Fund Government With Dirty Money
By CHARLES A. INTRIAGO and ROBERT A. BUTTERWORTH
NYT
FEDERAL prosecutors last week persuaded a judge to stop a group of Bernard L. Madoff’s victims from using an involuntary bankruptcy filing to claim more than $100 million of his personal assets. The prosecutors’ argument was simple: preserving Mr. Madoff’s assets for eventual forfeiture to the government is the best way to ensure as much money as possible is returned to the victims of his Ponzi scheme in an equitable manner.
Most people would assume that this is business as usual, that the government routinely seizes the assets of criminals and returns them to victims. After all, criminals should not have ill-gotten houses, cars and yachts waiting for them when they finish their sentences. But the reality is that the government’s focus on seizing Mr. Madoff’s assets for restitution is unusual. Lawbreakers are rarely forced to give up the proceeds of their crimes.
To take just one example: Between stints in prison over the past decade, John A. Gotti, the former Gambino crime family boss, was able to return to his luxurious house in Oyster Bay Cove, on Long Island, where the median house value in 2007 was more than $2 million. Does anyone believe the money that Mr. Gotti bought it with was legitimately earned?
Every year in the United States, criminals amass hundreds of billions of dollars in cash and goods from illegal activities — mortgage fraud, extortion, embezzlement, illegal gambling, bank fraud, public corruption, human trafficking, identity theft, securities violations, insurance fraud, intellectual property piracy and bankruptcy fraud — though it’s impossible to gauge the total take precisely. Drug trafficking alone brings in an estimated $18 billion to $64 billion a year, while estimates of Medicare fraud earnings are $35 billion to more than $70 billion a year. The part of that loot that is seized by federal, state and local governments amounts to a few billion dollars at most. Here again, it is difficult to assess the exact value because so many different government entities are involved in collecting it, and no one agency adds it all up.
(More here.)
NYT
FEDERAL prosecutors last week persuaded a judge to stop a group of Bernard L. Madoff’s victims from using an involuntary bankruptcy filing to claim more than $100 million of his personal assets. The prosecutors’ argument was simple: preserving Mr. Madoff’s assets for eventual forfeiture to the government is the best way to ensure as much money as possible is returned to the victims of his Ponzi scheme in an equitable manner.
Most people would assume that this is business as usual, that the government routinely seizes the assets of criminals and returns them to victims. After all, criminals should not have ill-gotten houses, cars and yachts waiting for them when they finish their sentences. But the reality is that the government’s focus on seizing Mr. Madoff’s assets for restitution is unusual. Lawbreakers are rarely forced to give up the proceeds of their crimes.
To take just one example: Between stints in prison over the past decade, John A. Gotti, the former Gambino crime family boss, was able to return to his luxurious house in Oyster Bay Cove, on Long Island, where the median house value in 2007 was more than $2 million. Does anyone believe the money that Mr. Gotti bought it with was legitimately earned?
Every year in the United States, criminals amass hundreds of billions of dollars in cash and goods from illegal activities — mortgage fraud, extortion, embezzlement, illegal gambling, bank fraud, public corruption, human trafficking, identity theft, securities violations, insurance fraud, intellectual property piracy and bankruptcy fraud — though it’s impossible to gauge the total take precisely. Drug trafficking alone brings in an estimated $18 billion to $64 billion a year, while estimates of Medicare fraud earnings are $35 billion to more than $70 billion a year. The part of that loot that is seized by federal, state and local governments amounts to a few billion dollars at most. Here again, it is difficult to assess the exact value because so many different government entities are involved in collecting it, and no one agency adds it all up.
(More here.)
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