Bank Seizure of a Victim’s Property
What happens if a victim of a scam or fraud has their money stolen? Sometimes, the government seizes funds from the fraudster’s bank account, and the funds seized belong to the victim.
An agent with the United States Secret Service might obtain a seizure warrant from a federal judge that allows the USSS to seize the funds in the fraudster’s account. The USSS might also seize cryptocurrency, including Bitcoin, from a trading platform such as Coinbase or Binance.
How does the victim get their money or cryptocurrency back in those cases? If the victim owned the money or cryptocurrency seized, they may have standing to file a claim for court action. That filing forces the government to file a complaint in the appropriate U.S. District Court.
After the complaint is filed, the victim can file a judicial claim and answer the complaint as a “Claimant.” By filing the judicial claim and answering the complaint, the victim becomes a party to the lawsuit. Then, the judge or jury must decide whether the funds will be returned to the victim. Or the government might settle the case with the victim before a trial on the merits.
The victim also has the option to file a petition for remission or mitigation. However, filing the petition allows USSS to decide what happens to the funds. All too often, USSS does not return the funds to the victim for a variety of reasons, including:
- the funds seized did not belong to the victim since they were comingled with funds from other sources; or
- the funds seized belong to more than one victim, and not enough was seized to cover all losses.
Sometimes, the total losses are determine and compared against the total amount seized. If the victims’ losses are less than the amount seized, the government might claim that each victim should received a pro rata amount. In some cases, the government will count losses from “unknown victim” who never receive notice. Depending on how that calculation is made, any one particular victim might receive far less than they would otherwise have been entitled to if they had filed a litigated a claim for court action.
If a complaint has already been filed, you might receive a letter from an Assistant United States Attorney with the Asset Forfeiture and Recovery Section of the United States Attorney’s Office. You may have the right to appear in the court case to contest the forfeitability of the property.
To contest forfeitability, you must file a judicial claim identifying your right or interest with the clerk of court on or before the deadline listed in the notice. After filing the judicial claim, you have an additional 21 days to file an answer. The judicial claim must comply with the provisions of Rule G(5) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions, which Rules are a supplement to the Federal Rules of Civil Procedure.
The claim must identify the claimant and the specific property being claimed, your interest in the property (as an owner, lienholder, etc.), and the circumstances under which you acquired the interest, including when the interest was acquired.
You must also verify the claim by signing it under oath. If you miss a deadline, the government will seek entry of default and default judgment against any interest you have in the property. This default will prohibit you from taking any future steps to prevent the forfeiture without specific permission from the court. Read more about seizures for forfeiture by USSS.
Attorneys for Victims in Civil Asset Forfeiture Cases
If you lost money or other property in a scam and learned that the government seized the money from the fraudster’s bank account or cryptocurrency trading platform, contact an experienced civil asset forfeiture attorney at Sammis Law Firm.
We can explain the problems with filing a petition for remission or mitigation when you have standing to file a claim for court action.
Call 813-250-0500.
This article was last updated on Friday, September 13, 2024.