Court Ruled For Bank That Forwarded Funds Sought In Seizure By DA's Office

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In Miaoulis v. AmegyBank, the Houston First Court of Appeals held that two banks forwarding of funds to a district attorney’s office and their refusal to segregate funds under 59.12 of the Texas Code of Criminal Procedure did not harm the account holders. No. 01-11-00959-CV, 2012 Tex. App. LEXIS 4709 (Tex. App.—Houston [1st District], June 14, 2012, no pet.). 

The district attorney charged bank account holders with multiple crimes for operating a gambling facility and obtained warrants for the seizure of their bank accounts. The banks tendered cashier's checks for the amounts held in the accounts. The account holders filed suit against the banks for breach of contract, breach of the duties of good faith and fair dealing, and breach of fiduciary duties arising from submitting the funds to the district attorney. 

The account holders argued that article 59.12 of the Texas Code of Criminal Procedure prohibited the banks from simply turning over the money and required them to transfer the money to a segregated account until an action on the forfeiture of the money was complete. The banks argued in a motion for summary judgment that the plain language of article 59.12 authorized them to turn over the money and that transferring the property to a segregated account was only elective. They also argued that, even if the money should have been transferred to a segregated account, the account holders could not establish any harm. The trial court awarded the banks summary judgment, and the account holder appealed. 

The court of appeals affirmed the judgment because the account holders failed to challenge the causation ground on appeal. The court noted that even if the funds had been kept in the banks, the account holders would not have had any access to the funds. And since the funds were ultimately forfeited, the court held that where the funds were held prior to their forfeiture could not have harmed the account holders.

Topics:  AmegyBank, Gambling, Segregated Funds

Published In: Criminal Law Updates, Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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