Source: http://www.heritage.org/crime-and-justice/report/comparison-federal-civil-and-criminal-forfeiture-procedures-which-provides
Timestamp: 2017-10-24 09:44:31
Document Index: 102709888

Matched Legal Cases: ['§ 853', '§ 853', '§ 983', '§ 983', '§ 983', '§ 853', '§ 1915', '§ 2465', '§ 853', '§ 983', '§ 853', '§ 983', '§ 1615', '§ 2680']

A Comparison of Federal Civil and Criminal Forfeiture Procedures: Which Provides More Protections for Property Owners? | The Heritage Foundation
July 30, 2015 18 min read Download Report
CAFRA actually expanded the scope of criminal forfeiture as part of the compromise with the DOJ that was necessary to secure passage of the bill in both houses of Congress through the unanimous consent procedure.[2] Not coincidentally, the DOJ pushed major changes in criminal forfeiture procedure (found in Rule 32.2 of the Federal Rules of Criminal Procedure) through the Advisory Committee on Rules of Criminal Procedure in 2000, just as CAFRA was nearing enactment.
The above-noted rule changes consistently reduced or eliminated procedural rights and protections for defendants—including the right to have the forfeiture issue decided by a jury—and for innocent third parties with interests in the property subject to criminal forfeiture. These alterations also tilted the criminal forfeiture “playing field” sharply in favor of the prosecution. Since then, criminal forfeiture has steadily become more oppressive thanks to other amendments to Rule 32.2 in 2009 and unwarranted judicial lawmaking sought by DOJ prosecutors.[3]
Some federal judges have engaged in tortured readings of criminal forfeiture statutes to expand prosecutorial power. This might be explained in part by the U.S. Supreme Court’s overly deferential attitude toward the criminal law.[4] In fact, the High Court has declined to review most of these criminal forfeiture issues, so erroneous lower court decisions have been left standing.[5]
Despite the many problems with civil forfeiture, federal and state laws now provide considerably more due process safeguards to a property owner than is the case with criminal forfeiture.[6] The biggest problem with civil forfeiture is that most owners cannot afford—or cannot even find—competent counsel or any counsel to defend the case.[7] In criminal forfeiture cases at the federal level, an indigent defendant (but not an indigent third party) is entitled to appointed counsel. However, few appointed counsel are competent or have the time and resources to litigate complex criminal forfeiture issues. Criminal defendants are easily buffaloed into signing plea agreements by prosecutors who are forfeiture specialists, and these plea agreements often expressly waive all of the defendant’s rights to resist what often turns into an overly broad or excessively punitive forfeiture order.
Many years ago, the Supreme Court observed that “broad [criminal] forfeiture provisions carry the potential for Government abuse and ‘can be devastating when used unjustly.’”[8] Regrettably, the government is now abusing criminal forfeiture on a daily basis to raise money earmarked for law enforcement, to deprive defendants of the wherewithal to retain counsel,[9] and to bully defendants into harsh and unfair plea agreements, and no one but underresourced defense counsel is trying to stop it.
Procedural Protections and Substantive Rights
What follows is a comparison of the procedural protections and substantive rights available to property owners facing civil and criminal forfeiture proceedings. With the major exceptions of a conviction being required and the right to appointed counsel, civil forfeiture offers superior protections for the property owner.
1. Civil forfeiture generally affords greater procedural rights than criminal forfeiture affords.
If property is seized pursuant to a warrant of seizure under 21 U.S.C. § 853(f), there is no time limit except the criminal statute of limitations (typically five years) for seeking criminal forfeiture. If the property is restrained under 21 U.S.C. § 853(e)(1)(B), the order is effective for not more than 90 days unless extended by the court “for good cause shown or unless an indictment or information…has been filed.”
In a “nonjudicial civil forfeiture proceeding”[10]under CAFRA, by contrast, the government must comply with two separate deadlines.
First, under 18 U.S.C. § 983(a)(1)(A)(i), the government must send written notice to interested parties “as soon as practicable, and in no case more than 60 days after the date of the seizure.”[11] A supervisory official in the headquarters of the seizing agency may extend the 60-day period for up to 30 days, and a court thereafter can grant further extensions of time under certain conditions on an ex parte basis pursuant to 18 U.S.C. § 983(a)(1)(B)–(D). The courts have been liberal in granting such extensions, thereby undermining the effectiveness of the 60-day notice provision. Moreover, although the government suffers no real penalty if it misses the 60-day deadline, it is still a substantive limitation on the government that is not present in the criminal context.
Second, if a claimant sends an administrative claim to the seizing agency, the government has 90 days from the date when the claim is received in which to file a complaint for civil forfeiture in court or to obtain a criminal indictment alleging that the property is subject to criminal forfeiture; otherwise, the property must be released. If the government fails to do any of these things, forfeiture is barred under 18 U.S.C. § 983(a)(3).
2. Civil asset forfeiture generally affords no right to counsel, whereas criminal forfeiture generally does.
In a criminal forfeiture case, an indigent defendant has a right to appointed counsel under the Criminal Justice Act (CJA), but an indigent third party who wishes to contest a criminal forfeiture in an “ancillary proceeding” under 21 U.S.C. § 853(n) has no right to appointed counsel. Further, if the third-party claimant prevails against the government, CAFRA does not authorize a fee award for the third party.
In a civil forfeiture case, an indigent property owner generally has no statutory right to appointed counsel except in one narrowly defined situation: where the government is seeking to forfeit the owner’s “primary residence.”[12] A court has discretion to appoint an attorney already representing a criminal defendant under the CJA to be counsel in a related civil forfeiture case under section 983(b)(1). The courts appear to exercise this authority only seldom, perhaps because defense counsel commonly are unaware of the statutory provision in question and therefore fail to ask for such an appointment. The court may also appoint pro bono counsel for an indigent claimant under 28 U.S.C. § 1915(d), but few claimants are aware of this statutory provision, and courts have rarely used it in civil forfeiture cases.
Under 28 U.S.C. § 2465(b)(1), if the claimant prevails against the government, CAFRA requires that the government pay the “reasonable” attorney fees of the claimant. This fee-shifting provision is no substitute for appointed counsel—a critical reform provided in the House-passed CAFRA bill in 1999 that was removed from the final Senate bill in order to obtain passage by unanimous consent of both houses in 2000.
3. The ability to obtain dismissal of a forfeiture action is greater in the civil context than it is in the criminal context because there is an early opportunity for discovery and the filing of a dispositive motion.
It is well known that discovery is severely limited in federal criminal cases, while some states have far more generous criminal discovery rules. So a defendant who is faced with a boilerplate, wholly opaque criminal forfeiture allegation in the indictment cannot use criminal discovery to determine what the government’s contentions really are and what evidence the government has to support them.
In civil forfeiture cases, discovery proceeds under the Federal Rules of Civil Procedure, which allow a party to discover everything relevant to the case unless it is privileged. Because the government typically has much greater investigative resources than a private party has, civil discovery serves to level the playing field, at least where a claimant can afford competent counsel. A claimant can require the government to state all of the evidence known to the government that supports each allegation in the civil forfeiture complaint, and all of the government’s witnesses can be deposed before trial.
The discovery process often produces evidence that leads to an early settlement or to a successful motion for summary judgment, thereby avoiding the expense of a trial. By contrast, it is seldom possible to obtain dismissal of criminal forfeiture charges before trial, and it is practically impossible to settle a criminal forfeiture charge before trial, outside of a plea agreement.
4. Civil asset forfeiture often provides greater opportunity to be heard promptly than criminal asset forfeiture provides.
In a criminal forfeiture proceeding, the defendant does not have a meaningful opportunity to be heard on the forfeiture aspect of the case until after he has been convicted. Under 21 U.S.C. § 853(k)(1), third parties are barred by statute from intervening in the criminal forfeiture case until after there is a preliminary order of forfeiture against the defendant and notice of that order is sent to them by the government.[13] Third parties are also barred under section 853(k)(2) from “commencing an action at law or equity against the United States concerning the validity of [their] alleged interest in the property.” A 1983 Senate report says that this provision “is not intended to preclude a third party with an interest in property that is or may be subject to a restraining order from participating in a hearing regarding the order, however.”[14]
In a civil forfeiture proceeding, all persons with an interest in the property may appear as parties and be heard in a timely fashion once the complaint for forfeiture is filed. A claimant may quickly file a motion to dismiss the complaint or a motion for summary judgment. Even before then, a person with a possessory interest in property suffering substantial hardship from the seizure may seek the release of the property under certain conditions pursuant to 18 U.S.C. § 983(f). However, this provision has so many exceptions that it has not served its intended purpose.
By contrast, third parties have very limited rights under the criminal ancillary hearing procedures. The criminal forfeiture statutes provide only two bases for third parties to exempt their property interest from forfeiture. Specifically, the third party must establish that he had a legal right, title, or interest in the forfeited property that was superior to the defendant’s interest at the time the property became subject to forfeiture (section 853(n)(6)(A)) or that, after the property became subject to forfeiture, he acquired it as a bona fide purchaser for value who was without reason to know that the property was subject to forfeiture (section 853(n)(6)(B)).
The courts are split on whether the preliminary order of forfeiture is binding on third parties. Elementary due process principles would seem to require that third parties have an opportunity to litigate the factual or legal basis for the forfeiture of their property.[15]
The narrowly defined exemptions from forfeiture leave many third parties out in the cold—for example, wives who have child support orders and employees who are owed wages.[16]
5. Criminal forfeiture should go to a jury but usually does not do so, whereas property owners have a constitutional right to a jury trial in every civil forfeiture action.
The criminal forfeiture statutes clearly contemplated trial by jury of the forfeiture issue and requiring the government to prove its case beyond a reasonable doubt. That is the way the statutes were interpreted and applied for many years. Under former Rule 31(e), the jury was also required to find that the defendant was the owner of the property.
In 2000, however, everything was changed for the worse by the Advisory Committee on Rules of Criminal Procedure without any input from Congress. The committee rubber-stamped amendments submitted to it by the DOJ that sharply tilted the playing field in favor of the government. After initially deciding to abolish jury trial altogether, the committee reached a compromise whereby the former right to a jury trial embodied in Rule 31(e) was substantially cut back.
These amendments were codified in the new Rule 32.2. Under Rule 32.2(b)(5)(B), the jury is restricted to determining “whether the government has established the requisite nexus between the property and the offense committed by the defendant.” There is no right to a jury trial if the government seeks what is known as a “money judgment” instead of the forfeiture of specific property, and the jury no longer determines whether the defendant or someone else owns the property. That is determined by the court in the ancillary proceeding if some third party requests that the court adjudicate its rights.
The government seeks a “money judgment” in the vast majority of forfeiture cases today because it affords the government many advantages over a traditional forfeiture of specific property items. Avoiding a jury trial is only one of those advantages. As explained below, there is no statutory basis for “money judgments” in criminal forfeiture cases. It is an improper piece of judicial legislation that has extended the scope and harshness of criminal forfeiture and diminished the defendant’s procedural protections.
It is well established by a long line of cases that a party in a civil forfeiture case against property seized on land has a right to trial by jury under the Seventh Amendment to the Constitution.[17] In fact, the abrogation of that right in civil forfeiture cases by King George III was listed in the Declaration of Independence as one of the infringements on American liberty justifying this nation’s break with Britain.[18]
A third party in a criminal forfeiture “ancillary hearing” should also have a right to a jury trial under the Seventh Amendment because the ancillary hearing is treated as civil in nature and closely resembles a civil in rem forfeiture proceeding, but the criminal forfeiture statute (21 U.S.C. § 853(n)(2)) directs that the hearing “shall be held before the court alone, without a jury.” Surprisingly, this important issue has been addressed by only a few courts, which have unpersuasively found no constitutional infirmity.
6. In court, the Federal Rules of Evidence are fully applicable in a civil forfeiture case but not in a criminal forfeiture case.
As already noted, the criminal forfeiture statutes contemplate—although they do not explicitly state—that the forfeiture issue will be tried before a jury under the traditional “beyond a reasonable doubt” burden of proof.[19] They likewise contemplated that the Federal Rules of Evidence would apply to the forfeiture trial. When the Advisory Committee on Rules of Criminal Procedure abolished those rights, it also opened the door to otherwise inadmissible evidence. Rule 32.2(b)(1)(B) allows forfeiture to be proven by any “information” the court considers “relevant and reliable.” It does not say whether such “information” is also admissible before the jury when it is hearing evidence, but that is the way the government interprets Rule 32.2.
In a civil forfeiture case, the Federal Rules of Evidence are fully applicable.
7. In the many Customs cases exempted from the CAFRA reforms, the unfair pre-CAFRA burden of proof still applies.
Although Congress intended that the government have to prove criminal forfeiture beyond a reasonable doubt, and although that burden was originally applied by the courts, the courts later decided that because forfeiture is part of the sentence in a case, the burden of proof should logically be by a preponderance of the evidence, the normal burden on the government at sentencing. In so holding, the courts simply ignored congressional intent—as if it did not matter.[20] Those decisions were embodied in Rule 32.2 in 2000.
In civil forfeiture cases covered by the CAFRA reforms, the government’s burden of proof is by a preponderance of the evidence as well. However, in the many Customs cases exempted from the CAFRA reforms (see 18 U.S.C. § 983(i), the Act’s “Customs carve-out” provision), the pre-CAFRA and blatantly unfair burden of proof codified in 19 U.S.C. § 1615 still applies.
Under that statute, which dates back to colonial times (1740), the government merely has the burden of showing probable cause for the forfeiture and may use otherwise inadmissible hearsay evidence to do so. Then the property owner has the burden of proving by a preponderance of the evidence (no hearsay allowed for the owner’s case) that the property is not subject to forfeiture. A number of courts had concluded that this absurd allocation of the burden of proof violated due process, but the issue has not received the attention it deserves since the enactment of CAFRA in 2000, despite its continuing presence in Title 19 and in 26 cases “carved out” of the CAFRA reforms.
8. Criminal forfeiture, unlike civil forfeiture, does require a criminal conviction.
A criminal forfeiture requires that the defendant be convicted of the crime triggering the forfeiture. However, innocent third parties (i.e., persons claiming a property interest in the assets who have not been charged with a crime) may have their property forfeited even though they have done nothing wrong. Ironically, the third party has even fewer protections than the criminal defendant has.
In a civil forfeiture proceeding, there is no requirement that anyone be charged with a crime, much less convicted. This opens the door to abuse since the government is able to civilly forfeit property where it could not possibly charge someone with a crime. But complete abolition of civil forfeiture—sought by many reformers, such as the Institute for Justice—would likely lead to an increase in otherwise unwarranted criminal prosecutions solely for the purpose of obtaining forfeitures. That is a big price to pay, particularly when criminal forfeiture procedures and substantive law remain so unfair to property owners.
9. Criminal forfeiture affords the government many “substantive” advantages in comparison with civil forfeiture.
In a criminal forfeiture, unlike in the civil context, “clean” assets may be substituted for missing forfeitable assets. One important difference between criminal and civil forfeiture is the prosecution’s ability to criminally forfeit untainted (clean) “substitute assets” if, “as a result of any act or omission of the defendant” the directly forfeitable tainted property:
(1) cannot be located upon the exercise of due diligence; (2) has been transferred or sold to, or deposited with, a third party; (3) has been placed beyond the jurisdiction of the court; (4) has been substantially diminished in value; or (5) has been commingled with other property which cannot be divided without difficulty.[21]
In a civil forfeiture proceeding, by contrast, there is no authority to substitute “clean” property for “dirty” property that is not available for forfeiture.[22] It is believed that the very nature of an in rem forfeiture proceeding, where the tainted property is the defendant, does not allow for substitute asset forfeiture.
Similarly, money judgments are allowed in the criminal context but not in the civil forfeiture context. Despite Congress’s enactment of the substitute asset provision in 1986, courts continued to allow their earlier invention of the concept of “money judgments” in lieu of the forfeiture of specific property, to be used for further expansion of the government’s criminal forfeiture powers.[23]
The concept of a personal money judgment, which looks and acts like a criminal fine, departs from the basic nature of a forfeiture, whether civil or criminal. It is deemed a “forfeiture” of sorts, but no specific property is forfeited. More important, this judicial lawmaking violates the principle of separation of powers[24] as well as an important rule of statutory construction.[25] As discussed below, money judgments allow the government to avoid the need to trace. They provide a way for the government to exaggerate the amount of proceeds generated by the offense of conviction through erroneous extrapolations. They allow for joint and several liability among co-defendants through an additional judicial invention. They produce forfeiture judgments that hang over a defendant for the rest of his life, regardless of his ability to pay, thus interfering with his rehabilitation.
The use of a money judgment also has the advantage of precluding the need for a jury to determine the facts on which the forfeiture rests because Rule 32.2 arbitrarily denies the jury any role in determining the amount of a money judgment.
Due to money judgments and substitute assets in criminal forfeiture, the requirement that property seized must be traceable to an alleged crime is often absent. In a civil forfeiture case, the government bears the sometimes heavy burden of tracing the seized property back to the crime that triggered the forfeiture. For example, if a car is used to smuggle narcotics and then sold to a bona fide purchaser, and if the sale proceeds are then used to buy furniture and a computer, the government will be able to forfeit only the furniture and the computer—assuming it wants those items—and must prove that the money from the sale of the car was used to purchase those things.
In a criminal forfeiture case, the government previously was required to trace the property it wants to forfeit back to the crime: i.e., to show that the money used to buy the property was the proceeds of the crime. Even if the government attempts to forfeit “substitute assets,” it must still prove that the directly forfeitable (“tainted”) property, which is no longer available, is traceable to the crime of conviction. With a money judgment, however, the government no longer has to trace the proceeds of the crime into any particular property. It just has to estimate the amount of proceeds that the defendants obtained from the offenses of conviction. These estimates can be wildly exaggerated by the use of faulty extrapolation techniques.[26]
Joint and several liability often produces oppressive criminal forfeiture judgments that are far beyond the defendant’s ability to pay. The imposition of joint and several liability on co-conspirators and co-schemers is another improper judicial invention that has grown progressively more oppressive.
As in the case of the money judgment, the first court to legislate this harsh additional punishment was the United States Court of Appeals for the Eleventh Circuit, in 1986.[27] Employing the same result-oriented analysis employed in Conner, the money judgment case, the court of appeals declared that joint and several liability was necessary—at least in some cases—to carry out the purpose of the Racketeer Influenced and Corrupt Organizations (RICO) Act’s criminal forfeiture provision.
Without delving into their authority for imposing joint and several liability absent any statutory basis to do so, other circuits have likewise authorized this remedy in the run-of-the-mill criminal forfeiture cases merely by citing prior decisions that have done so. That is also the way in which money judgments have been judicially legislated.
Initially, this remedy was thought of as discretionary, but a few of the later decisions appear to treat joint and several liability as something that a court must impose on all co-conspirators and co-schemers, regardless of the facts or the unfairness of doing so.[28] This is what the prosecutors tell district court judges, and few of the courts or defense counsel know enough to resist the prosecutor’s demand for full and automatic joint and several liability. Some courts hold that the actions of co-schemers generating the proceeds must be reasonably foreseeable to the defendant in order to hold him jointly and severally liable for all of the proceeds obtained; other courts reject even that limitation.[29]
CAFRA generally provides for mandatory fee-shifting, whereas criminal forfeiture at best provides limited, discretionary fee-shifting. The original version of CAFRA, which the House of Representatives approved overwhelmingly in 1999, had a very important provision requiring the appointment of counsel, under the Criminal Justice Act, for indigent claimants in every civil forfeiture case. This provision was anathema to the DOJ and was removed by the Senate in order to reach a compromise that could be adopted by unanimous consent in 2000, an election year.
The Senate crafted a good fee-shifting provision as a substitute for Chairman Henry Hyde’s much more effective appointment-of-counsel provision. The fee-shifting provision, like CAFRA as a whole, applies only to in rem civil forfeiture cases.[30] It has been held not to apply to third-party claims in the ancillary hearing, which is treated as a civil proceeding. But the discretionary Equal Access to Justice Act fee-shifting provision still applies to third-party claims in criminal forfeiture cases.[31]
CAFRA provides for compensation where the government damages seized property, but there is no analogue in the criminal forfeiture context. CAFRA also amended 28 U.S.C. § 2680(c), a provision of the Federal Tort Claims Act, to provide a damage remedy for property owners who prevail in a civil forfeiture case where the law enforcement agency has lost, destroyed, or damaged the property.
There is no such remedy in criminal forfeiture cases. Even the civil forfeiture remedy has been rendered nugatory by absurd court decisions holding that the damage remedy is available only if the property was seized solely for the purpose of civil forfeiture and not as possible evidence of a crime or for some other reason.[32]
Both civil and criminal forfeiture need many reforms at both the state and federal levels. The most critical reform, and the one that is currently being pushed at the state and federal levels, is the limiting or abolition of the notorious bounty-hunting system that provides an irresistible incentive for some law enforcement officials to pursue unjust and unlawful seizures of property. In spite of this push for reform of civil forfeiture law, however, it would be a mistake to leave our criminal forfeiture laws untouched. The profit motive would remain, and such reform would merely shift the abuse further into the criminal forum.
Although the requirement of a criminal conviction and the right to appointed counsel are very important procedural safeguards lacking in civil forfeiture, federal criminal forfeiture is otherwise less protective of property rights than civil forfeiture is. Perversely, then, civil asset forfeiture reform could lead to a tougher time for many property owners in the future.
—David B. Smith is a partner in Smith & Zimmerman, PLLC, and the author of the leading two-volume treatise, Prosecution and Defense of Forfeiture Cases (Matthew Bender, June 2015). From 1982–1983, he served as Deputy Chief of the Asset Forfeiture Office in the Criminal Division of the U.S. Department of Justice.