9-113.100
Forfeiture by Settlement and Plea
Bargaining in Civil and Criminal Actions
|
Settlements to forfeit property are encouraged to conserve the
resources of both the United States and claimants in situations
where justice will be served. See the
Criminal Resource Manual at 2240. The
following principles must be observed when negotiating and
structuring settlements. The critical principle that must be
applied to all settlements is that civil forfeiture, either
judicial or administrative, should not be used to gain an advantage
in a criminal case. Furthermore, all settlements must be in
compliance with Attorney General Order No. 92-1598, Appendix to
Subpart Y, Part O, Title 28, Code of Federal Regulations (C.F.R.)
establishing the settlement and compromise authority redelegated to
the United States Attorneys from the Assistant Attorney General,
Criminal Division, in accordance with the requirements of 28 C.F.R.
§ 0.168(d). Other general requirements applicable to all
settlements are set out in USAM
9-113.101 through
9-113.800.
9-113.101
Statutory Basis Requirement for
Forfeiture by Settlement and Plea Bargaining in Civil and Criminal
Actions
|
There must be a statutory basis for the forfeiture of the
property and sufficient facts stated in the settlement documents to
satisfy the elements of the statute.
[cited in
USAM 9-113.100]
9-113.102
Consultation with the Seizing Agency
Requirement for Forfeiture by Settlement and Plea Bargaining in
Civil and Criminal Actions
|
All settlements must be negotiated in consultation with the
seizing agency and the U.S. Marshals Service. See the
Criminal Resource Manual at 2241.
9-113.103
Consultation with the Seizing Agency
Before Settlement or Plea Bargaining in Civil and Criminal Actions
to Determine Pending Administrative Forfeitures
|
It is the obligation of both the Assistant United States
Attorney (AUSA) and the investigating agent before any type of
settlement is discussed to determine what property, if any, is
presently being processed for administrative forfeiture. Moreover,
AUSAs may not reach agreements with defendants or their counsel
about the return of property that is the subject of an
administrative forfeiture proceeding without first consulting the
seizing agency. See the Criminal Resource
Manual at 2242.
9-113.104
Dispute
Resolution in Consultations with the Seizing Agency Before
Settlement or Plea Bargaining in Civil and Criminal Actions
|
When the seizing agency disagrees with the United States
Attorney's recommended settlement proposal, it must follow the
procedures that are set forth in Attorney General Order 1598-92.
9-113.105
Coordination of Forfeiture
Settlements by United States Attorneys
|
A United States Attorney has the authority to settle those
judicial forfeiture actions involving property located in his or
her judicial district. In addition to complying with Department
rules and regulations governing the settlement of cases, to settle
forfeiture actions involving property located in another judicial
district, the United States Attorney handling the forfeiture must
notify and coordinate with the United States Attorney in the
district where the property is located. It is the complete
responsibility of the United States Attorney in the district that
forfeits real property located in another district to comply with
the requirements for forfeiture in the district where the property
is located. Failure to comply with such requirements may result in
a cloud on the government's title; coordination will minimize this
possibility.
9-113.106
Settlement of
Forfeiture in Conjunction with Plea Bargaining
|
The government may conclude a civil forfeiture action in
conjunction with the criminal charges against the defendant which
provided the cause of action against the property. The government
should not agree, however, to release property subject to
forfeiture (civil or criminal) in order to coerce a guilty
plea on the substantive charges, nor should the government agree to
dismiss criminal charges in order to coerce a forfeiture
settlement. If a plea agreement is not to conclude the civil
forfeiture case, language to that effect should also be stated in
the plea agreement. Failure to specify in this manner could be
fatal to the concurrent civil forfeiture action. Further specific
principles governing "global" settlements are as follows:
In all cases, agreements must be based upon facts which support
forfeiture. The Department does not release property which is
otherwise subject to forfeiture to encourage guilty pleas; nor does
it permit defendants to submit property which is otherwise not
subject to forfeiture in order to lighten the potential
incarceration component of the punishment.
To the maximum extent possible, the criminal plea and
forfeiture should conclude the defendant's business with the
government. Delaying forfeiture considerations until after the
conclusion of the criminal case unnecessarily extends the
government's involvement with the defendant and diminishes its
effectiveness.
Where the claimant/defendant has negotiated a plea agreement
and concurrently wishes to forfeit the property subject to a civil
forfeiture action, the plea agreement should state that the
defendant has waived any and all rights—constitutional, statutory,
or otherwise. Any civil settlement should be documented
independently of the plea agreement and should include the
following information:
- the claimant/defendant's interest in the property;
- an admission of the facts supporting forfeiture;
- the claimant/defendant gives up all rights to the
property;
- he/she gives up any right to contest the forfeiture;
and
- settlement should be supported by written
agreement.
Furthermore, the defendant, in the plea agreement, must admit to
facts sufficient to support the forfeiture. The government,
however, should not waive its right to reopen a civil forfeiture
action where it is later determined that the settlement was based
on false information or where the defendant violates his plea
agreement.
9-113.107
Forfeiture Settlements
Involving Partial Payments
|
Settlements shall not provide for partial payments, except upon
the advice and approval of the Asset Forfeiture and Money
Laundering Section, Criminal Division, in consultation with the
U.S. Marshals Service, Headquarters Seized Assets Division. In
Department of the Treasury cases also, the advice and approval of
the Asset Forfeiture and Money Laundering Section, Criminal
Division, should be sought.
[cited in
USAM 9-113.420;
USAM 9-119.118]
9-113.108
Reacquisition of Forfeited Property
|
The settlement should state that the claimant/defendant may not
reacquire the forfeited property directly or indirectly through
family members or others acting in concert with him or her.
9-113.109
Tax Obligations, Fines, Penalties, and
Other Monetary Obligations in Forfeiture Settlements
|
The terms of the settlement, unless specified, do not affect
the tax obligations, fines, penalties, or any other monetary
obligations of the claimant/defendant owed to the government. The
civil settlement documents should state this clearly. See the
Criminal Resource Manual at 2243.
9-113.200
Monetary Amounts of Forfeiture
Settlement Authority
United States Attorneys have authority to settle civil and
criminal forfeitures within the following monetary amount or value
limitations:
- cases not in excess of $500,000; and
- cases between $500,000 and $5,000,000, provided that the
settlement releases not more than 15 percent of the amount
involved.
The United States Attorney must consult with the Asset Forfeiture
and Money Laundering Section (AFMLS), Criminal Division, before
settling forfeiture cases involving $5,000,000 or more, and before
a settlement releasing more than 15 percent of the amount involved
in any case between $500,000 and $5,000,000. See Attorney
General Order No. 92-1598, Appendix to Subpart Y, Part O, Title 28,
Code of Federal Regulations (C.F.R.).
The authority of the Assistant Attorney General pursuant to 28
C.F.R. § 0.160 for settlement of forfeiture cases is
delegated to the Chief, AFMLS, (formerly "Director, Asset
Forfeiture Office"), Criminal Division, by paragraph (c) of
Attorney General Order No. 1598-92. This authority is limited to
settlements releasing not more than $2,000,000 or 15 percent of the
amount involved, whichever is greater. When the proposed settlement
would release more than $2,000,000 or 15 percent of the amount
involved, whichever is greater, the Director, AFMLS, Criminal
Division must refer the matter to the Deputy Attorney General for
approval pursuant to 28 C.F.R. § 0.161.
[cited in
USAM 9-119.117]
9-113.300
Effecting Settlement Agreements Through
Administrative Forfeiture
|
The following procedures apply to settlement agreements in
civil judicial forfeiture cases and to criminal forfeiture plea
agreements where an administrative forfeiture is necessary to
effectuate the agreement. In such cases, the headquarters of the
seizing agency involved must be consulted by the United States
Attorney's Office prior to finalizing an agreement in order to
ensure the agency can accommodate the terms of the agreement. The
Department's policy is to pursue an agreed upon administrative
forfeiture where it is possible and economically efficient to do
so.
9-113.310
Use of Administrative
Forfeiture in Settlement of Civil Judicial Forfeitures Stemming
From Administrative Actions
|
The following requirements must be met where a claim and a cost
bond have been filed and the case has been referred to the United
States Attorney but a settlement is reached before a civil judicial
complaint has been filed.
The terms of the settlement should be reduced to writing by the
United States Attorney and include:
- A provision whereby the claimant/defendant identifies his
or her ownership interest in the property to be forfeited;
- A provision whereby the claimant/defendant gives up all
right, title, and interest in the property;
- A provision whereby the claimant/defendant agrees not to
contest the government's administrative forfeiture action;
- A provision whereby the claimant/defendant agrees and
states that the property to be forfeited administratively was
connected to the illegal activity as proscribed by the applicable
civil forfeiture statute (e.g., money to be forfeited is in fact
proceeds from illegal drug trafficking);
- A "hold harmless" provision and a general waiver of
Federal Tort Claims Act rights and Bivens actions, as well
as other actions based on the Constitution (e.g., the Excessive
Fines Clause). Finally, a Halper waiver should be included
so that future civil or criminal cases are not hampered by the
settlement agreement.
The case should be referred promptly back to the seizing agency
to reinstitute the administrative process. The seizing agency shall
reinstitute the administrative forfeiture process to effectuate the
agreement upon receipt of a referral in compliance with this
policy, consistent with its lawful authority.
Where the agreement provides for the claimant to withdraw the
claim to all property covered by claim and cost bonds filed, the
entire case will be referred back to the agency for administrative
forfeiture. Re-publication of the notice of the administrative
forfeiture action is not necessary, provided publication occurred
prior to filing of the claim and cost bond.
Where the agreement provides for the claimant to withdraw only
a part of a claim, the case will be referred back to the agency for
administrative forfeiture of that portion of the forfeitable
property named in the agreement, and the agency may release the
remainder to the claimant consistent with the settlement.
Re-publication of the notice or of the administrative forfeiture
action is not necessary, provided publication covering the property
to be forfeited occurred prior to the filing of the claim and cost
bond.
[updated March 2001]
[cited in
USAM 9-112.330;
USAM 9-113.330]
9-113.320
Use of Administrative
Forfeiture in Settlement of Civil Judicial Forfeitures not Stemming
from Administrative Actions
|
In cases where the judicial action was commenced without a
prior administrative forfeiture action having begun and a
settlement agreement has been reached involving a proposed
administrative forfeiture of seized property:
- the headquarters of the seizing agency must concur in that
part of the settlement that would obligate the agency to commence
administrative forfeiture proceedings;
- the complaint must be dismissed; and
- the jurisdiction of the district court must be
relinquished before referral may be made to a seizing agency under
this policy.
The seizing agency shall initiate the administrative forfeiture
process to effectuate such an agreement upon receipt of a referral
in compliance with this policy, consistent with its lawful
authority.
9-113.330
Use of Administrative Forfeiture
in Settlement of Criminal Forfeitures
|
In those cases where property has been seized or restrained for
forfeiture under criminal statutes and an agreement reached between
the United States Attorney and the claimant/defendant prior to an
order of forfeiture relating to a proposed administrative
forfeiture of the property:
- the headquarters of the seizing agency must concur in that
part of the settlement that would obligate the agency to commence
administrative forfeiture proceedings;
- the seizure or restraining orders must be dismissed; and
- the jurisdiction of the district court over the property
must be relinquished. The provisions of
USAM 9-113.310 must be met before
referral may be made to a seizing agency under this policy.
The seizing agency shall initiate the administrative forfeiture
process to effectuate such an agreement upon receipt of a referral
in compliance with this policy, consistent with its lawful
authority.
9-113.400
Judicial Forfeiture
Settlements and Petitions for Remission or Mitigation
|
No agreement, whether a settlement in civil judicial action or
a plea agreement resolving both criminal charges and the forfeiture
of assets, may contain any provision binding the Department and the
agencies to a particular decision on a petition for remission or
mitigation, or otherwise contain terms whose effectiveness is
contingent upon such a decision. The remission and mitigation
process, like the pardon process in criminal cases, is completely
independent of the litigation and case settlement process.
The Asset Forfeiture and Money Laundering Section, however, in
appropriate cases upon request, will adjudicate a properly filed
petition for remission or mitigation prior to the negotiation of a
forfeiture settlement or entry of a final order of forfeiture. It
is proper to include in a settlement agreement a provision that
expressly leaves open or expressly forecloses the right of any
party to file a petition for remission or mitigation. The
settlement document should also include a "hold harmless" provision
and a general waiver of Federal Tort Claims Act rights and
Bivens actions, as well as other actions based on the
Constitution (e.g., the Excessive Fines Clause). Finally, a
Halper waiver should be included so that future civil or
criminal cases are not hampered by the settlement agreement.
9-113.410
Civil Judicial Forfeiture Settlement
Procedures
|
Any settlement that purports to "forfeit" property binds only
the parties to it and forfeits only that interest in the property
that the claimant possesses. The following procedures must be
followed to ensure that a valid and complete civil judicial
forfeiture by settlement occurs:
- A civil verified complaint for forfeiture of the property
must be filed in the U.S. District Court to establish the court's
jurisdiction. Filing an action as a "Miscellaneous Docket" and
other attempts to short-cut the process will not be recognized as
a valid forfeiture.
- A warrant of arrest in rem must be executed against the
property.
- All known parties in interest must be given written
notice, and notice by publication must be made.
- After 10 days, if no claim has been filed pursuant to Rule
C(6) of the Supplemental Rules for Certain Admiralty and Maritime
Claims, a default judgment must be sought pursuant to Rule 55,
Federal Rules of Civil Procedure.
- Proposed orders of forfeiture must be filed with the
settlement agreement and include the terms of the settlement
agreement. See the Criminal Resource Manual
at 2244.
9-113.420
Criminal
Forfeiture Settlement Procedures
|
The following procedures must be followed to ensure that a
valid forfeiture results from a plea settlement:
- There must be a forfeiture count in the indictment or
information, otherwise forfeiture is legally impossible. To the
extent property is known to be subject to forfeiture, it should be
listed in the indictment, information, or in a subsequent Bill of
Particulars. The United States Attorney's Office must ensure that
its criminal pleadings are in compliance with Rules 7 and 31 of the
Federal Rules of Criminal Procedure.
- The United States Attorney must comply with the
requirements applicable to third party interests (e.g., 21 U.S.C.
§ 853(n)(1)-(7), including notice of the forfeiture and
the right of third parties to obtain an adjudication of their
interests in the property.
- The settlement to forfeit property must be in writing, and
the defendant must concede facts supporting the forfeiture.
- Close attention should be paid to the potential issue of
"double jeopardy." Any plea or settlement agreement should include
a waiver of any and all double jeopardy claims that might otherwise
be asserted with respect to any subsequent government enforcement
action. Therefore, a Halper waiver should be included so
that future civil or criminal cases are not hampered by the
settlement agreement. The settlement document should also include
a "hold harmless" provision and a general waiver of Federal Tort
Claims Act rights and Bivens actions, as well as other
actions based on the Constitution.
- The court must issue a Final Order of Forfeiture that
incorporates the settlement and, if applicable, addresses any third
party claims.
- Wherever possible, in order to avoid protracted litigation
of ownership issues in the context of ancillary hearings, the
United States should agree to accept unencumbered property only,
with the exception of valid financial institution liens, or at the
very least, the plea agreement should require the defendant to
convey clear title to the government. See
USAM 9-113.107, (Forfeiture
Settlements Involving Partial Payments).
9-113.500
Acceptance of a Monetary Amount in Lieu
of Forfeiture
|
A monetary amount may be accepted in lieu of forfeiture of the
property in civil or criminal judicial forfeiture actions pursuant
to 19 U.S.C. § 1613(c), which is one of the customs laws
(Tariff Act of 1930, 19 U.S.C. § 1602-21) incorporated by
reference into various federal forfeiture statutes. See,
e.g., 21 U.S.C. § 881(d). The following procedures
must be followed:
- A civil complaint against the property or an indictment,
or information naming the property, and alleging the defendant's
interest in the property must be filed.
- A written statement that incorporates the language of
section 1613(c) must be filed and approved by the court.
- The agreement to substitute money in lieu of forfeiture of
property in judicial cases must be approved by the court.
- The U.S. Marshals Service will accept this court approved
settlement and deposit the money (and share it where appropriate)
in the same manner as the proceeds of sale of a forfeited
item.
- Monies received in lieu of forfeiture must be transferred
to the U.S. Marshals Service's District Office in custody of the
asset being returned.
- In cases where the Postal Inspection Service or the
National Marine Fisheries Service is the primary federal
investigative agency, the U.S. Marshals Service must deposit the
money, deduct expenses (if any) incurred with respect to the
property being returned, deduct the approved equitable shares
attributable to other federal agencies participating in the
Department of Justice Assets Forfeiture Fund, and transfer the
balance by refund to the above services, as appropriate. Each
service will be responsible for sharing with participating state
and local agencies in these cases.
[cited in
Criminal Resource Manual 2244]
9-113.600
Agreements to Exempt Attorneys' Fees
from Forfeiture
|
Any agreement to exempt an asset from forfeiture so that it can
be transferred to an attorney as fees must be approved by the
Assistant Attorney General for the Criminal Division. See
USAM 9-119.200
9-113.700
Settlement with Fugitives in Civil
Forfeiture Cases
|
Prosecutors should first consult with the Asset Forfeiture and
Money Laundering Section, Criminal Division, before engaging in
settlement negotiations in civil forfeiture cases where the
claimants are fugitives in United States criminal proceedings.
9-113.800
Expedited Payment of Lienholders
in Forfeiture Cases
|
The former Executive Office for Asset Forfeiture interpreted 28
U.S.C. § 524(c) as authorizing pre-forfeiture payment of
liens and mortgages. Use of this authority must be approved in
writing by the Asset Forfeiture and Money Laundering Section prior
to entering into any agreement to pay a lienholder. It is intended
that this authority be used sparingly and only in those situations
where pre-forfeiture payment of liens and mortgages is necessary to
avoid extreme hardship to natural persons. All other viable
options, including interlocutory sales, must be pursued prior to
seeking this authority.
[cited in
USAM 9-113.100;
USAM 9-119.109]
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