Seizing the assets of criminals

The onslaught of drug abuse in North America is overwhelming. The cost of human suffering is staggering. The increase of drug induced crimes is beyond comprehension. The profits in drug trafficking is astronomical. The adjectivesused in this paragraph are not an exaggeration.

The 1986 report on the President's Commission on Organized Crime, began with the following statement;

Drug trafficking is the most serious organized crime problem in the world today. The drug trade generates billions of dollars for organized crime each year, imposing incalculable costs on individuals, families,communities and governments worldwide.

The impact of organized crime and drug trafficking on society has far-ranging consequences, from the mental or physical destruction of the individual drug user to questions of national security.

In Malaysia and Singapore, trafficking in drugs is punishable by hanging even when the amount found on the suspect is minimal. In Iran, the death penalty is given to anyone found with one or more ounces of heroin or 5 or more pounds of opium in their possession. From January 1, 1989 to March 10, 1989, Iran hanged 306 drug smugglers with 81 of them hanged on March 10th of that year. The Congress of the United States of America in 1956 passed the Narcotic Control Act which made the sale of heroin to anyone under the age of 18, a capital offence, and in Wyoming, a judge sentenced a man to death for being found with a little more than an ounce of marijuana in his possession-although no one in the U.S. as of yet has been executed for these crimes. The American law makers considered a law that would permit the execution of drug importers who are part of a criminal enterprise but the law was never passed.

Imprisonment doesn't seem to work as effectively as a deterrent as people think. Many of those incarcerated are generally small fry traffickers or mini-importers who are losers in the first place and who have nothing to lose but their freedom.

In Canada, the crime of importing narcotics is punishable by imprisonment of no less than ten years and up to life----although the life sentence is rarely given. For example, in January 1988, Bikash Rai, 38, who was a heroin sales organizer for Canada and as such, a kingpin in an international heroin ring, received only 15 years in prison along with the two years he served in pre-trial custody for conspiracy to import heroin and trafficking in same. The punishment for the crime of trafficking in illicit chemical drugs such as LSD or MDA is less severe. The highest sentence that can be awarded is 10 years. So in effect, if a person is convicted of selling a tonne of LSD, the most he could get is ten years, despite the fact that he may have ruined the lives of thousands of users.

Evidence of the failure of imprisonment as a deterrent to drug traffickers is obvious when you consider the fact that so many of them go back to drug trafficking when they are released onto the streets again.

But what probably galls the public's sensibilities more than anything else is that most of the big-time pushers not only get away with their crimes, they also get to enjoy the benefits of their ill-gained profits from their nefarious enterprises.

One of the recommendations in the 1986 presidential report was that the cost of that nation's anti-drug efforts can be subsidized to a great extent by the seizure and forfeiture of drug trafficker's assets. Canada and other countries also have laws that permit the assets of these drug importers and traffickers to be seized.

That idea was already in force when this suggestion was made. For example, in 1984, the American Congress passed the Comprehensive Forfeiture Act which was legislation which made extensive revisions to Federal civil and criminal forfeiture laws and procedures aimed at the assets of racketeering and drug trafficking organizations. One of the Congressmen advocating the new legislation said in part;

“Today, few in the Congress or the law enforcement agencies fail to recognize that the traditional criminal sanctions of fine and imprisonment are inadequate to deter or punish the enormously profitable trade in dangerous drugs.....Clearly if law enforcement efforts are to be successful, they must include an attack on the economic aspects of these crimes. Forfeiture is the mechanism through which such an attack may be made.”

In that same year, American Federal agencies obtained an estimated $400 to $450 million through the seizure and forfeiture of drug trafficker's assets. Under current policy, the American Federal government channels all seized and forfeited assets into Federal, State and local law enforcement agencies and the Department of Justice Assets Forfeiture Fund.

The Comprehensive Forfeiture Act also amended the 1970 Comprehensive Act. With respect to criminal forfeiture, the 1984 Act added a new provision to the 1970 Act that is applicable to all felony drug offences, including the offence of 'Continuing Criminal Enterprise'.

The new drug criminal forfeiture provision also creates a rebuttable presumption that any property of a person convicted of a drug felony is subject to forfeiture if the government establishes by a preponderance of the evidence that the defendant acquired the property during the period of violation, or within a reasonably short period thereafter, and that there was no likely monetary source for the property other than through the profits of drug dealing. The Act also codified the judicially-recognized ‘relation back doctrine’ and provided that the filing of criminal charges which are related to a pending civil forfeiture proceeding, will, upon a motion of the government, stay the civil proceedings. In effect, what this means is that a drug pusher who bought his house through the sale of illicit drugs, can be prevented from selling his house while waiting for the outcome of his criminal trial.

No one is immune from this law of forfeiture. In March 1989, a 77-year-old blind man in Atlantic Beach, Florida, convicted the previous year of selling crack cocaine, was given two days to vacate his house. His home was seized by Federal authorities because it was classed as an asset of a convicted drug pusher. It's not likely that he paid for the house entirely through the sale of crack as this drug is a relatively new phenomenon in our society but the Federal authorities decided that whatever he owned, was now forfeited to the State.

It has been the regular practice of the American customs people and drug enforcement agencies to seize planes and boats of all sizes when they discover that these craft are used to carry large amounts of drugs for the purpose of importation. This is no different than when it was in the days of Prohibition or even now when people are caught smuggling aliens in their cars or trucks--they forfeit their vehicles.

The new American law (sometimes referred to as 'Zero Tolerance') even goes to such an extent that if the butt of a marijuana cigarettes found in the car, truck or boat, the owner forfeits his vehicle or craft. There have been a few cases of truck drivers having their $150,000 rigs taken from them by the custom authorities at the border crossings for being in possession of one marijuana cigarette. In one case, a marijuana cigarette butt was found in a million dollar yacht and the yacht was seized although it was later returned to the owner when it couldn't be established that the butt actually belonged to the owner. If it was established that the marijuana cigarette was his, he would have paid a terrible price for smoking it on his yacht.

In July 1988, the Canadian House of Commons unanimously passed Bill C-61. This new law gives police and the courts sweeping powers to deal with the ill-gotten gains of criminals. It is aimed primarily at the major profiteers of crime; the drug kingpins, motorcycle gangs, contract killers and fraud specialists who have managed in the past to protect their riches even while serving their jail sentences.

For example, the two members of a theft ring that were convicted in March 1988 of stealing $1 million in merchandise from trucks could easily find that when they are released from prison, they won't have homes to return to. The same could apply to the likes of Gabor Simonyl who was convicted in March 1989 of defrauding two lonely women out of their life's savings.

This new tough law, known colloquially as the 'seize and freeze' legislation, allows police to obtain renewable six-month arrants to trace and seize the assets of accused persons before their trials. Assets would include, homes and businesses, bank accounts, motor vehicles, boats, stock portfolios and even cash.

Section 16 (1) of the Controlled Drugs and Substances Act of Canada states that any and all offence-related property be seized by the government and disposed of , in other words sold at a public auction. This means that the owner of a house in which he is growing marijuana or is manufacturing other narcotic substances can have his property and house seized and sold. That is because no person shall possess any property or any proceeds of any property knowing that all or part of the property or of those proceeds was obtained or derived directly or indirectly as a result of the commission of Canada of an offence under section 4(1) and 7(1) which is trafficking in and the production of a controlled drug or any substance represented or held out by the person to be a controlled drug or have in possession any controlled drug for the purpose of trafficking.

I see a bit of a flaw in this forfeiture law. Would it be right to seize a man's home if the man is a con artist who attempts to sell an undercover police officer an ounce of baking soda purporting it to be LSD? Not likely. As Sgt. Bruce Bowie, the acting head of the RCMP's national anti-drug profiteering unit explained it; "It's aimed at organized criminal groups who have amassed large wealth through criminal activity."

In the past (since 1974) there had been legislation that made it possible to seize ill-gotten gains from criminals but up to the passing of Bil C-61, the two assets that couldn't be touched were bank accounts and real estate.

In some cases, the assets can still be forfeited if the accused is found innocent and the court hearing the motion for forfeiture is satisfied on a balance of probabilities that the assets are the end results of criminal profits. This reasoning is based on the premise that it would hardly be just to conclude for example, that a drug kingpin could keep his assets obtained through his criminal activity if he won his criminal case in court because a witness mysteriously ended up missing, or dead, or because the police goofed on a search warrant etc.

One of the cases before the courts that prompted this kind of legislation was the Pinto case. He was an American who was the chief money launderer for a group of Columbian cocaine traffickers. He transferred $600,000 from his bank in Florida to a Montreal Branch of the Royal Bank of Canada. When Florida investigators showed up in Canada to lay claim to the money, they found that there was no legal way they could get at the money because at that time, there wasn't any law in Canada that permitted the seizure of monies from banks when the depositor obtained his money by trafficking in illicit drugs. Pinto however didn't get to spend a cent of it because he was knifed to death in a Florida prison but the Supreme Court of Canada did permit his heirs to have the money in his place.

This raises an interesting question. Can the wife of a convicted drug dealer prevent the authorities from seizing their home because the home is in her name? To make such a seizure, the crown would have to prove that either; (1) the wife knew that her husband was dealing in drugs and condoned it, (2) the monies he obtained through illicit drug dealing was being used in full or in part for the purchase of the house, (3) he transferred the house into his wife's name shortly before or anytime after he began dealing in drugs.

Section 452.31(1) of the Proceeds of Crime Act of Canada refers to the laundering of money which states that no person shall use, transfer the possession of, send or deliver to any person or place, transport, transmit, alter, dispose of or otherwise deal with in any manner or by any means, any property or proceeds of any property with intent to conceal or convert that property or those proceeds and knowing that all or part of that property or of those proceeds was obtained or derived directly or indirectly as result of trafficking in a restricted drug etc.

Hence if the husband who is a drug dealer transferred his house into his wife's name (or the name of of anyone else) he would be guilty of an offence and could be sentenced to ten years in prison, over and above what he would get for trafficking.

The law goes so far as to state that no one can even possess any property or proceeds knowing that all or part of the property or of those proceeds was obtained or derived directly or indirectly through the trafficking of illicit drugs. Hence, the wife of a drug dealer who permits their home to be transferred to her name can be sentenced to prison for ten years if it is established that she knew that her husband was trafficking in drugs and used all or part of his money towards the purchase of their home.

The law of seizure and forfeiture which is referred to as the Proceeds of Crime Act covers such wrongdoings that is considered an enterprise crime offence and proceeds of crime in this context relate to proceeds obtained or derived directly or indirectly as a result of an offence against any of 24 provisions in the Criminal Code (e.g. arson, bribery) or against section 354 of the Criminal Code (possession of property obtained by crime) or being an accessory after the fact, in relation to, or any counseling in relation to, any of the above.

Section 354(1) states that everyone commits a crime who has in his possession any property or proceeds to any property that was obtained directly or indirectly from the commission of a crime

The legislation makes it possible to seize property, goods, cash or bank accounts even if the suspect is deceased, has fled Canada or was never in Canada. Earlier, I mentioned the Pinto case where the suspect died in a Florida prison and he had previously stashed $600,000 of his ill-gotten profits in a bank in Montreal. Under the new legislation, his money would be forfeited and turned over to the authorities in Florida who had originally requested it.

Under this law, the Revenue Canada can now be ordered by a court to disclose income tax returns in drug- related cases.

Since the banks and other financial institutions are not permitted to knowingly permit a depositor to put money in their banks if the money was obtained from drug-related enterprises, the new laws protect these banks et cettera from criminal or civil liability for disclosing this information to the police.

In 2001 in the United Kingdom, there was an amendment made with respect to the seizure of property which stated the seizure of assets of suspected criminals would not apply to property or cash obtained more than 12 years earlier. When a person is convicted of a serious criminal offence, the courts will have to implement asset confiscation procedures. A convicted criminal will have his assets seized unless there is proof they were obtained legitimately.

I have some concerns about this amendment. For example, suppose he bought the property with a substantial down payment without using proceeds from a criminal enterprise. Then twelve years later, it is learned that he paid the balance of the mortgage with the proceeds of crime. Should he be permitted to keep his home? Bob Ainsworth, the Home Office minister, said: "It is not acceptable that people should enjoy the proceed of criminal activity and live a life of luxury, including big houses, swimming pools and fast cars, when it is built on the misery of victims." I think that says it for me also.

Three of Scotland's police forces as of September 2009 are to receive a share of money recovered from criminals to help in their fight against serious organized crime - and they are demonstrating their commitment by matching the funding from their own resources. The Scottish Government and police service are together targeting the criminal’s assets to cut off the financial lifeblood of criminal enterprises. The government is committed to giving the police the right tools to take on these criminals. It is fitting that they are using the proceeds of crime to help the police track these gangsters' illegal dealings and seize their ill-gotten gains.

Legislation in Alberta aimed at hitting gangsters and drug dealers where it hurts----their wallets has had a major impact on crime. Alberta Justice Minister Alison Redford said in November 2009 that $11.4 million in homes, cars and cash linked to crime had been seized under the Victims Restitution and Compensation Payment Act. She said vehicles are becoming the primary tool of ‘dial-a-dopers’ who have taken their illicit commerce, mobile. The year-old law allows the police to take these vehicles, many loaded with concealed compartments for guns and drugs, off the road. The minister said, "The only thing that these mobile dealers require to run their drug business is a car and a cell phone. And if we can seize the car of a drug dealer, that's one less drug dealer doing business." Redford said Justice Department lawyers have had a 97% success rate so far in receiving judicial consent for seizure and forfeiture proceedings.

The director of Europol, the EU police co-ordinating agency, said the Criminal Assets Bureau in Ireland was a role model for the rest of Europe. "Europol is promoting it as the best practice in other European countries according to Rob Wainwright, the director of of Europol, the European Union police co-ordinating agency He said in part; "We’re trying to raise the model of criminal assets seizure in Europe, through, in particular, the establishment of our new Europol CAB as a platform for more integrated efforts in this area." The Criminal Assets Bureau operates in the Republic of Ireland in order to recover the proceeds of organised crime. It is a division of the Garda Síochána (Police), but reports annually to the Minister for Justice, Equality and Law Reform. It has wide ranging powers including the seizure of proceeds of crime from criminals and serious tax defaulters.

These laws are harsh, of that there can be no doubt. And there are those who will claim that these laws give the police the right to freeze the property before a court can establish guilt. But we are facing a global war against the onslaught of illicit drugs infesting our children, our neighbourhoods, our cities and our country. The craving for illicit drugs is creeping into every corner of the globe. The drug bosses in Columbia and Mexico are so powerful, they threaten the security of the state. Powerful drug traffickers join forces with terrorists and create havoc in cities where peace and tranquility once ruled.

In the city of Washington, D.C., during 1988, as many as 46,000 drug dealers were arrested and in the first two months of 1988, as many as 82 persons were killed in that city, most killings being drug-related. In Canada alone, drug trafficking is a $10-billion- dollar-a-year business.

It has been said that the fall of the Roman Empire has been attributed to the ingestion of lead by the people of that era who believed that eating lead was good for them. It is conceivable that the eventual fall of the Western World as we know it today may be attributed to the ingestion of illicit drugs.

I think our laws are too namby pamby. My personal feelings are that if a drug trafficker is convicted, he should automatically serve a minimum sentence of two years imprisonment if he is a minor drug trafficker and a ten year minimum prison sentence if he is a major drug trafficker. Further, I would like to see all drug traffickers lose all of their assets, be it their homes, their cars, their furniture, or their jewellery, and only permit them to keep what clothing they can put in one suitcase per person. When they realize that drug trafficking is going to bankrupt them and that they will have to begin all over again, it might act as a deterrent.

The blind man in Florida who lost his home because he was pushing crack out of his house is an excellent example of deterrence in extremis for drug traffickers who think that they only have a year or so of freedom to lose when they get caught. That stupid old man lost everything and quite frankly, it looks damn good on him. I don’t care if the owner of the house is a little old grandnmother. If she permits the manufacture of drugs in her home, then the home is no longer hers and she must vacate it immediately and leave it with only a suitcase of her clothes.

If you think this is harsh, consider this. When your child takes one hit of crack, he or she is addicted immediately. Your child can end up selling crack to others to support his or her habit, or rob little old ladies for their handbags, or go nuts on you during the constant withdrawal stages. And of course, your child could very probably die from an overdose. And if you and your child are victims of the slimebag that gave your child the crack, and you learn that this garbage from the gutter has, after being convicted of selling crack to school kids, forfeited all of his possessions which included his house, his cottage, his car, his jewellery, his money in the bank----everything except what clothes he can put in one suitcase, are you going to pound the sidewalks with a placard in your hand, claiming that he didn't get a fair deal? I think not.