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Federal Criminal and Civil Forfeiture Procedure In White Collar Criminal Cases

In Bennis v. Michigan, 516 U.S. 442 (1996), the United States Supreme Court identified three (3) categories of property subject to forfeiture; (1) contraband, (2) proceeds from illegal activity and (3) tools or instrumentalities used in the commission of a crime. There are three (3) different types of forfeitures the Government can use to seize property: Administrative Forfeiture, Criminal Forfeiture and Civil Forfeiture.

Administrative forfeiture

Federal Administrative Forfeiture is an in rem action. The Tariff Act of 1930, 19 U.S.C. § 1607, permits the federal seizing agency to forfeit the property without judicial involvement. Property that can be administratively forfeited includes: merchandise that is prohibited from importation; a conveyance used to import, transport, or store a controlled substance; a monetary instrument; or other property that does not exceed $500,000 in value. The United States Department of Justice, Types of Federal Forfeiture, http://www.supremecourt.ohio.gov/ROD/manual.pdf, (updated January 2013).

Written notice of an administrative forfeiture action must be sent to all interested parties as soon as practicable but no later than sixty (60) days after the date of the seizure. 18 U.S.C. § 983(a)(1).

Criminal Forfeiture

Federal Criminal Forfeiture is an in personam action brought as part of a criminal prosecution of individual and requires that the Government include in the indictment the property that was used and/or derived from the alleged criminal activity. Upon a jury determination that the property is forfeitable, the court will issue a final forfeiture order.

Following a guilty verdict or plea, the court must determine what property is subject to forfeiture and whether the government has established the requisite nexus between the property and the convicted offense. Fed. R. Crim. P. 32(b)(1)(A). There are no statutory time limits on filing an indictment following the seizure of property.

Civil Forfeiture

Federal Civil Forfeiture is an in rem action against the individual's property and/or assets and not against the individual. In a civil forfeiture the individual does not have to be arrested or convicted of a crime in order for their property to be seized.

The government is required to prove by preponderance of the evidence that the property was derived from or was used to commit a crime. There is no requirement of notice or filing prior to seizing the asset. Civil forfeiture actions can be brought at any time prior to or after criminal charges are filed, or even if criminal charges are never filed.

Once the U.S. Attorney's Office receives a referral from a seizing agency of a seized asset case, they have ninety (90) days to file a civil forfeiture case or include the seized asset in a criminal indictment and name it for criminal forfeiture. 18 U.S.C. § 983(a)(3)(A). If a civil case is not filed within the 90 days, the Government is forever barred from filing a civil forfeiture case. 18 U.S.C. § 983(a)(3)(B).

The law allows the Government or the claimant to obtain a stay of the civil forfeiture case while a criminal investigation is pending.

Claimants have thirty five (35) days from the date of notification to submit a verified claim indicating the basis for asserting an interest in the property. A verified claim of an individual asserting an interest in the forfeiture property must include:

1. Identify the specific property claimed;

2. Identify the claimant and their interest in the property;

3. Signed by the claimant under penalty of perjury;

4. And be served on the Government.

A claimant who fails to file a verified claim has no standing to contest a forfeiture action.

A claimant must file an answer to the complaint within twenty one (21) days after filing the verified claim and the case proceeds in U.S. District Court following the federal rules of civil procedure.

A civil forfeiture claimant may take one (1) of the two (2) following defense approaches:

Nexus to the Crime - there must be a substantial connection between the offense prompting the forfeiture and the property forfeited. The Government must prove that the property's connection to the criminal offense was "substantial" and not merely incidental or fortuitous.

Innocent Owner Status-If the interest was acquired prior to the activity underlying the forfeiture, an innocent owner is an someone who did not know of the conduct giving rise to forfeiture or who, upon learning of such conduct, did all that reasonably could be expected under the circumstances to terminate such use of the property. The claimant has the burden to show innocent ownership by a preponderance of the evidence.

If you or someone who cares about you has received a Federal seizure of assets and/or property notice call attorney Michael C. Hennenberg to schedule a consultation.

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