Theories of Forfeiture

There are four forfeiture theories. Property is subject to forfeiture if it is (1) contraband; (2) the proceeds of criminal activity; (3) used to facilitate criminal activity; and (4) connected to a criminal enterprise.

Forfeiture of Contraband

Contraband property is illegal to possess and, as such, is subject to forfeiture. No one can assert a legal interest in contraband property, so any property interest in it cannot exist. Again, this is why summary forfeiture of contraband is acceptable.12

Closely connected to contraband is so-called "derivative contraband."13 To use a drug example, derivative contraband might be scales used to weigh substances before sale. Such property is lawful to possess but is subject to forfeiture because it is used to facilitate crime. It cannot be summarily forfeited, however. Due process protections apply because one can assert legal interest in such property.

Forfeiture of Proceeds

The ability to target the proceeds of criminal activity is what makes forfeiture particularly attractive from a police standpoint. The proceeds of criminal activity can be several, including "...all interest, dividends, income, or property derived from the original illegal transaction..., including the appreciation in the value of the property."14 Proceeds can be targeted for forfeiture if they are connected to criminal activity in general. That is, there is no requirement that the proceeds be obtained directly from an illegal act. For example, if an individual sells drugs for cash, uses the cash to buy a car, sells the car, and then uses the money to contribute to a down payment on a home, the latter could be considered proceeds—but only the portion purchased with illicit funds.15

Although the ability to target proceeds of criminal activity is attractive, it can be difficult for the government to prove a connection between the property sought and the initial criminal act. The current requirement is that the government prove a "substantial connection" between the property to be forfeited and the criminal activity from which it is considered a proceed. A general suspicion of criminal activity is not sufficient to take an asset forfeiture case forward.

Facilitation Forfeiture

Forfeiture extends beyond criminal proceeds to include property that is used to facilitate, or carry out, criminal activity. Such forfeitures can include property that "is used or intended to be used in any manner or part to commit or facilitate the commission of a violation..."16 A facilitation forfeiture is sometimes called an instrumentality forfeiture, meaning the property targeted for forfeiture was instrumental to the commission of the crime. An example is a car used to transport illegal drugs for sale.

Enterprise Forfeiture

Enterprise forfeiture targets an offender's interest in any enterprise involved in criminal activity. Federal law provides that "... in the case of a person convicted of engaging in a continuing criminal enterprise..., the person shall forfeit, in addition to any property described in (1) proceeds or (2) instrumentality, any of his interest in, claims against, and property or contractual rights affording a source of control over, the continuing criminal enterprise."17 This is sweeping language because it reaches the offender's entire interest in a criminal enterprise. An example is the case of United States v. Cauble18, where the government forfeited a partnership interest in a ranch on the theory that the defendant used it for his drug smuggling operation. This type of forfeiture is relatively rare and tends to be limited to racketeering cases.19