http://www.federalcases.com/forfeit.htm Forfeiture FORFEITURE (GENERALLY)

United States v. Madeoy, 652 F.Supp. 371 (D.D.C. 1987): The defendant was charged with a RICO violation and all his assets were frozen by court order. The trial court held that he was permitted to use $26,250 for living expenses awaiting trial. The Government was not entitled to assert a claim against his home equivalent in value to such funds. United States v. Banco Cafetero Panama, 797 F.2d 1154 (2d Cir. 1986): Money earned from drug deals can be traced from one bank account to another despite the inability to trace the actual currency itself. The fact that money is commingled does not cleanse it; the proceeds of a drug transaction may be forfeited no matter how many bank accounts the money goes through and despite the fact that a bank may deposit its money in another bank. The Court further holds that the Government may proceed under either of two theories in taking money out of a bank account: Drugs in, last out, or drugs in, first out." That is, if the Government can establish that a $100 drug proceed deposit was made into a bank account, at any time in the future, the Government may forfeit $100 from that account. Similarly, if any money is taken out of that account and something else worth $100 is purchased, that $100 may be forfeited.

United States v. Dunn, 802 F.2d 646 (2d Cir. 1986): The Second Circuit holds that if the Government fails to win a criminal forfeiture proceeding, it may come back and institute a civil forfeiture proceeding against the same asset. The Court holds that the remedies are not mutually exclusive and no res judicata or collateral estoppel theory can bar a second attempt to forfeit the property.

United States v. Miscellaneous Jewelry, 667 F.Supp. 232 (D.Md. 1987): The Government sought to forfeit jewelry from a criminal defendant. During the course of the forfeiture proceeding, the defendant died. Though a criminal prosecution obviously abates upon the death of the defendant, the Court holds that a civil forfeiture action does not abate and because it is an in rem action, the Government may proceed against the estate.

United States v. Caporale, 806 F.2d 1487 (11th Cir. 1986): The Eleventh Circuit holds that joint and several liability for the entire amount of forfeitable proceeds is proper in a RICO forfeiture action. Furthermore, a forfeiture action can be predicated on a RICO conspiracy conviction as well as a RICO substantive conviction. In this case, there were numerous defendants who were officers of a labor union. The forfeiture order was applied jointly and severally against each of the defendants for an amount in excess of one million dollars. FORFEITURE (GENERALLY) Page 2

United States v. D.K.G. Appaloosa, Inc., 829 F.2d 532 (5th Cir. 1987): The Fifth Circuit holds that the forfeiture of the proceeds of a drug transaction is not sufficiently punitive so as to trigger the proscription of the ex post facto clause, that is, property which has been acquired as the proceeds of a drug transaction are forfeitable even if this property is acquired prior to the passage of 881(a)(6) in 1978.

United States v. $359,500 in U. S. Currency, 828 F.2d 930 (2d Cir. 1987): In a civil forfeiture proceeding relating to the knowing transportation of currency, actual knowledge of the currency reporting requirement is not required. This is in contrast to the criminal provision which would require actual knowledge in order to satisfy the "willful" requirement of the criminal law.

In Re Arnett, 804 F.2d 1200 (11th Cir. 1986): In the defendant's plea agreement, it was agreed that the defendant would plead guilty and he would forfeit money which was in his possession at the time of his arrest. Subsequently, the Government moved to forfeit various other assets owned by the defendant. The Court holds that the plea agreement impliedly limited the extent of the forfeiture. However, the Court holds that the Government may move for forfeiture and the defendant may be permitted to vacate his plea.

United States v. One 1979 Cadillac, 833 F.2d 994 (Fed.Cir. 1987): The Government lost in its effort to forfeit a car. The trial court ordered the Government to pay the claimant $4,000 representing the decreased value of the car during the time that the Government had the car in custody. The federal circuit reversed, holding that the Government cannot be held liable for any damages in connection with a forfeiture case other than simply the return of the seized property.

United States v. Benevento, 836 F.2d 60 (2d Cir. 1987): The Second Circuit holds that 21 U.S.C. 853 which provides for the forfeiture of any proceeds from a drug transaction creates joint and several liability as to all the participants in the illegal enterprise. Thus, all co-conspirators are liable for the entire amount of the forfeiture.

United States v. Kingsley, 851 F.2d 16 (1st Cir. 1988): The property was seized by the Government in a criminal forfeiture proceeding and held pending disposition of the criminal prosecution. The Court concludes that the defendant is entitled to interest on the property even if the property is eventually forfeited to the Government at the conclusion of the proceedings. Despite the fact that the relation back doctrine dictates that the property belonged to the Government since the drug transaction occurred, the Court holds that the defendant is still entitled to interest on the property pending the final disposition of the case. FORFEITURE (GENERALLY) Page 3

United States v. Nelson, 851 F.2d 976 (7th Cir. 1988): The net worth theory is an appropriate method of determining what assets are forfeitable to the Government following a CCE conviction.

United States v. Lopez, 688 F.Supp. 92 (E.D.N.Y. 1988): In this decision, the Court holds that a defendant may be compelled to sign a release form transferring foreign bank accounts to the custody of the United States. The funds were subject to a seizure warrant and following the defendant's refusal to sign a release of the bank accounts to the Government, sanctions for contempt of court in the amount of $2500 per week were assessed.

Wood v. United States, 863 F.2d 417 (5th Cir. 1989): Proceeds forfeitable to the federal government are taxable as income to the taxpayer. Even after forfeiture, if a defendant has exercised dominion and control over the funds, he is responsible for paying income tax.

United States v. Rivera, 884 F.2d 544 (11th Cir. 1989): The Government forfeited 27 quarter horses which belonged to the defendant. The theory of the forfeiture was not that the horses were purchased with drug proceeds but rather that the horses were used to "facilitate" the defendant's drug trafficking. The Court upholds the jury's finding on the theory that the horse farm was used as a front or as a way of hiding the drug operation. Interestingly, the jury found for the defendant with respect to the ranch; with respect to the quarter horses, the jury's apparent conclusion that the horses acted as a cover for his drug trafficking activities was supported by the evidence.

United States v. One 1985 Cadillac Seville, 866 F.2d 1142 (9th Cir. 1989): If a state forfeiture action has been instituted over certain property, the federal court may not subsequently entertain jurisdiction over the same res.

United States v. One Parcel of Real Estate at 7707 S.W. 74th Lane, Miami, Florida, 868 F.2d 1214 (11th Cir. 1989): A person who is a fugitive from justice may not challenge civil forfeiture proceedings under 21 U.S.C. 881. By fleeing from justice the litigant has disentitled himself from invoking the judicial process in the civil forfeiture action.

United States v. Roberson, 897 F.2d 1092 (11th Cir. 1990): Following the defendant's conviction of drug related offenses, the jury also ordered that the defendant's Ford Bronco be forfeited. This car was being driven by the defendant at the time of his arrest. However, the car had been disposed of prior to trial. The trial court erred in fixing the FORFEITURE (GENERALLY) Page 4

amount of the value of substitute property to be forfeited. The defendant had initially paid $10,000 down, and that is all that could be forfeited in the absence of proof of further payments by the defendant. The actual value of the Bronco could not be used to determine the value of substitute property which had to be forfeited.

United States v. 141st Street, Corp., 911 F.2d 870 (2d Cir. 1990): In this decision, the Second Circuit concludes that an owner of a commercial building may have the entire property forfeited if he fails to prove either that he did not know the drug activity existed on his property or that he did not consent to it. "Consent" however, includes the failure to take all measures necessary to stop the illicit conduct after learning about it. Finally, the Second Circuit concludes that forfeiture of the entire apartment building was justified in light of the fact that a substantial portion of the property was connected to ongoing drug trafficking.

United States v. $95,945.18, 913 F.2d 1106 (4th Cir. 1990): In contrast to a decision from the Eleventh Circuit, the Fourth Circuit holds that the Court of Appeals retains jurisdiction to decide a forfeiture case even though the claimant fails to obtain a stay pending appeal and the asset has been removed from the Circuit. The Court concluded that there was no reason to apply "an aquatic and dated legal fiction, which traditionally was used to allow plaintiffs to recover from ships whose owners had disappeared."

United States v. $1,630, 734 F.Supp. 450 (N.D.Ala. 1990): The Government could not forfeit the money which was seized illegally during an illegal search. Furthermore, the delay in instituting the forfeiture proceedings violated the defendant's right to due process.

United States v. 15824 West 143rd Street, Lockport, Illinois, 736 F.Supp. 882 (N.D.Ill. 1990): The defendant relied on the Fifth Amendment and refused to answer discovery questions posed by the Government. The Government was entitled to summary judgment in light of the claimant's failure to establish her lawful right to the property.

United States v. $37,590, 736 F.Supp. 1272 (S.D.N.Y. 1990): In this forfeiture action, the claimant contended that the search of his bag which revealed the presence of $37,590 was unlawful. The district court agreed, noting that perhaps a pat-down search was justified, but a full scale search of his shoulder bag was not justified by the circumstances. FORFEITURE (GENERALLY) Page 5

United States v. One 1979 Chevrolet C-20 Van, 924 F.2d 120 (7th Cir. 1991): The state seized the defendant's van and then requested that the federal prosecutors institute a forfeiture proceeding. This inter-agency transfer was not consistent with state law and the federal court did not have jurisdiction over the res. Once the state agents seized the property, only the state court had the power to transfer the res. The state police did not have the authority to transfer the property from their jurisdiction to the federal jurisdiction.

United States v. Reed, 924 F.2d 1014 (11th Cir. 1991): The substitute asset provision of RICO can be applied to property which was transferred prior to the enactment of the provision. Thus, where the defendant transferred property to an innocent purchaser in April 1983 and RICO was amended to provide for the forfeiture of substitute assets after that date, the ex post facto clause does not prevent the forfeiture of the substitute assets.

United States v. Real Property Located At Section 18, Tp. 23 . . .Olympic National Park, Grays Harbor County, Wash., 976 F.2d 515 (9th Cir. 1992): Defendant entered a guilty plea to manufacturing marijuana. This did not bar her from contesting the forfeiture of the property in a later forfeiture action. The criminal plea did not resolve conclusively the issue of whether the marijuana was on only one lot; the government sought to forfeit the entire property.

United States v. Lasanta, 978 F.2d 1300 (2d Cir. 1992): The police seized defendant's vehicle under the authority of 21 U.S.C. 881(b)(4), which purports to allow a warrantless seizure of any property -- including automobiles -- which are forfeitable. The government argued that the vehicle could be seized at any time if there was probable cause to believe the automobile was forfeitable. "While congress may have intended civil forfeiture to be a "powerful weapon in the war on drugs", it would indeed, be a Pyrrhic victory for the country if the government's relentless and imaginative use of that weapon were to leave the constitution itself a casualty." In short, because no other exception to the search warrant requirement applied, the officers could not seize the vehicle. (The Eleventh Circuit has approved such warrantless seizures, United States v. Valdes, 876 F.2d 1554 (11th Cir. 1989)).

Marine Midland Bank v. United States, ___ F.Supp.___, 1993 WL 158542 (S.D.N.Y. 5/11/93): Two important holdings: first, the court holds that there must be probable cause at the time of a seizure to support a forfeiture. The government may not seize now, and gather the probable cause later. Second, the court rejects the government's argument that money in a bank FORFEITURE (GENERALLY) Page 6

account can be seized, even if it cannot be shown to have been the proceeds of money-laundering or drug deals, on the theory that the money "disguised" genuinely forfeitable money. That is, the legitimate money was in the account to hide the money-laundering activity. This is not a basis for forfeiture on a facilitation theory. The court relied on the decision in United States v. Certain Accounts, Together with All Monies on Deposit Therein, 795 F.Supp. 391 (S.D.Fla. 1992). On appeal in the Second Circuit, the relevant holdings were affirmed. 11 F.3d 1119 (2d Cir. 1994). With regard to the issue of when probable cause must be established, the appellate court held that if a seizure is challenged (in a Rule 41(e) motion, for example), the government must establish probable cause for the seizure; the property cannot be held until trial and probable cause established at that time.

United States v. $7,850, 7 F.3d 1355 (8th Cir. 1993): The defendant purchased a ticket with cash to fly from Minneapolis to Nebraska; he carried no identification or baggage; he was seen by the ticket agent to have a large wad of cash; he lied to an officer about whether he had been at the airport the day before (he had been seen there by another officer); a NADDIS report indicated that he had a heroin supplier in Nebraska. These facts did not amount to probable cause to seize the currency. (Because the district court did not consider whether there was an articulable suspicion justifying the seizure, that was not addressed by the appellate court).

United States v. One 1985 Mercedes-Benz, 300 SD, 14 F.3d 465 (9th Cir. 1994): The defendant attempted to transport more than $10,000 across the border without complying with the currency reporting requirement. The government sought to forfeit the vehicle in which he was driving under the Espionage Act, which provides for the forfeiture of any article which is transported out of the country in violation of law, 22 U.S.C. 401. The defendant entered a guilty plea to one count of 1001, avoiding a conviction of a Title 31 offense, or of money laundering. Because forfeiture under these latter provisions is explicit, the forfeiture of the vehicle under the more general Title 22 provision would not be permitted.

United States v. $40,877.59, 32 F.3d 1151 (7th Cir. 1994): The fugitive disentitlement doctrine does not bar fugitives from challenging forfeiture actions against their assets. Though the majority of other circuits would preclude the fugitive from contesting the civil forfeiture, the Seventh Circuit concludes that where the government has filed the action, it cannot rely on the fugitive disentitlement doctrine. It is where the defendant has filed an appeal to a conviction -- and become a fugitive -- that the doctrine applies. Also, a defendant may not be found guilty in absentia without a trial. If criminal proceedings are to continue in the defendant's absence, they must continue as if the defendant were present. The defendant is not simply found guilty without any trial. The government is not relieved of the burden of proving its case in such circumstances.

FORFEITURE (GENERALLY) Page 7

United States v. $19,047 (Rodriguez), 1994 WL 673704 (S.D.N.Y. 1994): The exclusionary rule applies to currency forfeiture actions which are based on violations of 31 U.S.C. 5317(c).

United States v. $814,254.76 in U.S. Currency (Banamex), 51 F.3d 207 (9th Cir. 1995): 18 U.S.C. 981 provides that the government may seize funds in a bank account which represent the proceeds of some form of money laundering activity. That law was in effect when the government seized money in a bank account which was not the proceeds of money laundering activity, even though the account itself had been involved in laundering funds. After the seizure, Congress enacted 18 U.S.C. 984 which permits the seizure of untainted funds (such as the funds in this case) which are in an account which was involved in money laundering activity. The question is whether the new law applies to money which was seized before the law was enacted. The Ninth Circuit holds that the new law does not apply and the funds must be returned. Because 984 attaches new legal consequences to actions which occurred prior to its enactment, it would have to be shown that Congress specifically intended this result before the court would apply the new statute to conduct occurring before its enactment.

United States v. Eleven Vehicles, 898 F.Supp. 1143 (E.D.Pa. 1995): The money laundering forfeiture statute was amended in 1988 to include within the definition of forfeitable property any asset "involved in" a money laundering offense; thus, assets which facilitate money laundering may be forfeited. 18 U.S.C. 981(a)(1)(A). This law may not be applied retroactively. Because the new law impairs the rights of a party, or increases a party's liability for past conduct, the law should not be applied retroactively. Landgraf v. USI Film Prods, 114 S.Ct. 1483 (1994).

United States v. $500,000 in U.S. Currency (Gordin), 62 F.3d 59 (2d Cir. 1995): The defendant boarded a domestic flight to another city in the U.S. and was then going to connect to a foreign flight. He did not report the currency in his possession, and acknowledged when questioned that he was not planning to file a CMIR (though he did comply with CTR laws when withdrawing the money from the bank). The government could not proceed to forfeit the money on the theory that the defendant was "attempting" to violate the CTR laws. The law could not be violated until the defendant attempted to board the international flight and the offense was not "attempted" prior to that time. FORFEITURE (SUFFICIENCY OF EVIDENCE TO SUPPORT FORFEITURE)

United States v. 155' Fishing Vessel Known As "The Soul", 656 F.Supp. 967 (D.Mass. 1987): The Government attempted to seize a fishing vessel which was alleged to have been used to facilitate the transportation of marijuana. The claimant established that this vessel was never used or intended to be used to facilitate the transportation of marijuana. The claimant's brother, who was the defendant in the criminal case, stated that it was another vessel that he used and he was never allowed by the claimant to use this boat for smuggling purposes.

United States v. One 1984 Ford Van, 826 F.2d 918 (9th Cir. 1987): The Government failed to prove that a van was used to further illegal aliens' presence in the United States. The van was used to transport aliens from a work site back to their residence and to run personal errands for the crew; however, the van was not used to transport the aliens across the border.

United States v. Horak, 833 F.2d 1235 (7th Cir. 1987): The defendant was convicted of RICO, and the issue was what would be forfeited. The defendant was the head of a garbage collection company who was convicted of bribery offenses. The Government sought to forfeit his salary, profit sharing and other benefits from his company. The Seventh Circuit rejected the Government contention that a defendant acquires or maintains an interest in violation of the racketeering law simply by virtue of the fact that his racketeering activities "enhance" his performance within an enterprise. Instead, a "but for" test is required. The Seventh Circuit also held that it would not review the trial court's refusal to order forfeiture of the defendant's stockholdings in a parent corporation. The Court held that such an order is not appealable under 18 U.S.C. 3731.

United States v. Dickerson, 873 F.2d 1181 (9th Cir. 1988): The Government tracked an airplane going in and out of Mexico and observed it engaged in evasive maneuvers. The plane was finally forced down and a quick search of the cargo hole revealed a rolled up carpet. Six days later, a dog alerted to the presence of marijuana in the plane. Because the Government had not properly secured the plane during these six days, the Government cannot rely on the dog's sniff as probable cause to sustain its forfeiture. Evidence of the erratic flying and the trips to Mexico are not in themselves sufficient to justify forfeiture.

United States v. $134,752.00, 706 F.Supp. 1075 (S.D.N.Y. 1989): Probable cause did not exist for the forfeiture of currency on the basis that it was connected to a narcotics operation. While there may have been a strong suspicion that the money played some role in the activity, mere suspicion was the most that the evidence established. The claimant had never been arrested for any offense involving a controlled substance and had never been under investigation prior to the seizure of this money. FORFEITURE (SUFFICIENCY OF EVIDENCE TO SUPPORT FORFEITURE) Page 2

United States v. Real Property Located At 3203 West Meighan Blvd., Gasden, Ala., 724 F.Supp. 1363 (N.D.Ala. 1989): The Government failed to link any drug transactions with the house which was the subject of this forfeiture litigation.

United States v. All That Tract (Riverdale), 696 F.Supp. 631 (N.D.Ga. 1988): The Government was not entitled to summary judgment of forfeiture of real property. Although the Government made out a prima facie case of forfeiture, the claimant rebutted with evidence that the property was not derived from drug proceeds.

United States v. $13,000.00, 747 F.Supp. 430 (S.D.Ohio 1990): DEA agents seized $13,000 from the claimant at the airport. He met the drug courier profile, a drug dog alerted to the money, and he gave inconsistent stories to the police about the source of the funds. He said his mother-in-law gave him the money, but when called, she did not confirm this. In response to the government's summary judgment motion, the defendant filed an affidavit stating that the money was legitimate and the mother-in-law also provided an affidavit attesting to the legitimacy of the funds. Summary judgment was denied in light of the disputed genuine issue of material facts.

United States v. Parcel Of Land At 28 Emery Street, Merrimac, Massachusetts, 914 F.2d 1 (1st Cir. 1990): The Government failed to present sufficient evidence to support summary judgment in its favor on the forfeiture of the defendant's house. Though there was evidence of drug possession in the house, and even evidence of drug trade, the evidence was not undisputed that the house was actually used in connection with drug transactions. The First Circuit goes through a lengthy review of the standards required to sustain the forfeiture of real property based on its use in connection with a drug transaction. In this case, the only evidence was the confidential informant's testimony that she had seen cocaine in large amounts in the house almost a year prior to the seizure, and overheard telephone conversations between an occupant of the house and a drug dealer discussing a drug deal, and the physical evidence which was found in the house. This was not enough to support a summary judgment order in favor of the Government.

United States v. $31,990, 982 F.2d 851 (2d Cir. 1993): The government did not have probable cause to forfeit cash found in the trunk of a taxicab. Though the cash hoard was suspicious and suggestive of some criminal activity, there was no proven link to drug trafficking. At most, the government offered "profile" evidence and this, alone, did not provide probable cause to seize the cash.

FORFEITURE (SUFFICIENCY OF EVIDENCE TO SUPPORT FORFEITURE) Page 3

United States v. $2,279.10, 91-76168 (E.D.Mich. 10/26/92): A dog alerted to currency being carried by the claimant at the airport. This did not provide probable cause to seize or forfeit the claimant's watch or ring. No drugs were found on the claimant.

Jones v. U.S. DEA, 819 F.Supp. 698 (M.D.Tenn. 1993): In determining whether there was probable cause to seize the claimant's cash, the fact that a dog alerted to the presence of trace amounts of cocaine on the money added little if anything to the inquiry. The use of dog sniffs to separate "legitimate" currency from "drug-connected" currency is logically indefensible in light of recent studies which show that vast quantities of currency in this country are tainted with traces of cocaine.

United States v. All Funds on Deposit in Great Eastern Bank Account, 804 F.Supp. 444 (E.D.N.Y. 1992): The government sought to forfeit money in an account which had been deposited in a legitimate manner on a theory that these legitimate deposits were designed to disguise illicit transactions, and therefore "facilitated" the other structuring offenses. The District Court rejected this theory and granted the motion to dismiss the civil complaint.

United States v. Two Tracts of Real Property . . . Located in Carteret County, 998 F.2d 204 (4th Cir. 1993): The drug smugglers transported drugs from a boat to a public road. This transportation involved driving the marijuana across another parcel of land. This land was not forfeitable. Merely because the land is the situs of the crime does not mean the property is forfeitable. There must be some substantial connection between the crime and the property. That connection was missing in this case.

Scarabin v. DEA, 966 F.2d 989 (5th Cir. 1992): State agents seized currency from the defendant at the time of his arrest on drug charges. The state then purchased a cashier's check with the currency and turned the cashier's check over to the DEA to institute forfeiture proceedings. The DEA, however, never obtained control over the res of this forfeiture proceeding and thus was not entitled to institute forfeiture proceedings.

United States v. $12,248, 957 F.2d 1513 (9th Cir. 1991): The government seized the currency with probable cause. Nevertheless, the government then waited 15 months before instituting forfeiture proceedings. This was an unreasonable delay which prejudiced the claimant. The government was ordered to pay EAJA fees to the claimant's attorney in the amount of $16,000.

FORFEITURE (SUFFICIENCY OF EVIDENCE TO SUPPORT FORFEITURE) Page 4

United States v. $121,100, 999 F.2d 1503 (11th Cir. 1993): Though finding that forfeiture of the money was proper for other reasons, the Eleventh Circuit holds in no uncertain terms that a large amount of currency, in and of itself, is insufficient to establish probable cause for forfeiture under 21 U.S.C. 881(a)(6). In this case, however, the currency was seized from the defendant at the airport; he purchased his plane ticket with cash; he used a false first name; he travelled with over $100,000 for a one-day trip, making it unlikely that he was on vacation; he was nervous when questioned by DEA agents; he had a history of narcotics arrests and convictions. This was enough to establish probable cause.

United States v. Barromeo, 995 F.2d 23 (4th Cir. 1993): The defendant had been convicted of engaging in illegal activities -- unlawfully prescribing controlled substances. The government then sought to forfeit various properties under 881(a)(6) on the theory that these properties were traceable to the proceeds of the illegal acitivity. In its motion for summary judgment the government failed to prove a connection between the illegal activities and the property. The government failed to prove that the sole source of defendant's income was derived from unlawful activity.

United States v. Three Tracts of Property, 994 F.2d 287 (6th Cir. 1993): Three members of a family were convicted of manufacturing marijuana. After their conviction, the government filed a civil forfeiture action, seeking to take various parcels of land and money found in a car. With regard to one of the parcels of land, the evidence was that a few thousand marijuana seeds were found on the property, as well as a bag of marijuana. The one member of the family who was acquitted was the wife of the owner of this property and she claimed that she was unaware of the marijuana on the property. Based on her innocent owner claim, the trial court erred in granting summary judgment to the government. Also, with regard to the money in the car, though the claimant was convicted of manufacturing and selling marijuana, and though there was evidence that he transacted all his business in cash, he testified that the cash was the proceeds of a black lung settlement. Summary judgment for the government on this count was also erroneous.

United States v. Parcels of Property at 255 Broadway, Hanover, 9 F.3d 1000 (1st Cir. 1993): The First Circuit holds that in order to shift the burden of proof to the claimant, the government must establish that at the time the forfeiture suit was filed, there was probable cause to forfeit the property. The focus of the probable cause hearing is not at the time of the hearing, but at the time the suit is instituted. The Court went on to find that probable cause did exist at the time the complaint was filed in this case.

FORFEITURE (SUFFICIENCY OF EVIDENCE TO SUPPORT FORFEITURE) Page 5

United States v. $191,910.00 in U.S.Currency, 16 F.3d 1051 (9th Cir. 1994): In a lengthy and comprehensive opinion, the Ninth Circuit holds that the government must have probable cause when it institutes a forfeiture proceeding that the property is forfeitable. After- acquired evidence is irrelevant to this initial burden of establishing probable cause. This is a rational rule, because it deters the government from instituting suit with an inadequate basis in the hopes of acquiring more evidence down the road. Also, in this case, the trial court properly suppressed evidence derived from the search of the claimant's bags -- the currency itself. While the forfeiture proceeding is not necessarily terminated when the res is suppressed as evidence, the property could not be introduced as evidence. Absent the after-acquired evidence and absent the currency itself, the government could not establish probable cause to forfeit the currency.

United States v. $30,354, 863 F.Supp. 442 (W.D.Ky. 1994): Claimant told an informant that he intended to purchase marijuana with the $30,354 in currency which he had. This alone is not a basis for forfeiting the money. Though 881(a)(6) permits the forfeiture of money "intended to be furnished" in exchange for a controlled substance, the government must still prove that there was an underlying controlled substance violation. The claimant's mere statement of intent to purchase marijuana is not a crime. Moreover, because forfeiture is punitive, there must be a crime before there can be a forfeiture.

United States v. U.S. Currency, $30,060.00, 39 F.3d 1039 (9th Cir. 1994): The government sought to forfeit currency found in the claimant's car based on (1) a drug dog's alert to the money; (2) the packaging of the money; (3) the defendant's false account of the source of the money. These facts, alone, or in combination, are not sufficient to establish that the money is forfeitable. The value of a drug dog alert is questionable, in light of recent decisions recognizing that substantial quantities of U.S. currency is contaminated. See, e.g., United States v. $639, 558, 955 F.2d 712, 714 n.2 (D.C.Cir. 1992); Jones v. D.E.A., 819 F.Supp. 698, 719-21 (M.D.Tenn. 1993). The expert testimony in this case established that 75% of currency in Los Angeles and Las Vegas has detectable cocaine residue. Thus, the drug-dog alert evidence is of minimal significance. The combination of other factors, moreover, is insufficient to establish probable cause to forfeit the money found in the claimant's car.

United States v. $5,000 in U.S. Currency, 40 F.3d 846 (6th Cir. 1994): The DEA received a tip that a drug courier would be on a specific flight from New York to Cleveland. The agents approached the claimant, as well as his companion, obtained consent to search their bags, and ultimately seized $5,000 from one, and $9,750 from the other. The two were allowed FORFEITURE (SUFFICIENCY OF EVIDENCE TO SUPPORT FORFEITURE) Page 6

to leave. A drug dog then alerted to the currency. Though the dog alerted to the currency; the claimant matched the description of the person identified by the anonymous tipster; the money was wrapped in rubber bands; and the claimant's statement about where he had been in New York was contradicted by other evidence, this evidence did not amount to probable cause that the currency represented the proceeds of narcotics trafficking. Among other things, the anonymous tipster provided inaccurate information; and a drug dog's alert is rather inconsequential in light of the presence of cocaine residue on so much of the country's currency. See, e.g., United States v. $639, 558, 955 F.2d 712, 714 n.2 (D.C.Cir. 1992); Jones v. D.E.A., 819 F.Supp. 698, 719-21 (M.D.Tenn. 1993). Finally, the fact that the defendant entered a guilty plea to drug charges several years earlier was of little import here.

United States v. $500,000 in U.S. Currency (Gordin), 62 F.3d 59 (2d Cir. 1995): The defendant boarded a domestic flight to another city in the U.S. and was then going to connect to a foreign flight. He did not report the currency in his possession, and acknowledged when questioned that he was not planning to file a CMIR (though he did comply with CTR laws when withdrawing the money from the bank). The government could not proceed to forfeit the money on the theory that the defendant was "attempting" to violate the CTR laws. The law could not be violated until the defendant attempted to board the international flight and the offense was not "attempted" prior to that time. FORFEITURE (ATTORNEYS FEES)

NOTE: ALL THE DECISIONS IN THIS TOPIC ABOVE THE DOTTED LINE WERE DECIDED PRIOR TO THE SUPREME COURT'S DECISION IN THE MONSANTO AND CAPLIN & DRYSDALE DECISIONS.

United States v. Ianniello, 644 F.Supp. 452 (S.D.N.Y. 1985): Defendant's attorneys fees may not be forfeited under the Comprehensive Forfeiture Act of 1984. Only if the funds are transferred to an attorney as part of a sham or fraudulent transaction are they subject to forfeiture.

United States v. Figueroa, 645 F.Supp. 453 (W.D.Pa. 1986): A court appointed attorney can obtain attorneys fees and costs for money that has been ordered forfeited from his convicted client to the Government. Even under the "relation-back" provision of the forfeiture statute, despite the fact that the Government obtains its interest in the funds at the time they are used in connection with the drug transaction, the attorney can obtain fees and costs from that money.

United States v. Truglio, 660 F.Supp. 103 (N.D.W.Va. 1987): The defendant's pre-conviction assignment of seized currency to his attorney in exchange for legitimate legal services excluded that currency from forfeiture under the pre-1984 RICO provisions.

United States v. Thier, 801 F.2d 1463 (5th Cir. 1986): The Fifth Circuit holds that a district court must consider a defendant's qualified right to counsel in deciding whether to freeze assets prior to trial. Though the district court is not precluded under this Fifth Circuit case from freezing the assets, it is a matter which the Court must take into consideration. Furthermore, the attorney may file a post-trial motion to recover fees as an innocent claimant.

United States v. Marx, 39 Crim.L.Rep. 2386 (E.D.Wis. 1986): Bona fide attorney's fees are exempt from the criminal forfeiture laws. The district court holds, however, that if the assets are seized prior to the payment of legal fees, the attorney may not immediately take the fee. He must file a motion after the disposition of the case.

United States v. Bailey, 666 F.Supp. 1275 (E.D.Ark. 1987): The district court in Arkansas holds that the forfeiture of funds designated by a defendant as attorney's fees does not violate his Sixth Amendment right to counsel of choice. The Court notes that this case is distinguishable from other cases because the funds here were seized prior to hiring an attorney and were seized pursuant to a warrant. FORFEITURE (ATTORNEYS FEES) Page 2

United States v. $10,694 in U.S. Currency, 828 F.2d 233 (4th Cir. 1987): Attorneys fees are not subject to forfeiture. There was no showing at the time the funds were assigned to the attorney, that the attorney had actual knowledge that the money was derived from drug proceeds.

United States v. Jones, 837 F.2d 1332 (5th Cir. 1988): Following the defendant's conviction of narcotics offenses, his lawyers sought property which had been pledged to him as compensation for his legal services. The property was subject to forfeiture. The Fifth Circuit holds that the defendant's lawyer is entitled to a reasonable attorneys fee in spite of the forfeitability of the property.

United States v. $70,476, 677 F.Supp. 639 (N.D.Cal. 1987): The District Court permitted the defense to exclude from the forfeiture an amount equal to reasonable attorneys fees.

United States v. Nichols, 841 F.2d 1485 (10th Cir. 1988): The Tenth Circuit reverses the District Court decision, 654 F.Supp. 1541, which had held that the forfeiture provisions are unconstitutional to the extent that they attempt to subject the bona fide attorneys fees to forfeiture. The Tenth Circuit joins In re Caplin & Drysdale, in holding that assets which are subject to forfeiture are not exempted simply because they are earmarked for attorneys fees.

United States v. Friedman, 849 F.2d 1488 (D.C.Cir. 1988): Following a special verdict by the jury that the defendant's assets be forfeited, the defendant was not entitled to use forfeited assets for the purpose of hiring private counsel for his appeal.

United States v. Chinn, 687 F.Supp. 125 (S.D.N.Y. 1988): Assets accrued by the defendant prior to the time he allegedly became involved in criminal activity must be released to the defendant in order to enable him to hire retained counsel. The provision allowing forfeiture, as opposed to restraint, of any asset of a RICO defendant could not be retroactively applied to levy against assets obtained before the period covered by the indictment.

United States v. Moya-Gomez, 860 F.2d 706 (7th Cir. 1988): The Seventh Circuit concluded that the forfeiture act does apply to assets earmarked for privately retained counsel. The Court holds that an immediate post-restraint adversarial hearing is necessary to satisfy the due process requirements, but all assets may be seized if the Government FORFEITURE (ATTORNEYS FEES) Page 3

can establish the likelihood that the assets are subject to forfeiture even if the defendant is rendered incapable of hiring private counsel. This decision reverses the district court's decision in United States v. Estevez, 645 F.Supp. 869.

United States v. Stein, 690 F.Supp. 767 (E.D.Wis. 1988): Property which is otherwise forfeitable is not exempted from forfeiture in order to serve as a defendant's reasonable attorney's fees.

United States v. Bissell, 866 F.2d 1343 (11th Cir. 1989): Attorneys fees are forfeitable in the Eleventh Circuit.

United States v. Monsanto, 109 S.Ct. 2657 (1989); Caplin & Drysdale v. United States, 109 S.Ct. 2646 (1989): Attorney's fees are forfeitable.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

POST-MONSANTO DECISIONS

United States v. Monsanto, 924 F.2d 1186 (2d Cir. 1991): On remand from the United States Supreme Court, the en banc Second Circuit concludes that if a criminal defendant's assets are frozen pre-trial, the defendant is entitled to an evidentiary hearing pretrial to determine if there is a basis to continue the restraint as to assets which the defendant needs to retain counsel.

United States v. Noriega, 746 F.Supp. 1541 (S.D.Fla. 1990): If assets of the defendant are needed in order to retain counsel of choice, the Government must prove the forfeitability of the money at an adversarial hearing. The Government violated the defendant's rights in this case by persuading foreign governments to freeze bank accounts containing millions of dollars without affording the defendant the right to a hearing to contest the forfeitability of these funds.

United States v. DeOrtiz, 910 F.2d 376 (7th Cir. 1990): Prior to the defendant's conviction, he assigned to his attorney his bail money. After the conviction, the Government sought to forfeit this money. The defense attorney was entitled to a hearing to determine whether the money was in fact forfeitable and whether he had a legitimate claim to the money. The fact that the defendant himself declared the money to be forfeitable does not make it so. FORFEITURE (ATTORNEYS FEES) Page 4

United States v. All Funds On Deposit in Any Accounts ...., 767 F.Supp. 36 (E.D.N.Y. 1991): As in the context of criminal forfeiture, if a criminal defendant has his assets tied up in an 881 action, he has the right to a probable cause hearing if the assets are needed to retain counsel. The Court relied on the Monsanto decision issued by the Second Circuit after remand from the United States Supreme Court.

United States v. Unimex, Inc., 991 F.2d 546 (9th Cir. 1993): It is essential that a corporation have counsel at trial, for a corporation cannot appear pro se. Here, there was no counsel for the corporation and the government virtually assured this by forfeiting all of the corporation's assets prior to trial. The district court did not appoint an attorney for the corporation; indeed there is no sixth amendment right to appointed counsel (because there is no risk of jail time); and the Criminal Justice Act does not apply to corporations. In this situation, Caplin & Drysdale and Monsanto do not apply. The seizure of all the corporate assets deprived the corporation of the ability to retain counsel and there was no other means to defend itself at trial.

United States v. Michelle's Lounge, 39 F.3d 684 (7th Cir. 1994): The defendant was facing criminal charges and a civil forfeiture proceeding was also pending. The forfeiture case tied up all of the defendant's assets. The Seventh Circuit holds that in such cases, the defendant is entitled to a prompt post-seizure hearing to determine whether there is probable cause to seize the assets, thus depriving the defendant of the means to retain counsel. The government cannot rely simply on the indictment to establish probable cause, or rely on an ex parte showing to the court. Moreover, the failure to conduct such a hearing is subject to appellate review under the collateral order doctrine.

United States v. One 1973 Rolls Royce, 43 F.3d 794 (3rd Cir. 1994): A reputed drug dealer gave his attorney a Rolls Royce in payment of part of the fee (actually, to reimburse the attorney for expenses incurred at a victory party). The attorney was unaware of the car's use to facilitate drug transactions at the time the car was being used for that purpose, though he was arguably aware of that at the time he received the car. The court first held that in determining whether the claimant had knowledge, a willful blindness standard could be used, which is a subjective test, focusing on the claimant's actual knowledge, or efforts to remain ignorant. The mere fact that the claimant is aware that the defendant is drug dealer would not be enough, in and of itself, to establish that the claimant was willfully blind to the forfeitability of the car. The car in this case was seized pursuant to 881(a)(4)(C) -- a conveyance used to facilitate drug trafficking. The innocent owner defense for conveyances (881(a)(4)(C)), like the innocent owner defense for real property (881(a)(7)), allows a claimant to show that he was either unaware of the criminal activity, or did FORFEITURE (ATTORNEYS FEES) Page 5

not consent to it. The Third Circuit concludes that, pursuant to 92 Buena Vista Avenue, even if the lawyer knew when he received the car that it was tainted, this would not support a forfeiture, because he was not aware of, and did not consent to, the illegal acts at the time they occurred. NOTE: The Eleventh Circuit rejected the holding in this case in United States v. One Parcel of Real Estate located at 6640 S.W. 48th Street, Miami, Fla. (Larraz), 41 F.3d 1448 (11th Cir. 1995), where, like here, the claimant was an attorney who received the tainted property, knowing the property was forfeitable when he received it, but not knowing about the offense which tainted the res when the offense occurred. FORFEITURE (CIVIL PROCEDURE)

Republic National Bank of Miami v. United States, 113 S.Ct. 554 (U.S. 1992): Resolving a split in the Circuits, the Supreme Court holds that even if the res (in this case currency) is removed from the Circuit by the government, a forfeiture proceeding may continue.

In re Application of Kingley, 802 F.2d 571 (1st Cir. 1986): The First Circuit reviews a number of the procedures used by the Government to seize a defendant's house and all of his personal property under a seizure warrant pursuant to 21 U.S.C. 881. Though only limited issues were properly before the Court on the appeal, the First Circuit issues a strong condemnation of the Government's conduct in this case and the wholesale forfeiture of everything the defendant owned.

Gutt v. United States, 641 F.Supp. 603 (W.D.Va. 1986): The DEA forfeited numerous automobiles individually thereby requiring a bond up to $5,000 for each. The Court holds that it was not necessary for the DEA to proceed against the automobiles together thereby requiring that a judicial proceeding be instituted. The Court holds, however, that the mailing of a forfeiture notice to a hotel at which the DEA knew that the defendant no longer resided was not proper notice. The DEA was aware that the claimant was represented by counsel and that notice should have been sent to the attorney.

Camacho v. United States, 645 F.Supp. 725 (E.D.N.Y. 1986): The district court holds that a federal court has subject matter jurisdiction for an action to return currency even though the claimant waived his rights under the summary forfeiture statute, 19 U.S.C. 1608 by failing to post a bond.

United States v. Sharp, 655 F.Supp. 1348 (W.D.Mo. 1987): A delay of 23 months in initiating formal forfeiture proceedings violated the claimant's right to due process. Immediate return of all seized currency was required.

United States v. Miscellaneous Jewelry, 667 F.Supp. 232 (D.Md. 1987): The personal representative of an estate of an alleged drug trafficker had standing to contest the forfeiture of the alleged trafficker's property. The death of the alleged drug trafficker did not abate the Government's forfeiture action.

United States v. Various Parcels of Real Property, 650 F.Supp. 62 (N.D.Ind. 1986): The Government cannot obtain summary judgment simply because a claimant has failed to properly file a claim in a civil forfeiture proceeding. The Government must still satisfy its burden of establishing probable cause for forfeiture of the property. The forfeiture cannot be based simply on the basis of vague and conclusory allegations. FORFEITURE (CIVIL PROCEDURE) Page 2

In Re Seizure Warrant, 830 F.2d 372 (D.C.Cir. 1987): The owner of property seized under a civil forfeiture provision cannot obtain relief under Fed.R.Crim.P. 41(e). Because the seizure was not associated with any pending criminal case and the owner was not arrested or charged with any crime, he may not avail himself of the Rule of Criminal Procedure.

United States v. 1 Lear Jet, 836 F.2d 1571 (11th Cir. 1988): The defendant was unsuccessful in the trial court in keeping the Lear jet which the Government sought to forfeit because it had transported illegal aliens. Prior to docketing the appeal in the Eleventh Circuit, the Government moved the jet out of the jurisdiction. The Eleventh Circuit holds that this moots the appeal because it no longer has jurisdiction over the res. But see Republic National Bank supra page 1, this topic.

United States v. Premises Known As Lots 50 & 51, 250 Bricknel Avenue, 681 F.Supp. 309 (E.D.N.C. 1988): The United States Attorneys office in North Carolina filed a 881 action involving property located in Florida. The District Court rejected the claimant's argument that the Court lacked jurisdiction over this property. The Court holds that because the claimant was in the jurisdiction, this was the proper place to bring the action.

United States v. One Parcel of Real Property With Buildings, Appurtenances and Improvements Known As 147 Division Street, Woonsocket, Rhode Island, 682 F.Supp. 694 (D.R.I. 1988): The owner of the real property failed to object at a criminal trial to the search of the premises. This did not collaterally estop the owner from challenging the legality of the search in the subsequent civil forfeiture proceedings.

United States v. Mosquera, 845 F.2d 1122 (1st Cir. 1988): After property has been administratively forfeited, the proper way to seek return of the property is to file a civil action seeking return of forfeited property. If the property has been forfeited judicially, the better procedure is to seek to set aside judgment or file a motion for relief from judgment. Rule 41 is not the proper vehicle to attack forfeiture.

United States v. One Colt Python 357 Revolver, 845 F.2d 287 (11th Cir. 1988): The failure to give the claimant ten days notice prior to hearing a motion for summary judgment as required by the Rules of Civil Procedure requires reversal of the judgment. FORFEITURE (CIVIL PROCEDURE) Page 3

United States v. Jones, 852 F.2d 1235 (9th Cir. 1988): The Government failed to comply with any of the jurisdictional steps specified in custom law statutes with regard to forfeiture. The Government failed to post a notice of intent to forfeit and failed to conduct a hearing following the posting of a bond by claimants.

United States v. $150,000, 686 F.Supp. 133 (E.D.Va. 1988): Hearsay evidence is not admissible in a forfeiture proceeding to establish the Government's right to the property. Although hearsay is admissible on the issue of probable cause, there is no exception to the Fed.R.Evid. during the course of the forfeiture trial. Thus, the Government may not rely on hearsay evidence in defending against the claimant's claim to the property.

United States v. All That Tract (Riverdale), 696 F.Supp. 631 (N.D.Ga. 1988): The Government was not entitled to summary judgment of forfeiture of real property. Although the Government made out a prima facie case of forfeiture, the claimant rebutted with evidence that the property was not derived from drug proceeds.

United States v. One Urban Lot Located At One Street A-1, Valaparaiso, Puerto Rico, 885 F.2d 994 (1st Cir. 1989): A verified answer which contains all of the information required in a claim satisfies the requirement that a claim and answer be filed by one seeking to contest the forfeiture of property.

United States v. $103,387.27, 863 F.2d 555 (7th Cir. 1988): The trial court improperly denied the claimant's request for an extension of time to file a verified claim. The initial claim which was filed was not verified by either the attorney or the claimant. The Government could show no prejudice by the granting of such an extension of time.

United States v. South Half of Lot 7 and Lot 8, Kountze's 3rd Addition to the City of Omaha, 876 F.2d 1362 (8th Cir. 1989): The failure of the Government to obtain a probable cause determination from a judicial officer prior to seizing alleged gambling property rendered the seizure constitutionally invalid.

Garcia-Rubio v. I.N.S., 703 F.Supp 859 (S.D.Cal. 1989): A notice sent to the owner of a car was defective because it failed to inform the owner that she could obtain judicial review without posting a cost bond upon a showing of poverty. Merely setting forth various statutory provisions and regulations which provided for an in forma pauperis application was not sufficient. FORFEITURE (CIVIL PROCEDURE) Page 4

Dwyer v. United States, 716 F.Supp. 1337 (S.D.Cal. 1989): A sixty-two day delay was unreasonable between the time of seizure and notice to the vehicle owner. This does not satisfy the requirement that notice be supplied at the earliest practical opportunity. The DEA's claim that they were overworked was no excuse.

United States v. One 1984 Nissan, 711 F.Supp. 1570 (N.D.Ga. 1989): An eighteen month delay between the seizure of a vehicle and the commencement of civil forfeiture proceedings violated the due process clause.

United States v. 2511 East Fairmount Avenue, Baltimore, 722 F.Supp. 1273 (D.Md. 1989): Summary judgment was precluded in light of the genuine issue of material fact existing as to whether the claimants were innocent owners of property which was the subject of this forfeiture proceeding.

United States v. $116,000.00, 721 F.Supp 701 (D.N.J. 1989): In this gambling forfeiture case, the applicable statute of limitations began to run when the property was seized, not when the Government uncovered facts which showed the nexus between the property and the illegal gambling activity.

United States v. Property Known As 708-710 West Ninth Street, Erie, Pennsylvania, 715 F.Supp. 1323 (W.D.Pa. 1989): Forfeited property was subject to a lien which involved a right to receive continuing interest payments. The innocent lien holder was entitled to collect from the Government the interest as it accrued until the principle was repaid.

United States v. One Parcel of Real Estate at 1303 Whitehead Street, 729 F.Supp. 98 (S.D.Fla. 1990): In order for the Government to establish good cause for a stay pursuant to 21 U.S.C. 881(i), it must make the same showing which is generally required to win a preliminary injunction. That is, the Government must establish the likelihood of prevailing on the merits, that there is a substantial threat if the injunction to discovery is not granted and that the threatened injury to the Government outweighs the threatened harm that the stay of discovery would impose on the claimant. In this case, the Government failed to meet this stringent standard.

United States v. One White 1987 Tempest Sport Boat, 726 F.Supp. 7 (D.Mass. 1989): Pursuant to 21 U.S.C. 881-1, the Government must file a civil complaint for forfeiture no later than 60 days after a claim and cost bond have been filed by the claimant. The government FORFEITURE (CIVIL PROCEDURE) Page 5

filed for an extension of time one day after the 60 day period had expired. The Court holds that there was no reason to determine whether the Government could invoke the "good cause" exception of 881-1(c) because the motion was filed more than 60 days after the cost bond had been posted.

United States v. All Funds and Other Property, (TAN VOMINH), 727 F.Supp. 1372 (D.Ore. 1990): A claimant may seek to stay civil discovery in a forfeiture action in order to avoid having to incriminate himself in the discovery proceedings. A claimant should not be forced to waive his right against self-incrimination in a criminal prosecution in order to satisfy his burden of proof in a civil forfeiture case.

United States v. One Parcel of Real Property (APODACA), 904 F.2d 487 (9th Cir. 1990): Though the Government has a fairly light burden in establishing probable cause to seize property, the burden is more strenuous when attempting to prevail on a motion for summary judgment. In order to establish that there was no genuine issue regarding any material fact, the Government in this case failed to overcome an affidavit of the claimant that the property was not used to facilitate any drug transaction. The claimant provided more than a "conclusory" disclaimer, alleging that the drugs actually had been in his car, and never inside his home.

In re Ramu Corp., 903 F.2d 312 (5th Cir. 1990): In order to stay civil forfeiture proceedings, the Government must do more than simply allege that proceeding with the forfeiture action could jeopardize the criminal prosecution of a person other than the claimant of the property. In this case, the Government failed to show good cause for the stay, and also failed to show that the forfeiture proceedings were "related to" a drug offense for which there was a pending indictment.

United States v. $267,961.07, 916 F.2d 1104 (6th Cir. 1990): The trial court erred in not permitting the defendant an opportunity to amend her claims so as to properly assert standing. The claim was filed on behalf of the purported legal guardian of the rightful claimant.

United States v. Aiello, 912 F.2d 4 (2d Cir. 1990): The claimant failed to request a stay of execution of the judgment following her defeat in the lower court in this forfeiture action. The Second Circuit holds that the fact that the subject res may have been removed from the circuit does not deprive it of jurisdiction to entertain the appeal. FORFEITURE (CIVIL PROCEDURE) Page 6

United States v. Certain Real Property Located at 1 Hanson Avenue, 738 F.Supp. 580 (D.Me. 1990): The district court holds that the Government's verified complaint was not sufficiently particular pursuant to Rule E(2)(a) of the Admiralty Rules. Merely alleging that the property was purchased with cash derived from the sale of scheduled drugs did not suffice.

United States v. $31,000, 740 F.Supp. 803 (D.N.M. 1990): The Government failed to comply with the requirements of Rule E(2)(a) which requires specificity in a complaint for forfeiture. The complaint in this case did not specify any date or location of any purported or intended exchange, no dollar amount of such an exchange, no specific type or quantity of controlled substance, and no identified participants. This fails to comply with the Rule's requirements.

United States v. Real Property Located at 2101 Maple St., 750 F.Supp. 817 (E.D.Mich. 1990): The Seventh Amendment applies to forfeiture actions. Therefore, there is a constitutional right to a trial by jury.

United States v. Real Property and Residence Located At Route 1, Box 111, Firetower Road, 920 F.2d 788 (11th Cir. 1991): The cost bond which must be posted by a claimant in order to terminate administrative proceedings and require the government to proceed in district court is not penal in nature. At the conclusion of the litigation, if the government prevails, the government may only retain the actual costs of the litigation.

United States v. Real Property In Township of Charlton, 764 F.Supp. 1219 (E.D.Mich. 1991): Once the government has instituted forfeiture proceedings in federal district court, it cannot then institute administrative forfeiture proceedings.

United States v. All Funds On Deposit in Any Accounts ...., 767 F.Supp. 36 (E.D.N.Y. 1991): As in the context of criminal forfeiture, if a criminal defendant has his assets tied up in an 881 action, he has the right to a probable cause hearing if the assets are needed to retain counsel. The Court relied on the Monsanto decision issued by the Second Circuit after remand from the United States Supreme Court.

United States v. One Single Family Residence Located At 6960 Miraflores Ave., 932 F.2d 1433 (11th Cir. 1991): Real estate which was subject to a forfeiture was sold during the pendency of the litigation and the proceeds were deposited in the United Sates Marshal's account. After the government FORFEITURE (CIVIL PROCEDURE) Page 7

prevailed, the claimant failed to obtain a stay pending appeal, or a supersedeas. The Marshal transferred the assets to the United States Treasury. This deprived the appellate court of jurisdiction. This decision would not survive Republic National Bank, 113 S.Ct. 554, supra.

United States v. $13,000.00, 747 F.Supp. 430 (S.D.Ohio 1990): DEA agents seized $13,000 from the claimant at the airport. He met the drug courier profile, a drug dog alerted to the money, and he gave inconsistent stories to the police about the source of the funds. He said his mother-in-law gave him the money, but when called, she did not confirm this. In response to the government's summary judgment motion, the defendant filed an affidavit stating that the money was legitimate and the mother-in-law also provided an affidavit attesting to the legitimacy of the funds. Summary judgment was denied in light of the disputed genuine issue of material facts.

United States v. One 1987 Chevrolet Corvette, 746 F.Supp. 865 (E.D.Wis. 1990): In calculating the cost bond that the claimant must pay following his loss of the forfeiture action, the fees paid to jurors are not included.

United States v. One Lot of $25,721 in Currency, 938 F.2d 1417 (1st Cir. 1991): Despite the fact that the government executed judgment after prevailing in the district court in this forfeiture action, the court of appeals was not divested of jurisdiction. The "no res, no jurisdiction" rule should not apply in forfeiture actions.

United States v. $1,322,242.58 (Appeal of Whittington), 938 F.2d 433 (3rd Cir. 1991): The government's transfer of money from one account (in the jurisdiction) to another account (out of the jurisdiction) does not divest the appellate court of jurisdiction.

United States v. Certain Real And Personal Property Belonging To Hayes, 943 F.2d 1292 (11th Cir. 1991): The wife of the drug dealer contended that she was an innocent owner of the house. She lost in the trial court and filed a notice of appeal, but did not file a motion to stay the judgment. The Marshal sold the house. The appellate court lost jurisdiction of the case once the res was sold. This decision would not survive Republic National Bank, 113 S.Ct. 554, supra.

United States v. Certain Real Property, 1344 Ridge Road, 751 F.Supp. 1060 (E.D.N.Y. 1991): The claimants were granted a stay in discovery and an enlargement of time to answer the complaint pending the outcome of the criminal charges. FORFEITURE (CIVIL PROCEDURE) Page 8

United States v. One Parcel of Real Estate at 1012 Germantown Road, 963 F.2d 1496 (11th Cir. 1992): In a forfeiture trial, the issue of probable cause (the government's burden) should be decided by the trial judge and the evidence should not be heard by the jury. This is necessary in light of the fact that inadmissible hearsay evidence is admissible in the probable cause stage, but such evidence may not be used by the government to refute the defendant's claim of being an innocent owner. Even cautionary instructions to the jury do not ensure that the jury will not consider the inadmissible hearsay evidence in the second stage of the trial.

United States v. $12,248, 957 F.2d 1513 (9th Cir. 1992): EAJA fees were properly awarded to the claimant. The government waited for fifteen months prior to instituting the forfeiture proceedings; trial was delayed another three years and in the end, the court found that the funds were derived from a legitimate source. Even though there was probable cause for the initial seizure, the unreasonable delay was inexcusable. Reviewing the standard set forth in United States v. $8,850, 461 U.S. 555 (1983), the court concluded there was no reason for the delay and there was prejudice to the claimant. Moreover, "Whenever the government seizes a significant amount of money and withholds it for an unreasonable length of time without bringing charges and without offering evidence to justify its continued withholding and without any indication as to when if ever charges will be filed, the claimant suffers irreparable harm."

United States v. One 1987 BMW325, 985 F.2d 655 (1st Cir. 1993): When a claimant fails to answer interrogatories, the appropriate procedure is to comply with Rule 37, Fed.R.Civ.P., that is, to file a motion to compel and then to impose sanctions.

United States v. One Single Family Residence, 13 F.3d 1493 (11th Cir. 1994): A husband and wife owned a home which was the site of a weekly poker game. The husband was tried and convicted under 18 U.S.C. 1955. The husband, therefore, was estopped from contesting the probable cause basis for forfeiture. The wife, however, was not collaterally estopped from contesting forfeiture. She was not a party to the criminal case and was not barred from contending the gambling activities at the house were not sufficient under th gambling forfeiture statutes to support the forfeiture of the house.

United States v. $191,910.00 in U.S. Currency, 16 F.3d 1051 (9th Cir. 1994): The claimant was carrying the currency in his suitcase when he was stopped at the airport and the currency was seized. In his claim, he asserted that some of the money was his and the rest he was holding for a client (he claimed he was a gemolist). This was sufficient to establish standing to assert a claim. Asserting an ownership interest, or asserting a possessory interest is generally sufficient, though merely asserting possession may not be sufficient.

FORFEITURE (CIVIL PROCEDURE) Page 9

Aero-Medical Inc. v. United States, 23 F.3d 348 (10th Cir. 1994): The DEA erred in relying on notice by publication and failing to expressly notify the known owner of the airplane when it instituted forfeiture proceedings again the plane. The Court reviews precedents from other Circuits, as well as the United States Supreme Court in holding that the government must take reasonable steps to ensure that notice of a pending forfeiture is received by all interested parties, though extraordinary measures are not required: "Due process protections ought to be diligently enforced, and by no means relaxed, where a party seeks the traditionally disfavored remedy of forfeiture."

United States v. One Parcel of Real Property Located at 9638 Chicago Heights, St. Louis, 27 F.3d 327 (8th Cir. 1994): The holding in James Daniel Good is retroactive. The proper remedy for a seizure without a hearing is the dismissal of the forfeiture action. Merely suppressing evidence discovered during the initial seizure is not an adequate remedy.

Torres v. $36,256.80, 25 F.3d 1154 (2d Cir. 1994): Mailing a notice to the apparent owner of seized property at his last known address and at the prison where he was thought to be was insufficient where both notices were returned to the DEA and the owner was known to be somewhere in the custody of the Bureau of Prisons. A simple phone call by the DEA to the Bureau of Prisons was all it would have taken to determine the owner's actual location.

United States v. Real Property Known and Numbered as Rural Route 1, Box 137-B, Cutler, Ohio, 24 F.3d 845 (6th Cir. 1994): In a forfeiture proceeding, the government must first establish probable cause to seize the property. The claimant may challenge this probable cause showing either pretrial, by way of motion, or at trial. Here, the trial court erred by concluding that the Magistrate's initial decision finding probable cause and ordering that the property be arrested was all that was needed for the probable cause showing by the government. This procedure deprived the claimant of the right to contest the probable cause basis for the seizure, because the Magistrate's proceeding was conducted ex parte. In an unrelated holding, the court holds that the district court should not instruct the jury that an adverse inference may be drawn from a claimant's invocation of the Fifth Amendment. Though this is the traditional rule in civil cases, because of the decisions in Austin and related cases, forfeiture cases may no longer be viewed as typical civil cases, where civil inferences and rules apply.

United States v. Giraldo, 45 F.3d 509 (1st Cir. 1995): When a claimant is incarcerated, the government cannot satisfy its notice obligation by mailing a certified letter to the defendant's home. Where, as here, the claimant has not received adequate

FORFEITURE (CIVIL PROCEDURE) Page 10

notice, the claimant may file a motion for return of seized property pursuant to Rule 41(e) and collaterally attack the administrative forfeiture, or under the court's general federal question jurisdiction.

United States v. Indoor Cultivation Equipment, 55 F.3d 1311 (7th Cir. 1995): 21 U.S.C. 888(c) provides that with regard to conveyances, if a claim and cost bond is filed in accordance with 19 U.S.C. 1609, the government must file a civil complaint in district court within sixty days. In this case, the claimant filed the necessary claim and cost bond. Over a year later, the government filed the civil complaint. The defendant failed to file an answer and the government obtained a default judgment. This was erroneous. Because the government did not comply with 888(c), the district court had authority to do nothing more than order the return of the property. The government contended that the assets sought to be forfeited were not covered by 888(c). The assets were a power boat and trailer and a pickup truck. The theory of forfeiture was that these assets represented proceeds of narcotics transactions; the government argued that the statute only applied to conveyances which were seized "for a drug related offense" -- that is, assets which facilitated a drug deal. The court disagreed. The expedited procedure applies to all conveyance forfeitures.

In re Seizure of All Funds in Accounts in the Names Registry Publishing Co., 58 F.3d 855 (2d Cir. 1995): The district court entered an order requiring that all seized funds be returned to the claimants. The government appealed, requesting a stay pursuant to 28 U.S.C. 1355(c). The Second Circuit denied the motion for stay, concluding that the district court made adequate findings of fact to justify denying equitable relief to the government, even though it was clear that denying the stay would result in the loss of the funds.

United States v. $277,000 in U.S. Currency, 69 F.3d 1491 (9th Cir. 1995): When the government seizes currency and loses the forfeiture action, it must disgorge any interest actually earned while the money was kept. The government may not be forced to pay for the depreciation of an asset which has been seized and is not otherwise liable for damage to property which is seized. But interest which is actually earned may not be kept by the government. FORFEITURE (CIVIL PROCEDURE -- PLEADINGS)

United States v. $39,000, 801 F.2d 1210 (10th Cir. 1986): The Tenth Circuit holds that general allegations which generally would suffice under "notice pleadings" requirement do not suffice for a forfeiture complaint. Rather, the complaint must state the circumstances from which the claim arises with such particularity that a claimant can frame a response and commence an investigation without any more definite statement.

United States v. One 1980 Ford Mustang, 648 F.Supp. 1305 (N.D.Ind. 1986): A complaint which merely alleged that the automobile was used or intended to be used to transport controlled substances did not establish a substantial connection between the car and the controlled substance necessary for forfeiture. More facts must be included in the complaint to survive a motion to dismiss.

United States v. $38,000, 816 F.2d 1538 (11th Cir. 1987): The Eleventh Circuit holds that the Government is held to the same strict standard as claimants are in complying with the Supplemental Rules for Certain Admiralty and Maritime Claims which govern forfeiture proceedings. The Court holds that the Government's failure to obtain a warrant pursuant to Rule C(3) obviates the claimant's need to satisfy the stringent requirement of Rule C(6). Furthermore, the Government's failure to properly provide notice to the claimant excused the claimant's out of time pleadings. Finally, the Eleventh Circuit condemns the threadbare complaint which failed to provide sufficient information with which to file an answer and commence investigation.

United States v. Property Located at 4880 S.E. Dixie Highway, 838 F.2d 1558 (11th Cir. 1988): The Eleventh Circuit holds that the "bear bones" complaint filed in this case not only subjected the complaint to dismissal but also entitled the claimant to attorneys fees under the Equal Access To Justice Act. The Government failed to specify the particular circumstances giving rise to the Government's claim to forfeiture.

United States v. Pole, 3172, Hopkinton, 852 F.2d 636 (1st Cir. 1988): The Government's complaint for forfeiture of the property failed to allege sufficient facts to support its claim. Although there were allegations that part of the down payment was from drug proceeds, the down payment represented less than 21% of the value of the property. Even if later mortgage payments were made from drug proceeds, that did not support forfeiture of the entire property.

United States v. Certain Real Property Located at 1 Hanson Avenue, 738 F.Supp. 580 (D.Me. 1990): The district court holds that the Government's verified complaint was not sufficiently particular pursuant to Rule E(2)(a) of the Admiralty Rules. Merely alleging that the property was purchased with cash derived from the sale of scheduled drugs did not suffice.

FORFEITURE (CIVIL PROCEDURE -- PLEADINGS) Page 2

United States v. Property at 2323 Charms Road, 726 F.Supp. 164 (E.D.Mich. 1989): The complaint failed to allege sufficient probable cause and was therefore subject to dismissal. The complaint simply stated that the defendant was a known drug dealer, that he had used an airplane to fly to Mexico, and that a dog had alerted to the airplane. This does not constitute sufficient probable cause to seize the airplane and the complaint would be dismissed. With regard to other property, the Government set forth a "net worth" theory that the defendant's property was purchased with drug proceeds. Because the defendant had a legitimate car repair business and his profits from the business were used to buy additional equipment for the business, that property could not be forfeited under a net worth theory. In a subsequent opinion, the District Court awarded fees to the claimant under the Equal Access to Justice Act.

United States v. $260,242, 919 F.2d 686 (11th Cir. 1990): The trial court erred in preventing the claimant from amending his claim to show standing to contest the forfeiture of the assets. The claimant alleged that he was a bailee, but refused to identify the bailor. Although one in constructive possession of money is generally sufficient to assert a claim in a forfeiture proceeding, if the claimant states that he is a bailee, he must identify the bailor. This is because the rule requires that he state that he is "duly authorized to make the claim."

United States v. $31,000, 740 F.Supp. 803 (D.N.M. 1990): The Government failed to comply with the requirements of Rule E(2)(a) which requires specificity in a complaint for forfeiture. The complaint in this case did not specify any date or location of any purported or intended exchange, no dollar amount of such an exchange, no specific type or quantity of controlled substance, and no identified participants. This fails to comply with the Rule's requirements. FORFEITURE (CIVIL PROCEDURE -- SEIZURE)

United States v. James Daniel Good Real Property, 114 S.Ct. 492 (1993): Unless there are exigent circumstances, when the government institutes a civil forfeiture action against real property, they may not seize the property absent notice to the property owner and an opportunity to be heard.

United States v. $5,644,540, 799 F.2d 1357 (9th Cir. 1986): The Government must establish probable cause prior to seizing property under 21 U.S.C. 881. Such probable cause must establish the substantial connection between the property to be forfeited and the illegal activity.

In re Application of Kingley, 802 F.2d 571 (1st Cir. 1986): The First Circuit reviews a number of the procedures used by the Government to seize a defendant's house and all of his personal property under a seizure warrant pursuant to 21 U.S.C. 881. Though only limited issues were properly before the Court on the appeal, the First Circuit issues a strong condemnation of the Government's conduct in this case and the wholesale forfeiture of everything the defendant owned.

United States v. Life Insurance Company of Virginia, 647 F.Supp. 732 (W.D.N.C. 1986): The Court finds constitutional problems with the procedures used for seizing property under the supplemental rules. The Court holds that a clerk may not simply issue a warrant for the seizure of the property. A judicial officer must make the initial determination that there is probable cause to seize the property.

United States v. 124 E. North Avenue, 651 F.Supp. 1350 (N.D.Ill. 1987): The district court finds that there is a constitutional violation in seizing property simply by virtue of a warrant executed by a clerk. A judicial officer must make a finding of probable cause.

United States v. Real Property Located at 25321 Mammoth Circle, 659 F.Supp. 925 (C.D.Cal. 1987): Real property may not be seized in a forfeiture action as proceeds of a crime pursuant to 881(a)(6) absent a finding of probable cause by a judicial officer.

United States v. Premises and Real Property Located at 4492 So. Livonia Road, 667 F.Supp. 79 (W.D.N.Y. 1987): The Court holds that no prior hearing is required prior to the seizure of property. Furthermore, no adversary proceeding is required prior to the seizure of the real estate. All that is required is an ex parte proceeding before a judicial officer to establish probable cause to seize the property.

FORFEITURE (CIVIL PROCEDURE -- SEIZURE) Page 2

United States v. One Parcel of Land Commonly Known As 4204 Cedarwood, Matteson, Illinois, 671 F.Supp. 544 (N.D.Ill. 1987): The District Court of Illinois holds that the good faith exception to the exclusionary rule applies to civil forfeitures. Thus, although the statute which authorized the seizure of assets in this case was held to be unconstitutional, the officer acted in good faith in seizing the property.

United States v. $152,160, 680 F.Supp. 354 (D.Col. 1988): Although the Tenth Circuit has held that criminal rather than civil forfeiture proceedings are appropriate when the Government attempts to restrain a defendant's property prior to the filing of an indictment, a District Court in Colorado holds that an 881 order may be used to freeze assets prior to an indictment.

United States v. Property Located At 4880 Southeast Dixie Highway, 838 F.2d 1558 (11th Cir. 1988): The claimant sought to differentiate between real and personal property to prevent the Government from seizing real property pursuant to the Supplemental Admiralty Rules. The Court rejected this distinction holding that the Government did not have to seek pre-seizure judicial approval of in rem warrants which authorized seizure of property.

United States v. Premises and Real Property At 4492 South Lavonia Road, 889 F.2d 1258 (2d Cir. 1989): Pursuant to 21 U.S.C. 881(b), the Government can file a civil complaint for forfeiture, and obtain a summons and warrant for the arrest of the property from a court clerk. The Second Circuit finds that this procedure violates the defendant's right to due process. Only extraordinary circumstances can justify the failure to provide a pre-seizure hearing. The Court goes on to hold, however, that forfeiture was still appropriate since the impermissibly-obtained "evidence" was not used in the forfeiture proceeding itself. That is, the illegal seizure of property, standing alone, will not immunize that property from forfeiture, so long as the impermissibly obtained evidence is not used in the forfeiture proceeding.

United States v. Leasehold interest in Property Located at 850 South Maple, 743 F.Supp. 505 (E.D.Mich. 1990): Before a leasehold interest in residential property which is alleged to have been used for drug trafficking may be seized under 881(a)(7), the residents must be given notice and a hearing. The purpose of civil forfeiture proceedings is to seize the property which facilitates drug transactions, not simply to stop the consumption or sale of drugs by people using the property.

FORFEITURE (CIVIL PROCEDURE -- SEIZURE) Page 3

United States v. Lasanta, 978 F.2d 1300 (2d Cir. 1992): The police seized defendant's vehicle under the authority of 21 U.S.C. 881(b)(4), which purports to allow a warrantless seizure of any property -- including automobiles -- which are forfeitable. The government argued that the vehicle could be seized at any time if there was probable cause to believe the automobile was forfeitable. "While congress may have intended civil forfeiture to be a "powerful weapon in the war on drugs", it would indeed, be a Pyrrhic victory for the country if the government's relentless and imaginative use of that weapon were to leave the constitution itself a casualty." In short, because no other exception to the search warrant requirement applied, the officers could not seize the vehicle. (The Eleventh Circuit has approved such warrantless seizures, United States v. Valdes, 876 F.2d 1554 (11th Cir. 1989)).

United States v. All Funds Presently On Deposit . . .American Express Bank, 813 F.Supp. 180 (E.D.N.Y. 1993): Though the government is not required to demonstrate probable cause to make a warrantless seizure until the time of trial, the government must possess the probable cause at the time of the seizure. Here, the government seized $584,445.41 without a warrant. The claimant, a South American bank, immediately moved for the return of the money. Because the government could provide no probable cause for the seizure, it would be unconstitutional to allow the government to proceed. The government could continue in its effort to forfeit the money, but it could not seize it without a warrant or probable cause.

United States v. One Parcel of Real Property . . . Mills Second Subdivision, Burleigh County, 48 F.3d 289 (8th Cir. 1995): Where the government seizes real property without a pre-seizure hearing, in violation of United States v. James Daniel Good Real Property, 114 S.Ct. 492 (1993), the appropriate remedy is the dismissal of the forfeiture action.

United States v. Certain Real Property Located at 16510 Ashton, 47 F.3d 1465 (6th Cir. 1995): The government sought to seize property believed to be connected to some drug or money laundering activity. After a search warrant was executed at the property, the appellant filed a quit claim deed which had been signed some months earlier. The trial court decided that the claimant did not establish standing -- he appeared to be a nominal owner, or perhaps a straw man and failed to show that he paid anything for his ownership of the property. It was undisputed, however, that the property was titled in his name at the time the government instituted forfeiture proceedings. The appellate court reversed the decision of the lower court: because of the decision in James Daniel Good Real Property, any owner has a right to a pre-deprivation hearing. This right belongs to any owner, even if he is subsequently not able to establish standing. At a minimum, he is entitled to notice and a pre-deprivation hearing.

FORFEITURE (CIVIL PROCEDURE -- SEIZURE) Page 4

United States v. Real Property Located at . . . Big Rock Drive, Malibu, 51 F.3d 1402 (9th Cir. 1995): The remedy for a James Daniel Good violation is the suppression of any evidence discovered during the illegal seizure.

United States v. All Assets and Equipment of West Side Bldg., 58 F.3d 1181 (7th Cir. 1995): James Daniel Good is retroactive. Moreover, the government must compensate the claimants for any profit the government realized from the seizure of the property prior to an adversarial hearing.

United States v. 2751 Peyton Woods Trail, S.W., Atlanta, 66 F.3d 1164 (11th Cir. 1995): If the government seizes property without a prior hearing, in violation of James Daniel Good, the appropriate remedy is the dismissal of the forfeiture action.

United States v. Real Property Located at 6380 Little Canyon Road, El Dorado (Price), 59 F.3d 974 (9th Cir. 1995): If the government seizes property in violation of James Daniel Good, the appropriate remedy requires the government to compensate the claimant for the period of time that the claimant was deprived of his property. This would include the period of time between the improper seizure and the time that the property could lawfully be seized after a hearing was conducted. FORFEITURE (CRIMINAL PROCEDURE)

Libretti v. United States, ___ S.Ct. ___ (1995): There is no need for the court to determine that there is a factual basis with regard to the criminal forfeiture provisions in a plea agreement. Nor does there have to be an express waiver of the right to have a special jury verdict on the forfeiture count.

United States v. Sandini, 816 F.2d 869 (3rd Cir. 1987): The Third Circuit holds that a bifurcated proceeding is required in a criminal forfeiture/criminal prosecution case. That is, two separate trials are required, even if before the same jury, in order to establish the defendant's guilt and to establish the forfeitability of the property. One of the principal reasons for this exercise of the Court's supervisory power is to enable the defendant not to testify at his criminal trial but to testify at his forfeiture trial. The Court holds that the jury must return a verdict in the criminal case before they hear testimony on the forfeiture proceedings. Finally, the Court upholds the standard of proof -- preponderance of the evidence -- despite the defendant's contention that this violated his right to due process.

United States v. Amend, 791 F.2d 1120 (4th Cir. 1986): In its special verdict, the jury found that the defendant had acquired ownership interest in "all profits obtained or arising from . . . participation in this enterprise." This "catch-all" provision in the special verdict form was merely tautological and provided no basis upon which to forfeit assets under the CCE provisions.

United States v. Gelb, 826 F.2d 1175 (2d Cir. 1987): The Second Circuit holds that a post-indictment restraining order is appealable. Though the defendant may appeal the restraining order, he may not seek modification of the injunction without having adequately established a factual basis in the district court.

United States v. Pryba, 674 F.Supp. 1518 (E.D.Va. 1987): In determining whether property is forfeitable following a RICO conviction, the Government must meet the beyond a reasonable doubt standard and no presumption in favor of forfeiture arises following the guilty verdict.

United States v. Songer, 842 F.2d 240 (10th Cir. 1988): Though a defendant may be tried in absentia, property of the defendant may not be forfeited in his absence. This is because although the Constitution does not forbid the trial of one who voluntarily absents himself from the jurisdiction, one cannot be sentenced under the federal rules absent his presence and the same applies to forfeiture.

FORFEITURE (CRIMINAL PROCEDURE) Page 2

United States v. Perholtz, 842 F.2d 343 (D.C.Cir. 1988): The D.C. Circuit holds that a bifurcated proceeding is not required under either the Constitution or the Forfeiture Statute in order for the Government to obtain criminal forfeiture of a defendant's assets. The Court rejected the reasoning of United States v. Cauble, 706 F.2d 1322 (5th Cir. 1983), and United States v. Sandini, 816 F.2d 869 (3rd Cir. 1987). The D.C. Circuit holds that the use of special verdicts under Fed.R.Crim.P. 31 is sufficient to protect the defendant's right to a fair trial.

United States v. Estevez, 845 F.2d 1409 (7th Cir. 1988): The owner of certain property was not adequately notified that his property was the subject of a criminal forfeiture proceeding against another person. Simply publishing notice of the financial or other interest in property is not sufficient to give the actual owner adequate notice that a forfeiture action covers his property.

United States v. Regan, 858 F.2d 115 (2d Cir. 1988): An order restraining property pending the disposition of a criminal case may operate to deprive third parties of their interest in the property. However, the district court should avoid such restraint if the purpose can be served by such intrusive means.

United States v. Feldman, 853 F.2d 648 (9th Cir. 1988): The Ninth Circuit concludes that forfeiture proceedings should, in certain cases at least, be bifurcated from the guilt-innocence trial.

United States v. Hernandez-Escarsega, 886 F.2d 1560 (9th Cir. 1989): In a criminal forfeiture proceeding, the Government need only prove the forfeitability of the asset by a preponderance of the evidence. Forfeiture of property is not an element of the offense. It is an additional penalty prescribed for commission of the offense.

United States v. Acosta, 881 F.2d 1039 (11th Cir. 1989): The defendant, a pharmacist, was charged with providing chemicals through cocaine laboratories. He was convicted and the jury, in its forfeiture verdict, concluded that he had acquired two pieces of real property, a boat, CD's, as well as $6,000,000 in proceeds from his illicit activities. The evidence at trial, however, indicated that the $6,000,000 which he had earned from this venture was used to purchase the CD's, the real property and the boat. Therefore, the jury double- punished the defendant. A remand was appropriate to determine the worth of the forfeited assets and to reduce the cash forfeiture verdict by that amount.

FORFEITURE (CRIMINAL PROCEDURE) Page 3

United States v. Jackson, 718 F.Supp. 1288 (N.D.W.Va. 1989): The Government sought a preliminary injunction to preserve the defendant's assets in the event of forfeiture. However, the restraint sought by the Government was overbroad and not envisioned by the statute upon which the Government relied.

United States v. Herrero, 893 F.2d 1512 (7th Cir. 1990): The Seventh Circuit holds that the appropriate standard of proof in a criminal forfeiture action is by a preponderance of the evidence.

United States v. Roth, 912 F.2d 1131 (9th Cir. 1990): The trial court granted a TRO restraining the defendant's assets pending his criminal trial. The defendant was entitled to an interlocutory appeal to challenge such an order. Furthermore, in order to enter such an order, the trial court must make findings consistent with Fed.R.Civ.P. 65.

United States v. Monsanto, 924 F.2d. 1186 (2d Cir. 1991): On remand from the United States Supreme Court, the en banc Second Circuit concludes that if a criminal defendant's assets are frozen pre-trial, the defendant is entitled to an evidentiary hearing pretrial to determine if there is a basis to continue the restraint as to assets which the defendant needs to retain counsel.

United States v. Kramer, 912 F.2d 1257 (11th Cir. 1990): Following criminal convictions of various individuals associated with a card club casino, the jury returned special verdicts ordering the forfeiture of the club. Several claimants, who had neither been indicted nor tried, sought to protect their interest in the club, pursuant to 18 U.S.C. 1963(1). The trial court failed to expeditiously adjudicate these claimants' rights. The Eleventh Circuit ordered the district court to conduct a hearing within 30 days to the extent practical and consistent with the interest of justice to determine the rights of these third parties and to enter an order within 75 days resolving these claims.

United States v. Paccione, 948 F.2d 851 (2d Cir. 1991): The defendants and the government agreed that the defendant would forfeit $22 million as part of a RICO forfeiture judgment. The defendants did not honor their obligation under the agreement. The government sought to seize "substitute assets" pursuant to 18 U.S.C. 1963(m). This was not proper. The agreement provided for the forfeiture of assets, not for the forfeiture of substitute assets and the government's remedy for the defendants' breach was the same as any judgment creditor.

FORFEITURE (CRIMINAL PROCEDURE) Page 4

United States v. Sharir, 755 F.Supp. 77 (S.D.N.Y. 1991): The defendant was entitled to a post-seizure hearing to determine the propriety of the seizure of his assets.

United States v. Elgersma, 971 F.2d 690 (11th Cir. 1992): The standard by which the government must establish that property is forfeitable is by a preponderance of the evidence. This reflects Congress' intent in prescribing forfeiture as an ingredient of the sentence, not an element of the offense.

United States v. Floyd, 992 F.2d 498 (5th Cir. 1993): Substitute assets may not be seized pretrial. Only assets which are forfeitable under 853(a) may be restrained prior to trial. Substitute assets may be forfeited after trial. 997 F.2d 883 (5th Cir. 1993) (rehearing denied).

In re Assets of Martin, 1 F.3d 1351 (3rd Cir. 1993): Pre-indictment and pre-conviction seizures of assets may not include the seizure of substitute assets. This case, arising under RICO, follows the reasoning of Floyd, holding that 1963(d)(1) only refers to the seizure of assets set forth in 1963(a), which does not include substitute assets. Substitute assets are seizable under 1963(m), and the pre-conviction restraint provision does not refer to this section.

United States v. Robinson, 8 F.3d 418 (7th Cir. 1993): A defendant has a right to a jury trial under Rule 31 in a criminal forfeiture proceeding. This right may only be waived personally by the defendant. A silent record as to a waiver is not adequate.

United States v. Pelullo, 14 F.3d 881 (3rd Cir. 1994): The standard of proof in a RICO criminal forfeiture proceeding is proof beyond a reasonable doubt. The court distinguished the standard which most courts have applied in the CCE forfeiture context, and held that Congress intended that the applicable standard be proof beyond a reasonable doubt.

United States v. Ripinsky, 20 F.3d 359 (9th Cir. 1994): The criminal forfeiture provisions do not permit the pretrial restraint of substitute assets.

In re Moffitt, Zwerling & Kemler, 864 F.Supp. 527 (E.D.Va. 1994): A transferee of tainted funds can be required to disgorge the funds if he cannot establish that he is an innocent owner. However, the transferee cannot be required to disgorge substitute assets if the actual tainted money has been spent. The substitute asset provision found in 21 U.S.C. 853(p)

FORFEITURE (CRIMINAL PROCEDURE) Page 5

only allows for the seizure of substitute assets from the defendant. Thus, if an attorney receives tainted funds, only those funds can be forfeited, not assets of an equal value.

United States v. Bachner, 877 F.Supp. 625 (S.D.Fla. 1995): A proceeding under a criminal forfeiture action for an innocent owner to adjudicate his interest in seized assets is civil, for purposes of determining the availability of Equal Access to Justice Act relief. Even though 21 U.S.C. 853(n) represents "criminal" forfeiture, it is essentially a civil proceeding. In this case, the district court concluded that the government was acting in bad faith and awarded EAJA fees to the claimant.

United States v. Wild, 47 F.3d 669 (4th Cir. 1995): In United States v. Chandler, 36 F.3d 358 (4th Cir. 1994), the Fourth Circuit held that proportionality analysis was not appropriate in a civil forfeiture proceeding. Rather, the focus is entirely on the extent of the property's connection to the underlying offense. In a criminal forfeiture proceeding, however, the court holds that the proportionality anaylsis should be undertaken. The distinction is that in a criminal forfeiture proceeding, which is in personam, the defendant's culpability is the key, as opposed to an in rem proceeding, where the property's culpability is the key.

United States v. Field, 62 F.3d 246 (8th Cir. 1995): Joining several other circuits, the Eighth Circuit holds that the government may not restrain substitute assets prior to trial.

United States v. Douglas, 55 F.3d 584 (11th Cir. 1995): After property is forfeited in a criminal proceeding, an innocent owner may petition the court for return of the property pursuant to 21 U.S.C. 853(n). This proceeding is civil in nature and, therefore, if the government's position is not substantially justified, the claimant may receive fees pursuant to EAJA, 28 U.S.C. 2412(d)(1)(A). FORFEITURE (DOUBLE JEOPARDY)

NOTE: THE U.S. SUPREME COURT GRANTED CERT IN $405,089.23 AND URSERY IN JANUARY, 1996.

United States v. $405,089.23, 33 F.3d 1210 (9th Cir. 1994): The defendants were convicted of criminal offenses involving the manufacturing of methamphetamine and money laundering. In a separate civil forfeiture proceeding, the government sought to forfeit various assets connected to the criminal violations. The Ninth Circuit holds that the "civil" forfeiture proceedings were barred by the double jeopardy clause. While the government could have submitted the forfeiture issue in the same proceeding which decided the defendant's criminal exposure, the government sought to present this punishment issue to an entirely separate jury, thus implicating the double jeopardy clause. The Court rejected contrary authority in the Eleventh and Second Circuits, which suggest that "parallel" criminal and civil forfeiture proceedings are not "separate" for double jeopardy purposes. When the Supreme Court in Austin decided that forfeiture is "punishment" for Eighth Amendment purposes, it effectively decided the same issue for Fifth Amendment Double Jeopardy purposes, as well. This is so, even though in this case the forfeiture focused entirely on "proceeds", as opposed to property which facilitated a criminal offense.

United States v. McCaslin, 863 F.Supp. 1299 (W.D.Wash. 1994): The government obtained a judgment against the defendant, forfeiting his house because of his marijuana growing operation. This forfeiture judgment barred a subsequent criminal prosecution based on the same operation.

United States v. Parcel of Land located at 167 Woodland Road, Newton, Mass., 1994 WL 707129 (D.Mass. 1994): The defendant/claimant was confronting both a civil forfeiture action and a criminal prosecution. He offered a judgment in the civil action, resisting the government's motion to stay the civil action pending the completion of the criminal prosecution. The government's motion for a stay was denied: 881(i) does not authorize a stay for the purpose of avoiding double jeopardy -- the stay is only designed to prevent the civil litigant from obtaining discovery which could be used in the criminal case. Accordingly, judgment was entered in favor of the government.

United States v. One 1978 Piper Cherokee Aircraft, 37 F.3d 489 (9th Cir. 1994): The defendant was prosecuted and convicted for violating the CCE statute. Subsequently, a civil forfeiture action was initiated against an airplane, with the underlying criminal offense supporting the forfeiture being the same conduct as that which supported the CCE prosecution. This subsequent forfeiture proceeding was barred by the double jeopardy clause.

FORFEITURE (DOUBLE JEOPARDY) PAGE 2

United States v. Ursery, 59 F.3d 568 (6th Cir. 1995): Following a consent judgment in a civil forfeiture based on a particular criminal episode, the government may not prosecute the defendant for the same criminal conduct. The consent judgment was the equivalent of a guilty plea -- therefore, jeopardy had attached. The court also deflected the Blockburger argument that the civil forfeiture and the criminal prosecution each required proof of a fact not required by the other. There is no fact required in the criminal prosecution which is not required by the forfeiture proceeding.

United States v. Cretacci, 62 F.3d 307 (9th Cir. 1995): If the defendant does not file a claim to contest a forfeiture (in this case a car), he cannot later rely on that forfeiture as a double jeopardy bar to a criminal prosecution. This rule does not violate the defendant's Fifth Amendment rights. Failing to contest an administrative forfeiture is legally equivalent to abandoning the property and the forfeiture of abandoned property is not "punishment."

United States v. Baird, 63 F.3d 1213 (3rd Cir. 1995): The Third Circuit assumed, for the sake of argument, that the double jeopardy clause would bar a criminal case where there was a prior forfeiture based on the same criminal conduct. However, the court held that where the defendant fails to file a claim to the property in the forfeiture proceeding, he was never "in jeopardy" and therefore may not assert the protection of the fifth amendment double jeopardy clause.

United States v. $69,292 (Faheemi), 62 F.3d 1161 (9th Cir. 1995): The defendant was about to board a flight out of the country and filled out a currency form indicating that he was carrying $5,000 in currency. He was searched and was found to have in excess of $69,000.00. He was prosecuted for this offense. Later, the government sought to forfeit the money. This was barred by the double jeopardy clause. Clearly, the forfeiture of the money represents punishment. The lower court must decide, on remand, whether the defendant is the owner of the money, and thus allowed to assert the double jeopardy protection. With regard to the Excessive Fines Clause issue, the Ninth Circuit held that the forfeiture of the entire amount could be an excessive fine: the criminal offense is the failure to report the money, not the possession of the money. The lower court must consider the various "proportionality test" factors which were set out in the court's previous El Dorado decision in assessing whether the forfeiture of the entire amount of the currency is excessive in relation to the reporting violation.

United States v. All Assets of G.P.S. Automotive Corp. (Schaffer), 66 F.3d 483 (2d Cir. 1995): The state prosecuted the defendant for dealing in stolen car parts. The state prosecutor then referred the case to the U.S. Attorney's office to proceed on a money laundering forfeiture action. The state prosecutor was deputized as a special assistant U.S. Attorney. The claimant argued that

FORFEITURE (DOUBLE JEOPARDY) PAGE 3

the proceeds from the forfeiture would be given to the state. This was sufficient to require a hearing on whether an exception to the dual sovereignty doctrine applied, as set out in Bartkus v. Illinois, 359 U.S. 121 (1959). This exception applies when one sovereign is acting "as a tool" for another. Before reaching the Bartkus issue, the Second Circuit conducts a lengthy analysis of the double jeopardy jurisprudence in the forfeiture context..

United States v. Brophil, 899 F.Supp. 1257 (D.Vt. 1995): Even if a person whose property is forfeited fails to file a claim to the property, he may assert a double jeopardy bar to a subsequent criminal prosecution which is based on the same criminal conduct as the uncontested civil forfeiture. Because the double jeopardy protection bars double punishment (in addition to being put in jeopardy twice), the court must consider not simply whether there was a prior proceeding, but whether there was a prior punishment for the same conduct. A prior forfeiture, whether contested or not, represents a prior punishment.

United States v. Perez, 70 F.3d 345 (5th Cir. 1995): The Fifth Circuit joins several other Circuits in holding that a prior civil forfeiture bars a subsequent criminal case which is based on the same criminal conduct. In this case, the property (a car) was forfeited because it facilitated a drug transaction. The forfeiture was the result of a court-approved settlement between the parties of the forfeiture action. In a proceeds case, the court held, the court must engage in a case-by-case analysis to determine if the forfeiture was remedial, as opposed to punitive. See United States v. Tilley, 18 F.3d 295 (5th Cir. 1994).

United States v. Sherrett, 877 F.Supp. 519 (D.Or. 1995): The prior forfeiture proceeding against the defendant's property was predicated on the same conduct as the indicted conduct: a marijuana conspiracy involving the defendant and several others. The government could have proceeded in the forfeiture actions on the basis of specific transactions, but chose, instead, to proceed on a theory that there was a widespread marijuana conspiracy. Because this was the basis of the forfeiture actions, which resulted in a judgment against the defendant, the conspiracy indictment was barred by the double jeopardy clause.

Gainer v. United States, 904 F.Supp. 1234 (D.Kan. 1995): Even if a defendant did not filed a claim for property which had been seized from him in connection with a drug offense, the double jeopardy clause could bar a subsequent criminal prosecution. What counts is whether the defendant has been punished, not whether he has appeared in a prior proceeding. Here, the seizure of the car, which was titled in the defendant's name, unmistakably amounted to punishment, regardless of whether the defendant appeared in the case.

FORFEITURE (EXTENT OF FORFEITURE; PROPORTIONALITY)

Alexander v. United States, 113 S.Ct. 2766 (1993): Pursuant to 18 U.S.C. 1963, the RICO in personam forfeiture procedure, the forfeiture of defendant's entire adult entertainment inventory (including constitutionally protected material) was not violative of the first amendment. However, the in personam nature of the forfeiture proceeding must pass muster under the excessive fines clause of the eighth amendment.

Austin v. United States, 113 S.Ct. 2801 (1993): The Eighth Amendment applies to civil forfeiture proceedings under 21 U.S.C. 881. The Eighth Amendment is not limited to criminal cases -- it applies to any form of punishment and civil forfeiture amounts to punishment.

United States v. McKeithen, 822 F.2d 310 (2d Cir. 1987): The Second Circuit holds that real estate is forfeitable only to the extent that it affords a defendant influence over the CCE enterprise. That is, there is a proportionality requirement which precludes the forfeiture of an entire tract of land if only part of it was used to afford an influence over the enterprise. In this case, there were two buildings located on one piece of property. One building was used as part of the defendant's enterprise, the other was not. The Court holds that only the first building may be forfeited.

United States v. All Those Certain Lots In Virginia Beach, 657 F.Supp. 1062 (E.D.Va. 1987): The district court holds that real property may be forfeited under a facilitation theory only if there is a "substantial connection" between the property and the underlying illegal transaction.

United States v. Two Tracts of Real Property Containing 30.80 Acres, 665 F.Supp. 422 (N.D.N.C. 1987): The district court holds that each tract of land for which the Government has introduced evidence that forfeiture is appropriate should be forfeited. However, the Government must carry its burden of proof with respect to each tract of land individually and not as a collective whole.

United States v. Busher, 817 F.2d 1409 (9th Cir. 1987): The Court holds that the Eighth Amendment's prohibition against cruel and unusual punishment prohibits a forfeiture order which is grossly disproportionate to the illegal conduct. In this case, the defendant was convicted of a RICO violation for filing false statements and committing acts of mail fraud. His entire corporation was forfeited as well as various real estate interests which were owned by the corporation. The Court holds that this was disproportionate to the offense.

FORFEITURE (EXTENT OF FORFEITURE; PROPORTIONALITY) Page 2

United States v. Littlefield, 821 F.2d 1365 (9th Cir. 1987): The owner used a small portion of a 40 acre parcel of property to grow marijuana. The Court held that forfeiture of the entire parcel was proper under the forfeiture statute. However, the Court states that the district court must determine whether such forfeiture is disproportionate and a violation of the Eighth Amendment. The Court held that the district court should consider the value of the illegal drugs and the nexus between the portion of the real estate used to grow the drugs and the rest of the real estate.

United States v. $280,505, 655 F.Supp. 1487 (S.D.Fla. 1986): Marijuana residue found in the trunk of the defendant's BMW following his arrest for reckless driving supported forfeiture of the car as well as $280,000 in small bills found inside.

United States v. Securities That Represent Robbins' Interest In Brooks, Weinger, Robbins & Leeds, 42 Crim.L.Rep. 2055 (S.D.N.Y. 1987): The defendant, a stockbroker, was prosecuted for possession and sale of cocaine. Much of his dealings were carried on at his office. The Government sought to forfeit his interest in the stockbrokerage firm on the basis that his holdings in this firm facilitated his illicit activities. The District Court holds that no such forfeiture would be permitted. The Court holds that an intangible interest as a partner in a firm is not forfeitable although it does not rule out the possibility that had the defendant had a certificate or other tangible interest in the firm, it might be subject to forfeiture.

United States v. Benevento, 836 F.2d 129 (2d Cir. 1988): The provisions of 853 which provide for the forfeiture of any property or proceeds derived from narcotics violation creates joint and several liability. A defendant's forfeiture is not limited to his share of the profits from the drug deal, but extends to the totality of profits from a drug deal from which he was a participant.

United States v. Horak, 833 F.2d 1235 (7th Cir. 1987): The defendant was convicted of RICO and the issue was what would be forfeited. The defendant was the head of a garbage collection company who was convicted of bribery offenses. The Government sought to forfeit his salary, profit sharing, and other benefits from his company. The Seventh Circuit rejected the Government contention that a defendant acquires or maintains an interest in violation of the racketeering law simply by virtue of the fact that his racketeering activities "enhance" his performance within an enterprise. Instead, a "but for" test is required. FORFEITURE (EXTENT OF FORFEITURE; PROPORTIONALITY) Page 3

United States v. One Lear Jet, 861 F.2d 868 (6th Cir. 1988): A trace amount of cocaine was found on the defendant airplane. The amount was so small that it was invisible to the naked eye and could not even be seen with a magnifying glass. The Sixth Circuit holds that absent any evidence that the Jet was used at any time for purposes of transporting drugs, forfeiture was impermissible in this case.

United States v. Robinson, 721 F.Supp. 1541 (D.R.I. 1989): The defendant used her apartment in connection with the commission of a drug offense. The Government sought to forfeit her lease on the apartment as well as the federal housing assistance payments which subsidized it. The trial court held that this was inappropriate in light of the fact it would take from the defendant her home and the only means by which she could obtain housing for herself and her children.

United States v. Regan, 726 F.Supp. 447 (S.D.N.Y. 1989): The Southern District of New York holds that the Eighth Amendment "proportionality analysis" applies to RICO criminal forfeitures. The defendants were prosecuted under RICO for various mail fraud, wire fraud, securities fraud and tax violations. The District Court holds that forfeiture of the defendant's entire partnership interest in their company, plus salary and management fees "seems so excessive as to breach Eighth Amendment constraints, if those constraints are to have any applicability to forfeiture."

United States v. One 1980 Rolls Royce, 905 F.2d 89 (5th Cir. 1990): To the extent that a claimant can establish that non-drug proceeds were used to acquire property, such property is not subject to forfeiture. The Government contended in this case that an entire asset is forfeitable if any amount of drug money was used to acquire it. The Court held that forfeitability does not "spread like a disease from one infected mortgage payment to the entire interest in the property acquired prior to the payment." Only the actual proceeds of drug transactions are forfeitable.

United States v. Sarbello, 985 F.2d 716 (3rd Cir. 1993): The Eighth Amendment applies to forfeitures. Looking to Solem v. Helm, 463 U.S. 277 (1983) and Harmelin v. Michigan, 111 S.Ct. 2680 (1991) for guidance, the court holds that the extent of forfeiture should mirror the extent of the criminal activity, the punishment imposed on like offenders in the same jurisdiction and the punishment imposed on like offenders in other jurisdictions. The court should also consider the personal benefit gained by the defendant, as well as the extent to which the property was tainted by the criminal conduct. This was a RICO forfeiture action, and thus the forfeiture was in personam. FORFEITURE (EXTENT OF FORFEITURE; PROPORTIONALITY) Page 4

United States v. Real Property at 835 Seventh St., Rensselaer, N.Y., 832 F.Supp. 43 (N.D.N.Y. 1993): The government's effort to seize a house with over $69,000 in equity based on a seven gram marijuana sale, in addition to the possssion of six additional ounces, violates the Eighth Amendment.

United States v. $448,342.85, 969 F.2d 474 (7th Cir. 1992): In a money-laundering forfeiture case, an entire bank account is not forfeitable simply because some forfeitable money was deposited in the account. The government must prove that the amount of the fraudulently obtained money exceeded the balance at the time of seizure; and the defendant must be unable to show the existence of a legitimate source of other money in the account. The government's argument that an account "used" to launder fraudulently obtained money is forfeitable in its entirety for that reason alone was rejected.

United States v. Real Property at 835 Seventh St., Rensselaer, N.Y., 832 F.Supp. 43 (N.D.N.Y. 1993): Previously, the court had held that seizure of a house based on the sale of seven grams of marijuana was excessive (see, supra). The government sought to sell the property and to remit part of the proceeds to the claimant, hoping to cure the disproportionality in that manner. The district court rejected this proposal. Even post-Austin, this is an inappropriate remedy.

United States v. Certain Real Property . . .38 Whalers Cove Dr, Babylon, N.Y., 954 F.2d 29 (2d Cir. 1991): A civil forfeiture may be sufficiently punitive that it implicates Eighth Amendment concerns. Here, the defendant sold $250 worth of cocaine. This authorized the seizure of his condominium. Because of the high fines and prison sentences associated with drug offenses, the seizure of the condo -- with equity of about $68,000 -- was not disproportionate to the offense.

United States v. One Single Family Residence, 13 F.3d 1493 (11th Cir. 1994): The forfeiture of the claimants' house, worth approximately $150,000, under the gambling forfeiture statutes was a disproportionate penalty. The claimants home was the site of a weekly poker game attended by friends and relatives. FORFEITURE (EXTENT OF FORFEITURE; PROPORTIONALITY) Page 5

United States v. One Parcel of Property Located at Shelly's Riverside Heights, 851 F.Supp. 633 (M.D.Pa. 1994): The claimant was charged with possessing ten kilograms of marijuana on his property. The district court held that forfeiting 10 acres of land on this basis violated the Eighth Amendment. Though the crime was serious, in the realm of criminal prosecutions, it was not a crime of "tremendous gravity." There was no evidence of an intent to distribute and no evidence that any of the 10 acres was involved, other than the cabin in which the marijuana was found. Finally, in the criminal case, the district court imposed no fine, but sentenced the defendant to two years in custody.

United States v. One Parcel of Real Property Located at 461 Shelby County Road 361, Pelham, Ala., 857 F. Supp. 935 (N.D.Ala. 1994): The police purchased cocaine and marijuana from the claimaints, at their home, and also discovered additional drugs during a search, totalling (both the sales and the fruit of the search) 448 grams of marijuana and 14 grams of cocaine. Both the defendant and his wife were convicted, the husband receiving a jail sentence, the wife receiving probation. The house had equity of approximately $70,000.00. Forfeiting the property represents an excessive fine. A home is entitled to extra protection and the court looked to the restitution and fine statutes to determine if the forfeiture of the entire home was an appropriate punishment. Also, the court determined that the courts were not capable of carving up a forfeiture to make it non-excessive. In this case, the forfeiture of the home was excessive.

United States v. Two Parcels of Property at Castle Street, 31 F.3d 35 (2d Cir. 1994): Parcels of property separately described in the local land records, whether or not conveyed to an owner by a single instrument, should be considered separately for forfeiture purposes except where it is unreasonable or physically impossible to treat the property separately. Thus, if there are two separate lots, the trial court must determine the forfeitability of each. And if the owner is asserting an innocent owner defense, it must be evaluated separately with regard to each lot. Thus, the owner may be found to have known about the drug use on one lot, but not the other. In such a case, only one lot can be forfeited.

United States v. Certain Real Property Located at 2408 Parliament, Sterling Heights, Mich., 859 F.Supp. 1075 (E.D.Mich. 1994): Three factors should be considered in a proportionality analysis: (1) How extensive was the use of the property in the underlying crime? (2) What is the value of the property? (3) Given the extent of the property's use in the crime and its value, is forfeiture an excessive penalty? In this case, the forfeiture of a $87,000 piece of property was not found to be excessive in light of the defendant's use of the property to grow over 400 marijuana plants.

FORFEITURE (EXTENT OF FORFEITURE; PROPORTIONALITY) Page 6

United States v. Chandler, 36 F.3d 358 (4th Cir. 1994): The Fourth Circuit adopted the "instrumentality" test for determining an excessive fine claim in a forfeiture action. Under this standard, the court focuses on the relationship of the property to the offense, rather than the proportionality of the "fine" to the crime.

United States v. Wild, 47 F.3d 669 (4th Cir. 1995): In United States v. Chandler, 36 F.3d 358 (4th Cir. 1994), the Fourth Circuit held that proportionality analysis was not appropriate in a civil forfeiture proceeding. Rather, the focus is entirely on the extent of the property's connection to the underlying offense. In a criminal forfeiture proceeding, however, the court holds that the proportionality anaylsis should be undertaken. The distinction is that in a criminal forfeiture proceeding, which is in personam, the defendant's culpability is the key, as opposed to an in rem proceeding, where the property's culpability is the key.

United States v. Real Property Located at 6380 Little Canyon Road, El Dorado (Price), 59 F.3d 974 (9th Cir. 1995): The Ninth Circuit adopts the dual instrumentality / proportionality test in assessing whether a forfeiture violates the Excessive Fines Clause of the Constitution. Under this test, the government bears the initial burden of establishing that the asset bears a "substantial relationship" to the criminal offense. The burden then shifts to the claimant to establish that the value of the asset is grossly disproportionate to the gravity of the offense and the role played by the claimant in the commission of the offense. In assessing the proportionality test, the court should consider the fair market value of the property; the subjective value of the property (a family home versus some other asset); the hardship to the defendant, including the effect on the defendant's family. Other considerations include: whether the owner was reckless, or negligent in allowing the property to be used for illegal purposes; whether the owner was directly involved in the criminal offense; the harm caused by the illegal conduct, including (in drug cases) the amount of drugs, the duration of the illegal activity and the impact of the criminal conduct on the community. If the forfeiture of an entire tract of land would be disproportionate to the crime, the court may order that only a part of the land be forfeited.

United States v. $69,292 (Faheemi), 62 F.3d 1161 (9th Cir. 1995): The defendant was about to board a flight out of the country and filled out a currency form indicating that he was carrying $5,000 in currency. He was searched and was found to have in excess of $69,000.00. He was prosecuted for this offense. Later, the government sought to forfeit the money. This was barred by the double jeopardy clause. Clearly, the forfeiture of the money represents punishment. The lower court must decide, on remand, whether the defendant is the owner of the money, and thus allowed to assert the double jeopardy protection. With regard to the

FORFEITURE (EXTENT OF FORFEITURE; PROPORTIONALITY) Page 7

Excessive Fines Clause issue, the Ninth Circuit held that the forfeiture of the entire amount could be an excessive fine: the criminal offense is the failure to report the money, not the possession of the money. The lower court must consider the various "proportionality test" factors which were set out in the court's previous El Dorado decision in assessing whether the forfeiture of the entire amount of the currency is excessive in relation to the reporting violation.

United States v. Certain Real Property located at 11869 Westshore Dr., Putnam, Mich., 70 F.3d 923 (6th Cir. 1995): The Sixth Circuit declined to articulate a specific test to be used in making the Austin Excessive Fines Clause analysis, but approved the lower court's use of the hybrid instrumentality / proportionality test. The court reviews the tests which have been adopted by every other Circuit before simply holding that the forfeiture was not "excessive" in this case, regardless of the test which was used.

United States v. One 1990 Ford Ranger Truck, 876 F.Supp. 1283 and 888 F.Supp. 1170 (N.D.Ga. 1995): The claimant brought some mushrooms to a Grateful Dead concert in Atlanta. At trial, the jury concluded that the defendant's pickup truck should be forfeited because the mushrooms were transported in the pickup to the concert. The district court entered judgment in favor of the claimant on the basis of the Excessive Fines Clause. The connection between the truck and the mushrooms was too attenuated to satisfy the Eighth Amendment. There was no evidence that the truck was ever used for any other drug activities, or that it was purchased with drug proceeds. The fact that the claimant was about to divide and then digest the mushrooms in the "privacy" of the truck does not alter the fact that the truck was not a significant facet of the drug offense. For the property to be the site of illegal activity, without more, does not render the property an integral part of the activity. FORFEITURE (INNOCENT OWNER)

United States v. Parcel of Land Known as 92 Buena Vista Ave. (Goodwin), 937 F.2d 98 (3rd. Cir. 1991): The claimant was the girlfriend of a drug dealer. The dealer gave substantial amounts of money to his girlfriend with which she purchased a house. The girlfriend was not a "bona fide purchaser" of the currency, but she was an innocent owner. 881 does not require that the claimant be a bona fide purchaser in order to be an innocent owner. The result is otherwise under 853. The United States Supreme Court affirmed, 112 S.Ct. 1264 (1993): the "relation back" principle codified at 881(h) does not automatically vest title in the government at the time of the offending conduct; it merely means that the government's title relates back to that time once forfeiture is decreed, which can only occur if there is no innocent owner. Also, as held by the Third Circuit, the term "owner" encompasses more than simply a bona fide purchaser, and includes people, such as the claimant here, who received the property as a gift.

United States v. 163.25 Acre of Land, 663 F.Supp. 1119 (W.D.Ky. 1987): The Court holds that the Government was not justified in seeking forfeiture of a landowner's property after marijuana was found thereon. The landowners were not indicted for the marijuana and had no idea that the marijuana was on their land. The Court holds that fees should be paid to the innocent owners for having to defend this action.

United States v. One 1981 Datsun, 644 F.Supp. 1280 (E.D.Pa. 1986): The legal owner of an automobile used in an unlawful drug transaction is an innocent owner and forfeiture of his automobile is improper. The car owner's daughter used the car for a drug transaction totally unbeknownst to the owner.

United States v. Reckmeyer, 836 F.2d 200 (4th Cir. 1987): The Fourth Circuit holds that general creditors and creditors secured by specific assets have standing to make claims against property subject to forfeiture under 853. Creditors are permitted to claim that they were bona fide purchasers and may contest the forfeitability of a particular asset in attempting to recover their debts. The claimant in this case, the father of the defendant, knew that the defendant and the defendant's brother were under criminal investigation and that the assets from the brother had already been seized. Nevertheless, the father in good faith purchased the property of the defendant for value. The Court holds that the Government failed to demonstrate that the father purchased the property as part of a sham transaction to defeat the Government's forfeiture.

United States v. 155' Fishing Vessel Known As "The Soul", 656 F.Supp. 967 (D.Mass. 1987): The Government attempted to seize a fishing vessel which was alleged to have been used to facilitate the transportation of marijuana. The claimant established that this vessel was never used FORFEITURE (INNOCENT OWNER) Page 2

or intended to be used to facilitate the transportation of marijuana. The claimant's brother, who was the defendant in the criminal case, stated that it was another vessel that he used and he was never allowed by the claimant to use this boat for smuggling purposes.

United States v. One 1984 Chevrolet Truck, 682 F.Supp. 1221 (N.D.Ga. 1988): The District Court holds that the use of a truck to transport one illegal alien to work for 10 days was insufficient to justify forfeiture. The Claimant introduced evidence that neither he nor the truck driver were aware of the alien's illegal status.

United States v. Real Property Titled In Name Of Shashin, Ltd., 680 F.Supp. 332 (D.Hawaii 1987): An innocent mortgagee may foreclose on property which is the subject of forfeiture proceedings. However, a mortgagee's request that property be transferred before closure is premature prior to the Government's election whether to pay the mortgage amount which is claimed to be owing.

United States v. Santoro, 866 F.2d 1538 (4th Cir. 1989): There was a sufficient connection between illegal drug trafficking and the property in this case to justify forfeiture. However, because the claimant's children were beneficial owners of one half of the property, they should have been permitted to challenge the forfeiture and retain their interest in the property.

United States v. One Single Family Residence Located At 15621 S.W. 209th Avenue, 699 F.Supp. 1531 (S.D.Fla 1988): The Claimant had sufficient proof that she was not aware that her husband was engaged in drug trafficking. Therefore she was entitled to the return of her interest in the real estate which was otherwise subject to forfeiture because of the property's connection to the husband's illegal activities. United States v. Lots 12, 13, 14, and 15, Keeton Heights Subdivision, 869 F.2d 942 (6th Cir. 1989): A husband and wife jointly owned real property. The husband used the house to facilitate a drug transaction, but the wife was totally innocent and unaware of these transactions. The Government could not obtain summary judgment against the husband and wife. The wife was entitled to offer evidence at trial to support her innocent owner defense.

United States v. Marks, 703 F.Supp. 623 (E.D.Mich. 1988): Following the defendant's conviction of sale and distribution of cocaine, the Government sought to forfeit certain property. However, his wife was an innocent owner of certain of the assets and she could not be deprived of these assets solely on the basis of her spouse's participation in the FORFEITURE (INNOCENT OWNER) Page 3

criminal enterprise. The Government may not divest an innocent spouse of lawfully held property.

United States v. Real Property Known As 6109 Grub Road, 886 F.2d 618 (3rd Cir. 1989): An innocent owner defense is available to an owner of property who can establish that the illegal activity was conducted either without his knowledge or without his consent. The fact that the owner may be aware of illegal activity, but does not consent to it, does not deprive him of an innocent owner defense.

United States v. One 1980 Bertram 58 Foot Motor Yacht, 876 F.2d 884 (11th Cir. 1989): The Eleventh Circuit holds that to prevail on a defense of innocent ownership, a claimant must prove not only that he was uninvolved in and unaware of the activity upon which forfeiture is sought, but also that he did everything that reasonably could be expected to prevent the activity.

United States v. Premises Known As 171-02 Liberty Avenue, Queens, New York, 710 F.Supp. 46 (E.D.N.Y. 1989): The District Court holds that an innocent owner defense is available to an individual who owns the building and who is aware of illicit activities but who does not consent to the use of the building for purposes of drug trafficking.

United States v. Real Estate at 11885 S.W. 46th Street, Miami, Florida, 715 F.Supp. 355 (S.D.Fla. 1989): The wife of a convicted drug dealer was an innocent owner and thus was entitled to keep one-half of the interest in the forfeited residence of the drug dealer.

United States v. Real Estate Located at Fellows Tracts, C,D,E, and F of Pine Island Estates, 715 F.Supp. 360 (S.D.Fla. 1989): The Government placed a notice of lis pendens on property which was subject to forfeiture. Purchasers of the property who had no actual knowledge of the lis pendens were innocent owners for purposes of the forfeiture statutes.

United States v. One Single Family Residence Located At 15621 S.W. 209th Avenue, 894 F.2d 1511 (11th Cir. 1990): No portion of property held in tenancy by entirety by an innocent spouse and her husband who allegedly sold cocaine could be forfeited. This is because once the drug dealer loses his interest, as a matter of state law, the innocent spouse automatically acquires an interest in the entire property. Thus, there is nothing for the Government to take.

FORFEITURE (INNOCENT OWNER) Page 4

In re One 1985 Nissan 300 ZX, 889 F.2d 1317 (4th Cir. 1989): The Fourth Circuit holds that innocent heirs may not acquire an interest in property that is subject to forfeiture. This is because the Government acquires its interest at the time of the illegal act and the heirs have not acquired their interest at that time.

United States v. 60 Acres Located in Etowah County, 736 F.Supp. 1579 (N.D.Ala. 1990): A woman who suffered from post-traumatic stress syndrome and who suffered from intense fear of her husband was an innocent owner of the property who did not voluntarily "consent" to the illicit use of the property for narcotics purposes. The Eleventh Circuit REVERSED. 930 F.2d 857 (11th Cir. 1991): Absent a showing that the woman had been threatened with immediate harm unless she consented to the illicit use of the property, the duress defense to forfeiture was not available.

United States v. Real Property Located at 2525 Lee Roy Lane, 910 F.2d 343 (6th Cir. 1990): In Michigan, a woman who had an interest as a tenant by the entirety in residential property that was ordered forfeited because of her husband's use of the property in connection with his drug transaction, continues to retain that same interest following the forfeiture. However, the Government succeeds to the husband's role as the co-tenant.

United States v. Certain Real Property in Premises Known As 890 Noyac Road, 739 F.Supp 111 (E.D.N.Y. 1990): The Eastern District of New York includes that an innocent owner must establish that he neither knew of, nor consented to the criminal activity on the property.

United States v. One Parcel of Property Located at Route 1, Box 137, Randolph, Chilton County, 743 F.Supp. 802 (N.D.Ala. 1990): The district court concludes that in order to establish an innocent owner defense, the claimant need only show that the illegal acts were committed without his actual knowledge. It is not necessary to prove that the owner lacked constructive knowledge, or that the owner took reasonable steps to prevent the illegal activity. The Court distinguishes Eleventh Circuit cases which seem to suggest otherwise by concluding that a forfeiture under 881(a)(7)is different than forfeitures under 881(a)(4) or other forfeiture statutes.

United States v. Alright Title and Interest In Property And Premises Known As 710 Main Street, Peekskill, New York, 744 F.Supp. 510 (S.D.N.Y. 1990): The owner of the bar did not consent to the use of the bar for illegal purposes and thus established a viable innocent owner defense to the forfeiture. The Court concluded that the FORFEITURE (INNOCENT OWNER) Page 5

innocent owner defense is available to an owner who lacks knowledge or who did not consent to the illicit use of the property. It is the burden of the claimant to show an absence of actual knowledge. It is not necessary for the claimant to prove, however, that he has done all he could reasonably be expected to do to prevent the prescribed use of his property in order to establish lack of consent.

United States v. Real Property & Improvements Located At 5000 Palmetto Drive, Fort Pierce, 928 F.2d 373 (11th Cir. 1991): The title holder to property adequately showed that she was an innocent owner. The claimant's son resided in the house; the claimant did not. The son was involved in drug transactions there, but the mother never consented to such activity and specifically instructed her son not to engage in any illegal activities at the house. The district court did not err in finding that the mother was an innocent owner.

United States v. Lot 9, Block 2 of Donnybrook Place, Harris Co., Texas, 919 F.2d 995 (5th Cir. 1990): The trial court erred in granting summary judgment in this forfeiture action in light of the disputed factual issues regarding whether the wife was involved in her husband's drug activities. The Court does not decide, however, whether it is necessary for the innocent owner claimant to decide whether she had a lack of both knowledge and consent. (The court notes the Circuit split on this issue -- the Second requires that the claimant show either a lack of knowledge or a lack of consent; the Ninth requires the claimant to show a lack of consent and a lack of knowledge).

United States v. All Right Title, 710 Main Street, 753 F.Supp. 121 (S.D.N.Y. 1991): The claimant took a number of steps to rid drugs from the defendant premises (a restaurant and bar). He had fired a bartender, closed the restrooms, closed off the rear portion of the restaurant and installed signs. Though the claimant obviously was aware of the drug problem at the premises, his steps to remedy the problems established his innocent owner defense.

United States v. Certain Property, 418 57th St., 922 F.2d 129 (2d Cir. 1991): Though the owners of the real estate were aware of the drug trafficking at the premises, there was an issue of fact as to whether they consented to the use of the property for this purpose (by their failure to take adequate measures to terminate the trafficking). The issue was not ripe for summary judgment and the trial court erred in granting summary judgment.

FORFEITURE (INNOCENT OWNER) Page 6

United States v. Property . . .908 T Street, 770 F.Supp. 697 (D.D.C. 1991): The claimant was entitled to summary judgment on his innocent owner claim to the property. He indisputably did not consent to the use of the property for an illicit purpose and may not have known of the presence of drugs at the premises.

United States v. One Parcel of Real Estate at 1012 Germantown Road, 963 F.2d 1496 (11th Cir. 1992): Under both 881(a)(6) and 881(a)(7), an innocent owner must prove that he has taken all reasonable steps to prevent the illicit use of the property in order to establish the innocent owner defense.

United States v. Parcel of Real Property Known as 1500 Lincoln Ave, 949 F.2d 73 (3rd Cir. 1991): Where a wife is an innocent owner of property and the property is held as a tenancy by the entireties, the government may forfeit the husband's interest (where he has committed the illegal acts) and the wife is entitled to full and exclusive use of the property during her lifetime. If her husband dies first, then she is entitled to full fee simple title to the property.

United States v. One Parcel of Land Located at 7326 Highway 45 North, 965 F.2d 311 (7th Cir. 1992): A corporation owned a parcel of land, consisting of a tavern, a house, two cabins and a garage. The corporation was owned by a son and his two parents. The son engaged in drug dealing at the site. Because his parents did not know of this illegal activity and did not consent to it, the corporation could assert a valid innocent owner defense.

United States v. One Single Family Residence Located at 6960 Miraflores Ave, 995 F.2d 1558 (11th Cir. 1993): A lending institution sought refuge in the innocent owner defense to forfeiture of its interest in the residence. The trial court held that the institution "should have known" that the property was purchased with drug proceeds. This is the wrong standard. Though the borrower was a Panamanian shell corporation and the financial statement was not audited, the relevant question is whether the claimant actually knew, not whether the claimant should have known.

FORFEITURE (INNOCENT OWNER) Page 7

United States v. Premises Known as 717 South Woodward St., Allentown, 2 F.3d 529 (3rd Cir. 1993): The innocent owner claimants offered an affidavit that they were unaware of the premise's co- owner's drug dealing. This, alone, created an issue of fact which precluded granting summary judgment to the government. Even in the light of circumstantial evidence to the contrary, the claimants' assertions of innocence were sufficient to create a genuine factual issue.

United States v. Two Parcels of Property at Castle Street, 31 F.3d 35 (2d Cir. 1994): Parcels of property separately described in the local land records, whether or not conveyed to an owner by a single instrument, should be considered separately for forfeiture purposes except where it is unreasonable or physically impossible to treat the property separately. Thus, if there are two separate lots, the trial court must determine the forfeitability of each. And if the owner is asserting an innocent owner defense, it must be evaluated separately with regard to each lot. Thus, the owner may be found to have known about the drug use on one lot, but not the other. In such a case, only one lot can be forfeited.

United States v. One 1973 Rolls Royce, 43 F.3d 794 (3rd Cir. 1994): A reputed drug dealer gave his attorney a Rolls Royce in payment of part of the fee (actually, to reimburse the attorney for expenses incurred at a victory party). The attorney was unaware of the car's use to facilitate drug transactions at the time the car was being used for that purpose, though he was arguably aware of that at the time he received the car. The court first held that in determining whether the claimant had knowledge, a willful blindness standard could be used, which is a subjective test, focusing on the claimant's actual knowledge, or efforts to remain ignorant. The mere fact that the claimant is aware that the defendant is drug dealer would not be enough, in and of itself, to establish that the claimant was willfully blind to the forfeitability of the car. The car in this case was seized pursuant to 881(a)(4)(C) -- a conveyance used to facilitate drug trafficking. The innocent owner defense for conveyances (881(a)(4)(C)), like the innocent owner defense for real property (881(a)(7)), allows a claimant to show that he was either unaware of the criminal activity, or did not consent to it. The Third Circuit concludes that, pursuant to 92 Buena Vista Avenue, even if the lawyer knew when he received the car that it was tainted, this would not support a forfeiture, because he was not aware of, and did not consent to, the illegal acts at the time they occurred. NOTE: The Eleventh Circuit rejected the holding in this case in United States v. One Parcel of Real Estate located at 6640 S.W. 48th Street, Miami, Fla. (Larraz), 41 F.3d 1448 (11th Cir. 1995), where, like here, the claimant was an attorney who received the tainted property, knowing the property was forfeitable when he received it, but not knowing about the offense which tainted the res when the offense occurred.

FORFEITURE (INNOCENT OWNER) Page 8

United States v. Route 2 . . . (Dyer's Trout Farms, Inc.), 60 F.3d 1523 (11th Cir. 1995): The property which the government sought to forfeit was owned by a corporation. On the property, the president, who also was the and majority shareholder, was growing marijuana. The other shareholders, however, were not aware of this illegal activity. Because the president's duties did not include growing marijuana, and the corporation did not benefit from this activity, the corporation would not be held liable for the misdeeds of the president. Where a corporate employee acts illegally (and not for the benefit of the corporation) the corporation can still assert an innocent owner defense.

United States v. Real Property Located at . . . Big Rock Drive, Malibu, 51 F.3d 1402 (9th Cir. 1995): Instructing the jury (via a special verdict form) that an innocent owner defense required proof that the property was purchased with legitimate funds was erroneous. Property may be purchased with tainted funds and the claimant may still prevail on an innocent owner defense (i.e., Buena Vista). FORFEITURE (STANDING)

United States v. Real Property & Improvements Located At 5000 Palmetto Drive, Fort Pierce, 928 F.2d 373 (11th Cir. 1991): Though the possession of bare legal title by one who does not exercise dominion and control over the property is insufficient to establish standing to challenge a forfeiture, the evidence in this case established that the claimant had standing. The claimant had the title to the property but allowed her son to live there, rent free, as long as he paid all the bills.

United States v. Miscellaneous Jewelry, 667 F.Supp. 232 (D.Md. 1987): The personal representative of an estate of an alleged drug trafficker had standing to contest the forfeiture of the alleged trafficker's property. The death of the alleged drug trafficker did not abate the Government's forfeiture action.

United States v. $267,961.07, 916 F.2d 1104 (6th Cir. 1990): The trial court erred in not permitting the defendant an opportunity to amend her claims so as to properly assert standing. The claim was filed on behalf of the purported legal guardian of the rightful claimant.

United States v. $260,242, 919 F.2d 686 (11th Cir. 1990): The trial court erred in preventing the claimant from amending his claim to show standing to contest the forfeiture of the assets. The claimant alleged that he was a bailee, but refused to identify the bailor. Although one in constructive possession of money is generally entitled to assert a claim in a forfeiture proceeding, if the claimant states that he is a bailee, he must identify the bailor. This is because the rule requires that he state that he is "duly authorized to make the claim."

Torres v. $36,256.80, 25 F.3d 1154 (2d Cir. 1994): A certificate of deposit was registered in the name of the claimant's husband, who had been convicted of drug dealing. The claimant, however, asserted that the C.D. was initially hers and that she had a beneficial interest in the asset. She claimed that she put the C.D. in her husband's name so he could obtain credit, and that he had agreed to give it back to her upon maturity. This evidence was sufficient to establish her standing to contest the forfeiture. She established that she was more than a general creditor of her husband; she had a valid constructive trust interest in the C.D.