Forfeiting Property in a Federal Criminal Case
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Federal law allows law enforcement agencies and prosecutors to seize property, including money, from people convicted of certain federal crimes, such as drug trafficking, money laundering, and organized crime. The seizure is known as “forfeiture,” and it’s done without compensation to the owner. Prosecutors must be able to prove that the defendant used the property to commit a crime, earned the property from illegal activity, or purchased the property using the proceeds of illegal acts. Forfeiture laws are intended to punish the defendant, reduce profits from -- and thereby deter -- criminal activity, and produce revenue for law enforcement agencies.
In addition to federal forfeiture laws, most states have laws that permit state agencies to seize property gained or used in criminal activity. This article explains forfeiture in federal criminal cases only.
Forfeiture: What Can Be Seized?
Forfeiture has existed in the United States since colonial times. At that time, the government could seize the property of anyone convicted of treason. Historically, forfeiture was permitted in only a handful of situations and it was rarely invoked.
Beginning in the 1970s, federal lawmakers dramatically expanded forfeiture laws in an effort to combat drug trafficking and organized crime. Since then, the amount and value of real and personal property seized by the federal government has increased substantially.
Today, DEA agents can seize a boat if they can show that it was used to transport drugs, a warehouse if they can show it was used to store drugs, a residence if they can show it was purchased with money made from money laundering, and even a car that was used by a “john” to hire a prostitute.
Before property can be seized in a federal criminal case:
- the defendant must be convicted of a federal crime
- the federal prosecutor must show that the property was involved in criminal activity, and
- the federal prosecutor must identify the property to be seized, so that anyone else who has a claim on the property can come forward.
These steps are explained in detail below.
Forfeiture is not permitted in every federal criminal case. Forfeiture can be used only if the crime that the defendant is charged with committing provides for it. Forfeiture is permitted in cases of drug trafficking, organized crime, child pornography, money laundering, and copyright infringement. As with other criminal cases, the defendant must be convicted beyond a reasonable doubt.
Under federal laws, property may also be seized in civil proceedings or by administrative action, without a judge’s involvement. Civil and administrative forfeiture do not require a criminal conviction.
Involved in Criminal Activity
Once a defendant is convicted of a crime that allows for forfeiture, the prosecutor must show that there are assets that should be seized. The prosecutor must prove to the jury, by a preponderance of the evidence (more likely than not), that the defendant’s property was involved in criminal activity. This burden of proof is easier than the “beyond a reasonable doubt” standard applied to criminal convictions.
Property is involved in criminal activity if:
- the property is the proceeds of criminal activity, or
- the property was used to further criminal activity.
For example, guns bought with money made from extortion would be proceeds of criminal activity. A computer used to distribute child pornography is property that is used to further criminal activity.
Sometimes, however, the link between the property and the criminal activity is more tangential. For example, if a drug deal is arranged on a phone in a house, that house might be considered “involved” in criminal activity, even if the house was not otherwise connected to the drug trade. However, some courts have held that the seizure must be proportional to the criminal involvement. In these jurisdictions, a one-time use of a phone in a house might not justify seizure of the house.
The government’s seizure of property that has been used in a crime, or that was purchased using the fruits of a crime, can become tricky when third parties have an ownership interest in the property. For example, a defendant who uses his own property to store drugs may have a mortgage on that property—the bank owns an interest in the property, and will not take lightly to its being seized by the government.
Fortunately, these claimants have a way to protect their interests. In general, the process goes as explained below.
Identifying the property
At the beginning of the case, the prosecutor tells the defendant that the government intends to seize property. The government can place a lien (a legal claim) on the property, or obtain a restraining order to prevent the owner from transferring or disposing of the property before the case is decided. Later, after the defendant has been found guilty and the jury has determined that property should be forfeited, the property must be identified more specifically so that anyone who has an interest in it has a chance to object.
Preliminary order. After the jury determines that there are assets that should be seized, the federal court issues a preliminary order of forfeiture.
Notice to third parties. Even if a lien is placed on the property, the government must also publish notice that it intends to seize the property. Traditionally, this was done in the newspaper. Now, the government maintains a list of all property in federal forfeiture proceedings at www.forfeiture.gov.
Court hearing. Anyone who has an interest in the property—such as the bank who holds a mortgage—can appear and object to the property’s seizure.
Final order. If no one successfully asserts a defense, the court issues a final order and the government obtains title (ownership) of the property.
Defenses to Forfeiture
Criminal defendants and other people with interests in the property to be seized often raise one or more of the following defenses.
The property was not involved in the crime
The main defense raised by property owners in forfeiture proceedings is that the property was not used for an illegal purpose. For example, a criminal defendant can claim that money seized from his bank account was not the proceeds of his drug sales, but was earnings from his legitimate job. Or, the owner of a boat may claim that although the defendant, who ran a drug smuggling operation, had access to the boat, it was never involved in the operation.
The “innocent owner” was not aware of the tainted nature or use of the property
Property owners may also claim that they were unaware of the item’s role in an illegal activity. For instance, someone who buys property that is later threatened with forfeiture could claim that the property was purchased without any knowledge that it was used in criminal activity. Or, a truck’s owner could claim that the truck was used to transport drugs without the owner’s knowledge or consent. Owners can also assert that, if they had knowledge of the activity, they attempted, to a reasonable extent, to put a stop to the illegal activity.
The Feds and the States Share the Property
As explained above, states have their own forfeiture laws. “Equitable sharing “allows local and state law enforcement agencies to share in the proceeds of any federal seizure. Such sharing occurs when the state or local agency either participated in an investigation that resulted in forfeiture, or asked a federal agency to “adopt” seized property when the defendant has violated federal law. When agencies decide to participate in equitable sharing, federal forfeiture rules apply.
Getting Legal Advice and Representation
If your property is the subject of federal forfeiture proceedings, whether you are a defendant in a criminal case or have an interest in property that was allegedly used in a crime,you should contact a criminal defense attorney who practices in federal court immediately. Forfeiture proceedings are complicated and are aggressively pursued by law enforcement agencies and prosecutors. You will need an attorney to represent your interests. With an attorney’s help, hopefully you can protect your property rights and achieve the best possible outcome.