379 lines
20 KiB
Plaintext
379 lines
20 KiB
Plaintext
Fines and Forfeiture Laws
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This chapter is about existing laws which contain provisions to pay a
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percentage of fines and forfeitures to those who provide information
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leading to the conviction of felons. Examples of maximum fines for various
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felonies are listed in the last part of this chapter. The next chapter will
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tell you how to get the money.
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In certain circumstances the courts may assess a fine as part of the
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punishment. The amount depends on a lawbreaker's ability to pay as well as
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the appropriateness of such a fine. The courts realize that it serves the
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public interest to levy fines and forfeitures in lieu of, or with, jail
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terms. This is especially so when the felon has made huge profits by
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violating the law, and, the courts feel a need to take away ill-gotten
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gains. Fines and forfeitures are used to deny felons the "fruits of their
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criminal activity."
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Many laws contain provisions to pay 50 percent of resultant fines and
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forfeitures. This creates an unusual opportunity for CrimeFighters. As you
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look at the large dollar amounts involved, visualize yourself being
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eligible and being paid 50% of the fines and forfeitures.
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Some Examples
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On October 31, 1990, headlines in the Arizona Republic stated, "Underground
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Pot Factories Raided". Entrepreneurs had built two large houses designed
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specifically for marijuana growing in underground rooms. The rooms
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contained irrigation, lighting, diesel generators, and a compactor for
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making bales of pot worth an estimated $50 million. The houses cost
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$400,000. The sentence for each charge was 10 years to life in prison and
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a fine of up to $4 million.
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On April 13, 1990 a San Antonio Express-News headlines stated,"Mexican
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Agents Held in Border Cash Haul." Two customs agents were placed under
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arrest in Brownsville, Texas, when they were caught red-handed trying to
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smuggle $2.4 million into Mexico. The money was in various denominations,
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mostly small bills, and stashed in cardboard boxes. Only $10,000 can be
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legally taken out of the United States without registration. The violation
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of U.S. currency laws provide a maximum penalty of 15 years and fines up to
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$500,000. In this case, the Mexican customs agents violated the law, were
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caught, and the $2,400,000 in cash was seized and forfeited under customs
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law. In addition, their 1990 Jeep station wagon was also forfeited.
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The Bellingham (Washington) Herald (Bellingham, Washington) on June 11,
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1990 stated, "Huge Heroin Bust in Bellingham." The story tells how U.S.
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Border Patrol agents became suspicious of three men in a parked car. Having
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"reasonable grounds" They searched the vehicle and found 13 packages of
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Asian heroin with a wholesale value of about $1.25 million. When blended
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with other ingredients for street sale, it could be worth about $15
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million. The vehicle and heroin were forfeited.
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In 1981, also in Bellingham, 40 tons of marijuana valued at $25 million was
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seized from a ship on Bellingham Bay. The ship and its cargo were
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forfeited, and the ringleader was sentenced to 25 years in prison and fined
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$155,000.
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Almost every week a newspaper story tells of another large drug bust.
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Thousands of small drug busts of $100,000 are commonplace and hardly worth
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mentioning except in the local news media.
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It's been reported that 90 percent of all criminal activity is directly or
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indirectly related to narcotics. Drug-related crimes are the single largest
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law enforcement problem in America. On the other hand, they also provide
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CrimeFighters with an opportunity to make a better than average income to
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help police obtain evidence and to put violators in jail. RICO laws are
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being used more and more to remove the profit from criminal activity. With
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50% of the fines and forfeitures from just a dozen or more small drug
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busts, a CrimeFighter can become financially independent!
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Fraudulent Tax Shelter Schemes vs IRS
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Title 26 USCS 7302 provides that "it shall be unlawful to have or possess
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any property intended for use in violating the provisions of internal
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revenue laws... and no property rights shall exist in any such property."
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An unofficial interpretation of this law follows.
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Any person using any property as "bait" in illegal tax shelter schemes
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loses title to said property, which is then seized by the IRS.
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One case (United States vs One 1954 Rolls Royce Silver Dawn, 777F.2d 1358
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(9th Cir. 1985) involved a fraudulent tax shelter scheme in which the
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automobile was the "object" used in the illegal tax shelter. The Court of
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Appeals agreed it was an "active aid" in the illegal activity and was
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forfeited under civil procedure.
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Any object whether real estate or other property, used for illegal tax
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shelters, or any other fraud, are subject to forfeiture. Under RICO and
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other federal reward laws, the informant can get paid up to 50 percent of
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the value of confiscated assets that are involved in criminal activity.
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The courts may authorize seizure of cars, boats, airplanes, homes, and even
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going businesses when they are used in the commission of a felony. Most
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people know that customs laws, for example, provide for the forfeiture of
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contraband items plus the vehicles or vessels if drugs are found in them.
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Homes May Be Seized and Forfeited
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A recent (1989) newspaper article in the Harlingen (Texas) Valley Times
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mentioned a Brownsville man was arrested for 10 separate violations of
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importing photographs of naked children engaged in sexually explicit
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conduct. In many states, pornography of adults is permitted and tolerated
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by law. When it involves underage children the law is harsh on offenders.
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In this case, the possible penalty for each count is 10 years in jail and
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up to $250,000 in fines for each violation. The indictment includes a
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notice that the lawbreaker's house will be seized and forfeited under a
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pornography law (Title 18, Sections 2251 - 2254). This law allows the
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forfeiture of property used in the commission of pornographic offenses.
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If the Brownsville man had legitimate businesses (other than the porn
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business) and it was proven that part of the proceeds of his illegal
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business was used to finance the legitimate business, or the legitimate
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business was used to "launder" the illegal profits, the legitimate business
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and its bank accounts could also have been seized and forfeited.
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Money Laundering Problems
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Al Capone was indicted for income tax evasion after the government couldn't
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pin him down on other criminal charge. All they could prove was that Capone
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was spending a lot of money that wasn't reported on his income tax forms.
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Al couldn't account for the money or wouldn't say where it came from.
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Most criminals know if they don't have a job or a business to support
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expensive tastes, they will come under scrutiny for income tax evasion.
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Money laundering is the obvious solution.
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Money laundering is accomplished by investing illegally obtained money into
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a legitimate business. Criminals then report profits from the business.
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Laundering money solves one problem but creates another. If a criminal owns
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the business it becomes "tainted" with illegal money. When that can be
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proven, the business or business investments may be forfeited under various
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laws as the fruits of criminal activity.
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The Use of Corporations
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Most racketeering businesses are incorporated. Corporations provide tax
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sheltering and lower personal taxes. They also facilitate selling shares to
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raise money for investments. When a business owner has many legitimate
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business investments, accountants will recommend the use of a separate
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corporation as a holding company. Such a corporation "holds" the shares of
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various investments in the holding company's name. Dividend income from
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various corporations are paid to the holding company and not to the owner.
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That allows the owner to defer surplus business income and to reduce his
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personal income taxes. This common business practice is a legal tax-
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sheltering strategy. A successful criminal can become a rich business
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owner, obtain legal tax breaks, and receive a legitimate income to avoid
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suspicion of illegal activity.
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However, if it can be proved that a business was financed by the profits
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from criminal activity, the business can be forfeited. If illegal money can
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be traced to a holding company, that holding company (which "owns" the
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shares of all the various businesses) can itself be forfeited and the crime
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boss loses everything!
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Civil Forfeiture Cases
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United States vs Cauble. 706 F.2d 1322 (5th Cir. 1983). Cauble placed
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various legitimate businesses under the umbrella of a holding company which
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was the RICO enterprise named in the indictment for a marijuana smuggling
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enterprise. Although not all the businesses were involved in the illegal
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activity, the jury felt that it is impossible to determine which weren't
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tainted. They decided it would be better to declare forfeit all the
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businesses rather than none. It was estimated the total value of Cauble's
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enterprises was worth $15 to $20 million!
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United States vs $4,255,000. 762, F.2d 895 (11th Cir. 1985) is a case in
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which a person, who claimed to be an honest and well established money-
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exchanger, moved $242 million in drug proceeds through a Miami bank in less
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than eight months during 1981. The lawbreaker said he had no idea the money
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delivered to him were the proceeds of illegal drug activity. The government
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filed a $10 million civil penalty action against the defendant's company,
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Sonal, Inc. (under 31 USCS 5321 (a)(2)) and seized $453,731 that was in a
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Sonal's bank account.
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Most of the criminal laws mentioned in this book offer rewards based on
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either the arrest or conviction. An exception is Title 28, USCS 524, which
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states: "payment of awards may be paid for information or assistance
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leading to a civil or criminal forfeiture under the comprehensive Drug
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Abuse Prevention and Control Act or a criminal forfeiture under the
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Racketeer Influenced and Corrupt Organization Statute (RICO) 18 USCS 1961
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et seq."
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Keep USCS 524 in mind for RICO civil suits. The payment of awards provides
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legal standing to citizens to initiate civil actions against drug dealers.
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It's one of the keys to a CrimeFighter's financial success. (More on civil
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suits in chapter 8)
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Customs' Forfeiture Law
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Also an exception is 19 USCS 1619, mentioned later in more detail in
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Chapter 14. This Custom's law is very broad law and provides compensation
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to informers. USCS 1619 doesn't mention (therefore doesn't specifically
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prohibit) payment based on civil action fines and forfeitures. Payment is
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not tied to an arrest or conviction -- only that such information "leads to
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a recovery of any duties withheld, or any fine, penalty, or forfeiture of
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property incurred: the Secretary may award and pay such person an amount
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that does not exceed 25 percent of the net amount so recovered."
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Smuggling often involves large quantities of contraband. Drugs have a very
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high value (currently $100,000 per kilogram from Columbia which is sold for
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$1 million on the street.) This "drug value" seems to be anticipated in the
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25 percent Custom's reward. The reward is limited to $250,000 for each
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case. That's about where the total value of fines and forfeitures is
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expected to be $1 million or more.
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Bonuses
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Title 18 USCS 886, Drug Enforcement Agency pays an additional reward, up to
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$25,000, for information leading to the conviction of any drug-related
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criminal activity. Whether or not there is a conviction, but providing the
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case goes to trial, you can also qualify for up to $25,000 under Title 18
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USCS 3059, which pays a reward for information leading to the arrest for
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any state or Federal felony.
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If a conviction is obtained on drug-related crimes, you can qualify for up
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to 50% of the fines and forfeitures (vehicles, equipment, cash, jewelry,
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businesses, guns, stocks and bonds, etc.), plus rewards of up to $50,000
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via USCS 3059 and USCS 886.
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Free Vehicles, Guns, Boats and Aircraft?
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State and Federal district attorneys hardly ever try to sell forfeited
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items at retail prices. They usually sell them at wholesale prices or less
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to get rid of them as soon as possible. This is especially so when the
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items, such as vehicles, boats and airplanes, require maintenance charges,
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storage or are subject to vandalism, weathering, theft, or obsolescence
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which would quickly reduce their value.
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A CrimeFighter who has 50% claim to the items forfeited might be able to
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persuade authorities to use the 50% and possibly related rewards as the
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purchase amount. That would provide the authorities with immediate disposal
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of the forfeited property.
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Fines - How Much?
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USCS 3571 provides the courts with guidelines and amounts of fines:
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18 USCS 3571 Sentence of fine.
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(a) In general. A defendant who has been found guilty of an offense may be
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sentenced to pay a fine.
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(b) Fines for individuals. Except as provided in this subsection (e) of
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this section, an individual who has been found guilty of an offense may be
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fined not more than the greatest of -
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(1) the amount specified in the law setting forth the offense;
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(2) the applicable amount under subsection (d) of this section;
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(3) for a felony, not more than $250,000;
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(4) for a misdemeanor resulting in death not more than $250,000;
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(5) for a Class A misdemeanor that does not result in death, not
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more than $100,000;
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(6) for a Class B or C misdemeanor that does not result in death,
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not more than $5,000; or
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(7) for an infraction, not more than $5,000.
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- - - - - - - - -
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(c) Fines for organizations. Except as provided in subsection (e) of this
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section, an organization that has been found guilty of an offense may be
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fined not more than the greatest of -
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(1) the amount specified in the law setting forth the offense;
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(2) the applicable amount under subsection (d) of this section;
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(3) for a felony, not more than $500,000;
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(4) for a misdemeanor resulting in death, not more than $500,000;
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(5) for a Class A misdemeanor that does not result in death, not
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more than $200,000;
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(6) for a Class B or C misdemeanor that does not result in death,
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not more than $10,000; or
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(7) for an infraction, not more than $10,000.
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(d) Alternative fines based on gain or loss. If any person derives
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pecuniary gain from the offense, or if the offense results in pecuniary
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loss to a person other than the defendant, the defendant may be fined not
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more than the greater of twice the gross gain or twice the gross loss,
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unless imposition of a fine under this subsection would unduly complicate
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or prolong the sentencing process.
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(e) Special rule for lower fine specified in substantive provisions. If a
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law setting forth an offense specifies no fine or a fine that is lower than
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the fine otherwise applicable under this section and such law, by specific
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reference, exempts the offense from the applicability of the fine otherwise
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applicable under this section, the defendant may not be fined more than the
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amount specified in the law setting forth the offense."
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* * * * * *
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Comment: Note that under ordinary law, sub-paragraph (d) allows a fine to
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be doubled, as in a case of fraud, swindle, or larceny such as those often
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used by confidence artists and unethical businesses via shady dealings.
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Also note that organizations also pay twice as much in fines resulting in a
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maximum fine of up to four times the illegal profit! However, the amount
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and imposition of fines are contingent on individual personal or business
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finances of the defendant.
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Fines that are not suspended by the court constitute a lien until paid in
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full. Though the lawbreaker (or business) can't pay the full amount of the
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fine, it hangs over their head like any other debt and must be paid sooner
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or later. Bankruptcy laws do not include relief for fines based on criminal
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violations. Significant assets that are later obtained by a lawbreaker may
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be seized and sold to satisfy the debt.
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When prosecutions are under RICO laws, triple damages are possible. If you
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have a choice, RICO laws are best for prosecution to get maximum awards by
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the court. Prosecutions are easier under civil lawsuits than under criminal
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charges. If you decide to do the actual prosecution (which is possible) you
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can be awarded 50% of the total fines and forfeitures. In addition, you can
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also be paid for your investigative and related costs, plus legal fees to
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your lawyer who acts as your assistant to prosecute offenders.
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State Forfeiture Laws
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State laws are organized differently from Federal laws. That is, rewards
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for forfeitures (if any) are often found in separate laws that deal only
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with forfeitures. For example, Arizona's forfeiture law, 13-4315, has a
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provision that says "Payment of awards for information or assistance
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leading to a civil or criminal proceeding may be made under this Title."
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Awards (rewards) are authorized in any civil or criminal case, including
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Arizona's RICO law and any other law where and when forfeitures are
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imposed. When no reward dollar amount or percentage is specified it's
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purposely left negotiable. Always negotiate for 50% of all fines and
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forfeitures. That's the usual amount paid under various Federal laws.
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Conclusion
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In most criminal statutes the law provides for forfeiture of assets used or
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instrumental in the crime to prevent the crime from being easily repeated.
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Most readers know that customs laws and "zero tolerance" drug laws allow
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forfeiture of contraband items. If drugs are found, the law permits the
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seizure of vehicles, boats and airplanes if the vehicles were used to
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assist or commit the criminal act.
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No matter what the crime is, it can include fines. If the lawbreaker has
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the money to pay a fine, fines are imposed. Forfeiture is usually imposed
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on money used as working capital, money found in a drug bust, businesses,
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tools, guns, vehicles, etc. when the items are used in the execution of the
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crime. Any significant asset proven to be the fruits of criminal activity
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may be seized. CrimeFighters can get 50% of the value of same!
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Which law you should use to prosecute a lawbreaker depends on an analysis
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of state vs Federal laws. Determine which authority pays the maximum
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amount, or has the best advantages, all things considered. That's what
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State prosecutors do. In any event, USCS 3059 and 886 still apply no matter
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if you use state or Federal RICO laws.
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State laws are too numerous to try to fit into this book (and you'd only be
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interested in 1/50th of them). Instead, I'll recommend that you familiarize
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yourself with your state laws. They will be found in almost every public
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library or in local law libraries. (Chapter 20 includes some state laws
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that provide for suitable payment of rewards comparable to Federal laws.)
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Keep in mind that rewards (or awards) may be contained in a separate law.
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Look in the index for Rewards, Fines, Forfeitures, and Informants. As in
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Arizona law, they may not be specifically mentioned within the criminal
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statute itself. Criminal statutes may deal only with the definitions of the
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crime and assigns specific classes of felonies and misdemeanors, as
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appropriate, depending on the severity of the violation. Fines,
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forfeitures, and jail sentences are contained in other sections which are
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cross-referenced to the class of the felony or misdemeanor.
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F9 for next Chapter
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