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Where Are We With Criminal Forfeiture? Two Recent Cases.

Updated: May 1

Both the Supreme Court of the United States and the Supreme Judicial Court of Massachusetts recently interpreted statutes related to criminal forfeiture. It is first important to distinguish criminal forfeiture from civil forfeiture. Civil forfeiture is a racket run by police forces to pad their coffers. It has no place in civil society and yet it exists.


Criminal forfeiture, on the other hand, relates to contraband or unlawful fruits of criminal activity that would be ill-gotten gains if allowed to remain in the possession of the individual convicted. While civil asset forfeiture should be outlawed, criminal forfeiture often makes sense and – at least in the jurisdictions spoken of today – is subject to due process of law.


Non-forfeiture rabbit hole: Just want to air a pet peeve here. There is a basis for criminal forfeiture, so long as due process applies and there is notice and an opportunity to be heard. This is to be distinct from the idea of  “criminal restitution” which is basically poppycock. Restitution should only be part of a civil proceeding. I am well aware of the fact that criminal cases often order restitution. I am simply saying this is dumb. Criminal cases are between the government and an individual; penalties may involve fines and/or restraint of liberty. In criminal cases, there should never be restitution to a victim as that individual is not a party to the case. This is not to say that the victim could not bring a civil suit for restitution (in fact they can, and that is the whole point). I am simply saying that it should never be ordered by a criminal court or made part of any kind of probationary term. It should only ever be a civil remedy. You are welcome to argue with me on this - I welcome comments!


The Supreme Court of the United States ruled, in McIntosh v. United States, 144 S.Ct. 980 (2024), that a particular provision of the criminal forfeiture rule is a “time-related directive” and failure of the lower court to adhere to it is subject to harmless error review. In brief, that means the plaintiff, McIntosh, lost. But, let’s see what happened and why the unanimous decision comes as no surprise to anyone.


In federal court, when forfeiture is permitted by statute, when the government seeks to deprive criminal defendants of ill gotten gains through forfeiture, it must alert the defendant as early as the indictment. Federal Rule of Criminal Procedure 32.2(b)(2)(B) then requires a preliminary order of forfeiture sufficiently in advance of sentencing. The purpose is to allow the parties to suggest any necessary changes.  The question in McIntosh was: when the government alerts the defendant through indictment that it seeks to obtain ill-gotten gains through forfeiture and the court fails to enter a preliminary order for this forfeiture prior to sentencing, does this prohibit forfeiture?


In McIntosh, the defendant was accused and found guilty by a jury of committing several robberies in violation of the Hobbs Act (which allows for the government to move for forfeiture). The government mentioned a specific BMW purchased by the defendant just after one of the robberies as well as an amount of US currency as property subject to forfeiture in the indictment. After trial, the government submitted a sentencing memorandum that did not mention the forfeiture. The trial court did not enter a preliminary order of forfeiture prior to sentencing. However, forfeiture was ordered at sentencing. The defendant objected. And appealed. At that time, the government asked for a remand for the purpose of supplementing the record with a formal order for forfeiture which was allowed.


Basically, the courts treated the rule as very flexible – in a way it was like a “technical error”. The defendant, however, sought to quash the forfeiture for failure of the court to adhere to the rule. The Supreme Court accepted certiorari.


The Supreme Court noted that it recognizes three types of time limits: (1) jurisdictional deadlines, (2) mandatory claim-processing rules, and (3) time-related directives.  McIntosh argued that Rule 32.2(b) was subject to the second type of analysis – that it was a mandatory claim-processing rule and, therefore, acts as a deadline with protections for the litigant (who could, but did not here, waive or forfeit such protections). The government argued that the Rule was a time-related directive which basically is a guide for keeping cases on track. The main difference is that failing to follow a mandatory claim-processing rule is presumptively prejudicial while failing to follow a time-related directive is subject to harmless error review. (As an aside not really worthy of a rabbit hole but possibly its own post one day - folks really need to pay closer attention to appellate standards of review. They do not and this leads to some very unhappy conclusions.)


The problem for McIntosh was not only that the courts determined that the rule is a time-related directive, but also that he could not demonstrate prejudice. Therefore, the failure of the court to issue a preliminary order of forfeiture was error, but that error was harmless. The forfeiture of the BMW and of the cash was upheld; future litigants are now on notice. While it is unfortunate for McIntosh, a different ruling would have given a convicted thief a windfall. Further, it is impossible to argue a lack of due process since the indictment is required to alert the defendant to the government’s theory of ill-gotten gains from the outset of the case.


At the very same time, in Commonwealth v. James, 2024 WL 1724633 (April 23, 2024), the Supreme Judicial Court of Massachusetts interpreted a state statute regarding criminal forfeiture. This case involved items seized pursuant to a valid search warrant. G.L. ch. 276 sec. 3 governs property seized as a result of search warrants and has a provision regarding “public interest”. Applying that provision, the trial court granted the government’s motion to destroy certain items, primarily computer drives, “in the public interest”. Specifically, it states, "...other property seized in execution of a search warrant shall be disposed of as the court or justice orders and may be forfeited and either sold or destroyed, as the public interest requires, in the discretion of the court or justice..." For our purposes, the pivotal piece is the meaning of the clause, "as the public interest requires".


The trial court determined that it was in the public interest to destroy certain hard drives and other digital storage devices. Applying no due process save his own opinion, the trial court ordered forfeiture and destruction of the same. However, he did allow a stay for the matter to be litigated. Ignored were G.L. ch. 276 secs. 4-8 which create a detailed process to follow prior to allowing forfeiture of items seized pursuant to a search warrant. Given the “public interest” provision in sec. 3, the court did not follow those procedures. The question for the appellate court was whether this was correct. It was not.


One issue raised as to the public interest favoring destruction of the hard drives was that, regardless of anything else on the drives, given the charges in the case (which involve sexual abuse of a child and possession of child pornography), this case easily could have made terrible law. Instead, the SJC decided that when the Commonwealth seeks forfeiture of items seized pursuant to a search warrant, it bears the burden of proving by a preponderance of the evidence that the public interest requires forfeiture. So, a little kudos here for the members of the SJC.


To balance all the competing interests, what is required are appropriate proceedings in accordance with G. L. c. 276, §§ 4 to 8, including notice and a trial, so a judge may evaluate, on a full factual record, the merits of the competing arguments to determine if a forfeiture decree is in the “public interest” under § 3. Indeed, this case hinges on numerous factual disputes and thus requires a fact finder to resolve them. To be clear, we do not suggest it would be impossible or even unlikely for the Commonwealth to demonstrate the hard drives contain child pornography or forfeiture is not otherwise in the public interest; we conclude only that proceedings consistent with the requirements of §§ 4 to 8 are necessary for a judge to make such a determination.


Commonwealth v. James, 2024 WL 1724633 at *8.

 

The Court refused to allow a solitary judge to determine whether or not the state could require forfeiture of personal items as a matter of public interest. Instead, it determined – correctly – that the defendant was entitled to due process of law prior to any such determination. James – who was sentenced to a significant amount of carceral time - may yet lose the contents of the hard drives. But, at least he will be entitled to a trial and a full factual record before that occurs.


These two cases are not all that compelling or interesting except, perhaps, to the litigants involved. But, both cases give notice as to how certain statutory language will be interpreted, thereby clarifying the landscape for litigants. Sometimes, in a chaotic world, boring and unambiguous is good. It’s really very good.

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