The government may seize property used in a crime
In addition to an indictment, a criminal investigation may result in seizure and forfeiture of your property, including everything from bank accounts to the automobiles and boats used to ferry contraband, and the house which you may have purchased with some of the proceeds, or from which you dealt the drugs that landed you in an indictment. In pursuit of its forfeiture claim, the government may also disgorge assets that have been transferred to other individuals. Forfeiture proceedings can be civil or criminal. A criminal forfeiture proceeding accompanies the filing of a criminal case and will be adjudicated along with the case. However, a civil forfeiture proceeding may be filed before, or even in the absence of, any criminal proceeding.
The basic forfeiture law
The law of forfeiture is delineated by statutes, and thus can vary from state to state. However, there are certain doctrines appear in most statutes:
- The wrongdoer in a civil forfeiture action is the property. Therefore, civil forfeiture actions are against the property, and the property might be forfeitable even though its owner was innocent.
- The property becomes forfeitable and title vests in the government at the time of the crime that gives rise to the forfeiture. Thus, innocent transferees may find themselves divested of the property even if they obtained title before the crime was prosecuted or even discovered.
The three theories of forfeiture
There are three theories under which a prosecutor can seek the forfeiture of assets:
- The assets are contraband.
- The assets are the proceeds of criminal activity.
- The assets were used to commit or facilitate a crime.
Under the contraband theory, the very possession of the property violates the law. Therefore, the property cannot be claimed or returned. If the theory of forfeiture is that the property is the proceeds of a crime, litigation will focus on whether the crime has been proven, or, when the proceeds have been sold or transferred to a third party, whether that third party has a statutory defense such as the good faith purchaser for value or innocent owner defenses. Most constitutional issues arise in facilitation forfeiture cases. Relatively minor crimes (e.g., personal drug use, prostitution, or currency reporting violations) may involve expensive property such as cars or houses or substantial amounts of currency. Prosecutors sometimes attempt to forfeit the car, the house or the legally obtained but undeclared currency, giving rise to defense arguments that the forfeiture violates the Eighth Amendment’s Excessive Fines Clause.
Starting a forfeiture action
Civil actions Civil forfeiture actions commence either with the filing of a complaint against the property or with the pre-complaint seizure of the asset. If the government seizes property before filing a complaint, it must file the complaint or provide written notice to interested parties within a time set by statute or rule. Claimants may have an opportunity to contest the seizure after it takes place, but before the full trial. Administrative actions When an agency seizes an individual’s property, such as contraband at an airport, the agency will issue a notice to the person from whom the property was seized. If the person does not contest the administrative notice, the property will be forfeited. If the individual gives notice of a claim, the government must initiate a civil forfeiture action to preserve its forfeiture rights. Criminal actions A criminal forfeiture action commences with the inclusion in the indictment of forfeiture allegations. Criminal forfeiture is part of the defendant’s sentence. While the underlying crime must be proven beyond a reasonable doubt, proof of the property’s forfeitability need meet only a preponderance standard. However, some states impose a reasonable doubt standard by statute. Other jurisdictions entitle the defendant to a jury determination of whether property is forfeitable.
Third party rights
Since an order of criminal forfeiture against the defendant is part of the sentence, it becomes final as to the defendant at sentencing. However, third-party rights may remain to be adjudicated. In a federal criminal forfeiture action, third parties must assert their rights to the property by filing a petition within thirty days of notice of a preliminary order of forfeiture. The government may obtain a preliminary order any time after plea or verdict. Thus a third-party petition that awaits the final judgment of forfeiture is untimely and must be dismissed where there was a preliminary order and notice more than 30 days before the filing of the petition. Filing the claim triggers the government’s obligation to file a civil complaint, if one has not yet been filed.