Criminal Forfeiture Update | Innocent Owner Defense | Third Party Claim

Third Party Claim | Innocent Owner

Criminal Forfeiture Standard (A District Magistrate’s View)

“18 U.S.C. §§ 981(a)(1)(C), 982(a)(5), and 28 U.S.C. § 2461(c) provide in pertinent part that any property, real or personal, which constitutes, or is derived from proceeds traceable to the charged offenses in this case are subject to forfeiture by the United States. For the property to be subject to forfeiture, the Government must establish the requisite nexus between the offense and the property. FED. R. CRIM. P. 32(2)(b)(1).”

“Any third party asserting a legal interest in such property must petition the Court for a hearing to adjudicate her interest in the property. 21 U.S.C. § 853(n) (2). Rule 32.2(c)(1) provides that a Court must hold an ancillary proceeding if a third party files a petition asserting an interest in the property. FED. R. CRIM. P. 32.2(c)(1). The Federal Rules of Evidence apply to the ancillary proceeding. FED. R. CRIM. P. 32.2 (Advisory Committee Notes 2000). Section 853(n)(5) sets out the following procedure for the hearing:”

“At the hearing, the petitioner may testify and present evidence and witnesses on his own behalf, and cross-examine witnesses who appear at the hearing. The United States may present evidence . . . . In addition to testimony and evidence shall consider the relevant portions of the record of the criminal case which resulted in the order of forfeiture. 21 U.S.C. § 853(n)(5)(emphasis added).”

“The Court shall amend the order of forfeiture if the claimant establishes by a preponderance of the evidence either that: (A) the petitioner has a legal right, title, or interest in the property, and such right, title, or interest renders the order of forfeiture invalid in whole or in part because the right, title, or interest was vested in the petitioner rather than the defendant or was superior to any right, title, or interest of the defendant at the time of the commission of the acts which gave rise to the forfeiture of the property under this section; or (B) the petitioner is a bona fide purchaser for value of the right, title, or interest in the property and was at the time of purchase reasonably without cause to believe that the property was subject to forfeiture under this section ....21 U.S.C. § 853(n)(6)(emphasis added).”

“To prevail on a third-party claim under 21 U.S.C. § 853(n)(6)(A), a petitioner must show that she had a legal interest in the property and the interest vested in the claimant instead of the defendant. See 21 U.S.C. § 853(n)(6)(A). However, “[a] third-party claimant ... must have more than bare legal title to the forfeited property.” United States v. Hovind, No. 3:06cr83/MCR, 2009 WL 2369340, at *4 (N.D. Fla. July 29, 2009). In the Eleventh Circuit, possession of bare legal title without the right to exercise dominion and control over the property is insufficient to prove ownership. See A Single Family Residence Located at 900 Rio Vista Blvd., 803 F.2d 625, 630 (11th Cir. 1986).”

Source: Case 8:09-cr-00110-JDW-AEP January 28, 2011

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