June 30, 2021
Publication: Bloomberg
John McAfee, the founder of his eponymous anti-virus software company, was found dead in a Spanish jail cell hours after courts there approved his extradition to the U.S. for tax evasion. With his death, how could the U.S. recover the millions in taxes he allegedly owes? Kobre & Kim’s Evelyn Sheehan points to a potential route when she spoke with Bloomberg – civil forfeiture.
Ms. Sheehan, the former deputy chief of the Asset Forfeiture Division of the U.S. Attorney’s office in the Southern District of Florida, explains that while civil forfeiture is uncommon outside the U.S., the U.S. Department of Justice (DOJ) has been seeking to export the idea precisely because of situations like McAfee’s. The process is much like a criminal case, with the government having to prove “that someone committed an offense, that the property in question was either derived from or used to commit that offense.” Ms. Sheehan pointed out that a person contesting the forfeiture has a right to a jury trial, adding, “there’s a lot of due process.”
The civil forfeiture process is also an effective way of recouping funds in the form of cryptocurrency, which McAfee allegedly used to hide assets. The U.S. is working with private partners to map out where bitcoin went and in what exchanges funds might be held. “Their resources and their capabilities in the crypto space are increasingly better,” Ms. Sheehan said. “Just because it’s crypto doesn’t mean it’s gone and unrecoverable,” adding that if the U.S. can find the digital assets, “there is a good chance that you can get a court to freeze [them].”