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Feds Open New Door to Forfeiture Abuse
from High Times, December 1993
If you've ever lied on a loan application, you can lose your
ass. Precedent was recently set regarding a little-known
section of the 1989 Financial Institutions Reform, Recovery,
and Enforcement Act (FIRREA), allowing for the forfeiture of
any property derived from loans secured by those who knowingly
made false statements on their applications. The civil
forfeiture section of FIRREA applies specifically to
institutions protected by the Federal Deposit Insurance
Corporation (FDIC).
The precedent was set in the case of the United States v. 403
1/2 Skyline Drive, La Habra Heights, CA, a house which was
seized by federal authorities after it was determined that the
owner, Anthony Paul Feher, had misrepresented his employment at
the Action Garage Door company in his mortgage application with
Great Western Savings. Feher had claimed he worked at Action
for a period of two years prior to his mortgage application.
Great Western had given him the loan based on that
information. Though he never missed a mortgage payment,
forfeiture was initiated when it was discovered that Feher
had, in fact, never worked for the Action Garage Door company.
While the intent of the civil forfeiture section of FIRREA was
to protect lending institutions from the type of large-scale
fraud which led to the savings-and-loan-crisis, the fact that
precedent was set in such a small-scale case carries ominous
implications for those familiar with the widespread abuse of
forfeiture law. According to a report published recently in
the Los Angeles Times, fraudulent loan applications may account
for as many as 10% of all loan applications nationwide. Those
prosecutors and agencies looking to profit from civil
forfeiture may well see FIRREA as an open invitation to begin
looking into banking transactions. Once a single fraudulent
application is discovered, turning that applicant into an
informant may not be difficult; in addition to having their
own cases voided, informants stand to make up to 25% of any
profits they generate in civil forfeiture cases - a difficult
deal to turn down.
There is no statute of limitations on fraudulent loan
applications, and the civil forfeiture statutes of FIRREA apply
retroactively.
Other Items, Same Issue (HT, Dec '93)
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Item: The *Boston Globe* reported last November 1 on Colombian
officials' complaints that the US is violating US-Colombia
treaties and Colombian sovereignty in anti-drug efforts. US
Drug Enforcement Administration agents routinely pick up
1,000-pound loads of cocaine in Colombia without the knowledge
or consent of Colombian officials. This violates treaties on
airspace and shoreline rights, as well as Colombian law.
Colombian officials also protested the US Supreme Court ruling
okaying the DEA's abduction in Mexico of Dr. Humberto Machain,
a suspect in the torture death of DEA agent Enrique Camarena.
Colombia has its own "Machain" case. In 1991, Jorge Restrepo,
son of a former Colombian interior minister, was abducted by
the US Federal Bureau of Investigation in neighboring
Venezuela. He was lured across the border by undercover FBI
agents with the promise of a lucrative money-laundering deal and
private cruise. Since the FBI has no jurisdiction to arrest in
a foreign country, the Restrepo family calls this a
kidnapping. But the Machain decision bodes poorly for their
chance to win redress in the US courts.
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Item: The Washington Post reported on February 10 that the
Central Intelligence Agency is proposing a broadening of its
powers to include a wide role in law enforcement. Ironically,
the fact that US intelligence agencies slept through the
Iraqgate scandal is the rationale for this expansion of
prowess: if the CIA had "strong and direct working
relationships" with law enforcement agencies, money launderers
and their ilk would be more readily apprehended. Or so the
argument goes.
CIA Inspector General Frederick P. Hitz made clear that this
would go beyond the CIA's long-standing data exchanges with the
FBI and DEA. As a model, Hitz cited the CIA role in the
abduction and prosecution of former Panamanian strongman Manuel
Noriega, of course, was ousted by the US Christmas invasion of
1989 and subsequently arrested on drug-smuggling charges by US
forces in Panama.
The CIA's founding legislation, the 1947 National Security Act,
states that "the agency shall have no police, subpoena, law
enforcement powers, or internal security functions."
Other Items, Same Issue (HT, Dec '93)
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Item: On May 9, the *New York Times* ran an op-ed piece by
Federal Judge Whitman Knapp calling the Drug War a failure and
calling on Congress to repeal *all* federal drug legislation.
Judge Knapp subsequently announced that he would refuse to hear
any drug cases involving the "mandatory minimum" laws, which he
considers draconian and discriminatory. Good news, no? Get
ready for the backlash.
On May 18, *Times* columnist Abe Rosenthal launched his attack on
Knapp. Without mentioning the veteran justice by name,
Rosenthal wrote that judges who refuse mandatory minimum cases
"should resign...or be asked to leave by Congress." Demanding
beefed-up enforcement and interdiction budgets, Rosenthal
echoed the lurid rhetoric of paranoid American anti-Communism.
"Before it is too late, Americans should realize that the war
against drugs is in danger of being dismantled and the result
will be creeping legalization." Does this sound familiar?
The next to respond was then DEA chief Robert Bonner in a May 24
letter to the *Times*. Bonner warned that Colombia's Cali Cartel
is "more powerful than ever," manipulating Colombian politics
through "corruption, intimidation and murder," maintaining
"the most effective clandestine distribution system in America
for contraband and weapons." Bonner warns that "a global drug
cartel like Cali can only be weakened and incapacitated by
global law-enforcement." Otherwise, the Cartel "will export
death and violence to America." Therefore, "an isolationist
counter-narcotics strategy would be a tragic mistake." For
those who recall the rhetoric hurled against those who opposed
US military adventures in the Cold War era, this is deja vu all
over again.
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Item: On July 18, the *New York Times* reported that US Air Force
brass at North American Aerospace Defense (NORAD), the nation's
most elaborate and sophisticated command-and-control bunker,
have found a "new mission" since the decline of the Soviet
threat. Computer screens which once tracked Soviet missiles
are now tracking "pesky Cessnas ferrying cocaine from Latin
America." Air Force generals "are trying to preserve their
shrinking budgets by training some of their formidable weapons
against new villains: drug smugglers."
Filling the interior of Mount Cheyenne in the Colorado Rockies,
and actually built on springs to withstand nuclear attack, the
ultra-elite NORAD is in danger of becoming an anachronism.
Despite the fact that many smuggler planes fly too low to be
detected by the massive NORAD air surveillance system, Congress
voted to approve the complex's new anti-drug role four years
ago. Fifty percent of NORAD's mission now is tracking drug
traffickers.