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A Primer on California Asset Forfeiture

A Primer on California Asset Forfeiture

California’s asset-forfeiture laws mainly concern two things: drugs and organized crime.

It’s more complicated than that because the organized-crime statute covers a laundry list of 33 crimes (including drug trafficking), any one of which may be deemed “criminal profiteering activity” if it is committed for financial gain or advantage, and just two such incidents may qualify as a “pattern of criminal profiteering activity” that exposes you to forfeiture under the statute. See Pen. Code §§ 186.2.

But outside of organized crime, the state’s forfeiture laws are mainly about drugs, and they blend aspects of civil and criminal law. See Health & Safety Code §§ 11469-11495. Also, these drug forfeiture statutes are patterned after their federal counterparts in some ways, so California courts may regard federal cases on asset forfeiture as persuasive authority. People v. $497,590 in U.S. Currency (1997) 58 Cal. App. 4th 145, 151-52.

Here’s how it all works.

If a law-enforcement agency seizes money or other personal property worth $25,000 or less, the government can use a streamlined process called administrative (or non-judicial) forfeiture. Prosecutors must attempt to notify all potential claimants to the property either in person or by mail and by publication in a newspaper of general circulation. Any potential claimants must then file a verified claim with the court stating the nature of their interest in the property. Health & Safety Code § 11488.4(c). Generally, there is a strict deadline of 30 days within which to do that, and if no claim is filed, the government may simply declare the property forfeited and take legal ownership of it. See id. §§ 11488.4(j) & 11488.5(a)(1). If a claim is filed then prosecutors must file a formal, judicial-forfeiture petition and take the case to court. Id.

On the other hand, to win forfeiture of real property or of personal property worth more than $25,000, the government must always take the case to court, and if the forfeiture is contested, a jury trial is required unless it is waived by both sides. Id. § 11488.5(c)(2). The trial will resemble a standard civil case in most respects, including pretrial discovery, and be governed by the Code of Civil Procedure. Id. § 11488.5(e); People v. Real Property Located at 25651 Minoa Drive (1992) 2 Cal. App. 4th 787, 790-91. At least three-fourths of the jurors must agree on a verdict. See People v. Washington (1990) 220 Cal. App. 3d 912, 916-17.

The government then bears the burden of proving that the property is subject to forfeiture and that the claimant had actual knowledge of the facts that made it so. Health & Safety Code § 11488.5(d)(1)-(2). To be subject to forfeiture, property must have been either used (or intended to be used) to facilitate drug trafficking; furnished (or intended to be furnished) in exchange for drugs; or derived from proceeds traceable to an exchange for drugs. See generally id. § 11470.

The government’s burden is proof beyond a reasonable doubt if the property is cash less than $40,000 or if it’s a vehicle or real estate no matter the value. Id. § 11488.4(i)(1) & (2).

Also, in such cases, the court cannot order the forfeiture unless and until someone—though not necessarily the claimant—is convicted in an underlying or related criminal case on facts that happened within five years of the seizure or notice of intent to seek forfeiture. Id. § 11488.4(i)(3). The forfeiture case must then be tried before the same judge or jury that reached the guilty verdict. Id.

If the property is cash or its equivalents worth $40,000 or more, the government’s burden is lower: proof by clear and convincing evidence, and there’s no requirement that someone be convicted of a crime. Id. § 11488.4(i)(4).

For all other personal property—including raw materials or equipment for making the drugs; containers used to store or move them (besides planes, boats, other vehicles, or real property); or the books and records of these activities—the government’s burden is lower still: proof by a preponderance of the evidence, which means the judge or jury thinks the government’s case is more likely than not. People v. Nazem (1996) 51 Cal. App. 4th 1225, 1232 n.7. The drugs themselves are contraband that may be seized and summarily forfeited without any process at all. Health & Safety Code § 11475.

So where does the money go? First it goes to pay off any bona fide, innocent purchasers or secured creditors. Then it goes to offset any costs incurred to store, repair, transport, or sell the property. Finally, the balance is distributed to state or local government as follows: nearly two-thirds of it (65%) goes to the law-enforcement agencies that participated in the seizure in proportion to their individual contributions (but with 15% of it going to fund special programs to prevent drug abuse or gang activity); another ten percent goes to the prosecuting agency that processed the forfeiture; another 24% goes to the state’s General Fund, where up to $10 million of it is supposed to be earmarked for school safety and security; and last but not least, one percent of it goes to a private nonprofit organization composed of local prosecutors who must use the funds exclusively to train law enforcement in the proper use and ethics of the asset-forfeiture laws. See generally id. § 11489.

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