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The Forfeiture Lemon: Regaining Seized Property as an Innocent Owner

Participating in the American stream of commerce is a wonderful thing. We freely lend, sell, exchange, and transfer property to private citizens with little or no interference. However, this freedom comes with significant risk. We have all heard of the poor guy who buys a "lemon" meaning he bought something that turned out either to be in constant need of repair or to not work at all. Typically we associate the term "lemons" with property rendered worthless because of a mechanical defect. However, there is another type of lemon, or dud, which can destroy property's value even though it works. It's called the forfeiture lemon.

Asset forfeiture is a legal process that allows the federal government, and most state governments, to take private property on the basis that such property was either used in a crime or the proceeds of crime. Property used to break the law, for example, a car used to transport drugs, is said to be used to facilitate crime. Also, property obtained with the fruits of crime, for example, a car bought with bank robbery money, is called proceeds. Both facilitation and proceeds theories support the forfeiture of a citizen's property under the law. Not only are these laws on the books, state and federal prosecutors are adept at defending their takings in court and, if they are successful, keeping private property outright.

This means that if you buy or acquire something that turns out to be seized by any governmental agency you are in danger of permanently losing your property. That would mean you bought something that turns out to be worthless otherwise known as a forfeiture lemon.

To be sure, in most instances local and federal law enforcement officers undertake serious effort to ensure that property they seize is in fact connected to crime. However, the fact that property is used to facilitate a crime or was acquired with criminal proceeds does not mean that the government automatically gets to seize it and keep it. Luckily for citizens, persons who acquire property, that have no reason to know the property is connected to crime, have a defense under the law. This protection is known as the Innocent Owner Defense.

Under 18 U.S.C. 983(d), people who do not know that their property is being used to break the law (and, if they discover it's being used nefariously, try to stop it from such usage) can assert this defense. For example, if momma's car is used by her son to take marijuana from his house to a customer, and assuming she is none the wiser, she may be able to stop the government from owning it. However, if she learns what her son is up to and doesn't try to stop it then she has no innocent owner defense.

Furthermore the 983(d) law also protects people who buy property that was originally obtained with criminal proceeds. For example, if a Medicaid fraudster buys a house with his illicit proceeds and then sells it to a dupe who is also none the wiser, that customer may be able to prevent the government from taking his home.

While this defense is fair and intuitive, actually presenting it to a judge or prosecutor is not necessarily easy. The innocent owner defense often requires research into state property law to distinguish borrowers from owners or unsecured creditors from secured ones. These distinctions may seem to be fluffy fine print for attorneys but they can make all the difference in a forfeiture hearing. Further, forfeiture is rooted in arcane admiralty laws that came about when pirates were more like Captain Hook than religious extremists. That means that knowledge of juris prudence in this area is critical when trying to either regain or keep property subject to asset forfeiture. As is always the case in asset forfeiture controversies, legal assistance and professional investigation is needed to assert defenses and efforts to stop governmental entities from taking private property. 

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