3 types of asset forfeitures

On Behalf of | Feb 22, 2021 | White Collar Crime

White-collar crime, a term used since the 1930s, includes of offenses such as health care fraud, bribery, embezzlement and money laundering. According to TRAC Reports, the Justice Department filed 234 new white-collar crime suits in December 2020.

To combat white-collar crime, law enforcement agencies use asset forfeiture to punish criminals by removing money and property received by illegal means.

Types of forfeitures

Asset forfeiture began when governments in the past seized ships and contraband to penalize those accused of piracy. Taking away money and property from criminals continues today through three types of forfeitures.

1. Criminal forfeiture

Criminal forfeiture is an action brought against an individual. For the court to find a property or asset forfeitable, the government must indict the property and the individual. Once this happens, the court can issue an order.

2. Civil judicial forfeiture

Here, the court brings a suit against the property. The owner does not receive any formal charges and may contest the seizure through court proceedings.

3. Administrative forfeiture

Federal seizing agencies such as the FBI, Drug Enforcement Administration and IRS have the option to take property and assets under Section 28 of the Code of Federal Regulations. The agencies can give up the property without having judicial involvement.

Uses of asset forfeiture

Law enforcement uses asset forfeiture in different ways. These include:

  • Punishing criminals
  • Returning assets and property to victims
  • Disrupting criminal organizations and activity

Penalties for white-collar crimes may fall under both state and federal jurisdictions. Under the United States Sentencing Commission guidelines, a person charged with a white-collar crime can face a prison term of up to 20 years for an offense of theft, fraud, forgery or other crimes.