re later seized by law enforcement, triggering the subsequent civil forfeiture action.Government's AllegationsIn its pursuit of justice, the United States government has accused PT Petro and Royal Pearls of falsifying export documents, an act that violates the law. To demonstrate the seriousness of the situation, the U.S. Department of Treasury Office of Foreign Assets Control (OFAC) designated Royal Pearls, MKS, and Rostamian as "Specially Designated Nationals," further emphasizing the gravity of their involvement.Determining LiabilityIn a civil forfeiture case, the court has discretionary power when considering a default judgment. In this instance, well-pleaded allegations in the government's complaint play a significant role in establishing liability. To this end, the government has satisfied the procedural prerequisites for forfeiture, as outlined under Rule G. The specific legal basis for the government's entitlement to a default judgment and forfeiture of the defendant funds are 18 U.S.C. § 981(a)(1)(C) and 18 U.S.C. § 981(a)(1)(A).Notifying Potential ClaimantsDuring the forfeiture action, the government made every effort to notify potentially affected parties. Notices were served to PT Petro, MKS, U.S. Company 1, and Royal Pearls. Although some notices were returned undelivered, the government argues that its attempts to reach Royal Pearls were reasonably calculated to inform the company about the action.The Legal GroundsThe government invokes the International Emergency Economic Powers Act (IEEPA) to establish the basis for forfeiture. This act prohibits the export of goods or services to Iran without a license. The defendant funds in this case are alleged to be derived from proceeds traceable to violations of the IEEPA, making them subject to forfeiture under 18 U.S.C. § 981(a)(1)(C). Furthermore, the funds are also argued to be subject to forfeiture under § 981(a)(1)(A) due to their connection with violations of 18 U.S.C. § 1956, which prohibits the transportation of funds with t

On Tuesday, District Attorney Williams released a statement that the District Attorney’s Office “pursues forfeiture as a final disposition judiciously.”The primary statute for civil forfeiture in the federal white collar criminal context is 18 U.S.C. § 981, which provides extremely broad authority for the government to obtain assets. The assets specified by statute as subject to civil forfeiture include, inter alia, “any property, real or personal, which constitute or is derived from proceeds traceable to a violation” of “any offense constituting ‘specified unlawful activity’ (as defined in section 1956(c)(7) of this title), or a conspiracy to commit such offense.”

Here is the press release from the office of John Brownlee, the U.S. Attorney for the W.D. Va. The Roanoke article mentions that I am outside counsel for the County as it tries to get its money back.Some people have asked me what kind of proceeding was this, that resulted in this payment of the money to the County. The answer is that in the criminal case, the District Court did not order restitution but did enter a series of forfeiture orders against the defendants, pursuant to 18 U.S.C. §§ 981 and 982. Under 18 U.S.C. § 981(e)(6), property forfeited pursuant to 18 U.S.C. § 981 may be transferred to the victim of the offenses which gave rise to the forfeiture.

For example, an FCPA violation can result in up to a five-year prison sentence and a $100,000 fine,3while each transaction under § 1956 carries up to a 20-year prison sentence and a fine of up to $500,000 or twice the amount involved (whichever is greater).4The MLCA also provides an avenue for forfeiture under 18 U.S.C. §§ 981 and 982, whereas the FCPA does not have its own forfeiture remedy. Under §§ 981 and 982, property involved in, or traceable to, violations of §§ 1956 and 1957 are subject to forfeiture.

8 million—represented the over $2.6 million in Afriyie’s brokerage account at the time of his indictment, plus the almost $150,000 Afriyie wired from his brokerage account to his savings account between the ADT stock appreciation and the time of his arrest.The Court looked to the forfeiture statute, 18 U.S.C. § 981(a)(1)(C) as incorporated to criminal proceedings by 28 U.S.C. § 2461(c), which states that a defendant convicted of insider trading must forfeit “[a]ny property, real or personal, which constitutes or is derived from proceeds traceable to the offense.” Concluding that the phrase “derived from proceeds” does not restrict Section 981(a)(1)(C) from applying to funds that have appreciated in value, the Court held that “as a matter of law, forfeiture may extend to the appreciation of funds acquired through illegal transactions in an insider-trading scheme.”

As the Fourth Circuit instructed, these orders are based on a sequence of interlocking statutes. 18 U.S.C. § 981(a) (1) (c) provides that “any property, real or personal, which constitutes or is derived from proceeds traceable to … any offense constituting ‘specified unlawful activity’ [as defined in § 1956(c) (7), or a conspiracy to commit such offense … is subject to forfeiture to the United States.”§ 981 generally applies only to civil forfeiture.

blower Pilot Program, U.S. Atty’s Off., S. Dist. of N.Y. (Jan. 10, 2024), https://www.justice.gov/d9/2024-01/sdny_wbp_1.9.24.pdf; see also our Client Alert, “SDNY’s New Policy on Self-Disclosures for Individuals May Be a Game Changer,” dated Jan. 18, 2024, available athttps://www.paulhastings.com/insights/client-alerts/sdnys-new-policy-on-self-disclosures-for-individuals-may-be-a-game-changer.Brady v. Maryland, 373 U.S. 83 (1963). 28 U.S.C. § 524(c)(1)(C). For a comprehensive summary on the use of forfeiture in corporate criminal resolutions, see Leo Tsao, Daniel Kahn, & Eugene Soltes, Corporate Criminal Investigations and Prosecutions 301 (1st ed. 2022). Marshall Miller, U.S. Dep’t of Just., Principal Associate Deputy Attorney General Marshall Miller Delivers Remarks at the New York City Bar Association’s International White Collar Crime Symposium (Nov. 28, 2023), https://www.justice.gov/opa/speech/principal-associate-deputy-attorney-general-marshall-miller-delivers-remarks-new-york. 18 U.S.C. § 981(a)(1)(A) (civil forfeiture); 18 U.S.C. § 982(a)(1)(A) (criminal forfeiture).

privileges, exclusion of practice before BIS.Warrant to Seize AircraftMore significantly, the Department of Justice announced that it had obtained a warrant to seize the same aircraft. The US District Court for the Southern District of Texas found that there was probable cause of violations of the BIS Russian export controls because the aircraft operated without a license for export or re-export on March 8 and March 12 on flights from Moscow to Dubai and back. These violations supported the civil seizure of the aircraft pursuant to 50 U.S.C. § 4820(a)(5). See also, 50 U.S.C. § 4820(j) and 18 U.S.C. § 981(b)(1). The warrant for the seizure was issued by the US District Court for the Southern District of Texas because the aircraft had flown to Houston in 2019, and it was alleged the aircraft would be brought back to the Southern District of Texas in the future. The Court therefore implicitly found that there was venue in the Southern District of Texas for a forfeiture action pursuant to 18 U.S.C. §981(b)(3) and 28 U.S.C § 1355(b)(1)(B) and has such it had authority to issue the warrant. The warrant was issued notwithstanding the fact that the aircraft was believed to be in Russia at the time the warrant was issued.The Task Force KleptoCapture is coordinating the seizure action, and the seizure matter is being investigated by the FBI’s Houston Field Office, the Department of Commerce's Bureau of Industry and Security and US Immigrations and Customs Enforcement's Homeland Security Investigations in Houston. The US Department of Justice (US Attorney's Office Southern District of Texas) provided commentary in a press release issued by on August 31. No further action by the US Department of Justice has been announced since then.ConclusionIt is important to note that the violation that led to the issuance of the warrant for the seizure of the aircraft was not its ultimate ownership by a sanctioned entity, but rather the violation by the aircraft (regardless of its ownership) of the prohibition

The State Department uncovered the fraudulent scheme, and ultimately, Sestak pleaded guilty to conspiracy to commit offenses against the U.S. and to defraud the U.S., bribery of a public official, and conspiracy to engage in a monetary transaction in property derived from specified unlawful activity. In a plea deal, Sestak executed a preliminary consent order of forfeiture imposing a forfeiture money judgment of $6,021,441 in favor of the U.S., which included forfeiture of his real estate holdings in Thailand, all of which represented bribery proceeds traceable to the fraudulent visa scheme and were subject to forfeiture pursuant to 18 U.S.C. § 981(a)(1)(C), 18 U.S.C. § 982(a)(1) and (6), 21 U.S.C. § 853(p), and 28 U.S.C. § 2461.Sestak was permitted—under U.S. supervision and approval—to sell the real estate holdings in Thailand, with portions of the proceeds to be used to pay any of Sestak’s federal income tax due for tax years 2012 and 2013. Ultimately, Sestak sold his real estate holdings at a loss, but the U.S. received $1,551,134.

These transactions were subject to U.S. jurisdiction because they passed through the United States via correspondent bank account transfers. The Tango therefore was subject to forfeiture under 18 U.S.C. Sections 981(a) and 982(a).Next, the Court stated that venue for the warrant for seizure was established because Congress empowered the District Court for the District of Columbia to seize property located in a foreign country. Although the Court had rejected the government’s initial request to search items located in the Tango because the Court lacked venue to issue a search warrant for property held at a foreign port, the Court nonetheless reasoned that no search warrant was necessary because the Fourth Amendment does not apply to the search of property owned by a nonresident alien located in a foreign country, and Vekselberg lacked a reasonable expectation of privacy in the Tango.The Court concluded by discussing the Excessive Fines Clause of the Eighth Amendment, which limits the Government’s forfeiture power.