In the last two decades (pre-1994) a new and improved method of enforcing narcotic and dangerous drug laws has emerged in the United States. Along with the usual panoply of criminal penalties, law enforcement agencies have received broader and broader powers of asset forfeiture. Put simply, law enforcement agencies have been given the power to seize control over property, including money, that is associated with the manufacturing, selling and buying of illegal narcotics. The property is either sold for the public benefit or is converted to public use. A double benefit accrues from forfeiture activities, a financial loss to those engaged in criminal activities and a contribution to the public treasuries—to the benefit of the taxpayer.
The idea of forfeiture is not new. The Uniform Controlled Substances Act (1970) has forfeiture provisions. What is new is the scope of forfeiture. UCSA (1970) permitted seizure of any property used in illegal activities. The new notion of forfeiture adds the proceeds of criminal activity and any property acquired with those proceeds, even if that property is not used for criminal activities. Also, the new forfeiture procedures have developed under the civil law, rather than the criminal law. As a civil remedy, forfeiture is thought to be subject to different standards of proof and evidence, and makes available remedial aspects of civil law that are not available under the criminal law. Civil forfeiture actions are also conducted separately from criminal actions, and forfeiture of assets can occur even if there is no criminal prosecution.
History of the Uniform Controlled Substances Act
In 1994, the Uniform Law Commissioners have amended the Uniform Controlled Substances Act (1990) with new provisions that provide for both civil and criminal forfeiture actions. The Uniform Controlled Substances Act was originally promulgated in 1970. USCA (1970) is the basis for narcotic and dangerous drug law in 46 states and jurisdictions. It was substantially revised in 1990 in an effort to update this important act in general, and specifically to incorporate the relevant changes made in the Federal Controlled Substances Act of 1988. One of the stated goals in promulgating the UCSA from the beginning has been parallel law between state and federal government. The first four articles of the UCSA were included in the 1990 revision, except those provisions relating to criminal forfeiture. The 1994 amendments contain, entirely, the criminal and civil forfeiture provisions for the UCSA.
The fundamental law regulating narcotic and dangerous drugs in the states has long been a product of the Uniform Law Commissioners. UCSA 1970 replaced the Uniform Narcotic Drug Act, promulgated in 1934. Before the UCSA, it was the basis for drug enforcement in the great majority of the states in the United States.
The new criminal forfeiture provision, Section 419, in UCSA (1994) expands greatly upon the original in UCSA 1970. The objective of this section is to allow prosecutors to fold the forfeiture procedure into the criminal action. Forfeitable property is the same as in a civil forfeiture action, generally property used in criminal activities and property derived from the proceeds of criminal activities. Unlike the criminal forfeiture provision in UCSA 1970, the new provision establishes a "preponderance of the evidence" standard of proof, which is the same as the standard for a civil forfeiture. It is not necessary to establish the right to seize forfeitable property "beyond a reasonable doubt."
The criminal procedure commences with a recitation of forfeiture in the indictment or information that originates the criminal prosecution. The court may divide the actions into two parts, one to determine criminal penalties and one to determine whether property is to be forfeited. A defendant is entitled to a jury trial, exactly as in any criminal action.
For the most part, what is forfeitable property, the right to forfeiture, exemptions from forfeiture, the right to substitute property, and the limitations on forfeiture - all are incorporated from the civil forfeiture provisions in the UCSA. The new criminal provision essentially allows the prosecution to add forfeiture to the criminal proceeding with the same remedial effect as if the action was filed as a civil action.
Civil forfeiture is the subject of the entire, new Article 5 of the UCSA. Civil forfeiture comes in three forms. The prosecutor may bring an administrative forfeiture action, or may bring a judicial proceeding. If the prosecutor chooses the administrative proceeding, the defendant may choose to convert the administrative action to a judicial action. In addition, the most dangerous controlled substances, and dangerous materials associated with the manufacture of the most dangerous controlled substances, are subject to summary forfeiture. The objective of these choices is to give the prosecution maximum flexibility in conducting forfeiture actions, while protecting property owners'
rights. Administrative proceedings are a less onerous burden than judicial proceedings. There is practically no proceeding at all in a summary proceeding under UCSA 1994.
The right to bring a forfeiture action is triggered by conduct that constitutes a felony under the UCSA, or that furthers the commission of a felony under the UCSA. An action for forfeiture is also available for conduct outside the boundaries of a state that would be a felony within the state. So property is subject to forfeiture even though the defendant in the forfeiture action is not subject to criminal jurisdiction within the state. UCSA 1994 quite clearly states that property can be forfeited even if there is not a criminal prosecution.
Forfeitable property is generally illegal controlled substances themselves, any property used in the manufacture, transport or storage of illegal controlled substances, weapons used to facilitate illegal conduct, and probably most importantly, proceeds traceable to the illegal conduct. There are two ways under UCSA 1994 for obtaining control of property subject to forfeiture. The first way is to seize possession of the property. The second way is a statutory lien that may be established against any property subject to forfeiture.
Whether a warrant is needed to seize forfeitable property is dependent upon the need to obtain a warrant to seize property for evidence in a crime. If law enforcement needs a search warrant, it generally needs a warrant to seize property for forfeiture. The procedure for obtaining a warrant to seize for forfeiture is much the same as for a search warrant. The state must show probable cause exists to forfeit or that a judgment already exists subjecting the property to forfeiture. Seizure occurs either in anticipation of a forfeiture proceeding or to execute the judgment already entered in such a proceeding. Thus seizure either ends in disposal of the property for the benefit of the state, or is returned to the owner if the forfeiture action fails.
A lien is an encumbrance upon the title to property. Once an agency has established probable cause that property is subject to forfeiture, it can obtain a lien against that property by filing the lien in the appropriate property records. Liens are particularly effective for obtaining control of real property, which cannot be easily seized and placed in agency custody. A forfeiture lien, however, always attaches in anticipation of the forfeiture action. If property is forfeited, then the state assumes title to that property and must take the necessary actions to dispose of the forfeited property. If the property is not found subject to forfeiture, the state must release any forfeiture lien against the property.
An administrative forfeiture action permits the defendant two options, filing a claim for exemptions or filing for a judicial proceeding. A judicial proceeding is a full-blown trial in which in which the state must prove that it has grounds for forfeiture by a preponderance of the evidence. However, the defendant must prove most exemption rights or any other possible defense by a preponderance of the evidence, as well. Certain facts must be proved by clear and convincing evidence, however.
The state has the option of taking jurisdiction in rem or in personam. To take in rem jurisdiction, the state must either seize the property or file a lien. It then commences. Taking jurisdiction in personam requires serving the person with sufficient connection to the state to allow a proceeding against him. In an in personam action, the state may seek restraining orders to hold property that has not been seized. Thus, property that is not within the boundaries of the state can be reached, even if it cannot be immediately seized or subjected to lien.
Innocent Owner Protection
Forfeiture proceedings under UCSA 1994 are designed to maximize the state's ability to reach and obtain property that is forfeitable property. However, there must be protection for innocent owners of property, in accordance with the time-honored principles of private property. The provisions pertaining to exemptions from forfeiture are the primary protection for innocent owners. There are exemptions that must be requested in an administrative forfeiture or proved in a judicial forfeiture, and exemptions that are effective without request or that do not need to be proved as an affirmative defense. The state may prove that the latter category of exemptions are not valid, however.
In the first category of exemptions are interests acquired by an innocent owner prior to the criminal conduct upon which forfeiture is based, interests acquired by an innocent owner after the criminal conduct, and spousal property. Obviously, a defendant charged with the underlying crime will not be an innocent owner. Innocence is generally a question of knowledge and action. If property was acquired before the criminal conduct, the owner has an exemption if he or she does not know about the criminal conduct or if he or she acts to prevent the conduct or assists the prosecution of the criminal defendants after learning of the illegal conduct. If property is acquired after the criminal conduct, the owner qualifies for an exemption if he or she does not know about the criminal conduct or the fact that the property is forfeitable, and has given value for the property. There is a variation on this rule for property acquired as consideration for future services, as well.
A spouse's interest in a residence and a remaining automobile are also exempt, if the spouse did not know about the criminal conduct or know the fact that the property is subject to forfeiture. The spouse's interest is protected only to the extent of a dollar limit set in the statute.
Exemptions that are effective unless the state affirmatively challenges them are governmental property interests, and private property interests that are not directly held, exist because of operation of law, are acquired by entities regularly engaged as a matter of business in the acquisition of such property, are security interests held for the purchase price of property sold, or are lease rights held by an innocent lessee. An example of private property interests not directly held are easements or mineral rights. An example of interests by operation of law are judicial liens or other liens. Ownership of these kinds of interests tends to be so remote from the criminal conduct upon which forfeiture is based, they can be provided exemptions without asserting them as affirmative defenses. However, the state may challenge any such exemption upon notice to the owner that they will be challenged in the forfeiture action.
A special category of exemptions is property interests acquired in forfeitable property as attorney's fees. There are three alternative standards for granting such an exemption, at an adopting state's option. The issue is what the attorney knew about the property, whether the attorney knew about a probable cause proceeding holding the property subject to forfeiture, or whether the property interest acquired represents a fraud or sham to protect the property from forfeiture. Each state must decide which standard should be applied to attorney's fees.
Concluding the Forfeiture
UCSA 1994 holds the scope of forfeiture within the scope of the crime. The court must limit a grossly disproportionate forfeiture. Once forfeiture occurs and is complete, the state sells the property unless there is a finding that specific public ownership of the property is justified. The proceeds go to the general fund of the state. If there is federal law enforcement participation in the forfeiture, the court may divide proceeds between the state and federal government. A defendant has the opportunity to propose substitute property for the property that is subject to forfeiture, but must meet standards of value and security in order to obtain a substitution.
These are the principal features of asset forfeiture under UCSA 1994. What is presented is an effective set of asset forfeiture procedures that should make asset forfeiture a continuing part of the remedies available to the state for combatting drug offenses.