Forfeiture and restitution are two processes that are complimentary even though they may at first seem at odds. Both are mandatory and often they are imposed in amounts that are equal or identical. Often judges, and prosecutors view forfeiture and restitution favorably because they see it as compensating the victims and the government.
The truth is, sometimes it can be, but when done correctly, they balance each other out and typically don’t result in a double penalty. They are a way of compensating the victim of a crime or a process by which ill-gotten monies are given up.
The danger is, it can mean a great loss for the defendant when the government unjustly exercises its powers to seize property. It can lead to the defendant losing property, finances, or anything of value in their name. Any individual who is charged with a crime and forfeiture and restitution are imposed, is basically at the mercy of the government if they do not have a good criminal defense attorney fighting for them.
Overview of Criminal Forfeiture
Criminal forfeiture is an in personam action which means that the court exerts its power to adjudicate cases that are against a person. The term “in personam” literally means “against the person.”
As an in personam proceeding, criminal forfeiture is part of the criminal prosecution against the accused. It results in the forfeiture of the accused person’s property, proceeds, and assets that were directly or indirectly gained from the crime.
For criminal forfeiture to take place, there first must be a conviction. The accused party’s criminal prosecution must take place first with the criminal forfeiture following. It is, however, limited to the property, proceeds, and assets that are connected to or related to the crime that resulted in a conviction for the accused.
The prosecution must establish by a preponderance of the evidence that the property ( or proceeds, and assets) subject to forfeiture was obtained as a result of a crime for which the defendant was convicted.
To illustrate criminal forfeiture, a person is charged with a crime of drug trafficking and then convicted. Upon conviction, the prosecution moves to seize any money he made from selling the drugs. They would also seize the vehicle that was used to transport the drugs.
If the accused was not convicted, then the prosecution would not be able to pursue criminal forfeiture.
What is the Purpose of Forfeiture?
According to the United States Department of Justice, asset forfeiture has four distinct purposes:
- Deprive criminals of the proceeds of their crimes
- Break the financial backbone of organized criminal syndicates and drug cartels
- Recover property that may be used to compensate victims (restitution)
- Deter crime
It is typically enacted at the federal level, but many states also have forfeiture laws. Crimes prosecuted at the state level can be subjected to both, forfeiture and restitution.
What are the Three Types of Forfeiture?
Under federal law, there are three types of forfeiture:
- Criminal Forfeiture – Attached to criminal prosecution. Only the property that was involved in specific counts that have led to the conviction of the defendant can be used. The government is required to establish by a preponderance of evidence a connection between the crimes the defendant was convicted of, and the property being forfeited.
- Civil Judicial Forfeiture – Attached to civil proceedings. It is brought against property that was used to commit an offense or derived from an offense that was committed as opposed to being brought against a person who committed an offense. There is no requirement for a criminal conviction, but the government still must prove that the property was linked to a crime. Civil forfeiture opens up opportunities for the government to file cases against property that would not be accessible via criminal forfeiture. This can include the property of fugitives, terrorists, and other criminals who are located beyond U.S. borders. This type of forfeiture can also be used to recover property that was held by defendants who are deceased or where the defendant cannot be identified.
- Administrative Forfeiture – This is an action against property (in rem) that allows the forfeiture of property in the U.S. without filing a federal court case. This process of administrative forfeiture occurs before the agency that is responsible for the seizure of the property and there has not been any claim filed to contest it. There are a number of procedures and requirements such as posting notices and stringent time limits that are intended to protect the rights and interests of the owners of the property. Property that is seized by administrative forfeiture must meet the probable cause requirement. The reason for this type of forfeiture is to prevent overburdening of the courts, especially in cases where the forfeiture of the seized property is uncontested.
Seizure vs. Forfeiture
At first glance, seizure and forfeiture appear very similar. From a legal standpoint though, there are several distinctive differences.
- Seizure – This term is the actual act of taking the property from a criminal or accused person. It typically occurs when an agent or law enforcement officer takes physical property or money into the possession of the agency, usually during an arrest or a search of a person or property. This can include a bank account, real property, vehicles, weapons, and drugs. When a seizure occurs, the owner, the one the property was seized from, no longer has the right to use it or access it until and if the property is returned.
- Forfeiture – This is the next step in a seizure of property. A forfeiture occurs when the person who owns the seized property permanently loses their rights to that property.
It is important to note that property can be seized but not forfeited. Forfeiture is not always the end result of a seizure.
What is the Process of Criminal Forfeiture?
The Federal Rules of Criminal Procedure – Title VII Post Conviction Procedures – Rule 32.2 Criminal Forfeiture outlines the process for criminal forfeiture.
(b) Entering a Preliminary Order of Forfeiture
(1) Forfeiture Phase of the Trial
(A) Forfeiture Determinations – As soon as possible after a verdict of guilty, a finding of guilty, a plea of guilty, or nolo contendere is accepted on any count that has a criminal forfeiture attached, the court is required to determine the property that is subject to forfeiture under the applicable statute. The court must also determine if the government has proven a link between the offense and the property. If the property is monetary, the court is required to determine the amount that the defendant will have to pay.
(B) Evidence and Hearing – The determination that the court makes may be based on evidence that already exists on the record which may include any written plea agreement as well as any additional information or evidence that was submitted and accepted by the court. In the event that the forfeiture is contested, either party may request that the court conduct a hearing after the guilty verdict or finding.
(2) Preliminary Order
(A) Contents of a Specific Order – If the court determines that property is subject to forfeiture, it much immediately enter a preliminary order of forfeiture that sets forth the amount (any money judgment), directs the forfeiture of specific property as well as any substitute property if the government has met the criteria as set forth by law.
(B) Timing – The court is required to enter the preliminary order sufficiently in advance of sentencing (unless it is not practical) so that the parties can suggest modifications or revisions before the order is finalized.
(C) General Order – If, before sentencing, the court cannot identify all the specific property subject to forfeiture or calculate the total amount of the money judgment, the court may enter a forfeiture order that:
(i) lists any identified property
(ii) describes other property in general terms, and
(iii) states that the order will be amended under Rule 32.2(e)(1) when additional specific property is identified, or the amount of the money judgment has been calculated
(3) Seizing Property – A preliminary order of forfeiture is entered, authorizing the Attorney General or designee to seize the specific property that is subject to forfeiture, conduct any discovery that the court considers appropriate to identify, locate, or dispose of the property, and to begin the proceedings that comply with any laws that govern third party rights. The court may also include conditions that are deemed reasonably necessary to maintain the property’s value pending appeal.
(4) Sentence and Judgment
(A) When Final– If the defendant consents at any point before sentencing, the preliminary forfeiture order is made final as to the defendant. If the order directs the defendant to forfeit specific property, it remains preliminary as to third parties until the ancillary proceeding is concluded.
(B) Notice and Inclusion in the Judgment – When announcing the sentence, the court must include the forfeiture or other ensure the defendant is aware of the forfeiture at sentencing. The forfeiture order must also be included in the judgment either directly or by reference.
(C) Time to Appeal – Once the judgment is entered the clock starts for the timeframe that the defendant or government is able to file an appeal from the forfeiture order.
(5) Jury Determination
(A) Retaining the Jury – If the case is tried before a jury and the indictment or information states the government is seeking forfeiture, the court must decide before the jury begins deliberating whether either party requests that the jury be retained to determine the forfeitability of specific property if it returns a guilty verdict.
(B) Special Verdict Form – If a party timely requests to have the jury determine forfeiture, the government must submit a proposed Special Verdict Form listing each property subject to forfeiture and asking the jury to determine whether the government has established the requisite nexus between the property and the offense committed by the defendant.
(6) Notice of the Forfeiture Order
(A) Publishing and Sending Notice – If the court orders the forfeiture of specific property, the government must publish notice of the order and send notice to any person who reasonably appears to be a potential claimant with standing to contest the forfeiture in the ancillary proceeding.
(B) Content and Notice – The notice must describe the forfeited property, state the times under the applicable statute when a petition contesting the forfeiture must be filed, and state the name and contact information for the government attorney to be served with the petition.
(C) Means and Publication; Exceptions to Publication Requirement – Publication must take place as described in Supplemental Rule G(4)(a)(iii) of the Federal Rules of Civil Procedure, and may be by any means described in Supplemental Rule G(4)(a)(iv). Publication is unnecessary if any exception in Supplemental Rule G(4)(a)(i) applies.
(D) Means of Sending the Notice – The notice may be sent in accordance with Supplemental Rules G(4)(b)(iii)–(v) of the Federal Rules of Civil Procedure.
(7) Interlocutory Sale – At any time before entry of a final forfeiture order, the court, in accordance with Supplemental Rule G(7) of the Federal Rules of Civil Procedure, may order the interlocutory sale of property alleged to be forfeitable.
(c) Ancillary Proceeding; Entering a Final Order of Forfeiture
(1) If a law requires a third party to file a petition expressing interest in the property to be forfeited, the court must conduct an ancillary proceeding, but no ancillary proceeding is required to the extent that the forfeiture consists of a money judgment.
(A) In the ancillary proceeding the court may move to dismiss the petition for any lawful reason, including failure to state a claim or for lack of standing.
(B) If the court determines that discovery is necessary or desirable in order to resolve factual issues, the court may allow it for the parties.
(2) Entering a Final Order – Once the ancillary proceeding ends the court must enter a final order of forfeiture.
(3) Multiple Petitions – If multiple third-party petitions are filed in the same case, an order dismissing or granting one petition is not appealable until rulings are made on all the petitions unless the court determines that there is no just reason for delay.
(4) Ancillary Proceeding Not Part of Sentencing – An ancillary proceeding is not part of sentencing.
(d) Stay Pending Appeal – If a defendant appeals from a conviction or an order of forfeiture, the court may stay the order of forfeiture on terms appropriate to ensure that the property remains available pending appellate review.
(e) Subsequently Located Property; Substitute Property.
(1) In General. On the government’s motion, the court may at any time enter an order of forfeiture or amend an existing order of forfeiture to include property that:
(A) is subject to forfeiture under an existing order of forfeiture but was located and identified after that order was entered; or
(B) is substitute property that qualifies for forfeiture under an applicable statute.
(2) Procedure. If the government shows that the property is subject to forfeiture under Rule 32.2(e)(1), the court must:
(A) enter an order forfeiting that property, or amend an existing preliminary or final order to include it; and
(B) if a third party files a petition claiming an interest in the property, conduct an ancillary proceeding under Rule 32.2(c).
(3) Jury Trial Limited. There is no right to a jury trial under Rule 32.2(e).
Forfeiture & Restitution: New York Law
Three New York laws address forfeiture.
- New York Penal Law – Article 480 – Criminal Forfeiture – Felony Controlled Substance Offenses
- New York Penal Law – Article 460.30 – Enterprise Corruption; Forfeiture
- New York Consolidated Laws, Civil Practice Law, and Rules – CVP § 1311. Forfeiture actions
New York forfeiture law is similar to federal law with a few exceptions. One of the more significant exceptions is that for the most part, New York prosecutors are not legally able to forfeit real property. There are only a few exceptions that are attached to specific drug proceedings, but for the most part, the state cannot forfeit your home in connection to a crime you commit.
Understanding Forfeiture and Restitution
Restitution is repayment to the victim of a crime to compensate for their losses. It is usually paid by the person who is convicted of the crime. Restitution is a common vehicle that is used to get the repayment for the victim.
The two seem to be related, but in truth, they are not. Property can be forfeited without being used for restitution and restitution can be ordered without forfeiture ever occurring.
If you have been charged with a crime and your property seized, don’t wait another minute. Get legal representation now! Call the Litvak Law Firm today at (718) 989-2908 and get the representation you deserve. Mr. Litvak is experienced, highly trained, and very knowledgeable in both federal and New York state criminal cases. He will make sure that your rights are protected and that you have the best possible outcome for your case.