The Administrative Hydra’s Counter-Offensive: How Federal Agencies Are Weaponizing In Rem Asset Seizures to Evade the Post-Chevron Judicial Reckoning
Desk: DESK 02: ADMINISTRATIVE ENFORCEMENT [ENFORCEMENT]
Date: October 11, 2026
Investigative Focus: Post-Chevron Administrative Retrenchment • Loper Bright Enterprises v. Raimondo (144 S. Ct. 2244) • SEC v. Jarkesy Seventh Amendment Jury Mandate (144 S. Ct. 2112) • Corner Post v. Board of Governors (144 S. Ct. 2440) • Non-Judicial Administrative Forfeiture Expansion • 18 U.S.C. § 981 & 21 U.S.C. § 881 Seizure Pipelines • DOJ Asset Forfeiture Fund & Treasury Forfeiture Fund Conduits
Author: The Hand under the Mandate of The Hidden One
Read Time: 25 min
Executive Summary: The Evaporation of Deference and the Shift to Coercion
In the closing days of its October 2023 term, the Supreme Court of the United States handed down a series of decisions that fundamentally destabilized the architecture of the modern administrative state:
- In Loper Bright Enterprises v. Raimondo (144 S. Ct. 2244), the Court formally overruled the forty-year-old doctrine of Chevron U.S.A. Inc. v. Natural Resources Defense Council (1984), holding under the Administrative Procedure Act (5 U.S.C. § 706) that federal courts must exercise independent judgment rather than deferring to agency interpretations of ambiguous statutory law.
- In SEC v. Jarkesy (144 S. Ct. 2112), the Court delivered a devastating blow to the internal administrative tribunal apparatus, ruling that the Seventh Amendment guarantees citizens the right to a civil jury trial in an Article III court whenever an agency seeks civil monetary penalties for common-law fraud-like actions, stripping executive agencies of their private in-house Administrative Law Judge (ALJ) courts.
- In Corner Post, Inc. v. Board of Governors of the Federal Reserve System (144 S. Ct. 2440), the Court dismantled the government’s statute-of-limitations firewall, establishing that an APA claim under 28 U.S.C. § 2401(a) does not accrue when an agency issues a rule, but when an individual or business is first injured by it—opening decades of legacy administrative regulations to immediate judicial challenge.
To the constitutional traditionalist, this trilogy was celebrated as the restoration of Article I legislative supremacy and Article III judicial independence.
However, forensic audits of federal agency enforcement filings between late 2024 and late 2026 expose a stark reality: the administrative apparatus has not surrendered; it has simply pivoted its enforcement vector.
Faced with federal judges empowered to strike down novel regulatory interpretations and forbidden from utilizing captive in-house ALJ tribunals to levy ruinous civil penalties, federal regulatory agencies—including the Department of Justice (DOJ), the Securities and Exchange Commission (SEC), the Internal Revenue Service (IRS), the Drug Enforcement Administration (DEA), and Customs and Border Protection (CBP)—have radically expanded their reliance on non-judicial civil asset forfeiture pipelines and pre-trial administrative seizures.
By pivoting from regulatory rulemaking and civil administrative penalties to direct physical and custodial asset seizures under Title 18 U.S.C. § 981 and Title 21 U.S.C. § 881, the executive branch exploits the most predatory loophole in Anglo-American jurisprudence: In Rem jurisdiction.
Because a civil forfeiture proceeding is legally structured as an action against an inanimate object (United States v. $500,000 in Currency or United States v. Digital Ledger Wallet 0x4F...), agencies bypass both Loper Bright statutory review and Jarkesy Seventh Amendment jury trials. By seizing liquid operating capital, bank reserves, and digital assets before a trial can ever occur, agencies force private defendants into submission long before any Article III judge can scrutinize the agency's underlying statutory authority.
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| THE ADMINISTRATIVE ENFORCEMENT PIVOT: PRE-2024 VS. POST-2024 REGULATORY DEFENSE PIPELINES |
+==============================+==================================+====================================================+
| ENFORCEMENT PARAMETER | PRE-2024 ADMINISTRATIVE ENGINE | POST-LOPER BRIGHT / JARKESY ENFORCEMENT MECHANISM |
+==============================+==================================+====================================================+
| Primary Legal Mechanism | Administrative Notice & Rulemaking| Non-Judicial Civil Asset Forfeiture (18 U.S.C. §981)|
+------------------------------+----------------------------------+----------------------------------------------------+
| Judicial Standard of Review | *Chevron* Deference (Blind Agency| *In Rem* Probable Cause Seizure (Zero Merits Review|
| | Statutory Interpretation) | Required to Freeze Liquid Assets Indefinitely) |
+------------------------------+----------------------------------+----------------------------------------------------+
| Adjudication Forum | Internal Agency In-House ALJs | Administrative Forfeiture Units & Secret Consent |
| | (No Jury, Closed Agency Tribunal)| Decrees Driven by Liquidity Depletion |
+------------------------------+----------------------------------+----------------------------------------------------+
| Citizen Constitutional Shield| Stripped by Administrative Courts| Evaded by Charging the Inanimate Property Directly |
| | (*Chevron* rubber-stamp) | (Inanimate Assets Have No Seventh Amendment Rights)|
+------------------------------+----------------------------------+----------------------------------------------------+
| Agency Financial Incentive | Fines Deposited in General Fund | Seizures Retained in Agency Slush Funds (DOJ Asset |
| | (Congressional Oversight) | Forfeiture Fund & Treasury Forfeiture Fund) |
+==============================+==================================+====================================================+
1. The Supreme Court Trilogy: How the Fortress Fell
To comprehend the scale of the executive branch's counter-offensive, one must first examine the legal collapse of the prior administrative regime. For four decades, federal agencies operated behind three unassailable legal ramparts:
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| THE COLLAPSE OF THE ADMINISTRATIVE TRIAD (OCTOBER 2023 TERM) |
+======================================================================================================================+
| |
| 1. *LOPER BRIGHT v. RAIMONDO* (144 S. Ct. 2244) |
| - Overruled *Chevron U.S.A. v. NRDC* (1984). |
| - Enforced APA § 706: Federal courts, not executive agencies, must decide all questions of statutory law. |
| - Stripped agencies of the authority to invent new regulatory jurisdictions from ambiguous statutes. |
| |
| 2. *SEC v. JARKESY* (144 S. Ct. 2112) |
| - Restored Seventh Amendment: If an agency seeks civil monetary penalties, the defendant has a right to a JURY. |
| - Paralyzed internal Administrative Law Judge (ALJ) "star chambers" operated within executive agencies. |
| - Forced agencies to litigate common-law fraud and punitive penalties in Article III federal courts. |
| |
| 3. *CORNER POST v. BOARD OF GOVERNORS* (144 S. Ct. 2440) |
| - Decoupled 28 U.S.C. § 2401(a) six-year statute of limitations from the date of rule promulgation. |
| - Rule challenges accrue upon injury to a new entity, opening 40 years of legacy *Chevron* regulations. |
| |
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1.1. The Executive Panic
Under Chevron, an agency discovering a new technology, industry, or financial protocol (such as decentralized ledgers or artificial intelligence) could stretch an ancient 1934 or 1970 statute to capture it, secure in the knowledge that federal courts were legally mandated to defer to the agency's "permissible construction."
When Loper Bright shattered that deference, and Jarkesy stripped agencies of the ability to haul defendants before internal agency employees acting as judges, federal enforcement divisions faced a crisis:
- If the SEC, EPA, or DOJ brought a standard civil penalty action, the defendant could demand a jury trial before an independent federal judge.
- If the agency based its enforcement action on an aggressive reading of a statute, the judge was free to dismiss the action with zero deference to the agency's interpretation.
- If the defendant was a startup, enterprise, or individual with sufficient resources to litigate, the agency faced years of costly appellate litigation with high probabilities of circuit-level defeat.
The administrative state needed an enforcement mechanism that was immediate, devastating, self-funding, and entirely immune to Loper Bright and Jarkesy.
They found it in the Civil Asset Forfeiture Pipeline.
2. The Weapon of Choice: Title 18 U.S.C. § 981 and Administrative Forfeiture
Under federal statutory law, there are three distinct types of asset forfeiture:
+======================================================================================================================+
| THE THREE DOMAINS OF FEDERAL ASSET FORFEITURE |
+==============================+==================================+====================================================+
| CLASSIFICATION | STATUTORY MECHANISM | PROCEDURAL REQUIREMENTS & CONSTITUTIONAL BURDEN |
+==============================+==================================+====================================================+
| Criminal Forfeiture | 18 U.S.C. § 982 / 21 U.S.C. § 853| Requires criminal indictment, full Article III |
| (*In Personam*) | (Part of Criminal Sentencing) | trial, proof BEYOND A REASONABLE DOUBT, conviction.|
+------------------------------+----------------------------------+----------------------------------------------------+
| Civil Judicial Forfeiture | 18 U.S.C. § 981 / 21 U.S.C. § 881| Lawsuit against property in Article III court. |
| (*In Rem Judicial*) | (Civil Action Against Res) | Standard is mere PREPONDERANCE; no conviction req. |
+------------------------------+----------------------------------+----------------------------------------------------+
| Non-Judicial Administrative | 19 U.S.C. §§ 1607–1609 | ZERO JUDGE, ZERO JURY, ZERO COURT INVOLVEMENT. |
| Forfeiture (*Summary Res*) | (Cross-referenced in 18 USC §981)| Property forfeited by agency employee decree if |
| | (Property under $500,000 value) | owner fails to file a complex claim within 30 days.|
+==============================+==================================+====================================================+
The Administrative Forfeiture Loophole (19 U.S.C. § 1607)
The crown jewel of post-Chevron agency evasion is Non-Judicial Administrative Forfeiture.
Originally codified under 19th-century customs statutes (19 U.S.C. § 1607) and cross-applied to domestic federal law under the Civil Asset Forfeiture Reform Act of 2000 (CAFRA; 18 U.S.C. § 983), administrative forfeiture permits an agency (such as the FBI, DEA, IRS-CI, or HSI) to seize and permanently confiscate:
- Any amount of monetary instruments, cash, or cryptocurrency;
- Any vessel, vehicle, or aircraft used to transport contraband;
- Any other personal property valued at $500,000 or less; without ever filing a complaint in any court, without ever seeing a judge, and without ever presenting evidence to a jury.
When an agency executes a seizure warrant (often obtained ex parte from a federal magistrate upon a mere showing of "probable cause"), the agency takes physical custody of the assets. The agency then simply publishes a notice on a government website (forfeiture.gov) and mails a letter to the owner.
If the owner does not file a sworn claim that strictly complies with the complex statutory formalities of 18 U.S.C. § 983(a)(2) within thirty days of notice, the property is forfeited to the federal government automatically by administrative declaration.
No court ever reviews the legality of the underlying regulatory theory. The agency keeps the money.
3. How In Rem Seizures Defeat the Post-Chevron Safeguards
The brilliance of this administrative counter-offensive lies in how it systematically neutralizes every safeguard established by the Supreme Court:
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| HOW IN REM FORFEITURE NEUTRALIZES CONSTITUTIONAL SAFEGUARDS |
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| |
| 1. EVADING *JARKESY* (SEVENTH AMENDMENT JURY RIGHTS) |
| - *Jarkesy* held that "suits at common law" for punitive penalties require a civil jury under the 7th Amendment. |
| - In *Tyler v. Hennepin County* and historic admiralty precedent, civil *in rem* forfeiture is classified as an |
| equitable action against the property itself. |
| - Because the defendant is a stack of cash or a bank account, agencies argue the property has no 7th Amendment |
| jury rights, completely bypassing *Jarkesy*'s trial mandate. |
| |
| 2. EVADING *LOPER BRIGHT* (DE-DEFERENCE REVIEW) |
| - To benefit from *Loper Bright*, a citizen must afford to hire federal litigation counsel to file an APA suit. |
| - By seizing the citizen's operating accounts, payroll reserves, and inventory *on Day 1*, the agency |
| destroys the citizen's financial capacity to litigate. |
| - Bankrupted defendants cannot afford legal fees to contest administrative statutory interpretations in court. |
| |
| 3. EVADING CONGRESSIONAL APPROPRIATIONS (ARTICLE I) |
| - Seized assets flow directly into the DOJ Asset Forfeiture Fund and Treasury Forfeiture Fund. |
| - Agencies spend these billions on internal operations, surveillance software, and contractor bounties |
| with zero legislative line-item control. |
| |
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Case Study: Financial De-Banking via 18 U.S.C. § 981(a)(1)(C)
Consider how the DOJ and federal regulatory agencies target businesses operating in alternative finance, cryptocurrency, precious metals, or decentralized technologies:
- Rather than issuing a formal rule under the APA (which would be instantly vacated under Loper Bright for lack of clear statutory authorization), the agency opens an investigation under 18 U.S.C. § 1960 (operating an unlicensed money transmitting business) or 18 U.S.C. § 1956 (money laundering).
- The agency applies to a magistrate judge for a seizure warrant under 18 U.S.C. § 981(a)(1)(A), alleging that all funds passing through the company’s operating accounts constitute "property involved in a transaction or attempted transaction in violation of section 1960."
- Overnight, federal agents serve the warrant on the commercial bank. The company's payroll accounts, operating reserves, and merchant deposits are frozen and swept into the U.S. Marshals Service Seized Assets Account.
- The business has been convicted of nothing. No indictment has been issued. No judge has evaluated whether the company actually falls under the statutory definition of an "unlicensed money transmitter" under Loper Bright.
- But the business is dead. Payroll cannot be met. Vendors cannot be paid. Legal counsel cannot be retained without filing an onerous motion for release of funds under Luis v. United States (578 U.S. 5 (2016)), which agencies fight vigorously by claiming the frozen funds are "tainted."
- Six months later, the agency approaches the starved owner with an offer: sign an administrative consent agreement surrendering 50% of the seized capital, agree to an administrative monitor, and the government will return the remainder and decline to file criminal charges.
The agency achieves total regulatory compliance and massive monetary extraction without ever defending its statutory authority before a jury or an Article III judge.
4. The Self-Funding War Chest: The DOJ Asset Forfeiture Fund and Treasury Forfeiture Fund
Under Article I, Section 9, Clause 7 of the United States Constitution (the Appropriations Clause):
"No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law..."
The Founders intended that the executive branch would remain accountable to the citizenry through the House of Representatives' "power of the purse." If an agency abuses its regulatory power, Congress holds the constitutional authority to defund its enforcement programs.
Civil asset forfeiture systematically breaks this constitutional firewall through Permanent, Indefinite, Off-Budget Slush Funds:
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| THE FEDERAL ASSET FORFEITURE REVENUE CONDUITS |
+==============================+==================================+====================================================+
| STATUTORY FUND | GOVERNING CODE | ANNUAL BALANCE / USES |
+==============================+==================================+====================================================+
| Department of Justice Asset | 28 U.S.C. § 524(c) | $2.5 Billion – $4.0 Billion Annual Balance. |
| Forfeiture Fund (AFF) | (Established 1984) | Directly funds federal prosecutors, private asset- |
| | | tracking contractors, aircraft, and wiretaps. |
+------------------------------+----------------------------------+----------------------------------------------------+
| Department of the Treasury | 31 U.S.C. § 9705 | $800 Million – $1.5 Billion Annual Balance. |
| Forfeiture Fund (TFF) | (Established 1992) | Retained by IRS-CI, Secret Service, and CBP for |
| | | non-appropriated investigative operations. |
+------------------------------+----------------------------------+----------------------------------------------------+
| Equitable Sharing Program | 21 U.S.C. § 881(e) / | Over $500 Million distributed annually to local |
| (State/Local Police Pipeline)| 18 U.S.C. § 981(e) | police departments to bypass state forfeiture bans.|
+==============================+==================================+====================================================+
The Equitable Sharing Cartel
When state legislatures attempt to protect their citizens by passing state laws abolishing civil forfeiture (requiring a criminal conviction, as Nebraska, New Mexico, and North Carolina have done), federal agencies deploy the DOJ Equitable Sharing Program.
Under this scheme, local police departments pull over motorists on interstate highways (such as I-80, I-40, or I-95). When they discover large sums of cash, instead of prosecuting the seizure in state court under strict state laws, local police turn the seized cash over to a federal agency (such as the DEA or Homeland Security Investigations) for "federal adoption."
The federal agency processes the cash through federal administrative forfeiture under 18 U.S.C. § 981. Once forfeited, the DOJ returns up to 80% of the cash directly to the local police department's private bank account, while retaining 20% for the federal Asset Forfeiture Fund.
The local police bypass their own state constitution, their own state legislature, and their own state courts. The federal agency receives a 20% processing fee. The citizen loses their life savings.
And neither Congress nor state lawmakers have appropriated a single dime.
5. The Digital Frontier: Crypto Wallets, Unhosted Nodes, and Mass Warrant Sweeps
Nowhere is the post-Chevron forfeiture pipeline expanding more aggressively than across the frontier of cryptocurrency, decentralized finance (DeFi), and unhosted hardware wallets.
Having repeatedly suffered judicial rebukes when attempting to classify decentralized code and open-source software developers as "brokers" or "exchanges" through administrative guidance, federal agencies have pivoted directly to In Rem blockchain forfeiture complaints.
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| THE ANATOMY OF A BLOCKCHAIN IN REM SEIZURE ACTION |
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| |
| 1. THE CHAINALYSIS / TRM LABS SURVEILLANCE HEURISTIC |
| - Federal contractors run automated clustering heuristics across the public Bitcoin or Ethereum mempools. |
| - Transactions interacting with privacy-enhancing protocols (CoinJoins, Tornado Cash) are flagged as "tainted."|
| |
| 2. THE EX PARTE SEIZURE WARRANT |
| - A federal agent files an *in rem* affidavit alleging that unhosted address `0x...` holds property derived |
| from or involved in unlicensed money transmission (18 U.S.C. § 1960). |
| - A magistrate signs a seizure warrant authorizing OFAC blacklisting or exchange-hosted freezing. |
| |
| 3. THE IN REM FORFEITURE COMPLAINT |
| - DOJ files: *United States v. Approximately 2,840.12 Tether (USDT) Located in Account...* |
| - The property owner is not named. |
| - To contest the seizure, the owner must reveal their full real-world identity, tax records, and private keys. |
| |
| 4. THE DEFAULT FORFEITURE DECREE |
| - Facing the threat of an immediate retaliatory criminal tax indictment upon filing a claim, the majority of |
| crypto owners abandon the asset. |
| - The United States Marshals Service liquidates the crypto at auction, depositing millions into the AFF. |
| |
+======================================================================================================================+
Under this regime, the government no longer needs to win the legal argument that an unhosted wallet is a regulated financial institution under the Bank Secrecy Act. By seizing the tokens directly under civil forfeiture rules and daring the anonymous owner to step forward into a federal courtroom, the government enforces its policy through pure economic attrition.
6. The Constitutional Reckoning: Dismantling the In Rem Fiction
The post-Chevron era has revealed the administrative state's true character. When stripped of its intellectual veneer of "expert deference" and denied the luxury of private internal tribunals, the executive branch does not retreat to constitutional boundaries. It retreats to the exercise of raw custodial leverage.
To complete the restoration of constitutional order initiated by Loper Bright, Jarkesy, and Corner Post, the judicial and legislative branches must target the core legal fiction that enables this abuse:
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| THE FOUR PILLARS OF STATUTORY AND JUDICIAL RESTORATION |
+======================================================================================================================+
| |
| 1. JUDICIAL ABOLITION OF THE IN REM FICTION |
| - The Supreme Court must recognize that *in rem* civil forfeiture of domestic personal property is a |
| unconstitutional legal fiction that violates the Due Process Clause of the Fifth and Fourteenth Amendments. |
| - No property can be forfeited without a prior CRIMINAL CONVICTION of its human owner (*in personam*). |
| |
| 2. EXTENSION OF *JARKESY* TO ALL CIVIL FORFEITURE ACTIONS |
| - Civil forfeiture is punitive in nature (as recognized in *Austin v. United States* and *Timbs v. Indiana*). |
| - Therefore, any forfeiture of property exceeding $20 must guarantee the property owner an Article III |
| CIVIL JURY TRIAL under the Seventh Amendment, with the government bearing the burden Beyond Reasonable Doubt. |
| |
| 3. COMPLETE DEFUNDING OF OFF-BUDGET ASSET FORFEITURE FUNDS |
| - Congress must repeal 28 U.S.C. § 524(c) and 31 U.S.C. § 9705. |
| - All forfeited proceeds must be deposited strictly into the General Fund of the Treasury, with zero direct |
| reimbursement to the seizing law enforcement agency, permanently terminating the policing-for-profit incentive.|
| |
| 4. PROHIBITION OF THE EQUITABLE SHARING ADOPTION LOOPHOLE |
| - Federal agencies must be statutorily forbidden from adopting seizures from state or local police agencies |
| where state law prohibits civil forfeiture without a criminal conviction. |
| |
+======================================================================================================================+
Conclusion: The Final Fortress of Coercive Governance
The battle over the administrative state was never merely about fishing monitors in Loper Bright or hedge-fund fines in Jarkesy. It was about whether human beings in a constitutional republic are governed by known, enacted laws passed by elected representatives, or by an autonomous managerial elite operating outside constitutional constraints.
By striking down Chevron, the Supreme Court took away the administrative state's pen.
By enforcing Jarkesy, the Court took away its gavel.
In response, the administrative state has picked up the badge and the seizure warrant.
Until civil asset forfeiture is completely abolished—until the state is forced to prove a human being guilty of a crime before a jury of their peers before touching a single cent of their property—the administrative state will continue to rule. It will simply do so not through published regulations in the Federal Register, but through armed seizures on the highway, frozen bank accounts, and non-judicial forfeiture declarations signed in windowless agency basements.
The fight for constitutional liberty did not end with Loper Bright. It has merely moved to the forfeiture docket.