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Forfeiture And Asset Recovery

What is Forfeiture?

Law enforcement agents on the federal and state level have increasingly used forfeiture statutes to obtain assets of an individual or organization in an overreaching manner. Forfeiture, the legal process on which the government relies to take assets of an individual or organization, is not a new concept and the principles behind forfeiture law have evolved from its early onset in Greek and Roman law. These principles were expanded and codified in Britain’s Navigation Act of 1651, which banned vessels outside of the Commonwealth to participate in trade between Asia, Africa or America and the Commonwealth. Violation of this Act allowed Commonwealth to seize the offending non-state vessel, thus obtaining full legal ownership of the seized property.

In the United States, forfeiture laws were expanded during the Prohibition era and again in the 1970’s to curtail gang activity and any illegal proceeds. (See Racketeer Influence and Corrupt Organization Act of 1970, otherwise known as “RICO” and codified in 18 U.S.C. ch. 96 and 18 U.S.C. 1961-1968, and the Comprehensive Drug Abuse Prevention and Control Act of 1970, 21 U.S.C. ch. 13) In the 2018 fiscal year alone, the Department of Justice stated that over 45,855 items were seized by their law enforcement partners. Many of the items seized, including money, were in excess of one million dollars.

There are many critical deadlines that must be met when contesting an illegal seizure of your property. These deadlines will vary depending on the agent who sent the notice, i.e., a federal or state agent, and the type of forfeiture (more thoroughly discussed below). Have you received notice that property you own is subject to seizure? Urban Thier & Federer can assist you in navigating this complex and time sensitive field.

Why Are My Assets Being Seized When I Haven’t Been Arrested or Convicted? A Brief Overview of Civil Forfeiture.

It is a common misconception that you can only have your property seized if you have been convicted of a crime. How can personal property be seized without a personal nexus (connection) with the illegal action? An illustration may prove to be helpful.

An individual (Steve) lends his car to one of his classmates (Jill) during a study session in the library. Jill told Steve that she was using the car for the sole purpose of buying a sandwich and stated she would return to the library immediately after. Unbeknownst to Steve, Jill conducted multiple drug transactions from his vehicle.

During the first drug transaction, an undercover FBI Agent recognized Jill from previous encounters and followed her to the subsequent transactions. After seeing her last customer, Jill noticed it was getting late and she raced back to the library to return the vehicle before Steve became suspicious. In doing so, Jill ran through two stops signs, almost hit an elderly lady and was traveling over the speed limit.

The FBI Agent pulled over Jill and smelled the odor of marijuana emanating from the vehicle. A search incident to arrest revealed one pound of marijuana, $2,000 in cash and drug paraphernalia. Jill was arrested and Steve’s vehicle was seized.

In this situation, the FBI Agent is a federal government actor who seized the vehicle under the theory of civil forfeiture. Civil forfeiture is an action against the actual property (in rem) and not the individual (inpersonam) owning the property. This does not require any criminal conviction as prerequisite to the seizure.

Steve, who was unaware of any illegal activity involving his vehicle and was not arrested, has no nexus between the criminal act and Jill’s arrest beyond the use of his vehicle. Does Steve have any defenses?

The Innocent Owner Defense, codified in 18 U.S.C. § 983(d), generally states that an innocent owner’s interest shall not be forfeited under any civil forfeiture statute if the owner was unaware of the illegal use of the property or, if aware of the illegal use of property, took reasonable steps to prevent the illegal use of the property. Other legal defenses may exist depending on the facts of your individual case and if the matter was brought via state law. Urban Thier & Federer can help identify any defenses that may be inherent in your claim.

Are There Other Ways My Assets Can Be Seized?

Under the federal laws of the United States, there are three different ways an agent of the government may proceed in obtaining forfeited property: 1) Civil Forfeiture (discussed above), 2) Administrative Forfeiture, and 3) Criminal Forfeiture.

What is Administrative Forfeiture?

Administrative forfeiture occurs when an agent seizes property via warrant or probable cause that the property seized was used in, or was the proceeds of, a criminal offense. When this occurs by a federal agent, notice of the seizure must be provided within sixty days to the individual who had his property seized. Subsequently, the person who received the notice must respond within thirty days to either contest or admit to the seizure. Simply ignoring the notice is the equivalent of relinquishing your rights to the property. Issues regarding notice and response may vary if brought under state law.

If you have recently received a notice of seizure, we encourage you to contact Urban Thier & Federer for a more detailed discussion.

What is Criminal Forfeiture?

Criminal forfeiture is an action against the person (in personam) brought via federal or state prosecution. As such, criminal forfeiture requires a criminal conviction as a prerequisite to the seizure of property. However, this does not mean the government agent has to return the forfeited property until the conviction is entered, because a prosecutor can elect to have protective orders addressed prior to disposition of the criminal case.

In a federal criminal prosecution, the following elements must be established beyond a reasonable doubt before one’s property can be seized: 1) a criminal conviction involving an enumerated crime subject to federal forfeiture laws (examples include money laundering, conspiracy and tax evasion), 2) identification of the property, and 3) that the property subject to forfeiture was involved in a criminal activity. Property is considered to be involved in criminal activity if it is the proceeds of the criminal activity or was used to further criminal activity. Please contact Urban Thier & Federer for a more detailed discussion regarding any federal or state criminal forfeiture claim being brought against you.

My Business Partner and I Were Convicted of Federal Crimes Subject to Forfeiture, What Can I Do?

For decades the government has overreached their statutory authority in seizing assets. However, recent Supreme Court cases have attempted to curtail their ability to do so.

The Honeycutt v. United States,137 S. Ct. 1626 (2017), Supreme Court case stands for the proposition that in personam criminal forfeiture is limited to the property the defendant himself actually acquired as a result of the crime. In this matter, Terry Honeycutt worked for his brother, Tony Honneycutt’s hardware store. Both were indicted for federal crimes, including production of methamphetamine. The government sought judgments against each brother in excess of $269,000, in which the co-defendants were held to be jointly and severable liable (meaning the government can collect the entire judgment from either Terry or Tony to satisfy the obligation). Tony pleaded guilty and agreed to forfeit $200,000.

Since Terry had no ownership in his brother’s store and did not personally benefit from the illegal sales, the Court determined he was not liable to have any of his assets forfeited to satisfy the monetary obligation. This decision suggests that a defendant and third party may recover improperly forfeited assets by forcing the government to establish a sufficient link between the accused’s personal benefit and the illegal act. Previously, the accused had the burden of establishing that there was not a link between the illegal act and funds seized. While the ramifications of this case are still pending, it is crucial to have an experienced attorney on your claim to present and litigate this new government hurdle.

In Tumbs v. Indiana, 586 U.S. _____ (2019), the defendant pleaded guilty in state court to dealing in a controlled substance and conspiracy to commit theft. The sentence required him to pay $1,203 in fines and costs and he was subject to house arrest and five years of probation. However, at the time of the arrest, the police seized the defendant’s $42,000 vehicle he recently purchased. The United States Supreme Court held the seizure was grossly disproportionate to the gravity of the defendant’s offense and was unconstitutional under the Eighth Amendment’s Excessive Fines Clause. This decision was rendered on February 20, 2019, and will inevitably bring novel ways to fight the government’s excessive forfeiture overreach.

How Can Urban Thier & Federer Assist Me?

Given the arsenal of tools government agents have in seizing your assets, it is crucial to have an experienced attorney guiding you through the forfeiture process. But you may ask, “How can I pay an attorney when my assets are frozen?” Many cases are taken on a contingency basis, meaning you do not owe anything upfront and all fees and costs are recovered through an agreed-upon percentage of the monetary amount recovered.

Our team of lawyers and support staff at Urban Thier & Federer have ample experience navigating both state and federal court. We recommend you immediately consult an attorney following seizure of your personal property and we would be honored if you would contact Urban Thier & Federer when contesting any forfeiture claim.

“This content is for informational purposes only and does not constitute legal advice or establish an attorney-client relationship.”