United States. Congress. House. Committee on the J.

Civil Asset Forfeiture Reform Act : hearing before the Committee on the Judiciary, House of Representatives, One Hundred Fourth Congress, second session, on H.R. 1916 ... July 22, 1996 online

. (page 14 of 37)
Online LibraryUnited States. Congress. House. Committee on the JCivil Asset Forfeiture Reform Act : hearing before the Committee on the Judiciary, House of Representatives, One Hundred Fourth Congress, second session, on H.R. 1916 ... July 22, 1996 → online text (page 14 of 37)
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Sec. 306. Forfeiture of Proceeds of Certain Foreign Crimes

Sec. 307. Forfeiture of Property Used to Facilitate Foreign Drug
Crimes

Sec. 308. Forfeiture for Violations of Section 60501

Sec. 309. Criminal Forfeiture for Money Laundering Conspiracies

Sec. 310. Seizure of Vehicles with Concealed Compartments Used
for Smuggling

Sec. 311. Forfeiture of the Instrumentai*ti-es of Terrorism,
Telemarketing Fraud and Other Offenses

Sec. 312. Forfeiture of Vehicles Used for Gun Running

Sec. 313. Forfeiture of Criminal Proceeds Transported in
Interstate Commerce

Sec. 314. Forfeiture of Proceeds of Federal Food, Drug, and
Cosmetic Act Violations

Sec. 315. Summary Destruction of Explosives Subject to Forfeiture

Sec. 316. Archeological Resources Protection Act

TITLE IV - MISCELLANEOUS AND MINOR AND TECHNICAL AMENDMENTS

Sec. 401. Use of Forfeited Funds to Pay Restitution to Crime
Victims and Regulatory Agencies

Sec. 402. Enforcement of Foreign Forfeiture Judgment

Sec. 403. Minor and Technical Amendments Relating to 1992
Forfeiture Amendments



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Sec. 404. Civil Forfeiture of Coins and Currency in Confiscated *;
Gambl Ing Devices |

Sec. 405. Drug Paraphernalia Technical Amendments

Sec. 406. Authorization to Share Forfeited Property with
Cooperating Foreign Governments.

Sec. 407. Forfeiture of Counterfeit Paraphernalia

Sec. 408. Closing of Loophole to Defeat Forfeiture Through
Bankruptcy

Sec. 409. Statute of Limitations for Civil Forfeiture Actions

Sec. 410. Assets Forfeiture Fund and Property Disposition

Sec. 411. Clarification of 21 U.S.C. § 877

Sec. 412. Certificate of Reasonable Cause

Sec. 413. Conforming Treasury and Justice Funds

Sec. 414. Disposition of Property Forfeited Under Customs Laws

Sec. 415. Technical Amendments Relating to Obliterated Motor
Vehicle Identification Numbers

Sec. 416. Fugitive Disentitlement ■ — -

Sec. 417. Admissibility of Foreign Business Records

Sec. 418. Amendment to Financial Institutions Reform and Recover
Act of 1989

Sec. 419. Prospective Application

TITLE I - CIVIL FORFEITDRE

Subtitle A - Administrative Forfeitures

SEC. 101. TIME FOR FILING CLAIM; WAIVER OF COST BOND

(a) IN GENERAL. - Section 608 of the Tariff Act of 1930 (19

U.S.C. § 1608) is amended to read as follows:



"SEC. 608. Seizures; Claims; Judicial condemnation.



I



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" (a) Any person claiming seized property may file a
claim with the appropriate customs officer at any time after
the seizure, provided that such claim must be filed not
later than 30 days after the final publication of notice of
seizure. The claim shall be signed by the claimant under
penalty of perjury and shall set forth the nature and extent
of the claimant ' s ownership interest in the property and how
and when it was acquired.

" (b) Any claim filed pursuant to subsection (a) shall
include the posting of a bond to the United States in the
sum of $5,000 or 10 percent of the value of the claimed
property, whichever is lower, but not less than $250, with
sureties to be approved by the customs officer with whom the
claim is filed. No bond shall be required, however, if the
claim is' filed in forma pauperis WTtfh" all supporting
information as required by the seizing agency. The Attorney
General and the Secretary of the Treasury, with respect to
matters within their respective jurisdiction, shall have the
authority to waive or reduce the bond requirement in any
category of cases where he or she determines that the
posting of a bond is not required in the interests of
justice.

" (c) Upon the filing of a claim pursuant to this
section, the customs officer shall transmit the claim, with
a duplicate list and description of the articles seized, to
the United States attorney for a district in which a



124



forfeiture action could be filed pursuant to title 28,
United States Code, Section 1355(b), who shall proceed to a
condemnation of the merchandise or other property in the
manner prescribed in the Supplemental Rules for Certain
Admiralty and Maritime Claims."
(b) CONFORMING AMENDMENT. - Section 609 of the Tariff Act of

1930 (19 U.S.C. § 1609) is amended by striking "twenty" and

inserting "30" .

SEC. 102. JURISDICTION AND VENUE.

(a) TRANSMITTAL TO THE U.S. ATTORNEY. - Section 610 of the
Tariff Act of 1930 (19 U.S.C. § 1610) is amended by striking "the
district in which the seizure was made" and inserting "a district
in which a forfeiture action could be filed pursuant to title
28, United States Code, Section 1355(b)".

(b) ADMIRALTY RULES. - The Supplemental Rules for Certain
Admiralty and Maritime Claims are amended -

(1) in Rule E(3), by inserting the following at the end of
paragraph (a) : "This provision shall not apply in forfeiture
cases governed by 28 U.S.C. § 1355 or any other statute providing
for service of process outside of the district."; and

(2) in Rule C(2), by inserting the following after "that it
is within the district or will be during the pendency of the
action.": "If the property is located outside of the district,
the complaint shall state the statutory basis for the court's
exercise of jurisdiction over the property" .



125



SEC. 103. JUDICIAL REVIEW OF ADMINISTRATIVE FORFEITURES.

Section 609 of the Tariff Act of 1930 (19 U.S.C. § 1609) is

amended by adding the following new subsection:

" (d) Where no timely claim to the seized property is
filed, and a declaration of forfeiture is entered pursuant
to this section by the seizing agency, the declaration shall
be final and not subject to judicial review under any other
provision of law except as follows: If a claimant, upon the
filing of an action to set aside a declaration of forfeiture
under this section, establishes by a preponderance of the
evidence 1) that the seizing agency failed to comply with
the notice requirements of Section 607, and 2) that the
claimant had no other notice of the forfeiture proceeding
within the period for filing a claim, the district court
shall order that the declaration Qf_j£.orf eiture be set aside
pending the filing of a claim and posting of a bond and the
transmittal of the claim to the United States Attorney in
accordance with Section 608. An action to set aside a
declaration of forfeiture under this section must be filed
within 2 years of the last date of publication of notice of
the forfeiture of the property."

SEC. 104. JUDICIAL FORFEITURE OF REAL PROPERTY

Section 610 of the Tariff Act of 1930 {19 U.S.C. 1610) is

amended by adding at the end the following sentence.



35-668 96-5



126



"Notwithstanding any other provision of law, all forfeitures
of real property and interests in real property shall proceed as
judicial forfeitures as provided in this section."
SEC. 105. PIIESERVATION OF ARRESTED REAL PROPERTY

Rule E of the Supplemental Rules for Certain Admiralty and
Maritime Claims is amended by adding the following new subsec-
tion:

" (10) Preservation of Property. Whenever property is at-
tached or arrested pursuant to the provisions of Rule
E(4) (b) that permit the marshal or other person having the
warrant to execute the process without taking actual posses-
sion of the property, and the owner or occupant of the
property is thereby permitted to remain in possession, the
court, on the motion of any party or on its own motion,
shall enter any order necessary to-p*«6erve the value of the
property, its contents, and any income derived therefrom,
and to prevent the destruction, removal or diminution in
value of such property, contents and income."
SEC. 106. AMENDMENT TO FEDERAL TORT CLAIMS ACT EXCEPTIONS

Section 2680(c) of title 28, United States Code, is amended
to read as follows:

" (c) Any claim arising in respect of the assessment or
collection of any tax or customs duty, or the detention of
any goods, merchandise, or other property by any law en-
forcement officer performing any official law enforcement
function, except that the provisions of this chapter and

8



127



section 1346 (b) of this title shall apply to any claim based
on the negligent destruction, injury, or loss of goods,
merchandise, or other property while in the possession of
any law enforcement agency if the property was seized for
the purpose of forfeiture and no forfeiture proceedings are
pending against the property.

SEC. 107. PRE-JUDGMENT INTEREST.

(a) IN GENERAL. - Section 2465 of title 28, United States

Code, is amended by -

(1) designating the present matter as subsection (a) ; and

(2) inserting the following new subsection:

" (b) Interest. Upon entry of judgment for the claimant
in any proceeding to condemn or forfeit property seized or
arrested under any Act of Congress, the United States shall
be liable for post- judgment interesi^^^as set forth in section
1961 of this title. The United States shall not be liable
for pre-judgment interest, except that in cases involving
currency or other negotiable instruments, the United States
shall disgorge to the claimant any funds representing inter-
est actually paid to the United States from the date of
seizure or arrest of the property that resulted from the
investment of the property in an interest -bearing account or
instrument. 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 subsection."



128



(b) EFFECTIVE DATE. - The amendment made by subsection (a)

shall apply to any judgment entered after the date of enactment

of this Act.

Subtitle B - Judicial Forfeitures

SEC. 121. TRIAL PROCEDURE FOR CIVIL FORFEITURE

(a) IN GENERAL. - Chapter 46 of title 18, United States

Code, is amended by inserting the following new section:
"§ 987. Judicial forfeiture proceedings

"(a) Complaint. The Attorney General may file a civil
forfeiture complaint in the manner set forth in the Supple-
mental Rules for Certain Admiralty and Maritime Claims. In
cases where the applicable law authorizes the institution of
civil and criminal forfeiture proceedings in connection with
an offense, the Attorney General shall have the discretion
to determine whether to file a ci vil complaint under this
section, a criminal complaint, indictment or information
including a forfeiture count in accordance with the applica-
ble criminal forfeiture statute, or both civil and criminal
actions. Where a civil complaint and a related criminal
complaint, indictment or information are pending at the same
time, they shall be considered a single, unified proceeding
for purposes of the Double Jeopardy Clause of the Fifth
Amendment .

"(b) Time for filing complaint. (1) If property is
seized and a claim is filed pursuant to section 608 of the
Tariff Act of 1930 (19 U.S.C. § 1608), or if the seizure is

10



129



referred to the Attorney General pursuant to section 610 (19
U.S.C. § 1610), the Attorney General shall determine as soon
as practicable whether a forfeiture action should be insti-
tuted.

" (2) If the Attorney General determines not to insti-
tute a forfeiture action, he or she shall so advise the
seizing agency. A decision not to institute a forfeiture
action shall not preclude the seizing agency from transfer-
ring or returning the seized property to a state or local
law enforcement authority for appropriate forfeiture action
in accordance with state law. Nor shall a decision not to
institute a forfeiture action imply that the action of the
seizing agency in seizing the property was in any way im-
proper.

"(3-) If the Attorney General _det.ermines that a forfei-
ture action should be instituted, he or she shall institute
such action as soon as practicable, taking into account the
status of any criminal investigation to which the forfeiture
action may be related.

" (c) Claim and answer. A claim and answer to a civil
forfeiture complaint shall be filed in accordance with
Rule C of the Supplemental Rules for Certain Admiralty and
Maritime Claims and shall set forth the nature and extent of
the claim.ant ' s ownership interest in the property, the time
and circumstances of the claimant's acquisition of the
interest in the property, and any additional facts support -

11



130



ing the claimant's standing to file a claim challenging the
forfeiture action.

"(d) Standing. The claimant shall have the burden of
establishing standing to file the claim by virtue of an
ownership interest, as defined in section 983(c) of this
title, in the specific property subject to forfeiture. The
assertion in the claim regarding the nature and extent of
the claimant's ownership interest in the property shall be
sufficient to establish standing unless the government, at
or prior to trial, files a motion to dismiss the claim for
lack of standing. Upon the filing of such motion by the
government, the court shall conduct a hearing, in the manner
provided in Rule 43(e), Federal Rules of Civil Procedure,
and shall determine pre-trial whether the claimant has
established, by a preponderance of — Ctre evidence, that he or
she has the requisite ownership interest in the property to
challenge the forfeiture action. If the court determines
that a claimant lacks standing, it shall dismiss the claim
with prejudice and enter a final judgment as to that claim-
ant .

"(e) Burden of proof. At trial in a civil forfeiture
case, the government shall have the initial burden of prov-
ing that the property is subject to forfeiture by a prepon-
derance of the evidence. If the government proves that the
property is subject to forfeiture, the claimant shall have
the burden of proving by a preponderance of the evidence

12



131



that he or she has an interest in the property that is not
forfeitable under section 983 of this title. If the govern-
ment's theory of forfeiture is that the property facilitated
the commission jf a criminal offense, the government must
establish that there was a substantial connection between
the property and the offense.

"(f) Affirmative defenses. The claimant shall set
forth all affirmative defenses, including constitutional
defenses, in his or her answer, as provided in Rule 8,
Fed. R. Civ. P. , and shall comply with discovery requests
regarding such defenses in advance of trial. However, the
claimant shall not be required to adduce any evidence in
support of any affirmative defense at trial until the court
has determined, pursuant to Rule 50, Fed. R. Civ. P. , that
there is a legally sufficient evidentiary basis for a rea-
sonable finder of fact, based on all of the admissible
evidence and any adverse inferences that might apply, to
find that the property was subject to forfeiture.

"(g) Motion to suppress seized evidence. At any time
after a claim and answer are filed, a claimant with standing
to contest the seizure of the property may move to suppress
such property in accordance with the normal rules regarding
the suppression of evidence. If the claimant prevails on
such motion, the property shall not be admitted into evi-
dence as to that claimant at the forfeiture trial. However,
a finding that property should be suppressed shall not bar

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132



the forfeiture of the property based on evidence obtained
independently before or after the seizure.

"(h) Use of hearsay at pre-trial hearings. At any pre-
trial hearing under this section, the cjurt may accept and
consider hearsay otherwise inadmissible under the Federal
Rules of Evidence. The court shall not require the govern-
ment to reveal the identity of any confidential informant at
a pre-trial hearing if there are sufficient indicia of
reliability regarding such testimony to allow the statement
of such informant to be related by a law enforcement offi-
cer.

" (i) Adverse inferences. The assertion by the claimant
of any Fifth Amendment privilege against compelled testimony
in the course of the forfeiture proceeding, including pre-
trial discovery, shall give rise tii_an„ adverse inference
regarding the matter on which such privilege is asserted.
The government may rely on such adverse inference in support
of its burden to establish the forfeitability of the proper-
ty and in response to any affirmative defense. However, the
government may not rely solely on such adverse inferences to
satisfy its burden of proof.

"(j) Stipulations. Notwithstanding the claimant's
offer to stipulate to the forfeitability of the property,
the government shall be entitled to present evidence to the
finder of fact on that issue before the claimant presents
any evidence in support of any affirmative defense.

14



133



" (k) Preservation of property subject to forfeiture.

The court, before or after the filing of a forfeiture com-
plaint and on the application of the government, may:

" (1) enter any restraining order or injunction purouant
to section 413(3) of the Controlled Substances Act (21
U.S.C. § 853 (e) ) ;

" (2) require the execution of satisfactory performance
bonds ;

"(3) create receiverships;

" (4) appoint conservators, custodians, appraisers,
accountants or trustees; or

" (5) take any other action to seize, secure, maintain,
or preserve the availability of property subject to forfei-
ture under this section.

" (1) Release of property to pay-criminal defense costs.

" (1) A person charged with a criminal offense may apply
for the release of property seized for forfeiture to pay the
necessary expenses of the person's criminal defense. Such
application shall be filed with the court where the forfei-
ture proceeding is pending.

" (2) When an application is filed pursuant to paragraph
(1) , the burden shall first be upon the applicant to es-
tablish that he has no access to other assets adequate for
the payment of criminal defense counsel, and that the inter-
est in property to be released is not subject to any claim
other than the forfeiture. The government shall have an

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134



opportunity to cross-examine the applicant and any v;itnesses
he or she may present on this issue.

" (3) If the court determines that the applicant has met
the requirements set fortn in paragraph (2) , the court shall
hold a probable cause hearing at which the applicant shall
have the burden of proving the absence of probable cause for
the forfeiture of the property. If the court finds that
there is no probable cause for the forfeiture, it shall
order the release of the assets for which probable cause is
lacking. Otherwise, it shall dismiss the application. The
court shall not consider any affirmative defenses to the
forfeiture at the probable cause hearing.

" (m) Excessive Fines. . At the conclusion of the trial
and following the entry of a verdict of forfeiture, the
claimant -may petiition the court to-eletermine whether the
Excessive Fines Clause of the Eighth Amendment applies, and
if so, whether forfeiture is excessive. The claimant shall
have the burden of establishing that a forfeiture is exces-
sive by a preponderance of the evidence at a hearing con-
ducted in the manner provided in Rule 43 (e) , Federal Rules
of Civil Procedure, by the Court without a jury. If the
court determines that the forfeiture is excessive, it shall
adjust the forfeiture to the extent necessary to avoid the
Constitutional violation.

" (n) Applicability. This section shall apply to any
judicial forfeiture action brought pursuant to this title,

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135



the Controlled Substances Act, or the Immigration and Natu-
ralization Act of 1952. Section 615 of the Tariff Act of
1930 (19 U.S.C. § 1615) shall not apply to forfeitures under
this section, nor shall this section apply to forfeitures
under the customs laws .

" (o) Abatement. A civil forfeiture action or judgment
under this or any other provision of federal law shall not '
abate because of the death of any person."
(b) REBUTTABLE PRESUMPTIONS. - Section 981 of title 18,
United States Code, is amended by adding the following new
subsection:

" (k) Rebuttcible presumptions. (1) At the trial of an
action brought pursuant to subsection (a) (1) (B) , there is a
presumption, governed by Rule 301 of the Federal Rules of
Evidence', that the property is su bjec t- to forfeiture if the
United States establishes, by a preponderance of the evi-
dence, that such property was acquired during a period of
time when the person who acquired the property was engaged
in an offense against a foreign nation described in subsec-
tion (a) (1) (B) or within a reasonable time after such peri-
od, and there was no likely source for such property other
than such offense. i

" (2) At the trial of an action brought pursuant to
subsection (a) (1) (A) , there is a presumption, governed by
Rule 3 01 of the Federal Rules of Evidence, that the property
was involved in a violation of section 1956 or 1957 of this

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title if the United States establishes, by a preponderance
of the evidence, two or more of the following factors:

" (A) the property constitutes or is traceable to more
than $10,000 that has been or was intended to be transport-
ed, transmitted or transferred to or from a major drug-
transit country, a major illicit drug producing country, or
a major money laundering country, as those terms are deter-
mined pursuant to sections 481(e) and 490(h) of the Foreign
Assistance Act of 1961 (22 U.S.C. §§ 2291(e) and 2291j (h) ) ;

" (B) the transaction giving rise to the forfeiture
occurred in part in a foreign country whose bank secrecy
laws have rendered the United States unable to obtain re-
cords relating to the transaction by judicial process,
treaty or executive agreement;

" (C> a person more than miniraaiiy- involved in the tran-
saction giving rise to the forfeiture action (i) has been
convicted in any State, Federal, or foreign jurisdiction of
a felony involving money laundering or the manufacture,
importation, sale or distribution of a controlled substance,
or (ii) is a fugitive from prosecution for such offense; or

" (D) the transaction giving rise to the forfeiture
action was conducted by, to or through a shell corporation
not engaged in any legitimate business activity in the
United States.



18



137



"(3) For the purposes of this paragraph, 'shell cor-
poration' means any corporation that does not conduct any
ongoing and significant commercial or manufacturing business
or any other form of commercial operation.

" (4) The enumeration of presumptions in this subsection
shall not preclude the development of other judicially
created presumptions."
(c) CONFORMING AMENDMENT. - The chapter analysis for chapter

46 of title 18, United States Code, is amended by inserting the

following at the appropriate place:

"987. Judicial forfeiture proceedings"

SEC. 122. TIME FOR FILING CLAIM AND ANSWER.

Rule C{6) of the Supplemental Rules for Certain Admiralty

and Maritime Claims is amended by striking "10 days after the

process has been executed" and inserting — u-20 days after the

receipt of actual notice of the execution of the process or the

final publication of such notice as provided in subsection (4),

whichever is earlier,".

SEC. 123. UNIFORM INNOCENT OWNER DEFENSE.

(a) IN GENERAL. - Chapter 46 of title 18, United States

Code, is amended by inserting after Section 982 the following new

section:

"983. Innocent Owners.

"(a) An innocent owner's interest in property shall not
be forfeited in any judicial action under any civil forfei-



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138



ture provision of this title, the Controlled Substances Act,
or the Immigration and Naturalization Act of 1952.

"(b) (1) With respect to a property interest in exis-
tence at the time the illegal act giving rise to forfeiture
took place, a person is an innocent owner if he or she
establishes, by a preponderance of the evidence, -

" (A) that he or she did not know that the property

was involved in or was being used in the commission of

such illegal act, or

" (B) that upon learning that the property was

being used in the commission of such illegal act, he or

she promptly did all that reasonably could be expected

to terminate such use of the property.
A claimant who establishes a lack of knowledge under sub-
paragraph (A) shall be considered an i nnocent owner unless
the government, in rebuttal, establishes the existence of
facts and circumstances that should have created a reason-
able suspicion that the property was being or would be used
for an illegal purpose. In that case, the claimant must
establish that in light of such facts and circumstances, he
or she did all that reasonably could be expected to prevent
the use of the property in the commission of any such



Online LibraryUnited States. Congress. House. Committee on the JCivil Asset Forfeiture Reform Act : hearing before the Committee on the Judiciary, House of Representatives, One Hundred Fourth Congress, second session, on H.R. 1916 ... July 22, 1996 → online text (page 14 of 37)