Tag Archives: civil forfeiture

Supreme Court Delivers 2 Body Blows to Criminal Suspects

The U.S. Supreme Court recently issued two important decisions for criminal defendants. The Supreme Court (1) limited the constitutional protections of the Fourth Amendment that prohibits “unreasonable searches and seizures,” and (2) denied defendants the opportunity to contest seizure of assets intended to pay for their criminal defense attorney’s fees.

First, in Fernandez v. California, the Supreme Court ruled that police can enter and search a house without a warrant if one resident consents and any objecting residents are no longer present.  Previously, the Court held in Georgia v. Randolph that the police could not search a house when one resident objected. The Court clarified that “presence” of an objecting occupant triggers the protections of Randolph. Justice Alito writing for the majority in Fernandez, reasoned that when an objecting resident is removed from the scene, his objection expires.

The result is that officers can arrest an objecting resident — for some bogus charge like disorderly conduct or obstruction of a police officer — and then obtain consent to search the residence from another occupant. As Justice Ruth Bader Ginsburg wrote for the dissent, “Instead of adhering to the warrant requirement [of the Fourth Amendment], today’s decision tells police that they may dodge it.”

Second, the Supreme Court ruled that the federal government may freeze a defendant’s assets even when those assets are to be used for a criminal defense attorney before a case goes to trial. In Kaley v. United States, a saleswoman for Johnson & Johnson, Keri Kaley, was accused of stealing prescription medical devices and selling them with her husband on the black market in 2007.

Kaley anticipated criminal charges and took out a $500,000 home-equity line of credit to pay for the defense of her husband and her. After Kaley was indicted by a grand jury, the prosecution got a restraining order freezing the couple’s assets, including the house and funds from the line of credit, on the theory that the assets were the product of the illegal sale of medical devices. Federal law allows a trial court to freeze a defendant’s assets before trial to ensure property is available for forfeiture if there is a conviction.

Kaley requested a hearing to contest the restraining order. The Supreme Court ruled that she did not have a right to a pre-trial hearing because the grand jury had already found probable cause that she had committed the crime. In doing so, the Court held that the grand jury alone can determine whether there is probable cause and that determination cannot be reviewed by a judge. As her attorney, a law professor that likely took the case pro bono, said after the decision was issued: “I don’t know how I will explain to my students at the University of Miami Law School that the Supreme Court ruled that an innocent client cannot use her own money to hire an attorney to defend her in court.”

For more information on the Fernandez decision, check out Nina Totenberg’s story for NPR.

The Wall Street Journal covered both Fernandez and Kaley. Read more here.

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Ty the Tyrannosaurus Bataar and the Federal Civil Forfeiture Process

Yesterday news broke that Eric Prokopi, a “commercial paleontologist,” pled guilty to Federal criminal charges in connection with his importation of various dinosaur fossils.   The dinosaur fossils in his possession will be forfeited and presumably returned to Mongolia. Prokopi also forfeited a Chinese fossil as well. These fossils were seized by the US Government during its investigation of Prokopi. Although Prokopi’s plea was in a criminal case, the matter originally started as a civil forfeiture action against the full-sized Tyrannosaurus Bataar fossil known as “Ty.” The civil complaint is here. The civil forfeiture action against Ty (also known as Lenny) provides a good background to a discussion about Federal civil forfeiture procedures.

SEIZURE OF THE PROPERTY

The Federal government can seize property when it obtains a seizure warrant from a court. Fed. R. Crim. P. 41. A court may grant a warrant when the government demonstrates that it has “probable cause” to believe that the property is subject to forfeiture under a Federal civil and/or criminal statute. See 19 U.S.C. 1615; see also 18 U.S.C. 983. What happens after the seizure depends on what resulting action takes place. There can be a civil forfeiture action against the property directly such as Ty, and/or defendants can be criminally charged like Prokopi.

CRIMINAL FORFEITURE

There are no time limits for how long the Government can hold property for a criminal seizure. 21 U.S.C. 853(f). To ameliorate concerns about due process infringements, Rule 41(g) of Federal Rules of Criminal Procedure allows for a defendant to file a motion for return of property. A person filing a motion for return of property must show that they are lawfully entitled to possession. Generally, forfeiture of property involved in a crime occurs in connection with the sentence for a conviction such as Prokopi’s.

CIVIL FORFEITURE

In 2000, the US Congress passed the Civil Asset Forfeiture Reform Act (“CAFRA”) that revised many aspects of the judicial and administrative process for civil forfeitures. In accordance with CAFRA, the Government has 60 days to provide a “notice of seizure” or file a forfeiture action. 18 U.S.C. 983(a)(1)(A)(i). The Government can file a motion requesting more time only if there is reason to believe that notice to the owner will have an adverse result. 18 U.S.C.983(a)(1)(D). If the Government doesn’t provide adequate notice within 60 days, the Government must return the property.

Upon receiving a notice of seizure, a claimant has 35 days to file a claim (i) identifying the specific property being claimed; (ii) stating the person’s interest in the property, and (iii) be made under oath, subject to penalty of perjury. 18 U.S.C. 983(a)(2)(A). A person must show they have (1) a possessory interest in the property; (2) sufficient ties to the community to provide assurance that the property will be available at the time of trial; (3) the continued possession of the property by Customs pending the final disposition of forfeiture proceedings will cause substantial hardship to the claimant, such as preventing an individual from working, or leaving an individual homeless; and (4) the claimant’s likely hardship from the continued possession by Customs of the seized property outweighs the risk that the property will be destroyed, damaged, lost, concealed, or transferred if it is returned to the claimant during the pendency of the proceedings. 19 C.F.R. 162.95. Regardless, seized property will not be released if it is to be “used as evidence of a violation of the law.” Id. Once a person files a claim, the Government has 90 days to file a complaint for forfeiture. 18 U.S.C. 983(a)(3). If the Government does not file a complaint within that time period, it must return the property.

However, there is a carve-out in CAFRA for cases involving customs laws in Title 19, U.S.C. The forfeiture case against Ty fell within this carve-out because it was alleged that Ty was brought into the US by virtue of Prokopi’s criminal violations of various customs/import laws. Below is a chart laying out the differences between normal forfeiture cases where CAFRA applies, and customs cases like Ty and Prokopi’s.

PROCEDURE CAFRA cases Customs carve-out cases
Once property is seized, US must commence administrative or judicial forfeiture process or name property in a criminal forfeiture indictment. Government must send administrative forfeiture notice within 60 days of seizure (90 for state seizures adopted by feds), or obtain extension, or must release property pending further procedures. 18 U.S.C. §983(a)(1). Government has no deadline other than the 5-year statute of limitations.  Excessive delay is grounds for motion to dismiss for undue delay.  U.S. v. $8,850,  461 U.S. 555 (1983).
Administrative forfeiture notice – claimant must file administrative claim (and submit cost bond if applicable) by deadline or lose all right to judicial remedies. Deadline is specified in notice.  It must be at least 35 days from date notice is mailed. 18 U.S.C. §983(a)(2)(B).
Cost bond is abolished in CAFRA cases.  §983(a)(2)(E).
Deadline 20 days from date of first publication (specified in notice).  Claimant must pay 10% cost bond (with $250 minimum, $5,000 maximum) to submit claim. 19 U.S.C. § 1608.
Once admin. claim is received, US must file a federal civil forfeiture complaint or include the property in forfeiture count of an indictment. US has 90 days to file a judicial complaint or include property in indictment.  If US fails to meet this deadline or return property or obtain extension, it cannot later civilly forfeit the property.  18 U.S.C. §983(a)(3) Government has no deadline except 5 year statute of limitations.  19 U.S.C. § 1621.  Excessive delay is grounds for motion to dismiss for undue delay.  U.S. v. $8,850,  461 U.S. 555 (1983).
Claimant must file a judicial “claim” (also known as a “Verified Statement of Interest”) in federal court. Claimant has 30 days after service to file claim.  18 U.S.C. §983(a)(4)(A). Claimant has until the deadline specified in the notice (about 30 days) to file a claim. Supp. Rule G(4)(b)(ii)(B).
Claimant must file an Answer. Claimant has 20 days after filing claim to file Answer. 18 U.S.C. §983(a)(4)(B) Claimant has 20 days after filing claim to file Answer.  Supp. R. G(5)(b).
Court-appointment of counsel for those unable to afford retained counsel to defend their forfeiture cases: Court may appoint counsel if claimant has appointed counsel in a parallel federal criminal case, and must appoint counsel if claimant’s primary residence was seized. 18 U.S.C. §983(b). No statutory provision authorizes appointment of counsel
Burden of proof Government has burden of proof by preponderance. 18 U.S.C. §983(c). Government burden is probable cause, then burden shifts to claimant to disprove forfeitability by preponderance. 19 U.S.C. § 1615.
Admissibility of hearsay at trial hearsay is not admissible because burden of proof is preponderance. Government can use hearsay to meet its probable cause burden of proof (as in suppression hearings).
Innocent owner defense Universal innocent owner defense codified at 18 U.S.C. § 983(d). Innocent owner defense available only if codified in the specific forfeiture statute.
Remedy for vacating government’s declaration of administrative forfeiture where the government failed to give notice to owner. Motion to set aside declaration of forfeiture under 18 U.S.C. § 983(e) is exclusive remedy. Claimant can file Rule 41(g) motion or civil suit in nature of 41(g).
Release of property for substantial hardship Court, on motion, may release property pending trial if claimant shows substantial hardship. 18 U.S.C. § 983(f). Only way to get property released is to post a bond for its value. 19 U.S.C. § 1614.
Proportionality defense Codified at 18 U.S.C. § 983(g) Available under S.Ct. cases: Austin & Bajakajian
Civil fine for filing a frivolous claim Government can ask for this under 18 U.S.C. § 983(h) Not applicable to non-CAFRA cases, but this would be taken out of the cost bond.

Chart courtesy of Fear.org.

While Ty is likely on his way back to Mongolia as part of Prokopi’s plea deal, the full-sized fossil could have also been forfeited in a civil action in accordance with the above procedures.