HOUSTON (AP) — In the last three years, Texan federal agents have contributed to some of the largest forfeiture cases in American law enforcement history — seizing Caribbean bank accounts, stud racehorses and luxury condos allegedly linked to organized crime activity by drug dealers, Ponzi schemers and money launderers.
But a heavy veil of secrecy hangs over the details of most federal forfeiture cases, the vast majority of which were made based on investigations that are not disclosed in public records or even reviewed in federal court.
One of their biggest grabs involved Mexican cartel leader Osiel Cardenas Guillen. In 2010, Houston-based prosecutors struck a plea deal with the 42-year-old former car thief who long led Mexico’s powerful Gulf Cartel. Cardenas agreed to hand over $50 million in assets as part of his sentencing.
By 2012, the government already had distributed $29.5 million of the loot to Texas law enforcement agencies, among them Cameron County Sheriff Omar Lucio who told Hearst newspapers he’s already spent most of his $5.9 million federal check on 13 more officers, two “sniffer dogs,” vehicles, upgraded weapons and raises for everyone in the department that patrols the area closest to Cardenas’ former stronghold in Matamoros.
But details of how and where the federal agents recovered the cartel chief’s funds remain a state secret. Only a handful of seizures of Cardenas’ helicopters, including one $1.3 million chopper found grounded in Spokane, can be easily tracked back to Cardenas via court records.
Lucio said some of the forfeiture money was cash seized in drug hauls. There are accounts of millions more of his cartel cash being handed over to U.S. authorities at the border, but they can’t be confirmed. And Houston U.S. Attorney Ken Magidson told the Houston Chronicle (http://bit.ly/113HnIx) that it is unlikely the government would ever release the details.
The federal government tends to keep forfeiture actions secret for legal and strategic reasons, according to interviews with Magidson and other current and former federal agents. These include protecting confidential witnesses and sources, ensuring property linked to crimes is preserved prior to filing public criminal actions and giving investigators necessary court authorization to trace and freeze assets of criminals — both foreign and domestic.
Once used almost exclusively against drug runners and mafia bosses, forfeiture actions now often serve as strategic tools to fight a broad range of increasingly global crimes, ranging from human trafficking to fraud, Magidson said.
Still, as forfeiture activity continues to skyrocket, defense attorneys and civil rights advocates have repeatedly questioned whether keeping case information secret — some documents have remain sealed for years — protects the government from revealing potentially embarrassing blunders.
Most of the time, people who lose their property do not face related criminal charges, records obtained by Hearst Newspapers and the Houston Chronicle show.
U.S. Department of Justice records showed that only 19 percent of 8,700 forfeiture cases processed in Texas between fiscal year 2010 and 2012 were directly related to a criminal case; 9 percent were connected with civil lawsuits filed by the government and the rest — 72 percent — were administrative cases that were never reviewed by any judge or jury.
Even when forfeiture cases end up in court, case documents are often kept secret.
Recent federal efforts to trace and seize assets in Texas allegedly linked to Mexican crime organizations have fueled protests and public debate about the extent to which family members, friends and associates should be pounded by the U.S. government’s economic enforcement hammer.
In the last year, investigators in San Antonio, Corpus Christi and Brownsville tracked down Texas properties worth between $4 million and $20 million that were tied to four people who allegedly acted as straw buyers for ex-Mexican border state governor Tomas Jesus Yarrington Ruvalcaba.
Yarrington, an Institutional Revolutionary Party politician, served as mayor of Matamoros in the early 1990s — historically a Gulf Cartel stronghold across the border from Brownsville — and later as governor of Tamaulipas state from 1999 to 2005 before making an unsuccessful bid for the Mexican presidency.
He has never been charged with any U.S. crime, though he faces charges in Mexico. Joel Androphy, his Houston-based attorney, claims Yarrington owns none of the Texas properties and says the forfeitures are a “ruse” being used by the government to flush out potential witnesses and boost other cartel-related cases.
Shown in some photos with his graying mop of curls tucked into a cowboy hat, Yarrington appeared as an invited dignitary at public events with Texas governors George W. Bush and Rick Perry during his own stint as a border state governor. He often visited Texas until immigration authorities told him to leave in 2012.
In a series of federal civil lawsuits and affidavits — some public and some sealed — U.S. officials allege that after leaving office, Yarrington used straw buyers and corporate names to purchase property in Texas in alleged attempts to launder cartel money. The properties they targeted included a $450,000 waterfront condo on South Padre Island, 46 acres in San Antonio, and two more houses owned by a professor at Texas State University who allegedly dated Yarrington at one time, federal court records show.
The owner of 46 acres of commercial property near San Antonio’s upscale Shops at La Cantera — former Tamaulipas public works director Alberto Berlanga Bolado — insists he had nothing to do with any money laundering. An affidavit that prosecutors claim would justify the forfeiture was filed under seal. When Berlanga’s attorneys asked to unseal it, a judge postponed the matter until federal agents could finish their criminal investigation into another Mexican businessman, Fernando Cano, who is also linked to the land deal and has been criminally charged, but remains a fugitive.
The government next tried to take Berlanga’s SUV, again based on secret documents.
“We haven’t even been able to get a hearing in court, that’s how bad it is,” said Berlanga’s attorney, Gilberto Hinojosa. “We can’t even walk into the courtroom to talk to a judge to say, ‘Judge, make them tell us what we did wrong.’ ”
Hinojosa described Berlanga as a hard-working construction company owner who came to San Antonio to escape cartel violence, though property records indicate Berlanga did business with Cano.
“By the government attempting to forfeit this property, it’s put everything in limbo for (Berlanga) and hurt him financially a lot,” Hinojosa said. “He doesn’t come from wealth. … He worked 18-hour days for the last 20 years to get where he’s at.”
Generally, organized-crime figures seek to launder their dirty money by borrowing names or giving “gifts” to family, friends, business partners and other associates, some of whom may have no knowledge of underlying crimes, said Don DeGabrielle, a former Houston-based U.S. Attorney who now practices with Fulbright & Jaworski.
In such cases, the government must attempt to prove that the documented owners knew or should have known that the cash or property might have been laundered funds.
Houston-based agents and attorneys have worked for years on another pending case that -if they pull it off- would rank among one of the largest cash forfeitures in history: exploring the world to find the illicit financial empire created by R. Allen Stanford.
Stanford, a native Texan and former globe-trotting billionaire scam artist, was sentenced in Houston in 2010 to a total of 110 years after stealing some $7 billion in investors’ assets through his offshore Stanford International Bank.
Earlier this month, the Department of Justice announced that a judge in Antigua and Barbuda had approved a related settlement that would eventually allow victims to recover approximately $260 million in 29 offshore accounts frozen in the United Kingdom, the Caribbean, Canada and Switzerland.
But officials refused to discuss their progress, since the cases remain pending. Victims’ attorneys complain that by the time it’s all over, swindled investors will recover only pennies on the dollar.
DeGabrielle, who was involved in the Stanford case during his time as Houston’s U.S. Attorney from 2005 to 2008, declined comment about Stanford. But he said there’s been significant progress since the days when international forfeiture efforts routinely died after foreign governments or international bankers blocked them.
“There’s more of a concerted effort as the globe shrinks and more agencies around the world seem to be willing to share information,” said DeGabrielle. “These days no financial institution wants to have the reputation of being a center for laundered money.”
San Antonio Express-News writer Jason Buch contributed to this report.
Attribution:
Federal forfeitures cloaked in secrecy
Lise Olsen
June 1, 2013
Houston Chronicle
http://www.chron.com/news/texas
But a heavy veil of secrecy hangs over the details of most federal forfeiture cases, the vast majority of which were made based on investigations that are not disclosed in public records or even reviewed in federal court.
One of their biggest grabs involved Mexican cartel leader Osiel Cardenas Guillen. In 2010, Houston-based prosecutors struck a plea deal with the 42-year-old former car thief who long led Mexico’s powerful Gulf Cartel. Cardenas agreed to hand over $50 million in assets as part of his sentencing.
By 2012, the government already had distributed $29.5 million of the loot to Texas law enforcement agencies, among them Cameron County Sheriff Omar Lucio who told Hearst newspapers he’s already spent most of his $5.9 million federal check on 13 more officers, two “sniffer dogs,” vehicles, upgraded weapons and raises for everyone in the department that patrols the area closest to Cardenas’ former stronghold in Matamoros.
But details of how and where the federal agents recovered the cartel chief’s funds remain a state secret. Only a handful of seizures of Cardenas’ helicopters, including one $1.3 million chopper found grounded in Spokane, can be easily tracked back to Cardenas via court records.
Lucio said some of the forfeiture money was cash seized in drug hauls. There are accounts of millions more of his cartel cash being handed over to U.S. authorities at the border, but they can’t be confirmed. And Houston U.S. Attorney Ken Magidson told the Houston Chronicle (http://bit.ly/113HnIx) that it is unlikely the government would ever release the details.
The federal government tends to keep forfeiture actions secret for legal and strategic reasons, according to interviews with Magidson and other current and former federal agents. These include protecting confidential witnesses and sources, ensuring property linked to crimes is preserved prior to filing public criminal actions and giving investigators necessary court authorization to trace and freeze assets of criminals — both foreign and domestic.
Once used almost exclusively against drug runners and mafia bosses, forfeiture actions now often serve as strategic tools to fight a broad range of increasingly global crimes, ranging from human trafficking to fraud, Magidson said.
Still, as forfeiture activity continues to skyrocket, defense attorneys and civil rights advocates have repeatedly questioned whether keeping case information secret — some documents have remain sealed for years — protects the government from revealing potentially embarrassing blunders.
Most of the time, people who lose their property do not face related criminal charges, records obtained by Hearst Newspapers and the Houston Chronicle show.
U.S. Department of Justice records showed that only 19 percent of 8,700 forfeiture cases processed in Texas between fiscal year 2010 and 2012 were directly related to a criminal case; 9 percent were connected with civil lawsuits filed by the government and the rest — 72 percent — were administrative cases that were never reviewed by any judge or jury.
Even when forfeiture cases end up in court, case documents are often kept secret.
Recent federal efforts to trace and seize assets in Texas allegedly linked to Mexican crime organizations have fueled protests and public debate about the extent to which family members, friends and associates should be pounded by the U.S. government’s economic enforcement hammer.
In the last year, investigators in San Antonio, Corpus Christi and Brownsville tracked down Texas properties worth between $4 million and $20 million that were tied to four people who allegedly acted as straw buyers for ex-Mexican border state governor Tomas Jesus Yarrington Ruvalcaba.
Yarrington, an Institutional Revolutionary Party politician, served as mayor of Matamoros in the early 1990s — historically a Gulf Cartel stronghold across the border from Brownsville — and later as governor of Tamaulipas state from 1999 to 2005 before making an unsuccessful bid for the Mexican presidency.
He has never been charged with any U.S. crime, though he faces charges in Mexico. Joel Androphy, his Houston-based attorney, claims Yarrington owns none of the Texas properties and says the forfeitures are a “ruse” being used by the government to flush out potential witnesses and boost other cartel-related cases.
Shown in some photos with his graying mop of curls tucked into a cowboy hat, Yarrington appeared as an invited dignitary at public events with Texas governors George W. Bush and Rick Perry during his own stint as a border state governor. He often visited Texas until immigration authorities told him to leave in 2012.
In a series of federal civil lawsuits and affidavits — some public and some sealed — U.S. officials allege that after leaving office, Yarrington used straw buyers and corporate names to purchase property in Texas in alleged attempts to launder cartel money. The properties they targeted included a $450,000 waterfront condo on South Padre Island, 46 acres in San Antonio, and two more houses owned by a professor at Texas State University who allegedly dated Yarrington at one time, federal court records show.
The owner of 46 acres of commercial property near San Antonio’s upscale Shops at La Cantera — former Tamaulipas public works director Alberto Berlanga Bolado — insists he had nothing to do with any money laundering. An affidavit that prosecutors claim would justify the forfeiture was filed under seal. When Berlanga’s attorneys asked to unseal it, a judge postponed the matter until federal agents could finish their criminal investigation into another Mexican businessman, Fernando Cano, who is also linked to the land deal and has been criminally charged, but remains a fugitive.
The government next tried to take Berlanga’s SUV, again based on secret documents.
“We haven’t even been able to get a hearing in court, that’s how bad it is,” said Berlanga’s attorney, Gilberto Hinojosa. “We can’t even walk into the courtroom to talk to a judge to say, ‘Judge, make them tell us what we did wrong.’ ”
Hinojosa described Berlanga as a hard-working construction company owner who came to San Antonio to escape cartel violence, though property records indicate Berlanga did business with Cano.
“By the government attempting to forfeit this property, it’s put everything in limbo for (Berlanga) and hurt him financially a lot,” Hinojosa said. “He doesn’t come from wealth. … He worked 18-hour days for the last 20 years to get where he’s at.”
Generally, organized-crime figures seek to launder their dirty money by borrowing names or giving “gifts” to family, friends, business partners and other associates, some of whom may have no knowledge of underlying crimes, said Don DeGabrielle, a former Houston-based U.S. Attorney who now practices with Fulbright & Jaworski.
In such cases, the government must attempt to prove that the documented owners knew or should have known that the cash or property might have been laundered funds.
Houston-based agents and attorneys have worked for years on another pending case that -if they pull it off- would rank among one of the largest cash forfeitures in history: exploring the world to find the illicit financial empire created by R. Allen Stanford.
Stanford, a native Texan and former globe-trotting billionaire scam artist, was sentenced in Houston in 2010 to a total of 110 years after stealing some $7 billion in investors’ assets through his offshore Stanford International Bank.
Earlier this month, the Department of Justice announced that a judge in Antigua and Barbuda had approved a related settlement that would eventually allow victims to recover approximately $260 million in 29 offshore accounts frozen in the United Kingdom, the Caribbean, Canada and Switzerland.
But officials refused to discuss their progress, since the cases remain pending. Victims’ attorneys complain that by the time it’s all over, swindled investors will recover only pennies on the dollar.
DeGabrielle, who was involved in the Stanford case during his time as Houston’s U.S. Attorney from 2005 to 2008, declined comment about Stanford. But he said there’s been significant progress since the days when international forfeiture efforts routinely died after foreign governments or international bankers blocked them.
“There’s more of a concerted effort as the globe shrinks and more agencies around the world seem to be willing to share information,” said DeGabrielle. “These days no financial institution wants to have the reputation of being a center for laundered money.”
San Antonio Express-News writer Jason Buch contributed to this report.
Attribution:
Federal forfeitures cloaked in secrecy
Lise Olsen
June 1, 2013
Houston Chronicle
http://www.chron.com/news/texas
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