The Property Is Gone. Can the Government Take Something Else?

If the property tied to your crime is gone, the government can often take other property or money of equal value instead. This is called "substitute property." The Ninth Circuit applied this rule on December 21, 2018, in United States v. Valdez.

What criminal forfeiture is

Criminal Forfeiture

Forfeiture means the government takes property connected to a crime (see a general definition of criminal forfeiture). When the government charges someone, it can also seek criminal forfeiture of property used to commit the crime. In criminal forfeiture, the forfeiture is part of the sentence after a conviction. It is a punishment on top of any prison time or fine.

A criminal forfeiture order is an in personam judgment, which means it is enforceable against you personally. It can include a money judgment, so you owe the amount even if you no longer have the property.

How civil forfeiture is different

Civil forfeiture is a separate case against the property itself. The government does not need a criminal conviction to bring it. The property must be tied to a crime, but the owner does not have to be the person who committed it or be charged.

Avoiding a criminal forfeiture order

Because criminal forfeiture is part of the sentence, it generally requires a conviction. If the charges are dismissed or you are acquitted, there is no criminal forfeiture. Sometimes a plea agreement limits or rules out forfeiture. That is something to raise with your lawyer early in plea talks.

When the government can take substitute property

Under 21 U.S.C. § 853(p), the government can seek substitute property when the forfeitable property, because of something the defendant did or failed to do:

• cannot be found,
• was transferred or sold to someone else,
• was placed beyond the court's reach,
• lost much of its value, or
• was mixed with other property so it cannot be divided.

For example, if a car used in a crime was sold, destroyed, or hidden, the government may be able to take money equal to the car's value instead.

The issue in United States v. Valdez

Priscilla Valdez pleaded guilty to attempting to smuggle ammunition, including 10,000 rounds, from the U.S. into Mexico. The ammunition could have been forfeited under 18 U.S.C. § 924(d). But because she had caused it to be transferred to someone else, the government sought substitute property under 21 U.S.C. § 853(p) and 28 U.S.C. § 2461(c).

The judge ordered Valdez and a co-defendant to each pay a personal money judgment for half the value of the ammunition. For Valdez, that was $1,235.

On appeal, Valdez argued that substitute property was not available. She also said she was being treated worse than someone arrested before the ammunition changed hands.

The Ninth Circuit affirmed. It held that:

• Section 2461(c) lets the government seek criminal forfeiture whenever civil forfeiture is available and the defendant is convicted of the crime.
• Section 2461(c) brings in the substitute-property rule of § 853(p).
• Substitute property was proper because Valdez's own acts caused the ammunition to be transferred to a third party.

The court saw nothing unfair in treating people differently based on what happened to the property before their arrest.

Why it matters

Valdez is a reminder that criminal forfeiture orders have serious consequences and are very hard to undo. Forfeiture can follow you even after the property is gone, and the money or property may have to be turned over in addition to any fine. A forfeiture money judgment can be larger than any fine. Address forfeiture early, including trying to get the government to drop or limit forfeiture as part of any plea agreement.

If forfeiture is on the table, make a list of what the government is seeking, when and how each item was acquired, and where it is now. Those facts often decide whether property is tied to the crime and whether substitute property is even available.

Facing a federal sentence? Book a consultation to talk it through with Brandon Sample.