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Federal Criminal Asset Forfeiture

Asset forfeiture is a practice that was traditionally used as a measure of fighting piracy. Currently, it is used to fight drug trafficking organizations and organized crime. Asset forfeiture is particularly indispensable in the fight against white collar crime. Recent studies have shown that a huge share of federal forfeiture cases concern white collar crime. In the past decade, the Department of Justice recovered over $3 billion from criminal fraud proceeds through asset forfeiture. Here is a brief overview of what asset forfeiture entails and how it is used to recover assets for victims.

What is Asset Forfeiture?

Asset forfeiture is the seizure of property that is acquired through criminal means, or involved in a crime, or which makes it easier to commit a crime. For example, consider a scenario where a person uses their business to operate a ponzi scheme and uses money derived from this scheme to purchase fancy items like boats, cars, and condominiums. The government can step in to seize the business because it is involved in a crime and has facilitated criminal activities, or made it easier to conceal and commit criminal activities. Since the boats, cars, and condominiums were acquired through the business proceeds, the government may also forfeit these assets.

Types of Forfeiture

Asset forfeiture can be classified into three branches under federal law: civil judicial forfeiture, administrative forfeiture, and criminal forfeiture.

Civil Judicial Forfeiture: This is a judicial process that permits law enforcement agencies to seize assets that have been involved in a crime. Civil judicial forfeiture is also known as in rem action. This means the action is subject to property and not the person who owns the property.

Administrative Forfeiture: An administrative forfeiture is one where no one objects to the seizure of property. Examples of assets that can be administratively forfeited include a monetary instrument, merchandise that is prohibited from importation, and property whose value is not more than $500,000. Real property and houses are not subject to administrative forfeiture. If a seizure is contested, the government may resort to civil judicial or criminal forfeiture to claim the property.

Criminal Forfeiture: A criminal forfeiture is also known as an in personam action. In this action, the government indicts both the property used or acquired through criminal means, and the defendant. Individuals who are subject to criminal forfeiture can contest the acquisition through trial proceedings.

Methods of Seizure For Criminal Forfeiture

The government has no right to take possession of assets without a protective order or a seizure warrant.

Restraining/Protective Orders

After the government files an indictment, the court can enter a restraining order to preserve the availability of assets that are subject to forfeiture. When the concerned parties appear for a hearing, the court will determine that:

  • The government is likely to prevail on the case of forfeiture and; therefore, failure to issue a protective order will result in the property being made unavailable for forfeiture
  • The need for the availability of the property is more important than any hardship on the party against whom the order is served

Criminal Seizure Warrants

The procedure for obtaining a criminal seizure warrant is similar to that of obtaining a search warrant. To acquire a criminal seizure warrant, there is need to establish probable cause showing that:

  • The assets are subject to forfeiture
  • A restraining order is not enough to preserve the availability of the assets for forfeiture

Disposition of Forfeited Assets

After a criminal forfeiture order is acquired and the assets of a defendant are seized, the Department of Justice is authorized to return the forfeited assets to the victims of the criminal offenses that led to the forfeiture. The Department of Justice gives back forfeited assets to victims through the “Victim Asset Recovery Program” (VARP). VARP is executed by a team of professionals including claim analysts, auditors, accountants, and lawyers in the Asset Forfeiture and Money Laundering Section, a branch of the Department of Justice’s Criminal Division. There are two main procedures used to return seized assets to victims:

Remission

This is a process through which the attorney general uses their discretion to liquidate forfeited assets so as to provide financial payments to victims who incurred losses from the offense that led to the forfeiture.

Restoration

This is a process through which the attorney general uses their discretion to subject forfeited assets to the restitution imposed by the court against a defendant. Restitution is used to impose equitable measures against a defendant during sentencing. Restitution helps make the victims of a crime whole and prevent the defendants from ripping benefits from their criminal activities.

The Take Away

Criminal asset forfeiture is decided on a lower burden of proof than other criminal cases. In the event you need immediate funding, and loans, you can get a hard money loan against the assets taken away from you. The courts normally make rulings in these cases based on a preponderance of evidence. A criminal forfeiture can cause you to lose valuable assets which you cannot reclaim in future. To protect your assets and yourself from the negative effects of property forfeiture, you should hire a criminal asset forfeiture lawyer to protect your interests.

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