Seizing assets associated with criminal activity is an increasingly powerful law enforcement tool. But one of America's top legal experts warns that without proper legal protection, the innocent are vulnerable as well.
Both the federal and the state governments have enormous power to seize property from individuals who never have been convicted, or even charged, with any crime. Over the last quarter of a century, legislatures and courts have dramatically increased the government's authority to seize assets.
The result: serious abuses, with innocent people suffering enormous adverse consequences.
Today, over 400 different federal statutes allow the federal government to seize a person's assets without the requirement of a conviction for violating any law. Almost all states have such laws as well.
Increasingly, critics on both the left, such as the American Civil Liberties Union, and the right, such as the Heritage Foundation, are calling for legislative reforms.
Forfeiture laws are well-intentioned. They are meant to allow the government to take away ill-gotten gains from criminals and to help the government dismantle criminal enterprises.
Although assert forfeiture laws long have existed, the war on drugs saw a dramatic increase in the statutory authorization for forfeiture and the use of this tool. Prosecutors were able to seize assets from those suspected of profiting from the illegal drug trade without needing to get a criminal conviction.
Similar impetus has been provided by stepped-up efforts over the past decade to curb money-laundering.
The Supreme Court greatly enhanced this forfeiture power in a 1996 decision, Bennis v. Michigan, which held that the government may seize property used in illegal activity even if the property has an innocent owner.
The case involved a man in Michigan who stopped on a street to pick up a prostitute. The man was arrested for lewd conduct and the woman was arrested for prostitution. Additionally, the State of Michigan seized the car that the man was driving under a law that allowed for seizing property to abate a public nuisance.
The man's wife sued, arguing that the seizure of the car violated her property rights as co-owner of the car, because she obviously had done nothing wrong. The Supreme Court ruled 5-4 in favor of the government and said that if property is used in illegal activity the government may seize it, regardless of whether the owner of the property was involved in that activity.
Moreover, forfeiture laws allow the government to seize assets without filing criminal charges against the owner. Generally, the government need only show probable cause to believe that the property is the proceeds of illegal activity; the government does not have to prove this by a preponderance of the evidence, let alone beyond a reasonable doubt.
The owners of the property can then challenge the forfeiture in court, but often they cannot afford a lawyer to do so. The government is allowed to hold the property, including cash, until the matter is resolved? which can take months or years.
There are many stories of abuses.
The Wall Street Journal recently highlighted the case of James Lieto, a small business owner. Money held in vaults belonging to an armored-car firm which Lieto used to carry money to his business was seized by authorities (along with $392,000 of Leito's money) as part of an FBI investigation into the firm's suspected fraudulent activities. Leito did not figure in the investigation. But even though he was an innocent party, he had to wait for the underlying case to be resolved before the government would return his money.
In a different case, the Internal Revenue Service seized $157,000 from Raul Stio, a small business owner, without charging him with a crime. The Justice Department seized the money on the grounds that Stio allegedly attempted to avoid anti-money laundering regulations requiring documentation and reporting for deposits over $10,000 by depositing four deposits under the limits. Stio claims his deposits reflected his business earnings.
The problem is exacerbated by the financial incentives surrounding forfeiture. Statutes often allow agencies to keep a significant portion of the proceeds gained through forfeitures. Washington State law allows law enforcement agencies to retain 90 percent of the net proceeds from drug-related assets seized.
Some states have adopted reforms; others, such as Texas, are actively considering them. At the federal level, Republican Senator Scott Brown of Massachusetts introduced last June, the Asset Forfeiture Responsibility Act.
Action is clearly needed at the federal level and in states across the country.
For example, Congress should remove the financial incentive to seize assets by having all the money go the Treasury's general fund instead of back to the department or agency that seized it. States should adopt similar reforms. At both the national and the state level, laws should be adopted which keep the government from seizing property when there is an innocent owner.
Greater procedural protections should be enacted to protect people from abuses of government power.
There is likely to be opposition. For example, there may be objections from police forces that benefit from the assets they seize, especially in light of the strapped budgets across the country.
But the bias inherent to allowing police to profit from their seizures necessitates reform.
Forfeiture laws are a necessary weapon in the fight against crime, but they have also led to serious abuses. A proper regard for the rights of innocent victims requires legislative reform that can restrain the growing use of government powers to seize property without a criminal conviction.
Erwin Chemerinsky is Dean and Distinguished Professor of Law at the University of California, Irvine School of Law, and has argued several prominent cases before the Supreme Court. He welcomes comments from readers.