Forfeiture Laws Definition: Everything You Need to Know
Forfeiture laws definition is the involuntary loss of property, money, or privileges without compensation due to a breach of contract or commission of a crime.3 min read
2. What Government Agencies Can Enforce Forfeiture?
3. Forfeiture Laws
4. What Is a Private Forfeiture?
Forfeiture laws definition is the involuntary loss of property, money, or privileges without compensation because of a breach of contract, failure to meet a legal obligation, or the commission of a crime.
Private entities and the government can enforce forfeiture laws. In a private forfeiture, the defaulting party doesn't meet a contractual obligation and so must surrender property or money to the adversely affected party. In government forfeitures, the government seizes, or confiscates, a defendant's property used in the commission of a crime or gained as the result of illegal activity.
Forfeitures to the Government
Forfeiture to the government includes the surrender of property, money, or privileges as punishment for illegal or prohibited activities. This can be a civil or criminal process and often involves judicial proceedings.
Congress and state legislatures have passed statutes that enable law enforcement to confiscate property on suspicion that a person used a property to commit a crime or gained it because of illegal activity. The property is then forfeited, or surrendered, to the government upon conviction.
Within the federal government, there are three types of forfeiture:
- Criminal forfeiture is the result of criminal conviction of a defendant where the government can enforce forfeiture on property used or gained as part of the crime. To seize this property, the government must prove the defendant's guilt beyond a reasonable doubt.
- Civil judicial forfeiture is the result of a judicial process where the government can enforce forfeiture on property believed to be involved in a crime convicting a defendant on a criminal charge. This type of forfeiture is often controversial because it doesn't require a criminal conviction. To seize property, the government only needs to show that there is probable cause to believe that the property was involved in a crime.
- Administrative forfeiture doesn't require judicial involvement but allows the government to seize property such as importation of prohibited merchandise or transporting a controlled substance.
The government holds all seized properties until a case's resolution has been decided. If a defendant is acquitted of a crime, they are entitled to have their property returned.
What Government Agencies Can Enforce Forfeiture?
The Department of Justice (DOJ) manages a federal asset forfeiture program that includes other government agencies, such as the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration (DEA), the Federal Bureau of Investigations (FBI), and U.S. Attorneys Offices.
Other federal government agencies that have the power to impose forfeiture penalties include:
- The Securities and Exchange Commission (SEC), which can enforce the forfeiture of any profits resulting from insider trading, as well as civil penalties and possible incarceration.
- The U.S. Postal Inspection Service, which can enforce the forfeiture of properties in cases involving mail fraud or money laundering and drug trafficking through the mail system.
- The Food and Drug Administration, which can seize properties in cases involving health care fraud schemes and the production or sale of counterfeit drugs.
Forfeiture laws have existed in the government since colonial times, but some of the laws enforced today include:
- The Comprehensive Drug Abuse Prevention and Control Act (1970), also known as Forfeiture Act, allowed federal prosecutors to confiscate properties owned by a person convicted of dealing drugs.
- The Racketeer Influenced and Corrupt Organizations Act (RICO), also known as the Organized Crime Control Act (1970), allows federal authorities to seize the property of persons engaged in a pattern of racketeering.
- The Psychotropic Substances Act (1978) expanded the Forfeiture Act to include the forfeiture of properties associated with the purchase of illegal drugs.
- The Comprehensive Crime Control Act (1984) further expanded the Forfeiture Act to include the forfeiture of tangible properties, such as land and buildings, used in drug trafficking.
What Is a Private Forfeiture?
Private forfeiture often occurs when the defaulting party doesn't meet its contractual obligations. The adversely affected party, as defined by the terms of the contract, can seize an asset, money, or the cash flows from an asset as compensation due to any losses incurred because of the contract breach.
Private contract disputes regarding forfeiture often ask judicial courts to examine whether forfeitures are fair and not resulting from duress or deception.
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