[Congressional Record Volume 146, Number 45 (Tuesday, April 11, 2000)]
[House]
[Pages H2040-H2054]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CIVIL ASSET FORFEITURE REFORM ACT OF 2000
Mr. HYDE. Mr. Speaker, I move to suspend the rules and concur in the
Senate amendment to the bill (H.R. 1658) to provide a more just and
uniform procedure for Federal civil forfeitures, and for other
purposes.
The Clerk read as follows:
Senate amendment:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Civil
Asset Forfeiture Reform Act of 2000''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Creation of general rules relating to civil forfeiture
proceedings.
Sec. 3. Compensation for damage to seized property.
Sec. 4. Attorney fees, costs, and interest.
Sec. 5. Seizure warrant requirement.
Sec. 6. Use of forfeited funds to pay restitution to crime victims.
Sec. 7. Civil forfeiture of real property.
Sec. 8. Stay of civil forfeiture case.
Sec. 9. Civil restraining orders.
Sec. 10. Cooperation among Federal prosecutors.
Sec. 11. Statute of limitations for civil forfeiture actions.
Sec. 12. Destruction or removal of property to prevent seizure.
Sec. 13. Fungible property in bank accounts.
Sec. 14. Fugitive disentitlement.
Sec. 15. Enforcement of foreign forfeiture judgment.
Sec. 16. Encouraging use of criminal forfeiture as an alternative to
civil forfeiture.
Sec. 17. Access to records in bank secrecy jurisdictions
Sec. 18. Application to alien smuggling offenses.
Sec. 19. Enhanced visibility of the asset forfeiture program.
Sec. 20. Proceeds.
Sec. 21. Effective date.
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 982 the
following:
``Sec. 983. General rules for civil forfeiture proceedings
``(a) Notice; Claim; Complaint.--
``(1)(A)(i) Except as provided in clauses (ii) through (v),
in any nonjudicial civil forfeiture proceeding under a civil
forfeiture statute, with respect to which the Government is
required to send written notice to interested parties, such
notice shall be sent in a manner to achieve proper notice as
soon as practicable, and in no case more than 60 days after
the date of the seizure.
``(ii) No notice is required if, before the 60-day period
expires, the Government files a civil judicial forfeiture
action against the property and provides notice of that
action as required by law.
``(iii) If, before the 60-day period expires, the
Government does not file a civil judicial forfeiture action,
but does obtain a criminal indictment containing an
allegation that the property
[[Page H2041]]
is subject to forfeiture, the government shall either--
``(I) send notice within the 60 days and continue the
nonjudicial civil forfeiture proceeding under this section;
or
``(II) terminate the nonjudicial civil forfeiture
proceeding, and take the steps necessary to preserve its
right to maintain custody of the property as provided in the
applicable criminal forfeiture statute.
``(iv) 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 not more than 90 days after
the date of seizure by the State or local law enforcement
agency.
``(v) 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 supervisory official in the headquarters office of
the seizing agency may extend the period for sending notice
under subparagraph (A) for a period not to exceed 30 days
(which period may not be further extended except by a court),
if the official determines that the conditions in
subparagraph (D) are present.
``(C) Upon motion by the Government, a court may extend the
period for sending notice under subparagraph (A) for a period
not to exceed 60 days, which period may be further extended
by the court for 60-day periods, as necessary, if the court
determines, based on a written certification of a supervisory
official in the headquarters office of the seizing agency,
that the conditions in subparagraph (D) are present.
``(D) The period for sending notice under this paragraph
may be extended only if 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.
``(E) Each of the Federal seizing agencies conducting
nonjudicial forfeitures under this section shall report
periodically to the Committees on the Judiciary of the House
of Representatives and the Senate the number of occasions
when an extension of time is granted under subparagraph (B).
``(F) 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. The
Government shall not be required to return contraband or
other property that the person from whom the property was
seized may not legally possess.
``(2)(A) Any person claiming property seized in a
nonjudicial civil forfeiture proceeding under a civil
forfeiture statute 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
(which deadline may be not earlier than 35 days after the
date the letter is mailed), 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) A claim shall--
``(i) identify the specific property being claimed;
``(ii) state the claimant's interest in such property (and
provide customary documentary evidence of such interest if
available) and state that the claim is not frivolous; and
``(iii) be made under oath, subject to penalty of perjury.
``(D) A claim need not be made in any particular form. Each
Federal agency conducting nonjudicial forfeitures under this
section shall make claim forms generally available on
request, which forms shall be written in easily
understandable language.
``(E) 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--
``(i) file a complaint for forfeiture or return the
property, in accordance with subparagraph (A); or
``(ii) before the time for filing a complaint has expired--
``(I) obtain a criminal indictment containing an allegation
that the property is subject to forfeiture; and
``(II) take the steps necessary to preserve its right to
maintain custody of the property as provided in the
applicable criminal forfeiture statute,
the Government shall promptly release the property pursuant
to regulations promulgated by the Attorney General, and may
not take any further action to effect the civil forfeiture of
such property in connection with the underlying offense.
``(C) In lieu of, or in addition to, filing a civil
forfeiture complaint, the Government may include a forfeiture
allegation in a criminal indictment. If criminal forfeiture
is the only forfeiture proceeding commenced by the
Government, 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.
``(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) Representation.--
``(1)(A) If a person with standing to contest the
forfeiture of property in a judicial civil forfeiture
proceeding under a civil forfeiture statute is financially
unable to obtain representation by counsel, and the person is
represented by counsel appointed under section 3006A of this
title in connection with a related criminal case, the court
may authorize counsel to represent that person with respect
to the claim.
``(B) In determining whether to authorize counsel to
represent a person under subparagraph (A), the court shall
take into account such factors as--
``(i) the person's standing to contest the forfeiture; and
``(ii) whether the claim appears to be made in good faith.
``(2)(A) If a person with standing to contest the
forfeiture of property in a judicial civil forfeiture
proceeding under a civil forfeiture statute is financially
unable to obtain representation by counsel, and the property
subject to forfeiture is real property that is being used by
the person as a primary residence, the court, at the request
of the person, shall insure that the person is represented by
an attorney for the Legal Services Corporation with respect
to the claim.
``(B)(i) At appropriate times during a representation under
subparagraph (A), the Legal Services Corporation shall submit
a statement of reasonable attorney fees and costs to the
court.
``(ii) The court shall enter a judgment in favor of the
Legal Services Corporation for reasonable attorney fees and
costs submitted pursuant to clause (i) and treat such
judgment as payable under section 2465 of title 28, United
States Code, regardless of the outcome of the case.
``(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 a suit or action brought under
any civil forfeiture statute for the civil forfeiture of any
property--
``(1) the burden of proof is on the Government to
establish, by a preponderance of the evidence, that the
property is subject to forfeiture;
``(2) 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; and
``(3) if the Government's theory of forfeiture is that the
property was used to commit or facilitate the commission of a
criminal offense, or was involved in the commission of a
criminal offense, the Government shall establish that there
was a substantial connection between the property and the
offense.
``(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 the claimant 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 made a good faith
attempt 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.
[[Page H2042]]
``(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 means to maintain reasonable 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
reasonable 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.
``(5) If the court determines, in accordance with this
section, that an innocent owner has a partial interest in
property otherwise subject to forfeiture, or a joint tenancy
or tenancy by the entirety in such property, the court may
enter an appropriate order--
``(A) severing the property;
``(B) transferring the property to the Government with a
provision that the Government compensate the innocent owner
to the extent of his or her ownership interest once a final
order of forfeiture has been entered and the property has
been reduced to liquid assets; or
``(C) permitting the innocent owner to retain the property
subject to a lien in favor of the Government to the extent of
the forfeitable interest in the property.
``(6) In this subsection, the term `owner'--
``(A) 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; and
``(B) 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.
``(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)(A) Notwithstanding the expiration of any applicable
statute of limitations, 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.
``(B) Any proceeding described in subparagraph (A) shall be
commenced--
``(i) if nonjudicial, within 60 days of the entry of the
order granting the motion; or
``(ii) if judicial, within 6 months of the entry of the
order granting the motion.
``(3) A motion under paragraph (1) may be filed not later
than 5 years after the date of final publication of notice of
seizure of the property.
``(4) If, at the time a motion made under paragraph (1) is
granted, the forfeited property has been disposed of by the
Government in accordance with law, the Government may
institute proceedings against a substitute sum of money equal
to the value of the moving party's interest in the property
at the time the property was disposed of.
``(5) A motion filed under this subsection shall be the
exclusive remedy for seeking to set aside a declaration of
forfeiture under a civil forfeiture statute.
``(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 (8)
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)(A) If not later than 15 days after the date of a
request under paragraph (2) the property has not been
released, the claimant may file a petition in the district
court in which the complaint has been filed or, if no
complaint has been filed, in the district court in which the
seizure warrant was issued or in the district court for the
district in which the property was seized.
``(B) The petition described in subparagraph (A) shall set
forth--
``(i) the basis on which the requirements of paragraph (1)
are met; and
``(ii) the steps the claimant has taken to secure release
of the property from the appropriate official.
``(4) If the Government establishes that the claimant's
claim is frivolous, the court shall deny the petition. In
responding to a petition under this subsection on other
grounds, the Government may in appropriate cases submit
evidence ex parte in order to avoid disclosing any matter
that may adversely affect an ongoing criminal investigation
or pending criminal trial.
``(5) The court shall render a decision on a petition filed
under paragraph (3) not 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.
``(6) If--
``(A) a petition 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.
``(7) If the court grants a petition 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.
``(8) 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.--
``(1) The claimant under subsection (a)(4) may petition the
court to determine whether the forfeiture was
constitutionally excessive.
``(2) In making this determination, the court shall compare
the forfeiture to the gravity of the offense giving rise to
the forfeiture.
``(3) 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.
``(4) If the court finds that the forfeiture is grossly
disproportional to the offense it shall reduce or eliminate
the forfeiture as necessary to avoid a violation of the
Excessive Fines Clause of the Eighth Amendment of the
Constitution.
``(h) Civil Fine.--
``(1) In any civil forfeiture proceeding under a civil
forfeiture statute in which the Government prevails, if the
court finds that the claimant's assertion of an interest in
the property was frivolous, the court may impose a civil fine
on the claimant of an amount equal to 10 percent of the value
of the forfeited property, but in no event shall the fine be
less than $250 or greater than $5,000.
``(2) Any civil fine imposed under this subsection shall
not preclude the court from imposing sanctions under rule 11
of the Federal Rules of Civil Procedure.
``(3) In addition to the limitations of section 1915 of
title 28, United States Code, in no event shall a prisoner
file a claim under a civil forfeiture statute or appeal a
judgment in a civil action or proceeding based on a civil
forfeiture statute if the prisoner has, on 3 or more prior
occasions, while incarcerated or detained in any facility,
brought an action or appeal in a court of the United States
that was dismissed on the grounds that it is frivolous or
malicious, unless the prisoner shows extraordinary and
exceptional circumstances.
``(i) Civil Forfeiture Statute Defined.--In this section,
the term `civil forfeiture statute'--
``(1) means any provision of Federal law providing for the
forfeiture of property other than as a sentence imposed upon
conviction of a criminal offense; and
``(2) does not include--
``(A) the Tariff Act of 1930 or any other provision of law
codified in title 19;
``(B) the Internal Revenue Code of 1986;
``(C) the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
301 et seq.);
``(D) the Trading with the Enemy Act (50 U.S.C. App. 1 et
seq.); or
``(E) section 1 of title VI of the Act of June 15, 1917 (40
Stat. 233; 22 U.S.C. 401).''.
(b) Technical and Conforming Amendment.--The analysis for
chapter 46 of title 18,
[[Page H2043]]
United States Code, is amended by inserting after the item
relating to section 982 the following:
``983. General rules for civil forfeiture proceedings.''.
(c) Striking Superseded Provisions.--
(1) Civil forfeiture.--Section 981(a) of title 18, United
States Code, is amended--
(A) in paragraph (1), by striking ``Except as provided in
paragraph (2), the'' and inserting ``The''; and
(B) by striking paragraph (2).
(2) Drug forfeitures.--Paragraphs (4), (6) and (7) of
section 511(a) of the Controlled Substances Act (21 U.S.C.
881(a) (4), (6) and (7)) are each amended by striking ``,
except that'' and all that follows before the period at the
end.
(3) Automobiles.--Section 518 of the Controlled Substances
Act (21 U.S.C. 888) is repealed.
(4) Forfeitures in connection with sexual exploitation of
children.--Paragraphs (2) and (3) of section 2254(a) of title
18, United States Code, are each amended by striking ``,
except that'' and all that follows before the period at the
end.
(d) Legal Services Corporation Representation.--Section
1007(a) of the Legal Services Corporation Act (42 U.S.C.
2996f(a)) is amended--
(1) in paragraph (9), by striking ``and'' after the
semicolon;
(2) In paragraph (10), by striking the period and inserting
``; and''; and
(3) by adding at the end the following:
``(11) ensure that an indigent individual whose primary
residence is subject to civil forfeiture is represented by an
attorney for the Corporation in such civil action.''
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 was not forfeited;
``(3) the interest of the claimant was not remitted or
mitigated (if the property was subject to forfeiture); and
``(4) the claimant was not convicted of a crime for which
the interest of the claimant in the property was 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 accrues; 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
applicable to the 30-day Treasury Bill, 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), commencing 15 days after the
property was seized by a Federal law enforcement agency, or
was turned over to a Federal law enforcement agency by a
State or local law enforcement agency.
``(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 was subject to forfeiture
under a Federal criminal forfeiture law.
``(C) If there are multiple claims to the same property,
the United States shall not be liable for costs and attorneys
fees associated with any such claim if the United States--
``(i) promptly recognizes such claim;
``(ii) promptly returns the interest of the claimant in the
property to the claimant, if the property can be divided
without difficulty and there are no competing claims to that
portion of the property;
``(iii) does not cause the claimant to incur additional,
reasonable costs or fees; and
``(iv) prevails in obtaining forfeiture with respect to one
or more of the other claims.
``(D) If the court enters judgment in part for the claimant
and in part for the Government, the court shall reduce the
award of costs and attorney fees accordingly.''.
(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 has been filed in the
United States district court and the court 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 transferred to a Federal agency.
``(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
may be executed in any district in which the property is
found, or transmitted to the central authority of any foreign
state for service in accordance with any treaty or other
international agreement. Any motion for the return of
property seized under this section shall be filed in the
district court in which the seizure warrant was issued or in
the district court for the district in which the property was
seized.
``(4)(A) If any person is arrested or charged in a foreign
country in connection with an offense that would give rise to
the forfeiture of property in the United States under this
section or under the Controlled Substances Act, the Attorney
General may apply to any Federal judge or magistrate judge in
the district in which the property is located for an ex parte
order restraining the property subject to forfeiture for not
more than 30 days, except that the time may be extended for
good cause shown at a hearing conducted in the manner
provided in rule 43(e) of the Federal Rules of Civil
Procedure.
``(B) The application for the restraining order shall set
forth the nature and circumstances of the foreign charges and
the basis for belief that the person arrested or charged has
property in the United States that would be subject to
forfeiture, and shall contain a statement that the
restraining order is needed to preserve the availability of
property for such time as is necessary to receive evidence
from the foreign country or elsewhere in support of probable
cause for the seizure of the property under this
subsection.''.
(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
[[Page H2044]]
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--
``(A) is a fugitive;
``(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)(1) Real property may be seized prior to the entry of
an order of forfeiture if--
``(A) the Government notifies the court that it intends to
seize the property before trial; and
``(B) the court--
``(i) 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 in which the property
owner has a meaningful opportunity to be heard; or
``(ii) 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.
``(2) For purposes of paragraph (1)(B)(ii), 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)(1)(B)(ii), it shall conduct a prompt
post-seizure hearing during which the property owner shall
have an opportunity to contest the basis for the seizure.
``(f) This section--
``(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. STAY OF CIVIL FORFEITURE CASE.
(a) In General.--Section 981(g) of title 18, United States
Code, is amended to read as follows:
``(g)(1) Upon the motion of the United States, the court
shall stay the civil forfeiture proceeding if the court
determines that civil discovery will adversely affect the
ability of the Government to conduct a related criminal
investigation or the prosecution of a related criminal case.
``(2) Upon the motion of a claimant, the court shall stay
the civil forfeiture proceeding with respect to that claimant
if the court determines that--
``(A) the claimant is the subject of a related criminal
investigation or case;
``(B) the claimant has standing to assert a claim in the
civil forfeiture proceeding; and
``(C) continuation of the forfeiture proceeding will burden
the right of the claimant against self-incrimination in the
related investigation or case.
``(3) With respect to the impact of civil discovery
described in paragraphs (1) and (2), the court may determine
that a stay is unnecessary if a protective order limiting
discovery would protect the interest of 1 party without
unfairly limiting the ability of the opposing party to pursue
the civil case. In no case, however, shall the court impose a
protective order as an alternative to a stay if the effect of
such protective order would be to allow 1 party to pursue
discovery while the other party is substantially unable to do
so.
``(4) In this subsection, the terms `related criminal case'
and `related criminal investigation' mean an actual
prosecution or investigation in progress at the time at which
the request for the stay, or any subsequent motion to lift
the stay is made. In determining whether a criminal case or
investigation is `related' to a civil forfeiture proceeding,
the court shall consider the degree of similarity between the
parties, witnesses, facts, and circumstances involved in the
2 proceedings, without requiring an identity with respect to
any 1 or more factors.
``(5) In requesting a stay under paragraph (1), the
Government may, in appropriate cases, submit evidence ex
parte in order to avoid disclosing any matter that may
adversely affect an ongoing criminal investigation or pending
criminal trial.
``(6) Whenever a civil forfeiture proceeding is stayed
pursuant to this subsection, the court shall enter any order
necessary to preserve the value of the property or to protect
the rights of lienholders or other persons with an interest
in the property while the stay is in effect.
``(7) A determination by the court that the claimant has
standing to request a stay pursuant to paragraph (2) shall
apply only to this subsection and shall not preclude the
Government from objecting to the standing of the claimant by
dispositive motion or at the time of trial.''.
(b) Drug Forfeitures.--Section 511(i) of the Controlled
Substances Act (21 U.S.C. 881(i)) is amended to read as
follows:
``(i) The provisions of section 981(g) of title 18, United
States Code, regarding the stay of a civil forfeiture
proceeding shall apply to forfeitures under this section.''.
SEC. 9. CIVIL RESTRAINING ORDERS.
Section 983 of title 18, United States Code, as added by
this Act, is amended by adding at the end the following:
``(j) Restraining Orders; Protective Orders.--
``(1) Upon application of the United States, the court may
enter a restraining order or injunction, require the
execution of satisfactory performance bonds, create
receiverships, appoint conservators, custodians, appraisers,
accountants, or trustees, or take any other action to seize,
secure, maintain, or preserve the availability of property
subject to civil forfeiture--
``(A) upon the filing of a civil forfeiture complaint
alleging that the property with respect to which the order is
sought is subject to civil forfeiture; or
``(B) prior to the filing of such a complaint, if, after
notice to persons appearing to have an interest in the
property and opportunity for a hearing, the court determines
that--
``(i) there is a substantial probability that the United
States will prevail on the issue of forfeiture and that
failure to enter the order will result in the property being
destroyed, removed from the jurisdiction of the court, or
otherwise made unavailable for forfeiture; and
``(ii) the need to preserve the availability of the
property through the entry of the requested order outweighs
the hardship on any party against whom the order is to be
entered.
``(2) An order entered pursuant to paragraph (1)(B) shall
be effective for not more than 90 days, unless extended by
the court for good cause shown, or unless a complaint
described in paragraph (1)(A) has been filed.
``(3) A temporary restraining order under this subsection
may be entered upon application of the United States without
notice or opportunity for a hearing when a complaint has not
yet been filed with respect to the property, if the United
States demonstrates that there is probable cause to believe
that the property with respect to which the order is sought
is subject to civil forfeiture and that provision of notice
will jeopardize the availability of the property for
forfeiture. Such a temporary order shall expire not more than
10 days after the date on which it is entered, unless
extended for good cause shown or unless the party against
whom it is entered consents to an extension for a longer
period. A hearing requested concerning an order entered under
this paragraph shall be held at the earliest possible time
and prior to the expiration of the temporary order.
``(4) The court may receive and consider, at a hearing held
pursuant to this subsection, evidence and information that
would be inadmissible under the Federal Rules of Evidence.''.
SEC. 10. COOPERATION AMONG FEDERAL PROSECUTORS.
Section 3322(a) of title 18, United States Code, is
amended--
(1) by striking ``civil forfeiture under section 981 of
title 18, United States Code, of property described in
section 981(a)(1)(C) of such title'' and inserting ``any
civil forfeiture provision of Federal law''; and
(2) by striking ``concerning a banking law violation''.
SEC. 11. STATUTE OF LIMITATIONS FOR CIVIL FORFEITURE ACTIONS.
Section 621 of the Tariff Act of 1930 (19 U.S.C. 1621) is
amended by inserting ``, or in the case of forfeiture, within
2 years after the time when the involvement of the property
in the alleged offense was discovered, whichever was later''
after ``within five years after the time when the alleged
offense was discovered''.
SEC. 12. DESTRUCTION OR REMOVAL OF PROPERTY TO PREVENT
SEIZURE.
Section 2232 of title 18, United States Code, is amended--
(1) by striking subsections (a) and (b);
(2) by inserting ``(e) Foreign Intelligence Surveillance.--
'' before ``Whoever, having knowledge that a Federal
officer'';
(3) by redesignating subsection (c) as subsection (d); and
(4) by inserting before subsection (d), as redesignated,
the following:
``(a) Destruction or Removal of Property To Prevent
Seizure.--Whoever, before, during, or after any search for or
seizure of property by
[[Page H2045]]
any person authorized to make such search or seizure,
knowingly destroys, damages, wastes, disposes of, transfers,
or otherwise takes any action, or knowingly attempts to
destroy, damage, waste, dispose of, transfer, or otherwise
take any action, for the purpose of preventing or impairing
the Government's lawful authority to take such property into
its custody or control or to continue holding such property
under its lawful custody and control, shall be fined under
this title or imprisoned not more than 5 years, or both.
``(b) Impairment of In Rem Jurisdiction.--Whoever, knowing
that property is subject to the in rem jurisdiction of a
United States court for purposes of civil forfeiture under
Federal law, knowingly and without authority from that court,
destroys, damages, wastes, disposes of, transfers, or
otherwise takes any action, or knowingly attempts to destroy,
damage, waste, dispose of, transfer, or otherwise take any
action, for the purpose of impairing or defeating the court's
continuing in rem jurisdiction over the property, shall be
fined under this title or imprisoned not more than 5 years,
or both.
``(c) Notice of Search or Execution of Seizure Warrant or
Warrant of Arrest In Rem.--Whoever, having knowledge that any
person authorized to make searches and seizures, or to
execute a seizure warrant or warrant of arrest in rem, in
order to prevent the authorized seizing or securing of any
person or property, gives notice or attempts to give notice
in advance of the search, seizure, or execution of a seizure
warrant or warrant of arrest in rem, to any person shall be
fined under this title or imprisoned not more than 5 years,
or both.''.
SEC. 13. FUNGIBLE PROPERTY IN BANK ACCOUNTS.
(a) In General.--Section 984 of title 18, United States
Code, is amended--
(1) by striking subsection (a) and redesignating
subsections (b), (c), and (d) as subsections (a), (b), and
(c), respectively;
(2) in subsection (a), as redesignated--
(A) by striking ``or other fungible property'' and
inserting ``or precious metals''; and
(B) in paragraph (2), by striking ``subsection (c)'' and
inserting ``subsection (b)'';
(3) in subsection (c), as redesignated--
(A) by striking paragraph (1) and inserting the following:
``(1) Subsection (a) does not apply to an action against
funds held by a financial institution in an interbank account
unless the account holder knowingly engaged in the offense
that is the basis for the forfeiture.''; and
(B) in paragraph (2), by striking ``(2) As used in this
section, the term'' and inserting the following:
``(2) In this subsection--
``(A) the term `financial institution' includes a foreign
bank (as defined in section 1(b)(7) of the International
Banking Act of 1978 (12 U.S.C. 3101(b)(7))); and
``(B) the term''; and
(4) by adding at the end the following:
``(d) Nothing in this section may be construed to limit the
ability of the Government to forfeit property under any
provision of law if the property involved in the offense
giving rise to the forfeiture or property traceable thereto
is available for forfeiture.''.
SEC. 14. FUGITIVE DISENTITLEMENT.
(a) In General.--Chapter 163 of title 28, United States
Code, is amended by adding at the end the following:
``Sec. 2466. Fugitive disentitlement
``A judicial officer may disallow a person from using the
resources of the courts of the United States in furtherance
of a claim in any related civil forfeiture action or a claim
in third party proceedings in any related criminal forfeiture
action upon a finding that such person--
``(1) after notice or knowledge of the fact that a warrant
or process has been issued for his apprehension, in order to
avoid criminal prosecution--
``(A) purposely leaves the jurisdiction of the United
States;
``(B) declines to enter or reenter the United States to
submit to its jurisdiction; or
``(C) otherwise evades the jurisdiction of the court in
which a criminal case is pending against the person; and
``(2) is not confined or held in custody in any other
jurisdiction for commission of criminal conduct in that
jurisdiction.''.
(b) Conforming Amendment.--The analysis for chapter 163 of
title 28, United States Code, is amended by adding at the end
the following:
``2466. Fugitive disentitlement.''.
(c) Effective Date.--The amendments made by this section
shall apply to any case pending on or after the date of
enactment of this Act.
SEC. 15. ENFORCEMENT OF FOREIGN FORFEITURE JUDGMENT.
(a) In General.--Chapter 163 of title 28, United States
Code, is amended by adding at the end the following:
``Sec. 2467. Enforcement of foreign judgment
``(a) Definitions.--In this section--
``(1) the term `foreign nation' means a country that has
become a party to the United Nations Convention Against
Illicit Traffic in Narcotic Drugs and Psychotropic Substances
(referred to in this section as the `United Nations
Convention') or a foreign jurisdiction with which the United
States has a treaty or other formal international agreement
in effect providing for mutual forfeiture assistance; and
``(2) the term `forfeiture or confiscation judgment' means
a final order of a foreign nation compelling a person or
entity--
``(A) to pay a sum of money representing the proceeds of an
offense described in Article 3, Paragraph 1, of the United
Nations Convention, or any foreign offense described in
section 1956(c)(7)(B) of title 18, or property the value of
which corresponds to such proceeds; or
``(B) to forfeit property involved in or traceable to the
commission of such offense.
``(b) Review by Attorney General.--
``(1) In general.--A foreign nation seeking to have a
forfeiture or confiscation judgment registered and enforced
by a district court of the United States under this section
shall first submit a request to the Attorney General or the
designee of the Attorney General, which request shall
include--
``(A) a summary of the facts of the case and a description
of the proceedings that resulted in the forfeiture or
confiscation judgment;
``(B) certified copy of the forfeiture or confiscation
judgment;
``(C) an affidavit or sworn declaration establishing that
the defendant received notice of the proceedings in
sufficient time to enable the defendant to defend against the
charges and that the judgment rendered is in force and is not
subject to appeal; and
``(D) such additional information and evidence as may be
required by the Attorney General or the designee of the
Attorney General.
``(2) Certification of request.--The Attorney General or
the designee of the Attorney General shall determine whether,
in the interest of justice, to certify the request, and such
decision shall be final and not subject to either judicial
review or review under subchapter II of chapter 5, or chapter
7, of title 5 (commonly known as the `Administrative
Procedure Act').
``(c) Jurisdiction and Venue.--
``(1) In general.--If the Attorney General or the designee
of the Attorney General certifies a request under subsection
(b), the United States may file an application on behalf of a
foreign nation in district court of the United States seeking
to enforce the foreign forfeiture or confiscation judgment as
if the judgment had been entered by a court in the United
States.
``(2) Proceedings.--In a proceeding filed under paragraph
(1)--
``(A) the United States shall be the applicant and the
defendant or another person or entity affected by the
forfeiture or confiscation judgment shall be the respondent;
``(B) venue shall lie in the district court for the
District of Columbia or in any other district in which the
defendant or the property that may be the basis for
satisfaction of a judgment under this section may be found;
and
``(C) the district court shall have personal jurisdiction
over a defendant residing outside of the United States if the
defendant is served with process in accordance with rule 4 of
the Federal Rules of Civil Procedure.
``(d) Entry and Enforcement of Judgment.--
``(1) In general.--The district court shall enter such
orders as may be necessary to enforce the judgment on behalf
of the foreign nation unless the court finds that--
``(A) the judgment was rendered under a system that
provides tribunals or procedures incompatible with the
requirements of due process of law;
``(B) the foreign court lacked personal jurisdiction over
the defendant;
``(C) the foreign court lacked jurisdiction over the
subject matter;
``(D) the defendant in the proceedings in the foreign court
did not receive notice of the proceedings in sufficient time
to enable him or her to defend; or
``(E) the judgment was obtained by fraud.
``(2) Process.--Process to enforce a judgment under this
section shall be in accordance with rule 69(a) of the Federal
Rules of Civil Procedure.
``(e) Finality of Foreign Findings.--In entering orders to
enforce the judgment, the court shall be bound by the
findings of fact to the extent that they are stated in the
foreign forfeiture or confiscation judgment.
``(f) Currency Conversion.--The rate of exchange in effect
at the time the suit to enforce is filed by the foreign
nation shall be used in calculating the amount stated in any
forfeiture or confiscation judgment requiring the payment of
a sum of money submitted for registration.''.
(b) Conforming Amendment.--The analysis for chapter 163 of
title 28, United States Code, is amended by adding at the end
the following:
``2467. Enforcement of foreign judgment.''.
SEC. 16. ENCOURAGING USE OF CRIMINAL FORFEITURE AS AN
ALTERNATIVE TO CIVIL FORFEITURE.
Section 2461 of title 28, United States Code, is amended by
adding at the end the following:
``(c) If a forfeiture of property is authorized in
connection with a violation of an Act of Congress, and any
person is charged in an indictment or information with such
violation but no specific statutory provision is made for
criminal forfeiture upon conviction, the Government may
include the forfeiture in the indictment or information in
accordance with the Federal Rules of Criminal Procedure, and
upon conviction, the court shall order the forfeiture of the
property in accordance with the procedures set forth in
section 413 of the Controlled Substances Act (21 U.S.C. 853),
other than subsection (d) of that section.''.
SEC. 17. ACCESS TO RECORDS IN BANK SECRECY JURISDICTIONS.
Section 986 of title 18, United States Code, is amended by
adding at the end the following:
``(d) Access to Records in Bank Secrecy Jurisdictions.--
``(1) In general.--In any civil forfeiture case, or in any
ancillary proceeding in any criminal forfeiture case governed
by section 413(n) of the Controlled Substances Act (21 U.S.C.
853(n)), in which--
``(A) financial records located in a foreign country may be
material--
``(i) to any claim or to the ability of the Government to
respond to such claim; or
``(ii) in a civil forfeiture case, to the ability of the
Government to establish the forfeitability of the property;
and
[[Page H2046]]
``(B) it is within the capacity of the claimant to waive
the claimant's rights under applicable financial secrecy
laws, or to obtain the records so that such records can be
made available notwithstanding such secrecy laws;
the refusal of the claimant to provide the records in
response to a discovery request or to take the action
necessary otherwise to make the records available shall be
grounds for judicial sanctions, up to and including dismissal
of the claim with prejudice.
``(2) Privilege.--This subsection shall not affect the
right of the claimant to refuse production on the basis of
any privilege guaranteed by the Constitution of the United
States or any other provision of Federal law.''.
SEC. 18. APPLICATION TO ALIEN SMUGGLING OFFENSES.
(a) Amendment of the Immigration and Nationality Act.--
Section 274(b) of the Immigration and Nationality Act (8
U.S.C. 1324(b)) is amended to read as follows:
``(b) Seizure and Forfeiture.--
``(1) In general.--Any conveyance, including any vessel,
vehicle, or aircraft, that has been or is being used in the
commission of a violation of subsection (a), the gross
proceeds of such violation, and any property traceable to
such conveyance or proceeds, shall be seized and subject to
forfeiture.
``(2) Applicable procedures.--Seizures and forfeitures
under this subsection shall be governed by the provisions of
chapter 46 of title 18, United States Code, relating to civil
forfeitures, including section 981(d) of such title, except
that such duties as are imposed upon the Secretary of the
Treasury under the customs laws described in that section
shall be performed by such officers, agents, and other
persons as may be designated for that purpose by the Attorney
General.
``(3) Prima facie evidence in determinations of
violations.--In determining whether a violation of subsection
(a) has occurred, any of the following shall be prima facie
evidence that an alien involved in the alleged violation had
not received prior official authorization to come to, enter,
or reside in the United States or that such alien had come
to, entered, or remained in the United States in violation of
law:
``(A) Records of any judicial or administrative proceeding
in which that alien's status was an issue and in which it was
determined that the alien had not received prior official
authorization to come to, enter, or reside in the United
States or that such alien had come to, entered, or remained
in the United States in violation of law.
``(B) Official records of the Service or of the Department
of State showing that the alien had not received prior
official authorization to come to, enter, or reside in the
United States or that such alien had come to, entered, or
remained in the United States in violation of law.
``(C) Testimony, by an immigration officer having personal
knowledge of the facts concerning that alien's status, that
the alien had not received prior official authorization to
come to, enter, or reside in the United States or that such
alien had come to, entered, or remained in the United States
in violation of law.''.
(b) Technical Corrections to Existing Criminal Forfeiture
Authority.--Section 982(a)(6) of title 18, United States
Code, is amended--
(1) in subparagraph (A)--
(A) by inserting ``section 274(a), 274A(a)(1), or
274A(a)(2) of the Immigration and Nationality Act or'' before
``section 1425'' the first place it appears;
(B) in clause (i), by striking ``a violation of, or a
conspiracy to violate, subsection (a)'' and inserting ``the
offense of which the person is convicted''; and
(C) in subclauses (I) and (II) of clause (ii), by striking
``a violation of, or a conspiracy to violate, subsection
(a)'' and all that follows through ``of this title'' each
place it appears and inserting ``the offense of which the
person is convicted'';
(2) by striking subparagraph (B); and
(3) in the second sentence--
(A) by striking ``The court, in imposing sentence on such
person'' and inserting the following:
``(B) The court, in imposing sentence on a person described
in subparagraph (A)''; and
(B) by striking ``this subparagraph'' and inserting ``that
subparagraph''.
SEC. 19. ENHANCED VISIBILITY OF THE ASSET FORFEITURE PROGRAM.
Section 524(c)(6) of title 28, United States Code, is
amended to read as follows:
``(6)(A) The Attorney General shall transmit to Congress
and make available to the public, not later than 4 months
after the end of each fiscal year, detailed reports for the
prior fiscal year as follows:
``(i) A report on total deposits to the Fund by State of
deposit.
``(ii) A report on total expenses paid from the Fund, by
category of expense and recipient agency, including equitable
sharing payments.
``(iii) A report describing the number, value, and types of
properties placed into official use by Federal agencies, by
recipient agency.
``(iv) A report describing the number, value, and types of
properties transferred to State and local law enforcement
agencies, by recipient agency.
``(v) A report, by type of disposition, describing the
number, value, and types of forfeited property disposed of
during the year.
``(vi) A report on the year-end inventory of property under
seizure, but not yet forfeited, that reflects the type of
property, its estimated value, and the estimated value of
liens and mortgages outstanding on the property.
``(vii) A report listing each property in the year-end
inventory, not yet forfeited, with an outstanding equity of
not less than $1,000,000.
``(B) The Attorney General shall transmit to Congress and
make available to the public, not later than 2 months after
final issuance, the audited financial statements for each
fiscal year for the Fund.
``(C) Reports under subparagraph (A) shall include
information with respect to all forfeitures under any law
enforced or administered by the Department of Justice.
``(D) The transmittal and publication requirements in
subparagraphs (A) and (B) may be satisfied by--
``(i) posting the reports on an Internet website maintained
by the Department of Justice for a period of not less than 2
years; and
``(ii) notifying the Committees on the Judiciary of the
House of Representatives and the Senate when the reports are
available electronically.''.
SEC. 20. PROCEEDS.
(a) Forfeiture of Proceeds.--Section 981(a)(1)(C) of title
18, United States Code, is amended by striking ``or a
violation of section 1341'' and all that follows and
inserting ``or any offense constituting `specified unlawful
activity' (as defined in section 1956(c)(7) of this title),
or a conspiracy to commit such offense.''.
(b) Definition of Proceeds.--Section 981(a) of title 18,
United States Code, is amended by adding at the end the
following:
``(2) For purposes of paragraph (1), the term `proceeds' is
defined as follows:
``(A) In cases involving illegal goods, illegal services,
unlawful activities, and telemarketing and health care fraud
schemes, the term `proceeds' means property of any kind
obtained directly or indirectly, as the result of the
commission of the offense giving rise to forfeiture, and any
property traceable thereto, and is not limited to the net
gain or profit realized from the offense.
``(B) In cases involving lawful goods or lawful services
that are sold or provided in an illegal manner, the term
`proceeds' means the amount of money acquired through the
illegal transactions resulting in the forfeiture, less the
direct costs incurred in providing the goods or services. The
claimant shall have the burden of proof with respect to the
issue of direct costs. The direct costs shall not include any
part of the overhead expenses of the entity providing the
goods or services, or any part of the income taxes paid by
the entity.
``(C) In cases involving fraud in the process of obtaining
a loan or extension of credit, the court shall allow the
claimant a deduction from the forfeiture to the extent that
the loan was repaid, or the debt was satisfied, without any
financial loss to the victim.''.
SEC. 21. EFFECTIVE DATE.
Except as provided in section 14(c), this Act and the
amendments made by this Act shall apply to any forfeiture
proceeding commenced on or after the date that is 120 days
after the date of enactment of this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Illinois (Mr. Hyde) and the gentlewoman from Texas (Ms. Jackson-Lee)
each will control 20 minutes.
The Chair recognizes the gentleman from Illinois (Mr. Hyde).
General Leave
Mr. HYDE. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days within which to revise and extend their remarks
on H.R. 1658.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Illinois?
There was no objection.
Mr. HYDE. Mr. Speaker, I yield myself such time as I may consume.
(Mr. HYDE asked and was given permission to revise and extend his
remarks.)
Mr. HYDE. Mr. Speaker, this bill represents the culmination of a 7-
year effort to reform our Nation's civil asset forfeiture laws. We
would not be here today without the momentum generated by the House's
passage of H.R. 1658 last June by the overwhelming vote of 375-48. That
vote was made possible by the tireless support of my colleagues, the
gentleman from Michigan (Mr. Conyers), the ranking member of the
Committee on the Judiciary; the gentleman from Georgia (Mr. Barr); and
the gentleman from Massachusetts (Mr. Frank) and their staffs.
House passage was also made possible by the support of a multitude of
organizations who put aside their differences to work toward a common
goal: the National Association of Criminal Defense Lawyers, Americans
for Tax Reform, the American Civil Liberties Union, the National Rifle
Association, the American Bar Association, the National Association of
Realtors, the Credit Union National Association, the American Bankers
Association, the Aircraft Owners and Pilots Association, the National
Association of Home Builders, the Boat Owners Association of the United
States, United States Chamber of Commerce, the National Apartment
Association, the American Hotel and Motel Association, and the Law
Enforcement Alliance of America.
H.R. 1658 only got us through the House. Forfeiture reform would not
[[Page H2047]]
have become a reality had the cause not been adopted by Orrin Hatch,
the chairman of the Senate Committee on the Judiciary; and Pat Leahy,
the committee's ranking member. I owe a debt of gratitude to the
Senators and their staffs for succeeding in crafting a bill that could
get through the Senate and yet retain all the necessary elements of
reform.
I must thank Senators Sessions and Schumer and their staffs for
negotiating in the utmost good faith in helping craft a bill that both
reforms our forfeiture laws and yet leaves civil forfeitures as an
important crime-fighting tool for Federal, State, and local law
enforcement.
Similar thanks must go to Attorney General Reno and Assistant
Attorney General Robert Raben. They can all be proud of what they
helped to accomplish.
I also must thank our former colleague Bob Bauman and Brenda
Grantland of Forfeiture Endangers American Rights for their long and
dedicated work on behalf of forfeiture reform, and Chicago Tribune
columnist Stephen Chapman for first alerting me to the great abuses of
forfeiture laws.
And I must thank David Smith, who has been there since the beginning.
David helped me draft my first forfeiture reform bill, the Civil Asset
Forfeiture Reform Act of 1993, and helped draft Senators Leahy's and
Hatch's reform bill and helped draft the Senate-passed bill we are
considering today. This bill is truly his accomplishment.
And finally, George Fishman of our Committee on the Judiciary staff
has been tireless in helping shepherd this legislation through the
House and Senate.
Let me briefly outline the main points of H.R. 1658 as passed by the
Senate. The bill makes eight fundamental reforms:
(1) The bill requires the Government to prove by a preponderance of
the evidence that the property is subject to forfeiture. Currently,
when a property owner goes to Federal court to challenge a seizure of
property, all the Government needs to do is make an initial showing of
probable cause that the property is subject to civil forfeiture. The
owner then must establish that the property is innocent.
(2) The bill provides that if the Government's theory of forfeiture
is that the property was used to commit or facilitate the commission of
a crime or was involved in the commission of a crime, the Government
must show that there was a substantial connection between the property
and the crime.
(3) The bill provides that property can be released by a Federal
court pending final disposition of a civil forfeiture case if continued
possession by the Government would cause the property owner substantial
hardship, such as preventing the functioning of a business or leaving
an individual homeless, and the likely hardship outweighs the risks
that the property will be destroyed, damaged, lost, concealed or
transferred if returned to the owner.
(4) The bill provides that property owners who substantially prevail
in court proceedings challenging the seizure of their property will
receive reasonable attorney's fees. In addition, the bill allows a
court to provide counsel for indigents if they are represented by
appointed counsel in related criminal cases. Currently, property owners
who successfully challenge the seizure of their property almost never
are awarded attorney's fees. In addition, indigents have no right to
appointed counsel in civil forfeiture cases.
(5) The bill eliminates the cost bond requirement, under which a
property owner must now post a bond of the lesser of $5,000 or 10
percent of the value of the property seized merely for the right to
contest a civil forfeiture in Federal court. The bill provides that if
a court finds that a claimant's assertion of an interest in property
was frivolous, the court may impose a civil fine.
(6) The bill creates a uniform innocent owner defense for all Federal
civil forfeiture statutes. Importantly, the defense protects property
owners who have given timely notice to the police of the illegal use of
their property and have in a timely fashion revoked or made a good
faith attempt to revoke permission to use the property from those
engaging in the illegal conduct.
(7) The bill allows property owners to sue the Federal Government for
compensation for damage to their property when they prevail in civil
forfeiture actions. Currently, the Federal Government is exempt from
liability for damage caused during the handling or storage of property
being detained by law enforcement officers.
(8) The bill provides a uniform definition of the forfeitable
proceeds of criminal acts. In cases involving illegal goods or
services, unlawful activities and telemarketing and health care fraud
schemes, proceeds are properties obtained directly or indirectly as a
result of the commission of the offenses giving rise to forfeiture, and
any properties traceable thereto, and are not limited to the net gain
or profit realized from the offenses. In cases involving lawful goods
or services that are sold or provided in an illegal manner, proceeds
are money acquired through the illegal transactions less the direct
costs incurred in providing the goods or services.
H.R. 1658 also contains a number of provisions addressing the needs
of the Justice Department and State and local law enforcement.
{time} 1345
These include increasing the availability of criminal forfeiture and
the civil forfeiture of the proceeds of crimes, relaxing the statute of
limitations governing civil forfeiture actions, allowing Federal courts
discretionary use of the fugitive disentitlement doctrine, allowing
Federal courts to enhance forfeiture judgments of foreign nations,
allowing Federal courts to impose sanctions up to and including
dismissal of an owner's claim if property owners who have filed claims
in civil forfeiture cases refuse to provide the government with access
to potentially material financial records in foreign countries, and
allowing Federal courts to issue civil restraining orders against
property where there is a substantial probability the government will
prevail in civil forfeiture actions.
This bill is one we can all be proud of. It returns civil asset
forfeiture to the ranks of respected law enforcement tools that can be
used without risk to the civil liberties and property rights of
American citizens. We are all better off that this is so.
Mr. Speaker, I insert into the Record at this point a Congressional
Budget Office letter on this matter. I urge my colleagues to support
this bill today.
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 5, 2000.
Hon. Orrin G. Hatch,
Chairman, Committee on the Judiciary,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1658, the Civil
Asset Forfeiture Reform Act of 2000.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Lanette
J. Keith (for federal costs), who can be reached at 226-2860,
and Shelley Finlayson (for the state and local impact), who
can be reached at 225-3220.
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.
congressional budget office cost estimate
H.R. 1658--Civil Asset Forfeiture Reform Act of 2000
Summary: H.R. 1658 would make many changes to federal asset
forfeiture laws that would affect the processing of about
60,000 civil seizures conducted each year by the Department
of justice (DOJ) and the Department of the Treasury. (The
Treasury Department makes an additional 50,000 seizures
annually that would not be affected by this act.) Assuming
appropriation of the necessary amounts, CBO estimates that
implementing H.R. 1658 would cost $9 million over the 2001-
2005 period to pay for additional costs of court-appointed
counsel that would be authorized by this legislation. In
addition, enacting the legislation would affect direct
spending and receipts; therefore, pay-as-you-go procedures
would apply.
Because CBO expects that enacting H.R. 1658 would result in
fewer civil seizures by DOJ and the Treasury Department, we
estimate that governmental receipts (i.e., revenues)
deposited into the Assets Forfeiture Fund and the Treasury
Forfeiture Fund would decrease by about $115 million each
year beginning in fiscal year 2001. Under current law, both
forfeiture funds are authorized to collect revenue and spend
the balance without further appropriation. Thus, the
corresponding direct spending from the two funds would also
decline, but with some lag. CBO estimates that enacting this
provision would decrease projected surpluses by a total of
$46 million over the fiscal years 2001 and 2002 (the
difference between lower revenues and lower direct spending
over those years),
[[Page H2048]]
but that by fiscal year 2003 the changes in receipts and
spending would be equal, resulting in no net budgetary impact
thereafter.
H.R. 1658 also would require the Legal Services Corporation
(LSC) to represent certain claimants in civil forfeiture
cases and would require the federal government to reimburse
the LSC for its costs. CBO estimates that this provision
would increase direct spending by $5 million over the 2001-
2005 period.
In addition, H.R. 1658 would make the federal government
liable for any property damage, attorney fees, and pre-
judgment and post-judgment interested payments on certain
assets to prevailing parties in civil forfeiture proceedings.
CBO cannot estimate either the likelihood or the magnitude of
such awards because there is no basis for predicting either
the outcome of possible litigation or the amount of
compensation.
H.R. 1658 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act
(UMRA), but CBO expects that enacting this legislation would
lead to a reduction in payments to state and local
governments from the Assets Forfeiture Fund and the Treasury
Forfeiture Fund.
Description of the Act's major provisions: H.R. 1658 would
make various changes to federal laws relating to the
forfeiture of civil assets. In particular, the act would:
Establish a short statutory time limit for the federal
government to notify interested parties of a seizure and to
file a complaint;
Eliminate the cost bond requirement, whereby claimants have
to post bond in an amount of the lesser of $5,000 or 10
percent of the value of the seized property (but not less
than $250) to preserve the right to contest a forfeiture;
Permit federal courts to appoint counsel for certain
indigent claimants;
Increase the federal government's burden of proof to a
preponderance of the evidence;
Require the federal government to compensate prevailing
claimants for property damage;
Establish the federal government's liability for payment of
attorney fees and pre-judgment and post-judgment interest;
and
Authorize the use of forfeited funds to pay restitution to
crime victims.
Estimated cost to the Federal Government: As shown in the
following table, CBO estimates that implementing H.R. 1658
would increase discretionary spending for court-appointed
counsel by $9 million over the 2001-2005 period, assuming
appropriation of the necessary funds. (For the purposes of
this estimate. CBO assumes that spending for this purpose
would be funded with appropriated amounts from the
Defender Services account.) In addition, we estimate that
over the 2001-2005 period, the reductions in direct
spending of funds from forfeited assets would be smaller
than the reductions in revenues estimated to occur as a
result of enacting H.R. 1658, resulting in a net cost of
$46 over the five-year period. Finally, CBO estimates that
additional payments to the Legal Services Corporation
would be about $1 million each year. The costs of this
legislation fall within budget function 750
(administration of justice).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars
-----------------------------------------------------
2000 2001 2002 2003 2004 2005
----------------------------------------------------------------------------------------------------------------
Spending subject to appropriation
Spending Under Current Law Defender Services:
Estimated Authorization Level \1\..................... 375 387 397 408 419 429
Estimated Outlays..................................... 373 389 398 408 419 429
Proposed Changes:
Estimated Authorization Level......................... 0 1 2 2 2 2
Estimated Outlays..................................... 0 1 2 2 2 2
Spending Under H.R. 1658 for Defender Services:
Estimated Authorization Level \1\..................... 375 388 399 410 421 431
Estimated Outlays..................................... 373 390 399 410 421 431
Changes in revenues and direct spending
Changes in Forfeiture Receipts:
Estimated Revenues.................................... 0 -115 -115 -115 -115 -115
Spending of Forfeiture Receipts:
Estimated Budget Authority............................ 0 -115 -115 -115 -115 -115
Estimated Outlays..................................... 0 -76 -108 -115 -115 -115
Payments to the Legal Services Corporation:
Estimated Budget Authority............................ 0 1 1 1 1 1
Estimated Outlays..................................... 0 1 1 1 1 1
----------------------------------------------------------------------------------------------------------------
\1\ The 2000 level is the amount appropriated for that year. The estimated authorization levels for 2001 through
2005 reflect CBO baseline estimates, assuming adjustments for anticipated inflation.
Basis of estimate: For purposes of this estimate, CBO
assumes that H.R. 1658 will be enacted by the end of fiscal
year 2000 and that the necessary amounts will be appropriated
for each fiscal year. We also assume that outlays for
defender services and the use of forfeiture receipts will
continue to follow historical patterns.
Spending subject to appropriation
H.R. 1658 would allow for court-appointed counsel for
certain parties contesting a forfeiture who already have been
appointed counsel in a related criminal case. The act also
would eliminate the requirement that claimants post bond
before the case is tried in federal court. Consequently, CBO
anticipates that enacting H.R. 1658 would make it easier for
people whose assets have been seized to challenge the
forfeiture of such assets. Based on information from DOJ, we
estimate that the percentage of seizures that would result in
contested civil cases would increase from 5 percent annually
to at least 20 percent in fiscal year 2001. As the defense
bar becomes increasingly aware of and more familiar with the
provisions of H.R. 1658, CBO expects that the percentage of
contested civil cases would increase to about 30 percent each
year.
While the decision to appoint counsel would be at the
discretion of the judge assigned to each case, CBO expects
that judges would not want to encourage litigation in many
cases. Moreover, CBO expects that many of the contested cases
would involve larger assets, and such cases usually do not
involve indigent claimants who would need court-appointed
counsel. Based on information from DOJ, CBO estimates that a
small number of indigent claimants in civil forfeiture cases
would also have a criminal case pending. Specifically, we
estimate that court-appointed counsel would be provided in
about 5 percent of contested civil cases. In addition,
because forfeiture cases involve property, the courts might
have to appoint more than one attorney to represent multiple
claimants in the same case. Historical data suggest an
average of 1.5 claims per case.
While H.R. 1658 does not specify a level of compensation
paid to court-appointed counsel for a civil forfeiture case,
CBO expects such payment would be equivalent to amounts paid
in criminal cases. Based on information from the
Administrative Office of the United States Courts, CBO
estimates that court-appointed counsel would be paid about
$3,000 per claimant per case. In total, we estimate that
additional defender services related to civil asset
forfeiture proceedings would cost about $9 million over the
next five years.
In addition, other discretionary spending could be affected
by this act. On the one hand, the federal court system could
require additional resources in the future if additional
cases are brought to trial and the amount of time spent on
each case increases. On the other hand, some savings in
law enforcement resources could be realized if fewer
seizures and conducted each year. While CBO cannot predict
the amount of any such costs or savings, we expect that,
on balance, implementing the act would result in no
significant additional discretionary spending other than
the increases for court-appointed counsel.
Revenues and direct spending
Based on information from DOJ and the Treasury Department,
CBO estimates that about 23,000 seizures that would otherwise
occur each year under current law would be eliminated under
H.R. 1658. (Such seizures primarily involve assets whose
value is less than $25,000.) The various changes to civil
forfeiture laws under this act would make proving cases more
difficult and more time-consuming for the federal government.
In many instances, law enforcement agencies, including the
state and local agencies that work on investigations jointly
with the federal government and then receive a portion of the
receipts generated from the forfeitures, many determine that
certain cases, especially those with a value less than
$25,000, may no longer be cost-effective to pursue. While the
federal government and other law enforcement agencies would
take a few years following enactment of the legislation to
realize the full effects of its provisions on the forfeiture
and claims process, CBO expects that the total number of
seizures would decrease by nearly 40 percent. CBO estimates
that such a reduction in seizures would reduce total
forfeiture receipts by about $115 million in fiscal year 2001
and by $575 million over the 2001-2005 period.
The receipts deposited into the Assets Forfeiture Fund and
the Treasury Forfeiture fund are used to pay for all costs
associated with the operation of the forfeiture program, the
payment of equitable shares of proceeds to foreign, state,
and local law enforcement agencies, and other expenses not
directly associated with a forfeiture case, such as payment
of awards to informants. In recent
[[Page H2049]]
years about 67 percent of total asset forfeiture receipts
collected in a given year are spent in the same year in which
they are collected; therefore, we estimate that enacting H.R.
1658 would result in a decrease in federal spending of $76
million in fiscal year 2001, $108 million in 2001, and $115
million annually in subsequent years.
In addition, H.R. 1658 would require the Legal Service
Corporation to represent claimants in financial need and
whose claim involves an asset that is the claimant's primary
residence. Under H.R. 1658, the court must enter a judgment
in favor of the LSC for the cost of legal representation.
Based on historical data, CBO estimates that such judgments
would increase direct spending by about $1 million a year.
Additional potential budgetary impacts
In addition, this act would make the federal government
liable for any property damage, attorney fees, and pre-
judgment and post-judgment interest payments on certain
assets to prevailing parties in civil forfeiture proceedings.
However, CBO cannot estimate either the likelihood or the
magnitude of such awards because there is no basis for
predicting either the outcome of possible litigation or the
amount of compensation. Compensation payments could come from
appropriated funds or occur without further appropriation
from the Judgment Fund, or from both sources.
Pay-as-you-go considerations: The Balanced Budget and
Emergency Deficit Control Act sets up pay-as-you-go
procedures for legislation affecting direct spending or
receipts. The following table summarizes the estimated pay-
as-you-go effects of H.R. 1658. For the purposes of enforcing
pay-as-you-go procedures, only the effects in the current
year, the budget year, and the succeeding four years are
counted.
--------------------------------------------------------------------------------------------------------------------------------------------------------
By Fiscal Year, in Millions of Dollars
--------------------------------------------------------------------------------------------------
200 201 202 203 204 205 206 207 208 209 2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in outlays................................... 0 -75 -107 -114 -114 -114 -114 -114 -114 -114 -114
Changes in receipts.................................. 0 -115 -115 -115 -115 -115 -115 -115 -115 -115 -115
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated impact on state, local, and tribal governments:
H.R. 1658 contains no intergovernmental mandates as defined
in UMRA. However, because CBO expects that the seizure of
assets would decline under the act, CBO estimates that
payments to state and local law enforcement agencies from the
Assets Forfeiture Fund and the Treasury Forfeiture Fund would
decline by about $230 million over the 2001-2005 period.
State and local law enforcement agencies receive, on average,
about 40 percent of the receipts in these forfeiture funds
either because they participate in joint investigations that
result in the seizure of assets, or because they turn over
assets seized in their own investigations to the federal
government, which conducts the civil asset forfeiture case.
In both cases the receipts from a seizure are accumulated in
the funds and a portion is distributed to state and local
agencies according to their involvement.
Estimated impact on the private sector: This act would
impose no new private-sector mandates as defined in UMRA.
Previous CBO transmitted a cost estimate for H.R. 1658 as
reported by the House Committee on the Judiciary on June 18,
1999. While the two versions of the legislation are similar,
we estimate they would have different costs. CBO estimates
the House version would result in a greater loss of
forfeiture receipts, by $25 million annually, than the
version approved by the Senate Committee on the Judiciary
because the House version would place the burden of proof in
assets forfeiture cases more heavily on the federal
government.
In addition, the House version of H.R. 1658 would not
require payments to the Legal Services Corporation for
representation of certain claimants whose principal residence
has been seized. Finally, CBO estimates that the Senate
version of the legislation would authorize less spending than
the House version for the legal representation of indigent
claimants because it restricts the eligibility requirements
for this service more than the House legislation. We estimate
this representation would cost about $2 million annually
under the Senate version and about $13 million annually under
the House version.
Estimate prepared by: Federal Costs: Lanette J. Keith.
Impact on State, Local, and Tribal Governments: Shelley
Finlayson. Impact on the Private Sector: John Harris.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Mr. Speaker, since no Committee Report was filed for H.R. 1658 by the
Senate Judiciary Committee, the House Judiciary Committee Report
remains the best legislative history as to the bill. See H.R. Rep. No.
106-192 (1999). However, since new provisions were added to the bill in
the Senate and other provisions were modified from their original House
form, it will be useful for me to make a number of clarifying points.
standard of proof (section 2--creating 18 U.S.C. sec. 983(c))
H.R. 1658, as amended by the Senate, reduced the standard of proof
the government has to meet in civil asset forfeiture cases from clear
and convincing evidence to a preponderance of the evidence. While this
is obviously a lower standard, Congress remains extremely dubious as to
the probative value of certain types of evidence in meeting this
standard.
First, as noted in the Committee Report to H.R. 1658, Congress is
very skeptical that a person's carrying of ``unreasonably large''
quantities of cash is indicative of involvement in the drug trade. See
H.R. Rep. No. 106-192 at 8. Many federal courts have ruled that a
person's carrying of large amounts of cash does not even meet the
current government burden of probable cause. The Seventh Circuit so
ruled in U.S. v. $506,231 in U.S. Currency, 125 F. 3d 442 (7th Cir.
1997). The court found that ``[a]s far as we can tell, no court in the
nation has yet held that, standing alone, the mere existence of
currency, even a lot of it, is illegal. We are certainly not willing to
be the first to so hold.'' Id. at 452. The court also found it
necessary to remind a U.S. Attorney that ``the government may not seize
money, even half a million dollars, based on its bare assumption that
most people do not have huge sums of money lying about, and if they do,
they must be involved in narcotics trafficking or some other sinister
activity.'' Id. at 454 (emphasis in original). The Ninth Circuit found
similarly. See U.S. v. $191,910 in U.S. Currency, 16 F.3d 1051, 1072
(9th Cir. 1994) (``[A]ny amount of money, standing alone, would
probably be insufficient to establish probable cause for
forfeiture.''); See also U.S. v. One Lot of U.S. Currency ($36,634),
103 F.3d 1048, 1055 n.9 (1st Cir. 1997); U.S. v. $121,100, 999 F.2d
1503, 1507 (11th Cir. 1993). Congress disagrees with those courts that
have suggested otherwise. See U.S. v. $37,780 in U.S. Currency, 920
F.2d 159, 162 (2nd Cir. 1990). Clearly, if large amounts of cash do not
meet the probable cause standard, they do not meet the higher standard
of preponderance of the evidence.
The government can rely on large amounts of cash in conjunction with
other evidence in attempting to meet its standard of proof. For
instance, large amounts of cash found in proximity to drugs are often
relied upon. However, the probative value of this evidence is much
lower when the amount of drugs found is consistent with personal use.
See U.S. v. Real Property Located at 110 Collier Dr., 793 F. Supp.
1048, 1052 (N.D. Ala. 1992) (``The simultaneous presence of $8,861 in
mildewed currency and a small amount of drugs for personal use . . .
does not establish probable cause that the currency was intended to be
used for the exchange of drugs.'')
In any event, the relative evidentiary contribution of cash in
meeting a standard of proof, especially one raised above mere probable
cause, should rarely be significant. Why? As the court found in U.S. v.
One Lot of U.S. Currency Totalling $14,665, 33 F. Supp.2d 47 (D. Mass.
1998), reliance on cash can involve invidious assumptions: ``[m]any
immigrants and Americans with limited means--hard working and law
abiding--prefer to use cash in lieu of bank accounts and credit cards.
* * * Indeed, the whole notion that carrying cash is indicative of
illegal conduct reflects class and cultural biases that are profoundly
troubling.'' Id. at 53-54.
Of especially little probative value is the method by which cash is
carried. As the court found in One Lot of U.S. Currency Totalling
$14,665:
I do not doubt that drug couriers and dealers use rubber
bands to bundle their illgotten gains. However, drug dealers
also presumably use belts to hold up their trousers; under
the government's analysis, if [the claimant] was wearing a
belt at the time of the seizure, it would suggest his
involvement with illegal activity. Although many courts
appear to disagree, I find that the government's `rubber
band' hypothesis doesn't stretch quite that far.
Id. at 54 (footnotes omitted). See also $506,231 in U.S.
Currency, 125 F.3d at 452.
The second type of evidence whose probative value is questioned by
Congress is the fact that airline tickets are purchased with cash. See
H.R. Rep. No. 106-192 at 8. See also One Lot of U.S. Currency
($36,634), 103 F.3d at 1055 n. 9. U.S. v. $40,000 in U.S. Currency, 999
F. Supp. 234, 238 (D.P.R. 1998); U.S. v. Funds in the Amount of $9,800,
952 F. Supp. 1254, 1261 (N.D. III. 1996).
The third type of disfavored evidence is narcotic dog alerts on
currency. As one commentator has noted:
It has been estimated that one out of every three
circulating bills has been involved in a cocaine transaction.
Cocaine and other drugs attach to the oily surface of
currency in a variety of ways. Each contaminated bill
contaminates others as they pass through cash
[[Page H2050]]
registers, cash drawers, wallets, and counting machines. If,
in fact, a substantial part of the currency in this country
will cause a trained dog to alert, then the alert obviously
has no evidentiary value.
Smith, 1 Prosecution and Defense of Forfeiture Cases sec. 4.03, p. 4-
82.3 (footnotes omitted). The author cites experts finding that 70-97%
of all currency is contaminated with cocaine. Id. at sec. 4.03, p. 4-
82.1-4-82.2.
Many federal courts have agreed as to the low probative value of dog
alerts. See, e.g., $506,231 in U.S. Currency, 125 F.3d at 453; Muhammed
v. Drug Enforcement Agency, 92 F.3d 648, 653 (8th Cir. 1996)(``The fact
of contamination, alone, is virtually meaningless and gives no hint of
when or how the cash became so contaminated.''); U.S. v. $5,000 in U.S.
Currency, 40 F.3d 846, 849 (6th Cir. 1994) (``[T]he evidentiary value
of narcotics dog's alert [is] minimal.'') (footnote omitted); U.S. v.
U.S. Currency, $30,060, 39 F.3d 1039 (9th Cir. 1994) (`` `[T]he
continued reliance of courts and law enforcement officers on [drug dog
alerts] to separate `legitimate' currency from `drug-connected'
currency is logically indefensible.' '' Id. at 1043, quoting Jones v.
U.S. Drug Enforcement Administration, 819 F. Supp. 698, 721 (M.D. Tenn.
1993) (footnote omitted)); U.S. v. $53,082 in U.S. Currency, 985 F.2d
245 (6th Cir. 1993) (``[A] court should `seriously question the value
of a dog's alert without other persuasive evidence. . . .' '' Id. at
250-51 n.5, quoting U.S. v. $80,760 in U.S. Currency, 781 F. Supp. 462,
476 (N.D. Tex. 1991), aff'd, 978 F.2d 709 (5th Cir. 1992); One Lot of
U.S. Currency Totalling $14,665, 33 F. Supp.2d at 58. See also U.S. v.
$639,558 in U.S. Currency, 955 F.2d 712, 714 n.2 (D.C. Cir. 1992). Dog
alerts of little value in meeting a standard of probable cause, and are
of even less value in meeting a standard of preponderance of the
evidence.
Adding the above factors together, ``[t]he government must come
forward with more than a `drug-courier profile' and a positive dog
sniff [to meet the standard of probable cause].'' Funds in the Amount
of $9,800, 952 F. Supp. at 1261.'' As the court ruled in $80,760 in
U.S. Currency, 781 F. Supp. at 475, ``[p]rofile characteristics are of
little value in the forfeiture context without other persuasive
evidence establishing the requisite substantial connection.'' See also
Jones, 819 F. Supp. at 719 (``The mere fact that a traveler matches
some elements of a drug courier profile does not amount to even
articulable suspicion, much less probable cause.''). The same holds
true, to an even greater extent, when the standard is preponderance of
the evidence.
Lastly, ``[a]n owner does not have to prove where he obtained money
until the government demonstrates that it has [met its burden] to
believe the money is forfeitable.'' $506,231 in U.S. Currency, 125 F.3d
at 454.
I should also note that while hearsay may be used to establish
probable cause for seizure, see U.S. v. One 56 Foot Motor Yacht Named
Tahuna, 702 F.2d 1276, 1282-83 (9th Cir. 1983), it is not admissible to
establish the forfeitability of property by a preponderance of the
evidence. And, while the government may use evidence obtained after the
forfeiture complaint is filed to establish the forfeitability of the
property by a preponderance of the evidence, the government must still
have had enough evidence to establish probable cause at the time of
filing (or seizure, if earlier). The bill is not intended to limit the
right of either party to bring a motion for summary judgment after the
filing of the complaint pursuant to Fed. R. Civ. P. 56(a) or 56(b).
facilitating property (section 2--creating 18 U.S.C. sec. 983(c))
While H.R. 1658 as it was introduced and originally passed in the
House contained no provision reforming the standards regarding
``facilitation'' forfeiture, this is an issue about which I have been
long concerned. See Hyde, Forfeiting Our Property Rights: Is Your
Property Safe From Seizure? 61 (1995) I am gratified that it is
addressed in the Senate amendment to H.R. 1658.
There are many facilitation-type civil forfeiture provisions in the
U.S. Code. Most importantly, the federal drug laws make subject to
civil forfeiture ``[a]ll conveyances . . . which are used, or intended
for use . . . in any manner to facilitate the transportation, sale,
receipt, possession, or concealment of [controlled substances] . . .
.'' 21 U.S.C. sec. 881(a)(4). They also make subject to forfeiture
``[a]ll moneys, negotiable instruments, and securities used or intended
to be used to facilitate any violation of this subchapter . . . .'', 21
U.S.C. sec. 881(a)(6), and ``[a]ll real property . . . which is used,
or intended to be used, in any manner or part, to . . . facilitate the
commission of a violation of this subchapter punishable by more than
one year's imprisonment . . . [,]'' 21 U.S.C. sec. 881(a)(7). Also,
federal law make subject to civil forfeiture ``[a]ny property, real or
personal, involved in a transaction or attempted transaction in
violation of [certain money laundering laws] . . . .'' 18 U.S.C. sec.
981(a)(1)(A).
How strong need the connection be between the ``facilitating''
property and the underlying crime? As to 881(a)(6), courts have
interpreted its legislative history as requiring there to be a
``substantial connection'' between the property and the crime. See
Psychotropic Substances Act of 1978, Joint Explanatory Statements of
Titles II and III, 95th Cong., 2nd Sess., reprinted in 1978 U.S. Code
Cong. & Admin News 9518, 9522.
As to 881(a)(7), many courts require there to be a substantial
connection. See, e.g., U.S. v. Parcel of Land & Residence at 28 Emery
St., 914 F.2d 1, 3-4 (1st Cir. 1990); U.S. v. 26.075 Acres, Located in
Swift Creek Township, 687 F. Supp. 1005 (E.D.N.C. 1988), aff'd sub nom.
U.S. v. Santoro, 866 F.2d 1538, 1542 (4th Cir. 1989); U.S. v.
Forfeiture, Stop Six Center, 781 F. Supp. 1200, 1205-06 (N.D. Tex.
1991). Others do not. The Seventh Circuit has ruled that the
facilitating property need only have ``more than an incidental or
fortuitous connection to criminal activity . . . .'' U.S. v. Real
Estate Known as 916 Douglas Ave., 903 F.2d 490, 493 (7th Cir. 1990),
cert. denied sub nom. Born v. U.S. 498 U.S. 1126 (1991). See also U.S.
v. Property at 4492 S. Livonia Rd., 889 F.2d 1258, 1269 (2nd Cir. 1989)
(test is ``sufficient nexus'').
How significant is the difference? The Seventh Circuit in 916 Douglas
Ave. has found that ``[t]he difference between th[e substantial
connection] approach and our own appears largely to be semantic rather
than practical.'' 903 F.2d at 494. This might be the case--the Fourth
Circuit has ruled that under the substantial connection test, ``[a]t
minimum, the property must have more than an incidental or fortuitous
connection to criminal activity[!]'' U.S. v. Schifferli, 895 F.2d 987,
990 (4th Cir. 1990). Some courts don't even feel the need to choose
between the tests, ruling that facilitation has been shown in
particular cases under either test. See U.S. v. Rd 1, Box 1,
Thompsontown, 952 F.2d 53, 57 (3rd Cir. 1991); U.S. v. Real Property
and Residence at 3097 S.W. 111th Ave., 921 F.2d 1551, 1556 (11th Cir.
1991), cert. denied, 111 S.Ct. 1090 (1991).
As to 881(a)(4), some courts have applied the substantial connection
test. See U.S. v. 1966 Beechcraft Aircraft, 777 F.2d 947, 953 (4th Cir.
1985); U.S. v. One 1979 Porsche Coupe, 709 F.2d 1424, 1426 (11th Cir.
1983). Others have not. See U.S. v. 1964 Beechcraft Baron Aircraft, 691
F.2d 725, 727 (5th Cir. 1982), cert. denied, 461 U.S. 914 (1983).
H.R. 1658 provides that the substantial connection test should be
used whenever facilitating property is subject to civil forfeiture
under the U.S. Code. And the test is intended to mean something, it is
intended to require that facilitating property have a connection to the
underlying crime significantly greater than just ``incidental or
fortuitous.''
In one area in particular, courts have been much too liberal in
finding facilitation. An especially high standard should have to be met
before we dispossess a person or family of their home. A primary
residence should be accorded far greater protection than mere personal
property. See U.S. v. Certain Lots in Virginia Beach, 657 F. Supp.
1062, 1065 (E.D. Va. 1987). But, courts have not always felt this way
in applying section 881(a)(7). In U.S. v. Premises and Real Property at
250 Kreag Rd., 739 F. Supp. 120, 124 (W.D.N.Y. 1990), the court found a
home forfeitable because the owner grew 17 stalks of marijuana in his
backyard of home for personal use (standard used was unclear). See also
U.S. v. One Parcel of Real Property, 960 F.2d 200, 205 (1st Cir. 1992).
The court in 916 Douglas Ave. found a home forfeitable on the basis of
three phone calls made to or from it regarding the sale of two ounces
of cocaine. ``The loss of one's home for the sale of a small amount of
cocaine is undoubtedly a harsh penalty'', but that is what Congress
intended. 903 F.2d at 494 (no substantial connection needed). In U.S.
v. Plescia, 48 F.3d 1452, 1462 (7th Cir. 1995), one phone call to set
up a large drug deal resulted in the forfeiture of a home (no
substantial connection needed). See also U.S. v. Zuniga, 835 F. Supp.
622 (M.D. Fla. 1993) (Under a ``substantial connection'' or lesser
test, ten calls involving drug offenses resulted in the forfeiture of a
house (under a criminal forfeiture statute with an ``identical'' burden
as 881(a)(7)).). None of these cases would meet the substantial
connection test provided in H.R. 1658.
Under the substantial connection test, should an entire bank account
be forfeitable because some of its assets were involved in money
laundering? In U.S. v. All Monies ($477,048.62 in account #90-3617-3,
754 F. Supp. 1467 (D.Haw. 1991), the court ruled that under sec.
881(a)(6) and 18 U.S.C. sec. 981(a)(1)(A), the government showed
probable cause that an entire bank account worth approximately $477,000
was forfeitable for being involved in/facilitated drug and money
laundering offenses, not just the approximately $242,000 in the account
representing the proceeds of a drug crime. The court found that ``both
the legitimate and tainted money in the
[[Page H2051]]
account aided [the laundering of drug proceeds]. The account provided a
repository for the drug proceeds in which the legitimate money could
provide a `cover' for those proceeds, thus making it more difficult to
trace the proceeds.'' Id. at 1475-76 (substantial connection required).
Such a doctrine can quickly lead to unfair and disproportionate
results. The 10th Circuit presents the proper limitation:
[T]he mere pooling or commingling of tainted and untainted
funds in an account does not, without more, render the entire
contents of the account subject to forfeiture. . . .
[F]orfeiture of legitimate and illegitimate funds commingled
in an account is proper as long as the government
demonstrates that the . . . [owner] pooled the funds to
facilitate, i.e., disguise the nature and source of, his
scheme. * * *
U.S. v. Bornfield, 145 F.3d 1123, 1135 (10th Cir. 1998) (criminal
forfeiture under 18 U.S.C. sec. 982(a)(1)) (citations omitted)
(standard used was unclear). See also U.S. v. Contents of Account, 847
F. Supp. 329, 335 (S.D.N.Y. 1994) (``The facilitation theory is
appropriate in the present case where [the owner] established and
controlled the [accounts], and commingled legitimate and illegitimate
funds in these accounts, for the purpose of disguising the nature and
source of the proceeds of [the] scheme.'') (forfeiture under 18 U.S.C.
sec. 981(a)(1)(A)) (standard used was unclear).
Under H.R. 1658's substantial connection test, in order for an entire
bank account composed of both tainted and untainted funds to be
forfeitable, a primary purpose of its establishment or maintenance must
be to disguise a money laundering scheme. This rule should also apply
when the government seeks to forfeit an entire business because tainted
funds were laundered in a firm bank account. For the business to be
forfeitable, a primary purpose for the establishment or maintenance of
the entire business must be to disguise a money laundering scheme. See
U.S. v. Any and All Assets of Shane Co., 816 F. Supp. 389, 401
(M.D.N.C. 1991) (Business that was a front for money laundering was
forfeitable.) (forfeiture under 18 U.S.C. sec. 981(a)(1)(A)
(substantial connection required).
proportionality (section 2--creating 18 U.S.C. sec. 983(g))
This provision is designed to codify U.S. v. Bajakajian 524 U.S. 321
(1998).
Statute of Limitations (section 11)
This provision amends 19 U.S.C. sec. 1621, enlarging the time in
which the government may commence a civil forfeiture action by allowing
the government to commence an action within five years after the time
the alleged offense was discovered, or two years after the time when
the involvement of the property in an offense is discovered, whichever
is later. 19 U.S.C. sec. 1621 has been construed as requiring the
government to exercise reasonable care and diligence in seeking to
learn the facts disclosing the alleged wrong. Thus, the courts have
held under sec. 1621 that the time begins to run as soon as the
government is aware of facts that should trigger an investigation
leading to discovery of the offense. See Smith, 1 Prosecution and
Defense of Forfeiture Cases sec. 12.02. This construction will require
the government to exercise reasonable diligence in seeking discovery of
assets involved in an offense once the offense is discovered.
The provision should not be read as extending the statute of
limitations in cases that are already time-barred as of the date of
enactment of the bill.
uniform definition of proceeds (section 20)
S. 1931's uniform definition of proceeds is self-explanatory.
However, it is important to note Congress' disapproval of the ``ink
drop'' test for proceeds forfeiture developed by the Eleventh Circuit.
In U.S. v. One Single Family Residence, 933 F.2d 976, 981 (11th Cir.
1991) (proceeds forfeiture under 21 U.S.C. sec. 881(a)(6)), the court
ruled that ``[a]s to a wrongdoer, any amount of the invested proceeds
traceable to drug activities forfeits the entire property. We have
never held that as to a wrongdoer only the funds traceable to illegal
activities may be forfeited.'' To the contrary, only that portion of a
piece of property purchased with tainted funds is forfeitable.
destruction or removal of property (section 12)
18 U.S.C. sec. 2232 is amended to expand the scope of conduct which
constitutes an offense for damaging or removing property which is
subject to a lawful search or seizure. Subsection (a), which makes it a
crime to damage or remove property which has not yet been seized,
should be interpreted in a commonsense fashion to apply to a person or
persons who had knowledge that a law enforcement agency is attempting,
has attempted, or was about to attempt to seize the property.
Subsection (b), which has been added to this section, makes it an
offense to remove or destroy property which is already the subject of
the in rem jurisdiction of a United States District Court.
effective date (section 21)
For purposes of the effective date provision, the date on which a
forfeiture proceeding is commenced is the date on which the first
administrative notice of forfeiture relating to the seized property is
sent. The purpose of this provision is to give the Justice Department
and the U.S. courts four months from the date of enactment of the bill
to educate their employees as to the bill's changes in forfeiture law.
Mr. Speaker, I reserve the balance of my time.
Ms. JACKSON-LEE of Texas. Mr. Speaker, I yield myself such time as I
may consume.
(Ms. JACKSON-LEE of Texas asked and was given permission to revise
and extend her remarks.)
Ms. JACKSON-LEE of Texas. Mr. Speaker, this legislation has been long
in coming. I know on behalf of the gentleman from Michigan (Mr.
Conyers), we want to thank the gentleman from Illinois (Mr. Hyde)
because this is legislation that the gentleman from Illinois has worked
on extensively and without rest. The gentleman from Illinois has worked
in a bipartisan manner. He has those of us who have had disagreements
sometimes rally around this legislation because in every single one of
our districts we found someone's mother, someone's wife, someone's
sister, some innocent person who has been law abiding but because we
are part of a great family, have found some family member outside of
the law who has brought down the heavy hand of the law on hardworking
people who have retained, if you will, or worked hard for the
properties that they have.
I want to pay tribute to the gentleman; and I know the gentleman from
Michigan would because, as I just heard a few moments ago, this is
truly a bipartisan bill. I want to distinguish the fact that this is on
the suspension calendar because we have had some vigorous debates here
just earlier this morning about the process of suspensions bypassing
committee, and I would not want this legislation to be defined
accordingly.
This bill has been worked and worked and worked and your staff,
George, we thank you, we know you have been on the battle line working
hard to make sure that this comes together. I want to acknowledge Perry
Apelbaum and Cori Flam likewise and say that we rise in support of this
legislation, a bipartisan bill that is a result of extensive
negotiations and deliberations with our colleagues in the Senate,
Senators Hatch, Leahy, Sessions and Schumer as well as the Department
of Justice. I might do a slight editorial note and say that out of the
bipartisan effort, the bill from the House may not be the exact same
and I might have wanted the bill from the House maybe because I am a
House Member but we are gratified that we finally resolved it and it
has come back for a vote.
Mr. Speaker, the Civil Asset Forfeiture Reform Act makes common sense
changes to our civil asset forfeiture laws to make these procedures
fair and more equitable. H.R. 1658 strikes the right balance between
the needs of law enforcement and the right of individuals to not have
their property forfeited without proper safeguards. I recall that we
actually had hearings on this, and I recall some of the really horrific
stories of individuals losing their only house, their only source of
income because of this law.
Would you believe that under current law, the government can
confiscate an individual's private property on the mere showing of
probable cause? That is under current law. Then even though that person
has never been arrested, much less convicted of a crime, the government
requires a person to file action in a Federal court to prove that the
property is not subject to forfeiture just to get the property back.
Well, that is true.
We can imagine that the gentleman from Michigan enthusiastically
embraced and worked with the gentleman from Illinois on this
legislation. There is no question that forfeiture laws can, as Congress
intended, serve legitimate law enforcement purposes. My own police
department, a simple and small example, promotes and utilizes or has
utilized civil forfeiture laws as relates to drug intervention and drug
crimes. But they are currently susceptible to abuse. That is why the
bill makes reforms to the current civil forfeiture regimen.
To highlight a few examples, the bill places the burden of proof
where it belongs, with the government agency
[[Page H2052]]
that performed the seizure, and it protects individuals from the
difficult task of proving a negative, in other words, proving that
their property was not subject to forfeiture. H.R. 1658 also permits
the awarding of attorney's fees if the claimant substantially prevails,
creates an innocent owner defense and permits a court to provisionally
return property to a claimant on a showing of substantial hardship
where, for example, the forfeiture crippled the functioning of a
business, prevented an individual from working or left an individual
homeless. Is that not justice for Americans? These reforms simply
balance the scales so that innocent people have a level playing field
on which to challenge improper seizures.
H.R. 1658 also makes certain changes to help law enforcement crack
down on criminal activities. For example, the bill permits courts to
enter restraining orders to secure the availability of the property
subject to civil forfeiture, and it clarifies that the law prohibiting
the removal or destruction of property to avoid prosecution applies to
seizures as well as forfeitures.
As I see the ranking member on the floor of the House, I know that he
will have much to say about this bipartisan effort. But I am hoping
that this bill, although it appears on the suspension calendar, will
evidence the hard work that we have done collectively on the Committee
on the Judiciary on this very issue. I thank both the chairman and the
ranking member for their efforts. I am very proud to support this bill
today personally and to ask my colleagues to join us in supporting this
important legislation.
Mr. Speaker, I am in support of this bill which calls for civil asset
forfeiture reform. This is a good bipartisan bill which now shifts the
burden of proof to the government to prove by clear and convincing
evidence when seizing property and permits the appointment of counsel
for indigent claimants while protecting innocent owners.
Unlike criminal forfeiture, civil forfeiture requires no due process
before a property owner is required to surrender their property.
Studies suggest that minorities are acutely affected by civil asset
forfeitures. As we are well aware by now, racial profiling by the
police has alarmingly increased the number of cases of minorities
involved in traffic stops, airport searches and drug arrests. These
cases afford the government, sometimes justifiably, with the
opportunity to seize property. Since 1985, the justice department's
asset forfeiture fund increased from $27 million to $338 million.
Since a deprivation of liberty is not implicated in a civil
forfeiture, the government is not bound by the constitutional
safeguards of criminal prosecution. The government needs only show
probable cause that the property is subject to forfeiture. The burden
shifts to property owner to prove that the property is not subject to
forfeiture.
The property owner may exhaust his or her financial assets in
attorney's fees to fight for the return of property. If the financial
burden of attorney's fees is not rushing enough, the owner has to post
a bond worth 10 percent of the value of the property, before contesting
the forfeiture. Independent owners are not entitled to legal counsel.
Interestingly enough, persons charged in criminal cases are entitled
to a hearing in court and the assistance of counsel. The government
need not charge a property owner with a crime when seizing property
under civil laws. The result is that an innocent person, or a person
not charged with a crime, has fewer rights than the accused criminal.
This anomaly must end.
Reform of civil asset forfeiture laws is long overdue. I urge you to
support this bill to ensure that innocent owners are provided some
measure of due process before their property is seized.
Mr. Speaker, I reserve the balance of my time.
Mr. HYDE. Mr. Speaker, I yield such time as he may consume to the
distinguished gentleman from Georgia (Mr. Barr).
Mr. BARR of Georgia. Mr. Speaker, I thank the distinguished chairman
of the Committee on the Judiciary for yielding me this time. I would
like to commend the gentleman from Illinois for his tremendous work
over many years' time on reforming Federal asset forfeiture laws which,
as we all know, are an important tool for Federal law enforcement and
indirectly for local law enforcement which frequently because of their
participation in cases resulting in seized assets participate in the
disposition of those seized assets once they are forfeited.
Many of us, including myself as a former United States attorney,
while having tremendous regard and respect for our civil asset
forfeiture laws and what an important tool they are for law enforcement
also recognize they are subject to abuse and have been abused. This
legislation on which the gentleman from Illinois has been working for
many years and which will be one of the most important hallmarks of his
tenure as both chairman of the Committee on the Judiciary and his long
and distinguished service as a Member of the House of Representatives
will go a long way towards bringing back into balance a system that has
become sorely out of balance. I commend the gentleman for his work, and
I commend both sides of the aisle for bringing this forward in a
bipartisan manner. I urge its adoption.
Mr. Speaker, I also rise today with the chairman of the Committee on
the Judiciary to discuss the intent of section 983(a)(2)(C)(ii) which
states, ``A claim shall state the claimant's interest in such property
and provide customary documentary evidence of such interest if
available and state that the claim is not frivolous.''
Mr. Speaker, I interpret this language to require only prima facie
evidence to establish such an interest. I assume the gentleman from
Illinois concurs with my representation but would like for the record
to clarify what type of documentation would be necessary to establish
this interest in the seized property, sufficient to make a claim under
this legislation.
This documentary evidence should be fairly easy to obtain while still
establishing the claimant has a legitimate, nonfrivolous interest in
such property. This interest can be established by documents including
but not limited to a copy of an automobile title, a loan statement for
a home, or a note from a bank for a monetary account. For property such
as cash in which no documentary evidence is normally available, this
provision would be loosely applied and there would be an assumption of
the claimant's interest in such property by simply making a claim and
asserting its nonfrivolous nature.
Mr. HYDE. Mr. Speaker, if the gentleman will yield, I thank the
gentleman from Georgia for bringing this issue to the attention of the
House. The gentleman's explanation is accurate and reflects the intent
of the legislation. There was a need for such an explanation and I
appreciate the gentleman from Georgia's clarification of this issue.
Mr. BARR of Georgia. I thank the gentleman for engaging in the
colloquy.
Mr. HYDE. Mr. Speaker, I yield myself 30 seconds. I want to thank the
gentlewoman from Texas for her very cordial remarks. I want to
particularly thank the gentleman from Michigan and his staff and make a
point. This Committee on the Judiciary in this House of Representatives
can work together in a bipartisan fashion to turn out good legislation.
This is one example. There are many others. This bill had its genesis
in a newspaper article written by Steve Chapman of the Chicago Tribune
several years ago. When I read what was going on under civil asset
forfeiture, I thought it was more appropriate for the Soviet Union than
the United States, and it has taken 7 years but we are there today and
it is a great moment.
Mr. Speaker, I yield 2 minutes to the gentleman from New York (Mr.
Sweeney).
Mr. SWEENEY. Mr. Speaker, I thank the gentleman for yielding me this
time. I want to say, a year ago I rose on this floor with my colleagues
the gentleman from Arkansas (Mr. Hutchinson) and the gentleman from New
York (Mr. Weiner) in opposition to this bill. I come today in support
of this particular provision. I rose in opposition a year ago because I
was concerned about the effects on criminal justice and specifically
the effects on law enforcement, but I have to point out that the
chairman and the Committee on the Judiciary, as has been noted, in a
bipartisan manner has done a tremendous job to ease those concerns.
They have provided us great improvements on the bill. The compromise
provides important procedural protections to law-abiding property
owners without compromising law enforcement's ability to shut down
criminal enterprises. Specifically the bill shifts the burden of proof
in forfeiture cases from
[[Page H2053]]
property owners to the government with the appropriate threshold of a
preponderance of the evidence.
The compromise also limits the appointment of court-appointed lawyers
to indigent claimants whose primary residence is subject to forfeiture.
I want to say that there is one concern that I have and I think a
couple of my colleagues have as well as it relates to this legislation,
and, that is, that we have a continuing reservation that the removal of
the cost bond requirement could impair the asset forfeiture program in
the future.
We know that the Justice Department is already overwhelmed with
challenges to asset seizures, and I am fearful that the removal of the
cost bond could further paralyze that effort. But let me say this, I
hope to and I know my colleagues who stood with me a year ago hope to
work with the chairman and the committee to oversee the implementation
of cost bond provisions requiring up-front certification and
posthearing penalties and ensure that my fears do not become a reality
for law enforcement. But overall, Mr. Speaker, this is a victory for
the American people. I want to salute the Committee on the Judiciary
and its great chairman. I urge support for this bill.
The SPEAKER pro tempore (Mr. Pease). Without objection, the gentleman
from Michigan (Mr. Conyers) will control the time previously granted to
the gentlewoman from Texas (Ms. Jackson-Lee).
There was no objection.
Mr. CONYERS. Mr. Speaker, I yield myself 2 minutes.
I would like to begin by pointing out that the chairman of this
committee and I have worked together on this measure for at least a
couple of Congresses. I have been working on it, also, unbeknownst to
the gentleman from Illinois in the Committee on Government Reform. I
think we have come quite a long way. The bill retains the core of some
of the main reforms that was in Hyde-Conyers.
We have adopted the Senate version. But the shifting of the burden of
proof is very important. The appointment of counsel is a critical
improvement. The return of property in case of substantial hardship is
very important. And the innocent owner defense is now strong in the
bill. The claim for property damages while in the government's custody
is a valid concern. And an award of interest. The bill allows
prejudgment interest to be awarded when cash is improperly seized by
the government. And we eliminate the cost of bond which would be a part
of the current requirement that a claimant challenging a civil asset
forfeiture file a cost of bond.
Who would have believed that under our current law, the government
can confiscate an individual's private property on a mere showing of
probable cause? Then even though a person has never been arrested, not
to mention convicted, of a crime, the government requires the person to
file an action to prove that the property is not subject to forfeiture
to get the property back.
{time} 1400
It is important that we have asset forfeiture, but this puts it under
controls that have not existed before.
Mr. Speaker, I reserve the balance of my time.
Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from New York
(Mr. Weiner), a distinguished member of the Committee on the Judiciary.
Mr. WEINER. Mr. Speaker, I rise in support of the Senate amendments
to H.R. 1658, and I want to commend the gentleman from Illinois
(Chairman Hyde), our chairman, for his year-long effort to reform our
asset forfeiture laws. The gentleman quite literally wrote the book on
the subject. When the history is written of his prodigious work in this
House, this certainly warrants mention.
Last year, a somewhat divided House considered H.R. 1658. While it
garnered the support of the majority of our colleagues, it was
adamantly opposed by the administration, as well as by every major law
enforcement group. Because of this opposition, I offered, along with
the gentleman from Arkansas (Mr. Hutchinson) and the gentleman from New
York (Mr. Sweeney), a substitute version of H.R. 1658 on the floor of
the House.
The substitute would have made needed reforms by placing the burden
of proof on the Government to prove by a preponderance of the evidence
that property seized was used in an illegal activity. It would have
allowed for counsel to be appointed in those proceedings. It would have
protected innocent owners, and it would have allowed property to be
returned to claimants in instances of hardship.
It was, I thought, a balanced approach that had the support of all
major law enforcement organizations, as well as 155 of my colleagues.
That amendment failed, although it had some support, and many of us
voted against the base bill for that reason.
Mr. Speaker, today's amendment, today's bill I am pleased to vote in
favor of. It puts the burden of proof where it should be, on the
Government; and it rightfully protects the owners and spouses and
children, if they can show they were not involved in illegal activity.
Perhaps, most importantly, today's bill has the approval of the men
and women of law enforcement. Like our substitute, today's bill allows
civil asset forfeiture to continue to be used as a tool by police and
prosecutors across the country to shut down crack houses and seize
drug-running speedboats.
Mr. Speaker, I applaud the authors of this compromise and my
colleagues who voted in favor of reform originally.
Mr. CONYERS. Mr. Speaker, I yield myself such time as I may consume,
merely to point out in the colloquy between the gentleman from Georgia
and the gentleman from Illinois (Mr. Hyde), the distinguished chairman
of the committee, that I stand in agreement about the interpretation
given by the chairman of section 983A(2)(c)(2), which dealt with the
claimant's interests in such property and provide customary documentary
evidence of such evidence, if available, and state that the claim is
not frivolous.
Mr. Speaker, I just wanted to join in a clarification of the intent
that, for example, a person should not be barred from challenging an
improper forfeiture if he or she has misplaced a receipt or if the
person does not have the evidence on hand. I think that response is
consistent with the gentleman from Illinois (Mr. Hyde) and the
gentleman from Georgia, and I just wanted to weigh in on that.
This has taken quite awhile, but it is an important measure, and my
compliments are out to the gentleman from Illinois (Mr. Hyde), the
chairman of the committee, and to all of the Members who have gone
through a rethinking process to bring the bill to the kind of support
that I believe it is enjoying on the floor this afternoon.
Mr. Speaker, I began looking at this matter from the old Government
Operations Committee, and I was very pleased to learn that the
gentleman from Illinois had, indeed, studied the matter, had put
together his thoughts in a book on the matter, and it led us to
bringing forth a bill jointly that now has the imprimatur, I believe,
of most of the Members in both bodies.
It is in that spirit that we will want to make sure that it is
implemented fairly and that it adds to the good body of law that comes
out of the House Committee on the Judiciary.
Mr. Speaker, with those remarks, I reserve the balance of our time.
Mr. HYDE. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I wish to express my gratitude again to the gentleman
from Michigan (Mr. Conyers) and his staff and everyone who worked on
this bill. We did not mention Jon Dudas and Rick Filkins. I just want
to say, George Fishman who is sitting here, he was the single most
indispensable element of this bill, and I am grateful to him.
Mr. BARR of Georgia. Mr. Speaker, I would like to thank Mr. Hyde for
working so rigorously to come to a reasonable agreement with the Senate
on civil asset forfeiture reform. The compromise is fair and will
restore fairness to this process.
Civil asset forfeiture is a mechanism allowing law enforcement
authorities to seize assets such as homes, property, cash, and cars
that are used in furtherance of criminal activity. However, in recent
years, the laws have been used overly broadly, and have been cited by
civil libertarians as excessive and open to abuse.
One of the most important challenges Congress faces is balancing
individual liberties against the need for effective law enforcement.
Generally, our laws do this fairly well.
[[Page H2054]]
However, our civil asset forfeiture laws are tilted too far in one
direction. Current civil asset forfeiture laws allow police to seize a
person's assets, regardless of whether the person has been, or ever is,
convicted of a crime, if police have nothing more than probable cause
to believe the property was used for criminal purposes. You are
presumed guilty until you can prove yourself innocent.
In effect, our current asset forfeiture system targets both criminals
and law-abiding citizens, takes their cars, cash, homes, and property
away, and then forces them to prove they are innocent in order to get
their assets back. The goal of this reform legislation is to change a
system that sometimes violates the rights of the law-abiding, while
retaining those provisions that allow law enforcement to target
criminals, and hit them where it hurts--in their pocket books.
As I know from my service as a federal prosecutor, the majority of
jurisdictions in America use asset forfeiture laws sensibly and fairly.
Unfortunately, in some cases, law enforcement officers intentionally
target citizens and seize their assets, because they know proving
innocence under the constraints of the current law is extremely
difficult if not impossible. The burden of proof for the government is
minimal, the person may have less than 2 weeks to file a defense, and
they have to post a bond even though the government has seized their
assets.
H.R. 1658 was introduced to address this matter of allowing law
enforcement to use this important tool of asset forfeiture, while still
requiring them to be more mindful of due process and individual rights.
This legislation enjoys wide bi-partisan support, and passed the
House on June 24, 1999 by a vote of 375-48. Additionally, the 65,000
member Law Enforcement Alliance of America supports it, as do many
other line officers and retired police chiefs from across America. It
returns balance and fairness to an area of law that has been abused to
violate the rights of innocent citizens for too long.
This reform legislation does not deny law enforcement the ability to
seize and forfeit assets that truly are used for criminal endeavors. It
does, however, more properly balance those powers against civil
liberties.
Mr. UDALL of Colorado. Mr. Speaker, I strongly support this measure.
Passage of this bill is long overdue, and I urge all Members to join me
in voting to send it to the President for signing into law.
Since the House passed this bill last year, it has been the subject
of intensive negotiations that have involved the administration and law
enforcement organizations as well as Members of both the House and
Senate. Those negotiations have resulted in the revised version of the
bill now before the House. I am sure that it is not everything that
some might want, but it is acceptable to all concerned, and I think it
deserves approval.
Enactment of this bill will correct serious imbalances in the law
regarding civil forfeitures--cases in which the government seizes
property allegedly connected to a violation of law. Under current law,
seized property won't be returned unless the person whose property was
seized can prove either that the property was not connected to the
alleged crime or that the owner did not know about or consent to the
allegedly illegal use of the property.
This bill shifts the burden of proof to the government, where it
belongs, so that it would be up to the government to show by
preponderance of the evidence that an asset was sufficiently connected
to a crime to be subject to civil forfeiture. While this is a somewhat
less stringent requirement than in the bill as originally passed by the
House, it is a great improvement over the current law.
The bill also makes a number of other important improvements over the
current law. It will require that seizures be made pursuant to a
warrant. It will eliminate the need for people to post a bond in order
to contest a civil-forfeiture case. It will create a uniform ``innocent
owner'' defense for all civil-forfeiture cases. It will allow property
to be released from government custody before final disposition of a
case where continued custody would be a hardship to the owner
outweighing any risk to the government. And it will allow people to
seek to recover from the government if seized property is damaged while
in custody.
I congratulate all those whose hard work has made it possible for the
bill to be on the floor today, and I urge its approval.
Mr. Speaker, with great pleasure, I yield back the balance of my
time.
The SPEAKER pro tempore (Mr. Ose). The question is on the motion
offered by the gentleman from Illinois (Mr. Hyde) that the House
suspend the rules and concur in the Senate amendment to the bill, H.R.
1658.
The question was taken; and (two-thirds having voted in favor
thereof) the rules were suspended and the Senate amendment was
concurred in.
The motion to reconsider is laid on the table.
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