The Strange World of Asset Forfeitures [Pt. 1]
Asset Forfeitures, Equitable Sharing, and Special Interrogatories
by White Collar Crime Attorney Steve Jumes
Unlike the lottery, you can’t claim your property anonymously in asset forfeitures.
While most of us desire to be charitable and philanthropic, it has become an unfortunate reality that once a person amasses property they expect solicitations by individuals, organizations, or government entities. Stories of athletes who blow their fortunes because multiple family members and so-called friends begin harassing them or stories of lottery winners who squander their fortunes due to the same pressures are voluminous. In fact, our culture has become so sycophantic that Forbes actually advises lottery winners to “remain anonymous if your state rules permit it.”
Further, it should come as no surprise that the U.S. Government, and most states, are also susceptible to temptations to panhandle; however, in the case of the Government, begging is more like taking. No place is this more visible than in the fastest growing area in law enforcement, and jurisprudence… asset forfeiture.
The Strange World of Asset Forfeitures
In its simplest terms, asset forfeitures are judicial efforts by a government agency to seize, and ultimately keep, private property on the basis that the targeted property is somehow connected to illegal activity. This can be initiated in several ways. For instance, a police officer during a traffic stop may find cause to search a vehicle and find money that is suspiciously packaged or in close proximity to a scent associated with narcotics that allegedly only canines can detect. Or, as a different method, an agency investigating a crime may seek a seizure warrant from a state or federal judge requesting the right to freeze or seize a bank account because they hold proceeds of crime (wire and mail fraud, healthcare fraud, drug distribution, or virtually any other crime). Of course there are also ‘substitute assets’ theories where the government goes after clean property owned by a convicted criminal because the dirty money has already been transferred or dissipated. [See Steve Jumes’ Article on Fundamental Fairness in the Voice]
One may ask if asset forfeiture is common. The answer is a resounding yes. [Read more about asset forfeitures in Steve Jumes’ recent article on Suspicious Activity Reports.] The AFMLS (Department of Justice Asset Forfeiture and Money Laundering Section) Asset Forfeiture Fund (AFF) and the TEOAF (Treasury Executive Office for Asset Forfeiture) fund hold billions and hundreds of millions respectively. But don’t think this boon is limited to federal agencies, most states are in on the action. The City of Fort Worth police department received $29,432 in equitable sharing in Fiscal Year 2012. By comparison, the Dallas Police Department received $548,733 during that time period. Conversely, the Tarrant County District Attorney’s Office received $2,883,194 while the Dallas District Attorney’s Office received $20,051.
Equitable Sharing is a process where the federal government shares some of its forfeiture proceeds to compensate/reward local agencies for their assistance in federal investigations. It has been impacted somewhat by Eric Holder’s recent announcement that the federal government will no longer be adopting local seizures for federal forfeiture proceedings. However, don’t think this will curtail property seizures, local agencies will just handle those case themselves instead of asking for the federal government to adopt them. [The reason local agencies often chose adoption as opposed to local forfeiture proceedings is simple… profit. The federal government typically shares 80% of proceeds with local police departments while most district attorney’s offices share far less.] In fact, the Dallas District Attorney’s Office, in addition to the $20,051 equitable sharing proceeds it garnered, also received $1,300,000 through state forfeiture proceedings.
Civil Procedure and the Bar to Anonymity
When one’s property has been seized and targeted for forfeiture, the burden falls on property owners, also known as claimants or respondents, to actually inform the government entity (whether it’s the United States Attorney’s Office,IRS, FBI, ATF, DEA, U.S. Postal Inspector’s Service, or a city police department, a sheriff’s office, or a district attorney’s office) that they want their property back. This is necessary in both administrative and judicial forfeiture proceedings. [For a quick discussion regarding the various types of forfeitures see 10 Questions Asked About Forfeiture]
Federally, a claim must be made pursuant to 18 U.S.C. 983(a)(1)-(3) and Rule G, Supplemental Rules of Admiralty and Maritime Claims. If a claim is not timely made within about 30 days of receipt of notice of a civil complaint, the property automatically goes to the government by default. However, such a claim must be correctly filed or the Government will take additional discovery steps against owners.
Check here for Part 2 of 2 in this feature to learn about the claim process and special interrogatories in asset forfeitures.