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The US Government late Monday night filed a response to Costigan Media's Motion to Unseal seizure warrants and other court documents in relation to frozen online poker funds totaling up to $40 million. Costigan Media is the parent company of Gambling911.com.
The U.S. attorney for the Southern District of New York instructed three banks to freeze the accounts in early June and another to do so on June 24. A letter faxed to one bank, Alliance Bank of Arizona, claimed that accounts held by payment processor Allied Systems Inc. are subject to seizure and forfeiture "because they constitute property involved in money laundering transactions and illegal gambling offenses." The letter was signed by Arlo Devlin-Brown, the assistant U.S. attorney for the Southern District of New York.
The Government's response to Costigan Media's Motion to Intervene clearly argues that they believe funds are forfeitable because they contain proceeds of criminal activity, specifically money laundering. They are also actively still investigating the matter.
"Under these circumstances, granting Costigan's Motion would be unprecedented," the Government argues.
"Indeed while Costigan's brief cites dozens of decisions from various jurisdictions that support its arguments, it has not cited a single decision in any federal court granting a motion to unseal a seizure warrant affidavit while a criminal investigation is ongoing.
"Unsealing a seizure warrant application during the course of a related criminal investigation is unprecedented because neither the media nor the public have a right to access such documents."
Furthermore, the Government claims that the First Amendment rights of the press "does not create a qualified right of access to seizure warrant affidavits. Moreover, if such a qualified right existed it would be outweighed in this case by law enforcement interests."
Why do law enforcement concerns justify keeping the seizure warrants sealed?
The Government argues that it is "essential to preserve higher values and is narrowly tailored to serve that interest."
It would also interfere with the Government's ability to identify and seize forfeitable assets involved in alleged criminal activity.
The Second Circuit has never decided whether a common law qualified right of access applies to seizure warrant materials, but it has decided the public does have that right upon the conclusion of an investigation.
The US Government also cites the Bernie Madoff case: "Unsealing the application materials submitted in support of the Warrants would interfere with the Government's ability to identify and seize forfeitable assets.
Costigan Media will be submitting its response on Wednesday July 22. A hearing before the Circuit Court is scheduled for 10 am Monday, July 27.
Christopher Costigan, Gambling911.com Publisher
