Under 18 U.S.C. § 1963(d), the government may seek a restraining order upon the filing of a RICO indictment, in order to preserve all forfeitable assets until the trial is completed and judgment entered. Such orders can have a wide-ranging impact on third parties who do business with the defendants, including clients, vendors, banks, investors, creditors, dependents, and others. Some highly publicized cases involving RICO restraining orders have been the subject of considerable criticism in the press, because of a perception that pre-trial freezing of assets is tantamount to a seizure of property without due process. In order to ensure that the rights of all interested parties are protected, the Criminal Division has instituted the following requirements to control the use of restraining orders in RICO prosecutions. (It should be noted that these requirements are in addition to any other existing requirements, such as review by the Asset Forfeiture Office.):
- As part of the approval process for RICO prosecutions, the prosecutor must submit any proposed forfeiture restraining order for review and approval by the Organized Crime and Racketeering Section. The prosecutor must show that less-intrusive remedies (such as bonds) are not likely to preserve the assets for forfeiture in the event of a conviction;
- In seeking approval of a restraining order, the prosecutor must articulate any anticipated impact that forfeiture and the restraining order would have on innocent third parties, balanced against the government's need to preserve the assets;
- In deciding whether forfeiture (and, hence, a restraining order) is appropriate, the Section will consider the nature and severity of the offense; the government's policy is not to seek the fullest forfeiture permissible under the law where that forfeiture would be disproportionate to the defendant's crime;
- When a RICO restraining order is being sought, the prosecutor is required, at the earliest appropriate time, to state publicly that the government's request for a restraining order, and eventual forfeiture, is made in full recognition of the rights of third parties--that is, in requesting the restraining order, the government will not seek to disrupt the normal, legitimate business activities of the defendant; will not seek through use of the relation-back doctrine to take from third parties assets legitimately transferred to them; will not seek to vitiate legitimate business transactions occurring between the defendant and third parties; and will, in all other respects, assist the court in ensuring that the rights of third parties are protected, through proceedings under 18 U.S.C. § 1963(1) and otherwise.
The Division expects that the prosecutor will announce these principles either at the time the indictment is returned or, at the latest, at the first proceeding before the court concerning the restraining order.
Updated September 19, 2018