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Friday, May 17, 2024 | Back issues
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Feds Seize $17 Million, but Why?

LOS ANGELES (CN) - The federal government seized more than $17 million in bank accounts without explanation, threatening the very existence of Encino-based Sky Atlantic Capital, the company claims in court.

Sky Atlantic sued the United States in Federal Court on Tuesday. The company describes itself as an accounts-receivable financing and invoice-factoring company that helps clients collect large accounts and make timely cash payments to vendors.

It claims that Uncle Sam seized its accounts without notice, without a cause certain, and without explanations.

Based on information from the public record, the company says, it believes the government suspects it is involved in one or more conspiracies to distribute prescription drugs without a license.

But it does not distribute prescription drugs, Sky Atlantic says, so "it is clearly unreasonable, and there is no apparent probable cause for the seizures."

The federal government on Feb. 20 seized $11,001,040.08 from two Sky Atlantic accounts at the Bank of Manhattan, the company says.

Federal authorities later seized another $6,176,144.14 from two Sky Atlantic accounts at Comerica Bank.

Sky Atlantic says the seizures were unlawful, without probable cause, done without notice, and without any sort of forfeiture proceedings.

The seizures could put the company out of business, as it lacks the "ability to effectively operate its legitimate domestic factoring business" and has "numerous checks being dishonored, which has negatively affected (its) reputation in this highly competitive field."

"If the funds are not returned soon, this loss of the assets of a legitimate business, including operating capital, could force the business to close."

It claims the government has refused to provide seizure warrant affidavits, give a legal reason, initiate forfeiture proceedings or respond to its inquiries.

Sky Atlantic says the seizures violate the Fourth and Fifth Amendments, and that there is no pending criminal action against the company.

It wants the money back, now, with interest and attorney's fees and costs.

Sky Atlantic attorney Paul Gabbert declined to comment on the matter.

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