Summary: H.R.1658 — 106th Congress (1999-2000)All Information (Except Text)

Bill summaries are authored by CRS.

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Passed Senate amended (03/27/2000)

Civil Asset Forfeiture Reform Act of 2000 - Amends the Federal criminal code (the code) to establish general rules relating to civil forfeiture proceedings.

(Sec. 2) Sets forth notification requirements with respect to seized property and civil forfeiture proceedings, including: (1) a requirement that the notice the Government is required to send to interested parties in a nonjudicial civil forfeiture proceeding under a civil forfeiture statute be sent to achieve proper notice as soon as practicable and within 60 days after the date of the seizure; and (2) required conditions for extending the notification period.

Sets forth procedures for filing claims for seized property. Directs the Government, within 90 days after a claim has been filed, to file a complaint for forfeiture consistent with specified requirements or return the property pending the filing of a complaint (allows a court to extend the period for good cause shown or upon agreement of the parties). Provides that if the Government does not file such a complaint, return the property, or, before the time for filing a complaint has expired, obtain a criminal indictment containing an allegation that the property is subject to forfeiture and take the steps necessary to preserve its right to maintain custody of the property, the Government shall promptly release the property and may not take any further action to effect the civil forfeiture of such property.

Authorizes the Government, in lieu of or in addition to filing a civil forfeiture complaint, to include a forfeiture allegation in a criminal indictment. Specifies that if criminal forfeiture is the only forfeiture proceeding commenced by the Government, the Government's right to continued possession of the property shall be governed by the applicable criminal forfeiture statute. Bars dismissal of a complaint on the ground that the Government did not have adequate evidence at the time the complaint was filed to establish the forfeitability of the property.

Allows any person claiming an interest in seized property, in any case in which the Government files a complaint for forfeiture, to file a claim asserting such person's interest, with an exception. Directs such person to file an answer to the Government's complaint within 20 days after the date of the filing of the claim.

Authorizes the court, if a person with standing to contest the forfeiture of property is financially unable to obtain representation by counsel, to: (1) authorize counsel to represent that person with respect to the claim where the person is represented by counsel appointed in connection with a related criminal case; or (2) insure that the person is represented by a Legal Services Corporation (LSC) attorney, at the person's request, where the property subject to forfeiture is real property that is being used by the person as a primary resident.

Places the burden of proof, in an action brought under any civil forfeiture statute for the civil forfeiture of any property, on the Government to establish, by a preponderance of the evidence, that the property is subject to forfeiture. Authorizes the Government to use evidence gathered after the filing of a complaint for forfeiture to establish that property is subject to forfeiture. Directs the Government, if its theory of forfeiture is that the property was used to commit or facilitate the commission of a criminal offense, or was involved in such commission, to establish that there was a substantial connection between the property and the offense.

Declares that an innocent owner's interest in property shall not be forfeited under any civil forfeiture statute. Places on the claimant the burden of proving that the claimant is an innocent owner by a preponderance of the evidence.

Specifies that an otherwise valid claim shall not be denied on the ground that the claimant gave nothing of value in exchange for the property if: (1) the property is the claimant's primary residence; (2) depriving the claimant of the property would deprive the claimant of the means to maintain reasonable shelter in the community; (3) the property is not, and is not traceable to, the proceeds of any criminal offense; and (4) the claimant acquired his or her interest in the property through marriage, divorce, or legal separation, or the claimant was the spouse or legal dependent of a person whose death resulted in the transfer of the property to the claimant through inheritance or probate. Directs the court to limit the value of any such real property interest for which innocent ownership is recognized to the value necessary to maintain reasonable shelter. Bars the assertion of an ownership interest in contraband or other property that it is illegal to possess.

Sets forth provisions regarding partial interests in property subject to forfeiture by an innocent owner, motions to set aside forfeiture, and release of seized property.

Authorizes a claimant to petition the court to determine whether a forfeiture was constitutionally excessive. Directs the court to compare the forfeiture to the gravity of the offense. Places upon the claimant the burden of establishing, by a preponderance of the evidence at a hearing conducted by the court without a jury, that the forfeiture is grossly disproportional to the offense upon the claimant. Directs the court to reduce or eliminate a forfeiture found to be grossly disproportional as necessary to avoid a violation of the Eighth Amendment.

Authorizes the court to impose a civil fine of ten percent of the value of the forfeited property upon a claimant in any civil forfeiture proceeding in which the Government prevails if the court finds that the claimant's assertion of an interest in the property was frivolous. Specifies that such fine shall not be less than $250 nor greater than $5,000.

(Sec. 3) Amends the Federal Tort Claims Act to authorize compensation for injury or loss of goods, merchandise, or other property while in the possession of any customs or other law officer if the claimant was not convicted of a crime for which the claimant's property interest was subject to criminal forfeiture and if other specified circumstances apply. Authorizes the Attorney General to settle, for up to $50,000 in any case, a claim for damage to, or loss of, privately owned property caused by an investigative or law enforcement officer who is employed by the Department of Justice acting within the scope of his or her employment, subject to specified limitations.

(Sec. 4) Rewrites Federal judicial code provisions to provide that upon the entry of a judgment for the claimant in any proceeding to condemn or forfeit property seized or arrested under any provision of Federal law: (1) such property shall be returned forthwith to the claimant or his agent; and (2) if it appears that there was reasonable cause for the seizure or arrest, the court shall cause a proper certificate to be entered and neither the person who made the seizure or arrest nor the prosecutor shall be liable to suit or judgment on account of such suit or prosecution, nor shall the claimant be entitled to costs, except as follows. Makes the United States liable under specified circumstances, when the claimant substantially prevails, for: (1) reasonable attorney fees and costs reasonably incurred by the claimant; (2) post-judgment interest; and (3) specified interest and imputed amounts of interest in cases involving currency, other negotiable instruments, or the proceeds of an interlocutory sale. Specifies that the United States shall not be required to disgorge the value of any intangible benefits nor make any other payments to the claimant not specifically authorized by this Act.

Sets forth provisions regarding situations involving multiple claims to the same property. Directs the court to reduce the award of costs and attorney fees accordingly if the court enters judgment in part for the claimant and in part for the Government.

(Sec. 5) Rewrites code provisions regarding search warrant requirements for civil forfeiture. Authorizes the seizure of property by the Secretary of the Treasury or the United States Postal Service in the case of property involved in a violation investigated by such entity. Requires that any such seizures be made pursuant to a warrant obtained in the same manner as provided for a search warrant under the Federal Rules of Criminal Procedure, except that a seizure may be made without a warrant if: (1) a complaint for forfeiture has been filed in the U.S. district court and the court has issued an arrest warrant in rem pursuant to the Supplemental Rules for Certain Admiralty and Maritime Claims; (2) there is probable cause to believe that the property is subject to forfeiture and the seizure is made pursuant to a lawful arrest or search, or another exception to the Fourth Amendment warrant requirement would apply; or (3) the property was lawfully seized by a State or local law enforcement agency and transferred to a Federal agency.

Provides that a seizure warrant may be issued by a judicial officer in any district in which a forfeiture against the property may be filed and may be executed in any district in which the property is found or transmitted to the central authority of any foreign state for service in accordance with any treaty or other international agreement. Directs that any motion for the return of property seized be filed in the district court in which the seizure warrant was issued or in the district court for the district in which the property was seized.

Authorizes the Attorney General, if any person is arrested or charged in a foreign country in connection with an offense that would give rise to the forfeiture of property in the United States under this Act or under the Controlled Substances Act (CSA), to apply to any Federal judge or magistrate judge in the district in which the property is located for an ex parte order restraining the property subject to forfeiture for not more than 30 days, except that the time may be extended for good cause shown. Requires the application for the restraining order to: (1) set forth the nature and circumstances of the foreign charges and the basis for belief that the person arrested or charged has property in the United States that would be subject to forfeiture; and (2) contain a statement that the restraining order is needed to preserve the availability of property for such time as is necessary to receive evidence from the foreign country or elsewhere in support of probable cause for the seizure of the property.

Amends the CSA to provide for seizure by the Attorney General of property subject to forfeiture to the United States in the manner set forth in the code.

(Sec. 6) Authorizes the use of forfeited property to pay restitution to any victim of the offense giving rise to the forfeiture, including, in the case of a money laundering offense, any offense constituting the underlying specified activity.

(Sec. 7) Directs that all civil forfeitures of real property and interests in real property proceed as judicial forfeitures. Prohibits (with exceptions): (1) real property that is the subject of a civil forfeiture from being seized before entry of a forfeiture order; and (2) the owners or occupants of the real property from being evicted from, or otherwise deprived of the use and enjoyment of, real property that is the subject of a pending forfeiture action. Specifies that the filing of a lis pendens and the execution of a writ of entry for the purpose of conducting an inspection and inventory of the property shall not be considered a seizure.

Directs the Government to initiate a civil forfeiture action against real property by: (1) filing a complaint for forfeiture; (2) posting a notice of the complaint on the property; and (3) serving notice on the property owner, along with a copy of the complaint. Provides for constructive service under specified circumstances. Specifies that if real property has been posted in accordance with this Act, it shall not be necessary for the court to issue an arrest warrant in rem, or to take any other action to establish in rem jurisdiction over the property.

Prescribes requirements for and circumstances allowing the seizure of real property prior to entry of a forfeiture order.

(Sec. 8) Rewrites code provisions regarding the stay of civil forfeiture proceedings. Directs the court, upon motion of the United States, to stay such a proceeding upon determining that civil discovery will adversely affect the ability of the Government to conduct a related criminal investigation or the prosecution of a related criminal case. Directs the court, upon motion of a claimant, to stay a proceeding if the court determines that: (1) the claimant is the subject of a related criminal investigation or case; (2) the claimant has standing to assert a claim in the civil forfeiture proceeding; and (3) continuation of the forfeiture proceeding will burden the right of the claimant against self-incrimination in the related investigation or case. Authorizes the court, with respect to the impact of civil discovery, to determine that a stay is unnecessary if a protective order limiting discovery would protect the interest of one party without unfairly limiting the ability of the opposing party to pursue the civil case. Prohibits the court from imposing a protective order as an alternative to a stay if the effect of such order would be to allow one party to pursue discovery while the other party is substantially unable to do so. Authorizes the Government, in requesting a stay, in appropriate cases, to submit evidence ex parte in order to avoid disclosing any matter that may adversely affect an ongoing criminal investigation or pending criminal trial. Directs the court, whenever a civil forfeiture proceeding is stayed, to enter any order necessary to preserve the value of the property or to protect the rights of persons with an interest in the property while the stay is in effect. Specifies that a determination by the court that the claimant has standing to request a stay pursuant to this Act shall not preclude the Government from objecting to the standing of the claimant by dispositive motion or at the time of trial.

Amends the CSA to make code provisions regarding the stay of a civil forfeiture proceeding applicable to forfeitures under that Act.

(Sec. 9) Authorizes the court, upon application of the United States, to enter a restraining order or injunction, require the execution of satisfactory performance bonds, create receiverships, appoint conservators, custodians, appraisers, accountants, or trustees, or take any other action to seize, secure, maintain, or preserve the availability of property subject to civil forfeiture: (1) upon the filing of a civil forfeiture complaint alleging that the property with respect to which the order is sought is subject to civil forfeiture; or (2) prior to the filing of such a complaint if, after notice to persons appearing to have an interest in the property and opportunity for a hearing, the court determines that there is a substantial probability that the United States will prevail on the issue of forfeiture and that failure to enter the order will result in the property being destroyed, removed from the jurisdiction of the court, or otherwise made unavailable for forfeiture and that the need to preserve the availability of the property through the entry of the requested order outweighs the hardship on any party.

Makes an order entered prior to the filing of such a complaint effective for not more than 90 days, with exceptions.

Sets forth provisions regarding temporary restraining orders and consideration of information that would be inadmissible under the Federal Rules of Evidence.

(Sec. 10) Modifies code provisions regarding disclosure of matters occurring before a grand jury to allow a person who is privy to grand jury information to disclose the information to a Government attorney for use in connection with any civil forfeiture provision of Federal law.

(Sec. 11) Amends the Tariff Act of 1930 to provide that a civil forfeiture action under the customs laws must be commenced within two years after the time when the existence of the property and the involvement of the property in the alleged offense were discovered or within five years after the time when the alleged offense was discovered, whichever is later.

(Sec. 12) Rewrites code provisions regarding destruction or removal of property to prevent seizure. Provides for a fine, up to five years' imprisonment, or both, for: (1) knowingly destroying, damaging, wasting, disposing of, or transferring property before, during, or after any search for or seizure of property or otherwise taking any action for the purpose of preventing or impairing the Government's lawful authority to take such property into its custody or control or to continue holding such property; (2) knowingly and without authority from the court destroying property or attempting to do so, knowing that property is subject to the in rem jurisdiction of a U.S. court for purposes of civil forfeiture under Federal law, for the purpose of impairing or defeating the court's continuing in rem jurisdiction over the property; and (3) giving or attempting to give notice to any person in advance of a search, seizure, or execution of a seizure warrant or warrant of arrest in rem in order to prevent the authorized seizing or securing of any person or property.

(Sec. 13) Revises code provisions regarding civil forfeiture of fungible property to make such provisions inapplicable to an action against funds held by a financial institution in an interbank account unless the account holder knowingly engaged in the offense that is the basis for the forfeiture. Defines "financial institution" to include a foreign bank.

(Sec. 14) Amends the judicial code to authorize a judicial officer to prohibit a person from using the resources of the U.S. courts in furtherance of a claim in any related civil forfeiture action or a claim in third party proceedings in any related criminal forfeiture action upon a finding that such person: (1) after notice or knowledge of the fact that a warrant or process has been issued for his apprehension, in order to avoid criminal prosecution, purposely leaves U.S. jurisdiction, declines to enter or reenter the United States to submit to its jurisdiction, or otherwise evades the jurisdiction of the court in which a criminal case is pending against the person; and (2) is not confined or held in custody in any other jurisdiction for commission of criminal conduct in that jurisdiction.

(Sec. 15) Requires a foreign nation seeking to have a forfeiture or confiscation judgment registered and enforced by a U.S. district court to submit a request to the Attorney General that includes: (1) a summary of the facts of the case and a description of the proceedings that resulted in the forfeiture or confiscation judgment; (2) a certified copy of the forfeiture or confiscation judgment; and (3) an affidavit or sworn declaration establishing that the defendant received notice of the proceedings in sufficient time and that the judgment rendered is in force and is not subject to appeal.

Sets forth provisions concerning certification of such a request, jurisdiction and venue, entry and enforcement of judgment, finality of foreign findings, and currency conversion for any forfeiture or confiscation judgment requiring payment.

(Sec. 16) Authorizes the Government, if a forfeiture of property is authorized in connection with a violation of an Act of Congress and a person is charged in an indictment or information with such violation but no specific statutory provision is made for criminal forfeiture, to include the forfeiture in the indictment or information in accordance with the Federal Rules of Criminal Procedure. Directs the court, upon conviction, to order the forfeiture of the property in accordance with specified CSA procedures.

(Sec. 17) Provides for judicial sanctions up to and including dismissal with prejudice of the claim of any claimant in a civil forfeiture case or any related criminal forfeiture case under CSA when the claimant refuses to provide certain financial records located in a foreign country when it is within the claimant's capacity to waive the claimant's rights under applicable financial secrecy laws or to obtain the records.

(Sec. 18) Rewrites Immigration and Nationality Act (INA) provisions regarding the bringing in and harboring of aliens to authorize the seizure and forfeiture of the gross proceeds of a violation and any property traceable to such conveyance or proceeds. Specifies that standards under the code shall apply to civil forfeitures under the INA, with an exception for duties imposed upon the Secretary of the Treasury under the customs laws. Sets forth prima facie evidence that an alien involved in the alleged violation had not received prior official authorization to come to, enter, or reside in the United States, or that such alien remained in violation of law.

(Sec. 19) Rewrites congressional reporting requirements concerning the Department of Justice (DOJ) Assets Forfeiture Fund by the Attorney General to require submission of specified detailed reports for the prior fiscal year on: (1) total deposits to and total expenses paid from the Fund; (2) the properties placed into official use by Federal agencies; (3) the properties transferred to State and local law enforcement agencies or disposed of during the year; (4) the year-end inventory of property under seizure, but not yet forfeited; and (5) each property in the year-end inventory, not yet forfeited, with an outstanding equity of not less than $1 million. Requires that such reports include information with respect to all forfeitures under any law enforced or administered by DOJ. Allows meeting the transmittal and publication requirements by posting the reports on an Internet website maintained by DOJ for not less than two years, and by notifying the House and Senate Judiciary Committees when the reports are available electronically.

(Sec. 20) Amends the code to provide for the forfeiture of the proceeds of "specified unlawful activity" under money laundering provisions. Defines "proceeds" in cases involving: (1) illegal goods, illegal services, unlawful activities, and telemarketing and health care fraud schemes as property obtained as the result of the commission of the offense giving rise to forfeiture and any property traceable thereto, not limited to the net gain or profit realized from the offense; and (2) lawful goods or lawful services that are sold or provided in an illegal manner as the amount of money acquired through the illegal transactions resulting in the forfeiture, less the direct costs incurred in providing the goods or services (with the claimant having the burden of proof on the issue of direct costs, which shall not include any part of the overhead expenses of the entity providing the goods or services, or any part of the income taxes paid by the entity).

Directs the court, in cases involving fraud in the process of obtaining a loan or extension of credit, to allow the claimant a deduction from the forfeiture to the extent that the loan was repaid, or the debt was satisfied, without any financial loss to the victim.