Federal Asset Forfeiture – US Loses This One

The Wall Street Journal on August 29, 2011 released the following:

“Ex-Taiwan President Scores a Victory in Legal Fight Over Manhattan Condo

By Joe Palazzolo

A magistrate judge on Friday set back the Justice Department’s efforts to seize a Manhattan condominium prosecutors say is the fruit of a bribery scheme involving the former president of Taiwan.

Magistrate Judge Frank Maas in Manhattan said in a report to a U.S. district judge that the government’s forfeiture complaint against the $1.6 million condo should be dismissed because prosecutors failed to show it was purchased with the proceeds of bribery as defined under Taiwanese law.

U.S. District Court Judge George B. Daniels will ultimately decide whether to dismiss the complaint.

Prosecutors allege that the family of jailed former president Chen Shui-bian bought the $1.6 million condo with bribes from Taiwanese businessmen seeking favorable treatment in a bank merger.

Chen and his wife, Wu Shu-jen, were convicted of corruption during his time in office ending in 2008, but a Taipei court acquitted Chen last year of the bribery charges in connection with the bank merger.

According to the complaint, executives at Yuanta Securities Co. LLC delivered five or six fruit boxes stuffed with $6 million in cash to the first couple’s residence. Wu Shu-jen, who accepted the money, told investigators it was a legitimate political contribution rather than a bribe to bless a proposed bank merger.

At Wu’s direction, prosecutors allege, the cash was laundered through a labyrinth of shell companies and used to purchase a $550,000 property in Keswick, Va., and the Manhattan condo at 261 West 28th St.

Maas said the Justice Department fell short of showing that it would be able to prove at trial that the payments to the former first lady amounted to “bribery of a public official” under Taiwanese law.

“Significantly, the complaint in this action is devoid of any allegation that the President was aware that Yuanta had delivered NTD200 million to the First Lady, let alone that he had any direct involvement in the bribery scheme,” Maas wrote.

A lawyer for Chen family, Jonathan Harris of Harris, Cutler & Houghteling LLP, declined to comment on the ruling. A Justice Department spokeswoman did not immediately respond to a request for comment.

Maas’s ruling was at odds with that of a judge in Charlottesville, Va., who allowed the department’s forfeiture complaint against another house owned by the Chen family to proceed. In that case, U.S. District Judge Norman Moon said in June he was not bound by the Taipei court’s decision.

Moon plans to hear arguments and testimony on the Taiwanese law and will determine himself whether the allegations in the department’s complaints constituted an offense against a foreign nation.

Meanwhile, Taiwanese authorities are appealing the Taipei district court’s decision to toss out the bribery charges. If the acquittals are reversed on appeal, Maas said the government would be able to refile its claims against the properties.”

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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