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State can't seize wire transfers from Mexican nationals

By Howard Fischer
Capitol Media Services
Thursday, January 11, 2007

Arizona Attorney General Terry Goddard can't seize funds being sent by residents of other states to Mexico, a state judge has ruled.

Maricopa County Superior Court Judge Kenneth Fields has rejected Goddard's argument that he is entitled to divert cash being sent into Mexico because the funds may be being used to help commit crimes in Arizona. Fields said the people whose cash is being seized -- even if just temporarily -- just don't have enough proven ties to Arizona to give Goddard the jurisdiction. "The seizure warrant is an attempt by the state to apply its laws to customers engaged in Western Union Money Transfer transactions in interstate and foreign commerce which took place entirely outside of Arizona,'' Fields wrote in his ruling, made public Wednesday.

In fact, the judge pointed out that Goddard doesn't even know who the people are whose money he is diverting.

Fields said the warrant Goddard is using does not identify specific customers or even say exactly what he is seizing. And the judge said Goddard hasn't established that anyone whose money is being taken were breaking Arizona law in the first place.

The ruling is a victory for Western Union which has extensively marketed its money transfer services to Mexican nationals and their relatives living in the United States.

Western Union challenged the warrant in September, three days after Goddard obtained it. Fields issued a restraining order at that time -- but not before about 250 transactions had been seized totaling about $200,000.

The new order makes that injunction permanent.

"Western Union is a trusted friend of the Latino community,'' said Christina Gold, the company's president and chief executive in a prepared statements. "We pursued this case in court because we feel strongly about defending the rights of our consumers.''

Goddard, however, promised to appeal. He said the warrants are an important tool in combatting drug and human smuggling rings and help ``disrupt smuggling, secure Arizona's border and make our neighborhoods safer,'' saying those warrants have resulted the seizure of $17 million from the warrants and arrested more than 100 (ITALICS) coyotes. (ROMAN)

The decision does not affect the legality of similar warrants that Goddard's agency uses to seize money sent directly to or from Arizona. Western Union spokeswoman Kristin Kelly said her company did not challenge the legality of these.

But a separate civil lawsuit filed in U.S. District Court in Phoenix by an immigrant rights group contends that all of Goddard's seizures are illegal. The Illinois Coalition for Immigrant and Refugee Rights contends the practice violates constitutional requirements that governments must have some probable cause before taking someone's money.

At the heart of the dispute are what the state calls "damming warrants.'' The name comes from the procedure which allows state prosecutors to get a court order to "dam'' up all wire transfers meeting certain criteria unless and until the person to whom the money was being sent can show that the cash is for a legal purpose.

In this case, the warrant -- obtained by Goddard's office after applying to another judge -- allowed the state to divert all person-to-person wire transfers of at $500 or more, sent from Arizona and 28 other listed states which is bound for 26 Western Union locations in Sonora.

The warrant directed Western Union not to pay the money to the recipients but instead put it into a special account, with the company then giving these people a telephone number of an Arizona police agency to call.

Fields said it is then up to the police officers, who interrogate the callers, to determine whether to allow the transfer to be paid.

"If a customer does not satisfy the law enforcement officer that the money transfer is for a legal purpose, or does not call at the (Arizona) number ... the money transfer is deemed to be forfeited,'' the judge noted.

Goddard has said he does not believe the procedure is improper, saying those with a legitimate -- and legal -- right to the money should be able to have it released. But he said the amount that has been forfeited shows that much of what is being transferred is for criminal purposes.

But state Rep. Steve Gallardo, D-Phoenix, said the state's offer to refund funds improperly taken is insufficient because it requires people who want their money back to go to a government office to prove their ownership.

"That's intimidating for those folks who perhaps may be here undocumented,'' he said, but simply want to send money home to relatives.

Attorney Tim Eckstein who represents three named plaintiffs in the immigrant rights group lawsuit said all three sent money through Western Union for legal purposes -- and all had the money diverted.

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