Handbook 9.7
Asset Seizure and Forfeiture
Chapter 4
Criminal Forfeiture
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Contents
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Pursuant to 18 USC 982(a)(1), The federal district court can have property,
real or personal, forfeited to the government as a part of a sentence imposed
on a person convicted of money laundering vioaltions, 18 USC 1956, 18 USC
1957, or a violation of 31 USC 5313(a), or 31 USC 5324(a). It can also be
used (effective 10/28/92) if a person is found in violation of 18 USC 1960.
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Criminal forfeitures are "in personam" actions, i.e., part of the penalty
enacted against a person for the commission of a criminal offense. Therefore,
criminal forfeitures may only be sought as part of a criminal prosecution,
and may not be ordered unless and until the defendant is convicted of the
crime(s) for which forfeiture is to be imposed. Accordingly, all criminal
forfeitures are judicial. The following sections are discussed in this chapter:
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Authority to Forfeit Assets As A Criminal Sentence
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Statute Of Limitations
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Property Subject to Criminal Forfeiture
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Methods to Effect Seizures Subject to Criminal Forfeiture
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Criminal Forfeiture Proceedings
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Civil vs. Criminal Forfeiture Proceedings
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Closing Criminal Forfeiture Proceedings
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[9.7] 4.2 (04-30-1998)
AUTHORITY TO FORFEIT ASSETS AS A CRIMINAL SENTENCE
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Section 982(a)(1) of Title 18 is the criminal forfeiture statute for violations
of 18 USC 1956, 1957, and 31 USC 5313(a) and 5324. Title 18 USC 982(b)(1)
states that the provisions of Title 21 USC 853(c) and (e) through (p) shall
govern the seizure and disposition of any property subject to forfeiture
under Title 18 USC 982 as it relates to violations listed in 982(a)(1) and
(a)(6).
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The Assistant United States Attorney (AUSA) decides whether to use
18 USC 982 forfeiture provisions as part of the defendant's criminal
prosecution.
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The statute of limitations for Title 18 forfeitures is the statute of limitations
for the underlying crime which is usually 5 years.
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The property that is subject to criminal forfeiture is dependent upon the
date the property was involved in the money laundering violations and the
defendant's convicting statute violation--18 USC 1956, 18 USC 1957, 18 USC
1960, 31 USC 5313(a) or 31 USC 5324(a).
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The substitute asset provisions are applicable whether the property was seized
after 11/18/88 or 10/28/92.
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[9.7]
4.4.1 (04-30-1998)
Offending (or Substituted) Property From 11-18-88 to Present
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Any property, real or personal, involved in a transaction or attempted
transaction in violation of 18 USC 1956, 18 USC 1957, 31 USC 5313(a) or 31
USC 5324(a) is subject to criminal forfeiture.
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Any property traceable to property, real or personal, involved in a transaction
or attempted transaction in violation of 18 USC 1956, 18 USC 1957, 31 USC
5313(a) or 31 USC 5324(a) is subject to criminal
forfeiture.
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[9.7]
4.4.2 (04-30-1998)
Offending (or Substituted) Property From 10-28-92 to Present
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In 1992, a new criminal statute was enacted that was included in the criminal
forfeiture authority of 18 USC 982 resulting in an additional offending
violation. That statute, 18 USC 1960, relates to the operation of an illegal
money transmitting business. The forfeiture authority only allows the criminal
forfeiture of the property that is involved in or traceable to a violation
of Title 18 USC 1960.
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Title 18 U.S.C. 982(b)(1) also enables property to be substituted for property
subject to criminal forfeiture. Title 21 U.S.C. 853(p) governs property subject
to criminal forfeiture if the property, as a result of any act or omission
of the defendant, cannot be located upon the exercise of due diligence, has
been transferred or sold to, or deposited with, a third party; has been placed
beyond the jurisdiction of the court; has been substantially diminished in
value; or has been commingled with other property which cannot be divided
without difficulty.
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[9.7]
4.4.3 (04-30-1998)
Evidence to Support Criminal Seizures and Forfeitures (Burden of Proof)
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There is normally a rebuttable presumption at trial that any property of
a person convicted of violating 18 USC 1956, 1957, or 1960; or 31 USC 5313(a)
or 5324(a) is subject to forfeiture if the government established by a
preponderance of the evidence that the property was involved in the violation.
As noted below, some courts require the government to establish beyond a
reasonable doubt that the property was involved in the violation.
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Preponderance: United States v. Elgersma, 971 F.2d 690 (11th Cir., 1992);
United States v. Smith, 966 F.2d 1045 (6th Cir., 1992), United States v.
Myers, 21 F.3d 826 (8th Cir., 1994).
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Beyond a Reasonable Doubt: United States v. Saccoccia, 823 F.Supp. 984 (D.R.I.
1993); United States v. Swank Corp., 797 F.Supp. 497 (E.D.Va. 1992).
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[9.7] 4.5 (04-30-1998)
METHODS TO EFFECT SEIZURES OF PROPERTY SUBJECT TO CRIMINAL FORFEITURE
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The methods to effect seizures for criminal forfeiture are:
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Temporary Restraining Order.
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Seizure warrant pursuant to the Federal Rules of Criminal
Procedure.*
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Warrant of arrest in REM.*
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Seizure incident to lawful arrest or search.*
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Adoptive seizures.*
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NOTE:
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*Civil forfeiture procedures: The Supplemental Rules of Certain Admiralty
and Maritime Claims and Title 19 USC 1602 et seq. provide that the civil
forfeiture actions taken under those authorities are not inconsistent with
the actions taken to effect criminal forfeiture. This allows the pursuit
of parallel civil and criminal forfeiture actions, which must be approved
by, and coordinated closely with, the AUSA.
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In addition, because criminal forfeiture is an integral part of the underlying
criminal prosecution, the Federal Rules of Criminal Procedures (F.R.Cr.P.).
governs the general process by which property is criminally forfeited.
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A more detailed description of the methods to effect seizures is found in
Chapter 2 of this Handbook and Handbook 9.4 chapter 13.
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Criminal forfeitures are "in personam" actions, i.e., part of the penalty
enacted for the commission of a criminal offense. Criminal forfeitures may
only be sought as part of a criminal prosecution, and may not be ordered
unless and until the defendant is convicted of the crime(s) for which forfeiture
is to be imposed.
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A Criminal Investigation Management Information System (CIMIS) Subject Seizure
Number should be obtained when forfeitable assets are identified.
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The Asset Forfeiture Coordinator (AFC) should obtain an Asset Forfeiture
Tracking and Retrieval System (AFTRAK) number for assets identified in an
indictment or criminal information as being subject to criminal forfeiture.
The date of the indictment or the filing date of the information will be
used as the seizure date on Form 4008.
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NOTE:
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The issuance of a Temporary Restraining Order does not require the issuance
of an AFTRAK number unless the asset is named in an indictment.
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The AUSA decides whether to use 18 USC 982, which requires a higher burden
of proof on the part of the government. The government may pursue civil
forfeiture action in conjunction with the criminal forfeiture action, cognizant
of the pitfalls, i.e., excessive fines problems. Additionally, if the government
has not prevailed in a criminal forfeiture action, it may subsequently institute
a civil forfeiture action pursuant to Treasury Executive Office Asset Forfeiture
(TEOAF) Directive 19, Part II, Section A.
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The ability to forfeit substitute assets of the criminal defendant is generally
viewed as the greatest benefit of criminal forfeiture. Civil forfeiture does
not embrace this concept with the sole exception of highly fungible property
under limited circumstances (18 USC 984).
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The government's burden of proof in a criminal forfeiture case is either
preponderance of evidence or beyond a reasonable doubt, whereas the civil
forfeiture case is a probable cause showing by the government to be overcome
by the claimant's showing of a preponderance of evidence. A criminal conviction
that provides for forfeiture is a threshold requirement in criminal forfeiture.
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Unless the government obtains a seizure warrant for the assets in a criminal
case, it cannot take possession of the assets until the criminal defendant
has been convicted and the preliminary forfeiture order has been entered.
This problem is compounded if the defendant becomes a fugitive. In a civil
action, the forfeiture takes place regardless of whether the government succeeds
in proving the defendant guilty and is entitled to take possession of the
asset prior to forfeiture upon the filing of its civil complaint for forfeiture.
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Commencement of the civil judicial forfeiture action entitles the claimant
to pursue discovery of the government's case. If this occurs prior to an
indictment, such discovery can compromise undercover activity, sensitive
investigative techniques, and more. A stay of discovery is never guaranteed.
If the AUSA handling the collateral criminal matter believes any proposed
administrative action would jeopardize the criminal case, the AUSA must submit
to the Chief, CI, an explanation of the circumstances for the request to
stay the action. The Chief, CI, will seek approval from the Assistant
Commissioner, CI, through the respective Director of Investigations.
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After a defendant is convicted, a preliminary order of forfeiture is issued.
If there are third party claimants, their claims will be decided at an ancillary
hearing, after which a final order of forfeiture is issued by the court.
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Internal Revenue Manual
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Hndbk. 9.7 Chap. 4 Criminal Forfeiture
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(04-30-1998)
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