Recovering the proceeds of crime from the correspondent account of a foreign bank
| Published date | 01 October 2006 |
| Date | 01 October 2006 |
| Pages | 401-415 |
| DOI | https://doi.org/10.1108/13685200610707644 |
| Author | Stefan D. Cassella |
| Subject Matter | Accounting & finance |
Recovering the proceeds of crime
from the correspondent account
of a foreign bank
Stefan D. Cassella
Asset Forfeiture and Money Laundering Section,
United States Department of Justice, Washington, District of Columbia, USA
Abstract
Purpose – This paper aims to discuss the issues about the recovery of the proceeds of crime, with
emphasis on the USA situation.
Design/methodology/approach – The paper first sets forth the rationale for Section 981(k) of the
Patriot Act and the requirements the government must satisfy to use it successfully to recover criminal
proceeds. It then discusses the facts of a case where the new statute was applied and the legal
arguments that were made when a foreign bank challenged the application of the statute in federal
court. Finally, it discusses how the court resolved those issues in granting the government’s suit for
the recovery of the money.
Findings – Finds that Section 981(k), while controversial, has proven effective in allowing the
Government of the USA to recover property from wrongdoers in the types of cases where it was
intended to be applied.
Originality/value – Shows that Section 981(k) is an innovative and controversial addition to the
arsenal of weapons that federal law enforcement authorities in the USA can use to recover the proceeds
of crime.
Keywords Crimes, Financialcontrol, United States of America,Money laundering
Paper type General review
Introduction
Governments have developed a variety of tools for recovering the proceeds of crime.
In the USA, in addition to being able to recover property as part of the sentence in a
criminal case if the wrongdoer is convicted, the government may file a judicial action
against the criminally-derived property itself, and recover it in a civil case.
Such property, once recovered, may then be distributed to the victims of the crime.
This process is called civil forfeiture[1].
Civil forfeiture is widely used in the USA[2]. In particular, it is the vehicle of choice
for recovering criminal proceeds when the wrongdoer is deceased or is a fugitive from
justice who cannot be brought to trial in a criminal case. For example, if a fraudster
deposits money in a bank account in the USA and then flees to a foreign country, the
government will likely file a civil forfeiture action against the money that the fugitive
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This paper is an edited version of two presentations made by the author at the 22nd Cambridge
International Symposium on Economic Crime on September 2004 and the 23rd Cambridge
International Symposium on Economic Crime on September 7, 2005. The author is the Deputy
Chief of the Asset Forfeiture and Money Laundering Section of the United States Department of
Justice. The views expressed in this article are solely those of the author and do not necessarily
reflect the views of the Department of Justice or any of its agencies.
Recovering the
proceeds of crime
401
Journal of Money Laundering Control
Vol. 9 No. 4, 2006
pp. 401-415
qEmerald Group Publishing Limited
1368-5201
DOI 10.1108/13685200610707644
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