Stefan D. Cassella*
Asset forfeiture has become one of the most powerful and important
tools that federal law enforcement can employ against all manner
of criminals and criminal organizations -- from drug dealers to
terrorists to white collar criminals who prey on the vulnerable
for financial gain. Derived from the ancient practice of forfeiting
vessels and contraband in Customs and Admiralty cases, forfeiture
statutes are now found throughout the federal criminal code.
Why do forfeiture?
Federal law enforcement agencies use the forfeiture laws for a
variety of reasons, both time-honored and new. Like the statutes
the First Congress enacted in 1789, the modern laws allow the government
to seize contraband -- property that is simply unlawful to possess,
like illegal drugs, unregistered machine guns, pornographic materials,
smuggled goods and counterfeit money.
Forfeiture is also used to abate nuisances and to take the instrumentalities
of crime out of circulation. For example, if drug dealers are using
a "crack house" to sell drugs to children as they pass
by on the way to school, the building is a danger to the health
and safety of the neighborhood. Under the forfeiture laws, we can
shut it down. If a boat or truck is being used to smuggle illegal
aliens across the border, we can forfeit the vessel or vehicle to
prevent its use time and again for the same purpose. The same is
true for an airplane used to fly cocaine from Peru into Southern
California, or a printing press used to mint phony $100 bills.
The government also uses forfeiture to take the profit out of crime,
and to return property to victims. No one has the right to retain
the money gained from bribery, extortion, illegal gambling, or drug
dealing. With the forfeiture laws, we can separate the criminal
from his profits -- and any property traceable to it -- thus removing
the incentive others may have to commit similar crimes tomorrow.
And if the crime is one that has victims -- like carjacking or fraud
-- we can use the forfeiture laws to recover the property and restore
it to the owners far more effectively than the restitution statutes
Finally, forfeiture undeniably provides both a deterrent against
crime and as a measure of punishment for the criminal. Many criminals
fear the loss of their vacation homes, fancy cars, businesses and
bloated bank accounts far more than the prospect of a jail sentence.
In fact, in many cases, prosecution and incarceration are not needed
to achieve the ends of justice. Not every criminal act must be answered
with the slam of the jail cell door. Sometimes, return of the property
to the victim and forfeiture of the means by which the crime was
committed will suffice to ensure that the community is compensated
and protected and the criminal is punished.
The parade of horribles
The expansion of forfeiture into all of these areas has, of course,
been controversial. When laws that were designed to seize pirate
ships from privateers are applied, over the course of a decade,
to the seizure of homes, cars, businesses and bank accounts, there
are a lot of issues to sort out. How do we protect innocent property
owners? What procedures afford due process? When does forfeiture
go too far, in violation of the Excessive Fines Clause of the Eighth
Amendment? The ten forfeiture cases that the Supreme Court has had
on its docket in the past five terms are part of this sorting out
process. There are certain to be more; and Congress will need to
pass legislation to fill in many of the loopholes.
An informed debate on these issues is welcome. The debate is not
informed, however, if it is muddled by the misconceptions and plain
old-fashioned misstatements that seem to pop up in every article
critical of asset forfeiture. Roger Pilon's article, containing
the usual parade of horribles, is a good example.
Once again we are told that forfeiture is based on an absurd legal
"fiction" that the property is guilty of the crime, which
implies that property can be forfeited without proof that a crime
was committed by a real live person. We're told that the government
can seize property "almost at will," i.e. without due
process, and that innocent people find the process so unfair that
they walk away from their property without filing claims. And we're
told that even when they do file claims, innocent owners just don't
have any rights. Let's see if we can't inject a little truth and
understanding into the debate on these points.
The legal "fiction"
There are three types of forfeiture under federal law: administrative
forfeiture, civil judicial forfeiture, and criminal forfeiture.
An administrative forfeiture is essentially a default proceeding.
It occurs when property is seized and no one files a claim contesting
the forfeiture. By definition, all administrative forfeitures are
uncontested. Between 80 (eighty) and 85 (eighty-five) percent of
all forfeitures handled by the Department of Justice fall into this
If someone does file a claim to the property, the government has
a choice (assuming Congress has provided both options by statute).
It can file a civil complaint against the property in district court,
thus commencing a civil judicial forfeiture; or it can include a
forfeiture count in the indictment in a criminal case, which sets
the stage for a criminal forfeiture. In 1995, the Justice Department
began aggressively training criminal prosecutors in the use of the
forfeiture laws, so that now more than half of all contested forfeitures
are criminal forfeitures.
Just because a forfeiture is handled administratively or civilly,
of course, doesn't mean that there isn't a related criminal case.
In all forfeiture cases there must be proof that a crime was committed
by someone. In fact, in more than eighty percent of all forfeitures,
including administrative and civil forfeitures, there is a parallel
arrest and/or criminal prosecution. There wouldn't have been such
a wail and cry about forfeiture constituting a violation of the
Double Jeopardy Clause a few years ago if that weren't so. (Between
the Ninth Circuit's decision in United States v. $405,089.23 in
1994 and the Supreme Court's decision putting the double jeopardy
issue to rest in United States v. Ursery, thousands of federal prisoners
filed post-conviction actions alleging that their criminal conviction
and the civil forfeiture of their property constituted double jeopardy.)
The legal "fiction" that the property is "guilty"
of the crime is simply a shorthand for the way a civil forfeiture
case is styled: United States v. $405,089.23, United States v. 92
Buena Vista Ave., and so forth. In legal parlance, the property
in such a case is the "defendant." But property doesn't
commit crimes; people do. If there isn't proof that a person committed
a crime, there is no forfeiture. If our normally verbose legal system
styled its civil forfeiture cases to set forth the full legal theory,
this would be obvious. The above cases, for example, might have
been called United States v. $405,089.23 in Proceeds Earned by Charles
Arlt From Selling Methamphetamine; or United States v. A Residence
at 92 Buena Vista Ave. Purchased with Drug Proceeds that Joseph
Brenna, a Drug Dealer, Gave to His Girlfriend.
In short, forfeiture is a way of reaching the property involved
in a crime, but the focus is on the crime, without which there can
be no forfeiture.
Why do civil forfeiture?
If all forfeitures involve the commission of a crime, and the vast
majority involve an arrest or prosecution, why does the government
use civil forfeiture at all? It is not, as many contend, because
it is necessarily easier. To the contrary, the easiest way to forfeit
a criminal defendant's property in many cases is not to file a separate
civil action, but to present the forfeiture issue to the same jury
that just convicted the defendant in the criminal case. But sometimes,
criminal forfeiture isn't available or doesn't make sense.
Take the administrative forfeiture cases for example. There is
no point in including a criminal forfeiture count in an indictment
and presenting the issue to a jury if the defendant is not going
to contest the forfeiture. If a defendant facing criminal conviction
for drug trafficking thinks it pointless to contest the forfeiture
of the cash seized from him as drug proceeds at the time of his
arrest, it is equally pointless to clutter the indictment with a
forfeiture count when administrative forfeiture will answer.
What about the contested forfeitures that are done civilly? The
reasons for this are many. First, while there are over 100 civil
forfeiture statutes, there are relatively few criminal forfeiture
statutes. Drug proceeds can be forfeited either civilly or criminally,
for example, but firearms, gambling proceeds, vehicles used to smuggle
illegal aliens, and counterfeiting paraphernalia can only be forfeited
civilly. See 28 U.S.C. §2461(a). This is a problem Congress
needs to fix.
Second, criminal forfeiture requires a federal conviction for the
crime giving rise to the forfeiture. If the defendant is dead or
is a fugitive, there can be no prosecution and therefore no criminal
forfeiture. If the defendant was prosecuted in a State case, the
federal forfeiture has to be civil, because there is no federal
prosecution for the criminal offense. And if the defendant is prosecuted
for one crime, but the property was involved in a related but separate
crime, the forfeiture has to be civil, because the criminal forfeiture
is limited to the offense of conviction. For example, drug proceeds
seized from a defendant at the time of his arrest must be forfeited
civilly if the defendant is charged with possession of drugs with
intent to distribute, because such money was necessarily the proceeds
of an earlier drug deal, not the one for which the defendant is
Third, and perhaps most important, criminal forfeiture is limited
to the property of the defendant. If the defendant uses someone
else's property to commit the crime, criminal forfeiture accomplishes
nothing. Only civil forfeiture will reach the property. For example,
if a drug dealer uses an airplane to smuggle drugs into California,
the government has an interest in seizing and forfeiting the plane.
But suppose the only person arrested and prosecuted is the pilot.
If he owns the plane outright, criminal forfeiture is the way to
go. But if the plane is owned by a corporation, or a third-party
in South America, or by the pilot jointly with his spouse, criminal
forfeiture is pointless.
The same is true if we want to forfeit a crack house. We can prosecute
the tenants in the building until the cows come home, but we will
never be able to forfeit the building criminally if the tenants
don't own it. If the building belongs to a slumlord who allowed
his property to be turned into a crack house, we need civil forfeiture
to shut it down.
Whatever the reasons why civil forfeiture is essential to federal
law enforcement, it goes without saying that the process must be
fair. All property owners -- whether they be criminal defendants
or third parties -- are entitled to due process of law. Mr. Pilon
contends that due process is lacking. He says that the government
can seize property "almost at will," that officials can
"seize property, real or personal, without notice or hearing,"
and that innocent parties find the system so daunting that they
abandon their property without filing a claim. On all points, he
is greatly mistaken.
Seizures of property for forfeiture are governed by the same rules
that govern seizure of property for evidence -- the search and seizure
requirements of the Fourth Amendment. See United States v. Lasanta,
978 F.2d 1300 (2d Cir. 1992). If federal agents want to seize property
for forfeiture, they have to get a warrant, unless one of the recognized
exceptions to the Fourth Amendment applies, like when cash is found
in plain view in a vehicle that can be driven away, and there is
probable cause to believe it's drug proceeds, or when property is
found during a search incident to a lawful arrest. In fact, in many
instances, forfeiture seizures are more limited than their evidentiary
counterparts. See 18 U.S.C. §981(b)(2) (in money laundering
cases, warrantless seizures are authorized during searches incident
to arrest, but not in other exigent circumstances).
In real property cases, the rules are still more restrictive. In
United States v. James Daniel Good Property, 114 S. Ct. 492 (1993),
the Supreme Court held that real property may not be seized at all,
even with a warrant based on a showing of probable cause, until
the property owner has been given notice and an opportunity to be
heard. In short, in real property cases, the Due Process Clause
of the Fifth Amendment requires the government to give property
owners more "process" than is due under the Fourth Amendment.
Moreover, seizing the property isn't the end of the process; it's
only the beginning. If someone wants to contest a forfeiture he
has a right to file a claim, thereby forcing the government to file
a civil or criminal forfeiture action in federal court. If the case
is civil, the claimant has all the rights that attend normal civil
litigation, including the right to discovery and the right to a
trial by jury. Finally, the forfeiture verdict must be based on
a preponderance of the admissible evidence, not the probable cause
evidence that was sufficient for the seizure.
Of course, any system can be improved. The Justice Department has
proposed legislation to make the government carry the burden of
proof in civil forfeiture cases. We also have suggested making it
easier for people to file claims in forfeiture cases by extending
the filing deadlines, and we have proposed a remedy for those whose
property is damaged in government custody. (The Justice Department's
legislative proposal and supporting testimony are published in the
record of the Hearing on the Civil Asset Forfeiture Reform Act,
H.R. 1916, House Committee on the Judiciary, 104th Congress, 2d
Sess., Serial No. 94, July 22, 1996.) But it is preposterous to
say that property owners are denied due process under current law.
The Uncontested Forfeitures
What should we make of the fact that so many forfeitures are uncontested?
The critics, of course, see this as evidence that innocent property
owners are walking away from their property without filing a claim
because the procedures are unfair. But the opposite is far more
likely. Four out of five forfeitures are uncontested because in
most cases the evidence is so overwhelming that contesting the forfeiture
would be pointless. A defendant charged with smuggling illegal aliens,
for example, might see little advantage in contesting the forfeiture
of the truck he was driving when he was arrested and the aliens
were found. Remember, eighty percent of all forfeitures involve
a parallel arrest or prosecution. Those are cases in which the defendant
is in court anyway, has counsel, and yet most of the time does not
object to the forfeiture.
Certainly, there are still due process issues to be worked out.
One of the most nettlesome involves the current flood of post-conviction
pleadings being filed by federal prisoners who contend that they
didn't contest forfeiture actions because they didn't receive proper
notice. See e.g. United States v. Clark, 84 F.3d 378 (10th Cir.
1996). Most commonly, the prisoners complain that the government
sent the notice to the wrong jail or to a home address when the
government knew that the person was incarcerated. Criminals have
due process rights just like everyone else, so the government must
find a way to provide notice of forfeiture actions to persons being
held in jail. But these are hardly cases that involve innocent claimants
not filing claims because the procedures are stacked against them.
In his discussion of Bennis v. Michigan, Mr. Pilon makes a persuasive
argument that the Constitution does not adequately protect innocent
owners in civil forfeiture cases. It is an argument, however, that
has little relevance to federal forfeiture law.
Bennis, it must be remembered, was a State case. Michigan, apparently,
does not provide statutory protection for innocent owners, and the
Supreme Court held that no such protection is required by the Due
Process Clause. Fair enough. But the fact that the Constitution
doesn't protect innocent owners doesn't mean that the legislature
cannot do so. In fact, Congress has included an innocent owner defense
in virtually all of the most widely used federal forfeiture statutes.
For example, the drug statutes, 21 U.S.C. §881(a)(4) and (7),
say that neither vehicles nor real property, respectively, may be
forfeited if they were used to commit a crime without the knowledge
or consent of the owner.
Mr. Pilon's claim that "hotels and apartment buildings are
today forfeited when their owners are unable to prevent drug transactions
in them" is just plain wrong. Even a property owner who "knows"
that his property is being used for an illegal purpose is protected
from forfeiture if he shows that he took all reasonable steps to
prevent the activity. See United States v. 141st Street Corp., 911
F.2d 870, 877-78 (2nd Cir. 1990) (landlord who knew building was
being used for drug trafficking had opportunity to show he did not
consent to such use), cert. denied, 111 S. Ct. 1017 (1991); United
States v. Parcel of Real Property Known as 6109 Grubb Road, 886
F.2d 618, 626 (3rd Cir. 1989) (wife who knew of husband's use of
residence for drug trafficking had opportunity to show she did not
consent to such use); United States v. One Parcel of Real Estate
at 1012 Germantown Road, 963 F.2d 1496 (11th Cir. 1992).
For example, the owner of a residential hotel doesn't have to put
a stop to drug transactions on his property; he just has to do what
a reasonable owner would do to try to stop it, like call the police,
evict tenants convicted of committing drug crimes on the premises,
and install security devices like locks and adequate lighting. See
United States v. All Right, Title and Interest (Kenmore Hotel),
77 F.3d 648 (2d Cir. 1996).
What Congress Can Do
A key provision in the Justice Department's legislative proposal
would codify this concept and thus extend the innocent owner defense
to all federal forfeiture statutes. In addition to the other due
process reforms discussed above, this would go a long way toward
making sure that the forfeiture laws are up to date and protect
the rights of all property owners. But there is more that Congress
can do to enhance the forfeiture laws.
First, the criminal forfeiture statutes should be revised to make
sure the government can use them in all cases where it's appropriate
to do so. Criminal forfeiture should be available wherever civil
forfeiture is authorized. The government also needs better tools
to enforce criminal forfeiture judgments against convicted defendants,
and needs to be able to restrain property subject to forfeiture,
including substitute assets, pre-trial, to make sure that the assets
are still around once the defendant is convicted.
Also, there is no rhyme or reason to the current forfeiture laws
regarding the forfeiture of criminal proceeds. We can forfeit proceeds
in drug cases, but not in fraud cases; we can forfeit the money
paid to a "bag man" in a money laundering case, but not
the money paid to a "hit man" in a murder-for-hire case.
All criminal proceeds should be subject to forfeiture, and the term
"proceeds" should be defined to mean gross proceeds, not
net profits. It is absurd that some courts have allowed heroin traffickers
to deduct their overhead expenses from the amount of proceeds subject
to forfeiture. See United States v. McCarroll, 1996 U.S. Dist. LEXIS
8975 (N.D. Ill. Jun. 19, 1996).
In these and many other ways, the forfeiture laws can be improved
both to protect the rights of property owners and to allow the government
to make full use of this dramatically successful law enforcement
tool. Congress has that opportunity this year. If we can avoid the
misstatements and misconceptions that serve only to polarize the
debate, law enforcement, defense attorneys and legislators can work
together to produce a genuinely comprehensive and effective body
of laws to make forfeiture work for all of us.
*Stefan D. Cassella is the Assistant Chief, Asset Forfeiture and
Money Laundering Section U.S. Department of Justice. The opinions
expressed in this article are solely those of the author and do
not necessarily reflect the views or polices of the Department of