Can suicide before trial preserve any ill-gotten gains?

[aldiboronti]

The question is prompted by this news report of a Denver banker’s death, although I’m not specifically referring to that case.

Let’s say I’ve been caught defrauding my clients of millions of dollars, it’s a pretty open-and-shut case. Foreseeing the inevitable outcome I hurl myself under the nearest subway train just before my trial date. Can I now quite safely pass on to my family the millions stashed in my bank account, along with my private jet, yacht and all the other fruits of my years of financial jiggery-pokery?

[mangeorge]

@aldiboronti

The question is prompted by this news report of a Denver banker’s death, although I’m not specifically referring to that case.

Let’s say I’ve been caught defrauding my clients of millions of dollars, it’s a pretty open-and-shut case. Foreseeing the inevitable outcome I hurl myself under the nearest subway train just before my trial date. Can I now quite safely pass on to my family the millions stashed in my bank account, along with my private jet, yacht and all the other fruits of my years of financial jiggery-pokery?

No. Ill gotten gains are not allowed.
Maybe a lawyer can say why.
mangeorge

[hajario]

The people that you fleeced would just sue your estate.

[Noel_Prosequi]

Much depends on the local laws relating to confiscations of criminal profits. Some follow a model which requires a conviction before the confiscation laws are engaged, some do not. One can argue about the principles underlying this, but that is of marginal interest for present purposes.

However, the confiscation laws generally are only relevant in triggering the capacity of the state to get hold of the loot. For offences like drug dealing, etc, only the state has an interest in pursuing the money, because there is usually no “victim” who has an enforceable interest in clawing back drug profits.

Fraud cases are a different matter. If you defraud me, I can sue you, and the success or otherwise of my suit does not depend on the existence of a conviction (the principle was engaged in the case of the suit against OJ even after he was acquitted). If you, the fraudster, die for some reason before my suit is complete, then your estate remains liable to pay, and that liability takes precedence over any will. The usual rule is that what is distributed after death to rellies, etc, is what is left after all debts are paid, and my suit against you will create a debt (if I win).

Generally, if you are a banker who steals money from various accounts, a whole raft of potential plaintiffs might be able to sue, but generally, the bank will pay out the small fry whose accounts were emptied, then use its clout to finance going after the yacht, the Ferrari, the beach house, etc.

If you are not a banker, but just some spiv in the finance world who rips off clients, then there is a fair chance that you will have made some attempt to stash the money in accounts in false names, etc, which might make it harder to retrieve, but with the death of the fraudster, there is less capacity for him to try to obscure the retrieval of such money with bullshit. If I have lost enough money, and the chances seem worthwhile that I can get hold of enough of your assets to make it worth my while to sue, then I will make a commercial decision about whether to strip your grieving widow of said yacht, etc.

[don_t_ask]

That is an interesting question. I think in Australia there would be some chance of getting away with it. I recall some years ago a case, I believe in Queensland, where a notorious drug dealer dragged on his case for years at a cost of millions of dollars to keep himself on the streets. The government prosecutors were angered at the amount of money they had to spend to prosecute him while he was using money that, as soon as he was convicted would be confiscated as the proceeds of crime.

As I recall their was even suspicion that some of the crook’s lawyers, knowing about the ultimate conviction and fofeiture, were charging many times their normal rate and of course it didn’t matter to the crim.

[mangeorge]

@don't ask

That is an interesting question. I think in Australia there would be some chance of getting away with it. I recall some years ago a case, I believe in Queensland, where a notorious drug dealer dragged on his case for years at a cost of millions of dollars to keep himself on the streets. The government prosecutors were angered at the amount of money they had to spend to prosecute him while he was using money that, as soon as he was convicted would be confiscated as the proceeds of crime.

As I recall their was even suspicion that some of the crook’s lawyers, knowing about the ultimate conviction and fofeiture, were charging many times their normal rate and of course it didn’t matter to the crim.

In the US the cops get to grab the money first, then the baddie has to sue to get it back. Some dealers have even had to use a public defender because he was broke.

[KarlGauss]

The death, prior to conviction, of Ken Lay of Enron fame, may be of some elevance here. In particular, this quote, taken from the Wikipedia article about Lay, is quite interesting:

@Wiki on Lay

On October 17, 2006, since Lay died prior to exhausting his appeals, his conviction was abated.[16][17] Precedent in the Fifth Circuit Court of Appeals, the federal appellate court governing the district where Lay was indicted,[18] indicates that abatement had to be automatically granted. When abatement occurs, the law views it as though he had never been indicted, tried and convicted.[19][3] The government opposed Lay’s attorneys’ motion for abatement, and the Department of Justice issued a statement that it “remains committed to pursuing all available legal remedies and to reclaim for victims the proceeds of crimes committed by Ken Lay.”[20][21] Civil suits are expected to continue against Lay’s estate. However, according to a legal expert, claimants may not seek punitive damages against a deceased defendant, only compensatory damages.

So, when this precedent applies, the amount of recovery, or more specifically, the amount the estate might be liable for, is limited.

[Koxinga]

@KarlGauss

The death, prior to conviction, of Ken Lay of Enron fame, may be of some elevance here. In particular, this quote, taken from the Wikipedia article about Lay, is quite interesting:So, when this precedent applies, the amount of recovery, or more specifically, the amount the estate might be liable for, is limited.

Even more elevant the fact that he died after conviction but before sentencing.

[Koxinga]

Also, see the case of Budd Dwyer:

Since Dwyer died in office before being removed upon sentencing, his widow, Joanne, was able to collect full survivor benefits totaling over $1.28 million. A spokesman for Dwyer, immediately after the suicide, suggested Dwyer may have killed himself to retain the state-provided pension for his household, which had been ruined by legal defense costs.

[Noel_Prosequi]

Can’t comment on the Dwyer case, because it will have been decided by local rules. I suspect those rules have been tightened up since the 80s. Much would then have depended on the terms of the statutory benefits scheme to which his family were beneficiaries. Similar issues might potentially arise with insurance policies, and each case would depend on local rules and the terms of the policy. Those considerations are different from profits of fraud derived while the deceased was still alive.

As to the Lay case, the article suggests the only “limitation” on damages is that which serves to prevent plaintiffs getting the benefit of punitive damages. Makes sense - there is no point in punishing the family, who are innocent. But you can still get back what you lost under restorative damages, just not the “lottery jackpot effect” that punitive damages provides.

As to don’t ask’s suggestion that you can drag on a case to spend the ill-gotten gains on lawyers in Queensland, the rules have now changed.