SW Legal studies in Business

State Homestead Law Does Not Protect Property against Seizure in Criminal Conviction
Description

Appeals court held that when a defendant did not have enough cash to cover a payment ordered by a court upon conviction of a crime, the government could seize the defendantís interest in his homestead. The state homestead exemption is overridden by federal criminal law.

Topic Criminal Law
Key Words

Forfeiture; Homestead Exemption; Fraud

C A S E   S U M M A R Y
Facts

Fleet was convicted of wire fraud, money laundering, and other counts related to a fraudulent land-swap deal that bilked unwitting investors out of more than $11 million. The trial court ordered Fleet to forfeit $295,000 in cash to the government. He did not have enough cash, so the government moved to substitute property Fleet owned to generate revenue to provide the cash. Fleet owned two cars and a house jointly with his wife. Fleet opposed the motion, contending that the property was protected by the Florida homestead exemption, as well as the stateís tenancy by the entireties law. The trial court rejected his argument and ordered the property forfeited. Fleet appealed.

Decision

Affirmed. Federal law allows property to be forfeited when a person convicted of a crime does not have sufficient cash. Criminal forfeiture contains no innocent owner exception. Since the federal law preempts state law on such matters, unless Congress says otherwise, Fleetís homestead may be seized to help raise the needed cash. He has a one-half interest in the property; so that will be claimed by the government. Fleetís wife will retain her half interest.

Citation

U.S. v. Fleet, 498 F.3d 1225 (11th Cir., 2007)

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