Federal Criminal Cases and Forfeiture of Assets

In Atlanta I have been asked to give a speech to some lawyers who handle federal criminal cases.  The organizers of the seminar asked that I talk about criminal forfeitures.  A lot of lawyers are not well acquainted with this ancient form of punishment that is becoming more and more common in modern federal criminal law.  Here is the paper that is the basis for my speech.   Criminal Forfeiture

Forfeiture is a very old concept we inherited (like so many legal principles) from ancient English law.  The basic idea is that if property is used in or obtained from criminal conduct, the King could take the property.  They created a legal fiction by which title to the property actually turned over to the King at the point when the crime happened.

Fast forward to our incredibly bad War on Drugs beginning back in the 1970’s. Congress began re-tooling the ancient forfeiture concepts to let federal prosecutors go after dope dealers’ assets.  That is all fine and good, in theory.  However, many readers know that law enforcement and government officials began taking these rules to the extreme, taking property barely associated with a crime or taking money far greater than what was involved in any crime.  The United States Supreme Court recently heard arguments in a case out of Indiana exemplifying this issue.  Justin Timbs carried some drugs in his Range Rover and got caught.  The maximum fine for the crime was $5,000, but the state prosecutors seized and forfeited the $42,000 vehicle.  Oh yeah, Mr. Timbs proved that he bought the Range Rover with the money he got from his Dad’s life insurance policy.  Here is the usual excellent analysis from Scotusblog.com describing the case and the issues involved.  

Criminal forfeitures generally involve the property used in a crime.  Sometimes, prosecutors go after property that is called a “substitute asset.”  Under this theory, for example, the prosecutor claims that a business person received a million dollars as part of a fraud.  However, that million dollars was moved through business bank accounts, often being used to pay ongoing and regular business expenses.  Those specific “dollars” are gone, so under the substitute assets statute, a federal prosecutor can go after the Defendant’s other assets of an equal value.

Criminal defense attorneys who regularly handle federal cases are often called on to provide advice or guidance long before trial to their clients who may face potential forfeiture of substitute and other assets.  If the person has been formally notified he or she will or already has been indicted, the attorney cannot counsel the client to hide or impermissibly transfer assets.  Alternatively, if the client seeks legal counsel at an early enough phase of the matter so that charges have not yet been filed, then the lawyer very well may provide advice for moving assets so as to better protect the client.  Another one of the Supreme Court’s forfeiture cases, Kaley v. United States, involved some clients who did exactly that.  The lawyer’s advice was sound, but the prosecutors were nevertheless allowed to “restrain” the substitute assets prior to the trial.  Those same lawyers went back to the Supreme Court two years later and won a case that says prosecutors cannot restrain ahead of trial assets that have nothing to do with the crime.

Criminal forfeiture of assets is becoming a regular feature of federal criminal practice.  Anyone involved in such a matter, whether as part of an investigation or defending an actual case, needs advice from legal counsel who is familiar with this growing area of the law and how forfeitures impact the defense against the criminal charges themselves.