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Forfeiture - The Distinction Between Criminal And Civil Forfeiture

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Modern forfeiture law is entirely statutory, and the precise practices permitted depend on each enactment. Nevertheless there are broad patterns that allow a general description of how forfeiture laws operate. The central, defining characteristic is whether a statute permits criminal or civil forfeiture. Although both criminal and civil forfeiture laws are powerful weapons in the hands of law enforcement, these two types of forfeiture function in fundamentally different ways.

Criminal forfeiture is an in personam proceeding, that is, an action taken against the individual as part of a criminal case. A prosecutor triggers a criminal forfeiture by including within an indictment a forfeiture count describing the property to be confiscated. To suffer the penalty of forfeiture, the defendant must first be found guilty of the underlying offense, such as drug trafficking or money laundering. In the underlying criminal proceeding, the defendant enjoys all of the rights of the criminally accused such as right to counsel and a presumption of innocence. The criminal forfeiture is, however, an element of the defendant's sentence, not the underlying offense. It is thus an additional punishment imposed on the defendant, over and above a fine or imprisonment. Its closest ancestor is the English forfeiture of estate for felonious behavior or treason.

Upon a finding of forfeiture, the court enters an order authorizing seizure of the identified property. The property may already be in government hands if, after a hearing, the prosecutor convinced the court that there was a substantial likelihood that the defendant would be convicted and that there was an immediate need to protect the property. Under most statutes, property subject to criminal forfeiture includes the defendant's interest in any proceeds from the criminal violation and any property, such as cars, houses, or tools, used or intended to be used to commit or facilitate the violation. Under such expansive terms, criminal forfeiture can reach a wide range of property, and it may be valued far in excess of any fine authorized for the underlying crime. Almost all criminal forfeiture statutes also permit the government to confiscate the defendant's interest in other property as substitute assets if the forfeitable property was hidden, transferred, commingled, or diminished in value.

Criminal forfeiture affects only the defendant's interest in the tainted property and not the property itself. Third parties having a claim against the property, such as joint tenants or persons having security interests, do not lose their interests by virtue of a criminal forfeiture order. But the government may pursue forfeitable property in the hands of third parties, and third parties face significant hurdles in protecting their interests. First they face dissipation of their interests as they generally may not press their claims until the criminal proceeding is concluded. Second, after a court has entered an order of forfeiture and notice is given, third parties must act swiftly and convincingly. Typically they have thirty days to file their claims and, at a later hearing, must prove, by a preponderance of evidence, that they have a superior title in the property or are bona fide purchasers.

Although significant forfeitures have occurred in connection with criminal actions, the most explosive forfeiture activity has come in the area of civil forfeiture. This is not surprising since the procedures permitting such forfeitures are congenial to the government, and since civil forfeiture does not depend on the government meeting the arduous task of proving someone guilty of a crime. Under federal law and most state civil forfeiture laws, the government may seize property from anyone once it has probable cause to believe that the property is contraband, proceeds of a crime, or used or intended to be used in the commission of a crime. Probable cause is the weakest of all evidentiary burdens requiring only a fair probability that property is forfeitable.

Civil forfeiture is an action in rem, that is, a proceeding directed against "guilty" property and not against any person having an interest in the property. Civil forfeiture is a direct descendant of revenue and customs laws and, as a result, many federal forfeiture rules of practice are based on admiralty and customs procedures. In most cases, civil forfeiture laws permit the government to seize property without giving the owner notice or any prior opportunity to object. Once the property owner or claimant is notified that a seizure has occurred, he or she may contest the action, but they must do so speedily. Typically the property owner must file a claim within twenty days and post a bond. At a hearing on the matter, once the government discharges its small burden of proving probable cause to forfeit, the burden shifts to the property owner to show, by a preponderance of the evidence, that the property is "innocent."

Because the forfeiture proceeding is a civil proceeding, the property owner enjoys none of the procedural protections ordinarily associated with a criminal trial, such as appointed counsel or a presumption of innocence. To escape a civil forfeiture, a property owner must prove that there was no underlying offense, or that, if there was an offense, the property was not connected to it. Owners may not defend by saying that they were not involved in any criminal activity or did not know that the property was used for criminal purposes. Many federal and state statutes soften this harsh limitation by recognizing a so-called innocent owner defense. Property owners may avoid a forfeiture order if they prove they had no knowledge of any wrongdoing and did all that was reasonably possible to prevent wrongdoing. However, since it is virtually impossible for property owners to prove that they could not have been more cautious, the innocent owner defense has proved to be difficult to claim. For example, parents who lost their car because their son used it to transport drugs were denied the innocent owner defense because, although knowing absolutely nothing of the illegal activity, they knew the son had a minor criminal record.

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