In United States v. Huntington National Bank, the Sixth Circuit reversed a district court decision that had rejected a claim by Huntington Bank in connection with a criminal forfeiture proceeding.  The bank held an account by a company that was later found to have engaged in fraudulent activity.  In connection with the government's prosecution of the company, it seized over $700,000 from a bank account at Huntington.  Huntington, however, had a security interest in those proceeds based on loan agreements with the company. 

In an opinion by Judge Gibbons, the Court held that BFP status was an issue of federal law and that one who takes a security interest in property in exchange for antecedent debt can be a BFP of a property interest.  The Court also rejected the government's argument that a secured party could not be a BFP, drawing a distinction between a right of setoff and a security interest.  The Court likewise made short work of the government's effort to differentiate between tangible and intangible property, concluding that Congress intended BFP protections to apply to both.  Finally, as yet another reminder about the importance of waiver during trial proceedings, the Court soundly rejected the government's effort to question Huntington's status as a BFP.  In prior filings at the trial court, and in a prior appeal the government had conceded that Huntington had no knowledge of fraud.  Its effort to retreat from those statements in this present appeal was not looked upon favorably by the Court.