Criminal Law & Procedure Practice Group Newsletter - Volume 1, Issue 3, Fall 1997
December 1, 1997Stefan D. Cassella
The Justice Department has drafted and sent to Congress a set of legislative proposals to revise and reform the civil and criminal forfeiture laws. The bill, H.R. 1745, which was introduced by Rep. Charles Schumer on May 22, 1997, would create a uniform innocent owner defense and otherwise change civil forfeiture procedures to enhance the procedural due process rights of property owners. At the same time, it would expand the government's substantive forfeiture powers, by making the proceeds of virtually all federal crimes subject to forfeiture; and it would give the government new procedural tools, such as the ability to use criminal forfeiture in all cases where civil forfeiture is already authorized.
I want to summarize the major provisions of the bill -- particularly the procedural due process provisions -- in some detail. But first I must respond briefly to Roger Pilon's comment in the Spring 1997 issue of this newsletter that forfeiture "reform" presupposes that forfeiture is justified in the first place -- a notion that Mr. Pilon cannot accept.
In the Spring issue, Mr. Pilon and I wrote side-by-side articles giving sharply contrasting views of the forfeiture laws. In the Addendum to his article, Mr. Pilon takes me to task for focusing my attention on the due process protections embedded in our current forfeiture procedures without answering, to Mr. Pilon's satisfaction, what he calls the fundamental question: What justification is there for forfeiting someone's property in the first place? No amount of due process, he says, can legitimize the taking of property from a person who is not himself guilty of any criminal offense. I have assumed, he says, that the rationale for such forfeitures is "self-evident."
Perhaps I must plead guilty. When someone walks into a 7-Eleven convenience store with a shotgun and blows away the clerk, the police seize the gun. Why? Because it has been used to kill someone and could be used to kill someone else if not taken into police custody. Do I think this rationale self-evident? I guess so. But what if the gun didn't belong to the robber but belonged to someone else? Sorry, I don't see how that changes anything. When the robber is standing there with the smoking gun, we don't expect the police to say, "Excuse me, is this gun yours? Could it perhaps belong to your brother?" No, we seize the gun and forfeit it as the instrumentality of a crime, whether it belonged to the gunman, his brother, or his Aunt Louise from Nebraska.
The public is entitled to be protected from criminals -- which means not only that criminals should be locked up, but that the instrumentalities of their crimes should be confiscated so that they cannot be used -- by them or by others -- to commit additional crimes against additional victims. And if the forfeiture of the property deters others from committing similar crimes, so much the better.
The same rationale applies to the drug dealer's airplane, the alien smuggler's cargo vessel, the counterfeiter's printing press, or the tools of the terrorist. In each case, the property is forfeited, not because the property is itself the "offender," but because it has been used to tear a hole in the social fabric and could be used again to jeopardize the security and well-being of the citizens whose rights government was created to protect.
But Mr. Pilon is dissatisfied by such "crude utilitarian" arguments. He asks, in essence, Why should A lose his gun just because B used it to kill someone? Why should A lose his airplane just because B used it to fly half a ton of cocaine into the United States from Colombia? Why should a slumlord lose his building just because his tenants used it to sell drugs to children on their way to school? That the public is thereby protected from future criminal activity is apparently not enough of a justification for forfeiture. Evidently, when a pilot is arrested after transporting a load of cocaine, Mr. Pilon would have us return the plane to the drug dealer so that he can hire a new pilot to fly load after load of drugs into Texas or California until we extradite the dealer himself and bring him to justice.
The nub of Mr. Pilon's argument is that if the owner of the property hasn't been convicted of a crime -- or hasn't even committed a crime -- he hasn't done anything wrong, and therefore should not suffer the loss of his property, regardless of how it was used or might be used by someone else to commit a criminal offense. There are, of course, cases where a wholly innocent person's property was used to commit an offense that the owner knew nothing about or was powerless to stop. That's where the statutory innocent owner defense comes in, as will be discussed in a moment. But it is absolutely wrong to say that a property owner "has done nothing wrong" if he knowingly allows someone else to use his property to commit a crime.
If I let the local organized crime family use my building to run a gambling or prostitution operation, I may have committed no crime myself, but I've certainly made it easier for someone else to commit one. The same is true if I let my boat and dock be used to smuggle drugs, or if I allow by car dealership to be used to launder money.
There are degrees of offenses against society. Some -- the most serious -- are punished as crimes. Others are punished less severely -- through civil fines and forfeitures, debarments and revocation of licenses and privileges. Allowing another to use your property to violate the law and prey on innocent people falls in the latter category. It is not a crime, but it is a wrong that merits the sanction of forfeiture, not only to prevent the property from being used again for an illegal purpose, but to encourage property owners generally to take greater care that their property is not turned into an instrument of social destruction.
That civil forfeiture serves this collateral purpose was recognized by the Supreme Court when it was asked, "How is it possible that a civil forfeiture could constitute punishment for purposes of the Eighth Amendment's Excessive Fines Clause, but not constitute punishment for purposes of the Fifth Amendment's Double Jeopardy Clause?" In his concurring opinion in United States v. Ursery, 116 S. Ct. 2135 (1996), Justice Anthony Kennedy explained that the Double Jeopardy Clause protects against the imposition of two punishments for committing the same crime. But civil forfeiture doesn't punish a property owner for committing a crime; to the extent that it constitutes punishment at all and isn't simply a remedial device, it imposes a sanction on a property owner for using, or allowing another to use, his property to commit a criminal offense. That sanction does not fall within the ambit of the Double Jeopardy Clause, which is concerned only with the punishment imposed for the commission of a crime; but it is circumscribed by the limitations of the Excessive Fines Clause, which deal more generally with the sanctions the government may impose for a broader range of civil and criminal transgressions.
In my view, civil forfeiture is amply justified by the dual purpose of taking the instrumentalities of crime out of circulation and providing a civil sanction against those who allow their property to be used for socially destructive purposes. The key, as with all tools of law enforcement, regardless of their justification, is that the sanction be imposed fairly, with all attributes of due process afforded.
Mr. Pilon's attack on the due process protections built into current law is sad. One must assume that he has never had an opportunity to handle a civil forfeiture case.
He begins by asking, "How could it be right . . . to seize a person's property through an ex parte proceeding at which the standard of proof is mere "probable cause" . . . and afford that person no ground for subsequently reclaiming his property?" (Emphasis in original.) The entire process, Mr. Pilon says, in the absence of a statutory innocent owner defense, is ex parte, and gives property owners no chance whatsoever to challenge the forfeiture.
Totally wrong. Yes, personal property may be seized without notice -- i.e., ex parte -- assuming a warrant has been issued or an exception to the Fourth Amendment warrant requirement applies; and the seizure may be based solely on probable cause. It's the same with the arrest of an individual. Do the police call up a wanted fugitive to let him know in advance that they'll be coming over to arrest him? Not usually. As long as they have a warrant based on probable cause, they arrest the fugitive, put him in jail, and give him a hearing later. Similarly, we generally don't call international money launderers on the phone and say, "we're planning to seize the money you're going to wire to the Cayman Islands; would this be a convenient time?" Just as the fugitive would disappear if given any warning, so would the forfeitable property.
But just as the arrested fugitive is entitled to a trial and the other attributes of due process before the arrest can be transformed into a conviction, so does a property owner have a right to due process before a seizure matures into a forfeiture.
This is true whether the forfeiture statute provides for an innocent owner defense or not. In all cases, the property owner is entitled to a jury trial where he may attempt to establish either that no crime occurred (i.e. that there is no basis for the forfeiture) or that this particular property was not derived from, or used to commit, the offense.
Once the government establishes probable cause on these issues and a jury is empaneled, the standard of proof is preponderance of the evidence. If the property owner introduces evidence on either point, the government must rebut it with admissible evidence; it cannot rely on hearsay as it can in a probable cause hearing.
It's true that the burden of proof in a civil forfeiture trial is on the property owner. That is something that our legislative proposal would change. But it is totally wrong to suggest that civil forfeiture under current law is a fait accompli once the property is seized, with the property owner having no avenue of redress. There is a trial, by jury, with all of the rules of evidence available to both sides, at which the owner can challenge the legal and factual basis for the forfeiture. If there is an applicable innocent owner defense, as there is in most federal cases, the property owner may challenge the forfeiture on that basis as well.
Moreover, once the jury finds that the property is subject to forfeiture, the property owner has the right to ask the court to void or mitigate the forfeiture on the ground that it would be unconstitutionally excessive under the Excessive Fines Clause. Again, that's true whether the statute provides for an innocent owner defense or not.
Mr. Pilon's response is that even if there were such due process protections, they would be meaningless because of the "practical impediments" to litigating against the government. For example, he says if no one files a claim to seized property, the government will forfeit it in an administrative default proceeding; but if a person dares to file a claim, "the government can get rough, by filing a civil complaint against the property, or even worse, by including a forfeiture count in a criminal indictment." My goodness. Exactly what are we supposed to do? Ignore the claim and keep the property? Or does Mr. Pilon think that everyone who challenges a forfeiture is entitled to immediate return of the property? Is the validity of the claim to be assumed? Should we have a ceremony and give the claimant a medal for having the fortitude to file a claim?
I thought the whole idea was to give a property owner his "day in court" where the merits of the forfeiture action can be played out in front of a jury, instead of being determined by the agency that seized the property. The only way to do that is to initiate a formal civil forfeiture case or to pursue the forfeiture as part of an indictment in which someone is being prosecuted for the underlying offense.
The theme that runs throughout H.R. 1745, the Justice Department's legislative proposal, is that the federal courts should be accessible to anyone with standing to challenge a civil forfeiture action, and that the rules governing such actions should be fair -- to all parties -- and easy to understand. Let's look now at some of those provisions.
The centerpiece of the reform side of H.R. 1745 is the provision that places the burden of proof on the government in civil forfeiture cases. The standard of proof would remain "preponderance of the evidence," but instead of allowing the government to shift the burden of proof to the claimant upon a threshold showing of probable cause, the burden would at all times remain on the government to show that a crime occurred and that the property derived from, or was used to commit, that crime. Thus, property owners would no longer have cause to complain that they were being asked to "prove a negative."
Equally important is the provision enacting a "uniform innocent owner defense" that would apply to all civil forfeiture statutes enforced by the Department of Justice. Most federal statutes already contain a statutory innocent owner defense, but some, like the gambling and smuggling statutes, 18 U.S.C. §§1955(d) and 545, respectively, do not. Enactment of the defense would ensure that a wholly innocent owner, who established that he or she was unaware of, or took all reasonable steps to prevent, the illegal use of his or her property would be protected from forfeiture.
The defense would also protect bona fide purchasers who acquire forfeitable property in exchange for something of value without realizing that the property was derived from a criminal offense or used to commit one. But it would not protect persons, like drug dealers' girlfriends, who receive forfeitable property as a gift intended to insulate the property from forfeiture. This is a loophole in current law that has existed since the Supreme Court's decision in United States v. A Parcel of Land (92 Buena Vista), 507 U.S. 111, 113 S. Ct. 1126 (1993). In his dissent in that case, Justice Kennedy said that the failure to exclude donees from the application of the innocent owner defense "rips out the most effective enforcement provisions in all of the drug forfeiture laws," 113 S. Ct. at 1146, and "leaves the forfeiture scheme that is the centerpiece of the Nation's drug enforcement laws in quite a mess." 113 S. Ct. at 1145 (Kennedy, J. dissenting). Justice Stevens, however, writing for the plurality, said that the Court was bound by the statutory language enacted by Congress. "That a statutory provision contains 'puzzling' language, or seems unwise, is not an appropriate reason for simply ignoring the text." 113 S. Ct. at 1135 n.20. The new forfeiture bill would resolve this problem.
The bill does a number of other things to improve the access that property owners have to the federal courts to contest civil forfeiture actions. It extends the deadline for contesting an administrative forfeiture from 10 to 30 days from receipt of notice; it abolishes the "cost bond" requirement in cases involving the forfeiture of currency or monetary instruments because such cases do not involve any storage costs that are otherwise imposed on the government if frivolous claims are filed; and it creates a remedy under the Federal Tort Claims Act for owners whose property was damaged while in government custody but never forfeited.
The bill would also allow claimants to recover pre- and post-judgment interest if they successfully contest the forfeiture action, and it would allow the Attorney General to use property forfeited in civil cases to pay restitution to the victims of the underlying crime.
While H.R. 1745 contains these and a number of other provisions designed to enhance the procedural protections embodied in the civil forfeiture laws, the bill is a balanced proposal that also extends the government's forfeiture powers into new areas and provides new tools to make the enforcement of the forfeiture laws more effective.
Most important, the bill authorizes the forfeiture of the proceeds of virtually all crimes in the federal criminal code. There is no reason why a criminal should ever be permitted to retain the proceeds of a crime. Indeed, one of the primary purposes of forfeiture is to ensure "that persons do not profit from their illegal acts." Ursery, 116 S. Ct. at 2149.
The bill also gives the government new authority to confiscate guns used in crimes of violence, electronic gear used in telemarketing fraud schemes, chemicals, lab equipment and other articles used by terrorists, and property used to facilitate foreign drug crimes.
On the procedural side, the bill would do a number of things to address the growing tendency of criminals to ignore international borders when they commit crimes and seek to conceal their criminal proceeds. For example, the bill would allow courts to order criminals to repatriate property that is subject to forfeiture from abroad -- thus making it available for forfeiture and restitution to victims. It would also enhance our ability to work with foreign governments by creating a mechanism for the enforcement of foreign forfeiture judgments, and by allowing courts to freeze the U.S. assets of a person arrested abroad. The bill would also give the government the means to obtain access to bank records held overseas in bank secrecy jurisdictions, provide for the admissibility of foreign business records in forfeiture cases, and prohibit fugitives from litigating civil claims in federal court unless they surrender themselves in the related criminal case.
Finally, the bill would enhance the criminal forfeiture statutes to make them as effective as their civil counterparts. Criminal forfeiture would be available in every case where civil forfeiture is now authorized (it seems obvious that it should be, but it's not). The government would be able to seek an order restraining forfeitable property, including substitute assets, pre-trial, to make sure the assets didn't disappear. And there would be better procedural mechanisms for locating forfeitable assets, enforcing forfeiture judgments, and protecting the rights of third parties asserting an interest in forfeited property.
In all of these ways and more, H.R. 1745 would create a comprehensive and coherent set of forfeiture laws that would protect the rights of property owners, while preserving and enhancing asset forfeiture as an effective law enforcement tool. We should all hope that Congress moves quickly to consider it and enact it into law.
*Stefan D. Cassella is the Assistant Chief of the Asset Forfeiture and Money Laundering Section of the 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 Justice.
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