What is Asset Forfeiture?
Asset forfeiture is a powerful tool used by law enforcement agencies, including the FBI, against criminals and criminal organizations to deprive them of their ill-gotten gains through seizure of these assets.
History of Asset Forfeiture
Asset forfeiture has its roots in the ancient practice by governments to defend against piracy through the seizure of vessels and contraband.
Today it is used to disrupt, dismantle, and deter those who prey on the vulnerable for financial gain, including criminal organizations, drug dealers, terrorists, and white-collar criminals.
Why does the FBI Use Asset Forfeiture?
- To punish criminals
- To deter illegal activity
- To disrupt criminal organizations
- To remove the tools of the trade from criminals
- To return assets to victims
- To protect communities
Types of Forfeiture
There are three types of forfeiture under federal law: criminal forfeiture, civil judicial forfeiture, and administrative forfeiture.
- Criminal Forfeiture: Criminal forfeiture is brought as part of a criminal prosecution of a defendant. It is an in personam (against the person) action and requires that the government indict the property used or derived from the crime along with the defendant. In criminal forfeiture, an individual has the right to contest the seizure through trial proceedings.
- Civil Judicial Forfeiture: Civil judicial forfeiture is a judicial process that does not require a criminal conviction and is a legal tool that allows law enforcement to seize property that is involved in a crime. Referred to as an in rem (against the property) action, it is an action filed against the property itself, rather than a person. In civil judicial forfeiture, an individual has the right to contest the seizure through trial proceedings.
Administrative Forfeiture: The majority of federal forfeiture cases are uncontested even if there is a related criminal case. Administrative forfeiture occurs when a property is seized but no one files a claim to contest the seizure. Property that can be administratively forfeited includes merchandise prohibited from importation; a conveyance used to import, transport, or store a controlled substance; a monetary instrument; or other property that does not exceed $500,000 in value. Houses and other real property may not be forfeited administratively. Federal law imposes strict deadlines and notification requirements in the administrative forfeiture process. If the seizure is contested, then the U.S. government is required to use either criminal or civil judicial forfeiture proceedings to gain title to the property.
Returning assets to victims of crime is a top priority of the Department of Justice Asset Forfeiture Program. Since 2000, the victim compensation program has returned more than $5 billion in civilly and criminally forfeited assets to victims through the granting of petitions for remission or by transferring forfeited funds to courts for payment of restitution through the restoration process.
Examples of Forfeiture in Action
- In June 2017, a federal jury in New York found an office building worth at least $500 million as well as other properties and bank accounts forfeitable to the United States as proceeds of violations of the Iran sanctions and property involved in laundering the proceeds of those sanctions violations. This decision represents the largest civil forfeiture jury verdict and the largest terrorism-related civil forfeiture in U.S. history. Press release
- In January 2015, Jack Frison was sentenced to two years in prison in connection with his sale of counterfeit goods at a flea market he owned in Pagedale, Missouri. He was also ordered to pay $3,506,872.17 in restitution and forfeit his 2012 Porsche Panamera, 2009 Rolls Royce Phantom, 2007 Jeep Commander, 2006 Land Rover Range Rover, $74,915.72 in cash, and $12,649.23 previously seized from three of his bank accounts. Press release
- In May 2015, former bank official Joseph J. Graziano, Jr. was sentenced in Pittsburgh to 90 months in prison for his role in several multi-million-dollar financial fraud schemes and an international counterfeiting ring based in Uganda. The FBI’s forfeiture program identified $4 million worth of assets, including cash, jewelry, luxury cars, and other properties, to be returned to the victims as restitution. Press release
- In July 2015, Dr. Farid Fata—a Detroit-area hematologist and oncologist—was sentenced to 45 years in prison for his role in an extensive health care fraud scheme. The case resulted in more than $40 million in seizures of real property, a vehicle, bank accounts, and business entities, as well as a money judgment of $17.6 million. Investigators seized approximately $13 million and established a team of specialists to assist victims and their family members in submitting claims for restitution. Press release