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

. (page 29 of 37)
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 29 of 37)
Font size
QR-code for this ebook


" See e.g., Shaw v. United States, 891 F.2d 602 (6th Cir. 1989); United States v. Elais,
921 F.2d 870 (9th Cir. 1990); United States v. U.S. Currency, 851 F.2d 1231 (9th Cir. 1988);
United States v. Castro, 883 F.2d 1018(1 1th Cir. 1989); United States v. Price, 914 F.2d 1507
(D.C. Cir. 1990).

"5ee21 U.S.C. 888(c).

" The Senate Report accompanying the amendment adding subsection (a)(7) to 21 U.S.C.
881 noted that the proposed amendment adding real property to the categories of property that
could be forfeited would lead to the seizure and forfeiture of property "indispensable to the
commission of a crime." S. Rep. No. 225, 98th Cong, ist Sess. 195, reprinted in 1984
U.S.C.C.A.N. 3182, 3378. The Senate Report explained Congress' motivation in passing 21
U.S.C. 881 (a)(7) as follows:

Under current law. if a person uses a boat or a car to transport narcotics or uses
equipment to manufacture dangerous drugs, his use of the property renders it subject to
civil forfeiture. But if he uses a secluded barn to store tons of marijuana, or uses his

26



i



309



Absent explicit statutory guidance to the contrary, the courts have expanded the situations
in which real property can be forfeited; in many cases, doing away with the requirement that there
be a substantial connection to alleged criminality. In one of the most egregious cases, the court
affirmed the forfeiture of a residence based on two telephone calls midefrom the informant to the
homeowner at the residence, during which the sale of cocaine was said to have been negotiated."
This is all the evidence the government had, but it was deemed enough to allow a forfeiture of the
residence. No drugs were ever stored at the residence and no sales took place there.

Congress could not have intended such an unfair result. Congress should modify the statute
to require that a court must fmd that a substantial connection exists between the alleged unlav^I
activity and the property desired by the government before the property can be lawfully forfeited.
Congress should also give some examples in the legislative history, in order to guide courts as to
what "substantial nexus" means under this congressional revision. H.R. 1916 should be amended
to provide this explicit statutory clarification on the need for a substantial connection nexus.
D. Economic Conflict of Interest Must Be Eliminated

The incentive scheme for law enforcement's direct profiteering from the forfeiture statutes
must be addressed. H.R. 1916 should be amended to address this core problem with the current
forfeiture laws.



house as a manufacturing laboratory for methamphetamine, there is no provision to
subject his real property to civil forfeiture even though its use was indispensable to the
commission of a major drug on'ense and the prospect of forfeiture of the property
would have been a powerful deterrent,
(emphasis added here)

" United States v. One Parcel of Real Estate Commonly Known as 916 Douglas
Avenue, 903 F.2d 490 (7th Cir. 1990), cert, denied, 1 1 1 S.Ct. 1090 (1991).

27



310



We can no longer ignore the conflicts of interest and policy problems which arise when law
enforcement and prosecutorial agencies reap fmancial bounty fi-om the forfeiture decisions they
make. Decisions regarding whose property to seize, and how to deal with citizens whose property
has been seized is too often dictated by the profit the agencies stand to realize from the seizures.

State and local law enforcement agencies frequently work with federal agencies on forfeiture
cases and share the proceeds of the forfeiture. This procedure thwarts state law. which may requv
forfeited assets to be deposited into the general treasury. It also allows states to take advantage of
broader federal statutes. The types of cases the state and local agencies choose to pursue together
are often influenced by the state's knowledge that the federsil government will share the proceeds
from the forfeited assets they acquire together. The federal government's participation in this
preemption of state priorities should be eliminated by Congress.

In short, the inherent conflict of interest and unbridled discretion sanctioned by the current
forfeiture law invites abuse. The opportunities for abuse are legion. For example, local police may
cut deab with federal agencies to target individuals whose assets can best benefit both agencies.
Joint forfeitures allow local police and federal agencies to avoid state statutory and constitutional
law. Law enforcement officers and prosecutors have come to rely on forfeitures as sources of extra
revenue. Congress should especially investigate the conflict of interest created when prosecutors
and law enforcement agencies set quotas for forfeited assets and use the money to create additional
positions and buy "informants" (to help generate still more forfeitures, for still more revenue).



28



311



IV. Recap: Congress Must Act to Reform the Abusive Asset Forfeiture Laws

In August of 1 99 1 . NACDL's Board of Directors adopted the following resolution regarding

asset forfeiture:

It is the policy of the National Association of Criminal Defense Lawyers that the
seizure of a person's assets by the government should be treated in exactly the same
way as the seizure of a person, and all the protection afforded by the Bill of Rights
should apply.

Several basic safeguards should be incorporated into all forfeiture schemes, especially the federal

one, after which so many states pattern their own:

> The burden of proving that forfeiture law applies should always be on the government just
as it is in criminal prosecutions. The degree of proof required should be proof beyond a reasonable
doubt. At the very least, it must be higher than the current mere probable cause standard.

> Hearsay should not be allowed in the government's case.

>• In the absence of exigent circumstances, the government should be required to justify a
seizure of property to a court before, not after, the seizure is made.

>• The cost bond should be eliminated.

>■ Post-seizure probable cause determinations on demand should be instituted.

>-Deadlines for property owners to comply with procedural requirements should be longer.

y- The government should be required to promptly notify owners of the government's intent
to forfeit property, and should be required to promptly commence a judicial forfeiture proceeding
upon receipt of a claim — in a manner similar to the requirement under the Speedy Trial Act.

>• Provision should be made for the temporary release of seized property to the owner, vfhcK
the claimant can demonstrate to a court that a substantial hardship will result if the property is not

29



312



so released during the pendency of the action.

> Forfeiture laws should recognize that innocent people often incur huge expenses in
defending their property against wrongful seizure. Forfeiture laws should include an "early exit."
innocent owner provision. This would allow a case to be dismissed when an innocent part> shows
that he has an ownership interest in the property, and the government has no proof that the person
was in\olvement in the alleged criminal conduct.

> Forfeiture of real property should always require that there be a substantial nexus between
the alleged unlawful activity and the property seized.

>• Congress must acknowledge that forfeiture is a quasi-criminal action. Most people do not
realize that, under current laws, a citizen can be found not guilty (indeed, may not even be charged
with a crime), and nevertheless have her property taken by the government.

>-The United States government should be liable for the loss of use, and any deterioration
of an asset in cases where the claimant prevails.

H.R. 1916 incorporates many of these essential safeguards, and NACDL supports the effort
reflected in the bill.
v. Conclusion

We look forward to working with you, Chairman Hyde, and with the Committee, to achieve
meaningful reform through H.R. 1916. We thank you again for affording us this opportunity to
participate in this hearing on the need for civil asset forfeiture reform.



30



313



ATTACH. MEM A



NATIONAL ASSOCIATION OF CRIMINAL DEFENSE LAWYERS
F( RFEITURE ABUSE TASK FORCE
SECTION BY SECTION ANALYSIS OF
THE DEPARTMENT OF JUSTICE'S PROPOSED FORFEITURE ACT OF 1996



Section 101.

Time for Filing Claim; Waiver of Cost Bond.

Claimants should not be required to set forth "how and when" their ownership interest
was acquired. In a proceeds case this would often be ver^' burdensome. Claimant may have
to explain how and when he acquired dozens of items of property. He shouldn't have to do
this even before a complaint is filed when he may not have counsel or counsel has just been
retained.

The cost bond requirement should be completely eliminated or at least greatly
reduced. The cost of hiring an attorney is sufficient incentive not to pursue frivolous claims.

Section 103.

Judicial Review of Administrative Forfeitures.

19 U.S.C. 1609(d) should allow claimants to proceed under Fed. R. Crim. P. 41(e) as
well as by filing a separate civil action. Many or most claimants in this situation are
proceeding pro se and are incapable of filing a civil suit.

The claimant should have to establish that he had "no other actual notice of the
forfeiture proceeding within the period for filing a claim." He will always have constructive
notice through publication but that is constitutionally insufficient where the agency could
have given him personal notice but fails to.

The claimant should not have to establish that the seizing agency failed to comply
with the notice requirements of 19 U.S.C. 1607. That section merely requires the agency to
send written notice to each party who appears to have an interest in the seized property.
Virtually all of the reported notice cases finding a due process violation deal with the
situation where the agency technically complies with §1607 but makes no effort to actually
get the notice letter to the property owner once the letter is returned to the agency by the
postal service as undelivered. 19 U.S.C. 1609(d) should require the claimant to establish that



314



the seizing agency failed to lai' interest in the forfeitable property would get nothing.

Proposed 18 U.S.C. 983(c) significantly alters current law with respect to standing.
Currently bailees and beneficiaries of constructive trusts have standing to contest the
forfeiture. The proposed §983(c) specifically denies those potential claimants standing. We
see no reason for this. The courts have imposed standing requirements on bailees designed
to thwart money couriers from hiding the identity of the bailor. That is enough.

Proposed 983(d) would require the courts to enter orders severing tenancies by the
entireties and joint tenancies and transferring the property to the government for sale, or
converting joint tenancies and tenancy by the entireties property to a tenancy in common,
irrespective of state law. The innocent homemaker would lose all interest in her home if it
was purchased with drug money because she wouldn't qualify as a BFP.

How about this scenario?: Mr. Jones uses his home, bought with clean money, to
facilitate a drug transaction thereby making it subject to forfeiture. Thereafter, Jones meets
and marries innocent young woman who becomes owner of home by the entireties with
husband. Later, government seizes home for forfeiture. Innocent Mrs. Jones loses the roof
over her head because she isn't a BFP. She is thrown out in the street with her young
children.

Section 124.

Stay of Civil Forfeiture Case.

The proposed change to 21 U.S.C. 881(1) would make it too easy for the government
to obtain a stay of the civil forfeiture case and remove the district court's discretion in the
granting of stays. Case law requires the government to make a specific showing of the harm



319



it will suffer without a stay and why other methods of protecting its interest are insufficient.
See e.g.. In re Ramu Corp. . 903 F.2d 3 12, 32 ' (5th Cir. 1990). The language in the proposed
bill would require the court to grant a stay if it determines that civil discovery or trial could
possibly have an adverse affect on a related criminal investigation or prosecution. That
would almost always be the case.

We approve of proposed §881(I)(2), which allows the claimant to seek a stay. (He
already can under the case law.) We would clarify the language, however. Claimant ought
to be able to get a stay when, in order to effectively defend the civil forfeiture case, claimant
must testify and thereby risk self-incrimination. The courts have held that placing the
claimant in that difficult situation does not violate the fifth amendment privilege, however.
So the proposed language ("infringe upon the claimant's right against self-incrimination")
doesn't accomplish what DOJ's Stef Cassella apparently thinks it does.

Proposed §881(I)(5) would allow the government to make all its requests for stays ex
parte and under seal. This is obviously unacceptable. It would effectively prevent the
claimant from challenging or rebutting the prosecutor's arguments in favor of a stay.

Section 125.

Parallel Civil and Criminal Cases.

This provision doesn't specifically authorize the civil forfeiture and the criminal case
to be joined for trial. Isn't that what the government wants to allow? It might be a good
idea. Suggestion: where the two cases are joined for trial, allow the judge to appoint the
same CJA counsel to handle both matters, at least at the trial stage. That would prevent the
defendant from prejudicing his criminal case by being forced to appear /7ro se in the civil
forfeiture case tried by the same jury.

Section 131.

Seizure Warrant Requirement.

Proposed 18 U.S.C. §98 1(b)(3) greatly increases the government's flexibility in
deciding where to seek a seizure warrant but restricts claimants to the district where the
warrant was issued if they want to file a motion for return of seized property. This isn't fair.
The government has U.S. Attorneys and agents in every district. It would be allowed to
choose the district most favorable to itself and make the claimant litigate any motion for
return of seized property in that district, however inconvenient and expensive for the



320



claimant. 21 U.S.C. 881(b) would be amended to conform to the new §98 Kb).

Where a person is arrested or charged in a foreign country . the government could
apply under §98 1(b)(5) to any federal judge or magistrate in the United States for an ex parte
order restraining property subject to forfeiture in the United States for up to 30 days, which
period could be extended for good cause shown. This provision invites completely
unrestricted judge shopping. The government will go to judges or magistrates who it knows
will rubber stamp their requests.

The government should be required to apply to a judge or magistrate in the district
where the defendant's property is found. The provision is also objectionable because it
provides no mechanism for the owner to be heard at any time. Through successive
extensions of the original order a defendjint's property can be frozen for a lengthy period of
time without giving him any opportunity to be heard.

Finally, this provision would allow the government to freeze property without any
showing — even an ex pane showing — that there is probable cause to believe the property
is subject to forfeiture. This is very likely unconstitutional.

Section 132.

Civil Investigative Demands.

This provision is unacceptable for the reasons stated in our critique of the draft
Forfeiture Act of 1994, which was never submitted to Congress. It's a terrible idea. See
Attachment B.

Section 135.

Currency Forfeitures.

Proposed 21 U.S.C. §881(m) would create a rebuttable presumption that seized
currency is forfeitable drug money in two circumstances. Neither circumstance justifies the
presumption. For the reasons explained in David Smith's book (and even in the DEA's own
forfeiture manual), the close proximity of personal use quantities of drugs proves little or
nothing. The presumption would allow agents to seize any marijuana user's cash or pocket
change, thereby inviting abuse.



I



321



The second set of circumstances is more reasonable but still no cigar. Even under the
current probable cau s standard, case law holds that the mere fact that a traveler offers a false
explanation for his possession of the currency isn't enough by itself to prove its drug money.
It could easily be money derived from or intended for some other unlawful activity. We're
concerned that the presumption would give some dishonest agents (or police, when the
provision is copied on the state level) an incentive to fabricate "false explanations'" secure
in the knowledge that only the claimant can contradict their testimony.



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 29 of 37)