The crimes charged against SBF are simple — old-fashioned fraud through a Ponzi scheme. His conviction seems inevitable. For the government, the challenging part of this case will be the forfeiture proceedings. Under the Mandatory Victim Restitution Act (MVRA), federal prosecutors have an affirmative obligation to use their “best efforts” to
Last week the Supreme Court further clarified the procedures and limits regarding the government’s ability to freeze assets in connection with criminal prosecutions. Following the 2014 decision in Kaley v. United States, where the Court ruled (in the government’s favor) that a defendant could not challenge the legality of a pre-trial asset seizure by contesting the grand jury’s determination of probable cause, last week the Court added to the body of law on asset forfeiture by siding with defendants and limiting the government’s ability to freeze “untainted” assets. The Court’s March 30, 2016 decision in Luis v. U.S. holds that the government’s pre-trial freeze of “untainted” assets (meaning money not connected to the alleged crimes) violates the Sixth Amendment right to counsel by choice.
In an effort to lessen the risk that businesses and individuals performing legitimate financial transactions will have funds frozen through a prosecutor’s use of forfeiture laws, on March 31, Attorney General Eric Holder issued new guidance concerning asset forfeiture in structuring offenses. The new policy restricts the use by prosecutors of civil or criminal asset forfeiture for structuring until after a defendant has been criminally charged or found to have engaged in additional criminal activity. A typical structuring offense is where a single currency transaction with a financial institution (generally above $10,000) is broken into a series of transactions by an individual for purposes of avoiding the filing of a currency transaction report by the financial institution. Structuring at times accompanies charges of other criminal activity such as money laundering, but can also be charged as a standalone offense.