Claimant argues that the Complaint should be dismissed because the United States did not timely notify Claimant of its intent to initiate forfeiture of the Defendant currency. Section 983(a)(1)(A)(iv) of the Civil Asset Forfeiture Reform Act of 2000 (“CAFRA”) provides, “In a case in which the property is seized by a State or local law enforcement agency and turned over to a Federal law enforcement agency for the purpose of forfeiture under Federal law, notice shall be sent not more than 90 days after the date of seizure by the State or local law enforcement agency.” A claimant is entitled to judicial relief if he received inadequate notice. Section 983(e) states:

(1) Any person entitled to written notice in any nonjudicial civil forfeiture proceeding under a civil forfeiture statute who does not receive such notice may file a motion to set aside a declaration of forfeiture with respect to that person’s interest in the property, which motion shall be granted if – - (A) the Government knew, or reasonably should have known, of the moving party’s interest and failed to take reasonable steps to provide such party with notice; and (B) the moving party did not know or have reason to know of the seizure within sufficient time to file a timely claim.  18 U.S.C. § 983(e)(1).

The circumstances surrounding this case do not support dismissal of the Complaint. The Defendant currency was seized by law enforcement on November 28, 2011. Following the seizure, the United States attempted to notify Claimant by sending written notice to multiple addresses on several dates, including January 9, 2012, February 29, 2012, and March 16, 2012. Claimant ultimately received notice on approximately March 6, 2012, ninety-nine days after the November 28, 2011 seizure. It is apparent that the United States reasonably attempted to notify Claimant within the ninety-day time frame. Moreover, the delay in Claimant’s receipt of notice was minimal. United States of America v. $63,530.00 In United States Currency, No. 8: 12-CV-201 (D.Neb. May 10, 2013).

The memorandum and order is silent on which forfeiture notice(s) the court considered reasonably calculated to reach the claimant within the ninety-day time frame contemplated at 18 U.S.C. § 983 but one hopes that the court does not accept the latter notices, both apparently sent more than ninety days from the seizure, as probative of reasonable attempts. The opinion is equally silent on which notice(s) the claimant received and why the court believes it is apparent that the United States reasonably attempted to notify the claimant within the ninety-day time frame.

The court does, however, seem dismissive of the ninety-day deadline that Congress imposed on the Government pursuant to the Civil Asset Forfeiture Reform Act of 2000–which seems a bit unfair in light of repeated Eighth Circuit holdings “that district courts may require claimants in forfeiture proceedings to comply strictly with [the Supplemental Rules] in presenting their claims to the court.” United States v. $1,000.00 Refunded to Mango Creek Properties, Inc., No. 8: 11-CV-372 (D. Neb. Jan. 27, 2012) quoting United States v. Three Parcels of Real Property, 43 F.3d 388, 391 (8th Cir. 1994).

Perhaps connected, Virginia ABC apparently received three recent payments totaling slightly more than $753,000 from the U.S. Department of Justice’s Asset Forfeiture Fund. Such payments are frequently used to evade state laws directing forfeitures to education. The process, known as equitable sharing, permits state agencies (including those otherwise restricted from profiting on forfeitures) to give seizures to federal authorities. Federal authorities, in exchange, forfeit the property and give a percentage of the proceeds (frequently 80%) to the agency that brought the seizure.

In an attempt to avoid a question that I submitted to my local newspaper, Sheriff Chris Clinton of Towns County made harsh accusations directed toward me that have nothing to do with the issue at hand. The question was never published in the article to correspond with the response given by the sheriff, leaving the consumers of the Towns County Herald with new questions. Such as how could an attorney be used to intimidate law enforcement? And more importantly, leaving the question originally asked unanswered and unheard.

My question was for the sheriff of Towns County, Chris Clinton.

“If a person is found innocent of his or her criminal charges, any seized property is still subject to forfeiture pursuant OCGA 16-13-49. Most of the time this happens before a person is ever tried for the accusations against them. Legal representation is not provided for those who cannot afford to hire an attorney, making a forfeiture case difficult to win. My question is not about the legality of this issue, but rather the personal opinion of our sheriff in regards to this issue, since the option to pursue such a case is at his discretion. How does our sheriff feel about having the rights to a person’s personal property before they are even found guilty of a crime? Or after they are found innocent in a court of law?” –Chris Ledford

His response typical of many politicians these days, to change the subject by calling people names.

Was “recently it has come to my attention that brazen criminals are now attempting to intimidate witnesses, and law enforcement through attorneys, social media, the press, and other means. For these individuals I want to be very clear: As long as I’m allowed to serve as Sheriff, I will aggressively investigate and arrest ALL drug dealers.”

“By seizing their unlawfully obtained assets, which they did not work for, the incentive to commit the crime is taken away. That is in my opinion the reason the State of Georgia has decided that law enforcement should seize those assets –assets purchased with the proceeds of poisoning our children and our communities.” –Chris Clinton

Now, this might have been a good answer if I was asking for what the state of Georgia had originally intended for this law to do. And I’m sure the sheriff had good reason to completely ignore the fact that I’m talking about people who have never even been convicted of a crime.

But regardless of whether or not the sheriff chose to answer my question, or just simply beat around the bush a little bit. I think it’s a good question for every sheriff of every county in the state of Georgia, because it shows the moral character of the sheriff that the people elect in their county to serve and protect them. And I think most people would agree, that if a person is found innocent of the accusations against them, their property should be returned!

But I’m not trying to talk to you about the morality of police these days, or how bias the media can be. Instead, I’m trying to bring to your attention something far more important! A law so unjust, so unconstitutional, that it questions the very freedoms that our country was founded on. I’m talking about civil forfeiture.

And I know most of you are probably thinking about what society has come to accept when it comes to the seizure of property and its involvement with criminal activity. Which is if you get caught committing a crime, the police are going to take your stuff! But this commonly thought of criminal procedure is not to be mistaken for civil forfeiture.

Civil forfeiture as Sheriff Clinton pointed out, was designed to penalize a person engaged in criminal activity. I would never debate this. In fact, I agree that if a person is found to have committed a crime, they should be punished accordingly. But to deprive that person of certain procedural rights, such as the right to jury or the right to counsel, and to force that person to represent themselves in a case with such a direct relation to their criminal case that any question they answer could have a devastating effect on the outcome of that criminal case. To label a person guilty as charged! …Well these are just a few of the reasons that I strongly stand against civil forfeiture, and the government’s authority to legally rob hard working Americans all across the country.

Because you see, civil forfeiture is not just a way to punish criminals. It’s a civil action against the property itself. This means you don’t even have to be charged with a crime before they can take your stuff! In fact, my studies from the US department of Justice have shown that up to 90% of Americans facing civil forfeiture are never even charged with a crime, much less convicted.

But the saddest part about this law is that it’s not even necessary in getting the same end result of its naive intentions for punishing criminals. That’s because There is already a criminal statute that allows the forfeiture of these same assets upon a person’s conviction. So why take a person to civil court for the possession of their property if those possessions are going to be taken anyways after a criminal proceeding? What kind of incentive could the government possibly have in doing so? Well, aside from being able to take from the innocent, Georgia allows 100% of the proceeds from civil forfeiture cases to go to local law enforcement. This offers a huge initiative for police to target an individual based on their property instead of their actions

Now people, we need to reform civil forfeiture law, And I’m not the first person to realize this. In fact, There are many organizations out there who are fighting for our rights, and will continue to do so as long as our freedoms are in jeopardy. One of which, a litigation team known as the Institute for Justice has already introduced the need to reform civil forfeiture law. They’ve gone to Georgia law makers with a proposal of three key elements. One being that law enforcement should not profit from civil forfeiture. Two being that an innocent owner not charged with a crime should have no problem getting their property back. And most importantly, A conviction should be required before civil forfeiture takes place!

But the truth is they need your help in getting this pushed through congress. That’s why I encourage each and every one of you to stand up for what you believe in. Let your representative know that you support the legislation designed by the Institute for Justice. And lets put an end to the hardships of civil forfeiture, and make our country a better place for tomorrow.

Addendum: The Institute for Justice’s model forfeiture legislation is here. AFR’s prior coverage of Georgia forfeiture issues is here.

Retired law enforcement veteran Stephen Downing, former captain of detectives in the LAPD, says he has not seen proof that the police officers failed to adequately respond to information in this case; indeed, police cannot possibly crack every case and investigate every angle all the time. At the same time, we must recognize that police are incentivized to go after certain crimes — like drug crimes — and not other, far more heinous crimes, like rape.

In the first place, federal cash giveaways make police departments’ reactions to drug cases much more swift and severe.

“The statistical demands of the drug war and the grants that come from the federal government — all they do is incentivize our local police to chase drugs and chase seizures so they can supplement their budgets,” Downing said. “We call that ‘policing for profit.’”

Furthermore, allowing military training of local police has “turned our police into drug warriors,” instead of “police officers and peace officers.”

“Every police department, every sheriff’s department,  and the federal government have personnel that are dedicated 100 percent of the time to drug enforcement,” said Downing, “and the result of that is to use police resources for that purpose.”

Perhaps the strongest example of how drug war policing can distract resources from more pressing problems is the use of department laboratories. In Ohio, police agencies across the state have sent more than 2,300 untested rape kits to a state crime lab for testing. Some of them are decades old, and could contain vital clues regarding suspects in rapes. But they’ve been backed up in police departments across the country.

“What they don’t talk about is why do they have that backlog in the first place?” said Downing. “The answer is that drugs take a priority because they often involve people in custody, and they’re going to be in court, so when they show up in court, they’re going to have those tests. Thousands and thousands of tests run through our police labs for drugs when most of the time it’s a personal use decision. Most of the time it’s a recreational use of drugs rather than an abuse of drugs. But our criminal justice system is completely involved in dealing with drug crime rather than dealing with crime that truly affects public safety, like property and crimes against persons.”

Praising the man who helped Amanda Berry escape, Stephen Downing also says police need to become more involved with their communities.

“The community is involved in solving these cases and the willingness of people is helpful,” he said. “If the police would recognize more the true value of their community — that the people are the police and the police are the people — rather than chasing drugs and asset seizures and policing for profit modalities, all our communities would be better off and more aware.”

 

“Based on information from a confidential informant, the Drug
Enforcement Group began investigating Peloza for drug activity. Investigator
Jonathan Rivamonte made contact with Peloza and made arrangements to
purchase approximately one ounce of marijuana for $355. After that sale,
Rivamonte asked Peloza for a larger quantity. Peloza agreed to sell him another
six ounces of marijuana for about $1500. The sale was not completed, as Peloza
was arrested and charged with felony possession with intent to deliver marijuana.

Peloza entered a deferred prosecution agreement in which he pled
guilty to misdemeanor possession. Peloza successfully completed the agreement
and, upon payment of a $250 fine, Peloza’s conviction was ordered expunged. In
the meantime, the State filed a summons and complaint for the forfeiture of
Peloza’s car, a 2009 Mitsubishi Lancer GTS, because it had been used to transport
drugs. After the criminal case was resolved, the forfeiture case proceeded….”

“…When we consider the factors in this case, it is patently obvious that
forfeiture of Peloza’s car is excessive. Certainly, drug sales are not to be
encouraged, but Peloza was ultimately convicted of mere possession. Peloza’s
offense did not involve violence, did not result in injury to anyone, and was not
gang related. There is no suggestion that Peloza is a large-scale drug dealer, and
he had no prior criminal record. The total value of the drugs he sold was less than
$2000. The State apparently does not view the offense as exceptionally serious, as
it was willing to permit a disposition resulting in expunction of the conviction and
payment of a small $250 fine. The maximum fine for misdemeanor possession
was $1000, and even for the originally charged felony, the maximum fine was
only $10,000. Forfeiture of a $16,000 vehicle is unconstitutionally
disproportionate to the offense at hand. Upon remand, the circuit court shall
vacate the forfeiture order, direct return of the car to Peloza, and dismiss the
State’s forfeiture complaint.” State v. Peloza et al., Wis. Ct. App. 2012AP1650 (Unpublished)

H/T  Bruce Vielmetti of the Milwaukee-Wisconsin Journal Sentinel

In Maryland, the Baltimore Police Department is reportedly using asset forfeiture funds to fly a member of the department brass to Sweden for a peace-keeping course offered by the United Nations.

North Carolina considers a bill to expand asset forfeiture against real property for nuisance abatement. Included in the bill is a provision allowing authorities to retain forfeited property for official use. Assuming retained use did not constitute forfeiture proceeds, the bill would appear to provide departments who’ve had access to the U.S. Department of Justice’s equitable sharing program suspended a way to continue legally profiting from forfeitures. North Carolina’s Constitution requires that “the clear proceeds of all penalties and forfeitures and of all fines collected in the several counties for any breach of the penal laws of the State, shall belong to and remain in the several counties, and shall be faithfully appropriated and used exclusively for maintaining free public schools.” North Carolina law enforcement departments largely run seizures through the U.S. Department of Justice’s equitable sharing program to evade such constitutional directives.

Pennsylvania police chief resigns amid allegations of “unauthorized withdrawals and deposits on the account funded through the Department of Justice’s Asset Forfeiture Program.”

Illinois ranked last (again) among the several states in personal freedoms as a result of their draconian asset forfeiture laws and anachronistic (and draconian) drug laws.

Alabama authorities released figures indicating a $14,000.00 state trooper cost for a raid in which troopers seized some 1,600 gaming devices and more than $220,000.00 in cash from the Victoryland Casino. Law enforcement claim the gaming devices are being used illegally. Victoryland Casino disagrees. Law enforcement are currently fighting to remove the presiding judge due to the judge’s previous unwillingness to sign a warrant authorizing the seizure of the gaming devices.

Questions raised about an outgoing Georgia sheriff’s rapid depletion of the asset forfeiture fund account: “The federal forfeiture account in July had more than $2 million, but by December had about $1,000 after checks had cleared after the audit, Woodruff said. The audit report showed that more than $1.1 million in merchandise or funds from this account were given to Georgia State Patrol headquarters in Atlanta to be distributed to posts statewide.” A retired Chief Deputy wrote a letter in October warning that the give-away constituted a concerted effort to sabotage the incoming sheriff.

In Missouri and Montana, city councils approve expenditures of asset forfeiture funds while expressing concerns that forfeiture fund accounts are stocked by seizing property from people who haven’t been convicted of crimes.

The Asset Forfeiture bill for 2013 has passed committees in both the Tennessee House and Senate, which is good news.  The bad news is that the bill was entirely rewritten first.

In what is called an amendment, the entire wording of the bill (HB1078 in the House) was literally deleted and new wording replaced it.

The original bill provided a “second opinion” had to be obtained from a judge before the cop who stops you on the roadside could take your stuff – cash, car – even your house.  Only after the judge had approved the sense of the officer that there was probable cause to support the claim that your property had been the proceeds of or used to perpetrate an illegal act could the seizure warrant be issued, and your stuff be taken by the officer.  Then you would still have the opportunity to defend your ownership in court:  If you were found innocent, or not prosecuted at all, then your stuff had to be returned to you.

Under present law, the officer takes your stuff, gives you a receipt that tells you he has it, and you can file suit to recover it – after a forfeiture warrant turns ownership over to the agency involved.  The officer’s alleged “probable cause” is heard by the judge in an “ex parte” hearing – you are forbidden to be present as ownership of your things is disposed of.

That is what we had hoped to end.

What the amendment – the complete rewriting, actually – accomplished was to change the forfeiture hearing from ex parte to one where you are invited to defend your ownership, and show that there was no crime or other excuse to take your stuff.  That is a big step, and beneficial, for sure.  But it still allows them to take your stuff, and you have to go through a legal procedure where you are standing alone against an entire institution of experienced and authoritarian professionals, to show that you are not guilty of any illegality, and neither is your stuff.

The District Attorneys of the state could not hide their complicity in “Policing for Profit,” and had to agree that the current process in simply inexcusable.  But they persuaded – with the help of the bill’s sponsor, I have to say – the committees that there was a necessity to allow the takings on-the-spot to remain in the law.

Again, Representative Barrett Rich is to be commended for bringing the subject to the Assembly.  And the result will, indeed, be a significant improvement in property right protection.  But significant and sufficient are two different things.

“As the two top law enforcement officials in Navajo County, we cannot allow the Rutherford Institute’s ill-informed propaganda – “Governmental highway robbery: Asset forfeiture and the pillaging of the American people” (March 29) – to pass without a fact-based response. John Whitehead’s cynical column, passing off two cherry-picked anecdotes as an asset-forfeiture crisis, does Navajo County public safety and our taxpayers a grave disservice.

The truth? Far from terrorizing innocents, asset forfeiture allows the Sheriff’s Office, the County Attorney’s Office and local police departments to use money and property legally seized from drug syndicates and human smuggling cartels to fight those very same criminals.

At a time when Navajo County is resource-strapped – the county is down 76 positions compared to 2009, including six prosecutors, while current county revenues stand at 2004 levels – this funding taken from criminals can mean the difference between doing more with less or doing nothing at all.

While Rutherford’s writer insinuates that police agencies target the defenseless poor to grab their life savings, nothing could be further from the truth. Whitehead conveniently ignores the requirement that probable cause exist before a criminal stop can take place, much less an asset forfeiture. Additionally, Rutherford’s hyperbole – that police officers and prosecutors represent “an overlord bent on depriving us of our most inalienable and fundamental rights” – ignores the fact that asset forfeitures are contested in court and require the approval of a judge.

No one in Navajo County law enforcement is bent on putting “brow-beaten subjects in bondage.”

Most of the seizures in Navajo County come from criminals using the I-40 corridor to transport drugs and cash, or using our surface streets to move drugs, money and human cargo while avoiding the freeway. Once seized, these criminals’ resources are plowed back into crime prevention efforts like the Navajo County Major Crimes Apprehension Team (MCAT), a multi-agency effort uniting the county, the Arizona Department of Public Safety and five local police departments.

Navajo County MCAT – which we couldn’t afford without asset forfeiture funding – made more than 500 drug-related arrests in fiscal year 2012. MCAT officers confiscated more than $2 million worth of drugs, including 778 pounds of marijuana, more than 8,000 grams of meth and 5,844 grams of heroin. We seized 34 vehicles, 23 weapons and nearly $200,000 in cash.

According to Rutherford – a group that not surprisingly supports drug legalization – public safety and taxpayers should be deprived of resources essential to fighting crime, while criminal cartels should be allowed to keep the proceeds of their lucrative illegal enterprises. This approach would gut highly effective operations like the Southwest Border High Intensity Drug Trafficking Area Arizona Partnership, which brings together federal, state and local assets to secure our border against drug traffickers. Locally, we would be forced to gut valuable efforts like the We Tip crime hot line, the Partnership For a Drug-Free America and the Show Low Drug Court.

Rutherford suggests that offices like ours, tasked with keeping the public safe, function as “militarized extensions of the government.” That accusation falls flat when you consider the source: a think tank playing fast and loose with the facts while serving as a legitimate-seeming extension of narco-terrorists and criminal cartels.” Navajo County Attorney Brad Carlyon and Navajo County Sheriff K.C. Clark, Asset forfeiture a valuable tool for public safety, taxpayers, The White Mountain Independent, 05 Apr. 2013.

A couple of quick thoughts:

1.) Carylon and Clark’s statement about the Rutherford Institute (and by extension anyone supportive of drug legalization) is insulting and wrong. Furthermore, it states the relationship backwards. Drug-prohibition enforcement subsidizes violent narco-terrorism by inflating the profitability of selling illicit drugs and directing control of supply and distribution to violent cartels. These aren’t new concepts. They shouldn’t be difficult to grasp either. To be clear, prohibitionists do have cogent arguments against legalization. I find them wholly unpersuasive but there are reasonable arguments available. What Carylon and Clark advance though is nonsense.

2.)  Our biggest complaint isn’t that law enforcement aren’t using a legal process to self-appropriate private property (although we obviously object to illegal takings as well). Rather, we complain loudest at the legal processes permitting law enforcement to self-appropriate property from innocents. Carylon and Clark’s suggestion that individuals suffering property forfeitures are members of drug syndicates and human smuggling cartels does nothing to establish that they are in fact members of such criminal syndicates–as their wanton defamation of the Rutherford Insititute as “serving as a legitimate-seeming extension of narco-terrorists and criminal cartels” reinforces. Moreover, U.S. Department of Justice findings indicate a majority of asset forfeitures are administrative forfeitures–which require neither conviction nor criminal charge.

3.) Carylon and Clark indicate that taxpayers would somehow be deprived if police were to lack the power to self-appropriate through asset forfeiture. It’s a frequent refrain. It’s also false. Police appropriations properly rest with local elected representatives. Generally taxpayers and their representatives are neither given the power to appropriate those resources elsewhere nor are they under any duty to provide the funds for what police would do with asset forfeiture proceeds. Moreover, it is wholly inappropriate for police to determine whether and to the extent that they are “deprived of resources essential to fighting crime.”  A community’s power to control police appropriations is essential. It is the community’s power to compel the policing that the community wants. The degree that the community is not in charge of its police budget is the degree to which it lacks control over its police. It’s not mere coincidence that police militarization happened along with  these Achaean gifts of coercive federal law enforcement grants, police power to self-appropriate, and federal equitable sharing dollars.

Eight years ago this week, on a sunny, clear, but windy and hence cold day, near a wide spot in the road called Garryowen on the vast prairie of southern Montana an hour north of the Wyoming border, vans full of armed, SWAT-geared federal agents sped down I-80.  Garryowen is a private town owned by Christopher Kortlander that features, among other structures, a gas station, a convenience store, a fast-food outlet, an arts and crafts store (“The Trading Post”), and the Custer Battlefield Museum.  The vans skidded to a stop before the museum and the agents leaped out as they drew weapons, surrounded and stormed into the museum, and held its employees at gun point.

The agents were there to serve a warrant and collect evidence as to Mr. Kortlander’s alleged illegal sale, on eBay, of a cavalry uniform button.  Mr. Kortlander said he recovered the button on private land, which is legal; however, a Bureau of Land Management (BLM) agent asserted that, working undercover, he sold Mr. Kortlander the button, which contained a government “microdot” tag secreted on the back.  Mr. Kortlander responded that the button was exactly like numerous others in his collection and that he had shipped the tainted button by mistake.  He maintains that none of the buttons in his collection was recovered from public or Indian lands; sale or traffic in archeological resources from such lands is illegal.

The federal agents were unrepentant.  Three years and six months later, almost to the day, they stormed the museum again.  The agent who filed the 2005 affidavit swore out a new affidavit asserting that, while he was in the museum, he saw items containing bald and golden eagle feathers, the sale of which is illegal, and that, based on the testimony of confidential informants, Mr. Kortlander planned to sell these items.  More artifacts were seized, including an American Indian war bonnet, headdress, medicine bundle, and shield.

Over a period of four and a half years, the U.S. Attorney’s office in Billings, Montana, repeatedly threatened to file criminal charges against Mr. Kortlander, threats sweetened with offers of various plea bargain options.  Mr. Kortlander hired a criminal defense lawyer and fought back as best he could, but the years took a terrible toll financially and emotionally.  He feared he would be indicted, suffer through a lengthy criminal trial, and be sentenced to years in federal prison.  Courageously, Mr. Kortlander maintained he was innocent and refused to agree to any deal.  Incredibly, days later, in August 2009, the Assistant U.S. Attorney wrote that the federal government will “not be seeking prosecution in this case.”

In the same letter, the federal government said it was “reviewing” the items seized by the BLM agents to determine “whether they can be legally possessed by [Mr. Kortlander and the museum].”  Over time, all but twenty items—those with bald and golden eagle feathers—were returned.  The retained items, claims the federal government, were contraband per se because the possession of items containing such feathers is illegal under federal law and neither Mr. Kortlander nor the museum had the requisite federal permit.  Not so argued Mr. Kortlander and the museum, the feathers contained in the artifacts pre-date the Bald and Golden Eagle Protection Act and the Migratory Bird Treaty Act.

No matter, the United States refuses to return the artifacts.  It asserts that, because Mr. Kortlander has no documentary evidence proving from whom or when he acquired the items—despite his compliance with federal law as to how long he must keep such records—it need not return them.  Moreover, the United States maintains that it is not its obligation to prove the artifacts are illegally in the museum’s possession, but—relying in part on an affidavit from a convicted felon—the duty of Mr. Kortlander and the museum to prove their rightful ownership.  Might, argues the federal government in federal court in Montana, makes right.

Addendum: AFR previously covered the Kortlander story here.

 By John W. Whitehead March 26, 2013

“This is the problem when police officers and police departments have a financial interest in doing their job. We got rid of bounty hunters because they were not a good thing. This is modern day bounty hunting.”—Public Defender John Rekowski

Long before Americans charted their revolutionary course in pursuit of happiness, it was “life, liberty, and property” which constituted the golden triad of essential rights that the government was charged with respecting and protecting. To the colonists, smarting from mistreatment at the hands of the British crown, protecting their property from governmental abuse was just as critical as preserving their lives and liberties. As the colonists understood, if the government can arbitrarily take away your property, you have no true rights. You’re nothing more than a serf or a slave.

The Fifth Amendment to the U.S. Constitution was born of this need to safeguard against any attempt by the government to unlawfully deprive a citizen of the right to life, liberty, or property, without due process of law. Little could our ancestral forebears have imagined that it would take less than three centuries of so-called “independence” to once again render us brow-beaten subjects in bondage to an overlord bent on depriving us of our most inalienable and fundamental rights.

The latest governmental scheme to deprive Americans of their liberties—namely, the right to property—is being carried out under the guise of civil asset forfeiture, a government practice wherein government agents (usually the police) seize private property they “suspect” may be connected to criminal activity. Then—and here’s the kicker—whether or not any crime is actually proven to have taken place, the government keeps the citizen’s property, often divvying it up with the local police who did the initial seizure.

For example, the federal government recently attempted to confiscate Russell Caswell’s family-owned Tewksbury, Massachusetts, motel, insisting that because a small percentage of the motel’s guests had been arrested for drug crimes—15 out of 200,000 visitors in a 14-year span—the motel was a dangerous property. As Reason reports:

This cruel surprise was engineered by Vincent Kelley, a forfeiture specialist at the Drug Enforcement Administration who read about the Motel Caswell in a news report and found that the property, which the Caswells own free and clear, had an assessed value of $1.3 million. So Kelley approached the Tewksbury Police Department with an “equitable sharing” deal: The feds would seize the property and sell it, and the cops would get up to 80 percent of the proceeds.

Thankfully, with the help of a federal judge, Caswell managed to keep his motel out of the government’s clutches, but others are not so fortunate. One couple in Anaheim, Calif., is presently battling to retain ownership of their $1.5 million office building after the U.S. Drug Enforcement Administration filed an asset-forfeiture lawsuit against them because one of their tenants allegedly sold $37 in medical marijuana to an undercover agent.

Some states are actually considering expanding the use of asset forfeiture laws to include petty misdemeanors. This would mean that property could be seized in cases of minor crimes such as harassment, possession of small amounts of marijuana, and trespassing in a public park after dark.

As the Institute for Justice points out:

Civil forfeiture laws represent one of the most serious assaults on private property rights in the nation today.  Under civil forfeiture, police and prosecutors can seize your car or other property, sell it and use the proceeds to fund agency budgets—all without so much as charging you with a crime.  Unlike criminal forfeiture, where property is taken after its owner has been found guilty in a court of law, with civil forfeiture, owners need not be charged with or convicted of a crime to lose homes, cars, cash or other property.

Americans are supposed to be innocent until proven guilty, but civil forfeiture turns that principle on its head.  With civil forfeiture, your property is guilty until you prove it innocent.

Relying on the topsy-turvy legal theory that one’s property can not only be guilty of a crime but is guilty until proven innocent, government agencies have eagerly cashed in on this revenue scheme, often under the pretext of the War on Drugs. By asserting that someone’s personal property, a building or a large of amount of cash for example, is tied to an illegal activity, the government—usually, the police—then confiscates the property for its own uses, and it’s up to the property owner to jump through a series of legal hoops to prove that the property was obtained legally.

Despite the fact that 80 percent of these asset forfeiture cases result in no charge against the property owner, challenging these “takings” in court can cost the owner more than the value of the confiscated property itself. As a result, most property owners either give up the fight or chalk the confiscation up to government corruption, leaving the police and other government officials to reap the benefits. For example, under a federal equitable sharing program, police turn cases over to federal agents who process seizures and then return 80% of the proceeds to the police.

Asset forfeitures can certainly be lucrative for cash-strapped agencies and states. In the fiscal year ending September 2012, the federal government seized $4.2 billion in assets, a dramatic increase from the $1.7 billion seized the year before. Between 2004 and 2008, police in Jim Wells County, Texas seized over $1.5 million. The Metropolitan Police Department in Washington, D.C. collected $358,000 from civil forfeiture in fiscal year 2011, and $529,000 from federal equitable sharing. The State Attorney’s Office in Madison County, Illinois, made $500,000 from asset forfeiture over the course of eight years.

Often, these governmental property grabs take the form of highway robbery (literally), where police officers extract money, jewelry, and other property from unsuspecting motorists during routine traffic stops. As Mother Jones quips, “forfeiture corridors are the new speed traps.” Indeed, states such as Texas, Tennessee, and Indiana are among the worst offenders. Mother Jones continues:

You all know what a speed trap is, right? If you have a highway running through your small town, you can make a lot of money by ticketing out-of-state drivers who are going one or two miles per hour over the speed limit. How many victims are going to waste time trying to fight it, after all? But have you heard about “forfeiture corridors”? That’s a little different — and quite a bit more lucrative. All you have to do is pull over an out-of-state driver for supposedly making an unsafe lane change, have your police dog sniff around for a bit of marijuana residue, and then use civil asset forfeiture laws to impound any cash you might find. Apparently it’s especially popular on highways leading into and out of casino towns.

In typical fashion, these police traps tend to prey on minorities and the poor, as well as undocumented immigrants and individuals who happen to have large amounts of cash on hand, even for lawful reasons. One such person is Jerome Chennault, who fell prey to Madison County, Illinois’ forfeiture corridor in September 2010. En route to Nevada after a visit with his son, Chennault was pulled over by police for allegedly following another car too closely. When police asked to sweep Chennault’s car with a drug dog, Chennault obliged, believing that he had done nothing wrong and had nothing to hide and completely unaware that he had fallen into a forfeiture trap.

During the search, the drug dog alerted on a black bag in the back seat of the car which contained about $22,000 in cash. The money, Chennault explained, was intended for a down payment on a home.  The dog did not find any drugs in the car, nor was there any evidence of criminal activity. However, instead of letting Chennault go on his way with a traffic citation, the police confiscated the cash, claiming that since the drug dog alerted to it, it must have been used in the commission of a drug crime. Chennault challenged the seizure in court, after months spent traveling to and from Illinois on his own dime, and eventually succeeded in having his money returned, although the state refused to compensate him for his legal and travel expenses.

Tenaha, Texas, is a particular hotbed of highway forfeiture activity, so much so that police officers keep pre-signed, pre-notarized documents on hand so they can fill in what property they are seizing. Between 2006 and 2008, for instance, Tenaha police seized roughly $3 million.

As Roderick Daniels discovered, it doesn’t take much to get pulled over in a forfeiture corridor like Tenaha’s. Daniels was stopped in October 2007 for allegedly traveling 37 mph in a 35 mph zone. He was ordered to hand over his jewelry and the $8,500 in cash he had with him to purchase a new car. When he resisted, he was taken to jail, threatened with money-laundering charges and “persuaded” to sign a waiver forfeiting his property in order to avoid the charges.

In an even more egregious case, Jennifer Boatright and Ron Henderson, an interracial couple travelling through Tenaha, were forced to forfeit the $6,000 cash they had with them to buy another car when police threatened to turn their young children over to Child Protective Services. Another traveler, Maryland resident Amanee Busbee, was also threatened with losing her child to CPS after police stopped her, her fiancé and his business partner when they were en route to Houston with $50,000 to complete the purchase of a restaurant. Boatright and Busbee were eventually able to reclaim their money after mounting legal challenges.

Comparing police forfeiture operations to criminal shakedowns, journalist Radley Balko paints a picture of a government so corrupt as to render the Constitution null and void:

Police in some jurisdictions have run forfeiture operations that would be difficult to distinguish from criminal shakedowns. Police can pull motorists over, find some amount of cash or other property of value, claim some vague connection to illegal drug activity and then present the motorists with a choice: If they hand over the property, they can be on their way. Otherwise, they face arrest, seizure of property, a drug charge, a probable night in jail, the hassle of multiple return trips to the state or city where they were pulled over, and the cost of hiring a lawyer to fight both the seizure and the criminal charge. It isn’t hard to see why even an innocent motorist would opt to simply hand over the cash and move on.

In an age in which the actions of the police—militarized extensions of the government—are repeatedly sanctioned by the legislatures and the courts, hard-won concessions such as the U.S. Supreme Court’s 5-4 ruling in Florida v. Jardines that the use of drug-sniffing dogs to carry out warrantless searches of homes is unconstitutional comes as little comfort. After all, it was not long ago that this very same court sanctioned the use of drug-sniffing dogs in roadside stops, a practice that has proven extremely profitable for law enforcement officials tasked with policing the nation’s forfeiture corridors.

Always nice to see approving cites of Boyd v. United States (1886) and Entick v. Carrington (1765).

It continues to be disturbing that the Justices seem blindly accepting of unsupported assertions about trained drug-dogs.

More thoughts later.

Utah’s HB0384 would, among other things, limit cost-shifting awards to 20% of the value of the property:
769          Section 21. Section 24-4-110 is enacted to read:
770          24-4-110. Attorney fees and costs.
771          (1) In any forfeiture proceeding under this chapter, the court may award a prevailing

772      party reasonable:
773          (a) legal costs; and
774          (b) attorney fees.
775          (2) The legal costs and attorney fees awarded by the court to the prevailing party may
776      not exceed 20% of the value of the property.
777          (3) A party that prevails only in part is entitled to recover reasonable legal costs and
778      attorney fees only on those issues on which the party prevailed.

That effectively removes the incentive for forfeiture attorneys to provide counsel for fee-shifting awards alone unless the value of the property is immense–which predicts an escalation in uncontested forfeiture actions and in claims rejected for failing to adhere to procedural mandates.

Moreover, it should be stressed that such awards can only occur where the government takes someone’s stuff and the claimant substantially prevails. That is, where the government could not establish, even under laws favoring the government, that the government should be entitled to acquire the property. In such an environment, it simply makes no sense to limit recovery of costs.

Generally, present law provides for forfeiture of assets in connection with criminal activity or other violations of law. This bill states that the rights of any owner or owners of property provided for in this bill will supersede and override all Tennessee procedures, statutes and regulations governing forfeiture of property to the state or any county or municipality, whether the property is real, personal, or in other form. This bill further states that to the extent any statute, regulation or procedure is in conflict with this bill, the conflicting provisions will be null and void.

This bill provides that no seizure of any property may be executed without first obtaining a seizure warrant issued by a magistrate who is popularly elected within the county where the seizure is to be executed. If the seizure warrant identifies locations in more than one county, then the magistrate issuing the warrant must preside in a court in one of those counties. Any officer with the statutory authority to arrest an offender will have the authority to request the issuance of a seizure warrant. Upon issuance of a seizure warrant, only the sheriff of the county in which the seizure is to be executed will have the power to seize any property, real or personal.

If a forfeiture warrant is issued, upon execution of the forfeiture warrant, all real property seized will be either sequestered and guarded against damage from third parties, or released to the owner or occupant for use and caretaking until the disposal of the property is resolved by the court. Any person entrusted to such use pending the hearing will be responsible for any loss due to damage caused intentionally or by neglect, or removal of contents subject to the seizure. All personal property seized will remain upon the real property where it was located according to the warrant. If the real property is also being seized, the personal property will be removed to a secure location under the supervision of the jurisdiction wherein the magistrate presides.

The owner or persons in possession of the property at the time of the seizure must receive full documentation of the warrant and a receipt particularly describing the property seized and its condition. The seizing officer will bear custodial liability for the safekeeping of the property throughout its possession until disposition by the court. The owner of the property, lessor thereof, or agents of either will have access to the property sufficient to assure the safety and security of the property at all stages of the holding of that property prior to the disposition ordered by the court.

The person or entity claiming ownership of the property that has been seized will have the right to an expedited recovery hearing upon a showing of potential loss of value if such expedited resolution is not accomplished. No forfeiture will be final nor will title or other indicia of ownership pass to the state or jurisdiction seeking forfeiture until:

(1) The owner of the property in question is prosecuted and convicted of the criminal acts which render the property subject contraband; or
(2) The property is deemed contraband on account of its nature by a court of jurisdiction, the magistrate of which is an elected office, after a hearing wherein any persons opposing any finding of contraband shall have due process to present a case why it is not.

Any property damage, spoilage, or loss of any criterion of value during the pre-hearing possession of the jurisdiction will be grounds for recovery of that damage by the owner or user, from the jurisdiction making the seizure, if the hearing finds in favor of the opponent of the seizure. Such recovery may be ordered by the court wherein the seizure hearing is held, or in a separate suit by the owner or other interested party after return of the property.

Phil Williams from NewsChannel 5 in Nashville reports:

Tennessee lawmakers are prepared to consider a major overhaul of laws that allow police to take cash off of drivers to fund their agencies.

One lawmaker said this may be the year for some serious reforms.

It all stems from NewsChannel 5′s two-year “Policing For Profit” investigation.

Rep. Barrett Rich’s bill, as drafted, would completely outlaw the practice known as civil asset forfeiture. That practice allows police to take people’s cash or property without charging them with a crime.

While Rich didn’t believe he had the votes to go that far, he said that there is an emerging consensus over other reforms to protect the innocent.

“Since I’ve put the bill in, I’ve had member after member after member wish to cosponsor the bill,” he told  NewsChannel 5 Investigates .

Rich comes to the issue from the experience of having served as a Tennessee state trooper. The West Tennessee Republican himself did some interstate interdiction.

That’s the kind of enforcement activity that — for some agencies — has become more about making money than stopping drugs.

“When we went back and we watched NewsChannel 5 and we saw some of the issues that people have faced with civil forfeiture, the one thing that we see is that they are not actually given the opportunity to be heard by a real judge immediately,” Rich said.  Phil Williams, Lawmakers Set to Debate ‘Policing For Profit’ Reforms, NewsChannel 5, 14 Mar. 2013.

Other prime co-sponsors who are supporting this legislation are: Tony Shipley,  rep.tony.shipley@capitol.tn.gov , (615) 741-2886, Karen Camper,  rep.karen.camper@capitol.tn.gov , (615) 741-1898Jeremy Faison,  rep.jeremy.faison@capitol.tn.gov , (615) 741-6871G.A. Hardaway,  rep.ga.hardaway@capitol.tn.gov , (615) 741-5625William Lamberth,  rep.william.lamberth@capitol.tn.gov , (615) 741-1980Micah Van Huss,  rep.james.vanhuss@capitol.tn.gov , (615) 741-1717Eric Watson,  rep.eric.watson@capitol.tn.gov , (615) 741-7799. Rep. Vance Dennis, R-Savannah, has also been working on similar legislation.

The Court also granted review on whether an individual faced with the forfeiture of property that may be the proceeds of a crime has a right to a pre-trial hearing to challenge the basis for possible forfeiture.  The Justice Department agreed that the Court should address this issue because of a division among lower courts on it; the case is Kaley v. U.S. (12-464). Lyle Denniston, Court grants three cases, SCOTUSblog, 18 Mar. 2013.

IJ’s Press Release:

Arlington, Va.—Putting to rest the most contentious civil forfeiture fight in the nation, the U.S. Attorney’s office in Boston today announced it will not appeal a federal court’s decision that dismissed the civil forfeiture action filed against the Motel Caswell, a family-run motel in Tewksbury, Mass.  In January, Magistrate Judge Judith G. Dein of the U.S. District Court for the District of Massachusetts concluded that the motel was not subject to forfeiture under federal law and that its owners were wholly innocent of any wrongdoing.

Download the federal court ruling (pdf).

“The Caswell family has been put through the wringer by the federal government for over three years, and we are thrilled that this law-abiding family is now finally safe from civil forfeiture,” said Scott Bullock, senior attorney at the Institute for Justice. “The Caswells stood to lose everything for which they had worked so hard. This case epitomizes everything that is wrong with civil forfeiture laws and why they are in such desperate need of reform. We will build off of this victory in future cases to once and for all end civil forfeiture and the inevitable abuses that surround it.”

The government had sought to take the Motel Caswell from the Caswell family under the theory that the motel allegedly facilitated drug crimes. But, in her opinion, Judge Dein found that Mr. Caswell “did not know the guests involved in the drug crimes, did not know of their anticipated criminal behavior at the time they registered as guests, and did not know of the drug crimes while they were occurring.”

In her opinion, the court also lambasted the federal government’s case as “not supported by a scintilla of evidence” and accused the government of engaging in “gross exaggeration.”

“The district court decision will stand as important precedent for the protection of property rights and rights of innocent owners swept up in the civil forfeiture system,” said Larry Salzman, an IJ attorney. “What the government tried to do in this case amounted to little more than a grab for what they saw as quick cash under the guise of civil forfeiture.”

Russ Caswell said, “We have been living with this legal nightmare for almost four years, and I can’t express how happy we are that this is finally behind us. But my fight against civil forfeiture is not over. I will continue to speak out against this unbelievable power. I will work to see that no other American has to go through what our family did.”

The problem of civil forfeiture is widespread. In 1986, the year after the U.S. Department of Justice’s Asset Forfeiture Fund was created—the fund that holds the forfeiture proceeds from properties forfeited under federal law and available to be paid out to law enforcement agencies—it took in just $93.7 million. Today, it holds more than $1.6 billion. An Institute for Justice report, Inequitable Justice: How Federal “Equitable Sharing” Encourages Local Police and Prosecutors to Evade State Civil Forfeiture Law for Financial Gain, documents how the problem is growing worse. Between 2000 and 2008, equitable sharing payments from the U.S. Department of Justice to state and local law enforcement doubled from about $200 million to $400 million per year.

The Institute for Justice and local counsel Schlossberg, LLC, took on the Caswell case to expose the injustice of civil forfeiture laws that allow law enforcement agencies to pad their budgets by taking property from innocent owners who have never been convicted or even charged with a crime. The fight against civil forfeiture by IJ will continue through other litigation, legislation, activism, media outreach and strategic research.

“Civil forfeiture is a draconian power that is too easily abused,” said Darpana Sheth, an IJ attorney. “This case should serve as a cautionary tale of what can happen when an aggressive U.S. attorney wielding these laws goes after a small property owner like Russ Caswell.”

IJ President and General Counsel Chip Mellor said, “The Institute for Justice has documented time and again that civil forfeiture invites a lack of accountability, a lack of due process and a lack of restraints on government authority. Civil forfeiture needs to end. If the government wants to take someone’s property, it should first be required to convict that person of a crime. Short of that, you will keep ending up with what the federal government tried to do to the Caswells.” John E. Kramer, Federal Government Won’t Appeal Massachusetts Civil Forfeiture Case: Victory is Final for Motel Caswell and IJ, Institute for Justice, 15 Mar. 2013.

Catherine E. McCaw, Asset Forfeiture as a Form of Punishment: A Case for Integrating Asset Forfeiture into Criminal Sentencing, 38 American Journal of Criminal Law 181 (2011)

I. The Law of Asset Forfeiture
The laws that govern asset forfeiture are extremely complicated. The statutes do not straightforwardly describe which crimes give rise to forfeiture, nor which types of assets. There are also three different types of asset forfeiture, each with its own procedural requirements. First, the government may confiscate assets administratively without resort to court procedures if a property owner does not contest a forfeiture. If a property owner does contest the forfeiture, the government may pursue the forfeiture through two separate judicial channels: (1) criminal forfeiture and (2) civil forfeiture. This section explains both the substantive and the procedural law of asset forfeiture.

A. Substantive Forfeiture Law

In order to gain title to an asset through asset forfeiture, the government must fulfill two substantive requirements. ⁿ⁴¹ First, the government must demonstrate that the property to be forfeited has the requisite relationship to criminal activity.  Second, the government must show that the law allows it to obtain property when the property bears that relationship to a particular crime.  

The government may demonstrate that property has the requisite relationship to criminal activity under three theories. First, the government may argue that the property constitutes the proceeds of a crime.   In general, the government proves that property constitutes criminal proceeds through the use of circumstantial evidence. The government most frequently argues that a defendant has assets and had no legitimate income with which to purchase those assets. The government might also argue that large sums of cash seized from individuals who seem to be drug couriers constitute criminal proceeds, pointing, for example, to the fact that the money was stored with fabric softener sheets to conceal the money from drug dogs, that the money was transported from a drug capital, or that it was stored in a hidden compartment in a vehicle.  

The second theory the government may advance is that the property was an “instrumentality” of a crime, meaning that someone used the property while committing the crime.   Third, the government may argue that the property “facilitated” a crime, meaning that the property enabled the crime in a broader sense.  For example, in United States v. Smith, a farmer was growing marijuana on his property. He was required to forfeit not only the land on which he actually grew marijuana, but also surrounding tracts of land that facilitated his commission of the crime by concealing his marijuana growing operation from public view.  The government must demonstrate that there is a “substantial connection between the property and the offense” if the government is arguing the property facilitated a crime.  

Determining the second step in the analysis, that a crime can give rise to forfeiture, is a surprisingly difficult task. Congress initially enacted piecemeal statutes that authorized asset forfeiture for specific offenses.  For example, 21 U.S.C. § 853(a)(1) authorizes the criminal forfeiture of drug proceeds, whereas 21 U.S.C. § 881(a)(6) authorizes their civil forfeiture. In 2000, Congress enacted the Civil Asset Forfeiture Reform Act (CAFRA).  One of its provisions authorizes forfeiture of proceeds for a lengthy list of crimes, including mail and wire fraud, which had not previously given rise to asset forfeiture.  Other statutes also authorize forfeiture of instrumentalities or facilitating property.  Prior to CAFRA, certain types of crimes could give rise to civil forfeiture but not criminal forfeiture. CAFRA ended this confusion by authorizing criminal forfeiture wherever civil forfeiture was authorized.  

After the government demonstrates that property is subject to forfeiture, it must demonstrate that the forfeiture of this property does not constitute an excessive fine.  The Supreme Court has held that an Eighth Amendment excessive fines analysis is constitutionally necessary for all criminal forfeitures and for civil forfeitures that are not predicated upon the guilt of the property, such as when the because the property was the instrumentality of a crime.  CAFRA expanded this rule by requiring an excessive fines analysis for all civil forfeitures.  Most courts have held that forfeiture of criminal proceeds can never be excessive.  For example, in United States v. Betancourt, a defendant used criminal proceeds to  [*188] purchase a lottery ticket and ended up winning $ 5 million.  The Fifth Circuit held that the defendant must forfeit all of his lottery winnings because they were the proceeds of a drug transaction, even though the statutory maximum fine was only $ 152,000.  

Courts usually conduct a more extensive excessive fines analysis when the property is forfeited as facilitating property or an instrumentality. Most circuits determine excessiveness by comparing the value of the property to the statutory maximum fine for the underlying crime.  This test can end up being relatively harsh. For example, in von Hofe v. United States, the government attempted to divest both a husband and a wife of their interest in their home because the husband was growing marijuana in the basement. When the police searched their home, they found sixty-five marijuana plants in the basement but no evidence that anyone was participating in the drug trade (such as small plastic bags for packaging drugs, large amounts of cash, or firearms).  The husband stated that he had been growing marijuana in his basement for about a year.  During that time, he had bartered some of the marijuana for landscaping and roofing services and shared it with his neighbors.  

The government conceded that the husband’s activity did not “rise to the level of a major marijuana cultivation operation” and characterized the harm the husband had caused as “perhaps difficult to quantify in objective terms.”  The Second Circuit nonetheless noted that federal law authorized a fine of up to $ 1 million and went on to hold that the forfeiture of the husband’s interest in the house was not disproportionate.  But the court declined to hold that the government could constitutionally obtain the wife’s interest.  It noted that her “offensive conduct boils down to her joint ownership of [her marital home] and silence in the face of her husband’s decision to grow marijuana in their basement almost thirty years into their marriage.”  It reasoned that it was unfair to punish the wife as if she had been personally involved in growing marijuana and held the  [*189]  forfeiture to be constitutionally excessive.  Thus, the Eighth Amendment provides some check to asset forfeiture, but its protections can be meager.

B. Asset Forfeiture Procedure

Once the government decides to seize an asset, it must decide between several procedures at its disposal to carry out the forfeiture. There are two broad categories of forfeitures: administrative and judicial. Administrative forfeitures proceed without any involvement of the courts. Judicial forfeitures encompass two categories: civil and criminal forfeitures. These forms of forfeiture all have different procedural requirements and different benefits and drawbacks for the government.

1. Administrative Forfeitures

When the government uses administrative forfeiture, it obtains title to the property without any intervention from the courts through a procedure that resembles a default judgment.  Law enforcement agencies like the FBI and DEA pursue forfeiture against property on their own, without the assistance of the DOJ.  An agency seizes property and then sends a notice of intention to forfeit to parties that might have some claim to the property.  The government generally must provide notice within sixty days of seizing the property.  If no one challenges the forfeiture within thirty days, title to the property transfers to the government.  If a party does contest the forfeiture, the government must pursue the forfeiture action in court rather than relying on administrative forfeiture.  Once property is forfeited administratively, the owner may challenge the forfeiture in court only on procedural grounds.  In other words, a party may argue that she did not receive proper notice but may not argue that she was an innocent owner.  

The government may rely upon administrative forfeiture in most, but not all, cases. The government may use administrative forfeiture if the property is valued at less than $ 500,000, if the property may not be legally imported into the United States, if the property was used to transport a controlled substance, or if the property is a monetary instrument.  Even if the property falls into one of the above categories, the government may not use administrative forfeiture to gain title to real property.  

Approximately 80% of forfeiture actions are uncontested.  It is unclear why this number is so high, but it is clear why the government prefers administrative forfeitures. The Department of Justice advises agencies to pursue administrative forfeiture whenever possible because of the increased “speed and efficiency” of administrative forfeitures.  In some cases, parties may not contest forfeitures because doing so would tie them to illegal activity.  Others may calculate that the expense of contesting the forfeiture exceeds the value of the property. Still, these explanations are speculative, and the amount of information available about administrative forfeiture is limited.  

2. Judicial Forfeitures

If a party contests the government’s administrative forfeiture, the forfeiture must proceed before a judge. Once a forfeiture becomes a judicial forfeiture, litigating attorneys from the DOJ take over.  If someone files a claim against property that the government attempted to obtain through administrative forfeiture, government attorneys must commence a judicial forfeiture within ninety days or return the property to the claimant.  

There are two types of judicial forfeitures: civil forfeitures and criminal forfeitures. Civil forfeitures proceed against the property itself and  [*191]  do not require an underlying criminal conviction.  Criminal forfeitures proceed against a particular criminal defendant and are considered part of that defendant’s punishment.  In many cases, attorneys will file both civil and criminal forfeitures against the same property simultaneously.  

3. Civil Forfeitures

In civil forfeiture actions, the government proceeds in rem against the property to be forfeited, claiming that the property is subject to forfeiture because it has been tainted by its connection with criminal activity.  In the parlance of civil forfeiture, the property itself is guilty. Those who claim that they have an interest in the property may intervene to prevent the forfeiture from going forward.  The Supreme Court has held that civil forfeiture is not a punitive action for the purposes of Double Jeopardy, so the government is free to file a civil forfeiture action even after the property’s owner is prosecuted criminally.  The Seventh Amendment entitles claimants to a jury trial in forfeiture proceedings.  

If the forfeiture goes to trial, it proceeds in two stages. First, the government must prove by a preponderance of the evidence that the property is subject to forfeiture.  In doing so, it must demonstrate that the property on trial – and not merely the owner – has a connection to criminal activity.  In the case of physical items, that process is relatively straightforward. The process can be more complicated for fungible assets such as money. As an illustration, imagine the government wants to demonstrate that $ 100,000 were the proceeds of a drug transaction. In the same bank account, a drug dealer has $ 100,000 that were the proceeds of a drug transaction and another $ 100,000 that the drug dealer earned legitimately. The drug dealer then spends $ 50,000. Civil forfeiture law allows the government to seize the $ 100,000 involved in drug transactions, but not the innocent $ 100,000. Tracing which dollars are tainted can be difficult. Congress has made the task of determining which assets are tainted by crime somewhat easier in the case of fungible assets. If the  [*192]  government commences a forfeiture action within a year of the offense,  the government need not show that the specific fungible assets were tainted.  Instead, “any identical property found in the same place or account as the property involved in the offense that is the basis for the forfeiture shall be subject to forfeiture … .”  

After the government establishes that the property is subject to forfeiture, claimants may contest by asserting an innocent owner defense.  Claimants may demonstrate innocent ownership in several ways. The claimants may show that they had no knowledge that the property was being used for illegal purposes.  The claimants may also show that they knew of the illegal activity, but “did all that reasonably could be expected under the circumstances to terminate such use of the property.”  The statute provides an example of “all that reasonably could be expected”: an owner must both notify law enforcement and attempt to get the perpetrator to stop using the property for illegal purposes.  

Claimants to property may also demonstrate innocent ownership by demonstrating that they were bona fide purchasers for value  who, at the time of purchase, “did not know and was reasonably without cause to believe that the property was subject to forfeiture.”  An attorney who is paid with tainted assets is likely to have difficulty satisfying this standard.  The statute creates a very limited “innocent owner” defense for claimants who received their property as part of a divorce settlement or inheritance. These claimants must satisfy four conditions to assert the defense: the property must be a primary residence; deprivation of the property must render the claimant homeless; the property must not have been purchased with the proceeds of a criminal transaction; and the claimant must, in fact, be an “innocent owner” – that is, the claimant must not have known and could not have known of the property’s involvement in crime at the time of acquisition.  After the government establishes that property is subject to forfeiture, the burden shifts to the claimants if they wish to assert an “innocent owner” defense.  

4. Criminal Forfeitures

Criminal forfeiture does not proceed against the property itself, but rather proceeds against a specific criminal defendant and is considered a part of that defendant’s criminal punishment. The government begins criminal forfeiture proceedings by including forfeiture allegations in a criminal indictment.  The government must then demonstrate either at trial or through a guilty plea that the defendant is guilty of a crime. Defendants are not subject to criminal forfeiture unless they have been convicted of a crime.  

If a defendant opts for a trial, the trial may have two separate phases: a guilt phase and a forfeiture phase to determine whether there is “the requisite nexus between the property and the offense committed by the defendant.”  Still, in most instances both parties waive their right to a jury trial for the forfeiture phase and instead allow the judge to determine forfeitability.  Although the government must establish a defendant’s guilt beyond a reasonable doubt, the government need demonstrate only by a preponderance of the evidence that the property is subject to forfeiture.  

Because criminal forfeiture depends on the criminal defendant’s wrongdoing rather than the property’s taint, the government does not need to establish as strong a tie between the crime and the property as it does in civil forfeiture proceedings. Criminal forfeiture requires a defendant to forfeit the proceeds of a criminal transaction and property that facilitated a criminal transaction.  The government may also require a defendant to satisfy a forfeiture judgment by forfeiting substitute assets.  If, for example, the government can prove that a defendant earned $ 100,000 in drug proceeds, but it cannot locate those specific drug proceeds, it may seize other property worth up to $ 100,000.  If the government cannot identify substitute assets at the time of trial, it may identify them later as they become known to the government.  In other words, criminal forfeiture functions much like a judgment for damages. In contrast, the government must prove that the particular property to be forfeited is tainted by crime in a civil forfeiture proceeding.

Criminal proceedings are focused on the guilt of the criminal defendant and do not consider the claims that third parties might have to the property. After the government establishes that the defendant must forfeit the property, third parties may petition the court to hold an ancillary proceeding where the court considers whether the third party has a right to the property. Third parties may defeat forfeiture by establishing one of two things. First, they may establish that they were the legal owner of the property when the defendant committed the crime that rendered the property subject to forfeiture.  In other words, if a drug dealer borrows a friend’s car to transport drugs, the government may not confiscate the car through a criminal forfeiture proceeding. It might, however, be able to confiscate the car through civil forfeiture because civil forfeiture depends on the guilt of the property rather than the guilt of the party. Second, they may establish that they were bona fide purchasers for value after the property became subject to forfeiture and were “reasonably without cause to believe that the property was subject to forfeiture … .”  

This rule has important consequences for defense attorneys. Under the statute, “all right, title, and interest in property … vests in the United States upon the commission of the act giving rise to forfeiture … .”  As a consequence, the defendant may not pass legitimate title to the property to other parties.  The statute does not create an exception for attorney’s fees.  The fact that defendants may not pay for their attorneys with assets that are subject to forfeiture may make it more difficult for a defendant to afford an attorney. But the Supreme Court has held that this potential difficulty does not violate the Sixth Amendment.  The Court reasoned that “[a] defendant has no Sixth Amendment right to spend another person’s money for services rendered by an attorney, even if those funds are the only way that that defendant will be able to retain the attorney of his choice.”  The Court also observed that Congress crafted asset forfeiture statutes in part to deprive criminal organizations of their economic influence.   One manifestation of criminal organizations’ economic influence is their ability  [*195]  to pay for high quality legal representation.  As long as the defendant may still obtain a public defender, the Sixth Amendment is satisfied.

Even though criminal forfeiture is technically a part of a defendant’s sentence, the fact that a defendant has forfeited property does not generally affect his or her prison sentence. Courts do not grant defendants a downward departure from the sentencing guidelines because they have had property forfeited.  In addition, the courts do not have the discretion to adjust the amount of a forfeiture to take into account the length of a defendant’s prison sentence.  

Criminal forfeiture does not affect the size of the fine that a criminal defendant must pay. Such fines are determined in accordance with the sentencing guidelines, and it follows that if defendants cannot receive lower sentences in exchange for hefty forfeitures, then defendants may also not pay their fines with assets that they have forfeited. Under the relation back doctrine, title to the forfeited property transfers to the government as soon as the property becomes tainted by its involvement in criminal activity.  At the time the defendant is paying a fine, the property belongs to the government rather than the defendant.

5. Civil vs. Criminal Forfeitures

Civil forfeiture and criminal forfeiture are not exclusive remedies.  The government may file separate actions against the same piece of property under both theories.  If the government loses in one of its actions, it is not precluded from trying to gain title to the property under the other theory.  

Both types of forfeiture have advantages and disadvantages. Criminal forfeiture can be more efficient because it enables the government to dispose of the asset forfeiture and the criminal conviction in a single proceeding. The government may obtain what is essentially a money judgment against a criminal defendant if it proceeds through criminal forfeiture. In addition, criminal forfeiture can seem more legitimate because the government is not punishing crime through a civil remedy. The main disadvantage of criminal forfeiture for the government is that it must  [*196]  obtain a criminal conviction before it can obtain assets through criminal forfeiture. In addition, if a defendant chooses to go to trial, the government could have to try two cases: the guilt case and the asset forfeiture case.

The main advantage of civil forfeiture is that it does not require an underlying federal criminal conviction. This fact may strike some as sinister, but it also allows the government to pursue lesser punishments as the equities may demand. The government may pursue civil forfeiture as an alternative to criminal punishment when it judges that criminal punishment would be too harsh. For example, the government might confiscate a crack house in order to abate a nuisance even though it might not be fair to prosecute the owner for a crime. Similarly, if a juvenile were using his cell phone to disseminate naked pictures of an under-aged classmate, a prosecutor might choose to punish him by requiring him to forfeit his cell phone as the instrumentality of a crime rather than saddling him with a charge of distributing child pornography.

The government might pursue civil forfeiture to deprive the owner of property when the case against the owner is too weak to sustain a criminal conviction. If the government is depriving someone of property to which she has no legal right, this procedure might not be so bad. For example, the government can use asset forfeiture to return stolen archeological artifacts to museums.  Surely, the ability of the government to seize and return these artifacts should not turn on whether the government can make out a criminal case against the thief. The federal government also uses civil forfeiture against defendants who have been convicted in state court. The federal government cannot use criminal forfeiture in these so-called adoptive forfeitures because federal criminal forfeiture requires a federal criminal conviction.  Of course, others might consider it unfair for the government to impose a sanction on someone for criminal behavior it has not proven beyond a reasonable doubt.

The disadvantage from the government’s perspective of civil forfeiture is that it must tie the property more directly to the criminal activity. It does not have the option of demonstrating that a defendant has received a certain amount of money in proceeds and seeking substitute assets to satisfy that award.

The doctrines surrounding asset forfeiture are complicated in part because asset forfeiture is designed to serve a variety of different purposes. It is meant to punish, to serve remedial purposes, and to raise money for the government. Given that the doctrine is meant to serve such disparate purposes, it is not surprising that the doctrine ended up being extremely complicated. If the asset forfeiture system is modified, it is important to respect the diverse goals that asset forfeiture aims to achieve.

 

Whatever the appellate panel determines could have far-reaching effects on

1. the willingness and ability of private attorneys to take implicated cases;
2. availability of certain kinds of fee arrangements;
3. market prices for implicated cases;
4. the willingness and ability of public interest groups to provide legal services in implicated cases;
5. quality of representation provided in implicated cases;
6. quality of representation available to indigent claimants in implicated cases; and
7. quality of representation available to claimants who would otherwise be able to afford counsel of their choosing but cannot draw upon their assets because the government has seized or frozen the claimants’ assets.

Claimants who substantially prevail in federal civil asset forfeiture cases and seek costs are generally eligible to receive awards of reasonable attorney fees and other litigation costs reasonably incurred by the claimant pursuant to the fee-shifting provision of the Civil Asset Forfeiture Reform Act of 2000 (CAFRA). (CAFRA’s fee-shifting provision is codified at 28 U.S.C. § 2465.) ^1 2

The dispute over what constitutes a proper award of attorney fees stems from the government’s unsuccessful attempt to forfeit $28,000.00 from claimant Robert J. Moser. In March of 2012, U.S. District Judge Larry Alan Burns issued a ruling granting claimant Moser’s motion to suppress evidence and granting Moser’s motion for Summary Judgment after finding purposeful and flagrant constitutional violations:

“…Moser’s consent in this case followed closely on the heels of serial constitutional violations including ignoring the requirement to advise him of Miranda rights before questioning him about the marijuana and illegally entering and reentering Moser’s home without a search warrant.

The Court also finds the constitutional violations that preceded Moser’s consent were purposeful and flagrant. There is no suggestion here that either Deputy Bloomberg or Officer Reed believed that they were acting under the authority of a search warrant when they entered Moser’s home. And even if they were uninformed or confused about the existence of a search warrant, the federal agents were present during both of their searches (even accompanying Deputy Bloomberg on the first occasion) and did not inform their state counterparts that no search warrant had been obtained. Moser’s earlier limited consent to enter the home for the purpose of escorting him to retrieve his medication did not authorize the subsequent entries to search for marijuana and evidence of other crimes.

There is really nothing, then, to purge or attenuate the taint of the initial illegal searches of Moser’s home. Moser’s consent to search was tainted by those initial constitutional violations. The Court concludes that the $28,000 must therefore be suppressed.” United States of America v. $28,000.00 in United States Currency, Order Granting Defendant-Claimant’s Motions to Suppress and for Summary Judgment and Denying Plaintiff’s Motion for Summary Judgment, and Denying Plaintiff’s Motion to Strike the Claim as Moot, 2012 U.S. Dist. (S.D. Cal. March 29, 2012).

On February 11th, 2013, United States District Judge Larry Alan Burns issued another order granting an award of $14,000.00 of the $50,775.00 in attorney fees sought by Claimant Moser and his attorney Richard M. Barnett.³ The latter order is as problematic as the former was commendable. Judge Burns’ opinion first reduced Barnett’s requested-for-fee from $500.00/hour to $300.00/hour and then accepted only 60 hours of Barnett’s reported 100+ work hours, reasoning that “Barnett gave the government’s litigation work more respect than it deserved.” After arriving at a lodestar⁴ figure of $18,000.00⁵, Judge Burns proceeded to downgrade the $18,000.00, in part, because Barnett was willing to take the case on a contingency basis set at 1/3 of the $28,000.00 and because, in Judge Burns’ apparent reasoning, Barnett would have been aware that CAFRA fee-shifting awards are rare and not intended to produce a bounty for attorneys. Judge Burns then made a small allowance for risk and arrived at the $14,000.00 sum:

“The remaining relevant factors are the customary fee, whether the fee is fixed or contingent, the amount involved, and the “undesirability” of the case. These all boil down to a limited set of facts, namely that Barnett knew Moser could not recover more than $28,000, and he agreed in a contingent fee agreement to accept 1/3 of the total recovery as his fee.

Civil forfeiture cases involve a variety of types of property and a wide range of property values. Within this range, a claim for $28,000 is not as lucrative as some, but a contingency fee agreement would be enough to attract competent counsel. See Blanchard, 489 U.S. at 92 n.6 . It is not such an undesirable case that a higher fee award is merited in order to encourage attorneys to undertake the representation. The Court finds very significant the fact that Barnett was willing to undertake the representation for no more than $9,333.33 plus costs. He might have expected it to settle quickly, based on the strength of Moser’s suppression argument. But there was no assurance of that. He might also have hoped for an award of fees under CAFRA. But he would have been aware that fee awards are not common, and also that they are not intended to produce a bounty for attorneys. See Blanchard, 489 U.S. at 92 n.6. The logical and reasonable inference here is that Barnett and Moser agreed to a fee of no more than about $9300.

It is also significant that this was a contingent fee agreement. The fraction of the recovery that goes to the attorney under such agreements typically compensates the attorney not only for work done in cases where his client prevails, but also covers the attorney’s losses in cases where the client recovers little or nothing. In other words, it is adjusted upwards to account for risk. The $9,333 figure can be presumed to be higher than what Barnett would charge if there were no risk, i.e., if Moser had guaranteed payment regardless of the outcome.

While the Court recognizes that this figure is not a cap on the award, it is nevertheless relevant. See $186,416.00 in U.S. Currency, 642 F.3d at 755 (court may consider fee agreement when determining reasonable fee award). Bearing in mind the relevant Johnson factors, the Court determines that a fee award of $18,000 is excessive, but an award of $14,000 is reasonable.” United States of America v. $28,000.00 in United States Currency, Order Granting In Part Motion For Attorney’s Fees, 2013 U.S. Dist. (S.D. Cal. February 11th, 2013).

What Judge Burns’ formulations seem to ignore is that CAFRA’s fee-shifting provisions were meant by Congress to induce private attorneys to take civil forfeiture cases. The intended appeal of the awards were never meant to be mere happenstance or afterthought. Rather, the cost-shifting provisions were intended as a solution. They were supposed to create and drive a market. They were supposed to address that asset forfeiture law is highly specialized, unlikely to be handled well by those lacking significant experience in asset forfeiture law, frequently expensive to litigate, and that innocent property owners were understood to be conceding cases or going bankrupt defending against federal forfeiture actions. Moreover, an assessment that “fee awards are not common” would demand an upward determination from lodestar to sufficiently induce the availability of attorneys willing to take cases looking for such awards.

Furthermore, treating CAFRA’s fee-shifting provision as mere afterthought ignores the power of the provision to persuade public interest groups to assume the costs of litigating gross injustices in civil asset forfeiture. The availability of compelling fee-shifting awards makes it feasible for public interest groups to take more cases and argue them with added vigor. It should be reiterated that the government only pays when claimants substantially prevail–that is, only in cases of genuine merit and precisely when we would most want attorneys or public interest groups to step in and offer to take cases for the lure of CAFRA’s fee-shifting awards.

Readers might consider encouraging groups invested in fighting civil asset forfeiture abuse to weigh filing friend of the court briefs.

Appellate opinion here.

A new bill under consideration in Hawaii’s state senate would expand asset forfeiture to include petty misdemeanors.  Under Hawaii state law, petty misdemeanors are usually punished by up to 30 days in jail and/or $1,000 in fines.  But if SB 1342 passes, petty misdemeanors would join murder and theft as offenses that are subject to property forfeiture.  It would also raise a ton of new legal questions: for disorderly conduct, could stereos and iPods be seized if someone’s music is too loud?  Could someone lose his car if he is caught speeding or driving under the influence?

In submitted testimony, the Hawaii chapter of the ACLU posits that applying asset forfeiture to petty misdemeanors like trespassing could lead to all sorts of ridiculously-cruel consequences.  Homeless people could lose their property if they camp out in a park after hours.  Protestors could have their signs, petitions and other assets seized—a chilling effect on the First Amendment.

The bill is backed by Hawaii’s Department of Land and Natural Resources as a way to protect “natural, cultural, historical and recreational resources.”  The Department also argues that fines and other penalties are “not a sufficient deterrent.”  But including asset forfeiture as a punishment is excessive.  Indeed, Hawaii County Prosecutor Mitch Roth has lambasted the bill as “draconian.”  Meanwhile, state Sen. Russell Ruderman called SB 1342 “outrageous,” telling Big Island Now that “we should have more safeguards, not less, to protect people from forfeiture abuses.”

Hawaii’s forfeiture regime is one of the worst in the nation, with law enforcement receiving 100% of the proceeds of forfeiture. In their 2010 “Policing for Profit” report, the Institute for Justice graded Hawaii’s forfeiture statute a “D”, noting that:

The state may forfeit your property by showing by a preponderance of the evidence that the property was used in a crime.  Unfortunately, if you are an innocent owner and believe your property was wrongly seized, you bear the burden of proof.  Law enforcement has a strong incentive to seize property, as they receive 100 percent of the funds raised through civil forfeiture.

 

• Any lingering financial incentive for police to record field data on drug-dogs is extinguished. Preserved evidence of false positives could be used by a claimant to argue against the reliability of a particular drug-dog. While the evidentiary weight of field data on false positives is greatly diminished by yesterday’s ruling, preserving such evidence nonetheless creates an unnecessary risk of diminishing opportunities for police departments to realize windfall profits stemming from seizures conducted incident to alleged drug-dog alerts. Specifically, it risks that judge or jury would nonetheless find troubling a particular drug-dog’s field record of purportedly alerting where no drugs are to be found. The easiest way to prevent the appearance of such records is to simply not record the data.
• Severing incentives to keep field records increases incentives for police to employ drug-dogs that are certified but give false positive alerts in the field.¹ Current asset forfeiture laws largely permit police to self-appropriate by acquiring substantial portions of the proceeds of property seizures if the property is ultimately forfeited.² The more drug-dogs alert, the more opportunities are available for big paydays.
• Given the absence of agreed-upon standards for the certification of a drug-dog (other than an award of certification) and the incentives for false positives, police have an increased incentive to acquire certification from companies that will certify drug-dogs who can find drugs but who also give false positives (or self-certify). The market will of course correct for this phenomenon. Moreover, scrutiny over drug-dogs who give a surfeit of false positives will be reduced.
• The ruling likely reduces meaningful access to the courts in civil forfeiture proceedings involving positive drug-dog alerts. The opinion seems to presume the existence of defense counsel who possess the capacity to present competent rebuttals. Unfortunately, claimants fighting civil asset forfeitures generally need to hire their own counsel or do it themselves. There are fee-shifting provisions awarding attorney fees to claimants who substantially prevail. However, it just became more difficult to win these cases–reducing the incentives for private attorneys to take the cases on the hopes of winning awards of attorney fees. It is also predictable that hiring an attorney for such a claim just got more expensive. That likely means a lot of folks trying to navigate the process as pro se claimants or, more likely, more people who simply accede to the state forfeiting their property because the police want the property and they say a dog alerted to it.
• It seems more likely that Florida v. Jardines became an implied consent/curtilage issue as Professor Orin Kerr suggested last June:

If the front porch and space next to Jardines’s door was curtilage, then, the question becomes whether Jardines had impliedly consented to the officers’ visit. And this raises a classic criminal law puzzle: How do you construe the scope of implied consent, and what level of generality do you choose? If you construe the scope of consent at a high level of generality, you could say that homeowners impliedly consent to visits. This was a visit, so there was implied consent to go up to the door and knock. (The officer who was not the dog trainer testified that he approached the house with the intent to knock and talk, but it’s pretty obvious that the officers’ primary goal was to have Franky do his thing.) On the other hand, if you construe the scope of consent at a specific level of generality, you could say that homeowners do not impliedly consent. No one in their right mind would consent to have drug-detection dogs sent to their home to sniff to see if there are drugs inside. So from the more specific level of generality, there is no consent. The officers could approach the home and knock on the door, but they could not bring the trained dog to sniff for narcotics.Orin Kerr, A Preliminary Thought on Florida v. Jardines, Volokh Conspiracy, 21 Jun. 2012.

In sum, Florida v. Harris looks like very bad news for anyone concerned with civil asset forfeiture reform and anyone worried about how these laws corrupt law enforcement and/or prey on the poor.

The Columbia City Council on Monday night heard the first reading of a police department request to spend $16,000 in asset forfeiture funds on new SWAT team headsets, despite a request from the Citizens Police Review Board to use the money to launch its mediation program.

Council members did not directly question last night whether asset forfeiture funds collected by the U.S. Department of Justice and U.S. Department of Treasury could be allocated to the review board, but a police department presentation made clear that such a transaction would not be permitted. Federal guidelines prohibit the use of the funding to supplement salaries for positions exceeding one year, as well as the use of funding by non-law-enforcement personnel.

The Department of Justice Equitable Sharing guidelines controlling the use of federal asset forfeiture funds by recipient state and local law enforcement agencies are contained in the DOJ publication “Guide to Equitable Sharing for State and Local Law Enforcement Agencies” (April 2009). They are not statutory law; they are policies set by the Attorney General. It is correct that the use of federal forfeiture money by the Citizens Police Review Board would be prohibited by these guidelines, but that begs a larger question: why does a federal agency presume to tell Columbian citizens how they can spend the money received by the Columbia Police Department? Do we not have the right to control our own city and local agencies?

The Tribune continues:

The police department receives asset forfeiture funds through its participation in federal cases that result in the seizure of money collected as evidence or used in the process of a crime, assistant city counselor Nicole Volkert said. A federal judge then decides whether the money can be reallocated to the Federal Asset Forfeiture Equitable Sharing Program.

Strictly speaking, this is not entirely true. Federal forfeiture laws allow the seizure of property on the suspicion that the property was involved in illegal activity. The federal government does not have to substantiate its allegations, provide proof, or even file charges in criminal court to seize and forfeit property. As our colleagues at the Institute for Justice noted in their 2010 “Policing for Profit” report:

Seized assets transferred to the federal government through equitable sharing agreements may be forfeited regardless of whether an individual is charged, let alone convicted, of a crime in either state or federal courts.  If the assets are successfully forfeited to the federal government, the funds are deposited in the appropriate federal asset forfeiture fund, and state and local agencies receive a percentage back.

It is also worth noting that federal judges do not decide whether the forfeiture can be disbursed to the Federal Asset Forfeiture Equitable Sharing Program; that decision is wholly the purview of the federal agency initiating the forfeiture. Additionally, it is not necessarily even a common occurrence that a judge is involved; most federal forfeitures begin and are resolved as administrative forfeitures, where there is no judicial supervision. Additionally, federal agencies and US Attorneys will often try to “trick” claimants into filing a claim for remission (where the agency is the arbiter deciding the merit of the claim) instead of filing a claim to contest the forfeiture in federal court.

In September 2012, the Department of Justice’s Office of Inspector General (OIG) released an audit of Drug Enforcement Administration (DEA) adoptive seizure process and equitable sharing requests. It is worth noting that:

Of instances involving federal adoption of assets seized, 65% of reported samples [41 of the 63 examined samples] required DEA headquarter approval to adopt the seizure because the instance lacked all of the following criteria:

1. the seizure was based on a federal or state judicial seizure warrant;

2. an arrest was made for a felony violation of the Controlled Substances Act or an equivalent state felony charge that would be a felony if pursued under federal law; and/or

3. drugs or other contraband associated with a federal felony drug offense were also confiscated at the time of seizure.

These statistics indicate that it is a lie that forfeiture proceeds represent the proceeds of crime. We argue that in forfeitures where there is no warrant, felony arrest, or contraband found that innocent people (ordinary Americans) are essentially being robbed blind by a powerful federal agency. And it’s not just the DEA. As we reported in August:

Attorney General Eric Holder has granted the Bureau of Alcohol, Tobacco, Firearms, and Explosives authority, for a one-year trial period, to seize and administratively forfeit property allegedly involved in controlled substance offenses pursuant to United States Code Title 21 › Chapter 13 › Subchapter I › Part E › § 881.

21 U.S.C. § 881 is, among other things, often invoked to seize and forfeit bulk currency, where no drugs are found, on theories that the currency was furnished, or intended to be furnished, in exchange for a controlled substance.

Do we want Columbia Police Department involved in this federal racket? Unfortunately, it appears Columbia Police Chief Ken Burton turns a blind eye to this reality:

Funding collected through the federal program increased last year because Columbia police assigned a detective to work with the DEA in Jefferson City, Burton said. The department collected $61,165 in 2010, $41,769 in 2011 and $121,964 in 2012.

After all, law enforcement units have their own strong incentive to use effective training and certification programs, because only accurate drug-detection dogs enable officers to locate contraband without incurring unnecessary risks or wasting limited time and resources. Florida v. Harris, ___ U.S. ___ (2013).

For a more rational view, see Loyola of New Orleans Law Professor Leslie A. Shoebotham’s Off the Fourth Amendment Leash?: Law Enforcement Incentives to Use Unreliable Drug‐Detection Dogs. [Full article available here at SSRN.] [Professor Shoebotham also authored the Fourth Amendment Scholars Amici Curiae briefs in Florida v. Jardines and Florida v. Harris.]

‎”On receiving his monthly bank statements, a small business owner notices that the United States government has seized the balances of his accounts during the month. He calls the bank, and is given contact information of a Special Agent of the Internal Revenue Service Criminal Investigation Division. The owner’s lawyer calls the agent and leaves a voicemail message. An Assistant United States Attorney calls the owner’s attorney back saying that the funds were seized because of “structuring.” The AUSA adds that the government does not intend to seize any more money from the business, or to prosecute the business owner. The owner had no advance notice of the seizure. He is supposed to accept this.

According to the U.S. Department of Justice, civil asset net forfeitures surged to $4.2 billion in the year ended September 30, 2012, from $1.7 billion in the preceding year—a one-year increase of over 150%.

18 United States Code § 5313, enacted in 1982 as part of the Bank Secrecy Act, requires banks to report to the U.S. Treasury transactions in money in excess of $10,000. The purpose of the requirement is to alert Treasury to possible drug trafficking and attendant tax evasion. People evade this requirement by arranging their bank transactions in amounts less than $10,000. For example, instead of depositing $90,000, a person may make ten separate deposits of $9,000 each.

Congress responded by enacting 18 USC §§ 5324 and 5317 in 1986. 18 USC § 5324 makes it a crime for any person to structure or to attempt to structure transactions with one or more financial institutions for the purpose of evading the currency transaction reporting requirements of 18 USC § 5313.

The cases say that structuring has three elements: (1) arranging one’s currency transactions with banks so that they are less than $10,000; (2) doing so with knowledge of the requirement that banks report currency transactions in excess of $10,000; and (3) with intent to evade the bank reporting requirement.

18 USC § 5317(c)(2) provides in part:
“Civil forfeiture. Any property involved in a violation of section 5313 . . . or 5324 of this title, or any conspiracy to commit any such violation, and any property traceable to any such violation or conspiracy, may be seized and forfeited to the United States in accordance with the procedures governing civil forfeitures in money laundering cases pursuant to section 981(a)(1)(A) of title 18, United States Code.”

From the earliest days of the republic, the government has seized property used to perpetrate a crime, or produced by crime. But first the government must convict the property’s owner of a crime. This requires the government to carry the heavy burden of persuading the trier of fact that beyond a reasonable doubt that the elements of the crime are proved.

18 USC § 5317(c)(2) broadens forfeiture beyond its traditional criminal realm, into civil cases. To prevail in a civil case, the plaintiff need only persuade the trier of fact by a mere preponderance of evidence that the elements of the cause of action have been proved.

Broadly interpreting18 USC § 5317(c)(2), the IRS Criminal Investigation Division liberally seized bank balances. CID did so based upon its subjective interpretation that structuring had occurred, without any judicial intervention. It was a due process nightmare.

Congress responded by enacting the Civil Asset Forfeiture Reform Act of 2000 (“CAFRA”). This requires the government to procure an ex parte warrant from a U.S. District Court upon probable cause before seizing property. Within 60 days after the government seizes property, it must send written notice of the seizure to parties interested in the property (i.e., the owner). The interested parties then have 35 days to file a claim for the property. If a timely claim is filed, government has 90 days to either indict the claimant or bring a lawsuit in federal court seeking a judgment of civil forfeiture of the property. If the government does neither, it must return the seized property forthwith.

Congress struggled with the fungible nature of cash. For example, where there are many deposits to a bank account, some of which are allegedly structured and some of which are not, and there are many withdrawals from the bank account, so that the account balance turns over frequently, it is impossible to trace the balance in the account at any given time to one or more specific, allegedly structured, deposits. Congress resolved this by doing away with the tracing requirement for fungible property, but imposing a short statute of limitations—the government must bring a civil forfeiture lawsuit within one year after the allegedly structured transaction. The short statute of limitations works to the depositor’s advantage.

If the government does file a civil forfeiture action, the depositor’s accountant should be alerted to reconcile deposits into the depositor’s bank accounts to receipts reported on the depositor’s tax return for the subject year.

In a civil forfeiture lawsuit, the government prevails by proving the alleged structuring by a preponderance of evidence. The claimant can demand a jury trial. If, during the pendency of the suit, the claimant persuades the court that it needs a distribution of the seized funds to pay its expenses of suit, the court can order such a distribution to the claimant. If the claimant substantially prevails in the suit, the judge may in her discretion award the claimant legal costs against the government.

It is clear from the legislative history of CAFRA that Congress intended to limit civil forfeitures to alleged structuring connected with an underlying offense of drug trafficking or money laundering. Money laundering arises out of drug trafficking—that will be the subject of a separate post.

The business owner can also argue that the amount of money seized from his bank accounts violates the Excessive Fines Clause of the Eighth Amendment to the U.S. Constitution.

A person can gain exemption from the currency reporting requirements by having its bank complete FinCEN Form 110, Designation of Exempt Person, as to it and file the form with the IRS. Banks are reluctant file Forms FinCEN 110 for small businesses, as filing of the form draws greater IRS scrutiny upon the bank. But our owner should ask his bank to file a FinCEN Form 110 for it with the IRS, for several reasons. If the bank files the form, it will demonstrate to the jury the fortuitous nature of the government’s conduct. It will also benefit the business going forward. If the bank refuses to file the form, it will demonstrate to the jury the unfairness of the system.

Civil forfeiture remains a travesty of due process. The property owner receives no advance notice; he is not afforded an opportunity to participate in the District Court warrant hearing. Once the property is seized, the owner may file a claim, at peril of being indicted, or of incurring heavy civil litigation costs. The spectre of these unappealing potential consequences undoubtedly persuades many victims of civil forfeiture to do what the AUSA suggested here—go away without filing a claim.

 From Laura Krantz and Jessica Trufant. “Audit: Worcester DA’s office bought Zamboni, lawn gear with forfeited drug money“, Metrowestdailynews.com, 15 Feb. 2013.

The 2010 report “Policing for Profit” by our colleagues at the Institute for Justice gave Massachusetts a “D” for its asset forfeiture practices, noting:

Massachusetts has a terrible civil forfeiture regime.  Under Massachusetts civil forfeiture law, law enforcement need only show probable cause that your property was related to a crime to forfeit it.  You are then in effect guilty until proven innocent, as you must shoulder the burden of proving that the property was not forfeitable or that you did not know and should not have known about the conduct giving rise to the forfeiture.  Further, law enforcement keeps 100 percent of all forfeited property.  The receipts are split: half to the prosecutor’s office and half to the local or state police.  Massachusetts is required to collect forfeiture data, but in response to requests, the state provided data only for 2000 to 2003.

It’s well past time for Massachusetts lawmakers to abolish civil forfeiture entirely and return the proceeds of any fines or forfeitures to the general funds controlled by municipalities and the state.

Our other coverage of forfeiture issues in Massachusetts:

Our coverage of the Motel Caswell case

Massachusetts suit threatens the permanent forfeiture of firearms without due process (March 2012)

Marginal reform no solution to systemic problems (Suffolk, June 2011)

At minimum, city counselors should exercise their power of the purse and deny further local funding to the Syracuse Police until they relent and return the secret slush funds to the duly elected representatives of the people.

In a concurring opinion, Judge Marsha S. Berzon (joined by Judge Sidney R. Thomas) wrote separately to note that the court left unanswered the unraised question of “whether a defendant who essentially is paid a commission on other people’s money he handles as part of an illegal scheme can be made to “forfeit” funds that passed through his hands but were never his.”

1. elevating the state’s burden of proof to a showing of “clear and convincing evidence that seized property is subject to forfeiture”;
2. denying law enforcement agencies access to civil forfeiture proceeds when agencies misuse “property derived or resulting from civil forfeiture actions” as well as deny access to forfeiture proceeds where agencies fail to submit and make public (through the Carl Vinson Institute of Government) annual reports ”specifying the property received during the fiscal year and clearly identifying the use of such property, including the specifics of all monetary expenditures”;
3. requiring that Georgia law enforcement receiving federal forfeiture proceeds comply with Georgia’s proposed accountability restrictions;
4. capping forfeiture proceeds paid to district attorneys’ offices at 10% of forfeiture proceeds and limit applicable usage of such payments to the offices’ “trial expenses, victim-witness services, training expenses, travel expenses, and maintenance or improvement of equipment”; and
5. clarifying and simplifying forfeiture laws in Georgia through a comprehensive rewrite.

These reforms are a good start. Nonetheless, the bill requires a rewrite before becoming acceptable legislation.

Most problematic, in my opinion, is the innocent owner language:

118 9-16-5.
119 A property interest shall not be subject to forfeiture under this chapter if the owner of the
120 interest or interest holder establishes that the owner or interest holder:
121 (1) Is not legally accountable for the conduct giving rise to its forfeiture;
122 (2) Did not consent to it;
123 (3) Did not know and could not reasonably have known of the conduct or that it was
124 likely to occur;

125 (4) Had not acquired and did not stand to acquire substantial proceeds from the conduct
126 giving rise to its forfeiture other than as an interest holder in an arm’s length commercial
127 transaction;
128 (5) With respect to conveyances for transportation only, did not hold the property jointly,
129 in common, or in community with a person whose conduct gave rise to the forfeiture;
130 (6) Does not hold the property for the benefit of or as nominee for any person whose
131 conduct gave rise to its forfeiture, and, if the owner or interest holder acquired the interest
132 through any such person, the owner or interest holder acquired it as a bona fide purchaser
133 for value without knowingly taking part in an illegal transaction; and
134 (7) Acquired the interest:
135 (A) Before the completion of the conduct giving rise to its forfeiture and the person
136 whose conduct gave rise to its forfeiture did not have the authority to convey the
137 interest to a bona fide purchaser for value at the time of the conduct; or
138 (B) After the completion of the conduct giving rise to its forfeiture:
139 (i) As a bona fide purchaser for value without knowingly taking part in an illegal
140 transaction;
141 (ii) Before the filing of a forfeiture lien on it and before the effective date of a notice
142 of pending forfeiture relating to it and without notice of its seizure for forfeiture; and
143 (iii) At the time the interest was acquired, was reasonably without cause to believe
144 that the property was subject to forfeiture or likely to become subject to forfeiture.

The required elements may be read conjuctively, which could lend itself to absurd situations where the innocent owner defense could be denied because the property owner possessed knowledge that some third party was using the owner’s property, without consent, to commit illegal acts that the property owner was actively attempting to deny. Indeed, the unsuccessful effort to deny could be interpreted as evidence of knowledge. Moreover, it should be the prosecution’s burden to prove that the claimant had knowledge–not the other way around.

Secondly, the conveyance clause would allow the state to forfeit vehicles by parties who commonly own title to a vehicle where one party commits an act subjecting their shared property to forfeiture without the other party’s knowledge or consent. That is exactly what happened to Tina Bennis when Michigan forfeited her car because her husband was surreptitiously soliciting the services of a prostitute with their jointly owned car. Why Georgia would want to deprive innocent spouses the availability of an innocent owner defense is unclear–and frankly bizarre.

At minimum, the innocent owner defense needs to be genuinely available to innocent parties. It would be preposterous to pass the legislation with language that would make it easier for the state to forfeit property from innocents. Improvements need not end with the innocent owner language, however. Specificity in reporting requirements would greatly improve the bill. The bill would ideally condition the availability of forfeiture to a conviction–or at least dispose of the language preserving a prosecutor’s second chance at punishing an alleged offender through civil forfeiture after an acquittal in a criminal prosecution concerning the same conduct. Language arguably preserving the availability of forfeiture after constitutional violations should be amended to exclude the availability of forfeiture where law enforcement violate a person’s rights while seizing private property. Language authorizing triers of fact to infer that currency found in proximity to contraband was used, or intended to be used, to facilitate conduct giving rise to the forfeiture is wholly inappropriate and should be deleted. Additionally, the bill could (and should) do more to sever the corrosive incentives that drive the prevalence of forfeiture.

Sheriff Howard Sills is asking constituents to write to their local legislators in opposition to the reforms. While I respectfully disagree with Sheriff Sills on his stance concerning forfeiture laws, I do share his apparent respect for the democratic process. Prior to voting, legislators should be informed of why the laws need changing in Georgia–and particularly what is wrong with, or could be improved upon, their current proposals. So, if you have experienced or know of asset forfeiture abuse in Georgia, or have clients who might be willing to testify for Georgia’s Assembly about their personal experiences with forfeiture, or have criticisms/suggestions, please consider contacting Georgia’s legislators and/or contacting me to help get the information before those who will ultimately decide whether and how to reform Georgia’s forfeiture laws. I may be reached at scott (at) forfeiturereform (dot) com.

The Institute for Justice has evaluated Georgia’s asset forfeiture laws as being among the worst in the United States. Georgia’s forfeiture laws are clearly ripe for reform. And, Representative Willard deserves credit for trying to fix Georgia’s draconian laws. However, HB 1 still needs work.

It should be noted that the Institute for Justice strongly opposes the current incarnation of HB 1 for a number of reasons, including (but not limited to) those discussed above, but are hoping to help fix the bill’s current deficiencies.

Forfeiture Law Grade	State Law Evasion Grade	Final Grade
Georgia

Forfeiture Law

Georgia has terrible civil forfeiture laws and uses equitable sharing extensively.  Under state law, depending on the property, the government need only establish probable cause or a preponderance of the evidence that the property was connected to illegal activity to forfeit it.  You bear the burden of showing that the property is not derived from illegal activity or that you are an innocent owner.  Even worse, law enforcement keeps 100 percent of the proceeds from any sales of seized property, which creates a strong incentive for law enforcement to seize property even in situations where it may not be warranted.  And public oversight is limited:  In response to requests, Georgia provided only one year of forfeiture data, for 2001.

Retrieved from http://www.ij.org/asset-forfeiture-report-georgia

U.S. Attorney Carmen Ortiz said her office is weighing an appeal against a Tewksbury motel owner who criticized her for prosecutorial bullying last week after he won his battle in the feds’ three-year bid to seize his business, citing drug busts on the property.

“This case was strictly a law-enforcement effort to crack down on what was seen as a pattern of using the motel to further the commission of drug crimes for nearly three decades,” Ortiz said in a statement. “We are weighing our options with respect to appeal.”

Russ Caswell, owner of Motel Caswell, told the Herald he thought the case was “bullying by the government” and felt vindicated when a judge sided with him after his court victory last week.

IJ’s Press Release:

Arlington, Va.—In a major triumph for property rights, a federal court in Massachusetts dismissed a civil forfeiture action against the Motel Caswell, a family-run motel in Tewksbury, handing a complete victory to owners Russell and Patricia Caswell.  In one of the most contentious civil forfeiture fights in the nation, Magistrate Judge Judith G. Dein of the U.S. District Court for the District of Massachusetts concluded, based on a week-long bench trial in November 2012, that the motel was not subject to forfeiture under federal law and that its owners were wholly innocent of any wrongdoing.

The Institute for Justice and local counsel Schlossberg, LLC, brought the case to trial to expose the injustices of civil forfeiture laws that allow law enforcement agencies to pad their budgets by taking property from innocent owners who have never been convicted or even charged with a crime.

Download the federal court ruling (pdf).

“This is a complete victory for the Caswell family and for the protection of private property rights,” said Scott Bullock, senior attorney at the Institute for Justice.  “The Caswells will keep their motel, and private property rights are preserved.”

The government had sought to take the Motel Caswell from the Caswell family under the theory that the motel allegedly facilitated drug crimes.  But the court found that Mr. Caswell “did not know the guests involved in the drug crimes, did not know of their anticipated criminal behavior at the time they registered as guests, and did not know of the drug crimes while they were occurring.”

“This outrageous forfeiture action should never have been filed in the first place,” said Larry Salzman, an IJ attorney.  “What the government did amounted to little more than a grab for what they saw as quick cash under the guise of civil forfeiture.”

Caswell said, “I couldn’t have fought this fight without the help of the Institute for Justice.  It is hard to believe anything like this goes on in our country, but the government goes after people they think can’t afford to fight.  But with IJ’s help, we put up a heck of a fight and have won.  The public needs to stand up against these abuses of power.”

The Problem of civil forfeiture is widespread.  In 1986, the year after the U.S. Department of Justice’s Asset Forfeiture Fund was created—the fund that holds the forfeiture proceeds from properties forfeited under federal law and available to be paid out to law enforcement agencies—it took in just $93.7 million.  Today, it holds more than $1.6 billion.  An Institute for Justice report, Inequitable Justice:  How Federal “Equitable Sharing” Encourages Local Police and Prosecutors to Evade State Civil Forfeiture Law for Financial Gain, documents how the problem is growing worse.  Between 2000 and 2008, equitable sharing payments from the U.S. Department of Justice to state and local law enforcement doubled from about $200 million to $400 million per year.

“Civil forfeiture is a draconian power that is too easily abused,” said Darpana Sheth, an IJ attorney.  “This case epitomizes what an aggressive U.S. attorney wielding these laws can do to a small property owner like Russ Caswell.”

IJ President and General Counsel Chip Mellor said:  “The Institute for Justice has documented time and again that civil forfeiture invites a lack of accountability, a lack of due process and a lack of restraints on government authority.  Civil forfeiture needs to end.  If the government wants to take someone’s property, it should first be required to convict that person of a crime.  Short of that, you will end up with what the federal government tried to do in Tewksbury.” John E. Kramer, IJ Scores Major Federal Court Victory In Massachusetts Civil Forfeiture Case: Motel Caswell is Safe from Federal Seizure, Institute for Justice, 24 Jan. 2013.

1. elevate the state’s burden of proof to a showing of “clear and convincing evidence that seized property is subject to forfeiture”;
2. deny law enforcement agencies access to civil forfeiture proceeds when agencies misuse “property derived or resulting from civil forfeiture actions” as well as deny access to forfeiture proceeds where agencies fail to submit and make public (through the Carl Vinson Institute of Government) annual reports ”specifying the property received during the fiscal year and clearly identifying the use of such property, including the specifics of all monetary expenditures”;
3. require Georgia law enforcement receiving federal forfeiture proceeds comply with Georgia’s proposed accountability restrictions;
4. cap forfeiture proceeds paid to district attorneys’ offices at 10% of forfeiture proceeds and limit applicable usage of such payments to the offices’ “trial expenses, victim-witness services, training expenses, travel expenses, and maintenance or improvement of equipment”; and
5. clarify and simplify forfeiture laws in Georgia through a comprehensive re-write–including eliminating obsolete and conflicting code.

Representatives Willard, Lindsey, and Abrams previously teamed up to shore up state funding for the public defense of indigents.

MacKenzie Elmer in the Iowa Hawkeye reports:

52-inch TV auctioned by Lee County Sheriff’s Offfice; final bid: $130

Under new leadership, the Lee County Narcotics Task Force has cracked down on drug dealers and manufacturers in the southern tail of the state, but officers also are taking advantage of a state law that permits police to seize and sell property to cushion its budget.

“When I took over, I instructed officers to investigate everything to combat the meth epidemic,” said task force commander Stacy Weber. “We threw a large net out and arrested everyone from smurfers to manufacturers. The sheriff is on the control board and knows I’m aggressive. The jail filled up pretty fast.”

Nabbing drug criminals has a big bonus because Iowa’s forfeiture law, chapter 809A of Iowa code, makes selling property seized during drug busts easy.

“I have to pay for day-to-day expenses by forfeitures of seizures and selling them on eBay,” Weber said.

Within eight months of his promotion to commander of the task force, Weber created an eBay account to expedite the sale of forfeited property seized by his task force.

“We have to sell it by auction, and eBay is the biggest auction in the world,” he said. Weber posts photos of the items and links to the eBay bid page on the Lee County Sheriff’s Facebook page, too.

Between last August and November, Weber sold $4,099.95 worth of property through bids he monitors personally, money which goes back into the task force budget to pay for officer overtime, cell phone bills and equipment.

Though Weber may be taking a step across a digital divide unprecedented for most police forces, these forfeited goods represent a steal.

A 52-inch flat-screen TV, worth about $2,000, for instance, sold for only $130.49.

But, Weber isn’t proactive on the Internet alone.

During his short tenure, he also sold two former drug houses forfeited in Fort Madison and Keokuk totaling $10,100.

The cost-cutting commander even took a team of jail inmates to clean up the dank dwellings. The prisoners ripped out moldy carpets, gathered trash and moved furniture.

“I like to know that taxpayers don’t foot the bill,” Weber said.

Inmates also wash the growing fleet of seized vehicles kept behind the county jail and the commander’s car.

“I think outside of the box on everything,” Weber said.

Weber’s aggressive exercise of forfeiture law in drug cases relieves the county of undesirable properties, but the task force is struggling to stay afloat financially.

After a state audit in May of last year revealed $90,098 was missing from what police officials called a bookkeeping error, the county budget office took control of the records.

“We thought we were solvent, but we weren’t,” former Keokuk Police Chief Tom Crew said in June following the audit’s release. “This has nothing to do with any wrongdoing. Our accounting procedure was flawed, and we’re making it right.”

Crew also attributed the deficit to the federal government trimming the main funding source, called the Byrne Justice Assistance Grant.

Lee County’s grant dwindled to just $90,000 for fiscal year 2012.

As the task force scrambled to pay the large amount of overtime their officers accrued in 2012, its board predicts this year’s $68,400 of JAG money will be exhausted by March.

“We’re cops. We’re not going to stop working,” Weber said.

One revenue-generating avenue is sellling forfeited property, but Iowa’s enigmatic law seems to provide little avenue for the accused to get their property back once the task force has taken it, regardless of their innocence.

Iowa’s murky law

The Institute for Justice, a nonprofit civil liberties law firm, conducted a nationwide study to gauge whether state forfeiture laws encouraged police to take property to boost their budget.

Iowa’s law received a D-minus.

“Iowa has some of the worst laws in the nation for encouraging abuse,” the institute said in 2010.

The state’s forfeiture law has been in use since the 1990s. Originally, only federal courts took forfeiture cases. In Iowa, asset forfeiture cases are resolved in civil court separate from criminal court, where offenders are tried.

“Unlike criminal asset forfeiture, however, with civil forfeiture, a property owner need not be found guilty of a crime – or even charged – to permanently lose her cash, car, home or other property,” reads the Institute’s report.

Mike Short, Lee County attorney for 36 years, said his office is working on a couple dozen forfeitures at any given time.

“The vast majority of which go unanswered, meaning nobody makes a claim (for their property),” Short said.

Property owners are delivered a notice and list of their seized property, but if they don’t claim it within 30 days, it becomes task force property.

“Defendants are in a very difficult position to make that claim. It can still be used (against you) in a criminal case,” Short said. And public defenders usually only represent their client in criminal court, not during civil forfeiture cases. “It’s pretty difficult to fight forfeiture because (defendants) don’t have facts and truth is, it’s proceeds of criminal activity,” said Corwin Ritchie, executive director of the Iowa County Attorney’s Association.

He works in the state Attorney General’s Office, which keeps track of the 10 percent state cut from cash forfeitures.

Law enforcement agencies are not required to report any other types of forfeitures to the state.

How property is seized

After police have obtained a warrant and searched a drug house, they collect evidence to incriminate dealers and users like meth pots, baggies and weapons.

But officers also are authorized to take property that looks like it has been bought with drug proceeds.

This is where forfeiture law gets murky.

Under the Fourth Amendment of the U.S. Constitution, officers can seize items not listed on a warrant but still are in plain view and immediately determine it is contraband.

It’s up to the discretion of the officers to interpret what is “immediately apparent.”

“We take things that are proceeds of the drug trade like cars, houses and TVs,” Weber said. “A lot of these people never had a job, so you can tell what comes from drug proceeds.”

Short referenced one case against Anthony Laveal Moody, charged last May for dealing cocaine and maintaining a drug house.

When officers raided his home, they seized three flat-screen televisions, a digital camera, a copier and printer, video game consoles and controllers, a suitcase with tattoo equipment and $10,000 cash.

In another case, officers seized flat-bill hats and multiple pairs of shoes from a suspect who, according to his Facebook page, fled to Mexico.

Short said the property seizure affidavit was published in the local papers.

“Our papers have limited publication in Mexico,” he said, laughing. Weber sold the lot on eBay for $244.50.

But individuals facing drug charges often find themselves in a Catch-22.

If they file a claim for their property, it can be used as proof against them in criminal court.

“For Mr. Moody, claiming that money was more detrimental to him than kissing it goodbye,” Short said.

The Lee County Narcotics Task Force regularly seizes property not listed on a warrant but categorized as financial assets.

Moody’s case was an exceptionally lucrative forfeiture since money made from dealing meth, the most popular drug in Lee County, gets recycled into the addiction.

“Marijuana is also a moneymaker,” Short said.

And it’s during a pot bust where the task force tends to seize more profitable items.

Lee County aggression

County task forces in southeastern Iowa are competitive over how many successful forfeitures they accrue.

“Des Moines County, they’re not as aggressive as us. … Mike Short is just a better attorney than Des Moines County’s. He’s more aggressive about this,” Weber said. He and Short write up search warrants together.

“I can call him at 3 a.m. on a Sunday morning and get a warrant,” said Weber. A

my Beavers, senior assistant Des Moines county attorney, said she gets only a handful of forfeiture cases from time to time. Beavers errs on the side of caution with 809A.

Instead of using the loopholes of the law to her advantage, she takes steps to ensure a property seizure is tied to a criminal conviction.

“I like to wait until a criminal case runs its course so I don’t have civil and criminal cases running at the same time,” Beavers said. “It has to be connected. We can’t just go around doing forfeitures on whatever law enforcement wants.”

What may be a tricky law still helps the Lee County Narcotics Task Force chip away at debt. “It seems like a little water on a big flame but if I keep doing this like I am, we can get by with very little money,” Weber said.

A review of Police Department arrest logs from 2007 through 2012 shows that despite a relatively high number of drug arrests at the Motel Caswell property in recent years, more suspects have been busted on drug-related charges at nearby addresses.

During the examined six-year time period, police made 19 drug arrests at the Motel Caswell at 450 Main St., five fewer than at the property where Walmart is located at 333 Main St. Twenty-six drug arrests were made at each of the properties located at 85 Main St. and 95 Main St.

The arrest logs do not indicate if an arrest took place inside a business or elsewhere on the property, like on the fringe of a parking lot. Not all entries list the business or location name along with the address where the arrest took place. For example, the address of 85 Main St. is shared by Home Depot, Applebee’s and a Burger King, with a large parking lot. Of the 26 arrests there, 14 were listed as occurring at Home Depot, and 5 each at Applebee’s and Burger King, with the remaining two not specifying the precise location.

Route 38′s other budget motel, the Motel 6, is at 95 Main St., along with an IHOP restaurant. Four of the 26 drug arrests at that address were listed as taking place at IHOP, with 22 at the Motel 6.

Regardless of where on the property the arrests took place, three addresses in town have seen more drug arrests than the Motel Caswell in the last six years. And yet the Motel Caswell is being prosecuted by the federal government for being a drug-arrest magnet.

“It belies this notion that the area’s great and there’s this one problem property, the Motel Caswell,” said attorney Scott Bullock from the Institute for Justice, the Arlington, Va.-based libertarian law firm representing motel owner Russ Caswell. “That’s not the case at all.

Bullock said that when the Institute for Justice first took on the Motel Caswell case in 2011, the team examined police logs and found the rate of arrests at the motel comparable to that of its neighbors. He said more recent statistics obtained by The Sun seem in line with those initial findings. Excerpted from Katie Lannan, Tewksbury motel feels fed heat, but more drug arrests nearby, The Lowell Sun, 13 Jan. 2012.

It seems doubtful the prosecution would persist with this preposterous forfeiture attempt but for the corrosive asset forfeiture incentives, the value of the property, the lack of a mortgage, and the independence of the motel. Participation in a corporate or franchisee structure likely provides some short-term cover against such overreach. However, wins against the Motel Caswells of the country would predict expansion against whatever properties incentivized law enforcement decide facilitated drug crimes because independent third-party actors consumed drugs on the property–which implies just about any property in the U.S. worth something to the seizing agency would be, under the stated rationale, subject to forfeiture.

Some Missouri school children shiver at their desks because the budget is tight.

Some Missouri schools share textbooks.

All Missouri schools could use a little more help in their funding: a few new books, a roof repair, another teacher or afterschool activity to help keep kids in school and away from drugs.

Many police cars in Missouri never shut off. They happily burn precious gasoline for hours on end while the officers sitting in them blast the air conditioning or heat. The officers are comfortable, sporting new equipment purchased from the Feds with asset forfeiture funds for pennies on the dollar.

Other Missouri cops dig into fine dining and give each other awards, celebrating the money confiscated through asset forfeiture, money that has largely been returned to department to purchase toys, dinners, awards and serve as a general slush fund. These funds have been misused by law enforcement across the nation. But in Missouri, it is supposed to be different.

In Missouri, the police aren’t supposed to steal from the schoolchildren.

Yet they do.

Columbia, Mo., Chief of Police Ken “Pennies” Burton made regional and national news for describing federal asset forfeiture returns as “pennies from heaven.” Burton recently received permission from the Columbia City Council to spend asset forfeiture money to purchase wearable cameras for his officers.

But Burton’s “pennies” come with a price.

Some assets are confiscated from people who have not been convicted a crime. Those people experience strong-arm robbery at the hands of street gang. There is little to no difference between having your property stolen by criminal and having your property stolen by a cop. The only difference is recourse. If a criminal steals your stuff, you can call a cop.

But when a cop steals your stuff, attempting to stop him is a crime that will result in years as a guest of the Missouri Department of Corrections, which leaves the victim only two choices: hire an attorney or bend over and take it. Hiring an attorney to reclaim your property is pointless – except when there are significant sums involved. It is an expensive long process with the deck stacked against you.

The process is simple. If the cops find a significant amount of property they want to keep, they call in the DEA or other federal agency. The feds seize the property and return a large percentage back to the department. It is just like the old mafia business: Vito brought his idea to the Don. The Don blessed it and Vito kicked a share up to the Don.
If there is a smaller amount, the local law enforcement may simply confiscate it and send it over to the prosecuting attorney for forfeiture. Once the property is forfeited in this manner, 100% of the proceeds are transferred to Missouri schools.

Missouri law requires forfeited funds to benefit the schools.

So, when the police want to throw a party, buy some swag, or give each other awards, they bring in a fed and circumvent Missouri law.

This essentially means that the local and state police departments decided that they are above Missouri law and they should make a profit from their policing. And they do.

Millions of dollars funnel into Missouri law enforcement coffers through this system – Millions of dollars that should be spent teaching our youth.

In Columbia, the city council questioned the distribution of funds. They still approve the theft of money from Missouri schools, but at least they started questioning.

It is an old maxim among detectives and reporters: follow the money. When you find out who profits, you find out who had motive for the crime. It is time to end policing for profit.

Later this week, a pair of lawsuits filed against the Airway Heights Police Department will pull back the curtain on a secret investigation that targeted alleged prostitution rings in Spokane. The owners of two Asian spas raided last summer are demanding the return of thousands of dollars, seized during simultaneous raids.

Six months ago, the police raided Joe Jeans Oriental Spa on North Division, arresting 62-year old Yong Cha Kassim and seizing her black Mercedes. Now, she’s heading back to Superior Court, hoping to get that car returned. A 14-month long investigation identified almost 200 women working as prostitutes in massage parlors, where investigators say there were no massage tables at all.

“Each of these spas were different,” explained Airway Heights Police Chief Lee Bennett in July. “In talking with the undercover officers and our confidential informants, they all work about the same  – where a customer will come in, pay a door fee. Once that door fee is paid, then depending on what type of service that customer wants the price goes from there.”

Investigators say the spas were clearing $10,000 a month. When they searched the Oriental Spa owner’s safety deposit box, they found $38,900 in $100 bills and another $20,000 in $50 bills.

Police seized the spas’ assets in the hopes of putting them out of business.

“Well this is a cash-driven business and if they don’t have cash, they’re not going to reopen the doors,” said Airway Heights Police Detective Kelly Justice at the time of the raids. “Because you have to pay for electricity. you have to pay for  all the items that were seized as evidence. And, if you don’t have the cash it makes it a lot harder for them to reopen.”

Now, six months later, Oriental Spa North owner Chin Sim Day’s attorney Carl Oreskovich claims his client still hasn’t been made aware of the alleged evidence against her. That’s because investigators used a judge of special inquiry, in this case Kathleen O’Connor. Up until now, any of the search warrants she authorized have been kept secret.

Thursday, Oreskovich will argue his motion for the return of Day’s property. That will put prosecutors in the position of having to reveal their evidence, including having to release the names of the customers who patronized those spas. Jeff Humphrey, Asian spa owners demand details, seized property, KXLY4, 08 Jan. 2013.

Using seizure power to summarily inflict punishment on an alleged offender (no matter how guilty the police may believe the offender be), without first affording even rudimentary process protections, is repugnant and unreasonable. The concerted (and admitted) attempt to kill the business by starving it of assets before (if ever) bringing the case for independent review exacerbates the harm by eliminating the availability for process protections before punishment is substantially delivered.

Clearly, due process demands more.

 D. Analysis of Suppression Motion

→ PRELIMINARY ISSUE
One issue not briefed by the parties but bearing mention is the preliminary question of whether a Fourth Amendment-based suppression motion is proper in an in rem civil forfeiture proceeding like the case at bar. The federal courts have not answered this question uniformly. Some Courts of Appeal have held that since civil forfeiture proceedings are quasi-criminal in nature, the exclusionary rule applies, and suppression motions may be filed. See, e.g., U.S. v. $291,828.00 in U.S. Currency, 536 F.3d 1234, 1236-38 (11th Cir. 2008)(“The Fourth Amendment exclusionary rule applies to civil forfeiture actions.”); U.S. v. $493,850.00 in U.S. Currency, 518 F.3d 1159, 1164 (9th Cir. 2008)(“The exclusionary rule applies in civil forfeiture cases…. It bars the admission of evidence obtained in violation of the U.S. Constitution, as well as ‘fruits of the poisonous tree.’”). Other courts have voiced uncertainty about the use of suppression motions in civil forfeiture actions. A 2009 Seventh Circuit case furnishes an example.
In United States v. Marrocco, 578 F.3d 627, 631 n.5 (7th Cir. 2009), the Court of Appeals for the Seventh Circuit sidestepped the potential obstacle, because the Government had not argued that the remedy of suppression is unavailable in forfeiture proceedings under 21 U.S.C. 881. However, in his concurring opinion, Judge Easterbrook expressed concern with the assumption that suppression motions are appropriate in civil forfeitures:

All parties assume that the exclusionary rule applies to forfeiture, so that the res must be returned if it was improperly seized. Yet the Supreme Court has twice held that the exclusionary rule is not used in civil proceedings. See INS v. Lopez–Mendoza, 468 U.S. 1032 … (1984) (deportation); United States v. Janis, 428 U.S. 433 … (1976) (taxation). See also Pennsylvania Board of Probation & Parole v. Scott, 524 U.S. 357 … (1998)(rule inapplicable to probation revocation). Although One 1958 Plymouth Sedan v. Pennsylvania, 380 U.S. 693, 85 S.Ct. 1246, 14 L.Ed.2d 170 (1965), suppressed evidence in a forfeiture, Janis stated that this was because that forfeiture was intended as a criminal punishment. 428 U.S. at 447 n. 17…. The forfeiture in our case is civil. It is farther from a criminal prosecution than is a probation-revocation proceeding. Suppressing the res in a civil proceeding, even though the property is subject to forfeiture, would be like dismissing the indictment in a criminal proceeding whenever the defendant was arrested without probable cause.The Supreme Court has been unwilling to use the exclusionary rule to “suppress” the body of an improperly arrested defendant….

Why then would it be sensible to suppress the res? Marrocco, 578 F.3d at 642 (emphasis added).

Similarly, the District Court for Northern District of Illinois has pointed out: The Supreme Court has suggested that, barring “egregious” Fourth Amendment violations, the exclusionary rule does not apply in civil proceedings. See Krasilych v. Holder, 583 F.3d 962, 967 (7th Cir. 2009)(citing INS v. Lopez-Mendoza, 468 U.S. 1032, 1050-51 … (1984)). The primary purpose of the exclusionary rule is to deter unlawful police conduct. Courts have generally held that application of the exclusionary rule to criminal trials alone creates an adequate deterrent; any marginal benefit gained by extending the exclusionary rule to civil proceedings tends to be outweighed by the social cost of losing probative evidence. See generally United States v. Janis, 428 U.S. 433 … (1976). The exclusionary rule seems particularly ill-suited to civil forfeiture proceedings, where it is a physical object, not a person, that is the defendant.  United States v. Funds in the Amount of $239,400, — F. Supp. 3d –, 2012 WL 2007025, *6 (N.D. Ill. 2012).

The undersigned shares Judge Easterbrook’s reservations regarding the use of exclusionary rule-based suppression motions in civil forfeiture proceedings. However, here, as in Marrocco, the Government has not argued that suppression motions are unavailable in civil forfeitures. And the Seventh Circuit has not squarely held the exclusionary rule inapplicable to such proceedings. So the undersigned will reach the merits of Claimants’ Fourth Amendment challenge, analyzing the three components of the challenge (the traffic stop, the existence of a consent, and the scope of the consent) after addressing whether Claimants have standing to context the seizure of the res herein. United States v. $304,980 in United States Currency, U.S. Dist. (S.D. Ill. January 3, 2013). (Hat tip to John Wesley Hall’s Fourth Amendment Blog.)

The dogs often are used to find probable cause to search, for example, a suspicious vehicle. A dog is walked around the vehicle to sniff the air next to it, giving an alert signal such as digging at an area of the car if it senses an illegal drug.

But if a police dog has been trained to alert on a substance that is legal, it could be seen as overintrusive.

“This is definitely an area of concern we are looking at,” Larimer County District Attorney Larry Abrahamson said in an email. “Obviously if a dog detects marijuana, it may not be a crime if under one ounce — depending of course on where it is located.

“I am sure DAs and law enforcement agencies will be discussing this over the next few months.”

Since voters in November passed Amendment 64, adults over 21 can possess up to an ounce of marijuana as well as up to six pot plants and whatever those plants yield; anything more than an ounce is to be kept in the growing facility….”

“Fort Collins defense lawyer Derek Samuelson said the dogs’ “highly-developed sense of smell” probably could differentiate between marijuana and other drugs and even quantities of marijuana.

“Even if they have the ability to make those distinctions,” he said. “I seriously doubt that any of those dogs have the ability to communicate to their handler, ‘Hey, it’s cocaine that I’m smelling rather than marijuana, or, if it’s marijuana I’m smelling, (a) quantity greater than what’s permitted under the law change.”

Ultimately it will be up to the courts to decide whether Amendment 64 impacts the use of police dogs for searches.

“This is a really complicated issue, and I think it’s unclear how the state courts are going to interpret Amendment 64 and its impact in state court,” Samuelson said.

Robinson said that because possessing more than a certain amount of marijuana remains a felony, and because it’s still illegal under federal law, he doesn’t foresee a change.

“I think it would hold up,” he said. “Because the vast majority of things they’re trained to detect are still illegal.”

The Weld County District Attorney’s Office declined comment on the impacts of Amendment 64 on drug-sniffing dogs, and Boulder County District Attorney’s Office didn’t respond to requests for comment by press time.

Meanwhile, the U.S. Supreme Court is expected to decide in the next six months on two cases directly impacting the use of drug-sniffing dogs.

Florida v. Harris involves whether a well-trained drug dog’s alert is insufficient to establish probable cause for a vehicle search. Florida v. Jardines involves whether a dog sniff at a suspected marijuana grow house’s front door is a Fourth Amendment search that requires probable cause.

Lawyers say canine searches can be complicated issues, even without Amendment 64.

“I don’t think this is going to be sorted out at any time in the near future,” Samuelson said. “As far as the canine sniff issue goes, I imagine as is often the case with Supreme Court decisions, they will raise more questions and breed more issues than perhaps they resolve.”” Excerpted from Robert Allen, Drug-sniffing dogs may have a harder time with passage of Amendment 64, The Coloradoan, 30 Dec. 2012.

Of related interest, how courts will treat attempted forfeitures of currency, where no drugs are found, but a drug-dog purportedly gives a positive alert to currency. Amendment 64 includes language limiting the availability of civil asset forfeiture in instances of lawful personal possession of marijuana and lawful operation of marijuana-related facilities:

(3) Personal use of marijuana. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE FOLLOWING ACTS ARE NOT UNLAWFUL AND SHALL NOT BE AN OFFENSE UNDER COLORADO LAW OR THE LAW OF ANY LOCALITY WITHIN COLORADO OR BE A BASIS FOR SEIZURE OR FORFEITURE OF ASSETS UNDER COLORADO LAW FOR PERSONS TWENTY-ONE YEARS OF AGE OR OLDER…

(4) Lawful operation of marijuana-related facilities. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE FOLLOWING ACTS ARE NOT UNLAWFUL AND SHALL NOT BE AN OFFENSE UNDER COLORADO LAW OR BE A BASIS FOR SEIZURE OR FORFEITURE OF ASSETS UNDER COLORADO LAW FOR PERSONS TWENTY-ONE YEARS OF AGE OR OLDER…. Amendment 64, Use and Regulation of Marijuana

In instances where no drugs are found but drug-dogs purportedly alert, how state and local prosecutors might persuasively show that dogs were not simply alerting to exposure to legal marijuana is unclear–as is what that might mean. Courts have historically been responsive to the leap of logic that because dogs are good at finding drugs, a positive alert indicates that alerted-to-property is connectable to illicit drug trade–even where no drugs are found and numerous other theories might explain the alert. It should be obvious that the logic is unsound.¹ Nonetheless, courts routinely accept the reasoning. Whether that will continue, without curtailment, in a state where adults enjoy constitutional rights regarding marijuana possession and usage, will have to be mapped out.

Also unclear, how federal courts will treat adopted forfeitures where, and if, local police are judged to have seized property without local lawful basis for seizing the property before transferring the property to federal authorities for federal civil asset forfeiture. Equally unclear, where such seizures and transfers are permitted, whether eligibility for federal equitable sharing payments might be impacted due to arguably coercing local authorities to violate Colorado’s Constitution² and possibly violating federal guidelines requiring local law enforcement enjoy legal authority, under state law, to transfer the property to the federal adopting agency (authority arguably lacking absent authority to seize, continue detention, and/or sufficient control to authorize a transfer):

“A state or local law enforcement agency requesting federal adoption of a state or local seizure must comply with all applicable state laws and regulations pertaining to the transfer of seized property to a federal law enforcement agency, including any requirement for a state judicial order or prosecutorial consent (e.g., declination letter) for such transfer. When required by state law, a state transfer order should be obtained for assets seized pursuant to a state search warrant or a warrantless search to which state jurisdiction has attached. Federal officials should consult with appropriate state or local authorities in adoption situations.” United States Department of Justice, A Guide to Equitable Sharing for State and Local Law Enforcement Agencies.

 

Assistant United States Attorney Sonya Rao argues all property on which a drug crime has occurred is subject to forfeiture, regardless of the owner’s knowledge or consent. The prosecution’s theory would make continued private ownership of publicly-used property contingent on the discretion of prosecutors and mere happenstance. Successful use of the theory would also gut the protection that the government must first show property is subject to forfeiture.  To support this preposterous conclusion, AUSA Rao cuts-and-pastes largely distinguishable non-controlling out-of-circuit decisions–nearly all of which were decided before the Civil Asset Forfeiture Reform Act of 2000 and its attendant protections became law:

It is important to note, however, that whether the property’s role is integral, essential or indispensable to the crime is irrelevant in determining the property’s substantial connection to the crime. Schifferli, 895 F.2d at 990 (“[T]he language of §887(a)(7) makes clear that it is irrelevant whether the property is even used at all in the commission of a crime, so long as it is intended to be used…It is also irrelevant whether the property’s role in the crime is integral, essential or indispensable. The term ‘facilitate’ implies that the property need only make the prohibited conduct less difficult or more or less free from obstruction or hinderance.”)(internal citations and quotations omitted). Under First Circuit law, the fact that the illegal activities could have occurred elsewhere is not a defense against forfeiture. United States v. Heldeman, 402 F.3d 220, 222 (1st Cir. 2005). Moreover, while establishing a pattern of activity is one method by which the Government can demonstrate a substantial connection between a defendant property and illegal drug activity,2 “[j]ust one use of the property may be enough, given that a single violation is sufficient under § 881(a)(7).” United States v. One Parcel of Real Estate Commonly Known as 916 Douglas Ave., 903 F.2d 490, 494 (7th Cir. 1990).

The evidence adduced at trial establishes that over a period of at least fourteen years, from at approximately September 1994 through November 2008 (i.e., the period covered by the Findings of Fact in Section II, infra), the Defendant Property was the scene of continual illegal drug activity; at trial, the Government presented specific examples of the drug activity that occurred at the Defendant Property (hereinafter referred to as the “Drug Crimes”). The uncontroverted evidence at trial revealed the Motel Caswell, which is located on the Defendant Property, was the common dominator [sic] across all of the Drug Crimes, uniting the illegal drugs and dealers and users. Through lax oversight by the Claimant and no security at the Defendant Property, the Motel Caswell, in effect, invited [sic] the Drug Crimes and made [sic] detection of the Drug Crimes, as well as deterrence of future drug activity, less likely. For example, drug trafficking, drug possession, and even drug manufacturing, were less detectable because those activities occurred in the rooms of the Motel Caswell. The lack of security measures at the Motel Caswell also made it easier to complete a drug transaction. Quite simply, as long as a drug dealer or a drug user paid for a room, the Claimant and its Motel Caswell staff would turn a blind eye to drug activity.

In addition, some of the Drug Crimes that the Motel Caswell helped [sic] to facilitate resulted in individuals receiving a sentence of imprisonment of more than one year. Thus, the United States clearly carried its forfeitability burden at trial.

Claimant, however, incorrectly argued at trial that the United States did not establish forfeitability of the Defendant Property because the Government did not tie the Drug Crimes to the Claimant. Neither Congress, when it enacted CAFRA, nor the relevant caselaw impose such a requirement.¹

Civil forfeitures are in rem proceedings, with the issue of forfeitability dependent on the property and the property’s (not an individual’s) connection to crime. In contrast to criminal forfeiture, civil in rem forfeiture, is not limited to forfeiture of property belonging to principals or conspirators in the underlying illegal activity; civil judicial forfeiture can be ordered even if there is no criminal violation by a claimant. See United States v. All Right, Title and Interest…143-147 East 23rd Street (Kenmore Hotel), 77 F.3d 648 (2d Cir. 1996)(forfeiture of hotel where claimants were not personally involved in underlying drug conduct that was the basis for forfeiture); United States v. One Parcel of Real Estate at 1012 Germantown Road, Palm Beach County, Fla., 963 F.2d 1496 (11th Cir. 1992)(finding forfeiture of convenience store that was site of numerous drug offenses where claimant was not personally involved in underlying conduct, but remanding for new trial based on improper jury instruction regarding “reasonable efforts”); United States v. All Monies in Account No. 90-3617-3, Israel Disc. Bank, 754 F.Supp. 1467, 1476 (D. Haw. 1991)(citing United States v. Leong Chinese Merchants Assn. Building, 918 F.2d 1289, 1293 (7th Cir. 1990))(court rejected claimant’s argument that the facilitation theory should be confined to property belonging to principals or conspirators in the underlying criminal activity and noted that, while many cases may have applied the facilitation theory in such instances, nothing suggests that the limitation was intended by Congress).

This is not to say that an owner’s participation in (or knowledge of) the crimes is irrelevant to civil forfeitures. This information is clearly relevant to any innocent owner defense. The role of the owner in the relevant crimes, however, is irrelevant to the first inquiry into forfeitability. UNITED STATES’ POST-TRIAL BRIEF, UNITED STATES OF AMERICA v. 434 MAIN STREET, TEWKSBURY, MASSACHUSETTS

After arguing that all property is subject to forfeiture if incidental non-consensual third-party drug use took place on the property, AUSA Rao denies that it is sufficient, when invoking the innocent owner defense, to notify the police of suspected drug activity and to make a good faith effort to deny permission to the specific individuals using the property for the specified illegal acts, as Caswell did, despite the text of  18 U.S.C. § 983(d):

Innocent Owner Defense.— (1) An innocent owner’s interest in property shall not be forfeited under any civil forfeiture statute. The claimant shall have the burden of proving that the claimant is an innocent owner by a preponderance of the evidence.

(2) (A) With respect to a property interest in existence at the time the illegal conduct giving rise to forfeiture took place, the term “innocent owner” means an owner who—

(i) did not know of the conduct giving rise to forfeiture; or (ii) upon learning of the conduct giving rise to the forfeiture, did all that reasonably could be expected under the circumstances to terminate such use of the property. (B) (i) For the purposes of this paragraph, ways in which a person may show that such person did all that reasonably could be expected may include demonstrating that such person, to the extent permitted by law— (I) gave timely notice to an appropriate law enforcement agency of information that led the person to know the conduct giving rise to a forfeiture would occur or has occurred; and (II) in a timely fashion revoked or made a good faith attempt to revoke permission for those engaging in such conduct to use the property or took reasonable actions in consultation with a law enforcement agency to discourage or prevent the illegal use of the property.

(ii) A person is not required by this subparagraph to take steps that the person reasonably believes would be likely to subject any person (other than the person whose conduct gave rise to the forfeiture) to physical danger.

The text plainly provides affirmative defenses to those that did not know that their property was being used illegally AND to those that, upon learning that their property was being used illegally, took all reasonable steps to terminate such illegal use of the property. The codified text provides two examples of what could constitute reasonable steps:

1. notifying police and, in a timely fashion, revoking or making a good faith attempt to revoke permission from those illegally using the property; OR
2. notifying police and taking reasonable actions, in consultation with a law enforcement agency, to discourage or prevent the illegal use of the property.

The examples are distinct and not necessarily exhaustive. Assuming one notifies the police, either sufficient evidence of good faith attempts to revoke permission OR sufficient evidence of preventative steps should suffice–of course, neither would suffice in AUSA Rao’s fevered characterization: “In the instant case, the evidence at trial makes clear that….[Caswell] failed at any time during that period to take any reasonable or meaningful action to terminate or reduce such use of the Defendant Property.”

AUSA Rao’s account seems to be contradicted by the record. Caswell clearly demonstrated good faith attempts to revoke permission AND took self-initiated steps to prevent illegal use:

“[C]ontrary to the Government’s claim that Mr. Caswell did nothing to curtail drug activity at the Motel, the evidence demonstrates that he both fully cooperated with the police in their investigations while also proactively taking steps to address criminal activity. Mr. Caswell and his employees called the police to report suspicious activity, including drug activity. He always opened his registration records to the police and made keys to room available to them upon request. Mr. Caswell provided full and open access to all areas of the Motel. And, as noted previously, he even provided free rooms upon request to law enforcement while they conducted sting operations and surveillance of guests suspected of drug activity.

The Government claims that those are examples of Mr. Caswell just complying with the law. Not so. Neither Mr. Caswell nor his employees were under any legal obligation to call the police to report suspicious activity, but they consistently did so. Mr. Caswell could have challenged the government on access to the property and for keys to the room by asking questions or demanding search warrants. He could have denied access or charged the police if they wanted to use rooms for drug investigations. But instead he fully cooperated with law enforcement at every turn. Indeed, when the police asked him to improve the method by which he registers guests to ensure that the names are legibly written and to make copies of driver licenses, he responded and did what the police asked of him. The Government also claims that Mr. Caswell took no affirmative steps to attempt to reduce criminal activity at the Motel. . Again, that is simply not the case.

In addition to reporting suspicious activity and cooperating with the police, Mr. Caswell also put in security cameras, one in the office before the instant action was filed and additional security cameras in the parking lots a few years later.  He has lighting in the front and the back of the Motel to enhance security. He posts a sign in the lobby of the Motel, which has been there for at least ten years, asking patrons to call the police if they see any suspicious activity. He established a do-not-rent list for individuals that have caused problems at the Motel. And, perhaps most significantly, he has a desk clerk on-site 24 hours a day, seven days a week, to help with security and to report any problems to the police. As Mr. Caswell testified, it is not particularly economical to do this, since it is relatively rare for a guest to check in after midnight, but he keeps one there “[f]or security sake, just to keep an eye on things, . . . just call the police if anything crops up, that sort of thing.” [Citations omitted] Claimant Caswell’s Post-Trial Brief, UNITED STATES OF AMERICA v. 434 MAIN STREET, TEWKSBURY, MASSACHUSETTS

Unsurprisingly, the prosecution’s case also ignores what lawmakers and policy makers said about the uniform innocent owner defense when passing the Civil Asset Forfeiture Reform Act of 2000 (CAFRA). An animating controversy was the attempt to forfeit the Red Carpet Inn, a motel similarly confronted with illegal drug usage and preposterous prosecutorial overreach. Lawmakers thought it important to protect future property owners who, upon learning that individuals were using their property to engage in illicit acts, notified police and took reasonable steps to stop those individuals from further using the property to commit the illegal acts. The notion that owners must assume the responsibilities of police to stop crime was rejected.

“Thus, a safe harbor is created for an owner who notifies police and revokes or attempts to revoke (to the extent permitted by law) permission to use the property by those who are using it in the course of criminal activity. The owner’s obligations end right there—property owners should not have to assume the responsibilities of police to stop crime. In the Red Carpet Motel incident described earlier, the hotel owner could have taken advantage of the bill’s safe harbor by (as he did) notifying police of drug sales taking place at the motel and making a good faith attempt to evict the responsible motel guests from their rooms.” – Representative Henry Hyde, Chairman of the House Judiciary Committee, H.R. Rep. No. 106-192, June 18, 1999.

“There were no allegations that the hotel owners participated in any crimes. Indeed, motel personnel called the police to the establishment dozens of times to report suspected drug-related activity. U.S. Attorney James DeAtley readily bragged to the press that he envisioned using current civil asset forfeiture laws in the same fashion against similar types of legitimate commercial enterprises, such as apartment complexes.
The government claimed the hotel deserved to be seized and forfeited because it had “failed” to implement all of the “security measures” dictated by law enforcement officials. This failure to agree with law enforcement about what security measures were affordable and wise from a legitimate business-operating standpoint was deemed to be the “tacit approval” of illegality cited by the prosecutors, subjecting the motel to forfeiture action.” –Samuel J. Buffone, National Association of Criminal Defense Lawyers (NACDL), S. HRG. 106-673, July 21st, 1999. 

It provides a uniform innocent owner defense, and that was involved in the case Senator Biden talked about where this motel in a very tough neighborhood, a crime-ridden neighborhood, had drug transactions going on. And the owners repeatedly reported it to the police, withheld permission. You try to evict some drug dealers sometime; I wish you a lot of luck. But the police couldn’t do it, and the police took his property, and he finally got it back after the Houston newspapers raised hell and wrote editorials, and I have them here. So an innocent owner defense is where you do everything you can. You report it to the police, you withhold permission for these illegal transactions, and that gives you a safe harbor. -Representative Henry Hyde, Chairman of the House Judiciary Committee, S. HRG. 106-673, July 21st, 1999.

In the past year, Americans have had firsthand experience with what can happen when a prosecutor with all the powers of his office throws judgment to the wind and succumbs to zealotry. There is one example of a motel that was being used by drug dealers.There was no allegation that hotel owners participated in any crimes. Indeed, the motel people had called the police dozens of times to report suspected drug-related activity in the motel’s rooms by some of its overnight guests. I mean, they were doing what an honest citizen should do; they called and reported it.But the government said they didn’t do all the security measures suggested. What did they suggest? Well, among other things, they said, well, you have got to raise your room rates. And because they didn’t, they were giving tacit consent to the drug activity, and so they seized the motel.- Senator Patrick Leahy, Member of the Senate Judiciary Committee, S. HRG. 106-673, July 21st, 1999

Steve Kubby reports in the Lake Tahoe News:

Local resident Byron Stamate has just passed away and will be remembered as the key figure in a landmark case that helped upend California’s asset forfeiture laws.In 1994, when he was 74, Stamate was charged with cultivating marijuana in his El Dorado County home. He said that the marijuana was used by his live-in companion, Shirley Dorsey, 70, to treat chronic pain from arthritis. Prosecutors relentlessly sought to forfeit Byron’s home and life savings of $400,000 under a new state law modeled on the federal one, which did not require a conviction for forfeiture.Dorsey committed suicide rather than be forced to testify against him. The text of Shirley Dorsey’s suicide note follows:

“They want to take our property, security and herbal medicine from us, even though we have not caused harm to anyone.

“It is not fair or in the best interest of the people of society.

“I will never testify against you or our right to our home. I will not live in the streets without security and a place to sleep.

“I am old, tired and ill, and I see no end to the harassment and pressures until they destroy us.”

The prosecution backfired, generating intense adverse publicity against forfeiture abuse. Stamate’s case was settled for a nominal $1,000 fine. Subsequently, California’s forfeiture law was repealed and radically reformed thanks to a lobbying campaign led by Stamate’s attorney, Brenda Grantland, and an expose on forfeiture abuses by San Jose Mercury News reporter Gary Webb.

“Under Whren v. United States, 517 U.S. 806 (1996), the police can pull over a car based on probable cause to believe a traffic violation has occurred. Any civil traffic violation counts: If you’re driving at 36mph in a 35 mph zone, you can be lawfully pulled over. But what if the officer pulls over a car based on his belief that a violation has occurred, and it turns out that the officer has the law wrong? That is, what if you’re not violating the law, and the officer mistakenly thinks you are? And here’s where it gets interesting: What if the officer’s mistake about the law is a reasonable one?

Lower courts are deeply divided on the question, and the Supreme Court of North Carolina just entered the fray with State v. Heien, ruling by a vote of 4-3 that the Fourth Amendment permits an officer to execute a seizure based on a reasonable mistake of law. The facts of Heien are the best possible facts for the government in a case like this. An officer spotted a car with a broken rear right brake light. The officer pulled over the car, and the traffic stop eventually led to the discovery of drugs in the car. The defendant was convicted, and on appeal persuaded the North Carolina Court of Appeals to adopt a rather surprising interpretation of the traffic laws. According to a long statutory analysis from the North Carolina Court of Appeals, interpreting several archaic sections of the traffic code, it was actually legal to have one broken brake light as long as the other brake light functioned properly. The state government saw the opportunity: It accepted this interpretation of the statutes, and it petitioned the North Carolina Supreme Court only on the Fourth Amendment question of whether the stop was constitutionally reasonable even though it turned out that the officer’s belief that a broken tail light was unlawful was not correct. That is, did pulling over the car with a broken tail light violate the Fourth Amendment?

A divided North Carolina Supreme Court ruled that the stop was constitutionally reasonable. The officer had a reasonable belief as to what the traffic laws meant, the majority reasoned, and he acted reasonably. Because the Fourth Amendment requires reasonableness, this is all the Fourth Amendment requires and the resulting stop was constitutional. The dissent agrees that the officer acted reasonably in a generic sense, but it argues that we would not want to systemically allow stops of people who are not breaking the law at all based on erroneous officer understandings of what the law is. The dissent also points out that this is like an exclusionary rule case in disguise: The majority’s reasoning is akin to saying that there is a good faith exception at the remedies stage, the kind of thinking that should not infuse the court’s reasoning at the initial stage of whether a constitutional violation occurred.” Excerpted from Orin Kerr, Can a Police Officer Lawfully Pull Over a Car For A Traffic Violation Based on an Erroneous Understanding of the Traffic Laws?,  The Volokh Conspiracy, 21 Dec. 2012.

The United States Court of Appeals for the Fourth Circuit does not appear to have ruled directly on the question. However, the ruling predicts the question will surface. For North Carolina law enforcement to get around the state constitution’s directive that forfeitures go to education, local law enforcement invite federal authorities to adopt and prosecute their forfeiture cases with an understanding that up to 80% of the proceeds will be kicked back to the initial seizing agencies.

The lure of forfeiture proceeds is, of course, a powerful motivator to find violations–fictional and otherwise.

State Auditor Rebecca Otto today released the Criminal Forfeitures Report, which provides information on the amount of cash and property seized subject to forfeiture by Minnesota law enforcement agencies where the final disposition was completed in 2011. The report lists and summarizes forfeiture incidents after final disposition to provide transparency to the public and to inform lawmakers on the nature and frequency of property seized subject to forfeiture.
This report reflects the first full reporting year of data reported after major statutory changes in forfeiture reporting which were enacted by the 2010 Legislature. The statutory changes expanded the scope of information to be reported to the Office of the State Auditor. The changes included broadening the reporting requirements to include forfeitures involving driving under the influence (DUI), game and fish violations, off-road vehicle violations, gambling, and racketeering.
Highlights from the report include:

 In 2011, 292 Minnesota law enforcement agencies reported a total of 6,338 incidents of property seized subject to forfeiture. This compares to 271 agencies reporting 4,604 incidents of property seized subject to forfeiture in 2010.

 Of the 6,338 forfeiture incidents reported, 4,999 involved seized cash, property that was sold, or an agreement that required monetary compensation to the agency. The total value of net proceeds from these forfeitures was $6,923,260.

 The agencies with 100 or more forfeiture incidents completed in 2011 were: the Minnesota State Patrol (1,004), the Saint Paul Police Department (448), the Minneapolis Police Department (245), the Southeast Minnesota Drug Task Force (191), the Anoka-Hennepin Drug Task Force (148), the Dakota County Drug Task Force (119), and the CEE-VI Gang & Narcotics Task Force (112).

 In 2011, vehicles accounted for 58 percent (42 percent in 2010) of property seized,followed by cash at 32 percent (42 percent in 2010), firearms at 8 percent (15 percent in 2010), and other property at 2 percent (1 percent in 2010).

 The most common criminal activities leading to seizure, forfeiture, and final disposition of property in 2011 were controlled substance and DUI-related.

In their 2010 report “Policing for Profit”, the Institute for Justice graded Minnesota’s forfeiture laws a C, noting:

Minnesota law provides only slight protection for property owners against wrongful forfeitures, as its poor law grade of D shows.  The state’s somewhat higher final grade reflects limited use of equitable sharing to date (an evasion grade of B).  Although state statutes require that the government must show by clear and convincing evidence that the property is connected to drug trafficking and thus forfeitable, this burden is often easily met.  This is because, in practice, few cases are tried.  When they are, the owner is presumed guilty, bearing the burden of showing that he is an innocent owner.  Law enforcement also receives as much as 90 percent of the value of forfeited property, thus providing a profit incentive to law enforcement to focus on civil forfeitures instead of other law enforcement duties.  Nevertheless, as the numbers below indicate, Minnesota law enforcement has used forfeiture relatively modestly in recent years.

However, this changed in 2009.  Then, the consequences of Minnesota’s lax forfeiture laws were on full display with a scandal involving the state’s Metro Gang Strike Force, accused of using its forfeiture power to improperly seize property.  In some instances, officers have been alleged to keep the property for their own personal use.

Lee McGrath, executive director of IJ’s Minnesota Chapter, noted in a 2010 Star Tribune op-ed that:

American forfeiture law arose from the British Navigation Acts of the 17th century. The acts required any ship transporting goods to British ports to sail under the British flag. If the acts were violated, the ships or its cargo could be seized and forfeited to the crown. The British laws focused on seizing the assets because in that way violations of the law could result in punishment even when the violators could not be captured.

Modern civil forfeiture exploded during the early 1980s as governments expanded the war on drugs. No longer tied to the practical necessities of maritime law, forfeiture today is one of the most powerful weapons in the government’s crime-fighting arsenal — available even when it has apprehended suspects.

That’s the key point. Today, law enforcement apprehends suspectsand takes forfeited property. Unlike its British predecessors, it no longer uses forfeiture as a substitute for apprehension but in addition to apprehension.

There are also significant obstacles that today prevent even innocent people from trying to get their property back after it has been seized. Specifically, the legal costs are prohibitive. The forfeiture process is so daunting that property owners face the burden of paying thousands of dollars to lawyers to work through complicated forms and, in many situations, to initiate lawsuits.

This is particularly relevant when the value of the property seized is modest, as is the case in Minnesota, where more than 70 percent of forfeited assets are worth less than $1,000. With the value of seized assets being so low and the cost of litigation so high, it is an unfortunate reality that innocent property owners do not bother retrieving their assets. They just walk away without a fight.

Asset forfeiture is a serious assault on private-property rights in Minnesota. It allows police and prosecutors to take title to property without the property owner being found guilty of a crime and to have their agencies benefit from the proceeds. Just as this Legislature rightfully stopped eminent-domain abuse in 2006, it should end the abuses to property that occur daily under the state’s bad asset-forfeiture laws.

More information: IJ’s backgrounder on Minnesota forfeiture, the ACLU, and Chad Hedman’s political science senior thesis “Taking Money: The Politics of Asset Forfeiture in Minnesota“.

Richardson says those businesses and ones like them were a magnet for illegal activity, and the communities surrounding Myrtle Beach often attract them.

“[Due to] the transient nature around Myrtle Beach, there’s a lot of businesses that cater to a more loud crowd, maybe those that are more bent on doing illegal activities around the beach,” Richardson says.

Richardson says there are limitations to the law making it difficult to target the owners or employees themselves of businesses pegged as nuisances.

“It’s very hard to go in with a criminal prosecution and lock up those that are responsible at the businesses because they are shielded in some sort of corporation,” Richardson says.

It’s why Richardson says his office plans to use nuisance and forfeiture laws on the books now to target not just businesses, but homes that are the base for illegal activity.

“If you’re using a house a car, a house, or business to sell drugs out of – we can certainly bring forth a civil action almost akin to the nuisance action to take over that establishment,” Richardson says.

Richardson says his office is counting on anyone who thinks they live near a nuisance property to call police when a crime does occur at the location. He says the police reports from those calls give the Solicitor’s office the evidence needed to shut the business down. Sean Maginnis, Solicitor’s office to crack down on nuisance businesses, WMBF News, Accessed 18 Dec. 2012.

The Winston-Salem Police Department itself is no stranger to such allegations. Earlier this year, the department adopted new policies executing checkpoints after an American Civil Liberties Union of North Carolina Legal Foundation (ACLU-NCLF) investigation “found that approximately 85 percent of the 244 checkpoints placed throughout the city during an 11-month period were placed in minority neighborhoods.” The investigation was triggered by complaints of discriminatory policing:

“Our investigation really started with business owners and citizens complaining about [driver’s license] checkpoints, and then we started hearing similar complaints from people in different parts of the city,” [said Raul Pinto, Racial Justice Attorney for the ACLU-NCLF].

Complainants expressed concerns to the ACLU that the police department was targeting Latino residents and focusing its efforts almost exclusively in minority neighborhoods in the city.

“We heard that the checkpoints were being conducted consistently in the same intersection — we heard that most often, and we heard that police were waving Caucasian drivers through the checkpoints, and stopping Hispanic drivers,” Pinto said. (Keith Barber, ACLU Continues Investigation of WSPD License Checkpoints, Yes Weekly, 23 Nov. 2011.)

“Three years ago when Orlando Martinez de Castro was gunning for Bobby Richardson’s job as South Miami Chief of Police, he told us to look at Chief Richardson’s use of the State Forfeiture Fund.  So, a few months back, when we saw that Chief Martinez de Castro’s department had improperly used the State Forfeiture Fund to purchase tags and titles from his wife’s auto tag company, I looked into Chief Martinez de Castro’s own record with the State Forfeiture Fund.  Not a pretty picture.  In fact, it’s a morass of misdemeanors.  Conviction on any one of them will cost the Chief his job.  The former city manager appears to have been complicit, having personally authorized several of these transactions.  In addition, the Chief directed staff to assist his family’s businesses.

Below, I detail what I believe to be:

1 violation of F.S. 112.313 Standards of conduct for public officers

4 violations of F.S. 777.04 Attempts, solicitation, and conspiracy

3 violations of F.S. 837.06 False official statements

18 violations of F.S. 837.012 Perjury when not in an official proceeding

1 violation of F.S. 839.13 Falsifying Records

1 violation of South Miami Ordinance 8A-1. Conflict of Interest and Code of Ethics

1 violation of South Miami Ordinance 8A-3. Fair and Equal Treatment

4 violations of South Miami City Charter – Citizen’s Bill of Rights, Truth in Government

Laws governing the use of State Forfeiture Funds

Chapter 932.7055-5.a  Florida Statutes allows police to seize money and property that are used in narcotics crimes and to use those assets to support programs to reduce illegal drug use, and to provide a police department with equipment or new expertise for special investigations not currently available.  The law specifically forbids using forfeited funds for normal operating expenses of a police department.  These conditions are reinforced by a Florida Attorney General opinion. This distinction was put in place by the State Legislature to protect the rights of citizens by eliminating incentive for police commanders to confiscate citizen’s personal property to operate their departments.

The following conditions must be met before State Contraband Forfeiture funds can be expended:

1. The proposed use must meet the requirements of F.S. 932.7055 and the Attorney General’s opinion.

2. The Chief of police must write a letter certifying that the requested use meets the conditions for legitimate use under the statute.

3.  The elected body of the municipality must approve the use of forfeiture funds for the specific expenditure.

Chief Martinez de Castro’s use and misuse of State Forfeiture Funds

Of 33 purchase requisitions charged to the State Forfeiture Fund account during the tenure of Chief Orlando Martinez de Castro, the Chief personally certified 32.  Of those, 20 met the statutory requirements for legitimate use.  The remaining 12 of those charges appear not to comply with the use requirements of F.S. 932.7055-5.a.  Those 12 requisitions were for normal operating expenses of the Police Department, which are strictly forbidden under the statute and the Florida Attorney General’s written opinion.

For not a single purchase of 33 charges against the State Forfeiture account did Chief Martinez de Castro write a letter certifying that the use met requirements of F.S. 932.7055-5.a.

For 15 of the 33 expenditures, Chief Martinez de Castro obtained City Commission approval before authorizing the expenditure as required under F.S. 932.7055. However, Chief Orlando Martinez de Castro personally certified 17 requisitions which had no Commission approval, constituting 17 separate violations of F.S. 837.012 Perjury when not in an official proceeding.
Here’s what the fine print in the certification box reads:
“I HEREBY CERTIFY THAT THE ABOVE MATERIAL, EQUIPMENT, OR SERVICE IS ESSENTIAL AND A PROPER REQUEST AGAINST THE CODES CHARGED.”

Note: as per F.S. 92.52 an affirmation is equivalent to an oath for the purposes of state perjury statutes.I go through all the improper requisitions in detail below, but here’s an example of one such requisition.
[click here for full sized].  Chief OMC improperly certifies a requisition against the State Forfeiture Fund to pay $1,587 for the September Dade Chief’s dinner, a fine event I’m told, but not allowable under F.S. 932.7055.  The request was never brought before the Commission, so the expenditure was not authorized through resolution.  However, the Manager signed the form anyway to authorize payment from the State Forfeiture Fund.  By my count, that’s three violations of State statutes over paying for a meal.

On another requisition, Chief Orlando Martinez de Castro got his subordinate, Major Ana Baixauli, to certify the requisition in his place, even though only the Chief of Police is authorized by statute to certify a purchase against state forfeiture funds.  According to HR records, the Chief was in town at the time.  That was the only one of 33 requisitions against the SFF that the Chief did not personally certify.  By inducing a subordinate to certify requisitions that did not comply with F.S. 932.7055 in violation F.S. 837.012, Chief Martinez de Castro violated F.S. 777.04 Attempts, solicitation, and conspiracy.

Chief Orlando Martinez de Castro directed his staff to engage his wife’s expert services in obtaining automobile titles and tags for 3 forfeiture vehicles.  Staff complied and sent the Chief a memo (attached) stating the intention to purchase titles through his wife’s tag agency, Airways Auto Tag Agency.  Two weeks later, while the Chief was in town, the memo was initialed by Major Ana Baixauli, who then signed off on the requisition, charging purchases against the State Forfeiture Fund.   The Chief requested an accounting of all Forfeiture Fund purchases – the Airways charge was #2 on the list.  However the Chief wrote a summary, which the Manager forwarded to the Commission, that omitted only the Airways charge.  Deliberately leaving out information is a violation of the South Miami City Charter – Citizen’s Bill of Rights, Truth in Government.

Directing his staff to use a company belonging to his wife is a violation of:

(1) F.S. 112.313 Standards of conduct for public officers, employees of agencies, and localgovernment attorneys, Sec 3: Doing business with one’s agency

(2) South Miami Ordinance 8A-1. Conflict of Interest and Code of Ethics

(3) South Miami Ordinance 8A-3. Fair and Equal Treatment

Note that willful violation of Ordinance Sec. 8A-1 calls for immediate forfeiture of one’s position.

Why misuse of state forfeiture funds is a big deal

In none of these cases above were State Forfeiture moneys stolen or used for personal expenses, however, they were often improperly used to fund normal operating expenses of the department such as the Dade Chief’s banquet for $1,587.  These uses are explicitly banned by Florida statutes because they encourage the police leadership to step outside boundaries of the law and confiscate more possessions of citizens than they would otherwise.  Indeed, we have reason to believe this risk is real in the South Miami Police Department. A whistle-blower in the police department has alleged illegal confiscation of flat screen televisions from private citizens and placement of those TVs into the offices of the police command staff.  I’m looking into it.  Second, Chief Martinez de Castro has been drafting an ordinance to significantly expand the department’s powers of confiscation and forfeiture.  Thus the improper and unauthorized use of State Forfeiture moneys not only violates Florida Statutes, but poses a real threat to the private property rights of citizens in South Miami.
If anyone is obligated to follow the letter of the law, it the Chief of Police.  We citizens receive a ticket when we fail to produce a driver’s license or Proof of Auto Insurance.  For sure, we citizens would be prosecuted for making a false statement under oath, and we citizens are prosecuted for diverting money on our tax returns.  No one can be above the law, ESPECIALLY THE POLICE CHIEF.” Excerpted from Philip Stoddard, “My efforts to clean up city government”, Accessed at http://mayorstoddard.blogspot.com/2012/11/my-efforts-to-clean-up-city-government.html, 18 Dec. 2012.

NASHVILLE, Tenn. – NewsChannel 5′s award-winning investigative team wraps up a two-year investigation into practices that some call “policing for profit” with a primetime documentary airing Friday, Dec. 21, at 7 p.m. CST.

The one-hour special includes actual police “dashcam” videos of officers seizing cash from out-of-state drivers and extended interviews that have never been aired. It comes as lawmakers are debating possible reforms.

In addition to airing on NewsChannel 5, the documentary will also be simultaneously streamed on newschannel5.com.

“We are entitled not to be deprived of our property without due process of law, both under the Tennessee Constitution and the federal Constitution – and nobody cares,” Union City attorney John Miles says in the documentary.

NewsChannel 5′s investigation, led by chief investigative reporter Phil Williams, has already received some of the nation’s highest journalism awards – even as the NewsChannel 5 Investigates team continued to investigate and expand upon its original reporting.

The documentary examines civil forfeiture laws that allow Tennessee police to legally take cash from individuals based on suspicion that the money might be linked to drug trafficking. If an individual does not take legal action to recover the money, the police agency gets to keep it all – sometimes to pay the salaries of the officers seizing the cash.

As a result, NewsChannel 5 discovered, agencies across Tennessee have now become focused on stopping and often searching out-of-state drivers in search of money that they can confiscate. Some jurisdictions have struck deals to allow outside agencies patrol their highways – in exchange for a cut of any money seized off of drivers. It has also led to turf wars among police agencies working the same stretch of roadway. Excerpted from NC5 Documentary Examines ‘Policing For Profit’, NewsChannel 5, 13 Dec. 2012.

Check out Tennessee Tales: A Review Of Misappropriations, Missing Funds, Improper Accounting, & Stolen Drugs for further relevant coverage of Tennessee law enforcement’s recent difficulties:

4th Judicial District Drug Task Force: DTF agent indicted for two counts of theft of Drug Task Force funds after $5,700 goes missing.

10th Judicial District Drug Task Force: $4,500 shortage in evidence and confidential funds. A  In excess of $17,000 in 10th Judicial District DTF credit charges lacked adequate documentation including $6,800 with no documentation. Quality reporting from Judy Walton of the Times Free Press reveals that, between 2008 and 2010, 10th Judicial District DTF agents spent more than $100,000 of seizure proceeds on hotels, meals, mileage and airfare. Walton also reported that former “DTF Director Mike Hall’s drug task force credit card was used to charge more than $50,000 between 2008 and 2010 on meals for himself, task force members and guests at local restaurants, as well as gifts, flowers and goodies for co-workers and office secretaries, credit card receipts show.”

12th Judicial District Drug Task Force: Failed 42 U.S.C. § 1983 claim reveals that local DTF paid 20% ‘referral fees’ to at least one informant for seizures leading to DTF forfeiture proceeds as a bounty.

13th Judicial District Drug Task Force: An employee improperly charged personal expenses to Drug Task Force accounts resulting in a cash shortage of $10,000.

17th Judicial District Drug Task Force: At a motion to suppress hearing, U.S. District Judge Aleta Trauger notes: ”Essentially, all of [17th Judicial District Interdiction Agent] Daugherty’s traffic stops are pretextual attempts to find illegal drugs.” [Incidentally, Daugherty was the 2008 national runnerup for interdiction officer of the year-based on numerical measure of of productivity.] Under oath, Daugherty admits that DTF funding is reliant on seizure revenues. When asked by defense counsel: ‘”Is it a fair statement that part of the reason that you were up by the Kentucky border at least 100 miles away from your four counties was the fact that it’s better hunting grounds up there?” Daugherty agrees that the drug-related activity in that area is “better.”” Judge suppresses Daugherty’s testimony after noting that she finds his testimony unconvincing and speculates why Daugherty does not employ available equipment to document cause for stops.

23rd Judicial District Drug Task Force: Sloppy accounting and a missing $54,000 in seized currency. NewsChannel 5 Investigates reports that “that officers with the 23rd have been paid thousands of dollars in bonuses, some years higher than others.” DA denies bonuses are tied to drug busts or amount of money officers seize. NewsChannel 5 Investigates presents evidence that motorists are being pulled over for fictitious traffic violations after the Dickson Police Chief, who serves as chairman of the board for the 23rd Judicial District DTF, claims: ”Every time they stop somebody it is a legal traffic stop.”

24th Judicial District Drug Task Force: Cash, guns, drugs, jewelry, and equipment under the control of the Drug Task Force were misused, stolen, and/or lost. Falsified records. Theft and smoking of crack cocaine stored in evidence, missing marijuana, etc. Drug Task Force Director at the time of the offenses “charged with one count of theft, one count of official misconduct and one count of knowingly giving a false statement to an auditor.” DTF’sAdministrative Assistant charged several days later with “one count of theft and one count of knowingly giving a false statement to an auditor.”

Crump Police Department: Multiple unauthorized removals of various seized drugs.

Dickson County Sheriff’s Office: Missing drug money. Fraud. Forgery.

Etowah Police Department: Seized drugs, cash, and guns missing.

Gallaway Police Department: Missing guns, guns issued to non-law enforcement, allegations of duplicate pay for police chief.

Hawkins County Sheriff’s Office: Deputy initially “arrested and charged with one count of burglary, one count of theft and one count of tampering with evidence” after narcotics go missing from the evidence room. Charges grow to 68 counts.

Henry County Sheriff’s Office: Sheriff and sheriff’s office business manager indicted after audit finds $162,000 shortage and falsified records, mail fraud, conspiracy, etc.

Lauderdale County Sheriff’s Office: “A Lauderdale County deputy sheriff repeatedly spent undercover funds for unauthorized purposes and falsified documents to cover his tracks, a report by the Comptroller’s Division of County Audit has found.”

McMinn County Sheriff’s Office: Deputy indicted for one count of official oppression. Deputy accused of stealing prescription drugs from motorists.

Monterey Police Department: Guns and some $30,000 goes missing. Former police chief pleads guilty to theft. Allegations that the current police chief diverted asset forfeiture funds to pay for the use of a bulldozer leads local District Attorney to call for an investigation.

Trenton Police Department: $73,000 in cash goes missing from police department. Police chief and his secretary are purportedly the only individuals with access. Town officials have no explanations.

Unicoi County Sheriff’s Office: Sheriff  indicted on multiple felony charges including “six counts official misconduct, one count of theft over $1,000, one count of tampering with evidence, one count of criminal simulation and one count of attempted aggravated assault.”

Wilson County Sheriff’s Office: Former Lieutenant accused of, among other things, falsely claiming to witness a drug deal between two men, holding the men at gunpoint, falsely arresting them and seizing their vehicles and cash, forging documents in an attempt to claim ownership of (several) other vehicles seized by the sheriff’s office, checking out unknown amounts of marijuana from the Wilson County Sheriff’s Office evidence room and arranging for its sale at personal gain, selling confidential information to the target of a drug investigation, burglarizing the residence of his former girlfriend to give the stolen items to his wife as gifts, and attempting to poison his wife. Bunch of other stuff gone too-including disappeared cocaine.

Whitwell Police Department: former police chief and former city recorder arrested for theft.

Scott Alexander Meiner, Tennessee Tales: A Review Of Misappropriations, Missing Funds, Improper Accounting, & Stolen Drugs, Americans for Forfeiture Reform, 09 Sept. 2012.

The money is now at the center of a pending asset forfeiture case in Hampton Circuit Court. Both Terron and another New Jersey man, Harvey Acevedo — who wasn’t in the truck that day but asserts the cash was his — have interests in the money, according to court documents.

Neither Terron, 36, of Perth Amboy, N.J., nor Acevedo, 40, of Edison, N.J., were arrested or charged with any crimes.

A trial on whether the $80,690 in cash should be forfeited is on the court’s docket, scheduled for Dec. 14 before Circuit Court Judge Louis R. Lerner.

But the prosecutor on the case, Hampton Deputy Commonwealth’s Attorney Tim Murphy, said the matter is likely to be settled before that time. “We are working toward a mutual resolution,” Murphy said. “That we would get ‘X’ amount, and they would get ‘Y’ amount.”

The percentage that each side will get out of the $80,690 “is still being negotiated,” Murphy said, adding that Lerner would also need to sign off on the deal to avoid the trial.

Murphy said the prosecutors’ office’s interest in settling the case did not arise from publicity surrounding the Blue Water Tobacco cigarette operation nor from concerns over the conduct of officers involved in the sting.

“This isn’t an attempt to cover up what happened,” Murphy said of the likelihood of a settlement. “This was something that was presented to the defense at the very beginning of the case … In fact, I was prepared to do depositions with all the guys and put everything on the record.” Peter Dujardin, Hampton settlement close over $80,690 seized by police: No charges were ever filed despite cash being confiscated by officers, The Daily Press, 05 Dec. 2012.

Accepting the prosecutor’s candor as true, how is this not simply an unseemly tax–of the ilk mobsters impose–on bulk-currency moving through the jurisdiction? Willingness to simply charge a percentage, from inception, unmoors whatever tortured justification exists for civil asset forfeiture.

It also profiles perfectly with the sordid Blue Water Tobacco cigarette operation–an off-budget operation, prefaced on the need to crack-down on cigarette smugglers, that generated $3 million in revenue for local police,  but turned up no arrests (unless you count the instigating ATF agent who started the operation…He eventually entered a plea agreement admitting one count each of wire fraud, embezzlement, possessing stolen firearms, making a false statement and money-laundering).

The ability for the U.S. Government to reach the foreign accounts of a foreign national, accused of U.S. crimes, springs from a provision of the Patriot Act, codified at 18 U.S.C. § 981(k). The “statute provides that forfeitable funds on deposit at a foreign financial institution that has an eligible interbank account in the United States “shall be deemed to have been deposited into the interbank account in the United States, and any . . . arrest warrant in rem regarding the funds may be served on the covered financial institution, and funds in the interbank account . . . may be restrained, seized, or arrested.”” U.S. v. $6,976,934.65, Held in the Name of Soulbury, 554 F.3d 123, 125 (2009).

Under Dr. Lubchenco’s stewardship, NOAA persistently frustrated disclosure of the OLE’s use of asset forfeiture funds (including being unable to document what happened to over $38 million of the $96 million that went into their Asset Forfeiture Fund) and destruction of presumably material evidence via a ‘shredding party‘ at the behest of a senior department leader, Dale Jones Jr, wherein the department is estimated to have destroyed 75-80% of the files material to an ongoing Office of Inspector General investigation. Furthermore, NOAA blocked disclosure of purchasing a trip, to Kuala Lumpur, for at least one Administrative Law Judge responsible for impartially ruling on the legality of NOAA forfeitures. NOAA frustrated disclosure of duplicate, undocumented, and unexplained expenses for reimbursement, including one NOAA employee who apparently submitted his expenses twice every month. And, NOAA attempted to hide its pleasure boat escapades.

NOAA continues to block disclosure of the second half of a Special Master Report addressing accusations of further malfeasance.

Bal Harbour Police Chief Thomas Hunker has been suspended with pay following the release of a U.S. Justice Department report that slams the small police agency for allegedly misspending millions in drug money seized from criminals. The report also fingers Hunker for professional misconduct.

Hunker, 61, was sidelined with pay while an outside law enforcement agency investigates the allegations, according to a written statement issued by Jay Smith, the village’s human resources director.

“Chief Hunker requested that an investigation be conducted, and requested to be placed on leave to ensure the integrity of the investigation,’’ the statement said.

Treppeda and Bal Harbour Mayor Jean Rosenfield did not return repeated calls for comment.

The Justice Department also is looking into Bal Harbour’s handling of millions earned from laundering the money of drug dealers as part of ongoing, undercover investigations of criminal networks around the country.

Hunker, who has been chief since 2003, is about to complete the third year of a four-year employment contract that pays him a base salary of $141,959.80 a year, and provides him with a car, health insurance and a pension plan. In Hunker’s absence, Capt. Michael Daddario has been named acting chief.

In October, The Miami Herald reported that the village police department — a small-town force previously known for writing traffic tickets — conducts undercover operations all over the country targeting drug dealers. Records show the agency doled out $624,558 in payments to informants in less than four years, and ran up $23,704 in one month for cross-country trips with first-class flights and luxury car rentals.

In a rare move, federal agents froze millions that Bal Harbour helped confiscate under the program, and the Justice Department now wants the village to return more than $4 million.

The latest allegations against Hunker are outlined in an investigative report by the Justice Department Office of Inspector General. Among the specifics:

• Hunker conducted unauthorized checks of national criminal records databases for individuals who did not have access to those systems;

• Hunker provided individuals with honorary BHPD badges and identification and has influenced potential arrests and prosecutions;

• Hunker received multiple gifts from people who may have benefitted from the chief’s influence;

• Hunker ordered a police officer out of a marked vehicle and allowed an intoxicated individual to drive the vehicle on the beach;

• Hunker’s wife received a “deal’’ on her personal Jeep after BHPD purchased several police vehicles from the dealership;

• Hunker hired the son of a personal friend who was dismissed from the Miami-Dade Police Academy for cheating;

• BHPD-documented overtime related to money laundering investigations was inflated and abused. Specifically, that [a BHPD sergeant] inflated his overtime so that his pension is currently approximately $130,000 per year;

• BHPD improperly paid its informants.

Hunker referred all questions to his criminal defense attorney, Richard Sharpstein, who said the report reads like an irresponsible work of fiction, and that all the charges against the chief will be disproven.

We previously covered the breaking scandal in Bal Harbour and Hunker’s long history as a corrupt narcotics cop here.

North Carolina’s schools could benefit from the suspension. In North Carolina, forfeiture dollars are frequently routed through the DOJ’s Equitable Sharing program to avoid North Carolina’s constitutional requirement that forfeitures go to education. The Alamance County Sheriff’s Office reportedly seized $4,343,857.00 in currency, vehicles, and property through drug investigations in 2011 alone.