Asset Forfeitures and Restitution Resolution
In civics class we are taught that if we break the law then we get punished. We are told that our crime creates a debt to society that is only paid by imprisonment or sometimes probation. However, there is an entire scheme within the system that addresses punishment in financial terms that extends far beyond visiting a gray-bar hotel. This system is expressed in two similar but distinct concepts: Asset Forfeitures and Restitution.
Part One: Asset Forfeitures
Asset Forfeiture is a term used to describe a prosecutor’s efforts to seize and keep property to be owned by a government entity. There are state forfeitures and federal forfeitures. In fact, the Department of Justice’s Asset Forfeiture Fund manages over a billion dollars. It’s also worth knowing that the Treasury Executive Office of Asset Forfeiture (TEOAF) has its own fund which holds hundreds of millions of dollars. In addition, nearly every state pursues forfeiture and holds monies, cars, art, jewelry, homes, livestock, and a whole host of other items it intends to keep.
Put simply, seizures are actions where a government activity gains possession of a person’s or company’s property where forfeiture is the legal process whereby that entity actually owns such property outright.
A forfeiture is based upon theories that certain items are connected to a crime. Such theories are known as the “involved in” theory, facilitating property, and proceeds. If the Government can show that drugs were transported in a car then it can keep that car, because it is said to have ‘facilitated’ that offense. Also, if a fraudster gains money by deceiving investors, then that property is known as proceeds of a crime. As another example, if an internet gambling company comingles wager earnings with its lawful shipping subsidiary, then the comingled funds in the subsidiary account are ‘involved in’ the internet crimes and the entire account can be seized and forfeited.
Further, forfeitures may be accomplished through either criminal cases or civil cases. Criminal forfeitures are pursued against a defendant in a criminal proceeding. For a more detailed discussion regarding federal criminal forfeiture see “The Systematic Denial of Due Process” in the January/February 2014 issue of The Voice. A civil forfeiture case actually holds the property itself as a party to the action. These cases often are styled something like U.S. v. $87,000 in currency or State v. 2014 Audi. The implications of civil jurisdiction are significant. First and foremost, property owners have a duty to enter a lawsuit within a strict time period or they are estopped from pursuing their property. In other words, property owners must make a claim to their property after it has been seized or the Government wins by default. In fact, more than 80% of civilly (or administratively) pursued property is never claimed and thus the Government wins without a fight.
An administrative forfeiture is a proceeding where a police agency seeks forfeiture without consulting a court. Tens of millions of dollars worth of property is forfeited annually without a court ever participating. For example, property is often taken from roadside stops where a vehicle is searched and money is found. In many cases there is no drugs or other contraband found. Further, many of these cases do not even include an arrest or criminal charge of any kind. Nonetheless, an officer may seize money because he believes it to be drug money or connected to some other nefarious activity. Since the federal government often shares more money with local police departments than state entities, that local officer may request for a federal agency, such as the IRS, to “adopt” the forfeiture. This means that the IRS will issue notice of administrative forfeiture. No prosecutors, state or federal, are consulted and certainly no court receives a motion to pursue the forfeiture. Nonetheless, a failure to claim the property with the IRS will result in a default forfeiture that is enforceable and carries with it the entire weight of the U.S. Government.
Federal statutes that support forfeiture can be found in 18 U.S.C. 924, 981, 982, 983, Rule G of the Federal Rules of Civil Procedure, and Rule 32.2 Federal Rules of Criminal Procedure.
If the government has seized your assets or you are facing an asset forfeiture, contact us at 817-203-2220. Call a Fort Worth lawyer for Asset Forfeitures & Restitution Resolution. Our attorneys defend your rights to keep property in Tarrant County.
Learn more about Asset Forfeitures in Texas.