Finally, reform of structuring forfeiture — and the farm story that helped

This is welcome news from the U.S. Department of Justice, and rather than try to rewrite I’ll just quote at length what my Cato colleague Adam Bates wrote:

[On March 31] Attorney General Eric Holder issued new guidelines to federal prosecutors tightening the rules for seizing assets for so-called “structuring” offenses.

Under the Bank Secrecy Act, structuring occurs when someone is suspected of arranging their financial transactions as to avoid triggering a report to the federal government by the financial institution. Some of civil asset forfeiture’s most egregious abuses are the result of federal prosecutors utilizing this nebulous statute to empty the bank accounts of unwitting citizens and small businesses who are never charged with any crime or even aware that their transactions are considered illegal.

The new rules require:

1. That structuring seizures against people for whom there is no criminal charge be based upon probable cause that the funds were either generated by unlawful activity or intended for use in anticipated unlawful activity. Alternatively, prosecutors must procure a warrant from a court and with the approval of either the U.S. Attorney (for Assistant U.S. Attorneys) or the Chief of the Asset Forfeiture and Money Laundering Section (AFMLS) (for Criminal Division trial attorneys).

2. That when the prosecutor determines subsequent to a structuring seizure that the government lacks the necessary evidence to succeed at either a civil or criminal trial, the seizing agency must return the full amount.

3. That when a prosecutor seizes property pursuant to suspicion of structuring, the prosecutor must file either a criminal indictment or a civil complaint, or receive an exception from either a U.S. Attorney or Chief of AFMLS within 150 days or else return the seized assets.

4. That all settlements must be complete and in writing. Informal settlements are expressly prohibited.

Here’s the Justice Department memo, and Kent Hoover at the Business Journal chain has more coverage.

I’ve been writing about the outrages of these structuring cases for years, especially the feds’ ambush of Randy and Karen Sowers’s successful Middletown, Md. dairy farm and ice cream maker, South Mountain Creamery. In yesterday’s Washington Post, Rachel Weiner tells how the Sowers’ story “gave civil forfeiture reformers a powerful symbol”, especially after the Institute for Justice got involved. I’m quoted:

“The South Mountain case happened to be one of these that captured the imagination,” said Walter Olson, a blogger for the libertarian Cato Institute who has written about the Sowers case. “Once you’ve bought ice cream for your kids from one of their little trucks, the name sticks in your memory.”


  • I wonder whether I should file this under: a) .They were wrong about Eric Holder, he is not so bad after all, or b) Eric Holder is still the worst AG ever, but even a broken clock is right twice a day.

  • The latter – and in the digital age, it’s only once daily.

  • @Allan–
    File it under,
    “When he’s good, he’s really good, and when he’s bad, he’s really bad.”

    This has been the first Administration to do *anything*, even if tentative, to roll back abuses in the War on Drugs.

  • Eric Holder is a truly evil person. His malicious 3-year investigation into George Zimmerman was obscene. And he did a similar thing with Darren Wilson. Two transparently innocent people.

    These “structuring” cases boggle my mind. You’d think a one-hour investigation to look at the business and the books would reveal that it’s a legit business and not a drug operation.

    • If they do that Robert, they can’t keep the money.

  • Really? Two guys died, one having committed a trivial crime, and one for no apparent reason and you do not think an investigation is warranted?

    • Allan,

      Do you really believe that strong arm robbery and assaulting a police officer are “trivial?”

      Do you really believe that a person who was having their head beat in on the concrete was “no apparent reason?”

      Do you really think that an investigation should have been started against Zimmerman when Corey and the detectives lied on the affidavit? Shouldn’t they have been investigated too?

      There were investigations into the deaths and it appears that instead of actually doing an unbiased investigation, the investigations were politically motivated.

      The lady with the blindfold on can’t be happy.

  • Gitacarver,

    Ok, perhaps we could categorize Brown’s actions as greater than trivial. But they were certainly less than warranted the death penalty. The question here is not whether the shooting was justified. The question is whether DOJ had a legitimate reason to conduct an investigation. It did.

    The same goes for Martin. Certainly, it was possible that what Zimmerman did was justified. But an investigation was warranted.

    And, yes, I think an investigation into, at the very least, public officials who lied on reports (although it would have been more appropriate at the local level).

    Just a thought. Given the history of rural Florida and Ferguson, Missouri, do you really think it outlandish to questioning whether a white person killing a black person was racially motivated or that the local authorities might not investigate fully?

    • Allan,

      The DOJ investigation into the Ferguson Police Department may have been warranted because there might have been systemic and institutional issues within the department.

      The investigation into the individual shootings were baseless. The only “legitimate” reasons the DOJ had to conduct an investigation was if the shooting(s) were not justified.

      Your position seems to be that anytime an incident occurs, the DOJ should investigate, even if there has been no crime committed.

      I find your position on investigating the public officials baffling and inconsistent. In the paragraph following your statement that the officials should have been investigated “at the local level,” you say the DOJ was justified in its investigation because of the history of the two areas – history that is determined by the very public officials you want investigated at the local level.

      It seems to me that you are saying the Federal investigation into justified acts by individuals was warranted, but when local and state officials lie and commit crimes, that investigation should stay local. That makes absolutely no sense to me.

      Finally, a couple of clarifications. Sanford, Florida (where the Zimmerman / Martin shooting took place is not “rural.” Secondly, Zimmerman is not “white,” he is Hispanic.

  • Guess it depends on what you mean by “rural.”

    Yes, Zimmerman has been described as Hispanic.

    The distinction I make for federal investigations is whether there appeared to be a civil rights violation. If the lying was to cover for what happened to Brown, it should have been investigated on the federal level. If the lying was to attack the police officer, it should result in a local investigation (at least initially).

    How, exactly, could we determine if the shootings were justified if we did not investigate?

    Generally, I do not think individual shootings should be investigated on the federal level (assuming there was no specific federal law violated). However, where there is a history of racism by the police, including the failure to fully investigate, federal investigations might be warranted. Given the history of mid-Florida and Ferguson, I think that investigations of the individual acts were warranted (moreso for the case in Ferguson than in Sanford).

    • Sorry Allan, but you are all over the board here.

      The lying was done in the Zimmerman case where prosecutor Corey and a detective lied on the charging affidavit as well as hid evidence from the defense. There is no distinction between trying to attack or protect a government agent as both people in the incident were not state players.

      Secondly, the DOJ announced investigations before the state and local agencies had completed their investigations. As I said, you wanted a Federal investigation where the players were citizens and a local investigation where one of the players was a state agent.

      There is no need for the DOJ to investigate anything until the local authorities have come to a conclusion on their investigations. That did not happen. The sad thing is that if Martin had killed Zimmerman, most people think that there would not have been a hue and cry for a civil rights investigation. Apparently only some people are entitled to have their rights protected.

      Finally, the definition of “rural” is “of the countryside.” Sanford sits in the middle of a large population center where the commercial industries are most decidedly agrarian or “country.”

      • Thanks for the debate. IMHO, we are decidedly off topic now. I hoe we can have further discussion on the issue when one of Mr. Olson’s posts warrants.

        Mr. Olson,

        Sorry for the attempted hijacking of the thread. I hope this does not lead to the equivalent of a civil forfeiture of my commenting privileges.

  • […] Washington Post features the legal ordeal of Randy and Karen Sowers’s South Mountain Creamery as fuel for forfeiture/structuring reform, quotes me [more] […]

  • Allan wrote: “Ok, perhaps we could categorize Brown’s actions as greater than trivial. But they were certainly less than warranted the death penalty.”

    This is a classic example of the grocer’s boy error. The son of the grocer in my ex-wife’s community drove much too fast on the serpentine Rt. 97 that ran along the Delaware River on the New York/Pennsylvania border. The boy smashed into a large rock and was killed. Obviously speeding is not a capital offense. No, he wasn’t being chased by the police. If that were true then the police would have been blamed for his death.

    The Brown guy was excessively aggressive on the day he was shot. That too is not a capital offense, but like speeding it is a risky behavior. The simple assault of punching Mr. Zimmerman in the nose would not be a capital offense either, but Martin escalated his attack to justify Zimmerman’s use of lethal force. My sense is that the vast majority of whites killing blacks are associated with mental illness or theory of mind problems by the deceased. Inter racial homicides are almost all blacks killing whites. .

  • Now, we need States to move away from civil forfeiture.