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In re the application of Private International Development Bank of American Samoa [2000] WSSC 54 (6 October 2000)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

IN THE MATTER: of the Criminal Procedures Act Section 84(4).

AND

IN THE MATTER: of the application of Private International Development Bank of American Samoa.
Applicant

Counsel: S. K. Ainuu for applicant
G. Latu for respondent

Hearing: 20 September 2000
Judgment: 6 October 2000

JUDGMENT OF SAPOLU CJ

In these proceedings, the Court is concerned with an application by the applicant to release the funds which I take to mean the funds in account number 2303876 under the name of the applicant Private International Development Banc of American Samoa in the ANZ Bank (Samoa) Ltd. These funds were seized on 25 May 2000 pursuant to a search warrant issued by Wilson J under the provisions of section 83 of the Criminal Procedure Act 1972.

The ground on which the application is based is that more than three months have lapsed and the respondent, the Attorney General, has not filed any charge or brought any proceedings for an offence relating to those funds. Counsel for the applicant relied on section 84(4) of the Criminal Procedure Act 1972 which provides:

"If, upon the expiry of a period of 3 months after the date of seizure, proceedings have not been brought for an offence relating to the thing and the thing is still in the custody of a constable, any person claiming to be entitled to the thing may apply to a District Court Judge for an order that it be delivered to him; and on any such application the District Court Judge may adjourn the same on such terms as he thinks fit for proceedings to be brought, or make any order that a Court may make under subsection (2) of this section."

Section 83(2) of the Act then provides the orders that the District Court may make in relation to anything seized pursuant to a search warrant issued under section 83. One such order the District Court may make is for delivering the thing seized to the person who is claiming to be entitled to it.

The present application was initially filed in the District Court. That Court advised counsel in support of the application to refer his application to this Court as the order of seizure that is sought to be discharged was made by Wilson J in this Court. Counsel for both the applicant and the respondent indicated to this Court their consent for this Court to hear the application.

Factual background

Counsel for the applicant did not give any factual background relating to his application except to say that a search warrant was issued in May 2000 and pursuant to that search warrant the funds in account number 2303876 under the name of the applicant in the ANZ Bank (Samoa) Ltd were seized. It is now more than three months after seizure of the funds was ordered but the respondent has not brought any proceedings for an offence relating to those funds. Counsel for the respondent on the other hand produced to the Court a bundle of documents which contained an affidavit sworn on 30 August 2000 by David Rubincam a special agent of the United States Federal Bureau of Investigation (FBI). In that affidavit, Rubincam says that he is currently conducting a criminal investigation in the United States into the promoters of an alleged fraudulent investment scheme in which they and others are suspected of having committed securities fraud, mail fraud, wire fraud, money laundering and unlawful transportation of fraudulently obtained property.

The United States Securities and Exchange Commission (SEC), which is responsible for the civil enforcement of the United States securities laws, has also conducted an investigation into the aforesaid investment scheme and filed a civil lawsuit against its promoters and obtained an interim injunction against the promoters and the president of the applicant banc ordering them to repatriate all investor funds back to the United States and deposit them with the United States District Court for the Western District of Washington which is the state of Washington and not Washington DC the federal capital of the United States.

Essentially what is alleged in the affidavit of Rubincam is that the promoters set up an investment scheme which they promoted within the United States. People were induced to invest in the scheme by giving them assurances that there was no risk to their funds which will be traded offshore and there also promised a 120% return on their investments at the end of the year. As it turned out, the 120% returns promised by the promoters were not realised and many investors lost the entire amounts of their investments.

What happened was that there was no offshore trading with the investors' funds as promised by the promoters. A large amount of those funds worth millions of dollars was used by the promoters for their own benefit. An overwhelming amount of the funds worth many millions of dollars was also transferred to overseas bank accounts controlled by the promoters in three different countries including the aforesaid bank account under the name of the applicant in the ANZ Bank (Samoa) Ltd in Apia. In fairness to the ANZ Bank (Samoa) Ltd there is nothing in the material placed before the Court to suggest that it was aware of or had any knowledge that these funds were the proceeds of an alleged fraudulent investment scheme carried out in the United States.

The United States Government has requested the Attorney General for assistance in relation to the funds in the aforesaid bank account. This must be the reason for the Attorney General seeking a search warrant in May this year from this Court.

Difficulty with application

The real difficulty with the applicant's application is that the applicant must show that it is entitled to the funds that it seeks to be released. There was no challenge to the affidavit of Rubincam. I can therefore only assume that what it says is correct. In the circumstances, I am of the view that the applicant is not entitled to the funds or to the order it is seeking from this Court. The funds really belong to the investors in the United States who placed their funds in the aforesaid investment scheme. The United States Government, on behalf of those investors, has requested the Attorney General to assist in seizing those funds. So the Attorney General is really acting for those investors upon request from their Government.

I have not considered the question whether sections 83 and 84 of the Criminal Procedure Act 1972 can have extra-territorial effect in relation to the aforesaid investment scheme or can be invoked in aid of a criminal investigation or criminal proceedings in a foreign country. The point was neither argued nor raised. I say no more about it.

Conclusion

For the foregoing reasons, the application is dismissed.

Counsel for the Attorney General, the respondent, to furnish the ANZ Bank (Samoa) Ltd, which still holds the funds, with a copy of this judgment when it is ready.

CHIEF JUSTICE

Solicitors:
S. K. Ainuu for applicant
Attorney Generals Office for respondent