Tag Archives: civil forfeiture

Law Enforcement Predicts New Mexico Civil Forfeiture Reform Will Damage Police Budgets

Significant civil forfeiture reform in New Mexico went into effect on July 1, and law enforcement officials have predicted that their departments will be struggling to compensate for large cuts in their budgets due to the new law.

Before House Bill 560 was introduced and ultimately signed into law, police departments and other law enforcement agencies had the ability to seize cash, cars, luxury items, and homes with no requirement of obtaining a criminal conviction or even a criminal charge related to the items. Law enforcement officials would then turn these items over to sell at auctions. The proceeds from seized items sold at auction were used to purchase equipment and provide training. This practice has been described as “policing for profit”.

Last November, former Las Cruces, New Mexico city attorney Harry S. Connelly Jr. was heavily criticized after he was caught on video while holding a civil asset forfeiture seminar describing such items as “little goodies” and discussing excitement stemming from spotting a luxury car. “We always try to get, every once in a while, like maybe a good car,” Connelly said. “This guy drives up in a 2008 Mercedes, brand new. Just so beautiful, I mean, the cops were undercover and they were just like ‘Ahhhh.’ And he gets out and he’s just reeking of alcohol. And it’s like, ‘Oh, my goodness, we can hardly wait.'”

[RELATED: Police Wish List Reportedly Being Used to Train Cops on What to Seize from Drug Suspects]

Connelly also admitted that he had worked with police to secure “wish list” items. “If you want the car, and you really want to put it in your fleet, let me know- I’ll fight for it,” he had said. Connelly was later placed on leave and replaced by William R. Babington, Jr. as city attorney.

With the passage of HB 560, no items may be seized unless there is a criminal conviction or a guilty plea. Seized items must be placed in storage and then shipped to the state’s treasury office. Revenue collected from auctioned items will be placed in the state’s general fund rather than added to police budgets.

Farmington’s Daily Times reported that the civil forfeiture process had funded about a quarter of the Region II Narcotics Task Force’s operating budget- about $100,000 each year according to the task force’s director, Sgt. Kyle Dowdy. Dowdy said that now a plan must now be established to make up for the lost revenue, as well the consideration of a reduction in police purchases and training.

“We’re going to try not to seize,” Farmington Police Chief Steve Hebbe said. Hebbe pointed out that the department has to cover the cost of item storage and shipment and called that provision an unfunded mandate.

Rep. Rod Montoya, (R-Farmington) said that no law enforcement agents had testified in the House to discuss consequences of the bill, while Hebbe said no police chiefs were contacted regarding to the bill’s impact. Hebbe said that he’s unsure of what impact the new law will have on police department budgets across the state. “I don’t think that they anticipated how much it’s going to hit local law enforcement, and we’re still trying to figure out how bad it’s going to hit us,” he said.

College Student Fights To Reclaim Life Savings Seized by DEA In Civil Forfeiture

A college student has teamed up with the Institute for Justice to reclaim $11,000 that was taken from him at an airport by the DEA. University of Central Florida student Charles Clarke was never charged with committing a crime, but law enforcement officials have kept his savings using the practice of civil forfeiture.

Between late 2013 and early 2014, Clarke had been spending time with relatives in Ohio while his mother, with whom he had been living, was in the process of moving to a new apartment in Florida. Before he left his Florida home, he decided to bring his entire savings with him. His savings totaled $11,000 in cash, saved up over five years by collecting money from various jobs, gifts from relatives, financial aid, and educational benefits received due to his mother’s status as a disabled veteran.

Clarke said he brought the money with him because he worried about losing it during the move while he was away. He also said that the bank he uses has few branches, which could limit access to his money.

“I didn’t think it was a crime to carry cash, and it was mine so I felt like I could do whatever I wanted to with it,” he said.

Clarke arrived at the Cincinnati/Northern Kentucky airport in February 2014 to head back to Florida. After checking his bag, Clarke was approached by law enforcement officials who said the bag smelled like marijuana.

Clarke acknowledged that he was a recreational marijuana user and had smoked marijuana before arriving at the airport. Clarke insisted that he was not in possession of marijuana and was not a drug dealer. No drugs, paraphernalia or illegal items were found in any of Clarke’s bags but his money was seized regardless.

In addition to his money, Clarke said his phone and his iPad was also taken from him.

According to the Institute for Justice:

“Under a federal program called equitable sharing, state and local police receive up to 80 percent of forfeiture proceeds in exchange for referring seized property to federal authorities. Under this program, 13 different law enforcement agencies from Kentucky and Ohio are seeking their cut of Charles’ money, even though 11 of those agencies were not involved in the seizure.”

Before teaming up with the Institute for Justice, Clarke had been fighting without an attorney to get his money back. Civil forfeiture grants law enforcement agencies the ability to seize money or property based purely on suspicion that the money or property is connected to an illegal activity, with no criminal charges required.

In contrast to criminal proceedings, targets of civil forfeiture must provide proof of innocence in order to regain their property, rather than the government being forced to prove guilt of a crime to justify the seizure.

“Once it’s seized and gone through the seizure process, it’s very difficult to reverse that,” said former DEA Special Agent Finn Selander.

Clarke said the $11,000 was “to use for my living expenses, my everyday needs, to keep maintenance on my car and for future savings. And now it’s gone.” He said that after his money was taken, he has been fearful of keeping cash on him.

“Civil forfeiture allows law enforcement officials to keep the money they seize, which encourages them to target ordinary citizens like Charles,” said IJ Attorney Renée Flaherty.

IRS Seizes Nearly $19K From Widow Who Deposited Late Husband’s Savings In Increments

Dubuque, IA- The IRS has seized almost $19,000 from an Iowa woman’s bank account because she was depositing her late husband’s savings in increments under $10,000. Janet Malone, 68, is also facing a criminal misdemeanor charge alleging that she knew the deposits were violating federal law.

The Bank Secrecy Act, passed in 1970 to combat money laundering, requires banks to file reports to the federal government when customers make cash deposits over $10,000. Individuals making cash deposits that are close to meeting the threshold in order to bypass this requirement are considered to be committing a crime called “structuring” whether or not that money was legally or illegally obtained.

Ronald Malone, Janet Malone’s husband, had been visited by IRS agent Jeff McGuire in 2011 to investigate possible structuring. At that time, Ronald Malone was dying of cancer. According to the Associated Press, Mr. Malone acknowledged that the small deposits amounting to $35,500 could be considered structuring and signed a form confirming that he’d been warned about the practice. Janet Malone was at the home for part of that meeting between McGuire and Mr. Malone, but had not signed anything.

Mrs. Malone was reportedly told by her husband shortly before his death in October 2011 about a briefcase containing $180,000 in cash from investment income, gambling winnings and income from his career as an publishing executive. Mrs. Malone then made deposits ranging between $5,800 and $9,000. Prosecutors charged Janet Malone last week with a criminal misdemeanor accusing her of knowingly making small cash deposits from her husband’s savings after he died.

According to an IRS affidavit, Mrs. Malone said that she didn’t remember the details of McGuire’s 2011 visit with her husband because “she was in a state of despair over her husband’s health.”

Last October, the IRS had announced that the agency “will no longer pursue the seizure and forfeiture of funds associated solely with ‘legal source’ structuring cases unless there are exceptional circumstances justifying the seizure and forfeiture and the case has been approved at the director of field operations (D.F.O.) level.”  It is unclear if there are “exceptional circumstances” regarding Mrs. Malone’s deposits. Institute for Justice attorney Larry Salzman said that the government’s case against Mrs. Malone is “shocking because it demonstrates that prosecutors are not taking seriously the IRS’ alleged policy change not to prosecute legal source structuring.”

Restaurant owner Carole Hinders, also from Iowa, had nearly $33,000 seized in 2013 by the IRS for making frequent small cash deposits. Hinders maintained that she had been making small deposits from her cash-only restaurant at the same bank for decades and had never been warned by the bank that “I was making my deposits wrong.” The IRS later returned her money and dropped the case against her, but requested the authority to refile the case. Based on a plea agreement filed Monday, Janet Malone is expected to plead guilty next week and allow the government to keep the seized money. The charge is punishable by up to a year in jail and a $250,000 fine.

According to a review from the Institute for Justice, the IRS seized $242 million in 2,500 cases between 2005 and 2012. A third of those cases were simply cash transactions under $10,000. Nearly half was returned after challenges from owners disputing the seizures.

Class Action Lawsuit Exposes Philadelphia’s Civil Forfeiture Practices

Philadelphia, PA- The Institute for Justice has filed a class action lawsuit against the city of Philadelphia challenging the city’s aggressive civil forfeiture practices. Three plaintiffs named in the suit claim that their property has been improperly seized, violating their rights granted by the Due Process Clause of the Fourteenth Amendment.

One of the plaintiffs, Christos Sourovelis, claims that the city of Philadelphia evicted his family from their home, valued at about $300,000, earlier this year after Sourovelis’s son was caught selling $40 worth of drugs outside of the home. In an interview, Sourovelis said “I didn’t do anything wrong. I didn’t bother anybody. But we struggle from week to week not knowing what will happen.”

The city allowed the couple to move back into the home under the conditions they removed the son from the home and waive all legal rights in future civil forfeiture proceedings.

Sourovelis’s wife, Markela, said “it’s a constant battle- come this month, come that month…it’s scary.” The couple was never charged with any crime related to the action of their son.

Institute for Justice lawyer Darpana Sheth said that Philadelphia has turned the civil forfeiture process into a “veritable machine, devouring real and personal property from thousands of residents, many of whom are innocent, and converting that property into a $5.8 million average annual stream of revenue.”

Sheth said that civil forfeiture is “nothing more than state sanctioned theft” that reverses the burden of proof onto property owners rather than prosecutors.

The suit claims that the city of Philadelphia has made fighting civil forfeiture proceedings difficult because those who have had their property seized are not able to see a judge before the seizure takes place. Instead, according to the suit, people who have either been found innocent of crimes or not charged at all are subjected to hearings where prosecutors are in control.

Markela Sourovelis said “We haven’t seen a judge. We keep getting sent to this 478 room and for months, we go there and fill out papers.” Their case has been delayed several times in that courtroom. Sheth said that Courtroom 478 is not a courtroom at all: “There’s no judge, there’s no jury, there’s not even a court reporter to transcribe these so-called hearings– instead it’s the prosecutors that run Courtroom 478.”

The Institute for Justice, after reviewing over 8,000 Philadelphia forfeiture cases, found that property owners were forced to return to court at least five times on average.  Philadelphia civil rights lawyer David Rudovsky said missing one court date can mean the property is forfeited. “If they can’t tolerate going to court 10 times to resolve this – as many people can’t, with work and other commitments – they lose out,” he said.

Rudovsky also said prosecutors are often the ones giving legal advice, telling property owners that their cases are “simple” and do not require legal representation.

Philadelphia has seized over $64 million worth of property over the last ten years- this amount is nearly double that seized by Los Angeles County, CA and Brooklyn, NY combined. The proceeds of seizures and forfeitures goes to law enforcement: “It goes to pay salaries, including to prosecutors who wield an enormous amount of discretion to bring forfeiture claims,” said Sheth.

Philadelphia District Attorney R. Seth Williams’s spokeswoman, Tasha Emerson, said the program is a useful one in its fight against drug trafficking.

The plaintiffs have requested that a judge put an end to Philadelphia’s civil forfeiture program. “If this can happen to me and my family, it can happen to anybody. I want to get my house back, but more importantly, I want to end civil forfeiture in Philadelphia for good,” said Christos Sourovelis.