What is the innocent owner defense in forfeiture cases?

The Innocent Owner Defense in Forfeiture Cases

Civil asset forfeiture laws allow the government to seize property that is connected to criminal activity. Even if the property owner has not been convicted of or even charged with a crime, their property can still be taken through civil forfeiture proceedings if the government believes the property was used to facilitate criminal activity or represents the proceeds of crime.

However, there are some protections for property owners against unjust civil forfeitures. One of these is the “innocent owner” defense, which allows owners to fight the forfeiture of their property if they can prove they did not know about or consent to the activity that led to the forfeiture.

What is civil asset forfeiture?

Civil asset forfeiture allows law enforcement to seize assets like cash, cars, and real estate that are suspected to be connected to criminal activity. Unlike criminal forfeiture, civil forfeiture does not require a criminal conviction and has a lower standard of proof.

The legal theory behind civil forfeiture is that the property itself is considered guilty of facilitating crime, not the owner. So the case is filed against the property as the defendant, with names like “United States v. $10,000 in U.S. Currency.”

Because civil forfeiture is a civil action, the government only needs to show there is a preponderance of evidence, rather than proof beyond a reasonable doubt, that the property is linked to criminal activity. This makes it easier for the government to win forfeiture cases.

Critics argue civil forfeiture violates due process and property rights, because owners can permanently lose their property without ever being charged or convicted of a related crime. There have been many cases of innocent owners having cash, cars or homes seized through civil forfeiture.

What is the innocent owner defense?

The innocent owner defense is a legal protection for property owners in civil forfeiture cases. It allows owners to fight the forfeiture by proving they did not know about or consent to the activity that led to the forfeiture.

Both federal law and many state laws contain some version of the innocent owner defense. The exact requirements vary, but in general owners must show:

• They had no knowledge of the illegal use of the property, or
• If they did know, they did not consent to the property being used illegally.

The policy behind the innocent owner defense is that it would be unfair to punish property owners for criminal activity they were unaware of and did not agree to. Forfeiting their property under those circumstances would be an excessive fine in violation of the Eighth Amendment.

Federal innocent owner defenses

There are two main federal laws that provide for innocent owner defenses in civil forfeiture cases:

CAFRA innocent owner defense

The Civil Asset Forfeiture Reform Act of 2000 (CAFRA) expanded the innocent owner protections in federal civil forfeiture law.

Under CAFRA, owners can argue they did not know the property was being used illegally, or that they took reasonable steps to prevent the illegal use once they learned about it. This is called the “reasonable steps” requirement.

For example, if a family member uses your car to transport illegal drugs without your knowledge, you can argue you are an innocent owner. Or if you do find out your property is being misused, you may be able to avoid forfeiture by promptly reporting the activity or trying to stop it.

18 U.S.C. § 983(d) innocent owner defense

Section 983(d) of Title 18 of the U.S. Code provides another innocent owner defense specifically for property connected to money laundering crimes.

To use this defense, owners must show they did not know the property was involved in money laundering, or that they did not knowingly engage in the money laundering conduct. This sets a higher bar than CAFRA.

However, § 983(d) also states that no property can be forfeited if “the owner establishes that the property is so removed from the criminal activity that it would be grossly disproportionate to forfeit the owner’s interest.” This provides an avenue for owners of valuable property to argue the forfeiture is excessive.

State innocent owner defenses

Many states have incorporated innocent owner defenses into their civil forfeiture laws as well. For example, California’s Civil Code Section 11488.5 says:

No property interest, whether tangible or intangible, shall be forfeited under this chapter if the owner of the property establishes that he or she (1) had no knowledge of, or consented to, the act or omission…

Some state laws only require lack of knowledge, while others also require owners to show they did not consent to the activity once they became aware. The details vary in each state, so it is important to check the specific laws.

How does a property owner use the innocent owner defense?

If the government initiates civil forfeiture proceedings against your property, you can file a claim as an innocent owner to get it back. The process generally includes:

1. Filing a claim to contest the forfeiture within the required deadline
2. Asserting you qualify as an innocent owner under the relevant law
3. Providing evidence you were unaware of the illegal activity or did not consent to it
4. Proving you meet all legal requirements of an innocent owner

To successfully assert the innocent owner defense, you must be able to document you took reasonable steps to prevent illegal use of your property or ended the activity as soon as you found out. This evidence could include:

• Records showing you told the person to stop using your property illegally
• Attempts to gain control or ownership of the property
• Promptly reporting the activity to law enforcement
• Any other evidence you took action to stop the illegal activity

If you can convince the court you meet the legal definition of an innocent owner, your property cannot be forfeited. However, the burden is on you as the owner to prove your innocence.

Limits of the innocent owner defense

While the innocent owner defense is an important protection, it has some limitations. Some issues that can weaken an innocent owner claim include:

• Knowledge of prior crimes – If you knew about previous illegal activity involving the property, it can undermine your argument you were unaware of the new activity leading to forfeiture.
• Willful blindness – If you deliberately avoided learning about illegal use of your property, you may still be considered complicit.
• Reasonable steps – Failing to take reasonable actions to stop the activity once you found out may defeat your innocent owner claim.
• Timeliness – In some states, you must assert the defense and provide supporting evidence within a short timeframe to qualify.

It is also up to the judge’s discretion whether to accept your innocent owner defense. Even if you meet the technical legal requirements, a judge may still rule against you based on the specific circumstances.

Examples of the innocent owner defense

Here are some examples of how the innocent owner defense has succeeded and failed in real civil forfeiture cases:

United States v. One Parcel Property

When police found marijuana plants growing on Leslie Weinstein’s remote property in California, the government moved to seize it through civil forfeiture. But Weinstein argued he was unaware of the illegal plants, since he lived far away and rarely visited the property. The court agreed Weinstein qualified as an innocent owner and allowed him to keep the land.

State v. Fifteen Thousand Five Hundred Dollars

Sharon Anderson let her friend borrow her car, not knowing the friend was involved in drug trafficking. When police seized $15,500 in cash from the car, she argued she was an innocent owner. But the court said she failed to take reasonable steps to prevent misuse of her property once she suspected illegal activity. Her innocent owner defense failed.

United States v. One 1992 Isuzu Trooper

When Luis Munoz let his brother borrow his SUV, he had no idea the brother would use it to transport drugs. Police seized the SUV, but Munoz won it back by proving his innocent owner status. The court said he couldn’t be expected to anticipate or prevent his brother’s illegal actions.

Policy debates surrounding civil forfeiture and innocent owner defenses

The widespread use of civil forfeiture and limits of innocent owner defenses have led to many policy debates. Some of the key issues include:

• Whether the government’s lower burden of proof in civil forfeiture violates due process
• If forcing owners to prove innocence circumvents the presumption of innocence
• Whether innocent owner defenses adequately protect property rights
• If forfeiting property without convicting the owner is excessive fine
• If forfeiture disproportionately impacts low-income and minority communities
• Whether forfeiture creates perverse incentives for law enforcement

Some states and the federal government have enacted reforms to address some of these concerns. Potential changes include shifting the burden of proof to the government, requiring owners get quick hearings to challenge forfeitures, limiting how agencies can use forfeiture funds, and increasing innocent owner protections.

Balancing law enforcement needs, property rights, and due process remains an ongoing challenge around civil asset forfeiture laws and defenses.

Conclusion

The innocent owner defense provides important protections for property owners caught up in civil forfeiture proceedings. But successfully asserting the defense still requires owners to affirmatively prove their innocence and lack of consent or knowledge of the criminal activity.

Understanding the nuances around innocent owner defenses in both federal and state laws can help owners protect their property and avoid unjust forfeitures. Given the potential limits of the defense, legal assistance from an attorney knowledgeable in forfeiture law is recommended for anyone facing civil forfeiture of their property.

References

ACLU, “Asset Forfeiture Abuse”