Other Crimes: Asset Forfeiture

Asset forfeiture, both criminal and civil, is a way for the government to take the property of a private individual so long as the property is sufficiently connected to a criminal activity.

Criminal Forfeiture

Criminal Asset Forfeiture is usually a much easier concept to understand than civil, mostly because the procedure is much simpler and more straightforward.

The procedure for criminal forfeiture requires two things:

1. A criminal conviction; and
2. Proof that some personal property has a sufficient relationship to the crime.

Because a criminal forfeiture requires a criminal conviction, the action must start within the criminal court. In order to be seized, the property must be named in the same indictment as the alleged criminal charges against you. If you are subsequently convicted of the criminal violation, the trier of fact (either the judge or the jury) must decide if the property named in the indictment is sufficiently tainted to be forfeited and seized. Generally, if the property was gained as a result of the criminal activity, it will be considered sufficiently tainted.

What is the purpose of Asset Forfeiture?

The historical purpose behind asset forfeiture goes back hundreds of years and has its roots in British maritime law (maritime laws are laws relating to the ocean). All ships transporting goods to or from British ports were supposed to fly the British flag, any failure to do so was a crime. Since it was easier to seize the ship than it was to catch the owner of the ship, who may well be halfway around the world, the ship was seized with the reasoning being that it was the ship that had committed the crime, rather than the owner.

In the early years of the United States, forfeiture laws were created to allow tax collectors in their duties, since it was difficult to track and seize a person for nonpayment of taxes and duties, the government could instead seize the property that was being taxed as payment for the delinquent taxes or duties.

During prohibition, the police used forfeiture laws to seize cash and other property from bootleggers. The end of prohibition, in 1933, saw a dramatic decrease in forfeiture activity until the mid-1980’s.

During the 1980’s, the government’s emphasis on the “war on drugs” brought asset forfeiture back to the forefront of criminal proceedings. Asset forfeiture allowed the government to seize money obtained through the illegal sale of narcotics. And a 1984 law created the arrangement by which assets seized are divided up to help fund state, local, and federal agencies.

Since the 1980’s, many states have used asset forfeiture as a deterrent to many other crimes such as drunk driving, drag racing, and in-home gambling. More recently, asset forfeiture has been used to help in the war on terrorism as a means to deter terrorist activity, locate and track terrorist cells, and to help fund the agencies trying to stop terrorism.

Then how does Criminal Forfeiture work?

When you are arrested and charged with a crime, and the state has reason to believe that there is property involved in the crime, the government will bring charges against the property itself for being used in the commission of the crime, or for being derived from the crime.

The government will then seize the property and hold it for the duration of your criminal trial. If you are then convicted of the alleged criminal act, then a second phase of the trial begins wherein the government has to prove a sufficient connection between the seized asset and the criminal act. If the government is able to prove this connection, then the court will grant a preliminary order of forfeiture of the asset.

In the final stage, the government has to initiate an action to address whether there are any third-parties with a claim to the asset, and what that claim may amount to. Once all third-party claims the asset have been resolved, the court will enter a final order of forfeiture, and the asset will officially be property of the government.

Civil Forfeiture

Civil forfeiture differs from criminal forfeiture mainly in the fact that civil forfeiture does not require a criminal conviction in order for the government to seize the assets. Instead, civil forfeiture only requires that the property was probably gained through illegal means, or that the property was used in a crime. In fact, in civil forfeiture, the owner of the property doesn’t even have to be charged with a crime. For example, if you happened to own a computer that your friend used for the purposes of credit card fraud, that computer could be seized in a civil forfeiture action.

Also, civil asset forfeiture begins when the government initiates a civil lawsuit with the property as the defendant, instead of with the initiation of charges against an supposed criminal. As a result, civil forfeiture actions lead to some interesting and funny case names (United States v. 634 1st Ave, for example).

Finally, civil forfeiture actions only require that the government prove, by a preponderance of evidence, that the property was connected to a crime, whereas criminal forfeiture requires that the government prove the property’s connection to a crime, beyond a reasonable doubt.

What is the purpose of Civil Forfeiture?

The purpose is essentially the same as the purpose behind criminal forfeiture. The government uses the threat of asset forfeiture as a deterrent to crime. Also, the proceeds from asset forfeiture are apportioned to the various local, state, and federal law enforcement agencies to help fund further law enforcement.

And how does Civil Asset Forfeiture work?

As mentioned above, the government will initiate a civil lawsuit against the piece of property they are seeking to seize, alleging that the property is somehow connected to criminal activity. The premise of this The property will be temporarily seized, just like in a criminal asset forfeiture, awaiting the outcome of the trial.

The suit will proceed to trial where the government will have the burden to show that the property was more likely than not connected to criminal activity. In other words, the government will have to show that the likelihood that the property was either used in, or gained by, criminal activity is more than 50%.

If the government overcomes their burden, and the jury decides that the property was sufficiently connected to criminal activity, then the government will become the owner of the property.

So, the Government can just take my property, even if I’ve done nothing wrong?

To a degree, yes, they can. Assuming that there is a reason to believe that the property was connected to criminal activity. However, there is an ongoing nationwide debate regarding both the legality and the breadth of asset forfeiture.

That doesn’t seem fair, how can anyone stand behind that?

Proponents of asset forfeiture point to its ability to protect public interest and promote social good by compensating individual victims.

For example, back in 2009, Bernie Madoff was sentenced to 150 years in prison for running a ponzi scheme that scammed over $50 million dollars from his investors, many of whom lost their entire life savings. In order to help pay back some of the money that Madoff essentially stole from his victims, the government seized all of his assets and sold them off, dividing up the money among the victims.

Also, in many states, seized assets from drug crimes are converted into government property that is used to fund further law enforcement and drug treatment and education programs.

Finally, proponents point to asset forfeiture as an important for fighting, preventing, and punishing crime. Particularly in financially motivated crimes such as drug trafficking and sales, asset forfeiture can serve two important functions. First, as already noted above, the financial gains can be seized and used to repay victims, fund further drug enforcement, and fund other drug treatment and education programs. Second, many financially motivated crimes require expensive equipment in order to continue operations (think about counterfeiting money and the equipment needed to do so), by seizing these assets, the government can halt, or at least stall, many criminal activities.

Okay, I can agree with all of that, but there has to be more to it.

As with most government activities, asset forfeiture has its critics.

One of the first things pointed to be critics of asset forfeiture is its possible infringement on 4th Amendment protections relating to search and seizure. Asset forfeiture allows the government to institute an action against your property, and temporarily seize it pending the outcome of a trial. In criminal forfeiture, that property is instantly transferred to the government once you have been found guilty of the underlying crime. As is often noted by critics, this seems to violate one of the most basic principles of the Constitution, that no one can be deprived of person or property without a fair trial.

Perhaps most importantly, the process of asset forfeiture is completely contrary to the rest of our criminal justice system; where a criminal is presumed innocent until proven guilty, the process of asset forfeiture starts with a low burden for the government to prove that there is probable cause to seize the property and then shifts the burden onto the property owner to show that the property was not involved in criminal activity.

Please Note: In order for property to be forfeited to the Government, the Government will still have to overcome their burden that it was more likely than not that the property was used in, or acquired through, criminal activity. It is only at the first level where the property is temporarily seized that the level of proof is probable cause.

Critics also point to the unfairness in asset forfeiture proceedings. As noted above, property owners are essentially guilty until proven innocent once their property is initially seized. The United States Supreme Court has said that it is not necessary that a property owner knows that her property is being used in crime in order for the property to be forfeited. However, the Federal Government, as well as every State Government, has passed a law that makes these so-called “innocent owner” defenses allowable. Nevertheless, the burden is still on the owner to establish her innocence and lack of knowledge.

Finally, critics often point out that because of the combination of the above mentioned limited protections afforded property owners, along with the potential for tremendous financial gain, create an ideal situation for corruption. As already noted, asset forfeiture is often used for funding law enforcement. Coupled with the limited protections for property owners, it is easy to see how law enforcement agencies, particularly in underfunded areas, might be vulnerable to taking advantage of asset forfeiture to help their budget.

Then what should I do if I’m facing asset forfeiture proceedings?

As you can see from the above discussion, asset forfeiture proceedings are highly prejudiced in favor of the government. It is extremely important that you speak with an experienced attorney if you are facing asset forfeiture proceedings.