Status 30 June 2009

All the Dinars were recovered. The Department finished counting the Dinars, and arrived at essentially the same total. The Dinars were examined by the Secret Service again, and, again were confirmed to have all the anti-counterfeiting measures expected in currency.
The Dinars have been packaged, sealed and are stored in a bank vault.

Proof of Claim. The Department is going through the process of confirming how much each investor invested with Jack Smiley. The Department cannot simply accept a person's unsupported claim, and will require some proof or evidence of the amount actually invested.

Send documentation of your investment to the Department. Smiley's record keeping was inaccurate and unclear, and in many cases it is difficult to tell how much the investor actually gave to Smiley. The Joint Venture agreements alone probably cannot support a claim, for various reasons. The best evidence will be cancelled checks, or wire transfer receipts. Bank statements or records that show withdrawals of money in amounts and on dates that coincide with the Joint Venture Agreements are also helpful. Although many investors have already provided this documentation, the verification process make take a few weeks. The Department is preparing to notify investors who need to provide more documentation.

You can fax your material (208) 332-8016.

The process. Once the Department is satisfied that investors have verified their claims, it can determine how the Dinars will be distributed. That is, if 80% of the money was recovered, for example, investors will get 80% of their investment. The Department must provide the Judge with an accounting showing how it plans to distribute the Dinars, and cannot distribute them until the Judge signs off on the plan. The judge will oversee the entire distribution process.

The Department's interest. Some investors appear to believe Smiley's absurd claim that the State will keep some of the Dinars. The Department is not legally entitled to keep any of the money. The Department is entitled to be paid the penalty Smiley was ordered to pay, but the Department is not going to take the penalty from the Dinars unless all investors recover 100% of their investment and some surplus exists. This does not seem likely. Again, remember that the Judge will be overseeing the distribution.

Jack Smiley's status. A telephonic status conference has been set for Tuesday, 30 June 2009 with Judge Mitchell regarding Smiley's ongoing incarceration. Now that the Dinars have been recovered, ongoing incarceration cannot have a coercive effect, and civil contempt is over. It is likely that Smiley will be released from jail very soon.

Dinars recovered

The Department of Finance has recovered most if not all of the missing Dinars. The Department will count them and do an accounting to determine how many were recovered, and will begin the process of making restitution to investors.

The Department will initially determine the appropriate ratio of distribution. That is, depending on how many Dinars are actually present, a given investor might get 50 cents on the dollar, or 90 cents, or whatever. Once the ratio is determined, investors who choose to receive Dinars will get their Dinars. The remaining Dinars will be converted to cash, if that is possible, and the money will be distributed in the same ratio.

This process will be overseen and approved by Judge Mitchell, and may take some weeks to accomplish.

This blog will be updated as new information is available.

Contempt

The hearing on Mr. Smiley's Motion for Relief was held on Monday, June 15, 2009. Mr. Smiley testified briefly, and I cross examined him briefly as well.

After considering the arguments of the parties, and after having dome independent research, Judge Mitchell denied the motion for relief and returned Mr. Smiley to custody for an indefinite period.

Mr. Smiley remains in jail, and will until either he produces the Dinars, or until he convinces the court at a later time that continued incarceration will not have a coercive effect.

Motion for relief

Mr. Smiley's lawyer has filed a Motion for Relief. This motion is currently set for hearing at 4:00 PM on Monday June 15, 2009 at the Kootenai County Courthouse, Court Room 8 in front of Judge Mitchell. The Department will appear and resist this motion.

In the motion, Mr. Smiley's lawyer is suggesting that Mr. Smiley will never reveal where he has hidden the Dinars. Therefore, since more jail time will not cause him to reveal the location of the Dinars, he should be let out of jail.

The concept is that jail will coerce Mr. Smiley into producing the Dinars. If the judge decides that Mr. Smiley cannot be coerced by incarceration, continued incarceration then becomes punitive, and at that stage Mr. Smiley is entitled to the various protections provided by the criminal contempt rules.

Incarceration to coerce behavior is civil contempt; incarceration to punish is criminal contempt. Different rules apply to the two types. Civil contempt has fewer protections because the person can get out of jail at will just by obeying the Court's order.