Thomas A. Berry and Ethan Yang
Civil forfeiture allows the government to seize assets allegedly connected to a crime, even without a criminal conviction. This process was originally intended to be a tool for law enforcement to target the profits of criminal activity, such as stolen property. However, the lack of due process protections surrounding forfeiture proceedings has allowed the practice to balloon into a government money-making scheme. All too often, law enforcement takes whatever it can get away with via civil forfeiture to fund its own operations.
In Honeycutt v. United States (2017), the Supreme Court took an important step toward limiting the abuse of civil forfeiture. The court ruled that criminal defendants could not be held jointly and severally liable in forfeiture actions, meaning that only the actual recipient of criminal proceeds could be forced to divulge ill-gotten funds.
But now the Department of Justice argues that the Supreme Court left open a loophole in Honeycutt. Sometimes conspirators use a “passthrough scheme” to move money through one defendant into the pocket of another. The DOJ now argues that when there is such a scheme, the person acting as the “passthrough” may be held jointly and severally liable for all the money that she handled, even if none ended up in her pocket.
The Eleventh Circuit has accepted this argument, construing a statute that broadly authorizes forfeiture in healthcare fraud to permit joint and several liability when there is a passthrough scheme. The defendant in that case has asked the Supreme Court to review this decision, and Cato has filed an amicus brief supporting her petition.
In our brief, we explain that the Eleventh Circuit’s reasoning undermines the constitutional principles of proportionality and due process. The Supreme Court’s decision in Honeycutt was unambiguous: Only those who have personally profited from criminal activity can be liable in civil forfeiture proceedings. Forcing defendants to divulge money they never received merely because they acted as conduits in a broader scheme is inconsistent with the Supreme Court’s forfeiture jurisprudence.
Our brief also emphasizes the rampant abuse of civil forfeiture proceedings that have become all too common. Civil forfeiture is now used as a general funding tool for the government, going far beyond its justification as a specialized tool to target the profits of crime. Modern forfeiture proceedings often leave victims with little notice of the government’s justification for taking their property. Many people who never committed a crime have lost property to civil forfeiture. And even when a crime has been committed, these proceedings can result in disproportionate punishments. Furthermore, the scope of offenses that can be subject to forfeiture is vast. For these reasons, it is urgent that the Supreme Court impose greater due process protections.
The Supreme Court should grant review in Young v. United States and make clear that there is no “passthrough exception” to the categorical rule in Honeycutt against joint and several liability.
