Smart On Crime - Asset Forfeiture

Curb the Abuses of Federal and State Forfeiture Powers and Fulfill the Original Intent of the Bipartisan Civil Asset Forfeiture Reform Act and Related State Reforms.

Legislative

Congress should pass comprehensive legislation to curb abuses of federal and state forfeiture powers and fulfill the original intent of the bipartisan Civil Asset Forfeiture Reform Act and related state reforms. Amending the United States Code and Federal Rules of Civil Procedure as outlined below could provide meaningful solutions to curb abuse of civil asset forfeiture laws.

Amend the federal equitable sharing law, 21 U.S.C. § 881(e), under which state police circumvent state forfeiture laws by turning over the forfeiture to federal law enforcement authorities in exchange for a percentage of the proceeds. Any amendment should restrict the Attorney General’s authority to transfer forfeited property in such a manner, particularly in cases in which the property was originally seized by state or local law enforcement and state law would otherwise prohibit or limit law enforcement’s retaining the property.

Clarify CAFRA’s fee shifting provision, 28 U.S.C. § 2465(b)(1), which has been undermined by case law, to fully enforce the government’s obligation to pay attorney fees to prevailing claimants.

Close loopholes – created by judicial decisions – in the statutory right to sue the government (i.e., waiver of sovereign immunity) for negligent or intentional damages to or loss of seized property in its custody by amending 28 U.S.C. § 2680(c).

Explicitly waive sovereign immunity where the government forfeits property without proper notice to the owner or destroys, sells, or loses property without having forfeited it by amending Federal Rule of Civil Procedure 41(g).

In addition to these legislative solutions, Congress could prohibit or restrict the use of Department of Justice (DOJ) funds to forfeit property under the equitable sharing law.

Executive

Absent congressional action to amend federal civil asset forfeiture law, the President should issue an executive order or the Department of Justice should revise its regulations and policies to limit or forbid the use of equitable sharing designed to circumvent state law.

Criminal Asset Forfeiture Reform

Criminal Forfeiture Rules are Unfair to Defendants and Third Parties

The government increasingly relies on criminal forfeiture proceedings, which are less protective of property owners than civil forfeiture proceedings. Furthermore, court decisions have modified criminal forfeiture procedures in ways that unfairly tip the balance in favor of the government, in ways that circumvent and undermine the purposes of the Civil Asset Forfeiture Reform Act.

Safeguard the Rights of Defendants and Third Parties with Basic Procedural Reforms.

Legislative

Congress should pass comprehensive legislation to ensure fair procedures for the accused and third parties in criminal forfeiture proceedings, and to curtail the government’s use of criminal forfeiture as an end run around civil asset forfeiture reforms. The reforms proposed below fall into three broad categories. The first category is comprised of three proposals that would help safeguard the accused’s rights to a fair procedure for determining what is subject to criminal forfeiture. The second category contains four proposals that would limit the use of so-called personal “money judgments” in lieu of orders forfeiting specific property. Such money judgments are a judicially-crafted remedy that was never authorized by Congress. The third category of proposed reforms is intended to safeguard the rights of third parties who have an interest in the property subject to forfeiture.

Amending the Federal Rules of Criminal Procedure and United States Code, as suggested below, could provide meaningful solutions to the issues identified above.

1. Amend Rules 7 and 32.2 of the Federal Rules of Criminal Procedure

Congress should safeguard the accused’s right to a fair procedure for determining the amount of any criminal forfeiture by: (i) requiring fair notice through a bill of particulars; (ii) providing the right to challenge ex parte restraining orders; and (iii) restricting the use of hearsay.

2. Amend Rule 32.2 of the Federal Rules of Criminal Procedure and 21 U.S.C. § 85

Congress should amend these provisions to limit the use of money judgments in lieu of forfeiture of specific property by: (i) providing the right to a jury trial; (ii) limiting the use of joint and several liability; (iii) clarifying that the relation back principle does not apply to substitute (i.e., “clean”) assets; and (iv) limiting the amount of money judgments to the defendant’s known current assets, unless the government proves that the defendant has concealed assets. Short of abolishing the money judgment, Congress needs to rein in the abuses that have arisen in connection with the use of money judgments.

3. Amend Rule 32.2 of the Federal Rules of Criminal Procedure and 21 U.S.C. § 85

Congress should seek to safeguard the rights of third parties with interests in the property the government seeks to forfeit by: (i) providing the right to a jury trial, (ii) allowing a third party with standing to contest the forfeiture on the merits; (iii) requiring a finding that the defendant has some forfeitable interest in the property before a preliminary order of forfeiture is entered; and (iv) treating both court-ordered child support obligations and claims for compensation by the defendant’s employees like secured interests, with priority over the government’s forfeiture claims:

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