CIVIL ASSET FORFEITURE REFORM ACT: OVERVIEW OF S. 1931 AND H.R. 1658, 106TH CONGRESS
CRS Report for Congress
Civil Asset Forfeiture Reform Act: Overview of
S. 1931 and H.R. 1658, 106 Congress
Updated March 29, 2000
Paul Starett Wallace Jr.
Specialist in American Public Law
American Law Division
Congressional Research Service ˜ The Library of Congress
Property owners who contest the federal seizure of their property allegedly linked to criminalth
activity would be afforded greater safeguards under S. 1931 and H.R. 1658, 106 Congress.
Civil Asset Forfeiture Reform Act: Overview of
S. 1931 and H.R. 1658, 106th Congress
Difficulties still persist for the innocent-third-party who tries to justify his/her
rights in seized property due to its association with criminal conduct. On May 4,
1999, Representative Henry Hyde introduced H.R. 1658 (Civil Asset Forfeiture
Reform Act) which, among other purposes, is designed to provide a more uniform
procedure for Federal civil forfeitures. As reported out of the House Committee on
the Judiciary on June 18, 1999, the bill's main effect would provide greater safeguards
for property owners and make the Government's job of justifying the seizure more
difficult. Among other things, it would (1) provide several protections for people at
risk of having their assets seized; (2) place the burden of proof in civil forfeiture
proceedings upon the government; (3) allow for the provision of counsel to the
indigent; (4) allow for the pre-adjudication return of property to owners upon a
showing of hardship; (5) eliminate the cost bond requirement; (6) creates a uniform
innocent owner defense; (7) allow property owners adequate time to challenge a
seizure; and (8) allow property owners to sue the government for the negligent
damage or destruction of their property.
On June 24, 1999, the House passed H.R. 1658 (Hyde-Conyers civil forfeiture
reform bill) by a vote of 375-48. On June 28, 1999, the measure was referred to the
Senate Judiciary Committee.
Following the incorporation of some of the provisions in S. 1701, S. 1931
amended H.R. 1658 which passed the Senate Judiciary Committee by a voice vote on
March 23, 2000. The full Senate passed the compromise version of H.R. 1658 by
voice vote on March 27, 2000.
Background ................................................ 1
Current law: ...............................................2
Current law (pursuant to unanswered notice):......................4
Current law: ...............................................5
Current law: Requirements for Claim and Answer....................8
Section 5: .................................................9
The Substitute Amendment (S. 1931)............................10
Civil Asset Forfeiture Reform Act: Overview of
S. 1931 and H.R. 1658, 106 Congress
As a result of the increased volume of forfeiture, numerous third parties have
been drawn into forfeiture litigation. Coupled with the complexities of forfeiture
litigation and the inconsistencies in the judicial decisions, it has been difficult for the
innocent-third-party to justify his/her rights in the seized property.
Prior to the passage of the Comprehensive Forfeiture Act of 1984, “all third
parties, whether asserting a legal or equitable basis for relief from an order of criminal
forfeiture, [were required to] pursue the remedy of petitioning the Attorney General
for remission or mitigation of forfeiture.”1 The determination of these petitions was
left entirely to the discretion of the Attorney General and was not subject to judicial
review.2 However, Congress and the Department of Justice were not comfortable
with this practice and they agreed to create a limited exception which is as follows:
“[I]f a third party can demonstrate that his interest in the forfeitured property is
exclusive of or superior to the interest of the defendant, the third party’s claim renders
that portion of the order of forfeiture reaching his interest invalid. The [Senate
Judiciary] Committee strongly agrees with the Department of Justice that such third
parties are entitled to judicial resolution of their claims.”3 As a result, Congress
provided two categories of third party, standing to petition the courts to determine
the validity of their claims to forfeited assets. A third party standing to petition the
courts exists: “first, where the petitioner had a legal interest in the property that, at
the time of the commission of the acts giving rise to the forfeiture, was vested in him
rather than the defendant or was superior to the interest of the defendant; or second,
where the petitioner acquired his legal interest after the acts giving rise to the
forfeiture but did so in the context of a bona fide purchaser for value and had no
reason to believe that the property was subject to forfeiture.”4 However, for the
majority of third parties who assert an equitable, rather than a legal basis for relief,
petitioning the Attorney General for remission and mitigation remains the exclusive5
1S.Rept. 98-225, 98th Cong. 1st Sess., reprinted in 1984 U.S. Code Cong. & Admin. News
3Id. at 3391.
4Id. at 3392.
5Id. at 3391.
Similar to H.R. 1965, which was introduced in the 105th Congress, H.R. 1658
was created to make federal civil forfeiture procedures more equitable for property
owners in general and in addition give innocent property owners a process for6
recovering their property and make themselves whole.
On June 24, 1999, the House passed H.R. 1658 by a vote of 375-48.7 The
Senate passed an amended version of H.R. 1658 on March 27, 2000. This report sets
forth the provisions of H.R. 1658 and then describes the amendments which formed
Section 1 States its title: Civil Asset Forfeiture Reform Act.
Section 2 Creation of General Rules Relating to Civil Forfeiture Proceedings. This
section in general sets out an extensive addition to Title 18 of the United States
Code8 regarding the creation of general rules relating to civil forfeiture proceedings.
Section 981 of Title 18 of the United States Code would be amended “by
inserting after subsection (i) the following: (j)(1)(A) In any nonjudicial civil
forfeiture proceeding under a civil forfeiture statute, with respect to which the
agency conducting a seizure of property must give written notice to interested
parties, such notice shall be given as soon as practicable and in no case more than
60 days after the later of the date of the seizure or the date the identity of the
interested party is first known or discovered by the agency, except that the court may
extend the period for filing a notice for good cause shown. (B) A person entitled to
written notice in such proceeding to whom written notice is not given may on motion
void the forfeiture with respect to that person’s interest in the property, unless the
agency shows—(i) good cause for the failure to give notice to that person; or (ii) that
the person otherwise had actual notice of the seizure. (C) If the government does not
provide notice of a seizure of property in accordance with subparagraph (A), it shall
return the property and may not take any further action to effect the forfeiture of
Current law: Once the decision has been made with regard to proceeding with the
administrative forfeiture, an unjustified delay by the seizing agency may later be the
basis for a finding that a claimant has been denied his/her due process right to a9
hearing within a reasonable time on the forfeitability of the seized property.
6See H.Rept. 98-358, 105th Cong. 1st Sess. 27 (1997).
7145 Cong. Rec. H4878 (daily ed. June 24, 1999).
8Title 18 of the United States Code concerns crimes and criminal procedure.
9See United States v. Certificate of Deposit No. 8101730026, First National Bank of Omaha,
1339 (11 Cir. 1994); United States v. $23,407.69 in U.S. Currency, 715 F.2d 162, 165 (5
(2)(A) Any person claiming property seized in a nonjudicial forfeiture
proceeding may file a claim with the appropriate official after the seizure. (B) A
claim under subparagraph (A) may not be filed later than 30 days after—(i) the date
of final publication of notice of seizure; or (ii) in the case of a person entitled to
written notice, the date that notice is received. (C) The claim shall state the
claimant’s interest in the property.
Current law: A claim in a civil forfeiture action must be filed within ten days after
the execution of process, and an answer must be filed within twenty days after the
filing of a claim.10
(D) Not later than 90 days after a claim has been filed, the Attorney General
shall file a complaint for forfeiture in the appropriate court or return the property,
except that a court in the district in which the complaint will be filed may extend the
period for filing a complaint for good cause shown or upon agreement of the parties.
Current law: Formal judicial forfeiture proceedings are initiated by the filing of
a complaint against the property pursuant to the Federal Rules of Civil Procedure
Supplemental Rule C(2). Rule C(2) provides that complaints in civil forfeiture actions
must be verified. The purpose of the verification requirement is to cause an
authorized government official to satisfy himself that the allegations in the complaint11
are true, based either on personal knowledge or on information and belief. A
complaint for civil forfeiture should consist of the following facts, statements, and1213
allegations: (1) the basis for the court’s jurisdiction; (2) a description of the
property that is the subject of the forfeiture proceeding, including its appraised value,
and, if the action began as an administrative, a statement that a claim and cost bond
were filed; (3) a statement that the property is or will be within the judicial district
during the pendency of the action; (4) the place of seizure and whether it took place
on land or navigable water; (5) the date of seizure and the identity of the seizing
agency; (6) the circumstances from which the forfeiture claim arises; (7) an allegation
that the property has been forfeited to the United States; and (8) a request for such
relief as the court deems proper.
Claimants must file claims with the clerk of the court on or before a date named
in the notice. For cause shown, the court may enlarge the time within which claims
may be filed.
(E) If the government does not file a compliant for forfeiture of property in
accordance with subparagraph (D), it shall return the property and may not take any
further action to effect the forfeiture of such property.
10Supplemental Rules For Certain Admiralty And Maritime Claims, Federal Rules of Civil
Procedure (Supplemental Rule C(6)).
11See United States v. Banco Cafetero International, 608 F. Supp. 1394, 1400 (S.D.N.Y.
12F.R.C.P., Supplemental Rules C(2) and E(2)(a).
1328 U.S.C. §§ 1345, 1355, 1395 (1994).
Current effect: The government’s reasons for postponing judicial forfeiture
proceedings is generally the critical factor in the determination of whether the
claimant has been denied the right to due process. The reason most often offered and
found acceptable are based on related criminal investigations and proceedings14
(F) Any person may bring a claim under subparagraph (A) without posting
bond with respect to the property which is the subject of the claim.
(3)(A) In any case where the Government files in the appropriate United States
district court a compliant for forfeiture of property, any person claiming an interest
in the seized property may file a claim asserting such person’s interest in the
property within 30 days of service of the Government complaint or, where
applicable, within 30 days of alternative publication notice.
(B) A person asserting an interest in seized property in accordance with
subparagraph (A) shall file an answer to the Government’s complaint for forfeiture
within 20 days of the filing of the claim.
Current law (pursuant to unanswered notice): If no one claims the seized
property and files the necessary cost bond within twenty days, the seizing agency may
declare the property forfeited administratively to the United States and dispose of it15
according to law.
(4)(A) If the person filing a claim is financially unable to obtain representation
by counsel, the court may appoint counsel to represent that person with respect to
(B) In determining whether to appoint counsel to represent the person filing the
claim, the court shall take into account such factors as—
(i) the claimant’s standing to contest the forfeiture; and
(ii) whether the claim appears to be made in good faith or to be frivolous.
(C) The court shall set the compensation for that representation, which shall be
equivalent to that provided for court-appointed representation under section 3006A
of this title, and to pay such cost [that] are authorized to be appropriated [and] such
sums as are necessary as an addition to the funds otherwise appropriated for the
appointment of counsel under such section.
14United States v. One Rural Lot, 739 F.Supp. 74, 77 (D. Puerto Rico (1990) (Both civil
forfeiture proceedings and criminal actions can proceed simultaneously or consecutively
because a criminal case is an entirely separate action from a civil forfeiture proceeding);
United States v. U.S. Treasury Bills Totaling $160,916.25 and U.S. Currency Totalingth
$2,378.75, 750 F.2d 900, 902 (11 Cir. 1985) (per curiam)(holding that a 14-month delay
was not unreasonable because of the government’s “diligent pursuit” of the pending criminal
proceeding); United States v. Eighteen Thousand Five Hundred and Five Dollars and Tenth
Cents, 739 F.2d 354, 356 (8 Cir. 1984)(holding that the delay was justified because the
property was being held as evidence for a state criminal proceeding).
1519 U.S.C. § 1609 (1994).
Current law: Indigents are entitled to appoint counsel to assist them in criminal
forfeiture cases16, but not in civil forfeiture cases.17
(5) In all suits or actions brought under any civil forfeiture statue for the civil
forfeiture of any property, the burden of proof is on the United States Government
to establish by clear and convincing evidence, that the property is subject to
Current law: Reasonable grounds to believe that property constitutes proceeds
derived from an illegal activity may be based upon the government’s showing of
probable cause. Probable cause for forfeiture is generally defined as a reasonable
ground for belief of guilt, supported by less than prima facie proof but more than
Probable cause for forfeiture may be shown by direct evidence, such as19
eyewitness testimony or a claimant’s admission against interest.
Circumstantial evidence may also be used to satisfy the probable cause
requirement in civil forfeiture cases.20 For example probable cause to believe that21
cash was or would have been used in exchange for illegal drugs may be established
by a showing that it was discovered in large amounts along with drug paraphernalia22
and other indications of drug activity or dealing. Also, reasonable grounds to
believe that property constitutes proceeds derived from an illegal drug transaction23
may be proved by a showing that the subject items were purchased (usually in cash)
when the buyer had no known source of income except drug trafficking.24 Disclosure
1618 U.S.C. § 3006A(c) (1994); Lewis v. Casey, 518 U.S. 343, 371 (1996)(Thomas, J.
concurring); United States v. Martinson, 809 F.2d 1364, 1370 (9th Cir. 1987).
17United States v. Sardone, 94 F.3d 1233, 1236 (9th Cir. 1996) see also United States v.
Michelle’s Lounge, 39 F.3d 684, 698 (7th Cir. 1994).
18See United States v. 1982 Yukon Delta Houseboat, 774 F.2d 1432, 1434 (9th Cir. 1985);
United States v. Four Million Two Hundred Fifty-Five Thousand, 762 F.2d 895, 903 (11thth
Cir. 1985); United States v. One 1979 Mercury Cougar XR-7, 666 F.2d 228, 230 n.3 (5 Cir.
19See United States v. $49,576.00 U.S. Currency, 116 F.3d 425, 427 (9th Cir. 1997); Ted’s
Motors v. United States, 217 F.2d 777, 780 (8th Cir. 1954).
20See, e.g., United States v. $93,685.61 in U.S. Currency, 730 F.2d 571, 572 (9th Cir. 1984),
cert. denied, 469 U.S. 831 (1984).
2121 U.S.C. § 881(a)(6) (1994).
22United States v. $93,865.61 in U.S. Currency, 730 F.2d at 572; United States v. Twenty To
Thousand, Two Hundred Eight Seven Dollars ($22,287) United States Currency, 709 F.2d
2321 U.S.C. § 881 (a)(6) (1994).
24United States v. Certain Real Property Located at Route 3, 568 F.Supp. 434, 436 (W.D.
Ark. 1983); United States v. $131,602.00 in U.S. Currency, 563 F.Supp. 921, 923 (S.D.N.Y.
of the taxpayer’s (wrongdoer) recent tax returns pursuant to 26 U.S.C. §
(6)(A) An innocent owner’s interest in property shall not be forfeited under any
civil forfeiture statute.
(B) With respect to a property interest in existence at the time the illegal
conduct giving rise to forfeiture took place, the term `innocent owner’ means an
(i) did not know of the conduct giving rise to forfeiture; or
(ii) upon learning of the conduct giving rise to the forfeiture, did all
that reasonably could be expected under the circumstances to
terminate such use of the property.
(C) With respect to a property interest acquired after the conduct giving rise to
the forfeiture has taken place, the term `innocent owner' means a person who, at the
time that person acquired the interest in the property, was--
(i)(I) a bona fide purchaser or seller for value (including a purchaser
or seller of goods or services for value); or
(II) a person who acquired an interest in property through probate
or inheritance; and
(ii) at the time of the purchase or acquisition reasonably without
cause to believe that the property was subject to forfeiture.
(7) For the purpose of paragraph (6)--
(A) ways in which a person may show that such person did all that
reasonably can be expected may include demonstrating that such person,
to the extent permitted by law--
(i) gave timely notice to an appropriate law enforcement agency of
information that led the person to know the conduct giving rise to a
forfeiture would occur or has occurred; and
(ii) in a timely fashion revoked or attempted to revoke permission for
those engaging in such conduct to use the property or took
reasonable actions in consultation with a law enforcement agency to
discourage or prevent the illegal use of the property; and
(B) in order to do all that can reasonably be expected, a person is not
required to take steps that the person reasonably believes would be likely
to subject any person(other than the person whose conduct gave rise to the
forfeiture) to physical danger.
Current law: Congress crafted an "innocent owner" defense to forfeiture in 21
U.S.C. §§ 881(a)(4), (a)(6), and (a)(7) (1994). The "innocent owner" defense under
(a)(6) and (7) are the same: no owner's interest in property may be forfeited "by
reason of any act or omission established by that owner to have been committed or
omitted without the knowledge or consent of that owner."25 Congress later added the
innocent owner defense of subsection 881(a)(4), which is somewhat different: no
owner's interest in a "conveyance" shall be forfeited "by reason of any act or omission
1982); cf. 21 U.S.C. § 853(d) (1994)(rebuttable presumption as to forfeitable drug proceeds
in a criminal forfeiture trial).
2521 U.S.C. §§ 881(a)(6) and (a)(7) (1994).
established by that owner to have been committed or omitted without the knowledge,
consent, or willful blindness of the owner."26 Paragraphs (6) and (7) specifically
recognize an owner's innocence as a defense to the forfeiture of his interest in the
property if he did not know of or consent to the illegal conduct. The statutory
defense, which is available to "any person with a recognizable legal or equitable
interest in the property seized,"27 must be established by the owner.28 These statutory
provisions appear to offer broader protection than the Calero-Toledo v. Pearson29
Yacht Leasing Co. claimant's defense because it does not require the owner to show
that he/she "... did all that [he/she] reasonably could to avoid having [his/her] property
put to an unlawful use.30
(8) As used in this subsection:
(1) The term civil forfeiture statute means any provision of Federal law
(other than the Tariff Act of 1930 or the Internal Revenue Code of 1986) providing
for the forfeiture of property other than as a sentence imposed upon conviction of
a criminal offense.
Current law: Forfeiture procedures apply to any civil forfeiture action brought
under title 18 U.S.C. § 1 et seq., the Controlled Substances Act, or the Immigration
and Naturalization Act.
(2) The term `owner' means a person with an ownership interest in the specific
property sought to be forfeited, including a leasehold, lien, mortgage, recorded
security device, or valid assignment of an ownership interest. Such term does not
include— (i) a person with only a general unsecured interest in, or claim against, the
property or estate of another; (ii) a bailee unless the bailor is identified and the
bailee shows a colorable legitimate interest in the property seized; or (iii) a nominee
who exercises no dominion or control over the property.
Current law: No comparable provision found.
(k)(1) A claimant under subsection (j) is entitled to immediate release of seized
property if-- (A) the claimant has a possessory interest in the property; (B) the
continued possession by the United States Government pending the final disposition
of forfeiture proceedings will cause substantial hardship to the claimant, such as
2621 U.S.C. § 881(a)(4)(C) (1994). Judicial interpretations of these statutory (§§ 881(a)(4),
(a)(6), and (a)(7) defenses have not been consistent (see CRS Report 96-869, "Crime and
Forfeiture: The Innocent Third Party", by P. Wallace): one notable difference in the proposed
bill is that it would create an automatic "innocent owner" defense for people who took
reasonable measures to make sure their property was not used illegally.
27Joint Explanatory Statement of Titles II and III, H.Rept. 95-1193, 95th Cong., 2d Sess.
(1978), reprinted in 1978 U.S. Code Cong. & Admin. News 9522.
2821 U.S.C. § 881 (a)(6) and (a)(7) (requiring the owner to establish his/her lack of awareness
or involvement) see also 21 U.S.C. § 885 (a)(1) (1994).
29416 U.S. 663, 690 (1974).
preventing the functioning of a business, preventing an individual from working, or
leaving an individual homeless; and (C) the claimant's likely hardship from the
continued possession by the United States Government of the seized property
outweighs the risk that the property will be destroyed, damaged, lost, concealed, or
transferred if it is returned to the claimant during the pendency of the proceeding.
Current law: For property owners to get their property back, they must overcome
tremendous procedural impediments such as posting a cost bond of $5,000 or ten
percent of the value of the property seized, whichever is less, but in no case less than
$25031 and proving that their property is "innocent" after probable cause has been
shown. If no one claims the seized property and files the necessary cost bond within
twenty days, the seizing agency may declare the property forfeited administratively
to the United States and dispose of it according to law.32
(2) A claimant seeking release of property under this subsection must request
possession of the property from the appropriate official, and the request must set
forth the basis on which the requirements of paragraph (1) are met.
(3) If within 10 days after the date of the request the property has not been
released, the claimant may file a motion or complaint in any district court that would
have jurisdiction of forfeiture proceedings relating to the property setting forth--(A)
the basis on which the requirements of paragraph (1) are met; and (B) the steps the
claimant has taken to secure release of the property from the appropriate official.
(4) If a motion or complaint is filed under paragraph (3), the district court shall
order that the property be returned to the claimant, pending completion of
proceedings by the United States Government to obtain forfeiture of the property, if
the claimant shows that the requirements of paragraph (1) have been met. The court
may place such conditions on release of the property as it finds are appropriate to
preserve the availability of the property or its equivalent for forfeiture. (5) The
district court shall render a decision on a motion or complaint filed under paragraph
(3) no later than 30 days after the date of the filing, unless such 30-day limitation
is extended by consent of the parties or by the court for good cause.
Current law: Requirements for Claim and Answer. The requirements
for a claim33 in a civil forfeiture action, like the complaint, must be verified on oath
or solemn affirmation.34 It must set forth the interest in the property by virtue of
which the claimant seeks its restitution and asserts the right to defend the forfeiture
action.35 If the claim is made on behalf of the claimant by agent, bailee, or attorney,
31See 19 U.S.C. § 1608 (1994).
32See 19 U.S.C. § 1609 (1994).
33Supplemental Rules for Certain Admiralty and Maritime Claims, Federal Rules of Civil
Procedure (Supplemental Rule C(6)).
34The Supreme Court has noted that, whenever possible, it should be the principal who verifies
the claim, rather than an agent, who may "... from his want of knowledge, be the dupe of
cunning and fraud." The Schooner Adeline and Cargo, 13 U.S.(9 Cranch) 244, 285 (1815).
35Supplemental Rule C (6).
it must also contain a statement indicating that he/she has authority to act for the
The Supplemental Rules do not establish any particular requirement as to content
of the answer in a civil forfeiture case, and therefore the matter is generally
determined by Rule 8 of the Federal Rules of Civil Procedure.37
Section 3: Section 3 would repeal 21 U.S.C. § 888. This statute, which contains
a filing deadline in forfeiture cases involving automobiles used to facilitate drug
trafficking offenses, would be rendered unnecessary by the general purpose filing
deadline included in 18 U.S.C. § 983.
Section 4: Provides compensation for damage to seized property. If claims for
damage or loss to seized property caused by a law enforcement officer cannot be
settled under the Federal Tort Claims Act, the Attorney General may settle the claim38
for not more than $50,000.
Section 5: Upon entry of a judgment for the claimant in a proceeding to condemn
or forfeit seized property, the United States shall be liable for postjudgment interest39
pursuant to 28 U.S.C. § 1961 (Interest).
The United States would not be liable for prejudgment interest, except in cases
involving currency, proceeds of an interlocutory sale or other negotiable
37See Supplemental Rule A. One difference between forfeiture proceedings and other civil
actions is that no one has the right to answer a forfeiture complaint unless he/she has first put
himself/herself in the position of a claimant. See The Antoinetta, 49 F. Supp. 148, 151 (E.D.
Pa. 1943), aff'd, 153 F.2d 138 (3d Cir. 1945), cert. Denied, 328 U.S. 863 (1946).
38The Federal Tort Claims Act is a waiver of sovereign immunity, providing general authority
for tort suits against the government. Section 2680, however, creates several exceptions to
this broad waiver of sovereign immunity, including one for damages resulting from the
detention of goods. See Bazuaye v. United States, 83 F.3d 482, 486-87 (D.C. Cir. 1996) (suit
could be brought under the Federal Tort Claims Act to seek money damages for alleged
negligence and intentional interference with rights concerning government's seizure of bailth
money); Kurinsky v. United States, 33 F.3d 594, 598 (6 Cir. 1994) (the exception to waiver
of statutory immunity of the United States for claims arising from seizure of property by
F.B.I. agents were not related to the collection of taxes or custom duties which 28 U.S.C. §th
2680(c) is limited to); But see Haverson v. United States, 972 F.2d 654 (972 F.2d 654 (5
Cir. 1992) (§ 2680(c) exception is not limited to losses resulting from detention of goods and
merchandise by customs or tax officers). T. Wright, Discussion of historical background of
"other law-enforcement officer" and federal court rulings concerning the exception of section
L. J. 707 (1994-1995).
39Calabro v. United States, 830 F. Supp. 175, 179 (E.D. New York 1993)( claimant was
entitled to the return of money and interest from the date of judgment entered ten years
instruments.40 The United States would surrender to the claimant any funds
representing: (A) interest paid to the United States from the date of seizure of the
property that resulted from the investment of the property in an interest-bearing
account; and (B) any period during which no interest was paid, but would be paid
based upon an imputed amount of interest that the currency, proceeds, or
instruments would have earned.
Section 6: Provides that in general, the applicability of these amendments would
apply to forfeiture proceedings commenced on or after the date of the enactment of
The Substitute Amendment (S. 1931)
On March 23, 2000, Senators Hatch, Leahy, Sessions, and Schumer offered a
substitute amendment to H.R. 1658 which the Senate Judiciary Committee approved
by a voice vote. In essence, S. 1931 (Hatch/Leahy) was combined with suggestions
from Senators Sessions/Schumer (S. 1701) to form the new compromise measure
(H.R. 1658) which the full Senate passed by voice vote on March 27, 2000.41 The
new measure will go back to the House for floor action. Among the most significant
changes made by the Hatch/Leahy/Sessions/Schumer substitute amendment are as42
1.Burden of Proof. The substitute amendment puts the burden of proof on
the government to prove that the property to be seized was connected to
a crime by a preponderance of the evidence. H.R. 1658 establishes a clear
and convincing evidence burden of proof for the government. Under the
substitute amendment, the burden of proof for the government and the
claimant would be the same.43
2.Cost Board. The substitute amendment and H.R. 1658 provide for the
elimination of the “cost bond”. If the court finds that the claimant’s
assertion of an interest in the property was frivolous, the court may impose
a civil fine on the claimant of an amount equal to 10 percent of the value of
the forfeited property, but in no event shall the fine be less than $250 or
greater than $5,000. Under the current law, a property owner who seeks
40See United States v. $277,000 U.S. Currency, 69 F.3d 1491, 1492 (9th Cir.1995); United
States v. Giovanelli, 853 F. Supp. 88, 93 (S.D. New York 1994) (petitioner was entitled
prejudgment interest at prime interest rate and postjudgment interest to compensate for any
additional costs incurred following judgment).
41146 Cong. Rec. S 1762 (daily ed. March 27, 2000).
42Id. at 1761.
43The claimant would have the burden of proving that he/she is an innocent owner by a
preponderance of the evidence.
to recover his property after it has been seized by the government must pay
for the privilege by posting a bond with the court.44
3.Legal Assistance and Attorney Fees. The substitute amendment permits
courts to authorize counsel to represent an indigent claimant only if the
claimant is already represented by a court-appointed attorney in connection
with a related federal criminal case. Under H.R. 1658, if the person filing
a claim is financially unable to obtain representation by counsel, the court
may appoint counsel to represent that person with respect to the claim. For
claimants who are not provided with counsel, the substitute amendment
allows for the recovery of reasonable attorney fees and other costs if they
substantially prevail on their claim.
4.Filing Deadlines. Under the current law, a claim in a civil forfeiture action
must be filed within ten days after the execution of process, and an answer
must be filed within twenty days after the filing of a claim. Under H.R.
1658 and the substitute amendment, the current law is retained but both
extend the claimant’s time to file a claim following the commencement of
an administrative or judicial forfeiture action to 30 days. The amendment
also codifies current Department of Justice policy with respect to the time
period for sending notice of seizure, and establishes a 90-day period for
filing a complaint.
5.Release of Property for Hardship. The amendment would allow the
property owner to hold on to his property pending the final disposition of
the case, if he can show that continued possession by the government will
cause the owner substantial hardship, such as preventing him from working,
and this hardship outweighs the risk that the property will be destroyed or
concealed if returned to the owner during the pendency of the case. H.R.
1658 has a similar provision, however unlike H.R. 1658, the substitute
adopts the primary safeguards that property owners must have significant
ties to the community to provide assurance that the property will not
disappear, and if certain property, such as currency and property
particularly suited for use in illegal activities are involved, the hardship
provision would not apply and the property would not be returned.
6.Criminal Proceeds. In cases involving lawful goods or lawful services that
are sold or provided in an illegal manner, the term “proceeds” is defined in
the amendment to mean the amount of money acquired through the illegal
transaction resulting in the forfeiture, less the direct costs incurred in
providing the goods or services. An exception is made for cases involving
certain health care fraud schemes, since it would allow those who provide
unnecessary services to deduct the cost of those unnecessary services. The
amendment extends the government’s authority to forfeit criminal proceeds
under the civil asset forfeiture laws.
4419 U.S.C. § 1608 (1994).
7.Fugitive Disentitlement. The substitute amendment provides a basis for the
judge to disallow a civil asset forfeiture claim by a fugitive, while leaving
discretion to allow such claim in the interest of justice. There is no
comparable provision in H.R. 1658.