Default Judgments in Federal Civil Asset Forfeiture Cases
What happens if you don’t respond to a civil asset forfeiture complaint? If your property is seized, the agency might administratively forfeit the property if you fail to file a verified claim before the deadline listed in the notice of seizure.
In civil asset forfeiture cases at the federal law, the Assistant United States Attorney might proceed with a judicial forfeiture proceeding by filing a Verified Complaint for Forfeiture In Rem, alleging that the Defendant Currency seized is subject to civil forfeiture under 21 U.S.C. § 881(a)(6) and 18 U.S.C. § 981(a)(1)(A). If so, the Clerk of Court will typically issue a Warrant for Arrest In Rem for the seized property.
In determining whether the government’s motion for default judgment should be granted, the court will determined the sufficiency of the forfeiture complaint including:
- whether the Government has taken reasonable steps to provide notice to known potential claimants; and
- if so, whether the Government has otherwise complied with the notice requirements set forth in Supplemental Rule G(4).
During the pendency of the civil asset case, if no individual or entity makes a timely claim to the Defendant Currency, the Clerk might enter an Entry of Default.
The court will then review the matter to determine if the an order should be entered granting the Government’s Motion for Default Judgment. If so, the court will enter an order that GRANTS the Judgment of Forfeiture entered in favor of the United States against all persons and entities with respect to the Defendant Property identified in the Complaint.
The order decrees that any right, title, and interest of all persons to the Defendant Currency is hereby forfeited to the United States, and no other right, title, or interest shall exist therein. The order might also direct the United States Marshal to dispose of the Defendant Currency as provided by law.
What Must the Government Prove to Get the Default Judgment?
Pursuant to the Civil Asset Forfeiture Reform Act of 2000 (“CAFRA”), the Government has the initial burden of establishing by a preponderance of the evidence that the defendant property is subject to forfeiture. 18 U.S.C. § 983(c)(1). A complaint must “state sufficiently detailed facts to support a reasonable belief that the government will be able to meet its burden of proof at trial.” Fed. R. Civ. P. Supp. R. G(2)(f).
The most common grounds listed in a civil asset forfeiture occur when the Government seeks forfeiture of currency if it was used, or intended to be used in exchange for a controlled substance, or represents proceeds of trafficking in controlled substances, or was used or intended to be used to facilitate a violation of the Controlled Substances Act, 21 U.S.C. § 801 et seq. See 21 U.S.C. § 881(a)(6).
The allegations of the Government’s Verified Complaint, are deemed admitted as true, if noone filed a judicial claim or answer to the complaint. If the allegations are deemed true because noone response, then the Court might find that the Government has satisfied its burden of showing that the Defendant Currency is subject to civil forfeiture under 21 U.S.C. § 881(a)(6) and 18 U.S.C. § 981(a)(1)(A).
Additionally, the Court might find that the Government has taken reasonable steps to provide notice to known potential claimants, and the Government has otherwise complied with the notice requirements set forth in Supplemental Rule G(4).
If no individual or entity has timely filed a claim to the Defendant Currency, the Court might find the Government has established that default judgment is appropriate.
How to Set Aside a Default Judgment in a Federal Forfeiture Case
Read more about federal civil asset forfeiture proceedings, and how to avoid a default judgement. If you did not receive a written personal “notice of seizure,” an attorney can help you file a “Motion to Set Aside Forfeiture under 18 U.S.C. § 983(e) under Rule 60(b) of the Federal Rules of Civil Procedure.
When CAFRA was enacted in 2000, its statutory provisions became “the exclusive remedy for seeking to set aside a declaration of forfeiture under a civil forfeiture statute” under 18 U.S.C. § 983(e)(5) as arising under Fed. R. Civ. P. 60(b). 18 U.S. Code § 983(e)(1) provides:
Any person entitled to written notice in any nonjudicial civil forfeiture proceeding under a civil forfeiture statute who does not receive such notice may file a motion to set aside a declaration of forfeiture with respect to that person’s interest in the property, which motion shall be granted if:
(A) the Government knew, or reasonably should have known of the moving party’s interest and failed to take reasonable steps to provide such party with notice; and
(B) the moving party did not know or have reason to know of the seizure within sufficient time to file a timely claim.
18 U.S.C. § 983(e)(1).
The motion should be granted if the Government knew, or reasonably should have known, of the moving party’s interest and failed to take reasonable steps to provide such party with notice” and “the moving party did not know or have reason to know of the seizure within sufficient time to file a timely claim.”
In United States v. Brome, 942 F.3d 550, 552 (2d Cir. 2019), the court noted: “The right to seek to set aside [a] forfeiture is limited to claims of lack of adequate notice.” A motion under section 983(e) must be made within “5 years after the date of final publication of notice of seizure of the property.” Id. § 983(e)(3).
If granted, the declaration of forfeiture is set aside “without prejudice to the right of the Government to commence a subsequent forfeiture proceeding,” as explained in § 983(e)(2)(A), meaning the most likely result is a reopened proceeding in which the claimant can attempt to prevent the forfeiture of his property.
In most cases, a Rule 41(e) motion is an inappropriate vehicle for challenging a judicial forfeiture. Instead, the proper vehicle is a motion for relief of judgment under Rule 60(b) of the Federal Rules of Civil Procedure.”
Your ability to file a motion to vacate the default judgment in a federal civil asset forfeiture case is limited by the statute of limitations. CAFRA provides that “[a] motion to set aside the declaration of forfeiture must be filed no later than five years after the date of final publication of notice of seizure.” Landry v. United States, 600 F. App’x 216, 220 (5th Cir. 2015) (citing 18 U.S.C. § 983(e)(3)).
In some cases, the limitations period should be equitably tolled. “Generally, a litigant seeking equitable tolling bears the burden of establishing two elements: (1) that he has been pursuing his rights diligently, and (2) that some extraordinary circumstance stood in the way.” Pace v. DiGuglielmo, 544 U.S. 408, 418 (2005).
Visit our website to find a sample “Motion to Set Aside Forfeiture Under 18 U.S.C. § 983(e)” template. The attorneys at Sammis Law Firm are experienced in filing and litigating motions to file late claims based on the lack of notice before the default judgment is entered, or a motion to set aside a forfeiture after a default judgment is entered. Call 813-250-0500 for more information.
Default Judgment When the Government Seized Cryptocurrency for Forfeiture
Unique problems occur when the government seized cryptocurrency for forfeiture. For example, the owner of the seize wallet rarely receives the personal notice of seizure that should be mailed to them. When an cryptocurrency exchange is served with a seizure warrant, they know the wallet owner’s contact information and have a copy of their government issued identification.
Even when the government also knows this KYC contact information and the account owners email, the government might just ignore that fact and refuse to send the personal notice.
Instead, the government might put the last four digits of the wallet address or account number in the notice published on the forfeiture.gov website, making it particularly difficult to find. Especially since the wallet or account holder might not know which government agency seized the cryptocurrency.
To understand this problem with government overreach when seizing cryptocurrency, consider a recent order issued on March 3, 2026, in the United States District Court for the Northern District of New York. In United States v. 674,739.480211 USDT of Tether Cryptocurrency, No. 5:25-cv-01040 (BKS/PJE) 2026 U.S. Dist. LEXIS 42940 (N.D.N.Y. Mar. 3, 2026), the trial court issued an order that denied default judgment based on critical deficiencies after the government’s attempt to forfeiture nearly $675,000 in Tether (USDT) seized by the FBI.
In that case, the trial court found the government failed to provide constitutionally sufficient notice and also lacked an adequate tracing basis. The trial court identified several failures in the government’s tracing methodology and held the government to the “substantial connection” requirement found in 18 U.S.C. § 983(c)(3). The trial court also noted the obvious problem that the cryptocurrency identified in the published notice of seizure was different from the cryptocurrency listed in the complaint. The published notice provided:
IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF NEW YORK COURT CASE NUMBER: 5:25-CV-01040; NOTICE OF FORFEITURE ACTION
Pursuant to 18 U.S.C. § 981, the United States filed a verified Complaint for Forfeiture against the following property: 674,739.480211 USDT from Tether account number #XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX5usu, held in the name of Best Acct# XXXXXXXXXXXXXXXXXXXXXXXXX (25-FBI-003794) seized from Tether on May 22, 2025 in Albany, NY.
On the other hand, the complaint identifed the property as follows:
18. Additional tracing identified seven transactions totaling 286542.299 USDT to wallet 0xFf4bBDc981EbE275630704E680C2086498576909 (“Wallet 0xFf4bBD”). Wallet 0xFf4bBD then exchanged the Tether onto the Tron blockchain (simply a different network, but it retains the same value per USDT token) on December 15, 2024, for 118743.317351 USDT TRON, and on December 17, 2024, for 167225.897073 USDT TRON to wallet TDoj7UUpKZieJFK5CHfZcuDpJkWw55Dg3J (“Wallet TDoj7UUp”).
19. Wallet TDoj7UUp made two transfers to the Target Wallet TNj4y6nnTX on December 15, 2024 of 194479.719531 USDT TRON and December 17, 2024, of 249473.322623 USDT TRON. A total of 443,953 USDT TRON was traced from the Victim’s accounts to the Target Wallet.
The court also knoted that although the government claimed there were “no known potential claimants,” it made no deffort to contact the email or mailing addresses associated with the “Know Your Customer” (KYC) data typically held by exchanges. The reason any potential claimants could not be identified was not explained in the complaint.
The AUSA might fix these problems because the trial court gave the government an opportunity to “renew their motion for default judgment by filing, within thirty days of the date of this Order, a renewed motion for default judgment with affidavits or evidence and a memorandum of law addressing the issues raised in this decision.”
Read more about problems with forfeiting seized cryptocurrency in a default judgment.
This article was last updated on Thursday, May 14, 2026.