I have recently rewatched Breaking Bad, and something that happened in the last season had me wondering. Jessie tries to give $2.5M each to Mike's granddaughter and the family of the boy that was killed. Saul states that in both cases, this suspicious money would be seized instantly and advises against this plan. My question is, in a similar, real situation like that, would the authorities actually take all of the money if there was no clear source if a legitimate origin isn't known, but they also couldn't conclusively prove its the product of criminal activity? What legal reason would they have for taking it, provided the recipients were willing to report the income and pay the necessary tax?
The process would play roughly as follows.
- Jessie gives $2.5M to Mike's granddaughter as a gift.
- Mike's granddaughter files this as income. I believe the appropriate tax law would be inheritance law and as they are not related the tax would be quite high.
- The tax office notices that this is highly unusual and suspicious but not illegal per se. Hence they investigate to find out more.
- They find out that Jessie did not legally own the $2.5M he gave (because it was illegal drug money). Hence Jessie was not in a position to make this gift and they can and will confiscate it from Mike's granddaughter.
Note that if Jessie can prove that he legally owned the money there is no crime and he is free to give it to whoever he pleases.
You can keep unless they can take. The police cannot, for example, randomly enter my house and seize my property – any seizure must be reasonable. They cannot arbitrarily seize my bank accounts. Unless we're dealing with property in my possession when I am arrested, there probably has to be a warrant to search and seize, supported by some kind of evidence that there is evidence of a crime to be found.
Once the police are in possession of your property, they can (details vary by state) initiate a legal process of civil forfeiture, where they sue the property for its criminality, and if they win in court, they get to keep the money (or other property). The government has to prove by a preponderance of evidence that the money is the fruit of criminal activity. That means that the owner has to prove that the property is "legal". The specific legal requirements vary by state, here is a study of what the requirements are, though New Mexico is not one of those states that makes civil forfeiture easy and profitable for the police.