A plan allowing no-warrant seizures of funds on prepaid debit or stored-value cards, to block money-smuggling by drug-dealers or financing for terrorists, was approved Thursday by a Nevada Senate panel despite critics' constitutional concerns.
Senate Judiciary members endorsed SB82 after rejecting an amendment sought by the American Civil Liberties Union of Nevada to make investigators looking for unusual financial transactions without alerting suspects first get a search warrant from a judge.
Allen Lichtenstein of the ACLU said the amendment would have ensured judicial oversight and guarded against "unbridled discretion" of investigators during non-urgent, preliminary stages of a probe. He added it's not difficult to get a search warrant from a judge.
But Assistant Attorney General Keith Munro said that under a 2001 state law change Nevada authorities already can avoid the warrant process and subpoena service providers for such information, and that state policy should remain in place.
Judiciary members agreed to delete another section that would have authorized Nevada's financial institutions chief to revoke licenses of financial institutions that refused to turn over records. Critics had questioned whether that authority would extend beyond Nevada's borders.
Jim Earl, executive director of the Nevada Technological Crime Advisory Board, said Thursday that Congress is considering legislation to prevent abuses of the stored-value cards, and the Nevada legislation would put this state "on the leading edge" of such efforts.
In earlier testimony, Earl told the Judiciary Committee that SB82 wouldn't violate the U.S. Constitution's 4th Amendment protections against unreasonable search and seizure.
Earl also said his board was told that prepaid debit or stored-value cards worth more than $600 billion were issued last year in the United States, and it's clear that some are being used by criminals and not just people engaged in legitimate commercial transactions.
Under SB82, police with probable cause to believe a prepaid or stored-value card was linked to criminals could temporarily freeze the funds on the card account or even seize the funds without a warrant in certain cases.
Earl said the measure takes into account a federal appeals court decision late last year in New York that held authorities can conduct no-warrant searches and surveillance against U.S. citizens in foreign countries. As applied to SB82, he said that ruling provides legal support for seizures of funds in financial institutions outside this country.