SHAH ALAM: Civil forfeiture suits like the one involving 1Malaysia Development Bhd (1MDB) are controversial even in the United States due to concerns that they violate due process, a prominent US lawyer says.
"This is a very controversial practice, and there has been a push back in the US in the past three to four years as it was being used excessively," said Thomas C. Goldstein, an appellate advocate in the US Supreme Court.
Goldstein, during a talk at Universiti Teknologi Mara (UiTM) on Monday (Dec 4), said civil forfeitures were different from criminal charges as they were initiated only against property and not against persons.
He said the problem with civil forfeitures suits was that the burden of proof lay with the accused that has to prove that it was their property and no criminality was involved.
Goldstein, who formerly taught Supreme Court litigation at the Harvard Law School and the Stanford Law School, added that a famous case in the US stated that almost all due process in the US has to involve a hearing before one is deprived of the process.
"So it is quite anomalous to seize the property and ask questions later," he said during the talk entitled "Criminal Litigation in the United States of America".
He claimed that the suits also create an enormous incentive for law enforcement agencies involved in the forfeiture.
"If they get a bounty in affect it doesn't just go into the general treasury, the law enforcement agency itself can buy new police cars or whatever it is," he said, adding that this difficulty has caused the Department of Justice (DoJ) to recognise that it was creating an unfortunate set of incentives.
However, Goldstein said in regard to 1MDB, the DoJ's goal was not for the US to keep any money but rather to try and "determine whether the money can somehow be traced back to 1MDB".
The DoJ is currently conducting a criminal probe into 1MDB and has applied a stay on its civil forfeiture suits in connection with assets that were allegedly purchased using misappropriated funds from the sovereign wealth fund.
Goldstein said that as there were parallel civil and criminal proceedings ongoing, the stay requested by the DoJ was probably due to the US identifying more assets that were tied back to what it believed to be 1MDB.
"What they wanted to do was to make sure those assets were not dissipated, so that they can be held onto and be determined that it was related to 1MDB.
"They wanted to grab hold onto all of the assets and once they grab hold of it they were concerned if they went all the way through the civil forfeiture process they would have to disclose everything they know about the potential criminal case," he said.
Goldstein stressed that the investigation has not produced anything yet but "they want the money frozen so it doesn't get spent or dissipated, or the property sold," he said.
He also added that the US Supreme Court currently is also starting to confront the question of when civil forfeiture suit goes too far, when it is grabbing on to the property too much and when civil action should instead be pursued as a criminal action.