History and Scope of Asset Forfeiture
Under the law, prosecutors can pursue more than just jail time and fines, they are also authorized to pursue property belonging to the those suspected of crime. This process is known as asset forfeiture. This practice began centuries ago under maritime law where pirates could lose their boats when they came to port.
Since then, asset forfeiture has become a powerful tool in the arsenal of virtually every state and federal law enforcement agency. Over the last decade billions of dollars have been forfeited by the Department of Justice. However, federal agencies are not the only organizations seeking to take private property through forfeiture. Locally, District Attorney’s (DA’s) Offices also hire, train, and authorize prosecutors to forfeit private property and have been enriched by the taking of millions of dollars worth of property.
Legal Definition of Forfeiture and Example
Asset Forfeiture is a legal process where governmental entities take and keep private property on the basis that such property is connected to a crime. For example, if a gun is used in a bank robbery an FBI agent who finds that gun may seize it. Then, an Assistant United States Attorney may make a judicial forfeiture action to transfer the ownership of that gun from some private individual to the U.S. Government.
Types of Forfeiture
There are several jurisdictions that pursue asset forfeiture under various legal theories and justification. Below is a breakdown of common forfeiture categories.
Texas – Civil
Under Texas law Forfeiture is authorized under the Texas Code of Criminal Procedure under Articles 18 and 59. However, asset forfeiture in Texas is actually a civil action where the items sought by DAs are actually considered a party in the forfeiture lawsuit. For example, if a local DA’s Office sought a car that was used to transport drug money the lawsuit may be entitled The State of Texas v. one 2015 Honda Accord. Because these are civil actions, the rules of civil procedure apply including the use of potentially extensive and costly discovery practices such as interrogatories, admissions, depositions.
Unlike Texas, Federal Courts authorize forfeiture under both civil and criminal cases.
Federal – Civil
Under Sections 981 and 983 of Title 18 of the United States Code, the U.S. Government may file a lawsuit to forfeit private property. As is true under Texas forfeiture proceedings, the items sought by federal prosecutors are actually considered a party in the forfeiture lawsuit. Just like the example used above pertaining to Texas forfeitures, the lawsuit may be entitled The United States v. one 2015 Honda Accord. Because these are civil actions, the rules of civil procedure apply including the use of potentially extensive and costly discovery practices such as interrogatories, admissions, depositions.
Federal – Criminal
Under Section 982 of Title 18 as well has Section 853 of Title 21 of the U.S. Code, the U.S. Government may include forfeiture within a criminal prosecution. Unlike civil forfeiture actions, these actions require an actual prosecution of a company or person seeking a conviction, jail time, and/or fine. Also, these actions require a conviction before a forfeiture takes place. Using a similar example as used above, if a person is charged with participating in a drug conspiracy the Indictment in this case may contain a forfeiture notice stating that upon conviction the Government intends to forfeit a 2015 Honda Accord. If that person is convicted, then the Judge will begin proceedings to determine whether that person loses his or her interest in the car. If the car is forfeited, then an ancillary proceeding will commence to determine if other 3rd parties should be awarded the car or if the Government may keep it. This is known as an ancillary process.
The most commonly used forfeiture theory among prosecutors is the Instrumentality Theory. That is, any property which makes a crime easier to commit is considered to be an instrument of that crime. Common examples are vehicles used to transport drugs or drug money, guns used in robberies or other violent crime, houses and buildings used for drug trafficking or human trafficking, computers used to accomplish frauds and identity thefts, emission equipment used to render inaccurate inspection stickers, and a whole host of other actions taken to capture and forfeit private property. If a judge or jury believes that an item of property was used to commit a crime, it can be forfeited under this type of theory.
Another forfeiture theory used by prosecutors is the Proceeds Theory. This includes an allegation that an item was bought with illicit funds earned by the commission of a crime. For Example, if a fraudster buys a mansion or a Lamborghini with the fruit of stealing from unsuspecting victims, this property would be subject to forfeiture because it is Proceeds of the crime. Proceeds theories require an accounting that traces the property sought for forfeiture to the crime itself.
Money Laundering cases under Section 956 and 957 of Title 18 of the United States Code, allow prosecutors to forfeit property that is proceeds of crime as well as property commingled with proceeds of crime. For Example, imagine that a person commits wire fraud by using the internet to solicit the purchase of a nonexistent stock for $10,000 and then puts that money into his bank account which already held $1,000,000. If a federal prosecutor were so motived, either a criminal action against the fraudster or a civil action against the account would authorize the pursuit of the entire $1,010,000 within the account.
This theory is not prevalent under Texas law but is common under Federal law.
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