Both federal and state governments rely on asset forfeiture to curb criminal activity, particularly white-collar crimes, organized crime, and drug crimes. The assets recovered are often used to develop law enforcement facilities or to pay restitution to victims of crimes.
Federal and state forfeiture have critical differences in the procedures and approaches to seizure and ultimate forfeiture. In this article, the Asset Forfeiture Attorney will examine both federal and state asset forfeiture to help you understand the two.
Definition of Asset Forfeiture
Fighting crime is a challenge both state and federal governments have to face. While prosecution happens every day, criminals still find ways to continue their enterprise. To curb this, governments use asset forfeiture to deprive them of the money, assets, and resources they might use to commit crimes.
Asset forfeiture is the process through which the state or federal governments acquire ownership of a property. The property these governments can forfeit, including those involved in a crime, are proceeds of a crime or property that makes it easier to commit a crime and harder for law enforcement to detect the crime.
Asset forfeiture typically occurs in the fight against drug wars, white-collar crimes, terrorism, and organized crime.
The process draws from ancient wars against piracy, where the government seized ships owned by pirates to deter criminal activity.
Both federal and state governments pursue asset forfeiture for reasons such as:
- To remove from the criminal, his or her tools of trade. In most cases, charging the criminal for an offense does not stop criminal activity from continuing. However, if the assets and property acquired for and from criminal activity are acquired, the criminal will not have the tools to continue with the criminal activity.
- To protect and compensate the victims of a crime. for example, the forfeiture of the proceeds of fraud can facilitate compensation of the victims to ease their recovery from the crime
- To punish criminals
State and federal organizations must adhere to set laws and guidelines for asset seizure and forfeiture. These guidelines, especially at the state level, undergo constant changes to both fight crime and protect innocent citizens from undue forfeiture of their assets.
These laws also provide guidelines on the jurisdiction and distribution of the proceeds of forfeiture.
Some of the assets eligible for forfeiture include:
- The proceeds of crime
- Property that facilitated the crime
- Any property involved in the commission of the crime
These assets can be tangible or intangible, as long as they meet the above criteria and are valuable. Some intangible assets include interests, privileges, rights, claims, and securities.
Federal Asset Forfeiture
Law enforcement bodies such as the FBI and the DEA are responsible for federal asset forfeiture. These agencies initiate asset seizure and forfeiture after a federal crime. In some cases, the federal and state governments collaborate on asset forfeiture through the process of equitable sharing.
Other agencies involved in federal asset forfeiture include:
- The U.S. Marshals Service
- The Federal Trade Commission
- Internal Revenue Service
- S. Attorney’s Office
- The Bureau of Alcohol, Tobacco, Firearms, and Explosives
- The Securities and Exchange Commission
- The Department of Homeland Security
Asset forfeiture can be of three types, including:
Criminal forfeiture happens when the proceedings are a part of the criminal prosecution. Criminal forfeiture targets the recovery of assets used in committing the crime or as proceeds of the crime.
Criminal forfeiture is an action against the person; therefore, you have a right to contest the forfeiture through trial proceedings.
Criminal forfeiture usually serves to punish the defendant for the crime. In this case, the government must first file a case against the defendant and include a forfeiture allegation in the charging document or criminal indictment.
The forfeiture allegation will identify the property the government seeks to forfeit, which might include houses, bank accounts, cars, and boats.
If the defendant is found guilty of the charges, the trial will proceed to the forfeiture proceedings. Forfeiture proceedings have a lower burden of proof, as they only require a preponderance of evidence.
The government must prove that a connection exists between the crime and the assets in question. The court will grant a preliminary order of forfeiture if the government successfully proves the connection.
The government must, by law, disclose to the defendant, favorable information relating to the forfeiture.
After issuing the preliminary order, the court will also conduct a hearing to determine whether any third party has an interest or claim to the assets.
The court will issue a final order of forfeiture after settling the interests of third parties.
Civil Judicial Forfeiture
A civil judicial forfeiture is an act against the property whereby a law enforcement official seizes the property engaged or suspected to be engaged in a crime. In this case, the property, not the defendant, has violated the law.
Civil forfeiture, unlike criminal forfeiture, does not depend on a criminal conviction. A civil seizure and forfeiture can begin with the suspicion that you are committing a crime. The forfeiture does not seek to punish the offender for committing the crime. Instead, it provides a remedy to the society and the victims of the crime.
In civil forfeiture cases, the government assumes possession of the property the moment you use it to facilitate or commit a crime.
Federal bodies initiate civil forfeiture proceedings as part of their investigations into criminal cases. Once they seize the property, they will send a written notice to interested parties within 60 days.
If you respond to the notice, the law enforcement agency will have 90 days to file a formal complaint against the property or file a criminal indictment.
Filing a criminal indictment will make the forfeiture a criminal one. As in criminal forfeiture, you can contest the seizure of your property through a court trial.
You do not have the right to counsel in a civil forfeiture unless the property in question is your primary family residence.
Administrative forfeitures are cases where no one files a claim to contest the forfeiture after a property is seized. 80% of federal forfeitures are administrative and do not involve litigation.
The federal government can forfeit several types of assets, including cash, bank accounts, imported goods whose importation is illegal, vessels transporting contraband or controlled substances, buildings used for illegal activities, storing contraband or controlled substances, and computers, software, tools and equipment used to facilitate illegal activities.
Houses and real property cannot be forfeited administratively.
An administrative procedure follows the following steps:
- Publishing the notice of proposed forfeiture, once a week for three consecutive weeks in a general circulation newspaper
- Declaring the forfeiture in case the owner of the asset fails to file a claim against the forfeiture
Once forfeited, the asset becomes property of the United States subject to disposition as specified in the law.
The government forfeits most of the assets through administrative forfeiture since most people are stripped most or all of their assets, and are therefore unable to pursue a claim. However, an asset forfeiture attorney can work with you on a contingency basis, and are paid once you recover your assets.
You have an opportunity of contesting an administrative forfeiture by filing a petition for mitigation or remission. The petition must:
- Be in writing
- Made under oath
- Contain information such as your name, address, taxpayer I.D. number, the seizing agency, the place and date of the seizure, the identifying number of the asset, a detailed description of the asset, and an explanation (with documentary evidence) of the interest you hold to the property.
You should then submit the petition to the seizing agency within thirty days since the last publication of the notice of proposed forfeiture. The seizing agency will evaluate the petition and prepare a report of the investigation before forwarding the report and your petition to the ruling official.
The ruling official then reviews the report and your petition and decides whether to deny or grant the petition.
If denied, the official will notify you in writing with the reasons for the denial and advise you to request a reconsideration.
If accepted, the official will also send the written decision and share a copy with an asset custodian, such as the US Marshal Service. He or she will also include details on how you can recover the seized assets.
The first step in forfeiture is usually the seizure of the asset. Once the forfeiture is complete, the disposition process begins. Disposition is the process whereby the forfeited assets are distributed to various parties as stipulated in the law.
The Civil Asset Forfeiture Reform Act of 2000 gives authority to the Department of Justice to distribute the assets forfeited to victims and agencies involved in the recovery of those assets.
Victims of the crime are compensated through the Victim Asset Recovery program. The program consists of professionals such as auditors, lawyers, accountants, and analysts who work through complex cases to ensure fair distribution of recovered assets to the victims of the crime.
Asset Forfeiture in California
States also have the authority to forfeit property if it is involved in or used to facilitate a crime. The state laws for asset forfeiture differ from those at the federal level, as do the procedures followed.
Some of the assets that are subject to forfeiture in California include:
- Weapons used in committing assault
- Computer and communication devices
- Vehicles used in the commission of a crime
- Machinery and equipment used to facilitate a crime
- Illegal drugs
- Buildings used for the commission of illegal activities or related offenses
- Proceeds of criminal activity
Unlike in federal forfeiture, the state government must file a claim against the property. The state government usually forfeits assets in relation to drug crimes and organized crimes, unlike federal asset forfeiture, which is much broader.
Asset forfeiture in relation to organized crime can only happen after a conviction for criminal activity. The government must prove that the defendant committed two or more related criminal activities for financial gain.
Asset forfeiture in relation to organized crime is filing a petition with the court. The prosecution must then inform anyone with interest in the assets about the forfeiture.
Finally, the prosecution will file a notice in the local paper. As in federal asset forfeiture, any person with an ownership interest in the property must challenge the forfeiture within thirty days of the notice of forfeiture.
Once you challenge the forfeiture, the court will conduct a hearing to determine whether the forfeiture should proceed. The prosecution usually has the burden of proof to show that the property is beyond a reasonable doubt, subject to forfeiture.
California also forfeits assets in relation to drug crimes. Violating state laws regarding drug crimes will often lead to asset forfeiture, not to mention criminal proceedings.
Before the government can forfeit your assets for a drug crime, it must first secure a conviction for the underlying criminal behavior. However, it might still seize your property before the conviction. Most seizures happen during an arrest.
Some of the properties the government can forfeit include money or securities whose worth does not exceed $40,000, real estate, boats, vehicles, or airplanes.
The government can proceed to forfeit the property without securing a conviction first if you intentionally fail to appear for your case (for the underlying drug offense). In this case, the government will have to prove that the property is subject to forfeiture.
The government does not need to secure a conviction if the value of cash or securities in question exceeds $40,000. However, the government will have to prove by a preponderance of the evidence that the money was either from or for an illicit drug transaction.
The government usually forfeits assets related to drug offenses through one of three procedures, including:
- Summary forfeiture where the government forfeits some schedule I drugs such as marijuana, ecstasy, heroin, peyote, and LSD without following any procedures. The government, however, must give back forfeited marijuana if you had legal possession of medical marijuana.
- Administrative forfeiture deals with personal property other than real estate, where the value of the property is less than $25,000. In such a case, the seizing agency must provide public notice before it can forfeit the property. The notice will include a description of the asset, its appraised value, the date, location, and justifications for the seizure and instruction on how to challenge the seizure. The challenge must be made within thirty days to prevent the forfeiture of the property. If a challenge is filed, the case will be settled through a judicial procedure.
- Judicial procedures are used in cases where a person challenges an administrative forfeiture, or the value of the goods is more than $25,000. The judicial procedure is usually a civil trial in which the prosecution has to prove that the property was used in committing a crime, and the owner knew and agreed to the use of the property.
For a long time, California had loopholes in her asset forfeiture laws, which allowed law enforcement officials to transfer forfeiture to federal bodies to facilitate a forfeiture. What would happen is the seizing agency would choose to pass the forfeiture to the feds. The federal government would transfer 80% of the forfeited assets to the state or local governments.
Since the cost of fighting the U.S. government is expensive, most people would lose their seized property even if they had no wrongdoing in the first place.
SB 443 resolves this issue by adding restrictions on equitable sharing practices. Therefore, a law enforcement agency cannot bypass the law by handing over the forfeiture to the federal government.
Federal and state asset forfeiture have key differences in the way the proceedings are handled. California has strict asset forfeiture laws that seek to protect Californians against malicious asset forfeiture, which is good news to all law-abiding citizens whose actions such as merely carrying money on your person could lead to forfeiture.
Federal forfeiture also has a wide coverage of offenses that could lead to forfeiture. California mainly focuses on drug crimes and organized crimes, unlike the federal government, which focuses on wrongs such as tax evasion, and fraud.
Find an Asset Forfeiture Attorney Near Me
Understanding the difference between federal and state asset forfeiture can set you on the right path in taking action to protect your assets. As mentioned earlier, the government must adhere to the set regulations to ensure that they do not violate your constitutional rights. These regulations include the jurisdiction and the applicable type of forfeiture.
Although these laws exist, some law enforcement officials take advantage of loopholes to exploit these laws and benefit themselves. You will typically receive notice of forfeiture, and you must act quickly once you do. The first step is to contact a defense attorney so that you can protect your rights and assets.
We at Asset Forfeiture Attorney understand the scare of losing your property through asset forfeiture. We, therefore, help you, on a contingency basis, to fight the forfeiture and recover your assets. We have a proven record with more than 80% ending in the recovery of our client's assets. Schedule a free consultation at 888-571-5590 today.