S 1931 IS
To provide a more just and uniform procedure for Federal civil forfeitures, and for other purposes.
IN THE SENATE OF THE UNITED STATES
November 16, 1999
Mr. HATCH (for himself and Mr. LEAHY) introduced the following bill; which was read twice and referred to the Committee on the Judiciary
To provide a more just and uniform procedure for Federal civil forfeitures, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Civil Asset Forfeiture Reform Act'.
SEC. 2. CREATION OF GENERAL RULES RELATING TO CIVIL FORFEITURE PROCEEDINGS.
(a) IN GENERAL- Chapter 46 of title 18, United States Code, is amended by inserting after section 981 the following:
`Sec. 981A. General rules for civil forfeiture proceedings
`(a) NOTICE; CLAIM; COMPLAINT- (1)(A)(i) Except as provided in clauses (ii) and (iii), in any nonjudicial civil forfeiture proceeding under a civil forfeiture statute, with respect to which the Government must send written notice to interested parties, such notice shall be sent in a manner to achieve proper service as soon as practicable, and in no case more than 60 days after the date of the seizure.
`(ii) In a case in which the property is seized by a State or local law enforcement agency and turned over to a Federal law enforcement agency for the purpose of forfeiture under Federal law, notice shall be sent no more than 90 days after the date of seizure by the State or local law enforcement agency.
`(iii) If the identity or interest of a party is not determined until after the seizure or turnover but is determined before a declaration of forfeiture is entered, notice shall be sent to such interested party not later than 60 days after the determination by the Government of the identity of the party or the party's interest.
`(B) A court shall extend the period for sending notice under subparagraph (A) for a period not to exceed 60 days (which period may be further extended), if the court determines, based on a written ex parte certification of a supervisory official of the seizing agency, that there is reason to believe that notice may have an adverse result, including--
`(i) endangering the life or physical safety of an individual;
`(ii) flight from prosecution;
`(iii) destruction of or tampering with evidence;
`(iv) intimidation of potential witnesses; or
`(v) otherwise seriously jeopardizing an investigation or unduly delaying a trial.
`(C) If the Government does not send notice of a seizure of property in accordance with subparagraph (A) to the person from whom the property was seized, and no extension of time is granted, the Government shall return the property to that person without prejudice to the right of the Government to commence a forfeiture proceeding at a later time.
`(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 be filed not later than the deadline set forth in a personal notice letter, except that if that letter is not received, then a claim may be filed not later than 30 days after the date of final publication of notice of seizure.
`(C) The claim shall state the claimant's interest in the property and be made under oath, subject to penalty of perjury. The seizing agency shall make claim forms generally available on request.
`(D) Any person may make a claim under subparagraph (A) without posting bond with respect to the property which is the subject of the claim.
`(3)(A) Not later than 90 days after a claim has been filed, the Government shall file a complaint for forfeiture in the manner set forth in the Supplemental Rules for Certain Admiralty and Maritime Claims or return the property pending the filing of a complaint, 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.
`(B) If the Government does not file a complaint for forfeiture or return the property, in accordance with subparagraph (A), it shall return the property and may not take any further action to effect the civil forfeiture of such property.
`(C) In lieu of, or in addition to, filing a civil forfeiture complaint, the Government may include a forfeiture allegation in a criminal indictment. In such case, the Government's right to continued possession of the property shall be governed by the applicable criminal forfeiture statute.
`(D) No complaint may be dismissed 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 by a preponderance of the evidence.
`(4)(A) In any case in which the Government files in the appropriate United States district court a complaint 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 in the manner set forth in the Supplemental Rules for Certain Admiralty and Maritime Claims, except that such claim may be filed not later than 30 days after the date of service of the Government's complaint or, as applicable, not later than 30 days after the date of final publication of notice of the filing of the complaint.
`(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 not later than 20 days after the date of the filing of the claim.
`(b) APPOINTMENT OF COUNSEL- (1) If--
`(A) a person in a judicial civil forfeiture proceeding under a civil forfeiture statute is financially unable to obtain representation by counsel; and
`(B)(i) the property subject to forfeiture is real property that is being used by the person as a primary residence; or
`(ii) the person is represented by counsel appointed under section 3006A of this title in connection with a related criminal case;
the court may appoint or authorize counsel to represent that person with respect to the claim, as appropriate.
`(2) In determining whether to appoint or authorize counsel to represent a person asserting a claim under this subsection, the court shall take into account such factors as--
`(A) the person's standing to contest the forfeiture; and
`(B) whether the claim appears to be made in good faith.
`(3) The court shall set the compensation for representation under this subsection, which shall be equivalent to that provided for court-appointed representation under section 3006A of this title.
`(c) BURDEN OF PROOF- In all suits or actions brought under any civil forfeiture statute for the civil forfeiture of any property, the burden of proof is on the Government to establish, by a preponderance of the evidence, that the property is subject to forfeiture. The Government may use evidence gathered after the filing of a complaint for forfeiture to establish, by a preponderance of the evidence, that property is subject to forfeiture.
`(d) INNOCENT OWNER DEFENSE- (1) An innocent owner's interest in property shall not be forfeited under any civil forfeiture statute. The claimant shall have the burden of proving that he is an innocent owner by a preponderance of the evidence.
`(2)(A) 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 owner who--
`(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.
`(B)(i) For the purposes of this paragraph, ways in which a person may show that such person did all that reasonably could 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.
`(ii) A person is not required by this subparagraph 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.
`(3)(A) 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--
`(i) was a bona fide purchaser or seller for value (including a purchaser or seller of goods or services for value); and
`(ii) did not know and was reasonably without cause to believe that the property was subject to forfeiture.
`(B) An otherwise valid claim under subparagraph (A) shall not be denied on the ground that the claimant gave nothing of value in exchange for the property if--
`(i) the property is the primary residence of the claimant;
`(ii) depriving the claimant of the property would deprive the claimant of the claimant's only means of maintaining adequate shelter in the community for the claimant and all dependents residing with the claimant;
`(iii) the property is not, and is not traceable to, the proceeds of any criminal offense; and
`(iv) 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;
except that the court shall limit the value of any real property interest for which innocent ownership is recognized under this subparagraph to the value necessary to maintain adequate shelter in the community for such claimant and all dependents residing with the claimant.
`(4) Notwithstanding any provision of this subsection, no person may assert an ownership interest under this subsection in contraband or other property that it is illegal to possess.
`(e) MOTION TO SET ASIDE FORFEITURE- (1) Any person entitled to written notice in any nonjudicial civil forfeiture proceeding under a civil forfeiture statute who does not receive such notice may file a motion to set aside a declaration of forfeiture with respect to that person's interest in the property, which motion shall be granted if--
`(A) the Government knew, or reasonably should have known, of the moving party's interest and failed to take reasonable steps to provide such party with notice; and
`(B) the moving party did not know or have reason to know of the seizure within sufficient time to file a timely claim.
`(2) If the court grants a motion under paragraph (1), the court shall set aside the declaration of forfeiture as to the interest of the moving party without prejudice to the right of the Government to commence a subsequent forfeiture proceeding as to the interest of the moving party, which proceeding shall be instituted within 60 days of the entry of the order granting the motion.
`(3) A motion under paragraph (1) may be filed not later than 6 years after the date that the claimant discovered or had reason to discover that the property was forfeited, subject to the doctrine of laches, except that no motion may be filed more than 11 years after the date that the Government's forfeiture cause of action accrued.
`(f) RELEASE OF SEIZED PROPERTY- (1) A claimant under subsection (a) is entitled to immediate release of seized property if--
`(A) the claimant has a possessory interest in the property;
`(B) the claimant has sufficient ties to the community to provide assurance that the property will be available at the time of the trial;
`(C) the continued possession by the Government pending the final disposition of forfeiture proceedings will cause substantial hardship to the claimant, such as preventing the functioning of a business, preventing an individual from working, or leaving an individual homeless;
`(D) the claimant's likely hardship from the continued possession by the 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; and
`(E) none of the conditions set forth in paragraph (7) applies.
`(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 not later than 10 days after the date of a request under paragraph (2) the property has not been released, the claimant may file a motion or complaint in the district court in which the complaint has been filed or, if no complaint has been filed, 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) The 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 shown.
`(A) a motion or complaint is filed under paragraph (3); and
`(B) the claimant demonstrates that the requirements of paragraph (1) have been met;
the district court shall order that the property be returned to the claimant, pending completion of proceedings by the Government to obtain forfeiture of the property.
`(6) If the court grants a motion or complaint under paragraph (3)--
`(A) the court may enter any order necessary to ensure that the value of the property is maintained while the forfeiture action is pending, including--
`(i) permitting the inspection, photographing, and inventory of the property;
`(ii) fixing a bond in accordance with rule E(5) of the Supplemental Rules for Certain Admiralty and Maritime Claims; and
`(iii) requiring the claimant to obtain or maintain insurance on the subject property; and
`(B) the Government may place a lien against the property or file a lis pendens to ensure that the property is not transferred to another person.
`(7) This subsection shall not apply if the seized property--
`(A) is contraband, currency or other monetary instrument, or electronic funds unless such currency or other monetary instrument or electronic funds constitutes the assets of a legitimate business which has been seized;
`(B) is to be used as evidence of a violation of the law;
`(C) by reason of design or other characteristic, is particularly suited for use in illegal activities; or
`(D) is likely to be used to commit additional criminal acts if returned to the claimant.
`(g) PROPORTIONALITY- The claimant may petition the court to determine whether the forfeiture was constitutionally excessive. In making this determination, the court shall compare the forfeiture to the gravity of the offense giving rise to the forfeiture. If the court finds that the forfeiture is grossly disproportional to the offense it shall reduce or eliminate the forfeiture as necessary. The claimant shall have the burden of establishing that the forfeiture is grossly disproportional by a preponderance of the evidence at a hearing conducted by the court without a jury.
`(h) DEFINITIONS- In this section:
`(1)(A) Except as provided in subparagraph (B), the term `civil forfeiture statute' means any provision of Federal law providing for the forfeiture of property other than as a sentence imposed upon conviction of a criminal offense.
`(B) The term `civil forfeiture statute' does not include--
`(i) the Tariff Act of 1930 or any other provision of law codified in title 19;
`(ii) the Internal Revenue Code of 1986;
`(iii) the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.);
`(iv) the Trading with the Enemy Act (50 U.S.C. App. 1 et seq.); or
`(v) section 1 of title VI of the Act of June 15, 1917 (40 Stat. 233; 22 U.S.C. 401).
`(2)(A) 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 interest, or valid assignment of an ownership interest.
`(B) The term `owner' 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.'.
(b) TECHNICAL AND CONFORMING AMENDMENT- The analysis for chapter 46 of title 18, United States Code, is amended by inserting after the item relating to section 981 the following:
`981A. General rules for civil forfeiture proceedings.'.
SEC. 3. COMPENSATION FOR DAMAGE TO SEIZED PROPERTY.
(a) TORT CLAIMS ACT- Section 2680(c) of title 28, United States Code, is amended--
(1) by striking `any goods or merchandise' and inserting `any goods, merchandise, or other property';
(2) by striking `law-enforcement' and inserting `law enforcement'; and
(3) by inserting before the period at the end the following: `, except that the provisions of this chapter and section 1346(b) of this title apply to any claim based on injury or loss of goods, merchandise, or other property, while in the possession of any officer of customs or excise or any other law enforcement officer, if--
`(1) the property was seized for the purpose of forfeiture under any provision of Federal law providing for the forfeiture of property other than as a sentence imposed upon conviction of a criminal offense;
`(2) the interest of the claimant is not forfeited; and
`(3) the claimant is not convicted of a crime for which the interest of the claimant in the property would be subject to forfeiture under a Federal criminal forfeiture law.'.
(b) DEPARTMENT OF JUSTICE-
(1) IN GENERAL- With respect to a claim that cannot be settled under chapter 171 of title 28, United States Code, the Attorney General may settle, for not more than $50,000 in any case, a claim for damage to, or loss of, privately owned property caused by an investigative or law enforcement officer (as defined in section 2680(h) of title 28, United States Code) who is employed by the Department of Justice acting within the scope of his or her employment.
(2) LIMITATIONS- The Attorney General may not pay a claim under paragraph (1) that--
(A) is presented to the Attorney General more than 1 year after it occurs; or
(B) is presented by an officer or employee of the Federal Government and arose within the scope of employment.
SEC. 4. ATTORNEY FEES, COSTS, AND INTEREST.
(a) IN GENERAL- Section 2465 of title 28, United States Code, is amended to read as follows:
`Sec. 2465. Return of property to claimant; liability for wrongful seizure; attorney fees, costs, and interest
`(a) 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 thereof to be entered and, in such case, 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 provided in subsection (b).
`(b)(1) Except as provided in paragraph (2), in any civil proceeding to forfeit property under any provision of Federal law in which the claimant substantially prevails, the United States shall be liable for--
`(A) reasonable attorney fees and other litigation costs reasonably incurred by the claimant;
`(B) post-judgment interest, as set forth in section 1961 of this title; and
`(C) in cases involving currency, other negotiable instruments, or the proceeds of an interlocutory sale--
`(i) interest 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; and
`(ii) an imputed amount of interest that such currency, instruments, or proceeds would have earned at the rate described in section 1961, for any period during which no interest was paid (not including any period when the property reasonably was in use as evidence in an official proceeding or in conducting scientific tests for the purpose of collecting evidence).
`(2)(A) 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.
`(B) The provisions of paragraph (1) shall not apply if the claimant is convicted of a crime for which the interest of the claimant in the property would be subject to forfeiture under a Federal criminal forfeiture law.'.
(b) TECHNICAL AND CONFORMING AMENDMENT- The analysis for chapter 163 of title 28, United States Code, is amended by striking the item relating to section 2465 and inserting following:
`2465. Return of property to claimant; liability for wrongful seizure; attorney fees, costs, and interest.'.
SEC. 5. SEIZURE WARRANT REQUIREMENT.
(a) IN GENERAL- Section 981(b) of title 18, United States Code, is amended to read as follows:
`(b)(1) Except as provided in section 985, any property subject to forfeiture to the United States under subsection (a) may be seized by the Attorney General and, in the case of property involved in a violation investigated by the Secretary of the Treasury or the United States Postal Service, the property may also be seized by the Secretary of the Treasury or the Postal Service, respectively.
`(2) Seizures pursuant to this section shall 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--
`(A) a complaint for forfeiture based on probable cause has been filed in the United States district court and the court has issued an arrest warrant in rem pursuant to the Supplemental Rules for Certain Admiralty and Maritime Claims;
`(B) there is probable cause to believe that the property is subject to forfeiture and--
`(i) the seizure is made pursuant to a lawful arrest or search; or
`(ii) another exception to the Fourth Amendment warrant requirement would apply; or
`(C) the property was lawfully seized by a State or local law enforcement agency and has been transferred to a Federal agency in accordance with State law.
`(3) Notwithstanding the provisions of rule 41(a) of the Federal Rules of Criminal Procedure, a seizure warrant may be issued pursuant to this subsection by a judicial officer in any district in which a forfeiture action against the property may be filed under section 1355(b)
of title 28, and executed in any district in which the property is found.'.
(b) DRUG FORFEITURES- Section 511(b) of the Controlled Substances Act (21 U.S.C. 881(b)) is amended to read as follows:
`(b) SEIZURE PROCEDURES- Any property subject to forfeiture to the United States under this section may be seized by the Attorney General in the manner set forth in section 981(b) of title 18, United States Code.'.
SEC. 6. USE OF FORFEITED FUNDS TO PAY RESTITUTION TO CRIME VICTIMS.
Section 981(e) of title 18, United States Code, is amended by striking paragraph (6) and inserting the following:
`(6) as restoration 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 unlawful activity; or'.
SEC. 7. CIVIL FORFEITURE OF REAL PROPERTY.
(a) IN GENERAL- Chapter 46 of title 18, United States Code, is amended by inserting after section 984 the following:
`Sec. 985. Civil forfeiture of real property
`(a) Notwithstanding any other provision of law, all civil forfeitures of real property and interests in real property shall proceed as judicial forfeitures.
`(b)(1) Except as provided in this section--
`(A) real property that is the subject of a civil forfeiture action shall not be seized before entry of an order of forfeiture; and
`(B) the owners or occupants of the real property shall not be evicted from, or otherwise deprived of the use and enjoyment of, real property that is the subject of a pending forfeiture action.
`(2) 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 under this subsection.
`(c)(1) The Government shall initiate a civil forfeiture action against real property by--
`(A) filing a complaint for forfeiture;
`(B) posting a notice of the complaint on the property; and
`(C) serving notice on the property owner, along with a copy of the complaint.
`(2) If the property owner cannot be served with the notice under paragraph (1) because the owner--
`(B) resides outside the United States and efforts at service pursuant to Rule 4 of the Federal Rules of Civil Procedure are unavailing; or
`(C) cannot be located despite the exercise of due diligence,
constructive service may be made in accordance with the laws of the State in which the property is located.
`(3) If real property has been posted in accordance with this subsection, 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.
`(d) Real property may be seized prior to the entry of an order of forfeiture if--
`(1) the Government notifies the court that it intends to seize the property before trial; and
`(A) issues a notice of application for warrant, causes the notice to be served on the property owner and posted on the property, and conducts a hearing to determine if there is probable cause for the forfeiture; or
`(B) makes an ex parte determination that there is probable cause for the forfeiture and that there are exigent circumstances that permit the government to seize the property without prior notice and an opportunity for the property owner to be heard.
For purposes of paragraph (2)(B), to establish exigent circumstances, the Government shall show that less restrictive measures such as a lis pendens, restraining order, or bond would not suffice to protect the Government's interests in preventing the sale, destruction, or continued unlawful use of the real property.
`(e) If the court authorizes a seizure of real property under subsection (d)(2), it shall conduct a prompt post-seizure hearing during which the property owner shall have an opportunity to contest the basis for the seizure.
`(1) applies only to civil forfeitures of real property and interests in real property;
`(2) does not apply to forfeitures of the proceeds of the sale of such property or interests, or of money or other assets intended to be used to acquire such property or interests; and
`(3) shall not affect the authority of the court to enter a restraining order relating to real property.'.
(b) TECHNICAL AND CONFORMING AMENDMENT- The analysis for chapter 46 of title 18, United States Code, is amended by inserting after the item relating to section 984 the following:
`985. Civil forfeiture of real property.'.
SEC. 8. APPLICABILITY.
This Act and the amendments made by this Act shall apply to any forfeiture proceeding commenced on or after the date of enactment of this Act.