Federal criminal forfeiture is an extremely powerful tool of the federal prosecutor, and it can have sweeping consequences. It is becoming more and more prevalent in this district. Unlike civil forfeiture, criminal forfeiture is a action against an individual and it is considered to be part of the defendant’s sentence. This is significant because, unlike a civil proceeding, the court can order the defendant to pay a money judgment or forfeit substitute assets if the forfeited property is not available. For example, if someone is convicted of fraud, the Government may seek criminal forfeiture of the proceeds of the fraud. If these proceeds are long gone, it is possible for the Court to order the forfeiture of other property belonging to the defendant, such as his house (even if that house was entirely unrelated to the fraudulent conduct). This may not seem fair, but it is how the law works.
As with other forfeiture proceedings, the Government need only prove its case by a preponderance of the evidence. In the context of a criminal trial, the forfeiture process is the equivalent of a second trial. So, if a defendant is convicted at trial, he may then elect to have a second trial to defend his assets. Alternatively, if a defendant pleads guilty, often his guilty plea will include a provision requiring him to concede the forfeiture.
Because this proceeding is against a person and not directly against the property, it is very possible that an innocent third party can get swept into this unknowingly. For example, if a defendant is accused of using a house to facilitate illegal drug conduct, the Government may seek the criminal forfeiture of that house. But, if the house belongs to someone else, that third person may have a claim to the property. When this happens, the third person must initiate an ancillary proceeding to protect their interest in the house.
If your property is the subject of a federal criminal forfeiture, please contact our office for help.