Innocent Owner Defense

After the Government has sustained its initial burden of proof on forfeitability, federal law entitles any claimant with standing to assert the innocent owner defense. The rules for qualifying as an innocent owner of the property are defined in 18 U.S.C. § 983(d).

In addition to punishing drug dealers through civil forfeiture, § 881(a)(6) protects unwitting or innocent owners by explaining that “no property shall be forfeited … to the extent of the interest of an owner, by reason of any act or omission established by that owner to have been committed or omitted without the knowledge or consent of that owner.”

As to a wrongdoer, any amount of the invested proceeds traceable to drug activities forfeits the entire property. In other words, if one is a wrongdoer, the full value of the real property is forfeitable because some of the funds invested are traceable. On the other hand, if a person is an innocent owner, then no amount of that person’s or entity’s funds are forfeitable.

Attorneys for “Innocent Owner ” Forfeiture Defense

If your property was seized by federal agents in a civil asset forfeiture action, then contact an experienced criminal defense attorney at the Sammis Law Firm.

We represent clients throughout the greater Tampa Bay area after a seizure. We are particularly experienced with seizures of cash that take place at Tampa International Airport or other airports across Florida and the rest of the country.

Other defenses include the five-year statute of limitations in forfeiture cases, unreasonable and illegal searches or seizures, prolonged detentions, entrapment, duress, and undue delay in bringing a forfeiture action.

Of these defenses, the “innocent owner” defense is by far the most frequently utilized. This defense involves a property owner who claims that he or she is uninvolved in and unaware of the illegal activity that is the basis for the forfeiture and that he or she took every reasonable precaution to prevent the misuse of the property.

An attorney can help you assert the affirmative defense of innocent ownership. We understand how the civil asset forfeiture statutes differentiate between “wrongdoers” and “innocent owners.”

We can help you assert the innocent owner defense when the facts show that you had no knowledge of the illegal activities and did not consent to the illegal activities.

Call 813-250-0500 to discuss your case.

Differentiating Between the Wrongdoer and the Innocent Owner

The burden is on the claimant, not the government, to prove innocent ownership. In other words, the government need not prove, and the district court need not find, that the claimant had actual knowledge.

Instead, it is the claimant’s responsibility to prove the absence of actual knowledge.

The innocent owner defense is based on actual knowledge, not constructive knowledge, that existed at the time of the transfer and not at the time of the illegal activity. See United States v. 6640 SW 48th St., 41 F.3d 1448, 1452 (11th Cir.1995).

This rule prohibits profit by the post-illegal act transferees who knowingly take an interest in the forfeitable property. The innocent owner defense is not available just because the person was not on the scene early enough to consent to the illegal activity.

In other words, the post-illegal act transferee cannot assert the innocent owner defense to forfeiture if he could know of the illegal activity which would subject property to forfeiture at the time he takes his interest.

When considering the innocent owner defense, the courts are looking to see if a “strawman” setup is being used to conceal the financial affairs of illegal dealings of someone else.

Two Types of Innocent Owner Defenses

Federal law provides for two different innocent owner defenses:

• one version is applicable to persons who owned their property interests while the illegal activity was occurring; and
• the second version is applicable to persons who acquired their interest in the property only after the illegal conduct occurred.

Persons who had an interest in the property at the time the illegal activity was occurring can defeat the Government’s proven forfeiture claim by establishing one of the following:

• the person did not know of the conduct giving rise to the forfeiture. See 18 U.S.C. § 983(d)(2)(A)(i); or
• upon learning of the conduct, the person did all that reasonably could be expected, under the circumstances, to terminate such use of the property, including:
  • giving timely notice to an appropriate law enforcement agency of information that led the person to know the conduct giving rise to a forfeiture would occur or has occurred; and
  • acting in a timely manner to make a good faith attempt to revoke permission for those engaging in such conduct to use the property or taking reasonable actions in consultation with a law enforcement agency to discourage or prevent the illegal use of the property. See 18 U.S.C. § 983(d)(2)(A)(ii) and (B)(i)(I) and (II).

After the illegal conduct occurred, a person who acquires an interest in the property can defeat the Government’s proven forfeiture claim by establishing that:

• the person qualifies as a bona fide purchaser for value of the interest; and
• at the time they acquired the interest, the person did not know and was reasonably without cause to believe that the property was subject to forfeiture. 18 U.S.C. § 983(d)(3).

When the likely owner of the property used to facilitate or conceal the underlying criminal activity was either the perpetrator or knowing participant in the activity, that evidence might be used to overcome any “innocent owner” defense.

But if the owner of the property is not the perpetrator of, or knowing participant in, the underlying criminal activity, then the “innocent owner” defense would prevent the forfeiture.

The Asset Forfeiture Policy Manual on Innocent Owners

According to the Asset Forfeiture Policy Manual, the government evaluates the innocent owner claim by considering whether the owner:

• has standing to maintain a claim in the forfeiture proceeding;
• is merely a nominee or straw owner for the perpetrator of the criminal activity;
• had knowledge of, consented to, or was otherwise willfully blind to illegal use of the property at the time of the criminal activity;
• learned of the illegal use after the fact, but failed to take reasonable and timely steps to properly notify law enforcement or to prevent the further illegal use of the property;
• financially or otherwise benefit from the property’s involvement in the criminal activity; or
• would qualify as a bona fide purchaser for value if he/she acquired the property after the criminal activity subjecting the property to forfeiture had been completed.

Under 21 U.S.C. § 881(a), the innocent owner defense was (and is) not applicable to forfeitable property which is itself contraband—e.g., controlled substances. See, e.g., 21 U.S.C. § 881(a)(8).

Does a Bailee Have Standing to File a Claim to Contest a Seizure for Forfeiture?

In some cases, the person from whom the property is seized was given the property by a third person. In those cases, it might be best for the person from whom the property was seized to make a claim as a bailee. But to have standing to make such a claim, the bailee must identify the third party by name and address. The bailee must also show in the claim that he has “authority” to make the claim on the third party’s behalf.

To be safe, the third party should make their own claim while acknowledging that the property was given to the original claimant on a temporary basis to hold as the bailee. The third party should then acknowledge giving the bailee authority to make a claim on their behalf.

A bailee of property has standing to contest a civil forfeiture. In United States v. $38,000 in U.S. Currency, 816 F.2d 1538 (11th Cir.1987), the court found that a bailee of seized currency had a sufficient interest in the bailed currency to have standing to contest the currency’s forfeiture. Id. at 1544. The court reasoned that a bailee has a possessory interest in bailed property sufficient to assert a claim against anyone, other than the bailor, who interferes with that interest. Id. The court held that the bailee had standing to contest the forfeiture of the bailed currency. Id.

In $321,470.00, 874 F.2d at 304, the court held: “No one can question the standing of a bailee or agent to attack a forfeiture of property subject to a lawful or even colorably lawful bailment or agency.”

In United States v. $191,910.00 in U.S. Currency, 16 F.3d 1051, 1058 (9th Cir.1994), the court found that although mere unexplained possession is insufficient, “where a claimant asserts a possessory interest and provides some explanation of it (e.g., that he is holding the item for a friend), he will have standing.”

The cases also note that Rule C(6) of the Supplemental Rules for Certain Admiralty and Maritime Claims provide:

“[A] person who asserts an interest in or right against the property that is the subject of the [civil forfeiture] action must file a verified statement identifying the interest or right.”

Some courts have noted that a bailee cannot also make a claim as an “innocent owner.” Title 18, United States Code, Section 983(d) (1) provides, “An innocent owner’s interest in property shall not be forfeited under any civil forfeiture statute.

The claimant shall have the burden of proving that the claimant is an innocent owner by a preponderance of the evidence.” 18 U.S.C. § 983(d) (1). Section 983(d) (6) provides, for purposes of the “innocent owner” statute, the definition of the term “owner:”

In this subsection, the term “owner”-

(A) means a person with an ownership interest in the specific property sought to be forfeited, including a leasehold, lien, mortgage, recorded security interest, or valid assignment of an ownership interest; and

(B) does not include-

     (I) a person with only a general unsecured interest in, or claim against, the property or estate of another;

     (ii) a bailee unless the bailor is identified and the bailee shows a colorable legitimate interest in the property seized;

     (iii) a nominee who exercises no dominion or control over the property.

Id. § 983(d) (6).

Innocent Owner as a Bona Fide Purchaser

When the “property interest [was] acquired after the conduct giving rise to the forfeiture has taken place,” the person claiming to be an “innocent owner” must show that, at the time that person “acquired the interest in the property[,] . . . [the person] was a bona fide purchaser . . . for value (including a purchaser . . . of goods or services for value); and . . . did not know and was reasonably without cause to believe that the property was subject to forfeiture.” 18 U.S.C. § 983(d)(3)(A).

In United States v. Assets Described in Attachment A to the Verified Complaint Forfeiture In Rem, 799 F. Supp. 2d 1319, 1330 (M.D. Fla. 2011), the court found that “[i]n order to establish an innocent owner defense under Section 983(d)(3)(A), for a property interest arising after the conduct giving rise to forfeiture occurred, a claimant must demonstrate by a preponderance of the evidence that it was a bona fide purchaser or seller for value and did not know or was reasonably without cause to believe the property at issue was subject to forfeiture.”

Finding a Lawyer for the “Innocent Owner” Defense after a Seizure

If you are the owner with standing to assert a viable innocent owner defense, we can help you fight the forfeiture action so that the property can be returned to you without delay.

Our attorneys can help you file a claim asserting that you are an innocent owner under Section 983(d). We can also help you prove the necessary elements needed to satisfy the four-part test from Section 983(d)(3)(B) by a preponderance of the evidence.

With offices in downtown Tampa in Hillsborough County and in New Port Richey in Pasco County, FL, we fight forfeiture actions throughout the greater Tampa Bay area.

Call 813-250-0500 to discuss your case today.

This article was last updated on Friday, July 1, 2022.