Civil vs Criminal Forfeiture.

One of the fundamental differences between civil, criminal, and administrative forfeiture procedures is when ownership is affected.

For criminal forfeiture, this determination is made as part of the court’s sentencing phase, which occurs after a guilty verdict or plea. Criminal forfeiture is an “in-personam” action, which means it is directed at the person. The government asserts that you have a right to the property that the court can strip away as a punishment for the underlying offense. The government must demonstrate a connection between the property and the offense by a preponderance of the evidence.

In contrast, federal civil forfeiture is an “in-rem” action, which translates to “against the thing.” Instead of targeting you, the government targets the property itself, effectively naming the property as the defendant. The government must show a preponderance of the evidence that the property was involved in or derived from the illegal activity. A key difference here is that federal civil forfeiture does not require an indictment, a criminal charge, or a conviction. Even if you are never found guilty of a crime, or if you aren’t even charged, the government can still pursue forfeiture of the assets.

Finally, administrative forfeiture is a process that allows federal law enforcement agencies to seize and hold property without involving a judge or a jury. This is available for property that qualifies under certain circumstances, and agencies can complete the process without judicial intervention if there are no successful claims made to the seized property. Administrative forfeiture provides agencies with a mechanism to seize and retain property that is deemed to be related to illegal activities, and it streamlines the government’s ability to dispose of assets and funds.

These distinctions illustrate why it is critical to understand the specific nature of any forfeiture action against you. With the ability to strip ownership through in-personam, in-rem, or administrative means, the government can pursue different strategies depending on the timing of the seizure and the level of evidence it possesses.

What Must an Owner Do When a Federal Agency Starts Administrative Forfeiture?

The power of federal law enforcement agencies to conduct administrative forfeiture is broad. For example, 19 U.S.C. § 1607 provides for notice of seizure and intent to forfeit certain vessels, vehicles, aircraft, merchandise, baggage, prohibited merchandise, controlled-substance conveyances, and monetary instruments.

Beyond currency and other monetary instruments, qualifying property valued at $500,000 or less may be subject to administrative forfeiture. This qualifying property must either come from or be used to facilitate criminal activity.

In administrative forfeiture proceedings, the seizing federal agency is in charge. It controls the process and has the authority to initiate administrative forfeiture and execute the forfeitures. The seizing agency is responsible for determining whether the property should remain subject to forfeiture, as well as deciding how to handle any claims or protests filed by the owners.

If you are facing administrative forfeiture, you need to know that you are subject to strict deadlines. The time available to challenge administrative forfeiture in court or file a petition for remission and mitigation, which is a request to return the assets, is quite short. Due to the nature of these proceedings, time is of the essence.

The consequences for missing these deadlines can be severe. If you do not file a timely challenge, you may lose your right to contest the forfeiture or your right to seek a refund through a petition. Once the window closes, the federal government can proceed to sell or destroy the seized property.

Spodek Law Group handles federal law enforcement matters of all types, and this includes administrative forfeiture cases. Our attorneys can provide immediate assistance, assess your situation, and work with the agency involved to help you fight back and avoid the loss of your property.

Which Defenses Can Defeat a Federal Civil Forfeiture Complaint?

Federal civil forfeiture complaints are typically straightforward. They identify specific assets that the government alleges are connected to a specified federal crime or offenses. While the initiating pleading is brief, the standard of proof required to succeed in civil forfeiture is the preponderance of the evidence, meaning more than 50% of the evidence points toward forfeiture.

How to Contest Federal Civil Forfeiture Claims

Civil forfeiture claimants fight to recover their assets under 18 U.S.C. § 983. Claimants can challenge the government’s forfeiture complaint by filing an answer and demanding a judicial hearing. If the complaint is filed in federal district court, a set of procedural rules called Supplemental Rule G applies. This rule details the various steps of litigation, including how much time claimants have to answer and what they can request from the court.

Federal Civil Forfeiture Proceedings and Remedies

Claimants may demand a discovery process, discovery motions, and other pre-trial proceedings similar to those that occur in other types of litigation. Civil forfeiture claimants may demand a jury trial under Rule G(9) and Federal Rule of Civil Procedure 38. Once again, federal civil forfeiture proceedings have a lower standard of proof (preponderance of the evidence), making these proceedings a dangerous threat to property owners’ rights.

The Innocent-Owner Defense in Civil Forfeiture

In addition to challenging the government’s evidence of a connection between the property and a crime, civil forfeiture claimants have the option of asserting the innocent-owner defense. Found in 18 U.S.C. § 983(d), the innocent-owner defense allows owners to regain their property if they can prove that they:

• “did not know of the conduct” alleged,
• “upon learning of the conduct giving rise to the forfeiture, did all that reasonably could be expected under the circumstances to terminate such use of the property,”
• “did not know of the conduct giving rise to forfeiture; or... upon learning of the conduct giving rise to the forfeiture, did all that reasonably could be expected under the circumstances to terminate such use of the property.” the conduct, or
• “upon learning of the conduct giving rise to the forfeiture, did all that reasonably could be expected under the circumstances to terminate such use of the property,”

As in other forfeiture proceedings, asserting an innocent-owner defense requires meeting the preponderance of the evidence standard of proof. Additionally, in civil forfeiture cases, this defense must be asserted in the claimant’s answer. This makes the answer a crucial stage in the forfeiture process.

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Whose Property Can Federal Criminal Forfeiture Take After a Conviction?

What Property Interests Does Federal Criminal Forfeiture Reach?

Criminal forfeiture is an “in-personam” action, so it generally reaches the property interest of the convicted defendant. However, third parties who claim an interest in the target property may assert that interest in an ancillary proceeding, even if they were not charged or convicted in the underlying offense. If any property that was involved in or derived from the criminal offense is not available for forfeiture, whether because it was sold, lost, or concealed, then, under 21 U.S.C. § 853(p), criminal forfeiture can reach any other property that the defendant owns. This is referred to as “substitute property.”

How Is the Scope of Federal Criminal Forfeiture Defined?

The scope of federal criminal forfeiture is usually spelled out in the government’s criminal indictment. The indictment or information need not identify the property subject to forfeiture or specify the amount of any forfeiture money judgment. These provisions define what property interests can be taken and how they must be tied to criminal conduct in order to qualify for criminal forfeiture.

What Is the Scope of a Criminal Forfeiture Order?

Like indictments, criminal forfeiture orders are typically straightforward and state the specific property the government can take. However, criminal forfeiture orders can also include “the court shall order the forfeiture of any other property of the defendant, up to the value of any property described in subparagraphs (A) through (E) of paragraph (1), as applicable.” if the government cannot obtain the actual asset, a concept known as “substitute property” or “money judgment.” In either scenario, once the judgment becomes final, federal agencies can use the forfeited assets (and any property they obtain by selling the assets) for “There is established in the United States Treasury a special Fund to be known as the Department of Justice Assets Forfeiture Fund... which shall be available to the Attorney General without fiscal year limitation for the following law enforcement purposes-”

How Can a Criminal Forfeiture Order Be Challenged?

A third party with a superior right, title, or interest in the property can challenge a criminal forfeiture order under 21 U.S.C. § 853(n). This statute requires third parties to file a “petition for ancillary relief” in the district court where the criminal proceedings were conducted. The third party must prove by a preponderance of the evidence either that its legal interest was vested in it or superior to the defendant’s interest at the time of the offense, or that it was a bona fide purchaser for value who was reasonably without cause to believe the property was subject to forfeiture.

What Are the Procedures Involved in Criminal Forfeiture?

Following a criminal conviction or plea, the court will determine what property interests should be forfeit as part of the sentencing stage of the proceedings. During this hearing, the court will issue a preliminary order of forfeiture listing property that the court has determined is subject to forfeiture after the government establishes the requisite nexus between the property and the offense. The detailed criminal forfeiture procedure, which includes issuance of the preliminary order and handling of third-party claims, is governed by Federal Rule of Criminal Procedure 32.2.

When Can Arizona Law Enforcement Keep a Seized Asset?

Under A.R.S. § 13-4305, Arizona law enforcement officers have the authority to seize any property that is “subject to forfeiture” under state law. To seize property, officers may act on process issued under Arizona law, including a seizure warrant, or may seize without court process when they have probable cause to believe the property is subject to forfeiture and an additional statutory condition applies, such as a lawful arrest or search, a prior forfeiture judgment, or exigent circumstances.

How Long Can Arizona Law Enforcement Hold an Asset After a Seizure?

While there is no statutory deadline in Arizona requiring the seizure of property subject to forfeiture be released to its owner, the statute requiring the initiation of “the relevant pending-forfeiture proceeding” (i.e., the civil or criminal proceedings) contains language that imposes a deadline. A.R.S. § 13-4307 requires the state to file a notice of pending forfeiture or return the property within sixty days after seizure. The relevant proceeding must be one of the proceeding types covered by Arizona state law.

What Are the Grounds for Challenging a Seizure of Property in Arizona?

If the state does not file a notice of pending forfeiture proceeding within sixty days after making a seizure for forfeiture, it must return the property to the person from whom it was seized. When pursuing forfeiture, the government also needs to show probable cause to support the seizure of the property.

If you are facing a seizure or forfeiture under Arizona’s forfeiture statutes, you should promptly consult with a lawyer to understand what grounds you have available to challenge the seizure. The following are common grounds for challenging the government’s forfeiture case (or seizure):

• The property is not subject to forfeiture
• The property does not belong to the government under the relevant statutes
• The seizure was not based on probable cause or authorized by a warrant
• The forfeiture proceedings were not timely initiated
• The asserted evidence does not meet the requisite standard of proof

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.