December 6, 2010

Whitehouse and Cornyn Introduce Legislation to Crack Down on Foreign Criminal Assets in the United States

Washington, DC – Two members of the Senate Judiciary Committee, Senators Sheldon Whitehouse (D-RI) and John Cornyn (R-TX), have introduced the Preserving Criminal Assets for Forfeiture Act, which would make it easier to freeze the assets held in the United States by foreign criminals. In doing so, the legislation will cut down on the funds available for international criminals to further their enterprises. It will also encourage foreign countries to assist the United States in recovering the overseas assets of U.S. criminals.

“This legislation will make sure that foreign criminals do not avoid accountability by moving their assets beyond the reach of the law,” said Whitehouse. “Assisting other nations in cracking down on international criminal activity also will help us recover the ill-gotten proceeds that U.S. criminals have hidden abroad.”

“The Preserving Foreign Criminal Assets for Forfeiture Act will arm law enforcement with a critical tool to help our foreign partners combat criminals who seek to shield their ill-gotten assets within our borders. It will thwart criminals’ attempts to evade the law by hiding those assets before our foreign allies are able to secure a final ruling against them. I was pleased to work with my colleagues across the aisle and with the U.S. Department of Justice on this bill to help keep law enforcement one step ahead of foreign criminals,” said Senator Cornyn.

A companion bill was also introduced in the House by Representatives Judy Chu (D-CA32) and Ted Poe (R-TX2).

“The United States must do more to fight the dangerous drug cartels that thrive along our southern border. I know all too well how these drug cartels can hurt Americans, both at home and abroad. That is why I have introduced this legislation that will help law enforcement strike at the heart of these organizations – by seizing their illicit profits,” said Rep. Chu.

“Currently, US law only allows us to seize a drug cartel member’s assets in the United States after a final judgment has been issued in a Mexican criminal court. With a conviction rate of less than 5% in Mexico, this means that we are unable to seize a majority of cartel assets in the United States before the money has disappeared. The legislation would allow a US court to issue a restraining order to freeze these assets after ruling that there is evidence of criminal activity. Not only will this increase our ability to hit these cartels financially, but also use those resources to fund additional investigations and prosecutions,” said Rep. Poe.

The Preserving Foreign Criminal Assets for Forfeiture Act will equip law enforcement with an important tool to freeze the ill-gotten gains of foreign criminal enterprises. The U.S. government is authorized to assist foreign nations seeking to enforce their forfeiture judgments, for example by seizing the proceeds of large-scale international fraud, drug trafficking, or money laundering. Under recent decisions, however, our courts lack the power to restrain known criminal assets prior to the issuance of a foreign forfeiture judgment. Criminals are therefore able to move and hide their assets as soon as they find out they will be subject to such proceedings, or even while the proceedings are ongoing, leaving U.S. courts with no property to freeze once the foreign forfeiture judgment is entered. Because of this hole in the law, foreign criminals have been able to shield hundreds of millions of dollars worth of ill-gotten property.

The bill will fix that problem by preventing criminals from removing assets from the United States during the pendency of foreign forfeiture proceedings. Subject to appropriate due process protections that make sure only criminal assets are targeted, U.S. courts will have the power to freeze the assets until the foreign forfeiture proceedings have concluded. The legislation will bring the treatment of foreign criminals’ assets in line with that of domestic criminals. In so doing, the bill will increase the ability of U.S. law enforcement to obtain similar assistance from foreign governments.


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