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                         Fines and Forfeiture Laws

This chapter is about existing laws which contain provisions to pay a
percentage of fines and forfeitures to those who provide information
leading to the conviction of felons. Examples of maximum fines for various
felonies are listed in the last part of this chapter. The next chapter will
tell you how to get the money.

In certain circumstances the courts may assess a fine as part of the
punishment. The amount depends on a lawbreaker's ability to pay as well as
the appropriateness of such a fine. The courts realize that it serves the
public interest to levy fines and forfeitures in lieu of, or with, jail
terms. This is especially so when the felon has made huge profits by
violating the law, and, the courts feel a need to take away ill-gotten
gains. Fines and forfeitures are used to deny felons the "fruits of their
criminal activity."

Many laws contain provisions to pay 50 percent of resultant fines and
forfeitures. This creates an unusual opportunity for CrimeFighters. As you
look at the large dollar amounts involved, visualize yourself being
eligible and being paid 50% of the fines and forfeitures.

                               Some Examples

On October 31, 1990, headlines in the Arizona Republic stated, "Underground
Pot Factories Raided". Entrepreneurs had built two large houses designed
specifically for marijuana growing in underground rooms. The rooms
contained irrigation, lighting, diesel generators, and a compactor for
making bales of pot worth an estimated $50 million. The houses cost
$400,000. The sentence for each charge was 10 years to life in prison and
a fine of up to $4 million.

On April 13, 1990 a San Antonio Express-News headlines stated,"Mexican
Agents Held in Border Cash Haul."  Two customs agents were placed under
arrest in Brownsville, Texas, when they were caught red-handed trying to
smuggle $2.4 million into Mexico. The money was in various denominations,
mostly small bills, and stashed in cardboard boxes. Only $10,000 can be
legally taken out of the United States without registration. The violation
of U.S. currency laws provide a maximum penalty of 15 years and fines up to
$500,000. In this case, the Mexican customs agents violated the law, were
caught, and the $2,400,000 in cash was seized and forfeited under customs
law. In addition, their 1990 Jeep station wagon was also forfeited.

The Bellingham (Washington) Herald (Bellingham, Washington) on June 11,
1990 stated, "Huge Heroin Bust in Bellingham." The story tells how U.S.
Border Patrol agents became suspicious of three men in a parked car. Having
"reasonable grounds" They searched the vehicle and found 13 packages of
Asian heroin with a wholesale value of about $1.25 million. When blended
with other ingredients for street sale, it could be worth about $15
million. The vehicle and heroin were forfeited.

In 1981, also in Bellingham, 40 tons of marijuana valued at $25 million was
seized from a ship on Bellingham Bay. The ship and its cargo were
forfeited, and the ringleader was sentenced to 25 years in prison and fined
$155,000.

Almost every week a newspaper story tells of another large drug bust.
Thousands of small drug busts of $100,000 are commonplace and hardly worth
mentioning except in the local news media.

It's been reported that 90 percent of all criminal activity is directly or
indirectly related to narcotics. Drug-related crimes are the single largest
law enforcement problem in America. On the other hand, they also provide
CrimeFighters with an opportunity to make a better than average income to
help police obtain evidence and to put violators in jail. RICO laws are
being used more and more to remove the profit from criminal activity. With
50% of the fines and forfeitures from just a dozen or more small drug
busts, a CrimeFighter can become financially independent!

                   Fraudulent Tax Shelter Schemes vs IRS

Title 26 USCS 7302 provides that "it shall be unlawful to have or possess
any property intended for use in violating the provisions of internal
revenue laws... and no property rights shall exist in any such property."

An unofficial interpretation of this law follows.

Any person using any property as "bait" in illegal tax shelter schemes
loses title to said property, which is then seized by the IRS.

One case (United States vs One 1954 Rolls Royce Silver Dawn, 777F.2d 1358
(9th Cir. 1985) involved a fraudulent tax shelter scheme in which the
automobile was the "object" used in the illegal tax shelter. The Court of
Appeals agreed it was an "active aid" in the illegal activity and was
forfeited under civil procedure.

Any object whether real estate or other property, used for illegal tax
shelters, or any other fraud, are subject to forfeiture.  Under RICO and
other federal reward laws, the informant can get paid up to 50 percent of
the value of confiscated assets that are involved in criminal activity.

The courts may authorize seizure of cars, boats, airplanes, homes, and even
going businesses when they are used in the commission of a felony. Most
people know that customs laws, for example, provide for the forfeiture of
contraband items plus the vehicles or vessels if drugs are found in them.

                     Homes May Be Seized and Forfeited

A recent (1989) newspaper article in the Harlingen (Texas) Valley Times
mentioned a Brownsville man was arrested for 10 separate violations of
importing photographs of naked children engaged in sexually explicit
conduct. In many states, pornography of adults is permitted and tolerated
by law. When it involves underage children the law is harsh on offenders.
In this case, the possible penalty for each count is 10 years in jail and
up to $250,000 in fines for each violation. The indictment includes a
notice that the lawbreaker's house will be seized and forfeited under a
pornography law (Title 18, Sections 2251 - 2254). This law allows the
forfeiture of property used in the commission of pornographic offenses.

If the Brownsville man had legitimate businesses (other than the porn
business) and it was proven that part of the proceeds of his illegal
business was used to finance the legitimate business, or the legitimate
business was used to "launder" the illegal profits, the legitimate business
and its bank accounts could also have been seized and forfeited.

                         Money Laundering Problems

Al Capone was indicted for income tax evasion after the government couldn't
pin him down on other criminal charge. All they could prove was that Capone
was spending a lot of money that wasn't reported on his income tax forms.
Al couldn't account for the money or wouldn't say where it came from.

Most criminals know if they don't have a job or a business to support
expensive tastes, they will come under scrutiny for income tax evasion.
Money laundering is the obvious solution.

Money laundering is accomplished by investing illegally obtained money into
a legitimate business. Criminals then report profits from the business.
Laundering money solves one problem but creates another. If a criminal owns
the business it becomes "tainted" with illegal money. When that can be
proven, the business or business investments may be forfeited under various
laws as the fruits of criminal activity.

                          The Use of Corporations

Most racketeering businesses are incorporated. Corporations provide tax
sheltering and lower personal taxes. They also facilitate selling shares to
raise money for investments. When a business owner has many legitimate
business investments, accountants will recommend the use of a separate
corporation as a holding company. Such a corporation "holds" the shares of
various investments in the holding company's name. Dividend income from
various corporations are paid to the holding company and not to the owner.
That allows the owner to defer surplus business income and to reduce his
personal income taxes. This common business practice is a legal tax-
sheltering strategy. A successful criminal can become a rich business
owner, obtain legal tax breaks, and receive a legitimate income to avoid
suspicion of illegal activity.

However, if it can be proved that a business was financed by the profits
from criminal activity, the business can be forfeited. If illegal money can
be traced to a holding company, that holding company (which "owns" the
shares of all the various businesses) can itself be forfeited and the crime
boss loses everything!

                          Civil Forfeiture Cases

United States vs Cauble. 706 F.2d 1322 (5th Cir. 1983). Cauble placed
various legitimate businesses under the umbrella of a holding company which
was the RICO enterprise named in the indictment for a marijuana smuggling
enterprise. Although not all the businesses were involved in the illegal
activity, the jury felt that it is impossible to determine which weren't
tainted. They decided it would be better to declare forfeit all the
businesses rather than none. It was estimated the total value of Cauble's
enterprises was worth $15 to $20 million!

United States vs $4,255,000. 762, F.2d 895 (11th Cir. 1985) is a case in
which a person, who claimed to be an honest and well established money-
exchanger, moved $242 million in drug proceeds through a Miami bank in less
than eight months during 1981. The lawbreaker said he had no idea the money
delivered to him were the proceeds of illegal drug activity. The government
filed a $10 million civil penalty action against the defendant's company,
Sonal, Inc. (under 31 USCS 5321 (a)(2)) and seized $453,731 that was in a
Sonal's bank account.

Most of the criminal laws mentioned in this book offer rewards based on
either the arrest or conviction. An exception is Title 28, USCS 524, which
states: "payment of awards may be paid for information or assistance
leading to a civil or criminal forfeiture under the comprehensive Drug
Abuse Prevention and Control Act or a criminal forfeiture under the
Racketeer Influenced and Corrupt Organization Statute (RICO) 18 USCS 1961
et seq."

Keep USCS 524 in mind for RICO civil suits. The payment of awards provides
legal standing to citizens to initiate civil actions against drug dealers.
It's one of the keys to a CrimeFighter's financial success. (More on civil
suits in chapter 8)
                          Customs' Forfeiture Law

Also an exception is 19 USCS 1619, mentioned later in more detail in
Chapter 14.  This Custom's law is very broad law and provides compensation
to informers. USCS 1619 doesn't mention (therefore doesn't specifically
prohibit) payment based on civil action fines and forfeitures. Payment is
not tied to an arrest or conviction -- only that such information "leads to
a recovery of any duties withheld, or any fine, penalty, or forfeiture of
property incurred: the Secretary may award and pay such person an amount
that does not exceed 25 percent of the net amount so recovered."

Smuggling often involves large quantities of contraband. Drugs have a very
high value (currently $100,000 per kilogram from Columbia which is sold for
$1 million on the street.) This "drug value" seems to be anticipated in the
25 percent Custom's reward. The reward is limited to $250,000 for each
case. That's about where the total value of fines and forfeitures is
expected to be $1 million or more.

                                  Bonuses

Title 18 USCS 886, Drug Enforcement Agency pays an additional reward, up to
$25,000, for information leading to the conviction of any drug-related
criminal activity. Whether or not there is a conviction, but providing the
case goes to trial, you can also qualify for up to $25,000 under Title 18
USCS 3059, which pays a reward for information leading to the arrest for
any state or Federal felony.

If a conviction is obtained on drug-related crimes, you can qualify for up
to 50% of the fines and forfeitures (vehicles, equipment, cash, jewelry,
businesses, guns, stocks and bonds, etc.), plus rewards of up to $50,000
via USCS 3059 and USCS 886.

                 Free Vehicles, Guns, Boats and Aircraft?

State and Federal district attorneys hardly ever try to sell forfeited
items at retail prices. They usually sell them at wholesale prices or less
to get rid of them as soon as possible. This is especially so when the
items, such as vehicles, boats and airplanes, require maintenance charges,
storage or are subject to vandalism, weathering, theft, or obsolescence
which would quickly reduce their value.

A CrimeFighter who has 50% claim to the items forfeited might be able to
persuade authorities to use the 50% and possibly related rewards as the
purchase amount. That would provide the authorities with immediate disposal
of the forfeited property.

                             Fines - How Much?

USCS 3571 provides the courts with guidelines and amounts of fines:

18 USCS 3571  Sentence of fine.

(a) In general. A defendant who has been found guilty of an offense may be
sentenced to pay a fine.

(b) Fines for individuals. Except as provided in this subsection (e) of
this section, an individual who has been found guilty of an offense may be
fined not more than the greatest of -

 (1) the amount specified in the law setting forth the offense;
 (2) the applicable amount under subsection (d) of this section;
 (3) for a felony, not more than $250,000;
 (4) for a misdemeanor resulting in death not more than $250,000;
 (5) for a Class A misdemeanor that does not result in death, not
     more than $100,000;
 (6) for a Class B or C misdemeanor that does not result in death,
     not more than $5,000; or
 (7) for an infraction, not more than $5,000.

     - - - - - - - - -

(c) Fines for organizations. Except as provided in subsection (e) of this
section, an organization that has been found guilty of an offense may be
fined not more than the greatest of -

 (1) the amount specified in the law setting forth the offense;
 (2) the applicable amount under subsection (d) of this section;
 (3) for a felony, not more than $500,000;
 (4) for a misdemeanor resulting in death, not more than $500,000;
 (5) for a Class A misdemeanor that does not result in death, not
     more than $200,000;
 (6) for a Class B or C misdemeanor that does not result in death,
     not more than $10,000; or
 (7) for an infraction, not more than $10,000.

(d) Alternative fines based on gain or loss. If any person derives
pecuniary gain from the offense, or if the offense results in pecuniary
loss to a person other than the defendant, the defendant may be fined not
more than the greater of twice the gross gain or twice the gross loss,
unless imposition of a fine under this subsection would unduly complicate
or prolong the sentencing process.

(e) Special rule for lower fine specified in substantive provisions. If a
law setting forth an offense specifies no fine or a fine that is lower than
the fine otherwise applicable under this section and such law, by specific
reference, exempts the offense from the applicability of the fine otherwise
applicable under this section, the defendant may not be fined more than the
amount specified in the law setting forth the offense."

                                * * * * * *

Comment: Note that under ordinary law, sub-paragraph (d) allows a fine to
be doubled, as in a case of fraud, swindle, or larceny such as those often
used by confidence artists and unethical businesses via shady dealings.
Also note that organizations also pay twice as much in fines resulting in a
maximum fine of up to four times the illegal profit!  However, the amount
and imposition of fines are contingent on individual personal or business
finances of the defendant.

Fines that are not suspended by the court constitute a lien until paid in
full. Though the lawbreaker (or business) can't pay the full amount of the
fine, it hangs over their head like any other debt and must be paid sooner
or later. Bankruptcy laws do not include relief for fines based on criminal
violations. Significant assets that are later obtained by a lawbreaker may
be seized and sold to satisfy the debt.

When prosecutions are under RICO laws, triple damages are possible. If you
have a choice, RICO laws are best for prosecution to get maximum awards by
the court. Prosecutions are easier under civil lawsuits than under criminal
charges. If you decide to do the actual prosecution (which is possible) you
can be awarded 50% of the total fines and forfeitures. In addition, you can
also be paid for your investigative and related costs, plus legal fees to
your lawyer who acts as your assistant to prosecute offenders.

                           State Forfeiture Laws

State laws are organized differently from Federal laws. That is, rewards
for forfeitures (if any) are often found in separate laws that deal only
with forfeitures. For example, Arizona's forfeiture law, 13-4315, has a
provision that says "Payment of awards for information or assistance
leading to a civil or criminal proceeding may be made under this Title."

Awards (rewards) are authorized in any civil or criminal case, including
Arizona's RICO law and any other law where and when forfeitures are
imposed. When no reward dollar amount or percentage is specified it's
purposely left negotiable. Always negotiate for 50% of all fines and
forfeitures. That's the usual amount paid under various Federal laws.

                                Conclusion

In most criminal statutes the law provides for forfeiture of assets used or
instrumental in the crime to prevent the crime from being easily repeated.
Most readers know that customs laws and "zero tolerance" drug laws allow
forfeiture of contraband items. If drugs are found, the law permits the
seizure of vehicles, boats and airplanes if the vehicles were used to
assist or commit the criminal act.

No matter what the crime is, it can include fines. If the lawbreaker has
the money to pay a fine, fines are imposed. Forfeiture is usually imposed
on money used as working capital, money found in a drug bust, businesses,
tools, guns, vehicles, etc. when the items are used in the execution of the
crime. Any significant asset proven to be the fruits of criminal activity
may be seized. CrimeFighters can get 50% of the value of same!

Which law you should use to prosecute a lawbreaker depends on an analysis
of state vs Federal laws. Determine which authority pays the maximum
amount, or has the best advantages, all things considered. That's what
State prosecutors do. In any event, USCS 3059 and 886 still apply no matter
if you use state or Federal RICO laws.

State laws are too numerous to try to fit into this book (and you'd only be
interested in 1/50th of them). Instead, I'll recommend that you familiarize
yourself with your state laws. They will be found in almost every public
library or in local law libraries. (Chapter 20 includes some state laws
that provide for suitable payment of rewards comparable to Federal laws.)

Keep in mind that rewards (or awards) may be contained in a separate law.
Look in the index for Rewards, Fines, Forfeitures, and Informants. As in
Arizona law, they may not be specifically mentioned within the criminal
statute itself. Criminal statutes may deal only with the definitions of the
crime and assigns specific classes of felonies and misdemeanors, as
appropriate, depending on the severity of the violation. Fines,
forfeitures, and jail sentences are contained in other sections which are
cross-referenced to the class of the felony or misdemeanor.

                            F9 for next Chapter