Asset forfeiture occurs when the government forces an individual to forfeit property connected with criminal activity. Asset forfeiture was created by law enforcement and government to reduce any incentive for illegal conduct by forcing offenders to relinquish their property. Asset forfeiture takes the profit out of crime by eliminating the ability of the offender to command resources that are typically necessary to continue these illegal activities.
Additionally, asset forfeiture can be an effective means of compensating innocent victims. Specifically, in white collar crimes, the restoration of property to victims is a first priority. In white collar crimes, most typically the victims have had money stolen from them.
There are three types of asset forfeiture: Criminal, civil and administrative. Criminal forfeiture occurs when the action is brought against the person. Once convicted, forfeiture can then be used against this individual. In contrast, civil forfeiture action is against the property, where the property is “sued” as an asset in a crime, even though the civil forfeiture carries no criminal penalties. Administrative forfeitures also do not require a criminal charge.
Criminal Forfeiture Actions
For a criminal forfeiture action to take place, the following requirements must be met:
The court will then issue an order to seize the property. The government's attempt to seize property is added as a separate and additional count or charge to the criminal complaint or indictment against the defendant. At this point, innocent third parties who have an interest in the property seized can come forward and seek to retrieve the property. The innocent third party must prove their ownership in the property in order to get it back. These third parties are typically required to file a petition and fight the government in an evidentiary hearing, wherein the party has the burden of proof that they have an interest in the particular property.
Typically, innocent third parties can get their property back even if they did nothing to prevent the property's illegal use. If a third party acquired an interest in the property after the property has been tainted by illegal activity, they must prove that he or she was an innocent purchaser who had no reasonable cause to believe the property was used in or connected to a crime and subject to forfeiture.
Civil Forfeiture Actions
Civil forfeiture actions are not conducted in the same manner as criminal asset forfeiture proceedings. There are no criminal proceedings or even arrests. The government decides in this situation to pursue a civil action only; it will file a civil legal complaint for the purpose of permanently seizing and forfeiting the specific item of property which it seeks to confiscate. The burden of proof in a civil matter is much lower for the government. There is no requirement that the government prove anyone's criminal guilt, but rather show a sufficient connection between the property and criminal activity.
Many times, the government seeks to shift the burden of proof on the owner or claimant of the property, requiring them to show that the property they seek to recover came from a legitimate source and was not connected to any criminal conduct.
Administrative Asset Forfeiture
Administrative asset forfeitures are non-judicial proceedings instituted by governmental agencies, such as the Department of Justice, Drug Enforcement Administration, Federal Bureau of Investigation, Customs Service, Internal Revenue Service or the Bureau of Alcohol, Tobacco and Firearms. These forfeitures are handled internally within each agency wherein no court litigation proceeding takes place. These types of forfeitures are common and make up the majority of federal forfeitures.
Under federal law, there are various different types of property that the government can seize when associated with a criminal forfeiture proceeding. These include the following:
The criminal paraphernalia;
In civil forfeiture proceedings, as stated above, the owner of the property does not need to be guilty of a crime. Civil asset procedure charges the property itself with involvement in a crime. Therefore, police can seize cars, homes, money, or valuables without charging the owner of the property with a crime. Administrative asset forfeiture proceedings are conducted in a similar manner to civil asset forfeiture proceedings.
If police or the government take an individual's property through asset forfeiture, unless the property is seized as evidence of a crime, the property will be returned when the case is concluded. There are exceptions though. If the property itself is contraband or for one of these exceptions, then the property may not be returned. The government will give the owner a receipt for any property taken.
If property is held for asset forfeiture, a notice from the government will be provided that the individual's property is being held for this reason. If the government has claimed one's property by asset forfeiture, even if that individual is found not guilty of a crime or not charged with a crime at all, that individual must be successful in a separate forfeiture case to get their property back.
Once notice has been provided regarding your property, you must respond to the notice according to the deadlines stated in the notice or else the individual may lose their rights to the property. If the owner requests a hearing to challenge the forfeiture, a bond will likely be required for the duration of the proceeding.
The federal Civil Asset Forfeiture Reform Act of 2000 was passed as a reform to help those facing asset forfeiture proceedings. Those whose assets have been seized are entitled to legal counsel throughout the proceeding, as well as the temporary return of the seized assets while the investigation is proven. However, the temporary return of the seized assets is not automatic. The individual must prove that a hardship exists without the asset.
Typically, the government will look at a person's property to determine if it meets the following requirements:
One would think that only criminals are targeted in asset forfeiture cases. However, this is not the case. While criminal asset forfeiture proceedings are common, civil forfeiture proceedings are also common place. As stated above, these types of proceedings do not require a finding of guilt or even a charging of a crime. There are many stories of innocent people having their property seized through civil and administrative asset forfeiture proceedings.
There are many defenses that an individual can raise depending on your state and under federal law. Some examples of defenses include:
Innocent Third Party Owner
In a civil forfeiture proceeding, the third party must establish an ownership interest in the forfeited property and his or her innocence regarding the property's seizure. However, an important aspect of raising this defense depends upon when the innocent owner acquired an interest in the property.
If the third party's interest in the property existed at the time of the illegal conduct, the third party is considered an innocent party if the individual either had no knowledge of the conduct giving rise to the forfeiture, or upon learning of that conduct, did all they reasonably could to terminate criminal use of the property.
If the third party's interest was acquired after the conduct giving rise to the forfeiture that had taken place, the third party is considered an innocent owner if the individual was a bona fide purchaser or seller of value and did not have knowledge, and could not reasonably be expected to believe, that the property was subject to a forfeiture proceeding.
In a criminal forfeiture proceeding, innocence is not a valid defense. The third party must prove superior ownership rights in the property by convincingly showing that they have a legal interest or right in the property superior to the criminal defendant's interest in the property.
Another defense that can be raised is the third party was a bona fide purchaser for value. To establish their standing as a bona fide purchaser for value, it must be shown that an actual purchase was made and that the property was obtained in an arms length transaction. The individual must also have had no knowledge that the property was subject to a forfeiture proceeding.
Value of Property Disproportionate to Crime Alleged
Since assets are seized in an asset forfeiture proceeding for the possible purpose of reimbursing victims, if it can be proven that the value of the property being seized is disproportionate to the crime alleged, an effective defense may be raised to prevent the property from being seized.
There are many legal arguments to raise if your assets have been seized in a forfeiture proceeding. A criminal defense attorney informed about asset forfeiture cases can aid in the difficult road ahead.
Last Modified: 04-06-2016 03:40 PM PDTLaw Library Disclaimer
We've helped more than 4 million clients find the right lawyer – for free. Present your case online in minutes. LegalMatch matches you to pre-screened lawyers in your city or county based on the specifics of your case. Within 24 hours experienced local lawyers review it and evaluate if you have a solid case. If so, attorneys respond with an offer to represent you that includes a full attorney profile with details on their fee structure, background, and ratings by other LegalMatch users so you can decide if they're the right lawyer for you.