United States. Congress. House. Committee on the J.

Civil Asset Forfeiture Reform Act : hearing before the Committee on the Judiciary, House of Representatives, One Hundred Fourth Congress, second session, on H.R. 1916 ... July 22, 1996 online

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Online LibraryUnited States. Congress. House. Committee on the JCivil Asset Forfeiture Reform Act : hearing before the Committee on the Judiciary, House of Representatives, One Hundred Fourth Congress, second session, on H.R. 1916 ... July 22, 1996 → online text (page 27 of 37)
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If we had a bounty every time a police officer made an arrest,
the people of this country would rise up in outcry. Well, what we
have now is a bounty on property. And drug officers, DBA and local
drug officers alike, have told me privately, you know, we used to
get promoted and we used to get good writeups, good recommenda-
tions in our annual reviews by making big drug busts. It doesn't
work that way anymore, Mr. Edwards. It is how much property we
have seized.

If you take the financial incentive out of the priorities in law en-
forcement, it will change the complexion for the better of law en-
forcement in this country.

Mr. Chairman, thank you so much for hearing me.

[The prepared statement of Messrs. Edwards, Smith, and
Troberman follows:]



283

Prepared Statement of E.E. (Bo) Edwards III, Esq., David B. Smith, and Rich-
ard J. Troberman, Cochairs, National Association of Criminal Defense
Lawyers Asset Forfeiture Abuse Task Force, on Behalf of the National
Association of Criminal Defense Lawyers



Chairman Hyde and Members of the Committee:

The 9,000 direct and 30,000 state and local affiliated memuers of the National Association
of Criminal Defense Lawyers are private defense lawyers, public defenders, judges and law
professors. They have devoted their lives to protecting the many provisions of the Constitution and
the Bill of Rights concerned with fairness in the criminal justice system. NACDL's interest in, and
special qualifications for understanding the import of H.R. 1916, and the dangers of the currently
unabated federal government asset seizure and forfeiture programs, are keen.

On behalf of NACDL, we thank you for inviting us to share our collective expertise on asset
seizure and forfeiture programs, and for inviting one of us, E.E. Edwards, to speak on behalf of the
Association at this hearing. We are also thankful that other outstanding members of NACDL will
be appearing on behalf of their clients and other bar associations: Terrance G. Reed, of Washington,
D.C; and Stephen M. Komie, of Chicago, Illinois.



284 I



I. Background

A. Summary of NACDL's Position on H.R. 1916 and the DOJs Lattst "Reform" ProposalCst j

For several years now, the Department of Justice's (DOJ) asset forfeiture program and similar I

state and local programs, utilizing a broad array of new and expanded federal and state forfeiture '

statutes', have provided federal, state and local law enforcement agencies with an undulv powerful I

i

weapon with which to fight the War on Drugs. And too often, the weaponry has been deployed to '
abuse law-abiding Americans. ^

The unchecked use of over-broad civil forfeiture statutes has run amok. Law enforcement '

I

agencies, in their zeal, have turned the War on Drugs into a War on the Constitution. NACDL has '
long had several concerns with the federal asset forfeiture program, and the resulting denigration of i

constitutional protections. We thus support Chairman Hyde's much-needed bill, H.R. 1916, ;

i
although we think it does not go far enough to reign in over-zealous law enforcement in this area, j

We also think the Department of Justice's latest "reform" proposal still fails to rise to the level of

a meaningful set of corrections. Attached to this statement is our analysis of the latest DOJ ,

I
proposal(s) (1994 and 1996), which we regard as taking away at least as much as they would give j

in terms of reform. Still, there is some common ground between DOJ and NACDL on this subject, \

and any provisions of their proposal left un-critiqued in the attachment are unobjectionable to us.

i

See Attachments A and B. ■



I



' There are over two hundred federal civil forfeiture statutes, encompassing crimes from
gambling and narcotics violations to child pornography profiteering.



I

i



285



B. Criminal Forfeiture Versus Civil Forfeiture

For purposes of this hearing, we will distinguish between civil forfeitures and criminal
forfeitures. We will focus on the former.

Criminal forfeitures are part of a criminal proceeding against a defendant. The verdict of
forfeiture is rendered by a court or jury only if the defendant is found guilty of the underlying crime
giving rise to the forfeiture. While defendants facing criminal forfeiture have most of the
constitutional safeguards afforded persons in criminal proceedings, substantial problems nevertheless
persist, particularly for third party claimants who have an interest in property subject to criminal
forfeiture. Moreover, in its most recent Term, the United States Supreme Court held that Federal
Rule of Criminal Procedure 1 1(0 does not require a trial court to make a factual inquiry at the time
it accepts a guilty plea to determine that there is a factual basis for a criminal forfeiture as charged
in the indictment.- The Court also held in that case that criminal forfeiture is an element of the
sentence imposed for violation of certain laws, and is not an element of the offense. Accordingly,
the Court held that the right to a jury verdict on forfeitability of property does not fall within the
Sixth Amendment's constitutional protection, but is merely statutory; and that a trial court does not
have to advise a defendant of the right to a jury trial in a criminal forfeiture case at the time it accepts
a guilty plea.



- Libretti v. U.S., - U.S. - ,116 S.Ct. 356 (1995). NACDL recommends that Congress
amend Rule 1 1 (0 to require a trial judge to determine whether there is a factual basis for a
criminal forfeiture included in a plea agreement. The Supreme Court in Libretti recognized the
desirability of such a congressionally clarified requirement, but felt bound by the current text of
1 1(0, which was not changed after Congress enacted the criminal forfeiture statutes in 1970.
This oversight should be corrected.



35-668 96-10



286



It is civil forfeiture law, however, which concerns us the most, due to the utter lack of
constitutional safeguards and the unfair procedural advantages it afiords the goverrunent at the
expense of law-abiding citizens.^
C. Civil Forfeit ure in Particular

Civil forfeitures are in rem proceedings. The government is technically targeting the
property, as, according to a "legal fiction," the inanimate property is deemed to be guilty and
condemned. Because the property itself is the defendant, the guilt or innocence of the property
owner is said to be irrelevant. The "use" made of the property becomes the central issue. It is the
legal fiction which allows many extremely harsh and unwarranted repercussions to flow from the
use of civil forfeiture statutes.^



^ The abuse of the civil forfeiture laws, and the concomitant destruction of private
property rights, has been well documented in both scholarly and popular publications. See e.g.,
Honorable Henry J. Hyde, Forfeiting Our Property Rights: Is Your Property Safe From
Seizure? (Cato Inst. 1995); Leonard L. Levy, A License to Steal, The Forfeiture of Property

(Univ. of N. Car. 1996); Tamara Piety, Scorched Earth: How the Expansion of Civil Forfeiture
Doctrine Has Laid Waste to Due Process, 45 U. Miami L. Rev. 911 (1991); Mary M. Cheh,
Constitutional Limits on Using Civil Remedies to Achieve Criminal Law Objectives, 42 Hastings
L.J. 1325 (1991); George Fishman, Civil .Asset Forfeiture Reform. The Agenda Before Congress,
39 New York L.S.L.R. 121 (1994); Anthony J. Franze, Casualties of War?: Drugs, Civil
Forfeiture and the Plight of the Innocent Owner, 70 Notre Dame L. Rev. 369 (1994); Brazil &
Berry, "Tainted Cash or Easy Money?," Orlando Sentinel Tribune (June 14-15, 1992 expose);
Schneider & Flaherty, "Presumed Guilty: The Law's Victims in the War on Drugs," Pittsburgh
Press (Aug. 1 1-Sept. 6, 1991 expose).

" In a 1993 decision, the United States Supreme Court in Austin v. U.S., 509 U.S. 602, all
but laid to rest the legal fiction that the guilt or innocence of the property owner is irrelevant
because it is the property that is the "wrongdoer" in an in rem forfeiture. However, during its
most recent Term, the Court breathed new flames into this fiction, in Bennis v. Michigan, -
U.S. -, 116 S.Ct. 994 (1996); and then completely retreated from logic and fundamental fairness
in United States v. Ursery, and United States v. $405,089.23 U.S. Currency, 516 U.S. - ,116
S.Ct. -(1996).



287



Civil forfeitures allow the government to impose economic sanctions on persons who are
buyond the reach of the criminal law — either because there is insufficient evidence to obtain a
conviction against them; or because, while innocently supplying the material means necessary for
certain criminal activity, they have broken no laws themselves.

In deciding when to seize property under these laws - power which is largely unbridled -
law enforcement officers are influenced by provisions which often allow them to profit directly from
the forfeiture. This obvious conflict of interest invites abusive practices.

Historically and traditionally, as a matter of fundamental due process, the Supreme Court has

recognized the need for special scrutiny where the government stands to benefit financially from the

imposition of sanctions as a result of criminal laws. As Justice Antonin Scalia has well explained:

There is good reason to be concerned that fines, uniquely of all punishments, wall be imposed
in a measure out of accord with the penal goals of retribution and deterrence. Imprisonment,
corporal punishment and even capital punishment cost a State money; fines are a source of
revenue. As we have recognized in the conte.xt of other constitutional provisions, it makes
sense to scrutinize governmental action more closely when the State stands to benefit.'

The Supreme Court has also recognized that, under the forfeiture statutes, the government

"has a direct pecuniary interest in the outcome of [forfeiture] proceeding[s]."* The Court put it this

way:



' Harmelin v. Michigan, 1 1 1 U.S. 2680, 2693 n.9 (1991) (Scalia, J., concurring) (citing
cases).

* United States v. James Daniel Good Real Property, 510 U.S. 43 (1993).

5



288



The extent of the Government's financial stake in drug forfeiture is apparent from the 1990
memo in which the Attorney General urged United States Atf^meys to increase the volume
of forfeitures in order to meet the Department of Justice's annual budget target;
"We must significantly increase production to reach our budget target."

* * *

". . . Failure to achieve the $470 million projection would expose the Department's
forfeiture program to criticism and undermine confidence in our budget projections.
Every effort must be made to increase forfeiture income during the remaining three
months of [fiscal year] 1990."

Executive Office of the U.S. Attorneys, U.S. Department of Justice, 38 U.S. Attorney's

Bulletin 180 (Aug. 15, 1990).'

Likewise recognizing that the practical implications of this inherent conflict, a federal district court

recently explained well the unintended consequences of the current civil forfeiture statutes so in need

of congressional reform:

Failure to strictly enforce the Excessive Fines Clause inevitably gives the government an
incentive to investigate criminal activity in situations involving valuable property, regardless
of its seriousness, but to ignore more serious criminal activity that does not provide financial
gain to the government.'

Indeed, this inherent conflict of interest can and does lead to serious law enforcement

problems. For example, assume that law enforcement agents receive information from an informant

that a shipment of 20 kilos of cocaine, worth an estimated $500,000, is to arrive at a stash house on

Monday; that it is to be "fronted" to mid-level dealers once it arrives; and that those mid-level

dealers are to deliver $500,000 to the stash house on Friday. If the agents make the arrests on

Monday, they can confiscate the cocaine. If, on the other hand, they wait until Friday to make

arrests, they can seize the $500,000, which they can forfeit for their use. Which do you think they



■ Id. at 502, n.2.

' United States v. Real Property Located at 6625 Zumeriz Drive, 845 F. Supp. 725,
735 (CD. Cal. 1994).



289



will choose, the money or the cocaine? Again and again, the money is too enticing to pass up.

The incentive structure under current law is actually debilitating to effective law
enforcement. And all too often is the root of outright abuse of entirely innocent, but property-
holding, Americans.

The presumption of innocence is fundamental to the American criminal justice system.
This basic tenet is compromised whenever assets are confiscated, as they are under federal and
many state civil forfeiture statutes, without any proof of wrongdoing.' Under these unconscionable
laws, after confiscation it is up to the person whose assets have been seized to prove that he or she,
and the 'suspect" property, is innocent, and thus that the Government should give the property back
to the owner. This turns our precious justice system "on its head."

Although these forfeiture laws can, as Congress intended, serve legitimate law enforcement
purposes, they are currently susceptible to (and arguably invite) unwise, unjust, or unconstitutional
abuse. The current forfeiture laws are being used to forfeit property of persons who have no
responsibility for its criminal misuse ~ for instance, as occurs with the forfeiture of currency due to
cocaine "traces" found on it (a very, very large percentage of all the currency in .\merica). This
"police practice" has fimneled millions of dollars into local police and federal agency coffers, with
most of the seizures ~ between 80% to 90% - never challenged. The reason they are so rarely
challenged has nothing to do with the owner's guilt, and everything to do with the arduous path one



' For example, the Orlando Sentinel investigation found that no charges were filed in
three out of every four cases lodged b\ Volusia County Sheriffs Deputies. And the Pittsburgh
Press investigation found that Americans fared even worse when encountering federal law
enforcement agents: 80% of the people who lost property to the federal government were
never charged.



290



must joumev against a presumption of guilt, often without the benefit of counsel, and perhaps
without any money left after the seizure with which to fight the battle. As in Witness Wilhe Jones'
case, authorities unbridled in their handling of the current, unrestrained civil forfeiture laws routinely
seize large amounts of cash at airports and roadblocks without establishing any connections to drug
dealing other than the money itself (and perhaps, even more perniciously, the racial "profile" of the
money-holder).

The policy of allowing the seizures of large sums of cash simply because it is currency, must
be re-evaluated for comportment with sound policy as well as constitutional protections. Studies
have shown that between 80% and 90% of the currency available today will test positive for some
kind of drug; therefore, the practice of having drug dogs "alert" on the money is meaningless.'" The
frequent practice of targeting minorities in airports and along interstate highways for search and
seizure" is based on nothing more than blatant racism. It is morally (and should be legally)
bankrupt.

Statistics on seizures document the use of racially based "profiles" to determine law
enforcement targets. Willie Jones' case is but one example. There is also the infamous, but not
unique, case of Volusia County, Florida. Armed with "anything goes" asset forfeiture laws



'" See e.g. United States v. $639,558 U.S. Currency, 955 F.2d 712, 714 n.2 (D.C. Cir.
1992); United States v. S53,082.00 U.S. Currency, 985 F.2d 245, 250-251 n.5 (6th Cir. 1993);
United States v. 530,060.00, 39 F.3d 1039, 1042 (9th Cir. 1994). See also David B. Smith.
Prosecution and Defense of Forfeiture Cases (Matthew Bender) at para. 4.03, 4-79-84.

" See "Tainted Cash or Easy Money", Orlando Sentinel Tribime (Jun.-Aug. 1992);
"Presumed Guilty; The Law's Victims in the War on Drugs", The Pittsburgh Press (Aug. 11-16,
1991).



291



patterned after the federal statutes, Sheriff Bob Vogel's "elite drug squad" has seized well o\er S8
million in the past few years from motorists exercising their constitutional right to travel peacefully
along the Nation's highway system, on "1-95."

Out of 262 seizure cases, only 63 even resulted in criminal charges. Of the 199 cases in
which there was no evidence to supjsort criminal charges, 90% of the drivers were minorities.
Though neither arrested nor charged with a crime, these individuals had their money seized. When
confronted with the facts of his lucrative operation. Sheriff Vogel said: "What this data tells me is
that the majority of money being transported for drug activity involves blacks and Hispanics."'-
Similarly, a 10-month Pittsburgh Press investigation of drug law seizure and forfeiture included an
examination of court records on 121 "drug courier" stops where money was seized and no drugs
were discovered. The Pittsburgh Press foimd that African-American, Latino, and Asian people
accounted for 77% of the cases. '•'

Wherever these unrestrained asset forfeiture statutes exist, in the state or the federal system,
they invite, and have borne, abuse of the Nation's citizenry. This is true, be it by state and local
officers, federal agents, or some combination of the two in ever-more-frequent joint "task force"
operations.

H.R. 1 91 6 is an important first step toward ensuring that federal agents, and those with whom
they work in joint task force operations, do not wreak havoc upon the People's rights in the name



'- See id.
" See id.



292



of "asset forfeiture" and for their own financial benefit. Moreover. man\ state civil asset forfeiture
statutes are patterned on the federal scheme. Thus, congressional correction of the federal asset
forfeiture will also provide the states with a better, more just model to follow.
D. Ca.se Study

A prime example of forfeiture "justice" in America is the Volusia County, Florida case study.
In the absence of any evidence of criminal complicity, and with the Sheriffs knowledge that the
currency would have to be returned, the law enforcement agency offers "settlement" to asset
forfeiture victims who seek to (or who for economic reasons, must) avoid undue delay and
unnecessary legal fees.''' Rather than go to court to defend seizures, the agency cuts "deals" with
the drivers.

Motorists can get some of their money back if they agree not to sue the abusive agency. For
example, Sheriffs Deputies seized $19,000 from a Massachusetts paint shop owner. They returned
$14,250 and kept $4750. They seized $38,923 from a Miami lawn care business ovwier; returned
$28,923 and kept $ 1 0,000. They seized $3 1 ,000 from a Virginia car salesman; rettimed $27,250 and
kept S3750. None of these people were charged with a crime. All were offered out-of-court
settlements with no judicial supervision of the process. Indeed, Volusia County judges expressed
surprise at these settlements.'*



'* Note that there is no "speedy trial" right to assist a citizen in getting back her
wrongfully seized property, although we strongly encourage this as an amendment to H.R. 1916.

" See authorities cited jwpra note 3.



10



293



Volusia County is just one especially well documented case stud\ Its fact pattern is neither
anomalous nor confined to state and local authorities. If anything, the federal government's civil
asset arsenal is even more ripe for abuse, more troubling, and pervasive. Federal law enforcement's
jurisdictional reach, funding and equipment grows ever-more expansive and sophisticated (even
militaristic).'*

Although DOJ professes in its public documents to abide by the principle that "[n]o property
may be seized unless the government has probable cause to believe that it is subject to forfeiture,""
the reality is very different. Federal agents routinely seize people's propert>- based on nothing more
than otherwise inadmissible "hearsay" evidence, frequently from notoriously suspect "informants"
who stand to profit from production of such "tips." DOJ gives monetary rewards to individuals who
"report" information leading to a forfeiture. These contingency bounties can be as much as 25% of



" See generally e.g., James Bovard, Lost Rights: The Destruction of American
Liberty 13 (St. Martin's 1994), chronicling the fatal case of the unfortunately property-rich,
Donald Scott:

Early in the morning of October 2, 1992, a small army of thirty-one people [from several
law enforcement agencies, including the federal Drug Enforcement Agency (DEA)]
smashed their way into sixty-one-year-old Donald Scott's home on his 200-acre Trails'
End Ranch in Malibu, California. The raiders were equipped with automatic weapons,
flak jackets, and a battering ram. * * * After killing Scott, the agents thoroughly searched
his house and ranch but failed to find any illicit drugs [One of the claimed objectives;
they then said they were looking for undocumented aliens]. Ventura County
[California] district attorney Michael Bradbury investigated the raid and issued a report in
1993 that concluded that a "primary purpose of the raid was a land grab [by the
agencies]."
See also Edwin Meese 111 & Rhett DeHart, "How Washington Subverts Your Local Sheriff,"
Policy Review (Jan./Feb. 1996) (explaining dangers of current over-federalization of the criminal
law, with federal criminal jurisdiction now spaiming over 3,000 "federal" crimes).

" U.S. Department of Justice, Annual Report of the Department of Justice Asset
Forfeiture Program 1991 (Washington, D.C.: Government Printing Office, 1992), at 7.



294



the forfeiture proceeds. That kind of money can buy a lot of "tips."

The DOJ's internal documents read a little different from their public ones. A September
1992 DOJ newsletter noted: "Like children in a candy shop, the law enforcement community chose
all manner and method of seizing and forfeiting property, gorging themselves in an effort which soon
came to resemble one designed to raise revenues."" Nevertheless, Cary Copeland, Director of the
DOJ's Executive Office for Asset Forfeiture, declared at a June 1993 congressional hearing: ' / ■?•
forfeiture is still in its relative infancy as a law enforcement program."" The darling of a federal
police state's nursery? And the Federal Bureau of Investigation announced in 1992 that it
anticipated its total seizures of private property would increase 25% each year for the following three
years.-"

Most courts have recognized the problem is the law; that any real relief from asset

forfeiture abuse must come from Congress, through meaningftil legislative reform. For example,

as the United States Court of Appeals for the Second Circuit recently put it:

We continue to be enormously troubled by the government's increasing and virtually
unchecked use of the civil forfeiture statutes and the disregard for due process that is
buried in those statutes."^'



" U.S. Department of Justice, "Message From the Director: 'Do the Right Thing,'" Asset
Forfeiture News (Sept./Oct. 1992), at p. 2.

" Statement of Cary H. Copeland before the Subcommittee on Legislation and National
Security, United States House of Representatives Government Operations Committee (Jun. 22,
1993), at 4.

-" U.S. Department of Justice, Annual Report of the Department of Justice Asset
Forfeiture Program 1991 (Washington, D.C.: Government Printing Office, 1992), at p. 27.

-' United States v. All Assets of Statewide Auto Parts, 971 F.2d 896, 905 (2nd Cir.
1992).

12



295



In short, an utter tide of abuse of innocent citizens is sweeping the Nation, which has led to

widespread awareness that the forfeiture law must be reformed to stop the abuse. This Comminees

hearing, and H.R. 1916, should go some distance toward alerting the rest of the public and the rest

of the Congress to the grave reality of the current laws, and toward correcting this egregious state

of "justice" in America. We encourage you Mr. Hyde, and the rest of this Honorable Committee,

to forge ahead on the road to real reform of the federal asset forfeiture regime.

II. H.R. 1916:

Achieves Much; Should be Strengthened to Finish the Journey to Reform

A. Notice of Seizure and Cost Bond

H.R. 1916 would correct the unfairness spawned by the currently unconscionable "cost
bond" requirements for access to justice. The bill would eliminate the requirement of the cost bond,
and it would extend the time limits under which a person whose property is seized may file a claim
after the government files a forfeiture action in court against the property.



Online LibraryUnited States. Congress. House. Committee on the JCivil Asset Forfeiture Reform Act : hearing before the Committee on the Judiciary, House of Representatives, One Hundred Fourth Congress, second session, on H.R. 1916 ... July 22, 1996 → online text (page 27 of 37)