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Navigating Criminal Forfeiture Settlements under 21 USC 853 in Federal Court

Posted by Ann Fitz | Jul 09, 2023

In the realm of criminal law, plea agreements play a significant role in resolving cases efficiently and effectively. One aspect often considered in plea negotiations is criminal forfeiture, a legal mechanism that aims to strip individuals of the proceeds or assets derived from their illicit activities. Negotiating criminal forfeiture settlements in federal court requires a delicate balance between the interests of the government, the accused, and the pursuit of justice. In this blog post, we will delve into the intricacies of criminal forfeiture settlements and explore the challenges faced by federal criminal defendants in navigating this complex terrain.

Understanding Criminal Forfeiture

Criminal forfeiture is a powerful tool employed by the government to seize assets linked to criminal activities. It is distinct from civil forfeiture, which focuses on the seizure of assets involved in or connected to illegal activities.  When a person is convicted of an offense that triggers criminal forfeiture under 21 USC 853 (such as fraud and money laundering), the court has the authority to order the forfeiture of specific assets that are linked to the offense.  Assets subject to forfeiture can include property, money, or other items of value that were derived from, or used in, the commission of the offense, such as cash, vehicles, real estate, bank accounts, and other property that has a connection to the offense.

To initiate the process of criminal forfeiture under 21 USC 853, the government must file a forfeiture action with the court. This is usually included in the criminal prosecution as a forfeiture allegation in the indictment.  The forfeiture allegation is included in the indictment to provide notice to the defendant and inform them that the government intends to pursue the forfeiture of specific assets upon conviction.  The forfeiture allegation usually specifies the assets or property subject to forfeiture and cites the relevant statutory authority under which the forfeiture is sought. The inclusion of this allegation in the federal indictment allows the court to consider the forfeiture issue alongside the criminal charges during the course of the trial.

The Forfeiture Bill of Particulars

In the context of criminal forfeiture, a bill of particulars refers to a document that provides additional details and specifics about the assets or property subject to forfeiture. It serves as a more detailed explanation or clarification of the forfeiture allegations contained in the indictment.

When the government includes forfeiture allegations in an indictment, they generally provide a broad description of the assets or property they seek to forfeit. However, in certain cases, the defendant may request a bill of particulars to obtain more precise information about the assets involved. The bill of particulars helps the defendant understand the government's forfeiture claims and allows for a clearer presentation of their defense.

The bill of particulars in a criminal forfeiture case may include details such as:

  1. Identification of specific assets: It may specify the type of assets or property the government seeks to forfeit, such as bank accounts, vehicles, real estate, or other items of value.
  2. Description of the assets: The bill of particulars may provide further description or details about the assets, including their location, monetary value, or any other relevant identifying information.
  3. Connection to criminal activity: It should outline how the government believes the assets are linked to the alleged criminal activity, demonstrating that they were obtained through or used in connection with the offense.
  4. Tracing of assets: If applicable, the bill of particulars may describe the government's efforts to trace the assets, showing a clear connection between the alleged criminal conduct and the assets subject to forfeiture.

The bill of particulars serves to ensure fairness and provide the defendant with sufficient information to prepare their defense against the forfeiture allegations. It helps prevent surprises during trial and allows the defendant to challenge the government's claims regarding the specific assets at stake. By providing more detailed information, it enables the defendant and their legal team to assess the strength of the government's case and develop a targeted defense strategy.

Negotiating the Terms

If the defendant is convicted of the underlying criminal offense and the court finds that the forfeiture allegation has been established, it can order the forfeiture of the assets identified in the indictment. The process of forfeiture typically involves separate legal proceedings after the conclusion of the criminal case, during which the government must prove, by a preponderance of the evidence, the connection between the assets and the criminal activity.  However, criminal forfeiture can be negotiated and entered into as either a stipulation or as part of a plea agreement.  The negotiation acts as a final settlement of the forfeiture and can benefit the defendant by excluding specific property from government forfeiture.

In the context of a plea agreement, criminal forfeiture settlements often arise when defendants are willing to forfeit certain assets or proceeds in exchange for leniency, such as reduced charges, shorter sentences, or the avoidance of additional criminal charges.

When negotiating criminal forfeiture settlements, defendants must grapple with several critical factors. First, they must assess the nature and value of the assets subject to forfeiture. This evaluation involves identifying the assets that are directly traceable to criminal conduct and considering their monetary worth. A thorough understanding of the assets at stake ensures that the negotiations are fair and reasonable for both parties involved.

Secondly, defendants must consider the impact of forfeiture on the accused and their ability to support themselves or their dependents. The forfeiture of assets can have far-reaching consequences, often affecting innocent family members or third parties with legitimate claims. Striking a balance between the interests of the government and the potential hardship faced by the accused or their loved ones is a challenge that requires sensitivity and pragmatism.

The Role of Restitution

Restitution is another critical aspect intertwined with criminal forfeiture settlements. Restitution seeks to compensate victims for the harm they have suffered as a result of the defendant's criminal actions. In many cases, plea agreements encompass both forfeiture and restitution provisions, with the liquidated value of the forfeited assets offsetting the amount of restitution. Federal defendants must assess the financial implications of restitution, ensuring that it aligns with the defendant's ability to make amends while also taking into account the government's pursuit of justice.

Substitute Assets

Under 21 USC 853(p), criminal forfeiture of substitute assets allows the government to seek the forfeiture of assets that have been transferred or substituted for the original assets subject to forfeiture. This provision aims to prevent defendants from evading forfeiture by transferring or concealing assets before they can be seized.  When assets that are directly traceable to the offense are no longer available for forfeiture due to transfer or concealment, the government can pursue the forfeiture of substitute assets.

The process of criminal forfeiture of substitute assets involves several steps. Firstly, the government must demonstrate to the court that the original assets are unavailable for forfeiture and provide evidence of a purposeful act or omission done by the defendant to transfer or conceal the assets. This may involve tracing the financial transactions or presenting other forms of evidence to establish the link between the original assets and the substitute assets.

Once the court determines that the government has met its burden of proof, it can order the forfeiture of the substitute assets. The court will evaluate the value of the substitute assets and may require the defendant to forfeit assets of equivalent value to the original assets. This ensures that the government can still seize assets that are connected to the illegal activities, even if they are not the exact same assets originally subject to forfeiture.

It is important to note that the criminal forfeiture of substitute assets under 21 USC 853(p) serves as a deterrent to individuals who may attempt to transfer or conceal assets to avoid forfeiture. By allowing the government to pursue substitute assets, the provision reinforces the effectiveness of criminal forfeiture as a tool to disrupt and dismantle criminal enterprises.

Conclusion

Negotiating criminal forfeiture settlements in federal court is a complex undertaking, demanding the expertise of federal attorneys well-versed in the intricacies of criminal law. The delicate balance between the interests of the government, the accused, and the pursuit of justice necessitates a nuanced approach that considers the nature of the assets, the impact on the accused and their loved ones, and the principles of restitution. As federal criminal defense lawyers navigate these challenging negotiations, they must strive to ensure fairness and uphold the principles of justice while recognizing the practical realities at play.

About the Author

Ann Fitz

Attorney Ann Fitz Attorney Ann Fitz has 20 years of experience as a federal criminal attorney and appellate practice attorney.  She began her career as a prosecutor in 2003 and started her own federal criminal defense practice in 2007.  She is devoted to protecting the rights of the accused in f...

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