18 U.S. Code § 981 and 982 - Civil and Criminal Forfeiture Laws
For many federal crimes involving finances or generating revenue through criminal activity, the assets and proceeds of these crimes may be legally forfeited to the United States government.
Title 18 U.S. Codes 981 and 982 are the federal statutes that address how and when the U.S. government may seize and confiscate property through asset forfeiture.
Asset forfeiture is a powerful tool intended to strip criminals of the profits they've generated, disrupt organized criminal organizations, and deter illegal activity.
The asset forfeiture proceeds may also be used to compensate victims of these crimes. However, if someone is falsely accused or the government wrongly suspects certain assets of being linked to criminal activity, they can be seized unfairly.
Asset forfeiture can occur by one of two legal methods: criminal forfeiture or civil forfeiture—although both types of forfeiture are intended to seize assets linked to illegal activity.
The main difference between them is that criminal forfeiture requires prosecutors to obtain a criminal conviction, while civil forfeiture does not. Let's explore both in more detail.
18 U.S.C. 981 civil forfeiture says, “(a) (1) 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 1956, 1957 or 1960 of this title, or any property traceable to such property.”
18 U.S.C. 982 criminal forfeiture says, “(a) (1) The court, in imposing sentence on a person convicted of an offense in violation of section 1956, 1957, or 1960 of this title, shall order that the person forfeits to the United States any property, real or personal, involved in such offense, or any property traceable to such property.”
Forfeitures and seizures are often connected to federal criminal investigations into organized crime, such as drug trafficking, money laundering, and Racketeer Influenced and Corrupt Organizations Act (RICO) cases.
There are other criminal statutes where a violation could result in the forfeiture of proceeds gained from a criminal offense, such as false statements, embezzlement, counterfeiting, mail fraud, wire fraud, drug smuggling, identity theft, computer crimes, and other fraud crimes. Let's explore both in more detail.
What Is Criminal Forfeiture?
Criminal forfeiture under 18 U.S.C. 982 involves confiscating property as part of a criminal conviction. This type of forfeiture is contingent upon the successful prosecution and conviction of someone for engaging in illegal activity, such as drug trafficking or money laundering.
The property or assets to be confiscated are detailed in the criminal indictment, and they are turned over to the government only if prosecutors successfully gain a conviction.
If any third parties have a claim to the property, an ancillary hearing will be held after the conviction to determine if those claims are valid.
What Is Civil Forfeiture?
18 U.S.C. 981 authorizes civil forfeiture proceedings, which do not require a criminal conviction. Instead, the government must demonstrate by a preponderance of the evidence that a particular property is connected to illegal activity.
In effect, the action is taken against the property itself rather than against a human defendant—and if the government can show the property qualifies for forfeiture based on applicable laws, it can seize the property without even giving the owner notice.
The burden of proof then falls on the owner or claimant of the property to demonstrate that it was obtained lawfully and not used in any illegal activities. Understandably, most asset forfeitures are civil actions rather than criminal ones because it's easier for the government to access them, and the burden of proof is lower.
What Are the Related Statutes?
18 U.S. Code Chapter 46 forfeiture has other federal statutes that are related to 18 U.S.C. 981 and 18 U.S.C. 982 civil and criminal forfeiture, including the following:
- 18 U.S.C. 983 - General rules for civil forfeiture proceedings;
- 18 U.S.C. 984 - Civil forfeiture of fungible property;
- 18 U.S.C. 985 - Civil forfeiture of real property;
- 18 U.S.C. 986 - Subpoenas for bank records;
- 18 U.S.C. 987 - Anti-terrorist forfeiture protection.
What Types of Crimes Can Property Be Forfeited?
18 U.S.C. 981 and 982 detail many circumstances and applicable crimes in which property or proceeds may be forfeited to the government. Examples include, but are not limited to:
- Drug trafficking, smuggling, and other forms of organized crime;
- Crimes related to fraud, such as money laundering, tax evasion, wire fraud, and other white-collar crimes;
- Crimes involving the trafficking of stolen vehicles;
- Assets related to the trafficking of biological, nuclear, or other weapons of mass destruction;
- Assets being used to promote terrorist activities;
- Assets connected to a wide range of financial crimes, especially involving banking institutions.
Asset forfeiture laws also allow the government to claim assets and property that are "traceable" to criminal activity, not just direct revenues.
This means that in some cases, the government may even seize assets or property purchased with proceeds from illegal activity but not necessarily used in illicit behavior. An example would be a luxury car bought with drug money.
Can You Reclaim Assets Unfairly Forfeited to the Government?
Because the asset forfeiture laws are so broad, it's possible, or even probable, that the government will sometimes seize assets unfairly, primarily through civil forfeiture.
In criminal forfeiture cases, since the claimed assets are listed in the indictment, the primary recourse is for your federal defense attorney to prove that the named assets were not the proceeds of criminal activity or to have you acquitted or the charges dismissed.
There are several ways to get the government to release wrongly seized assets for civil forfeiture cases. These include becoming a claimant against the seized property.
If you claim a legitimate legal right to the property, you can become a claimant in the civil forfeiture case. The burden of proof is on you to show that either (a) the property doesn't derive from criminal activity; or (b) that you have some other claim on the property, such as you were a victim of the crime.
Perhaps you can utilize the "innocent owner" defense. With this claim, you effectively tell the government that even if the property in question was related to criminal activity, you were completely unaware of this information when you assumed ownership. This approach can be difficult to prove but can sometimes yield results.
To fight the forfeiture, a defendant has to prove that the property is not subjected to forfeiture. So, you'll need a lawyer who has experience in federal court and will know how to get you through this complicated process.
You can contact our law firm for a case review by phone or using the contact form. We offer legal representation across the United States on federal matters. Eisner Gorin LLP is located in Los Angeles, California.