Failing Forfeiture Finally

By Monte Hester; June 1999

      If it ain’t fair, sooner or later our Constitution, as supervised by the Courts, gives relief.

     The Eighth Amendment to the United States Constitution reads as follows:

     “Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.”

      We now have a case out of our Ninth Circuit Court of Appeals which analyzes the excessive fines part of the Eighth Amendment, supra, as applied to an (in rem) forfeiture of property obtained as a result of a fraud scheme.  U.S. v. 3814 Thurman St., Portland, Oregon (Ladum) No. 97-35054 (9^th Cir. Jan. 5, 1999).

    The Ninth Circuit utilized the holding in the Supreme Court case, U.S. v. Bajakajian, 118 S.Ct. 2028 (1998) as the appropriate criteria to be considered in deciding whether a forfeiture is punitive and therefore in violation of the Eight Amendment as excessive.

     The factors considered were:

Does the violation triggering the forfeiture relate to any other illegal activities;

How does the sought after forfeiture relate to the scope and gravity of other penalties authorized for the offense; and

The relationship of the forfeiture to the harm caused by the crime.

     The Bajakajian case involved the failure to report the carrying of some $350,000 out of the United States in violation of a law requiring declaration of any sums in excess of $10,000.  There was no evidence of any other law violations in relation to the cash.  A maximum fine and sentence for the offense would have been $5,000 and a six month sentence.

     The Ninth Circuit in Thurman, supra, concluded that the forfeiture was excessive, finding that the amount forfeited bore no reasonable relation to any injuries caused by the relevant criminal acts and that the value of the property to be forfeited was significantly disproportionate when compared to the maximum possible fine and sentence that could have been imposed against the criminal defendant.  The Thurman case involved false statements made to an FDIC insured bank regarding levels of income as an inducement for a refinance after which the defendant had an equity of $357,144.  There was no other criminal activity associated with the false statement/fraud and there was no loss to the bank or the government.  The maximum fine under the guidelines was $5,000 and the maximum guideline sentence was six months. 

     See also United States v. Van Brocklin, 115 F.3d 587, (8^th Cir. 1997) wherein, citing Alexander v. United States, 509 U.S. 544, 558-59, 113 S.Ct. 2766, 2775-76, 125 L.Ed.2d 441 (1993), the court said that the question of whether the Eighth Amendment has been violated is a fact sensitive issue referencing the following concerns:

The seriousness of the offense;

An assessment of the personal benefit reaped by the particular defendant;

The defendant’s motive and culpability; and

The extent that the defendant’s interest and the enterprise itself were tainted by criminal conduct.

     These judicially announced standards should provide guidance to those in government whose discretion determines whether or not a forfeiture will be pursued.