Criminal Forfeiture and Substitute Property

If a defendant is charged with a crime, the government may also bring a criminal forfeiture action to collect the property used in the criminal activity. When the defendant's actual property is not available, the government can obtain an order for the value of the property instead. The Ninth Circuit Court of Appeals tackled the issue of whether a defendant’s personal funds can be seized instead of the actual substance that the defendant was charged with smuggling in the case of United States v. Valdez.

What is Criminal Forfeiture?

When the government brings a charge against a defendant, it can also bring a criminal forfeiture action, which means that the defendant's property that was used to commit the crime must be forfeited. A criminal forfeiture order is considered to be an in personam judgment against the defendant, which means that it is enforceable against the defendant personally. It is a punishment imposed on the defendant in addition to having to serve any prison time or pay additional fines.

Criminal Forfeiture vs. Civil Forfeiture

Civil forfeiture is different in that the defendant does not have to be criminally convicted in order for the government to seize assets. In addition, the assets seized by the government in civil forfeiture do not necessarily have to be directly linked to the defendant's commission of a crime.

Avoiding a Criminal Forfeiture Order

To avoid criminal forfeiture, the defendant must also succeed in having the criminal charges against him dismissed or be acquited. A defendant is sometimes able to negotiate a plea agreement with the prosecution that includes the government agreeing not to pursue any criminal forfeiture against the defendant.

Criminal Forfeiture and Substitute Property

In the event that the actual property that the defendant used in the commission of a crime cannot be recovered, the government is able to proceed against substitute property. The same is true if the value of the property is diminished or if the defendant has transferred or hidden the property from the government. For example, if the government instituted a criminal forfeiture action against a defendant's car used in a crime, the government may be able to substitute the value of the car for the defendant's money if the car was destroyed or irreparably damaged.

The Issue of Criminal Forfeiture in United States v. Valdez

In United States v. Valdez, the defendant pleaded guilty to the attempted smuggling of more than 10,000 rounds of ammunition from the U.S. into Mexico. Even though the actual rounds of ammunition were subject to seizure by the FBI, the government declined to seize that property. The FBI instead sought the defendant's personal funds as a substitute forfeiture pursuant to 21 USC § 853(p) and 28 USC § 2461(c). The defendant was ordered to pay a personal judgment in the amount of the value of the ammunition that she helped smuggle.

On appeal, the defendant argued that the government was not entitled to actual funds in place of the ammunition. She claimed that the government was treating her differently than had they arrested her before any of the ammunition changed hands, then there would have been no option to seek substitute property via criminal forfeiture.

The Ninth Circuit Court of Appeals rejected the defendant's arguments and ruled that the district court properly ordered the criminal forfeiture of substitute property in that case. The appellate court was unpersuaded by the defendant's point that the timing of the government's arrest should not factor into whether substitute property is available through civil forfeiture.

Challenging the Government’s Seizure of Assets Through Criminal Forfeiture

The Ninth Circuit's ruling in United States v. Valdez is a strong reminder that criminal forfeiture orders have serious consequences and are extremely difficult to overcome. It is important to attempt to negotiate with the government into abandoning any criminal forfeiture action as a part of a plea agreement that the defendant signs. The amount that a defendant may have to pay for criminal forfeiture can be much more than any fines imposed.

If you or a loved one is charged with a crime that involves a criminal forfeiture action, the money or property seized by the government may have to be turned over in addition to any fines paid. It is prudent to contact an experienced criminal lawyer, such as Brandon Sample, Esq., to find out what the possibilities are for challenging a criminal forfeiture order.