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Preventing Asset Seizures During Federal Counterfeiting Cases
Preventing Asset Seizures During Federal Counterfeiting Cases
Getting accused of federal counterfeiting can be scary. The penalties are harsh, and the feds have power to seize assets even before you’re convicted. But there are things you can do to protect yourself and your property.
First off, counterfeiting means making or selling something that infringes on a trademark, patent, or copyright. Common examples are fake designer handbags or clothing, pirated movies or software, or knockoff pharmaceuticals. If the feds think you’re doing this on a commercial scale, they can charge you with felony criminal counterfeiting under federal law.
One thing that freaks people out is the asset seizure part. Federal agents can seize property like bank accounts, cars, or houses connected to the alleged crime. And they can do this before you’re even convicted, through a process called civil asset forfeiture.
So what can you do to prevent or challenge an unfair seizure? Here are some tips:
Secure Your Finances
If possible, avoid commingling personal and business funds in the same accounts. Keep business accounts strictly separate from household accounts. This makes it harder for agents to argue all your assets are tied to the alleged crime.
Also be cautious about transferring large sums of money between accounts right before or after a raid. Prosecutors may claim you’re trying to hide illicit funds.
Work with a Lawyer From the Start
Hire a qualified criminal defense lawyer as soon as you learn you’re being investigated. Don’t try to handle things yourself. A good lawyer can negotiate with prosecutors to minimize seizures, or challenge them in court.
For instance, your lawyer may argue agents improperly seized assets unrelated to the case, or took more than necessary to secure potential fines or restitution.
Understand Your State Laws
Federal forfeiture laws set minimum standards, but states can impose additional protections. For example, some states require a criminal conviction before most assets can be forfeited. So the state you’re in matters.
Also be aware that real estate law varies by state. In some states, prosecutors can’t seize a primary residence connected to a federal crime. But in others they can, unless the home is owned by an “innocent spouse.”
Claim an “Innocent Owner” Defense
If assets are seized, you or family members may be able to file a petition as “innocent owners.” You’ll have to show you own the property, had no knowledge of or involvement in the alleged crime, and took reasonable steps to prevent illegal use of the assets.
This can be used to protect a spouse’s share of jointly owned property, or assets belonging to minor children. But the burden is on you to establish innocence.
Request a “Hardship Release”
If seizure of assets would cause significant hardship, your lawyer can request their release. This is allowed in cases where assets are needed for basic living expenses or business operations.
For example, seizure of a vehicle used for work or the only family car. The court may order release if it won’t hinder the government’s case or dissipate assets.
Explore Alternatives to Seizure
In some cases, prosecutors may agree to alternatives like bond, community confinement, or house arrest in lieu of asset seizure. This depends on factors like criminal history and flight risk.
Alternatives are more likely if you have strong community ties and minimal risk of dissipating assets needed for fines or restitution.
Don’t Try to Hide Assets
Never attempt to conceal assets from federal agents. That itself can be a serious crime. Be cooperative, but have your lawyer present for any questioning or searches.
Honesty and transparency are your best bet. Lying or hiding assets can really antagonize prosecutors and lead to more aggressive pursuit of forfeiture.
Bottom Line
Asset seizure is meant to prevent dissipation of illegal gains and secure potential fines and restitution. But innocent people can get caught up too. Working closely with an experienced attorney from the start, keeping personal and business finances separate, and being upfront with investigators offers the best chance of protecting your property.
Every case is different, with many nuances in both federal and state law. So get knowledgeable legal help right away if you’re facing a federal counterfeiting investigation. Your freedom and financial future may depend on it.
References
U.S. Department of Justice. “Largest-Ever Counterfeit Goods Seizures Result In Trafficking Charges Against Two Individuals.” https://www.justice.gov/usao-sdny/pr/largest-ever-counterfeit-goods-seizures-result-trafficking-charges-against-two. Accessed 4 December 2023.
U.S. Customs and Border Protection. “Intellectual Property Rights.” https://www.cbp.gov/trade/priority-issues/ipr. Accessed 4 December 2023.
U.S. Patent and Trademark Office. “U.S. Intellectual Property and Counterfeit Goods—Landscape Review of Existing/Emerging Research.” https://www.uspto.gov/sites/default/files/documents/USPTO-Counterfeit.pdf. Accessed 3 December 2023.
U.S. Government Accountability Office. “INTELLECTUAL PROPERTY CBP Has Taken Steps to Combat Counterfeit Goods in Small Packages but Could Streamline Enforcement.” https://www.gao.gov/assets/710/709987.pdf. Accessed 24 September 2020.
Venable LLP. “Fighting Counterfeits at the U.S. Border: The Counterfeit Goods Seizure Act of 2019 Would Expand Customs and Border Patrol Enforcement to Design Patents.” https://www.venable.com/insights/publications/2020/08/fighting-counterfeits-at-the-us-border-the-cou. Accessed 13 August 2020.