Criminal Forfeiture
Forfeiture is the taking by the government of property that is illegally acquired or used, without compensation to the owner. Criminal forfeitures are in personam. They are part of a criminal proceeding against a defendant. A forfeiture verdict is rendered by a jury only after a guilty verdict on the predicate charge. Civil forfeiture statutes are in rem. In an in rem forfeiture, it is the property which is proceeded against, and, by resort to a legal fiction, held guilty. Since the property itself is the defendant, the guilt or innocence of the property owner is not relevant. “It is the illegal use that is the material consideration, it is that which works the forfeiture, the guilt of innocence of its owner being accidental.” J. W. Goldsmith, Jr.-Grant Co. v. United States, 254 U.S. 505, 513 (1921).
Put another way, while civil in rem proceedings determine the government’s title to the property against the whole world, criminal in personam proceedings determine the government’s right to the property only against the criminal defendant.
Third Party Claims
Rather than being a defendant in a criminal forfeiture case, you may also be a third party claimant with an interest in the forfeited assets. Third party claims to property subject to criminal forfeiture are adjudicated in a post-judgment ancillary hearing under 21 U.S.C. § 853. This is the exclusive procedure for asserting third party claims in federal court.
The federal criminal forfeiture statutes limit third party recovery to two relatively narrow categories of petitioners:
Superior Interest: The first forfeiture exemption, codified at § 853(n)(6)(A), exempts from forfeiture “a legal right, title, or interest in the property” that was “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.” Put another way, if the defendant had a subordinate interest to the petitioner, so does the government. “[I]f a third parties interest in the forfeited property, at the time of the criminal acts, was superior to the criminal defendant’s interest, then the interest that the government acquires when it steps into the defendant’s shoes is subordinate to that of the third party.” United States v. Lavin, 942 F.2d 177, 185 (3rd Cir. 1991).
Bona Fide Purchaser: The second criminal forfeiture exemption, codified at § 853(n)(6)(B), is where a 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.”