D.C. U.S. Attorney’s Office on the Hunt for Criminals’ Assets
By Andrew Ramonas | May 27, 2011 10:26 am

Criminals beware: Assistant U.S. Attorney Stephanie Brooker is after your toys.

Brooker, chief of the D.C. U.S. Attorney’s Office Asset Forfeiture and Money Laundering Section, is on the hunt for the items criminals used in their crimes and for the proceeds of their misdeeds.

The U.S. Attorney’s office over the last few years seized cars, jet skis, computer equipment and a house that was used for drug dealing. In fiscal 2010, the office collected more money from criminal and civil asset forfeitures than any other U.S. Attorney’s office — $543 million.

And Brooker is looking to get more.

“Although we’ve done a lot of work over the last year, I think we’ve really set some groundwork for many more cases to come that are using forfeiture as an appropriate tool in our mission,” Brooker said in a recent interview with Main Justice at the U.S. Attorney’s office.

The assets seized by the office can come from a wide array of offenses, including fraud, drug crimes and child exploitation. The forfeited funds are used to support local law enforcement activities and provide restitution to crime victims.

The U.S. Attorney’s office has done asset forfeiture decades, but the asset-collecting efforts of the office received a boost under U.S. Attorney Ronald Machen, said Brooker, a six-year veteran of the office.

Machen, who became U.S. Attorney in February 2010, turned what had been the Asset Forfeiture and Money Laundering Unit into a standalone section within the office’s Criminal Division.

DOJ headquarters told Machen after he became U.S. Attorney that his office’s asset forfeiture work could use improvement, he said.

“By putting it as a standalone unit, we’ve really put a focus on it,” Machen told Main Justice. “We’ve put more resources there.”

The U.S. Attorney said he saw the power of asset forfeiture when he was a white-collar criminal defense lawyer at Wilmer Cutler Pickering Hale and Dorr LLP in D.C. He said a lot of his former clients were more concerned about holding on to their assets than staying out of prison.

“I’ve been on the side of the defense counsel where prosecutors have used it effectively and I’ve seen the power of asset forfeiture,” Machen said. “And I’ve been in other cases where it hasn’t been utilized. And I tell you, when it is utilized effectively and aggressively, it’s a tremendous tool for the government.”

Of the $543 million the U.S. Attorney’s office collected from criminal and civil asset forfeitures in fiscal 2010, $500 million came from a case against ABN AMRO Bank. The DOJ alleged the Dutch corporation defrauded the United States, had inadequate anti-money laundering practices and violated U.S. sanctions against Libya, Iran, Cuba, Sudan and other countries.

Of the remaining $43 million, $40 million came from a Ponzi scheme run by Isamu Kuroiwa, a Japanese citizen. Kuroiwa laundered the $40 million through U.S. and Japanese financial institutions to a U.S. broker for investment. The Asset Forfeiture and Money Laundering Section at DOJ headquarters handled the case, but the D.C. U.S. Attorney’s Office processed the payments in the case.

The U.S. Attorney’s office collected the other $3 million from several cases, including some involving fraud schemes in which the office collected assets that were returned to victims. In at least two cases, defendants had to forfeit vehicles to help satisfy restitution orders.

“I think anything we can do, whatever tool we can use, to try to bring compensation and healing to victims, needs to be used,” Brooker said. “And when you’ve had your money swindled from you, you’ve been betrayed, perhaps you’ve had your life savings taken and your elderly, although we can’t erase the fact that you’ve been the victim of criminal conduct, if we can achieve some return of your stolen funds to you, I think that’s a very powerful tool on behalf of victims.”

Brooker, who has led the section since its establishment last year, relies on three, full-time Assistant U.S. Attorneys, in addition to DOJ lawyers working in her section on a limited or temporary basis, to help collect assets. They are assisted by paralegal and non-attorney staff, including a Deputy U.S. Marshal, who aids with the maintenance and disposition of assets gathered.

The Assistant U.S. Attorney said she looks at every criminal case the office handles a week or two after it is opened to see if the U.S. Attorney’s office can collect assets in the case. About 70 percent of cases have forfeiture potential, according to Brooker.

“I think individuals realize if they engage in illegal activity and they think they’re going to buy homes, buy cars, launder the money, we’re on to that and we’re going to aggressively pursue asset forfeiture and seizures from the beginning of a case and try to take that money back as quickly as possible,” Machen said.

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One Comment

  1. bgrantland says:

    Depicting asset forfeiture as targeting “criminals’ toys” is very misleading. Although some criminals’ ill-gotten assets are confiscated through forfeiture, almost every federal forfeiture case has one or more innocent third party victims who aren’t even suspected of crime – yet they have to spent huge sums defending against the forfeiture or they lose their interests. Many forfeiture cases don’t involve even a single arrest of a person charged with crime.

    Victims of crime are not protected by forfeiture. Instead the opposite is true — often the government is trying to forfeit for itself the assets that were taken from the crime victim. In fraud cases like the Petters Ponzi scheme case in Minnesota (in which I represent a victim that lost $165 million), the victims are entitled to mandatory restitution under the Mandatory Victim Restitution Act, which is supposed to protect victims’ right to restitution notwithstanding all other laws. In my mind, that means mandatory restitution trumps forfeiture, since the MVRA is the newer statute. Nevertheless, the court denied all the victims’ rights to restitution under the MVRA and instead is forfeiting the assets to the federal government. The court told victims they can ask the DOJ to give them part of the forfeiture spoils under the remission program. But that program is completely discretionary with the DOJ, allows the DOJ to give preference to some victims over others, and does not allow any judicial review or a determination by a judge, period. Also, in the Petters case the DOJ has said it intends to share the “net proceeds” of forfeitures with victims. “Net proceeds” obviously means after the government has deducted its law enforcement costs from the prosecution. The statute even lets them pay informants up to 25% of the forfeiture as a reward. So how much exactly will be left for the victims after they get through with such discretionary awards from what was in actuality the victims’ own money? It’s been almost 3 years since the raid on Petters, the seizure of all his, and his condefendants’ assets and companies, and the litigation stay preventing any lawsuits from being filed against any of the defendants or their companies. Not a dime has been paid to Petters’ and his codefendants’ direct and proximate victims, who were entitled to MANDATORY restitution under the statute. Ironically, the government has made a deal to pay investors in Metro Gem which netted HUGE PROFITS from Petters’ scheme) from Metro Gem’s frozen assets. Also ironically, just weeks after this cushy settlement, Metro Gem’s CEO Frank Vennes was indicted as a Petters co-conspirator.

    In essence what the government is advocating for victims is that the DOJ be entity with absolute discretion to pay victims or not, and that their forfeiture powers should trump the victims’ rights to mandatory restitution.

    Forfeiture is not the wonderful, victim-protecting program this article paints it to be.

    Brenda Grantland
    Forfeiture Defense Attorney
    Mill Valley, CA