New Jersey governor freezes (or seizes?) bank account of gym that refused to close

This sounds more like the plot to a dystopian film from the future than an actual headline in the American press, but it’s apparently real. In New Jersey, the Atillis Gym in Bellmawr, has been defying Governor Phil Murphy’s lockdown orders and other restrictions on operations during the pandemic. This led to a legal battle over the shutdown orders and alleged violations. Such a court fight can really run up someone’s legal bills, so co-owner Ian Smith set up a legal defense fund that soon racked up nearly $200,000. But he and his partner received an unpleasant surprise when they opened their most recent bank statement. According to Smith, the account containing the donations had been emptied by the state. That claim is being disputed, but something definitely happened between the bank and the New Jersey state government and Atillis Gym no longer has access to the funds. (Washington Examiner)

A New Jersey gym owner who has stayed open in defiance of coronavirus lockdowns said the state emptied a bank account containing almost $200,000.

“As of yesterday morning, my partner and I checked the bank statement … and we had no money in our bank account,” Atilis Gym co-owner Ian Smith told Fox News’s Tucker Carlson on Thursday night.

The day before, Smith tweeted that New Jersey Gov. Phil Murphy “and his cronies” had seized their legal defense fund, which amounted to $173,613.

Here’s the video of the interview Smith did with Tucker Carlson to discuss the matter.

A spokesperson for the Governor denied that the money had been “seized,” but did admit that a judgment for unpaid fines and fees had been entered against the gym’s owners to the tune of $165,222 of the gym’s assets. As a result, some portion of the gym’s assets had been frozen.

The Atilis Gym had refused to close during the total lockdown, and even after they were allowed to be open, they are accused of not implementing the social distancing protocols mandated by the Governor. This resulted in the rapid accrual of fines in the amount of $15,000 per day and the eventual loss of their license. Operating without a license compounded the situation, bring even more fees and threats of possible jail time.

Whether the state actually emptied the bank account doesn’t seem to be much more than a technicality because if the assets are frozen they might as well be gone. Also, the state is clearly signaling its intent to claim the funds sooner or later, so it all works out the same in the end.

Can New Jersey actually do this? That question is a bit complicated. It’s true that the state can move to seize assets as part of the collection process for unpaid debts, but that process generally takes a long time. This all happened in a rather rapid progression that makes it appear as if Phil Murphy is acting vindictively to make an example out of Smith and his partner. Also, such a collection shouldn’t be undertaken until the case is resolved and the gym’s owners are still going through the legal appeals process.

Even if that’s the case, it’s conceivable that Smith could wind up losing in court. There is probably a question to be answered as to whether or not the state could confiscate money from a legal defense fund, leaving the owners unable to fully employ their right to counsel. But I’ll leave it up to the lawyers in the audience to figure out if such funds have to be handled in some separate fashion and if Smith was following the rules.

If Ian Smith and his business partner wanted to take a stand and prove a point by defying the Governor’s executive orders, they seem to have been going about it the right way. They remained in operation and began proceedings through the courts to see if they could prevail. But the fines that were levied could well hold up under legal scrutiny as the courts have continued to grant executive officials wide latitude during a declared state of emergency. That was a risk that Smith surely must have known he was taking when he decided to press the issue. If he isn’t granted any sort of relief by a judge, he may have raised awareness about excessive use of executive orders and proven his point, but it may wind up costing him his business and putting him into bankruptcy, if not behind bars.