Federal asset forfeiture allows the government to seize money, vehicles, bank accounts, cryptocurrency, real estate, and other property that investigators claim is connected to criminal activity. 

In many cases, the seizure happens before any conviction, and sometimes before formal charges are even filed.

Under 18 U.S.C. § 981 and 18 U.S.C. § 983, federal agencies such as the FBI, DEA, IRS, Homeland Security Investigations, and the Department of Justice may pursue civil or criminal forfeiture proceedings based on allegations of fraud, drug trafficking, money laundering, healthcare fraud, wire fraud, securities violations, and other federal offenses.

These cases often involve aggressive investigations and immediate financial pressure designed to disrupt a target's business operations and personal life.

Eisner Gorin LLP can help you. Schedule your consultation by calling (818) 781-1570 or using the contact form here. 

What is Federal Civil Asset Forfeiture?

Federal forfeiture laws permit the government to take ownership of property allegedly connected to criminal conduct. The government may claim that assets represent criminal proceeds, facilitated illegal activity, or were involved in money laundering transactions.

There are generally two types of federal forfeiture proceedings: civil and criminal.

How Does Civil Asset Forfeiture Work?

In a civil forfeiture case, the government sues the property itself rather than accusing the owner of a crime. These cases often carry unusual captions such as “United States v. $250,000 in U.S. Currency.”

Put simply, prosecutors argue that the money, car, bank account, or other asset was involved in a crime or represents proceeds of unlawful conduct, so the case is filed against the property itself rather than against an individual.

The idea behind civil forfeiture is that the property is allegedly connected to illegal activity, even though the property itself is not inherently unlawful.

In these cases, the property is often money, cars, homes, or bank accounts, which are legal property (as opposed to, say, narcotics, which are illegal).

For example, if the government claims that $250,000 came from wire fraud, it is not saying that cash is inherently illegal. It claims that the source of the money was illegal, which is what allegedly makes it subject to forfeiture.

To succeed in civil asset forfeiture, federal prosecutors must argue that the assets were either:

• Proceeds of criminal activity
• Used to facilitate a crime
• Involved in money laundering or another offense

What is the Difference Between Civil and Criminal Asset Forfeiture?

The government does not need a criminal conviction to move forward with a civil forfeiture action. Criminal forfeiture occurs after a criminal prosecution and is tied to a conviction for certain federal offenses.

Essentially, criminal forfeiture requires a conviction, and civil forfeiture does not.

But there are several similarities. Both civil and criminal federal forfeiture proceedings commonly involve allegations related to:

• Wire fraud
• Mail fraud
• Money Laundering
• Healthcare fraud
• Securities fraud
• Drug trafficking
• Counterfeiting operations
• RICO investigations
• Cryptocurrency fraud allegations

For both, property subject to forfeiture may include:

• Bank accounts
• Investment accounts
• Cash
• Luxury vehicles
• Aircraft
• Jewelry and watches
• Homes and commercial real estate
• Business revenue
• Cryptocurrency wallets
• Computers and electronic devices

Federal agencies frequently acquire seizure warrants from a judge based on probable cause. Additionally, in certain cases, agents might seize assets during search warrant executions or arrests.

Once property is seized, the government is required to notify interested parties. Then, strict deadlines come into effect for anyone wanting to contest the forfeiture. Failing to meet a filing deadline can lead to the permanent loss of the property, regardless of whether the owner was convicted of a crime.

What Must the Government Prove in a Federal Forfeiture Case?

The government bears the burden of proving that property is connected to unlawful conduct.

Under 18 U.S.C. § 983(c), prosecutors generally must establish by a preponderance of the evidence that the property is subject to forfeiture, meaning it is more likely than not that the property is connected to unlawful conduct.

In practical terms, federal prosecutors may attempt to show:

• Funds originated from illegal conduct
• Property facilitated criminal activity
• Assets were involved in money laundering
• Transactions were structured to conceal proceeds
• Real estate or vehicles were used in furtherance of alleged crimes

What are Common Defenses in Federal Asset Forfeiture Cases?

Every forfeiture case depends on the facts, the financial records, and the procedures followed by investigators. Several defenses may apply depending on the circumstances. Potential forfeiture defenses include:

• Lack of connection between the property and the alleged criminal conduct
• Illegal search and seizure
• Defective seizure warrants
• Violation of due process rights
• Failure to provide proper notice
• Innocent owner defense
• Statute of limitations issues
• Insufficient tracing evidence
• Excessive fines concerns

In some cases, property owners may establish that they did not know about alleged unlawful activity connected to the assets. This issue commonly arises in shared bank accounts, jointly owned businesses, and family property disputes.

Federal agencies often rely heavily on financial tracing analysis. Our white-collar defense team at Eisner Gorin LLP frequently examines whether investigators improperly linked lawful funds to alleged criminal proceeds through speculative accounting methods or incomplete financial analysis.

We do this by working closely with forensic accountants and other financial tracing experts.

Pretrial motions can be especially important in federal forfeiture matters for suppression of evidence, constitutional concerns, and more.

Hypothetical Case Study: Seizure of a Business Owner's Accounts During a Federal Fraud Investigation

A technology consultant operating several online businesses becomes the subject of a federal wire fraud investigation involving overseas transactions and alleged false invoices.

Federal agents execute search warrants and seize approximately $1.8 million from business operating accounts under 18 U.S.C. § 981.

The account seizures immediately disrupt payroll, vendor contracts, and pending real estate transactions. Prosecutors argue that the funds represent proceeds of fraudulent conduct, even though the accounts contain revenue from multiple legitimate companies.

Our attorneys at Eisner Gorin LLP review the underlying financial records and identify substantial commingling of lawful business income with the transactions referenced in the seizure warrant affidavit.

Our attorneys also discovered that investigators relied on incomplete banking summaries that omitted several legitimate client payments. The litigation strategy focuses on:

• Challenging the tracing methodology used by federal investigators
• Demonstrating legitimate sources of revenue
• Contesting overbroad seizure allegations
• Seeking the release of untainted assets needed for business operations

During the proceedings, forensic accounting analysis reveals that a significant percentage of the seized funds originated from lawful contracts unrelated to the alleged fraud scheme.

Prosecutors ultimately narrow the forfeiture allegations and release a substantial portion of the frozen assets.

How Do Federal Forfeiture Cases Intersect with Other Criminal Allegations?

Federal forfeiture proceedings rarely exist in isolation. They often accompany broader criminal investigations involving fraud, conspiracy, internet crimes, or financial offenses.

Related investigations may involve:

• Internet Crimes
• Antitrust Violations
• Counterfeiting
• Healthcare fraud
• Tax investigations

In some matters, prosecutors use forfeiture exposure as leverage during plea discussions. Asset seizure issues may also affect settlement negotiations, restitution calculations, and sentencing exposure.

For executives, professionals, and business owners, allegations of forfeiture can create immediate reputational concerns. Frozen accounts and seized property may interfere with ongoing business relationships and contractual obligations before any adjudication occurs.

Why Does Early Action Matter in Federal Forfeiture Cases?

Federal forfeiture litigation moves quickly, and often without warning. There are strict procedural deadlines for filing verified claims, petitions, and responses. Missing those deadlines can result in default forfeiture judgments. Important early issues often include:

• Determining whether the matter involves civil or criminal forfeiture
• Identifying all seized assets
• Reviewing seizure warrant affidavits
• Preserving financial records
• Retaining forensic accounting support
• Evaluating parallel criminal exposure

Asset forfeiture proceedings can also involve extensive procedural rules under other federal laws, as well as provisions of the Civil Asset Forfeiture Reform Act.

You need counsel that understands not only asset forfeiture, but how it intersects with other federal charges you may be facing.

Eisner Gorin LLP analyzes both the underlying criminal allegations and the financial evidence supporting the seizure itself to find weaknesses in the prosecution's case.

In many cases, the government's theory depends heavily on assumptions drawn from incomplete records, disputed transactions, or broad interpretations of financial activity. Schedule your consultation by calling (818) 781-1570 or using the contact form here.

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