Texas Federal Agents Pursue Largest Forfeiture Cases To Date

Federal agents in Texas are playing part in a number of the biggest forfeiture cases in the history of US law enforcement. However, the details of cases, which have involved the seizure Caribbean bank accounts, luxury condominiums, and stud racehorses purportedly linked to drug dealers and organized crime, money launderers, and Ponzi scammers, are generally kept secret. Many of the cases are a result of probes that haven’t been revealed in public records or looked at in court.

Two reasons for the secrecy are strategy and legal purposes. Sources and witnesses are generally kept confidential and protected, property connected to alleged crimes are preserved before public criminal actions are filed, and investigators are provided with the court authority that they need to freeze and trace criminals’ assets. However, civil rights advocates and defense lawyers are asking, does the secrecy surrounding forfeiture cases protect the government from having to reveal mistakes they’ve made in the investigations?

One of the largest successful forfeiture cases thus far involved Osiel Cardenas Guillen, a Mexican cartel leader. In exchange for a plea agreement with prosecutors in Houston, as part of his sentence the 42-year-old head of the Gulf Cartel agreed to fork over $50 million in assets.

Meantime, it is not uncommon for organized crime members to try to launder money by gifting family and connections or borrowing their names. Because of recent attempts by investigators to find and grab assets in Texas purportedly connected to Mexican crime groups, protests have resulted over the debate about how much friends, relatives, and associates of suspects should contend with the US government’s enforcement forces.

Just this past year, investigators from Brownsville, Corpus Christi, and San Antonio identified properties in Texas with values ranging between $4 million and $20 million linked to four individuals accused of acting as straw buyers for Tomas Jesus Yarrington Ruvalcaba, the former governor of a Mexican border state. Per affidavits and federal civil lawsuits, after he left office Yarrington allegedly used corporate names and straw buyers to buy Texas property to allegedly launder cartel funds. (Yarrington faces criminal charges in his homeland but not in the US. His Houston-based lawyer claims that Yarrington doesn’t own property in Texas but that the government is using the forfeitures to get potential witnesses to come forward.)

Although federal forfeiture cases used to just target mafia bosses and drug runners, these actions are now being applied as a strategic tool to combat global crimes, including fraud and human trafficking. According to DOJ records, just 19% of the 8,700 forfeiture cases that were processed in Texas between the 2010 and 2012 fiscal years directly involved criminal cases. A judge or a jury did not review 72%. 9% involved government-filed civil lawsuits.

Shepherd Smith Edwards and Kantas, LTD, LLP is a Texas securities fraud law firm that represents clients throughout the state and the US. As for your free case assessment with one of our Houston securities lawyers today.

Federal forfeitures cloaked in secrecy, My San Antonio, June 1, 2013

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Stock Trader Faces Front Running Charges In Alleged $1.7M Texas Securities Fraud, Stockbroker Fraud Blog, June 1, 2013

Texas Securities Roundup: $10M Ponzi Scheme, Foreign Note Sale Fraud, Promissory Note Scam, and Money Laundering Lead to Indictments, Criminal Sentences, Stockbroker Fraud Blog, May 21, 2013
Two Oppenheimer Investment Advisers Settle for Over $2.8M SEC Fraud Charges Over Private Equity Fund, Institutional Investor Securities Blog, March 14, 2013

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