JUSTICE MANUAL 9-113.000 – Forfeiture Settlements - The Law Office of Sebastian Rucci

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 Chapter 11 of the Asset Forfeiture Policy Manual. 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 0, 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 JM 9-113.101 through 9-113.800.

For purposes of this chapter, the term settlement includes a plea agreement with the defendant in a criminal case in which there is an agreement regarding the forfeiture of property; the resolution of a third party claim in the ancillary proceeding in a criminal case; and the resolution of a claim filed by any claimant in a civil forfeiture case, either before or after the judicial complaint is filed.

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.

9-113.102 – Recovery of Investigative Costs
In general, the Government should not attempt to use a settlement to recover the costs of its investigation. It may be appropriate in unusual circumstances, however, to recover extraordinary expenditures, such as funds needed to clean up environmental damage to the forfeited property.

9-113.103 – 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 Chapter 11 of the Asset Forfeiture Policy Manual.

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. Property that has been administratively forfeited belongs to the Government and, therefore, cannot be returned to a defendant or be used to pay restitution as part of a plea agreement, except through the restoration process outlined in Chapter 14 of the Asset Forfeiture Policy Manual.

Input from the USMS should be sought to determine current and prospective expenses to ensure that the settlement is fiscally sound from the Government’s perspective.

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 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 must not agree, however, to release property subject to forfeiture (civil or criminal) in order to coerce a guilty plea on the substantive charges, nor may 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; 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 Installment Payments
Settlements shall not provide for installment payments over time, except upon the advice and approval of the Money Laundering and Asset Recovery Section (MLARS), Criminal Division, in consultation with the U.S. Marshals Service, Headquarters Seized Assets Division. In Department of the Treasury and Homeland Security cases also, the advice and approval of MLARS, Criminal Division, should be sought.

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. Family members who already own a partial interest in the forfeited property may, however, purchase the forfeited interest. See Chapter 11.B.8 of the Asset Forfeiture Policy Manual (“Reacquiring the property”).

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 Chapter 11.B.9 of the Asset Forfeiture Policy Manual (“Effect on taxes and other obligations”).

9-113.200 – Monetary Amounts of Forfeiture Settlement Authority
United States Attorneys have authority to settle civil and criminal forfeiture cases as follows:

any case in which the amount involved does not exceed $1,000,000, regardless of the portion of the property that would be released as a result of the settlement; and

any case in which the amount involved exceeds $1,000,000 but does not exceed $5 million, if the amount to be released does not exceed 15 percent of the amount involved.
In all other cases, the United States Attorney must obtain approval of the settlement by the Money Laundering and Asset Recovery Section (MLARS). The chief of MLARS has the authority to approve any settlement required to be submitted for approval, unless the amount to be released exceeds 15 percent of the amount involved and is more than $2 million; in such cases, the settlement must be approved by the Deputy Attorney General. See 28 C.F.R. §§ 0.160, 0.161; Attorney General Order No. 1598-92. See Chapter 11 of the Asset Forfeiture Policy Manual (“Settlement Approval Authorities”).

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 seiz…

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