Can Hobbs Act charges lead to asset forfeiture?

Can Hobbs Act Charges Lead to Asset Forfeiture?

The Hobbs Act, 18 U.S.C. § 1951, is a federal law that prohibits actual or attempted robbery or extortion affecting interstate or foreign commerce. The act also criminalizes conspiracy to commit robbery or extortion without reference to the general federal conspiracy statute at 18 U.S.C. § 371. Although originally intended to combat racketeering in labor disputes, the Hobbs Act today is frequently used in cases involving public corruption, commercial disputes, violent criminals and street gangs, and corruption directed at labor union members. An important question is whether a Hobbs Act violation can also lead to asset forfeiture.

Overview of Asset Forfeiture

Asset forfeiture refers to the seizure of property by law enforcement when that property is suspected to be involved in a crime. There are two main types of asset forfeiture:

• Criminal forfeiture – Occurs after a criminal conviction and requires the higher “beyond a reasonable doubt” standard of proof.
• Civil forfeiture – Does not require a criminal conviction and uses the lower “preponderance of evidence” standard. The property itself is considered guilty, not the owner.

Both types allow law enforcement to seize cash, vehicles, real estate, weapons, and other assets associated with criminal activity. The assets can then be liquidated, with the proceeds going to law enforcement agencies.
Asset forfeiture linked to federal crimes is governed by federal statutes. Some of the main laws include:

• Comprehensive Drug Abuse Prevention and Control Act of 1970
• Racketeer Influenced and Corrupt Organizations (RICO) Act
• Money Laundering Control Act of 1986
• Civil Asset Forfeiture Reform Act of 2000 (CAFRA)

These laws identify which crimes allow asset forfeiture and set the procedures for seizing and forfeiting assets.

Asset Forfeiture Under the Hobbs Act

The Hobbs Act is not specifically mentioned in the main federal asset forfeiture laws. However, there are a few ways Hobbs Act violations can still result in asset forfeiture:

Criminal Forfeiture

The Hobbs Act is a federal felony offense. Under 18 U.S.C. § 982(a)(2), a defendant convicted of any felony violation of the Hobbs Act must forfeit to the government any property involved in or traceable to the crime.
This includes proceeds obtained directly or indirectly from the crime. For example, if a defendant extorted money from a business, the extorted funds would be subject to forfeiture.
Criminal forfeiture under the Hobbs Act requires the government prove beyond a reasonable doubt that:

• The defendant was convicted of a Hobbs Act felony
• The property was involved in or traceable to the Hobbs Act violation

Civil Judicial Forfeiture

Even without a criminal conviction, the government can pursue civil forfeiture of assets connected to a Hobbs Act crime.
Under 18 U.S.C. § 981(a)(1)(C), the government can civilly forfeit any property derived from “specified unlawful activity.” The definition of specified unlawful activity includes any act indictable under the Hobbs Act 1.
To civilly forfeit property under the Hobbs Act, the government must show by a preponderance of evidence that:

• The property was involved in or traceable to a Hobbs Act violation
• The owner cannot establish an “innocent owner” defense

The government does not have to prove the property owner committed the Hobbs Act crime or even knew about it. This makes civil forfeiture possible even when there is not enough evidence for a criminal conviction.

Administrative Forfeiture

For smaller forfeitures (usually under $500,000), the government can administratively forfeit assets related to a Hobbs Act violation 2.
This allows federal seizing agencies like the FBI to forfeit assets without going through the courts.
The property owner is notified and has the right to challenge the forfeiture in court. If no challenge is made, the agency can forfeit the property without judicial oversight.

Criticisms of Asset Forfeiture Under the Hobbs Act

Using the Hobbs Act for asset forfeiture is controversial for several reasons:

• The Hobbs Act covers a wide range of crimes, resulting in broad forfeiture powers
• Civil forfeiture does not require a criminal conviction
• Seizing agencies often get to keep the forfeited assets, creating a profit motive
• It is often expensive and difficult for property owners to challenge forfeitures

Critics argue this combination of broad authority and limited owner protections leads to abuse of asset forfeiture. There are instances of questionable seizures where the connection to a Hobbs Act crime is unclear 3.
However, supporters contend asset forfeiture is an important tool to disrupt criminal enterprises. In their view, the potential for abuse must be balanced against the ability to target resources that enable racketeering, extortion, and other Hobbs Act offenses.

Famous Hobbs Act Forfeiture Cases

Here are some notable examples of asset forfeiture related to Hobbs Act violations:

United States v. Private Sanitation Industry Association

This landmark case in the late 1980s involved forfeiture of over $10 million from five waste hauling companies in New York City. The companies engaged in collusive bid-rigging and customer allocation in violation of the Hobbs Act. The forfeited funds were used to pay restitution to victims 4.

United States v. Mongol Nation

Federal prosecutors sought forfeiture of the trademarks and other intellectual property of the Mongols motorcycle club. The government argued the marks were subject to seizure as property derived from racketeering activity including Hobbs Act extortion. However, the forfeiture attempt was overturned on appeal in 2020 5.

Timbs v. Indiana

In this 2019 Supreme Court case, Tyson Timbs challenged the civil forfeiture of his Land Rover after a conviction for drug crimes. The state sought forfeiture under a law allowing seizure of vehicles used to transport illegal drugs. Although not a Hobbs Act case, Timbs has implications for limits on excessive forfeitures under the 8th Amendment.

Conclusion

In summary, the Hobbs Act does allow for both criminal and civil forfeiture of assets connected to Hobbs Act felonies. Law enforcement can criminally or civilly seize property involved in Hobbs Act extortion, robbery, and racketeering. However, broad asset forfeiture authority under the Hobbs Act raises concerns about potential abuse and excessive seizures. Going forward, Congress and the courts may seek to strike a balance providing this tool for combating organized and commercial crime while still protecting property rights.

References

[1] https://www.law.cornell.edu/uscode/text/18/981 [2] https://crsreports.congress.gov/product/pdf/RL/97-139/13 [3] https://www.law.com/newyorklawjournal/2020/05/07/hobbs-act-robbery-criminal-forfeiture-fmla-violations/ [4] https://digitalcommons.law.umaryland.edu/cgi/viewcontent.cgi?article=1045&context=endnotes [5] https://www.justice.gov/usao-dc/pr/more-dozen-charged-violent-crime-conspiracy-includes-armed-carjacking-armed-robbery https://www.law.com/supremecourtbrief/2019/02/20/tracing-the-limits-of-asset-forfeiture-in-timbs-v-indiana/?slreturn=20230103153528