What is Asset Forfeiture?

Asset forfeiture occurs when the law enforcement authorities within a given state seize a person's assets. Assets refer to possessions, such as a home, car, clothes, jewelry or any other tangible item that has value that a person owns. Forfeiture refers to the taking of those tangible items.

There are many different reasons why asset forfeiture may occur. The most common reason that the law enforcement authorities seize assets is that the goods are the proceeds of a crime. If, for example, a drug dealer obtains an expensive home and car through the sale of drugs, that home and car are the proceeds of his illegal activity. The law enforcement officials are thus permitted to seize those assets, which may be referred to as "ill-gotten gains."

The government may also seize assets or items that were used in the commission of a crime, even if those items were not purchased with money from criminal activity. For example, if a person used his vehicle to kill someone in, the police could seize the asset — the vehicle — since it was used for the purpose of committing illegal criminal activity. Terrorism is another justifiable cause for asset forfeiture; if assets are used in a terrorist action or the government has reason to believe that the assets are the result of terrorist activity, it can seize the items in question.

Forfeiture cannot occur without legal proceedings prior to the taking. Within the United States, this rule is established by the Due Process clauses of the Fifth and Fourteenth amendments. Other countries also have similar protections in place, mandating some type of legal process before assets are taken by law enforcement.

In the United States, the Civil Asset Forfeiture Reform Act of 2000 sets forth the rules that the government must adhere to when taking assets. Under the rules, the government must prove by a preponderance of evidence that the assets were used to commit a crime or that they were bought with the proceeds from criminal activity. This is a tougher burden to meet than "probable cause," in which the government only has to prove it is likely that the assets were used in this manner, but not as stringent a standard as "beyond a reasonable doubt," in which the government would have to demonstrate that there is no doubt the assets were involved in a crime. When the government wants to seize assets, it thus brings a lawsuit against the property itself or against the property owner; if it wins that lawsuit by meeting its burden of proof, asset forfeiture takes place.