4 Initiation of Civil Forfeiture Proceedings

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

4 Initiation of Civil Forfeiture Proceedings

A. Introduction

Once the property has been seized, it is time to initiate the civil forfeiture proceeding. This requires the seizing agency to confront two issues:

1) Should the case be filed as a state or a federal forfeiture action?
2) What type of forfeiture should be filed? (judicial or administrative)

Although it would appear that the filing decision should be governed by whether the property was seized by a federal or state law enforcement agency, federal law permits property seized by state agencies to be adopted by federal law enforcement agencies and litigated in the federal system. Madewell v. Downs, 68 F.3d 1030, 1037 (8th Cir. 1995).) This allows the state agency to participate in the federal equitable sharing program.

B. Federal Equitable Sharing

One of the unique aspects of federal forfeiture is that it provides for the sharing of forfeited assets with state and local law enforcement agencies that assisted in the federal forfeiture. This is specifically authorized in the statutes, see 21 U.S.C. §§ 881(e)(1)(A) and (e)(3); 18 U.S.C. § 981(e)(2) and 19 U.S.C. § 1616a, and is intended to "encourage further cooperation between the recipient State or local agency and Federal law enforcement agencies." See 21 U.S.C. § 881(e)(3)(B). To assist in this sharing decision, the federal government classifies forfeitures into two types: 1) joint investigations and 2) adoptive forfeitures.

1. Joint Investigation

A joint investigation is defined as a case in which federal agencies work together with state or local law enforcement agencies to enforce federal criminal laws. See A Guide to Equitable Sharing of Federally Forfeited Property for State and Local Law Enforcement Agencies, U.S. Department of Justice, April 2009, at 6. A task force comprised of federal, state, and local law enforcement agencies is an example of a joint investigation.

2. Adoptive Forfeiture

Generally, when a state or local agency seizes property as part of an ongoing state criminal investigation, and criminal charges are being prosecuted in state court, the forfeiture should also be pursued in a state action. Asset Forfeiture Policy Manual (2012) Ch. 1, Sec. VII.E. However, to immobilize criminal organizations and promote cooperation among federal, state, and local law enforcement agencies, federal personnel are encouraged to adopt state and local seizures for federal forfeiture whenever appropriate. Asset Forfeiture Policy Manual (2012) Ch. 1, Sec. VII.A.

A state or local law enforcement agency may therefore seize an asset and request that a federal law enforcement agency adopt the seizure and proceed with federal forfeiture. State v. Gray, 21 S.W.3d 847, 851 (Mo. App. 2000) (small agency with limited investigative resources made federal forfeiture more appropriate). This cloaks the initial seizure with federal authority as if federal officials made the seizure. DeSantis v. State, 384 Md. 656, 866 A.2d 143, 145-46 (Md. App. 2005). Seizing property under state law and forfeiting the asset federally does not violate the owner's due process rights. North Carolina ex rel. Haywood v. Barrington, 256 F. Supp. 2d 452, 466 (M.D.N.C. 2003).

Before a case will be adopted, the federal law enforcement agency must determine that the conduct giving rise to the forfeiture is a violation of federal law, and there is a federal statute authorizing the forfeiture. See Guide to Equitable Sharing, at 6. Additionally, federal agencies have set up minimum monetary thresholds that apply to various categories of assets (i.e., conveyances, real property, cash) that should be met before the case will be accepted into the federal program. These thresholds vary between the Department of Justice and Treasury programs; accordingly, the guidebooks of each agency should be reviewed to determine whether property will qualify for adoption. See Department of Treasury Guide to Equitable Sharing for Foreign Countries and Federal, State, and Local Law Enforcement Agencies, April 2004.

On joint investigations, contributing agencies are entitled to request a share of the asset that reflects the degree of their direct participation resulting in the forfeiture. See Guide to Equitable Sharing, at 12. On adoptive forfeitures where all of the pre-seizure activity was performed by the state or local agency, the federal government returns the net proceeds after deducting a flat rate of at least 20 percent for processing the forfeiture. Guide to Equitable Sharing, at 12. Therefore, if the state or local law enforcement agency seizes an asset while part of a joint federal investigation or that meets the criteria for adoptive forfeiture, it may desire that the property be filed as a federal forfeiture. United States v. $6,207.00 in U.S. Currency, 2009 WL 2169167, *5 (M.D. Ala. 2009).

With this background we will now examine the available civil forfeiture procedures within the federal and state systems.

C. Administrative Forfeiture

One of the filing options in the federal and state jurisdictions with enabling statutes is to initiate the seizure as an administrative or nonjudicial forfeiture. Where authorized, most jurisdictions prefer to use the administrative procedure because it identifies contested claims early in the process, allowing uncontested property to be processed quickly and reserving the judicial court system for contested matters. United States v. McDaniel, 2008 WL 1816455, *3 (S.D. Ga. 2008).

1. Federal Administrative Forfeiture

Rooted in customs laws, administrative forfeitures have a long history in the federal system, but they have been significantly altered by the recent enactment of the Civil Asset Forfeiture Reform Act of 2000 (CAFRA).

2. Federal Administrative Forfeiture under the Customs Laws (19 U.S.C. § 1602 et seq.)

Administrative forfeitures under the customs law are found at 19 U.S.C. § 1602 through § 1621. They permit the seizing agency to proceed nonjudicially against property that does not exceed $500,000, is illegally imported, or is a conveyance used in controlled substances offenses or monetary instruments as defined by 31 U.S.C. § 5312(a)(3). See 19 U.S.C. § 1607.

Written notice of the seizure and intent to forfeit the property is given to all persons with an interest in the seized property who can reasonably be ascertained. See Vance v. United States, 676 F.2d 183, 186 (5th Cir. 1982). Notice must be published once a week for three weeks in a newspaper of general circulation, see 19 U.S.C. § 1607(a), or posted on an official government Internet site for at least 30 consecutive days. 19 C.F.R. § 162.45. Claimants have 20 days from the date of first publication notice to file a claim and post a cost bond. See 19 U.S.C. § 1608. If no claim is timely filed, the seizing agency declares the property forfeit and issues a declaration of forfeiture. See 19 U.S.C. § 1609. If a claim is filed, the administrative proceeding is terminated, and the seizing agency refers the matter to the U.S. Attorney to initiate judicial forfeiture proceedings. See 19 U.S.C. § 1608. The administrative forfeiture provisions of 19 U.S.C. § 1602 et seq. have been incorporated by reference as an authorized procedure in other federal civil forfeiture statutes. See 18 U.S.C. § 981(d); 21 U.S.C. § 881(d).

3. Federal Administrative Forfeiture under CAFRA (18 U.S.C. § 983)

With the passage of CAFRA Section 2 (106 P.L. 185; 114 Stat. 202, 203), Congress significantly amended the administrative forfeiture process. CAFRA Section 2 applies to cases initiated on or after August 23, 2000. United States v. One "Piper" Aztec "F" Deluxe Model, 321 F.3d 355, 358 (3d. Cir. 2003). Instead of amending the customs administrative procedures, however, it created a new provision found at 18 U.S.C. § 983 containing administrative forfeiture provisions that override the customs procedures where they are inconsistent.¹ The new CAFRA provisions apply to all civil forfeiture actions under federal law except the customs forfeiture provisions at title 19 and four other limited sections.² This is called the "Customs Carve-Out" because it exempts certain offenses investigated by the U.S. Department of Homeland Security (DHS) Homeland Security Investigations/Immigration and Customs Enforcement (HSI/ICE), U.S. Customs and Border Protection (CBP), and other Treasury departments. ³

Some of the changes to the deadlines and procedures of federal administrative forfeiture under CAFRA include:

1) A deadline of 60 days from the date of seizure to send notice of administrative forfeiture to interested parties, (18 U.S.C. § 983(a)(1)(A)(i)) unless the forfeiture is an adopted forfeiture where the deadline is extended to 90 days. 18 U.S.C. § 983(a)(1)(A)(iv); Cason v. Holder, 815 F. Supp. 2d 918, 923-24 (D. Md. 2011); United States v. $6,180.00 in U.S. Currency, 2010 WL 2472499, *2 (W.D.N.Y. 2010).
2) This deadline may be extended by 30 days upon request by federal supervisory personnel, 18 U.S.C. § 983(a)(1)(B), or 60 days by court order. 18 U.S.C. § 983(a)(1)(C).
3) If the government fails to meet this deadline, it must return the property without prejudice to the right to commence the forfeiture action at a later time. 18 U.S.C. § 983(a)(1)(F), but see Manjarrez v. United States, 2002 WL 31870533 (N.D. Ill. 2002); United States v. $11,500.00 in U.S. Currency, 710 F.3d 1006, 1015-16 (9th Cir. 2013).
4) The claimant has 35 days after the date of mailing of the notice letter to file a claim 18 U.S.C. § 983(a)(2)(B); Supplemental Rule G(5)(a)(ii)(A), or 30 days from the date of last publication. 18 U.S.C. § 983(a)(2)(B); Supplemental Rule G(5)(a)(ii)(B).
5) The cost bond requirement is waived. 18 U.S.C. § 983(a)(2)(E).
6) The government has 90 days after a claim is filed to initiate a judicial forfeiture action. 18 U.S.C. § 983(a)(3)(A).

A claim filed in opposition to an administrative forfeiture must be timely filed, verified by the claimant, identify the specific property claimed...