Lapas attēli
PDF
ePub

Another effect I don't think anyone has focused on to date is the effect this will have on electronic surveillance. In the Comprehensive Crime Control Act of 1984, violations of title 31 of the United States Code, which would include the money-laundering violations, were made predicate acts that could be used to obtain a warrant for electronic surveillance. If the statute as proposed by the administration is passed, the Federal Government will then have the authority to conduct electronic surveillance on virtually every crime committed except for the plain street assault of murder, rape and mayhem. All other crimes will probably be subject to wire-tap surveillance. I feel the statute is far too broad.

Mr. Chairman, your bill does not contain this type of problem, and I do endorse it. I have some doubts as to the wisdom of money laundering laws; but I recognize views may differ, and if there is a need for a money-laundering statute, I would certainly recommend your bill.

I want to make one further, brief comment on the forfeiture provisions that are contained on the administration bill. Forfeiture is presently contained in the Continuing Criminal Enterprise and the RICO offense, and I think this subcommittee ought to re-examine carefully the scope of these forfeiture provisions. They are having, right now, today, a severe impact on the right to counsel.

Let me tell you a situation which I was recently involved in, a case which received a lot of publicity in this area. It was United States v. Christopher R. Reckmeyer, in the eastern district of Virginia.

Mr. Reckmeyer was charged under the Continuing Criminal Enterprise and a variety of substantive narcotics offenses. We were retained by Mr. Reckmeyer, my firm and myself, to represent him in a grand jury investigation which I was initially led to believe was a tax investigation. It subsequently turned out it was a narcotics investigation and Mr. Reckmeyer was indicted for substantial charges.

The day the indictment was returned was the first time I knew Mr. Reckmeyer was involved in narcotics offenses. The court, under the Comprehensive Crime Control Act of 1984, issued a restraining order preventing Mr. Reckmeyer from transferring any of his funds. Mr. Reckmeyer came to me, on the culmination of a grand jury investigation that I had represented him, and said, "Here's what happened, and I can't pay you.'

Ethically, legally, morally, I had an obligation, and I discussed this with my partners and we agreed to continue to represent this man. Our time charges and out-of-pocket expenses on that investigation exceeded $300,000. I don't know whether a fee application which we have before this court now will be granted or not.

I will tell you, though, Mr. Chairman, neither I nor any other attorney can afford to do this very often. And I would recommend that you consider whether or not attorneys' fees, particularly, in order to implement the sixth amendment right to counsel, be exempted from forfeiture legislation. I have heard it said, primarily by people at Ninth and Pennsylvania Avenue, that attorneys should not be treated any different than realtors, or doctors, or other individuals. Attorneys are different, Mr. Chairman. Just as we permit a doctor to handle dangerous drugs because it's neces

sary, just because we permit an undertaker to transport human remains across a State line because it's necessary, we are going to have to recognize that attorneys are going to have to engage in business where they're going to get knowledge from their clients because it's necessary for them to defend the rights of their client. Mr. Chairman, I appreciate the opportunity to address these matters, and I look forward to any question you may ask.

[The statement of Mr. Bailor follows:]

STATEMENT

OF

BERNARD S. BAILOR

ON PROPOSALS RELATING TO MONEY LAUNDERING

BEFORE THE

SUBCOMMITTEE ON CRIME

OF THE

COMMITTEE ON THE JUDICIARY

UNITED STATES HOUSE OF REPRESENTATIVES

SEPTEMBER 12, 1985

INTRODUCTION

Mr. Chairman and Members of the Subcommittee, my name is Bernard S. Bailor. I am pleased to appear here today as a public witness to testify on the various legislative proposals currently being considered by the Subcommittee to deal with money laundering. Before getting into the substance of my testimony, I would like to briefly introduce myself. I am a practicing criminal defense attorney with the law firm of Caplin and Drysdale, Chartered, at One Thomas Circle, Washington, D.C. I have been involved in the practice of criminal law since 1970. I was a senior trial attorney with the Criminal Section of the Tax Division of the Department of Justice for over six years. Since 1977, I have been actively involved in

the defense bar, specializing in white collar crimes. While a prosecutor, I spent several years supervising grand jury investigations examining the illegal use of tax havens, principally in the Caribbean. In that position, I investigated numerous money laundering schemes. I have also encountered money laundering as a defense attorney. During the past year, I have chaired a White Collar Crime Subcommittee of the American Bar Association's Criminal Justice Section looking into the problem of money laundering. I do wish, however, to emphasize that I am not testifying today on behalf of the American Bar Association. In testifying today, it is my hope

that my views, shaped by my experiences with money laundering, will be of assistance to the Subcommittee.

2

in

Money laundering is the process used to conceal the source of illegally obtained funds. It is also used to facilitate other crimes such as tax evasion, smuggling and bribery. One of the most effective ways to investigate and prosecute certain types of crimes is to focus on the criminal profits. By investigating the use of illicitly earned profits, it is often possible to identify parties involved in criminal activity who, because of their high level role in the criminal organization, would otherwise escape detection. This approach has proven to be highly effective in narcotics and organized crime investigations. High level individuals in these types of criminal organizations rarely get directly involved in the dirty work. Thus, they can only be linked to the criminal activity through the substantial profit earned from it.

Recognition of the significant role money laundering plays in the operation of criminal organizations has led to a number of proposals now being considered by this Subcommittee to increase the effectiveness of federal law enforcement in dealing with money laundering. The most effective way to combat money laundering is to enact legislation and take administrative steps to facilitate its detection. This includes allocating substantial additional personnel and other law enforcement resources to money laundering investigations. Unfortunately, most of the proposed legislation does not do this and for this reason is not an effective response to the money laundering problem.

Analysis of the Interim Report to the President and the Attorney General, THE CASH CONNECTION: Organized Crime, Financial Institutions, and Money Laundering, President's Commission on Organized

« iepriekšējāTurpināt »