Deterring Undue Enforcement by Protecting Rights of Citizens from Excessive Searches and Seizures Act of 2016

To amend title 18, United States Code, to reform certain forfeiture procedures, and for other purposes. 1. Short title This Act may be cited as the DUE PROCESS Act of 2016 Deterring Undue Enforcement by Protecting Rights of Citizens from Excessive Searches and Seizures Act of 2016 2. General rules for civil forfeiture proceedings Section 983(a) of title 18, United States Code, is amended— (1) in the subsection heading, by striking complaint complaint; initial hearing (2) in paragraph (1)— (A) in subparagraph (A)— (i) in clause (i), by striking 60 days 30 days (ii) by striking clause (ii); (iii) in clause (iii)— (I) in the matter preceding subclause (I)— (aa) by striking 60-day 30-day (bb) by striking does not file obtain obtains (II) in subclause (I), by striking 60 days 30 days (iv) in clause (iv), by striking 90 days 60 days (v) in clause (v), by striking 60 days 30 days (vi) by adding at the end the following: (vi) The notice under this subparagraph shall include an address, which shall also be widely published, at which the seizing agency can receive until 5 p.m. on any business day an interested party’s claim contesting a seizure or forfeiture. The interested party may send such a claim to that address by courier or overnight mail. For the purpose of determining compliance with any deadlines in filing such a claim, an interested party completes the filing by placing the communication making the claim in the control of an independent third party delivery service such as a courier company or the United States mail. In determining whether any legal deadline for the filing of such a claim has been met a court shall allow for the equitable tolling of the deadline in appropriate cases. (vii) The seizing agency shall make publicly available for each nonjudicial forfeiture, with respect to which a request for mitigation or remission is made, a statement of the agency’s disposition of that request, redacted if necessary, including the reasons for the decision. ; (B) in subparagraph (C)— (i) by striking 60 30 (ii) by striking which period may as necessary, (C) by adding at the end the following: (G) Any notice described in subparagraph (A) that is provided to a party shall include notice of— (i) the right of the party to request an initial hearing in accordance with paragraph (5); (ii) the right of the party to be represented by counsel at the initial hearing described in clause (i) and any civil forfeiture proceeding under a civil forfeiture statute; and (iii) the right of the party to request that the party be represented by counsel at the initial hearing described in clause (i) and any civil forfeiture proceeding under a civil forfeiture statute if the party meets the requirements described in subsection (b). ; and (D) by striking nonjudicial (3) in paragraph (2)(A), by striking nonjudicial (4) in paragraph (2)(B)— (A) by striking 35 days 65 days (B) by striking 30 days 60 days (5) so that subparagraph (A) of paragraph (3) reads as follows: (A) Not later than 90 days after a claim has been filed, the Government shall file a complaint for forfeiture in the manner set forth in the Supplemental Rules for Certain Admiralty and Maritime Claims or return the property pending the filing of a complaint, except that a court in the district in which the complaint has been filed may extend the period for filing a complaint upon agreement of the parties. ; and (6) by adding at the end the following: (5) (A) A party claiming property seized in a civil forfeiture proceeding under a civil forfeiture statute may request, not later than 30 days after the date on which a notice described in paragraph (1)(A) is received or if notice is not received, not later than 30 days after the date of final publication of notice of seizure, an initial hearing to take place before a magistrate judge in the appropriate United States district court not later than the date on which a civil forfeiture proceeding under a civil forfeiture statute relating to the seized property commences. (B) If a party makes a request under subparagraph (A), a magistrate judge shall conduct an initial hearing not later than 10 days after the date on which the request is made. (C) At the initial hearing— (i) the magistrate judge shall— (I) inform the party in easily understood terms of— (aa) the right of the party to be represented by counsel at the initial hearing and any civil forfeiture proceeding under a civil forfeiture statute; (bb) the right of the party to request that the party be represented by counsel at the initial hearing and any civil forfeiture proceeding under a civil forfeiture statute if the magistrate judge finds that the party meets the requirements described in subsection (b); (cc) sufficiently detailed facts regarding the seizure of the property if the property was seized pursuant to a warrant described in the matter preceding subparagraph (A) of section 981(b)(2); and (dd) the right of the party to challenge the lawfulness of the seizure of the property, including on the grounds that at the time the property was seized— (AA) if the property was seized pursuant to a warrant described in the matter preceding subparagraph (A) of section 981(b)(2), the warrant was not supported by probable cause; or (BB) if the property was seized without a warrant described in subitem (AA), none of the exceptions described in subparagraphs (A) and (B) of section 981(b)(2) apply to the seizure of the property; and (II) if the party meets the requirements described in subsection (b), authorize counsel to represent the party or insure that the party is represented by an attorney for the Legal Services Corporation, as applicable, in accordance with that subsection; and (ii) the burden of proof is on the Government to establish that at the time the property was seized— (I) if the property was seized pursuant to a warrant described in the matter preceding subparagraph (A) of section 981(b)(2), the warrant was supported by probable cause; or (II) if the property was seized without a warrant described in subclause (I)— (aa) sufficiently detailed facts regarding the seizure of the property; and (bb) an exception described in subparagraphs (A) and (B) of section 981(b)(2) applies to the seizure of the property. (D) The magistrate judge shall enter an order for the immediate release of the seized property with prejudice to the right of the Government to commence a civil forfeiture proceeding at a later time if the magistrate judge finds that— (i) the requirements described in subparagraphs (A) through (E) of subsection (f)(1) are met; and (ii) the Government did not meet the burden of proof described in subparagraph (C)(ii). . 3. Representation Section 983(b) of title 18, United States Code, is amended— (1) in paragraph (1)(A), by striking judicial (2) in paragraph (2)(A), by striking judicial civil forfeiture proceeding under a civil forfeiture statute is financially unable to obtain representation by counsel, and the property subject to forfeiture is real property that is being used by the person as a primary residence civil forfeiture proceeding under a civil forfeiture statute is financially unable to obtain representation by counsel 4. Burden of proof Section 983(c) of title 18, United States Code, is amended— (1) in paragraph (1), by striking a preponderance of the evidence clear and convincing evidence (2) in paragraph (2), by striking a preponderance of the evidence clear and convincing evidence 5. Right to request hearing on pretrial restraint of property to retain counsel of choice (a) Title 18 Section 1963(d) of title 18, United States Code, is amended— (1) by striking paragraph (1) and inserting the following: (1) (A) Upon application of the United States, the court may enter a restraining order or injunction, require the execution of a satisfactory performance bond, or take any other action to preserve the availability of property described in subsection (a) for forfeiture under this section— (i) upon the filing of an indictment or information charging a violation of section 1962 and alleging that the property with respect to which the order is sought would, in the event of conviction, be subject to forfeiture under this section; or (ii) prior to the filing of such an indictment or information, if, after notice to persons appearing to have an interest in the property and opportunity for a hearing, the court determines that— (I) there is a substantial probability that the United States will prevail on the issue of forfeiture and that failure to enter the order will result in the property being destroyed, removed from the jurisdiction of the court, or otherwise made unavailable for forfeiture; and (II) the need to preserve the availability of the property through the entry of the requested order outweighs the hardship on any party against whom the order is to be entered. (B) (i) Upon motion of a defendant charged with a violation of section 1962 for which criminal forfeiture is ordered under this section and against whom the order is entered, supported by an affidavit, the court shall hold a hearing to determine whether to modify or rescind, in whole or in part, an order entered under subparagraph (A) to allow the defendant to use the property subject to the order to retain counsel of choice. (ii) At the hearing, the court shall consider— (I) the weight of the evidence against the defendant with respect to the violation of section 1962 for which criminal forfeiture is ordered under this section; (II) the weight of the evidence with respect to whether the property will be subject to forfeiture under this section; (III) the history and characteristics of the defendant; and (IV) the nature and circumstances of the case. (C) An order entered pursuant to subparagraph (A)(ii) shall be effective for not more than 90 days, unless— (i) extended by the court for good cause shown; or (ii) an indictment or information described in subparagraph (A)(i) has been filed. ; and (2) in paragraph (2), by inserting that the defendant committed a violation of section 1962 for which criminal forfeiture may be ordered under this section and probable cause to believe believe (b) Controlled Substances Act Section 413(e) of the Controlled Substances Act ( 21 U.S.C. 853(e) (1) by striking paragraph (1) and inserting the following: (1) (A) Upon application of the United States, the court may enter a restraining order or injunction, require the execution of a satisfactory performance bond, or take any other action to preserve the availability of property described in subsection (a) for forfeiture under this section— (i) upon the filing of an indictment or information charging a violation of this title or title III for which criminal forfeiture may be ordered under this section and alleging that the property with respect to which the order is sought would, in the event of conviction, be subject to forfeiture under this section; or (ii) prior to the filing of such an indictment or information, if, after notice to persons appearing to have an interest in the property and opportunity for a hearing, the court determines that— (I) there is a substantial probability that the United States will prevail on the issue of forfeiture and that failure to enter the order will result in the property being destroyed, removed from the jurisdiction of the court, or otherwise made unavailable for forfeiture; and (II) the need to preserve the availability of the property through the entry of the requested order outweighs the hardship on any party against whom the order is to be entered. (B) (i) Upon motion of a defendant charged with a violation of section 1962 for which criminal forfeiture is ordered under this section and against whom the order is entered, supported by an affidavit sufficient to demonstrate a genuine need for the defendant to use the property subject to an order entered under subparagraph (A) to retain counsel of choice, the court shall hold a hearing to determine whether to modify or rescind, in whole or in part, the order to allow the defendant to use the property to retain counsel of choice. (ii) At the hearing, the court shall consider— (I) the weight of the evidence against the defendant with respect to the violation of this title or title III for which criminal forfeiture is be ordered under this section; (II) the weight of the evidence with respect to whether the property will be subject to forfeiture under this section; (III) the history and characteristics of the defendant; and (IV) the nature and circumstances of the case. (C) An order entered pursuant to subparagraph (A)(ii) shall be effective for not more than 90 days, unless— (i) extended by the court for good cause shown; or (ii) an indictment or information described in subparagraph (A)(i) has been filed. ; and (2) in paragraph (2), by inserting that the defendant committed a violation of this title or title III for which criminal forfeiture may be ordered under this section and probable cause to believe believe 6. Recovery of attorneys fees Section 2465(b) of title 28, United States Code, is amended— (1) in paragraph (1), by striking substantially (2) by adding at the end the following: (3) If the claim is resolved by a settlement in which the claimant prevails, the claimant is entitled to attorneys fees under this subsection to the same extent that the claimant would be if a judgment were issued in the proceeding for the property recovered under the settlement. The payment of attorneys fees under this subsection may not be waived as a part of any settlement with the claimant. That payment is not subject to any offset or deduction by the United States in connection with any claim the United States may have against the claimant. (4) For the purposes of this subsection, a claimant prevails if the claimant recovers more than 50 percent, by value, of the money or other property that is claimed. . 7. Annual audit of civil forfeitures The Inspector General shall annually conduct an audit of a representative sample of Federal civil forfeitures under statutes described in section 983(i) of title 18, United States Code, to ensure those forfeitures are constitutionally sound and consistent with the letter and spirit of the law. The Department of Justice Inspector General shall report the results of the audit to the Attorney General and to Congress. Such report shall also include the fiscal status of the Asset Forfeiture Fund and Treasury Forfeiture Fund, including any projected growth or shrinking of the Funds in future years, and the viability of the Funds. 8. Publicly available databases (a) Quarterly updated database on details of forfeitures The Attorney General shall establish and maintain, with updates on a quarterly basis, a publicly available database that describes with respect to seizures for all Federal civil forfeiture containing the following: (1) For each such seizure: (A) Unit of an agency responsible for the seizure, and the location, including at a minimum the State, city, and judicial district where and date when the seizure took place. (B) The type of initial seizure (such as during a stop based on probable cause, or pursuant to a Federal warrant). (C) The nature and value of the seized property. (D) In what manner forfeiture of seized property was conducted (whether by a civil or administrative proceeding, through settlement, or otherwise). (E) Whether a forfeiture of the seized property was of the entire property, or only a part, and if partial, the proportion of the whole that was forfeited. (F) The disposition of the seized property, the date of forfeiture, if any, and the date the disposition took place. (G) What type of criminal activity any forfeited property relates to. (H) Whether any forfeited money was returned to the victim of a crime in connection with which the forfeiture occurred, and the amount returned. (I) The status of any concurrent or related criminal proceeding against the owner of the property, any pending case under title 11 in which the owner of record of the property is the debtor, and any pending civil case in which a receiver has been ordered to take control of the property. (J) Whether the forfeiture was contested. (K) Whether the innocent owner made a claim on the property. (L) The total expenses associated with the forfeiture. (M) The total net proceeds of the forfeiture. (N) Demographic information on the person or persons subject to the seizure. (2) A statistical breakdown for each agency of the cases of remission and mitigation, including— (A) the numbers of requests for remission and mitigation that were— (i) fully granted; (ii) partially granted; or (iii) returned; and (B) with respect to requests that were partially granted— (i) the average percentage of the value of seized property that was returned to the owner; and (ii) what percentage of requests resulted in returned property in each of the following categories: (I) More than zero but less than 25 percent of the property was returned. (II) 25 percent or more of the property was returned, but less than 50 percent. (III) 50 percent or more of the property was returned, but less than 75 percent. (IV) 75 percent or more of the property was returned, but less than 100 percent. (3) Any money given from the Asset Forfeiture Fund or Treasury Forfeiture Fund to State or local law enforcement for Joint Law Enforcement Operations (commonly referred to as JLEO (b) Real-Time database To assist persons whose property is seized (1) Establishment The Attorney General shall establish and maintain, with updates on a real-time basis, a database, organized by State and county, with respect to each Federal seizure of real and personal property for Federal civil forfeiture under statutes described in section 983(i) of title 18, United States Code. (2) Design The Attorney General shall design the database to allow any interested party, including any owner, creditor, or lienholder, to determine whether that party has an interest in any such property and to inform that party, and the general public, on the specifics of how to contest each seizure before the forfeiture. (c) Heads of agencies To submit information for databases Not less frequently than quarterly, on a schedule determined by the Attorney General, the head of each Federal agency shall submit to the Attorney General a report that provides, in such form as the Attorney General may prescribe, the information the Attorney General is required to include in the databases established under this section. 9. Standard of proof relating to possibly innocent owners (a) Burden of proof Paragraph (3) of section 983(c) of title 18, United States Code, is amended to read as follows: (3) if the Government’s theory of forfeiture is that the property was used to commit or facilitate the commission of a criminal offense, or was involved in the commission of a criminal offense, the Government shall establish by clear and convincing evidence that— (A) there was a substantial connection between the property and the offense; and (B) the owner of any interest in the seized property— (i) intentionally used the property in connection with the offense; (ii) knowingly consented to the use of the property by another in connection with the offense; or (iii) knew that the property was being used in connection with the offense. . (b) Innocent owner defense (1) Section 983( d Paragraph (1) of section 983(d) of title 18, United States Code, is amended to read as follows: (1) An innocent owner’s interest in property shall not be forfeited under any civil forfeiture statute. The Government shall have the burden of proving that the claimant is not an innocent owner by clear and convincing evidence. . (2) Section 983( d i Paragraph (2)(A)(i) of section 983(d) of title 18, United States Code, is amended by inserting or consent to did not know of 10. Proportionality Section 983(g) of title 18, United States Code, is amended— (1) in paragraph (1), by inserting or otherwise disproportional to the gravity of the offense (2) by amending paragraph (2) to read as follows: (2) In making this determination, the court shall consider, in addition to the analysis as to whether the forfeiture is constitutionally excessive, the value of the property, the seriousness of the offense, the level of the claimant’s culpability in the offense giving rise to forfeiture, the claimant’s prior record, the claimant’s financial condition, and whether the forfeiture statute is intended to address the type of conduct alleged as the basis for forfeiture. . 11. Search and forfeiture of monetary instruments Section 5317(c) of title 31, United States Code, is amended by striking paragraph (2) and inserting the following: (2) Civil forfeiture (A) In general Any property involved in a violation of section 5313 or 5316, or any conspiracy to commit any such violation, and any property traceable to any such violation or conspiracy, may be seized and forfeited to the United States in accordance with the procedures governing civil forfeitures in money laundering cases pursuant to section 981(a)(1)(A) of title 18. (B) Structuring Any property involved in a violation of section 5324, or any conspiracy to commit any such violation, and any property traceable to any such violation or conspiracy, may be seized and forfeited to the United States in accordance with the procedures governing civil forfeitures in money laundering cases pursuant to section 981(a)(1)(A) of title 18 only if the property to be seized and forfeited is derived from an illegal source or if the structuring offense was used to conceal violations of other criminal laws. . 12. Effective date and applicability This Act and the amendments made by this Act shall take effect on the date of the enactment of this Act and apply only with respect to seizures made on or after that date. Seizures made before that date shall continue to be governed by the law as it existed without regard to this Act or the amendments made by this Act. December 23, 2016 Reported from the Committee on the Judiciary December 23, 2016 The Committees on Financial Services Energy and Commerce

Summary: DUE PROCESS Act of 2016 or the Deterring Undue Enforcement by Protecting Rights of Citizens from Excessive Searches and Seizures Act of 2016 This bill amends the federal criminal code to revise provisions related to federal civil forfeiture cases. Specifically, the bill: raises the evidentiary standard in such cases from "preponderance of the evidence" to "clear and convincing evidence"; with respect to property owners who are indigent, provides for the appointment of counsel; provides for recovery of attorney's fees with respect to settled claims in which the claimant prevails; adds specified notice requirements; and expedites and otherwise modifies certain procedures. The Department of Justice must: (1) annually audit federal civil forfeiture cases, and (2) establish a publicly available database with respect to seizures in such cases.