Jerry Bernstein, a partner at Blank Rome LLP in New York who represented Absolute Poker, said many money-laundering cases end with a settlement, given the potential sweep of the money- laundering law.
Settlement Thinking
“Some settle because the company isn’t able to do business any longer and isn’t able to fight on,” he said.
The government’s forfeiture claims against SAC might be one of the few cases of its kind to make its way to trial, Buell said.
“It will be interesting because forfeiture cases rarely get litigated to the end, but it might be worth defending fully here,” he said.
If the government wins the civil case, it gets another bite at the fund’s assets beyond the forfeited amount: It has also asked in its complaint for fines for money laundering. Those can be as much as twice the illegal proceeds, according to the money-laundering statute.
Jonathan Gasthalter, a spokesman for SAC, declined to comment on the money laundering suit. Gasthalter has said SAC Capital has never “tolerated insider trading” and that it “will continue to operate.”
Criminal Forfeiture
“Some people might view this as a money grab by the government but would you prefer that the government not enforce the law?” said Anthony Sabino, a law professor at St. John’s University in New York. “This is the government seeking to punish a very large organization accused of enormous wrongdoing.”
The money-laundering suit isn’t the government’s only alternative: In the indictment of SAC, prosecutors included forfeiture allegations seeking “all property, real and personal” which are the proceeds of the fund’s alleged insider trading. The commingling theory isn’t available under the criminal statute.