DOJ Publication
CIVIL AND CRIMINAL FORFEITURE PROCEDURE

Table of Contents

Part II - Criminal Forfeiture

TEXT OF PART II  - pages 1-48 - in PDF format

  A. Criminal forfeiture requires a conviction - - - - - - - - - - - 1
   B. Only property involved in the offense of conviction may be forfeited - - - - - - 2
   C. Only the defendant's property can be forfeited - - - - - - - - - - 2
   D. Property held by third party nominees - - - - - - - - - - - - 3
   E. Court may disregard corporate form - - - - - - - - - - - - 5
   F. Defendant may forfeit his or her interest in property held by tenants in common or partnership - 5
   G. Property transferred after-the-fact to non-bona fide purchasers - - - - - - - 5

II. Criminal Forfeiture Procedure - - - - - - - - - - - - 6
   A. In general - - - - - - - - - - - - - - - - - 6
   B. Forfeiture is part of sentencing - - - - - - - - - - - - - 6
   C. Application of Federal Rules of Criminal Procedure - - - - - - - - - 7

III. Seizure Warrants - 21 U.S.C§ 853(f) - - - - - - - - - - 7

  A. Probable cause standard - - - - - - - - - - - - - - - 7
   B. Inadequacy of restraining order - - - - - - - - - - - - - 7
   C. Seizure warrants used to seize substitute assets - - - - - - - - - - 7
   D. How long can the Government hold property seized with section 853(f) warrant? - - - 8
   E. Application of 2l U.S.C. § 888(c) to criminal forfeiture - - - - - - - - 8
   F. Effect of illegal seizure - - - - - - - - - - - - - - - 8
   G. Seizure of bail money - - - - - - - - - - - - - - - 8
   H. Application of James Daniel Good - - - - - - - - - - - - 8
   I. Lis pendens - - - - - - - - - - - - - - - - - 8

      2. Same rule applies if the property was seized or restrained in a parallel civil forfeiture - 10

      4. The Eleventh Circuit does not allow a post-restraint hearing in any event - - - - 11
  E. Lis pendens - - - - - - - - - - - - - - - - - 11
  F. Restraint of foreign assets - - - - - - - - - - - - - - II

      1. Restraining order may include order to repatriate property - - - - - - - 11

      2. Challenges to restraint in foreign court - - - - - - - - - - - 12

  G. Posting bond in lieu of restrained property - - - - - - - - - - - 12
  H. Federal court may restrain or remove state court proceeding - - - - - - - 12

      1. Mortgage foreclosure - - - - - - - - - - - - - - 12

      2. Other civil actions - - - - - - - - - - - - - - - 12

  I. Probable cause for restraint - - - - - - - - - - - - - 13
  J. Issuance of restraining order is appealable under 28 U.S.C§ 1292 ---13

  K. Restraining assets of third parties - - - - - - - - - - - - 13
  L. Third party entitled to hearing on restraint of property - - - - - - - - - 14
  M. Filing lis pendens on property in which third party has an interest - - - - - - 15
  N. Spousal privilege - - - - - - - - - - - - - - - 15
  O. Pretrial restraint of substitute assets - - - - - - - - - - - - 15
  P. Procedure at hearing on restraining order - - - - - - - - - - - 17
      1. Courts differ regarding the application of Rule 65 - - - 17

  Q. Burden of proof - - - - - - - - - - - - - - - - 17

      1. Reliance on grand jury's finding of probable cause - - - - - - - - 18

      2. Evidence- - - - - - - - -19

  R. Scope of third party challenges to restraining orders - - - - - - - - - 19
  S. Violation of restraining order - - - - - - - - - - - - - 19
  T. Interlocutory sale - - - - - - - - - - - - - - - - 19

V. Retention of Property Seized With Civil Process - - - - - - - - - - - - - - - - 20

VI. Indictment - - - - - 20

  A. Rule 32.2(a) is a notice provision - - - - - - - - - - - - - 20

      1. Cases decided after Rule 32.2 took effect - - - - - - - - - - 20

      2. Cases decided under old Rule 7(c)(2) - - - - - 20

  B. Specifying amount of money judgment - - - - - - - - - - - .21
  C. Extent of defendant's interest need not be specified - - - - - - - - - 22
  D. Substitute assets need not be listed in the indictment - - - - - - - - - 22
  E. Motion to dismiss - - - - - - - - - - - - - - - - 22
  F. Vindictiveness - - - - - - - - - - - - - - - - 23

  G. Joinder and severance - - - - - - - - - - - - - - - 24

VII. Bifurcated Proceeding - - - - - - - - - - - - - 24

  A. Under Rule 32.2(b), the criminal trial must be bifurcated - - - - - - - - 24

  B. Before Rule 32.2 took effect, courts were divided as to whether bifurcation was required - 24

VIII. Burden of Proof I Jury Instructions - - - - - - - - - - 25
  A. Post-Libretti cases - - - - - - - - - - - - - - - - 25
  B. Pre-Libretti cases discussing standard of proof - - - - - - - - - - 26
      1. Section 982 forfeitures - - - - - - - - - - - - - - 26
      2. Section 853 forfeitures - - - - - - - - - - - - - - 26
      3. RICO forfeitures - - - - - - - - - - - - - - - 27

  C. Application of Apprendi v. New Jersey, 530 U.S. 466 (2000) - - - - - - - - - - 27

  D. The Government may not shift burden to defendant- - - - - - - - - 28
  E. Jury instructions - - - - - - - - - - - - - - - - 29
      1. Money judgments - - - - - - - - - - - - - - - 29
      2. Property involved in money laundering - - - - - - - - - - - 29

IX. Guilty Pleas - - - - - - - - - - - - - - - 29
  A. Rule ll(f) does not apply to forfeiture - - - - - - - - - - - - 29
  B. Defendant can plead guilty to the offense but contest the forfeiture - - - - - - 29
  C. Agreement not to contest civil forfeiture - - - - ~ - - - - - - 29
  D. Withdrawal of guilty plea - - - - - - - - - - - - - - 30
  E. Ownership issue - - - - - - - - - - - - - - - - 30

X. Special Verdict / Right to Jury - - - - - - - - - - - - 30

  A. Defendant has no constitutional right to jury determination - - - - - - - 30
      1. Rule 32.2(b)(4) requires a specific request that the jury be retained - - - - - 30
      2. Case can proceed with ll-member jury - - - - - - - - - - - 31
      3. Jury argument on the forfeiture issue - - - - - - - - - - - 31
      4. Scope of the jury's responsibility - - - - - - - - - - - - 31
      5. Jury's exposure to publicity concerning the forfeiture - - - - - - - - 31
      6. Before Rule 32.2, the right to jury could be waived - - - - - - - - 32
      7. There is no right to a jury if defendant pleads guilty - - - - - - - - -32

      8. Judicial review of the jury's finding - - - - - - - - - - - 32

  B. Conduct of the forfeiture phase of the trial - - - - - - - - - - - .32
      1. Presence of the defendant - - - - - - - - - - - - - 32
      2. Use of hearsay - - - - - - - - - - 32

      3. Reliance on evidence from "guilt phase" - - - - - - - - - - 33
  C. "Ownership" vs. "nexus" - - - - - - - - - - 33

      1. Rule 32.2 repeals Rule 31(e) - - - - - - - - - - 33

      2. Before Rule 32.2 took effect, some courts held that jury must determine ownership - - 33
      3. Other courts limited jury to nexus issue - - - - - - - - - - - 34
      4. Ownership an issue for the court to consider before entering an order of forfeiture - - 34
      5. Other cases - - - - - - - - - - - - - - - - 35
      6. Rule 31(e) did not permit a jury to nullify a forfeiture - - - - - - - - 35

XI. Money Judgment - - - - - - - - - - 35

   A. Court may order forfeiture of an amount of money - - - - - - - - - 35
      1. Money laundering cases - - - - - - - - - - - - - - 35
      2. Fraud and other economic crimes - - - - - - - - - - - - 36
      3. Drug cases - - - - - - - - - - - - - - - - 37
      4. RICO cases - - - - - - - - - - - - - - - - 37

  B. If the proceeds were not cash - - - - - - - - - - - - - 38
  C. Money judgment may be based on value of the facilitating property - - - - - - 38
  D. Defendant is liable for proceeds directed to a third party - - - - - - - 38

  E. Variance from the indictment - - - - - - - - - - - - - 38
  F. Enforcement of money judgment - - - - - - - - - - - - - 38
  G. Burden of proof on money judgment - - - - - - - - - - - - 39

XII. Preliminary Order of Forfeiture - - - - - - - - - - - 39
  A. Rule 32.2(b)(2) - - - - - - - - - 39

  E. Seizure of property pursuant to preliminary order - - - - - - - - - 41

      1. Section 853(g) - - - - - - - 41

      2. Contempt for failure to produce forfeited property - - - - - - - - .41

  F. Preliminary order may include order to repatriate property - - - - - - - 41

XIII. Order of Forfeiture / Sentencing - - - - - - - - - - - 42
  A. Forfeiture is mandatory - - - - - - - - - - - - - - 42
  B. Forfeiture must be included in the "verbal pronouncement" - - - - - - - 43

  C. Order of forfeiture must be included in the judgment and commitment order - - - - 43
  D. Courts are split - - - - - - - - - - - - - - - - 43
      1. Courts holding that the judgment may be amended - - - - - - - - 43
      2. Courts holding that the judgment may not be amended - - - - - - - - 44

  E. Frustrating the forfeiture is punishable as an obstruction of justice - - - - - - 45
  F. Forfeiture cannot be used to offset the defendant's fine - - - - - - - - 45
  G. Forfeiture is not a basis for a downward departure - - - - - - - - - 46
  H. Revocation of supervised release - - - - - - - - - - - - - 46
  I. Effect of the sentence on the forfeiture - - - - - - - - - - - 46
      1. Inconsistent findings - - - - - - - - - - - - - - - 46
  K. Consent decree - - - - - - - - - - - - - - - - 47
  L. Stay pending appeal - - - - - - - - - - - - - - - 47

XV. Joint and Several Liability - - - - - - - - - - - - 47

XVI. Conspiracies - - - - - - - - - - - 49

XVII. Substitute Assets - -  - - - - - - - - - - - 49

      2. It is unclear what notice defendant must be given of the motion to substitute assets - - 50

XVIII. Property Transferred to Third Parties - - - - - - - - - - 55
  A. Relation back doctrine - - - - - - - - - - - - - - - 55
  B. Application of relation back doctrine to substitute assets - - - - - - - - 56
      1. The ancillary proceeding gives third parties the right to contest the forfeiture of substitute assets - - - - - - - - - - - - - - - - - 56

      2. Transfers of substitute assets to third parties may be voided under the relation back doctrine - - - - - - - - - 56
  C. Procedure for forfeiting property in third party's name as substitute asset - - - - - 57
  D. Forfeiture may include money transferred to defense counsel as his or her fee - - - - 57
  E. Government has option of recovering property from third party or seeking substitute assets - 58
  F. Government cannot recover substitute assets from third party - - - - - - - 58
  G. Government may forfeit other property traceable to that property - - - - - - 58
  H. Government may file a conversion action - - - - - - - - - - - 59
      1. Third party may be held in contempt - - - - - - - - - - - - 60

XIX. Right of Third Party To Object to the Forfeiture - - - - - - - - 60
  A. Third party has no right to intervene in a criminal case until after conviction under sections 1963(i) and 853(k) - - - - - - - - - - - - - - - - - 60

  B. Third party cannot seek return of property seized for criminal forfeiture - - - - - 61

  C. Third party cannot seek division of restrained assets - - - - - - - - - 61
  D. Third party may not seek dismissal offorfeiture count - - - - - - - - 61
  E. Third party cannot object to validity of defendant's guilty plea - - - - - - - 61
  F. Third party cannot object to entry of order offorfeiture - - - - - - - - - -61

  G. Third party may not object to motion to forfeit substitute assets - - - - - - - 61
  H. Third party may not move to quash preliminary order of forfeiture - - - - - - 62
  I. Third party cannot file any action in another court - - - - - - - - - 62
      1. Mortgage foreclosure - - - - - - - - - - - - - - 62
      2. Interpleaders - - - - - - - - - - - - - - 62

      3. Bankruptcy - - - - - - - - - - - - - - 62

      4. Other civil actions - - - - - - - - - - - - - - - 63

  J. Third party cannot use section 2255 proceeding - - - - - - - - - - 63
  K. But a third party can seek permissible to conduct an interlocutory sale - - - - - 63

XX. Ancillary Hearing-Procedural Issues - - - - - - - - - - 63
  A. Purpose of the ancillary proceeding - - - - - - - - - - - - 63
  B. Ancillary proceeding is essentially civil in nature - - - - - - - - - 64
  C. Government cannot force third party to file claim - - - - - - - - - 64
  D. Notice requirement under section 853(n)(I) - - - - - - - - - - - 64
      1. Courts are split over whether section 853(n)(1) requires direct written notice - - - 64
      2. Person with actual notice can't complain oflack of notice - - - - - - - 65
      3. Notice of the hearing on the petition - - - - - - - - - - - 65

  E. When the ancillary proceeding is commenced - - - - - - - - - - 65
  F. Amendments to the preliminary order of forfeiture - - - - - - - - - 66
  G. Subject matter jurisdiction - - - - - - - - - - - - - - 66
  H. Application of James Daniel Good - - - - - - - - - - - - 66
  I. Application of CAFRA to the ancillary proceeding - - - - - - - - - 67
  J. Pleading requirements - - - - - - - - - - - - - - - 67
      1. Petition must be filed under penalty of perjury - - - - - - - - - 67
      2. Claim must assert basis for the legal interest - - - - - - - - - - 67

  K. Time for filing claim - - - - - - - - - - - - - - - 68
  L. Third party claims may be dismissed as untimely - - - - - - - - - 68
  M. Interlocutory sale during ancillary proceeding - - - - - - - - - - 68
  N. Hearing to be held within 30 days where practicable - - - - - - - - - 69
  O. Corporation must be represented by counsel - - - - - - - - - - 69
  P. No hearing is necessary where court can dismiss claim on the pleadings - - - - - 69
  Q. Motion for summary judgment - - - - - - - - - - - - - 70
  R. Court can consider the record in the criminal case - section 853(n)(5) - - - - - 70
  S. No right to a jury trial - - - - - - - - - - - - - - - 70
  T. Burden of proof in the ancillary proceeding - - - - - - - - - - - - - - 71

  U. Other constitutional challenges - - - - - - - - - - - - - 71
  V. Rights of third parties to contest forfeiture of substitute assets - - - - - - - 72
  W. EAJA fees - - - - - - - - - - - - - - - - - 72

  X. Remedy for lack of notice - - - - - - - - - - - - - - 72
  Y. Rule 11 sanctions - - - - - - - - - - - - - - - - 72

XXI. Choice of Law - - - - - - - - - - - - - - - 72

  A. Federal law is used to determine the meaning of terms - - - - - - - - - - - - - - 72

  B. Federal law is used to determine whether a legal interest is the kind of interest Congress intended to protect - - - - - - - - - - - - - - - - - 73
  C. Court must look to state property law - - - - - - - - - - - - 73
  D. Effect of state court ruling - - - - - - - - - - - - - - 75

XXII. Standing Under Sections 853(n)(2) and 1963(1)(2) - - - - - - - - - - - - - - 76

  A. In general - - - - - - - - - - - - - - - - - 76
  B. Defendant may not file a claim - - - - - - - - - - - - - 76
  C. Right of codefendant to challenge forfeiture as a third party - - - - - - - 77
       1. Pre-Rule 32.2 law - - - - - - - - - - - - - - - 77
       2. Under Rule 32.2 - - - - - - - - - - - - - - - 77

  D. Alter ego may contest decision to ignore the corporate form - - - - - - - 78
  E. Person in bankruptcy may not file a claim - - - - - - - - - - - 78
  F. No standing to contest forfeiture of proceeds - - - - - - - - - - 78
  G. General creditors do not have legal interest - - - - - - - - - - - 78
  H. Ability to trace assets to defendant is irrelevant - - - - - - - - - - 80
  I. Stockholders do not have standing to challenge forfeiture of corporate assets - - - - 80
      1. Tort victims do not have a legal interest - - - - - - - - - - - 80
  K. Judgment creditors - - - - - - - - - - - - - - - 80
  L. Right of set off - - - - - - - - - - - - - - - - 81
  M. Person whose title is invalid does not have standing - - - - - - - - - 81
  N. Courts are divided over whether bare legal title is sufficient for standing - - - - - 81

  E. Third party cannot assert rights that other third parties might have asserted - - - - 85
  F. Application of 92 Buena Vista to criminal forfeiture - - - - - - - - - 85

XXIV. Superior Legal Interest Under Section 853(n)(6)(A) - - - - - - - - - 85

  A. Paragraph (6)(A) embodies the relation back doctrine - - - - - - - - - 85
  B. Legal interest must exist at the time of the crime - - - - - - - - - - 86
  C. "Innocence" is not required - - - - - - - - - - - - - - 88
  D. Nominal ownership not sufficient - - - - - - - - - - - - 88

  E. Traceable ownership interest - - - - - - - - - - - - - 89
  F. Bailor retains legal interest in bailed property - - - - - - - - - - 89
  G. Marital property - - - - - - - - - - - - - - - - 89
  H. Constructive trusts - - - - - - - - - - - - - - - 90

XXV. Bona Fide Purchasers Under Section 853(n)(6)(B) - - - - - - - 91
  A. Court does not reach bona fide purchaser claim if claimant does not first establish a legal right, title, or interest - - - - - - - - - - - - - - - - 91
  B. Bona fide purchaser provision comes from state commercial law - - - - - - 92
  C. Donees/family members are not bona fide purchasers - - - - - - - - - 92
  D. Creditors and victims are not bona fide purchasers - - - - - - - - - 92
  E. Claimant must be reasonably without cause to believe - - - - - - - - 93
  F. Claimant must give something of value - - - - - - - - - - - 94
  G. Defense attorneys - - - - - - - - - - - - - - - - 95
  H. Estoppel - - - - - - - - - - - - - - - - - - - - - - 96

  I. Mortgagees and lienholders - - - - - - - - - - - - - - 96
  J. Joint ownership of property - - - - - - - - - - - - - - 96

XXVI. Discovery In the Ancillary Proceeding - - - - - - - - - 97
  A. Rule 32.2(c)(1)(B) - - - - - - - - - - 97
  B. The Government may withhold discovery requests until the court rules on a motion to dismiss - - - - - - - - - - 97
  C. Sanctions for failure to comply with discovery - - - - - - - - - - 97

XXVII. Clear Title to Forfeited Property - - - - - - - - - - 98

XXVIII. Appeals - - - - - - - - - - 98

  A. Government appeals - - - - - - - - - - - - - - - 98
  B. Procedure - - - - - - - - - - 98

  C. Ripeness - - - - - - - - - - 99

  D. Stay pending appeal - - - - - - - - - - - - - - - 99

XXIX. Jurisdiction Pending Appeal - - - - - - - - - - - 99
  A. Substitute assets - - - - - - - - - - - - - - - - 99
  B. Ancillary hearing - - - - - - - - - - - - - - - 100
  C. Contempt - - - - - - - - - - 100

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