Right. So if a crime occurred why not just prosecute it in the actual justice system.

A parallel to this would be the government directing banks to seize any assets of a person accused of fraudulent behavior. No due process, no representation, just a single person at the bank acting as judge, prosecutor and investigatory. I bought a bicycle off you, but had buyers remorse the next day and wanted my money back. You said no, so I reported you to the bank and they seized your money. This rule may help stop fraud, but it also transfers a great deal of power to me in this scenario.