Asset Forfeiture

Asset forfeiture is the loss of property, without compensation, due to the commission of a criminal act. Federal forfeiture occurs when federal agents target a property that may have been used to facilitate criminal activity or functions as the proceeds of criminality. Through federal litigation, any interest allocated to the property vests in the United States.

Agencies maintaining forfeiture programs are U.S. attorneys' offices, the Drug Enforcement Agency, the U.S. Customs Service, the Federal Bureau of Investigation, the Immigration and Naturalization Service, the U.S. Marshals Service, the U.S. Postal Inspection Service, the Internal Revenue Service (Criminal Investigation Division), the U.S. Secret Service, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.

Current federal asset forfeiture programs are intended to punish and deter criminal activity by depriving criminals of property used through illegal activities, take the instrumentalities of crime out of circulation, return property to victims, and make property available as resources to strengthen law enforcement.

Forfeiture law distinguishes between different classes of property. The first, contraband, includes property whose mere possession is a crime (e.g., illegal drugs, smuggled goods, counterfeit money, child pornography, and unregistered machine guns). The second class, derivative contraband, includes property such as boats, automobiles, and airplanes that functions to transport or facilitate the exchange of contraband. Direct proceeds, which is the third class, describes property, such as cash, that is received in exchange for, or as payment for, any transaction involving contraband. Derivative proceeds comprise the fourth class and include property such as financial instruments, real estate, legitimate businesses, and conveyances that are purchased or otherwise acquired with the proceeds of an illegal transaction. Although contraband and derivative contraband have been subjected to forfeiture in this country for nearly two centuries, direct and derivative proceeds were not subjected to forfeiture until after 1970.

Federal forfeiture law recognizes both civil and criminal forfeitures. Civil forfeiture involves a legal fiction in which the property (the offending object) is personified and the government sues the object. Litigation proceeds against the property, since the guilt of the property is at issue. The owner's guilt or innocence is not necessarily considered. Conviction of the property holder is not a prerequisite for the imposition of civil forfeiture. Civil forfeiture proceeds as an in rem action. In rem is a legal proceeding against an object in which the government forfeits all right, title, and interest in that object. Criminal forfeiture, on the other hand, is based on a determination of personal guilt. The right of the government in the property subject to forfeiture stems from an in personam criminal action against the offender for the purpose of obligating the offender to forfeit the offender's interest in the property to the government.

Both civil and criminal forfeiture have complex histories that date back to before the birth of the American colonies. In common law England, forfeiture included transference of the offending object to the king. Forfeiture of property to the Crown also automatically followed most felony convictions, regardless of the property's relationship to the crime alleged. The offending objects were not destroyed, but rather their value was assessed and the proceeds were given to the Crown as forfeiture. This practice came to be seen as a deterrent to negligence. This forfeiture process continued in England until the advent of the Industrial Revolution when machinery regularly caused workers' deaths. English law further evolved with statutory in rem proceedings against property involved in illegal activity.

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