Using Asset Forfeiture to Compensate Victims
By Alice W. Dery, Program Management and Training Unit Money Laundering and Asset Recovery Section of U.S. Department of Justice
January 16, 2020
The Department of Justice (Department) Asset Forfeiture Program (Program) plays a critical role in disrupting and dismantling illegal enterprises, depriving criminals of the proceeds of illegal activity, deterring crime, and restoring property to victims.
One of the four primary goals of the Department’s Program is to recover assets that may be used to compensate victims when authorized under federal law. See The Attorney General’s Guidelines on the Asset Forfeiture Program (2018), §§ II, V.D. (available at https://www.justice.gov/criminal-mlars/file/1123146/download). Federal regulations permit the Department to return those forfeited assets to victims through the remission and restoration processes. See 28 C.F.R. Part 9. Since 2002, the Department has returned over $8.5 billion in assets to victims of crime through the remission and restoration processes.
Forfeiture has played a critical role in assisting victims in several recent high-profile financial fraud cases. For example, in the Bernard Madoff securities fraud case, the government seized and forfeited more than $4 billion from Madoff and others and is currently remitting the funds to approximately 40,000 of Madoff’s investor-victims. In the most recent Madoff distribution, victims have recovered more than 65% of their losses.
DEPARTMENT OF JUSTICE ASSET FORFEITURE DISTRIBUTION PROGRAM Madoff Victim Fund
In addition to Madoff, the Money Laundering and Asset Recovery Section (MLARS) has coordinated significant victim recoveries from the civil forfeiture of $586 million paid by Western Union Company for its role in a facilitating a fraud scheme involving persons posing as victims’ family members needing assistance or promising prizes or job opportunities. In the scheme, victims were directed to send money through Western Union to purportedly help their relative or claim their prize. The government is currently evaluating petitions received from over 180,000 victims in advance of distributing funds.
The government returns seized or forfeited funds to victims through three avenues: remission, restoration, and restitution.
- Remission occurs when the Attorney General exercises discretion to transfer forfeited funds to victims of the crime underlying the forfeiture. A victim is a person who has suffered a specific pecuniary loss as a direct result of the crime underlying the forfeiture or a related offense. The definition of “person” includes “an individual, partnership, corporation, joint business enterprise, estate, or other legal entity capable of owning property.”
- Restoration occurs when the Attorney General authorizes the transmittal of forfeited funds to a criminal court to be applied towards satisfaction of the defendant’s restitution order.
- Restitution is when a court orders a criminal defendant to compensate the victim for losses caused by the defendant’s crime; at times this is satisfied with forfeited funds.
Additional information can be found on MLARS’s website at https://www.justice.gov/criminal-mlars/victims, including a list of on-going Department remission matters as well as a brochure on Returning Forfeited Assets to Crime Victims.