Distinctions between Administrative, Civil, and Criminal Forfeiture
Asset forfeiture is a complex yet interesting legal topic. The Federal government as well as many state and local governments use asset forfeiture laws to supplement their budgets by seeking to forfeit illegally obtained assets. From the government’s perspective there is a three-fold benefit: first the government gets much needed funding; second it keeps assets out of the hands of criminals; and third, it deprives criminals the primary benefit or incentive for criminal conduct.
Because forfeitures are so complex and contain many deadlines and precepts rooted in maritime law, many people are left with little recourse after their assets are seized. because Unfortunately, they simply do not know what to do to get their assets back or who to contact to help them.
The first priority is to make a claim. Failure to do so will end up in a default judgment and the claimant will be sunk before he even begins. Under Texas law, Art. 59.02-59.06, citizens typically have around 30 days to claim their property. Under 18 USC 983(a), claimants in an administrative forfeiture action have roughly the same deadline.
With respect to the various legal categories for forfeiture, there are three types of forfeiture actions that will be discussed: Administrative, Civil and Criminal forfeiture.
Many forfeitures are actually administrative in nature and never make it to the courts. Put simply, administrative forfeitures occur where the police agency itself, such as the IRS, CBP, FBI, or DEA, bring the action. Judicial forfeitures, however, are brought by a prosecuting agency such as a state district attorney’s office or the United States Attorney. An interesting fact about forfeitures is that a large majority go uncontested because people are reluctant to claim assets or simply because they don’t know how to go about doing so. Administrative forfeitures occur at the agency level and not within the courts. In other words, these forfeitures are initially processed by the agency that seized the assets. See 18 USC § 983.
Note, the State of Texas does not have administrative forfeiture and thus either a district attorney’s office or the State Attorney General’s Office can bring a forfeiture action.
As for administrative forfeitures, the policing agency will begin by providing the potential owners of the property a notice of seizure and intended forfeiture. If no one has claimed the assets in question and the forfeiture has not been challenged the agency may administratively forfeit the asset. As a result, the forfeiture matter never even makes it to the courts and a declaration of forfeiture is entered in favor of the government. It is important to know that there are limits on what can be forfeited administratively and houses and real property may not be forfeited in this manner. Also, under 18 USC 983 assets valued at more than $500,000 may not be administratively forfeited.
It is important to remember that once the strict claim deadlines have been missed, there is little that can be done to recover your assets. Federal appellate courts have consistently refused to visit the merits of administrative forfeitures and will only review whether the police agency sent notice timely. If they have, that’s all the appellate court cares about and it will back up the forfeiture. That is why it is important to seek legal help and file a claim immediately once a forfeiture notice is received. If the owner does file a claim, there are two ways the government can proceed: civil or criminal forfeiture.
If you file a claim at the administrative level, then the government may choose to proceed with a civil forfeiture action. For a myriad of reasons, civil forfeiture is easier for the government to pursue than criminal forfeiture. One of the reasons is that there is no requirement for a criminal charge or conviction for an asset to be forfeited by civil forfeiture. In addition, the action is pursued against the asset itself and not an individual. Thus the property acts as the defendant. This makes it easier for the government to forfeit property because the burden of proof in a civil forfeiture action is “preponderance of the evidence” which is lower standard than a criminal action, which requires proof “beyond a reasonable doubt.”
Because civil asset forfeiture has a lower standard of proof than a criminal action, it is much easier to forfeit money without definitively proving it was obtained from criminal activity. In fact, to get seized assets returned, the owner, and not the government, is usually required to prove that the assets are not connected to criminal activity.
Civil forfeiture is not punitive in nature because it is not done as punishment but rather to correct the harm caused by the crime. Of course, this is legal fiction because property owners certainly feel a punitive sting if they lose money via forfeiture. In most cases, the government must prove that the property itself, the property is the proceeds of involved with or facilitates illegal activity. As with any forfeiture proceeding, it is absolutely necessary to file a claim for the assets and answer the forfeiture complaint within the prescribed time period, otherwise you are at risk for losing your property. See 59.02-59.06 of the Texas Code of Criminal Procedure and 18 U.S.C. 983.
This means that if the property was previously sought in an administrative proceeding that an owner must make two claims, not just one. Put another way, the administrative claim does not count as a judicial claim.
One important defense is available in Texas and under federal law with respect to civil forfeitures. That is, innocent owners are afforded a defense.
While civil forfeitures enjoy a lower standard of proof than necessary for a criminal conviction, there are some significant advantages afforded the government under a criminal forfeiture. Specifically, the government can collect money judgments and forfeit substitute assets criminally.
Criminal forfeiture actions are unique in that they are pursued as part of the criminal case against an individual or group of people. For criminal forfeiture actions a conviction is required. In a sense, this makes it more difficult for the government to pursue criminal forfeiture actions, which is why civil forfeiture actions are more readily pursued by the government. Criminal forfeitures are intended to be punitive in nature as opposed to civil forfeitures and a defendant’s property can be forfeited as part of the defendant’s sentence. Also since the defendant is an individual as opposed to property in a civil case, the defendant can be ordered to pay a money judgment or forfeit substitute assets that were not part of the crime, if the assets related to the crime are no longer present. See 21 USC § 853.
If the government is seeking criminal forfeiture and the case proceeds to trial, the trial will occur in two phases. The first phase will be proving the defendant is guilty of the crimes alleged beyond a reasonable doubt. If the government obtains a guilty verdict, then the next phase occurs which is where the government must prove the connection between the property and the defendant’s criminal conduct. Once again forfeiture requires the “preponderance” standard of proof so in the second phase the government must only prove the connection between the property and the crime based upon this lower standard.
If the government meets its burden of proof, then the court will grant a preliminary order of forfeiture for the government. The forfeiture is only finalized once an ancillary hearing takes place to address any interest third parties may have in the property. Once any third party claims are heard, the government will enter a final order of forfeiture, which gives the government title to the defendant’s property.
Criminal forfeiture proceedings are provided for under Rule 32.2 of the Federal Rules of Criminal Procedure.
As is the case with administrative forfeitures, Texas does not provide for criminal forfeitures but it does have a substitute assets provision under Article 59.
Learn more about state and federal asset forfeitures:
- Administrative, Civil and Criminal Forfeitures
- Civil Asset Forfeitures
- Criminal Asset Forfeitures
- Corporate Asset Forfeitures
- Airport Seizures
- Texas Asset Forfeitures
- Asset Forfeiture Basics
- Substitute Assets
- Innocent Owner Defense
- Suspicious Activity Reports
- Asset Forfeitures Pt. 1
- Asset Forfeitures Pt. 2
- More on Asset Forfeitures
- Asset Forfeiture Reform
- Restitution Resolution