Policing for Profit: Law Enforcement Agencies Abuse Civil Asset Forfeiture

While crime may not pay, policing can be very profitable when law enforcement agencies are allowed to seize assets not only from criminals but also people merely suspected of breaking the law. No criminal convictions – or even charges – are needed before property or money can be taken through civil forfeiture. That is because the property itself is “prosecuted” for having been used in a crime or obtained from the proceeds of illicit acts, and the owner has to prove the property is innocent.

The legal precedent for the modern era of civil forfeiture was the U.S. Supreme Court’s decision in Bennis v. Michigan, 516 U.S. 442 (1996). The Court held in Bennis that the innocent owner defense in civil forfeiture cases was not constitutionally required by the due process clause.

Civil forfeiture existed long before that ruling, though, and has a history in maritime law, including piracy and customs enforcement, when the owners of vessels carrying contraband could not be brought before U.S. courts. Instead, law enforcement officials seized the ships and their illegal cargo. Forfeiture of assets due to criminal conduct was traditionally rare and required that the owner of the property be convicted of a crime and the assets somehow tied to that crime.

Civil forfeiture practices today, however, have severely digressed from the original intent of such laws. In July 2016, John Malcolm, vice-president of the Institute for Constitutional Government, defined the practice as “a legal tool whereby law enforcement agencies seize property suspected of being involved in, or the fruits of, illicit activity.” Civil forfeiture rests on the premise that “property itself can be guilty of a crime and thereby forfeited to the sovereign,” and therefore civil forfeiture actions require no conviction, nor even an arrest.

All that is needed to justify an asset seizure is for a law enforcement officer to suspect the property is connected to a crime. Then begins a lopsided process in which prosecutors claim the property should be forfeited and the owner must prove the property has not been used in or obtained through the proceeds of illegal activities.

Due to forfeiture being a civil and not a criminal proceeding, property owners do not have the right to court-appointed counsel. This means that unless the assets are very valuable, attorney fees will quickly exceed their value. Conversely, prosecutors have almost unlimited resources to pursue forfeiture cases. While criminal forfeiture is also used, in cases where criminal charges are filed, the vast majority of property seizures are civil in nature.

According to the Washington Post, state and local law enforcement agencies seized assets worth around $3 billion from 2008 to 2015 – not including federal forfeitures. In 81% of those cases the property owners were not charged with a crime.

U.S. Supreme Court Justice Clarence Thomas recently criticized civil forfeiture, saying “[t]his system – where police can seize property with limited judicial oversight and retain it for their own use – has led to egregious and well-chronicled abuses.” He added that “forfeiture operations frequently target the poor and other groups least able to defend their interests in forfeiture proceedings.” Thomas’ comments came after the Supreme Court, on March 8, 2017, refused to hear a case involving a Texas woman who lost over $200,000 to civil forfeiture; she had not been charged with any crime. See: Leonard v. Texas, 137 S.Ct. 847 (2017).

Texas attorney Steve Jumes has successfully defended several civil forfeiture cases. He explained that his retainer for a complicated case starts at $25,000, though simpler ones can be litigated for less. That is why almost all civil forfeiture cases involving property valued at less than $5,000 are uncontested – including thousands of cell phones, laptops, personal computers and other valuables seized by police every year. In fact, about half of all Texas civil asset forfeiture cases are uncontested.

Civil forfeiture has become addictive for both prosecutors and law enforcement agencies – just as addictive as illicit drugs are to addicts. They have profited enormously from seizing cars, boats, electronics, homes, businesses and large amounts of cash from both criminals and innocent citizens. Law enforcement organizations and prosecutors’ offices, often cash-strapped, have used the money for equipment, furniture, vehicles and new hires they were unable to afford through legislative appropriations. But they needed more seized assets to fulfill an even larger and more grandiose unbudgeted wish list, and quickly became hooked on the easy cash afforded through forfeiture actions. Civil forfeiture is thus also known as “policing for profit.”

Equitable Sharing and Private Profiteering

Civil asset forfeiture practices shifted significantly in 1984 when a new federal statute, the Comprehensive Crime Control Act, permitted law enforcement agencies to retain profits from seized property for their own use. Prior to the 1984 law, forfeiture proceeds were deposited into the federal government’s general fund; afterwards they were placed in the U.S. Department of Justice’s Assets Forfeiture Fund, which allows law enforcement agencies to use money obtained from civil forfeitures outside the standard budgetary process. The 1984 law created an incentive for law enforcement officials to focus on forfeiting assets as a means of generating revenue rather than pursuing criminal convictions.

The federal government also decided to make civil forfeiture more attractive to state and local law enforcement agencies, by sharing with them the proceeds of federal forfeiture cases. Federal forfeiture policies are generally more permissive; in 25 states, local and state agencies that assist in federal investigations are allowed to keep 100% of seized assets. Such “equitable sharing” resulted in federal civil forfeitures skyrocketing to a high of $4.5 billion in 2014 – a significant increase from the $478.7 million seized a decade earlier.

One characteristic of equitable sharing by federal officials is that it allows local law enforcement to seize assets even when there is no state law that permits forfeiture. Further, in cases where state forfeiture laws afford property owners greater rights than under federal law, equitable sharing allows local law enforcement officials to bypass the rights granted pursuant to state statutes.

After learning that police had seized $2.5 billion in civil forfeitures from 2001 to 2014 through the federal equitable sharing program, without warrants or indictments, then-Attorney General Eric Holder imposed new restrictions on federal forfeiture policies in January 2015. According to the Washington Post, the restrictions limited “the ability of state and local law enforcement officials to choose more lenient federal forfeiture guidelines over state law.” But critics contended that limitation was not enough, and argued equitable sharing should be banned entirely because it creates an incentive for forfeiture actions based on the police’s profit motive and greed.

As noted by Supreme Court Justice Thomas, “because the law enforcement entity responsible for seizing the property often keeps it, these entities have strong incentives to pursue forfeiture.”

According to Forbes, only eight states prohibit police agencies from keeping the proceeds from civil forfeiture actions: Indiana, Maine, Maryland, Missouri, North Carolina, North Dakota, Ohio and Vermont. New Mexico recently joined that list.

The Institute for Justice, a public-interest law firm with nationally-recognized expertise on civil forfeiture abuses, issued a report titled “Policing for Profit” in 2013. The report graded each state’s forfeiture laws, and Texas and Georgia both received grades of D-, the lowest grade reported. Michigan, Virginia and West Virginia received the same low score; only three states received grades of B or higher.

A 2015 report by the FreedomWorks Foundation also graded states on their civil forfeiture policies. That report granted only one “A” – to New Mexico, after significant reform legislation was passed. More than half the states received grades of “D” or lower.

It is clear that law enforcement agencies and prosecutors profit from civil asset forfeiture, but there are others that benefit as well – including private corporations that sell confiscated property. One such firm is the auction company Property Room, which remits over $500,000 to Tarrant County, Texas and around $18,000 to the Fort Worth Police Department each year. Those funds come from property seized by law enforcement and sold through Property Room. The revenue from the auctions can be a significant portion of the agencies’ budgets; Herschel Tebay, commander of the Tarrant County Narcotics Unit, said one-third of generated revenue in the agency’s budget comes from seized asset auctions.

Property Room holds both live and online auctions. The most common items sold by the company include power tools and electronics, but vehicles are also auctioned, as are watches and other jewelry, coins and musical instruments. Seized guns, military equipment, body armor, drug-related paraphernalia, pornography and alcohol are destroyed.

New York-based Property Room was founded by a former police officer who combined forfeited items from over 3,000 police departments for the online auctions, which generate about $50 million a year for those agencies, combined. Prior to the public auctions, the seized assets are shipped to Property Room’s West Coast warehouse where they are certified, graded, valued and photographed. The property is then sold for up to 80% less than its retail value.

Property Room is not the only compa…

Additional Reading:
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