Federal Asset Seizure and Forfeiture

Understanding Federal Asset Seizure and Forfeiture

Federal asset seizure and forfeiture is the legal process by which the government takes ownership of property connected to criminal activity or that violates certain laws. The government seizes the property first (takes physical or legal control), and then pursues forfeiture (permanent transfer of ownership to the government.  

How the Federal Government Seizes and Forfeits Assets

The federal government uses three distinct forfeiture mechanisms:

• Criminal Forfeiture
  
  • Occurs as part of a criminal prosecution against a defendant
  • Requires a criminal conviction
  • The forfeiture is imposed as part of the defendant's sentence
  • Property must be connected to the specific criminal conduct for which the defendant was convicted
  • In personam proceeding (against the person)
• Civil Forfeiture
  
  • Filed as a civil lawsuit against the property itself (in rem proceeding)
  • Does not require a criminal conviction or even criminal charges against the owner
  • Government must prove by a preponderance of the evidence (the standard of proof in most civil cases, meaning a party must show their claim is more likely true than not true, or has a greater than 50% chance of being accurate) that the property is subject to forfeiture
  • Property owner can contest the forfeiture and has burden to prove innocent owner defense
  • Case caption names the property (e.g., United States v. $124,700 in U.S. Currency)
• Administrative Forfeiture
  
  • Handled entirely by the seizing agency (DEA, FBI, Customs, IRS, etc.) without court involvement
  • Only available for property valued at $500,000 or less, and for certain categories of property (currency, vehicles, etc.)
  • Property owner must file a claim within strict deadlines (typically 35 days) or the forfeiture becomes final by default
  • If a proper claim is filed, the case must be referred to court and proceeds as civil judicial forfeiture
  • Most common type of federal forfeiture due to streamlined process

What Assets Can and Can’t Be Seized?

The federal government can seize virtually any asset that is connected to criminal activity, used to facilitate a crime, or represents proceeds of illegal conduct. However, certain property is protected by constitutional exemptions, statutory carve-outs, and homestead laws that shield necessities of life from forfeiture.

Assets That CAN Be Seized

• Real Property
  
  • Homes, land, commercial buildings, rental properties
  • Property used to commit crimes or purchased with illicit funds
• Currency and Monetary Instruments
  
  • Cash (U.S. and foreign currency)
  • Cashier's checks, money orders, traveler's checks
  • Cryptocurrency and digital assets
• Financial Accounts
  
  • Bank accounts, savings accounts, CDs
  • Brokerage accounts and investment portfolios
  • Retirement accounts (401(k)s, IRAs) if funded with criminal proceeds
• Vehicles
  
  • Cars, trucks, motorcycles
  • Boats, yachts, jet skis
  • Aircraft and helicopters
• Business Assets
  
  • Business interests and ownership stakes
  • Equipment, inventory, and accounts receivable
  • Intellectual property and trademarks
• Personal Property
  
  • Jewelry, watches, art, collectibles
  • Electronics and computers
  • Firearms and weapons
• Contraband
  
  • Illegal drugs and controlled substances
  • Counterfeit goods
  • Unlicensed firearms or prohibited weapons

Assets That CANNOT Be Seized (Protected/Exempt)

• Homestead Exemptions (varies by state)
  
  • Primary residence up to certain equity limits in some jurisdictions
  • Federal law may override state homestead protections in criminal cases
• Necessities of Life
  
  • Basic household furnishings and appliances reasonably necessary for living
  • Clothing and personal effects (non-luxury items)
  • Tools of trade necessary for employment (up to certain value limits)
• Certain Retirement Funds
  
  • ERISA qualified retirement plans may have some protection
  • Social Security benefits (generally exempt from civil forfeiture)
• Property of Innocent Owners
  
  • Assets owned by third parties who had no knowledge of or consent to the illegal activity
  • Requires affirmative innocent owner defense
• Attorney's Fees (limited protection)
  
  • Untainted legal fees paid before seizure may be protected
  • Fees paid with criminal proceeds are subject to forfeiture
• Spousal/Family Property
  
  • Property held by spouse or family members with no connection to criminal activity
  • Community property interests of innocent spouse (in community property states)
• De Minimis Value Items
  
  • Property worth less than administrative costs of forfeiture (though agencies have discretion)

Important Note: Even “protected” assets can be seized if they are directly traceable to criminal proceeds or were used to facilitate serious crimes. The innocent owner defense and exemptions must be affirmatively raised and proven by the claimant.

How Does the Asset Seizure and Forfeiture Process Work?

The federal asset seizure and forfeiture process begins when a law enforcement agency (DEA, FBI, IRS, Customs, etc.) seizes property based on probable cause that it is connected to criminal activity or violates forfeiture laws. After seizure, the government sends written notice to known interested parties and publishes notice (for civil cases), giving owners a limited window typically 35 days for administrative forfeiture or specific deadlines under civil judicial forfeiture rules to file a claim contesting the seizure. 

If no claim is filed, the property is forfeited by default and ownership transfers to the government. If a claim is filed, the case proceeds to federal court (civil forfeiture) or becomes part of a criminal prosecution (criminal forfeiture), where the government must prove its case and the claimant can assert defenses such as innocent ownership. Once forfeiture is finalized through default, settlement, or court judgment, the government takes permanent ownership and typically liquidates the assets, with proceeds funding law enforcement programs.

Why Do Federal Authorities Seize Assets and Use Forfeiture?

The primary goal of federal asset forfeiture is to deter and disrupt criminal activity by stripping illegal enterprises of their financial lifeblood and the physical tools used to commit crimes. By seizing “ill-gotten gains,” authorities aim to ensure that crime does not pay while simultaneously using the proceeds to compensate victims and fund ongoing law enforcement initiatives.

Risks and Concerns: Potential for Abuse

The most significant concern is the “profit motive,” where agencies may prioritize seizures to bolster their own budgets rather than to enhance public safety, a practice critics call “policing for profit.” Because civil forfeiture often allows the government to take property without ever charging the owner with a crime, it can lead to due process violations where innocent individuals must spend more on legal fees than the property is worth just to prove their innocence.

Criminal Defense Strategy for Federal Asset Seizure and Forfeiture

Retaining federal defense counsel at the earliest stage of an asset seizure investigation is critical for several high-stakes reasons:

• Combating Aggressive Timelines: Federal authorities operate on strict procedural clocks sometimes as short as 35 days where failing to file a formal claim results in the permanent, automatic loss of property.
• Preventing Self-Incrimination: Because forfeiture cases often run parallel to criminal investigations, any statement an owner makes to recover their property can be used as evidence in their criminal prosecution; an attorney is vital to navigate this “Fifth Amendment minefield.”
• Protecting the Right to Counsel: The government frequently freezes the very bank accounts a defendant needs to pay for their legal defense, requiring an immediate “Monsanto” hearing or similar judicial challenge to release funds for attorney fees.
• Strategic Intervention: Experienced counsel can immediately deploy the “Innocent Owner Defense” or challenge the seizure's proportionality under the Eighth Amendment, often negotiating a partial or full return of assets before a case ever reaches a courtroom.

Your Defense Begins Today

If you are being investigated for a federal crime or facing federal asset seizure or forfeiture, you must receive counsel immediately. We understand that losing your property can be life-altering and thus we’ll protect your rights, minimize financial harm, and hold the authorities to its constitutional obligations. Contact the Law Offices of Jason Goldman today.