Burnin’ Down the House

Crimes/Forfeiture;

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The Eleventh Circuit recently held that federal law governing forfeiture of substitute assets, 21 U.S.C. § 853(p), preempts the homestead exemption in the Florida Constitution.  United States v. Fleet, No. 06-12454 (11th Cir. Sept. 5, 2007).  After the money-laundering defendant was ordered, post-conviction, to forfeit $259,000 in cash he did not have, pursuant to 18 U.S.C. § 982, the feds went after his Florida home, which he jointly owned with his wife.

Defendant argued that because § 853(a) expressly preempted state law, the absence of such preemption language from the substitute asset provision showed that Congress did not intend preemption in the context of substitute assets, or, as the Eleventh Circuit and we always say, inclusio unius est exclusio alterius.  The Court rejected that argument and found implied preemption because the substitute asset provision applies to “any” property.  In so deciding, the Eleventh Circuit now conflicts with the Seventh Circuit, which had held that a defendant’s interest in a home he and his wife jointly owned in tenancy by the entirety was not a substitute asset subject to forfeiture, see United States v. Lee, 232 F.3d 556 (7th Cir. 2000).

In contrast to criminal forfeiture, however, the decision makes clear that the innocent spouse exception still applies to prevent the forfeiture of property held in tenancy by both spouses in the civil forfeiture context.  As this case involved forfeiture pursuant to the criminal forfeiture statute, 18 U.S.C. § 982, this leaves open the question as to whether the homestead exemption is preempted in the case of a criminal forfeiture sought pursuant to the civil forfeiture statute, 18 U.S.C. § 981, made applicable to certain criminal cases pursuant to the Civil Asset Forfeiture Reform Act of 2000 (“CAFRA”), 28 U.S.C. § 2461(c).

In any event, given this decision and global warming, it may be best to advise clients and their spouses that they no longer need to brave swamps and alligators and that they should just go ahead and buy up some future beach-front property in the Black Hills of South Dakota…