2 Property Subject to Forfeiture

• Library: Asset Forfeiture: Practice and Procedure in State and Federal Courts (ABA) (2014 Ed.)

2 Property Subject to Forfeiture

A. Introduction

The world was stunned when President John F. Kennedy was assassinated in 1963. In the grim aftermath of that event, the federal government filed a forfeiture action against the rifle and pistol found by the Warren Commission to have been used by Lee Harvey Oswald in the assassination of the president and the killing of Dallas Police Officer J. D. Tippit. The government's forfeiture theory was that the firearms had been used in violation of the Federal Firearms Act. 15 U.S.C. § 903(d). Obviously, the government was interested in retaining the weapons for their historic value. The government was chagrined when the appellate court reversed the forfeiture finding that the evidence did not warrant forfeiture under the statute. See King v. United States, 364 F.2d 235, 241 (5th Cir. 1966).

This case highlights two important principles pertaining to forfeiture litigation. First, there must be a specific statute authorizing forfeiture of the property, Carlisle v. One (1) Boat, 119 Hawaii 245; 195 P.3d 1177, 1197-98 (Hawaii 2008); and second, there must be sufficient evidence to establish that the property is subject to forfeiture as defined in the statute. Richardson v. One 1972 GMC Pick-up, 121 Idaho 599; 826 P.2d 1311, 1315 (Idaho 1992) (firearms not included within statute).

This chapter will discuss what property is subject to forfeiture as defined in the federal and state statutes.

B. History of Federal Forfeiture

American forfeiture has its roots in biblical and pre-Judeo-Christian law. During the 17th century, colonial courts enforced English and local forfeiture statutes. After the ratification of the U.S. Constitution, one of the initial acts of the first U.S. Congress in 1790 was to enact forfeiture statutes for vessels and cargoes involved in customs violations. See Calero-Toledo v. Pearson Yacht Leasing, 416 U.S. 663, 683 (1974). From those early beginnings, federal forfeiture statutes migrated into such diverse areas as property used in connection with an illegal distillery, see Dobbins' Distillery v. United States, 96 U.S. 395, 399 (1878), tax fraud, see J.W. Goldsmith, Jr.-Grant Co. v. United States, 254 U.S. 505, 508 (1921), and criminal racketeering, see 18 U.S.C. § 1963.

This unending growth of forfeiture statutes led the U.S. Supreme Court in Calero-Toledo to opine: "[t]he enactment of forfeiture statutes has not abated; contemporary federal and state forfeiture statutes reach virtually any type of property that might be used in the conduct of a criminal enterprise." Calero-Toledo, 416 U.S. at 683.

A review of recently enacted federal forfeiture statutes demonstrates the reality of this statement. In 1998, the U.S. Department of Justice estimated that there were more than 140 federal civil forfeiture statutes. See U.S. Department of Justice, Criminal Division, Asset Forfeiture and Money Laundering Section, Asset Forfeiture Law and Practice Manual (1998) Ch. 1, Sec. II p. 1-1. With the enactment of the Civil Asset Forfeiture Reform Act of 2000, also known as CAFRA (Pub. L. 106-185; 114 Stat. 202 (2000), Congress authorized the addition of all specified unlawful activities contained in the federal money laundering statute, see 18 U.S.C. § 1956(c)(7), as subject to forfeiture on a proceeds theory. See 18 U.S.C. § 981(a)(1)(C). Then the USA PATRIOT Act of 2001 (See Pub. L. 107-56, 115 Stat. 272) added offenses related to terrorism as predicates of the criminal racketeering statute, making them forfeitable on a proceeds theory as well. See 18 U.S.C. § 2332b(g)(5)(B) & 18 U.S.C. § 1961(1). The expanse of federal forfeiture statutes is extensive.

C. Types of Federal Forfeiture

The federal forfeiture system uses summary, administrative, criminal, and civil in rem procedures. Civil in personam forfeitures are rarely used in the federal statutes.¹ While the federal statutes utilize both criminal and civil procedures, their use has been far from uniform. Table 2-1 (pages 25-26) is a summary of selected federal asset forfeiture statutes in effect prior to 2000.

A review of this chart demonstrates the inconsistencies in the statutory authority to forfeit property under various federal offenses. While copyright infringement, 17 U.S.C. § 509, firearms, 18 U.S.C. § 922, and gambling offenses, 18 U.S.C. § 1955, authorized the forfeiture of facilitating property using civil forfeiture procedures, there was no power to forfeit the same property using criminal forfeiture. Conversely, health care fraud, 18 U.S.C. § 1347, obscenity, 18 U.S.C. §§ 1461-1466, 1468, and money remitter, 18 U.S.C. § 1960, offenses could forfeit proceeds of the crimes using criminal procedures but there was no corresponding authority to use the civil forfeiture statutes. There were other offenses such as narcotics trafficking, 21 U.S.C. §§ 841-846, prostitution, 18 U.S.C. §§ 2421-2424, and child sexual exploitation, 18 U.S.C. §§ 2251-2252, that had full authority to forfeit property civilly or criminally on both a proceeds and facilitation theory. The result was confusion and limited application of certain forfeiture laws to various criminal offenses.

Table 2-1 Summary of Selected Federal Asset Forfeiture Statutes Pre-CAFRA

Offense	Statute	Civil Proceeds	Civil Facilitation	Criminal Proceeds	Criminal Facilitation
Copyright Infringement	17 USC §509		17 USC §509
Counterfeiting	18 USC §§471-473	18 USC § 981(a)(1)(C)	18 USC §492	18 USC § 982(a)(2)(B)
Firearms	18 USC § 922		18 USC § 924(d)
Identity Theft	18 USC § 1028	18 USC § 981(a)(1)(C)		18 USC § 982(a)(2)(B)	18 USC § 982(a)(8)
Mail Fraud	18 USC § 1341	18 USC § 981(a)(1)(C)		18 USC § 982(a)(2)(A)
Wire Fraud	18 USC § 1343	18 USC § 981(a)(1)(C)		18 USC § 982(a)(2)(A)
Bank Fraud	18 USC § 1344	18 USC § 981(a)(1)(C)		18 USC § 982(a)(2)(A)
Health Care Fraud	18 USC § 1347			18 USC § 982(a)(7)

Table 2-1 (continued) Summary of Selected Federal Asset Forfeiture Statutes Pre-CAFRA

Offense	Statute	Civil Proceeds	Civil Facilitation	Criminal Proceeds	Criminal Facilitation
Obscenity	18 USC §§ 1461-1466,1468			18 USC § 1467	18 USC § 1467
Gambling	18 USC § 1955		18 USC § 1955(d)
Money Remitters	18 USC § 1960			18 USC § 982(a)(1)	18 USC § 982(a)(1)
RICO	18 USC § 1962			18 USC § 1963(a)(3)	18 USC §§ 1963(a)(1)&(2)
Child Sexual Exploitation	18 USC §§2251-2252	18 USC § 2254(a)(3)	18 USC § 2254(a)(2)	18 USC § 2253(a)(2)	18 USC § 2253(a)(3)
Prostitution	18 USC §§2421-2424	18 USC § 2254(c)	18 USC § 2254(b)	18 USC § 2253(a)(2)	18 USC § 2253(a)(3)
Narcotics Trafficking	21 USC §§ 841-846	21 USC § 881(a)(6)	21 USC § 881(a)	21 USC § 853(a)(1)	21 USC § 853(a)(2)
Continuing Criminal Enterprise	21 USC § 848	21 USC § 881(a)(6); 21 USC § 881(a)(6)	21 USC § 881(a)	21 USC § 853(a)(3)	21 USC§§ 848, 853(a)(3)
Bank Secrecy Act	31 USC§§ 5313, 5316,5324		18 USC § 981(a)(1)(A); 31 USC §531 7(c)		18 USC § 982(a)(1)

The passage of CAFRA in 2000 (106 P.L. 185; 114 Stat. 202) helped to rectify this hodgepodge of forfeiture authority with two simple paragraphs. Section 16 (106 P.L. 185; 114 Stat. 202, 221) amended 28 U.S.C. § 2461 to allow for criminal forfeiture to be sought anytime there is a civil forfeiture provision but no corresponding criminal forfeiture statute, and the defendant is charged and convicted of the underlying crime. United States v. Razmilovic, 419 F.3d 134, 136 (2d Cir. 2005). Section 20 (106 P.L. 185; 114 Stat. 202, 224) amended 18 U.S.C. § 981(a)(1)(C) to permit the forfeiture of the proceeds of any offense listed as a specified unlawful activity or conspiracy to commit that offense as contained in 18 U.S.C. § 1956(c)(7). United States v. All Funds, 345 F.3d 49, 53 n. 2 (2d Cir. 2003).

These two paragraphs have substantially enhanced the property subject to forfeiture under the federal system. The reader is directed to the chart entitled Summary of Selected Federal Asset Forfeiture Statutes Post-CAFRA and Post-USA PATRIOT Act contained as Table 2-2 (pages 28-29). The items in bold print indicate new powers to forfeit property after CAFRA was enacted. The result of these two legislative amendments is to make virtually all of the selected offenses listed on the chart subject to both civil and criminal forfeiture with the exception of the federal RICO or criminal racketeering statute found at 18 U.S.C. § 1962 that remains solely subject to criminal forfeiture.

The reader is also directed to a new offense entitled Bulk Cash Smuggling, 31 U.S.C. § 5332, which was added by the USA PATRIOT Act in 2001 and provides for both criminal and civil forfeiture. These recent amendments help clarify federal forfeiture practice by making criminal and civil procedures applicable to many federal criminal violations.

The federal criminal offenses with forfeiture provisions number in the hundreds and range from environmental, see 33 U.S.C. § 1411-1421, hunting, see 16 U.S.C. § 26, and endangered species violations, see 16 U.S.C. § 1540, to murder, see 18 U.S.C. § 1114, fraud, see 18 U.S.C. § 1343-1344, and trademark infringement, see 19 U.S.C. § 1526. The offenses listed on the summary charts as Tables 2-1 and 2-2 are merely representative of some of the major offenses. A detailed review of these statutes is beyond the purview of this publication and readers are directed to the specific statutes or other treatises for an analysis of these sections. However, there are a few civil and criminal forfeiture statutes that merit a little more attention and are discussed in the sections that follow.

Table 2-2 Summary of Selected Federal Asset Forfeiture Statutes Post-CAFRA & USA PATRIOT Act

Offense Statute Specified Unlawful Activity Civil Proceeds ...