USA Law and Practice Contributed by: Daniel J. Fetterman and Brian S. Choi, Kasowitz LLP
6.3 Proceeds of Crime Recovery Forfeiture proceedings are legal proceedings following a conviction aimed at recovering any financial gain or benefit from the criminal’s conduct. The govern - ing statutes for these proceedings are 21 U.S.C. 853, which is incorporated by reference in 18 U.S.C. 981 and 982, and Federal Rule of Criminal Procedure Rule 32.2. Forfeiture proceedings occur “following convic - tion of a substantive criminal offense”, and apply to (1) any property constituting or derived from proceeds obtained as a result of the violation; (2) any property used or intended to be used to commit or facilitate the offence; and (3) any property affording control over an ongoing criminal enterprise. Once the court determines which property is forfeit - able, it enters a preliminary order which becomes final after sentencing, and the government need only prove that the property at issue is subject to forfeiture “by a preponderance of the evidence” – a lower standard than the usual “beyond a reasonable doubt” in crimi - nal cases. After forfeiture is ordered, the government must pub - lish a notice of the order to notify potential interest holders in the property at issue. Those alleged inter - est holders may petition to be heard on their alleged interests in the property and are subject to the same standard of proof as the government. Then, the gov - ernment may seize all property ordered forfeited, and may direct its disposition through many tools, includ - ing commercial sale, and the appointment of receiv - ers and conservators to maintain the property. In the event a court cannot locate assets due to a defend - ant’s actions, the court can order substitute assets to satisfy a money judgment. Finally, forfeiture may extend to interest accrued on forfeitable assets, divi - dends derived from such assets, or appreciation on the value of those assets. Civil recovery can run in parallel with criminal cases based on Congress’s authorisation of the government to seek parallel in rem civil forfeiture actions and crimi - nal prosecutions based upon the same underlying events.
6.4 Victim Compensation and Asset Recovery Restitution is the mechanism for compensating vic - tims when recovering criminal proceeds, as governed by the Mandatory Victims Restitution Act (MVRA) and the Victim and Witness Protection Act. Restitution may be ordered for a plethora of financial losses, excluding pain and suffering damages, state or federal taxes, interest, penalties or fines, and expenses for private legal representation, among others. The amount of restitution is determined based on the financial loss information provided by the prosecutor in a case, the investigative agent(s), if any, and the victims prior to sentencing. At sentencing, the judge enters an “Order for Restitution” directing the defendant to reimburse victims for some or all of their losses. Victims can assert proprietary rights over misappro - priated assets separate from what they are provided through restitution. After the government completes forfeiture proceedings against a defendant and pub - lishes notice of the assets being forfeited, third parties (which include victims) can assert their interests in that property through third-party petitions. This process is governed by 21 U.S.C. 853. 7. Enforcement Priorities and Case Law Developments 7.1 Enforcement Priorities DOJ is principally focused on prosecuting healthcare, government contracting, and customs duties fraud. The most prevalent law under which the government has sought to combat fraud is the False Claims Act (FCA), which prohibits the submission of fraudulent claims for payment from the government. Additionally, DOJ is pursuing financial crimes linked to the financ - ing of terrorist groups, cartels, or transnational crimi - nal organisations. 7.2 Recent Case Law and Latest Developments See the US Trends and Developments chapter in this guide.
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