UNITED STATES OF AMERICA v. DAVID HARRIS MILLER
US Court of Appeals for the Fourth Circuit, Duncan, December 20, 2018,
Forfeiture – Real Property improved by proceeds from money laundering is forfeitable even if the property itself was purchased with legal funds

Facts:
Miller and his wife were charged with fraud and money laundering. As part of these proceedings, two properties were seized by the government.
At a hearing to challenge the seizure of the properties, an FBI Forensic Accountant testified that Miller used the proceeds of the fraud to pay interest on a mortgage for one property and improvements on both properties.
The district court affirmed the seizure.
Miller appealed, arguing that he needed the money from the property sales to pay his lawyer.

Held: The Fourth Circuit held that property traceable to money laundering may be seized, even if the defendant needs money from the sale to pay for a lawyer.

Forfeiture – Money Laundering – Property is subject to civil forfeiture or criminal forfeiture if the property was “involved in” or “traceable to” money laundering, wire fraud (if it affected a financial institution), or related crimes.

Forfeiture – Property involved in a money laundering offense is subject to forfeiture in its entirety, even if legitimate funds have also been invested in the property.

Forfeiture – Real Property is subject to forfeiture if it was either purchased with or improved by laundered funds.

Forfeiture – Mortgage payments made using the proceeds from money laundering make the entire property forfeitable.

Forfeiture Hearing – A defendant who has property seized by the government but claims that the property is required to pay for an attorney may request a hearing to challenge the seizure

Forfeiture pending trial – The government is entitled to seize assets subject to forfeiture pending a criminal trial even if a defendant needs those assets to retain counsel.

Forfeiture pending trial – To seize property that a defendant claims is required to pay for an attorney, the government must show probable cause to believe that the assets are forfeitable, which requires showing that the property has a “substantial connection” to the crime on which forfeiture is predicated

From the Case: Because there is probable cause to find that Miller used fraudulently obtained and laundered funds to make mortgage payments and property tax payments associated with his Virginia property, and that he used funds to pay for improvements to both of his properties, probable cause exists to find that the properties are “involved in” and “traceable to” Miller’s wire fraud and money laundering charges and are, therefore,
forfeitable.