Chasing Down the 'Ill-Gotten Gains'
Sunday, October 2, 2005
Law enforcement can be a grim business. One day, you're trying to save the nation from a terrorist attack. The next day, you're comforting victims of a horrible crime.
Yet one recent afternoon, the chief federal law enforcer for the Eastern District of Virginia was flashing a broad grin and holding up two giant checks for the cameras. The reason for U.S. Attorney Paul J. McNulty's joy was evident: He was seizing other people's money.
"This is one of the more enjoyable aspects of a big prosecution, taking ill-gotten gains," McNulty said as he announced that more than $6 million had been forfeited to the federal government in the case of U.S. v. Samuel G. Kooritzky. Calling it "poetic justice," McNulty presented the two oversize checks to police officials from Fairfax and Arlington counties.
Those checks were just for the television cameras. The real checks would contain $505,873 for Fairfax and $72,267 for Arlington -- payback for those agencies' roles in the investigation of Kooritzky, an Arlington lawyer sentenced to 10 years in prison in 2003 for a massive labor fraud scheme that targeted immigrants. More than $4.6 million of the seized funds and assets has gone to restitution for Kooritzky's victims. The rest was spread to various federal agencies.
The case spotlighted an important area of federal law enforcement that often doesn't receive much attention, as evidenced by the few reporters who showed up for McNulty's news conference: asset forfeiture. That's when the government seizes cash, property and other assets, usually from convicted criminals but sometimes from people who haven't even been charged.
Asset forfeiture is big business. Nationally, the Justice Department seized $535 million in forfeitures in fiscal year 2004, department statistics show.
For criminal cases, the law spells out what federal agents can seize. That includes cash proceeds of the crime, property used to commit it and automobiles or other modes of transportation that facilitated it. A judge first must determine that the government has shown a connection between the assets and criminal activity.
The government conducts forfeiture sales of seized assets, and the proceeds are combined with seized cash. Under a federal formula, 20 percent is taken off the top as overhead and used to fund the forfeiture process. Other funds are divvied up among the various law enforcement agencies, federal and local, that participated in the investigation. That process is known as "equitable sharing."
Marvin D. Miller, an attorney for Kooritzky at his sentencing, criticized the forfeiture process as a "cash cow, and cash cows shouldn't be what's driving law enforcement."
"All of these funds are slushing back into law enforcement across America," Miller said. "I don't think anyone is monitoring where the money goes."
Elliot Casey, an assistant commonwealth's attorney in Alexandria and Arlington who oversees forfeiture cases prosecuted by both jurisdictions, strongly disagreed. He said money seized by the federal government has helped local police buy everything from police cars to surveillance equipment and has funded important training programs for officers.
"The money is not going into our pockets. It's not like we are using it to take expensive vacations," Casey said. "By law, the money must go back into the investigation and prosecution of other crimes."
Seizures are taken particularly seriously by McNulty's Alexandria-based office. Several years ago, McNulty set up a Monetary Penalties Unit to focus on forfeiture. Four lawyers work on it full time.
The results are evident. Total asset forfeitures in the Eastern District of Virginia were about $11.6 million for the fiscal year that ended Friday -- an all-time high, prosecutors say. Nearly all of that is criminal forfeitures taken from those convicted. About $275,000 is civil, when the government seizes property from someone who has not been charged criminally.
"In every single case, whether it be fraud, drugs or terrorism, we always look at the possibility of not only convicting a defendant but also grabbing assets, the ill-gotten gains made from the criminal activity," McNulty said in an interview.
Assets other than cash taken over the past year range from a 1996 Mercedes and a 2003 Land Rover to "household furnishings" seized from one defendant.
The Kooritzky case -- in which he and an associate were convicted of charging immigrants $8,000 to $20,000 to file false labor certification papers to help them get green cards -- ranks among the highest asset forfeitures ever in McNulty's jurisdiction. Federal officials seized more than $6 million in connection with the prosecution, including $1 million in cash found at the home of Kooritzky's associate, Ronald W. Bogardus.