7 August 2001

See contents of full IRS Handbook of Criminal Investigation: http://cryptome.org/irs-ci/irs-ci.htm

## Handbook 9.7 Asset Seizure and Forfeiture Chapter 4 Criminal Forfeiture
### Contents [9.7] 4.1 OVERVIEW [9.7] 4.2 AUTHORITY TO FORFEIT ASSETS AS A CRIMINAL SENTENCE [9.7] 4.3 STATUTE OF LIMITATIONS [9.7] 4.4 PROPERTY SUBJECT TO CRIMINAL FORFEITURE [9.7] 4.4.1 Offending (or Substituted) Property From 11-18-88 to Present [9.7] 4.4.2 Offending (or Substituted) Property From 10-28-92 to Present [9.7] 4.4.3 Evidence to Support Criminal Seizures and Forfeitures (Burden of Proof) [9.7] 4.5 METHODS TO EFFECT SEIZURES OF PROPERTY SUBJECT TO CRIMINAL FORFEITURE [9.7] 4.6 CRIMINAL FORFEITURE PROCEEDINGS [9.7] 4.7 CIVIL VS. CRIMINAL FORFEITURE PROCEEDINGS [9.7] 4.8 CLOSING CRIMINAL FORFEITURE PROCEEDINGS
### [9.7] 4.1 (04-30-1998) OVERVIEW
Pursuant to 18 USC 982(a)(1), The federal district court can have property, real or personal, forfeited to the government as a part of a sentence imposed on a person convicted of money laundering vioaltions, 18 USC 1956, 18 USC 1957, or a violation of 31 USC 5313(a), or 31 USC 5324(a). It can also be used (effective 10/28/92) if a person is found in violation of 18 USC 1960. Criminal forfeitures are "in personam" actions, i.e., part of the penalty enacted against a person for the commission of a criminal offense. Therefore, criminal forfeitures may only be sought as part of a criminal prosecution, and may not be ordered unless and until the defendant is convicted of the crime(s) for which forfeiture is to be imposed. Accordingly, all criminal forfeitures are judicial. The following sections are discussed in this chapter: Authority to Forfeit Assets As A Criminal Sentence Statute Of Limitations Property Subject to Criminal Forfeiture Methods to Effect Seizures Subject to Criminal Forfeiture Criminal Forfeiture Proceedings Civil vs. Criminal Forfeiture Proceedings Closing Criminal Forfeiture Proceedings
### [9.7] 4.2 (04-30-1998) AUTHORITY TO FORFEIT ASSETS AS A CRIMINAL SENTENCE
Section 982(a)(1) of Title 18 is the criminal forfeiture statute for violations of 18 USC 1956, 1957, and 31 USC 5313(a) and 5324. Title 18 USC 982(b)(1) states that the provisions of Title 21 USC 853(c) and (e) through (p) shall govern the seizure and disposition of any property subject to forfeiture under Title 18 USC 982 as it relates to violations listed in 982(a)(1) and (a)(6). The Assistant United States Attorney (AUSA) decides whether to use 18 USC 982 forfeiture provisions as part of the defendant's criminal prosecution.
### [9.7] 4.3 (04-30-1998) STATUTE OF LIMITATIONS
The statute of limitations for Title 18 forfeitures is the statute of limitations for the underlying crime which is usually 5 years.
### [9.7] 4.4 (04-30-1998) PROPERTY SUBJECT TO CRIMINAL FORFEITURE
The property that is subject to criminal forfeiture is dependent upon the date the property was involved in the money laundering violations and the defendant's convicting statute violation--18 USC 1956, 18 USC 1957, 18 USC 1960, 31 USC 5313(a) or 31 USC 5324(a). The substitute asset provisions are applicable whether the property was seized after 11/18/88 or 10/28/92.
### [9.7] 4.4.1 (04-30-1998) Offending (or Substituted) Property From 11-18-88 to Present
Any property, real or personal, involved in a transaction or attempted transaction in violation of 18 USC 1956, 18 USC 1957, 31 USC 5313(a) or 31 USC 5324(a) is subject to criminal forfeiture. Any property traceable to property, real or personal, involved in a transaction or attempted transaction in violation of 18 USC 1956, 18 USC 1957, 31 USC 5313(a) or 31 USC 5324(a) is subject to criminal forfeiture.
### [9.7] 4.4.2 (04-30-1998) Offending (or Substituted) Property From 10-28-92 to Present
In 1992, a new criminal statute was enacted that was included in the criminal forfeiture authority of 18 USC 982 resulting in an additional offending violation. That statute, 18 USC 1960, relates to the operation of an illegal money transmitting business. The forfeiture authority only allows the criminal forfeiture of the property that is involved in or traceable to a violation of Title 18 USC 1960. Title 18 U.S.C. 982(b)(1) also enables property to be substituted for property subject to criminal forfeiture. Title 21 U.S.C. 853(p) governs property subject to criminal forfeiture if the property, as a result of any act or omission of the defendant, cannot be located upon the exercise of due diligence, has been transferred or sold to, or deposited with, a third party; has been placed beyond the jurisdiction of the court; has been substantially diminished in value; or has been commingled with other property which cannot be divided without difficulty.
### [9.7] 4.4.3 (04-30-1998) Evidence to Support Criminal Seizures and Forfeitures (Burden of Proof)
There is normally a rebuttable presumption at trial that any property of a person convicted of violating 18 USC 1956, 1957, or 1960; or 31 USC 5313(a) or 5324(a) is subject to forfeiture if the government established by a preponderance of the evidence that the property was involved in the violation. As noted below, some courts require the government to establish beyond a reasonable doubt that the property was involved in the violation. Preponderance: United States v. Elgersma, 971 F.2d 690 (11th Cir., 1992); United States v. Smith, 966 F.2d 1045 (6th Cir., 1992), United States v. Myers, 21 F.3d 826 (8th Cir., 1994). Beyond a Reasonable Doubt: United States v. Saccoccia, 823 F.Supp. 984 (D.R.I. 1993); United States v. Swank Corp., 797 F.Supp. 497 (E.D.Va. 1992).
### [9.7] 4.5 (04-30-1998) METHODS TO EFFECT SEIZURES OF PROPERTY SUBJECT TO CRIMINAL FORFEITURE
The methods to effect seizures for criminal forfeiture are: Temporary Restraining Order. Seizure warrant pursuant to the Federal Rules of Criminal Procedure.* Warrant of arrest in REM.* Seizure incident to lawful arrest or search.* Adoptive seizures.* NOTE: *Civil forfeiture procedures: The Supplemental Rules of Certain Admiralty and Maritime Claims and Title 19 USC 1602 et seq. provide that the civil forfeiture actions taken under those authorities are not inconsistent with the actions taken to effect criminal forfeiture. This allows the pursuit of parallel civil and criminal forfeiture actions, which must be approved by, and coordinated closely with, the AUSA. In addition, because criminal forfeiture is an integral part of the underlying criminal prosecution, the Federal Rules of Criminal Procedures (F.R.Cr.P.). governs the general process by which property is criminally forfeited. A more detailed description of the methods to effect seizures is found in Chapter 2 of this Handbook and Handbook 9.4 chapter 13.
### [9.7] 4.6 (04-30-1998) CRIMINAL FORFEITURE PROCEEDINGS
Criminal forfeitures are "in personam" actions, i.e., part of the penalty enacted for the commission of a criminal offense. Criminal forfeitures may only be sought as part of a criminal prosecution, and may not be ordered unless and until the defendant is convicted of the crime(s) for which forfeiture is to be imposed. A Criminal Investigation Management Information System (CIMIS) Subject Seizure Number should be obtained when forfeitable assets are identified. The Asset Forfeiture Coordinator (AFC) should obtain an Asset Forfeiture Tracking and Retrieval System (AFTRAK) number for assets identified in an indictment or criminal information as being subject to criminal forfeiture. The date of the indictment or the filing date of the information will be used as the seizure date on Form 4008. NOTE: The issuance of a Temporary Restraining Order does not require the issuance of an AFTRAK number unless the asset is named in an indictment. The AUSA decides whether to use 18 USC 982, which requires a higher burden of proof on the part of the government. The government may pursue civil forfeiture action in conjunction with the criminal forfeiture action, cognizant of the pitfalls, i.e., excessive fines problems. Additionally, if the government has not prevailed in a criminal forfeiture action, it may subsequently institute a civil forfeiture action pursuant to Treasury Executive Office Asset Forfeiture (TEOAF) Directive 19, Part II, Section A.
### [9.7] 4.7 (04-30-1998) CIVIL VS. CRIMINAL FORFEITURE PROCEEDINGS
The ability to forfeit substitute assets of the criminal defendant is generally viewed as the greatest benefit of criminal forfeiture. Civil forfeiture does not embrace this concept with the sole exception of highly fungible property under limited circumstances (18 USC 984). The government's burden of proof in a criminal forfeiture case is either preponderance of evidence or beyond a reasonable doubt, whereas the civil forfeiture case is a probable cause showing by the government to be overcome by the claimant's showing of a preponderance of evidence. A criminal conviction that provides for forfeiture is a threshold requirement in criminal forfeiture. Unless the government obtains a seizure warrant for the assets in a criminal case, it cannot take possession of the assets until the criminal defendant has been convicted and the preliminary forfeiture order has been entered. This problem is compounded if the defendant becomes a fugitive. In a civil action, the forfeiture takes place regardless of whether the government succeeds in proving the defendant guilty and is entitled to take possession of the asset prior to forfeiture upon the filing of its civil complaint for forfeiture. Commencement of the civil judicial forfeiture action entitles the claimant to pursue discovery of the government's case. If this occurs prior to an indictment, such discovery can compromise undercover activity, sensitive investigative techniques, and more. A stay of discovery is never guaranteed. If the AUSA handling the collateral criminal matter believes any proposed administrative action would jeopardize the criminal case, the AUSA must submit to the Chief, CI, an explanation of the circumstances for the request to stay the action. The Chief, CI, will seek approval from the Assistant Commissioner, CI, through the respective Director of Investigations.
### [9.7] 4.8 (04-30-1998) CLOSING CRIMINAL FORFEITURE PROCEEDINGS
After a defendant is convicted, a preliminary order of forfeiture is issued. If there are third party claimants, their claims will be decided at an ancillary hearing, after which a final order of forfeiture is issued by the court.
### Internal Revenue Manual | ### Hndbk. 9.7 Chap. 4 Criminal Forfeiture | ### (04-30-1998)

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