Innocent Owner Defense and Third-Party Forfeiture Claims

By Elizabeth Franklin-Best, Esq., and Christopher Zoukis, JD, MBA

When the government moves to forfeit property in someone else’s federal case, a spouse, co-owner, lender or buyer has rights of their own, on a clock of their own — and both depend on whether the forfeiture is civil or criminal. This page explains those rights for the person who is not the defendant; the federal asset forfeiture attorney page covers forfeiture as a whole. Elizabeth Franklin-Best, P.C. handles federal matters nationwide from offices in Columbia and Mount Pleasant, South Carolina.

Quick Answer

Civil or criminal decides it. Most federal civil forfeitures allow a true innocent owner defense under 18 U.S.C. § 983(d), which you prove by a preponderance of the evidence. Criminal forfeiture has none: you must fit 21 U.S.C. § 853(n)(6)(A) or (B) and petition within 30 days of final publication or receipt of direct notice, whichever is earlier.

Key Takeaways

• Civil (CAFRA, the Civil Asset Forfeiture Reform Act of 2000): An innocent owner’s interest “shall not be forfeited under any civil forfeiture statute,” but the owner must prove innocent ownership by a preponderance of the evidence (18 U.S.C. § 983(d)(1)).
• Criminal: There is no innocent owner defense; a third party must prove an interest that was vested in the third party, or superior to the defendant’s, when the crime was committed — or a bona fide purchase for value made without reason to believe the property was forfeitable (21 U.S.C. § 853(n)(6); United States v. Jimerson, 11th Cir. 1993).
• Criminal deadline: 30 days from final publication or receipt of notice, whichever is earlier (§ 853(n)(2)) — and the period can start before sentencing (United States v. Marion, 11th Cir. 2009).
• No intervention (criminal): Section 853(k) bars third parties from intervening in the criminal trial or appeal; § 853(n) is “the exclusive means” to assert an interest (United States v. Phillips, 4th Cir. 1999).
• Spouses (criminal): The court orders forfeiture of “the defendant’s interest in the property—whatever that interest may be” (Fed. R. Crim. P. 32.2, 2000 Committee Note), but a third party who files no timely petition cannot object later (Rule 32.2(c)(2)).
• Primary residence (civil only): § 983(d)(3)(B) excuses the lack of a purchase price for a primary residence acquired after the conduct through marriage, divorce or legal separation, or by a spouse or legal dependent through inheritance or probate — only if four conditions are met, and with the value capped at what reasonable shelter requires.

Is your case civil or criminal?

Every right on this page depends on which kind of forfeiture you face. Civil forfeiture is a proceeding against the property itself — in rem — brought under a statute “providing for the forfeiture of property other than as a sentence imposed upon conviction of a criminal offense” (18 U.S.C. § 983(i)(1)); no one has to be charged. Criminal forfeiture is part of a convicted defendant’s sentence, ordered by the court “in imposing sentence” (18 U.S.C. § 982(a)).

The paperwork usually tells you which system you are in:

• Civil: an agency notice of seizure, or a federal complaint in which the property itself is the defendant. The notice of seizure page explains which track a letter puts you on.
• Criminal: a forfeiture allegation in an indictment, a “preliminary order of forfeiture,” or a notice that third parties may petition. The criminal forfeiture page explains how that order is entered against the defendant.
• Neither yet: property taken in a search, with no forfeiture proceeding begun — usually a matter for a motion for return of property.

The tracks can change: after a claim is filed in an administrative forfeiture, the government may keep the property by obtaining “a criminal indictment containing an allegation that the property is subject to forfeiture” and preserving custody (§ 983(a)(3)(B)). The civil defense applies only to forfeitures under a “civil forfeiture statute,” a term that excludes forfeitures under Title 19 (customs), the Internal Revenue Code and several other statutes (§ 983(i)(2)). The Second Circuit has held that forfeiture actions under the customs statute 19 U.S.C. § 1595a “are not subject to CAFRA’s innocent-owner provision” (United States v. Davis, 648 F.3d 84 (2d Cir. 2011)). Which track applies turns on the forfeiture statute cited in the notice, and seizures by state or local agencies in state proceedings are governed by state law. The criminal rules reach beyond drug cases: § 853’s procedures “apply to all stages of a criminal forfeiture proceeding” (28 U.S.C. § 2461(c); see 18 U.S.C. § 982(b)(1)), including wire fraud, health care fraud, money laundering and other white-collar cases.

Civil vs. criminal: a third party’s rights, side by side

Each cell states the rule and links its source. “Civil” means forfeiture under a civil forfeiture statute covered by the Civil Asset Forfeiture Reform Act of 2000 (CAFRA); “criminal” means forfeiture ordered as part of a federal sentence.

Question	Civil forfeiture (CAFRA)	Criminal forfeiture
Governing provision	18 U.S.C. § 983(d); claims under § 983(a) and Supplemental Rule G	21 U.S.C. § 853(n) and Fed. R. Crim. P. 32.2(c), applied to most federal criminal forfeitures by 28 U.S.C. § 2461(c)
Is there an “innocent owner” defense?	Yes: “An innocent owner’s interest in property shall not be forfeited under any civil forfeiture statute” (§ 983(d)(1))	No: § 853 “does not contain an innocent owner provision” (Jimerson, 11th Cir. 1993; accord Hooper, 9th Cir. 2000)
Who bears the burden, at what standard	The claimant, by a preponderance of the evidence (§ 983(d)(1)); separately, the government must prove the property forfeitable by a preponderance (§ 983(c)(1))	The petitioner, by a preponderance of the evidence (§ 853(n)(6))
Ways to win	(1) Owner at the time of the conduct who did not know of it; (2) owner who, on learning of it, “did all that reasonably could be expected” to end the illegal use (§ 983(d)(2)(A)); (3) later acquirer who was a bona fide purchaser or seller for value with no reason to believe the property was forfeitable (§ 983(d)(3)(A))	(A) An interest “vested in the petitioner rather than the defendant” or “superior” to the defendant’s at the time of the acts giving rise to forfeiture; (B) bona fide purchaser for value “reasonably without cause to believe” the property was forfeitable (§ 853(n)(6))
Deadline to file	Administrative stage: the date in the personal notice letter (not earlier than 35 days after mailing), or 30 days after final publication if the letter was not received (§ 983(a)(2)(B)); court stage: § 983(a)(4)(A) and Supplemental Rule G(5)(a)(ii) set different periods; calendar the earlier — see notice of seizure	30 days from final publication or receipt of notice, whichever is earlier (§ 853(n)(2))
Where it is decided	In a civil forfeiture case in federal district court, filed directly or after a timely administrative claim (§ 983(a)(3)(A)); with no timely claim, the agency declares the property forfeited and no court reviews the merits (28 C.F.R. § 8.12)	In an ancillary proceeding in criminal forfeiture, “before the court alone, without a jury” (§ 853(n)(2)), which “is not part of sentencing” (Rule 32.2(c)(4))
Can you intervene in the defendant’s case?	The civil case is against the property, and “a claimant with standing may intervene earlier to contest the forfeiture on the merits” (Phillips, 4th Cir. 2018)	No: § 853(k) bars intervention in the trial or appeal, and bars suits against the United States over the interest once an indictment or information alleges forfeiture
What happens to a spouse’s share	If the spouse proves innocent ownership of a partial, joint-tenancy or entireties interest, the court may sever the property, order compensation, or let the spouse keep it subject to a government lien (§ 983(d)(5))	Only the defendant’s interest is ordered forfeited (Rule 32.2, 2000 Committee Note; Fleet, 11th Cir. 2007); the spouse must petition or lose the right to object (Rule 32.2(c)(2))
The primary-residence rule	For an interest acquired after the conduct, lack of value is excused for a primary residence acquired through marriage, divorce or legal separation, or by a spouse or legal dependent through inheritance or probate, if four conditions are met, with value capped at reasonable shelter (§ 983(d)(3)(B))	No counterpart: ground (B) requires a purchase “for value” (§ 853(n)(6)(B))

The practical difference is sharp: a spouse who knew nothing may have a complete defense in a civil case but no innocence defense in a criminal one, where ground (A) “says nothing about knowledge or notice of criminal activity” and turns instead on the timing and nature of the spouse’s interest (United States v. Alquzah, 91 F. Supp. 3d 818 (W.D.N.C. 2015), a district court decision). Remission, a discretionary channel covered below, exists in both systems (28 C.F.R. § 9.5; 21 U.S.C. § 853(i)(1)).

How the civil innocent owner defense works under 18 U.S.C. § 983(d)

In a CAFRA civil forfeiture, the innocent owner defense protects an owner who proves one of two things, depending on when the interest was acquired, and “[t]he claimant shall have the burden of proving that the claimant is an innocent owner by a preponderance of the evidence” (§ 983(d)(1)). The defense matters only if the government carries its own burden of proving the property forfeitable (§ 983(c)(1)).

Who counts as an “owner”

An owner holds “an ownership interest in the specific property sought to be forfeited, including a leasehold, lien, mortgage, recorded security interest, or valid assignment of an ownership interest” (§ 983(d)(6)(A)). Excluded are general unsecured creditors, bailees who cannot identify the bailor and show “a colorable legitimate interest,” and “a nominee who exercises no dominion or control over the property” (§ 983(d)(6)(B)). A claim of ownership must be backed by evidence: in the Fourth Circuit a civil claimant must show a colorable interest supported by “some evidence beyond a mere assertion of ownership” to survive summary judgment (Phillips, 4th Cir. 2018).

Owners at the time of the conduct: § 983(d)(2)

For an interest that existed when the conduct occurred, an innocent owner is one who “(i) did not know of the conduct giving rise to forfeiture; or (ii) upon learning of the conduct giving rise to the forfeiture, did all that reasonably could be expected under the circumstances to terminate such use of the property” (§ 983(d)(2)(A)). Not knowing is enough. An owner who did learn “may” show reasonable steps by giving “timely notice to an appropriate law enforcement agency” and then revoking (or trying in good faith to revoke) the wrongdoer’s permission, or taking reasonable actions with law enforcement to prevent the illegal use (§ 983(d)(2)(B)(i)). An owner is not required to take steps the owner “reasonably believes would be likely to subject any person (other than the person whose conduct gave rise to the forfeiture) to physical danger” (§ 983(d)(2)(B)(ii)). Records made at the time — a report to police, a revoked key, a demand that the use stop — carry more weight than recollection.

Interests acquired afterward: § 983(d)(3)(A)

For an interest acquired after the conduct, the claimant must have been “a bona fide purchaser or seller for value” — someone who gave real value in good faith — who “did not know and was reasonably without cause to believe that the property was subject to forfeiture” (§ 983(d)(3)(A)). Gifts do not qualify, apart from the residence exception below. The House Judiciary Committee’s report on the 1999 House bill gave the reason for limiting after-acquired interests this way: “much fraud could result were innocent donees allowed to be considered innocent owners” (H.R. Rep. No. 106-192).

The primary-residence exception: § 983(d)(3)(B)

This is the one place the civil statute relaxes the value requirement, and it is narrower than often described. “An otherwise valid claim under subparagraph (A) shall not be denied on the ground that the claimant gave nothing of value in exchange for the property” only if all four conditions are met (§ 983(d)(3)(B)):

1. the property is the claimant’s primary residence;
2. losing it would deprive the claimant, and dependents living there, of “the means to maintain reasonable shelter in the community”;
3. the property “is not, and is not traceable to, the proceeds of any criminal offense”; and
4. the claimant acquired the interest “through marriage, divorce, or legal separation,” or as the spouse or legal dependent of a decedent “through inheritance or probate.”

The court must also cap the protected value of real property at “the value necessary to maintain reasonable shelter in the community.” The exception excuses only the missing purchase price; the claimant still must show the no-knowledge element of (d)(3)(A). It covers only interests acquired after the conduct, so a spouse who co-owned the home when the conduct occurred proceeds under (d)(2)(A). Descriptions limiting it to a “spouse or minor child” track the 1999 House bill, not the enacted text (H.R. Rep. No. 106-192).

Contraband and shared ownership: § 983(d)(4)–(5)

No one can claim innocent ownership of “contraband or other property that it is illegal to possess” (§ 983(d)(4)). When an innocent owner holds a partial interest, “a joint tenancy or tenancy by the entirety,” the court “may” sever the property; transfer it to the government and compensate the innocent owner once it “has been reduced to liquid assets”; or let the innocent owner keep it “subject to a lien in favor of the Government to the extent of the forfeitable interest in the property” (§ 983(d)(5)). The choice matters: a lien order leaves the owner in possession, while a transfer order converts the share to money after a sale.

Remission uses the same definitions

Remission — a request that the government forgive all or part of a forfeiture as a matter of discretion — borrows these definitions in the Justice Department’s regulations. The petitioner must hold “a valid, good faith, and legally cognizable interest in the seized property as owner or lienholder” and be “an innocent owner within the meaning of 18 U.S.C. 983(d)(2)(A) or 983(d)(3)(A)” (28 C.F.R. § 9.5(a)(1)); the regulation does not mention the (d)(3)(B) residence exception. The ruling official “shall presume a valid forfeiture” (§ 9.5(a)(4)), and mitigation can relieve “extreme hardship” for a party not involved in the offense (§ 9.5(b)(1)). The notice of seizure page explains how remission fits with a claim.

Why criminal forfeiture has no innocent owner defense

In criminal forfeiture, innocence alone is not a defense. “Section 853, however, does not contain an innocent owner provision; as a result, her alleged innocence, standing alone, cannot defeat the Government’s interest in criminally forfeited property,” the Eleventh Circuit held in rejecting a wife’s claim (United States v. Jimerson, 5 F.3d 1453 (11th Cir. 1993)). The statute “protects only two types of transferees of forfeitable property: bona fide purchasers and those whose interest in the property antedated the crime” (United States v. Hooper, 229 F.3d 818 (9th Cir. 2000)). As the Eleventh Circuit later put it, “There is no innocent spouse defense to criminal forfeiture because the only property being forfeited is the interest that belongs to the defendant” (United States v. Fleet, 498 F.3d 1225 (11th Cir. 2007)). Within the Fourth Circuit, a federal district court in North Carolina agrees that “criminal forfeiture has no such category as an ‘innocent third-party owner'” (Alquzah), and the Fourth Circuit holds that “Section 853(n) provides the exclusive means by which a third party can assert his interest in forfeited property” (United States v. Phillips, 185 F.3d 183 (4th Cir. 1999)).

Ground (A): an interest that came first

Ground (A) protects a “legal right, title, or interest” that “was vested in the petitioner rather than the defendant or was superior to any right, title, or interest of the defendant at the time of the commission of the acts which gave rise to the forfeiture of the property under this section” (§ 853(n)(6)(A)). The date is fixed: a petitioner must show “a legal interest in the forfeited property before the underlying crime was committed,” which is why a petitioner “is unlikely ever to prevail … where the forfeited property consists of ‘proceeds'” (United States v. Watts, 786 F.3d 152 (2d Cir. 2015)). Innocence plays no part: “a third party holding ‘superior title’ will prevail, regardless of innocence” (Alquzah).

Ground (B): a purchase for value, in good faith

Ground (B) protects a later acquirer who is “a bona fide purchaser for value” and “was at the time of purchase reasonably without cause to believe that the property was subject to forfeiture under this section” (§ 853(n)(6)(B)). The Fourth Circuit reads the term liberally “to include all persons who give value to the defendant in an arms’-length transaction with the expectation that they would receive equivalent value in return” (United States v. Reckmeyer, 836 F.2d 200 (4th Cir. 1987)). But a buyer who “ignored red flags or otherwise acted unreasonably in completing the deal” can fail even as a victim of fraud (United States v. Swartz Family Trust, 67 F.4th 505 (2d Cir. 2023)).

Apart from ground (B)’s good-faith requirement, innocence counts in one place in a criminal forfeiture: the Justice Department’s remission process. The Attorney General may “take any other action to protect the rights of innocent persons” (§ 853(i)(1)), and remission applies the civil definitions described above (28 C.F.R. § 9.5(a)(1)). It is discretionary, and “[n]o hearing shall be held” (28 C.F.R. § 9.4).

How the ancillary proceeding in criminal forfeiture works

The ancillary proceeding in criminal forfeiture is the separate proceeding, after the court orders the defendant’s interest forfeited, where third parties’ claims are decided. The criminal case does not decide them: the court enters its order “without regard to any third party’s interest in the property” and defers that question to the ancillary proceeding (Fed. R. Crim. P. 32.2(b)(2)(A)), which “does not involve relitigation of the forfeitability of the property” (Rule 32.2, 2000 Committee Note).

Section 853(k): no intervention, no separate lawsuit

Until then, a third party is shut out: “Except as provided in subsection (n), no party claiming an interest in property subject to forfeiture under this section may— (1) intervene in a trial or appeal of a criminal case involving the forfeiture of such property under this section; or (2) commence an action at law or equity against the United States concerning the validity of his alleged interest in the property subsequent to the filing of an indictment or information alleging that the property is subject to forfeiture under this section” (21 U.S.C. § 853(k)).

The sequence, step by step

1. Preliminary order. It becomes final as to the defendant at sentencing, but as to specific property “it remains preliminary as to third parties until the ancillary proceeding is concluded” (Rule 32.2(b)(4)(A)).
2. Notice. The government “must publish notice of the order and send notice to any person who reasonably appears to be a potential claimant” (Rule 32.2(b)(6)(A)), and the notice must “state the times under the applicable statute when a petition contesting the forfeiture must be filed” (Rule 32.2(b)(6)(B)). Publication may be an internet posting “for at least 30 consecutive days” (Supplemental Rule G(4)(a)(iv)(C), applied through Rule 32.2(b)(6)(C)).
3. The 30 days. The petition is due “within thirty days of the final publication of notice or his receipt of notice under paragraph (1), whichever is earlier” (§ 853(n)(2)). The Eastern District of Virginia has counted from the last day of an internet posting (United States v. Phillips, No. 2:12-cr-00037 (E.D. Va. Feb. 1, 2013)), and the period runs “even if it is before criminal judgment is entered” (Marion, 11th Cir. 2009).
4. The petition. It “shall be signed by the petitioner under penalty of perjury” and must set out the nature and extent of the interest, “the time and circumstances” of its acquisition, supporting facts and the relief sought (§ 853(n)(3)). A conclusory “legal interest” is not enough (United States v. Fabian, 764 F.3d 636 (6th Cir. 2014)), and a petition signed by the wrong entity fails (United States v. Davis, 137 F.4th 349 (5th Cir. 2025)).
5. Motions and discovery. The court may dismiss “for lack of standing, for failure to state a claim, or for any other lawful reason,” taking the petition’s facts as true, then allow civil-rules discovery and summary judgment (Rule 32.2(c)(1)).
6. Hearing. A judge alone hears the petition, “to the extent practicable” within thirty days of filing (§ 853(n)(2), (4)). Both sides may present evidence and cross-examine, and the court considers “the relevant portions of the record of the criminal case” (§ 853(n)(5)).
7. Final order. The court amends the preliminary order “as necessary to account for any third-party rights.” If no timely petition is filed, the preliminary order becomes final once the court finds the defendant had a forfeitable interest, and no third party may object on the ground that it “had an interest in the property” (Rule 32.2(c)(2)); the United States then holds “clear title” (§ 853(n)(7)).

Because the ancillary proceeding is not part of sentencing (Rule 32.2(c)(4)), it runs on its own schedule, apart from the defendant’s federal sentencing hearing; even a stay pending the defendant’s appeal does not delay it (Rule 32.2(d)). If the forfeiture is only a money judgment — an order to pay a sum — no ancillary proceeding is required until the government moves to forfeit specific or substitute property (Rule 32.2(c)(1), (e)(2)).

The 30 days are treated as mandatory (United States v. Davenport, 668 F.3d 1316 (11th Cir. 2012); United States v. Rosga, 864 F. Supp. 2d 439 (E.D. Va. 2012) (parallel RICO provision)). Tolling has been allowed in an isolated district case, where the government’s own notice misstated the deadline (Phillips, E.D. Va. 2013); no published Fourth Circuit decision addresses tolling. A third party who never received adequate notice may move under Civil Rule 60(b) to reopen (Rule 32.2, 2000 Committee Note). Rulings on petitions are appealable, though with several petitions an order on one generally waits until all are decided (Rule 32.2(c)(3)); a federal appeals lawyer can take that appeal for the third party. Fee shifting under 28 U.S.C. § 2465(b)(1) reaches a “civil proceeding to forfeit property”; the Eighth Circuit refused fees under it to a § 853(n) petitioner (United States v. Moser, 586 F.3d 1089 (8th Cir. 2009)), and the Fourth Circuit has not decided the question.

Applied Insight — Elizabeth Franklin-Best, Esq., Principal Attorney: In criminal forfeiture, the most common mistake a spouse or co-owner makes is waiting for the defendant’s case to end. Sentencing feels like the moment property is decided, so people plan to act afterward — but the 30 days run from the final publication of notice of the preliminary order or receipt of direct notice, whichever is earlier, and that can come well before sentencing. Section 853(k) bars intervening in the trial; it does not bar watching the docket for a preliminary order of forfeiture, or checking forfeiture.gov, the Justice Department’s posting site, whose public notices include those of U.S. Attorney’s Offices (agency site, not law). The § 853(n) petition goes to the court, not through the site’s remission-petition page. The defendant’s federal criminal defense attorney represents the defendant, and the petition is the third party’s own sworn filing.

Who can file a third-party petition?

In criminal forfeiture, any person “other than the defendant” asserting “a legal interest” in the forfeited property may petition (§ 853(n)(2)). State law generally defines the interest; federal law decides whether it qualifies, because “the question of whether a petitioner’s interest satisfies the requirements of 21 U.S.C. § 853(n)(6) is a question of federal law” (United States v. Oregon, 671 F.3d 484 (4th Cir. 2012)). The Fourth Circuit has also “occasionally departed from state law” where there is evidence a defendant “manipulated state law property rights to shield assets from the reach of the forfeiture law” (Oregon).

Bare title is not enough: the nominee rule

A nominee holds title to property someone else beneficially owns; as the remission regulation puts it, “[a] nominal owner of property will not be treated as its true owner if he or she is not its beneficial owner” (28 C.F.R. § 9.2). The Fourth Circuit applies “a dominion and control test” under ground (A): a wife named on a joint checking account and certificate of deposit was “no more than a mere name on the account, with no power over the disposition of the account funds” (United States v. Morgan, 224 F.3d 339 (4th Cir. 2000)). Courts “look beyond bare legal title” (United States v. Bangiyeva, 75 F.4th 445 (4th Cir. 2023), a RICO case applying the parallel provision and quoting Morgan), and in Bangiyeva a sister on the deed for a one-third share bought for $10 was a nominal owner. Where agents have frozen or seized a joint account, see bank account seizure.

Applied Insight — Elizabeth Franklin-Best, Esq., Principal Attorney: A third-party petition in criminal forfeiture is built from documents, and the strongest ones predate the crime. Ground (A) asks about the interest at the time of the acts, so the records that matter are dated: the deed and closing statement, the title, account-opening records and signature cards. Because the Fourth Circuit also asks about dominion and control, the petition needs proof of where the money came from and who managed the asset — pay records that funded the account, checks drawn on it, mortgage payments from the claimant’s own funds. That record comes first, because the petition states the time and circumstances of acquisition under penalty of perjury.

Can a third party challenge whether the property was forfeitable?

Almost everywhere, no. “[L]ike every circuit to have reached the issue,” the Sixth Circuit held that third parties “lack statutory standing to challenge” the forfeitability finding in a preliminary order (Fabian); accord Davenport (11th Cir.). The Fourth Circuit‘s 1987 decision in Reckmeyer points the other way. It reasoned that “[s]erious due process questions would be raised … if third parties asserting an interest in forfeited assets were barred from challenging the validity of the forfeiture” (Reckmeyer). District courts in the circuit have divided: United States v. Bailey, 926 F. Supp. 2d 739 (W.D.N.C. 2013) follows Reckmeyer, while United States v. Bangiyev, 2021 WL 5304187 (E.D. Va. Nov. 15, 2021), aff’d in part and vacated in part, United States v. Bangiyeva, 75 F.4th 445 (4th Cir. 2023), declined to rely on it because it predates Rule 32.2. The Fourth Circuit did not address the question in Bangiyeva (2023). A petition should therefore rest on ground (A) or (B), with any forfeitability argument as an addition.

Relation back: why the date of your interest matters

Relation back is the rule that, once property is forfeited, the government’s ownership is treated as dating from the crime, not from the forfeiture order. In criminal forfeiture, “[a]ll right, title, and interest in property described in subsection (a) vests in the United States upon the commission of the act giving rise to forfeiture under this section,” and property later transferred to someone other than the defendant “shall be ordered forfeited” unless the transferee proves bona fide purchase for value without reason to believe (21 U.S.C. § 853(c)). Civil forfeiture under 18 U.S.C. § 981 has the same rule: “All right, title, and interest in property described in subsection (a) of this section shall vest in the United States upon commission of the act giving rise to forfeiture under this section” (18 U.S.C. § 981(f)). The Fourth Circuit has explained that Congress aimed the criminal provision at “sham or fraudulent transfers” and “did not intend to permit courts to void ‘arms’-length’ transactions” (Reckmeyer).

• Later buyers and lenders must fit ground (B) in a criminal case (§ 853(n)(6)(B)), or § 983(d)(3)(A) in a civil one.
• Spouses who acquire an interest after the acts — by gift, retitling or divorce — cannot use ground (A) in a criminal case. A divorce court’s “special equity” award failed because “there is no ‘special equity provision’ in section 853(n)(6)” (United States v. Kennedy, 201 F.3d 1324 (11th Cir. 2000)). Ground (B) usually fails too, for lack of an “arm’s-length transaction” or “equivalent value” (Alquzah, W.D.N.C.). The Fourth Circuit applies the timing strictly: a son had to prove “a legal interest in the properties in 1993 when his father began to swindle” the victim (In re Bryson, 406 F.3d 284 (4th Cir. 2005)).
• The civil contrast: § 983(d)(3)(B) can excuse the missing value for a home acquired through marriage, divorce or legal separation, if all four of its conditions are met. Criminal forfeiture has no equivalent.

Spouses and jointly owned property

IRS “innocent spouse” relief — relief from joint and several liability on a joint tax return under 26 U.S.C. § 6015 — is a tax doctrine and plays no part in forfeiture.

Can jointly owned property be seized for a co-owner’s crime?

Yes — joint ownership does not prevent forfeiture of the guilty owner’s share. The other owner’s interest can be protected, but only if that owner acts, and the rules differ by system. In criminal forfeiture the court orders “the forfeiture of the defendant’s interest in the property—whatever that interest may be” (Rule 32.2, 2000 Committee Note), and a co-owning wife’s “one-half interest was never subject to forfeiture” (Kennedy). In civil forfeiture, an innocent owner’s joint or entireties interest can be protected by severance, compensation or a lien order (§ 983(d)(5)). Either way, the forfeiture of jointly owned property proceeds without the co-owner unless the co-owner comes forward. Without a timely claim, the agency declares the property forfeited and no federal court reviews the merits (CAFRA: 28 C.F.R. § 8.12; customs: 19 U.S.C. § 1609), and in a civil case already in court an interest is contested only “by filing a claim” (Supplemental Rule G(5)(a)(i)); without a timely petition, a criminal forfeiture order becomes final and the co-owner may not object (Rule 32.2(c)(2)).

A plea forfeits only the defendant’s interest — but silence can cost yours

A plea agreement reaches only the defendant’s interest. The Supreme Court has explained that “§853(n), rather than Rule 11(f), provides the means by which third-party rights must be vindicated” and that “[t]hird-party claimants are not party to Rule 11(f) proceedings” (Libretti v. United States, 516 U.S. 29 (1995)). Justice Department policy is to the same effect: “In any plea agreement, a defendant may only consent to the forfeiture of his or her interest in the property” (Justice Manual 9-113.420, policy, not law). The forfeiture terms of a federal plea agreement are covered on that page. Two cautions. In criminal forfeiture, a third party who lets the 30-day petition period pass “forfeits her interests in the property,” in the Eleventh Circuit’s words (Marion). And state law can give the defendant spouse authority over marital property: in a civil case, the Fifth Circuit held that under the Texas Family Code the government “was entitled to rely on Calvin’s authority to deal with the annuities in executing the plea agreement” (United States v. Tracts 31A, Lots 31 and 32, Lafitte’s Landing Phase Two, 852 F.3d 385 (5th Cir. 2017)).

Tenancy by the entirety

Tenancy by the entirety is ownership by spouses, recognized in some states, under which neither can convey the property alone and the survivor takes the whole. In criminal forfeiture the defendant’s entireties interest generally can be forfeited, but the other spouse’s cannot. The non-defendant spouse usually cannot claim superior title under ground (A) — “[t]he very nature of the tenancy by the entireties prevents Mrs. Jimerson from claiming that her title is superior to her husband’s” — yet the forfeiture “did not affect Mary Lou’s interest in the residence” (Jimerson).

How the two interests coexist is unsettled. In a civil, pre-CAFRA case, the Third Circuit held that the innocent owner keeps “exclusive use and possession” for life, protection against “any conveyance without his or her consent,” and survivorship (United States v. Parcel of Real Property Known as 1500 Lincoln Avenue, 949 F.2d 73 (3d Cir. 1991)); a federal district court in Virginia applied a similar remedy in a criminal case (United States v. Franco, No. 5:14-cr-00011 (W.D. Va. July 26, 2017)). For a home taken only as a substitute asset — other property of the defendant forfeited when forfeitable property cannot be reached (§ 853(p); see criminal forfeiture) — the circuits split. The Seventh Circuit required the wife’s consent under Florida entireties law (United States v. Lee, 232 F.3d 556 (7th Cir. 2000)); the Eleventh held that § 853(p) “preempts Florida’s homestead exemption and tenancy by the entireties laws” (Fleet).

The Fourth Circuit has not decided the entireties question. In Bangiyeva, a tenancy-in-common case, it held that the government became a co-tenant with the defendant’s wife and refused to give her exclusive lifetime use (Bangiyeva). As background only, an unpublished, pre-CAFRA civil decision found nothing presently forfeitable in North Carolina entireties property owned with an innocent wife, while noting that the tenancy “does not forever preclude forfeiture of the guilty spouse’s interest” (United States v. 35 Acres, More or Less, in Cherokee County, 940 F.2d 654 (4th Cir. 1991) (table) (unpublished)). It is not binding, and in CAFRA civil cases § 983(d)(5) now authorizes specific orders for an innocent owner’s entireties interest.

Community property and other marital interests

In criminal forfeiture in community-property states, relation back comes first: in a RICO case, proceeds of a husband’s crimes “and any property purchased with the proceeds, never became community property,” though the wife’s half of land bought before the conspiracy was protected (United States v. Martinez, 228 F.3d 587 (5th Cir. 2000)). The Ninth Circuit rejected wives’ community claims to drug proceeds (Hooper) but held that § 853 does not reach the community-property interest of an uninvolved spouse in substitute property (United States v. Lester, 85 F.3d 1409 (9th Cir. 1996)). Elsewhere, a spouse’s own pre-crime interest can prevail: a federal district court in North Carolina recognized a wife’s Kentucky dower interests and joint bank-account interest under ground (A), subject to valuation (Alquzah).

What happens to lenders, lienholders and buyers?

A lender’s position turns on whether its interest is secured by the specific property, and on when and how it was acquired.

Civil (CAFRA). A “lien, mortgage, recorded security interest” is an ownership interest (§ 983(d)(6)(A)). A lien that predates the conduct is tested under (d)(2)(A); a later lender must have given value without knowledge or reason to believe under (d)(3)(A). A creditor with “only a general unsecured interest” is not an owner (§ 983(d)(6)(B)(i)).

Criminal. A security interest that predates the crime supports ground (A). In United States v. Schecter, 251 F.3d 490 (4th Cir. 2001), a land-installment seller’s security interest “functioned under Maryland law in a manner similar to a lien created by a deed of trust or a mortgage”; it secured the contract balance, and the seller was entitled to nothing more once the government had “fully compensated” him for that interest. A lender that advanced money after the crime must qualify under ground (B) — the posture of the Gravity Funding litigation described under “What changed recently” below. Nor can a lender foreclose around the ancillary proceeding: a state foreclosure sale held after the government acquired title “constituted ‘an action at law or equity against the United States’ and was statutorily barred under § 853(k)” (Phillips, 4th Cir. 1999). When the lender is itself the victim — a bank deceived in a bank fraud scheme, for example — its loss is ordinarily addressed through victim remission unless it holds a lien on the property (28 C.F.R. § 9.8).

Unsecured creditors (criminal). The Second Circuit holds that a general creditor cannot petition without an interest “in” a “particular, specific asset” (DSI Associates LLC v. United States, 496 F.3d 175 (2d Cir. 2007)), and the D.C. Circuit, which “respectfully disagree[d] with Reckmeyer,” holds that “a general creditor can never have an interest in specific forfeited property” (United States v. BCCI Holdings (Luxembourg), S.A., 46 F.3d 1185 (D.C. Cir. 1995)). In the Fourth Circuit, Reckmeyer lets general creditors who “gave valuable consideration to the estate without knowledge of the potential forfeitability of the defendant’s assets” recover “the value so conveyed” under (n)(6)(B) (Reckmeyer) — but only where, as there, the entire estate was forfeited, a limit the Fourth Circuit emphasized in Schecter.

Remission. A “lienholder” holds a lien that was established by operation of law or contract, created in exchange for “money, goods, or services,” and “perfected against the specific property forfeited” (28 C.F.R. § 9.2); a general creditor cannot obtain remission “unless he or she otherwise qualifies as petitioner” (§ 9.6(a)). A lienholder granted relief is notified of the right to choose between return of the property on payment of costs and of any value above its net equity, and sale of the property with payment “up to the sum of the lienholder’s net equity”; if it makes no choice “within 20 days of the receipt of notification,” the property is sold (§ 9.7). Justice Department policy also allows paying liens before forfeiture, “sparingly” and only “to avoid extreme hardship to natural persons” (Justice Manual 9-113.800, policy, not law).

Are crime victims third-party claimants?

Usually not. A victim with no ownership interest in the forfeited property is compensated, if at all, through remission, which the regulation extends to “victims of an offense underlying the forfeiture of property, or of a related offense, who do not have a present ownership interest in the forfeited property” — for property forfeited under statutes that “explicitly authorize restoration or remission of forfeited property to victims” (28 C.F.R. § 9.8); the criminal forfeiture statute lets the Attorney General “restore forfeited property to victims” (§ 853(i)(1)). The victim must show five things: a documented pecuniary loss of a specific amount directly caused by the offense; a loss that resulted from the illegal acts, not from otherwise lawful acts; no knowing contribution to, participation in, benefit from or willful blindness toward the offense; no compensation for the loss; and no other assets reasonably available for recovery (§ 9.8(b)). The loss is limited to the property’s fair market value on the date of the loss, and remission cannot exceed the victim’s share of the net forfeiture proceeds (§ 9.8(c), (i)). Remission is a non-judicial remedy left to the Attorney General’s discretion (Willis Management (Vermont), Ltd. v. United States, 652 F.3d 236 (2d Cir. 2011)). Restoration is a related, discretionary Justice Department procedure: under the Asset Forfeiture Policy Manual 2025 (policy, not law), it “enables the Attorney General to transfer forfeited funds to a court for satisfaction of a criminal restitution order, provided that all victims named in the order otherwise qualify for remission under the applicable regulations” (Chapter 14, Section I).

In a criminal case, a victim who can trace its money into the forfeited property may instead claim a constructive trust — an equitable remedy a court imposes on wrongfully obtained property — as a ground (A) interest. The Eleventh Circuit, with “the large majority of courts,” treats a constructive trust as a “legal right, title, or interest in … property” (United States v. Shefton, 548 F.3d 1360 (11th Cir. 2008)), and the Second Circuit allows claims by “beneficiaries of properly traced constructive trusts” (Willis Management). The D.C. Circuit disagrees: a constructive trust “could not have been shown to exist at the time the acts were committed” (BCCI Holdings). The Fourth Circuit has not ruled; a federal district court in North Carolina found that “a constructive trust arose in those funds at the time that they were conveyed to the Defendant” (Bailey). Victims of investment fraud and Ponzi schemes face this choice when scheme assets are forfeited.

Bennis v. Michigan and the uniform civil defense

Bennis v. Michigan, 516 U.S. 442 (1996), upheld 5–4 a state forfeiture of an unknowing co-owner’s interest against due process and takings challenges. A Michigan court ordered a jointly owned car forfeited as a public nuisance after the husband engaged in sexual activity with a prostitute in it, “with no offset for her interest, notwithstanding her lack of knowledge of her husband’s activity.” The Court held that the order “did not offend the Due Process Clause of the Fourteenth Amendment or the Takings Clause of the Fifth Amendment” (Bennis).

Bennis applied a state nuisance law and decided nothing about a federal statute, but it appears in CAFRA’s legislative history. The House Judiciary Committee’s report on the bill that became CAFRA noted that in Bennis the Court “ruled that the defense was mandated by neither the due process clause of the Fourteenth Amendment (and presumably that of the Fifth Amendment) nor the just compensation clause of the Fifth Amendment,” called existing federal defenses “nonuniform,” and said the Committee’s innocent owner defense was “designed to provide such a defense for all federal civil forfeitures, to make that defense uniform” (H.R. Rep. No. 106-192 (1999)). The enacted text is the Senate amendment, passed March 27, 2000 and accepted by the House April 11, 2000, which became Public Law 106-185 (H.R. 1658, all actions). Senator Hatch described “a uniform innocent owner defense to all federal civil forfeitures affected by the bill” (146 Cong. Rec. S1759 (daily ed. Mar. 27, 2000)), and Representative Hyde said the bill “creates a uniform innocent owner defense for all Federal civil forfeiture statutes” (146 Cong. Rec. H2047 (daily ed. Apr. 11, 2000)). That defense is § 983(d), and it is civil only.

What changed recently

• October 20, 2025 — certiorari denied in Gravity Funding, LLC v. United States, No. 25-193 (Supreme Court docket). The question was “whether Section 853(n) permits a third-party claimant to amend its petition to cure technical pleading defects after the expiration of the 30-day filing period.” The Fifth Circuit’s ruling stands: “even assuming such an amendment were ordinarily allowed,” an amendment sought “at least eleven months after the deadline” was untimely (Davis, 5th Cir. 2025). The petition described the Fifth, Ninth and Eleventh Circuits as barring any amendment after the deadline and the Second and Seventh as allowing amendments for good cause. The Second Circuit calls the deadline “strict but not always fatal” (Swartz Family Trust), and the Seventh remanded for the district court to provide “either a hearing or an opportunity to amend the petition” (United States v. Furando, 40 F.4th 567 (7th Cir. 2022)). The Fourth Circuit has not ruled on post-deadline amendment, so the safe course is a complete petition, signed by the petitioner under penalty of perjury, within the 30 days.
• June 10, 2025 — United States v. Peck, 139 F.4th 1158 (10th Cir.). An employee-owner prevailed under ground (A) under Utah law, the court noting that one aim of the forfeiture scheme is “to protect third parties with ‘superior’ interests” (Peck).
• 2025 — Asset Forfeiture Policy Manual 2025. The Justice Department’s current manual (policy, not law) supersedes earlier editions and requires publication for all assets, “including those valued at under $1,000” (AFPM 2025) — and publication can start the criminal petition clock.

Related Pages

• federal asset forfeiture attorney — the forfeiture overview
• notice of seizure — seizure letters, claims and remission
• bank account seizure — frozen and seized accounts
• motion for return of property — property taken in a search
• criminal forfeiture — the defendant’s side, through appeal
• plea agreement — forfeiture terms in plea deals
• federal sentencing hearing — what happens at sentencing
• money laundering — forfeiture of property “involved in” laundering
• white collar crime lawyer — the fraud and laundering charges behind many forfeitures

Why Work With Elizabeth Franklin-Best, P.C.

Elizabeth Franklin-Best founded the firm in 2019 as a boutique federal criminal defense and appellate firm: a national federal practice run on an intentionally small caseload, with offices in Columbia and Mount Pleasant, South Carolina, serving clients nationwide. She brings more than 20 years of federal and appellate criminal defense experience — more than 330 federal proceedings, over 100 of them appeals, and sixteen published decisions as counsel of record — and has been admitted pro hac vice in federal courts from Montana to Florida. She is admitted to the U.S. Supreme Court and twelve of the thirteen U.S. Courts of Appeals — every regional circuit (1st–11th) plus the D.C. Circuit.

On forfeiture, she co-authored “Harjo v. City of Albuquerque: A Road Map for Challenging Government Forfeiture Programs” (with David B. Smith), The Champion (NACDL), May 2019. Independent recognition includes Best Lawyers in America 2027 (Appellate Practice; Criminal Defense: White Collar; Criminal Defense: General Practice) and Chambers USA 2026 (Litigation: White-Collar Crime & Government Investigations, Band 2, South Carolina).

Schedule a Consultation

In a criminal case the 30-day petition period can close before the defendant is sentenced, so the time to get advice is when the first notice arrives, not when the case ends. To discuss your situation with Elizabeth Franklin-Best, schedule a consultation or call (843) 620-1100. Reading this page does not create an attorney-client relationship; it is general information, not legal advice for your case.

Frequently Asked Questions About the Innocent Owner Defense

Reviewed for legal accuracy by Elizabeth Franklin-Best, Esq., Principal Attorney·October 2026