Civil, Criminal, and Administrative Asset Forfeiture

"Criminal Forfeiture

"Criminal forfeiture is an action brought as part of the criminal prosecution of a defendant that includes the forfeiture of property used or derived from the crime. If the defendant is convicted, the judge or the jury may find that the property is forfeitable. Forfeiture is limited to the property interests of the defendant and only to property involved in the particular counts on which the defendant is convicted. Only the defendant’s interest can be forfeited in a criminal case because criminal forfeiture is part of the sentence in the criminal case. For example, if the defendant used someone else’s car to commit a crime and the owner of the car was not indicted for the crime in which the car was used, the car cannot be forfeited in the criminal case. Instead, a civil forfeiture case can be filed against the car.

"If a third party claims an interest in the property that the Government seeks to forfeit criminally, the issue is determined in an ancillary hearing before the court only after the criminal trial is completed, the defendant convicted, and a preliminary order of forfeiture is entered. Once the interests of third parties are resolved, the court issues a final order of forfeiture. The order of forfeiture might not happen for months or years, even if the forfeiture is uncontested, resulting in a delay in the disposal of the property.

"If the property subject to forfeiture is no longer available, the court can enter a money judgment or order the forfeiture of substitute assets.

"Civil Forfeiture

"Civil forfeiture is a proceeding brought against the property rather than against the person who committed the offense. Civil forfeiture does not require either criminal charges against the owner of the property or a criminal conviction.

"To obtain a federal forfeiture, the Government must prove the forfeiture and the connection between the property and the crime by a preponderance of the evidence. Forfeiture may be applicable to property that is traceable as proceeds of the offense, that facilitated the offense, or that was involved in money laundering. All claims of interest or ownership in the property, such as property owned by third parties, are resolved in a single trial."

"As a general rule, if property is seized as part of an ongoing federal criminal investigation and/or the criminal defendants are being prosecuted in federal court—or it is anticipated that a federal prosecution will be pursued—the forfeiture action should be commenced administratively by a federal agency or pursued in federal court regardless of whether a federal, state, or local agency made the seizure.¹

"As discussed in Chapter 14 of this Manual, forfeitures should follow the prosecution for both legal and practical reasons. Parallel state forfeitures can jeopardize the pending federal criminal investigation or prosecution and create unnecessary confusion. Where federal resources are expended on an investigation and state and local law enforcement are assisting in a federal prosecution, federal forfeiture, administrative or judicial, should be pursued absent extraordinary circumstances. The efforts of state and local law enforcement should be recognized through formal equitable sharing rather than a division of assets between state and federal forfeiture."

"The AFF reported $1,586.4 million in forfeiture revenue in FY 2017 and $1,886.9 million in FY 2016, a decrease of $300.5 million. The decrease is the result of the $900 million forfeiture from the General Motors case in FY 2016, less revenue in FY 2017 from the Western Union and Tenet Healthcare cases totaling $436.4 million. Also included in these figures are receipts from the Treasury Forfeiture Fund (TFF) for the Department’s participation in cases that resulted in forfeiture revenue to the AFF of $167.1 million and $73.6 million in FYs 2017 and 2016 respectively, an increase of $93.5 million. The increase is due primarily to proceeds from the ING Bank case of $143.4 million."

"For many years, law enforcement agencies around the nation have faced shrinking budgets.⁴ Police administrators have been forced to develop creative budgeting strategies, such as securing federal grants and partnering with community foundations.⁵ Though it is an enforcement tool, asset forfeiture can assist in the budgeting realm by helping to offset the costs associated with fighting crime. Doing what it takes to undermine the illicit drug trade is expensive and time-consuming. Forfeiture can help agencies target these difficult problems, sometimes without the need to seek additional outside resources to offset their costs."

"• In 2008, for the first time in history, the U.S. Department of Justice’s Assets Forfeiture Fund (AFF) held more than $1 billion in net assets—that is, money forfeited from property owners and now available for federal law enforcement activities after deducting various expenses. A similar fund at the U.S. Treasury Department held more than $400 million in net assets in 2008. By contrast, in 1986, the year after the AFF was created, it took in just $93.7 million in deposits.
"• State data reveal that state and local law enforcement also use forfeiture extensively: From 2001 to 2002, currency forfeitures alone in just nine states totaled more than $70 million. This measure excludes cars and other forfeited property, as well as forfeitures from many states that did not make data available for those years, and so likely represents just the tip of the forfeiture iceberg.
"• Equitable sharing payments to states have nearly doubled from 2000 to 2008, from a little more than $200 million to $400 million."

"Total assets, which present as of a specific time the amounts of future economic benefits owned or managed by the AFF/SADF [Assets Forfeiture Fund and Seized Asset Deposit Fund], increased in FY 2008 to $3,120.7 million from $3,056.5 million in FY 2007, an increase of 2.1 percent. If seized assets, which are not yet owned by the government, are backed out, the adjusted assets of the Fund increased to $1,892.2 million in FY 2008 from $1,790.6 million in FY 2007, an increase of 5.7 percent. This is attributable to an increase in forfeited assets in FY 2008 from FY 2007, indicating a strong current and future potential stream of assets flowing into the AFF. The AFF/SADF fund balances with the U.S. Treasury were lower in FY 2008 than FY 2007."

"CAFRA [Civil Asset Forfeiture Reform Act] has not reduced the amount of annual forfeitures. In fact, the value of assets seized annually by the federal government has risen substantially since CAFRA was passed: in 1985, $27 million was deposited into the Department of Justice’s Asset Forfeiture Fund.⁶⁷ A decade later in 1996, four years before CAFRA and during the period that motivated Rep. Hyde to press for changes, $338 million was deposited into the fund.⁶⁸ And in 2008, the fund reported receipts of approximately $1.3 billion,⁶⁹ a figure that does not include hundreds of millions of dollars more that federal agencies collected as their share from seizures by state agencies.⁷⁰"

"We did not seek to determine whether forfeiture activities ultimately reduce crime or affect drug-related arrest patterns. However, we found some evidence that police agencies engage in forfeiture practices that maximize their potential for revenue generation. Specifically, we found that significantly fewer equitable-sharing payments are collected in generous forfeiture states, which is consistent with the policing-for-profit allegation put forth by forfeiture's critics (e.g., Blumenson and Nilsen, 1998)."

"Thirty-six percent of all local police departments received money, property, or goods from a drug asset forfeiture program during 2002 (table 32). These departments employed 78% of all local police officers. At least 80% of the departments in each population category of 25,000 or more had drug asset forfeiture receipts."

"There can be few components of law enforcement programmes which actually cost nothing. The asset forfeiture provision of the federal law for crop suppression (relating mainly to cannabis in the State of Kentucky), proved to be such a case, costing the United States Government $13.7 million, but yielding a return of $53 million in 1991, or almost $4 in assets seized for every $1 invested by the Drug Enforcement Administration."

Laws and Policies

"Today’s civil asset forfeiture system also raises several constitutional issues. First, the potential for law enforcement to operate independently of the political process may violate the Constitution’s Appropriations Clause.¹⁵⁴ Second, a federally created forfeiture tool called “equitable sharing” effectively permits state and local law enforcement to bypass states’ attempts to mandate how proceeds are disbursed, raising federalism concerns.¹⁵⁵ Finally, the increasingly popular use of waivers—whereby the police offer property owners the choice of avoiding criminal charges in exchange for their property—means owners are deprived of the chance to challenge the forfeiture in a proceeding.¹⁵⁶ Agencies that use waivers bypass civil asset forfeiture laws and deprive owners of the protections they provide, raising serious due process concerns."

"Civil forfeiture can occur via three mechanisms:
"1. Summary forfeiture occurs when property is summarily seized. Property subject to summary forfeiture is typically contraband, such as illegal narcotics and drug paraphernalia.
"2. Administrative forfeiture is usually commenced against property valued at less than $500,000, or against cash of any value. Administrative proceedings are conducted by the seizing agency; the government initiates a forfeiture action and will take ownership of the property if no one steps forward to contest the forfeiture.§ Real property is not subject to administrative forfeiture, even if it is valued at less than $500,000. Probable cause is the requisite standard in administrative forfeiture (as it is roughly analogous to preponderance of evidence).
"3. Civil judicial forfeiture proceedings occur before a judge. It is akin to a trial. If the value of the property in question exceeds $500,000 (or a claim of ownership is filed or real property is involved), this is the mechanism of choice."
^{Note: This source contains several sections that may be of interest, including:
• Appendix B: Disposition Statutes by State (p. 37)
• Appendix C: National Code of Professional Conduct for Asset Forfeiture (p. 39)
• Appendix D: National District Attorneys Association Guidelines for Civil Asset Forfeiture (p. 41)}

"Forfeiture was especially controversial during the 1980s and 1990s (Hyde, 1995; Levy, 1996), but in 2000, the Civil Asset Forfeiture Reform Act (CAFRA) (Pub. L. No. 106-185) was passed. One major feature of the legislation was improved: due-process protections for property owners. And before CAFRA in 2000, the burden of proof fell on property owners. This process all changed with CAFRA. CAFRA did not, however, alter the burden of proof for civil forfeiture proceedings. It just shifted it from property owners to the government, and it did not change the law governing the disposition of forfeited assets (Worrall, 2004)."

"In 1970, Congress passed the Comprehensive Drug Abuse Prevention and Control Act.⁴⁵ This Act included a provision authorizing the government to seize drugs, drug manufacturing and storage equipment, and items used to transport drugs.⁴⁶ Later, Congress passed legislation broadening forfeiture laws to include proceeds from drug transactions⁴⁷ and real property.⁴⁸ Then in 1984, Congress passed the Comprehensive Crime Control Act, further expanding federal prosecutors’ ability to seize assets.⁴⁹
"After more than twenty years of unbridled police power in the area of asset forfeitures, critics, led by Representative Henry Hyde, the former chairman of the House Judiciary Committee, began calling for reforms."

"The statutes pertaining to drug offenses authorize the forfeiture of more than just the proceeds of the offense. Under 21 U.S.C. §§ 853(a) and 881(a) (criminal and civil forfeiture, respectively), a court may order the forfeiture of both the drug proceeds and any real or personal property used to commit, or to facilitate the commission of, the drug offense. These are the statutes that a federal law enforcement agency or federal prosecutor would use to take a car, boat, gun, airplane, or farm, away from a drug dealer.
"Facilitating property is defined in the case law to mean any property that "makes the prohibited conduct less difficult or more or less free from obstruction or hindrance." United States v. Schifferli, 895 F.2d 987, 990 (4th Cir. 1990) (Facilitation occurs when the property "make[s] the prohibited conduct less difficult or more or less free from obstruction or hindrance."); United States v. Bornfield, 145 F.3d 1123, 1135 (10th Cir. 1998) (citing Schifferli); United States v. Puche, 350 F.3d 1137, 1153 (11th Cir. 2003) (citing Bornfield)). The drug cases provide a plethora of examples of cases where houses, businesses, and even medical licences, have been forfeited as facilitating property."

"In 2000, Congress passed the Civil Asset Forfeiture Reform Act, which now requires law enforcement agencies to demonstrate by 'a preponderance of the evidence,' rather than merely a showing of 'probable cause,' that the property to be seized is linked to criminal activity. Moreover, the government now has the burden of proving that property was involved in a crime, rather than the previous standard under which the owner was required to prove that the property was not the product of criminal involvement."

"The advent of a now common police tactic, called the “reverse sting,” illustrates the shift in priorities from crime control to funding raids.¹⁰⁷ In a reverse sting, an officer attempts to sell drugs to an unsuspecting buyer.¹⁰⁸ The method permits the police to seize the buyer’s cash rather than a seller’s drugs, which have no value to the agency.¹⁰⁹"

"In Fiscal Year (FY) 2008, monies were available under a permanent indefinite appropriation to finance the following:

(1) The operational costs of the forfeiture program, including handling and disposal of seized and forfeited assets, and the execution of legal forfeiture proceedings to perfect the title of the United States in that property.
(2) The payment of innocent third party claims.
(3) The payment of equitable shares to participating foreign governments and state and local law enforcement agencies.
(4) The costs of ADP [Automatic Data Processing] equipment and ADP support for the Program.
(5) Contract services in support of the Program.
(6) Training and printing associated with the Program.
(7) Other management expenses of the Program.
(8) Awards for information leading to forfeiture.
(9) Joint Federal, state, and local law enforcement operations.
(10) Investigative expenses leading to seizure."

"In 1984, Congress passed the Comprehensive Forfeiture Act, which vastly expanded the federal government’s forfeiture powers.¹⁶⁹ The Act also created 'equitable sharing,' a process by which federal agencies 'adopt' forfeiture cases from state law enforcement agencies.¹⁷⁰ Equitable sharing is used when federal forfeiture is more favorable to state and local police, which usually occurs when state law mandates that law enforcement keep a smaller amount than that available under equitable sharing.¹⁷¹ Perhaps of more concern is when it is used to skirt state laws that either prevent forfeiture in a particular case, or direct that all or a portion of the proceeds be deposited into non-law enforcement funds.¹⁷² The federal agency keeps 20% of the recovered amount, while the remainder is returned to the state or local entity that brought the action.¹⁷³"

"In a growing and disturbing trend among state and local police, some law enforcement agencies now use contracts and waivers to obtain property, a practice that permits them to avoid forfeiture proceedings altogether. Generally, owners waive any interest in their property in exchange for the agency’s promise not to pursue criminal charges. This practice raises several concerns, the most serious of which is its complete disregard for the procedural guarantees current forfeiture legislation provides."

"During the past decade, law enforcement agencies increasingly have turned to asset seizures and drug enforcement grants to compensate for budgetary shortfalls, at the expense of other criminal justice goals. We believe the strange shape of the criminal justice system today—the law enforcement agenda that targets assets rather than crime,²⁰ the 80 percent of seizures that are unaccompanied by any criminal prosecution,²¹ the plea bargains that favor drug kingpins and penalize the “mules” without assets to trade,²² the reverse stings that target drug buyers rather than drug sellers,²³ the overkill in agencies involved even in minor arrests,²⁴ the massive shift towards federal jurisdiction over local law enforcement²⁵—is largely the unplanned by-product of this economic incentive structure."

"Unlike a criminal proceeding in which legal action is brought against an individual, in civil forfeiture, the government proceeds against the property directly, as if the property somehow acted to assist in the commission of a crime. It is a scheme based on 18th-century maritime law that permitted courts to obtain jurisdiction over property when it was virtually impossible to obtain jurisdiction over the property owners—pirates, for example—guilty of violating the law.
"Although civil forfeiture remained a relative backwater in American law for many years, modern civil forfeiture expanded greatly during the early 1980s as governments at all levels stepped up the war on drugs. No longer tied to the practical necessities of enforcing maritime law, the forfeiture power now applies to a broad range of crimes. Almost all states and the federal government have civil forfeiture laws, and Georgia’s is among the worst."

"In a civil forfeiture action, the government need only prove by a preponderance of evidence that the property is subject to forfeiture. Criminal forfeiture, which is apparently much less common than civil forfeiture (Hyde, 1995), usually accompanies criminal charges and is more difficult because of the proof-beyond-a-reasonable-doubt standard (Warchol, Payne, and Johnson, 1996:53-54). Civil forfeiture may thus be pursued more frequently because of the lower standard of proof. In fairness, however, criminal forfeiture may be preferred sometimes because restrictions exist on divulging the amount of assets forfeited (Clingermayer, Hecker, and Madsen, 2005)."

Sociopolitical Research

"Results from the present study demonstrate that all three factors of state forfeiture law that we studied - proceeds to law enforcement, innocent owner burden, and standard of proof - impact the extent to which state and local law enforcement agencies choose to pursue federal equitable sharing. Moreover, when state laws make forfeiture more difficult and less rewarding, agencies are even more apt to turn to the federal government's easier and more generous forfeiture procedures."

"In sum, the present study found that law enforcement agencies in jurisdictions with more restrictive or less rewarding state forfeiture laws receive greater forfeiture proceeds through federal equitable sharing. These results provide compelling evidence that law enforcement agencies consider the legal burdens and financial rewards of their own state law compared to those under federal equitable sharing in determining how to process asset seizures. Whether such actions are viewed as appropriate, innovative, and utility-maximizing police behavior or something more problematic is a matter for the public and policy-makers to assess. Any discussion about these results, however, certainly raises political and normative questions about the independence of law enforcement from public oversight and the budgetary process as well as the appropriate role and limits of asset forfeiture by law enforcement."

"In general, however, the powerful incentives for profit-seeking found within forfeiture current laws is criticized as encouraging inappropriate enforcement activities and detracting from the proper role of law enforcement within a democratic state. The dependency of the police on public resources for their operations is an important check on police power. Self-generating revenues by the police through forfeiture potentially threatens the ability of popularly elected officials to constrain police activities. Perhaps such concerns partially explain the differences in state laws. If the legislators and the public wished for forfeiture to be very easy and rewarding to law enforcement, every state would have low standards of proof, limited innocent owner protections, and all proceeds would go exclusively to the police."