U.S. Appellate Court Disallows U.S. Jurisdiction over Offshore Banks

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Friday, March 1, 2002
Author: 
Bruce Zagaris
Volume: 
18
Issue: 
3
103
Abstract: 
On December 27, 2001, the U.S. Court of Appeals for the First Circuit affirmed the District Court’s ruling that the U.S. Government has no jurisdiction to forfeit funds against the Swiss American Bank in Antigua and its alleged alter ego, Bank of New York-Inter-Maritime Bank. On May 4, 1994, the District Court entered a final order decreeing the money in Fitzgerald’s SAB account to be forfeited to the U.S. In November 1995, the U.S. learned that $5 million of the SAB funds had been transferred to the Antiguan Government and $ 2 million was used to pay off loans taken out by Fitzgerald. In 1997, the U.S. sued SAB and IMB for conversion, unjust enrichment, and breach of contract. On September 30, 1998, the District Court dismissed the government’s case for lack of personal jurisdiction. The court ruled that the government did not establish that the defendants were beyond the jurisdictional reach of any state court of general jurisdiction, as required y Federal Rule of Civil procedure 4(k)(2). However, on appeal the appellate court found the government had satisied that the claim arose under federal law.