By now just about every white-collar defense lawyer has learned firsthand of the potentially devastating impact of the federal asset forfeiture laws. Whether through criminal forfeiture or the filing of a parallel civil forfeiture case, it is widely understood that the U.S. Attorney's Office can and will confiscate just about every dollar associated with alleged wrongdoing. In both criminal and civil settings, the laws generally provide for the seizure and forfeiture of any property that directly or indirectly constitutes "proceeds" of certain specified offenses. While these sweeping statutes vest enormous power in the prosecutor's hands, recent legal developments in the U.S. Court of Appeals for the Second Circuit have set some important limitations on the permissible scope of forfeiture.
Basic Forfeiture Principles
Civil forfeiture is an in rem proceeding brought against property derived from or used to commit a crime. Title 18, U.S. Code, Section 981(a)(1), the primary civil forfeiture statute, provides for forfeiture of "any property, real or personal, which constitutes or is derived from proceeds traceable to" various enumerated offenses including most importantly wire and mail fraud crimes. In addition, Section 981 authorizes forfeiture of proceeds of any offense constituting "specified unlawful activity" as defined in 18 U.S.C. §1956(c)(7) to include a gamut of offenses such as bribery, copyright infringement, export control violations and environmental crimes. Section 981(a)(1) also authorizes civil forfeiture of property "involved in" certain money laundering offenses, arguably an even more inclusive standard.
