Asset forfeiture
Encyclopedia
Asset forfeiture is confiscation, by the State
State (law)
A jurisdiction is an area with a set of laws under the control of a system of courts or government entity which are different to neighbouring areas. Unitary states usually form single jurisdictions, whilst each state in a federal state forms a separate jurisdiction...

, of assets which are either (a) the alleged proceeds of crime
Crime
Crime is the breach of rules or laws for which some governing authority can ultimately prescribe a conviction...

 or (b) the alleged instrumentalities of crime, and more recently, alleged terrorism. Instrumentalities of crime are property that was allegedly used to facilitate crime
Crime
Crime is the breach of rules or laws for which some governing authority can ultimately prescribe a conviction...

, for example cars allegedly used to transport illegal narcotics. The terminology used in different jurisdictions varies. Some jurisdictions use the term "confiscation" instead of forfeiture. In recent years there has been a growing trend for countries to introduce civil forfeiture and such proceedings may be brought in the USA, Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...

, the UK, Ireland
Ireland
Ireland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...

, Italy
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...

, South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...

, various Canadian
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...

 Provinces and Antigua
Antigua
Antigua , also known as Waladli, is an island in the West Indies, in the Leeward Islands in the Caribbean region, the main island of the country of Antigua and Barbuda. Antigua means "ancient" in Spanish and was named by Christopher Columbus after an icon in Seville Cathedral, Santa Maria de la...

.

Issues

Proponents of seizure suggest that it is a necessary tool to prevent drug trafficking or other crimes. "Asset forfeiture is a law enforcement success story" http://www.usmarshals.gov/duties/asset.htm. Statistics indicate that asset forfeiture has failed to prevent methamphetamine drug crime in South Africa http://www.simonprophet.com. Former United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

 president George H. W. Bush
George H. W. Bush
George Herbert Walker Bush is an American politician who served as the 41st President of the United States . He had previously served as the 43rd Vice President of the United States , a congressman, an ambassador, and Director of Central Intelligence.Bush was born in Milton, Massachusetts, to...

 said, "[Asset forfeiture laws allow [the government] to take the alleged ill-gotten gains of drug kingpins and use them to put more cops on the streets."

The civil law/criminal law distinction

Most legal systems distinguish between the criminal and the civil, generally using separate courts, different procedures and different evidential rules. The traditional view is that crimes are public wrongs and that the criminal law addresses those who harm society through morally culpable acts in order that punishment may be imposed and potential offenders may thereby be deterred from committing similar offenses. Criminal proceedings are therefore “officially designated ceremonies of guilt designation” and the label “criminal” carries with it a social stigma, which is not imposed on the losing party in a civil action. Because of this stigma and the potential punishment, which may be imposed by a criminal court, legal systems provide procedural protections above those available to a respondent in a civil case. For example, criminal proceedings require a standard of proof. In the civil proceedings against Simon Prophet http://www.simonprophet.com no evidence was presented by the state to the courts. The court's decision to deprive Prophet of his home was based solely on affidavits. Generally it is the state that brings criminal proceedings. However, this is not an absolute rule since many jurisdictions also allow private individuals to initiate criminal prosecutions.

The bringing of civil proceedings is, by comparison, primarily the forum for a wronged private individual. Nevertheless this too is not an absolute position, as the state also may sue in the civil courts as a wronged individual, for example, in respect of a contractual dispute with a multinational company. Civil law does not aim to punish, but rather is designed to provide two types of remedy. Firstly, it provides a remedy requiring a return to the way things were, the status quo ante, so as to restore the position of an injured party. Secondly, it provides a remedy to compensate an injured party for harm done to him.

While the traditional view of civil and criminal proceedings might be described as neighboring countries divided by a common border, this dichotomy is not as distinct as that metaphor might suggest. In recent years there has been a growing homogeneity between criminal and civil procedures. Criminal cases now often involve civil, or quasi-civil, procedures and some civil litigation has become quasi-criminal. Indeed it has been said that almost every attribute associated with the criminal law also appears in civil law and vice versa. This “significant disintegration of the wall between criminal and civil proceedings” has occurred on a number of fronts and is due, at least in part, to the fact that multiple strategies are now used to deal with crime. An early example was the use of injunctions to protect victims of domestic violence, even though, to obtain such an injunction, the plaintiff may be alleging the commission of a criminal assault. Rather than the traditional dichotomize perspective therefore, legal proceedings might be better seen as a continuum, with distinctly civil proceedings at one end and clearly criminal proceedings at the other. Between the two ends of the continuum are a range of possibilities, each of which may be more or less criminal or civil.

The trend towards civil forfeiture

The traditional approach to serious criminality has been arrest, followed by the institution of criminal proceedings with a view to conviction and imprisonment. In recent years a confiscation or forfeiture element has been added to the criminal process in many jurisdictions. The US President’s Commission on Organized Crime argued for a broader response than a solely criminal one in 1986:

"To be successful, an attack on organized crime in our mainstream economy cannot rely solely on the enforcement of federal criminal laws…The Commission believes that a strategy aimed at the legitimate economic base of organized crime must build upon the recent successes of law enforcement, and must be based upon intervention measures as broad-based as the nature of the threat posed by organized crime. A strategy in this area should also rely upon civil and regulatory measures tailored to the specific problems confronted..."

Although most prevalent in the USA, jurisdictions that have introduced civil forfeiture legislation include Italy, South Africa, Ireland, the United Kingdom, Fiji, the Canadian Provinces of Ontario, Alberta, Manitoba, Saskatchewan and British Columbia, Australia and its individual States, and Antigua and Barbuda. In addition, the Commonwealth has produced model provisions to serve as a template for jurisdictions that wish to introduce such legislation.

Advocates justify this trend towards civil forfeiture by citing the nature of organized crime. Organized crime heads use their resources to keep themselves distant from the crime that they are controlling and to mask the criminal origin of their assets. Thus it is thought to be too difficult to carry out successful criminal investigations leading to the prosecution and conviction of such individuals, so that finances derived from crime are often effectively out of the reach of the law and are available to be used to finance more crime. Criminal confiscation regimes may be seen as inadequate and ineffective in these cases.

Civil asset forfeiture has been harshly criticized by liberals and civil libertarians for its greatly reduced standards for conviction, reverse onus
Reverse onus
A reverse onus clause is a provision within a statute that shifts the burden of proof on to the individual specified to disprove an element of the information. Typically, this provision concerns a shift in burden onto a defendant in either a criminal offence or tort claim...

, and financial conflicts of interests
Conflict of interest
A conflict of interest occurs when an individual or organization is involved in multiple interests, one of which could possibly corrupt the motivation for an act in the other....

 arising when the law enforcement agencies who decide whether or not to seize assets stand to keep those assets for themselves.

Asset forfeiture in the United States

There are two types of forfeiture cases, criminal and civil. Almost all forfeiture cases practiced today are civil. In civil forfeiture cases, the US Government sues the item of property, not the person; the owner is effectively a third party claimant
Plaintiff
A plaintiff , also known as a claimant or complainant, is the term used in some jurisdictions for the party who initiates a lawsuit before a court...

. Once the government establishes probable cause
Probable cause
In United States criminal law, probable cause is the standard by which an officer or agent of the law has the grounds to make an arrest, to conduct a personal or property search, or to obtain a warrant for arrest, etc. when criminal charges are being considered. It is also used to refer to the...

 that the property is subject to forfeiture, the owner must prove on a "preponderance of the evidence
Evidence (law)
The law of evidence encompasses the rules and legal principles that govern the proof of facts in a legal proceeding. These rules determine what evidence can be considered by the trier of fact in reaching its decision and, sometimes, the weight that may be given to that evidence...

" that it is not. The owner need not be judged guilty of any crime. In contrast, criminal forfeiture is usually carried out in a sentence following a conviction and is a punitive act against the offender. Since the government can choose the type of case, a civil case is almost always chosen. The costs of such cases is high for the owner, usually totaling around $10,000 and can take up to three years.

The United States Marshals Service
United States Marshals Service
The United States Marshals Service is a United States federal law enforcement agency within the United States Department of Justice . The office of U.S. Marshal is the oldest federal law enforcement office in the United States; it was created by the Judiciary Act of 1789...

 is responsible for managing and disposing of properties seized and forfeited by Department of Justice agencies. It currently manages around $1 billion worth of property. The United States Treasury Department is responsible for managing and disposing of properties seized by Treasury agencies. The goal of both programs is to maximize the net return from seized property by selling at auction
Auction
An auction is a process of buying and selling goods or services by offering them up for bid, taking bids, and then selling the item to the highest bidder...

s and to the private sector and then using the property and proceeds for law enforcement purposes.

A form of asset forfeiture is roadside forfeiture during a vehicle stop. Usually enforcing State policies by Highway police, local law enforcement have built up seized funds and spent them with oversight only from local judges who sometimes benefit from the expenditures of such funds. The presumption is that travelers hiding large amounts of cash are transporting drug money. Often, the vehicle occupants are required to simply sign a waiver that they will leave the State and not return, thus also not attempt to retrieve their funds. Some complain that this is law enforcement action requires more oversight in order to minimize the impact on travelers who are not involved in drug money but who simply wish to avoid further involvement with law enforcement agents and sign the waiver anyway. Sen. John Whitmire
John Whitmire
John Harris Whitmire is the longest-serving of current members of the Texas State Senate representing District 15, which includes much of northern Houston, since 1983. Previously he was a member of the Texas House of Representatives from 1973 through 1982...

, D-Houston, chair of the Senate Criminal Justice Committee is investigating the Tenaha, Texas Police seizures scandal.

The number of federal statutes giving the government the right to confiscate citizens’ assets has nearly doubled since the 1990s, by one count. More than 400 federal statutes allow for forfeiture for a wide range of reasons, including violations of the Northern Pacific Halibut Act.

Asset forfeiture in the United Kingdom

In the UK asset forfeiture proceedings are initiated under the Proceeds of Crime Act 2002
Proceeds of Crime Act 2002
The Proceeds of Crime Act 2002 is an Act of the Parliament of the United Kingdom which provides for the confiscation or civil recovery of the proceeds from crime and contains the principal money laundering legislation in the UK.-Background:...

. These fall into various types. Firstly there are confiscation proceedings, which may follow a criminal conviction. Secondly, there are cash forfeiture proceedings, which take place (in England and Wales) in the Magistrates Court with a right of appeal to the Crown Court
Crown Court
The Crown Court of England and Wales is, together with the High Court of Justice and the Court of Appeal, one of the constituent parts of the Senior Courts of England and Wales...

, having been brought by either the police or Customs. Thirdly, there are civil recovery
Civil recovery
-United Kingdom:In the legal systems of the constituent countries of the United Kingdom, civil recovery is claimed by retailers to enable the retailer's claims handling agent to recover, in civil proceedings before the High Court or Court of Session, property which is, or represents, property...

 proceedings that at the moment are brought by the Assets Recovery Agency
Assets Recovery Agency
The Assets Recovery Agency was a non-ministerial government department in the United Kingdom. It was established under the Proceeds of Crime Act 2002 to reduce crime by confiscating the proceeds of any crime...

 "ARA". Under the Serious Crime Act 2007
Serious Crime Act 2007
The Serious Crime Act 2007 is an Act of the Parliament of the United Kingdom that makes several radical changes to English criminal law. In particular, it creates a new scheme of serious crime prevention orders to frustrate crime in England and Wales and in Northern Ireland, replaces the common law...

 ARA's functions will be transferred to the Serious Organized Crime Agency and the National Policing Improvement Agency
National Policing Improvement Agency
The United Kingdom's National Policing Improvement Agency is a non-departmental public body established to support police by providing expertise in such areas as information technology, information sharing, and recruitment.-Background:...

. Neither cash proceedings nor proceedings for a civil recovery order require a prior criminal conviction.

In Scotland, confiscation proceedings are initiated by the procurator fiscal
Procurator Fiscal
A procurator fiscal is a public prosecutor in Scotland. They investigate all sudden and suspicious deaths in Scotland , conduct Fatal Accident Inquiries and handle criminal complaints against the police A procurator fiscal (pl. procurators fiscal) is a public prosecutor in Scotland. They...

 or Lord Advocate
Lord Advocate
Her Majesty's Advocate , known as the Lord Advocate , is the chief legal officer of the Scottish Government and the Crown in Scotland for both civil and criminal matters that fall within the devolved powers of the Scottish Parliament...

 through the Sheriff Court
Sheriff Court
Sheriff courts provide the local court service in Scotland, with each court serving a sheriff court district within a sheriffdom.Sheriff courts deal with a myriad of legal procedures which include:*Solemn and Summary Criminal cases...

 or High Court of Justiciary
High Court of Justiciary
The High Court of Justiciary is the supreme criminal court of Scotland.The High Court is both a court of first instance and a court of appeal. As a court of first instance, the High Court sits mainly in Parliament House, or in the former Sheriff Court building, in Edinburgh, but also sits from time...

. Cash forfeiture and civil recovery are brought by the Civil Recovery Unit of the Scottish Government in the Sheriff court, with appeals to the Court of Session
Court of Session
The Court of Session is the supreme civil court of Scotland, and constitutes part of the College of Justice. It sits in Parliament House in Edinburgh and is both a court of first instance and a court of appeal....

.

Asset forfeiture in Ireland

Ireland was one of the first countries to introduce Asset Forefeiture in the form of the Criminal Assets Bureau
Criminal Assets Bureau
The Criminal Assets Bureau is a law enforcement agency in Ireland, the purpose of which is to recover the proceeds of organised crime. It is a division of the Garda , but reports annually to the Minister for Justice, Equality and Law Reform...

 which initiates civil forfeiture proceedings and the Director of Public Prosecutions who initiates confiscation proceedings. It was set up under the Criminal Assets Bureau Act,1996 by the Irish Government in response to the murder of investigative journalist Veronica Guerin
Veronica Guerin
Veronica Guerin was an Irish crime reporter who was murdered on 26 June 1996 by drug lords, an event which, alongside the murder of Detective Garda Jerry McCabe three weeks earlier, helped establish the Criminal Assets Bureau....

 who was actively digging up dirt on the Irish Criminal Underworld.

Notable United States forfeitures

After the Madoff investment scandal
Madoff investment scandal
The Madoff investment scandal broke in December 2008 when former NASDAQ chairman Bernard Madoff admitted that the wealth management arm of his business was an elaborate Ponzi scheme....

 had surfaced, Bernard Madoff was ordered to forfeit $170 billion, although it is believed that he did not have anywhere close to that amount. His wife, Ruth, although not charged, agreed to forfeit about $80 million in assets.

In 2009 Lloyds Bank
Lloyds Bank
Lloyds Bank Plc was a British retail bank which operated in England and Wales from 1765 until its merger into Lloyds TSB in 1995; it remains a registered company but is currently dormant. It expanded during the nineteenth and twentieth centuries and took over a number of smaller banking companies...

 forfeited $350 million in connection with violations of the International Emergency Economic Powers Act
International Emergency Economic Powers Act
The International Emergency Economic Powers Act , Title II of , is a United States federal law authorizing the President to regulate commerce after declaring a national emergency in response to any unusual and extraordinary threat to the United States which has a foreign source.-Provisions:In the...

 (IEEPA) (falsified outgoing wire transfers to persons on U.S. sanctions lists).

In 2009 Credit Suisse
Credit Suisse
The Credit Suisse Group AG is a Swiss multinational financial services company headquartered in Zurich, with more than 250 branches in Switzerland and operations in more than 50 countries.-History:...

, a Swiss corporation, forfeited $536 million in connection with violations of IEEPA.

In 2010 Barclays Bank forfeited $298 million in connection with violations of the IEEPA and the Trading with the Enemy Act.

In 2010 ABN Amro Bank
ABN AMRO
ABN AMRO Bank N.V. is a Dutch state-owned bank with headquarters in Amsterdam. It was re-established, in its current form, in 2009 following the acquisition and break up of ABN AMRO Group by a banking consortium consisting of Royal Bank of Scotland Group, Santander and Fortis...

 forfeited $500 million in connection with violations of the IEEPA and the Trading with the Enemy Act.

See also

  • Eminent domain
    Eminent domain
    Eminent domain , compulsory purchase , resumption/compulsory acquisition , or expropriation is an action of the state to seize a citizen's private property, expropriate property, or seize a citizen's rights in property with due monetary compensation, but without the owner's consent...

  • Forfeiture Endangers American Rights
    Forfeiture Endangers American Rights
    Forfeiture Endangers American Rights is an organization in the United States dedicated to stopping abuse of asset forfeiture, the practice whereby governments seize tangible and financial assets alleged to have been used in the commission of certain crimes. It is a 501 charitable organization...

     - U.S. anti-forfeiture activist organization
  • Operation Protect Our Children
    Operation Protect Our Children
    Operation Protect Our Children was a joint operation by the US ICE, CEOS, and DOJ Asset Forfeiture and Money Laundering Section to execute "seizure warrants against 10 domain names of websites engaged in the advertisement and distribution of child pornography"...

  • USA v. $124,700
    USA v. $124,700
    United States of America v. $124,700 in U.S. Currency, 05-3295 , was a decision of the United States Court of Appeals for the Eighth Circuit that was handed down on August 18, 2006....

     August 18, 2006 case from the Eighth Circuit Court on civil forfeiture of $124,700

External links

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