Asset forfeiture

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Asset forfeiture or asset seizure is a form of confiscation of assets by the authorities. In the United States, it is a type of criminal-justice financial obligation. It typically applies to the alleged proceeds or instruments of crime. This applies, but is not limited, to terrorist activities, drug-related crimes, and other criminal and even civil offenses. Some jurisdictions specifically use the term "confiscation" instead of forfeiture. The alleged purpose of asset forfeiture is to disrupt criminal activity by confiscating assets that potentially could have been beneficial to the individual or organization.

Contents

Civil and criminal law

Legal systems distinguish between criminal and civil proceedings. Criminal prosecutions regulate crimes against society as a whole or against the government. Penalties for conviction of a violation of a criminal law typically include being sent to prison, jail or some other form of incarceration. Civil litigation involves disputes either between individuals or individuals and the government. At the conclusion of civil litigation one side can be ordered to pay money [damages] to the other side. Courts also have the authority to order one party to do or not do a specific thing in order to resolve civil disputes. Because of the potential for a loss of liberty, defendants in a criminal case will be provided an attorney at public expense if they are unable to pay for their own lawyer. The same is generally not true in civil cases although there are exceptions. In order for an individual to be found guilty of a crime the government has to provide proof beyond a reasonable doubt of the defendant's guilt. There are several standards of proof in a civil case, the most common is a preponderance of the evidence which is described as anything over fifty percent. [1]

Civil asset forfeiture has been harshly criticized by civil liberties advocates for its greatly reduced standards for conviction, reverse onus, and financial conflicts of interests arising when the law enforcement agencies who decide whether or not to seize assets stand to keep those assets for themselves. [2] [3] [4] [5]

Canada

Part XII.2 of the Criminal Code, a federal statute, provides a national forfeiture régime for property arising from the commission of a designated offence (i.e. most indictable offences), subsequent to conviction. Provision is also made for the use of restraint and management orders to govern such property during the course of a criminal proceeding. [6]

All provinces and territories except Newfoundland and Labrador, Prince Edward Island and Yukon Territory, have also enacted statutes to provide for similar civil forfeiture régimes.[ citation needed ] [7] [8] These generally provide, on a balance of probabilities basis, for the seizure of property:

The Supreme Court of Canada has upheld civil forfeiture laws as a valid exercise of the provincial government power over property and civil rights. The extent to which the Charter of Rights and Freedoms applies to civil forfeiture statutes is still under dispute. To the extent that such laws are applied for a "punitive" purpose, there is case law to suggest that the Charter applies. [10] In cases where evidence has been obtained illegally, courts in Alberta [11] and British Columbia [12] have excluded such evidence.

European Union

In April 2014, the European Parliament and the Council of the European Union enacted Directive 2014/42/EU on the freezing and confiscation of proceeds of crime in the European Union. [13] The directive allows the seizure and confiscation of property without a criminal conviction only under very specific circumstances. [14] [15] [16] [17] [18] Article 4 states:

  1. Member States shall take the necessary measures to enable the confiscation, either in whole or in part, of instrumentalities and proceeds or property the value of which corresponds to such instrumentalities or proceeds, subject to a final conviction for a criminal offence, which may also result from proceedings in absentia.
  2. Where confiscation on the basis of paragraph 1 is not possible, at least where such impossibility is the result of illness or absconding of the suspected or accused person, Member States shall take the necessary measures to enable the confiscation of instrumentalities and proceeds in cases where criminal proceedings have been initiated regarding a criminal offence which is liable to give rise, directly or indirectly, to economic benefit, and such proceedings could have led to a criminal conviction if the suspected or accused person had been able to stand trial.

United Kingdom

In the UK, asset forfeiture proceedings are initiated under the Proceeds of Crime Act 2002. These fall into various types. Firstly there are confiscation proceedings. A confiscation order is a court order made in the Crown Court requiring a convicted defendant to pay a specified amount of money to the state by a specified date. Secondly, there are cash forfeiture proceedings, which take place (in England and Wales) in a magistrates' court with a right of appeal to the Crown Court, having been brought by either the police or customs. Thirdly, there are civil recovery proceedings that are brought by the National Crime Agency (NCA). Neither cash forfeiture proceedings nor proceedings for a civil recovery order require a prior criminal conviction.

In Scotland, confiscation proceedings are initiated by the procurator fiscal or Lord Advocate through a sheriff court or High Court of Justiciary. Cash forfeiture and civil recovery are brought by the Civil Recovery Unit of the Scottish Government in a sheriff court, with appeals to the Court of Session.

United Nations Convention against Corruption

To facilitate international cooperation in confiscation, the United Nations Convention against Corruption encourages state parties to consider taking the necessary measures to allow confiscation of the proceeds of corruption without a criminal conviction in cases in which the offender cannot be prosecuted by reason of death, flight or absence or in other appropriate cases. [19] [20]

United States

There are two types of forfeiture (confiscation) cases, criminal and civil. Approximately half of all forfeiture cases practiced today[ when? ] are civil, although many of those are filed in parallel to a related criminal case. [ citation needed ] In civil forfeiture cases, the US government sues the item of property, not the person; the owner is effectively a third-party claimant. The burden is on the government to establish that the property is subject to forfeiture by a preponderance of the evidence. If it is successful, the owner may yet prevail by establishing an "innocent owner" defense.

Federal civil forfeiture cases usually start with a seizure of property followed by the mailing of a notice of seizure from the seizing agency (generally the DEA or FBI) to the owner. The owner then has 35 days to file a claim with the seizing agency. The owner must file this claim to later protect his property in court. Once the claim is filed with the agency, the U.S. Attorney has 90 days to review the claim and to file a civil complaint in U.S. District Court. The owner then has 35 days to file a judicial claim in court asserting his ownership interest. Within 21 days of filing the judicial claim, the owner must also file an answer denying the allegations in the complaint. Once done, the forfeiture case is fully litigated in court. [21]

In civil cases, the owner need not be judged guilty of any crime; it is possible for the government to prevail by proving that someone other than the owner used the property to commit a crime (this claim seems outdated and as such would be contradicted by the "innocent owner" defense).[ citation needed ] In contrast, criminal forfeiture is usually carried out in a sentence following a conviction and is a punitive act against the offender.

The United States Marshals Service is responsible for managing and disposing of properties seized and forfeited by Department of Justice agencies. It currently[ when? ] manages around $2.4 billion worth of property. The United States Treasury Department is responsible for managing and disposing of properties seized by Treasury agencies. The goal of both programs is to maximize the net return from seized property by selling at auctions and to the private sector and then using the property and proceeds to repay victims of crime and, if any funds remain after compensating victims, for law enforcement purposes.[ citation needed ]

History

Congress has incrementally expanded the government's authority to disrupt and dismantle criminal enterprises and their money-laundering activities since the early 1970s. They have done this by enacting various anti-money-laundering and forfeiture laws such as the RICO Act of 1970 and the USA Patriot Act of 2001. The concepts of asset forfeiture goes back thousands of years and has been recorded throughout history on many occasions. [22]

In 2015 a number of criminal justice reformers, including Koch family foundations and the ACLU, announced plans to reduce asset forfeiture in the United States due to the disproportionate penalty it places on low-income alleged wrongdoers. The forfeiture of private property often results in the deprivation of the majority of a person's wealth. [23]

Forfeiture of terrorist finances

It is difficult for authorities to track, confiscate, and disrupt terrorist-organization finances because they may come from a variety of sources—such as other countries, supporting sympathizers, crime, or legal businesses. Terrorist groups can profit from many crimes—such as black mail, robbery, extortion, fraud, drug trafficking, etc. If discovered and proven terrorist assets, authorities can confiscate property to disrupt terrorist activities. Understanding what constitutes 'terrorist property' is important, because these offenses are widely defined by the 2000 Act as:

  1. Property or money that is likely to be used for the purposes of terrorism (including any resources of an organization)
  2. Proceeds of the commission of acts of terrorism
  3. Proceeds of acts actually carried out for the purposes of terrorism. [24]

The 2000 Act brought a new system for the forfeiture of terrorist cash. This was modeled on the UK's drug-trafficking cash-seizure process and allowed for the seizure of cash for 48 hours by a constable, customs officer or immigration officer if reasonable grounds were found for suspecting that it was intended to be used for terrorism or was terrorist property. An officer who seized the assets or cash could apply to a magistrates' court[ clarification needed ] for an order authorizing its continued detention to give time for further investigation into where it came from. If the magistrates' court is generally satisfied on the balance of probabilities that the cash was intended to be used for the purposes of terrorism or was terrorist property, then it could make a forfeiture order. [24]

Use of forfeited assets

The assets that are forfeited for criminal and civil offenses are used "to put more cops on the street", according to former United States President George H. W. Bush. [25] [ failed verification ] The assets are dispersed among the law enforcement community for things such as paying the attorneys involved in the forfeiture case, police vehicles, meth-lab clean up, and other equipment and furniture. [22]

Notable forfeitures

See also

Related Research Articles

Confiscation is a legal form of seizure by a government or other public authority. The word is also used, popularly, of spoliation under legal forms, or of any seizure of property as punishment or in enforcement of the law.

<span class="mw-page-title-main">Assets Recovery Agency</span> Former non-ministerial government department in the United Kingdom

The Assets Recovery Agency (ARA) was a non-ministerial government department in the United Kingdom. It was established under the Proceeds of Crime Act 2002 (POCA) to reduce crime by confiscating the proceeds of any crime. It was granted a new power of civil recovery through the High Court, and could also take over the powers of the HM Revenue and Customs (HMRC) to levy tax without identifying a source for taxed income.

<span class="mw-page-title-main">Criminal Assets Bureau</span> Irish law enforcement agency

The Criminal Assets Bureau (CAB) is a law enforcement agency in Ireland. The CAB was established with powers to focus on the illegally acquired assets of criminals involved in serious crime. The aims of the CAB are to identify the criminally acquired assets of persons and to take the appropriate action to deny such people these assets. This action is taken particularly through the application of the Proceeds of Crime Act 1996. The CAB was established as a body corporate with perpetual succession in 1996 and is founded on the multi-agency concept, drawing together law enforcement officers, tax officials, social welfare officials as well as other specialist officers including legal officers, forensic analysts and financial analysts. This multi-agency concept is regarded by some as the model for other European jurisdictions.

In rem jurisdiction is a legal term describing the power a court may exercise over property or a "status" against a person over whom the court does not have in personam jurisdiction. Jurisdiction in rem assumes the property or status is the primary object of the action, rather than personal liabilities not necessarily associated with the property.

An amercement is a financial penalty in English law, common during the Middle Ages, imposed either by the court or by peers. The noun "amercement" lately derives from the verb to amerce, thus: the king amerces his subject, who offended some law. The term is of Anglo-Norman origin, and literally means "being at the mercy of": a-merce-ment.

Civil recovery is the method in some legal systems employed to recover the proceeds of crime, instead of, or in addition to, criminal court proceedings.

<span class="mw-page-title-main">Proceeds of Crime Act 2002</span> British statute law on confiscation and money laundering

The Proceeds of Crime Act 2002 (c.29) (POCA) is an Act of the Parliament of the United Kingdom which provides for the confiscation or civil recovery of the proceeds from crime and contains the principal money laundering legislation in the UK.

<span class="mw-page-title-main">International Emergency Economic Powers Act</span> United States federal law

The International Emergency Economic Powers Act (IEEPA), Title II of Pub. L. 95–223, 91 Stat. 1626, enacted October 28, 1977, is a United States federal law authorizing the president to regulate international commerce after declaring a national emergency in response to any unusual and extraordinary threat to the United States which has its source in whole or substantial part outside the United States. The act was signed by President Jimmy Carter on December 28, 1977.

The USA PATRIOT Act was passed by the United States Congress in 2001 as a response to the September 11, 2001 attacks. It has ten titles, each containing numerous sections. Title III: International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001 is actually an act of Congress in its own right as well as being a title of the USA PATRIOT Act, and is intended to facilitate the prevention, detection and prosecution of international money laundering and the financing of terrorism. The title's sections primarily amend portions of the Money Laundering Control Act of 1986 and the Bank Secrecy Act of 1970.

<span class="mw-page-title-main">Fifth Amendment to the United States Constitution</span> 1791 amendment enumerating due process rights

The Fifth Amendment to the United States Constitution creates several constitutional rights, limiting governmental powers focusing on criminal procedures. It was ratified, along with nine other articles, in 1791 as part of the Bill of Rights.

<span class="mw-page-title-main">International asset recovery</span> Any effort by governments to repatriate the proceeds of corruption hidden in foreign jurisdictions

International asset recovery is any effort by governments to repatriate the proceeds of corruption hidden in foreign jurisdictions. Such assets may include monies in bank accounts, real estate, vehicles, arts and artifacts, and precious metals. As defined under the United Nations Convention against Corruption, asset recovery refers to recovering the proceeds of corruption, rather than broader terms such as asset confiscation or asset forfeiture which refer to recovering the proceeds or instrumentalities of crime in general.

In modern U.S. usage, forfeiture is deprivation or destruction of a right in consequence of the non-performance of some obligation or condition. It can be accidental, and therefore is distinguished from waiver: see waiver and forfeiture. In the law of England and Wales, the forfeiture rule is the rule of law which prevents a killer from inheriting the estate of a person they have unlawfully killed. The term also refers to the rule in English law under which an insured person who makes a fraudulent insurance claim loses their claim: this rule was derived from common law until the passage of the Insurance Act 2015, which "puts the common law rule of forfeiture on a statutory footing".

<span class="mw-page-title-main">Equitable sharing</span> U.S. police practice in which state and federal police share revenue from asset forfeiture

Equitable sharing refers to a United States program in which the proceeds of liquidated seized assets from asset forfeiture are shared between state and federal law enforcement authorities. The Comprehensive Crime Control Act of 1984 set up the arrangement in which state and local police can share the seizures with federal agents. The law allows state and local law enforcement to retain up to 80% of the proceeds from seizures made in collaboration with federal agencies and from seized assets turned over to the federal government that the federal government then elects to adopt.

<span class="mw-page-title-main">Krimstock hearing</span>

A Krimstock hearing is an administrative law proceeding that offers vehicle owners the opportunity to recover possession of a vehicle confiscated by the New York City Police Department (NYPD) during an arrest. Police have authority to impound vehicles used as an instrument of a crime, and later to seek permanent ownership of these vehicles in civil forfeiture actions. Such forfeiture actions, like the Krimstock administrative hearings, are entirely separate from any criminal charges the vehicle owner may face stemming from his or her arrest.

<span class="mw-page-title-main">Civil forfeiture in the United States</span> Aspect of U.S. law enforcement

In the United States, civil forfeiture is a process in which law enforcement officers take assets from people who are suspected of involvement with crime or illegal activity without necessarily charging the owners with wrongdoing. While civil procedure, as opposed to criminal procedure, generally involves a dispute between two private citizens, civil forfeiture involves a dispute between law enforcement and property such as a pile of cash or a house or a boat, such that the thing is suspected of being involved in a crime. To get back the seized property, owners must prove it was not involved in criminal activity. Sometimes it can mean a threat to seize property as well as the act of seizure itself. Civil forfeiture is not considered to be an example of a criminal justice financial obligation.

Between 2006 and 2008, in Tenaha, Texas, the Tenaha Marshal’s Office used state forfeiture regulations to seize property from nearly 200 motorists. In about 50 of the cases, suspects were charged with drug possession. But in 147 incidents, marshals seized cash, jewelry, cell phones and automobiles even though no contraband was found, and the motorist was not charged with any crime. Many of these were African-American or Latino drivers. At least 150 motorists had property seized by Tenaha marshal’s office, totaling more than US$3 million.

Luis v. United States, 578 U.S. ___ (2016), was a case in which the Supreme Court of the United States held that the Sixth Amendment to the United States Constitution prohibits the pre-trial restraint of assets needed to retain a defendant's counsel of choice when those assets have not been used in conjunction with criminal activity.

Timbs v. Indiana, 586 U.S. ___ (2019), was a United States Supreme Court case in which the Court considered whether the excessive fines clause of the Constitution's Eighth Amendment applies to state and local governments. The case covered the asset forfeiture of the petitioner's truck after the police found a small quantity of drugs within it and was convicted on non-felony possession charges.

Nebraska v. One 1970 2-Door Sedan Rambler (Gremlin) 191 Neb. 462, 215 N.W.2d 849 (1974) is a Nebraska Supreme Court civil forfeiture case. It was brought by the American state of Nebraska to seize a Rambler Gremlin on the sole grounds it was transporting illegal marijuana. The owner appealed against the forfeiture decision on the grounds of a claimed lack of due process. The court ruled 4–2 and sustained the confiscation as lawful.

Task Force KleptoCapture is a United States Department of Justice unit established in March 2022 with the goal of enforcing sanctions on Russian oligarchs in response to the Russian invasion of Ukraine.

References

  1. ↑ "Preponderance of the Evidence". Wex. Cornell Law School. Retrieved 16 December 2017.
  2. ↑ "The Forfeiture Racket". Reason.com. 26 January 2010. Retrieved 2013-06-18.
  3. ↑ "A truck in the dock". The Economist. May 27, 2010.
  4. ↑ Kevin Drum (2010-04-07). "Civil Asset Forfeiture". Mother Jones. Retrieved 2013-06-18.
  5. ↑ Osburn, Judy. "Forfeiture Endangers American Rights". FEAR. Retrieved 2013-06-18.
  6. ↑ "Criminal Code, RSC 1985, c C-46, Part XII.2" . Retrieved 2012-04-29.
  7. ↑ John Thompson (2010-05-07). "Fighting civil forfeiture". Yukon News. Retrieved 2019-05-30.
  8. ↑ Joshua Alan Krane (2010). "Forfeited: Civil Forfeiture and the Canadian Constitution" (PDF). Retrieved 2012-04-29.
  9. ↑ "Civil Forfeiture in Ontario" (PDF). Archived from the original (PDF) on 2012-05-14. Retrieved 2012-04-29.
  10. ↑ "Civil Forfeiture & the Charter – Civil Forfeiture in Canada".
  11. ↑ "Alberta (Minister of Justice) v Willis, 2015 ABQB 328 – Examination for Discovery Does Not Breach Charter Right to Silence – Civil Forfeiture in Canada".
  12. ↑ "British Columbia (Director of Civil Forfeiture) v. Huynh, 2013 BCSC 980 – Civil Forfeiture Engages "Exactly the Same Charter Principles" as Criminal Law – Civil Forfeiture in Canada".
  13. ↑ "EUR-Lex – 32014L0042 – EN – EUR-Lex". 29 April 2014.
  14. ↑ Nielsen, Nikolaj (25 February 2014). "EU to donate criminal assets to charity". EUobserver.
  15. ↑ "European Parliament Passes New EU Rules To Crack Down On Crime Profits". rttnews.com. 25 February 2014.
  16. ↑ "How seizing criminal assets could leave everyone better off – except criminals". European Parliament. 25 February 2014.
  17. ↑ "Cecilia Malmström welcomes European Parliament's vote on new EU rules to crack down on crime profits" (Press release). European Commission. 25 February 2014.
  18. ↑ "Making it easier to confiscate criminal assets EU-wide" (Press release). EPP Group. EurActiv. 25 February 2014.
  19. ↑ Proposal for a Directive of the European Parliament and of the Council on the freezing and confiscation of proceeds of crime in the European Union Archived March 3, 2014, at the Wayback Machine (COM/2012/085) at EUR-Lex
  20. ↑ United Nations Convention against Corruption § 54(1)(c)
  21. ↑ 18 United States Code 983(a) & Rule G, Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions
  22. 1 2 Chris D. Edoardo & A. D. Hopk (1 April 2001). "In Depth: Where the Money Goes: Forfeiture proceeds buy small luxuries, but no slush". Las Vegas Review–Journal. Las Vegas, Nevada. p. 27A.
  23. ↑ Hudetz, Mary (October 15, 2015). "Forfeiture reform aligns likes of billionaire Charles Koch, ACLU". The Topeka Capital Journal.
  24. 1 2 Bell, R. E. (Autumn 2003). "The Confiscation, Forfeiture and Disruption of Terrorist Finances". Journal of Money Laundering Control. 7.2: 105–125.
  25. ↑ "Judy Biggert (IL-11) Research Book" (PDF). Democratic Congressional Campaign Committee Research Department. Archived from the original (PDF) on 2015-01-09. Retrieved 2014-12-01.
  26. ↑ "Report: Ruth Madoff Agrees To Forfeit $80M". CBS News. June 28, 2009.
  27. ↑ "Lloyds TSB Bank Plc Agrees to Forfeit $350 Million in Connection with Violations of the International Emergency Economic Powers Act". U.S. Department of Justice. 2009-01-09. Retrieved 2013-06-18.
  28. ↑ "Credit Suisse Agrees to Forfeit $536 Million in Connection with Violations of the International Emergency Economic Powers Act and New York State Law" (Press release). U.S. Department of Justice. 2009-12-16. Retrieved 2013-06-18.
  29. ↑ "Barclays Bank PLC Agrees to Forfeit $298 Million in Connection with Violations of the International Emergency Economic Powers Act and the Trading with the Enemy Act" (Press release). U.S. Federal Bureau of Investigation. 18 August 2010. Archived from the original on 24 September 2010. Retrieved 2013-06-18.
  30. ↑ "Former ABN Amro Bank N.V. Agrees to Forfeit $500 Million in Connection with Conspiracy to Defraud the U.S. & with Violation of Bank Secrecy Act". Washington: Financialtaskforce.org. 2010-05-10. Archived from the original on 2010-05-23. Retrieved 2013-06-18.
  31. ↑ "Triumphant motel owner slams Carmen Ortiz". Boston Herald. 2013-08-07. Retrieved 2013-08-07.
  32. 1 2 "Texas Seizes Polygamist Warren Jeffs' Ranch". Eldorado, Texas: NBC. Associated Press. April 17, 2014. Retrieved April 18, 2014.
  33. 1 2 Carlisle, Nate (April 17, 2014). "Texas takes possession of polygamous ranch". The Salt Lake Tribune. Eldorado, Texas: MediaNews Group. Retrieved April 17, 2014.

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