Forfeiture Procedure in Federal Court: An Overview

UIdaho Law Digital Commons @ UIdaho Law Articles Faculty Works 1999 Forfeiture Procedure in Federal Court: An Overview David Pimentel Follow this and additional works at: https://digitalcommons.law.uidaho.edu/faculty_scholarship Part of the Constitutional Law Commons FORFEITURE PROCEDURE IN FEDERAL COURT: An Overview David Pimentel' '• Deputy Circuit Executive, U.S. Courts for the Fifth Circuit. Judical Fellow (1997-98). Administrative Office of the U.S. Courts; J.D. Boalt Hall School of Law (1988). This paper was written for the Rules Committees of the Judicial Conference of the United States. Thanks to Carl Tobias for comment and insight. The views expressed are those of the author and do not necessarily reflect the views ot the Publisher, any federal court of the Judicial Conference of the United States, or ot any ot its committees. 1 183 FEDERAL RULES DECISIONS 2 TABLE OF CONTENTS I. II. Introduction Historical Background A. Deodands B. Statutory Forfeiture C. Forfeiture of Estate (Common Law) III. Modern Forfeitures A. Types of Forfeitable Property 1. Contraband 2. Instrumentalities/Tools of Crime 3. Proceeds of Crime B. Offenses that Subject Property to Forfeiture IV. Procedure—Criminal v. Civil A. Criminal Forfeiture Procedure 1. Jurisdiction 8 8 2. Statutes and Rules Governing Criminal Forfeitures 3. Procedural Due Process 4. Burden of Proof (Criminal) 5. Third Party Claims " B. Civil Forfeiture Procedure 1. Jurisdiction * 2. Administrative Forfeiture 3 9 10 10 10 12 12 SAp^ly 81X1 Rules~Customs Admiralty Procedures 4. Procedural Due Process-Notice 5. Burden of Proof (Civil) 6. Defenses a. Innocent Owner b. Double Jeopardy c. Excessive Fines 7Return of the Property 5 6 6 6 6 J? ' 17 17 v V. Conclusions and Recommendations 17 Appendix A-Commonly used forfeiture-related statutes is FORFEITURE PROCEDURE IN FEDERAL COURT Cite as 183 F.R.D. I I. 3 Introduction The government's pursuit of civil forfeitures has recently drawn increased attention. Civil forfeiture Filings in federal court are again on the increase after declining from their frequent invocation during the Bush administra­ tion.2 Moreover, they remain a subject of attention and concern, with the Supreme Court deciding significant forfeiture cases in recent years,3 and with Congress considering various legislative proposals to curtail or expand the use of forfeitures.4 Both liberal and libertarian voices are calling present civil forfeiture practice a grave threat to the private property rights of the innocent, as well as the not-so-innocent.5 Prosecutors and law-and-order conservatives, 2. Civil "forfeiture and penalty" filings have plummeted since the start of the Clinton administration; Proportion of All Civil Filings Civil Forfeiture Filings Year 1988 4.348 1.81% 1989 5,823 2.59% 1990 5,950 2.81% 1991 5,368 2.47% 1992 5,434 2.38% 1993 4,173 1.81% 1994 3,081 1.29% 1995 2,362 0.91% 1996 2,322 0.88% 1997 2,353 0.86% -igures drawn from Table C-2A. Administrative Office of the U.S. Courts. Data on criminal orfeitures are not available at the AO. because such forfeitures are sought as part ot the larger :riminal case. The decrease in civil forfeiture proceedings, according to sources at the FB I., is attnbutable to the circuit court decisions in the early 1990s that civil forfeiture could bar : criminal prosecution under the double-jeopardy clause. Those decisions a\e reversed, see discussion of double jeopardy infra, and in the Spring ot 1996.^the Attorney General issued a statement urging more active pursuit of civil forfeitures. Acc°1^1"^^e filings picked up a little in 1997 and should be expected to continue their rebound. 1. See. e.g., discussion of cases infra at section IV.B.6, Civil Forfeiture Procedures; Defenses. 1. As of February 19. 1998, there were 87 bills pending in Congress referencing forfeitures. Several of them are advanced as significant reform ot forfeiture law. ' ; P* Schumers bill "to reform asset forfeiture laws"). H.R. 428 (Rep. Pickett.ibiU toJ P^de that ep , the property of innocent owners is not subject to forfeiture ), H.R. v bills "to provide a more just and uniform procedure for Federal cm! forfe. ures ). Mos are more specific laws imposing or promoting forfeiture as a reme > or pena > . .. • (Sen. D Amato's bill "to require the forfeiture of counterfeit access devices ). H.R. 21 1- (Rep. Franks" bill "to increase the forfeiture penalty for telephone service s amming X H^ l lJb (Rep. Lowey's bill "to end the use of steel jaw leghold traps on animals provisions for illegal traps and furs), and S ^ C. import, export, sale, purchase, possession ... ot bear viscera f viscera). Representative Henr, Hyde (R-IL), Chair of the House J"dicia^. ranks with law-and-order conservatives on this point. He as pu is 'for t torfeiture of the 183 FEDERAL RULES DECISIONS 4 as well as some "new Democrats," hail forfeitures-both civil and criminal-as a powerful tool in combating crime. It can be difficult to distill a reasoned and reasonable debate on forfeitures, particularly at a time when it is politically expedient to be "tough on crime." This paper is intended to provide an overview of federal forfeiture procedure. It begins with historical background on the law of forfeitures and discusses some practical aspects of forfeiture procedure as it now operates in federal court. It concludes with some recommendations for the Rules Committees of the Judicial Conference of the United States, as they attempt to address the problems and deficiencies in federal forfeiture procedure, both civil and criminal. II. Historical Background The hoary history of forfeitures begins with some elaborate legal fictions. Forfeiture practice has its origins in biblical precepts, under which an ox that gores a person to death will be stoned "and his flesh shall not be k fk Pre_Christian Europeans also practiced "noxal surrender," under Inch the instrument of accidental injury or death was surrendered to the victim or his kin' Both practices, while less than entirely Xtive of the "* T""PRIN* " t» A. £ 'nd """ M DeodanHc The doctrines evolved over time In F no-u^k . object causing the death of a snhient f n v comm°n law, the value of an - a deodand *££,'the'J?**6 > Waited to the Crown P«d," t h e C r o w n ft-noU n e d S e r ^ T m e a n s " g i v e n t o east, the Crown was in a Iwon tn? °f deit>' At th* 8 de for the soul of the deceased The nJT °dand to purchase Masses rationales evolved. By the ninete^T ^ °V6r the ™ but the LST property was justified on an entirely diffe neg gence. Because there w^i forfeitures were a nan l"7' th® surrender of such gr°Und; 38 3 detel™t to e^ -_w|»ch governed maritime 6 6 - P afe from J Exodus 2:28 (KJV) Einkelstein The r:^ Seizure-* (cI, T (Cato Hyde' Henry, Forfeits y r neiting '69, ,8| mm 'WronKfu' Procedural Due „N Institute, 1995). ' ° ^ w \ ** 4 Gill. Wco L R« »• Id. " 46 TemP- L 57. 64 (198°.**"""• *•**. ../nteBtt ' Q 73)' c FORFEITURE PROCEDURE IN FEDERAL COURT 5 Cite as 183 F.R.D. I shipping. Penalties for violation of these laws included the forfeiture not only of the illegally shipped goods, but of the vessel itself.10 Vicarious liability also applied in these cases, so the offense of a solitary sailor could result in the forfeiture of the entire ship, even if the sailor were acting against the owner's wishes.11 The first U.S. Congress enacted customs laws patterned after the Naviga­ tion Acts, prescribing penalties including the forfeiture of both cargo and ship. The Supreme Court upheld these procedures in 1827, deciding that a ship could be forfeited even without a criminal conviction.12 The Court reasoned that this was an in rem proceeding: "The thing is here primarily considered as the offender."1! In United States v. Brig Malek Adhel not too many years later, the Court upheld a forfeiture notwithstanding the owner's innocence, justifying it on tort-inspired grounds: that the forfeiture was the "only adequate means of suppressing the offense or wrong, or insuring an indemnity to the injured party."11 C. Forfeiture of Estate (Common Law) Forfeiture of estate, unlike deodands and statutory forfeiture under the Navigation Acts and their progeny, focused on the offender rather than on the property itself. At common law, anyone convicted of a felony forfeited all his lands and personal property. Such forfeitures were rare in America. The Constitution prohibited such extreme penalties in treason cases, and Congress soon restricted their application to other crimes.'1 III. Modern Forfeitures Notwithstanding antecedents in the common law, all modem-day forfei­ tures, both civil and criminal, proceed under statutory authorizations. The patchwork of applicable statutes establishes varying standards and proce­ dures for different types of forfeitures. It may be helpful to analyze them under several broad categories. A. Types of Forfeitable Property In the dissent in Bennis v. Michigan,lb Justice Stevens classifies forfeita­ ble property into three categories: (1) "pure contraband. (2) tools of the criminal's trade," and (3) "proceeds of criminal activity." This categoriza10. Doyle. Crime and Forfeiture, CRS Report for Congress. CRS-3 (rev. 1993). 11. Note, Bane of American Forfeiture Law—Banished at Last?. 62 Cornell L Rt\. 768. (1977). 12. The Palmyra. 25 U.S. (12 Wheat.) 1 (1827) (involving charges of. but no conviction tor. piracy). 13. Id. at 14. 14- United States v. Brig Malek Adhel. 43 U.S. (2 How.) 210 233 (1844); but see Reed & GUI at 66 & n. 81 (suggesting that the procedures were employed and up e . a °n the importance of the revenues generated by such forfeitures, an o se of federal revenue was generated through customs duties and seizures) 15. Doyle. Crime and Forfeiture. CRS Report for Congress. CRS-3 (rev. 1993). '6. 516 U.S. 442, 116 S. Ct. 994. 1004. 134 L.Ed.2d 68 (1996). 70-80% £ 183 FEDERAL RULES DECISIONS tion is helpful in understanding the origins and rationales of modern forfeiture procedure. Each will be considered in tinn. 1. Contraband The simplest forfeitures, both conceptually and practically, are forfeitures of contraband, that is, property the mere possession of which is illegal. Justification for this type of forfeiture is self-evident: because the law prohibits the individual from possessing the property in the first place, forfeiture is an essential element of the remedy. This is particularly true when the contraband is a threat to public health or morals—e.g., obscene material, sawed-off shotguns, adulterated food, or illegal drugs. Seizure of these materials serves the important function of removing them from public circulation where they may do damage. Because there can be no legitimate claim to such property, procedural lights of "owners" in confiscation pro­ ceedings are not a significant concern. Contraband seizures typically do not result in significant revenues for the government. 2. Instrumentalities/Tools of Crime Property used in the commission of a crime may also be subject to forfeiture. Vehicles are often confiscated under these provisions, as well as real property used for the manufacture or cultivation of illegal narcotics. I his type of forfeiture has been justified on two separate grounds: (1) it deterre"elfor the by prescribing an additional penalty for the crime and (2) it provides an incentive to the property owmer to take precautions that prevent others from using his property for criminal 3. Proceeds of Crime ™i.bl< » Three forfeiture. „ " »• k"Wr nnci unjust enrichment; the wrongdoer should „„(1 P P'e of avoiding his crime. This tvpe of forfeiture fW permitted to profit from primarily at tho^e activities likehT WtneSSed in RICO, has been aimed llkely to perpetrators. generate a large payoff for the m< °'d'h • "?*",,f • e™»»i p™™- SKKT«*•--sssssas;- EK forffih y Cnnunal aetivity- —____ The ranee of rfeiture - - ftunpiTiifan °rfeitures itself is always Carry forteiture . provisions, carried out h by the U.S. 18. 21 U S C § 853(p) (as 19. tended in 1986) ^ Appendix A, listing nearly 200 Qf 20. See supra note 4. the e _ more commonly uwd forfeiture provisions FORFEITURE PROCEDURE IN FEDERAL COURT 7 Cite as 183 F.R.D. I Department of Justice are executed under one of two statutes.21 Section 981 of Title 18 prescribes civil forfeiture as a remedy for violation of a wide range of criminal statutes, including counterfeiting, smuggling, money laun­ dering, and crimes against financial institutions.22 Moreover, 21 U.S.C. § 881 allows civil forfeiture of almost everything associated with the manu­ facture, sale, and distribution of controlled substances, including firearms used in conjunction with such activities.23 Criminal forfeitures, representing 21. 1 8 U.S.C. § 981; 21 U.S.C. § 881. Both statutes are discussed in some detail infra. 22. Section 981(a)(1)(A) calls for the forfeiture of any property involved in financial transac­ tions which violate the laws governing (1) the reporting of such transactions, 31 U.S.C. § 5313(a). (2) structuring transactions to evade reporting requirements, 31 U.S.C. § 5324(a), (3) money laundering, 18 U.S.C. § 1956, and (4) engaging in monetary transactions with criminally derived property, 18 U.S.C. § 1957. Section 981(aXD(B) renders forfeitable the proceeds of any offense against a foreign nation involving manufacture, sale or distribution of controlled substances. Section 981(a)(1)(C) provides for the civil forfeiture of proceeds traceable to a violation of 18 U.S.C. §§215 (loan kickbacks), 471-74, 476-81, 485-88, 501, or 502 (counter­ feiting securities, currency, and postal stamps). 510 (forging signatures on U.S. checks, securities or bonds), 542 (false statements in customs). 545 (smuggling), 656 or 657 (bank embezzlement), 842 or 844 (trafficking in explosives), 1005, 1006 or 1007 (falsifying bank records), 1014 (false statement in loan applications), 1028 (false identification of documents), 1029 (trafficking in access devices), 1030 (computer hacking), 1032 (asset concealment), 1341 or 1343 (mail and wire fraud, forfeiture limited to fraud against financial institutions), or 1344 (bank fraud). Section 981(a)(1)(D) governs forfeiture of property traceable to the gross receipts obtained, even indirectly, from violations of 18 U.S.C. §§ 666(a)(1) (federal program fraud), 1001 (false statements), 1031 (major fraud against the U.S.), 1032 (asset concealment), 1341 and 1343 (mail and wire fraud) when arising out of the sale of assets by a federal conservator or receiver (e.g., FDIC). Finally, section 981(a)(lXF) calls for forfeiture of property traceable to the gross receipts obtained, even indirectly, from violations of 18 U.S.C. §§511 (altering or removing motor vehicle ID numbers), 553 (import/export of motor vehicles), 2119 (car-jac ingl, 2312 or 2323 (trafficking in stolen motor vehicles). 23. (a) Subject property The following shall be subject to forfeiture to the United States and no property nght shall exist in them: (1) All controlled substances which have been manufactured, distributed, dispensed, or acquired in violation of this subchapter. (2) All raw materials, products, and equipment of any kind which are used. mtendedtor use, in manufacturing, compounding, processing, delivering, importing, or e po controlled substance or listed chemical in violation of this subchapter. (3) All property which is used, or intended for use, as a container for property escri t in paragraph (1), (2), or (9). . ,. (4) All conveyances, including aircraft, vehicles, or vessels, which are use. orare ,n^" for use, to transport, or in any manner to facilitate the transporta ion, • P fauainst sion, o r concealment of property described in paragraph (1), (2), o r ( ). ttp certain innocent owners]. , , ... (5) All books, records, and research, including formulas, microfilm, tapes, and data which are used, or intended for use, in violation of this subchapter. . , , (6) All moneys, negotiable instruments, securities, or other things o |jstecj intended to be furnished by any person in exchange for a con r exchange and all chemical in violation of this subchapter, all proceeds traceable o s facilitate anv c money negotiable instruments, and securities used or intended 0 violation of this subchapter, except ... [against certain innocen ovs . . (7) All real property, including any right, title, and interest interest) in the whole of any lot or tract of land and any appu which is used, or intended to be used, in any manner or part, to comm commission of, a violation of this subchapter punishable by more ment, except ... [against certain innocent owners]. facilitate the , , nIiir (8) All controlled substances which have been possessed in violat.on of (9) All listed chemicals, all drug manufacturing equipment, a exported, encapsulating machines, and all gelatin capsules, whic jnt..nded to be distributed, manufactured, possessed, distributed, dispensed ^J^.^Xhapter or subchapter II of dispensed, acquired, imported, or exported, in violation 01 this chapter. g 183 FEDERAL RULES DECISIONS a smaller proportion of the overall forfeiture picture, and carried out only as part of a criminal prosecution, are authorized for essentially these same crimes.24 In addition to these, however, separate statutory provisions provide for forfeitures in a remarkable array of contexts, including, among others, immigration (Title 8, forfeiting vessels, vehicles, aircraft, etc.), hazardous and deceptive products (Title 15, forfeiting the products themselves), fish and wildlife (Title 16, forfeiting guns, traps, fishing vessels, etc.), racketeer­ ing25 (Title 18, forfeiting instrumentalities and proceeds), customs (Title 19, forfeiting contraband, as well as vessels, vehicles, aircraft, ete.), internal revenue (Title 26, forfeiting alcohol, tobacco and firearms), trading with the enemy (Title 50, forfeiting goods offered for trade).26 Many of these provide for both civil and criminal forfeiture. IV. Procedure—Criminal v. Civil Today, forfeitures may be classified into two categories: (1) criminal (in personam) forfeitures, and (2) civil (in rem) forfeitures. The former func­ tion explicitly as a punishment for the offender following a criminal conviction. The latter proceed against the "offending" property itself; the innocence of the owner is not necessarily a defense. The procedures employed in each type of forfeiture warrant separate consideration. A. Criminal Forfeiture Procedure uvi Any drug paraphernal* (as defined in sec.ion 857 of this titkh °fTi"e '8) Used " «o be used to <2> -d any proceeds .PraSersU^Cm^meM °f -to*. offenses; „ deSCribed in torfeilure under Section 981 listed iiwhe'[rac|dng the list of crimes prompting civil W^The Rico statute ^T CUon 982 ln reads, at IS U.S.C. § 1963(a) ofthis Chapter shall be fined under this title or h' *nd sha" forfa' "> 'he United States, 'irespecuveof any ptosis,on of Sute law-' (2) ancf^1*611651 " '° Appendix A); 21 U.S.C. § 881. Paiaon has acquired or maintained in violation of section 1962; (A) interest in; (B) security of; <C) claim against; or any enterprise whic^r^3' °f 3"y k'nd affording a source of infl - partici- sS fif-* The court, in imposing senten defendant who derives nr ??' the person obtained. in violation of co,lection ihat ,eu ^^fcrfelrto of a fine oth^r, nthdduion to any °iher sentence Un,ted States all property FORFEITURE PROCEDURE IN FEDERAL COURT 9 Cite a* 183 F.R.D. I The essential condition precedent for a criminal forfeiture is a criminal conviction. Typically, the criminal conviction and the criminal forfeiture are pursued simultaneously in a single proceeding: the criminal trial. 1. Jurisdiction Seizure of the property is not necessary in order to assert jurisdiction for a criminal forfeiture, since the jurisdiction is over the person rather than over the property. However, in some cases the court may restrain the use or transfer of the property pending the outcome of the trial.27 2. Statutes and Rules Governing Criminal Forfeitures The procedures for criminal forfeiture, at least for most of the Title 18 crimes that allow for forfeiture, are dictated by statute.28 The statute details, among other things, the methods and standards for issuing a seizure warrant,29 how the warrant is executed,3" how the property is disposed of,31 and the Attorney General's discretion to grant mitigation or remission.32 After returning a conviction, the jury (or trier-of-fact) must determine, by special verdict, which of the property described in the indictment is actually subject to forfeiture, as provided in Criminal Rule 31(e).33 Following the special verdict (or guilty plea), Criminal Rule 32(d)(2) provides that the court may enter a preliminary order of forfeiture and allow discovery to identify and locate the property,34 and conduct any hearings on third part} claims,35 before entering the final order of forfeiture.36 The rules also allow 27. 21 U.S.C. § 853(e)(l)-(2); see also 18 U.S.C. § 1963(d)(lM2) (RICO). 28. 21 U.S.C. § 853 (controlled substances): 18 U.S.C. § 982(aM6)(Bi & (b><1 ) (e*Pl,c'l[>' invoking the procedures of 21 U.S.C. § 853 for other forfeitures under Title 18); 18 U.S.C. § 1963 (RICO). 29. 21 U.S.C. § 853(0. 30. 21 U.S.C. § 853(g). 31. 21 U.S.C. § 853(h); see also 18 U.S.C. § 1963(0 (RICO). 32. 21 U.S.C. § 853(0; see also 18 U.S.C. § 1963(g) (RICO). 33. "If the indictment or the information alleges that an interest or propert> is criminal forfeiture, a special verdict shall be returned as to t e exten o property subject to forfeiture, if any." Criminal Rule 31(e). 34. 21 U.S.C. § 853(m); see also 18 U.S.C. § 1963(k) (RICO). 35. 2 1 U.S.C. § 853(n); see also 18 U.S.C. § 1963(0 (RICO); a* also discussion of third pari) claims infra. a.^.^ike'a^urt may enter a 36. If a verdict contains a finding that property is subJe£l defendant enters a guilty plea subjecting property to sue oand a reas0nable preliminary order of forfeiture after providing notice t ^ ^ forfeiture shal, opportunity to be heard on the timing and form of the • ^ conduct any authorize the Attorney General to seize the property su j distx>se of the property, discovery that the court considers proper to help identi •• J*^ents pining to ancillary and to begin proceedings consistent with any sta,ut°^ ^^ order of forfeiture shall be hearings and the rights of third parties. At sentenc g. ^ may inciU(je in the final made part of the sentence and included in the judgmen value of the property order such conditions as may be reasonably necessary to preserve the value P P pending any appeal. Criminal Rule 32(d)(2). jq 183 FEDERAL RULES DECISIONS the court to include in its order any conditions necessary to protect the value of the property pending appeal.3, 3. Procedural Due Process In criminal cases, the procedural rights of the defendant/owner—notice, counsel, speedy trial, etc.—are protected in the context of the tnal itself. Rights to notice of the forfeiture are formalized in Criminal Rule 7(c)(2),38 which requires in the case of a criminal forfeiture that the indictment itself identify the property to be forfeited. In the course of the trial, the defendant has the right to present the case and evidence not only against his or her conviction, but also against the forfeiture of his or her property. 4. Burden of Proof (Criminal) The criminal conviction, of course, must be found beyond a reasonable doubt; otherwise, there can be no criminal forfeiture. The special verdict, the finding that property is subject to confiscation, however, is made under a subtle burden-shifting scheme established by the statute.39 If the govern­ ment shows, by a preponderance of the evidence, that a convicted felon acquired the property at or soon after the time of the felony, and there was no likely source for such property other than the violation, the prosecution enjoys a "rebuttable presumption" of forfeitability.40 Once the presumption is established, the burden is on the claimant to prove, again by a preponder­ ance, that the property is not subject to forfeiture. 5. Third Party Claims JhTZ^b l6gal aCti°" in Criminal forfeitures DroDertv^k eSsheri nib 2SH focuses on the defendant '? Werutont's interest in the Lef®ate third party interests should not be ^ T° proteet these interests, the statutes S°Ught rec<uire publishe« notice, the property " Third nani 18 Clear that 0nly the Jb' °i Sovernment's intent to dispose of 37. Id. or the inflation suf''S^eThe^nt^^im '^ PrOCeeding un,ess *e indictme Cnmmal Rule 7(cX2) ^ °f 016 or property subject to forfeiture 39- 21 U.S.C. § 853(d). , v b 5 < ^ <« ****»« can ^ effect( 2'^ rhTmCn' 'S <"*> Pe™it,ed-bu, n, notice ,0 an Jl?7rnmen' may also. to Tt rate*, subject of ,he order oC, °Wn 10 have alleged an in" not,fled e M a substitute for published Id. aS the A,tom' ?rac1tlcabla. provide dire PTOPerty thai is tl notice as to those persons s FORFEITURE PROCEDURE IN FEDERAL COURT 11 Cheat 183 F.R.D. I Once a petition is filed, the hearing must be held within 30 days.43 The hearing is conducted before the judge alone, without a jury.44 The thirdparty claimant and the government can introduce evidence and crossexamine witnesses at the hearing, and the court also considers any relevant portions of the record of the underlying ciiminal case.45 The petitioner bears the burden of proof, by a preponderance of the evidence, (1) that his or her right or title to the property is vested and/or superior to the defendant's, or (2) that he or she was a bona fide purchaser, who acquired the property for value, reasonably without cause to believe the property was subject to forfeiture.46 Based on such a showing, the statute permits the court to amend its order of forfeiture, and the rule contemplates that any such amendment will be made in a final forfeiture order issued at sentencing.1' These procedures are detailed in Title 18 and apply primarily to a defined set of Title 18 offenses. There are many other statutes that provide for forfeiture as a criminal penalty or as a remedy available "upon conviction" of a crime, which include no third-party claim adjudication procedure.4" These presumably can be carried out as directed by the court. The Any person, other than the defendant, asserting a legal interest in the property .. may. within thirty days of the final publication of notice or his receipt of notice under paragraph (1), whichever is earlier, petition the court for a hearing to adjudicate the validity ot his alleged interest in the property. The hearing shall be held before the court alone, without a jury. 43. 18U.S.C. § I963(/X4); 21 U.S.C. § 853(n)(4): The hearing on the petition shall, to the extent practicable and consistent with the >n^te ° justice, be held within thirty days of the filing of the petition. The court ma% consolidate hearing on the petition with a hearing on any other petition filed b\ a person ot tr a defendant under this subsection. 44. 18 U.S.C. § 1963(0(2); 21 U.S.C. § 853(n)(2). 45. 18 U.S.C. § 1963(/)(5); 21 U.S.C. § 853(n)(5): At the hearing, the petitioner may testify and present evidence and J^lt"^j States may behalf, and cross-examine witnesses who appear at the hearing. , nmnertv and present evidence and witnesses in rebuttal and in defense o its c aim o evidence cross-examine witnesses who appear at the hearing In addition to testimony andI evidence presented at the hearing, the court shall consider the relevant portions o criminal case which resulted in the order of forfeiture. 46. 18 U.S.C. § 1963(/)(6); 21 U.S.C. § 853(n)(6): If, after the hearing, the court determines that the petitioner has esta ance of the evidence that— is t , \ a ( . • \ t;.ip or (A) the petitioner has a legal right, title, or !ntere?1 o^^pjrt^ause the right,' title, or interest renders the order of forfeiture invalid in whole . P superior to any right, interest was vested in the petitioner rather than the deten the acts which gave rise to title, or interest of the defendant at the time of the commission of the acts which ga the forfeiture of the property under this section; or . : tue (B) the petitioner is a bona fide purchaser for value otJt)^"tgCaUse to believe that the property and was at the time of purchase reasonab property was subject to forfeiture under this section; . j the court shall amend the order of forfeiture in accordance with its tkmuna ion. See also 18 U.S.C. § 1963(c) and 21 U.S.C. § 853(c) for the bona fi e puic 47- 18 U.S.C. § 1963(/)(6); 21 U.S.C. § 853(n)(6); Criminal Rule 32(d)(2). 48' Many of the statutes governing endangered specu-s and tish^and^ wdd ifc^ conviction. example, provide for forfeiture of guns, traps, nets, ve i . , . listings £ 16 U S.C. §§ 26. 670j(c>, 707. inter alia. See Append,x A for further hst.ngs. 183 FEDERAL RULES DECISIONS 12 statutory procedures for the Title 18 cases detailed above, however, may provide a useful guide for a court seeking to fashion appropriate pi ocedures when the statute specifies none. At the very least, the court can be assured that these procedures have passed constitutional muster. B. Civil Forfeiture Procedure Unlike criminal forfeitures, civil forfeitures proceed in rem: "The proper­ ty is the defendant in the case and burden of proof rests on the party alleging ownership."49 This fundamental difference has very significant implications, for jurisdiction, for notice, for burdens of proof, and for third party rights. 1. Jurisdiction Because the proceeding is in rem, the court must seize the property before it can exercise jurisdiction. Jurisdiction was traditionally available only in the district where the res was located. However, in 1992, Congress expanded jurisdiction in forfeiture actions to include the district "in which any of the acts or omissions giving rise to the forfeiture occurred."50 The statute recognizes several permissible venues, including (1) the district in which the forfeiture "accrues," (2) the district where the property is found, as well as (3) any district into which the property is brought.51 The Rules Committees recently recognized Congress' expansion of juris­ diction and approved an amendment to Supplemental Rule E(3)(a) authoriz1^ f t <liStriet'i2 ™S maJl6S ^ C nsistent "ith TOrresnondin"statutory corresponding provision at 28 U.S.C. § 1355(d). ° 2. the Administrative Forfeiture forfeitoT^es"'uSnconndtetht°defTS ^ "Se CUSt0ms P^dures-U most * handled given to anyone with an inS in tte T opportunity to contest the forfeiture in court prMeedings5,1S administra n0tiee * ^ th^ ci~ -st«within Va'Ue °f the Property or requesUngZSr faSoZdi * "V the waivers are easy to obtain CWp 1 • g?nce' ^ a Practical matter, "administrative" character and bewmes^^ourt; proceeding ^^* Apply <2dCir'19921 p.2d 472. 476 50- 28 USC§ 1355(b)(1)(A). 5L 28 U.S.C. § 1395 "• ^ action IV.B.3.infra. -enue .LCsfJe7l,68U.sSicmf73P--io- f°r ^--rative forfeiture exi: exist under the FORFEITURE PROCEDURE IN FEDERAL COURT Cite as 183 F.R.D. I 13 As noted above, the overwhelming majority of civil forfeitures are carried out under one of two statutes: 18 U.S.C. § 981 and 21 U.S.C. § 881. Both statutes specifically invoke, for process purposes, the "Supplemental Rules for Certain Admiralty and Maritime Claims" appended to the Federal Rules of Civil Procedure.55 Moreover, a separate catch-all statute makes admiral­ ty procedure applicable by default in all forfeiture actions, absent a Con­ gressional provision to the contrary: Unless otherwise provided by Act of Congress, whenever a forfeiture of property is prescribed as a penalty for violation of an Act of Congress and the seizure takes place on the high seas or in navigable waters within the admiralty and maritime jurisdiction of the United States, such forfeiture may be enforced by libel in admiralty but in cases of seizures on land the forfeiture may be enforced by a proceeding by libel which shall conform as near as may be to proceedings in admiralty Beyond the specific invocation of admiralty rules, these two laws govern­ ing forfeitures specifically incorporate customs procedure at 18 U.S.C. § 981(d)57 and at 21 U.S.C. § 881(d)58 respectively. Therefore, courts and practitioners find themselves referring to 19 U.S.C. § 1602 et seq., the customs statutes, for law and procedure in a wide variety of cases.1 55. 18 U.S.C. § 981(b)(2); 21 U.S.C. § 881(b). 56. 28 U.S.C. § 2461(b) (emphasis added). 57. For purposes of this section, the provisions of the customs laws relating to the seizure, summary and judicial forfeiture, condemnation of property for violation of the customs law . the disposition of such property or the proceeds from the sale of this s<*tion.' ® "J" , mitigation of such forfeitures, a n d the compromise of claims (1 ' " . , , j insofar as they are applicable and not inconsistent with the provisions o '^sec , ' .. apply to seizures and forfeitures incurred, or alleged to ha\e en incurre ' " section, except that such duties as are imposed upon the customs officer or any o with respect to the seizure and forfeiture of property under t e customs ^ , performed with respect to seizures and forfeitures of property un tr 1 's uv the officers, agents, or other persons as my be authorized or designate or a P , , Attorney General, the Secretary of the Treasury, or the Postal Service as thecasem^ The Attorney General shall have sole responsibility for disposing o petitions mitigation with respect to property involved in a judicial forfeiture procee ing 18 U.S.C. § 981(d). 58. The provisions of law relating to the seizure, summary and 0f^uch property condemnation of property for violation of the customs laws; the '^P°s ^ t^e or the proceeds from the sale thereof; the remission or mitigation compromise of claims shall apply to seizures and forfeitures incurre , nn|;cahle and not incurred, under any of the provisions of this subchapter, insofar as applicable and inconsistent with the provisions hereof 21 U S.C. § 881(d). The relevant sections of the customs -explained in more detail in Append,x A-are laws summarized here by title: 1602 Seizure; report to customs officer 1603 Seizure; warrants and reports 1604 Seizure; prosecution 1605 Seizure; custody; storage 1606 Seizure; appraisement 1607 Seizure; value $500,000 or less, prohibited articles, transporting tonvcvai u 1608 Seizure; claims; judicial condemnation ' 609 Seizure; summary forfeiture and sale '610 Seizure; judicial forfeiture proceedings 14 183 FEDERAL RULES DECISIONS The internal revenue code also details some forfeiture procedures, pri­ marily directed at alcohol, tobacco, and firearms violations."" Even these, however, directly reference the customs laws for remission and mitigation procedures."' 4. Procedural Due Process—Notice Notice, particularly to potential third party claimants, is a sensitive issue in civil forfeitures. The matter never reaches court unless someone files a timely claim and a bond. Absent such filing, the forfeiture is perfected administratively, without any judicial proceeding at all. Less than adequate notice will result in extinguishing even the most meritorious of claims against the forfeiture. The stringent notice requirements probably have their origins, once again, in ancient admiralty law. In an early U.S. Supreme Court case known simply as The Mary, Chief Justice John Marshall held that the only notice required in an i n rem admiralty case was service upon t h e res. 6 2 B y today's standards, particularly as applied to property other than a ship, such notice appears inadequate. the C0Urt'S h°lding in The Man~'• Supplemental Rule CM) accordingly requires notice not only by service on the property itself S tcKtrn'r rrof generai cir™iatio^ £ *££ e s^cifics of such notice by publication are usually the subject of local weeks ^he turns " 16,1 " 06 reqmrement 3 thS££K that applies to administrative forfei- Seizure; sale unlawful 1612 Seizure; summary sale 1613 Disposition of proceeds of forfeited propeny 1614 Release of seized property >615 Burden of proof in forfeiture proceedings 1616a Disposition of forfeited property 1618 Remission or mitigation of penalties 9 Award of compensation to informers 60 26 U.S.C. § 7321-27 Th &^eCkineLnC0^rate"-^~Ldt her than the procedures detailed elsewhere in WUuh H"UOr ^lung and J*'*"™! "venue',aws, 61. 26 U.S.C. § 7327 "• 13°S- (9 (c) & 3667" cnuuth) 126(18,5). «3. Notice. No notice other than ,k ™ ™ *yS after or within such time as u arrest to be given in a new** lh* court slch notice 2^' °,f —v Rule E(5)" ,f the execution of nr, ! court cause rTki P,aintiff shall promptly action a"d circulaTon in ""l". °f C<J by ,he gCneral gnaled by order of by subdivision ( 6 W k^C tlme Wilhin wh'ch the an""' nonce in actions to foreclose J r ^ This rule does notfr* ISLre<'uired to be filed d Preferred ^ip mortage pursuant to the T re qUiremen,s of 50, § 30 as amended. f ant ,ott>e Ac, of June 6. 1920. Rule C{4), Supplemental Rules for r as Provided consecutive weeks) ^d for three (a) (nolice of customs ^ FORFEITURE PROCEDURE IN FEDERAL COURT 15 Cite as 183 F.R.D. I Until recently, Supplemental Rule C(6)a allowed claimants only 10 days "after process has been executed" in which to file a claim, and 20 days more file an "answer." This conflicted with customs forfeiture law at 19 U.S.C. s 1608 which allows 20 days after first publication to file a claim. In January 1998, the Standing Committee approved amendments to Supple­ 66 mental Rule C(6) expanding response time for non-admiralty forfeitures, bringing the rule into line with the statute. In so doing, the Committee, for the first time, drew a formal distinction between traditional admiralty proceedings, which remain subject to the 10-day limit, and the much more common non-admiralty forfeitures, for which the greater time was allowed. Even as amended, however, the time to respond is short. Because the property rights of innocent third parties are at stake, the adequacy of notice and time to respond deserve particular attention. Ancient admiralty princi­ ples—e.g., that execution of process on the ship is sufficient notice to anyone with an interest in it—are clearly inadequate as applied to modern civil forfeiture practice. 5. Burden of Proof (Civil) In the court proceedings for a civil forfeiture, the government need only establish probable cause to believe that the property is subject to forfeiture. The government need not prove even that a crime was committed; probable cause will suffice for civil forfeiture purposes. Once the government has met this burden, the burden shifts to the claimant to pro\ e by a prepon er ance of the evidence that his or her interest in the property is not su ject to a declaration of forfeiture.67 He or she may do so by establishing either that the predicate offense was never committed, or (2) that the p r o p e y lacks a sufficient nexus to the crime to qualify for forfeituie un ei t e statute. 6. Defenses a. Innocent Owner Except when the relevant statute provides otherwise, the innocence o owner is not typically a defense to civil forfeiture. T e upieme e that 65. Claim and Answer; Interrogatories. The claimant ot ^e such e action in rem shall file a claim within 10 days after P^^ss as *^ r'^thin 20 days additional time as mav be allowed by the court, and shal serve , affirmation and after the filing of the claim. The claim shall be verified on oath or solemn affi shall state the interest in the property by virtue of which t e L^™[fnof the entitled to and the right to defend the action. If the claim is made hailee or attorney is possession by an agent, bailee, or attorney, it shall state t at t e a^ ' shall also serve duly authorized to make the claim. At the time of answenng. the cl^man^ ^ answers to any interrogatories served with the complaint n c roay be so served without leave of court. Ru>e C(6), Supplemental Rules for Certain Admiralty and Maritime Claims. 66 Minutes (January 1998), Standing Committee on Rules ol Practice and Pnxedu Conference of the United States. 67- 19 U.S.C. § 1615. C^ero-Toledo v. Pearson Yacht Leasing Co., 416 68' U.S. ot>3. (1974) C[T]he innocence of the owner ot property uniformly been rejected as a defense."); United ^ One Jeep Wrangler. 972 F.2d 472. 476 (2d Cir. 1992) elevant—it is enough that the property was involved attaches."). has almost r m Administration) v. of the owner is which forfeiture jg 183 FEDERAL RULES DECISIONS recently reaffirmed the absence of constitutional protections for innocent owners in Bennis v. Michigan69 In that case, an innocent owner of an automobile—used by her husband for a liaison with a prostitute—challenged the forfeiture of her interest in the car not only as an unconstitutional taking but also as a due process violation. She relied on the Court's comment in Calero-Toledo that "it would be difficult to reject the constitu­ tional claim of ... an owner who proved not only that he was uninvolved in and unaware of the wrongful activity, but also that he had done all that reasonably could be expected to prevent the proscribed use of his proper­ ty."" But that statement was dismissed in Bennis as mere dictum.71 The Court concluded with a ringing endorsement of civil forfeiture, even from innocent owners, as "too firmly fixed in the punitive and remedial jurispru­ dence of the country to be now displaced."72 The Bennis case, of course, arose out of a state forfeiture law, but nonetheless clarified the constitutional limits, or lack thereof, on civil forfeiture. Although the constitution may not protect an innocent owner, some of the federal forfeiture statutes do, barring confiscation absent the owners knowledge or consent to the illegal use of his property.73 These statutory exceptions have not always been interpreted generously to "inno­ cent claimants. The "lack of consent" defense has been interpreted to rZvenTfhP -IT" ^ d°ne 311 that reasonably couJd be expected to prevent the proscribed use; the "lack of knowledge" defense may in -£££&*** * ^ b. M flU Double Jeopardy the CT1US'°n' Pre™Usl>' U S P S vifil —hed forfeitures under 1 8 U.S.C § 981 a n d 21 J criminal sentence has been imposed forfeiture has been ordered. ***** ^ ' forfeiture after a * i^ criminal prosecution after a civil 70. 416 U.S. at 689. 94 S.Ct. 2080. 7'- 116 S. Ct. at 999. 72. Id. at 1001 (quoting JW CntA a-Ct ,89. 65 L.Ed. •t Co. , Unite, Sm,„. 254 „s ^ ^ ^ 73. E.g., 18 U.S.C. § 981(aW2) On estaW.shedebvmth°aft,hL' So^eTbJ"10 ^ be f°rfeited act or omission knowledge')^!h^°rWnserfl0Or "older to have £en not forfeitable if operated bv^'^' ^ COntrolled substance ca^v £"l,hout fhis or herl forfeiture were without "the V" ,|n"0ccnt c°nimon carrier or j'f .1 .a"d Vesse,s are act|ons prompting U.S.C. § 881(a)(7) fin knowledge, consent or willful ki A ex,en, of al! "T SUbsla"« «WS. ^ °Wncr"> f°rfeiled ... to owner to have been commmj"™"' by r<!ason of a"y act or o^ commuted or omitted without [his 1[ Tf'0" K,ablished by that 7\ £•«•. ttntted Slates v. 7J5 c„ "^ °' consent",. D FORFEITURE PROCEDURE IN FEDERAL COURT Cite as 183 F.R.D. I 17 c. Excessive Fines The Supreme Court has held that a forfeiture, even a civil forfeiture, may so great as to violate the Eighth Amendment's excessive fines clause.76 Th *°Court just this term has attempted to clarify the application of the , M Amendment to forfeitures in United States v. Bajakajian." In that the Court concluded that where the forfeiture is punitive in function and purpose even if styled as an in rem civil forfeiture—it is a "fine," and when it is "grossly disproportional to the gravity of the ... offense," it is unconstitutionally excessive.78 7. Return of the Property If the claimant succeeds in proving by a preponderance of the evidence that the forfeiture was improper, the government must return the proper­ ty 79 The government is not required to make compensation for deprecia­ tion or damage to the property sustained while in government custody, however.80 If the forfeiture stands, the property is disposed of as dictated by the applicable statute. V. Conclusions and Recommendations The long and peculiar history of forfeitures in English and American law has yielded procedural constructs that are less than intuitive. It may dely common sense to consult customs laws or admiralty rules for guidance when confiscating illegal drugs from an urban crack house. An understanding ot the history and evolution of forfeiture principles and practices, there ore, is critical for any consideration of procedural reform. Civil forfeiture procedures are pretty well established in the customs laws and the admiralty rules. These procedures are not necessani v we sui e to the typical civil forfeiture case, however. The recent amen ments o e admiralty rules governing notice of civil forfeitures, accordingy, we premised, at least in part, on the recognition that tradition admiralty do not always accommodate the legitimate interests o ep in modern forfeiture actions. Because the statutes spec ca v customs procedures and admiralty rules, however, the u es om are, at least for now, required to consider forfeiture procedure issues in tne context of the Supplemental Rules for Certain Admira tv an Claims. Preserving procedures that make sense for a ra v i* require development of two "tracks" for cases under the admir ; (1) one for traditional admiralty cases, and (2) one or non _ forfeitures. The Standing Committee on Rules of Practice and P ^ 76- Alexander v. United States. 113 S.Ct. 2766 (1993); Austin v. I nited Stuns. 113 S. Cl (1993). 77- United States v. Bajakajian. 118 S.Ct. 2028 (1998). 78- Id. at 2037-38. The nuances of this 5-4 decision, and its forceful| *ope of this article. raise 79- d,SSC^ It is sufficient for these purposes to note that even a Eighth Amendment concerns. 28 U.S.C. § 2465. ®°- United States v. Lewis. 987 F.2d 1349, 1357 (8th Cir. 1993). 183 FEDERAL RULES DECISIONS 18 already heading in this direction with its latest amendments. It appears to be a promising approach. Criminal forfeiture proceedings, in contrast, do not always have welldefined procedures prescribed. The statute governing most cases under Title 18 prescribes some detailed procedures, but the criminal rules do little to clarify them. Moreover, criminal forfeitures under many of the other statutes have neither statutory nor rule-based procedures prescribed for them. The Rules Committees should consider establishing some rules, perhaps reflecting the procedures set by Congress for Title 18 and Title 26 cases, that would apply generally to criminal forfeitures wherever they may arise. Once a set of such rules is in place, Congress may be willing to defer to the rule-based procedures, and will not feel the need to impose proce­ dures statutorily as it has for most of the Title 18 criminal forfeitures. It may well be time for a legislative overhaul of forfeiture procedure given the somewhat tortured procedural landscape modern forfeitures curentlj face. In the meantime, the Rules Committees should devote atten­ tion to admiralty rules to assure that they fimction aPProPriaten0r nom ^ le« ~ o"aZforth detailed criminal forfeit^ 6 C™inal niles should be amended to set tory ones—to fill a nrrv H T P^edures—consistent with current statu- Appendix A Commonly used forfeiture-related statutes Tl,ie 7 60^, Agricultural Products (or those aiding) "shall forfed^th?"8 ^gncultural 1u°ta or allotment recoverable in a "cTvdsm ^ of such excess; ^ br°Ught ^ name of the U.S." •s prohibit^whLrasLmt^0^ris^™|)ortation of certain products g the grade, size, quality of the nmd d marketlnS order regulat* the ~ed by fig* - forfeitable 2024(g) (money or ^ties^ewh^gS^ im'°lved in the operation Procedures to be determined by U®AUmSadonUsbjeCt'° f0rfdtU 2156(f) USTS? ^ aUny3ltiineV0lVed ^ "'iable to Title 8 1324(b) Fm . Immi immigration P™" ^ ^ Transporting aliens the lnsofar as claimant to thProvislons herein." Once nrnhPki the Pr " °^ ^ the burden of proof ^ " Sh° FORFEITURE PROCEDURE IN FEDERAL COURT 19 Cite as 183 F.R.D. I Appendix A—Continued Title 15 Trade and Commerce Conspiracy in restraint of trade. Property owned by an illegal combination or pursuant to a conspiracy may be forfeited under the customs procedures. 6 77 1195 Unfair competition. The president may detain foreign vessels in time of war if the other country discriminates against Americans in trade. Any detained vessel that attempts to depart shall be forfeit­ ed to the U.S. The president may deploy military to effect forfei­ ture. Flammable fabrics. Fabrics are forfeitable by libel process con­ forming as nearly as possible to "proceedings in rem in admiralty", except that on demand of any party and in the discretion of court, issues of fact shall be tried by jury. Disposal by destruction, return to claimant (on payment of all costs) or sale, the latter two condi­ tioned on posting of bond to assure that the fabric will be treated to make it lawful. 1265 Misbranded hazardous substance or banned substance. Substance is forfeitable under provisions tracking the language of Section 119o. 2071(b) Consumer product which fails an applicable safety rule Product is forfeitable under provisions tracking the language ot Section 11. 0. except there is no right to a jury trial. 2104 Hobbv protection (coins, political items, etc.). Counterfeits and unlabeled imitations, when imported, are subject to seizure and forfeiture under the customs laws. Title 16 Endangered Species and Wildlife Resources 26 Yellowstone. Guns, traps, horses, etc. used to hunt i"JKj? seized and, upon conviction of persons using ^m^hall te forfeited Seized property is disposed of by authority of the Secretary of Interior. 470gg(b) Unauthorized excavation/trafficking in archeological ^s^s from public/Indian lands. Vehicle and equipment used in ~n"fc^n M f ttas- wsfeaSKF1 forfeited property is returned to the Indian or the Indian tribe affected. B68b(b) & (c) Bald/golden eagle. Guns and vehicles, ete used ft***'a part, nest or egg is subject to forfeiture. .. chapter" except "insofar as applicable and not inconsisten interior that duties of customs officers shall be earned out by Intenor Department personnel. 668dd(f) National Wildlife Refuge System. ^%0finsh^^%^on!lhall fully taken shall be seized, and upon c d f bv the gecrebe forfeited. Forfeited property shall be disposed tary in accordance with law. 670j(c) Public lands subject to conservation Mid rehablittatioifohing^i°n such Guns, traps, etc. used in unauthorized hunting and n; ^ lands may be seized. Upon conviction. be carried out by ed as a penalty. Customs laws apply, but shall 1 r>»- A m-ipnlturp Department pei so I83 FEDERAL RULES DECISIONS 20 Appendix 690(e) 706 707 A-Continued • d f ™ Rirds animals, and natural growths removed Bear River Refuge. Bird. • ^ UpQn com1ctl0n or from the relluge , the" wrT. killed or captured contrary judgment by U.S. -yeize(1 property is disposed of by sspssrastt &«• »«»•"• •» '**• ,. , D- Aa nPct= and eggs taken are seized and STaSing to'language tracking that of Section 690(e). Migratory birds. Guns, traps, nets, vehicles, and vessels used to violate Section "06 may be seized and, upon conviction, shall1 be foXedas a penalty/ Seized property is disposed of by authority of the Secretary of Interior. 742S-1 Airborne hunting. Birds, fish, and animals shot or captured and guns, aircraft and other equipment used are subject to forfeiture. Customs laws apply, but shall be carried out by Interior Department personnel. 773h North Pacific halibut. Fishing vessel, gear, and fish shall be forfeit­ ed pursuant to a civil proceeding under this section. Attorney General may seize property "upon judgment." Customs laws apply unless "inconsistent with the provisions, policies, or purposes of this subchapter." Rebuttable presumption that fish on board were taken in violation of law. 916f Whaling. Court may order whales or monetary value thereof for­ feited and disposed of at the direction of court. 1030 North Pacific fisheries. Fishing vessel, gear, and fish shall be forfeited pursuant to a civil proceeding under this section. Attorney General may seize property "upon judgment." Customs laws apply unless inconsistent with the provisions, policies, or purposes of this subchapter. Rebuttable presumption that fish on board were taken in violation of law. 1171 North Pacific fur seals. Vessels and equipment, as well as seals, or mone r\ value thereof, shall be forfeited. Customs laws apply DrZr~Ummary and^Udicial forfeiture- condemnation, sale, biwns^tent. S1°" °r ™tlgation'insofar 88 "applicable and not 1376 apply insofar as "applicable and not inconsistent." 1540(e) Uken' sold> or shipped shall be subje^toforfekur^c'^t^ forfeiture, condemnation disnnrstoms law procedures for seizure, of sale, remission ^°f J*™ Proceeds inconsistent." ' pp- lns°far as "applicable and not 1860 Fishery conservation Vp««p1 ^ • fair market value thereof) £ ?Ulp?ent- cargo, as well as fish (or proceeding. Customs law nroepH r*10 for^eiture in a civil es r disposition, proceeds, remission or mitigation and pL Mstent with the%StCS™se °f claims 8PP'y unless -bo­ osting a bond stays the seizure ' PurPoses of this subchapter." me seizure. Fish cannot be sold for less than FORFEITURE PROCEDURE IN FEDERAL COURT Cite as 183 F R.I). I 21 Appendix A—Continued market value. Rebuttable presumption that fish on board were taken in violation of law. 2409 Antarctic conservation. Animal or plant, guns, traps, equipment, vessels, vehicles, and aircraft are subject to forfeiture. Customs lawapplies insofar as "applicable and not inconsistent." 2439 Antarctic Convention. Antarctic marine living resources, guns, traps, equipment, vessels, vehicles, and aircraft are subject to forfei­ ture. Customs law applies insofar as "applicable and not inconsis­ tent." 3374 Illegally taken fish and wildlife. Fish, wildlife, and plants illegally trafficked in are subject to forfeiture notwithstanding any culpability requirements for civil penalty or criminal prosecution. Vehicles, vessels, etc. are subject to forfeiture if owner was consenting party or privy thereto or should have known. Customs law procedures for seizure, forfeiture, condemnation, disposition, proceeds, remission or mitigation apply insofar as they are "applicable and not inconsis­ tent." Any warrant for search and seizure must be issued in accordance with Criminal Rule 41. 3606 North Atlantic salmon. Vessel, as well as fish (or their fair market value) are subject to civil forfeiture as under Section 1860. Title Copyright Protection 506(a Infringing copies and equipment. Upon conviction for criminal copyright infringement, the court shall order forfeiture and destruc­ tion of infringing copies, as well as the equipment used to make them. 603 Importation prohibition. Infringing articles imported are subject to seizure and forfeiture in the same manner as property ™POrted 1,1 violation of "customs revenue laws." Articles are destroyed *, directed bv the Secretary of the Treasury or the court or may be returned to foreign country if the Secretap is persuaded that the importer had no reason to know it was a violation of law. 910 Semi-conductor chip products. Same standards as provided in Section 603. Title Criminal Code 492 Counterfeiting. Counterfeit coins, obligate>ns and securiti^ „ as material and equipment for their Interested persons can petition the SwreSilr l3^f0?or Attorney General if other crimes are involved) for remission o mitigation. 542 Entry of Goods by False Statements. Treated under section 981 (below). 544 Relanding of Goods. Any merchandise 333S ««K5K Sj-is" to be illegally imported property and shall be 545 Smuggling. Treated under section 981 (below). f°r 183 FEDERAL RULES DECISIONS 22 Appendix A—Continued 548 Bonded Warehouse Goods. Fraudulently concealed, removed, or repacked merchandise in a bonded warehouse as well as merchan­ dise whose numbers and markings have been altered or defaced, "shall be forfeited." 550 False Claims for Refunds of Duties. Whoever files such a false claim for refund of duties on exported merchandise shall forfeit the merchandise or the value thereot 844(c) Explosive Materials. Treated under section 981 (below). 924(d) Firearms. Firearms or ammunition used in any criminal violation shall be subject to seizure and forfeiture as provided in the Internal Revenue Code (26 U.S.C. § 5845(a)). Forfeiture proceedings must begin within 120 days of seizure. The property must be returned, however, upon acquittal of—or dismissal of charges against—the owner or possessor. 962-967 Neutrality Laws. Arming a vessel against a friendly nation, deliver­ ing an armed vessel to a belligerent nation, departure of a vessel detained in aid of neutrality by the president, etc., results in forfeiture of the vessel, equipment, and cargo. In the case of arming a vessel, half is forfeited to the U.S., the other half to the informer 981 White Collar Transactions (Civil Forfeiture). Discussed at some length in the text of the paper to which this is appended, this section specifies forfeiture as a civil remedy for criminal wrongdoing and The criminai statutes f r which the ° S are smnm^iwvf whereot" 215 485-88, & 5014)2 u are listed in fo°tnote 22 of n SeCti°nS COming fr°m ' Loan lookbacks. Forfeiture of property de­ rived from proceeds traceable to the crime. securities» currency, and postal tamp currency, and postal stamps. Forfei- ble tothecrime 510 the text. They ™e 18 eXCePl F de"ved ^rom proceeds tracea- . c^ec^s- securities and^n/lg?a!l-,res °n from nro1°*"^ of P^rty derived Proceeds traceable to the crime 511 Alt • motor vehic,e ID num- the crime gnss receiPte t u r e o ble to the crime l traceable to 542 F o rom r f e i ' Pr°ceeds tracea- 545 fromgp^^ 553 656-57 P f ltu^ of Property derived d^ ^^ eedstraceaWe to the crime. feiture ofg^os^lTJrting stolen vehicles. Force'pts traceable to the crime. derived ^m'proTeeds^^^K? °f property eeds traceable to the crime. ' FORFEITURE PROCEDURE IN FEDERAL COURT Cite as 183 F.R.D. I 23 Appendix A—Continued 666(a)(1) Federal program fraud. Forfeiture of gross receipts traceable to the crime if related to a sale by a federal receiver. 842, 844 Trafficking in explosives. Forfeiture of prop­ erty derived from proceeds traceable to the crime. 1001 False statements. Forfeiture of gross receipts traceable to the crime if related to a sale by a federal receiver. 1005-07 Falsifying bank records. Forfeiture of prop­ erty derived from proceeds traceable to the crime. 1014 False statement in loan applications. Forfei­ ture of property derived from proceeds tracea­ ble to the crime. 1028 False identification of documents. Forfeiture of property derived from proceeds traceable to the crime. 1029 Trafficking in access devices. Forfeiture of property derived from proceeds traceable to the crime. 1030 Computer hacking. Forfeiture of property de­ rived from proceeds traceable to the cnme. 1031 Major fraud against the U.S. Forfeiture of gross receipts traceable to the cnme if related to a sale by a federal receiver. 1032 Asset concealment Forfeiture of property de­ rived from proceeds or gross receipts (related to a sale by a federal receiver) traceable to the crime. 1341 & 1343 1344 1956 Mail and wire fraud. Forfeiture of property derived from proceeds or gross receipts (relat­ ed to a sale by a federal receiver) traceable to the crime. Bank fraud. Forfeiture of property derived from proceeds traceable to the cnme. Money laundering. Forfeiture of property involved. 1957 Monetary transactions in criminally derived property. Forfeiture of property involved. 2119 Carjacking. Forfeiture of gross receipts traceable to the crime. 2312-13 cle. Forfeiture of gross receipts traceable to Possessing, selling or transporting stolen vehi­ the crime. 183 FEDERAL RULES DE( ISIONS 24 Appendix A—Continued 31TISC § 5313(a) ' '' ' 6 Reporting certain financial transactions. Forfeiture of property involved in transactions that are not reported as required. 31 U S C § 5324(a) Structuring transactions to evade reporting requirements. Forfeiture of property involved in the structured transactions. 982 "White Collar" Transactions (Criminal Forfeiture). Also discussed in the text, this provision calls for the forfeiture of property "derived from or traceable to the proceeds of' the crime, as well as property "used to facilitate the commission of," or the conspiracy to commit, the crime. Forfeiture is made part of the sentence, upon criminal conviction for any of the crimes listed above under Section 981, as well as convictions under the following statutes (all sections are from Title 18 except where otherwise noted): 8 U.S.C. § 1324a(a) Employment of illegal aliens. 1425 Unlawful procurement of citizenship. 1426 Reproduction of citizenship or naturalization papers. 1427 Sale of citizenship or naturalization papers. 1541 Unauthorized issuance of passport. 1542 False statement in application and use of pass­ port. 1543 Forgeiy or false use of passport. 1544 i, Misuse of passport. documents I™SUSe I960 Permits, and other Illegal money transmitting business. 31 U.S.C § 53ifi 1165 1467 v*sas' p 53SZ? • Obscene Materials Po Proofs of for lk ti for t^d Procedures. Ws import and export of moneUr7 oe ioneited. ',al1 game' f°rfeit (1) obscene in the court's'Zl « a"y proPerty used to c^tnte goes on ?'Is ProPortional to th g on at 80me length to detail prote 38 execution, and disposition 1762 fuviuea i property. 1963 'cSf^^^tio™ (Criminal II substance and procedure set FORFEITURE PROCEDURE IN FEDERAL COURT 25 Cite as 183 F.R.D. I Appendix A—Continued detail; tracking closely the parallel provisions at 21 U.S.C. § 853; discussed at in the text at pp. 10-14 and quoted at footnote 25. 2274 Misuse of Vessel. If misuse is with the knowledge of the owner or master, the vessel and its equipment "shall be subject to seizure and forfeiture in the same manner as merchandise is forfeited for violation of the customs revenue laws." 2318(d) Counterfeit Labels. Upon conviction, the court shall order forfei­ ture of all counterfeit labels and all articles to which such labels were, or were to be, affixed. 2344(c) Trafficking in Cigarettes. Contraband cigarettes shall be subject to forfeiture under the provisions of the Internal Revenue Code that apply to seizure and forfeiture of firearms. 2513 Intercepting devices. Devices used to violate laws against intercep­ tion may be seized and forfeited under customs laws relating to seizure, disposition, remission and mitigation, compromise of claims, and awards to informers "insofar as applicable and not inconsistent with the provisions of this section." Although customs laws apply, they shall be carried out by Justice Department personnel. 3665 Possession of firearms during felony. The judgment of conviction may order the confiscation and disposal of firearms and ammunition found in the possession of the defendant. The court may direct delivery of the firearm to the law-enforcement agency which appre­ hended the defendant for its use or disposal. 3667 Liquor trafficking. All liquor involved in .wel1 aS vehicles and vessels used in transporting it, shall be forfeited in accordance with the internal revenue laws governing forfeitures. Title 19 Customs 130 Importation in vessels of the U.S. or of the country goods wares and merchandise illegally imported, as well as \essels, o^o, tackle and furniture, "shall be forfeited" under the procedures and regulations established by the "several revenue laws. 467-69 Marks, brands, or stamps on imported distiUedspirita .^contain S e r o f i m p o r t e d s p i r i t s w i t h o u t s u c h m a r k s 1 ° lie. with its contents, forfeited. Stamps sha 1 be• remmedI upon emptying the container, otherwise, the container is forfeited. . . onePdealtagt or using empty, but still stamped, containers shall forfeit both containers and contents. 1305 ssaessssQs&E&Sl jury trial. 1322(b) International (U.S.-Mexico) traffic and ^^trkte^pted brought into the country to do rescue andreliefwork from otherwise applicable^toms law^ jn g wa>, it shall ^ used for other purposes, or not exj forfeited. 1338 Discrimination in trade by ^ "J *additional1 dutie^ to address power to impose trade restrictions and addiuc 26 183 FEDERAL RULES DECISIONS Appendix A—Continued such discrimination. Imports that violate the president's restrictions are forfeitable under the procedures and regulations established by the "several revenue laws." 1453 Lading and unlading of merchandise or baggage. If lading is done without special license or permit, the master of the vessel or vehicle is liable to the value of the merchandise, and the merchandise shall be subject to forfeiture. If the value is $500 or more, the vehicle or vessel shall also be subject to forfeiture. 1461-62 Baggage inspections. If the owner/agent of the baggage fails to submit to the customs officer's inspection, the officer can retain and open the container or vehicle. If the officer finds anything prohibit­ ed or subject to duty, the container and its entire contents are subject to forfeiture. 1463-64 Sealed vehicles and vessels. Violation of the regulations of the Secretary of the Treasury is a felony, punishable by imprisonment and fine, and the vessel or vehicle an its contents shall be forfeited. 1466<a) Equipment and repairs of vessels. If purchased in a foreign coun­ ty, o0% ad valorem duty is due on return to U.S. Willful evasion un mfhpvTUrXdn> t°] iture °f the vesse1' or a monetarv amount TVeasury * *S determined b-v the Secretary of the 1497 oflhTundS' aSrlff 1°T faUu7 10 declare inel"de forfeiture article (except contrnllpH ' 1? * Penu !^ equal the value of the 8ub8tan«» bring a penalty of 1000% of the value of the Article) 1510(b) 10 e5Smine books- The Secretary merchandise imported bv thp i ° ^rs to withhold delivery of remains in con™ mp^or mo- E°" °r f°r Ws account' If P*™" be sold at public auction. °ne Xear' withheld property may °m> 1526 shall be seized a^,<^^ta^t™unterfeit trademark. Merchandise owner, shall be forfeit^ foS," "T"1 fr°m the trademark seatre, the trademark owmer f„f«^,St?ms laws' UP°n either the merchanSr.18 ^froyed, or, where feasMe !k' 1527 SSS^'SSRSr-- ™""™ **>"* cases, 1584 1586 fw e^^ition falsity or lack nf a ^ U h e ^ ^ ' ^ei^taddl1 " "<* includad t0 criminal the master. owner or oTer Unlawful unladinu respons.ble party, before recS* °r '"""shipment. If . alcoholic beveraffpi^T1^ to do 80» or transfi^ vesse' onloads cargo 6rage8 lnt€nded for the USnirs c ntraband or T T ?, a f -S. vessel on the high FORFEITURE PROCEDURE IN FEDERAL COURT 27 Cite as 183 F.R.D. 1 Appendix A—Continued seas, criminal penalties apply and the vessel and merchandise shall be seized and forfeited. 1587 Examination of hovering vessels. If dutiable merchandise destined for the U.S. is found, the vessel and its cargo shall be seized and forfeited. 1588 Transportation between American ports via foreign ports. If done by a foreign vessel for the purpose of evading provisions for the transportation of merchandise between American ports, the vessel shall pay a tonnage duty and the merchandise shall be seized and forfeited. 1592(c)(6) Introducing merchandise into U.S. commerce by false documents or material omissions. If the Secretary of the Treasury has 'reason­ able cause" to believe this has been violated and that the person is insolvent or beyond U.S. jurisdiction, the merchandise may be seized and, unless the monetary penalty is paid, forfeited. The Secretary must return seized property if a deposit is made. 1594 Seizure of conveyances. vehicle, vessel, or aircraft used to violate customs laws may be held for the payment ot the penalty, and mav be seized, forfeited and sold in accordance with the customs laws. The proceeds of sale, beyond the penalty and the expenses, shall be held for the account of any interested party. 1595a Illegal imports. Conveyances and items used to facilitate illegal imports may be seized and forfeited. 1602-06 Any Procedures for customs seizures. Every seizure must be reported, search warrants under Fed. R. Crim. P are req^; P^^nis by the Department of Justice; customs officers shall take custody property and appraise it. 1607 Seizure of property valued at $500,000 or less, (controlled substances) and their t^sportng Jeeks may be seized with notice given by publication for three weeKs. 1608-10 Administrative forfeiture. IfJf"f^ng^a dmely claim, auto matl7''J^0/^ g property f Attorney and judicial proceedings referred to the U.S. Attorney. 1611-12 er customs district for sale. 1613 Disposition of a ^iTSS, «•» - make application for remission o o 1613b 1614 Customs Forfeiture Fund A Treasury for proceeds of FOR[^ ^us expenses of customs enforceupon by customs officials for various expe ment operations. » if a nerson with a substantial interest in Release of seized property, it 1 • Secretary of the Treasurythe property offers to pay its the^ecre . may release the property to that individual. value 28 183 FEDERAL RULES DECISIONS Appendix A-Continued 1615 Burden of proof in forfeiture proceedings. Once probable cause is shown, by one of various prima facie showings, the burden is on the claimant 1616a Disposition of forfeited property. Forfeiture proceedings may be discontinued in favor of State proceedings. Forfeited property may be retained for official use. transferred to another federal agency, to cooperating state law enforcement agencies, or (for non-jet-powered aircraft) to the Civil Air Patrol. 1617 Compromise of claims. Such compromise may be made by the Secretary of the Treasury. 1618 Mitigation and remission of penalties. This may be made if there is no "willful negligence" or wrongful intent on the part of the claimant. 1619-20 Compensation of informers. Informers may get up to 25% of net recovery, not to exceed $250,000. It is a felony for a federal officer to take a kickback on such compensation. 1621 Statute of limitations. Forfeitures under the customs laws must commence within five years after discovery of the alleged offense. 1703 HS2ad *S»T °f VeSSe,S- If used for smuggKng or to enue»the <Ve88eI and its cargo shall be seized and forfeited 2093 ^ttZs^shT^1 °F rhfCtUral SCU,Ptures and "^ac­ 6 customs laws." subject to forfeiture under the Title 21 Drugs and Controlled Substances 334 -j™* Such property "shaL judicial condemnation. Procedure1 f °,1 ,nforrnation" and subjec­ addressing multiplicity of ting proceedings for Z!! d~".an df0r^fe^o^ after decreed c 467b wothereiseun^^P^^that are adulterated, misbrant aftainst 673 ftble or ^nd seized ann"^ CPmmeree- sh<tH be "liablf C»de t»^ei"gexc ratlffi S3LT 824(f) 848(a) 853 d!7F 7 in'SSrmal p e n a i t i e s in" FORFEITURE PROCEDURE IN FEDERAL COURT 29 Cite m 183 F.R.D. I Appendix A—Continued 881 * ontrolled Substances—Civil Forfeitures. Procedures set forth in detail; discussed in the text at pp. 15-16. Title 22 Foreign Relations and Intercourse 401 Illegal export of war materials. If there is an attempt, or probable cause to believe someone intends to illegally export arms or muni­ tions, the Secretary of the Treasury may seize it. All such materi­ als, as well as vehicles, vessels, and aircraft used for such attempt, "shall be forfeited." Customs laws apply "insofar as applicable and not inconsistent." Disposition of forfeited property is by the Secre­ tary of Defense. 1978 Importation of Fish and wildlife products. The illegally imported products shall be forfeited. Customs laws apply "insofar as applica­ ble and not inconsistent." Title 26 Taxation 5607 Unlawful use or concealment of distilled spirits. Prescribes criminal penalties including forfeiture of all personal property used in connec­ tion with the business, as well as the real property where the offense was committed. 5608 Fraudulent claim for drawback on distilled spirits or for relanding exported spirits. Prescribes criminal penalties, including forfeiture of triple the amount sought to be fraudulently obtained, and the ship or vessel where the shipment was made shall be forfeited in admiralty by libel" whether or not there is a criminal conviction. 5612 Taxpaid distilled spirits remaining on bonded premises. If taxpaid spirits are allowed to remain on the premises, they will be forfeited as a penalty. 5613 Distilled spirits. Spirits not closed, marked, or branded as required by law shall be forfeited. 5614 Burden of proof. A claimant seeking return of seized sp.nLs has the burden of proving that no fraud was committed and that the tax law has been complied with. 5615 Propertv subject to forfeiture. Unregistered still, distilling appara­ tus removed or set up without notice, distilled spirits produced in a vinegar plant, spirits unlawfully removed from place of manufacture, and spirits tainted with Fictitious proof are all subject to forfeiture, as well as all spirits, materials, equipment, real property used, an personal property on the premises, when the distilling is done without giving bond or with intent to defrauc. 5661(a) Violations relating to wine. Criminal penuries include forfeiture of "all products and materials used in any such violatu n. 5671 Evasion of beer tax. Criminal penalties include forfeiture of beer and the equipment used to make it. 5681(c) is i*/• vessels, or aircraft used shall be forfeited. -• "" 30 183 FEDERAL RILES DECISIONS Appendix A—Continued 5683 Removal of liquor under in,proper brands^ Violation is a misde­ meanor, which includes among penalties the forfe.ture of spints, wine, beer and casks or packages. 5685(c) Firearms. Those possessed while violating liquor laws are forfeita­ ble under section 5872. 5763 Tobacco operations. Improperly packaged tobacco products, or products held with intent to defraud shall be forfeited. When there is an intent to defraud, the personal property on the premises of the manufacturer or warehouse shall be forfeited. Illicit operators forfeit not only personal property but real property as well. 58?2 Firearms involved in the violation of revenue laws. Such Firearms are forfeitable under the provisions of internal revenue laws govern­ ing forfeiture of unstamped articles. Disposal is not by public sale, but by destruction, by sale to state or local authorities, or by transfer to federal authorities. 7301 Property held to defraud the U.S. Any property held for the purpose of sale or removal to defraud the U.S. of taxes legally owed shall be forfeited. This includes to raw materials, equipment, pack­ aging and conveyances (vehicles, vessels, aircraft and draft animals) associated with the scheme to defraud. 7302 Property used in violation of internal revenue laws. It is unlawful to possess such property and no property rights vest in it. Search may 18 seizure and'f ^ Fed' R' Crim' P ^ures for seizure and forfe.ture are those of the internal revenue laws. 7303 forfeiture are counterfeit stamps, falsely stanmed naci50 y P**"*68' ^ fraudulent bonds and permits. 7321-22 JtaKfwSES Intemal ReVenUe Code' Autho" forfeitable property and delivery to U.S. Marshal. 7323-24 District is by.in rem action in sold, or returned on posting of a a-e deposited with the court pending final Perishab,e g°ods may be dedsion^8' ^ 7325-26 appraised? shall be claimants to the property mint ,PUb "!hed for three weeks, e matter is referred to the IK ah° d ^°nd' uPon wbicb no c^mants come orward. the property may be solH s ^ PU auction after reasonable notice of the sale fvl giving 8ale- Coin-operated gaming devices may be destroyed. 7327 Title 27 206 Remission and Mitigation D,8ti»ed Spirits r, * ' Customs laws apply FORFEITURE PROCEDURE IN FEDERAL COURT Cite as 183 F.R.D. I 31 Appendix A—Continued Title 28 Civil Procedure ",hl Mode of recovery. Admiralty procedure applies to all civil forfeitures unless Congress indicates to the contrary; quoted in the text at p. 15. Title 30 Mining and Minerals Leases and Prospecting Permits. Unlawful leases may be canceled and the interest under the lease forfeited. Rights of bona fide purchasers are protected. ufifi Deep Seabed Mineral Resources. Vessels, equipment, and cargo involved in a violation shall be subject to forfeiture. Customs procedures apply "insofar as applicable and not inconsistent. At tornev General mav seize forfeited property. Post of bond will stay process. Rebuttable presumption that anything on board the vessel is implicated. Title 31 Money and Currency 5111 Coins. Coins that are exported, melted or treated shall be forfeited. Forfeitures enforced under Internal Revenue Code (26 U.S.C. § 7321, et seq.). 5317 Unreported monetary instioimwt^n^The prQpert>% real est traceable to ^ or traceable to it may also and personal, involved in the transacti be seized and forfeited, tie 39 Seized Mail c— shall be forfeited. itle 46 App. 18(d) Revenue laws apply• Coast Guard and Documenting \ essels . . -pristrv Unlawful charter, sale, or foreign g* Vessel may be seized and forfeited. 15 33 83-1 • • time of war If transfer is done Transfer of shipping facilities }n " the vessel, shipyard, without approval of Secretary o dry-dock, etc. shall be forfeited. ^ ^ Transportation of merchandise; forfeiture of the m Must be done in a U.S. vess the value thereot merchandise (or a monetary amount up If a vessel transports mer Vessel documentation requirement rchandise shall be forfeitchandise in violation of this section, the ed. «3a i A If the report is not made as Reports of vessels rebuilt abroad »J ^ment shall be forferted. required, the vessel and all tacKie Secretary. Remission and mitigation can be grantea 183 FEDERAL RULES DECISIONS Appendix A—Continued Communications Devices Electronic devices. Devices intended to violate the laws governing radio transmission may be seized and forfeited. Admiralty proce­ dure applies, except that seizure without such process may be made if incident to lawful arrest or search. Sale of forfeited property according to customs laws "insofar as applicable and not inconsis­ tent." Proceeds go to the general fund of the U.S. Treasury. Territories and Possessions Alien land conveyances. Where an alien is not pennitted to hold land, he may convey it; but if he attempts to convey the land "in trust" or otherwise tries to evade the prohibition on alien land holding, the conveyance shall be null and void and the lands shall be forfeited and escheat. App. Trading with the Enemy Wartime transactions. During time of war. the President benefit of the U.S. Alien Property Custodian. All money owed to he alien property custodian, who, with the pov