U.S. Civil Forfeiture

Civil forfeiture is a legal process that enables a government to seize property and other assets belonging to persons suspected of committing a crime. The main purpose of civil forfeiture is to provide an effective means of prosecuting criminals and fighting organized crime. Beginning in the early 1980s, governments and law enforcement agencies in the United States and other parts of the world placed an ever-increasing emphasis on targeting the activities of organized criminal activity. Civil forfeiture was the culmination of this enforcement approach.

An underlying tenet of crime enforcement as a punitive strategy is that the resulting penalties encompass the forfeiture of cash and other assets and involve fines and criminal sentences. An added benefit of this enforcement approach is that it can remove the financial power base that funds the operations of criminal organizations.

In most countries, asset forfeiture is pursued through the criminal courts. For a conviction, countries relying on the English common law systems require proof beyond a reasonable doubt, which often translates into a heavy burden for prosecutors, especially concerning criminal entrepreneurs who have successfully concealed ownership of assets. In response, some governments enacted legislation that provides the state with the tools to undertake civil action against individuals and entities involved in an organized criminal activity. This includes civil forfeiture laws, which allow the government to seize property through civil court rather than criminal court.

Because civil forfeiture allows the assets to be pursued and seized through the civil courts, the burden of proof placed on the state is reduced from “beyond a reasonable doubt” to a “balance of probabilities.” In other words, governments can confiscate money or assets where only a “reasonable suspicion” may exist that the cash or assets constitute the proceeds of crime. The onus of proof is now shared between the state and the defendant; that is, unlike a criminal trial where there is no obligation by the defendant to prove innocence, in a civil forfeiture process, the defendant must often prove that the assets in question were derived through legal and legitimate means.

Civil sanctions against organized and economic crimes have been most vigorously and controversially applied in the United States. A prime example is the federal Racketeer Influenced Corrupt Organization (RICO) Act, making it unlawful to acquire, operate, or receive income from an enterprise through criminal means. RICO allows the U.S. government or a private citizen to file a civil suit requesting the court to order sanctions or to provide injunctive relief against an individual or organization involved in a “pattern of racketeering.” Civil RICO injunctions can prohibit individuals from owning or becoming involved in certain legitimate or illegitimate businesses or activities. RICO also allows the state or private victims to sue civilly to recoup “treble” damages (that is, the defendant must pay the plaintiff three times the number of damages determined by a court). A criminal conviction is not a prerequisite for injunctive relief or asset forfeiture under RICO. No person needs to be charged; the civil asset forfeiture provisions of RICO focus on property, not persons.

The application of civil injunctions, treble damages, and civil asset forfeiture against criminal organizations and offenders under the RICO statute have proven successful in the United States in their impact on various organized crime groups. However, critics have argued that the law has overstepped its original purpose and has been abused by justice officials and private citizens. As a result, federal and state officials have taken steps to curtail the far-reaching powers of RICO, including shifting the burden of proof back to the state and ensuring due process is preserved for defendants.