Rights Group Sues Arizona To Stop Wire-Transfer Seizures

Rights group sues Ariz. to stop wire-transfer seizures
By Howard Fischer

Capitol Media Services
Tucson, Arizona | Published: 10.19.2006

PHOENIX An immigrant rights group wants a federal judge to block Arizona from using a tactic Attorney General Terry Goddard says is necessary to block human- and drug-smuggling rings.

Legal papers filed in U.S. District Court contend warrants issued by Goddard's office to seize wire transfers of $500 or more violate federal constitutional requirements that government must have probable cause before taking the money.

Those warrants have resulted in what plaintiffs contend is the illegal seizure of more than $12 million in interstate transfers of money involving in excess of 11,000 transactions.

The actual number may be larger: Goddard said Wednesday his agency has taken in $17 million from the warrants and arrested more than 100 people smugglers.

Josh Hoyt, executive director of the Illinois Coalition for Immigrant and Refugee Rights, said he understands Arizona's desire to bust smuggling rings. But he said the state's use of warrants to take every transaction in excess of $500 and then make senders prove the money is legal is both unfair and illegal.

“Where this process needs targeted rifle-shot prosecutions, he's committing a legal drive-by shooting with automatic weapons,” Hoyt said. “And he is taking out lots of innocent people while he's taking out a few bad guys.”

Goddard defended the warrants, saying, “Our investigations and seizures are helping us disrupt human smuggling, secure Arizona's border and make our neighborhoods safer.”

He also said the lawsuit filed under the names of three individuals isn't about protecting the right to send money without fear of government seizure but to protect the profits of money transmitters.

“If it is successful, our human-smuggling investigations would be crippled, and Western Union and other money transmitters would continue to profit from illegal activity,” he said.

Hoyt acknowledged his organization has received grants in the past from Western Union, and confirmed that some of the information for the lawsuit came from the company. But he said the interest of his group is solely to protect the rights of individuals.

Goddard, however, said, Western Union specifically sought out plaintiffs for the lawsuit.

At the heart of the dispute are what the state calls “damming warrants.” The name comes from the procedure that allows state prosecutors to get a court order to “dam” up all wire transfers meeting certain criteria until the person to whom the money is being sent can show that the money is for a legal purpose.

Assistant Attorney General Cameron Holmes said prosecutors use a computer algorithm to review every money transfer sent into Arizona. He said these tend to be in amounts between $800 and $1,500, usually in final payments to smugglers for ferrying people into the United States.

Then, under a court warrant, the funds are put into a special fund. The intended recipient can call a toll-free number to claim them. If no claim is made, the money is forfeited to the state.

But the lawsuit says the actions are far broader, with the state issuing warrants generally good for 10-day periods for all transfers exceeding a certain amount. Attorney Tim Eckstein, who filed the papers on behalf of three individuals whose money was taken by the state, said those warrants originally affected transfers of $2,000 or more. Now transactions of as little as $500 coming from certain states are subject to seizure.

Goddard said not all wire transfers are seized. He said only those that meet certain criteria are set aside and recipients with “plausible” explanations can get them back.

State Rep. Steve Gallardo, D-Phoenix, said the state needs authority to go after those who use wire transfers to move money from criminal enterprises.

“At the same time we have to make sure we protect the rights of those folks who legitimately send money back and forth,” he said.

Gallardo said seizing transfers of $500 or more affects a lot more people than criminals.

“We should not just be using the $500 threshold,” he said, but instead require proof of some sort of pattern or other evidence of criminal activity.

Goddard said the state provides that proof to the judge who issues each of the damming warrants.

Gallardo also said the state's offer to refund funds improperly taken is insufficient because it requires people to go to a government office to prove their ownership in order to get their money back.

“That's intimidating for those folks who perhaps may be here undocumented,” he said, and simply want to send money home to relatives.