“Can I see your license and registration” took on a whole new meaning for Alfonso on July 2018. He was preparing to depart El Paso International Airport in his Cessna 172 for, Chihuahua, Mexico.[1]
It was a flight that he had become accustomed to, as it turned a four-hour drive into an hour-plus flight. However, prior to departure, he was asked to taxi to customs for an unknown inspection. He complied.
Federal Aviation Administration (FAA) and Homeland Security Investigations (HSI) agents were there and proceeded to inspect his pilot certificate and aircraft registration. HSI subsequently served him with a notice of forfeiture, took custody of the 172 and began a seven-month journey to the eventual recovery of his aircraft.
In order to be registered with the FAA, United States law requires that U.S. civil aircraft be owned by a: United States citizen, a lawfully admitted permanent resident or a non-citizen corporation—but only if that corporation is “organized and doing business under the laws of the United States or a State and the aircraft is based and primarily used in the United States”.[1] This is very different than the ownership requirements for real property, which while varying from state to state, are generally not enforced even when a state bars ownership by aliens.[2] Aliens can also purchase vehicles, but in the U.S., aircraft ownership is in effect restricted by a federal statute that most are not aware exists—which, before that fateful day, included Alfonso.[3]
Forfeiture is part of American law that most people are shocked to hear about. In short, the government may seize any property, including aircraft, if involved with or derived from a crime. It has its origins in maritime law but was brought to the forefront of federal law in the Comprehensive Crime Control Act of 1984 (passed as part of the war on drugs). However, as was stated in United States v. Wallace, the law allows an aircraft to be seized for non-drug violations alone.[4] In that case, an aircraft was seized after the government alleged that the owner failed to register the aircraft with the FAA despite owning it for about seven years. The Court held that “Congress clearly intended that forfeiture apply for violations not involving drug trafficking.”[5] This is a shock for most. Although whether forfeitures for an administrative violation like this can be sought following the United States Supreme Court’s recent ruling in Timbs v. Indiana remains to be seen.[6] In Timbs the Court ruled that the value of the forfeited property cannot be excessive as compared to the violation. Interestingly, this contradicts the previous language in United States v. Wallace where the Court said that “forfeiture is not in violation of the Excessive Fines Clause.”[7]
The excessiveness test is, like many legal standards, a relative one. In the present case, the government took a Cessna 172 with an approximate value of $40,000 for failure to properly execute an FAA registration form that has a processing fee of $5. Alfonso had filled out the form and simply left blank the check boxes for the type of person he was claiming to be–a common occurrence. An interesting side note is that the registration form, AC 8050-1, was revised and clarified substantially in October 2018. Unfortunately, we cannot tie that to this forfeiture though.
While a Mexican National or other foreigner cannot directly own a U.S. aircraft, a non-citizen can own an aircraft through a non-citizen corporation or a non-citizen trust.[8] In a non-citizen trust, the foreigner creates a trust and appoints an American citizen as a trustee, who becomes the “owner” as far as the FAA is concerned. Therefore, a recommendation was made to have Alfonso contact a trust company and register his aircraft in a legal trust. This would allow him to take possession of the aircraft once the case was resolved successfully.
After HSI seized the plane on July 19, 2018, Alfonso waited for the receipt of the Civil Asset Forfeiture Notice that would be sent under the Civil Asset Forfeiture Reform Act of 2000 (CAFRA). He received this a full month later. Once we received notice, we responded to it with a notice of claim. One must be careful when responding to a forfeiture notice as it is an administrative action, so you must strictly comply with the required timelines. The only real choice is usually number 4—Court Action. While opinions vary, any other option leaves your property within the hands of the agency who “stole” it in the first place.[9] We chose court action and reached out to the Assistant United States Attorney who would be handling the case. Negotiations ensued and, ultimately, in December of 2018 a settlement was reached.
Another hurdle was that this particular office had not handled the forfeiture of a small airplane in response to an administrative violation before, and was not overly receptive to attempts to locate and negotiate the release of the plane. Repeated requests fell on deaf ears. It was especially difficult to convince them that the value of the aircraft would play a large part in the negotiations. As can be imagined, a 172 case cannot absorb as much in fees, expenses, or any other costs as a Gulfstream could.
In the beginning of December, it became very clear how the value of the aircraft would play into the resolution. The government called, said that they wanted to discuss settlement options, and offered to return the aircraft after payment of an unknown fine plus movement and storage fees of $7,500. They had moved the airplane from El Paso, Texas to Harlingen, Texas, which together with a government-imposed storage fee, is what composed the requested $7,500.
A forfeiture is like any civil case; it can be negotiated. In this case a settlement to return the airplane was reached for much less than the $7,500-plus fine. However, it was much more expensive than the $5 fee that was owed to the FAA for a correctly registered airplane.
Unfortunately, Alfonso is not the only individual who has made this mistake. Foreign nationals tend to make purchases different than most Americans. They tend to be cash buyers, especially for purchases as “small” as a 172. The problem with this approach, in the author’s experience, is that this will end up functionally excluding necessary oversight from attorneys, title companies and financiers. These types of individuals can be very important in today’s world because they are keenly attuned to the rules that must be complied with to protect one’s interest in property. Cash buyers run the risk of failing to be able to seek the benefit of this low-cost service and advice.
On a final note, Alfonso said that the company that seized his airplane told him this was the first airplane they had given back—a scary thought.
By Brock Benjamin
Board Certified Criminal Defense Attorney.
http://www.brockmorganbenjamin.com
(915) 412-5858
[1] 49 United States Code 44102
[2] Aliens in United States law are individuals who are not citizens or lawful permanent residents of the United States. In 1965 the Fifty-ninth Texas Legislature repealed the laws from the 1921 act on the grounds that they imposed "unreasonable and discriminatory restrictions" on alien ownership and militated against efforts by the state to entice foreign investment and stimulate economic development and industrial growth. See https://tshaonline.org/handbook/online/articles/mla01. Last visited March 2, 2019.
[3] 49 United States Code 44102- Which provides (a) Eligibility… (A) a citizen…(B) …lawfully admitted permanent resident…
[4] United States v. Wallace, 389 F.3d 483 (5th Cir. 2004).
[5] Id. at 487.
[6] Timbs v. Indiana, 139 S.Ct. 682 (2019).
[7] Id.
[8] 14 C.F.R. § 47.7
[9] I facetiously use the term “stole” in lieu of seized because I’ve never met a client who agreed that the Government should have taken their property. Be careful using that term with the Government, as it is sure to sidetrack any resolution.
Brock Benjamin is a board-certified criminal defense attorney. He uses his plane to travel around West Texas and New Mexico. He handles various types of cases, to include civil cases involving airplane disputes.
He is a current member of the Baja Bush Pilots, Experimental Aircraft Association, the Aircraft Owners and Pilots Association (where he serves on the Legal Services Plan panel), National Business Aviation Association, and the Lawyer Pilot Bar Association. He enjoys flying for work and fun.
The opinions expressed in this article are those of the author.
