[House Report 105-358]
[From the U.S. Government Publishing Office]
105th Congress Rept. 105-358
HOUSE OF REPRESENTATIVES
1st Session Part 1
_______________________________________________________________________
CIVIL ASSET FORFEITURE REFORM ACT
_______________________________________________________________________
October 30, 1997.--Ordered to be printed
_______
Mr. Hyde, from the Committee on the Judiciary, submitted the following
R E P O R T
[To accompany H.R. 1965]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 1965) to provide a more just and uniform procedure
for Federal civil forfeitures, and for other purposes, having
considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
TABLE OF CONTENTS
Page
The Amendment.............................................. 2
Purpose and Summary........................................ 19
Background and Need for the Legislation.................... 20
Hearings................................................... 36
Committee Consideration.................................... 36
Vote of the Committee...................................... 36
Committee Oversight Findings............................... 37
Committee on Government Reform and Oversight Findings...... 37
New Budget Authority and Tax Expenditures.................. 37
Congressional Budget Office Cost Estimate.................. 37
Constitutional Authority Statement......................... 41
Section-by-Section Analysis and Discussion................. 41
Changes in Existing Law Made by the Bill, as Reported...... 72
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Civil Asset
Forfeiture Reform Act''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title and table of contents.
Sec. 2. Creation of general rules relating to civil forfeiture
proceedings.
Sec. 3. Compensation for damage to seized property.
Sec. 4. Prejudgment and postjudgment interest.
Sec. 5. Seizure warrant requirement.
Sec. 6. Access to records in bank secrecy jurisdictions.
Sec. 7. Access to other records.
Sec. 8. Disclosure of grand jury information to Federal prosecutors.
Sec. 9. Use of forfeited funds to pay restitution to crime victims and
regulatory agencies.
Sec. 10. Enforcement of foreign forfeiture judgment.
Sec. 11. Admissibility of foreign business records.
Sec. 12. Conforming amendments to title 28, to Rules of Procedure, and
to the Controlled Substances Act.
Sec. 13. Inapplicability of the customs laws.
Sec. 14. Applicability.
Sec. 15. Jurisdiction and venue in forfeiture cases.
Sec. 16. Minor and technical amendments relating to 1992 forfeiture
amendments.
Sec. 17. Drug paraphernalia technical amendments.
Sec. 18. Certificate of reasonable cause.
Sec. 19. Authorization to share forfeited property with cooperating
foreign governments.
Sec. 20. Forfeiture of property used to facilitate foreign drug crimes.
Sec. 21. Forfeiture of proceeds traceable to facilitating property in
drug cases.
Sec. 22. Forfeiture of proceeds of certain foreign crimes.
Sec. 23. Civil forfeiture of coins and currency in confiscated gambling
devices.
Sec. 24. Clarification of judicial review of forfeiture.
Sec. 25. Technical amendments relating to obliterated motor vehicles
identification numbers.
Sec. 26. Statute of limitations for civil forfeiture actions.
Sec. 27. Destruction or removal of property to prevent seizure.
Sec. 28. In personam judgments.
Sec. 29. Uniform procedures for criminal forfeiture.
Sec. 30. Availability of criminal forfeiture.
Sec. 31. Discovery procedure for locating forfeited assets.
Sec. 32. Criminal forfeiture for money laundering conspiracies.
Sec. 33. Correction to criminal forfeiture provision for alien
smuggling and other immigration offenses.
Sec. 34. Repatriation of property placed beyond the jurisdiction of the
court.
Sec. 35. Right of third parties to contest forfeiture of substitute
assets.
Sec. 36. Archeological Resources Protection Act.
Sec. 37. Forfeiture of instrumentalities of terrorism, telemarketing
fraud, and other offenses.
Sec. 38. Forfeiture of criminal proceeds transported in interstate
commerce.
Sec. 39. Forfeitures of proceeds of Federal Food, Drug, and Cosmetic
Act violations.
Sec. 40. Forfeiture of counterfeit paraphernalia.
Sec. 41. Closing of loophole to defeat criminal forfeiture through
bankruptcy.
Sec. 42. Collection of criminal forfeiture judgment.
Sec. 43. Criminal forfeiture of property in Government custody.
Sec. 44. Delivery of property to the Marshals Service.
Sec. 45. Forfeiture for odometer tampering offenses.
Sec. 46. Pre-trial restraint of substitute assets.
Sec. 47. Hearings on pre-trial restraining orders; assets needed to pay
attorney's fees.
SEC. 2. CREATION OF GENERAL RULES RELATING TO CIVIL FORFEITURE
PROCEEDINGS.
(a) In General.--Chapter 46 of title 18, United States Code, is
amended by inserting the following new section after section 982:
``Sec. 983. Civil forfeiture procedures
``(a) Administrative Forfeitures.--(1)(A) In any nonjudicial civil
forfeiture proceeding under a civil forfeiture statute, with respect to
which the agency conducting a seizure of property must send written
notice of the seizure under section 607(a) of the Tariff Act of 1930
(19 U.S.C. 1607(a)), such notice together with information on the
applicable procedures shall be sent not later than 60 days after the
seizure to each party known to the seizing agency at the time of the
seizure to have an ownership or possessory interest, including a
lienholder's interest, in the seized article. If a party's identity or
interest is not determined until after the seizure but is determined
before a declaration of forfeiture is entered, such written notice and
information shall be sent to such interested party not later than 60
days after the seizing agency's determination of the identity of the
party or the party's interest.
``(B) If the Government does not provide notice of a seizure of
property in accordance with subparagraph (A), it shall return the
property pending the giving of such notice.
``(2) The Government may apply to a Federal magistrate judge (as
defined in the Federal Rules of Criminal Procedure) in any district
where venue for a forfeiture action would lie under section 1355(b) of
title 28 for an extension of time in which to comply with paragraph
(1)(A). Such an extension shall be granted based on a showing of good
cause.
``(3) A person with an ownership or possessory interest in the
seized article who failed to file a claim within the time period
prescribed in subsection (b) may, on motion made not later than 2 years
after the date of final publication of notice of seizure of the
property, move to set aside a declaration of forfeiture entered
pursuant to section 609 of the Tariff Act of 1930 (19 U.S.C. 1609).
Such motion shall be granted if--
``(A) the Government failed to take reasonable steps to
provide the claimant with notice of the forfeiture; and
``(B) the person otherwise had no actual notice of the
seizure within sufficient time to enable the person to file a
timely claim under subsection (b).
``(4) If the court grants a motion made under paragraph (3), it
shall set aside the declaration of forfeiture as to the moving party's
interest pending forfeiture proceedings in accordance with section 602
et seq. of the Tariff Act of 1930 (19 U.S.C. 1602 et seq.), which
proceedings shall be instituted within 60 days of the entry of the
order granting the motion.
``(5) If, at the time a motion under this subsection is granted,
the forfeited property has been disposed of by the Government in
accordance with law, the Government shall institute forfeiture
proceedings under paragraph (4). The property which will be the subject
of the forfeiture proceedings instituted under paragraph (4) shall be a
sum of money equal to the value of the forfeited property at the time
it was disposed of plus interest.
``(6) The institution of forfeiture proceedings under paragraph (4)
shall not be barred by the expiration of the statute of limitations
under section 621 of the Tariff Act of 1930 (19 U.S.C. 1621) if the
original publication of notice was completed before the expiration of
such limitations period.
``(7) A motion made under this subsection shall be the exclusive
means of obtaining judicial review of a declaration of forfeiture
entered by a seizing agency.
``(b) Filing a Claim.--(1) Any person claiming such seized property
may file a claim with the appropriate official after the seizure.
``(2) A claim under paragraph (1) may not be filed later than 30
days after--
``(A) the date of final publication of notice of seizure;
or
``(B) in the case of a person receiving written notice, the
date that such notice is received.
``(3) The claim shall set forth the nature and extent of the
claimant's interest in the property.
``(c) Filing a Complaint.--(1) In cases where property has been
seized or restrained by the Government and a claim has been filed, the
Attorney General shall file a complaint for forfeiture in the
appropriate court in the manner set forth in the Supplemental Rules for
Certain Admiralty and Maritime Claims, or shall include a forfeiture
count in a criminal indictment or information, or both, not later than
90 days after the claim was filed, or return the property pending the
filing of a complaint or indictment. By mutual agreement between the
Government and the claimants, the 90-day filing requirement may be
waived.
``(2) The Government may apply to a Federal magistrate judge (as
defined in the Federal Rules of Criminal Procedure) in any district
where venue for a forfeiture action would lie under section 1355(b) of
title 28 for an extension of time in which to comply with paragraph
(1). Such an extension shall be granted based on a showing of good
cause. If the reason for the extension is that the filing required by
paragraph (1) would jeopardize an ongoing criminal investigation or
prosecution or court-authorized electronic surveillance, the
application may be made ex parte.
``(3) Upon the filing of a civil complaint, the claimant shall file
a claim and answer in accordance with the Supplemental Rules for
Certain Admiralty and Maritime Claims.
``(d) Appointment of Counsel.--(1) If the person filing a claim is
financially unable to obtain representation by counsel and requests
that counsel be appointed, the court may appoint counsel to represent
that person with respect to the claim. In determining whether to
appoint counsel to represent the person filing the claim, the court
shall take into account--
``(A) the nature and value of the property subject to
forfeiture, including the hardship to the claimant from the
loss of the property seized, compared to the expense of
appointing counsel;
``(B) the claimant's standing to contest the forfeiture;
and
``(C) whether the claim appears to be made in good faith or
to be frivolous.
``(2) The court shall set the compensation for that representation,
which shall be the equivalent to that provided for court-appointed
representation under section 3006A of this title, and to pay such cost,
there are authorized to be appropriated such sums as are necessary as
an addition to the funds otherwise appropriated for the appointment of
counsel under such section.
``(3) The determination of whether to appoint counsel under this
subsection shall be made following a hearing at which the Government
shall have an opportunity to present evidence and examine the claimant.
The testimony of the claimant at such hearing shall not be admitted in
any other proceeding except in accordance with the rules which govern
the admissibility of testimony adduced in a hearing on a motion to
suppress evidence. Nothing in this paragraph shall be construed to
prohibit the admission of any evidence that may be obtained in the
course of civil discovery in the forfeiture proceeding or through any
other lawful investigative means.
``(e) Burden of Proof.--In all suits or actions brought for the
civil forfeiture of any property, the burden of proof at trial is on
the United States to establish, by a preponderance of the evidence,
that the property is subject to forfeiture. If the Government proves
that the property is subject to forfeiture, the claimant shall have the
burden of establishing any affirmative defense by a preponderance of
the evidence.
``(f) Innocent Owners.--(1) An innocent owner's interest in
property shall not be forfeited in any civil forfeiture action.
``(2) With respect to a property interest in existence at the time
the illegal conduct giving rise to the forfeiture took place, the term
`innocent owner' means an owner who--
``(A) did not know of the conduct giving rise to the
forfeiture; or
``(B) upon learning of the conduct giving rise to the
forfeiture, did all that reasonably could be expected under the
circumstances to terminate such use of the property.
``(3)(A) With respect to a property interest acquired after the
conduct giving rise to the forfeiture has taken place, the term
`innocent owner' means a person who, at the time that person acquired
the interest in the property, was a bona fide purchaser for value and
was at the time of the purchase reasonably without cause to believe
that the property was subject to forfeiture.
``(B) Except as provided in paragraph (4), where the property
subject to forfeiture is real property, and the claimant uses the
property as his or her primary residence and is the spouse or minor
child of the person who committed the offense giving rise to the
forfeiture, an otherwise valid innocent owner claim shall not be denied
on the ground that the claimant acquired the interest in the property--
``(i) in the case of a spouse, through dissolution of
marriage or by operation of law, or
``(ii) in the case of a minor child, as an inheritance upon
the death of a parent,
and not through a purchase. However, the claimant must establish, in
accordance with subparagraph (A), that at the time of the acquisition
of the property interest, the claimant was reasonably without cause to
believe that the property was subject to forfeiture, and was an owner
of the property, as defined in paragraph (6).
``(4) Notwithstanding any provision of this section, no person may
assert an ownership interest under this section--
``(A) in contraband or other property that it is illegal to
possess; or
``(B) in the illegal proceeds of a criminal act unless such
person was a bona fide purchaser for value who was reasonably
without cause to believe that the property was subject to
forfeiture.
``(5) For the purposes of paragraph (2) of this subsection a person
does all that reasonably can be expected if the person takes all steps
that a reasonable person would take in the circumstances to prevent or
terminate the illegal use of the person's property. There is a
rebuttable presumption that a property owner took all the steps that a
reasonable person would take if the property owner--
``(A) gave timely notice to an appropriate law enforcement
agency of information that led to the claimant to know the
conduct giving rise to a forfeiture would occur or has
occurred; and
``(B) in a timely fashion, revoked permission for those
engaging in such conduct to use the property or took reasonable
steps in consultation with a law enforcement agency to
discourage or prevent the illegal use of the property.
The person is not required to take extraordinary steps that the person
reasonably believes would be likely to subject the person to physical
danger.
``(6) As used in this subsection--
``(A) the term `civil forfeiture statute' means any
provision of Federal law providing for the forfeiture of
property other than as a sentence imposed upon conviction of a
criminal offense;
``(B) the term `owner' means a person with an ownership
interest in the specific property sought to be forfeited,
including a lien, mortgage, recorded security device, or valid
assignment of an ownership interest. Such term does not
include--
``(i) a person with only a general unsecured
interest in, or claim against, the property or estate
of another;
``(ii) a bailee unless the bailor is identified and
the bailee shows a colorable legitimate interest in the
property seized; or
``(iii) a nominee who exercises no dominion or
control over the property;
``(C) a person shall be considered to have known that the
person's property was being used or was likely to be used in
the commission of an illegal act if the person was willfully
blind.
``(7) If the court determines, in accordance with this subsection,
that an innocent owner had a partial interest in property otherwise
subject to forfeiture, or a joint tenancy or tenancy by the entirety in
such property, the court shall enter an appropriate order--
``(A) severing the property;
``(B) transferring the property to the Government with a
provision that the Government compensate the innocent owner to
the extent of his or her ownership interest once a final order
of forfeiture has been entered and the property has been
reduced to liquid assets; or
``(C) permitting the innocent owner to retain the property
subject to a lien in favor of the Government, to the extent of
the forfeitable interest in the property, that will permit the
Government to realize its forfeitable interest if the property
is transferred to another person.
To effectuate the purposes of this subsection, a joint tenancy or
tenancy by the entireties shall be converted to a tenancy in common by
order of the court, irrespective of state law.
``(8) An innocent owner defense under this subsection is an
affirmative defense.
``(g) Motion To Suppress Seized Evidence.--At any time after a
claim and answer are filed in a judicial forfeiture proceeding, a
claimant with standing to contest the seizure of the property may move
to suppress the fruits of the seizure in accordance with the normal
rules regarding the suppression of illegally seized evidence. If the
claimant prevails on such motion, the fruits of the seizure shall not
be admitted into evidence as to that claimant at the forfeiture trial.
However, a finding that evidence should be suppressed shall not bar the
forfeiture of the property based on evidence obtained independently
before or after the seizure.
``(h) Use of Hearsay at Pre-Trial Hearings.--At any pre-trial
hearing under this section in which the governing standard is probable
cause, the court may accept and consider hearsay otherwise inadmissible
under the Federal Rules of Evidence.
``(i) Stipulations.--Notwithstanding the claimant's offer to
stipulate to the forfeitability of the property, the Government shall
be entitled to present evidence to the finder of fact on that issue
before the claimant presents any evidence in support of any affirmative
defense.
``(j) Preservation of Property Subject to Forfeiture.--The court,
before or after the filing of a forfeiture complaint and on the
application of the Government, may--
``(1) enter any restraining order or injunction in the
manner set forth in section 413(e) of the Controlled Substances
Act (21 U.S.C. 853(e));
``(2) require the execution of satisfactory performance
bonds;
``(3) create receiverships;
``(4) appoint conservators, custodians, appraisers,
accountants or trustees; or
``(5) take any other action to seize, secure, maintain, or
preserve the availability of property subject to forfeiture
under this section.
``(k) Excessive Fines.--(1) At the conclusion of the trial and
following the entry of a verdict of forfeiture, or upon the entry of
summary judgment for the Government as to the forfeitability of the
property, the claimant may petition the court to determine whether the
excessive fines clause of the Eighth Amendment applies, and if so,
whether forfeiture is excessive. The claimant shall have the burden of
establishing that a forfeiture is excessive by a preponderance of the
evidence at a hearing conducted in the manner provided in Rule 43(e),
Federal Rules of Civil Procedure, by the Court without a jury. If the
court determines that the forfeiture is excessive, it shall adjust the
forfeiture to the extent necessary to avoid the Constitutional
violation.
``(2) The claimant may not object to the forfeiture on Eighth
Amendment grounds other than as set forth in paragraph (1), except that
a claimant may, at any time, file a motion for summary judgment
asserting that even if the property is subject to forfeiture, the
forfeiture would be excessive. The court shall rule on such motion for
summary judgment only after the Government has had an opportunity--
``(A) to conduct full discovery on the Eighth Amendment
issue; and
``(B) to place such evidence as may be relevant to the
excessive fines determination before the court in affidavits or
at an evidentiary hearing.
``(l) Pre-Discovery Standard.--In a judicial proceeding on the
forfeiture of property, the Government shall not be required to
establish the forfeitability of the property before the completion of
discovery pursuant to the Federal Rules of Civil Procedure,
particularly Rule 56(f) as may be ordered by the court or if no
discovery is ordered before trial.
``(m) Applicability.--The procedures set forth in this section
apply to any civil forfeiture action brought under any provision of
this title, the Controlled Substances Act, or the Immigration and
Naturalization Act.''.
(b) Conforming Amendment.--Section 274(b)(5) of the Immigration and
Naturalization Act (8 U.S.C. 1324(b)(5)) is amended--
(1) by striking ``the burden of proof shall lie upon such
claimant, except that probable cause shall be first shown for
the institution of such suit or action. In determining whether
probable cause exists,''; and
(2) by adding after and below subparagraph (C) the
following:
``The procedures set forth in chapter 46 of title 18, United States
Code, shall govern judicial forfeiture actions under this section.''
(c) Striking Superseded Provisions.--(1) Section 981(a) of title
18, United States Code, is amended by--
(A) striking paragraph (2); and
(B) striking ``Except as provided in paragraph (2), the''
and inserting ``The''.
(2) Paragraphs (4), (6), and (7) of section 511(a) of the
Controlled Substances Act (21 U.S.C. 881(a)) are each amended by
striking ``, except that'' and all that follows, each time it appears
and inserting a period.
(3) Paragraphs (2) and (3) of section 2254(a) of title 18, United
States Code, are each amended by striking ``, except that'' and all
that follows, each time it appears and inserting a period.
(4) Section 274(b)(1) of the Immigration and Naturalization Act (8
U.S.C. 1324(b)(1)) is amended by striking ``, except that'' and all
that follows and inserting a period.
(d) Release of Property.--Chapter 46 of title 18, United States
Code, is amended to add the following section after section 984:
``Sec. 985. Release of property to avoid hardship
``(a) A person who has filed a claim under section 983 is entitled
to release pursuant to subsection (b) of seized property pending trial
if--
``(1) the claimant has a possessory interest in the
property sufficient to establish standing to contest forfeiture
and has filed a nonfrivolous claim on the merits of the
forfeiture action;
``(2) the claimant has sufficient ties to the community to
provide assurance that the property will be available at the
time of the trial;
``(3) the continued possession by the United States
Government pending the final disposition of forfeiture
proceedings will cause substantial hardship to the claimant,
such as preventing the claimant from working, leaving the
claimant homeless, or preventing the functioning of a business;
``(4) the claimant's hardship outweighs the risk that the
property will be destroyed, damaged, lost, concealed,
diminished in value or transferred if it is returned to the
claimant during the pendency of the proceeding; and
``(5) none of the conditions set forth in subsection (c)
applies;
``(b)(1) The claimant may make a request for the release of
property under this subsection at any time after the claim is filed.
If, at the time the request is made, the seizing agency has not yet
referred the claim to a United States Attorney pursuant to section 608
of the Tariff Act of 1930 (19 U.S.C. 1608), the request may be filed
with the seizing agency; otherwise the request must be filed with the
United States Attorney to whom the claim was referred. In either case,
the request must set forth the basis on which the requirements of
subsection (a)(1) are met.
``(2) If the seizing agency, or the United States Attorney, as the
case may be, denies the request or fails to act on the request within
20 days, the claimant may file the request as a motion for the return
of seized property in the district court for the district represented
by the United States Attorney to whom the claim was referred, or if the
claim has not yet been referred, in the district court that issued the
seizure warrant for the property, or if no warrant was issued, in any
district court that would have jurisdiction to consider a motion for
the return of seized property under Rule 41(e), Federal Rules of
Criminal Procedure. The motion must set forth the basis on which the
requirements of subsection (a) have been met and the steps the claimant
has taken to secure the release of the property from the appropriate
official.
``(3) The district court must act on a motion made pursuant to this
subsection within 30 days or as soon thereafter as practicable, and
must grant the motion if the claimant establishes that the requirements
of subsection (a) have been met. If the court grants the motion, the
court must enter any order necessary to ensure that the value of the
property is maintained while the forfeiture action is pending,
including permitting the inspection, photographing and inventory of the
property, and the court may take action in accordance with Rule E of
the Supplemental Rules for Certain Admiralty and Maritime Cases. The
Government is authorized to place a lien against the property or to
file a lis pendens to ensure that it is not transferred to another
person. The Government, in responding to a motion under this
subsection, may, in appropriate cases, submit evidence ex parte in
order to avoid disclosing any matter relating to an ongoing criminal
investigation or pending trial.
``(4) If property returned to the claimant under this section is
lost, stolen, or diminished in value, any insurance proceeds shall be
paid to the United States and such proceeds shall be subject to
forfeiture in place of the property originally seized.
``(c) This section shall not apply if the seized property--
``(1) is contraband, currency or other monetary instrument,
or electronic funds unless such currency or other monetary
instrument or electronic funds constitutes the assets of a
business which has been seized,
``(2) is evidence of a violation of the law,
``(3) by reason of design or other characteristic, is
particularly suited for use in illegal activities; or
``(4) is likely to be used to commit additional criminal
acts if returned to the claimant.
``(d) Once a motion for the release of property under this section
is filed, the person filing the motion may request that the motion be
transferred to another district where venue for the forfeiture action
would lie under section 1355(b) of title 28 pursuant to the change of
venue provisions in section 1404 of title 28.''.
(e) Chapter Analysis.--The table of sections for chapter 46 of
title 18, United States Code, is amended--
(1) by inserting after the item relating to section 982 the
following:
``983. Civil forfeiture procedures.''; andQ03
(2) by inserting after the item relating to section 984 the
following:
``985. Release of property to avoid hardship.''.
(f) Civil Forfeiture of Proceeds.--Section 981(a)(1) of title 18,
United States Code, is amended--
(1) in subparagraph (C) by inserting before the period the
following: ``or any offense constituting `specified unlawful
activity' as defined in section 1956(c)(7) of this title or a
conspiracy to commit such offense''; and
(2) by striking subparagraph (E).
(g) Criminal Forfeiture of Proceeds.--Section 982(a)(2) of title
18, United States Code, is amended by--
(1) striking ``or'' at the end of subparagraph (A);
(2) inserting ``or'' after the comma at the end of
subparagraph (B); and
(3) inserting the following after subparagraph (B):
``(C) any offense constituting `specified unlawful
activity' as defined in section 1956(c)(7) of this title,''.
(h) Uniform Definition of Proceeds.--(1) Section 981(a) of title
18, United States Code, as amended by subsection (c), is amended--
(A) in paragraph (1), by striking ``gross receipts'' and
``gross proceeds'' wherever those terms appear and inserting
``proceeds''; and
(B) by adding the following after paragraph (1):
``(2) For purposes of paragraph (1), the term `proceeds' means
property of any kind obtained, directly or indirectly, as the result of
the commission of the offense giving rise to forfeiture, and any
property traceable thereto, and is not limited to the net gain or
profit realized from the commission of the offense. In a case involving
the forfeiture of proceeds of a fraud or false claim under paragraph
(1)(C) involving billing for goods or services part of which are
legitimate and part of which are not legitimate, the court shall allow
the claimant a deduction from the forfeiture for the amount obtained in
exchange for the legitimate goods or services. In a case involving
goods or services provided by a health care provider, such goods or
services are not `legitimate' if they were unnecessary.
``(3) For purposes of the provisions of subparagraphs (B) through
(H) of paragraph (1) which provide for the forfeiture of proceeds of an
offense or property traceable thereto, where the proceeds have been
commingled with or invested in real or personal property, only the
portion of such property derived from the proceeds shall be regarded as
property traceable to the forfeitable proceeds. Where the proceeds of
the offense have been invested in real or personal property that has
appreciated in value, whether the relationship of the property to the
proceeds is too attenuated to support the forfeiture of such property
shall be determined in accordance with the excessive fines clause of
the Eighth Amendment.''.
(2) Section 982 of title 18, United States Code, is amended--
(A) in subsection (a), by striking ``gross receipts'' and
``gross proceeds'' wherever those terms appear and inserting
``proceeds''; and
(B) in subsection (b), by adding at the end the following:
``(3) For purposes of subsection (a), the term `proceeds' has the
meaning set forth in section 981(a)(2).''.
SEC. 3. COMPENSATION FOR DAMAGE TO SEIZED PROPERTY.
(a) Tort Claims Act.--Section 2680(c) of title 28, United States
Code, is amended--
(1) by striking ``law-enforcement'' and inserting ``law
enforcement''; and
(2) by inserting before the period the following: ``,
except that the provisions of this chapter and section 1346(b)
of this title do apply to any claim based on the negligent
destruction, injury, or loss of goods, merchandise, or other
property, while in the possession of any officer of customs or
excise or any other law enforcement officer, if the property
was seized for the purpose of forfeiture but the interest of
the claimant is not forfeited''.
(b) Department of Justice.--
(1) In general.--With respect to a claim that cannot be
settled under chapter 171 of title 28, United States Code, the
Attorney General may settle, for not more than $50,000 in any
case, a claim for damage to, or loss of, privately owned
property caused by an investigative or law enforcement officer
(as defined in section 2680(h) of title 28, United States Code)
who is employed by the Department of Justice acting within the
scope of his or her employment.
(2) Limitations.--The Attorney General may not pay a claim
under paragraph (1) that--
(A) is presented to the Attorney General more than
1 year after it occurs; or
(B) is presented by an officer or employee of the
United States Government and arose within the scope of
employment.
SEC. 4. PREJUDGMENT AND POSTJUDGMENT INTEREST.
Section 2465 of title 28, United States Code, is amended--
(1) by inserting ``(a) In General.--'' before ``Upon''; and
(2) adding at the end the following:
``(b) Interest.--
``(1) Post-judgment.--Upon entry of judgment for the
claimant in any proceeding to condemn or forfeit property
seized or arrested under any Act of Congress, the United States
shall be liable for post-judgment interest as set forth in
section 1961 of this title.
``(2) Pre-judgment.--The United States shall not be liable
for prejudgment interest, except that in cases involving
currency, proceeds of an interlocutory sale, or other
negotiable instruments, the United States shall disgorge to the
claimant any funds representing--
``(A) interest actually paid to the United States
from the date of seizure or arrest of the property that
resulted from the investment of the property in an
interest-bearing account or instrument; and
``(B) for any period during which no interest is
actually paid, an imputed amount of interest that such
currency, proceeds, or instruments would have earned.
The United States shall provide the court with an accounting of
the amount actually earned or the amount that would have been
earned had the funds been invested in obligations of, or
guaranteed by, the United States.
``(3) Limitation on other payments.--The United States
shall not be required to disgorge the value of any intangible
benefits nor make any other payments to the claimant not
specifically authorized by this subsection.''.
SEC. 5. SEIZURE WARRANT REQUIREMENT.
(a) In General.-- Section 981(b) of title 18, United States Code,
is amended to read as follows:
``(b)(1) Any property subject to forfeiture to the United States
under subsection (a) may be seized by the Attorney General. In
addition, in the case of property involved in a violation investigated
by the Secretary of the Treasury or the United States Postal Service,
the property may also be seized by the Secretary of the Treasury or the
Postal Service, respectively.
``(2) Seizures pursuant to this section shall be made pursuant to a
warrant obtained in the same manner as provided for a search warrant
under the Federal Rules of Criminal Procedure, except that a seizure
may be made without a warrant if--
``(A) a complaint for forfeiture has been filed in the
United States district court and the court has issued an arrest
warrant in rem pursuant to the Supplemental Rules for Certain
Admiralty and Maritime Claims;
``(B) the seizure is made pursuant to a lawful arrest or
search, or if there is probable cause to believe that the
property is subject to forfeiture and another exception to the
Fourth Amendment warrant requirement would apply; or
``(C) the property was lawfully seized by a State or local
law enforcement agency and has been transferred to a Federal
agency in accordance with State law.
``(3) Notwithstanding the provisions of Rule 41(a), Federal Rules
of Criminal Procedure, a seizure warrant may be issued pursuant to this
subsection by a judicial officer in any district in which a forfeiture
action against the property may be filed under section 1355(b) of title
28, United States Code, and executed in any district in which the
property is found. Any motion for the return of property seized under
this section shall be filed in the district in which the seizure
warrant was issued.
``(4) If any person is arrested or charged in a foreign country in
connection with an offense that would give rise to the forfeiture of
property in the United States under subsection (a) or under the
Controlled Substances Act, the Attorney General may apply to any
Federal judge or magistrate judge in the district where the property is
located for an ex parte order restraining the property subject to
forfeiture for not more than 30 days, except that the time may be
extended for good cause shown at a hearing conducted in the manner
provided in Rule 43(e) of the Federal Rules of Civil Procedure. The
application for the restraining order shall set forth the nature and
circumstances of the foreign charges and the basis for belief that the
person arrested or charged has property in the United States that would
be subject to forfeiture, and shall contain a statement that the
restraining order is needed to preserve the availability of property
for such time as is necessary to receive evidence from the foreign
country or elsewhere in support of probable cause for the seizure of
the property under this subsection.
``(5) Once a motion for the return of seized property under Rule
41(e) is filed, the person filing the motion may request that the
motion be transferred to another district where venue for the
forfeiture action would lie under section 1355(b) of title 28 pursuant
to the change of venue provisions in section 1404 of title 28.''.
(b) Drug Forfeitures.--Section 511(b) of the Controlled Substances
Act (21 U.S.C. 881(b)) is amended to read as follows:
``(b) Any property subject to forfeiture to the United States under
this section may be seized by the Attorney General in the manner set
forth in Section 981(b) of title 18, United States Code.''.
SEC. 6. ACCESS TO RECORDS IN BANK SECRECY JURISDICTIONS.
Section 986 of title 18, United States Code, is amended by adding
at the end the following:
``(d) Access to Records Located Abroad.--In any civil forfeiture
case, or in any ancillary proceeding in any criminal forfeiture case
governed by section 413(n) of the Controlled Substances Act (21 U.S.C.
853(n)), where--
``(1) financial records located in a foreign country may be
material--
``(A) to any claim or to the ability of the
Government to respond to such claim; or
``(B) in a civil forfeiture case, to the
Government's ability to establish the forfeitability of
the property; and
``(2) it is within the capacity of the claimant to waive
the claimant's rights under such secrecy laws or to obtain the
records, so that the records can be made available,
the refusal of the claimant to provide the records in response to a
discovery request or take the action necessary otherwise to make the
records available shall result in the dismissal of the claim with
prejudice. This subsection shall not affect the claimant's rights to
refuse production on the basis of any privilege guaranteed by the
Constitution or Federal laws of the United States.''.
SEC. 7. ACCESS TO OTHER RECORDS.
Section 6103(i)(1) of the Internal Revenue Code of 1986 (26 U.S.C.
6103(i)(1)) is amended--
(1) in subparagraph (A)(i) by inserting ``or related civil
forfeiture'' after ``enforcement of a specifically designated
Federal criminal statute''; and
(2) in subparagraph (B)(iii) by inserting ``or civil
forfeiture investigation or proceeding'' after ``Federal
criminal investigation or proceeding''.
SEC. 8. DISCLOSURE OF GRAND JURY INFORMATION TO FEDERAL PROSECUTORS.
Section 3322(a) of title 18, United States Code, is amended--
(1) by striking ``civil forfeiture under section 981 of
title 18, United States Code, of property described in section
981(a)(1)(C) of such title'' and inserting ``any civil
forfeiture provision of Federal law''; and
(2) by striking ``concerning a banking law violation''.
SEC. 9. USE OF FORFEITED FUNDS TO PAY RESTITUTION TO CRIME VICTIMS AND
REGULATORY AGENCIES.
Section 981 of title 18, United States Code, is amended--
(1) by amending subsection (e)(6) to read as follows:
``(6) as restoration to any victim of the offense giving
rise to the forfeiture, including, in the case of a money
laundering offense, any offense constituting the underlying
specified unlawful activity; or'';
(2) in subsections (e)(3), (4) and (5), by striking ``in
the case of property referred to in subsection (a)(1)(C)'' and
inserting ``in the case of property forfeited in connection
with an offense resulting in a pecuniary loss to a financial
institution or regulatory agency''; and
(3) in subsection (e)(7), by striking ``In the case of
property referred to in subsection (a)(1)(D)'' and inserting
``In the case of property forfeited in connection with an
offense relating to the sale of assets acquired or held by any
Federal financial institution or regulatory agency, or person
appointed by such agency, as receiver, conservator or
liquidating agent for a financial institution''.
SEC. 10. ENFORCEMENT OF FOREIGN FORFEITURE JUDGMENT.
(a) In General.--Chapter 163 of title 28, United States Code, is
amended by inserting the following new section:
``Sec. 2466. Enforcement of foreign forfeiture judgment
``(a) Definitions.--As used in this section:
``(1) The term `foreign nation' shall mean a country that
has become a party to the United Nations Convention Against
Illicit Traffic in Narcotic Drugs and Psychotropic Substances
(hereafter `the United Nations Convention') or a foreign
jurisdiction with which the United States has a treaty or other
formal international agreement in effect providing for mutual
forfeiture assistance.
``(2) The term `value-based confiscation judgment' shall
mean a final order of a foreign nation compelling a defendant,
as a consequence of the defendant's criminal conviction for an
offense described in Article 3, Paragraph 1, of the United
Nations Convention, to pay a sum of money representing the
proceeds of such offense or property the value of which
corresponds to such proceeds.
``(b) Review by Attorney General.--A foreign nation seeking to have
its value-based confiscation judgment registered and enforced by a
United States district court under this section must first submit a
request to the Attorney General or the Attorney General's designee.
Such request shall include--
``(1) a summary of the facts of the case and a description
of the criminal proceeding which resulted in the value-based
confiscation judgment;
``(2) certified copies of the judgment of conviction and
value-based confiscation judgment;
``(3) an affidavit or sworn declaration establishing that
the defendant received notice of the proceedings in sufficient
time to enable the defendant to defend against the charges that
the value-based confiscation judgment rendered is in force and
is not subject to appeal;
``(4) an affidavit or sworn declaration that all reasonable
efforts have been undertaken to enforce the value-based
confiscation judgment against thedefendant's property, if any,
in the foreign country; and
``(5) such additional information and evidence as may be
required by the Attorney General or the Attorney General's
designee.
The Attorney General or the Attorney General's designee, in
consultation with the Secretary of State or the Secretary of State's
designee, shall determine whether to certify the request, and such
decision shall be final and not subject to either judicial review or
review under chapter 7 of title 5, United States Code.
``(c) Jurisdiction and Venue.--Where the Attorney General or the
Attorney General's designee certifies a request under paragraph (b),
the foreign nation may file a civil proceeding in United States
district court seeking to enforce the foreign value-based confiscation
judgment as if the judgment had been entered by a court in the United
States. In such a proceeding, the foreign nation shall be the plaintiff
and the person against whom the value-based confiscation judgment was
entered shall be the defendant. Venue shall lie in the district court
for the District of Columbia or in any other district in which the
defendant or the property that may be the basis for satisfaction of a
judgment under this section may be found. The United States district
court shall have personal jurisdiction over a defendant residing
outside of the United States if the defendant is served with process in
accordance with Rule 4 of the Federal Rules of Civil Procedure.
``(d) Entry and Enforcement of Judgment.--The United States
district court shall enter such orders as may be necessary to enforce
the value-based confiscation judgment on behalf of the foreign nation
where it finds that all of the following requirements have been met:
``(1) The value-based confiscation judgment was rendered
under a system which provides impartial tribunals or procedures
compatible with the requirements of due process of law.
``(2) The foreign court had personal jurisdiction over the
defendant.
``(3) The foreign court had jurisdiction over the subject
matter.
``(4) The defendant in the proceedings in the foreign court
received notice of the proceedings in sufficient time to enable
the defendant to defend.
``(5) The judgment was not obtained by fraud.
Process to enforce a judgment under this section will be in accordance
with Rule 69(a) of the Federal Rules of Civil Procedure.
``(e) Finality of Foreign Findings.--Upon a finding by the United
States district court that the conditions set forth in subsection (d)
have been satisfied, the court shall be bound by the findings of facts
insofar as they are stated in the foreign judgment of conviction and
value-based confiscation judgment.
``(f) Currency Conversion.--Insofar as a value-based confiscation
judgment requires the payment of a sum of money, the rate of exchange
in effect at time when the suit to enforce is filed by the foreign
nation shall be used in calculating the amount stated in the judgment
submitted for registration.''.
(b) Conforming Amendment.-- The table of sections for chapter 163,
title 28, United States Code, is amended by inserting the following at
the end:
``2466. Enforcement of foreign forfeiture judgment.''.
SEC. 11. ADMISSIBILITY OF FOREIGN BUSINESS RECORDS.
(a) In General.--Chapter 163 of title 28, United States Code, is
amended by adding at the end the following new section:
``Sec. 2467. Foreign records
``(a) In a civil proceeding in a court of the United States,
including civil forfeiture proceedings and proceedings in the United
States Claims Court and the United States Tax Court, a foreign record
of regularly conducted activity, or copy of such record, obtained
pursuant to an official request shall not be excluded as evidence by
the hearsay rule if a foreign certification, also obtained pursuant to
the same official request or subsequent official request that
adequately identifies such foreign record, attests that--
``(1) such record was made, at or near the time of the
occurrence of the matters set forth, by (or from information
transmitted by) a person with knowledge of those matters;
``(2) such record was kept in the course of a regularly
conducted business activity;
``(3) the business activity made such a record as a regular
practice; and
``(4) if such record is not the original, such record is a
duplicate of the original;
unless the source of information or the method or circumstances of
preparation indicate lack of trustworthiness.
``(b) A foreign certification under this section shall authenticate
such record or duplicate.
``(c) As soon as practicable after a responsive pleading has been
filed, a party intending to offer in evidence under this section a
foreign record of regularly conducted activity shall provide written
notice of that intention to each other party. A motion opposing
admission in evidence of such record shall be made by the opposing
party and determined by the court before trial. Failure by a party to
file such motion before trial shall constitute a waiver of objection to
such record or duplicate, but the court for cause shown may grant
relief from the waiver.
``(d) As used in this section, the term--
``(1) `foreign record of regularly conducted activity'
means a memorandum, report, record, or date compilation, in any
form, of acts, events, conditions, opinions, or diagnoses,
maintained in a foreign country;
``(2) `foreign certification' means a written declaration
made and signed in a foreign country by the custodian of a
record of regularly conducted activity or another qualified
person, that if falsely made, would subject the maker to
criminal penalty under the law of that country;
``(3) `business' includes business, institution,
association, profession, occupation, and calling of every kind
whether or not conducted for profit; and
``(4) `official request' means a letter rogatory, a request
under an agreement, treaty or convention, or any other request
for information or evidence made by a court of the United
States or an authority of the United States having law
enforcement responsibility, to a court or other authority of a
foreign country.''.
(b) Conforming Amendment.--The table of sections for chapter 163 of
title 28, United States Code, is amended by inserting the following at
the end:
``2467. Foreign records.''.
SEC. 12. CONFORMING AMENDMENTS TO TITLE 28, TO RULES OF PROCEDURE, AND
TO THE CONTROLLED SUBSTANCES ACT.
(a) In General.--Section 524(c) of title 28, United States Code, is
amended--
(1) by striking out ``law enforcement purposes--'' in the
matter preceding subparagraph (A) of paragraph (1) and
inserting ``purposes--'';
(2) by striking out ``(H)'' in the first sentence after the
last subparagraph in paragraph (1) and in subparagraph (A) of
paragraph (8) and inserting ``(I)''; and
(3) by striking the last subparagraph (I) in paragraph (1)
and inserting after and below subparagraph (I) the following:
``After all reimbursements and program related expenses have
been met at the end of fiscal year 1989, the Attorney General
may transfer deposits from the Fund to the building and
facilities account of the Federal prison system for the
construction of correctional institutions.''.
(b) In Rem Proceedings.--Paragraph (6) of Rule C of the
Supplemental Rules for Certain Admiralty and Maritime Claims to the
Federal Rules of Civil Procedure (28 U.S.C. Appendix) is amended by
striking ``10 days'' and inserting ``20 days''.
(c) Controlled Substances Act.--Section 518 and the item relating
to section 518 in the table of contents of the Controlled Substances
Act (21 U.S.C. 888) are repealed.
SEC. 13. INAPPLICABILITY OF THE CUSTOMS LAWS.
(a) Title 18, United States Code.--Section 981(d) of title 18,
United States Code, is amended by inserting after the first sentence
the following: ``However, the cost bond provision of section 608 of the
Tariff Act of 1930 (19 U.S.C. 1608) and the burden of proof provision
of section 615 of the Tariff Act of 1930 (19 U.S.C. 1615) shall not
apply to any forfeiture governed by the procedures set forth in this
chapter.''.
(b) Controlled Substances Act.--Section 511(d) of the Controlled
Substances Act (21 U.S.C. 881(d)) is amended by inserting after the
first sentence the following: ``However, the cost bond provision of
section 608 of the Tariff Act of 1930 (19 U.S.C. 1608) and the burden
of proof provision of section 615 of the Tariff Act of 1930 (19 U.S.C.
1615) shall not apply to any forfeiture governed by the procedures set
forth in chapter 46 of title 18, United States Code.''.
(c) Libel in Admiralty.--Section 2461(b) of title 28, United States
Code, is amended--
(1) by striking ``may be enforced by libel in admiralty''
and inserting ``may be enforced under the procedures set forth
in chapter 46 of title 18 and libel in admiralty if not in
conflict with such procedures, except that only the libel in
admiralty procedures shall apply to forfeitures under the
customs laws''; and
(2) by striking ``may be enforced by a proceeding by libel
which shall conform as near as may be to proceedings in
admiralty'' and inserting ``may be enforced under the
procedures set forth in chapter 46 of title 18 and by a
proceeding by libel, if not in conflict with such procedures,
which shall conform as near as may be to proceedings in
admiralty, except that only such proceeding by libel shall
apply to forfeitures under the customs laws''.
SEC. 14. APPLICABILITY.
(a) In General.--Unless otherwise specified in this Act, the
amendments made by this Act apply to forfeiture proceedings commenced
on or after the date of the enactment of this Act.
(b) Administrative Forfeitures.--The amendments in this Act
relating to seizures and administrative forfeitures shall apply to
seizures and forfeitures occurring on or after the 60th day after the
date of the enactment of this Act.
(c) Civil Judicial Forfeitures.--The amendments in this Act
relating to judicial procedures applicable once a civil forfeiture
complaint is filed by the Government shall apply to all cases in which
the forfeiture complaint is filed on or after the date of the enactment
of this Act.
(d) Substantive Law.--The amendments in this Act expanding
substantive forfeiture law to make property subject to civil or
criminal forfeiture which was not previously subject to civil or
criminal forfeiture shall apply to offenses occurring after the date of
the enactment of this Act.
SEC. 15. JURISDICTION AND VENUE IN FORFEITURE CASES.
(a) Administrative Forfeitures.--Section 608 of the Tariff Act of
1930 (19 U.S.C. 1608) is amended by striking ``to the United States
Attorney for the district in which seizure was made'' and inserting
``to the United States attorney for a district in which a forfeiture
action could be filed pursuant to title 28, United States Code, section
1355(b)''.
(b) Judicial Forfeitures.--Section 610 of the Tariff Act of 1930
(19 U.S.C. 1610) is amended by striking ``to the United States attorney
for the district in which the seizure was made'' and inserting ``to the
United States attorney for a district in which a forfeiture action
could be filed pursuant to title 28, United States Code, Section
1355(b)''.
(c) Admiralty Rules.--The Supplemental Rules for Certain Admiralty
and Maritime Claims are amended--
(1) in Rule E(3), by inserting the following at the end of
paragraph (a): ``This provision shall not apply in forfeiture
cases governed by section 1355 of title 28 or any other statute
providing for service of process outside of the district.'';
and
(2) in Rule C(2), by inserting the following after ``that
it is within the district or will be during the pendency of the
action.'': ``If the property is located outside of the
district, the complaint shall state the statutory basis for the
court's exercise of jurisdiction over the property.''.
SEC. 16. MINOR AND TECHNICAL AMENDMENTS RELATING TO 1992 FORFEITURE
AMENDMENTS.
(a) Criminal Forfeiture.--Section 982 of title 18, United States
Code, is amended in subsection (b)(2), by striking ``The substitution''
and inserting ``With respect to a forfeiture under subsection (a)(1),
the substitution''.
(b) Subpoenas for Bank Records.--Section 986(a) of title 18, United
States Code, is amended by--
(1) striking ``section 1956, 1957, or 1960 of this title,
section 5322 or 5324 of title 31, United States Code'' and
inserting ``section 981 of this title'';
(2) striking ``after'' and inserting ``before or after'';
and
(3) striking the last sentence.
(c) Section 981(d) of title 18, United States Code, is amended by
striking ``sale of this section'' and inserting ``sale of such
property''.
SEC. 17. DRUG PARAPHERNALIA TECHNICAL AMENDMENTS.
(a) Section 511(a)(10) of the Controlled Substances Act (21 U.S.C.
881(a)(10)) is amended by striking ``section 1822 of the Mail Order
Drug Paraphernalia Control Act'' and inserting ``section 422''.
(b) Section 422 of the Controlled Substances Act (21 U.S.C. 863) is
amended--
(1) by deleting subsection (c); and
(2) by redesignating subsections (d), (e), and (f) to be
subsections (c), (d), and (e).
SEC. 18. CERTIFICATE OF REASONABLE CAUSE.
Section 2465 of title 28, United States Code, is amended--
(1) by striking ``property seized'' and inserting
``property seized or arrested'' and
(2) by striking ``seizure'' each time it appears and
inserting ``seizure or arrest''.
SEC. 19. AUTHORIZATION TO SHARE FORFEITED PROPERTY WITH COOPERATING
FOREIGN GOVERNMENTS.
(a) In General.--Section 981(i)(1) of title 18, United States Code,
is amended by striking ``this chapter'' and inserting ``any provision
of Federal law''.
(b) Conforming Amendment.--Section 511(e)(1) of the Controlled
Substances Act (21 U.S.C. 881(e)(1)) is amended by inserting ``or'' at
the end of subparagraph (C), by striking ``; or'' at the end of
subparagraph (D) and inserting a period, and by striking subparagraph
(E).
SEC. 20. FORFEITURE OF PROPERTY USED TO FACILITATE FOREIGN DRUG CRIMES.
Section 981(a)(1)(B) of title 18, United States Code, is amended by
inserting ``, or any property used to facilitate such offense'' at the
end before the period.
SEC. 21. FORFEITURE OF PROCEEDS TRACEABLE TO FACILITATING PROPERTY IN
DRUG CASES.
(a) Conveyances.--Section 511(a)(4) of the Controlled Substances
Act (21 U.S.C. 881(a)(4)) is amended by inserting ``, and any property
traceable to such conveyances'' after ``property described in paragraph
(1), (2), or (9)''.
(b) Real Property.--Section 511(a)(7) of the Controlled Substances
Act (21 U.S.C. 881(a)(7)) is amended by inserting ``, and any property
traceable to such property'' after ``one year's imprisonment''.
(c) Negotiable Instruments and Securities.--Section 511(a)(6) of
the Controlled Substances Act (21 U.S.C. 881(a)(6)) is amended by
inserting ``, and any property traceable to such property'' after
``this title'' the second time it appears.
SEC. 22. FORFEITURE OF PROCEEDS OF CERTAIN FOREIGN CRIMES.
Section 981(a)(1)(B) of title 18, United States Code, is amended
by--
(1) inserting ``(i)'' after ``against a foreign nation
involving''; and
(2) inserting ``or (ii) any other conduct described in
section 1956(c)(7)(B)'' after ``(as such term is defined for
the purposes of the Controlled Substances Act)''.
SEC. 23. CIVIL FORFEITURE OF COINS AND CURRENCY IN CONFISCATED
GAMBLING DEVICES.
Section 7 of Public Law 81-906 (15 U.S.C. 1177) is amended--
(1) by inserting ``Any coin or currency contained in any
gambling device at the time of its seizure pursuant to the
preceding sentence shall also be seized and forfeited to the
United States.'' after the first sentence; and
(2) in the last sentence, by inserting ``, coins, or
currency'' after ``gambling devices''.
SEC. 24. CLARIFICATION OF JUDICIAL REVIEW OF FORFEITURE.
Section 507 of the Controlled Substances Act (21 U.S.C. 877) is
amended by adding at the end the following: ``This section does not
apply to any findings, conclusions, rulings, decisions, or declarations
of the Attorney General, or any designee of the Attorney General,
relating to the seizure, forfeiture, or disposition of forfeited
property brought under this subchapter.''.
SEC. 25. TECHNICAL AMENDMENTS RELATING TO OBLITERATED MOTOR VEHICLES
IDENTIFICATION NUMBERS.
Section 512 of title 18, United States Code, is amended--
(1) in subsection (b), by inserting ``and the provisions of
chapter 46 of this title relating to civil judicial
forfeitures'' before ``shall apply''; and
(2) in subsection (a)(1), by striking ``does not know'' and
all that follows up to the semicolon and inserting ``is an
innocent owner as defined in section 983 of this title''.
SEC. 26. STATUTE OF LIMITATIONS FOR CIVIL FORFEITURE ACTIONS.
Section 621 of the Tariff Act of 1930 (19 U.S.C. 1621) is amended
by inserting ``, or in the case of forfeiture, within 2 years after the
time when the involvement of the property in the alleged offense was
discovered, whichever was later'' after ``within five years after the
time when the alleged offense was discovered''.
SEC. 27. DESTRUCTION OR REMOVAL OF PROPERTY TO PREVENT SEIZURE.
(a) Section 2232(a) of title 18, United States Code, is amended
by--
(1) inserting ``or Seizure'' after ``Physical Interference
With Search'';
(2) inserting ``, including seizure for forfeiture,'' after
``after seizure'';
(3) striking ``searches and seizures'' after ``authorized
to make'' and inserting ``searches or seizures'';
(4) striking ``or'' after ``wares,''; and
(5) inserting ``, or other property, real or personal,''
after ``merchandise''
(b) Section 2232(b) of title 18, United States Code, is amended
by--
(1) inserting ``or Seizure'' after ``Notice of Search'';
(2) striking ``searches and seizures'' after ``authorized
to make'' and inserting ``searches or seizures'';
(3) inserting ``, including seizure for forfeiture'' after
``likely to make a search or seizure''; and
(4) inserting ``real or personal,'' after ``merchandise or
other property,''.
SEC. 28. IN PERSONAM JUDGMENTS.
Section 1963(l)(1) of title 18, United States Code, and section
413(n)(1) of the Controlled Substances Act (21 U.S.C. 853(n)(1)) are
each amended by adding the following sentence at the end: ``To the
extent that the order of forfeiture includes only an in personam money
judgment against the defendant, no proceeding under this subsection
shall be necessary.''.
SEC. 29. UNIFORM PROCEDURES FOR CRIMINAL FORFEITURE.
(a) In General.--Section 982(b)(1) of title 18, United States Code,
is amended to read as follows:
``(b)(1) The forfeiture of property under this section, including
any seizure and disposition of the property and any related
administrative or judicial proceeding, shall be governed by the
provisions of section 413 of the Comprehensive Drug Abuse Prevention
and Control Act of 1970 (21 U.S.C. 853), except for subsection 413(d)
which shall not apply to forfeitures under this section.''.
(b) Conforming Amendment.--The second paragraph (6) of section
982(a), of title 18, United States Code, is amended by striking
``(A)'', by redesignating clauses (i) and (ii) as subparagraphs (A) and
(B), respectively, by redesignating subclauses (I) and (II) as clauses
(i) and (ii), respectively, by striking out ``this subparagraph'' and
inserting ``this subsection'', and by striking all of subparagraph (B).
SEC. 30. AVAILABILITY OF CRIMINAL FORFEITURE.
(a) In General.--Section 2461 of title 28, United States Code, is
amended by adding the following subsection:
``(c) Whenever a forfeiture of property is authorized in connection
with a violation of an Act of Congress but no specific statutory
provision is made for criminal forfeiture upon conviction or the
criminal forfeiture provisions contain no procedural provisions, the
government may include the forfeiture in the indictment or information
in accordance with the Federal Rules of Criminal Procedure and the
procedures set forth in section 982 of title 18, United States Code,
and upon conviction, the court shall order the forfeiture of the
property.''.
(b) Order of Forfeiture.--Section 3554 of title 18, United States
Code, is amended--
(1) by striking ``an offense described in section 1962 of
this title or in title II or III of the Comprehensive Drug
Abuse Prevention and Control Act of 1970'' and inserting ``an
offense for which criminal forfeiture is authorized''; and
(2) by inserting ``pursuant to the Federal Rules of
Criminal Procedure,'' after ``shall order,''.
SEC. 31. DISCOVERY PROCEDURE FOR LOCATING FORFEITED ASSETS.
(a) In General.--Section 1963(k) of title 18, United States Code,
and section 413(m) of the Controlled Substances Act (21 U.S.C. 853(m))
are each amended by--
(1) adding the following at the end before the period: ``to
the extent that the provisions of the Rule are consistent with
the purposes for which discovery is conducted under this
subsection''; and
(2) adding the following additional sentence: ``Because
this subsection applies only to matters occurring after the
defendant has been convicted and his property has been declared
forfeited, the provisions of Rule 15 requiring the consent of
the defendant and the presence of the defendant at the
deposition shall not apply.''
(b) Bank Records.--Section 986 of title 18, United States Code, is
amended--
(1) in subsection (a), by striking ``in rem''; and
(2) in subsection (c), by inserting ``or Criminal'' after
``Civil''.
SEC. 32. CRIMINAL FORFEITURE FOR MONEY LAUNDERING CONSPIRACIES.
Section 982(a)(1) of title 18, United States Code, is amended by
inserting ``, or a conspiracy to commit any such offense'' after ``of
this title''.
SEC. 33. CORRECTION TO CRIMINAL FORFEITURE PROVISION FOR ALIEN
SMUGGLING AND OTHER IMMIGRATION OFFENSES.
Section 982(a) of title 18, United States Code, as amended by
section 29(b) is amended--
(1) by redesignating the second paragraph (6) as paragraph
(7);
(2) by inserting ``sections 274(a), 274A(a)(1), or
274A(a)(2) of the Immigration and Nationality Act of 1952 (8
U.S.C. 1324(a), 1324A(a)(1), and 1324A(a)(2)),'' before
``section 1425'' the first time it appears;
(3) in subparagraph (A), by striking ``a violation of, or a
conspiracy to violate, subsection (a)'' and inserting ``the
offense of which the person is convicted''; and
(4) in subparagraph (B)(i) and (ii), by striking ``a
violation of, or a conspiracy to violate, subsection (a)''
through ``of this title'' and inserting ``the offense of which
the person is convicted''.
SEC. 34. REPATRIATION OF PROPERTY PLACED BEYOND THE JURISDICTION OF THE
COURT.
(a) Order of Forfeiture.--Section 413(p) of the Controlled
Substances Act (21 U.S.C. 853(p)) is amended by inserting the following
at the end: ``In the case of property described in paragraph (3), the
court may, in addition, order the defendant to return the property to
the jurisdiction of the court so that it may be seized and
forfeited.''.
(b) Pre-Trial Restraining Order.--Section 413(e) of the Controlled
Substances Act (21 U.S.C. 853(e)) is amended by adding the following
after paragraph (3):
``(4) Pursuant to its authority to enter a pre-trial restraining
order under this section, including its authority to restrain any
property forfeitable as substitute assets, the court may also order the
defendant to repatriate any property subject to forfeiture pending
trial, and to deposit that property in the registry of the court, or
with the United States Marshals Service or the Secretary of the
Treasury, in an interest-bearing account. Failure to comply with an
order under this subsection, or an order to repatriate property under
subsection (p), shall be punishable as a civil or criminal contempt of
court, and may also result in an enhancement of the sentence for the
offense giving rise to the forfeiture under the obstruction of justice
provision of section 3C1.1 of the United States Sentencing
Guidelines.''.
SEC. 35. RIGHT OF THIRD PARTIES TO CONTEST FORFEITURE OF SUBSTITUTE
ASSETS.
(a) In General.--Section 413(c) of the Controlled Substances Act
(21 U.S.C. 853(c)), is amended by--
(1) inserting the following after the first sentence:
``All right, title and interest in property described in subsection (p)
of this section vests in the United States at the time an indictment,
information or bill of particulars specifically describing the property
as substitute assets is filed.''; and
(2) by striking ``Any such property that is subsequently
transferred to a person other than the defendant'' and
inserting ``Any property that is transferred to a person other
than the defendant after the United States' interest in the
property has vested pursuant to this subsection''.
(b) Conforming Amendment.--Section 413(n)(6) of the Controlled
Substances Act (21 U.S.C. 853(n)(6)) is amended by adding at the end
the following sentence: ``In the case of substitute assets, the
petitioner must show that his interest in the property existed at the
time the property vested in the United States pursuant to subsection
(c), or that he subsequently acquired his interest in the property as a
bona fide purchaser for value as provided in this subsection.''.
SEC. 36. ARCHEOLOGICAL RESOURCES PROTECTION ACT.
Section 8(b) of the Archeological Resources Protection Act of 1979
(16 U.S.C. 470gg(b)) is amended by--
(1) inserting ``all proceeds derived directly or indirectly
from such violation or any property traceable thereto,'' before
``and all vehicles'' in the unnumbered paragraph;
(2) inserting ``proceeds,'' before ``vehicles'' in
paragraph (3); and
(3) inserting the following at the end of the subsection:
``If a forfeiture count is included within an indictment in
accordance with the Federal Rules of Criminal Procedure, and
the defendant is convicted of the offense giving rise to the
forfeiture, the forfeiture may be ordered as part of the
criminal sentence in accordance with the procedures for
criminal forfeitures in chapter 46 of title 18, United States
Code. Otherwise, the forfeiture shall be civil in nature in
accordance with the procedures for civil forfeiture in said
chapter 46 of title 18.''.
SEC. 37. FORFEITURE OF INSTRUMENTALITIES OF TERRORISM, TELEMARKETING
FRAUD, AND OTHER OFFENSES.
(a) Civil Forfeiture.--Section 981(a)(1) of title 18, United States
Code is amended by adding the following subparagraphs:
``(G)(i) Any computer, photostatic reproduction machine,
electronic communications device or other material, article,
apparatus, device or thing made, possessed, fitted, used or
intended to be used on a continuing basis to commit a violation
of sections 513, 514, 1028 through 1032, and 1341, 1343, and
1344 of this title, or a conspiracy to commit such offense, and
any property traceable to such property.
``(ii) Any conveyance used on two or more occasions to
transport the instrumentalities used in the commission of a
violation of sections 1028 and 1029 of this title, or a
conspiracy to commit such offense, and any property traceable
to such conveyance.
``(H) Any conveyance, chemicals, laboratory equipment, or
other material, article, apparatus, device or thing made,
possessed, fitted, used or intended to be used to commit--
``(i) an offense punishable under chapter 113B of
this title (relating to terrorism);
``(ii) a violation of any of the following sections
of the Federal explosives laws: subsections (a) (1) and
(3), (b) through (d), and (h)(1) of section 842, and
subsections (d) through (m) of section 844; or
``(iii) any other offense enumerated in section
2339A(a) of this title;
or a conspiracy to commit any such offense, and any property
traceable to such property.''.
(b) Criminal Forfeiture.--Section 982(a) of title 18, United States
Code is amended by adding at the end the following:
``(8)(A) The court, in imposing a sentence on a person convicted of
a violation of sections 513, 514, 1028 through 1032, and 1341, 1343,
and 1344 of this title, or a conspiracy to commit such offense, shall
order the person to forfeit to the United States any computer,
photostatic reproduction machine, electronic communications device or
other material, article, apparatus, device or thing made, possessed,
fitted, used or intended to be used to commit such offense, and any
property traceable to such property.
``(B) The court, in imposing a sentence on a person convicted of a
violation of sections 1028 or 1029 of this title, or a conspiracy to
commit such offense, shall order the person to forfeit to the United
States any conveyance used on two or more occasions to transport the
instrumentalities used to commit such offense, and any property
traceable to such conveyance.
``(9) The court, in imposing a sentence on a person convicted of--
``(A) an offense punishable under chapter 113B of this
title (relating to terrorism);
``(B) a violation of any of the following sections of the
Federal explosives laws: subsections (a)(1) and (3), (b)
through (d), and (h)(1) of section 842, and subsections (d)
through (m) of section 844; or
``(C) any other offense enumerated in section 2339A(a) of
this title;
or a conspiracy to commit any such offense, shall order the person to
forfeit to the United States any conveyance, chemicals, laboratory
equipment, or other material, article, apparatus, device or thing made,
possessed, fitted, used or intended to be used to commit such offense,
and any property traceable to such property.''.
SEC. 38. FORFEITURE OF CRIMINAL PROCEEDS TRANSPORTED IN INTERSTATE
COMMERCE.
Section 1952 of title 18, United States Code, is amended by adding
the following subsection:
``(d)(1) Any proceeds distributed or intended to be distributed in
violation of subsection (a)(1) or a conspiracy to commit such
violation, or any property traceable to such property, is subject to
forfeiture to the United States in accordance with the procedures set
forth in chapter 46 of this title.
``(2) The court, in imposing sentence on a person convicted of an
offense in violation of subsection (a)(1) or a conspiracy to commit
such offense, shall order that the person forfeit to the United States
any proceeds distributed or intended to be distributed in the
commission of such offense, or any property traceable to such property,
in accordance with the procedures set forth in section 982 of this
title.''.
SEC. 39. FORFEITURES OF PROCEEDS OF FEDERAL FOOD, DRUG, AND COSMETIC
ACT VIOLATIONS.
Chapter III of the Federal Food, Drug, and Cosmetic Act is amended
by adding at the end the following:
``civil forfeiture of proceeds of federal food, drug, and cosmetic act
violations
``Sec. 311. (a) Any property, real or personal, that constitutes,
or is derived from or is traceable to the proceeds obtained directly or
indirectly from a criminal violation of, or a conspiracy to commit a
criminal violation of, a provision of this Act shall be subject to
judicial forfeiture to the United States.
``(b) The provisions of chapter 46 of title 18, United States Code,
relating to civil forfeitures shall extend to a seizure or forfeiture
under this section, insofar as applicable and not inconsistent with the
provisions hereof, except that such duties as are imposed upon the
Secretary of the Treasury under chapter 46 shall be performed with
respect to seizures and forfeitures under this section by such
officers, agents, or other persons as may be authorized or designated
for that purpose by the Secretary of Health and Human Services.
``criminal forfeiture of proceeds of federal food, drug, and cosmetic
act violations
``Sec. 312. (a) Any person convicted of a violation of, or a
conspiracy to violate, a provision of this Act shall forfeit to the
United States, irrespective of any provision of State law, any property
constituting, or derived from, any proceeds the person obtained,
directly or indirectly, as the result of such violation. The court, in
imposing sentence on such person, shall order that the person forfeit
to the United States all property described in this subsection.
``(b) Property subject to forfeiture under this section, any
seizure and disposition thereof, and any administrative or judicial
proceeding in relation thereto, shall be governed by the provisions of
section 413 of the Comprehensive Drug Abuse Prevention and Control Act
of 1970 (21 U.S.C. 853), except for subsection 413(d) which shall not
apply to forfeitures under this section.''.
SEC. 40. FORFEITURE OF COUNTERFEIT PARAPHERNALIA.
Section 492 of title 18, United States Code, is amended--
(1) by striking the third and fourth undesignated
paragraphs;
(2) by designating the remaining paragraphs as subsections
(a) and (b);
(3) by adding the following new subsections:
``(c) For the purposes of this section, the provisions of the
customs laws relating to the seizure, summary and judicial forfeiture,
condemnation of property for violation of the customs laws, the
disposition of such property or the proceeds from the sale of such
property, the remission or mitigation of such forfeitures, and the
compromise of claims (19 U.S.C. 1602 et seq.), insofar as they are
applicable and not inconsistent with the provisions of this section,
shall apply to seizures and forfeitures incurred, or alleged to have
been incurred, under this section, except that the duties as are
imposed upon the customs officer or any other person with respect to
the seizure and forfeiture of property under the customs laws shall be
performed with respect to seizures and forfeitures of property under
this section by such officers, agents, or other persons as may be
authorized or designated for that purpose by the Secretary of the
Treasury.
``(d) All seizures and civil judicial forfeitures pursuant to
subsection (a) shall be governed by the procedures set forth in chapter
46 of this title pertaining to civil forfeitures. The Attorney General
shall have sole responsibility for disposing of petitions for remission
or mitigation with respect to property involved in a judicial
forfeiture proceeding.
``(e) A court in sentencing a person for a violation of this
chapter or of sections 331-33, 335, 336, 642 or 1720 of this title,
shall order the person to forfeit the property described in subsection
(a) in accordance with the procedures set forth in section 982 of this
title.''; and
(4) in subsection (b), as so designated by this section, by
striking ``fined not more than $100'' and inserting ``fined
under this title''.
SEC. 41. CLOSING OF LOOPHOLE TO DEFEAT CRIMINAL FORFEITURE THROUGH
BANKRUPTCY.
Section 413(a) of the Controlled Substances Act (21 U.S.C. 853(a))
is amended by inserting ``, or of any bankruptcy proceeding instituted
after or in contemplation of a prosecution of such violation'' after
``shall forfeit to the United States, irrespective of any provision of
State law''.
SEC. 42. COLLECTION OF CRIMINAL FORFEITURE JUDGMENT.
Section 413 of the Controlled Substances Act (21 U.S.C. 853) is
amended by redesignating subsection (q) as subsection (r) and by adding
after subsection (p) the following:
``(q) In addition to the authority otherwise provided in this
section, an order of forfeiture may be enforced--
``(1) in the manner provided for the collection and payment
of fines in subchapter B of chapter 229 of title 18, United
States Code; or
``(2) in the same manner as a judgment in a civil
action.''.
SEC. 43. CRIMINAL FORFEITURE OF PROPERTY IN GOVERNMENT CUSTODY.
Section 413(f) of the Controlled Substances Act (21 U.S.C. 853(f))
is amended by adding the following at the end: ``If property subject to
criminal forfeiture under this section is already in the custody of the
United States or any agency thereof, it shall not be necessary to seize
or restrain the property for the purpose of criminal forfeiture.''.
SEC. 44. DELIVERY OF PROPERTY TO THE MARSHALS SERVICE.
Section 413(j) of the Controlled Substances Act (21 U.S.C. 853(j))
is amended by inserting ``, and Rule C(5) of the Supplemental Rules for
Certain Admiralty and Maritime Claims,'' before ``shall apply to a
criminal forfeiture''.
SEC. 45. FORFEITURE FOR ODOMETER TAMPERING OFFENSES.
(a) Criminal Forfeiture.--Section 982(a)(5) of title 18, United
States Code, is amended--
(1) by striking ``or'' at the end of subparagraph (D);
(2) by inserting ``or'' after the semicolon at the end of
subparagraph (E);
(3) by inserting the following after subparagraph (E), as
amended:
``(F) section 32703 of title 49, United States Code (motor
vehicle odometer tampering);''; and
(4) by adding the following after the last period: ``If the
conviction was for a violation described in subparagraph (F),
the court shall also order the forfeiture of any vehicles or
other property involved in the commission of the offense.''.
(b) Civil Forfeiture.--Section 981(a)(1)(F) of title 18, United
States Code, is amended--
(1) by striking ``or'' at the end of clause (iv);
(2) by striking the period at the end of clause (v) and
inserting ``; or'';
(3) by inserting the following after clause (v), as
amended:
``(vi) section 32703 of title 49, United States
Code (motor vehicle odometer tampering).''; and
(4) by adding the following after the last period: ``In the
case of a violation described in clause (vi), any vehicles or
other property involved in the commission of the offense shall
also be subject to forfeiture.''
SEC. 46. PRE-TRIAL RESTRAINT OF SUBSTITUTE ASSETS.
Section 413(e)(1) of the Controlled Substances Act (21 U.S.C.
853(e)(1)) is amended--
(1) by striking ``(a)'' and inserting ``(a) or (p)''; and
(2) by adding at the end the following:
``To the extent that property forfeitable only pursuant to subsection
(p) is restrained under this paragraph, the court shall afford the
defendant a prompt post-restraint hearing and shall exempt from such
restraint such property as may reasonably be needed by the defendant to
pay attorney's fees, other necessary cost-of-living expenses, and
expenses of maintaining restrained assets pending the entry of judgment
in the criminal case.''.
SEC. 47. HEARINGS ON PRE-TRIAL RESTRAINING ORDERS; ASSETS NEEDED TO PAY
ATTORNEY'S FEES.
Section 413(e) of the Controlled Substances Act (21 U.S.C. 853(e))
is amended by adding the following new paragraph:
``(5)(A) When property is restrained pre-trial subject to paragraph
(1)(A), the court may, at the request of the defendant, hold a pre-
trial hearing to determine whether the restraining order should be
vacated or modified with respect to some or all of the restrained
property because--
``(i) it restrains property that would not be subject to
forfeiture even if all of the facts set forth in the indictment
were established as true;
``(ii) it causes a substantial hardship to the moving party
and less intrusive means exist to preserve the subject property
for forfeiture; or
``(iii) the defendant establishes that he or she has no
assets, other than the restrained property, available to
exercise his or her constitutional right to retain counsel, and
there is no probable cause to believe that the restrained
property is subject to forfeiture.
``(B) In any hearing under this paragraph where probable cause is
at issue, the court shall limit its inquiry to the existence of
probable cause for the forfeiture, and shall neither entertain
challenges to the validity of the indictment, nor require the
Government to produce additional evidence regarding the facts of the
case to support the grand jury's finding of probable cause regarding
the criminal offense giving rise to the forfeiture. In all cases, the
party requesting the modification of the restraining order shall bear
the burden of proof.''.
Purpose and Summary
H.R. 1965, as reported by the Committee, would create
general rules relating to federal civil forfeiture proceedings,
expand procedural protections for property owners in such
proceedings, extend the availability of civil and criminal
forfeiture to additional federal crimes, and make miscellaneous
changes to federal civil and criminal forfeiture statutes.
Background and Need for the Legislation
I. Antecedents of Civil Asset Forfeiture
Civil asset forfeiture is based on the legal fiction that
an inanimate object can itself be ``guilty'' of wrongdoing,
regardless of whether the object's owner is blameworthy in any
way. This concept descends from a medieval English practice
whereby an object responsible for an accidental death was
forfeited to the king, who ``would provide the [proceeds, the
`deodand'] for masses to be said for the good of the dead man's
soul . . . or [would] insure that the deodand was put to
charitable uses.'' \1\
---------------------------------------------------------------------------
\1\ Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 681
n.16 (1974).
---------------------------------------------------------------------------
The immediate ancestor of modern civil forfeiture law is
English admiralty law. As Oliver Wendell Holmes noted, ``a ship
is the most living of inanimate things. . . . [E]very one
gives a gender to vessels. . . . It is only by supposing the
ship to have been treated as if endowed with personality, that
the arbitrary seeming peculiarities of the maritime law can be
made intelligible.'' \2\
---------------------------------------------------------------------------
\2\ Holmes, Jr., The Common Law 25 (1881).
---------------------------------------------------------------------------
Justice Holmes used this example:
A collision takes place between two vessels, the
Ticonderoga and the Melampus, through the fault of the
Ticonderoga alone. That ship is under a lease at the
time, the lessee has his own master in charge, and the
owner of the vessel has no manner of control over it.
The owner, therefore, is not to blame, and he cannot
even be charged on the ground that the damage was done
by his servants. He is free from personal liability on
elementary principle. Yet it is perfectly settled that
there is a lien on his vessel for the amount of the
damage done, and this means that the vessel may be
arrested and sold to pay the loss in any admiralty
court whose process will reach her. If a livery-stable
keeper lets a horse and wagon to a customer, who runs a
man down by careless driving, no one would think of
claiming a right to seize the horse and the wagon.\3\
---------------------------------------------------------------------------
\3\ Id.
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Holmes then provided the rationale:
The ship is the only security available in dealing
with foreigners, and rather than send one's own
citizens to search for a remedy abroad in strange
courts, it is easy to seize the vessel and satisfy the
claim at home, leaving the foreign owners to get their
indemnity as they may be able.\4\
---------------------------------------------------------------------------
\4\ Id. at 26.
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II. Federal Civil Asset Forfeiture Statutes
Since early in the nation's history, ships and cargo
violating the customs laws were made subject to federal civil
forfeiture.\5\ Forfeiture was once vital to the federal
treasury, with customs duties constituting over 80% of federal
revenues.\6\
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\5\ See Act of July 31, 1789, Sec. Sec. 12, 36, 1 Stat. 39, 47.
\6\ See Piety, Scorched Earth: How the Expansion of Civil
Forfeiture Doctrine Has Laid Waste to Due Process, 45 U. Miami L. Rev.
911, 940 n.137 (1991).
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Today, there are scores of federal forfeiture statutes,
both civil and criminal.\7\ They range from the forfeiture of
gamecocks used in cockfighting,\8\ to cigarettes seized from
smugglers,\9\ to property obtained from violations of the
Racketeer Influenced and Corrupt Organizations Act.\10\
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\7\ Criminal forfeiture can occur only after a property owner has
been convicted of a crime.
\8\ See 7 U.S.C. Sec. 2156.
\9\ See 18 U.S.C. Sec. 2344.
\10\ See 18 U.S.C. Sec. 1963.
---------------------------------------------------------------------------
The Comprehensive Drug Abuse Prevention and Control Act of
1970 made civil forfeiture a weapon in the war against drugs.
The Act provides for the forfeiture of:
[a]ll controlled substances which have been
manufactured, distributed, dispensed, or acquired in
violation of this subchapter . . . [a]ll raw
materials, products, and equipment of any kind which
are used, or intended for use, in manufacturing . . .
delivering, importing, or exporting any controlled
substance[s] . . . in violation of this subchapter .
. . [a]ll property which is used, or intended for use,
as a container for [such controlled substances, raw
materials, products or equipment] . . . [a]ll
conveyances, including aircraft, vehicles or vessels,
which are used, or intended for use, to transport, or
in any manner to facilitate the transportation, sale,
receipt, possession, or concealment [of such controlled
substances, raw materials, products or equipment].\11\
---------------------------------------------------------------------------
\11\ 21 U.S.C. Sec. 881(a) .
In 1978, the Act was amended to provide for civil
---------------------------------------------------------------------------
forfeiture of:
[a]ll moneys, negotiable instruments, securities, or
other things of value furnished or intended to be
furnished by any person in exchange for a controlled
substance in violation of this subchapter, all proceeds
traceable to such an exchange, and all moneys,
negotiable instruments, and securities used or intended
to be used to facilitate any violation of this
subchapter. . . .\12\
---------------------------------------------------------------------------
\12\ Section 301(a)(1) of the Psychotropic Substances Act of 1978
(found at 21 U.S.C. Sec. 881(a)(6)).
In 1984, the Act was amended to provide for the forfeiture
---------------------------------------------------------------------------
of:
[a]ll real property . . . which is used, or
intended to be used, in any manner or part, to commit,
or to facilitate the commission of, a violation of this
subchapter punishable by more than one year's
imprisonment. . . .\13\
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\13\ Section 306(a) of the Comprehensive Crime Control Act of 1984
(found at 21 U.S.C. Sec. 881(a)(7)).
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III. The Success--and Abuse--of Forfeiture
Before 1984, the monies realized from federal forfeitures
were deposited in the general fund of the United States
Treasury. Now they primarily go to the Department of Justice's
Assets Forfeiture Fund \14\ and the Department of the
Treasury's Forfeiture Fund.\15\ The money is used for
forfeiture-related expenses and various law enforcement
purposes.\16\
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\14\ See 28 U.S.C. Sec. 524(c)(4)).
\15\ See 31 U.S.C. Sec. 9703.
\16\ See 28 U.S.C. Sec. 524(c)(1)).
---------------------------------------------------------------------------
In recent years, enormous revenues have been generated by
federal forfeitures. The amount deposited in Justice's Assets
Forfeiture Fund (from both civil and criminal forfeitures)
increased from $27 million in fiscal year 1985 to $556 million
in 1993 and then decreased to $338 million in 1996.\17\ Of the
amount taken in 1996, $250 million was in cash and $74 million
was in proceeds of forfeitable property; $163 million of the
total was returned to state and local law enforcement agencies
that participated in investigations.\18\
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\17\ See Civil Asset Forfeiture Reform: Hearing Before the House
Committee on the Judiciary, 105th Cong., 1st Sess. 116 (1997)
(statement of Stefan Cassella) (hereinafter cited as ``1997 Hearing'');
U.S. Dept. of Justice, Asset Forfeiture Fact Sheet (1993); Annual
Report of the Dept. of Justice Asset Forfeiture Program: 1993, at 15.
\18\ See 1997 Hearing at 116 (statement of Stefan Cassella). Under
``adoptive forfeiture'', state and local law enforcement officers seize
property and then bring it to a federal agency for forfeiture (provided
that the property is forfeitable under federal law). The federal
government then returns as much as 85% of the net proceeds to the state
or local agency that initiated the case. Also, state and local law
enforcement agencies that have cooperated in federal law enforcement
actions often receive a percentage of the net proceeds.
---------------------------------------------------------------------------
Federal forfeiture has been a great monetary success. As
former Attorney General Richard Thornburgh said: ``[I]t is
truly satisfying to think that it is now possible for a drug
dealer to serve time in a forfeiture-financed prison, after
being arrested by agents driving a forfeiture-provided
automobile, while working in a forfeiture-funded sting
operation.'' \19\
---------------------------------------------------------------------------
\19\ Richard Thornburgh, Address Before the Cleveland City Club
Forum Luncheon (May 11, 1990).
---------------------------------------------------------------------------
The purposes of federal forfeiture were set out by Stefan
Cassella, Assistant Chief, Asset Forfeiture and Money
Laundering Section, Criminal Division, U.S. Department of
Justice, in testimony before this Committee:\20\
---------------------------------------------------------------------------
\20\ 1997 Hearing at 112.
Asset forfeiture has become one of the most powerful
and important tools that federal law enforcement can
employ against all manner of criminals and criminal
organizations--from drug dealers to terrorists to white
collar criminals who prey on the vulnerable for
financial gain. . . .
Federal law enforcement agencies use the forfeiture
laws for a variety of reasons, both time-honored and
new. . . . [They] allow the government to seize
contraband--property that it is simply unlawful to
possess, such as illegal drugs, unregistered machine
guns, pornographic materials, smuggled goods and
counterfeit money.
Forfeiture is also used to abate nuisances and to
take the instrumentalities of crime out of circulation.
If drug dealers are using a ``crack house'' to sell
drugs to children as they pass by on the way to school,
the building is a danger to the health and safety of
the neighborhood. Under the forfeiture laws, we can
shut it down. If a boat or truck is being used to
smuggle illegal aliens across the border, we can
forfeit the vessel or vehicle to prevent its being used
time and again for the same purpose. The same is true
for an airplane used to fly cocaine from Peru into
Southern California, or a printing press used to mint
phony $100 bills.
The government also uses forfeiture to take the
profit out of crime, and to return property to victims.
No one has any right to retain the money gained from
bribery, extortion, illegal gambling, or drug dealing.
With the forfeiture laws, we can separate the criminal
from his profits--and any property traceable to it--
thus removing the incentive others may have to commit
similar crimes tomorrow. And if the crime is one that
has victims--like car jacking or fraud--we can use the
forfeiture laws to recover the property and restore it
to the owners far more effectively than the restitution
statutes permit.
Finally, forfeiture undeniably provides both a
deterrent against crime and a measure of punishment for
the criminal.\21\ Many criminals fear the loss of their
vacation homes, fancy cars, businesses and bloated bank
accounts far more than the prospect of a jail sentence.
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\21\ The Justice Department has in the past argued that civil
forfeiture serves ``remedial'' rather than ``punitive'' goals. The
Department took this position in part to stave off Eighth Amendment
challenges to purportedly excessive civil forfeitures. The Eighth
Amendment prohibits, among other things, the imposition of excessive
fines. The Supreme Court rejected this argument in Austin v. United
States, 509 U.S. 602 (1993), by holding that civil forfeitures are at
least partly punitive in nature and thus subject to Eighth Amendment
limitations.
However, a number of years ago, as forfeiture revenues were
approaching their peaks, some disquieting rumblings were heard.
The Second Circuit stated that ``[w]e continue to be enormously
troubled by the government's increasing and virtually unchecked
use of the civil forfeiture statutes and the disregard for due
process that is buried in those statutes.'' \22\ Newspaper and
television exposes appeared alleging that innocent property
owners were having their property taken by federal and local
law enforcement officers with nothing that could be called due
process. \23\
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\22\ United States v. All Assets of Statewide Auto Parts, Inc., 971
F.2d 896, 905 (2nd Cir. 1992).
\23\ See, e.g., Brazil & Berry, Tainted Cash or Easy Money?,
Orlando Sentinel, June 14-17, 1992; Schneider & Flaherty, Presumed
Guilty: The Law's Victims in the War on Drugs, Pitt. Press, Aug. 11-16,
1991; Poor & Rose, Hooked on the Drug War, St. Louis Post-Dispatch,
Apr. 28-May 5, 1991, Oct. 6-11, 20, 1991.
---------------------------------------------------------------------------
Congress investigated these charges through a series of
hearings held by the House Committee on Government Operations
Subcommittee on Legislation and National Security under then
Chairman John Conyers \24\ and then by this Committee.\25\
---------------------------------------------------------------------------
\24\ See Review of Federal Asset Forfeiture Program: Hearing Before
the Subcomm. on Legislation and National Security of the House Comm. on
Government Operations, 103d Cong., 1st Sess. (1993); Department of
Justice Asset Forfeiture Program: Hearing Before the Subcomm. on
Legislation and National Security of the House Comm. on Government
Operations, 102nd Cong., 2d Sess. (1992).
\25\ See 1997 Hearing; Civil Asset Forfeiture Reform Act: Hearing
Before the House Committee on the Judiciary, 104th Cong., 2nd Sess.
(1996) (hereinafter cited as ``1996 Hearing'').
---------------------------------------------------------------------------
The stories of two of the witnesses at the Judiciary
Committee hearings provide a sampling of the types of abuses
that have surfaced. Willie Jones (and his attorney E.E. (Bo)
Edwards III) testified before the Judiciary Committee on July
22, 1996. Mr. Jones' testified as follows:\26\
---------------------------------------------------------------------------
\26\ 1996 Hearing at 12-14.
Mr. Hyde: Would you please state your name and where
you live.
Mr. Jones. My name is Willie Jones. I live in
Nashville, Tennessee.
Mr. Hyde. Very well, sir. Would you tell us your
story involving asset forfeiture.
Mr. Jones. Yes. On February 27, 1991, I went to the
Metro Airport to board a plane for Houston, TX, to buy
nursery stock. I was stopped in the airport after
paying cash for my ticket.
Mr. Hyde. What business are you engaged in or were
you engaged in?
Mr. Jones. I am engaged in landscaping.
* * * * *
Mr. Jones. I paid cash for a round-trip ticket to
Houston, TX, and I was detained at the ticket agent.
The lady said no one ever paid cash for a ticket. And
as I went to the gate, which was gate 6, to board the
plane, at that time three officers came up to me and
called me by my name, and asked if they could have a
word with me, and told me that they had reason to
believe that I was carrying currency, had a large
amount of currency, drugs. So at that time----
Mr. Hyde. Proceeds of a drug transaction; you had
money that was drug money then, that's what they
charged you with?
Mr. Jones. Yes, sir.
Mr. Hyde. Were you carrying a large amount of cash?
Mr. Jones. Yes, sir. I had $9,000.
Mr. Hyde. $9,000 in cash. Why was that, sir? Was your
business a cash business?
Mr. Jones. Well, it was going to be if I had found
the shrubbery that I liked, by me being--going out of
town, and the nursery business is kind of like the
cattle business. You can always do better with cash
money.
Mr. Hyde. They would rather be paid in cash than a
check, especially since you are from out of town?
Mr. Jones. That is correct.
* * * * *
Mr. Jones. So we proceeded to go out of the airport.
. . . I was questioned about had I ever been involved
in any drug-related activity, and I told them, no, I
had not. So they told me I might as well tell the truth
because they was going to find out anyway. So they ran
it through on the computer after I presented my
driver's license to them, which everything was--I had--
it was all in my name. And he ran it through the
computer, and one officer told the other one, saying,
he is clean. But instead, they said that the dogs hit
on the money. So they told me at that time they was
going to confiscate the money.
Mr. Hyde. They determined from the dog's activities
that there were traces of drugs on the money?
Mr. Jones. That is what they said.
Mr. Hyde. That is what they claimed? \27\
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\27\ A federal court later found that ``[t]he presence of trace
narcotics on currency does not yield any relevant information
whatsoever about the currency's history. A bill may be contaminated by
proximity to a large quantity of cocaine, by its passage through the
contaminated sorting machines at the Federal Reserve Banks, or by
contact with other contaminated bills in the wallet or at the bank.''
Jones v. U.S. Drug Enforcement Administration 819 F. Supp. 698, 720
(M.D. Tenn. 1993) (citation omitted).
---------------------------------------------------------------------------
Mr. Jones: Yes, sir.
Mr. Hyde. Therefore, they kept the money?
Mr. Jones. They kept the money.
Mr. Hyde. Did they let you go?
Mr. Jones. They let me go.
Mr. Hyde. Were you charged with anything?
Mr. Jones. No. I asked them to, if they would, if
they would count the money and give me a receipt for
it. They refused to count the money, and they took the
money and told me that I was free to go, that I could
still go on to Texas if I wanted to; that the plane had
not left.
Mr. Hyde. Of course, your money was gone. You had no
point in going to Texas if you can't buy shrubs.
Mr. Jones. No.
Willie Jones did not challenge the forfeiture under the
normal mechanism provided by law \28\ because he could not
afford to post the required 10% cost bond.\29\ He instead filed
suit in federal district court alleging that his Fourth
Amendment right to be secure against unreasonable searches and
seizures had been violated.\30\ The court ruled that the
``frisk'' that produced the $9,000 in currency was an
unconstitutional search,\31\ and that the subsequent seizure of
the money was made without probable cause and therefore
illegal.\32\
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\28\ The money was seized pursuant to 21 U.S.C. Sec. 881(a)(6),
under which ``[a]ll moneys . . . furnished or intended to be
furnished by any person in exchange for a controlled sub- stance. .
.'' are subject to civil forfeiture. If Jones challenged the
forfeiture, he would have the burden of proving by a preponderance of
the evidence that the currency was not subject to forfeiture, provided
that the government first showed probable cause that the currency was
subject to forfeiture. See 19 U.S.C. Sec. 1615.
\29\ See 1996 Hearing at 15 (statement of E.E. (Bo) Edwards III).
See 19 U.S.C. Sec. 1608.
\30\ Jones, 819 F. Supp. at 716.
\31\ Id. at 718.
\32\ Id. at 719. Probable cause is ``a reasonable ground for belief
of guilt, supported by less than prima facie proof but more than mere
suspicion.'' Id. (citation omitted).
---------------------------------------------------------------------------
The court's final comments gave rise for pause:
The Court also observes that the statutory scheme as
well as its administrative implementation provide
substantial opportunity for abuse and potentiality for
corruption. [Drug Interdiction Unit] personnel
encourage airline employees as well as hotel and motel
employees to report ``suspicious'' travelers and reward
them with a percentage of the forfeited proceeds. The
forfeited monies are divided and distributed by the
Department of Justice among the Metropolitan Nashville
Airport and the Metropolitan Nashville Police
Department partners in the DIU and itself. As to the
local agencies, these monies are ``off-budget'' in that
there is no requirement to account to legislative
bodies for its receipt or expenditure. Thus, the law
enforcement agency has a direct financial interest in
the enforcement of these laws. The previous history in
this country of an analogous kind of financial interest
on the part of law enforcement officers--i.e., salaries
of constables, sheriffs, magistrates, etc., based on
fees and fines--is an unsavory and embarrassing scar on
the administration of justice. The obviously dangerous
potentiality for abuse extant in the forfeiture scheme
should trigger, at the very least, heightened scrutiny
by the courts when a seizure is contested.\33\
---------------------------------------------------------------------------
\33\ Id. at 724.
---------------------------------------------------------------------------
Although Mr. Jones' case had a happy ending, his case
typifies the kind of case apparently that this Committee is
gravely concerned about. That is, citizens innocent of any
criminal wrongdoing, who happen to fit a drug courier profile,
are subjected to unlawful searches and investigations. If they
have large sums of cash, it is seized. They don't have to be
arrested, indicted, or convicted of a crime because civil
forfeiture requires no related criminal proceeding.
To seize and forfeit property, all the government has to
prove is that it had probable cause to believe the property was
involved in criminal activity. For property owners to get their
property back, they must overcome tremendous procedural hurdles
like posting cost bonds and proving that their property is
``innocent'' (once probable cause has been shown). The abuses
can even be worse under certain state forfeiture laws.\34\
---------------------------------------------------------------------------
\34\ See Hyde, Forfeiting Our Property Rights: Is Your Property
Safe from Seizure? 38-40 (1995).
---------------------------------------------------------------------------
Billy Munnerlyn testified before the Judiciary Committee on
June 11, 1997. The following is a short summary of his
experience with federal civil forfeiture laws:
For years Billy Munnerlyn and his wife Karon owned
and operated a successful air charter service in Las
Vegas, Nevada. In October 1989, Mr. Munnerlyn was hired
for a routine job--flying Albert Wright, identified as
a ``businessman,'' from Little Rock, Arkansas, to
Ontario, California. When the plane landed, DEA agents
seized Mr. Wright's luggage and the $2.7 million it
contained. Both he and Mr. Munnerlyn were arrested. The
DEA confiscated the airplane, the $8,500 charter fee
for the flight, and all of Munnerlyn's business
records. Although drug trafficking charges against Mr.
Munnerlyn were quickly dropped for lack of evidence,
the government refused to release his airplane (similar
charges against Mr. Wright, who unbeknownst to Mr.
Munnerlyn was a convicted cocaine dealer, were
eventually dropped as well). Mr. Munnerlyn spent over
$85,000 in legal fees trying to get his plane back,
money raised by selling his three other planes. A Los
Angeles jury decided his airplane should be returned
because they found Mr. Munnerlyn had no knowledge that
Mr. Wright was transporting drug money; however, a U.S.
District Court judge reversed the jury's verdict. Mr.
Munnerlyn eventually was forced to settle with the
government, paying $7,000 to get his plane back. He
then discovered that DEA agents had caused about
$100,000 of damage to the aircraft. Under federal law
the agency could not be held liable for the damage.
Unable to raise enough money to restart his air charter
business, Mr. Munnerlyn declared bankruptcy. He is now
driving a truck for a living.\35\
---------------------------------------------------------------------------
\35\ Id. at 12 (based on reporting by Schneider & Flaherty &
Miniter, ``Property Seizures on Trial,'' Insight, Feb. 22, 1993, at 10,
33).
---------------------------------------------------------------------------
For Mr. Munnerlyn, there was no happy ending.
IV. H.R. 1965, the Civil Asset Forfeiture Reform Act
H.R. 1965 is designed to make federal civil forfeiture
procedures fair for property owners--to give innocent property
owners the means to recover their property and make themselves
whole. H.R. 1965 is not designed to emasculate federal civil
forfeiture efforts. To the contrary, by making civil forfeiture
fairer, this Committee is prepared to (and H.R. 1965 does)
expand the reach of civil forfeiture and make it an even
stronger law enforcement tool. It is the Committee's belief,
however, that criminal forfeiture should be used in lieu of
civil forfeiture where feasible because it has the heightened
due process safeguards of the criminal law. The bill also
expands the reach of federal criminal forfeiture, such as to
crimes that frequently generate criminal proceeds.
A. The Eight Core Reforms of H.R. 1965
1. Burden of Proof
When a property owner goes to federal court to challenge
the seizure of his property under federal civil forfeiture
laws, the government is required to make an initial showing of
probable cause that the property is subject to forfeiture. The
property owner must then establish by a preponderance of the
evidence that the property is not subject to forfeiture.\36\ As
mentioned previously, the government can meet its burden
without having obtained a criminal conviction. Since the
government does not have to prove its case beyond a reasonable
doubt--as it would to gain a criminal conviction--even the
acquittal of the owner following a criminal trial will not bar
the forfeiture his property. Probable cause--what the
government needs to show--is the lowest standard of proof in
the criminal law. It is the same standard required to obtain a
search warrant and can be established by evidence with a low
indicia of reliability such as hearsay.\37\
---------------------------------------------------------------------------
\36\ See 19 U.S.C. Sec. 1615.
\37\ See United States v. A Single Family Residence and Real
Property Located at 900 Rio Vista Blvd., Ft. Lauderdale, 803 F.2d 625,
629 n.2 (11th Cir. 1986).
---------------------------------------------------------------------------
Allowing property to be forfeited upon a mere showing of
probable cause can be criticized on many levels:
[T]he current allocations of burdens and standards of
proof requires that the [owner] prove a negative, that
the property was not used in order to facilitate
illegal activity, while the government must prove
almost nothing. This creates a great risk of erroneous,
irreversible deprivation. ``The function of a standard
of proof, as that concept is embodied in the Due
Process Clause and in the realm of fact finding, is to
`instruct the fact finder concerning the degree of
confidence our society thinks he should have in the
correctness of factual conclusions for a particular
type of adjudication.' '' Addington v. Texas, 441 U.S.
418, 423 . . . (1979). . . . The allocation of
burdens and standards of proof implicates similar
concerns and is of greater importance since it decides
who must go forward with evidence and who bears the
risk of loss should proof not rise to the standard set.
In civil forfeiture cases, where claimants are required
to go forward with evidence and exculpate their
property by a preponderance of the evidence, all risks
are squarely on the claimant. The government, under the
current approach, need not produce any admissible
evidence and may deprive citizens of property based on
the rankest of hearsay and the flimsiest evidence. This
result clearly does not reflect the value of private
property in our society, and makes the risk of an
erroneous deprivation intolerable.\38\
---------------------------------------------------------------------------
\38\ United States v. $12,390, 956 F.2d 801, 811 (8th Cir. 1992)
(Beam, J., dissenting).
---------------------------------------------------------------------------
Some federal courts have even intimated that probable cause
is an unconstitutional standard:
The Supreme Court . . . has recently expanded the
constitutional protections applicable in forfeiture
proceedings to include those of the Eighth Amendment.
. . . We therefore agree with the Second Circuit:
``Good and Austin reopen the question of whether the
quantum of evidence the government needs to show in
order to obtain a warrant in rem allowing seizure--
probable cause--suffices to meet the requirements of
due process.'' United States v. One Parcel of Property
Located at 194 Quaker Farms Road, 85 F.3d 985, 990 (2nd
Cir.), cert denied . . . 117 S.Ct. 304 . . .
(1996).
* * * * *
[W]e observe that allowing the government to forfeit
property based on a mere showing of probable cause is a
``constitutional anomaly''. . . . As the Supreme
Court has explained, burdens of proof are intended in
part to ``indicate the relative importance attached to
the ultimate decision.'' . . . The stakes are
exceedingly high in a forfeiture proceeding: Claimants
are threatened with permanent deprivation of their
property, from their hard-earned money, to their sole
means of transport, to their homes. We would find it
surprising were the Constitution to permit such an
important decision to turn on a meager burden of proof
like probable cause.\39\
---------------------------------------------------------------------------
\39\ United States v. $49,576, No. 95-56170, 1997 WL 345961, at *3-
4 (9th Cir. June 25, 1997) (citations omitted).
---------------------------------------------------------------------------
The Committee concludes that probable cause is an
insufficient quantum of evidence to justify the forfeiture of
property, and H.R. 1965 will therefore require proof by a
preponderance of the evidence. Preponderance of the evidence is
the quantum of evidence required in most civil proceedings.
Under H.R. 1965 the property owner would still have the
burden of proving affirmative defenses--such as the ``innocent
owner'' defense--by a preponderance of the evidence.
Additionally, current law would be retained allowing the
government to forfeit property on a showing of probable cause
if the property owner elects not to challenge the forfeiture by
filing a claim.
2. Appointment of Counsel
There is no Sixth Amendment right to appointed counsel for
indigents in civil forfeiture cases, since imprisonment is not
threatened.\40\ This is undoubtedly one of the primary reasons
why at least 80% of civil forfeiture cases are not challenged:
``The reason they are so rarely challenged has nothing to do
with the owner's guilt, and everything to do with the arduous
path one must journey against a presumption of guilt, often
without the benefit of counsel, and perhaps without any money
left after the seizure with which to fight the battle.'' \41\
This Committee believes that given the punitive, quasi-criminal
nature of civil forfeiture proceedings, legal representation
should be provided for those who are indigent in appropriate
circumstances.
---------------------------------------------------------------------------
\40\ See United States v. $292,888.04 in U.S. Currency, 54 F.3d
564, 569 (9th Cir. 1995); United States v. 7108 West Grand Ave.,
Chicago, Illinois, 15 F.3d 632, 635 (7th Cir. 1994), cert. denied, 114
S. Ct. 2691 (1994).
\41\ 1996 Hearing at 289-90 (statement of E.E. (Bo) Edwards III,
David Smith, and Richard Troberman, cochairs, National Association of
Criminal Defense Lawyers Asset Forfeiture Abuse Task Force).
---------------------------------------------------------------------------
H.R. 1965 provides that a federal court may appoint counsel
to represent an individual filing a claim in a civil forfeiture
proceeding who is financially unable to obtain representation.
In determining whether to appoint counsel, the court shall take
into account (1) the nature and value of the property subject
to forfeiture, including the hardship to the claimant from the
loss of the property seized, compared to the expense of
appointed counsel, (2) the claimant's standing to contest the
forfeiture, and (3) whether the claim appears to be made in
good faith or to be frivolous. The first consideration
described in the preceding sentence should not be a simple
dollar comparison. There will be many instances in which a
court should appoint counsel even if the cost of counsel will
likely exceed the value of the seized property. Conversely,
there will be instances in which a court should not appoint
counsel even if the cost of counsel will likely be less than
the value of the seized property. The court needs to consider
the nature of the property and the hardship that will be caused
by its loss. Compensation for appointed counsel will be
equivalent to that provided for court-appointed counsel in
federal felony cases.\42\ An owner would certainly suffer great
hardship where the loss of property would prevent the owner
from working, leave the owner homeless, or prevent the
functioning of a business. These are just illustrative examples
of situations where great hardship would result from the
forfeiture of property.
---------------------------------------------------------------------------
\42\ See 18 U.S.C. Sec. 3006A(d)(2). Currently, maximum
compensation would not exceed $3,500 per attorney for representation
before a U.S. district court and $2,500 per attorney for representation
before an appellate court. These maximums can be waived in cases of
``extended or complex'' representation where ``excess payment is
necessary to provide fair compensation and the payment is approved by
the chief judge of the circuit.'' 18 U.S.C. Sec. 3006A(d)(3).
---------------------------------------------------------------------------
The court shall make the determination of whether to
appoint counsel following a hearing during which the government
shall have the opportunity to present evidence and examine the
claimant. Of course, such evidence and examination must be
relevant either to the three factors listed in Sec. 983(d) (A)
through (C) of title 18 that the court must take into account
in deciding whether to appoint counsel or to whether the owner
is financially unable to obtain representation. The testimony
of the claimant at such a hearing shall not be admitted in any
other proceeding except in accordance with the rules which
govern the admissibility of testimony adduced in a hearing on a
motion to suppress evidence. If the court does decide to
appoint counsel, counsel may be compensated for time spent
during, and in preparation for, the hearing.
3. Innocent Owner Defense
Since 1974, many observers assumed that the Constitution
mandated an ``innocent owner'' defense to a civil forfeiture
action.\43\ However, last year the Supreme Court in Bennis v.
Michigan ruled that the defense was not mandated by either the
due process clause of the Fourteenth Amendment (and presumably
that of the Fifth Amendment) or the just compensation clause of
the Fifth Amendment.\44\ The Court found that ``a long and
unbroken line of cases holds that an owner's interest in
property may be forfeited by reason of the use to which the
property is put even though the owner did not know that it was
to be put to such use.'' \45\
---------------------------------------------------------------------------
\43\ In Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663,
689 (1974), the Supreme Court stated in dicta that ``it would be
difficult to reject the constitutional claim of . . . an owner who
proved not only that he was uninvolved in and unaware of the wrongful
activity, but also that he had done all that reasonably could be
expected to prevent the proscribed use of his property.''
\44\ ``[N]or shall any State deprive any person of life, liberty,
or property, without due process of law. . . .'' U.S. Const. Amend.
XIV, Sec. 1. ``[N]or shall any person . . . be deprived of life,
liberty, or property, without due process of law; nor shall private
property be taken for public use, without just compensation.'' U.S.
Const. Amend. V.
\45\ Bennis v. Michigan, No. 94-8729, slip op. at 4 (U.S. March 4,
1996).
---------------------------------------------------------------------------
The dissenting justices in Bennis argued that:
The logic of the Court's analysis would permit the
States to exercise virtually unbridled power to
confiscate vast amounts of property where professional
criminals have engaged in illegal acts. Some airline
passengers have marijuana cigarettes in their luggage;
some hotel guests are thieves; some spectators at
professional sports events carry concealed weapons; and
some hitchhikers are prostitutes. The State surely may
impose strict obligations on the owners of airlines,
hotels, stadiums, and vehicles to exercise a high
degree of care to prevent others from making illegal
use of their property, but neither logic nor history
supports the Court's apparent assumption that their
complete innocence imposes no constitutional impediment
to the seizure of their property simply because it
provided the locus for a criminal transaction.\46\
---------------------------------------------------------------------------
\46\ Id., slip op. at 2 (Stevens, J., Souter, J., Breyer, J.,
dissenting).
Justice Thomas stated in his concurrence that:
``[i]mproperly used, forfeiture could become more like a
roulette wheel employed to raise revenue from innocent but
hapless owners whose property is unforeseeably misused, or a
tool wielded to punish those who associate with criminals, than
a component of a system of justice.''\47\
---------------------------------------------------------------------------
\47\ Id., slip op. at 4 (Thomas, J., concurring).
---------------------------------------------------------------------------
The impact of Bennis is limited by the fact that many
federal civil forfeiture provisions contain statutory innocent
owner defenses. For instance, real property used to commit or
to facilitate a federal drug crime is forfeitable unless the
violation was ``committed or omitted without the knowledge or
consent of [the] owner.'' \48\ Conveyances used in federal drug
crimes are not forfeitable ``by reason of any act or omission
established by that owner to have been committed or omitted
without the knowledge, consent, or willful blindness of the
owner.'' \49\ Property involved in certain money laundering
transactions shall not be forfeited ``by reason of any act or
omission established by that owner or lienholder to have been
committed without the knowledge of that owner or lienholder.''
\50\ Other federal civil forfeiture statutes contain no
innocent owner defenses. For instance, the statute providing
for forfeiture of any property, including money, used in an
illegal gambling business contains no such defense.\51\
---------------------------------------------------------------------------
\48\ 21 U.S.C. Sec. 881(a)(7).
\49\ 21 U.S.C. Sec. 881(a)(4)(C).
\50\ 18 U.S.C. Sec. 981(a)(2).
\51\ 18 U.S.C. Sec. 1955(d).
---------------------------------------------------------------------------
Not only are these statutory innocent owner defenses not
uniform, but the protections of the statutes using the
``committed or omitted'' language have been seriously eroded by
a number of federal courts ruling that qualifying owners must
have had no knowledge of and provided no consent to the
prohibited use of the property.\52\ Such an interpretation
means that diligent owners who try to end the illegal use by
others of their property cannot make use of the defense simply
because they knew about the illegal use. Many courts require
that to qualify as an innocent owner, an owner have done all
that reasonably could be expected to prevent the illegal use of
the property.\53\
---------------------------------------------------------------------------
\52\ See, e.g., United States v. Lot 111-B, Tax Map Key 4-4-03-
71(4), 902 F.2d 1443, 1445 (9th Cir. 1990) (per curiam). See, contra,
United States v. 141st St. Corp. by Hersh, 911 F.2d 870, 877-78 (2nd
Cir. 1990), cert. denied, 111 S. Ct. 1017 (1991).
\53\ See, e.g., United States v. One Parcel of Property Located at
755 Forest Road, Northford, Connecticut, 985 F.2d 70, 72 (2nd Cir.
1993); United States v. One Parcel of Real Estate at 1012 Germantown
Road, Palm Beach County, Fla., 963 F.2d 1496, 1506 (11th Cir. 1992).
---------------------------------------------------------------------------
Believing that an innocent owner defense is required by
fundamental fairness, the Committee sets out an innocent owner
defense in H.R. 1965 designed to provide such a defense for
federal civil forfeitures, to make that defense uniform, and to
ensure it offers protection in all appropriate cases (including
situations where the innocent owner knew of but could not stop
the illegal use of property by others).\54\
---------------------------------------------------------------------------
\54\ H.R. 1965 would exempt traditional U.S. Customs Service
seizures and forfeitures from the bill's proposed procedures for
reasons explained below.
---------------------------------------------------------------------------
With respect to a property interest in existence at the
time the illegal conduct giving rise to the forfeiture took
place, an owner is innocent if he did not know of the conduct
giving rise to the forfeiture, or upon learning of such
conduct, did all that reasonably could be expected under the
circumstances to terminate such use.
The provision creates a rebuttable presumption that an
owner took all the steps that a reasonable person would take if
the owner (1) gave timely notice to an appropriate law
enforcement agency of information that led the owner to know
that the conduct giving rise to forfeiture would occur or has
occurred, and (2) in a timely fashion, revoked permission for
those engaging in such conduct to use the property or took
reasonable steps in consultation with a law enforcement agency
to discourage or prevent the illegal use.\55\ The rebuttable
presumption signifies the Committee's belief that--absent
unusual circumstances--an owner has taken all steps that a
reasonable person would take if he has met the terms of the
presumption. Moreover, an owner--to be considered a reasonable
person--should not be required to take extraordinary steps that
he reasonably believes would likely subject him to physical
danger.
---------------------------------------------------------------------------
\55\ Of course, an owner may be constrained in revoking permission
to use property because of provisions of local, state or federal law
(i.e., contract or landlord-tenant law). In instances when an owner
cannot simply orally revoke permission for use because of such reasons,
the owner shall be considered to have revoked permission for purposes
of the rebuttable presumption if the owner has taken those actions
pursuant to revocation that are permitted by law.
---------------------------------------------------------------------------
A different formulation of the innocent owner defense is
employed for an owner who acquired his interest after the
offense giving rise to the forfeiture. Generally, the owner
must have been a bona fide purchaser for value who at the time
of purchase did not know and was reasonably without cause to
believe that the property was subject to forfeiture. The term
``bona fide purchaser'' is derived from commercial law. It
includes any person who gives money, goods or services in
exchange for the property subject to forfeiture, but it does
not include general unsecured creditors who acquire only a
debt. Moreover, a ``bona fide purchaser'' must give something
of value in exchange for the property. This formulation is
required because much fraud could result if criminals could
shield their property from forfeiture by transferring it to
coconspirators, relatives or friends.
An exception is made to the bona fide purchaser rule to
avoid hardship in cases involving spouses and minor children
who acquire interests in property other than by purchasing
them. If the property is real property, the owner is the spouse
or minor child of the person who committed the offense giving
rise to forfeiture, and the owner uses the property as a
primary residence, a valid innocent owner claim shall not be
denied because the owner acquired the interest through the
dissolution of marriage or by operation of law (in the case of
a spouse) or by inheritance upon the death of a parent (in the
case of a minor child). To be considered an innocent owner, the
spouse or minor child must have been reasonably without cause
to believe that the property was subject to forfeiture at the
time of the acquisition of his interest in the property.
4. Return of Property Upon Showing of Hardship
Even though a claimant may prevail in a civil forfeiture
proceeding, irreparable damage can be done to his property
while it is in government control. For example, if the property
in question is a business, its lack of availability for the
time necessary to win a victory in court could force its owner
into bankruptcy. If the property is a car, the owner might not
be able to commute to work until he can win it back. If the
property is a house, the owner might be left temporarily
homeless (unless the government lets the owner rent the house
back). In such cases, even when the government's case is very
weak, the owner must often settle with the government and lose
a certain amount of money in order to get the property back as
quickly as possible.
Customs law does allow for the release of property pending
final disposition of a case upon payment of a full bond.\56\
However, many property owners do not have the resources to make
use of this provision. Therefore, in order to alleviate
hardship, H.R. 1965 provides that an owner may be entitled to
release of his seized property pending trial.
---------------------------------------------------------------------------
\56\ See 19 U.S.C. Sec. 1614.
---------------------------------------------------------------------------
The owner must show that (1) he has a possessory interest
in the property sufficient to establish standing to contest
forfeiture and has filed a non frivolous claim on the merits of
the forfeiture action, (2) he has sufficient ties to the
community to provide assurance that the property will be
available at the time of trial, (3) continued possession by the
government will cause substantial hardship, such as preventing
him from working, leaving him homeless, or preventing the
functioning of a business, and (4) his hardship outweighs the
risk that the property will be destroyed, damaged, lost,
concealed, diminished in value or transferred if it is
returned. When a court grants a motion to return property, it
must enter any order necessary to ensure that the value of the
property is maintained while the forfeiture action is pending,
including permitting the inspection, photographing and
inventory of the property, and the court may take action in
accordance with Rule E of the Supplemental Rules for Certain
Admiralty and Maritime Cases (such as requiring bonds). The
government may place a lien against the property or file a lis
pendens to ensure that it is not transferred to another person.
Certain property cannot be returned pursuant to this
provision. Such property includes (1) contraband, (2) currency,
monetary instruments, or electronic funds unless they
constitute the assets of a business which has been seized, (3)
property that is evidence of a violation of law, (4) property
particularly suited for use in illegal activities, or (4)
property that is likely to be used to commit additional
criminal acts if returned.
5. Damage to Property while in the Government's Possession
The federal government is exempt from liability under the
Federal Tort Claims Act for damage caused by the negligent
handling or storage of property detained by law enforcement
officers.\57\ As the U.S. Comptroller General once stated,
seized property awaiting forfeiture can be damaged:
---------------------------------------------------------------------------
\57\ ``The provisions of [the Act] shall not apply to . . . [a]ny
claim arising in respect of the assessment or collection of any tax or
customs duty, or the detention of any goods or merchandise by any
officer of customs or excise or any other law-enforcement officer.'' 26
U.S.C. Sec. 2680(c).
Seized conveyances devalue from aging, lack of care,
inadequate storage, and other factors while waiting
forfeiture. They often deteriorate--engines freeze,
batteries die, seals shrink and leak oil, boats sink,
salt air and water corrode metal surfaces, barnacles
accumulate on boat hulls, and windows crack from heat.
On occasion, vandals steal or seriously damage
conveyances.\58\
---------------------------------------------------------------------------
\58\ U.S. Comptroller Gen., U.S. Gen. Accounting Office, Better
Care and Disposal of Seized Cars, Boats, and Planes Should Save Money
and Benefits Law Enforcement, at ii (GAO/PLRD-83-94, 1983).
It is not a victory when a boat owner gets back, for
example, a rusted and stripped hulk of a vessel. Therefore,
H.R. 1965 amends the Federal Tort Claims Act to allow tort
claims based on the negligent destruction, injury, or loss of
goods, merchandise, or other property seized for the purpose of
forfeiture while in the possession of any law enforcement
officer. Of course, if seized property is successfully
forfeited, no claim would be allowed. The Attorney General may
settle certain claims for up to $50,000.
6. Elimination of the Cost Bond
Under current law, a property owner wanting to contest a
seizure of property under a civil forfeiture statute must post
a bond of $5,000 or ten percent of the value of the property
seized, whichever is less, but in no case less than $250.\59\
The bond is unconstitutional in cases involving indigents
because it would deprive such claimants of access to the courts
simply because of their inability to pay.\60\ Even in cases not
involving indigents, the bond should not be required. As
forfeiture expert David Smith stated, it ``is simply an
additional financial burden on the claimant and an added
deterrent to contesting the forfeiture.'' \61\ H.R. 1965
eliminates the requirement that a property owner must file a
cost bond to challenge a civil forfeiture.
---------------------------------------------------------------------------
\59\ See 19 U.S.C. Sec. 1608.
\60\ See Wiren v. Eide, 542 F.2d 757, 763 (9th Cir. 1976).
\61\ Letter from David Smith to Kathleen Clark, Senate Judiciary
Committee, at 5 (Aug. 19, 1992).
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7. Adequate Time to Contest Forfeiture
Currently, a property owner has 20 days (from the date of
the first publication of the notice of seizure) to file a claim
in federal court challenging the government's administrative
forfeiture of property.\62\ To challenge a judicial forfeiture,
the property owner has an exceedingly short 10 days after
process has been executed: \63\
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\62\ 19 U.S.C. Sec. 1608.
\63\ Fed. R. Civ. P. C(6) (Supplemental Rules for Certain Admiralty
and Maritime Claims) (This is the date when a U.S. court takes
possession of the property through ``arrest'' by a federal marshal. It
is not the date when it is initially seized by a law enforcement
officer).
---------------------------------------------------------------------------
Even though these time limits sometimes are ignored in the
interests of justice, failure to file a timely claim can result
in judgment in favor of the government.\64\ H.R. 1965 provides
a property owner 30 days to file a claim following the final
publication of notice (or, if written notice was provided, the
date it was received) of an administrative forfeiture
proceeding. In a judicial forfeiture proceeding, 20 days is
provided after process has been executed.
---------------------------------------------------------------------------
\64\ See, e.g., United States v. Beechcraft Queen Airplane, 789
F.2d 627, 630 (8th Cir. 1986).
---------------------------------------------------------------------------
8. Interest
Under current law, even if a property owner prevails in a
forfeiture action, he will receive no interest for the time
period in which he lost use of his property.\65\ In cases where
money or other negotiable instruments were seized, or money
awarded a property owner, this is manifestly unfair. H.R. 1965
provides that upon entry of judgment for the owner in a
forfeiture proceeding, the United States shall be liable for
post-judgment interest on any money awarded (as set forth in
section 1961 of title 28). The United States shall be liable
for pre-judgment interest in cases involving currency, proceeds
of an interlocutory sale, or other negotiable instruments. The
government must disgorge any funds representing interest
actually paid to the United States or an imputed amount that
would have been earned had it been invested.
---------------------------------------------------------------------------
\65\ In the absence of an express waiver of sovereign immunity, the
government is not liable for interest on seized currency. See Library
of Congress v. Shaw, 478 U.S. 310, 311 (1986).
---------------------------------------------------------------------------
B. Expansions of Federal Forfeiture Power
1. Extension of Forfeiture to Other Crimes
Current law limits civil forfeiture to certain enumerated
federal crimes, and by doing so excludes a number of federal
crimes that frequently generate criminal proceeds. Because H.R.
1965 makes civil forfeiture procedures fair, and civil
forfeiture generally should be available to combat federal
crimes, it makes sense to extend the availability of forfeiture
to these other crimes. Rather then simply making civil
forfeiture available for all federal crimes, some of which do
not generate criminal proceeds, the bill would amend sections
981(a)(1) and 982(a)(2) of title 18 to extend proceeds
forfeiture (both civil and criminal) to the crimes enumerated
in the money laundering statute, 18 U.S.C. Sec. 1956(c)(7).
By providing for forfeiture of the proceeds of these
offenses, the bill ensures that the government will have a
means of depriving criminals of the fruits of their criminal
acts without having to resort to the RICO and money laundering
statutes--provisions which currently permit forfeiture of
criminal proceeds but also carry higher penalties--in cases
where it is unnecessary to do so or where the defendant is
willing to enter a guilty plea to the offense that generated
the forfeitable proceeds but not to the RICO or money
laundering offense.
2. Uniform Definition of Proceeds
To enforce the age-old adage that ``crime does not pay,''
our forfeiture laws seek to deprive criminals of both the tools
they use to commit crime and the fruits--the ``proceeds''--of
their crime. H.R. 1965 would amend sections 981 and 982 of
title 18 to clearly define the term ``proceeds'' in the context
of civil and criminal forfeitures. Proceeds would generally
mean all of property obtained, directly or indirectly, from an
offense or scheme, not just the net profit. Lacking a clear
definition of the term, some courts have construed ``proceeds''
to mean ``net profits'' and allowed criminals to deduct the
cost of their criminal activity from the amount subject to
forfeiture.
3. Expanded Availability of Criminal Forfeiture
H.R. 1965 would amend section 2461 of title 28 to give the
government the option of pursuing criminal forfeiture as an
alternative to civil forfeiture if civil forfeiture is
otherwise authorized. Under current law (28 U.S.C.
Sec. 2461(a)), if a statute provides for forfeiture without
prescribing whether the forfeiture is civil or criminal, it is
assumed that only civil forfeiture is authorized. In such
cases, the government may not pursue forfeiture as part of the
criminal prosecution, but must file a parallel civil forfeiture
case in order to prosecute an individual and forfeit the
proceeds of the offense.\66\
---------------------------------------------------------------------------
\66\See, e.g., 18 U.S.C. Sec. 1955 (gambling), Sec. 545
(smuggling).
---------------------------------------------------------------------------
The vast majority of federal forfeiture statutes fall into
this category. That is, the vast majority of forfeitures must
be pursued civilly even if there is a related criminal
prosecution. To encourage greater use of criminal forfeiture--
with its heightened due process protection--this amendment
would revise section 2461(a) to authorize criminal forfeiture
whenever any form of forfeiture is otherwise authorized by
statute.
C. Exemption of Traditional U.S. Customs Service Forfeitures from H.R.
1965
H.R. 1965 would amend section 2461(b) of title 28 to exempt
traditional U.S. Customs Service forfeiture cases from the
bill's proposed forfeiture procedures. Traditional Customs
Service cases involve the interdiction of imported merchandise
and contraband in violation of the customs revenue and criminal
laws. As the Supreme Court stated in United States v.
Hernandez,\67\ ``[s]ince the founding of our Republic, Congress
has granted the Executive plenary authority to conduct routine
searches and seizures at the border, without probable cause or
a warrant, in order to regulate the collection of duties and to
prevent the introduction of contraband into this country.''
---------------------------------------------------------------------------
\67\ 473 U.S. 531, 537 (1985).
---------------------------------------------------------------------------
To apply the forfeiture procedures proposed in H.R. 1965 to
Customs Service border operations would compromise the
Service's ability to carry out its mission. The bill's proposed
forfeiture procedures will apply, however, when the Customs
Service steps outside of its traditional role and commences
forfeiture actions pursuant to the Controlled Substances Act
and the Immigration and Naturalization Act.
Hearings
The Committee held one day of hearings on civil asset
forfeiture reform on June 11, 1997. Testimony was received from
Billy Munnerlyn, E.E. (Bo) Edwards III, F. Lee Bailey, Susan
Davis, Gerald B. Lefcourt, Stefan D. Cassella, Deputy Chief,
Asset Forfeiture and Money Laundering Section, Criminal
Division, U.S. Department of Justice, Jan P. Blanton, Director,
Executive Office for Asset Forfeiture, Department of the
Treasury, Bobby Moody, Chief of Police, Marietta, Georgia, and
1st Vice President, International Association of Chiefs of
Police., and David Smith. Additional material was submitted by
Nadine Strossen, President, American Civil Liberties
Organization, and Roger Pilon, Director, Center for
Constitutional Studies, Cato Institute.
Committee Consideration
On June 20, 1997, the Committee met in open session and
ordered reported favorably the bill H.R. 1965, without
amendment, by a recorded vote of 26 to 1, a quorum being
present.
Vote of the Committee
Vote on final passage: Adopted 26 to 1.
ROLLCALL NO. 1
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Sensenbrenner............................................... X .............. ..............
Mr. McCollum.................................................... X .............. ..............
Mr. Gekas....................................................... X .............. ..............
Mr. Coble....................................................... X .............. ..............
Mr. Smith (TX).................................................. X .............. ..............
Mr. Schiff...................................................... .............. .............. ..............
Mr. Gallegly.................................................... .............. .............. ..............
Mr. Canady...................................................... .............. .............. ..............
Mr. Inglis...................................................... X .............. ..............
Mr. Goodlatte................................................... X .............. ..............
Mr. Buyer....................................................... X .............. ..............
Mr. Bono........................................................ X .............. ..............
Mr. Bryant (TN)................................................. X .............. ..............
Mr. Chabot...................................................... X .............. ..............
Mr. Barr........................................................ .............. X ..............
Mr. Jenkins..................................................... X .............. ..............
Mr. Hutchinson.................................................. X .............. ..............
Mr. Pease....................................................... X .............. ..............
Mr. Cannon...................................................... X .............. ..............
Mr. Conyers..................................................... X .............. ..............
Mr. Frank....................................................... X .............. ..............
Mr. Schumer..................................................... .............. .............. ..............
Mr. Berman...................................................... .............. .............. ..............
Mr. Boucher..................................................... .............. .............. ..............
Mr. Nadler...................................................... .............. .............. ..............
Mr. Scott....................................................... X .............. ..............
Mr. Watt........................................................ X .............. ..............
Ms. Lofgren..................................................... X .............. ..............
Ms. Jackson Lee................................................. X .............. ..............
Ms. Waters...................................................... X .............. ..............
Mr. Meehan...................................................... X .............. ..............
Mr. Delahunt.................................................... X .............. ..............
Mr. Wexler...................................................... .............. .............. ..............
Mr. Rothman..................................................... .............. .............. ..............
Mr. Hyde, Chairman.............................................. X .............. ..............
-----------------------------------------------
Total....................................................... 26 1 ..............
----------------------------------------------------------------------------------------------------------------
Committee Oversight Findings
In compliance with clause 2(l)(3)(A) of rule XI of the
Rules of the House of Representatives, the Committee reports
that the findings and recommendations of the Committee, based
on oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
Committee on Government Reform and Oversight Findings
No findings or recommendations of the Committee on
Government Reform and Oversight were received as referred to in
clause 2(l)(3)(D) of rule XI of the Rules of the House of
Representatives.
New Budget Authority and Tax Expenditures
Clause 2(l)(3)(B) of House Rule XI is inapplicable because
this legislation does not provide new budgetary authority or
increased tax expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 2(l)(3)(C) of rule XI of the
Rules of the House of Representatives, the Committee sets
forth, with respect to the bill, H.R. 1965, the following
estimate and comparison prepared by the Director of the
Congressional Budget Office under section 403 of the
Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, August 14, 1997.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives,
Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1965, the Civil
Asset Forfeiture Reform Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Susanne S.
Mehlman, who can be reached at 226-2860.
Sincerely,
June E. O'Neill, Director.
Enclosure.
H.R. 1965--Civil Asset Forfeiture Reform Act
SUMMARY
Assuming appropriation of the necessary amounts, CBO
estimates that implementing H.R. 1965 would cost $52 million
over the 1998-2002 period. Because enacting the bill could
affect both direct spending and receipts, pay-as-you-go
procedures would apply, but CBO estimates that any such effects
would not be significant.
Section 4 of the Unfunded Mandates Reform Act of 1995
(UMRA) excludes from application of that act legislative
provisions that are necessary for the implementation of
international treaty obligations. Because section 10 and
section 20 would implement obligations of the United States
under the United Nations Convention Against Illicit Traffic in
Narcotic Drugs and Psychotropic Substances, they would fall
within that exclusion. The remaining sections of H.R. 1965
contain no intergovernmental or private-sector mandates as
defined in UMRA and would impose no costs on state, local, or
tribal governments.
This bill would make numerous changes to federal asset
forfeiture laws that would significantly affect the processing
of about 40,000 seizures conducted each year by the Department
of Justice (DOJ) and the Treasury Department. (The Treasury
Department makes an additional 50,000 seizures annually that
would not be affected by this bill.) Provisions that would have
significant budgetary effects include section 2, which would
allow federal courts to appoint counsel for indigent claimants
who want to contest civil asset forfeiture proceedings, and
section 13, which would eliminate the cost bond requirement,
whereby claimants have to post a bond in the amount of 10
percent of the value of the seized property to preserve the
right to contest the forfeiture. Other provisions in the bill,
such as shifting the burden of proof to the government, would
make proving cases more difficult and time-consuming for the
federal government. Enacting H. R. 1965 also would expand the
government's forfeiture authority to certain criminal cases.
In addition, H.R. 1965 would hold the federal government
liable for any negligent destruction of property held in
government custody. Any judgment rendered against the
government would be paid out of the Claims, Judgments, and
Relief Acts account and would be considered direct spending.
ESTIMATED COST TO THE FEDERAL GOVERNMENT
CBO estimates that implementing H.R. 1965 would increase
discretionary spending for defender services and U.S. Attorneys
by $52 million over the 1998-2002 period, subject to
appropriation of the necessary amounts. We estimate that any
changes in spending from the Claims, Judgments, and Relief Acts
account and in spending and receipts of the Assets Forfeiture
Fund would not be significant. The following table summarizes
the estimated budgetary impact of the bill.
SPENDING SUBJECT TO APPROPRIATION
[By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Spending under current law for defender services and U.S.
Attorneys:
Estimated authorization level \1\....................... 1,308 1,354 1,401 1,448 1,498 1,550
Estimated outlays....................................... 1,296 1,331 1,396 1,443 1,492 1,543
Proposed changes, defender services:
Estimated authorization level........................... 0 4 5 6 6 6
Estimated outlays....................................... 0 4 5 6 6 6
U.S. Attorneys:
Estimated authorization level........................... 0 3 5 5 6 6
Estimated outlays....................................... 0 3 5 5 6 6
Total Changes:
Estimated authorization level........................... 0 7 10 11 12 12
Estimated outlays....................................... 0 7 10 11 12 12
Spending under H.R. 1965:
Estimated authorization level........................... 1,308 1,361 1,411 1,459 1,510 1,562
Estimated outlays....................................... 1,296 1,338 1,406 1,454 1,504 1,555
----------------------------------------------------------------------------------------------------------------
\1\ The 1997 level is the amount appropriated for that year. The
estimated authorization levels for 1998 through 2002 reflect CBO
baseline estimates, assuming adjustment for inflation.
The costs of this legislation fall within budget function
750 (administration of justice).
BASIS OF ESTIMATE
Spending Subject to Appropriation
For the purposes of this estimate, CBO assumes that the
bill will be enacted by October 1, 1997, and that the necessary
funds will be appropriated by the beginning of each fiscal
year.
Because H.R. 1965 would allow for court-appointed counsel
and would eliminate the cost bond requirement, CBO anticipates
that enacting this bill would make it easier for people whose
assets have been seized to challenge the forfeiture of such
assets. Based on information from DOJ, we estimate that the
number of contested civil cases would increase from 3,000
annually to about 3,750 in fiscal year 1998. As the defense bar
becomes increasingly aware of and more familiar with the
provisions of H.R. 1965, CBO expects that the number of
contested civil cases would increase to about 4,500 each year
by fiscal year 2000. While the decision to appoint counsel
would be at the discretion of the judge assigned to each case,
various legal experts expect that court-appointed counsel would
be provided in at least 20 percent of contested civil cases. In
addition, because forfeiture cases involve property, it is
possible that the courts may have to appoint more than one
attorney to represent multiple claimants in the same case.
Historical data suggest an average of 1.5 claims per case.
According to the Administrative Office of the United States
Courts (AOUSC), a court appointed attorney spends an average of
100 hours on a criminal case at an average cost of $66 per hour
(in 1997 dollars and including overhead costs). Because a
forfeiture case is usually less time-consuming and complicated
than a criminal case, CBO estimates that a court-appointed
attorney would spend about 50 hours on a civil forfeiture case.
Additional court-appointed attorneys could be required to
represent claimants in court proceedings held to determine a
claimant's eligibility for court-appointed counsel in the civil
forfeiture proceedings. CBO assumes that eligibility hearings
would be held in 90 percent of contested cases and that a
court-appointed attorney would spend 2 hours, on average, on an
eligibility hearing. We therefore estimate that additional
defender services related to civil asset forfeiture proceedings
would cost about $27 million over the next five years.
CBO expects that the various changes to forfeiture laws
contained in H.R. 1965 would increase the workload for federal
attorneys, especially for the assistant U.S. Attorneys, who are
responsible for working on the contested civil cases. Contested
cases, in particular, could be subject to numerous court
proceedings if this bill is enacted. Moreover, in contested
cases where free legal counsel would be provided, claimants
would have less incentive to settle and more incentive to
pursue all available legal avenues. Based on information from
DOJ, and assuming the historical average claims-to-cases ratio
of 1.5, CBO estimates that the provisions of this bill would
necessitate assistant U.S. Attorneys spending about 15
additional hours on each contested case. CBO estimates that
additional assistant U.S. Attorneys required to meet this
increase in workload would cost about $25 million over the next
five years. This amount includes overhead costs and takes into
account the usual six-month process for hiring assistant U.S.
Attorneys.
CBO also expects that the federal court system could
require additional resources in the future if additional cases
are brought to trial and the number of court proceedings per
case increase. CBO cannot predict the amount of such additional
costs, but we expect that such costs would not be significant.
Direct Spending and Revenues
Enacting H.R. 1965 could affect both direct spending and
governmental receipts (revenues). But CBO estimates that any
such changes would be less than $500,000 a year.
Based on information from various legal experts, CBO does
not expect that a significant number of claims alleging
property damage would be filed against the government.
Therefore, any direct spending from the Claims, Judgments, and
Relief Acts account is not likely to be significant. Also,
based on information from DOJ, CBO estimates that enacting H.R.
1965 would result in little or no net change in the amount of
receipts deposited in the Assets Forfeiture Fund. While fewer
receipts may be realized because certain cases may be harder to
win, the fund could realize additional receipts as a result of
the expanded forfeiture authority provided to the government
under this bill. We expect that any such changes in receipts
are likely to roughly offset each other. Hence, the net change
in receipts would probably be insignificant, as would the
corresponding change in spending from the Assets Forfeiture
Fund.
PAY-AS-YOU-GO CONSIDERATIONS
The Balanced Budget and Emergency Deficit Control Act of
1985 specifies pay-as-you-go procedures for legislation
affecting direct spending or receipts through fiscal year 2007.
Although H.R.1965 could affect both direct spending and
receipts, CBO estimates that any such effects would be less
than $500,000 a year.
INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT
Section 4 of UMRA excludes from application of that act
legislative provisions that are necessary for the
implementation of international treaty obligations. Because
section 10 and section 20 would implement obligations of the
United States under the United Nations Convention Against
Illicit Traffic in Narcotic Drugs and Psychotropic Substances,
they would fall within that exclusion. The remaining sections
of H.R. 1965 contain no intergovernmental or private-sector
mandates.
Estimate prepared by: Susanne S. Mehlman (226-2860).
Estimate approved by: Robert A. Sunshine, Deputy Assistant
Director for Budget Analysis.
Constitutional Authority Statement
Pursuant to Rule XI, clause 2(l)(4) of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in Article I, section 8 of the Constitution.
Section-by-Section Analysis
Sec. 1. Short title and table of contents
Section 1 contains the Short Title of the bill.
Sec. 2. Creation of general rules relating to civil forfeiture
proceedings
Section 2 contains a comprehensive revision of the
procedures governing administrative and judicial civil
forfeiture actions.
Subsection 2(a) enacts a new statute, 18 U.S.C. Sec. 983,
that will set forth the procedures governing a civil forfeiture
case. In some cases, the new statute simply codifies existing
procedures that have been developed in the case law; in those
cases, the case law would continue to apply to the new statute.
In other instances, however, section 983 is intended to depart
from existing practice.
Subsection (a) of section 983 imposes on the government a
set of procedural requirements in administrative forfeiture
proceedings. These requirements are imposed in addition to, and
not in place of, the requirements set forth in the Customs
laws, 19 U.S.C. Sec. 1602, et seq. To the extent that the
procedures are inconsistent, the procedures in section 983 will
apply.
First, subsection (a) requires that the government send
notice of an administrative forfeiture action to all interested
persons,\68\ within 60 days of the seizure of the property. As
is the case under current law, the government is not required
to give actual notice of the forfeiture proceeding, but only to
takes steps ``reasonably calculated'' to apprise interested
parties of the pendency of the action.\69\
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\68\ See 19 U.S.C. Sec. 1607(a).
\69\ See United States v. Clark, 84 F.3d 378, 380 (10th Cir. 1996)
(mailing notice to inmate's place of incarceration is sufficient;
personal service not necessary); Concepcion v. United States, 938 F.
Supp. 134, 141 (E.D.N.Y. 1996) (publication and sending notice to last
known address and prison where defendant was incarcerated is adequate
whether defendant actually receives the notice or not); Hong v. United
States, 920 F. Supp. 311, 316 (E.D.N.Y. 1996) (same); United States v.
Franklin, 897 F. Supp. 1301, 1303 (D. Or. 1995) (attempts to send
notice to defendant's home, attorney and place of confinement were
sufficient; failure to receive notice was not government's fault);
United States v. Schiavo, 897 F. Supp. 644, 648-49 (D. Mass. 1995)
(sending notice to fugitive's last known address is sufficient; not
government's fault that notice was not effective).
---------------------------------------------------------------------------
If the government fails to send the notice within the 60-
day period, it must return the property to the person from whom
it was seized pending further forfeiture action. However, the
statute provides that the government may obtain an extension of
the 60-day time limit from a judge for ``good cause.'' For
example, the court should grant an extension of time if the
government showed that the sending of notice would start an
administrative forfeiture proceeding prematurely, and thus
jeopardize an ongoing criminal investigation. Because the
request for an extension of time would always arise before any
claim was filed, the request would necessarily be made to the
court ex parte.
Subsection (a) also provides a mechanism whereby a person
who did not file a claim in the administrative forfeiture
proceeding because he did not receive adequate notice could
seek to reopen the case.
In general, administrative forfeitures are generally not
subject to judicial review.\70\ Thus, if a claimant fails to
file a claim opposing an administrative forfeiture action, he
may not subsequently ask a court to review the declaration of
forfeiture on the merits.\71\ The new statute would not change
the law in this regard.
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\70\ See 19 U.S.C. Sec. 1609(b) (``A declaration of forfeiture
under this section shall have the same force and effect as a final
decree and order of forfeiture in a judicial forfeiture proceeding in a
district court. . . .'')
\71\ Linarez v. U.S. Department of Justice, 2F.3d 208,213 (7th Cir.
1993) (``[A] forfeiture cannot be challenged in district court under
any legal theory if the claims could have been raised in an
administrative proceeding, but were not.'').
---------------------------------------------------------------------------
Fundamental fairness, however, requires that a claimant
have the opportunity to attack an administrative forfeiture on
the ground that the he did not file a timely claim because the
government failed to provide him with notice of the
administrative action. In such cases, it is appropriate for a
court to determine if the government complied with the
statutory notice provisions and if not, to allow the claimant
to file a claim in accordance with section 1608 notwithstanding
the expiration of the claims period.\72\
---------------------------------------------------------------------------
\72\ See United States v. Woodall, 12 F.3d 791, 793 (8th Cir.
1993).
---------------------------------------------------------------------------
Under current law, however, it is unclear what statute
gives the district courts jurisdiction to review due process
challenges to administrative forfeiture; indeed, plaintiffs
have attempted to base claims on a variety of provisions
including the Tucker Act, 28 U.S.C. Sec. 1346(a)(2); the
Federal Tort Claims Act, 28 U.S.C. Sec. 1346(b); the
Administrative Procedures Act, 5 U.S.C. Sec. 702; Rule 41(e) of
the Federal Rules of Criminal Procedure; 28 U.S.C. Sec. 1356;
and the Fourth and Fifth Amendments to the Constitution.\73\
This has led to widespread confusion as different procedures
are applied in different cases, including different statutes of
limitations depending on the statute employed.\74\
---------------------------------------------------------------------------
\73\ See Wright v. United States, 902 F. Supp. 486, 488-89
(S.D.N.Y. 1995).
\74\ See Williams v. U.S. DEA, 51 F.3d 732, 735 (7th Cir. 1995)
(applying Illinois two-year statute of limitations but noting that the
contours of the exercise of the court's equitable jurisdiction are
``largely undefined''); Demma v. United States, 1995 WL 642831 (N.D.
Ill. Oct. 31, 1995) (applying six-year statute of limitations to Tucker
Act theory).
---------------------------------------------------------------------------
Paragraphs (3) through (7) of subsection (a) establish a
uniform procedure for litigating due process issues in
accordance with the leading cases. Under this procedure, which
is intended to be the exclusive procedure for challenging
administrative forfeiture declarations, a claimant who
establishes that the government failed to comply with the
statutory notice requirements would be entitled to have the
administrative forfeiture set aside.\75\
---------------------------------------------------------------------------
\75\ See United States v. Volanty, 79 F.3d 86,88 (8th Cir. 1996)
(government could correct due process violation by vacating
administrative forfeiture and instituting new judicial forfeiture
proceeding); Barrera-Montenegro v. United States, 74 F.3d 657, 661 (5th
Cir. 1996) (remanding for renewed administrative proceeding unless a
judicial proceeding is commenced); United States v. Giraldo, 45 F.3d
509, 512 (1st Cir. 1995) (same); United States v. Woodall, 12 F.3d 791,
795 (8th Cir. 1993) (same); but see United States v. Boero, 1997 WL
175099 (2nd Cir. Apr. 14, 1997) (when district court finds that notice
of administrative forfeiture was inadequate it should vacate the
forfeiture and proceed directly to the merits of the claim).
---------------------------------------------------------------------------
If the property itself has already been disposed of, the
claim would be made against a sum of money of equivalent
value.\76\ To invoke the jurisdiction of the district court
under this provision, an action to set aside a declaration of
forfeiture would have to be filed within two years of the last
date of publication of notice of the forfeiture of the
property.
---------------------------------------------------------------------------
\76\ See Republic National Bank v. United States, 113 S. Ct. 554
(1992).
---------------------------------------------------------------------------
The claimant could not seek relief under this section if,
notwithstanding the defect in the government's compliance with
the notice provision, the claimant had actual notice of the
seizure from some other source, or was actually present when
the property was seized and knew that it would be
forfeited.\77\
---------------------------------------------------------------------------
\77\ See United States v. One 1987 Jeep Wrangler, 972 F.2d 472, 482
(2nd Cir. 1992) (lack of publication did not amount to violation of due
process where claimant had actual knowledge of the seizure); Lopes v.
United States, 862 F. Supp. 1178, 1188 (S.D.N.Y. 1994) (where there is
actual notice of an impending forfeiture, there is not violation of due
process).
---------------------------------------------------------------------------
The limitations in this section are applicable only to
actions to set aside forfeiture decrees, and do not apply to
actions against agencies for damages relating to the loss or
destruction of seized property.
Subsection (b) of section 983 modifies the procedures in
the Customs laws governing the filing of the claim that
transforms an administrative forfeiture action into a judicial
action. In particular, subsection (b) overrides the provision
in 19 U.S.C. Sec. 1608 regarding the timing of the filing of a
claim. Under the subsection, the claimant would have 30 days
from the last date of publication of the notice of forfeiture.
In the alternative, a person receiving written notice would
have 30 days from the receipt of that notice to file the claim.
If the government sends notice but it is never received, for
whatever reason, the claimant would have to file the claim
within 30 days of the last date of publication. Also, the
subsection dispenses with the cost bond requirement in 19
U.S.C. Sec. 1608.
In filing the claim, the claimant will have to describe the
nature and extent of the claimant's ownership interest in the
property. This minimal requirement is necessary to discourage
the filing of spurious or baseless claims; but it is not
intended to place on the seizing agency any duty to evaluate
the merits of the claim. To the contrary, the seizing agency
will simply transfer the claim to the United States Attorney to
take whatever action is appropriate under the law.
Subsection (c) of section 983 codifies the existing
practice under 28 U.S.C. Sec. 2461(b) which makes the
Supplemental Rules for Certain Admiralty and Maritime Cases
applicable to civil judicial forfeiture actions. As is the case
under current law, the government would have to file a civil
judicial forfeiture complaint in accordance with the Admiralty
Rules.\78\ The new statute modifies current practice, however,
by creating a 90-day time limit on the filing of the complaint
in cases where the government has seized or restrained the
property subject to forfeiture. Under the Customs laws, no
fixed time limit applies.
---------------------------------------------------------------------------
\78\ See e.g. Supplemental Rules C and E.
---------------------------------------------------------------------------
The statute also modifies current practice in that it gives
the Attorney General the option of complying with the 90-day
time limit by filing either a civil complaint or by including a
forfeiture count in a criminal indictment or information, or
both. Current law requires the government to file a civil
complaint.
Subsection (c) also provides a mechanism whereby the
government may request an extension of time from a federal
judge or magistrate. In cases where the reason for the delay
does not require secrecy, notice of the request for the delay
would have to be served on the person filing the claim. But
where the reason relates to the government's concern that
filing the complaint will jeopardize a criminal investigation
or prosecution, the request may be made ex parte. In
particular, the court should grant an extension of time where
the filing of the complaint, which is required to recite the
factual basis in some detail,\79\ would reveal facts concerning
a pending investigation, undercover operation, or court-
authorized electronic surveillance, or would jeopardize
government witnesses. Also, the court could grant the extension
to allow the government to include the forfeiture in a criminal
indictment, and thus avoid the necessity of initiating parallel
civil and criminal forfeitures. However, an extension should
not be granted merely to allow the government additional time
to conduct its investigation. In all such cases, when the 90-
day time limit expires, the claimant would be entitled to know
that the court granted the government an extension of time, but
the claimant would not be entitled to know the reasons for the
extension.
---------------------------------------------------------------------------
\79\See Supplemental Rule E(2).
---------------------------------------------------------------------------
By granting an extension of time, the court would make it
unnecessary for the government, as it often must under current
law, to file a complaint and then immediately request a stay
under Rule 26, Federal Rules of Civil Procedure, or under other
statutory authority,\80\ to avoid jeopardizing a criminal case.
---------------------------------------------------------------------------
\80\ See 18 U.S.C. Sec. 981(g).
---------------------------------------------------------------------------
Finally, subsection (c) codifies the existing rule that
requires a claimant to respond to a civil forfeiture complaint
by filing a claim and answer in accordance with the Admiralty
Rules.
Subsection (d) of section 983 grants district courts the
discretion to appoint counsel for a claimant in a civil
forfeiture proceeding. See Background and Need for Legislation
for a discussion of this subsection.
Subsection (e) of section 983 places the burden on the
government to prove by a preponderance of the evidence that the
property is subject to forfeiture. See Background and Need for
Legislation for a discussion of this subsection.
Subsection (f) of section 983 creates a uniform innocent
owner defense. See Background and Need for Legislation for a
discussion of this subsection.
Subsection (g) of section 983 establishes rules regarding
motions to suppress seized evidence. It recognizes that a
claimant must be afforded a remedy if the government's initial
seizure of the property was illegal for lack of probable cause
and the claimant has standing to object to the Fourth Amendment
violation.\81\ The statute codifies the general rule that the
remedy in such cases is the suppression of the illegally seized
evidence. In such cases, civil forfeiture law is analogous to
the criminal law which provides for the suppression of
illegally seized evidence while permitting the government to go
forward with its case based on other admissible evidence.\82\
---------------------------------------------------------------------------
\81\ See Rawlings v. Kentucky, 448 U.S. 98 (1980).
\82\ See United States v. $7,850.00 in U.S. Currency, 7 F.3d 1355
(8th Cir. 1993); United States v. $67,220.00 in United States Currency,
957 F.2d 280, 284 (6th Cir. 1992); United States v. A Parcel of Land
(92 Buena Vista), 937 F.2d 98 (3rd Cir. 1991), aff'd on separate issue,
113 S. Ct. 1126 (1993); United States v. Premises and Real Property at
4492 S. Livonia Rd., 889 F.2d 1258, 1268 (2nd Cir. 1989); United States
v. $633,021.67 in U.S. Currency, 842 F. Supp. 528 (N.D. Ga. 1993);
United States v. Certain Real Property Located on Hanson Brook, 770 F.
Supp. 722, 730 (D. Me. 1991); United States v. 155 Bemis Road, 760 F.
Supp. 245, 251 (D.N.H. 1991).
---------------------------------------------------------------------------
Subsection (h) of section 983 authorizes the use of hearsay
at pre-trial hearings in which the governing standard is
probable cause. This is consistent with the present rule
regarding criminal forfeitures.\83\ The term ``hearing'' means
either an oral hearing or a determination on written papers, as
provided in Rule 43(e), Federal Rules of Civil Procedure.
Hearsay will not be admissible at trial except as provided in
the Federal Rules of Evidence.
---------------------------------------------------------------------------
\83\ See 18 U.S.C. Sec. 1963(d)(3) permitting hearsay to be
considered in pre-trial hearings in criminal forfeiture cases. See also
McCray v. Illinois, 386 U.S. 300 (1967) (in pre-trial motion to
suppress, informer's identity need not be revealed in a pre-trial
hearing if the government can establish, through another person's
testimony, that the informer is reliable and the information credible).
---------------------------------------------------------------------------
Subsection (i) of section 983, relating to stipulations,
ensures that the government will have an opportunity to present
the facts underlying the forfeiture action to the jury so that
the jury understands the context of the case even if the
claimant concedes forfeitability and relies exclusively on an
affirmative defense.
Subsection (j) of section 983 authorizes the court to take
whatever action may be necessary to preserve the availability
of property for forfeiture. Although not limited to such
instances, it will apply mainly in cases where the government
has not seized the subject property in advance of trial.\84\
---------------------------------------------------------------------------
\84\ See United States v. James Daniel Good Property, 114 S. Ct.
492 (1993) (government need not seize real property, but may use
restraining orders to preserve its availability at trial).
---------------------------------------------------------------------------
Subsection (k) of section 983 provides that Eighth
Amendment issues are to be resolved by the court alone
following return of the verdict of forfeiture. The appropriate
procedure for determining Eighth Amendment issues has confused
the courts and litigants since the Supreme Court decided Austin
v. United States \85\ and Alexander v. United States (holding
that Excessive Fines Clause of the Eighth Amendments may apply
to civil and criminal forfeitures respectively).\86\
---------------------------------------------------------------------------
\85\ 509 U.S. 602, 113 S. Ct. 2801 (1993).
\86\ 509 U.S. 544, 113 S. Ct. 2766 (1993). See, e.g., United States
v. Premises Known as RR #1, 14 F.3d 864, 876 (3d Cir. 1994) (noting
that ``neither Austin nor Alexander addresses the question of whether
judge or jury decides if a civil forfeiture is excessive'' and
suggesting that in view of the ``present uncertainty of the law,'' the
issue be submitted to the jury by special interrogatory and that the
answer be treated as ``non-binding'' on the court).
---------------------------------------------------------------------------
The subsection provides that the Eighth Amendment
determination is to be made after return of the verdict of
forfeiture, or the entry of summary judgment for the
government. This is consistent with cases holding that the
Eighth Amendment's guarantee against Cruel and Unusual
Punishment does not apply until after a verdict of guilt is
returned.\87\ It also makes sense because it is premature to
make excessiveness determination before the court determines
if, and to what extent, property is forfeitable.\88\
---------------------------------------------------------------------------
\87\ See Hewitt v. City of Truth or Consequences, 758 F.2d 1375,
1377 n.2 (10th Cir. 1985), cert. denied, 474 U.S. 844 (1985) (``The
Eighth Amendment does not apply until after an adjudication of
guilt''); see also Ingraham v. Wright, 430 U.S. 651, 671-72 n.40
(1977).
\88\ United States v. One Parcel . . . . 13143 S.W. 15th Lane,
872 F. Supp. 968 (S.D. Fla. 1994); United States v. $633,021.67 in U.S.
Currency, 842 F. Supp. 528 (N.D. Ga. 1993) (denying pre-trial motion to
dismiss on excessiveness grounds).
---------------------------------------------------------------------------
In the interest of conserving judicial resources, the
subsection provides a mechanism for resolving a case on
excessiveness grounds without having to address the
forfeitability issues. The statute recognizes, however, that
excessiveness determinations under Austin are fact-intensive.
Thus, though the claimant might stipulate to the forfeitability
of the property, the court would not be able to rule on the
excessive fines issues until the government had the opportunity
to conduct full discovery on those issues and to place the
relevant evidence before the court.
The subsection also provides that Eighth Amendment
determinations are to be made by the court alone and not by the
jury. Again, there has been some confusion in the case law on
this issue. The Supreme Court has recognized that the right to
a jury trial extends only to factual determinations of guilt or
innocence.\89\ Eighth Amendment determinations, by contrast,
are made by the court alone, generally after the jury has been
discharged. This is consistent with the view that
constitutional issues generally present questions of law for
resolution by the court.
---------------------------------------------------------------------------
\89\ Quick v. Jones, 754 F.2d 1521, 1523 (9th Cir. 1984) (question
of what process is due is a question of law); Burris v. Willis
Independent School District, 713 F.2d 1087, 1094 (1983) (``The question
of whether specific conduct or speech is protected by the first
amendment is ultimately a question of law.'').
---------------------------------------------------------------------------
Finally, the subsection provides that, where an Eighth
Amendment violation is found, the court should adjust the
forfeiture to meet constitutional standards. Again, this
provision is consistent with Eighth Amendment case law.\90\
---------------------------------------------------------------------------
\90\ See United States v. Sarbello, 985 F.2d 716, 718 (3d Cir.
1993) (``We hold that the court may reduce the statutory penalty in
order to conform to the eighth amendment.''); see also United States v.
Chandler, 36 F.3d 358 (4th Cir. 1994); United States v. Bieri, 21 F.3d
819 (8th Cir. 1994); United States v. Busher, 817 F.2d 1409, 1415 (9th
Cir. 1987).
---------------------------------------------------------------------------
This subsection is purely procedural in nature. It is not
intended to define any standard upon which the excessiveness
determination under Austin is to be made nor does it expand the
remedies available to the claimant beyond those required by the
Eighth Amendment.
Subsection (l) of section 983 provides that the government
need not meet its burden of proving forfeitability by a
preponderance of the evidence until the completion of
discovery, or until trial (if no discovery 15 ordered). Of
course, pursuant to the Fourth Amendment, the government must
have probable cause at the time it seizes property. In a
judicial forfeiture action, a claimant may always move to
suppress evidence if he believes that the government has
violated the Fourth Amendment. However, with the exception of a
motion to suppress, the claimant may not move the court for a
preliminary hearing on the status of the government's evidence.
Additionally, the claimant may not move to dismiss the case for
lack of evidence pre-trail. However, the claimant may move to
dismiss alleging that the complaint is facially deficient
pursuant to Rule E of the Supplemental Rules for Certain
Admiralty and Maritime Claims. See e.g., United States v. Two
Parcels of Real Property Located in Russell County, Alabama, 92
F.3d 1123, 1126 (11th Cir. 1996) (``To satisfy this specificity
requirement [Rule E(2)(a)], the complaint `must allege
sufficient facts to provide a reasonable belief that the
property is subject to forfeiture . . .'.'') (bracketed
material added). Pre-trial dispositive motions are limited to
those based on defects in the pleadings, as set forth in Rule
12 of the Federal Rules of Civil Procedure. A claimant may, of
course, move for the entry of summary judgment pursuant to Rule
56, Fed. R. Civ. P., once discovery is complete.
Subsection (m) of section 983 provides that this section's
forfeiture procedures apply to any civil forfeiture action
brought under title 18 U.S.C. Sec. 1 et seq., the Controlled
Substances Act, or the Immigration and Naturalization Act.
Subsection (b) of section 2 of the bill is a conforming
amendment that applies the procedures of 18 U.S.C. Sec. 983 to
civil forfeiture actions brought under the Immigration and
Naturalization Act.
Subsection (c) of section 2 of the bill makes additional
conforming amendments striking the existing innocent owner
provisions in the Immigration and Naturalization Act, the
Controlled Substances Act, and in title 18.
Subsection (d) of section 2 of the bill creates a new
statute, to be codified at 18 U.S.C. Sec. 985, that addresses
the need for a mechanism to permit the release of seized
property back to the claimant pending trial in order to avoid a
hardship. See Background and Need for Legislation for a
discussion of this subsection.
Subsection (e) of section 2 of the bill makes two technical
amendments to the chapter analysis of chapter 46 of title 18.
Subsection (f) of section 2 of the bill makes the proceeds
of any crime constituting ``specified unlawful activity'' for
purposes of the money laundering statute, 18 U.S.C.
Sec. 1956(c)(7), subject to civil forfeiture.
Subsection (g) of section 2 of the bill makes a parallel
amendment to the criminal forfeiture statute. Neither amendment
is intended to override more specific provisions authorizing
forfeiture of facilitating property and instrumentalities of
crime under existing forfeiture statutes.\91\
---------------------------------------------------------------------------
\91\ See, e.g., 18 U.S.C. Sec. 1955(d) (relating to gambling),
Sec. 981(a)(1)(A) and Sec. 982(a)(1) (relating to money laundering).
---------------------------------------------------------------------------
By providing for forfeiture of the proceeds of these
offenses, the amendment ensures that the government will have a
means of depriving criminals of the fruits of their criminal
acts without having to resort to the RICO and money laundering
statutes--provisions which currently permit forfeiture of
criminal proceeds but also carry higher penalties--in cases
where it is unnecessary to do so or where the defendant is
willing to enter a guilty plea to the offense that generated
the forfeitable proceeds but not to the RICO or money
laundering offense.
Subsection (h) of section 2 of the bill is intended to
replace the conflicting and inconsistent terms used to describe
``proceeds'' subject to forfeiture with a uniform definition.
Sections 981 and 982 of title 18 were amended and expanded in
1988, 1989, 1990, 1992 and 1996 to add new offenses to the list
of crimes for which forfeiture is authorized. In each instance,
Congress chose a different term to describe the property that
could be forfeited, leading to great confusion as to the
difference, if any, between ``proceeds'' and ``gross proceeds''
and between ``gross proceeds'' and ``gross receipts.'' The
amendment eliminates this problem by using the term
``proceeds'' throughout the statutes.
Moreover, the amendment defines ``proceeds'' to mean all of
the property derived, directly or indirectly, from an offense
or scheme, not just the net profit. This point is important.
Lacking a clear definition of ``proceeds'' some courts have
construed ``proceeds'' to mean ``net profits'' and have thus
allowed criminals to deduct the cost of their criminal activity
from the amount subject to forfeiture.\92\
---------------------------------------------------------------------------
\92\ See United States v. McCarroll, 1996 U.S. Dist. LEXIS 8975
(N.D. Ill. Jun. 19, 1996) (heroin dealer given credit for cost of
heroin sold); United States v. 122,942 Shares of Common Stock, 847 F.
Supp. 105 (N.D. Ill. 1994) (defendant in fraudulent securities deal
permitted to deduct the amount invested in the scheme from the amount
subject to forfeiture); but see, United States v. McHan, 101 F.3d 1027
(4th Cir. 1996) (Sec. 853(a) authorizes forfeiture of gross proceeds).
---------------------------------------------------------------------------
This makes no sense. A person committing a fraud on a
financial institution has no right to recover the money he
invested in the fraud scheme; nor does a drug dealer have any
right to recover his overhead expenses when ordered to forfeit
the proceeds of drug trafficking. However, in an overbilling
scheme, where the defendant provided some legitimate goods and
services but billed for more than the amount actually provided,
the court would be required to exempt from the forfeiture the
amount of proceeds that the defendant established was traceable
to the legitimate goods and services.
Subsection (h) also enacts a new paragraph (3) of section
981(a) to address a different concern regarding the scope of
the forfeiture of criminal proceeds. Several provisions of
section 981(a)(1) authorize the forfeiture of proceeds or
``property traceable thereto.'' There are two issues regarding
the meaning of ``traceable'' property.
First, the statute codifies the existing case law holding
that if forfeitable proceeds are invested or commingled with
real or personal property, only the portion of that property
derived from the criminal proceeds is considered to be
``traceable to'' the criminal proceeds for purposes of
forfeiture.\93\ However, once the government makes a prima
facie case that the property was illegally acquired, the burden
is on the opposing party to show what part, if any, was
legitimately acquired.\94\
---------------------------------------------------------------------------
\93\ See United States v. One 1980 Rolls Royce, 905 F.2d 89, 91-92
(5th Cir. 1990) (``[W]e conclude that a court should not . . . permit
the complete forfeiture . . . when there is evidence that the
properties were purchased at least in part with legitimate funds.'');
United States v. Pole No. 3172, Hopkinton, 852 F.2d 636, 639 (1st Cir.
1988) (``We agree that the interest acquired as a result of mortgage
payments made with the proceeds of drug transactions should be
forfeitable. . . . [but not] that forfeitability spreads like a
disease from one infected mortgage payment to the entire interest in
the property acquired prior to the payment.'').
\94\ See United States v. One Parcel of Real Property, 921 F.2d
370, 375 (1st Cir. 1990); United States v. One 1987 Mercedes 560 SEL,
919 F.2d 327, 331 (5th Cir. 1990).
---------------------------------------------------------------------------
Thus, for example, if a person invests $5,000 in a fraud
scheme that results in his acquisition of $50,000 in money from
his victims, the entire $50,000 is forfeitable as proceeds; as
provided in section 981(a)(2), no credit is given for the
$5,000 originally invested in the scheme. But if the person
then uses the $50,000 to buy a $100,000 car, paying the balance
with untainted funds, only half the value of the car would be
subject to forfeiture under a ``proceeds'' theory.
The second issue concerns the attenuation of proceeds
invested in a business or other thing of value that has so
appreciated since the time of the investment that it may be
unfair to consider the present value of the business, in its
entirety, to be subject to forfeiture even though it is
traceable to the offense. For example, one could start a small
business with $10,000 obtained in a fraud scheme. Later, the
business could grow to be worth $1 million. Surely, the
original ``seed money'' remains subject to forfeiture, but
under subsection 981(a)(3), whether the entire business would
be subject to forfeiture would be determined according to the
Eighth Amendment, even though the entire business was
undeniably traceable to the original investment of fraud
proceeds.
Sec. 3. Compensation for damage to seized property
Section 3 provides that property owners who prevail in
forfeiture actions can sue the government for any negligent
destruction or damage to the property. See Background and Need
for Legislation for discussion of this section.
Sec. 4. Prejudgment and postjudgment interest
Section 4 provides for the payment of interest to property
owners who prevail in forfeiture actions. See Background and
Need for Legislation for discussion of this section.
Sec. 5. Seizure warrant requirement
Section 5 simplifies and clarifies the government's
authority to seize property for forfeiture. First, 18 U.S.C.
Sec. 981(b)(1) is amended to update the authority of the
Attorney General, and in appropriate cases the Secretary of the
Treasury and the Postal Service, to seize forfeitable property.
This section was last amended in 1989 before paragraphs (D),
(E) and (F) were added to section 981(a)(1). Absent this
amendment, the seizure warrant authority for property
forfeitable under those provisions is unclear. Otherwise, the
amendment is not meant to alter the investigative authority of
the respective agencies.
Subsection (b)(2) preserves the current rule that property
may be seized for civil forfeiture either pursuant to the
Admiralty Rules once a civil judicial complaint is filed, or
pursuant to a seizure warrant. The statute is revised, however,
to provide that a seizure warrant is obtained ``in the same
manner'' as provided in the Rules of Criminal Procedure, not
``pursuant to'' those Rules which, of course, do not apply to
civil forfeitures.\95\
---------------------------------------------------------------------------
\95\ See Rule 54(b)(5).
---------------------------------------------------------------------------
Subsection (b)(2) also conforms section 981(b) to the
current version of 21 U.S.C. Sec. 881(b) (the parallel seizure
statute for drug forfeitures) by authorizing warrantless
seizures in cases where an exception to the Fourth Amendment
warrant requirement would apply. For example, in section 881
cases, courts have approved warrantless seizures in cases where
there is probable cause for the seizure but exigent
circumstances preclude obtaining a seizure warrant.\96\ The
amendment to section 981(b) is necessary because such
circumstances occur frequently in money laundering cases
involving electronic funds transfers.
---------------------------------------------------------------------------
\96\ See United States v. Daccarett, 6 F.3d 37 (2nd Cir. 1993). See
also United States v. Dixon, 1 F.3d 1080 (10th Cir. 1993) (warrantless
seizure under section 881(b)(4) upheld where plain view exception
applies).
---------------------------------------------------------------------------
Finally, subsection (b)(2) is revised to make clear that
federal authorities do not have to obtain a federal warrant to
re-seize property already lawfully in the possession of state
law enforcement authorities when the State elects, in
accordance with state law, to turn the property over to the
federal government for forfeiture under federal law. If there
is a controversy over whether the State seizure of the property
was lawful, of course, federal law would control, once the
property is transferred to federal authority.
The remaining subsections are new provisions. The first, to
be codified as section 981(b)(3), makes clear that the seizure
warrant may be issued by a judge or magistrate judge in any
district in which it would be proper to file a civil forfeiture
complaint against the property to be seized, even if the
property is located, and the seizure is to occur, in another
district. Previously, there was no ambiguity in the statute,
since in rem actions could only be filed in the district in
which the property was located. In 1992, however, Congress
amended 28 U.S.C. Sec. 1355 to provide for in rem jurisdiction
in the district in which the criminal acts giving rise to the
forfeiture took place, and to provide for nationwide service of
process so that the court in which the civil action was filed
could bring the subject property within the control of the
court.\97\ In accord with that statute, the amendment makes
clear that it is not necessary for the government to obtain a
seizure warrant from a judge or magistrate judge in the
district where the property is located, but rather that it may
obtain such process from the court that will be responsible for
the civil case once the property is seized and the complaint is
filed. Any motion for the return of seized property filed
pursuant to Rule 41(e) will have to be filed in the district
where the seizure warrant was issued so that judges and
prosecutors in other districts are not required to deal with
warrants involving property unrelated to any case or
investigation pending in the district. After filing a Rule
41(e) motion, however, the moving party may seek to have the
motion considered by a judge in another district by filing a
change of venue request pursuant to subsection (b)(6).
---------------------------------------------------------------------------
\97\ See 28 U.S.C. Sec. 1355(d).
---------------------------------------------------------------------------
The second new provision, set forth as section 981(b)(4),
relates to situations where a person has been arrested in a
foreign country and there is a danger that property subject to
forfeiture in the United States in connection with the foreign
offenses will disappear if it is not immediately restrained. In
the case of foreign arrests, it is possible for the property of
the arrested person to be transferred out of the United States
before U.S. law enforcement officials have received from the
foreign country the evidence necessary to support a finding a
probable cause for the seizure of the property in accordance
with federal law. This situation is most likely to arise in the
case of drug traffickers and money launderers whose bank
accounts in the United States may be emptied within hours of an
arrest by foreign authorities in the Latin America or Europe.
To ensure that property subject to forfeiture in such cases is
preserved, the new provision provides for the issuance of an ex
parte restraining order upon the application of the Attorney
General and a statement that the order is needed to preserve
the property while evidence supporting probable cause for
seizure is obtained. A party whose property is restrained would
have a right to a post-restraint hearing in accordance with
Rule 65(b), Fed.R.Civ.P. Subsection (b) makes parallel changes
to the Controlled Substances Act (21 U.S.C. Sec. 881(b)).
Sec. 6. Access to records in bank secrecy jurisdictions
Section 6 deals with financial records located in foreign
jurisdictions that may be material to a claim filed in either a
civil or criminal forfeiture case. Frequently in order for the
government to respond to a claim, it must have access to
financial records abroad. For example, in a drug proceeds case
where a claimant asserts that the forfeited funds were derived
from a legitimate business abroad, the government might need
access to foreign bank records to demonstrate in rebuttal that
the funds actually came from an account controlled by
international drug traffickers or money launderers.
Numerous mutual legal assistance treaties and other
international agreements now in existence provide a mechanism
for the government to obtain such records through requests made
to a foreign government. In other cases, the government can
request the records only through letters rogatory. This
amendment deals with the situation that commonly arises where a
foreign government declines to make the requested financial
records available because of the application of secrecy laws.
In such cases, where the claimant is the person protected by
the secrecy laws, the claimant has it within his power to waive
the protection of the foreign law to allow the records to be
made available to the United States, or to obtain the records
himself and turn them over to the government. It would be
unreasonable to allow a claimant to file a claim to property in
federal court and yet hide behind foreign secrecy laws to
prevent the United States from obtaining documents that may be
material to the claim. Therefore, proposed subsection 986(d)
provides that the refusal of a claimant to waive secrecy in
this situation may result in the dismissal of the claim with
prejudice as to the property to which the financial records
pertain.
Sec. 7. Access to other records
Section 7 allows disclosure of tax returns and return
information to federal law enforcement officials for use in
investigations leading to civil forfeiture proceedings in the
same circumstances, and pursuant to the same limitations, as
currently apply to the use of such information in criminal
investigations. Current law, 26 U.S.C. Sec. 6103(I)(4), permits
the use of returns and return information in civil forfeiture
proceedings, but only in criminal cases does it authorize the
disclosure of such information to law enforcement officials at
the investigative stage.\98\ The amendment revises the statute
to treat civil forfeiture investigations and criminal
investigations the same.
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\98\ See 26 U.S.C. Sec. 6103(i)(1).
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Sec. 8. Disclosure of grand jury information to federal prosecutors
Section 8 extends a provision in the FIRREA Act of 1989
that authorizes the use of grand jury information by government
attorneys in civil forfeiture cases. Under current law, a
person in lawful possession of grand jury information
concerning a banking law violation may disclose that
information to an attorney for the government for use in
connection with a civil forfeiture action under 18 U.S.C.
Sec. 981(a)(1)(C). This provision makes it possible for the
government to use grand jury information to forfeit property
involved in a bank fraud violation; it does not permit
disclosure to persons outside the government, nor does it
permit government attorneys to use the information for any
other purpose. Thus, the provision recognizes that civil
forfeiture actions under section 981 are part of any law
enforcement action arising out of a criminal investigation.
The limitation to forfeiture under section 981(a)(1)(C) for
banking law violations, however, is obsolete. Because all civil
forfeiture actions are now recognized as law enforcement
functions, grand jury information should be available to
government attorneys for their use in all civil forfeiture
cases. The amendment therefore strikes the references to
paragraph (c) and to banking law so that disclosure under 18
U.S.C. Sec. 3322(a) will be permitted in regard to any
forfeiture under federal law. The restrictions regarding the
persons to whom disclosure may be made and the use that may be
made of the disclosed material will remain unchanged.
Sec. 9 Use of forfeited funds to pay restitution to crime victims and
regulatory agencies
Section 9 amends the civil forfeiture statutes to make it
clear that forfeited property may be used to restore property
to victims of the offense giving rise to the forfeiture. The
statute dealing with restitution to victims, 18 U.S.C.
Sec. 981(e), explicitly authorizes the use of forfeited funds
to restore property only in cases based on the offenses set
forth in sections 981(a)(1)(C) and (D), most of which involve
financial institution fraud.\99\ In contrast, the criminal
statute, section 982, permits forfeited funds to be restored to
victims in virtually all instances.\100\ Taken together, these
statutes imply that the Attorney General may not use forfeited
funds to restore property to victims in other civil cases--such
as consumer fraud and money laundering.\101\ These amendments
negate that implication by making it clear that the Attorney
General make use the forfeiture laws to restore property to
victims in all cases.
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\99\ The restitution provisions were enacted as part of the
Financial Institutions Reform and Recovery Act (FIRREA) of 1989, which
explains their limitation to these particular offenses.
\100\ See 21 U.S.C. Sec. 853(i) incorporated by reference in
section 982(b).
\101\ Section 981(d) incorporates the Customs laws, which in turn
contain remission and mitigation authority. See 19 U.S.C. Sec. 1618.
But that authority has been interpreted only to permit remission to the
owner of the seized property, a category that does not include most
victims.
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First, subsection (e)(6), which presently authorizes the
payment of restitution to victims of any crime listed in
section 981(a)(1)(C), is expanded to cover all offenses for
which forfeiture is authorized under section 981. In the case
of money laundering offenses, this includes the offense that
constituted the underlying ``specified unlawful activity.''
Second, subsections (e)(3), (4) and (5), which authorize
restitution to financial institutions in cases governed by
section 981(a)(1)(C), is revised to take into account the fact
that not all financial institution offenses are covered by
subsection (a)(1)(C).\102\ Thus, the introduction to each
subsection, respectively, is amended to refer to ``property
forfeited in connection with an offense resulting in pecuniary
loss to a financial institution or regulatory agency''
regardless of what statutory provision is employed to
accomplish the forfeiture.
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\102\ See subsection (a)(1)(A) relating to money laundering
offenses in which the underlying unlawful activity may be a financial
institution offense.
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Third, a similar amendment is made to subsection (e)(7) to
reflect that not all crimes relating to the sale of assets by
receivers of failed financial institutions are covered by
subsection (a)(1)(D), and to eliminate the need to revise the
cross references in this section in the future each time the
various subparagraphs of subsection (a)(1) are amended or
redesignated.
Sec. 10. Enforcement of foreign forfeiture judgment
Section 10 puts the United States in compliance with Vienna
Convention regarding the enforcement of foreign forfeiture
orders. The United States was the eighth country to ratify the
United Nations Convention Against the Illicit Traffic in
Narcotic Drugs and Psychotropic Substances (the Vienna
Convention), and has been under an obligation to meet the
Convention's requirements since the treaty went into effect on
November 11, 1990.
Article V of the Vienna Convention requires the member
nations (the Parties) to enact legislation providing for the
forfeiture of proceeds and instrumentalities of drug
trafficking and drug-related money laundering offenses.
Specifically, paragraph 1(a) of Article V says that each Party
shall adopt measures authorizing the forfeiture of ``proceeds
derived from offenses established in accordance with article 3,
paragraph 1, [which defines the predicate drug and drug-related
money laundering offenses], or property the value of which
corresponds to that of such proceeds.''
The United States is in full compliance with these
requirements insofar as they relate to domestic forfeitures.
The drug and money laundering forfeiture statutes enacted by
Congress since 1978 authorize the forfeiture of both drug
proceeds and property involved in money laundering offenses
where the underlying crime is committed in the United States.
The substitute assets provisions of these statutes permit the
forfeiture of property of ``equivalent value'' when the
property traceable to the criminal offense is unavailable.\103\
Indeed, these statutes frequently serve as models for other
Parties seeking to comply with the Vienna Convention's
requirements. Additional legislation, however, will support our
compliance with the Convention's international forfeiture
obligations.
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\103\ See 21 U.S.C. Sec. 853(p).
---------------------------------------------------------------------------
Under Article V, a Party must provide for the forfeiture of
drug proceeds derived from an offense occurring in another
country by providing forfeiture assistance to a Party in whose
jurisdiction the underlying drug or money laundering offense
occurred. This obligation applies both to the drug proceeds
themselves and to property of equivalent value. Under 18 U.S.C.
Sec. 981(a)(1)(B), the United States can initiate a civil
action against foreign drug proceeds that would result in the
seizure and confiscation of such property. But because that
statute is a civil in rem statute, it does not authorize the
forfeiture of substitute assets of equivalent value.
The proposed statute is intended to reinforce our
compliance with the Vienna Convention in this regard by giving
our treaty partners access to our courts for enforcement of
their forfeiture judgments. Under the proposal, once a
defendant is convicted of a drug trafficking or money
laundering offense in a foreign country and an order of
forfeiture is entered against him, the foreign country, as the
Party requesting assistance under the Vienna Convention, would
file a civil action as a plaintiff in federal court seeking
enforcement of the judgment against assets that may be found in
the United States. The Requesting Party, however, would not be
allowed to file for enforcement without approval from the
United States Department of Justice, thereby permitting the
United States to screen out requests that are factually
deficient or based on unacceptable foreign proceedings.
The concept of placing the Requesting Party in the posture
of a plaintiff seeking enforcement of a judgment is drawn from
Canada's Mutual Legal Assistance in Criminal Matters Act.
Section 9 of the Act provides, in pertinent part:
Where the Minister [of Justice] approves a request of
a foreign state to enforce the payment of a fine
imposed in respect of an offense by a court of criminal
jurisdiction of the foreign state, a court in Canada
has jurisdiction to enforce the payment of the fine and
the fine is recoverable in civil proceedings instituted
by the foreign state, as if the fine had been imposed
by a court in Canada.
The Justice Department has been informed by Canadian
Justice Ministry authorities that, although this provision has
not yet been applied, it is expected to cover foreign criminal
forfeiture orders. Canada views Section 9 as part of its
response to the Vienna Convention.
Enactment of this proposal would bring the United States
into line with an important trend in international law
enforcement while preserving our in rem/in personam
distinctions and without requiring the government to become a
party to the enforcement of a foreign order. Laws providing for
the enforcement of foreign confiscation orders have been
enacted by a number of jurisdictions, including Australia,
Denmark, Hong Kong, Japan, the Netherlands, Singapore, and the
United Kingdom. We can anticipate that more countries will
enact laws to give full faith and credit to their treaty
partners' ``equivalent value'' forfeiture orders. If we expect
such countries to enforce our forfeiture orders against
substitute assets located abroad, we must be prepared to render
reciprocal assistance.
Sec. 11. Admissibility of foreign business records
Section 11 adds a new provision to Title 28 to allow
foreign-based records of a regularly conducted activity,
obtained pursuant to an official request, to be authenticated
and admitted into evidence in a civil proceeding, including
civil forfeiture proceedings, notwithstanding the requirements
of F.R.Evid. Rules 803(6) and 901(a)(1), by means of a
certificate executed by a foreign custodian (or other person
familiar with the record keeping activities of the institution
maintaining the records). This new provision would be the civil
analog to 18 U.S.C. Sec. 3505.
To make foreign records of a regularly conducted activity
admissible in a civil proceeding under current law, F.R.Evid.
Rules 803(6) and 901(a)(1) currently require that a foreign
custodian or other qualified witness give testimony, either by
appearing at a proceeding, or in a deposition taken abroad and
introduced at the proceeding, establishing a record-keeping
exception to the hearsay rule (under Rule 803(6)) and
authentication (under 901(a)(1)).
There is, however, no means by which the U.S. government
can compel the attendance of a foreign custodian or other
qualified foreign witness at a U.S. proceeding to testify.
Thus, to adduce the requisite testimony the government must (1)
rely on the prospective witness' willingness to voluntarily
appear (which is very rare and subject to vicissitudes) or (2)
attempt to obtain a foreign deposition of the witness. The
latter process is unduly cumbersome (when measured in terms of
the objective, i.e., to make records admissible) and may not be
available in many situations, especially under administrative
agreements, such as a tax treaty.
By enacting a civil analog to 18 U.S.C. Sec. 3505, which
provides for the admissibility of foreign business records in
criminal cases, this provision would provide for a streamlined
process for making foreign records of a regularly conducted
activity admissible without the U.S. government having to
either (1) rely on having a foreign witness voluntary travel to
the U.S. and appear at a civil proceeding or (2) get involved
in the unduly cumbersome process of deposing the witness
abroad.
Sec. 12. Conforming amendments to title 28, to rules of procedure, and
to the Controlled Substances Act
Section 12 makes minor and technical amendments to 28
U.S.C. Sec. 524(c), the statute governing the Justice Assets
Forfeiture Fund. In addition, Section 12 amends the Admiralty
Rules to give the claimant 20 days, instead of only 10 days, to
file a claim in a civil judicial forfeiture case. Finally,
Section 12 repeals 21 U.S.C. Sec. 888. That statute, which
contains a filing deadline in forfeiture cases involving
automobiles used to facilitate drug trafficking offenses, is
rendered unnecessary by the general purpose filing deadlines
included in 18 U.S.C. Sec. 983.
Sec. 13. Inapplicability of the Customs laws
Section 13 is intended to make clear that the incorporation
of the Customs forfeiture laws for forfeiture cases under 18
U.S.C. Sec. 983 does not include the cost bond requirement in
19 U.S.C. Sec. 1608 or the burden of proof provision in 19
U.S.C. Sec. 1615. The latter provision, of course, is plainly
inconsistent with the burden of proof provision in section
983(e).
Also, Section 13 amends 28 U.S.C. Sec. 2461(b) to make
clear that in any civil forfeiture case, the procedures set
forth in chapter 46 of title 18 apply, except that those
procedures do not apply in cases handled by the U.S. Customs
Service under statutes other than those in title 18 or title
21.
Sec. 14. Applicability
This section provides that the amendments made in this Act
are intended to apply prospectively. In the case of the
amendments to the Customs laws, Admiralty Rules, and other
statutes affecting administrative forfeitures and the procedure
for filing a claim to initiate a judicial civil forfeiture, the
new provisions would apply to seizures occurring 60 days after
the effective date of the Act. The new trial procedures
governing judicial civil forfeitures would apply to cases in
which the complaint was filed by the government after the
effective date of the Act. Finally, changes to the substantive
forfeiture statutes, such as those that expand forfeiture to
apply to offenses for which forfeiture has not previously been
available as a remedy, would apply to offenses occurring on or
after the effective date.
Sec. 15. Jurisdiction and venue in forfeiture cases
Section 15 amends the statutes relating to jurisdiction and
venue. Historically, courts had in rem jurisdiction only over
property located within the judicial district. Since 1986,
however, Congress has enacted a number of jurisdictional and
venue statutes permitting the courts to exercise authority over
property located in other districts under certain
circumstances.\104\
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\104\ See 28 U.S.C. Sec. 1355(b) (authorizing forfeiture over
property in districts where act giving rise to the forfeiture
occurred); 18 U.S.C. Sec. 981(h) (creating expanded venue and
jurisdiction over property located elsewhere that is related to a
criminal prosecution pending in the district); 28 U.S.C. Sec. 1355(d)
(authorizing nationwide service of process in forfeiture cases).
---------------------------------------------------------------------------
Many older statutes and rules, however, still contain
language reflecting the old within-the- district requirements.
These technical amendments bring those provisions up to date in
accordance with the new venue and jurisdictional statutes.
Indeed, several courts have already held that nationwide
service of process provisions necessarily override Rule
E(3)(a).\105\ The amendment is therefore intended merely to
remove any ambiguity resulting from Congress's previous
omission in conforming Rule E and the other amended provisions
to section 1355(d) as they apply to forfeiture cases.
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\105\ See United States v. Parcel I, Beginning at a Stake, 731 F.
Supp. 1348, 1352 (S.D. Ill. 1990); United States v. Premises Known as
Lots 50 & 51, 681 F. Supp. 309, 313 (E.D.N.C. 1988).
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Sec. 16. Minor and technical amendments relating to 1992 forfeiture
amendments
Section 16(a) amends section 982(b)(2) to clarify, in light
of additions made to section 982(a) in 1990 and 1992, that the
substitute asset limitation in that section applies only to
money laundering cases. Section 16(b) makes stylistic changes
to section 986, making it applicable to all section 981
forfeitures including the provisions added in 1992, and
eliminating the erroneous reference to section 1960. The
amendment also makes it possible to issue a subpoena before a
civil complaint is filed, and strikes a meaningless cross-
reference to a non-existent statute, 18 U.S.C. Sec. 985.
Section 16(c) is a purely technical amendment.
Sec. 17. Drug paraphernalia technical amendments
Section 17 makes technical changes to the drug
paraphernalia statute. Section 511(a)(10) of the Controlled
Substances Act (21 U.S.C. Sec. 881(a)(10)) provides for the
civil forfeiture of ``[a]ny drug paraphernalia (as defined in
section 857 of this title).'' Section 2401 of the Crime Control
Act of 1990, Pub.L. 101-647, 104 Stat. 4858, November 29, 1990,
transferred 21 U.S.C. Sec. 857 (drug paraphernalia violations)
to a new 21 U.S.C. 863 and made it part of the Controlled
Substances Act. ``Drug paraphernalia'' is defined at section
863(d). Paragraph (a) above amends 21 U.S.C. Sec. 881(a)(10) to
correct the misreference to the repealed section 857.
Prior to enactment of 21 U.S.C. Sec. 863, references in 21
U.S.C. Sec. Sec. 881 and 853 to violations of ``this
subchapter'' as bases for forfeiture did not include drug
paraphernalia violations because 21 U.S.C. Sec. 857 was part of
the Anti-Drug Abuse Act of 1986. The references to ``this
subchapter'' in 21 U.S.C. Sec. Sec. 853 and 881 are actually
references to the original legislation (Title II of Pub.L. 91-
513, October 27, 1970, 84 Stat. 1242) popularly known as the
``Controlled Substances Act''.\106\ Consequently, the reference
to ``this title'' in 21 U.S.C. Sec. 881(a)(10) should be
corrected to ``this subchapter'' when the proposed amendment is
codified.
---------------------------------------------------------------------------
\106\ See editorial note entitled ``References in Text'' after 21
U.S.C. Sec. 801 in West's Federal Criminal Code and Rules (1991 Revised
Edition) at 962.
---------------------------------------------------------------------------
Section 863 penalizes sale, use of any facility of
interstate commerce to transport, and import or export of drug
paraphernalia with imprisonment for up to three years.
Additionally, 21 U.S.C. Sec. 863(c) provides for criminal
forfeiture of drug paraphernalia involved in a violation of 21
U.S.C. Sec. 863 ``upon the conviction of a person for such
violation'' and directs forfeited drug paraphernalia to be
delivered to the Administrator of General Services, who may
order its destruction or authorize its use by federal, state,
or local authorities for law enforcement or educational
purposes. Paragraph (b) above deletes section 863(c) as
unnecessary because 21 U.S.C. Sec. 853(a)(2) provides for
criminal forfeiture of any property used to commit ``a
violation of this subchapter'' that is punishable by
imprisonment for more than one year. Section 863 is such a
violation. Deletion of section 863(c) also removes section
863(c)'s contradiction of section 853(h)'s provision for
disposition of criminally forfeited drug paraphernalia by the
Attorney General. Disposition of drug paraphernalia forfeited
civilly under section 881 is also by the Attorney General
pursuant to 21 U.S.C. Sec. 881(e).
Sec. 18. Certificate of reasonable cause
Section 18 makes a technical amendment to 28 U.S.C.
Sec. 2465 to provide that a certificate of reasonable cause
shall be issued in appropriate circumstances whether the
property in question was seized or merely arrested pursuant to
an arrest warrant in rem. The amendment is necessary because of
the Supreme Court's decision in United States v. James Daniel
Good Property, \107\ which explained that the government need
not seize real property for forfeiture but may instead post the
property with an arrest warrant issued pursuant to the
Admiralty Rules and file a lis pendens.
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\107\ 114 S. Ct. 492 (1993).
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Sec. 19. Authorization to share forfeited property with cooperating
foreign governments
Section 19 provides authorization to share forfeited
property with cooperating foreign governments. Section 981(i)
of title 18 authorizes the sharing of forfeited property with
foreign governments in certain circumstances. It currently
applies to all civil and criminal forfeitures under 18 U.S.C.
Sec. Sec. 981-82, which are the forfeiture statutes for most
federal offenses in title 18. Older parallel provisions
applicable only to drug cases and Customs cases appear in 21
U.S.C. Sec. 881(e)(1)(E) and 19 U.S.C. Sec. 1616a(c)(2),
respectively.
The amendment simply extends the existing sharing authority
to all other criminal and civil forfeitures, including those
undertaken pursuant to RICO, the Immigration and Naturalization
Act, the anti-pornography and gambling laws, and other statutes
throughout the United States Code. Because the amendment makes
the parallel provisions in the drug and customs statutes
unnecessary, section 881(e) is amended to remove the
redundancy.
Sec. 20. Forfeiture of property used to facilitate foreign drug crimes
Section 20 is another provision relating to Vienna
Convention, which the United States ratified on November 11,
1990. Under the Convention, the United States is obligated to
enact procedures for the forfeiture of both the proceeds and
the instrumentalities of foreign crimes involving drug
trafficking. 18 U.S.C. Sec. 981(a)(1)(B) already provides for
the forfeiture of foreign drug proceeds, but it does not
provide for the forfeiture of facilitating property. The
amendment rectifies this omission.
Sec. 21. Forfeiture of proceeds traceable to facilitating property in
drug cases
Section 21 provides for the forfeiture of proceeds
traceable to facilitating property in drug cases. Currently 21
U.S.C. Sec. 881(a)(4) permits the forfeiture of conveyances
used to facilitate a controlled substance violation. Similarly,
section 881(a)(7) permits the forfeiture of real property used
to facilitate such a violation. Neither statute, however,
explicitly extends forfeiture to the proceeds traceable to the
sale of such conveyances or real property. Not infrequently,
for investigative reasons, facilitating property is not
immediately seized. Thus, the owners are able to sell the
property, and the proceeds of that sale are outside the purview
of the statute. Similarly, if property is destroyed before it
is seized, the government is unable to forfeit the insurance
proceeds.
The amendment revises sections 881(a)(4) and (7) to permit
forfeiture of proceeds traceable to forfeitable property,
including proceeds of a sale or exchange as well as insurance
proceeds in the event the property is destroyed. The amendment
also insures that the ``innocent owner'' exceptions apply to
the forfeiture of traceable property in all cases where the
facilitating property itself would not be forfeitable. (This
latter provision is necessary, of course, only if the uniform
innocent owner provisions of 18 U.S.C. Sec. 983 are not
enacted. If section 983 is enacted, these innocent owner
provisions will be stricken by conforming amendments.) The
portion of this amendment relating to section 881(a)(4) passed
the Senate in 1990 as section 1907 of S. 1970.
Sec. 22. Forfeiture of proceeds of certain foreign crimes
Section 22 authorizes the forfeiture of the proceeds of any
foreign crime designated as ``specified unlawful activity'' for
purposes of the money laundering statute. Such crimes currently
include drug trafficking, terrorism and other crimes of
violence and bank fraud. By authorizing the forfeiture of the
proceeds of such crimes when found in the United States, the
provision makes it more difficult for international criminals
to use the United States as a haven for the profits from their
crimes, and it permits the United States to assist foreign
governments in recovering the proceeds of crimes committed
abroad.
The forfeiture provision will only apply where the foreign
offense was punishable by at least one year in prison in the
foreign country, and would be recognized as a felony under
federal law if committed within the jurisdiction of the United
States.
Sec. 23. Civil forfeiture of coins and currency in confiscated gambling
devices
Section 23 makes a change in the civil forfeiture
provisions in the Gambling Devices Act, 15 U.S.C. Sec. 1171, et
seq. The Gambling Devices Act, set out as chapter 24 of title
15, is a scheme for regulating devices like slot machines and
other machines used for gambling. In general, the chapter makes
it illegal to ship such devices into states where they are
illegal and to use or possess them in areas of special federal
responsibility such as in the special maritime and territorial
jurisdiction and in Indian country. 15 U.S.C. Sec. 1175
provides for the seizure and civil forfeiture of gambling
machines involved in a violation of the chapter. Occasionally a
slot machine or video game involved in a violation will contain
money. This section clarifies that money in such a machine at
the time it is seized is also subject to seizure and
forfeiture. Such a forfeiture is justified and the section
eliminates any need for a complicated procedure under which
such a machine would have to be opened and the money counted
and removed before it can be seized.
Sec. 24. Clarification of judicial review of forfeiture
Section 24 clarifies 21 U.S.C. Sec. 877. That statute
provides that ``(a)ll final determinations, findings, and
conclusions of the Attorney General under this subchapter shall
be final . . . except that any person aggrieved by a final
decision of the Attorney General may obtain review of the
decision in the United States Court of Appeals for the District
of Columbia or the circuit in which his principal place of
business is located upon petition filed with the court. . .
.'' One court has found that the ``express and unambiguous
terms'' of section 877 provided the court of appeals with
jurisdiction to review on direct appeal a denial of a petition
for remission or mitigation of the forfeiture of property by an
agency.\108\
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\108\ Scarabin v. DEA, 925 F.2d 100, 100-01 (5th Cir. 1991). This
decision was later upheld in Clubb v. FBI, No. 93-4912 (5th Cir. Feb.
28, 1994) (unpublished).
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The decision in Scarabin is contrary to the statutory
language and legislative history of section 877 which show that
Congress intended judicial review only for those decisions of
the Attorney General affecting the pharmaceutical and research
industries. The amendment clarifies the meaning of section 877
by excluding the review of decisions of the Attorney General or
the Attorney General's designees relating to the seizure,
forfeiture, and disposition of forfeited property, including
rulings on petitions for remission or mitigation.
Sec. 25. Technical amendments relating to obliterated motor vehicle
numbers
Section 25 contains technical amendments relating to
obliterated motor vehicle identification numbers. 18 U.S.C.
Sec. 512 is the civil forfeiture statute governing motor
vehicles and parts with obliterated serial numbers. The
amendments cross-reference the new procedural statutes in
sections 981-86, including the innocent owner defense in
section 983.
Sec. 26. Statute of limitations for civil forfeiture actions
Presently, forfeiture actions must be filed within five
years of the discovery of the offense giving rise to the
forfeiture. In customs cases, in which the property is the
offender, this presents no problem. In such cases, the
discovery of the offense and the discovery of the involvement
of the property in the offense occur simultaneously.
This provision of the customs laws, however, is
incorporated into other forfeiture statutes. In those cases,
the government may be aware of an offense long before it learns
that particular property is the proceeds of that offense. For
example, the government may know that a defendant robbed a bank
in 1990 but not discover that the proceeds of the robbery were
used to buy a motorboat until 1996. Under current law the
forfeiture of the motorboat would be barred by the statute of
limitations. The amendment rectifies this situation by allowing
the government to file the forfeiture action within five years
of the discovery of the offense giving rise to the forfeiture,
as under current law, or within two years from the discovery of
the involvement of the property in the offense, whichever is
longer.
Sec. 27. Destruction or removal of property to prevent seizure
Section 27 is intended to remove any possible ambiguity
about whether 18 U.S.C. Sec. 2232 (Destruction or removal of
property to prevent seizure) applies to seizures for
forfeiture. In particular, it is intended to alleviate any
concern that section 2232 is limited to investigative
``searches and seizures'' only and thus excludes forfeiture
seizures executed by law enforcement agencies pursuant to
seizure warrants issued against forfeitable property (see,
e.g., 21 U.S.C. Sec. 881(b)) and forfeiture seizures executed
by the U.S. Marshals Service pursuant to warrants of arrest in
rem or orders of criminal forfeiture. The amendment also adds
language to clarify that interference with seizures of real
property is included within the statute's prohibitions.
Sec. 28. In personam judgments
Section 28 makes it clear that ancillary proceedings are
not necessary where the order of forfeiture contains only an in
personam money judgment against the defendant. It is well-
established that in a criminal forfeiture case, the court, in
lieu of ordering the forfeiture of specific assets, can enter a
personal money judgment against the defendant for an amount of
money equal to the amount otherwise subject to forfeiture.\109\
In such cases, obviously, no interests of any third parties can
be implicated. Therefore, there is no need for any ancillary
hearing.
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\109\ United States v. Voight, 89 F.3d 1050 (3rd Cir. 1996)
(government is entitled to a personal money judgment equal to money
involved in the money laundering offense); United States v. Ginsburg,
773 F.2d 798, 801 (7th Cir. 1985) (en banc), cert. denied, 475 U.S.
1011 (1986); United States v. Conner, 752 F.2d 566, 576 (11th Cir.
1985), cert. denied, 474 U.S. 821 (1985).
---------------------------------------------------------------------------
Sec. 29. Uniform procedures for criminal forfeiture
Section 29 corrects omissions that occurred when Congress
enacted new criminal forfeiture provisions for cases involving
fraud against government regulatory agencies (18 U.S.C.
Sec. 982(a)(3)) and car-jacking (18 U.S.C. Sec. 982(a)(5)) but
neglected to enact any criminal forfeiture procedures. To solve
that problem, and to make it unnecessary to amend the
procedural statute again each time new forfeiture statutes are
enacted, section 981(b)(1) is amended to incorporate the
procedures in 21 U.S.C. Sec. 853 for all criminal forfeitures
under section 981(a). The section dealing with rebuttable
presumptions in drug cases, 21 U.S.C. Sec. 853(d), is the only
provision omitted because it has no application outside the
context of narcotics violations.
Sec. 30. Availability of criminal forfeiture
Section 30 is intended to give the U.S. Attorneys the
option of pursing criminal forfeiture as an alternative to
civil forfeiture if civil forfeiture is otherwise authorized.
Under current law, 28 U.S.C. Sec. 2461(a), if a statute
provides for forfeiture without prescribing whether the
forfeiture is civil or criminal, it is assumed that only civil
forfeiture is authorized. In such cases, the government may not
pursue forfeiture as part of the criminal prosecution, but must
file a parallel civil forfeiture case in order to prosecute an
individual and forfeit the proceeds of the offense.\110\
---------------------------------------------------------------------------
\110\ See, e.g., 18 U.S.C. Sec. 1955 (gambling), Sec. 545
(smuggling).
---------------------------------------------------------------------------
The vast majority of federal forfeiture statutes fall into
this category. That is, the vast majority of forfeitures must
be done civilly even if there is a related criminal
prosecution. To encourage greater use of criminal forfeiture--
with its heightened due process protection--this amendment
revises section 2461(a) to authorize criminal forfeiture
whenever any form of forfeiture is otherwise authorized by
statute.
Sec. 31. Discovery procedure for locating forfeited assets
Section 31(a) amends 21 U.S.C. 853(m) to give the court the
discretion to exclude a convicted defendant from a post-trial
deposition conducted for the purpose of locating the
defendant's forfeited assets if the defendant's presence could
frustrate the purpose of the inquiry. The provision is
necessary because otherwise, under Rule 15 of the Federal Rules
of Criminal Procedure, the defendant would have the right to be
present at a deposition conducted for the purpose of locating
assets that have been declared forfeited.\111\ If, for example,
the assets include funds in bank accounts that the defendant
had hoped to conceal from the government and the court, the
defendant's presence at the deposition could frustrate its
purpose because upon learning that the government had
discovered the location of his secret accounts, the defendant
could quickly take steps to remove the assets before government
agents could recover them. Subsection (b) contains a technical
amendment that makes clear that the authority to subpoena bank
records in 18 U.S.C. Sec. 986 applies in criminal forfeiture
cases.
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\111\ United States v. Saccoccia, 913 F. Supp. 129 (D.R.I. 1996).
---------------------------------------------------------------------------
Sec. 32. Criminal forfeiture for money laundering conspiracies
Section 32 clarifies the scope of criminal forfeiture for
money laundering conspiracies. Current law provides for the
forfeiture of property involved in the substantive money
laundering offenses set forth in titles 18 and 31. It also
provides for the forfeiture of property involved in
conspiracies to commit violations of 18 U.S.C. Sec. Sec. 1956
and 1957 because such conspiracies are charged as violations of
section 1956(h). There is no provision, however, for the
forfeiture of property involved in conspiracies to violate the
title 31 money laundering offenses because such conspiracies
are charged as violations of 18 U.S.C. Sec. 371, a statute for
which forfeiture is not presently authorized. The amendment
plugs this loophole by providing for forfeiture of the property
involved in a conspiracy to commit any of the offenses listed
in section 982(a)(1) following a criminal conviction on the
conspiracy count.
Sec. 33. Correction to criminal provision for alien smuggling and other
immigration offenses
Section 33 corrects technical errors in the drafting of
Section 217 of the Illegal Immigration Reform and Immigrant
Responsibility Act of 1996 that nullify the intended effect of
the criminal forfeiture provisions. It is evident from the text
of the provision that Congress intended to authorize criminal
forfeiture for violations of 8 U.S.C. Sec. Sec. 1324(a),
1324A(a)(1) and 1324A(a)(2). References to those statutes,
however, appear only in one subparagraph of the provision, and
not in the introductory paragraph that lists the offenses for
which forfeiture may be imposed as a penalty. The statutes must
be referenced in the introductory language to give the
provision its intended effect. Subsequent surplus references
are deleted. In addition, the statute is re-designated as
paragraph (7) of 18 U.S.C. Sec. 982(a) because another
paragraph (6) was previously enacted.
Sec. 34. Repatriation of property placed beyond the jurisdiction of the
court
Section 34 allows a court to order the repatriation of
property placed beyond the jurisdiction of the court. In
criminal forfeiture cases, the sentencing court is authorized
to order the forfeiture of ``substitute assets'' when the
defendant has placed the property otherwise subject to
forfeiture ``beyond the jurisdiction of the court.''
Frequently, this provision is applied when a defendant has
transferred drug proceeds or other criminally derived property
to a foreign country. Often, however, the defendant has no
other assets in the United States of a value commensurate with
the forfeitable property overseas. In such cases, ordering the
forfeiture of substitute assets is a hollow sanction.
Other countries, such as the United Kingdom, address this
problem by authorizing the court to order the defendant to
repatriate the property that he has sent abroad. Because the
sentencing court has in personam jurisdiction over the
defendant, it can use this authority to reach assets that are
otherwise beyond the jurisdiction of the court, as long as the
defendant retains control of the property. This section amends
21 U.S.C. Sec. 853 to authorize the sentencing court to issue a
repatriation order either post-trial as part of the criminal
sentence and judgment, or pre-trial pursuant to the court's
authority under 21 U.S.C. Sec. 853(e) to restrain property,
including substitute assets, so that they will be available for
forfeiture.\112\ Failure to comply with such an order would be
punishable as a contempt of court, or it could result in a
sentencing enhancement, such as a longer prison term, under the
U.S. Sentencing Guidelines, or both. The government has the
authority to grant use immunity to a defendant for the act of
repatriating property to the United States pre-trial or while
an appeal was pending if such an act would tend to implicate
the defendant in a criminal act in violation of the Fifth
Amendment.\113\
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\112\ See United States v. Sellers, 848 F. Supp. 73 (E.D. La. 1994)
(pre-trial repatriation order).
\113\ Id. (no Fifth Amendment violation if government does not use
evidence of the repatriation in its case in chief).
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Sec. 35. Right of third parties to contest forfeiture of substitute
assets
Section 35 deals with the right of third parties to contest
the forfeiture of substitute assets. Current law is unclear
with respect to when the government's interest in substitute
assets vests. Some have argued that because the relation-back
provisions of section 853(c) do not expressly apply to
substitute assets, the government's interest in substitute
assets does not vest until the jury returns a special verdict
of forfeiture or the court enters a preliminary order of
forfeiture. Others have argued that because the substitute
asset is forfeited in place of property in which the
government's interest vested at the time of the act giving rise
to forfeiture, the government's interest in the substitute
asset vests on the date on which the crimes were committed.
Still another interpretation is that the government's interest
in substitute assets vests at the time the grand jury returns
an indictment including a substitute assets provision, because
at that time the defendant and any potential claimants
(including potential bona fide purchasers) are placed on notice
that the defendant's estate is subject to forfeiture up to the
amount of the proceeds of his criminal activity.
The amendment ends this uncertainty by adopting the third
interpretation as a reasonable compromise between the other two
more extreme positions. Under this provision, a defendant would
be free to transfer his untainted property to a third person at
any time prior the filing of an indictment, information or bill
of particulars identifying the property as subject to
forfeiture (unless, of course, the property was subject to a
pre-indictment restraining order). After that time, however,
the defendant and potential transferees would be on notice that
the government was seeking to forfeit the property as
substitute assets in a criminal case, and that the property
would belong to the government upon the conviction of the
defendant and the entry of an order of forfeiture. Accordingly,
any transfer by the defendant to a third party after the
property was identified in an indictment, information or bill
of particulars would be void, unless the transferee
establishes, pursuant to section 853(n)(6)(B), that he or she
was a bona fide purchaser for value of the property who was
reasonably without cause to believe that the property was
subject to forfeiture.
Sec. 36. Archeological Resources Protection Act
Section 36 expands the forfeiture provisions of the
Archeological Resources Protection Act of 1979 (16 U.S.C.
Sec. 470gg(b)) to include proceeds of a violation of the Act
and to provide that the procedures governing criminal and civil
forfeiture in title 18 apply to such forfeitures.
Sec. 37. Forfeiture of instrumentalities of terrorism, telemarketing
fraud, and other offenses
Section 37 adds new civil and criminal forfeiture
provisions to sections 981 and 982, respectively, to cover the
instrumentalities used to commit certain fraud offenses and
violations of the Explosives Control Act. These provisions are
necessary because in many such cases forfeiture of the proceeds
of the offense alone is an inadequate sanction. For example, in
a computer crime case in which the defendant has penetrated the
security of a computer network, there may not be any proceeds
of the offense to forfeit, but the perpetrator should be made
to forfeit the computer or other access device used to commit
the offense. The description of the articles subject to
forfeiture in such cases is derived from 18 U.S.C. Sec. 492,
the forfeiture provision for instrumentalities used to commit
counterfeiting crimes. The reference to specific items such as
computers in the statutory language is not intended to limit
the generic description of the articles subject to forfeiture
to those particular items.
The provision relating to fraud offenses states that only
property used on a ``continuing basis'' is subject to
forfeiture. This is intended to make clear, as many courts have
already held, that there must be a substantial temporal
connection between the forfeited property and the act giving
rise to forfeiture. Under the statute, property otherwise used
for lawful purposes will be subject to forfeiture if it is used
to commit two or more offenses, or if it used to commit a
single offense that involved the use of the property on a
number of occasions. On the other hand, property otherwise used
for lawful purposes would not be subject to forfeiture if used
only in an isolated instance to commit or facilitate the
commission of an offense.
Sec. 38. Forfeiture of criminal proceeds transported in interstate
commerce
Section 38 provides for the forfeiture of criminal proceeds
transported in interstate commerce in violation of 18 U.S.C.
Sec. 1952. Section 1952(a)(1) makes it a crime to distribute
the proceeds of an ``unlawful activity'' in interstate
commerce. ``Unlawful activity'' includes gambling, drug
trafficking, prostitution, extortion, bribery and arson. \114\
There is, however, no statute authorizing forfeiture of the
criminal proceeds distributed in violation of section
1952(a)(1). Prosecutors have attempted to work around this
problem by charging interstate transportation of drug proceeds
as a money laundering offense under 18 U.S.C.
Sec. 1956(a)(1)(B)(i), an offense for which forfeiture of all
property involved is authorized.\115\ The courts, however, have
not endorsed this theory either on the ground that mere
transportation of drug money is not a ``financial
transaction,'' \116\ or because transporting cash does not, by
itself, evince an intent to ``conceal or disguise'' drug
proceeds.\117\
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\114\ See 18 U.S.C. Sec. 1952(b).
\115\ See 18 U.S.C. Sec. 981(a)(1)(A) and 982(a)(1).
\116\ See United States v. Puig-Infante, 19 F.3d 929 (5th Cir.
1994) (transporting drug proceeds from Fla. to Tex. not a
``transaction'' absent evidence of disposition once cash arrived at
destination).
\117\ See United States v. Dimeck, 24 F.3d 1239 (10th Cir. 1994)
(covert nature of transportation of funds from one state to another not
sufficient to imply intent to conceal or disguise); United States v.
Garcia-Emanuel, 14 F.3d 1469 (10th Cir. 1994) (simple wire transfer of
proceeds to Colombia evidences no intent to conceal or disguise).
---------------------------------------------------------------------------
The amendment to section 1952 cures this problem by
authorizing civil and criminal forfeiture of the proceeds of
unlawful activity distributed in violation of subsection
(a)(1). In each instance, the applicable procedures would be
the same as those applicable to money laundering forfeitures.
Sec. 39. Forfeitures of proceeds of Federal Food, Drug, and Cosmetic
Act violations
Section 39 creates civil and criminal forfeiture provisions
for proceeds traceable to Federal Food, Drug, and Cosmetic Act
(FFDCA) violations codified in chapter 9 of title 21 (21 U.S.C.
Sec. 301 et seq.). The new forfeiture provisions would be
additions to chapter 9 (new 21 U.S.C. Sec. 311 (civil
forfeiture) and Sec. 312 (criminal forfeiture)). FFDCA
violations are investigated by the Food and Drug
Administration's Office of Criminal Investigations (FDAOCI).
The FFDCA presently provides for forfeiture of only the
specific articles of food, drugs, or cosmetics that are in
violation of the FFDCA.\118\ In order to achieve forfeitures of
the proceeds of FFDCA violations, FDAOCI has to expand FFDCA
cases to include additional offenses (e.g., mail or wire fraud
and the laundering of fraud proceeds) which serve as predicate
offenses for adoptive forfeitures undertaken by other federal
law enforcement agencies under statutes outside the FFDCA
(e.g., 18 U.S.C. Sec. Sec. 981 and 982). FDAOCI forfeiture
cases under the FFDCA forfeiture statutes will simplify the
process by which FDAOCI investigations lead to proceeds
forfeitures.
---------------------------------------------------------------------------
\118\ See 21 U.S.C. Sec. 334 (seizure, judicial condemnation, and
court-ordered destruction or sale of adulterated or misbranded foods,
drugs, or cosmetics, with net proceeds of any sale going to the
Treasury of the United States).
---------------------------------------------------------------------------
FDAOCI does not seek forfeiture of facilitating property;
nor does FDAOCI seek administrative forfeiture authority.
FDAOCI does not want to establish organizational
infrastructures for managing property seized for facilitating
FFDCA violations (e.g., factories and warehouses) or for
executing administrative forfeitures. All forfeitures of
articles that are in violation of the FFDCA under the existing
FFDCA forfeiture statute (21 U.S.C. Sec. 334) are judicial.
Sec. 40. Forfeiture of counterfeit paraphernalia
18 U.S.C. Sec. 492 has provided for the civil forfeiture of
counterfeiting paraphernalia since 1909. It was last amended in
1938. The amendments are intended to bring the statute up to
date and in conformance with modern civil forfeiture statutes
by cross-referencing procedures pertaining to administrative
forfeitures in customs law, 19 U.S.C. Sec. 1602 et seq., and
the civil forfeiture procedures in 18 U.S.C. Sec. Sec. 981-87.
The amendments also add a criminal forfeiture provision that
cross-references the procedure in section 982.
Sec. 41. Closing of loophole to defeat criminal forfeiture through
bankruptcy
Section 41 closes a loophole that has been used to defeat
criminal forfeiture through bankruptcy. These provisions would
prevent the circumvention of criminal forfeiture through the
use of forfeitable property to satisfy debts owed to unsecured
general creditors. The limitation to those bankruptcy
proceedings commenced after or in contemplation of criminal
proceedings safeguards against interference with legitimate
bankruptcy filings.
Sec. 42. Collection of criminal forfeiture judgment
Section 42 makes the provisions for enforcing a criminal
fine available for the enforcement of a criminal forfeiture
judgment. The language of the provision is taken virtually
verbatim from 18 U.S.C. Sec. 3663(h), the provision for
enforcing a restitution order in a criminal case, which
likewise incorporates the procedure for enforcing a criminal
fine. The amendment is intended to give the government a means
of enforcing an in personam money judgment entered against a
convicted defendant when there are no substitute assets
available to be seized.
Sec. 43. Criminal forfeiture of property in government custody
Section 43 is intended to resolve any ambiguity that may
exist as to whether a federal agency that has obtained lawful
custody of property pursuant to a civil seizure warrant or
otherwise may retain custody of the property without obtaining
another warrant or restraining order when the property is made
the subject of a forfeiture count in a criminal case.\119\ The
amendment makes clear that if the property is already in the
custody of the government, obtaining a new seizure warrant or
restraining order is unnecessary.
---------------------------------------------------------------------------
\119\ See United States v. Schmitz, 156 F.R.D. 136 (E.D. Wis. 1994)
(once government files criminal forfeiture action, it no longer has
authority to retain property seized for civil forfeiture under section
881 unless it obtains a restraining order under section 853(e) or a
seizure warrant under section 853(f)).
---------------------------------------------------------------------------
Sec. 44. Delivery of property to the Marshals Service
Section 44 is intended to incorporate procedures from the
Admiralty Rules regarding the delivery of property to the
Marshals Service. 21 U.S.C. Sec. 853(j) incorporates the civil
forfeiture procedures set forth in 21 U.S.C. Sec. 881(d) for
purposes of criminal forfeiture. The cross reference to section
881(d), however, fails to include a useful provision of the
Admiralty Rules that is used in civil forfeiture. Under Rule
C(5) of the Admiralty Rules, the court has the authority to
order any person who has custody of a portion of property
subject to forfeiture to show cause why that property should
not be turned over to the Marshals Service. For example, the
government may seize and ultimately forfeit an airplane. To
sell the plane for its true value, the Marshals would need to
obtain the log books showing the number of hours the plane has
flown and its maintenance history. Rule C(5) may be used to
order the person holding the log books to show cause why they
shouldn't be turned over to the Marshals. The amendment makes
this useful procedural tool applicable to criminal forfeitures
by incorporating a cross-reference to Rule C(5) in section
853(j).
Sec. 45. Forfeiture for odometer tampering offenses
Sections 981 and 982 of title 18 were amended in 1992 to
include civil and criminal forfeiture provisions, respectively,
for certain offenses relating to carjacking and transporting
stolen automobiles. This amendment expands the forfeiture
statutes to include odometer tampering offenses under 49 U.S.C.
Sec. 32703. Because the forfeiture of the proceeds of the
odometer tampering offense would not, by itself, be sufficient
to deter the commission of this crime, the amendment makes the
vehicles and other property used to commit the offense subject
to forfeiture as well.
Sec. 46. Pre-trial restraint of substitute assets
It is necessary to resolve a split in the circuits
regarding the proper interpretation of the pre-trial
restraining order provisions of the criminal forfeiture
statutes. Under 21 U.S.C. Sec. 853(e)(1), a court may enter a
pre-trial restraining order to preserve the availability of
forfeitable property pending trial. At first, the courts were
unanimous in their view that the restraining order provisions
applied both to property directly traceable to the offense and
to property forfeitable as substitute assets.\120\
Subsequently, however, other courts held that because Congress
did not specifically reference the substitute assets provisions
in the restraining order statutes, pre-trial restraint of
substitute assets is not permitted.\121\
---------------------------------------------------------------------------
\120\ See Assets of Tom J. Billman, 915 F.2d 916 (4th Cir. 1990);
United States v. Regan, 858 F.2d 115 (2nd Cir. 1988); United States v.
Schmitz, 156 F.R.D. 136 (E.D. Wis. 1994); United States v. O'Brien, 836
F. Supp. 438 (S.D. Ohio 1993); United States v. Swank Corp., 797 F.
Supp. 497 (E.D. Va. 1992).
\121\ See United States v. Field, 62 F.3d 246 (8th Cir. 1995);
United States v. Ripinsky, 20 F.3d 359 (9th Cir. 1994); In Re Assets of
Martin, 1 F.3d 1351 (3rd Cir. 1993); United States v. Floyd, 992 F.2d
498 (5th Cir. 1993).
---------------------------------------------------------------------------
At least one of the recent cases was based on an erroneous
reading of the legislative history. In re Assets of Martin
relies on a footnote in a 1982 Senate Report that states that
the restraining order provision in section 1963 would not apply
to substitute assets.\122\ The appellate court was apparently
unaware that before the restraining order provision was finally
enacted in 1984, the footnote in question was dropped from the
Senate Report, thus negating any suggestion that Congress did
not intend for the new statute to apply to substitute
assets.\123\
---------------------------------------------------------------------------
\122\ 1 F.3d at 1360, citing S. Rep. 97-520, 97th Cong., 2d Sess.
(1982) at 10 n.18.
\123\ See S. Rep. 98-225, 98th Cong., 1st Sess. (1983) at 201-05.
---------------------------------------------------------------------------
The amendment cures this problem of statutory
interpretation by including specific cross-references to the
substitute assets provision, 21 U.S.C. Sec. 853(p), at the
appropriate place in the section dealing with pre-trial
restraining orders. The government, in cases involving the pre-
trial restraint of substitute assets, must exempt from the
restraining order any property needed to pay attorneys fees in
the criminal case and for ordinary living expenses.
Sec. 47. Hearing on pre-trial restraining orders; assets needed to pay
attorney's fees
Section 47 concerns the scope of a post-restraint, pre-
trial hearing following the issuance of a restraining order in
a criminal case. The criminal forfeiture statutes provide that
in order to preserve assets for forfeiture at trial, the
government may seek, and the court may issue, an ex parte pre-
trial restraining order.\124\ This procedure supplements, and
does not preclude, seizure of the property pursuant to a
seizure warrant.
---------------------------------------------------------------------------
\124\ See 21 U.S.C. Sec. 853(e).
---------------------------------------------------------------------------
If a restraining order is to be issued before any
indictment is returned, ``persons appearing to have an interest
in the property'' are entitled to an immediate hearing.\125\
The statute, however, makes no provision for any hearing--
either pre- or post-restraint--where the property is not
restrained until after an indictment is filed. The legislative
history of these provisions makes clear that Congress
considered a hearing unnecessary in the post-indictment context
because the grand jury's finding of probable cause to believe
that the restrained property was subject to forfeiture was
sufficient to satisfy the due process rights guaranteed by the
Fifth Amendment:
---------------------------------------------------------------------------
\125\ 21 U.S.C. Sec. Sec. 853(e)(1)(B) & (2). Restraining orders
apply to both the criminal defendant and to any third party who might
otherwise have access to the subject property. United States v.
Jenkins, 974 F.2d 32 (5th Cir. 1992); In re Assets of Tom J. Billman,
915 F.2d 916 (4th Cir. 1990); United States v. Regan, 858 F.2d 115 (2nd
Cir. 1988).
[T]he probable cause established in the indictment or
information is, in itself, to be a sufficient basis for
issuance of a restraining order. While the court may
consider factors bearing on the reasonableness of the
order sought, it is not to ``look behind'' the
indictment or require the government to produce
additional evidence regarding the merits of the case as
a prerequisite to issuing a post-indictment restraining
order.\126\
---------------------------------------------------------------------------
\126\ S. Rep. 255, 98th Cong., 1st Sess. (1983) at 202-03.
The Senate Report went on to explain that the statute was
not intended to preclude the court from holding a post-
restraint hearing in appropriate circumstances to determine if
a restraining order should be continued, but it stressed that
in that context as well, the court was not to reexamine the
validity of the indictment or the grand jury's finding of
---------------------------------------------------------------------------
probable cause for the forfeiture:
This provision does not exclude, however, the
authority to hold a hearing subsequent to the initial
entry of the order and the court may at that time
modify the order or vacate an order that was clearly
improper (e.g., where information presented at the
hearing shows that the property restrained was not
among the property named in the indictment. However, it
is stressed that at such a hearing the court is not to
entertain challenges to the validity of the indictment.
For the purposes of issuing a restraining order, the
probable cause established in the indictment or
information is to be determinative of any issue
regarding the merits of the government's case on which
the forfeiture is to be based.\127\
---------------------------------------------------------------------------
\127\ Id. at 203 (emphasis supplied).
Congress' principal concern in precluding any re-
examination by the court of the validity of the indictment was
that such an examination might force the government to make a
``damaging premature disclosure of the government's case and
trial strategy.'' \128\
---------------------------------------------------------------------------
\128\ Id. at 196.
---------------------------------------------------------------------------
Since the restraining order provisions were enacted in
1984, several appellate courts have had occasion to determine
whether the statutory structure comports with due process under
the 5th Amendment. The courts unanimously hold that due process
does not require a pre-restraint adversary hearing where the
restraining order is not issued until after the return of an
indictment.\129\ In such circumstances, the property owner's
right to a hearing is outweighed by the government's need for
``some means of promptly heading off any attempted disposal of
assets that might be made in anticipation of a criminal
forfeiture.'' \130\
---------------------------------------------------------------------------
\129\ See e.g. United States v. Monsanto, 924 F.2d 1186, 1192 (2nd
Cir. 1991); United States v. Bissell, 866 F.2d 1343, 1352 (11th Cir.
1989).
\130\ Monsanto, 924 F.2d at 1192.
---------------------------------------------------------------------------
The courts differ, however, as to whether a post-indictment
restraining order may be continued up to and through trial
without granting the defendant an opportunity for a post-
restraint hearing. Those courts that would require such a
hearing also differ among themselves as to whether the scope
the hearing should include a re-examination by the court of the
validity of the indictment and the grand jury's finding of
probable cause for forfeiture.
On the one extreme, the Eleventh Circuit has held that
there is no constitutional right to a post-restraint hearing on
the validity of a restraining order because the Speedy Trial
Act ensures that a defendant will have a prompt opportunity to
challenge the validity of the order at trial.\131\ The Eleventh
Circuit holds this view even where the defendant alleges that
the restraining order infringes upon his Sixth Amendment right
to hire counsel of his choice.\132\ The Tenth Circuit is in
accord, at least where the right-to-counsel issue is not
implicated.\133\
---------------------------------------------------------------------------
\131\ Bissell, 866 F.2d at 1354. See In Re Protective Order, 790 F.
Supp. 1140 (S.D. Fla. 1992).
\132\ Bissell, supra.
\133\ See United States v. Musson, 802 F.2d 384, 387 (10th Cir.
1986) (no hearing required); but see United States v. Nichols, 841 F.2d
1485, 1491 n.4 (10th Cir. 1988) (leaving open question whether hearing
is required if Sixth Amendment issue is raised).
---------------------------------------------------------------------------
On the other extreme, the Second Circuit, in a 7-6 en banc
opinion, held not only that a post-restraint, pre-trial hearing
is required whenever Sixth Amendment right to counsel issues
are raised, but that at such hearing the court is required ``to
reexamine the probable cause determinations'' embodied in the
grand jury indictment.\134\ In so holding, the Second Circuit
expressly declined to follow Congress' admonition that the
courts should not ``entertain challenges to the validity of the
indictment.'' \135\
---------------------------------------------------------------------------
\134\ Monsanto, 924 F.2d at 1195-97.
\135\ 924 F.2d at 1197, quoting S. Rep. 225, supra, at 196. See
also United States v. Crozier, 777 F.2d 1376, 1383-84 (9th Cir. 1985).
---------------------------------------------------------------------------
In between these two extremes, several courts have held
that a defendant's Sixth Amendment right to counsel is an
interest of such importance that due process requires that the
defendant be granted a hearing pre-trial to determine the
validity of an order that restrains the assets the defendant
would use to retain counsel of his choice. \136\ As the Seventh
Circuit noted in United States v. Moya-Gomez, cases implicating
the Sixth Amendment are unique because a ``defendant needs the
attorney [pre-trial] if the attorney is to do him any good.''
\137\ Thus, where the defendant asserts that the assets he
would use to hire counsel have been improperly restrained,
forcing the defendant to wait until the time of trial to
contest the restraining order would constitute an
unconstitutional ``permanent deprivation'' of property without
a hearing.\138\
---------------------------------------------------------------------------
\136\ See e.g. United States v. Moya-Gomez, 860 F.2d 706, 729 (7th
Cir. 1988); United States v. Thier, 801 F.2d 1463, 1469 (5th Cir.
1986).
\137\ 860 F.2d at 726
\138\ Id.
---------------------------------------------------------------------------
These courts, however, have declined to go as far as the
Second Circuit in United States v. Monsanto in sanctioning a
full-blown reexamination of the validity of the indictment. For
example, in United States v. Thier, the Fifth Circuit noted
Congress' ``clear intent to specifically forbid a court to
`entertain challenges to the validity of the indictment' at a
hearing on a motion to modify or vacate a restraining order,''
\139\ and held that the grand jury's finding of probable cause
that the defendant's property was subject to forfeiture should
be regarded as a strong, though not irrebuttable, showing in
support of the restraining order.\140\ The court continued:
---------------------------------------------------------------------------
\139\ 801 F.2d at 1469-70.
\140\ Id. at 1470.
The court is not free to question whether the grand
jury should have acted as it did, but it is free, and
indeed required, to exercise its discretion as to
whether and to what extent to enjoin based on all
matters developed at the hearing.\141\
---------------------------------------------------------------------------
\141\ Id.
Similarly, the Seventh Circuit in Moya-Gomez held that
where Sixth Amendment issues are implicated, the defendant is
entitled to a hearing at which the government is ``required to
prove the likelihood that the restrained assets are subject to
forfeiture.'' \142\ But at the same time the court held that
the ``careful and deliberate judgment of Congress'' was
entitled to ``respect,'' \143\ and that therefore ``[w]hatever
may be the precise limits on the authority of the district
judge at a [post-restraint] hearing . . ., it is clear that
the court may not inquire as to the validity of the indictment
and must accept that `the probable cause established in the
indictment or information is . . . determinative of any issue
regarding the merits of the government's case on which the
forfeiture is to be based.' '' \144\
---------------------------------------------------------------------------
\142\ 860 F.2d at 731.
\143\ Id. at 729.
\144\ 860 F.2d at 728 (emphasis added), quoting S. Rep. 225, supra.
---------------------------------------------------------------------------
The Seventh Circuit continued as follows:
It is therefore not open to the defendant to attempt
to persuade the court that the government's claim to
the property is any less strong than suggested by the
government in the indictment. . . . \145\
---------------------------------------------------------------------------
\145\ Id. See Monsanto, 924 F.2d at 1206 (Cardamone, J. dissenting)
(``The prosecution's ability to prepare its case without being forced
to `tip its hand' prematurely was of paramount importance to the
drafters and provides a persuasive reason for delaying a full
adversarial hearing on the merits of the government's case during the
post-restraint, pre-trial period.''); United States v. O'Brien, 836 F.
Supp. 438 (S.D. Ohio 1993) (following Moya-Gomez).
The proposed legislation attempts to end the uncertainty
and ambiguity in the law by codifying the majority view,
consistent with the original intent of Congress, on the issues
raised. Proposed paragraph (5) codifies the rule that permits
the district court, in its discretion, to grant a request for a
hearing for modification of the restraining order. Paragraph
(5) also sets forth two grounds, other than the Sixth Amendment
grounds, upon which a court may be asked to modify a
restraining order. As the Second Circuit held in Monsanto, an
order may be modified upon a showing that even if all of the
facts set forth in the indictment are established at trial, the
restrained property would not be subject to forfeiture.\146\
The court would also have the discretion to revise an order, in
light of evidence produced at a hearing, to employ less
restrictive means of restraint if such means are available to
protect the government's interests without infringing on the
defendant's property rights unnecessarily.\147\ Under the
statute, the court would have the discretion to grant a hearing
for such purposes at any time before trial.
---------------------------------------------------------------------------
\146\ 924 F.2d at 1199, quoting S. Rep. 225 at 203.
\147\ Id. at 1207 (Cardamone, J. dissenting).
---------------------------------------------------------------------------
With respect to the use of restrained property to retain
criminal defense counsel, the restraining order would be
modified if the defendant establishes that he or she has no
other assets available with which to retain counsel, and
demonstrates that there is no probable cause to believe that
the restrained property is likely to be forfeited if the
defendant is convicted. The issue before the court, however,
would be solely the likelihood of forfeiture assuming a
conviction. As Congress stated in the 1984 legislative history,
and as the majority of courts have held since that time, the
indictment itself conclusively establishes probable cause
regarding the criminal offense upon which the forfeiture would
be based. Thus, in a money laundering case, for example, the
court would require the government to establish probable cause
to believe that the restrained assets were ``involved in'' the
money laundering offense(s) set forth in the indictment, \148\
but it would not look behind the indictment to determine
independently whether there was probable cause to believe that
the money laundering offense itself had been committed.
---------------------------------------------------------------------------
\148\ See 18 U.S.C. Sec. 982(a)(1).
---------------------------------------------------------------------------
This provision explicitly codifies the 1984 legislative
history and recent case law regarding challenges to the
sufficiency of the indictment. It would prohibit the defendant
from challenging the validity of the indictment itself, and
would bar the court from reexamining the factual basis for the
grand jury's finding of probable cause. In this way, the
statute would protect the defendant from the unlawful restraint
of his property when there is no legal basis for the restraint,
but it would preclude the use of the pretrial hearing as
pretext for forcing the government to tip its hand prematurely
as to its evidence and trial strategy.
H.L.C.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3 of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
TITLE 18, UNITED STATES CODE
* * * * * * *
PART I--CRIMES
* * * * * * *
CHAPTER 25--COUNTERFEITING AND FORGERY
* * * * * * *
Sec. 492. Forfeiture of counterfeit paraphernalia
(a) All counterfeits of any coins or obligations or other
securities of the United States or of any foreign government,
or any articles, devices, and other things made, possessed, or
used in violation of this chapter or of sections 331-333, 335,
336, 642 or 1720, of this title, or any material or apparatus
used or fitted or intended to be used, in the making of such
counterfeits, articles, devices or things, found in the
possession of any person without authority from the Secretary
of the Treasury or other proper officer, shall be forfeited to
the United States.
(b) Whoever, having the custody or control of any such
counterfeits, material, apparatus, articles, devices, or other
things, fails or refuses to surrender possession thereof upon
request by any authorized agent of the Treasury Department, or
other proper officer, shall be [fined not more than $100] fined
under this title or imprisoned not more than one year, or both.
[Whenever, except as hereinafter in this section provided,
any person interested in any article, device, or other thing,
or material or apparatus seized under this section files with
the Secretary of the Treasury, before the disposition thereof,
a petition for the remission or mitigation of such forfeiture,
the Secretary of the Treasury, if he finds that such forfeiture
was incurred without willful negligence or without any
intention on the part of the petitioner to violate the law, or
finds the existence of such mitigating circumstances as to
justify the remission or the mitigation of such forfeiture, may
remit or mitigate the same upon such terms and conditions as he
deems reasonable and just.
[If the seizure involves offenses other than offenses
against the coinage, currency, obligations or securities of the
United States or any foreign government, the petition for the
remission or mitigation of forfeiture shall be referred to the
Attorney General, who may remit or mitigate the forfeiture upon
such terms as he deems reasonable and just.]
(c) For the purposes of this section, the provisions of the
customs laws relating to the seizure, summary and judicial
forfeiture, condemnation of property for violation of the
customs laws, the disposition of such property or the proceeds
from the sale of such property, the remission or mitigation of
such forfeitures, and the compromise of claims (19 U.S.C. 1602
et seq.), insofar as they are applicable and not inconsistent
with the provisions of this section, shall apply to seizures
and forfeitures incurred, or alleged to have been incurred,
under this section, except that the duties as are imposed upon
the customs officer or any other person with respect to the
seizure and forfeiture of property under the customs laws shall
be performed with respect to seizures and forfeitures of
property under this section by such officers, agents, or other
persons as may be authorized or designated for that purpose by
the Secretary of the Treasury.
(d) All seizures and civil judicial forfeitures pursuant to
subsection (a) shall be governed by the procedures set forth in
chapter 46 of this title pertaining to civil forfeitures. The
Attorney General shall have sole responsibility for disposing
of petitions for remission or mitigation with respect to
property involved in a judicial forfeiture proceeding.
(e) A court in sentencing a person for a violation of this
chapter or of sections 331-33, 335, 336, 642 or 1720 of this
title, shall order the person to forfeit the property described
in subsection (a) in accordance with the procedures set forth
in section 982 of this title.
* * * * * * *
Sec. 512. Forfeiture of certain motor vehicles and motor vehicle parts
(a) If an identification number for a motor vehicle or
motor vehicle part is removed, obliterated, tampered with, or
altered, such vehicle or part shall be subject to seizure and
forfeiture to the United States unless--
(1) in the case of a motor vehicle part, such part
is attached to a motor vehicle and the owner of such
motor vehicle [does not know that the identification
number has been removed, obliterated, tampered with, or
altered] is an innocent owner as defined in section 983
of this title;
* * * * * * *
(b) All provisions of law relating to--
(1) the seizure and condemnation of vessels,
vehicles, merchandise, and baggage for violation of
customs laws, and procedures for summary and judicial
forfeiture applicable to such violations;
(2) the disposition of such vessels, vehicles,
merchandise, and baggage or the proceeds from such
disposition;
(3) the remission or mitigation of such forfeiture;
and
(4) the compromise of claims and the award of
compensation to informers with respect to such
forfeiture;
and the provisions of chapter 46 of this title relating to
civil judicial forfeitures shall apply to seizures and
forfeitures under this section, to the extent that such
provisions are not inconsistent with this section. The duties
of the collector of customs or any other person with respect to
seizure and forfeiture under such provisions shall be performed
under this section by such persons as may be designated by the
Attorney General.
* * * * * * *
CHAPTER 46--FORFEITURE
Sec.
981. Civil forfeiture.
982. Criminal forfeiture.
983. Civil forfeiture procedures.
984. Civil forfeiture of fungible property.
985. Release of property to avoid hardship.
986. Subpoenas for bank records.
Sec. 981. Civil forfeiture
(a)(1) [Except as provided in paragraph (2), the] The
following property is subject to forfeiture to the United
States:
(A) Any property, real or personal, involved in a
transaction or attempted transaction in violation of
section 5313(a) or 5324(a) of title 31, or of section
1956 or 1957 of this title, or any property traceable
to such property. However, no property shall be seized
or forfeited in the case of a violation of section
5313(a) of title 31 by a domestic financial institution
examined by a Federal bank supervisory agency or a
financial institution regulated by the Securities and
Exchange Commission or a partner, director, or employee
thereof.
(B) Any property, real or personal, within the
jurisdiction of the United States, constituting,
derived from, or traceable to, any proceeds obtained
directly or indirectly from an offense against a
foreign nation involving (i) the manufacture,
importation, sale, or distribution of a controlled
substance (as such term is defined for the purposes of
the Controlled Substances Act) or (ii) any other
conduct described in section 1956(c)(7)(B), within
whose jurisdiction such offense would be punishable by
death or imprisonment for a term exceeding one year and
which would be punishable under the laws of the United
States by imprisonment for a term exceeding one year if
such act or activity constituting the offense against
the foreign nation had occurred within the jurisdiction
of the United States, or any property used to
facilitate such offense.
(C) Any property, real or personal, which
constitutes or is derived from proceeds traceable to a
violation of section 215, 471, 472, 473, 474, 476, 477,
478, 479, 480, 481, 485, 486, 487, 488, 501, 502, 510,
542, 545, 656, 657, 842, 844, 1005, 1006, 1007, 1014,
1028, 1029, 1030, 1032, or 1344 of this title or a
violation of section 1341 or 1343 of such title
affecting a financial institution or any offense
constituting ``specified unlawful activity'' as defined
in section 1956(c)(7) of this title or a conspiracy to
commit such offense.
(D) Any property, real or personal, which
represents or is traceable to the [gross receipts]
proceeds obtained, directly or indirectly, from a
violation of--
(i) section 666(a)(1) (relating to Federal
program fraud);
(ii) section 1001 (relating to fraud and
false statements);
(iii) section 1031 (relating to major fraud
against the United States);
(iv) section 1032 (relating to concealment
of assets from conservator or receiver of
insured financial institution);
(v) section 1341 (relating to mail fraud);
or
(vi) section 1343 (relating to wire fraud),
if such violation relates to the sale of assets
acquired or held by the Resolution Trust Corporation,
the Federal Deposit Insurance Corporation, as
conservator or receiver for a financial institution, or
any other conservator for a financial institution
appointed by the Office of the Comptroller of the
Currency or the Office of Thrift Supervision or the
National Credit Union Administration, as conservator or
liquidating agent for a financial institution.
[(E) With respect to an offense listed in
subsection (a)(1)(D) committed for the purpose of
executing or attempting to execute any scheme or
artifice to defraud, or for obtaining money or property
by means of false or fraudulent statements, pretenses,
representations or promises, the gross receipts of such
an offense shall include all property, real or
personal, tangible or intangible, which thereby is
obtained, directly or indirectly.]
(F) Any property, real or personal, which
represents or is traceable to the [gross] proceeds
obtained, directly or indirectly, from a violation of--
(i) section 511 (altering or removing motor
vehicle identification numbers);
(ii) section 553 (importing or exporting
stolen motor vehicles);
(iii) section 2119 (armed robbery of
automobiles);
(iv) section 2312 (transporting stolen
motor vehicles in interstate commerce); [or]
(v) section 2313 (possessing or selling a
stolen motor vehicle that has moved in
interstate commerce)[.]; or
(vi) section 32703 of title 49, United
States Code (motor vehicle odometer tampering).
In the case of a violation described in clause (vi),
any vehicles or other property involved in the
commission of the offense shall also be subject to
forfeiture.
(G)(i) Any computer, photostatic reproduction
machine, electronic communications device or other
material, article, apparatus, device or thing made,
possessed, fitted, used or intended to be used on a
continuing basis to commit a violation of sections 513,
514, 1028 through 1032, and 1341, 1343, and 1344 of
this title, or a conspiracy to commit such offense, and
any property traceable to such property.
(ii) Any conveyance used on two or more occasions
to transport the instrumentalities used in the
commission of a violation of sections 1028 and 1029 of
this title, or a conspiracy to commit such offense, and
any property traceable to such conveyance.
(H) Any conveyance, chemicals, laboratory
equipment, or other material, article, apparatus,
device or thing made, possessed, fitted, used or
intended to be used to commit--
(i) an offense punishable under chapter
113B of this title (relating to terrorism);
(ii) a violation of any of the following
sections of the Federal explosives laws:
subsections (a) (1) and (3), (b) through (d),
and (h)(1) of section 842, and subsections (d)
through (m) of section 844; or
(iii) any other offense enumerated in
section 2339A(a) of this title;
or a conspiracy to commit any such offense, and any
property traceable to such property.
[(2) No property shall be forfeited under this section to
the extent of the interest of an owner or lienholder by reason
of any act or omission established by that owner or lienholder
to have been committed without the knowledge of that owner or
lienholder.]
(2) For purposes of paragraph (1), the term ``proceeds''
means property of any kind obtained, directly or indirectly, as
the result of the commission of the offense giving rise to
forfeiture, and any property traceable thereto, and is not
limited to the net gain or profit realized from the commission
of the offense. In a case involving the forfeiture of proceeds
of a fraud or false claim under paragraph (1)(C) involving
billing for goods or services part of which are legitimate and
part of which are not legitimate, the court shall allow the
claimant a deduction from the forfeiture for the amount
obtained in exchange for the legitimate goods or services. In a
case involving goods or services provided by a health care
provider, such goods or services are not ``legitimate'' if they
were unnecessary.
(3) For purposes of the provisions of subparagraphs (B)
through (H) of paragraph (1) which provide for the forfeiture
of proceeds of an offense or property traceable thereto, where
the proceeds have been commingled with or invested in real or
personal property, only the portion of such property derived
from the proceeds shall be regarded as property traceable to
the forfeitable proceeds. Where the proceeds of the offense
have been invested in real or personal property that has
appreciated in value, whether the relationship of the property
to the proceeds is too attenuated to support the forfeiture of
such property shall be determined in accordance with the
excessive fines clause of the Eighth Amendment.
[(b)(1) Any property--
[(A) subject to forfeiture to the United States
under subparagraph (A) or (B) of subsection (a)(1) of
this section--
[(i) may be seized by the Attorney General;
or
[(ii) in the case of property involved in a
violation of section 5313(a) or 5324 of title
31, United States Code, or section 1956 or 1957
of this title investigated by the Secretary of
the Treasury or the United States Postal
Service, may be seized by the Secretary of the
Treasury or the Postal Service; and
[(B) subject to forfeiture to the United States
under subparagraph (C) of subsection (a)(1) of this
section may be seized by the Attorney General, the
Secretary of the Treasury, or the Postal Service.
[(2) Property shall be seized under paragraph (1) of this
subsection upon process issued pursuant to the Supplemental
Rules for certain Admiralty and Maritime Claims by any district
court of the United States having jurisdiction over the
property, except that seizure without such process may be made
when--
[(A) the seizure is pursuant to a lawful arrest or
search; or
[(B) the Attorney General, the Secretary of the
Treasury, or the Postal Service, as the case may be,
has obtained a warrant for such seizure pursuant to the
Federal Rules of Criminal Procedure, in which event
proceedings under subsection (d) of this section shall
be instituted promptly.]
(b)(1) Any property subject to forfeiture to the United
States under subsection (a) may be seized by the Attorney
General. In addition, in the case of property involved in a
violation investigated by the Secretary of the Treasury or the
United States Postal Service, the property may also be seized
by the Secretary of the Treasury or the Postal Service,
respectively.
(2) Seizures pursuant to this section shall be made
pursuant to a warrant obtained in the same manner as provided
for a search warrant under the Federal Rules of Criminal
Procedure, except that a seizure may be made without a warrant
if--
(A) a complaint for forfeiture has been filed in
the United States district court and the court has
issued an arrest warrant in rem pursuant to the
Supplemental Rules for Certain Admiralty and Maritime
Claims;
(B) the seizure is made pursuant to a lawful arrest
or search, or if there is probable cause to believe
that the property is subject to forfeiture and another
exception to the Fourth Amendment warrant requirement
would apply; or
(C) the property was lawfully seized by a State or
local law enforcement agency and has been transferred
to a Federal agency in accordance with State law.
(3) Notwithstanding the provisions of Rule 41(a), Federal
Rules of Criminal Procedure, a seizure warrant may be issued
pursuant to this subsection by a judicial officer in any
district in which a forfeiture action against the property may
be filed under section 1355(b) of title 28, United States Code,
and executed in any district in which the property is found.
Any motion for the return of property seized under this section
shall be filed in the district in which the seizure warrant was
issued.
(4) If any person is arrested or charged in a foreign
country in connection with an offense that would give rise to
the forfeiture of property in the United States under
subsection (a) or under the Controlled Substances Act, the
Attorney General may apply to any Federal judge or magistrate
judge in the district where the property is located for an ex
parte order restraining the property subject to forfeiture for
not more than 30 days, except that the time may be extended for
good cause shown at a hearing conducted in the manner provided
in Rule 43(e) of the Federal Rules of Civil Procedure. The
application for the restraining order shall set forth the
nature and circumstances of the foreign charges and the basis
for belief that the person arrested or charged has property in
the United States that would be subject to forfeiture, and
shall contain a statement that the restraining order is needed
to preserve the availability of property for such time as is
necessary to receive evidence from the foreign country or
elsewhere in support of probable cause for the seizure of the
property under this subsection.
(5) Once a motion for the return of seized property under
Rule 41(e) is filed, the person filing the motion may request
that the motion be transferred to another district where venue
for the forfeiture action would lie under section 1355(b) of
title 28 pursuant to the change of venue provisions in section
1404 of title 28.
* * * * * * *
(d) For purposes of this section, the provisions of the
customs laws relating to the seizure, summary and judicial
forfeiture, condemnation of property for violation of the
customs laws, the disposition of such property or the proceeds
from the [sale of this section] sale of such property, the
remission or mitigation of such forfeitures, and the compromise
of claims (19 U.S.C. 1602 et seq.), insofar as they are
applicable and not inconsistent with the provisions of this
section, shall apply to seizures and forfeitures incurred, or
alleged to have been incurred, under this section, except that
such duties as are imposed upon the customs officer or any
other person with respect to the seizure and forfeiture of
property under the customs laws shall be performed with respect
to seizures and forfeitures of property under this section by
such officers, agents, or other persons as may be authorized or
designated for that purpose by the Attorney General, the
Secretary of the Treasury, or the Postal Service, as the case
may be. However, the cost bond provision of section 608 of the
Tariff Act of 1930 (19 U.S.C. 1608) and the burden of proof
provision of section 615 of the Tariff Act of 1930 (19 U.S.C.
1615) shall not apply to any forfeiture governed by the
procedures set forth in this chapter. The Attorney General
shall have sole responsibility for disposing of petitions for
remission or mitigation with respect to property involved in a
judicial forfeiture proceeding.
(e) Notwithstanding any other provision of the law, except
section 3 of the Anti Drug Abuse Act of 1986, the Attorney
General, the Secretary of the Treasury, or the Postal Service,
as the case may be, is authorized to retain property forfeited
pursuant to this section, or to transfer such property on such
terms and conditions as he may determine--
(1) to any other Federal agency;
(2) to any State or local law enforcement agency
which participated directly in any of the acts which
led to the seizure or forfeiture of the property;
(3) [in the case of property referred to in
subsection (a)(1)(C)] in the case of property forfeited
in connection with an offense resulting in a pecuniary
loss to a financial institution or regulatory agency,
to any Federal financial institution regulatory
agency--
(A) to reimburse the agency for payments to
claimants or creditors of the institution; and
(B) to reimburse the insurance fund of the
agency for losses suffered by the fund as a
result of the receivership or liquidation;
(4) [in the case of property referred to in
subsection (a)(1)(C)] in the case of property forfeited
in connection with an offense resulting in a pecuniary
loss to a financial institution or regulatory agency,
upon the order of the appropriate Federal financial
institution regulatory agency, to the financial
institution as restitution, with the value of the
property so transferred to be set off against any
amount later recovered by the financial institution as
compensatory damages in any State or Federal
proceeding;
(5) [in the case of property referred to in
subsection (a)(1)(C)] in the case of property forfeited
in connection with an offense resulting in a pecuniary
loss to a financial institution or regulatory agency,
to any Federal financial institution regulatory agency,
to the extent of the agency's contribution of resources
to, or expenses involved in, the seizure and
forfeiture, and the investigation leading directly to
the seizure and forfeiture, of such property;
[(6) in the case of property referred to in
subsection (a)(1)(C), restore forfeited property to any
victim of an offense described in subsection (a)(1)(C);
or]
(6) as restoration to any victim of the offense
giving rise to the forfeiture, including, in the case
of a money laundering offense, any offense constituting
the underlying specified unlawful activity; or
(7) [In the case of property referred to in
subsection (a)(1)(D)] In the case of property forfeited
in connection with an offense relating to the sale of
assets acquired or held by any Federal financial
institution or regulatory agency, or person appointed
by such agency, as receiver, conservator or liquidating
agent for a financial institution, to the Resolution
Trust Corporation, the Federal Deposit Insurance
Corporation, or any other Federal financial institution
regulatory agency (as defined in section 8(e)(7)(D) of
the Federal Deposit Insurance Act).
The Attorney General, the Secretary of the Treasury, or the
Postal Service, as the case may be, shall ensure the equitable
transfer pursuant to paragraph (2) of any forfeited property to
the appropriate State or local law enforcement agency so as to
reflect generally the contribution of any such agency
participating directly in any of the acts which led to the
seizure or forfeiture of such property. A decision by the
Attorney General, the Secretary of the Treasury, or the Postal
Service pursuant to paragraph (2) shall not be subject to
review. The United States shall not be liable in any action
arising out of the use of any property the custody of which was
transferred pursuant to this section to any non-Federal agency.
The Attorney General, the Secretary of the Treasury, or the
Postal Service may order the discontinuance of any forfeiture
proceedings under this section in favor of the institution of
forfeiture proceedings by State or local authorities under an
appropriate State or local statute. After the filing of a
complaint for forfeiture under this section, the Attorney
General may seek dismissal of the complaint in favor of
forfeiture proceedings under State or local law. Whenever
forfeiture proceedings are discontinued by the United States in
favor of State or local proceedings, the United States may
transfer custody and possession of the seized property to the
appropriate State or local official immediately upon the
initiation of the proper actions by such officials. Whenever
forfeiture proceedings are discontinued by the United States in
favor of State or local proceedings, notice shall be sent to
all known interested parties advising them of the
discontinuance or dismissal. The United States shall not be
liable in any action arising out of the seizure, detention, and
transfer of seized property to State or local officials. The
United States shall not be liable in any action arising out of
a transfer under paragraph (3), (4), or (5) of this subsection.
* * * * * * *
(i)(1) Whenever property is civilly or criminally forfeited
under [this chapter] any provision of Federal law, the Attorney
General or the Secretary of the Treasury, as the case may be,
may transfer the forfeited personal property or the proceeds of
the sale of any forfeited personal or real property to any
foreign country which participated directly or indirectly in
the seizure or forfeiture of the property, if such a transfer--
(A) has been agreed to by the Secretary of State;
(B) is authorized in an international agreement
between the United States and the foreign country; and
(C) is made to a country which, if applicable, has
been certified under section 490 of the Foreign
Assistance Act of 1961.
A decision by the Attorney General or the Secretary of the
Treasury pursuant to this paragraph shall not be subject to
review. The foreign country shall, in the event of a transfer
of property or proceeds of sale of property under this
subsection, bear all expenses incurred by the United States in
the seizure, maintenance, inventory, storage, forfeiture, and
disposition of the property, and all transfer costs. The
payment of all such expenses, and the transfer of assets
pursuant to this paragraph, shall be upon such terms and
conditions as the Attorney General or the Secretary of the
Treasury may, in his discretion, set.
* * * * * * *
Sec. 982. Criminal forfeiture
(a)(1) The court, in imposing sentence on a person
convicted of an offense in violation of section 5313(a), 5316,
or 5324 of title 31, or of section 1956, 1957, or 1960 of this
title, or a conspiracy to commit any such offense, shall order
that the person forfeit to the United States any property, real
or personal, involved in such offense, or any property
traceable to such property. However, no property shall be
seized or forfeited in the case of a violation of section
5313(a) of title 31 by a domestic financial institution
examined by a Federal bank supervisory agency or a financial
institution regulated by the Securities and Exchange Commission
or a partner, director, or employee thereof.
(2) The court, in imposing sentence on a person convicted
of a violation of, or a conspiracy to violate--
(A) section 215, 656, 657, 1005, 1006, 1007, 1014,
1341, 1343, or 1344 of this title, affecting a
financial institution, [or]
(B) section 471, 472, 473, 474, 476, 477, 478, 479,
480, 481, 485, 486, 487, 488, 501, 502, 510, 542, 545,
842, 844, 1028, 1029, or 1030 of this title, or
(C) any offense constituting ``specified unlawful
activity'' as defined in section 1956(c)(7) of this
title,
shall order that the person forfeit to the United States any
property constituting, or derived from, proceeds the person
obtained directly or indirectly, as the result of such
violation.
(3) The court, in imposing a sentence on a person convicted
of an offense under--
(A) section 666(a)(1) (relating to Federal program
fraud);
(B) section 1001 (relating to fraud and false
statements);
(C) section 1031 (relating to major fraud against
the United States);
(D) section 1032 (relating to concealment of assets
from conservator, receiver, or liquidating agent of
insured financial institution);
(E) section 1341 (relating to mail fraud); or
(F) section 1343 (relating to wire fraud),
involving the sale of assets acquired or held by the Resolution
Trust Corporation, the Federal Deposit Insurance Corporation,
as conservator or receiver for a financial institution or any
other conservator for a financial institution appointed by the
Office of the Comptroller of the Currency or the Office of
Thrift Supervision, or the National Credit Union
Administration, as conservator or liquidating agent for a
financial institution, shall order that the person forfeit to
the United States any property, real or personal, which
represents or is traceable to the [gross receipts] proceeds
obtained, directly or indirectly, as a result of such
violation.
(4) With respect to an offense listed in subsection (a)(3)
committed for the purpose of executing or attempting to execute
any scheme or artifice to defraud, or for obtaining money or
property by means of false or fraudulent statements, pretenses,
representations, or promises, the [gross receipts] proceeds of
such an offense shall include any property, real or personal,
tangible or intangible, which is obtained, directly or
indirectly, as a result of such offense.
(5) The court, in imposing sentence on a person convicted
of a violation or conspiracy to violate--
(A) section 511 (altering or removing motor vehicle
identification numbers);
(B) section 553 (importing or exporting stolen
motor vehicles);
(C) section 2119 (armed robbery of automobiles);
(D) section 2312 (transporting stolen motor
vehicles in interstate commerce); [or]
(E) section 2313 (possessing or selling a stolen
motor vehicle that has moved in interstate commerce);
or
(F) section 32703 of title 49, United States Code
(motor vehicle odometer tampering);
shall order that the person forfeit to the United States any
property, real or personal, which represents or is traceable to
the [gross] proceeds obtained, directly or indirectly, as a
result of such violation. If the conviction was for a violation
described in subparagraph (F), the court shall also order the
forfeiture of any vehicles or other property involved in the
commission of the offense.
(6) The court, in imposing sentence on a person convicted
of a Federal health care offense, shall order the person to
forfeit property, real or personal, that constitutes or is
derived, directly or indirectly, from [gross] proceeds
traceable to the commission of the offense.
[(6)(A)] (7) The court, in imposing sentence on a person
convicted of a violation of, or conspiracy to violate, sections
274(a), 274A(a)(1), or 274A(a)(2) of the Immigration and
Nationality Act of 1952 (8 U.S.C. 1324(a), 1324A(a)(1), and
1324A(a)(2)), section 1425, 1426, 1427, 1541, 1542, 1543, 1544,
or 1546 of this title, or a violation of, or conspiracy to
violate, section 1028 of this title if committed in connection
with passport or visa issuance or use, shall order that the
person forfeit to the United States, regardless of any
provision of State law--
[(i)] (A) any conveyance, including any vessel,
vehicle, or aircraft used in the commission of [a
violation of, or a conspiracy to violate, subsection
(a)] the offense of which the person is convicted; and
[(ii)] (B) any property real or personal--
[(I)] (i) that constitutes, or is derived
from or is traceable to the proceeds obtained
directly or indirectly from the commission of
[a violation of, or a conspiracy to violate,
subsection (a), section 274A(a)(1) or
274A(a)(2) of the Immigration and Nationality
Act, or section 1028, 1425, 1426, 1427, 1541,
1542, 1543, 1544, or 1546 of this title] the
offense of which the person is convicted; or
[(II)] (ii) that is used to facilitate, or
is intended to be used to facilitate, the
commission of a violation of, or a conspiracy
to violate, subsection (a), section 274A(a)(1)
or 274A(a)(2) of the Immigration and
Nationality Act, or section 1028, 1425, 1426,
1427, 1541, 1542, 1543, 1544, or 1546 of this
title.
The court, in imposing sentence on such person, shall order
that the person forfeit to the United States all property
described in this [subparagraph] subsection.
[(B) The criminal forfeiture of property under subparagraph
(A), including any seizure and disposition of the property and
any related administrative or judicial proceeding, shall be
governed by the provisions of section 413 of the Comprehensive
Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 853),
other than subsections (a) and (d) of such section 413.]
(8)(A) The court, in imposing a sentence on a person
convicted of a violation of sections 513, 514, 1028 through
1032, and 1341, 1343, and 1344 of this title, or a conspiracy
to commit such offense, shall order the person to forfeit to
the United States any computer, photostatic reproduction
machine, electronic communications device or other material,
article, apparatus, device or thing made, possessed, fitted,
used or intended to be used to commit such offense, and any
property traceable to such property.
(B) The court, in imposing a sentence on a person convicted
of a violation of sections 1028 or 1029 of this title, or a
conspiracy to commit such offense, shall order the person to
forfeit to the United States any conveyance used on two or more
occasions to transport the instrumentalities used to commit
such offense, and any property traceable to such conveyance.
(9) The court, in imposing a sentence on a person convicted
of--
(A) an offense punishable under chapter 113B of
this title (relating to terrorism);
(B) a violation of any of the following sections of
the Federal explosives laws: subsections (a)(1) and
(3), (b) through (d), and (h)(1) of section 842, and
subsections (d) through (m) of section 844; or
(C) any other offense enumerated in section
2339A(a) of this title;
or a conspiracy to commit any such offense, shall order the
person to forfeit to the United States any conveyance,
chemicals, laboratory equipment, or other material, article,
apparatus, device or thing made, possessed, fitted, used or
intended to be used to commit such offense, and any property
traceable to such property.
[(b)(1) Property subject to forfeiture under this section,
any seizure and disposition thereof, and any administrative or
judicial proceeding in relation thereto, shall be governed--
[(A) in the case of a forfeiture under subsection
(a)(1) or (a)(6) of this section, by subsections (c)
and (e) through (p) of section 413 of the Comprehensive
Drug Abuse Prevention and Control Act of 1970 (21
U.S.C. 853); and
[(B) in the case of a forfeiture under subsection
(a)(2) of this section, by subsections (b), (c), (e),
and (g) through (p) of section 413 of such Act.]
(b)(1) The forfeiture of property under this section,
including any seizure and disposition of the property and any
related administrative or judicial proceeding, shall be
governed by the provisions of section 413 of the Comprehensive
Drug Abuse Prevention and Control Act of 1970 (21 U.S.C 853),
except for subsection 413(d) which shall not apply to
forfeitures under this section.
(2) [The substitution] With respect to a forfeiture under
subsection (a)(1), the substitution of assets provisions of
subsection 413(p) shall not be used to order a defendant to
forfeit assets in place of the actual property laundered where
such defendant acted merely as an intermediary who handled but
did not retain the property in the course of the money
laundering offense unless the defendant, in committing the
offense or offenses giving rise to the forfeiture, conducted
three or more separate transactions involving a total of
$100,000 or more in any twelve month period.
(3) For purposes of subsection (a), the term ``proceeds''
has the meaning set forth in section 981(a)(2).
Sec. 983. Civil forfeiture procedures
(a) Administrative Forfeitures.--(1)(A) In any nonjudicial
civil forfeiture proceeding under a civil forfeiture statute,
with respect to which the agency conducting a seizure of
property must send written notice of the seizure under section
607(a) of the Tariff Act of 1930 (19 U.S.C. 1607(a)), such
notice together with information on the applicable procedures
shall be sent not later than 60 days after the seizure to each
party known to the seizing agency at the time of the seizure to
have an ownership or possessory interest, including a
lienholder's interest, in the seized article. If a party's
identity or interest is not determined until after the seizure
but is determined before a declaration of forfeiture is
entered, such written notice and information shall be sent to
such interested party not later than 60 days after the seizing
agency's determination of the identity of the party or the
party's interest.
(B) If the Government does not provide notice of a seizure
of property in accordance with subparagraph (A), it shall
return the property pending the giving of such notice.
(2) The Government may apply to a Federal magistrate judge
(as defined in the Federal Rules of Criminal Procedure) in any
district where venue for a forfeiture action would lie under
section 1355(b) of title 28 for an extension of time in which
to comply with paragraph (1)(A). Such an extension shall be
granted based on a showing of good cause.
(3) A person with an ownership or possessory interest in
the seized article who failed to file a claim within the time
period prescribed in subsection (b) may, on motion made not
later than 2 years after the date of final publication of
notice of seizure of the property, move to set aside a
declaration of forfeiture entered pursuant to section 609 of
the Tariff Act of 1930 (19 U.S.C. 1609). Such motion shall be
granted if--
(A) the Government failed to take reasonable steps
to provide the claimant with notice of the forfeiture;
and
(B) the person otherwise had no actual notice of
the seizure within sufficient time to enable the person
to file a timely claim under subsection (b).
(4) If the court grants a motion made under paragraph (3),
it shall set aside the declaration of forfeiture as to the
moving party's interest pending forfeiture proceedings in
accordance with section 602 et seq. of the Tariff Act of 1930
(19 U.S.C. 1602 et seq.), which proceedings shall be instituted
within 60 days of the entry of the order granting the motion.
(5) If, at the time a motion under this subsection is
granted, the forfeited property has been disposed of by the
Government in accordance with law, the Government shall
institute forfeiture proceedings under paragraph (4). The
property which will be the subject of the forfeiture
proceedings instituted under paragraph (4) shall be a sum of
money equal to the value of the forfeited property at the time
it was disposed of plus interest.
(6) The institution of forfeiture proceedings under
paragraph (4) shall not be barred by the expiration of the
statute of limitations under section 621 of the Tariff Act of
1930 (19 U.S.C. 1621) if the original publication of notice was
completed before the expiration of such limitations period.
(7) A motion made under this subsection shall be the
exclusive means of obtaining judicial review of a declaration
of forfeiture entered by a seizing agency.
(b) Filing a Claim.--(1) Any person claiming such seized
property may file a claim with the appropriate official after
the seizure.
(2) A claim under paragraph (1) may not be filed later than
30 days after--
(A) the date of final publication of notice of
seizure; or
(B) in the case of a person receiving written
notice, the date that such notice is received.
(3) The claim shall set forth the nature and extent of the
claimant's interest in the property.
(c) Filing a Complaint.--(1) In cases where property has
been seized or restrained by the Government and a claim has
been filed, the Attorney General shall file a complaint for
forfeiture in the appropriate court in the manner set forth in
the Supplemental Rules for Certain Admiralty and Maritime
Claims, or shall include a forfeiture count in a criminal
indictment or information, or both, not later than 90 days
after the claim was filed, or return the property pending the
filing of a complaint or indictment. By mutual agreement
between the Government and the claimants, the 90-day filing
requirement may be waived.
(2) The Government may apply to a Federal magistrate judge
(as defined in the Federal Rules of Criminal Procedure) in any
district where venue for a forfeiture action would lie under
section 1355(b) of title 28 for an extension of time in which
to comply with paragraph (1). Such an extension shall be
granted based on a showing of good cause. If the reason for the
extension is that the filing required by paragraph (1) would
jeopardize an ongoing criminal investigation or prosecution or
court-authorized electronic surveillance, the application may
be made ex parte.
(3) Upon the filing of a civil complaint, the claimant
shall file a claim and answer in accordance with the
Supplemental Rules for Certain Admiralty and Maritime Claims.
(d) Appointment of Counsel.--(1) If the person filing a
claim is financially unable to obtain representation by counsel
and requests that counsel be appointed, the court may appoint
counsel to represent that person with respect to the claim. In
determining whether to appoint counsel to represent the person
filing the claim, the court shall take into account--
(A) the nature and value of the property subject to
forfeiture, including the hardship to the claimant from
the loss of the property seized, compared to the
expense of appointing counsel;
(B) the claimant's standing to contest the
forfeiture; and
(C) whether the claim appears to be made in good
faith or to be frivolous.
(2) The court shall set the compensation for that
representation, which shall be the equivalent to that provided
for court-appointed representation under section 3006A of this
title, and to pay such cost, there are authorized to be
appropriated such sums as are necessary as an addition to the
funds otherwise appropriated for the appointment of counsel
under such section.
(3) The determination of whether to appoint counsel under
this subsection shall be made following a hearing at which the
Government shall have an opportunity to present evidence and
examine the claimant. The testimony of the claimant at such
hearing shall not be admitted in any other proceeding except in
accordance with the rules which govern the admissibility of
testimony adduced in a hearing on a motion to suppress
evidence. Nothing in this paragraph shall be construed to
prohibit the admission of any evidence that may be obtained in
the course of civil discovery in the forfeiture proceeding or
through any other lawful investigative means.
(e) Burden of Proof.--In all suits or actions brought for
the civil forfeiture of any property, the burden of proof at
trial is on the United States to establish, by a preponderance
of the evidence, that the property is subject to forfeiture. If
the Government proves that the property is subject to
forfeiture, the claimant shall have the burden of establishing
any affirmative defense by a preponderance of the evidence.
(f) Innocent Owners.--(1) An innocent owner's interest in
property shall not be forfeited in any civil forfeiture action.
(2) With respect to a property interest in existence at the
time the illegal conduct giving rise to the forfeiture took
place, the term ``innocent owner'' means an owner who--
(A) did not know of the conduct giving rise to the
forfeiture; or
(B) upon learning of the conduct giving rise to the
forfeiture, did all that reasonably could be expected
under the circumstances to terminate such use of the
property.
(3)(A) With respect to a property interest acquired after
the conduct giving rise to the forfeiture has taken place, the
term ``innocent owner'' means a person who, at the time that
person acquired the interest in the property, was a bona fide
purchaser for value and was at the time of the purchase
reasonably without cause to believe that the property was
subject to forfeiture.
(B) Except as provided in paragraph (4), where the property
subject to forfeiture is real property, and the claimant uses
the property as his or her primary residence and is the spouse
or minor child of the person who committed the offense giving
rise to the forfeiture, an otherwise valid innocent owner claim
shall not be denied on the ground that the claimant acquired
the interest in the property--
(i) in the case of a spouse, through dissolution of
marriage or by operation of law, or
(ii) in the case of a minor child, as an
inheritance upon the death of a parent,
and not through a purchase. However, the claimant must
establish, in accordance with subparagraph (A), that at the
time of the acquisition of the property interest, the claimant
was reasonably without cause to believe that the property was
subject to forfeiture, and was an owner of the property, as
defined in paragraph (6).
(4) Notwithstanding any provision of this section, no
person may assert an ownership interest under this section--
(A) in contraband or other property that it is
illegal to possess; or
(B) in the illegal proceeds of a criminal act
unless such person was a bona fide purchaser for value
who was reasonably without cause to believe that the
property was subject to forfeiture.
(5) For the purposes of paragraph (2) of this subsection a
person does all that reasonably can be expected if the person
takes all steps that a reasonable person would take in the
circumstances to prevent or terminate the illegal use of the
person's property. There is a rebuttable presumption that a
property owner took all the steps that a reasonable person
would take if the property owner--
(A) gave timely notice to an appropriate law
enforcement agency of information that led to the
claimant to know the conduct giving rise to a
forfeiture would occur or has occurred; and
(B) in a timely fashion, revoked permission for
those engaging in such conduct to use the property or
took reasonable steps in consultation with a law
enforcement agency to discourage or prevent the illegal
use of the property.
The person is not required to take extraordinary steps that the
person reasonably believes would be likely to subject the
person to physical danger.
(6) As used in this subsection--
(A) the term ``civil forfeiture statute'' means any
provision of Federal law providing for the forfeiture
of property other than as a sentence imposed upon
conviction of a criminal offense;
(B) the term ``owner'' means a person with an
ownership interest in the specific property sought to
be forfeited, including a lien, mortgage, recorded
security device, or valid assignment of an ownership
interest. Such term does not include--
(i) a person with only a general unsecured
interest in, or claim against, the property or
estate of another;
(ii) a bailee unless the bailor is
identified and the bailee shows a colorable
legitimate interest in the property seized; or
(iii) a nominee who exercises no dominion
or control over the property;
(C) a person shall be considered to have known that
the person's property was being used or was likely to
be used in the commission of an illegal act if the
person was willfully blind.
(7) If the court determines, in accordance with this
subsection, that an innocent owner had a partial interest in
property otherwise subject to forfeiture, or a joint tenancy or
tenancy by the entirety in such property, the court shall enter
an appropriate order--
(A) severing the property;
(B) transferring the property to the Government
with a provision that the Government compensate the
innocent owner to the extent of his or her ownership
interest once a final order of forfeiture has been
entered and the property has been reduced to liquid
assets; or
(C) permitting the innocent owner to retain the
property subject to a lien in favor of the Government,
to the extent of the forfeitable interest in the
property, that will permit the Government to realize
its forfeitable interest if the property is transferred
to another person.
To effectuate the purposes of this subsection, a joint tenancy
or tenancy by the entireties shall be converted to a tenancy in
common by order of the court, irrespective of state law.
(8) An innocent owner defense under this subsection is an
affirmative defense.
(g) Motion To Suppress Seized Evidence.--At any time after
a claim and answer are filed in a judicial forfeiture
proceeding, a claimant with standing to contest the seizure of
the property may move to suppress the fruits of the seizure in
accordance with the normal rules regarding the suppression of
illegally seized evidence. If the claimant prevails on such
motion, the fruits of the seizure shall not be admitted into
evidence as to that claimant at the forfeiture trial. However,
a finding that evidence should be suppressed shall not bar the
forfeiture of the property based on evidence obtained
independently before or after the seizure.
(h) Use of Hearsay at Pre-Trial Hearings.--At any pre-trial
hearing under this section in which the governing standard is
probable cause, the court may accept and consider hearsay
otherwise inadmissible under the Federal Rules of Evidence.
(i) Stipulations.--Notwithstanding the claimant's offer to
stipulate to the forfeitability of the property, the Government
shall be entitled to present evidence to the finder of fact on
that issue before the claimant presents any evidence in support
of any affirmative defense.
(j) Preservation of Property Subject to Forfeiture.--The
court, before or after the filing of a forfeiture complaint and
on the application of the Government, may--
(1) enter any restraining order or injunction in
the manner set forth in section 413(e) of the
Controlled Substances Act (21 U.S.C. 853(e));
(2) require the execution of satisfactory
performance bonds;
(3) create receiverships;
(4) appoint conservators, custodians, appraisers,
accountants or trustees; or
(5) take any other action to seize, secure,
maintain, or preserve the availability of property
subject to forfeiture under this section.
(k) Excessive Fines.--(1) At the conclusion of the trial
and following the entry of a verdict of forfeiture, or upon the
entry of summary judgment for the Government as to the
forfeitability of the property, the claimant may petition the
court to determine whether the excessive fines clause of the
Eighth Amendment applies, and if so, whether forfeiture is
excessive. The claimant shall have the burden of establishing
that a forfeiture is excessive by a preponderance of the
evidence at a hearing conducted in the manner provided in Rule
43(e), Federal Rules of Civil Procedure, by the Court without a
jury. If the court determines that the forfeiture is excessive,
it shall adjust the forfeiture to the extent necessary to avoid
the Constitutional violation.
(2) The claimant may not object to the forfeiture on Eighth
Amendment grounds other than as set forth in paragraph (1),
except that a claimant may, at any time, file a motion for
summary judgment asserting that even if the property is subject
to forfeiture, the forfeiture would be excessive. The court
shall rule on such motion for summary judgment only after the
Government has had an opportunity--
(A) to conduct full discovery on the Eighth
Amendment issue; and
(B) to place such evidence as may be relevant to
the excessive fines determination before the court in
affidavits or at an evidentiary hearing.
(l) Pre-Discovery Standard.--In a judicial proceeding on
the forfeiture of property, the Government shall not be
required to establish the forfeitability of the property before
the completion of discovery pursuant to the Federal Rules of
Civil Procedure, particularly Rule 56(f) as may be ordered by
the court or if no discovery is ordered before trial.
(m) Applicability.--The procedures set forth in this
section apply to any civil forfeiture action brought under any
provision of this title, the Controlled Substances Act, or the
Immigration and Naturalization Act.
* * * * * * *
Sec. 985. Release of property to avoid hardship
(a) A person who has filed a claim under section 983 is
entitled to release pursuant to subsection (b) of seized
property pending trial if--
(1) the claimant has a possessory interest in the
property sufficient to establish standing to contest
forfeiture and has filed a nonfrivolous claim on the
merits of the forfeiture action;
(2) the claimant has sufficient ties to the
community to provide assurance that the property will
be available at the time of the trial;
(3) the continued possession by the United States
Government pending the final disposition of forfeiture
proceedings will cause substantial hardship to the
claimant, such as preventing the claimant from working,
leaving the claimant homeless, or preventing the
functioning of a business;
(4) the claimant's hardship outweighs the risk that
the property will be destroyed, damaged, lost,
concealed, diminished in value or transferred if it is
returned to the claimant during the pendency of the
proceeding; and
(5) none of the conditions set forth in subsection
(c) applies;
(b)(1) The claimant may make a request for the release of
property under this subsection at any time after the claim is
filed. If, at the time the request is made, the seizing agency
has not yet referred the claim to a United States Attorney
pursuant to section 608 of the Tariff Act of 1930 (19 U.S.C.
1608), the request may be filed with the seizing agency;
otherwise the request must be filed with the United States
Attorney to whom the claim was referred. In either case, the
request must set forth the basis on which the requirements of
subsection (a)(1) are met.
(2) If the seizing agency, or the United States Attorney,
as the case may be, denies the request or fails to act on the
request within 20 days, the claimant may file the request as a
motion for the return of seized property in the district court
for the district represented by the United States Attorney to
whom the claim was referred, or if the claim has not yet been
referred, in the district court that issued the seizure warrant
for the property, or if no warrant was issued, in any district
court that would have jurisdiction to consider a motion for the
return of seized property under Rule 41(e), Federal Rules of
Criminal Procedure. The motion must set forth the basis on
which the requirements of subsection (a) have been met and the
steps the claimant has taken to secure the release of the
property from the appropriate official.
(3) The district court must act on a motion made pursuant
to this subsection within 30 days or as soon thereafter as
practicable, and must grant the motion if the claimant
establishes that the requirements of subsection (a) have been
met. If the court grants the motion, the court must enter any
order necessary to ensure that the value of the property is
maintained while the forfeiture action is pending, including
permitting the inspection, photographing and inventory of the
property, and the court may take action in accordance with Rule
E of the Supplemental Rules for Certain Admiralty and Maritime
Cases. The Government is authorized to place a lien against the
property or to file a lis pendens to ensure that it is not
transferred to another person. The Government, in responding to
a motion under this subsection, may, in appropriate cases,
submit evidence ex parte in order to avoid disclosing any
matter relating to an ongoing criminal investigation or pending
trial.
(4) If property returned to the claimant under this section
is lost, stolen, or diminished in value, any insurance proceeds
shall be paid to the United States and such proceeds shall be
subject to forfeiture in place of the property originally
seized.
(c) This section shall not apply if the seized property--
(1) is contraband, currency or other monetary
instrument, or electronic funds unless such currency or
other monetary instrument or electronic funds
constitutes the assets of a business which has been
seized,
(2) is evidence of a violation of the law,
(3) by reason of design or other characteristic, is
particularly suited for use in illegal activities; or
(4) is likely to be used to commit additional
criminal acts if returned to the claimant.
(d) Once a motion for the release of property under this
section is filed, the person filing the motion may request that
the motion be transferred to another district where venue for
the forfeiture action would lie under section 1355(b) of title
28 pursuant to the change of venue provisions in section 1404
of title 28.
Sec. 986. Subpoenas for bank records
(a) At any time before or after the commencement of any
action for forfeiture [in rem] brought by the United States
under [section 1956, 1957, or 1960 of this title, section 5322
or 5324 of title 31, United States Code] section 981 of this
title, or the Controlled Substances Act, any party may request
the Clerk of the Court in the district in which the proceeding
is pending to issue a subpoena duces tecum to any financial
institution, as defined in section 5312(a) of title 31, United
States Code, to produce books, records and any other documents
at any place designated by the requesting party. All parties to
the proceeding shall be notified of the issuance of any such
subpoena. [The procedures and limitations set forth in section
985 of this title shall apply to subpoenas issued under this
section.]
* * * * * * *
(c) Nothing in this section shall preclude any party from
pursuing any form of discovery pursuant to the Federal Rules of
Civil or Criminal Procedure.
(d) Access to Records Located Abroad.--In any civil
forfeiture case, or in any ancillary proceeding in any criminal
forfeiture case governed by section 413(n) of the Controlled
Substances Act (21 U.S.C. 853(n)), where--
(1) financial records located in a foreign country
may be material--
(A) to any claim or to the ability of the
Government to respond to such claim; or
(B) in a civil forfeiture case, to the
Government's ability to establish the
forfeitability of the property; and
(2) it is within the capacity of the claimant to
waive the claimant's rights under such secrecy laws or
to obtain the records, so that the records can be made
available,
the refusal of the claimant to provide the records in response
to a discovery request or take the action necessary otherwise
to make the records available shall result in the dismissal of
the claim with prejudice. This subsection shall not affect the
claimant's rights to refuse production on the basis of any
privilege guaranteed by the Constitution or Federal laws of the
United States.
* * * * * * *
CHAPTER 95--RACKETEERING
* * * * * * *
Sec. 1952. Interstate and foreign travel or transportation in aid of
racketeering enterprises
(a) * * *
* * * * * * *
(d)(1) Any proceeds distributed or intended to be
distributed in violation of subsection (a)(1) or a conspiracy
to commit such violation, or any property traceable to such
property, is subject to forfeiture to the United States in
accordance with the procedures set forth in chapter 46 of this
title.
(2) The court, in imposing sentence on a person convicted
of an offense in violation of subsection (a)(1) or a conspiracy
to commit such offense, shall order that the person forfeit to
the United States any proceeds distributed or intended to be
distributed in the commission of such offense, or any property
traceable to such property, in accordance with the procedures
set forth in section 982 of this title.
* * * * * * *
CHAPTER 96--RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS
* * * * * * *
Sec. 1963. Criminal penalties
(a) * * *
* * * * * * *
(k) In order to facilitate the identification or location
of property declared forfeited and to facilitate the
disposition of petitions for remission or mitigation of
forfeiture, after the entry of an order declaring property
forfeited to the United States the court may, upon application
of the United States, order that the testimony of any witness
relating to the property forfeited be taken by deposition and
that any designated book, paper, document, record, recording,
or other material not privileged be produced at the same time
and place, in the same manner as provided for the taking of
depositions under Rule 15 of the Federal Rules of Criminal
Procedure to the extent that the provisions of the Rule are
consistent with the purposes for which discovery is conducted
under this subsection. Because this subsection applies only to
matters occurring after the defendant has been convicted and
his property has been declared forfeited, the provisions of
Rule 15 requiring the consent of the defendant and the presence
of the defendant at the deposition shall not apply.
(l)(1) Following the entry of an order of forfeiture under
this section, the United States shall publish notice of the
order and of its intent to dispose of the property in such
manner as the Attorney General may direct. The Government may
also, to the extent practicable, provide direct written notice
to any person known to have alleged an interest in the property
that is the subject of the order of forfeiture as a substitute
for published notice as to those persons so notified. To the
extent that the order of forfeiture includes only an in
personam money judgment against the defendant, no proceeding
under this subsection shall be necessary.
* * * * * * *
CHAPTER 109--SEARCHES AND SEIZURES
* * * * * * *
Sec. 2232. Destruction or removal of property to prevent seizure
(a) Physical Interference With Search or Seizure.--Whoever,
before, during, or after seizure, including seizure for
forfeiture, of any property by any person authorized to make
[searches and seizures] searches or seizures, in order to
prevent the seizure or securing of any goods, wares, [or]
merchandise, or other property, real or personal, by such
person, staves, breaks, throws overboard, destroys, or removes
the same, shall be fined under this title or imprisoned not
more than five years, or both.
(b) Notice of Search or Seizure.--Whoever, having knowledge
that any person authorized to make [searches and seizures]
searches or seizures has been authorized or is otherwise likely
to make a search or seizure, including seizure for forfeiture,
in order to prevent the authorized seizing or securing of any
person, goods, wares, merchandise or other property, real or
personal, gives notice or attempts to give notice of the
possible search or seizure to any person shall be fined under
this title or imprisoned not more than five years, or both.
* * * * * * *
CHAPTER 110--SEXUAL EXPLOITATION AND OTHER ABUSE OF CHILDREN
* * * * * * *
Sec. 2254. Civil forfeiture
(a) Property Subject to Civil Forfeiture.--The following
property shall be subject to forfeiture by the United States:
(1) Any visual depiction described in section 2251,
2251A, or 2252 of this chapter, or any book, magazine,
periodical, film, videotape or other matter which
contains any such visual depiction, which was produced,
transported, mailed, shipped, or received in violation
of this chapter.
(2) Any property, real or personal, used or
intended to be used to commit or to promote the
commission of an offense under this chapter involving a
visual depiction described in section 2251, 2251A, or
2252 of this chapter[, except that no property shall be
forfeited under this paragraph, to the extent of the
interest of an owner, by reason of any act or omission
established by that owner to have been committed or
omitted without the knowledge or consent of that
owner.].
(3) Any property, real or personal, constituting or
traceable to gross profits or other proceeds obtained
from a violation of this chapter involving a visual
depiction described in section 2251, 2251A, or 2252 of
this chapter[, except that no property shall be
forfeited under this paragraph, to the extent of the
interest of an owner, by reason of any act or omission
established by that owner to have been committed or
omitted without the knowledge or consent of that
owner.].
* * * * * * *
PART II--CRIMINAL PROCEDURE
* * * * * * *
CHAPTER 215--GRAND JURY
* * * * * * *
Sec. 3322. Disclosure of certain matters occurring before grand jury
(a) A person who is privy to grand jury information
[concerning a banking law violation]--
(1) received in the course of duty as an attorney
for the government; or
(2) disclosed under rule 6(e)(3)(A)(ii) of the
Federal Rules of Criminal Procedure;
may disclose that information to an attorney for the government
for use in enforcing section 951 of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989 or for use in
connection with [civil forfeiture under section 981 of title
18, United States Code, of property described in section
981(a)(1)(C) of such title] any civil forfeiture provision of
Federal law.
CHAPTER 227--SENTENCES
* * * * * * *
SUBCHAPTER A--GENERAL PROVISIONS
* * * * * * *
Sec. 3554. Order of criminal forfeiture
The court, in imposing a sentence on a defendant who has
been found guilty of [an offense described in section 1962 of
this title or in title II or III of the Comprehensive Drug
Abuse Prevention and Control Act of 1970] an offense for which
criminal forfeiture is authorized shall order, pursuant to the
Federal Rules of Criminal Procedure, in addition to the
sentence that is imposed pursuant to the provisions of section
3551, that the defendant forfeit property to the United States
in accordance with the provisions of section 1963 of this title
or section 413 of the Comprehensive Drug Abuse and Control Act
of 1970.
* * * * * * *
----------
SECTION 274 OF THE IMMIGRATION AND NATIONALITY ACT
Sec. 274. (a) * * *
(b)(1) Any conveyance, including any vessel, vehicle, or
aircraft, which has been or is being used in the commission of
a violation of subsection (a) shall be seized and subject to
forfeiture[, except that--
[(A) no conveyance used by any person as a common
carrier in the transaction of business as a common
carrier shall be forfeited under the provisions of this
section unless it shall appear that the owner or other
person in charge of such conveyance was a consenting
party or privy to the illegal act; and
[(B) no conveyance shall be forfeited under the
provisions of this section by reason of any act or
omission established by the owner thereof to have been
committed or omitted by any person other than such
owner while such conveyance was unlawfully in the
possession of a person other than the owner in
violation of the criminal laws of the United States, or
of any State.].
* * * * * * *
(5) In all suits or actions brought for the forfeiture of
any conveyance seized under this section, where the conveyance
is claimed by any person, [the burden of proof shall lie upon
such claimant, except that probable cause shall be first shown
for the institution of such suit or action. In determining
whether probable cause exists,] any of the following shall be
prima facie evidence that an alien involved in the alleged
violation had not received prior official authorization to come
to, enter, or reside in the United States or that such alien
had come to, entered, or remained in the United States in
violation of law:
(A) * * *
* * * * * * *
(C) Testimony, by an immigration officer having
personal knowledge of the facts concerning that alien's
status, that the alien had not received prior official
authorization to come to, enter, or reside in the
United States or that such alien had come to, entered,
or remained in the United States in violation of law.
The procedures set forth in chapter 46 of title 18, United
States Code, shall govern judicial forfeiture actions under
this section.
* * * * * * *
----------
CONTROLLED SUBSTANCES ACT
* * * * * * *
TITLE II--CONTROL AND ENFORCEMENT
* * * * * * *
Part E--Administrative and Enforcement Provisions
Sec. 501. Procedures.
* * * * * * *
[518. Expedited procedures for seized conveyances.]
* * * * * * *
TITLE II--CONTROL AND ENFORCEMENT
* * * * * * *
Part D--Offenses and Penalties
* * * * * * *
Criminal Forfeitures
property subject to criminal forfeiture
Sec. 413. (a) Any person convicted of a violation of this
title or title III punishable by imprisonment for more than one
year shall forfeit to the United States, irrespective of any
provision of State law, or of any bankruptcy proceeding
instituted after or in contemplation of a prosecution of such
violation--
(1) * * *
* * * * * * *
third party transfers
(c) All right, title, and interest in property described in
subsection (a) vests in the United States upon the commission
of the act giving rise to forfeiture under this section. All
right, title and interest in property described in subsection
(p) of this section vests in the United States at the time an
indictment, information or bill of particulars specifically
describing the property as substitute assets is filed. [Any
such property that is subsequently transferred to a person
other than the defendant] Any property that is transferred to a
person other than the defendant after the United States'
interest in the property has vested pursuant to this subsection
may be the subject of a special verdict of forfeiture and
thereafter shall be ordered forfeited to the United States,
unless the transferee establishes in a hearing pursuant to
subsection (n) that he is a bona fide purchaser for value of
such property who at the time of purchase was reasonably
without cause to believe that the property was subject to
forfeiture under this section.
* * * * * * *
protective orders
(e)(1) Upon application of the United States, the court may
enter a restraining order or injunction, require the execution
of a satisfactory performance bond, or take any other action to
preserve the availability of property described in subsection
(a) or (p) for forfeiture under this section--
(A) upon the filing of an indictment or information
charging a violation of this title or title III for
which criminal forfeiture may be ordered under this
section and alleging that the property with respect to
which the order is sought would, in the event of
conviction, be subject to forfeiture under this
section; or
(B) prior to the filing of such an indictment or
information, if, after notice to persons appearing to
have an interest in the property and opportunity for a
hearing, the court determines that--
(i) there is a substantial probability that
the United States will prevail on the issue of
forfeiture and that failure to enter the order
will result in the property being destroyed,
removed from the jurisdiction of the court, or
otherwise made unavailable for forfeiture; and
(ii) the need to preserve the availability
of the property through the entry of the
requested order outweighs the hardship on any
party against whom the order is to be entered:
Provided, however, That an order entered pursuant to
subparagraph (B) shall be effective for not more than ninety
days, unless extended by the court for good cause shown or
unless an indictment or information described in subparagraph
(A) has been filed. To the extent that property forfeitable
only pursuant to subsection (p) is restrained under this
paragraph, the court shall afford the defendant a prompt post-
restraint hearing and shall exempt from such restraint such
property as may reasonably be needed by the defendant to pay
attorney's fees, other necessary cost-of-living expenses, and
expenses of maintaining restrained assets pending the entry of
judgment in the criminal case.
* * * * * * *
(4) Pursuant to its authority to enter a pre-trial
restraining order under this section, including its authority
to restrain any property forfeitable as substitute assets, the
court may also order the defendant to repatriate any property
subject to forfeiture pending trial, and to deposit that
property in the registry of the court, or with the United
States Marshals Service or the Secretary of the Treasury, in an
interest-bearing account. Failure to comply with an order under
this subsection, or an order to repatriate property under
subsection (p), shall be punishable as a civil or criminal
contempt of court, and may also result in an enhancement of the
sentence for the offense giving rise to the forfeiture under
the obstruction of justice provision of section 3C1.1 of the
United States Sentencing Guidelines.
(5)(A) When property is restrained pre-trial subject to
paragraph (1)(A), the court may, at the request of the
defendant, hold a pre-trial hearing to determine whether the
restraining order should be vacated or modified with respect to
some or all of the restrained property because--
(i) it restrains property that would not be subject
to forfeiture even if all of the facts set forth in the
indictment were established as true;
(ii) it causes a substantial hardship to the moving
party and less intrusive means exist to preserve the
subject property for forfeiture; or
(iii) the defendant establishes that he or she has
no assets, other than the restrained property,
available to exercise his or her constitutional right
to retain counsel, and there is no probable cause to
believe that the restrained property is subject to
forfeiture.
(B) In any hearing under this paragraph where probable
cause is at issue, the court shall limit its inquiry to the
existence of probable cause for the forfeiture, and shall
neither entertain challenges to the validity of the indictment,
nor require the Government to produce additional evidence
regarding the facts of the case to support the grand jury's
finding of probable cause regarding the criminal offense giving
rise to the forfeiture. In all cases, the party requesting the
modification of the restraining order shall bear the burden of
proof.
warrant of seizure
(f) The Government may request the issuance of a warrant
authorizing the seizure of property subject to forfeiture under
this section in the same manner as provided for a search
warrant. If the court determines that there is probable cause
to believe that the property to be seized would, in the event
of conviction, be subject to forfeiture and that an order under
subsection (e) may not be sufficient to assure the availability
of the property for forfeiture, the court shall issue a warrant
authorizing the seizure of such property. If property subject
to criminal forfeiture under this section is already in the
custody of the United States or any agency thereof, it shall
not be necessary to seize or restrain the property for the
purpose of criminal forfeiture.
* * * * * * *
applicability of civil forfeiture provisions
(j) Except to the extent that they are inconsistent with
the provisions of this section, the provisions of section
511(d) of this title (21 U.S.C. 881(d)), and Rule C(5) of the
Supplemental Rules for Certain Admiralty and Maritime Claims,
shall apply to a criminal forfeiture under this section.
* * * * * * *
depositions
(m) In order to facilitate the identification and location
of property declared forfeited and to facilitate the
disposition of petitions for remission or mitigation of
forfeiture, after the entry of an order declaring property
forfeited to the United States, the court may, upon application
of the United States, order that the testimony of any witness
relating to the property forfeited be taken by deposition and
that any designated book, paper, document, record, recording,
or other material not privileged be produced at the same time
any place, in the same manner as provided for the taking of
depositions under Rule 15 of the Federal Rules of Criminal
Procedure to the extent that the provisions of the Rule are
consistent with the purposes for which discovery is conducted
under this subsection. Because this subsection applies only to
matters occurring after the defendant has been convicted and
his property has been declared forfeited, the provisions of
Rule 15 requiring the consent of the defendant and the presence
of the defendant at the deposition shall not apply.
third party interests
(n)(1) Following the entry of an order of forfeiture under
this section, the United States shall publish notice of the
order and of its intent to dispose of the property in such
manner as the Attorney General may direct. The Government may
also, to the extent practicable, provide direct written notice
to any person known to have alleged an interest in the property
that is the subject of the order of forfeiture as a substitute
for published notice as to those persons so notified. To the
extent that the order of forfeiture includes only an in
personam money judgment against the defendant, no proceeding
under this subsection shall be necessary.
* * * * * * *
(6) If, after the hearing, the court determines that the
petitioner has established by a preponderance of the evidence
that--
(A) the petitioner has a legal right, title, or
interest in the property, and such right, title, or
interest renders the order of forfeiture invalid in
whole or in part because the right, title, or interest
was vested in the petitioner rather than the defendant
or was superior to any right, title, or interest of the
defendant at the time of the commission of the acts
which gave rise to the forfeiture of the property under
the section; or
(B) the petitioner is a bona fide purchaser for
value of the right, title, or interest in the property
and was at the time of purchase reasonably without
cause to believe that the property was subject to
forfeiture under this section;
the court shall amend the order of forfeiture in accordance
with its determination. In the case of substitute assets, the
petitioner must show that his interest in the property existed
at the time the property vested in the United States pursuant
to subsection (c), or that he subsequently acquired his
interest in the property as a bona fide purchaser for value as
provided in this subsection.
* * * * * * *
(p) If any of the property described in subsection (a), as
a result of any act or omission of the defendant--
(1) * * *
* * * * * * *
the court shall order the forfeiture of any other property of
the defendant up to the value of any property described in
paragraphs (1) through (5). In the case of property described
in paragraph (3), the court may, in addition, order the
defendant to return the property to the jurisdiction of the
court so that it may be seized and forfeited.
(q) In addition to the authority otherwise provided in this
section, an order of forfeiture may be enforced--
(1) in the manner provided for the collection and
payment of fines in subchapter B of chapter 229 of
title 18, United States Code; or
(2) in the same manner as a judgment in a civil
action.
[(q)] (r) The court, when sentencing a defendant convicted
of an offense under this title or title III involving the
manufacture of methamphetamine, may--
(1) order restitution as provided in sections 3612
and 3664 of title 18, United States Code;
(2) order the defendant to reimburse the United
States for the costs incurred by the United States for
the cleanup associated with the manufacture of
methamphetamine by the defendant; and
(3) order restitution to any person injured as a
result of the offense as provided in section 3663 of
title 18, United States Code.
* * * * * * *
drug paraphernalia
Sec. 422. (a) * * *
* * * * * * *
[(c) Any drug paraphernalia involved in any violation of
subsection (a) of this section shall be subject to seizure and
forfeiture upon the conviction of a person for such violation.
Any such paraphernalia shall be delivered to the Administrator
of General Services, General Services Administration, who may
order such paraphernalia destroyed or may authorize its use for
law enforcement or educational purposes by Federal, State, or
local authorities.]
[(d)] (c) The term ``drug paraphernalia'' means any
equipment, product, or material of any kind which is primarily
intended or designed for use in manufacturing, compounding,
converting, concealing, producing, processing, preparing,
injecting, ingesting, inhaling, or otherwise introducing into
the human body a controlled substance, possession of which is
unlawful under the Controlled Substances Act (title II of
Public Law 91-513). It includes items primarily intended or
designed for use in ingesting, inhaling, or otherwise
introducing marijuana, cocaine, hashish, hashish oil, PCP, or
amphetamines into the human body, such as--
(1) metal, wooden, acrylic, glass, stone, plastic,
or ceramic pipes with or without screens, permanent
screens, hashish heads, or punctured metal bowls;
(2) water pipes;
(3) carburetion tubes and devices;
(4) smoking and carburetion masks;
(5) roach clips: meaning objects used to hold
burning material, such as a marihuana cigarette, that
has become too small or too short to be held in the
hand;
(6) miniature spoons with level capacities of one-
tenth cubic centimeter or less;
(7) chamber pipes;
(8) carburetor pipes;
(9) electric pipes;
(10) air-driven pipes;
(11) chillums;
(12) bongs;
(13) ice pipes or chillers;
(14) wired cigarette papers; or
(15) cocaine freebase kits.
[(e)] (d) In determining whether an item constitutes drug
paraphernalia, in addition to all other logically relevant
factors, the following may be considered:
(1) instructions, oral or written, provided with
the item concerning its use;
(2) descriptive materials accompanying the item
which explain or depict its use;
(3) national and local advertising concerning its
use;
(4) the manner in which the item is displayed for
sale;
(5) whether the owner, or anyone in control of the
item, is a legitimate supplier of like or related items
to the community, such as a licensed distributor or
dealer of tobacco products;
(6) direct or circumstantial evidence of the radio
of sales of the item(s) to the total sales of the
business enterprise;
(7) the existence and scope of legitimate uses of
the item in the community; and
(8) expert testimony concerning its use.
[(f)] (e) This section shall not apply to--
(1) any person authorized by local, State, or
Federal law to manufacture, possess, or distribute such
items; or
(2) any item that, in the normal lawful course of
business, is imported, exported, transported, or sold
through the mail or by any other means, and
traditionally intended for use with tobacco products,
including any pipe, paper, or accessory.
* * * * * * *
Part E--Administrative and Enforcement Provisions
* * * * * * *
judicial review
Sec. 507. All final determinations, findings, and
conclusions of the Attorney General under this title shall be
final and conclusive decisions of the matters involved, except
that any person aggrieved by a final decision of the Attorney
General may obtain review of the decision in the United States
Court of Appeals for the District of Columbia or for the
circuit in which his principal place of business is located
upon petition filed with the court and delivered to the
Attorney General within thirty days after notice of the
decision. Findings of fact by the Attorney General, if
supported by substantial evidence, shall be conclusive. This
section does not apply to any findings, conclusions, rulings,
decisions, or declarations of the Attorney General, or any
designee of the Attorney General, relating to the seizure,
forfeiture, or disposition of forfeited property brought under
this subchapter.
* * * * * * *
forfeitures
Sec. 511. (a) The following shall be subject to forfeiture
to the United States and no property right shall exist in them:
(1) * * *
* * * * * * *
(4) All conveyances, including aircraft, vehicles,
or vessels, which are used, or are intended for use, to
transport, or in any manner to facilitate the
transportation, sale, receipt, possession, or
concealment of property described in paragraph (1),
(2), or (9)[, except that--
[(A) no conveyance used by any person as a
common carrier in the transaction of business
as a common carrier shall be forfeited under
the provisions of this section unless it shall
appear that the owner or other person in charge
of such conveyance was a consenting party or
privy to a violation of this title or title
III;
[(B) no conveyance shall be forfeited under
the provisions of this section by reason of any
act or omission established by the owner
thereof to have been committed or omitted by
any person other than such owner while such
conveyance was unlawfully in the possession of
a person other than the owner in violation of
the criminal laws of the United States, or of
any State; and
[(C) no conveyance shall be forfeited under
this paragraph to the extent of an interest of
an owner, by reason of any act or omission
established by that owner to have been
committed or omitted without the knowledge,
consent, or willful blindness of the owner.],
and any property traceable to such conveyances.
* * * * * * *
(6) All moneys, negotiable instruments, securities,
or other things of value furnished or intended to be
furnished by any person in exchange for a controlled
substance or listed chemical in violation of this
title, all proceeds traceable to such an exchange, and
all moneys, negotiable instruments, and securities used
or intended to be used to facilitate any violation of
this title[, except that no property shall be forfeited
under this paragraph, to the extent of the interest of
an owner, by reason of any act or omission established
by that owner to have been committed or omitted without
the knowledge or consent of that owner.], and any
property traceable to such property.
(7) All real property, including any right, title,
and interest (including any leasehold interest) in the
whole of any lot or tract of land and any appurtenances
or improvements, which is used, or intended to be used,
in any manner or part, to commit, or to facilitate the
commission of, a violation of this title punishable by
more than one year's imprisonment[, except that no
property shall be forfeited under this paragraph, to
the extent of an interest of an owner, by reason of any
act or ommission established by that owner to have been
committed or omitted without the knowledge or consent
of that owner.], and any property traceable to such
property.
* * * * * * *
(10) Any drug paraphernalia (as defined in [section
1822 of the Mail Order Drug Paraphernalia Control Act]
section 422).
* * * * * * *
[(b) Any property subject to civil forfeiture to the United
States under this title may be seized by the Attorney General
upon process issued pursuant to the Supplemental Rules for
Certain Admiralty and Maritime Claims by any district court of
the United States having jurisdiction over the property, except
that seizure without such process may be made when--
[(1) the seizure is incident to an arrest or a
search under a search warrant or an inspection under an
administrative inspection warrant;
[(2) the property subject to seizure has been the
subject of a prior judgment in favor of the United
States in a criminal injunction or forfeiture
proceeding under this title;
[(3) the Attorney General has probable cause to
believe that the property is directly or indirectly
dangerous to health or safety; or
[(4) the Attorney General has probable cause to
believe that the property is subject to civil
forfeiture under this title.
In the event of seizure pursuant to paragraph (3) or (4) of
this subsection, proceedings under subsection (d) of this
section shall be instituted promptly. The Government may
request the issuance of a warrant authorizing the seizure of
property subject to forfeiture under this section in the same
manner as provided for a search warrant under the Federal Rules
of Criminal Procedure.]
(b) Any property subject to forfeiture to the United States
under this section may be seized by the Attorney General in the
manner set forth in Section 981(b) of title 18, United States
Code.
* * * * * * *
(d) The provisions of law relating to the seizure, summary
and judicial forfeiture, and condemnation of property for
violation of the customs laws; the disposition of such property
or the proceeds from the sale thereof; the remission or
mitigation of such forfeitures; and the compromise of claims
shall apply to seizures and forfeitures incurred, or alleged to
have been incurred, under any of the provisions of this title,
insofar as applicable and not inconsistent with the provisions
hereof; except that such duties as are imposed upon the customs
officer or any other person with respect to the seizure and
forfeiture of property under the customs laws shall be
performed with respect to seizures and forfeitures of property
under this title by such officers, agents, or other persons as
may be authorized or designated for that purpose by the
Attorney General, except to the extent that such duties arise
from seizures and forfeitures effected by any customs officer.
However, the cost bond provision of section 608 of the Tariff
Act of 1930 (19 U.S.C. 1608) and the burden of proof provision
of section 615 of the Tariff Act of 1930 (19 U.S.C. 1615) shall
not apply to any forfeiture governed by the procedures set
forth in chapter 46 of title 18, United States Code.
(e)(1) Whenever property is civily or criminally forfeited
under this title the Attorney General may--
(A) * * *
* * * * * * *
(C) require that the General Services
Administration take custody of the property and dispose
of it in accordance with law; or
(D) forward it to the Bureau of Narcotics and
Dangerous Drugs for disposition (including delivery for
medical or scientific use to any Federal or State
agency under regulations of the Attorney General)[;
or].
[(E) transfer the forfeited personal property or
the proceeds of the sale of any forfeited personal or
real property to any foreign country which participated
directly or indirectly in the seizure or forfeiture of
the property, if such a transfer--
[(i) has been agreed to by the Secretary of
State;
[(ii) is authorized in an international
agreement between the United States and the
foreign country; and
[(iii) is made to a country which, if
applicable, has been certified under section
490(b) of the Foreign Assistance Act of 1961.]
* * * * * * *
[expedited procedures for seized conveyances
[Sec. 518. (a)(1) The owner of a conveyance may petition
the Attorney General for an expedited decision with respect to
the conveyance, if the conveyance is seized for a drug-related
offense and the owner has filed the requisite claim and cost
bond in the manner provided in section 608 of the Tariff Act of
1930. The Attorney General shall make a determination on a
petition under this section expeditiously, including a
determination of any rights or defenses available to the
petitioner. If the Attorney General does not grant or deny a
petition under this section within 20 days after the date on
which the petition is filed, the conveyance shall be returned
to the owner pending further forfeiture proceedings.
[(2) With respect to a petition under this section, the
Attorney General may--
[(A) deny the petition and retain possession of the
conveyance;
[(B) grant the petition, move to dismiss the
forfeiture action, if filed, and promptly release the
conveyance to the owner; or
[(C) advise the petitioner that there is not
adequate information available to determine the
petition and promptly release the conveyance to the
owner.
[(3) Release of a conveyance under subsection (a)(1) or
(a)(2)(C) does not affect any forfeiture action with respect to
the conveyance.
[(4) The Attorney General shall prescribe regulations to
carry out this section.
[(b) At the time of seizure, the officer making the seizure
shall furnish to any person in possession of the conveyance a
written notice specifying the procedures under this section. At
the earliest practicable opportunity after determining
ownership of the seized conveyance, the head of the department
or agency that seizes the conveyance shall furnish a written
notice to the owner and other interested parties (including
lienholders) of the legal and factual basis of the seizure.
[(c) Not later than 60 days after a claim and cost bond
have been filed under section 608 of the Tariff Act of 1930
regarding a conveyance seized for a drug-related offense, the
Attorney General shall file a complaint for forfeiture in the
appropriate district court, except that the court may extend
the period for filing for good cause shown or on agreement of
the parties. If the Attorney General does not file a complaint
as specified in the preceding sentence, the court shall order
the return of the conveyance to the owner and the forfeiture
may not take place.
[(d) Any owner of a conveyance seized for a drug-related
offense may obtain release of the conveyance by providing
security in the form of a bond to the Attorney General in an
amount equal to the value of the conveyance unless the Attorney
General determines the conveyance should be retained (1) as
contraband, (2) as evidence of a violation of law, or (3)
because, by reason of design or other characteristic, the
conveyance is particularly suited for use in illegal
activities.]
* * * * * * *
----------
TITLE 28, UNITED STATES CODE
* * * * * * *
PART II--DEPARTMENT OF JUSTICE
* * * * * * *
CHAPTER 31--THE ATTORNEY GENERAL
* * * * * * *
Sec. 524. Availability of appropriations
(a) * * *
* * * * * * *
(c)(1) There is established in the United States Treasury a
special fund to be known as the Department of Justice Assets
Forfeiture Fund (hereafter in this subsection referred to as
the ``Fund'') which shall be available to the Attorney General
without fiscal year limitation for the following [law
enforcement purposes--] purposes--
(A) * * *
* * * * * * *
(I) payment of overtime salaries, travel, fuel,
training, equipment, and other similar costs of State
or local law enforcement officers that are incurred in
a joint law enforcement operation with a Federal law
enforcement agency participating in the Fund;
[(I) after all reimbursements and program-related
expenses have been met at the end of fiscal year 1989,
the Attorney General may transfer deposits from the
Fund to the building and facilities account of the
Federal prison system for the construction of
correctional institutions.]
After all reimbursements and program related expenses have been
met at the end of fiscal year 1989, the Attorney General may
transfer deposits from the Fund to the building and facilities
account of the Federal prison system for the construction of
correctional institutions. Amounts for paying the expenses
authorized by subparagraphs (A)(iv), (B), (C), (F), (G), and
[(H)] (I) shall be specified in appropriations Acts and may be
used under authorities available to the organization receiving
the funds. Amounts for other authorized expenditures and
payments from the Fund, including equitable sharing payments,
are not required to be specified in appropriations acts. The
Attorney General may exempt the procurement of contract
services under subparagraph (A) under the fund from section
3709 of the Revised Statutes of the United States (41 U.S.C.
5), title III of the Federal Property and Administrative
Services Act of 1949 (41 U.S.C. 251 and following), and other
provisions of law as may be necessary to maintain the security
and confidentiality of related criminal investigations.
* * * * * * *
(8)(A) There are authorized to be appropriated such sums as
necessary for the purposes described in subparagraphs (A)(iv),
(B), (C), (F), (G), and [(H)] (I) of paragraph (1).
* * * * * * *
PART VI--PARTICULAR PROCEEDINGS
* * * * * * *
CHAPTER 163--FINES, PENALTIES AND FORFEITURES
Sec.
2461. Mode of recovery.
* * * * * * *
2466. Enforcement of foreign forfeiture judgment.
2467. Foreign records.
Sec. 2461. Mode of recovery
(a) * * *
(b) Unless otherwise provided by Act of Congress, whenever
a forfeiture of property is prescribed as a penalty for
violation of an Act of Congress and the seizure takes place on
the high seas or on navigable waters within the admiralty and
maritime jurisdiction of the United States, such forfeiture
[may be enforced by libel in admiralty] may be enforced under
the procedures set forth in chapter 46 of title 18 and libel in
admiralty if not in conflict with such procedures, except that
only the libel in admiralty procedures shall apply to
forfeitures under the customs laws but in cases of seizures on
land the forfeiture [may be enforced by a proceeding by libel
which shall conform as near as may be to proceedings in
admiralty] may be enforced under the procedures set forth in
chapter 46 of title 18 and by a proceeding by libel, if not in
conflict with such procedures, which shall conform as near as
may be to proceedings in admiralty, except that only such
proceeding by libel shall apply to forfeitures under the
customs laws.
(c) Whenever a forfeiture of property is authorized in
connection with a violation of an Act of Congress but no
specific statutory provision is made for criminal forfeiture
upon conviction or the criminal forfeiture provisions contain
no procedural provisions, the government may include the
forfeiture in the indictment or information in accordance with
the Federal Rules of Criminal Procedure and the procedures set
forth in section 982 of title 18, United States Code, and upon
conviction, the court shall order the forfeiture of the
property.
* * * * * * *
Sec. 2465. Return of property to claimant; certificate of reasonable
cause; liability for wrongful seizure
(a) In General.--Upon the entry of judgment for the
claimant in any proceeding to condemn or forfeit [property
seized] property seized or arrested under any Act of Congress,
such property shall be returned forthwith to the claimant or
his agent; but if it appears that there was reasonable cause
for the [seizure] seizure or arrest, the court shall cause a
proper certificate thereof to be entered and the claimant shall
not, in such case, be entitled to costs, nor shall the person
who made the [seizure] seizure or arrest, nor the prosecutor,
be liable to suit or judgment on account of such suit or
prosecution.
(b) Interest.--
(1) Post-judgment.--Upon entry of judgment for the
claimant in any proceeding to condemn or forfeit
property seized or arrested under any Act of Congress,
the United States shall be liable for post-judgment
interest as set forth in section 1961 of this title.
(2) Pre-judgment.--The United States shall not be
liable for prejudgment interest, except that in cases
involving currency, proceeds of an interlocutory sale,
or other negotiable instruments, the United States
shall disgorge to the claimant any funds representing--
(A) interest actually paid to the United
States from the date of seizure or arrest of
the property that resulted from the investment
of the property in an interest-bearing account
or instrument; and
(B) for any period during which no interest
is actually paid, an imputed amount of interest
that such currency, proceeds, or instruments
would have earned.
The United States shall provide the court with an
accounting of the amount actually earned or the amount
that would have been earned had the funds been invested
in obligations of, or guaranteed by, the United States.
(3) Limitation on other payments.--The United
States shall not be required to disgorge the value of
any intangible benefits nor make any other payments to
the claimant not specifically authorized by this
subsection.
Sec. 2466. Enforcement of foreign forfeiture judgment
(a) Definitions.--As used in this section:
(1) The term ``foreign nation'' shall mean a
country that has become a party to the United Nations
Convention Against Illicit Traffic in Narcotic Drugs
and Psychotropic Substances (hereafter ``the United
Nations Convention'') or a foreign jurisdiction with
which the United States has a treaty or other formal
international agreement in effect providing for mutual
forfeiture assistance.
(2) The term ``value-based confiscation judgment''
shall mean a final order of a foreign nation compelling
a defendant, as a consequence of the defendant's
criminal conviction for an offense described in Article
3, Paragraph 1, of the United Nations Convention, to
pay a sum of money representing the proceeds of such
offense or property the value of which corresponds to
such proceeds.
(b) Review by Attorney General.--A foreign nation seeking
to have its value-based confiscation judgment registered and
enforced by a United States district court under this section
must first submit a request to the Attorney General or the
Attorney General's designee. Such request shall include--
(1) a summary of the facts of the case and a
description of the criminal proceeding which resulted
in the value-based confiscation judgment;
(2) certified copies of the judgment of conviction
and value-based confiscation judgment;
(3) an affidavit or sworn declaration establishing
that the defendant received notice of the proceedings
in sufficient time to enable the defendant to defend
against the charges that the value-based confiscation
judgment rendered is in force and is not subject to
appeal;
(4) an affidavit or sworn declaration that all
reasonable efforts have been undertaken to enforce the
value-based confiscation judgment against the
defendant's property, if any, in the foreign country;
and
(5) such additional information and evidence as may
be required by the Attorney General or the Attorney
General's designee.
The Attorney General or the Attorney General's designee, in
consultation with the Secretary of State or the Secretary of
State's designee, shall determine whether to certify the
request, and such decision shall be final and not subject to
either judicial review or review under chapter 7 of title 5,
United States Code.
(c) Jurisdiction and Venue.--Where the Attorney General or
the Attorney General's designee certifies a request under
paragraph (b), the foreign nation may file a civil proceeding
in United States district court seeking to enforce the foreign
value-based confiscation judgment as if the judgment had been
entered by a court in the United States. In such a proceeding,
the foreign nation shall be the plaintiff and the person
against whom the value-based confiscation judgment was entered
shall be the defendant. Venue shall lie in the district court
for the District of Columbia or in any other district in which
the defendant or the property that may be the basis for
satisfaction of a judgment under this section may be found. The
United States district court shall have personal jurisdiction
over a defendant residing outside of the United States if the
defendant is served with process in accordance with Rule 4 of
the Federal Rules of Civil Procedure.
(d) Entry and Enforcement of Judgment.--The United States
district court shall enter such orders as may be necessary to
enforce the value-based confiscation judgment on behalf of the
foreign nation where it finds that all of the following
requirements have been met:
(1) The value-based confiscation judgment was
rendered under a system which provides impartial
tribunals or procedures compatible with the
requirements of due process of law.
(2) The foreign court had personal jurisdiction
over the defendant.
(3) The foreign court had jurisdiction over the
subject matter.
(4) The defendant in the proceedings in the foreign
court received notice of the proceedings in sufficient
time to enable the defendant to defend.
(5) The judgment was not obtained by fraud.
Process to enforce a judgment under this section will be in
accordance with Rule 69(a) of the Federal Rules of Civil
Procedure.
(e) Finality of Foreign Findings.--Upon a finding by the
United States district court that the conditions set forth in
subsection (d) have been satisfied, the court shall be bound by
the findings of facts insofar as they are stated in the foreign
judgment of conviction and value-based confiscation judgment.
(f) Currency Conversion.--Insofar as a value-based
confiscation judgment requires the payment of a sum of money,
the rate of exchange in effect at time when the suit to enforce
is filed by the foreign nation shall be used in calculating the
amount stated in the judgment submitted for registration.
Sec. 2467. Foreign records
(a) In a civil proceeding in a court of the United States,
including civil forfeiture proceedings and proceedings in the
United States Claims Court and the United States Tax Court, a
foreign record of regularly conducted activity, or copy of such
record, obtained pursuant to an official request shall not be
excluded as evidence by the hearsay rule if a foreign
certification, also obtained pursuant to the same official
request or subsequent official request that adequately
identifies such foreign record, attests that--
(1) such record was made, at or near the time of
the occurrence of the matters set forth, by (or from
information transmitted by) a person with knowledge of
those matters;
(2) such record was kept in the course of a
regularly conducted business activity;
(3) the business activity made such a record as a
regular practice; and
(4) if such record is not the original, such record
is a duplicate of the original;
unless the source of information or the method or circumstances
of preparation indicate lack of trustworthiness.
(b) A foreign certification under this section shall
authenticate such record or duplicate.
(c) As soon as practicable after a responsive pleading has
been filed, a party intending to offer in evidence under this
section a foreign record of regularly conducted activity shall
provide written notice of that intention to each other party. A
motion opposing admission in evidence of such record shall be
made by the opposing party and determined by the court before
trial. Failure by a party to file such motion before trial
shall constitute a waiver of objection to such record or
duplicate, but the court for cause shown may grant relief from
the waiver.
(d) As used in this section, the term--
(1) ``foreign record of regularly conducted
activity'' means a memorandum, report, record, or date
compilation, in any form, of acts, events, conditions,
opinions, or diagnoses, maintained in a foreign
country;
(2) ``foreign certification'' means a written
declaration made and signed in a foreign country by the
custodian of a record of regularly conducted activity
or another qualified person, that if falsely made,
would subject the maker to criminal penalty under the
law of that country;
(3) ``business'' includes business, institution,
association, profession, occupation, and calling of
every kind whether or not conducted for profit; and
(4) ``official request'' means a letter rogatory, a
request under an agreement, treaty or convention, or
any other request for information or evidence made by a
court of the United States or an authority of the
United States having law enforcement responsibility, to
a court or other authority of a foreign country.
* * * * * * *
CHAPTER 171--TORT CLAIMS PROCEDURE
* * * * * * *
Sec. 2680. Exceptions
The provisions of this chapter and section 1346(b) of this
title shall not apply to--
(a) * * *
* * * * * * *
(c) Any claim arising in respect of the assessment
or collection of any tax or customs duty, or the
detention of any goods or merchandise by any officer of
customs or excise or any other [law-enforcement] law
enforcement officer, except that the provisions of this
chapter and section 1346(b) of this title do apply to
any claim based on the negligent destruction, injury,
or loss of goods, merchandise, or other property, while
in the possession of any officer of customs or excise
or any other law enforcement officer, if the property
was seized for the purpose of forfeiture but the
interest of the claimant is not forfeited.
* * * * * * *
----------
SECTION 6103 OF THE INTERNAL REVENUE CODE OF 1986
SEC. 6103. CONFIDENTIALITY AND DISCLOSURE OF RETURNS AND RETURN
INFORMATION.
(a) * * *
* * * * * * *
(i) Disclosure to Federal Officers or Employees for
Administration of Federal Laws not Relating to Tax
Administration.--
(1) Disclosure of returns and return information
for use in criminal investigations.--
(A) In general.--Except as provided in
paragraph (6), any return or return information
with respect to any specified taxable period or
periods shall, pursuant to and upon the grant
of an ex parte order by a Federal district
court judge or magistrate under subparagraph
(B), be open (but only to the extent necessary
as provided in such order) to inspection by, or
disclosure to, officers and employees of any
Federal agency who are personally and directly
engaged in--
(i) preparation for any judicial or
administrative proceeding pertaining to
the enforcement of a specifically
designated Federal criminal statute or
related civil forfeiture (not involving
tax administration) to which the United
States or such agency is or may be a
party,
* * * * * * *
(B) Application for order.--The Attorney
General, the Deputy Attorney General, the
Associate Attorney General, any Assistant
Attorney General, any United States attorney,
any special prosecutor appointed under section
593 of title 28, United States Code, or any
attorney in charge of a criminal division
organized crime strike force established
pursuant to section 510 of title 28, United
States Code, may authorize an application to a
Federal district court judge or magistrate for
the order referred to in subparagraph (A). Upon
such application, such judge or magistrate may
grant such order if he determines on the basis
of the facts submitted by the applicant that--
(i) there is reasonable cause to
believe, based upon information
believed to be reliable, that a
specific criminal act has been
committed,
(ii) there is reasonable cause to
believe that the return or return
information is or may be relevant to a
matter relating to the commission of
such act, and
(iii) the return or return
information is sought exclusively for
use in a Federal criminal investigation
or proceeding or civil forfeiture
investigation or proceeding concerning
such act, and the information sought to
be disclosed cannot reasonably be
obtained, under the circumstances, from
another source.
* * * * * * *
----------
SUPPLEMENTAL RULES FOR CERTAIN ADMIRALTY AND MARITIME
* * * * * * *
Rule C. Action in Rem: Special Provisions
* * * * * * *
(2) Complaint. In actions in rem the complaint shall be
verified on oath or solemn affirmation. It shall describe with
reasonable particularity the property that is the subject of
the action and state that it is within the district or will be
during the pendency of the action. If the property is located
outside of the district, the complaint shall state the
statutory basis for the court's exercise of jurisdiction over
the property. In actions for the enforcement of forfeitures for
violation of any statute of the United States the complaint
shall state the place of seizure and whether it was on land or
on navigable waters, and shall contain such allegations as may
be required by the statute pursuant to which the actions is
brought.
* * * * * * *
(6) Claim and Answer; Interrogatories. The claimant of
property that is the subject of an action in rem shall file a
claim within [10] 20 days after process has been executed, or
within such additional time as may be allowed by the court, and
shall serve an answer within 20 days after the filing of the
claim. The claim shall be verified on oath or solemn
affirmation, and shall state the interest in the property by
virtue of which the claimant demands its restitution and the
right to defend the action. If the claim is made on behalf of
the person entitled to possession by an agent, bailee, or
attorney, it shall state that the agent, bailee, or attorney is
duly authorized to make the claim. At the time of answering the
claimant shall also serve answers to any interrogatories served
with the complaint. In actions in rem interrogatories may be so
served without leave of court.
* * * * * * *
Rule E. Actions in Rem and Quasi in Rem: General Provisions
* * * * * * *
(3) Process.
(a) Territorial Limits of Effective Service.
Process in rem and of maritime attachment and
garnishment shall be served only within the district.
This provision shall not apply in forfeiture cases
governed by section 1355 of title 28 or any other
statute providing for service of process outside of the
district.
* * * * * * *
----------
TARIFF ACT OF 1930
* * * * * * *
SEC. 608. SEIZURE; CLAIMS; JUDICIAL CONDEMNATION.
Any person claiming such vessel, vehicle, aircraft,
merchandise, or baggage may at any time within twenty days from
the date of the first publication of the notice of seizure file
with the appropriate customs officer a claim stating his
interest therein. Upon the filing of such claim, and the giving
of a bond to the United States in the penal sum of $5,000 or 10
percent of the value of the claimed property, whichever is
lower, but not less than $250, with sureties to be approved by
such customs officer, conditioned that in case of condemnation
of the articles so claimed the obligor shall pay all the costs
and expenses of the proceedings to obtain such condemnation,
such customs officer shall transmit such claim and bond, with a
duplicate list and description of the articles seized, [to the
United States attorney for the district in which seizure was
made] to the United States attorney for a district in which a
forfeiture action could be filed pursuant to title 28, United
States Code, section 1355(b), who shall proceed to a
condemnation of the merchandise or other property in the manner
prescribed by law.
* * * * * * *
SEC. 610. SEIZURE; JUDICIAL FORFEITURE PROCEEDINGS.
If any vessel, vehicle, aircraft, merchandise, or baggage
is not subject to section 607, the appropriate customs officer
shall transmit a report of the case, with the names of
available witnesses, [to the United States attorney for the
district in which the seizure was made] to the United States
attorney for a district in which a forfeiture action could be
filed pursuant to title 28, United States Code, Section 1355(b)
for the institution of the proper proceedings for the
condemnation of such property.
* * * * * * *
SEC. 621. LIMITATION OF ACTIONS.
No suit or action to recover any duty under section
593A(d), or any pecuniary penalty or forfeiture of property
accruing under the customs laws shall be instituted unless such
suit or action is commenced within five years after the time
when the alleged offense was discovered, or in the case of
forfeiture, within 2 years after the time when the involvement
of the property in the alleged offense was discovered,
whichever was later; except that--
(1) in the case of an alleged violation of section
592 or 593A, no suit or action (including a suit or
action for restoration of lawful duties under
subsection (d) of such sections) may be instituted
unless commenced within 5 years after the date of the
alleged violation or, if such violation arises out of
fraud, within 5 years after the date of discovery of
fraud, and
(2) the time of the absence from the United States
of the person subject to the penalty or forfeiture, or
of any concealment or absence of the property, shall
not be reckoned within the 5-year period of limitation.
* * * * * * *
----------
SECTION 7 OF THE ACT OF JANUARY 2, 1951
AN ACT To prohibit transportation of gambling devices in interstate and
foreign commerce.
Sec. 7. Any gambling device transported, delivered,
shipped, manufactured, reconditioned, repaired, sold, disposed
of, received, possessed, or used in violation of the provisions
of this Act shall be seized and forfeited to the United States.
Any coin or currency contained in any gambling device at the
time of its seizure pursuant to the preceding sentence shall
also be seized and forfeited to the United States. All
provisions of law relating to the seizure, summary and judicial
forfeiture, and condemnation of vessels, vehicles, merchandise,
and baggage for violation of the customs laws; the disposition
of such vessels, vehicles, merchandise, and baggage or the
proceeds from the sale thereof; the remission or mitigation of
such forfeitures; and the compromise of claims and the award of
compensation to informers in respect of such forfeitures shall
apply to seizures and forfeitures incurred, or alleged to have
been incurred, under the provisions of this Act, insofar as
applicable and not inconsistent with the provisions hereof:
Provided, That such duties as are imposed upon the collector of
customs or any other person with respect to the seizure and
forfeiture of vessels, vehicles, merchandise, and baggage under
the customs laws shall be performed with respect to seizures
and forfeitures of gambling devices, coins, or currency under
this Act by such officers, agents, or other persons as may be
authorized or designated for that purpose by the Attorney
General.
* * * * * * *
----------
SECTION 8 OF THE ARCHEOLOGICAL RESOURCES PROTECTION ACT OF 1979
rewards; forfeiture
Sec. 8. (a) * * *
(b) All archaeological resources with respect to which a
violation of subsection (a), (b), or (c) of section 6 occurred
and which are in the possession of any person, all proceeds
derived directly or indirectly from such violation or any
property traceable thereto, and all vehicles and equipment of
any person which were used in connection with such violation,
may be (in the discretion of the court or administrative law
judge, as the case may be) subject to forfeiture to the United
States upon--
(1) such person's conviction of such violation
under section 6,
(2) assessment of a civil penalty against such
person under section 7 with respect to such violation,
or
(3) a determination by any court that such
archaeological resources, proceeds, vehicles, or
equipment were involved in such violation.
If a forfeiture count is included within an indictment in
accordance with the Federal Rules of Criminal Procedure, and
the defendant is convicted of the offense giving rise to the
forfeiture, the forfeiture may be ordered as part of the
criminal sentence in accordance with the procedures for
criminal forfeitures in chapter 46 of title 18, United States
Code. Otherwise, the forfeiture shall be civil in nature in
accordance with the procedures for civil forfeiture in said
chapter 46 of title 18.
* * * * * * *
----------
FEDERAL FOOD, DRUG, AND COSMETIC ACT
* * * * * * *
CHAPTER III--PROHIBITED ACTS AND PENALTIES
* * * * * * *
civil forfeiture of proceeds of federal food, drug, and cosmetic act
violations
Sec. 311. (a) Any property, real or personal, that
constitutes, or is derived from or is traceable to the proceeds
obtained directly or indirectly from a criminal violation of,
or a conspiracy to commit a criminal violation of, a provision
of this Act shall be subject to judicial forfeiture to the
United States.
(b) The provisions of chapter 46 of title 18, United States
Code, relating to civil forfeitures shall extend to a seizure
or forfeiture under this section, insofar as applicable and not
inconsistent with the provisions hereof, except that such
duties as are imposed upon the Secretary of the Treasury under
chapter 46 shall be performed with respect to seizures and
forfeitures under this section by such officers, agents, or
other persons as may be authorized or designated for that
purpose by the Secretary of Health and Human Services.
criminal forfeiture of proceeds of federal food, drug, and cosmetic act
violations
Sec. 312. (a) Any person convicted of a violation of, or a
conspiracy to violate, a provision of this Act shall forfeit to
the United States, irrespective of any provision of State law,
any property constituting, or derived from, any proceeds the
person obtained, directly or indirectly, as the result of such
violation. The court, in imposing sentence on such person,
shall order that the person forfeit to the United States all
property described in this subsection.
(b) Property subject to forfeiture under this section, any
seizure and disposition thereof, and any administrative or
judicial proceeding in relation thereto, shall be governed by
the provisions of section 413 of the Comprehensive Drug Abuse
Prevention and Control Act of 1970 (21 U.S.C. 853), except for
subsection 413(d) which shall not apply to forfeitures under
this section.