Asset Forfeiture

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ASSET FORFEITURE

Asset forfeiture is the involuntary relinquishment of money or property without compensation as a consequence of a commission of a crime. Forfeiture laws authorize prosecutors to file civil lawsuits asking a court for permission to take property from a criminal defendant that was either used in the crime or was the fruit of a criminal act. Since the 1970s, federal asset forfeiture laws have been used against drug dealers. By 2000, however, there were many in Congress and the legal community who urged reform of these forfeiture laws, as they have been often resulted in harsh and unfair outcomes for innocent third parties.

In 1970, Congress enacted the Comprehensive Drug Abuse Prevention and Control Act, also known as the Forfeiture Act. The Forfeiture Act authorized federal prosecutors to bring civil forfeiture actions against certain properties owned by persons convicted of federal drug crimes. The act was not used much because it limited forfeiture to the property of persons convicted of participating in continuing criminal enterprises. In 1978, Congress amended the law to allow forfeiture of anything of value used or intended to be used by a person to purchase illegal drugs. This expanded the act to allow the forfeiture of all proceeds and property traceable to the purchase of illegal drugs. The amended law authorized the federal government to proceed in rem against property. In rem forfeiture proceedings are actions taken against the property, not the owner of the property. This allows the government to remove property from persons suspected of a crime without ever charging them with a crime.

Congress amended the Forfeiture Act again in 1984 as part of the Comprehensive Crime Control Act. The amendment authorized the federal government to pursue in rem forfeitures of land and buildings. Federal authorities may seize any real property purchased, used, or intended to be used to facilitate narcotics trafficking. Although Congress appears to have intended the law to apply only to drug manufacturing or storage facilities, federal courts have interpreted the law to allow the seizure of any real property, including fraternity houses, hotels, ranches, and private residences. In addition, courts have allowed forfeitures regardless of whether the property was used to store or manufacture drugs.

The process of seizing property under the Forfeiture Act is straightforward. Forfeiture begins with the constructive or actual seizure of property after a warrant has been issued by a federal district court. This warrant must be based on the reasonable belief that the property was used in a crime subject to forfeiture, but this belief can be based on hearsay and circumstantial evidence. After the property is seized, the court holds it until the case is resolved.

In a civil forfeiture proceeding, the government must prove that the property is subject to forfeiture because there is a substantial connection between the property and the crime. If the defendant fails to rebut this proof with sufficient evidence, the government is allowed to keep the property. At the trial, the government's standard of proof is by a preponderance of the evidence, a lesser burden of proof than the criminal standard of a reasonable doubt.

The Forfeiture Act permits law enforcement agencies to receive a part of the proceeds from property forfeiture. Prior to the 1984 amendments, all revenue derived from a federal asset forfeiture was deposited into the U.S. Treasury general fund. The 1984 law allowed federal law enforcement agencies to keep all proceeds from confiscated property and to use the proceeds to support asset-seizure programs. State and local law enforcement agencies that turned over their seizure cases to federal authorities received up to 80 percent of the profit after the property had been sold. Many legal scholars criticized this feature of the law, arguing that it detracts from the traditional police function of fighting crime and created incentives for police to pursue forfeitures that lacked probable cause. Proponents of this budgetary scheme argue that drug activity is the source of much violent crime and that the proceeds benefit community programs and increase the capacity to fight violent crime.

Most states also have forfeiture laws upon conviction of certain crimes. These laws often mandate forfeiture of prohibited drugs, property used to contain, protect, or secure prohibited drugs, fire-arms, and vehicles. In contrast to the federal law, many states require that profits from the sale of forfeited property be deposited in the state's general treasury fund.

Defendants have employed several defenses to forfeiture and some have proved successful. If notice and a hearing before a court do not precede the initial seizure, a defendant may argue that forfeiture violates the Due Process Clause of the Fifth and Fourteenth Amendments. If a forfeiture is disproportionate to the offense that gave rise to it, it may be found to violate the Eighth Amendment's Excessive Fines Clause.

Congress has also responded to criticism by enacting an "innocent owner" defense in civil drug forfeiture cases. These are cases where forfeiture is sought without prosecution of the owner. A defendant in a civil forfeiture case may invoke this defense if the property was connected with illegal drugs without the owner's knowledge or consent. For example, if the owner of an automobile innocently allows another person to borrow the car and that person commits a drug offense in the car, the owner can offer this defense and retain the car.

As state and federal prosecutors intensified their use of asset forfeiture laws, public grew. By the early 1990s, the federal government was prosecuting only 20 percent of the individuals from whom they seized property through forfeiture. According to Department of Justice statistics, over 28,000 properties were seized in 1996, with a combined value of $1.264 billion. Critics have argued that the government routinely violates the Fifth Amendment's ban against taking property without due process of law, largely because it sees forfeiture as an easy way to collect funds. Supporters have countered that forfeiture has helped in the war on drugs by stripping criminals of their resources.

Congress finally responded by passing the Civil Asset Forfeiture Reform Act of 2000. It requires federal prosecutors to show a substantial connection between the property and the crime. In addition, it allows the property to be released by the district court pending final disposition of the case when the owner can demonstrate that possession by the government causes a hardship to the owner. Moreover, the law allows owners of property to sue the government for any damage to the property if the victim of the seizure prevails in a civil forfeiture action.