Civil Forfeiture of the Family Home in a Drug Case.

As a result of the fact that civil judicial forfeiture is technically referred to as an “in rem” (meaning “against the thing”) action, the government proceeds not against a person, but rather against property that has allegedly been used to commit a federal crime or has been acquired using proceeds from criminal activity.

As a result of this distinction, federal civil forfeiture proceedings do not require the government to establish that any person has violated the law before it can seize a property. For example, even in cases where it becomes clear that a criminal conviction is not on the horizon, federal agents can seize a property without anyone being charged or convicted, and even in cases where criminal charges or a conviction would normally be required for a forfeiture, the property does not become government property just because agents possess it.

There are two primary scenarios in which the government can target a home in federal civil forfeiture proceedings in drug cases:

1. The Home Facilitated a Drug Crime

In this scenario, the federal government will argue that the home was used as a storage location, a distribution center, or that it was sold, manufactured, or dispensed controlled substances (meaning, for example, that drug-dealing took place on the home’s property). In these cases, the property is targeted because it was used to “facilitate” the drug offense, regardless of whether the home owner personally was involved in the criminal activity or whether they were knowingly and willfully assisting in the offense.

2. The Home Was Purchased with Drug Proceeds

In a second scenario, the federal government will argue that the home was purchased with the proceeds of illegal drug-related activity. This means that the government claims the buyer used drug-dealing money to buy the home, or used drug-dealing money to make mortgage payments, regardless of whether the buyer was personally involved in the crimes that generated the proceeds. In these cases, the government claims the home is “All moneys, negotiable instruments, securities, or other things of value furnished or intended to be furnished by any person in exchange for a controlled substance or listed chemical in violation of this subchapter, all proceeds traceable to such an exchange, and all moneys, negotiable instruments, and securities used or intended to be used to facilitate any violation of this subchapter.” even though the criminal investigation may not have reached the stage of issuing criminal charges.

In either of these scenarios, civil forfeiture can proceed independently of criminal charges. It can proceed before anyone is charged, during a criminal trial, or even if no one is criminally charged. It can proceed even when the government does not have sufficient evidence for a criminal case, which requires proof “beyond a reasonable doubt”, but is able to pursue forfeiture because the burden of proof for civil cases is significantly lower.

Which seizure and claim deadlines control a federal home forfeiture?

In most federal forfeiture cases, two separate civil forfeiture practices apply: administrative forfeiture and judicial forfeiture. Each of these options is governed by unique rules, and the relevant laws in each case may impose different deadlines.

For eligible personal property, federal administrative forfeiture may proceed without a judicial hearing unless a person files a timely administrative claim; federal civil forfeiture of real property must proceed judicially. This method allows the government to conduct administrative-level proceedings that can be sufficient to prove civil forfeiture when “practicality and public interest” justify the forfeiture. The process of administrative forfeiture typically starts with the issuance of a written seizure notice from the responsible law enforcement agency.

If the government pursues administrative forfeiture, the victim has the opportunity to file an administrative claim. A properly filed administrative claim shifts the dispute forward toward judicial forfeiture proceedings in federal court. If the administrative claim is not denied, it may be possible to settle the claim with a joint stipulation to return the home in a non-adversarial resolution. If no timely administrative claim is filed, the agency may declare the property administratively forfeited; if a timely claim is filed, the government generally must commence a judicial forfeiture action, return the property, or obtain a court-approved extension.

For eligible personal property, filing a timely administrative claim generally requires the government to proceed judicially or return the property; a family home, however, must be forfeited through a judicial forfeiture action. If the administrative claim process is not followed, it can become final by default, and, once the administrative forfeiture is final, it may be impossible to challenge the agency’s forfeiture in court. This means the administrative claim deadline may impose the highest stakes for the property owner, especially since this deadline can be as short as 35 days from the date of the seizure notice, depending on the case.

As one federal practice source says, “In the federal system, criminal forfeiture proceedings are in personam proceedings, while civil forfeiture proceedings are in rem proceedings.” However, in the context of federal administrative forfeiture, it seems as if the civil forfeiture laws were intended to operate without the need for a prior criminal conviction. Under these laws, the government cannot seize the home just because agents have custody of it, but the government can keep it unless the owner files an administrative claim in time.

The attorneys at Spodek Law Group carry more than fifty years of combined experience between them.

What must the government prove, and what can a spouse challenge?

In a federal civil forfeiture case, the government must prove the home’s alleged connection by a preponderance of the evidence, meaning it must be “more likely than not” that the home should be forfeited.

While the government can target the home in civil forfeiture proceedings, forfeiture is not automatic. An innocent owner (who did not participate in the alleged criminal conduct) may still be able to assert a “civil forfeiture defense,” such as the innocent-owner defense.

The innocent-owner defense has the potential to protect a co-owner from losing their entire portion of the home’s value if they can prove that they were unaware of the illegal use of the home. Although the federal government can target the home without charging a criminal defendant, an innocent spouse or other co-owner generally cannot remain silent during a civil forfeiture case. For a home, a spouse or other co-owner must timely assert their ownership interest and any applicable defenses in the judicial forfeiture proceeding.

Along with the innocent-owner defense, property owners can challenge the forfeiture by contesting the alleged connection between the home and the criminal conduct. They can also challenge the forfeiture by disputing the government’s determination that the home falls within one of the statutory forfeiture categories (meaning a home must be acquired with proceeds or used to facilitate a drug-related crime to be subject to forfeiture), and by challenging the government’s justification for taking the property.

In these circumstances, owners can challenge civil forfeiture either by negotiating with the government, which may be possible in certain cases where the owner is not the target of the criminal investigation, or by going to litigation and showing that the home should be returned. In order to successfully negotiate or litigate, however, owners must often engage with the government and establish their lawful ownership of the home through clear and admissible evidence.

With that said, the burden is initially on the federal government. According to the U.S. Department of Justice’s “Justice Manual”:

“The government bears the burden of establishing the forfeitability of the property by a preponderance of the evidence.”

In order to establish that the property is subject to forfeiture, the government must meet the applicable burden of proof (i.e., it must have sufficient evidence to prove the property falls within a statutory forfeiture category). If the government does not do so, then the claim should be granted. If the government does so, it is the property owner’s turn to show that the home is not subject to forfeiture under the governing law.

Why can a home remain unavailable after the criminal case ends?

If a criminal defendant is convicted and sentenced, the government may pursue criminal forfeiture as part of the criminal case; if the defendant is acquitted, the government may still pursue a separate civil forfeiture when authorized, but not criminal forfeiture based on that acquitted case. In either scenario, civil and criminal forfeiture have different rules, including different burdens of proof.

Even if a criminal defendant is not convicted, civil forfeiture can still proceed, and it doesn’t just require the government to show that a person has violated the law in order to maintain possession of the property; it means that even if the innocent spouse is able to protect their interest in the home in the criminal case, this will not prevent civil forfeiture proceedings from proceeding.

Similar to cases involving state law, state and federal forfeiture cases have the same potential to proceed independently. However, they have the same potential to impose different procedural rules, different burdens, and different available remedies as well.

If the criminal proceedings conclude in a trial acquittal, the home may not automatically be returnable unless it was never subject to forfeiture in the first place. With this in mind, for many house owners, the key is to promptly pursue their defenses in civil forfeiture. By proactively dealing with the government’s forfeiture action, owners may avoid a situation in which the home remains unavailable.

Even if the house owner is not convicted, the lack of a criminal conviction does not automatically end the forfeiture proceedings, and, the innocence of the owner in a criminal case does not automatically establish the owner’s “innocence” under civil forfeiture laws. If the government believes that the home was still subject to forfeiture, then the civil forfeiture action can continue regardless of how the criminal prosecution ends. As a result, the house owner still needs to resolve the issue in the civil forfeiture proceeding. In many cases, this may require a negotiated settlement with the government, while in others it may require pursuing the appropriate defenses in a civil forfeiture action.

Talk It Through With a Lawyer

Every case turns on its own facts. Todd Spodek is the managing partner of Spodek Law Group, a second generation firm his father opened in 1976, and the firm takes federal criminal and white collar matters nationwide. Call 888 348 8028 to talk it through.