Asset forfeiture is an important legal weapon that can be used for a variety of law enforcement purposes. Last month, several legislative initiatives were sent to Congress by the Biden Administration to enhance asset forfeiture.

Asset forfeiture is intended to destabilize organized criminal organizations, corporate entities, individuals and drug cartels financially by seizing assets that the prosecution contends are the proceeds of  criminal activity. It also aims to reclaim property that can be used to recompense victims and discourage crime.

Types of Federal Forfeiture

Criminal, administrative, and civil judicial forfeiture are the three types of asset forfeiture recognized by federal law.

Criminal Forfeiture

In a criminal case, the formal charging document, an indictment, may include a forfeiture accusation-a notification of the intention to forfeit possessions. In this type of forfeiture, the defendant must be convicted of a crime before forfeiture can occur.  Criminal forfeiture is confined to the defendant’s property interests, including any assets acquired via illicit behavior. In most cases, criminal forfeiture is restricted to the property implicated in the specific counts for which the offender is found guilty at a legal trial.

A court can grant forfeiture of a particular asset identified in the indictment, a sum of money, or other assets that are characterized as substitute property. The procedure for attaching and forfeiting substitute property occurs when the prosecution asserts it cannot locate the items identified in the indictment and requests permission to forfeit other assets of the defendant. The government must prove the required link between the offense and the asset. Following the entry of a preliminary forfeiture order, a separate, ancillary procedure is initiated to establish any third-party ownership rights in the property sought to be forfeited by the government.

Administrative Forfeiture

An action against the property allows assets to be ceded to the US without having to file a lawsuit in federal court. In that instance, an agency, such as the Drug Enforcement Adminstration, Securities and Exchange Commission, or Federal Bureau of Investigation, can initiate an administrative forfeiture.  If no claim is filed disputing the seizure, the assets are forfeited through administrative forfeiture before the authority that seized them. There are many procedures in place to protect property owners’ interests and rights, including tight time restrictions and notice requirements. The danger to an individual who may have a claim for the asset seized is that the administrative process permits a deposition of the person(s) making a claim.  There is no Fifth Amendment privilege in that deposition process, and information gathered can be utilized to prosecute the party making a claim.

Any seizure of administrative forfeiture property must be predicated on probable cause. The main advantage of an administrative forfeiture procedure is that it spares legal professionals and the courts from having to deal with judicial proceedings and trial preparation when no one disputes the forfeiture of seized property.

Civil Judicial Forfeiture

This type of forfeiture is brought against the property derived from or utilized to commit a crime, rather than against the person who committed the crime. In contrast to criminal forfeiture, there isn’t any requirement for a criminal conviction, however, the government must still establish that the item was tied to criminal behavior. The procedure allows courts to include everyone who has any interest in the assets in the same lawsuit and handle all of the property’s issues at the same time.

The state or federal government is the plaintiff in a civil forfeiture lawsuit, the asset is the asset, and anyone who declares interest in the asset is a claimant. Civil forfeiture permits the government to pursue a property that would otherwise be out of reach under criminal forfeiture, including that of foreign nationals, such as terrorists, and fugitives. The property attached can be that of a deceased offender or when no defendant can be identified.

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Disclaimer: This blog is only intended for educational purposes and shouldn’t be used as a substitute for legal advice.