Asset Forfeiture and Third Party Rights: The Need for Further Law Reform

Abstract

Asset forfeiture has become an important weapon in the fight against narcotics trafficking and racketeering. ... Pearson addressed the constitutionality of Puerto Rico's civil forfeiture statute. ... Who had standing to assert it? For example, would a reasonable precautions defense be available to a bona fide purchaser who paid full value for a conveyance and neither knew, nor had reason to know, of any prior illegal use? Similarly, would the defense be available to a lienholder acting reasonably without knowledge of any impropriety? Such third party claimants seem to deserve more protection than an owner because they generally lack any opportunity to prevent illegal use of the conveyance. ... In 1970 Congress provided for criminal forfeiture in the newly enacted CCE and RICO statutes. CCE authorized forfeiture of assets linked to drug trafficking, and RICO extended asset forfeiture beyond narcotics trafficking to other racketeering activities as defined in the statute. ... By adopting a negligence test instead of some higher standard or one that distinguishes between types of third party claims, Congress has failed to adequately protect the third party interest. ...