The forfeiture of assets associated with criminal activity has an ancient history. American colonists, particularly business owners, objected to general "writs of assistance" issued by British authorities that allowed broad searches and the subsequent seizures of discovered property suspected of being associated with smuggling or other crimes. This experience became the basis of the specific search warrant provisions contained in the Fourth Amendment to the U.S. Constitution. The Fifth and Fourteenth Amendments prohibit governmental takings of life, liberty or property without due process of law. Due process requires an appropriate legal procedure including prior notice and a right to be heard by a neutral decision maker. There are, however, numerous roadblocks to successfully challenging civil asset forfeiture. It is often used to seize cash, automobiles, and items of personal property, as well as land and buildings.
Federal and state statutes address civil, criminal, and administrative asset forfeiture. Criminal asset forfeiture occurs after a conviction and administrative asset forfeiture is related to contraband. This comment focuses on civil asset forfeiture as it involves individuals not possessing contraband and not convicted of a crime. Civil asset forfeiture statutes contain procedural rules and the types of offenses allowing forfeiture. While drug offenses are the most visible, some forms of white collar crime such as certain frauds and money laundering are also included.
Business funds tainted by illegal conduct that are commingled with lawful activities may provide a basis for forfeiting the entire enterprise. Thus, unlawful actions by a low level employee may result in significant loss. While this outcome is very unusual, it is not unknown. Enterprise forfeitures are generally associated with major investments made by drug kingpins; however, don't underestimate this possibility in small businesses where relatively minor sums may have a substantial financial impact. Additionally, some crimes resulting in forfeiture may not be solely financial.
In civil asset forfeiture cases the government proceeds directly against the property. Consequently, an individual need not be convicted of a crime and more demanding criminal procedure does not apply. Furthermore, typically the burden of proof is on an owner asserting unawareness of criminal activity associated with the asset (such as a automobile loaned to a friend that was used to transport illegal drugs) or presenting an innocent explanation for possessing large sums of cash. Possession of significant amounts of currency, while not illegal, is frequently perceived as coming from illegal drug sales. Since the forfeiture action is against the property, the owner is a third party claimant requesting to be heard by the court.
Sworn statements (affidavits) concerning the circumstances of the seizure are typically prepared by government employees, such as police officers or FBI agents. These statements (explaining, for example, the legal basis for an initial vehicle stop and what the officer observed such as the smell of burning marijuana) are presented to courts to link the property in question to the underlying criminal behavior, thus allowing forfeiture. Forfeiture challenges are costly and time consuming. Some travelers have reported threats of unjustified or highly suspect criminal charges and other actions unless they surrendered property on the spot with a signed waiver. Since the government may utilize the forfeited property to fund a variety of programs including the salaries of officers seizing the property pursuant to the forfeiture statute, many commentators see an inherent conflict of interest. Additionally, property seized by state authorities may under some circumstances be transferred to the federal government. This avoids stricter state legal standards and places the forfeiture action before a federal judge. After forfeiture the federal government may, again in specific situations, share the forfeited assets with the state government. While legislation in some jurisdictions has addressed a few of these issues, civil asset forfeiture remains a unique area of the law that presents special public policy questions.
An August 13, 2013, LexisNexis search found forty reported federal and state decisions in the previous month containing the words "civil forfeiture" or a closely related variation. All but seven were in federal court. In a significant number of these cases the government won because no claimant challenged the forfeiture (default judgment) or the challenger failed to meet a procedural deadline. Some challengers failed to demonstrate their right to be involved in the forfeiture proceeding (lacked standing). In many of these cases the government met a "preponderance of the evidence" standard establishing a right to forfeiture. In two cases the government did not meet this burden of proof.
The U.S. District Court of Nebraska in a July 18 decision ordered the U.S. to return $1,074,900 (U.S. v. $1,074,900, Tara Mishra, claimant). A Nebraska state trooper stopped a speeder who agreed to a vehicle search. The currency was in duffel bags and a back-pack. The claimant was not in the vehicle but asserted that the currency was for a business deal. After a detailed factual recitation, the district judge determined that no direct evidence linked the money to a drug transaction. The judge was troubled that the money was not made physically available for the claimant to drug test or otherwise examine since the police asserted that a dog sniff alerted to the presence of drugs although no drugs were found. Nor was there evidence concerning the reliability of the dog sniff or how the money had been handled by the police. In ordering the money returned, the judge concluded that "in general, the government left too many unanswered questions and had a general failure of proof in this case."
In like manner, a July 15 decision by a U.S. District Court in Maryland found an insufficient link between drug dealing and an automobile (U.S. v. One 2003 Mercedes Benz). The criminal defendant had made a comparatively modest $4,000 down payment on the car and there was no evidence indicating a substantial connection between the car and drug activity. The judge did allow the government to refile the forfeiture action and provide additional factual information.
This brief survey of recent civil asset forfeiture decisions indicates that a forfeiture challenger must meet procedural deadlines. One must present a detailed basis for a claim of ownership as well as the objections to forfeiture. A very carefully prepared factual analysis may sometimes overcome a presumed link between the property and criminal activity. Immediately obtain an experienced attorney when challenging asset forfeiture.
Beyond the technical procedural details, the due process and public policy questions surrounding civil asset forfeiture are important. The appropriate balance between secure property ownership and fighting crime is essential to both individuals and the business community. It would be a mistake for ordinary citizens and business leaders to ignore civil asset forfeiture actions in the belief that they only impact convicted criminals or persons known to commit crimes.