State justices to rule on AG seizure of suspicious funds wired to Mexico

By Howard Fischer
Capitol Media Services

Tucson, Arizona | Published: 12.08.2008

PHOENIX β€” The Arizona Supreme Court has agreed to decide how much power the Attorney General's Office has over wire transfers that may be used to pay for human and drug smuggling from Mexico.

In a procedural order, the justices agreed to review a decision by the state Court of Appeals that said Attorney General Terry Goddard was entitled to seize funds being sent by wire from other states into Mexico.

The judges acknowledged that the funds being taken from Western Union never actually passed through Arizona. But in their unanimous decision earlier this year, they said there was enough evidence to conclude that the money was linked to human smuggling and narcotics trafficking occurring in this state.

In their new order, the Supreme Court justices said they want to decide whether the appellate court ruling improperly expanded the scope of Goddard's "extraterritorial jurisdiction" in violation of federal constitutional provisions, which govern both interstate and international commerce.

Goddard won at least a partial victory from the Supreme Court: The justices upheld another part of the appellate court ruling that said the patterns of activity he used to determine which funds to seize were not overly broad.

At issue are "damming warrants" that Goddard contends are necessary to interrupt the flow of money into Mexico β€” and, by extension, dry up the finances of people committing crimes here. The procedure allows state prosecutors to get a court order to "dam" all wire transfers meeting certain criteria until the person for whom the money is intended can show it is for a legal purpose.

Goddard had obtained a warrant from a Maricopa County Superior Court judge allowing him to seize person-to-person wire transfers of $500 or more sent from 28 other states to certain locations in the northern part of the Mexican state of Sonora, located directly south of Arizona. The warrant directed Western Union not to pay the money to the recipients but instead to put it into a special account.

The intended recipients had to call police, who then questioned the callers to determine whether to allow the transfer to be paid.

Goddard's office had seized about $200,000 from about 250 transactions before being blocked by a trial judge, who concluded there were insufficient links to Arizona to let the state tie up money that went from other states to Mexico. That judge also pointed out that Goddard didn't even know whose money he was diverting.

But appellate Judge Ann Scott Timmer said the Attorney General's Office presented sufficient evidence to show that money being wired to Mexico from other states is linked to smuggling of humans and drugs from that country into Arizona. She also said the fact that Goddard did not know ahead of time exactly whose money was being diverted did not make the warrants invalid.

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