Last Updated on: 20th October 2023, 09:10 am

How Do Federal Criminal Forfeiture Proceedings Work? Property and Asset Seizures

Having your property or assets seized by the federal government can be a scary and confusing experience. Let’s break down how federal criminal forfeiture works, so you can understand your rights and options if this happens to you.

What is Criminal Forfeiture?

Criminal forfeiture is when the government takes ownership of property or assets that were involved in certain federal crimes. This includes:

• Property used to commit a crime, like a car used for drug trafficking
• Proceeds from illegal activity, like money from drug sales
• Substitute assets that have a value equal to illegal proceeds, if those proceeds are unavailable

Criminal forfeiture happens alongside sentencing when someone is convicted of a federal crime. It’s meant to punish criminals by taking away tools and profits from their crimes.

How Does the Criminal Forfeiture Process Work?

Here’s a basic overview of how federal criminal forfeiture works:

1. The government identifies property or assets they believe should be forfeited and includes them in the indictment.
2. If the defendant is convicted, the jury decides if the identified property should be forfeited.
3. The court reviews the forfeiture and enters a preliminary order of forfeiture.
4. The government seizes the forfeited property and starts the process to make the forfeiture final.
5. Third parties can challenge the forfeiture if they have a legal interest in the property.
6. The court enters a final order of forfeiture after any challenges are resolved.

This gives the basic flow, but there are a lot of details involved at each step. Let’s break it down further.

Identifying Property for Forfeiture

Federal prosecutors must identify any property or assets subject to forfeiture in the indictment when they initially charge the defendant with a crime. This puts the defendant on notice that the government intends to forfeit certain property.

The government doesn’t have to identify all the property at this stage. They can amend the indictment to add more later on if additional forfeitable property is discovered.

The Forfeiture Phase of Trial

If a defendant is convicted at trial, there is a separate forfeiture phase where the jury decides what property should be forfeited. This is based on evidence presented during the trial about the property’s connection to the crime.

The burden is on the government to prove by a “preponderance of evidence” that the property is subject to forfeiture. This is a lower standard than proving guilt “beyond a reasonable doubt.”

Preliminary Order of Forfeiture

After the jury determines what should be forfeited, the court enters a preliminary order of forfeiture. This authorizes the government to seize the property if they don’t already have it.

At this point, the government takes ownership of the property in theory. But the forfeiture isn’t final yet – third parties can still challenge it if they have a legal interest in the property.

Seizing Forfeited Property

Once the preliminary forfeiture order is entered, federal marshals, FBI agents, or other law enforcement can seize any forfeited property not already in the government’s possession. This includes:

• Taking physical possession of assets like cars, houses, or jewelry.
• Serving restraining orders to bar access to bank accounts or other financial assets.
• Filing notices of lis pendens against real estate to prevent sale or transfer.

The government tries to seize forfeited property quickly to prevent it from being sold, hidden, or destroyed before forfeiture is finalized.

Challenging the Forfeiture

After receiving notice of the preliminary forfeiture order, third parties have 30 days to file a petition claiming a legal interest in the property. This is how someone could challenge the forfeiture to try and get their property back.

Possible third party claimants include:

• Owners – If property was stolen or used without consent
• Lienholders – Like banks holding a mortgage or car loan
• Bonafide purchasers – Who acquired an interest before the illegal acts
• Victims – Who have a claim for compensation against the property

The court holds a hearing to consider any petitions and amend the forfeiture order if necessary. If a third party claim is successful, the government may have to return seized property or pay compensation.

Final Order of Forfeiture

Once any third party claims are resolved, the court enters a final order of forfeiture. This formally transfers title of the property to the government. At this point, the forfeiture is very difficult to challenge.

The seized assets are sold, and sale proceeds go to the Department of Justice Assets Forfeiture Fund. This fund supports law enforcement efforts and compensates victims.

Can Forfeiture Happen Without a Criminal Conviction?

In limited circumstances, property can be forfeited civilly without a criminal conviction. This happens through administrative forfeiture proceedings when:

• The seized property is worth less than $500,000, and
• No one contests the forfeiture by filing a claim.

With administrative forfeiture, law enforcement can seize property linked to illegal activity and forfeit it more quickly without going through a criminal trial. But the value limits mean it’s not used for major assets.

For property worth more than $500,000, the government must obtain a criminal conviction before forfeiting assets, which provides greater procedural protections.

How to Get Seized Property Back

If your property or assets are seized for federal forfeiture, here are some options to try and get them back:

• File a claim opposing the forfeiture after receiving notice.
• Provide proof you have a legitimate interest in the property not connected to a crime.
• Request a hardship release if you need access to seized funds for basic living expenses.
• Negotiate a settlement where the government returns a portion of the assets.
• Challenge the seizure as improper or abusive if the circumstances don’t justify it.

An experienced attorney can advise you on the best strategies based on your situation. But in general, it’s an uphill battle once the seizure and forfeiture process has begun.

Takeaways on Federal Criminal Forfeiture

The key takeaways on federal criminal forfeiture proceedings include:

• Forfeiture allows the government to seize assets linked to criminal activity.
• The forfeiture process happens alongside a federal criminal case.
• Prosecutors must identify assets for forfeiture in the indictment.
• A jury decides if seizure is appropriate after a conviction.
• Third parties can challenge the forfeiture after it is ordered.
• Forfeiture becomes very difficult to fight once finalized.

Having property or assets seized in federal forfeiture can be devastating. Consult an attorney immediately if this happens to understand your rights and navigate the process. An experienced lawyer may be able to negotiate return of some assets or help protect your interests in a federal investigation.