PHOENIX — The Attorney General's Office is legally entitled to seize funds being sent by wire from other states into Mexico, the Arizona Court of Appeals ruled Tuesday.
In a unanimous decision, the judges acknowledged funds being taken from Western Union wire transfers never actually passed through Arizona. But they said there was enough evidence to conclude that the money was linked to human smuggling and narcotics trafficking that is occurring in the state.
Tuesday's ruling, unless overturned, is a significant victory for Attorney General Terry Goddard, who said these "damming warrants" are necessary to interrupt the flow of money into Mexico — and, by extension, dry up the finances of those committing illegal activities here.
The name comes from a procedure that 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.
People are also reading…
In this case, Goddard obtained a warrant from Maricopa County Superior Court allowing him to seize person-to-person wire transfers of $500 or more sent from 28 other states to certain locations in northern Sonora, Mexico, directly south of Arizona.
The warrant directed Western Union not to pay the money to the recipients but instead put it into a special account.
Intended recipients were given the phone number of an Arizona police agency to call. Police officers then interrogated 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 Goddard didn't even know whose money he was diverting.
But the appellate court sided with Goddard.
Judge Ann Scott Timmer, writing for the court, said the Attorney General's Office presented sufficient evidence to show money being wired to Mexico from other states is linked to the smuggling of humans and drugs into Arizona.
She said that is buttressed by the fact that when Goddard's office began seizing funds being sent from Arizona into Mexico, there was a sharp decline in those transactions — and a sharp increase in funds sent to Sonora from other states.
And the judge said the amount of money being sent increased during the peak season for smuggling illegal immigrants into the country.
The court said the fact that Goddard did not know ahead of time exactly whose money was being diverted does not make the warrants invalid.
"What we're talking about here are crimes in Arizona," Goddard said.
"We're simply following the lead of criminal activity in Arizona," he continued. "Just because certain aspects of it take place in Sonora doesn't stop it from being an Arizona crime."
Tuesday's decision may not be the last word.
"On behalf of our customers, we are disappointed in the ruling," said Daniel Diaz, a Western Union spokesman. He said the company is deciding whether to take the issue to the state Supreme Court.
Goddard acknowledged the blanket approach his office uses could be tying up money being sent to Mexico for legitimate reasons. But he said there are criteria other than the place of origin, the destination of the funds and the amount that trigger seizure, factors he would not publicly disclose.
"We're sure trying very hard to make sure the only ones that are caught in this procedure — and we wouldn't get the warrant if that weren't the case — meet the indicia of criminal activity," he said. "I believe very strongly that we have got it to the point that having a truly innocent transaction caught in this net is virtually impossible."
Still, he said, it could happen, which is why his office set up a procedure for recipients to be able to protest the seizure without having to go to court.
Goddard said having to justify the legitimacy of a wire transfer to a police officer can be inconvenient.
"But given the extraordinary amount of criminal activity and the large number of folks being brutalized by that activity, I think — and the court has agreed — it's a very small price to pay," he said.
