No Precedent
Bachner, the defense lawyer, said he doesn’t expect the government to use the SAC money-laundering precedent to sue hedge funds for all their money if there are only isolated instances of insider trading.
“Unless a fund has demonstrated a systematic course of criminal conduct, I don’t think it has to be worried,” he said.
Taken to its extreme, the government’s demand for assets in its money-laundering suit could cover even Cohen’s personal property, from his mansion in the Hamptons to his art collection, said Hillary Sale of the Washington University School of Law.
“If the government can establish that the funds were comingled with other funds, and it stands to reason that is the direction the government will take, then the amount could be as large as the company’s net capital and, then, possibly Cohen’s own assets, including that Picasso he just bought,” she said.
Poker Cases
In some cases, involving gambling or drug transactions, where an entire enterprise is based on unlawful activity, the government has succeeded in seizing all of a company’s assets.
Bharara’s office used civil money-laundering statutes to go after Internet poker companies accused of circumventing U.S. laws that prevent American banks from processing player payments. Last year PokerStars, Full Tilt Poker and Absolute Poker agreed to pay at least $731 million to settle money- laundering allegations in an accord with Bharara’s office.
Full Tilt agreed to forfeit virtually all of its assets, while PokerStars agreed to forfeit $547 million to the U.S and pay $184 million owed to foreign players by Full Tilt.
While the U.S. agreement with Absolute Poker didn’t specify a monetary figure, the deal required the company to give up all its assets, including money held in accounts, hardware and intellectual property.