Tag: civil asset forfeiture

Oklahoma Sheriff Indicted for Extortion, Blames Civil Forfeiture Reformers

Instances of civil forfeiture abuse are common. Indictments against law enforcement are not.

However, this week an Oklahoma grand jury returned an indictment against Wagoner County Sheriff Bob Colbert and one of his deputies stemming from a civil asset forfeiture case.  The indictment charges Sheriff Colbert and Deputy Jeffrey Gragg with extortion and bribery, among other things, stemming from the stop, arrest, and subsequent release of Torrell Wallace and a 17-year old passenger.  

According to the indictment, during a traffic stop of Wallace’s car, Deputy Gragg discovered $10,000 in cash.  When asked about the money, Wallace and his passenger both claimed it belonged to them and were subsequently arrested for “possession of drug proceeds.”

At the jail, the indictment alleges that Sheriff Colbert and Deputy Gragg told the men that they’d be allowed to go free if they signed over the $10,000 to the office’s asset forfeiture fund, which they did.

If this fact pattern sounds familiar, it’s because cases like this are not isolated incidents. The case of Javier Gonzalez sounds eerily familiar. In 2013 Sarah Stillman at The New Yorker documented several similar cases of seemingly extortive forfeiture actions.  Our friends at the Institute for Justice have compiled many more

Because the burden of proof for civil forfeitures is so low, even perfectly benign behaviors can result in seizures. These include carrying too much money, carrying money in an envelope or some other “unorthodox” fashion, or even “traveling to or from a known drug source city,” which seems to include virtually every major city in America.  Such a deficient process for government seizures of cash and property makes abuse inevitable, especially when the seizing agency is permitted to keep most or all of the proceeds for itself.

Department of Justice Resurrects the Equitable Sharing Program

Well, it was fun while it lasted.

Last December, civil liberties advocates cheered the Department of Justice’s announcement that it was indefinitely suspending its equitable sharing asset forfeiture program due to fiscal constraints.  This week, unfortunately, the Department of Justice lifted the suspension and resumed payments to local police departments.

Civil asset forfeiture allows the government to seize property and cash from Americans, without charge or trial, on the mere suspicion of wrongdoing. In most jurisdictions, the seizing agency gets to keep some or even all of the proceeds, creating a clear profit motive for the agencies to seize property.  

Equitable sharing is a federal program which allows state and local law enforcement to seize property under federal, rather than state, forfeiture law. Law enforcement agencies in states with more restrictive forfeiture laws are thus able to get around those state restrictions by participating in the federal program.

The equitable sharing program also provides an 80% kickback to the seizing local agency, which is a larger share of the proceeds than many states allow. As one might expect, the more a state restricts the use and abuse of civil asset forfeiture, the more state and local police tend to rely on the federal program instead.

In short, equitable sharing creates a federal incentive for law enforcement to sidestep state law and chase profits under federal law instead.

While then-Attorney General Eric Holder imposed some small rerforms on the equitable sharing program on his way out of office, the program still rakes in hundreds of millions of dollars a year.  Given this week’s announcement, the chances that the Obama Administration will take further steps to rein in forfeiture abuse in its final year seem slim.  

Nothing, however, prevents state governments from asserting their sovereignty by restricting their law enforcement agencies from participating in the federal program.

This morning I discussed the resumption of equitable sharing with Darpana Sheth of the Institute for Justice:

 

For more on civil asset forfeiture, check out the Institute for Justice’s exhaustive survey of forfeiture laws and abuses, Policing for Profit.

Also check out Cato’s explainer on civil asset forfeiture.

Lyndon McLellan Finally Beats the IRS

Last year I referred readers to the abuse of civil asset forfeiture laws by the IRS in its attempt to take more than $107,000 from North Carolina small business owner Lyndon McLellan without charging him with any crime.

The IRS cleaned out Mr. McLellan’s business account because it suspected him of “structuring,” an offense whereby a person avoids legally-mandated financial reporting requirements by keeping their deposits and withdrawals under $10,000.  Because there are many perfectly legitimate reasons a business owner may deposit less than $10,000 at a time (for instance, if their insurance policy only covers $10,000 cash on hand), and because civil asset forfeiture allows the government to seize cash and property without proving any wrongdoing, IRS structuring seizures are prone to abuse.

Tacitly recognizing the abuse allowed by the law, former Attorney General Eric Holder announced changes to the use of civil forfeiture in structuring offenses last year.  The policy changes should have spared innocent business owners like Lyndon McLellan, but it seems some federal prosecutors never got the memo.  In fact, the Assistant U.S. Attorney in charge of the case responded to criticism by sending veiled threats to Lyndon McLellan and his lawyers at the Institute for Justice, warning them against publicizing the case lest it “ratchet up feelings” in the IRS offices.

The publicity worked. After significant public and political pressure, the IRS relented and returned the amount they had taken from Mr. McLellan’s bank account. As I noted last year, however, the IRS refused to reimburse Mr. McLellan for the costs of fighting the seizure or to pay interest on the money it had wrongfully seized.

But this week a federal judge ruled that the IRS must do more to make Mr. McLellan whole, and awarded him legal costs totalling more than $20,000.

The court held:

Certainly, the damage inflicted upon an innocent person or business is immense when, although it has done nothing wrong, its money and property are seized. Congress, acknowledging the harsh realities of civil forfeiture practice, sought to lessen the blow to innocent citizens who have had their property stripped from them by the Government… . This court will not discard lightly the right of a citizen to seek the relief Congress has afforded.

Fortunately, thanks to the efforts of Mr. McLellan and the Institute for Justice, the good guys won this time. Ultimately, however, the only way to ensure that civil forfeiture abuses stop happening is to abolish civil forfeiture. If the government cannot prove beyond a reasonable doubt that a person engaged in criminal activity, it should not be able to punish them as if they’re guilty.  As long as Congress and state legislatures allow this practice to continue, more innocent Americans will end up fighting for their livelihoods like Lyndon McLellan had to.  

For the Institute for Justice page detailing Mr. McLellan’s case, click here.

For Cato’s explainer on the troubling history of civil asset forfeiture, click here.

What the President Should Do: Civil Asset Forfeiture

As President Obama counts down the days of his last year in office, one positive step he could take for his legacy would be to halt the federal government’s use of civil asset forfeiture and make the suspension of the equitable sharing program permanent.   

Civil asset forfeiture, which allows the government to seize your cash and property without ever charging you with a crime, is rife with abuse and violates many cherished principles such as due process, separation of powers, federalism, and private property rights.  The predatory practice has become so prevalent that in 2014, for the first time on record, law enforcement officers took more money from Americans under federal forfeiture law than burglars stole from their victims.  More than $5 billion was deposited into the Treasury Department and Justice Department forfeiture funds, and that astonishing figure doesn’t include seizures that were purely state-based.
 
Further compounding the abusive nature of civil forfeiture is the federal government’s equitable sharing program, which allows state and local cops in states with restrictive forfeiture laws (or none at all) to circumvent their state laws and seize property under more-permissive federal law in exchange for an 80% kickback of the proceeds.  The Department of Justice recently suspended the equitable sharing program, citing a budget shortfall, but it’s clear from the suspension statement that the Justice Department plans to restart the program in the future.
 
Civil asset forfeiture creates an inappropriate profit motive for predatory policing, it distorts the priorities of law enforcement, and it tramples our constitutional principles.  President Obama should take the time to end these practices before he leaves office.
  
For more information about civil asset forfeiture, check out our civil forfeiture explainer on PoliceMisconduct.net.
 
And for an updated version of the Institute for Justice’s fantastic national survey of civil forfeiture practices, check out Policing for Profit, 2nd Edition.

Institute for Justice Publishes New Edition of Policing for Profit

Yesterday, the Institute for Justice, which has long been a leader in the fight against the abusive practice of civil asset forfeiture, released a new edition of its important 2010 study Policing for Profit.

Civil asset forfeiture has been with us for centuries, but the Drug War has kicked the government’s incentives to seize property without charge or trial into high gear.  Federal seizures alone have gone from tens of millions to billions of dollars a year over the last generation, while the vast majority of states still use a deficient and abusive process to take private property from citizens who haven’t been charged with any wrongdoing.

Thanks to the work of organizations like IJ, journalist exposés of numerous egregious abuses, and legislators committed to the rule of law, several states have reformed their forfeiture laws.  But as the new report shows, the work is far from finished, and, despite a pledge to reform, the federal government continues to undermine state reforms while seizing billions of dollars on its own.

The key findings of the report include:

  • a massive increase in civil forfeiture actions in the 21st century
  • a continued burden on property owners who have to prove themselves innocent rather than being proven guilty by the state
  • an abject lack of transparency about how much the government seizes and how the agencies are spending the proceeds of those seizures
  • the perverse incentives provided by laws that allow executive agencies to add to their own budgets by taking property and cash from individuals

 The report also includes updates to IJ’s state-by-state assessments of forfeiture laws, with 35 states and the federal government earning grades of D+ or worse.

 IJ also released an excellent video to summarize their findings:

 The full report can be found here.  How does your state stack up?

 For Cato’s explainer on the issues and abuses inherent in civil asset forfeiture, click here.

An Illustrated Guide to Civil Asset Forfeiture

This cheerfully drawn comic from the Daily Signal does an excellent job highlighting the insanity of civil asset forfeiture.  It begins with a quintessentially American premise: a young person setting out on his own, all wordly possessions in hand, to start a new life as an adult.  Far be it from me to spoil the rest:

 

Arresting your property

 

If such stories seem unbelievable (it is a cartoon after all), be sure and check out the recent all-too-real stories of Joseph Rivers and Charles Clarke, for whom this cartoon surely hits too close to home.  Even they are only the tip of the iceberg.

New Mexico has taken the initiative to end this inherently abusive practice once and for all, and there are active reform efforts underway in California, Michigan, Montana, Oklahoma, Maryland, and others. But until every other state and the federal government join in, these incredible tales of legalized theft and policing for profit will continue.

FreedomWorks recently released a handy map accompanying their report on state forfeiture laws. How does your state stack up?  

 

 

Airport Pirates Find Bounty in a College Student’s Life Savings

Today, our friends at the Institute for Justice launched a new challenge to yet another instance of egregious civil asset forfeiture abuse.

Charles Clarke is a 24-year-old college student who found out the hard way that government officials can confiscate property on the mere suspicion that it has a “substantial connection” to a crime or is the proceeds of a crime. No underlying conviction is required. Functionally, this means that officers can claim that “something was a little off” about your behavior, or that “something smells a little like drugs” and then have carte blanche to take whatever cash you have on you. After that, your cash is presumptively guilty, and it is up to you to prove its innocence.

In the winter of 2013, Charles was stopped at the Cincinnati/Northern Kentucky airport based on the officers’ assertion that his bag smelled like marijuana. Actually, it was based off of a drug dog’s “signal” that his bag smelled like marijuana. By claiming that a dog “alerted” an officer can obtain probable cause, but in reality the dogs are about as reliable as Clever Hans.

After searching his bag, the officers found no drugs or other illegal substances. They then asked him if he was carrying any cash. Charles volunteered that he was carrying $11,000–clearly thinking, not unreasonably, that in a just world there is no way the officers could just take his money. Charles’s mistake, however, was thinking that he lives in a just world, and the officers walked away with his life savings.

Charles had saved the $11,000 over the previous five years, from work, financial aid, educational benefits, and gifts from family. Now he must overcome the officers’ hunches by proving that his money came from legal sources.

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