Month: September 2022

Source: United States Department of Justice News

The Department of Justice today announced significant actions regarding digital assets, including the public release of its report, pursuant to the President’s March 9 Executive Order on Ensuring Responsible Development of Digital Assets,  on The Role of Law Enforcement in Detecting, Investigating, and Prosecuting Criminal Activity Related to Digital Assets;[1] and the establishment of the nationwide Digital Asset Coordinator (DAC) Network, in furtherance of the department’s efforts to combat the growing threat posed by the illicit use of digital assets to the American public.

“As digital assets play a growing role in our global financial system, we must work in tandem with departments and agencies across government to prevent and disrupt the exploitation of these technologies to facilitate crime and undermine our national security,” said Attorney General Merrick B. Garland. “The efforts announced today reflect the commitment of the Justice Department and our law enforcement and regulatory partners to advancing the responsible development of digital assets, protecting the public from criminal actors in this ecosystem, and meeting the unique challenges these technologies pose.” 

As noted in the White House Fact Sheet, these efforts are part of a larger, collaborative effort across government agencies “to develop frameworks and policy recommendations that advance six key priorities identified in the EO: consumer and investor protection; financial stability; illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation.”

“Developments in digital assets have created a new landscape for criminals to exploit innovation to further significant criminal and national security threats domestically and abroad,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division.  “Through the creation of the DAC Network, the Criminal Division and the National Cryptocurrency Enforcement Team will continue to ensure that the Department and its prosecutors are best positioned to combat the ever-evolving criminal uses of digital asset technology.”

First, in response to the March 9 Executive Order, the department’s report discusses the manner in which illicit actors are exploiting digital asset technologies; the challenges that digital assets pose to criminal investigations; initiatives that the department and law enforcement agencies have established as part of whole-of-government efforts to more effectively detect, investigate, prosecute, and otherwise disrupt these crimes; and recommended regulatory and legislative actions to further enhance law enforcement’s ability to address digital asset crimes.

Second, the department’s Criminal Division has launched the DAC. Led by the department’s National Cryptocurrency Enforcement Team (NCET), the DAC Network comprises over 150 designated federal prosecutors from U.S. Attorneys’ Offices and across the department’s litigating components, and will serve as the department’s primary forum for prosecutors to obtain and disseminate specialized training, technical expertise, and guidance about the investigation and prosecution of digital asset crimes. The Director of the NCET, Eun Young Choi, chaired the DAC Network’s first meeting on September 8.

Reports on Ensuring Responsible Development of Digital Assets

The department’s report on the Role of Law Enforcement in Detecting, Investigating, and Prosecuting Criminal Activity Related to Digital Assets begins by detailing the many ways in which illicit actors have exploited digital assets. It delineates three principal categories of illicit uses: 1) cryptocurrency as a means of payment for or manner of facilitating criminal activity; 2) the use of digital assets as a means of concealing illicit financial activity; and 3) crimes involving or undermining the digital asset ecosystem. The report also discusses how novel technology, particularly in the area of decentralized finance, or DeFi, has created new challenges for law enforcement; includes examples of successful law enforcement efforts to investigate, prosecute, and otherwise disrupt digital asset crimes in spite of the investigative challenges; and describes initiatives that the department and other law enforcement agencies have established—including the department’s launch of the DAC Network—to more effectively detect, investigate, prosecute, and otherwise disrupt crimes relating to digital assets, and to seize and forfeit those assets that constitute ill-gotten gains.

The report also addresses the Executive Order’s request for recommendations on appropriate regulatory and legislative actions. It proposes actions designed to enhance law enforcement’s ability to gather evidence and initiate prosecutions; strengthen certain laws and penalty provisions that play an important role in digital asset prosecutions; support regulations that would enhance customer-identification efforts and other anti-money-laundering requirements under the Bank Secrecy Act; and ensure that law enforcement and regulatory agencies have adequate resources to conduct the technologically sophisticated investigations inherent in the digital assets space. The report identifies three proposals as priorities: 1) expanding to virtual asset service providers the laws preventing employees of financial institutions from tipping off suspects to ongoing investigations; 2) strengthening the law criminalizing the operation of unlicensed money transmitting businesses; and 3) extending the statute of limitations of certain statutes to account for the complexities of digital assets investigations.

This report complements the June 2022 report issued by the department on How to Strengthen International Law Enforcement Cooperation for Detecting, Investigating, and Prosecuting Criminal Activity Related to Digital Assets, which details the unique challenges posed by cross-border digital asset investigations, and includes recommendations on how to bolster enforcement and improve international cooperation in the area.  In line with the whole-of-government approach called for in the Executive Order, both reports are the culmination of collaborative efforts between the department, led by the NCET, and multiple federal agencies, including the Department of the Treasury, the Department of Homeland Security, and the Department of State. 

The Digital Asset Coordinators Network

To ensure that the department continues to meet the challenge posed by the illicit use of digital assets, the department’s Criminal Division recently launched the nationwide DAC Network. Led by the NCET, in close coordination with the Criminal Division’s Computer Crime and Intellectual Property Section and the Money Laundering and Asset Recovery Section’s Digital Currency Initiative, the DAC Network is composed of designated federal prosecutors from U.S. Attorneys’ Offices nationwide and the department’s litigating components. Each DAC will act as their office’s subject-matter expert on digital assets, serving as a first-line source of information and guidance about legal and technical matters related to these technologies.

As members of the DAC Network, prosecutors will learn about the application of existing authorities and laws to digital assets and best practices for investigating digital assets-related crimes, including for drafting search and seizure warrants, restraining orders, criminal and civil forfeiture actions, indictments, and other pleadings. The DAC Network will also serve as a source of information and discussion addressing new digital asset issues, such as DeFi, smart contracts, and token-based platforms, and their use in criminal activity. The DAC Network will likewise raise awareness of the unique international considerations of the crypto ecosystem, including the benefits of leveraging foreign relationships and the challenges of cross-border digital asset investigations. 

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[1] In addition to the report, and in further response to the Executive Order, the Attorney General separately transmitted to the Assistant to the President for National Security Affairs and the Assistant to the President for Economic Policy, via the White House Counsel’s Office, an assessment from the Department of whether legislative changes would be necessary to issue a CBDC, should it be deemed appropriate and in the national interest. 

Source: United States Department of Justice News

Assistant U. S. Attorneys Daniel D. Shin (619) 546-7609

NEWS RELEASE SUMMARY—September 15, 2022

SAN DIEGO—Sergio Cervantes-Lopez of San Diego and Remigio Sosa-Laez, a Mexican national, were charged yesterday in connection with a human smuggling event that ended with a high-speed chase.

According to documents filed in U.S. District Court, U.S. Border Patrol Agents observed Cervantes-Lopez as he drove a large sport utility vehicle to an area near Donovan State Prison and the George Bailey Detention Center shortly after 4:00 p.m. on September 13, 2022. The agents conducting surveillance on Cerventes-Lopez’s vehicle reported that a large group of eight to ten individuals entered his car before he drove away. When other agents responded to the area and attempted to conduct a traffic stop, Cervantes-Lopez fled at speeds as high as ninety miles per hour.

According to the complaint, during the ensuing chase, Cervantes-Lopez rammed a U.S. Border Patrol vehicle and backed into a civilian’s pick-up truck before running through a red light and colliding with another civilian’s sport utility vehicle. Cervantes-Lopez’s vehicle tipped over in the collision. After the collision, Cervantes-Lopez attempted to flee the area on foot but was quickly apprehended.

Cervantes-Lopez had eight other people in his sport utility vehicle at the time of the crash. A follow up investigation revealed that one of the individuals in the vehicle, Remigio Sosa-Laez, had allegedly guided the group across the border on foot. Two of the passengers stated that they feared for their lives during the chase.   

Cervantes-Lopez and Sosa-Laez were both arrested shortly after the collision and are awaiting their initial appearance before a United States Magistrate Judge.

“You gamble with your life when you trust a smuggler,” said U.S. Attorney Randy Grossman. “Smugglers don’t care about the health and safety of their cargo.” Grossman thanked the prosecution team and the U.S. Border Patrol for their excellent work on this case.

“Smugglers threaten the health and safety of our citizens and those migrants in their care, when they engage in these dangerous-senseless tactics,” said U.S. Border Patrol San Diego Sector Chief Patrol Agent Aaron M. Heitke.

DEFENDANT                                               Case Number 22mj3368-AHG                                 

Sergio Cervantes-Lopez, 30 years old

Remigio Sosa-Laez, 19 years old

SUMMARY OF CHARGES

Transportation of Illegal Aliens—Title 8, U.S.C., Section 1324

Maximum penalty: Five years in prison

Bringing in Aliens Without Presentation— Title 8, U.S.C., Section 1324

Maximum penalty: Ten years in prison

AGENCY

United States Border Patrol

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

Source: United States Department of Justice 2

Thank you, Ambassador [Susan] Rice, for bringing us all together. Thanks to the members of this panel. Thanks everyone out here for joining us. A little louder? Okay. People are not shy in this room. That’s excellent. 

I have often said, and I say often, that the Justice Department was founded in 1870 with the first principal purpose of protecting the rights of Black Americans under the 13th, 14th, and 15th Amendments, and in particular, fighting against the Ku Klux Klan and white supremacists who were trying to deprive them of the right to vote.

Now, 152 years later, the task of confronting hate-fueled violence remains central to the mission of the Justice Department.

In one of my very first acts as Attorney General, I directed an expedited review to determine how the Justice Department could improve its efforts to fight against acts of hate that were unlawful, constituted crimes.

While that review was nearing completion, Congress passed and the President signed into law the COVID-19 Hate Crimes Act and the Jabara-Heyer NO HATE Act.

Shortly after that, I directed the Justice Department to enhance our efforts to combat unlawful acts of hate, including:

• By improving incident reporting,
• By increasing law enforcement training and coordination at all levels of government,
• By prioritizing community outreach,
• And making better use of civil enforcement mechanisms.  

Over the past year and a half, the Justice Department has sharpened its tools to help us prevent, deter, investigate, and prosecute hate crimes.

Earlier this year, we secured the convictions of three men who targeted and killed Ahmaud Arbery just because he was a Black man jogging on a public street.

We successfully prosecuted an individual who, motivated by racist and xenophobic beliefs about the COVID-19 pandemic, targeted and attacked an Asian family at a supermarket in Midland, Texas.

We obtained the conviction of an individual in New York who mailed more than 60 letters to LGBTQ affiliated individuals, organizations and businesses, many of which contained threats to kill, shoot, and bomb the recipients.

And we obtained the conviction of a man in Tennessee for a series of arsons targeting Catholic, Methodist, and Baptist churches in the state.

And these are only a few examples of the Justice Department’s criminal law enforcement efforts against perpetrators of hate crimes.

The Justice Department remains committed to enforcing federal hate crime laws. But we also recognize that prosecutions alone are not enough.

That is why the Justice Department has launched its new United Against Hate program. This initiative brings together community groups, community leaders, and law enforcement at every level to build trust and strengthen coordination to combat unlawful acts of hate. 

The initiative seeks to improve the reporting of hate crimes and hate incidents by working with communities about how to identify and report unlawful acts of hate.

Earlier this year, our U.S. Attorneys’ Offices for Massachusetts, New Jersey, and the Eastern District of Washington completed United Against Hate pilot programs.

And today, I am pleased to announce that this initiative will expand to 16 more U.S. Attorneys’ offices and will launch in all 94 U.S. Attorneys’ offices within the next year.

United Against Hate brings together community-focused resources from across the Justice Department, including from the Civil Rights Division and the FBI, which are both important parts of the United Against Hate initiative. The Community Relations Service and the Office for Victims of Crime are also expanding the resources and support that they offer to communities and individuals targeted [by] hate.

Finally, over the time I have served as Attorney General, many in this audience, who I am looking at today, have played a critical role in helping advance our efforts to combat hate.

You helped to push the passage of the COVID-19 Hate Crimes Act and Jabara-Heyer NO HATE Act. To mark the one-year anniversary of that legislation this past May, the Department released our first grant solicitations under those authorities.

Our law enforcement partners, like the International Association of Chiefs of Police (IACP), have ramped up your anti-hate crime training resources for local police departments.

Many of you here today provided valuable input for the guidance we issued with our partners at the Department of Health and Human Services to raise awareness of hate crimes during the pandemic.

Earlier in my tenure, you underscored the importance of language access in the reporting of hate crimes and hate incidents. As a consequence, then, we hired the Department’s first-ever full-time Language Access Coordinator.

Confronting unlawful acts of hate is complex and difficult work, but we are grateful for your advocacy and your partnership in this work.

As I have said many times before, the Justice Department does not investigate or prosecute people because of their ideology or the views they hold. In our democracy, people are entitled to voice their opinions, to argue, and to debate.

But in our democracy, people are not entitled to commit violent acts or make unlawful violent threats motivated by bias or hate. And the Justice Department will not hesitate to hold accountable people who do so.

All people in this country should be able to live without fear of being attacked or harassed because of where they are from, what they look like, whom they love, how they worship, or what they believe.

The Justice Department will never stop working toward that end. Thank you.

Source: United States Department of Justice News

Through the United Against Hate Initiative, All 94 U.S. Attorneys’ Offices Will Host Outreach and Community Engagement Programs to Address and Prevent Unlawful Acts of Hate Over the Next Year; 16 Districts Will Roll Out Programs This Fall