Forfeiting Property in a Criminal Case

In certain criminal cases, a convicted person's property might be subject to "forfeiture," meaning the government can take it. Read on to find out about forfeiture and what types of cases it can happen in.

What Is Criminal Forfeiture?

In certain types of criminal cases, the prosecution can take property (including money) that a defendant gained from a crime, used in a crime, or bought with proceeds from a crime. The taking is called "forfeiture." It's intended to punish the defendant and deter crime by reducing profits from criminal activity. Forfeiture also produces revenue for law enforcement agencies and prosecutors' offices.

Forfeiture can happen in both state and federal prosecutions. Because each state's forfeiture rules will vary, this article focuses primarily on federal forfeiture to provide examples of how the process generally works. The state forfeiture process will be similar, but there may be important differences, depending on the state.

What Types of Property Can Be Forfeited?

To take someone's property in a criminal case, 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.

Here are a few examples of when law enforcement agents can seize someone's property in connection with a federal criminal case:

• 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, or
• a computer or video and audio equipment if they can show it was used in connection with a child pornography offense.

Law enforcement can also seize and forfeit cash, financial instruments, internet domains, vehicles, or even a business, as long as it has the correct ties to a crime.

When Can the Government Take Property in a Criminal Case?

Property can be seized in a federal criminal case when:

• the defendant is convicted of a particular type of federal crime
• the prosecutor proves that the property was involved in the crime, and
• the prosecutor identifies the property to be seized, so that anyone else who has a claim on the property can come forward to contest the forfeiture.

These steps are explained in more detail below.

Types of Crimes That Allow Forfeiture

Generally, forfeiture is limited to certain types of cases. For example, under federal law, it's allowed when someone is convicted of drug trafficking, money laundering, organized crime, child pornography, or criminal copyright infringement.

As in any criminal case, to convict someone of a crime, the prosecutor must prove that the person is guilty beyond a reasonable doubt.

Proving That Property Was Involved in Criminal Activity

A prosecutor who wants to take the defendant's property must prove that the property was involved in the crime.

Proving forfeiture is easier than proving the crime itself: The prosecutor only has to show by a preponderance of the evidence (more likely than not) that the defendant's property was involved in the crime. Property is involved in criminal activity if:

• the property represents 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 used to further criminal activity.

But sometimes, the link between the property and the criminal activity isn't so strong. 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 had no other connection to the drug trade. However, some courts have held that the seizure must be proportional to the criminal involvement. In these jurisdictions, one-time use of a phone in a house may not justify seizing the house.

Can the Government Forfeit Property When a Third-Party Lien Exists?

The government's seizure of property can become tricky when third parties have an ownership interest in the property. For example, a defendant who uses their own property to store drugs might have a mortgage on that property. In that scenario, the bank owns an interest in the property, and will not take lightly to its being seized by the government.

Fortunately, banks and other third-party claimants have a way to protect their interests. Below is the general process for protecting third-party property interests in federal cases.

Identify 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 the 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. But 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 that 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.

What Are Defenses to Property Forfeiture?

Defendants in criminal cases and other people with interests in the property often raise one or more of the following defenses to forfeiture.

Property Wasn't Involved in the Crime

The main defense raised by property owners in forfeiture proceedings is that the property was not used for any illegal purpose. Depending on the facts, a defendant might be able to argue that the 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 or other vehicle might be able to show that the vehicle wasn't used in the illegal operation.

Innocent Owner Defense

A property owner other than the defendant might be able to argue that as an "innocent owner," their property shouldn't be forfeited. For example, let's say a couple owns a house together, and the defendant-spouse secretly uses drug money to make renovations. If the government tries to take the house, the innocent spouse could argue that she should at least be able to keep her financial interest (usually half) in the house. This might mean that the house will be sold to pay the government what the defendant owes, but at least the innocent spouse will keep the value of her equity in the home (minus the equity in the illegally funded addition).

(United States v. Wolf, 375 F.Supp.3d 428 (S.D.N.Y. 2019); 21 U.S.C. § 853(n).)

The Feds and the States Can Share Forfeiture Proceeds

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. Sharing might happen when the state or local agency participated in an investigation that resulted in forfeiture. Or, the state might ask 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 forfeiture proceedings—whether you are a defendant in a criminal case or have an interest in the property—you should contact a criminal defense attorney immediately. Forfeiture proceedings can be very complicated and are often aggressively pursued by law enforcement agencies and prosecutors. You'll need an attorney familiar with forfeiture proceedings to represent your interests.