State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_75D > GS_75D-5

§75D‑5.  RICO civil forfeiture proceedings.

(a)        All property ofevery kind used or intended for use in the course of, derived from, or realizedthrough a racketeering activity or pattern of racketeering activity is subjectto forfeiture to the State. Forfeiture shall be had by a civil procedure knownas a RICO forfeiture proceeding.

(b)        A RICO forfeitureproceeding shall be governed by Chapter 1A of the General Statutes of NorthCarolina except to the extent that special rules of procedure are stated in thisChapter.

(c)        A RICO forfeitureproceeding shall be an in rem proceeding against the property.

(d)        A RICO forfeitureproceeding shall be instituted by complaint and prosecuted only by the AttorneyGeneral of North Carolina or his designated representative. The proceeding maybe commenced and a final judgment rendered thereon before or after seizure ofthe property and before or after any criminal conviction of any person forviolation of those laws set forth in G.S. 75D‑3(c).

(e)        If the complaint isfiled before seizure, it shall state what property is sought to be forfeited,that the property is within the jurisdiction of the court, the grounds forforfeiture, and the names of all persons known to have or claim an interest inthe property. The court shall determine ex parte whether there is reasonableground to believe that the property is subject to forfeiture and, if the Stateso alleges, whether notice to those persons having or claiming an interest inthe property prior to seizure would cause the loss or destruction of theproperty. If the court finds:

(1)        That reasonableground does not exist to believe that the property is subject to forfeiture, itshall dismiss the complaint; or

(2)        That reasonableground does exist to believe the property is  subject to forfeiture but thereis not reasonable ground to believe that prior notice would result in loss ordestruction, it shall order service on all persons known to have or claim aninterest in the property prior to a further  hearing on whether a writ of seizureshould issue; or

(3)        That there isreasonable ground to believe that the property is subject to forfeiture and tobelieve that prior notice would cause loss or destruction, it shall without anyfurther hearing or notice, issue a writ of seizure directing the sheriff of orany other law enforcement officer in the county where the property is found toseize it.

(f)         Seizure may beeffected by a law enforcement officer authorized to enforce the penal laws ofthis State prior to the filing of the complaint and without a writ of seizureif the seizure is incident to a lawful arrest, search, or inspection and theofficer has probable cause to believe the property is subject to forfeiture andwill be lost or destroyed if not seized. Within 24 hours of the time ofseizure, the seizure shall be reported by the officer to the district attorneyof the prosecutorial district as defined in G.S. 7A‑60 in which theseizure is effected who shall immediately report such seizure to the AttorneyGeneral. The Attorney General shall, within 30 days after receiving notice ofseizure, examine the evidence surrounding such seizure, and if he believesreasonable ground exists for forfeiture under this Chapter, shall file acomplaint for forfeiture. The complaint shall state, in addition to theinformation required in subsection (e) of this section, the date and place ofseizure.

(g)        After the complaintis filed or the seizure effected, whichever is later, every person known tohave or claim an interest in the property, or in the property or enterprise ofwhich the subject property is a part or represents any interest, shall beserved, if not previously served, with a copy of the complaint and a notice ofseizure in the manner provided by Chapter 1A of the General Statutes of NorthCarolina. Service by publication may be ordered upon any party whosewhereabouts cannot be determined with reasonable diligence within 30 days offiling of the complaint.

(h)        (1)        Anyperson claiming an interest in the property, may become a party to the actionat any time prior to judgment whether named in the complaint or not. Any partyclaiming a substantial interest in the property, upon motion may be allowed bythe court to take possession of the property upon posting bond with good andsufficient security in double the amount of the property's value conditioned topay the value of any interest in the property found to be subject to forfeitureor the value of any interest of another not subject to forfeiture.

(2)        The court, upon suchterms and conditions as it may prescribe, may order that the property be soldby an innocent party who holds a lien on or security interest in the propertyat anytime during the proceedings. Any proceeds from such sale over and abovethe amount necessary to satisfy the  lien or security interest shall be paidinto court pending final judgment in the forfeiture proceeding. No such saleshall be ordered, however, unless the obligation upon which the lien orsecurity interest is based is in default.

(3)        Pending finaljudgment in the forfeiture proceeding, the court may make any other dispositionof the property necessary to protect it or in the interest of substantialjustice, and which adequately protects the interests of innocent parties.

(i)         The interest of aninnocent party in the property shall not be subject to forfeiture. An innocentparty is one who did not have actual or constructive knowledge that theproperty was subject to forfeiture. An attorney who is paid a fee forrepresenting any person subject to this act, shall be rebuttably presumed to bean innocent party as to that fee transaction.

(j)         Subject to therequirement of protecting the interest of all innocent parties, the court may,after judgment of forfeiture, make any of the following orders for dispositionof the property:

(1)        Destruction of theproperty or contraband, the possession of, or use of, which is illegal;

(2)        Retention forofficial use by a law enforcement agency, the State or any politicalsubdivision thereof. When such agency or political subdivision no longer hasuse for such property, it shall be disposed of by judicial sale as provided inArticle 29A of Chapter 1 of the General Statutes of North Carolina, and theproceeds shall be paid to the State Treasurer;

(3)        Transfer to theDepartment of Cultural Resources of property useful for historical orinstructional purposes;

(4)        Retention of theproperty by any innocent party having an interest therein, including the rightto restrict sale of an interest to outsiders, such as a right of first refusal,upon payment or approval of a plan for payment into court of the value of anyforfeited interest in the property. The plan may include, in the case of aninnocent party who holds an interest in the property through an estate by theentirety, or an undivided interest in the property, or a lien on or securityinterest in the property, the sale of the property by the innocent party undersuch terms and conditions as may be prescribed by the court and the paymentinto court of any proceeds from such sale over and above the amount necessaryto satisfy the divided ownership value of the innocent party's interest or thelien or security interest. Proceeds paid into the court must then be paid tothe State Treasurer;

(5)        Judicial sale of theproperty as provided in Article 29A of Chapter 1 of the General Statutes ofNorth Carolina, with the proceeds being paid to the State Treasurer;

(6)        Transfer of theproperty to any innocent party having an interest therein equal to or greaterthan the value of the property; or

(7)        Any otherdisposition of the property which is in the interest of substantial justice andadequately protects innocent parties, with any proceeds being paid to the StateTreasurer.

(k)        In addition to theprovisions of subsections (c) through (g) relating to in rem actions, the Statemay bring an in personam action for the forfeiture of any property subject toforfeiture under subsection (a) of this section.

(l)         Upon the entry ofa final civil judgment of forfeiture in favor of the State:

(1)        The title of theState to the forfeited property shall:

a.         In the case of realproperty or beneficial interest, relate back to the date of filing of the RICOlien notice in the official record of the county where the real property orbeneficial interest is located and, if no RICO lien notice is filed, then tothe date of the filing of any notice of lis pendens in the official records ofthe county where the real property or beneficial interest is located and, if noRICO lien notice or notice of lis pendens is so filed, then to the date ofrecording of the final judgment of forfeiture in the official records of thecounty where the real property or beneficial interest is located; and

b.         In the case ofpersonal property, relate back to the date the personal property was seizedpursuant to the provisions of this Chapter.

(2)        If property subjectto forfeiture is conveyed, alienated, disposed of, or otherwise renderedunavailable for forfeiture after the filing of a RICO lien notice or after thefiling of a RICO civil proceeding whichever is earlier, the Attorney Generalmay, on behalf of the State, institute in action in an appropriate courtagainst the person named in the RICO lien notice or the defendant in the civilproceeding and the court shall enter final judgment against the person named inthe RICO lien notice or the defendant in the civil proceeding in an amountequal to the fair market value of the property,  together with investigativecosts and attorney's fees incurred by the Attorney General in the action. (1985(Reg. Sess., 1986), c. 999, s. 1; 1987 (Reg. Sess., 1988), c. 1037, ss. 98, 99;1989, c. 489, s. 1.)