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Forfeiture of Property

Review of Federal Criminal Forfeiture Laws and Defenses

Under federal laws of the United States, law enforcement agencies and prosecutors are allowed to seize property and money from people convicted of certain federal offenses, which is called a “forfeiture,” and most common in drug trafficking and related cases.

Federal prosecutors, however, must be able to prove the defendant used the property or money to commit the offense, earned it from unlawful activity, or purchased the property from illegal behavior.

Forfeiture of Property in a Federal Criminal Case
Federal laws allow agents to seize property related to federal drug crimes and other offenses.

Forfeiture laws are not only designed to be a deterrent for criminal activity, but they are a great source of revenue for all types of law enforcement expenses.

In situations where federal law enforcement has valid reasons to believe the property and money were used as instruments to a crime, then they are allowed to confiscate it.

The Drug Enforcement Agency (DEA), Federal Bureau of Investigation (FBI), and the Internal Revenue Service (IRS), are the primary agencies involved in a federal forfeiture case.

The DEA often seizes speed boats used to transport drugs and even homes if they are able to prove it was purchased with what they call “dirty money,” but legally known as proceeds from money laundering.

Readers should note that individual states have their own forfeiture laws. Equitable sharing permits local and state law enforcement agencies to share the proceeds in a federal seizure under forfeiture laws.

Federal agents have just seized your car, business equipment, trade tools, home, or other property. They claim your property's forfeiture relating to drug crime or other federal crime. 

You fear losing everything. You also fear facing federal criminal charges if you contest the forfeiture of your property. Learn here about federal forfeiture law by our Los Angeles criminal defense lawyers.

What you know and do can make the difference in defeating federal forfeiture and retaining your assets.

What is the Purpose of Asset Forfeiture?

Federal agents seize real and personal property under federal statutes like 18 U.S.C. § 982, the Comprehensive Drug Abuse and Prevention Control Act's 21 U.S.C. § 853, and similar laws.

The forfeiture and seizure of property and money is not a separate indictment, but rather a civil proceeding closely connected with the criminal actions.

The FBI describes the purpose of those federal asset forfeiture laws as depriving criminals and criminal organizations of their ill-gotten gains.

The FBI says it uses forfeiture laws to punish criminals, deter crime, disrupt criminal organizations, and protect communities. Forfeited property and funds frequently go to:

  • crime victims,
  • treatment facilities,
  • education programs,
  • law-enforcement tools like bomb-sniffing canines, body cameras, and bulletproof vests.

But federal agents make mistakes applying forfeiture laws. Overreach and abuse can also occur when federal agents seize assets.

Beneficial purposes don't justify illegal asset seizures. Forfeiture laws have precise requirements and limits, but a prosecutor's burden of proof in a civil forfeiture very low compared to a federal criminal proceeding.

In fact, there are situations where the burden of proof is the responsibility of the defendant who have to show a valid legal claim to the property or money in civil seizure proceedings.

Even further, federal courts might decide to the property is forfeited due to illegal activity when the prosecutor is unable to convict the defendant.

Put simply, civil and administrative forfeiture don't require a criminal conviction.

Types of Federal Crimes Justifying Forfeiture

Asset forfeiture applies only to certain federal crimes, but not every crime.

Federal drug crimes are the main example where asset forfeiture can apply under the Comprehensive Drug Abuse and Prevention Control Act's 21 U.S.C. § 853.

Yet federal drug crimes are just one type of crime to which federal asset forfeiture laws can apply.

The federal statute 21 U.S.C. § 982 broadens asset forfeiture to apply to these other federal crimes, among many others:

  • money laundering under 18 U.S.C. §§ 1956, 1957, and 1960;
  • bank bribery under 18 U.S.C. § 215;
  • embezzlement under 18 U.S.C. § 641;
  • bank embezzlement under 18 U.S.C. § 656;
  • counterfeiting under 18 U.S.C. § 472;
  • forging endorsements on Treasury checks under 18 U.S.C. § 510;
  • federal program fraud under 18 U.S.C. § 666;
  • federal false statements under 18 U.S.C. § 1001;
  • concealing assets from federal bank agents under 18 U.S.C. § 1032;
  • racketeer influenced and corrupt organizations Act (RICO);
  • copyright infringement under 17 U.S.C. § 501;
  • identity theft under 18 U.S.C. § 1028;
  • computer hacking under 18 U.S.C. § 1030;
  • child pornography under 18 U.S.C. § 2252;
  • mail fraud under 18 U.S.C. § 1341; and
  • wire fraud under 18 U.S.C. § 1343.

According to the Money Laundering Act, it's a crime to engage in financial transactions with funds from specific illegal activity when the intent is to conceal the source of the money, or to avoid reporting requirements.

This includes a variety of federal fraud offenses that transaction reporting for over $10,000 by financial institutions, and it's also illegal to transport over $10,000 outside the United States with intent to avoid federal laws.

Types of Asset Forfeiture

Federal asset forfeiture laws generally make two types of property subject to forfeiture.

Proceeds of crime are the first type of property subject to forfeiture. For example, 21 U.S.C. § 853(a)(1) includes as forfeitable property:

  • “any property constituting, or derived from, proceeds the person obtained, directly or indirectly, as the result of the qualifying federal crime.”

Proceeds are what the suspect gains from the crime, which are often cash or accounts into which the suspect has placed cash gained from the crime.

But proceeds can also be things purchased with cash, such as jewelry, vehicles, boats, airplanes, and homes.

Instrumentalities of crime are the other type of property generally subject to forfeiture. For example, 21 U.S.C. § 853(a)(2) includes as forfeitable property:

  • “any person's property used, or intended to be used, in any manner to commit, or facilitate the commission of the qualifying federal crime.”

 Instrumentalities are what the suspect uses to commit the crime, such as vehicles, homes, warehouses, business locations, boats, airplanes, or guns. 

Persons Facing Forfeiture

Persons who face forfeiture begin with the defendants whom federal prosecutors convict of qualifying federal crimes.

Federal statutes like 18 U.S.C. § 982 state expressly that the court may impose forfeiture as a sentencing term, in addition to any imprisonment or fines, on defendants convicted of federal crimes qualifying for forfeiture.

Federal Criminal Forfeiture Laws
18 U.S.C. § 982 states federal court s are allowed to impose forfeiture as part of a sentencing term.

Defendants facing federal charges qualifying for asset forfeiture should anticipate forfeiture as a potential sentencing term.

Retain skilled counsel to defend those charges. Don't ignore or minimize the risk of asset forfeiture as a sentencing term following a criminal conviction.

But the federal government can also reach property for forfeiture without a federal criminal charge or conviction.

Federal prosecutors may file a civil action in rem, meaning against the property rather than against a person, when they have evidence that the property was proceeds or instrumentality of a qualifying federal crime.

As noted, owners claiming an interest in that property must litigate their interest in the civil action or face losing the property, even if not charged or convicted of any federal crime. With skilled representation, you could defeat federal civil asset forfeiture.

Know Your Upside and Your Downside

Of course, stepping forward to claim an interest in cash, guns, equipment, vehicles, or other assets that federal prosecutors believe are proceeds or instrumentalities of federal crime carries risks.

The last thing an owner of forfeited property wants to do is get implicated in an as-yet-uncharged federal crime.

Contesting federal asset forfeiture is not simple. Some property owners just let the property go so as not to risk a criminal charge and conviction.

But skilled representation could save your property from forfeiture without exposing you to federal charges.

What is the Forfeiture Court Process?

The government's seizure of property or money used as the fruits of a crime can get complicated and it's not always easy to defend. Here are the general steps in the forfeiture process.

Identification of the property is where prosecutors will inform defendant what exactly they intend to seize and will often place a lien on it to prevent owner from selling or transferring it.

Next a preliminary order is issued by a federal court after it's decided assets that should be seized, then there is a notice sent to any third parties who have a stake in ownership.

Next in the process is a court hearing where anyone with an interest in the property, such as a bank who carries a mortgage, are allowed to appear and make an argument.

Finally, the court will usually issue a final order that the government get ownership of the property.

How Can I Prevent Forfeiture?

Federal criminal defendants and anyone with an interest in the property or money to be seized can use a wide range of defenses.

The property or money are not connected to a crime 

The primary defense strategy in forfeiture proceedings is to make an argument the property or money were not used in illegal activity.

A common example includes a situation where a defendant's money was seized from their bank account, but the money was from a legitimate source, such as their job.

Further, perhaps their boat was seized for drug trafficking, but it was actually never associated with such illegal acts.

Innocent owner defense 

It might be possible to make an "innocent owner" defense meaning they were not even aware of the illegal activity involving their property.

For example, perhaps a new home owner is informed of property forfeiture when they simply had no knowledge of what was going on there before they made the purchase.

Getting Legal Advice from a Federal Lawyer

If your property or money is exposed in a forfeiture proceeding, you need to immediately consult with a criminal defense lawyer with experience in federal courts.

Seasoned counsel will know how to property navigate through this complicated process.

Criminal Defense for Federal Forfeiture of Property
Contact our firm to review the details and options.

You do have options and might be able to petition the federal agencies for the return of your property. A forfeiture challenge must be dealt with carefully as part of a defense strategy.

If you are the defendant or someone with an interest in the property, these proceeding can often become complex and aggressively pursued by law enforcement and federal prosecutors.

You will need a lawyer to protect your property right and legal right to have the best chance at a favorable outcome.

Eisner Gorin LLP is based in Los Angeles County and has two office locations.

Call our law firm for an initial consultation at (310) 328-3776, or you can fill out our contact form.

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