Communications Law 302

nobody at nobody at
Mon Mar 28 06:02:24 PST 1994

Does anyone know what happened to the banks lovely sytem a while
back when New York account holders found out that withdrawls were
made twice on their accounts?

What happened, did someone actually get creditted with the
corresponding debits, or was this another case of an operator
putting up a tape twice?


As an aside, I remember an old wire from some years ago when
$58Million was held up by the US with co-operation of European

In case anyone is interested the following was the reult of the
legal wranglin'.  and is dated 11/93.  Forget Clipper, and check
out how else they're stickin it to ya.

In short they 'seized' data packets, at an intermediary remailer.
They have made information seizable **EGADS**


AN        PTS2096146
DD        11/01/93
SO     *  Money Laundering Alert (MLAL)
          Alert International, Inc
          Vol. 5, No. 2
LP           When operatives of the Santacruz-Londono Cali drug
          cartel were arrested in June 1990 in Luxembourg, a 
          flurry of wire transfers flew from hundreds of cartel
          bank accounts in Europe.  Anticipating the transfers, 
          Luxembourg authorities asked other countries to freeze
          the money linked to those accounts
TX           Of the $58 million seized worldwide, $12 million was
          frozen in New York City banks which had served as 
          "intermediary banks" in the wire transfers. The role of
          those banks was to credit the accounts of certain 
          correspondent Colombian banks who would then notify the
          beneficiaries that the funds were available.
             The banks were instructed by DEA agents to attach
          all funds on deposit in the names of Cali cartel 
          associates, including "all related entities and 
          individuals," and to say which transfers were
          destined for beneficiaries in Colombia.
             Two groups of Colombian clothing exporters filed
          claims to about $6.5 million of the seized funds saying 
          the money was legitimately earned. They also sued the 
          New York banks for loss of use of their funds and for 
          violation of the Right to Financial Privacy Act and the
          Electronic Communications Privacy Act (ECPA). Their
          suits against the banks were dismissed. After a two-month
          trial last year, the jury found that 18 of the 22
          accounts seized were forfeitable.
             Now, in a case of great importance to the emerging
          wire transfer battles between the government and the 
          movers of dirty money, the key federal appellate court
          which rules on issues arising from the New York financial
          center has given a resounding victory to the government.
             The Second Circuit Court of Appeals ruled that wire
          transfers that pass through intermediary banks can be 
          seized even without "alleging facts sufficient to show
          that specific property is tainted." All the government 
          must show are "facts sufficient to support a reasonable
          belief that (it) can demonstrate probable cause for
          finding the property tainted," the court said.
             By naming the intermediary banks and the
          beneficiaries, the U.S. described the property with 
          "reasonable particularity."  Moreover, the U.S. did not 
          need a warrant for the seizures because the law permits
          the Justice Department to seize property when it has
          "probable cause to believe" it is subject to civil 
          forfeiture, said the court.
             "Because the (transfers were) fungible and capable
          of rapid motion due to modern technology,...exigent 
          circumstances were present here," said the court, 
          dismissing the claimants' assertions that their
          constitutional rights had been violated.
             Likewise, there was no violation of the Right to
          Financial Privacy Act, said the court, because the 
          claimants did not maintain "accounts" at the banks. 
             The ECPA also provided no relief to the claimants because 
          that law deals with the use of "devices" to "intercept" 
          communications. Here, no devices were used and there was
          no interception, said the court.
             The court also ruled than an EFT at an intermediary
          bank is "clearly a seizable res (thing) under the forfeiture
          statutes" and that only a "nexus" and not a "substantial 
          connection" between seized property and illegal drug 
          activity must be shown by the government to
          show probable cause.
             The case has far-reaching implications since a
           majority of international wire transfers pass through 
           intermediary banks, many of them in New York. 
           (U.S. vs. Daccarett, Docket Nos. 92-6229 and 6259,
          2nd Cir. Ct of App., September 10, 1993).
             ---Richard M. Lucas, CPA, is a consultant for the
                          Philip Manuel
          Resource Group and a former IRS Special Agent.
             COPYRIGHT 1993 by Alert International, Inc.


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