal Reserve.
This and the subsequent sections will make reference to United States Code sections. These code sections will appear in the following format: example - 18 USC 982. This would be read: Title 18, United States Code, section 982. All U.S. code Titles and Sections can be accessed via the website: http://www.law.cornell.edu/. From this website, click "Constitution and Codes" then click "US Codes" then go to the middle of the page and enter the Title number in the box and the Section number in the next box. Click "Go to Title and Section".
18 USC 982 provides the authority to forfeit assets after a criminal conviction has been obtained. Assets that are targeted for forfeiture can often be restrained prior to the conviction. The procedures for the seizing, freezing and restraining assets are contained in 21 USC 853. Below are excerpts from this code section:
(e) Protective orders
- (1) Upon application of the United States, the court may enter a restraining order or injunction, require the execution of a satisfactory performance bond, or take any other action to preserve the availability of property described in subsection (a) of this section for forfeiture under this section -
(A) upon the filing of an indictment or information charging a violation of this subchapter or subchapter II of this chapter for which criminal forfeiture may ordered under this section and alleging that the property with respect to which the order is sought would, in the event of conviction, be subject to forfeiture under this section
- (2) A temporary restraining order under this subsection may be entered upon application of the United States without notice or opportunity for a hearing when an information or indictment has not yet been filed with respect to the property, if the United States demonstrates that there is probable cause to believe that the property with respect to which the order is sought would, in the event of conviction, be subject to forfeiture under this section and that provision of notice will jeopardize the availability of the property for forfeiture. Such a temporary order shall expire not more than ten days after the date on which it is entered, unless extended for good cause shown or unless the party against whom it is entered consents to an extension for a longer period. A hearing requested concerning an order entered under this paragraph shall be held at the earliest possible time and prior to the expiration of the temporary order.
18 USC 982 authorizes the forfeiture (confiscation) of property following a criminal conviction in money laundering cases and those involving over 200 predicate offenses to money laundering that include a variety of corruption offenses. An excerpt of 18 USC 982 is as follows:
"(1) The court, in imposing sentence on a person convicted of an offense in violation of section 1956, 1957, or 1960 of this title, shall order that the person forfeit to the United States any property, real or personal, involved in such offense, or any property traceable to such property."
This law also provides a substitute asset provision, which means that if the property involved in or traceable to the offense is not available, the court can order the forfeiture of other substitute assets that the defendant possesses.
18 USC 981 authorizes the forfeiture (confiscation) of property without a criminal conviction. The following is an excerpt from 18 USC 981:
"(1) The following property is subject to forfeiture to the United States:
(A) Any property, real or personal, involved in a transaction or attempted transaction in violation of section 1956, 1957 or 1960 of this title, or any property traceable to such property."
IV. Civil Law Suits
It is possible for the government to initiate a civil law suit in the U.S. in an attempt to recover assets that have been stolen or misappropriated through fraud or criminal conduct. If a civil judgment is obtained awarding the government assets or a money judgment from the target of the investigation, the judgment will be processed through the Department of Justice, Office of International Affairs (OIA) (202-514-000). OIA will submit the judgment through diplomatic channels to the country where the assets are located.
Conversely, if a civil judgment is obtained in a foreign country, it can be processed through OIA in the United States. Through this action the foreign country will be requesting the assistance of the United States in the enforcement of this judgment.
