The Texas attorney general's office submitted a 91-page affidavit to a state court claiming the 1,600-acre YFZ Ranch was purchased with laundered money from illegal activities "in a failed attempt to establish a remote outpost where they could insulate themselves from criminal prosecution for sexually assaulting children."
Jeffs was tried and convicted in 2011 and is serving a prison sentence for sexually abusing two girls. His fundamentalist sect bought the west Texas ranch in 2003.
Its YFZ name reportedly stands for "Yearning for Zion," The Salt Lake (Utah) Tribune said.
Texas and federal law enforcement officials raided the property in 2008 acting on a false tip that a girl was being held against her will at the ranch. Instead, they found evidence of underage marriage and sexual abuse of children.
Nine members of the Fundamentalist Church of Jesus Christ of Latter Day Saints group, including Jeffs, were convicted of bigamy or sexual assault of minors at the compound.
"Based on a through financial audit of the FLDS's bank accounts, the affidavit details how the purchase of the ranch itself and the construction of a massive compound on ranch property were financed with the proceeds of illegal money laundering," the attorney general office's release said.
A judge in the same West Texas court where Jeffs was convicted will schedule a hearing on the state's effort to seize the ranch, the Tribune said.