Today, The Heritage Foundation releases “Arresting Your Property: How Civil Asset Forfeiture Turns Police Into Profiteers.” This booklet highlights the important problem of civil asset forfeiture and tells lawmakers how states and the federal government can help fix these broken laws.
The booklet reveals the dark side of civil forfeiture, where the government seizes your property without ever convicting you of, or even charging you with, a crime, and then keeps the profits for its own coffers. Here are nine such examples:
1. Georgia—Iraq War veteran Andrew Clyde owns a small gun shop armory in Athens, Ga. In April 2013, the IRS seized nearly $1 million from the company’s bank account. Without any prior warning, two IRS agents showed up at his work with a seizure warrant. They justified their seizure citing a structuring offense—making repeated cash deposits under $10,000 allegedly to avoid the creation of any record of those deposits.
Even after his lawyer proved that all of the money was legitimately earned through lawful activity, the IRS still refused to return his money.
Instead, the IRS offered a deal: If he let them keep $300,000, the rest would be returned. Although Clyde decided to fight, after several months of costly (over $150,000 in legal fees) and time-consuming negotiations, he settled before going to trial, forfeiting $50,000.
>>> Want to learn more? Read Heritage Foundation’s booklet, “Arresting Your Property: How Civil Asset Forfeiture Turns Police Into Profiteers.”
Testifying at a hearing on Capitol Hill, Clyde said, “I did not serve three combat terms in Iraq only to come home and be extorted by my government’s use of civil forfeiture laws, but that is what I feel they have done to me, and I need you to stop it from happening to anyone else.”
2. Iowa—In Spirit Lake, Iowa, Carole Hinders owned and operated her restaurant, Mrs. Lady’s Mexican Food, for nearly 40 years. In August 2013, through a secret warrant and with no warning, the federal government seized Carole’s entire bank account—nearly $33,000.
She was not charged with any crime, nor did the government claim that her money was earned through any illegal activity; however, she was told by two IRS agents that they seized her account because she had made several cash deposits of slightly less than $10,000. The IRS viewed this as an attempt to avoid a federal reporting requirement on deposits exceeding $10,000.
The simple explanation for this was that Hinders’ small establishment was cash-only; to avoid the danger of keeping large amounts of cash at the restaurant, she made frequent deposits to her bank account.
Pro bono representation by the Institute for Justice made it possible for her to challenge the seizure, but the impact on her business was still devastating. After 16 months of litigation, the IRS agreed to return her money—she is one of the lucky ones.
“I did not do anything wrong, but they took my money,” said Hinders. “I was unable to pay my bills for the first time in my life. I had to borrow money, use my credit cards and beg vendors to extend me credit. This nightmare has left me broke, frightened and exhausted.”
3. Michigan—At the Contemporary Art Institute in Detroit, Mich., in 2008, a fun night out at a “Funk Night” event for 130 attendees morphed into a scene out of an action movie. Armor-clad police stormed the party with their guns drawn, forced attendees to the floor and seized 40 vehicles from those in attendance.
What heinous crime necessitated this treatment? It turned out that, unbeknownst to Funk Night patrons, the Art Institute failed to get a permit to serve alcohol. Using Prohibition-era reasoning combined with modern civil asset forfeiture law, the police determined that merely attending made everyone complicit.
And because the cars were used to transport their users to the party, the cars were also “guilty” and subject to seizure. Police even seized a car parked in a friend’s driveway over a mile away from the Art Institute.
Attendees had to pay $900 each to have their vehicles returned. Ironically, one of the patron’s vehicles was stolen from the impound lot—a crime made possible by the Detroit Police. Thankfully, a federal district court judge held the Funk Night seizures unconstitutional, calling the incident part of a “widespread practice” of detaining everyone present at a venue without an alcohol permit, searching them and seizing their cars simply because of their presence.
4. Minnesota—Minnesota’s infamous Metro Gang Strike Force, a multi-jurisdictional task force, was dissolved over the widespread abuse of civil forfeiture laws. Strike Force personnel seized property from Minnesotans for their own personal use.
Among their prizes: flat screen TVs, jewelry, sports memorabilia and cash. One seized SUV was returned with 20,000 more miles on it than when it had been taken. Strike Force personnel were accused of physically assaulting those whose property was being seized.
In one particularly disturbing incident, an officer attempting to kick a woman kicked her toddler in the head instead. The Strike Force was terminated in 2009 after its unconscionable tactics were made public. Victims of the illegal seizures and abusive tactics were awarded $840,000 in a settlement. Minnesota reformed its forfeiture laws in 2014 to require a criminal conviction before property can be forfeited.
5. New York—For 27 years, brothers Jeffrey, Richard and Mitch Hirsch ran Bi-County Distributor Inc., a small business that sold candy, snacks and cigarettes to local convenience stores. In May 2012, three family business bank accounts totaling more than $446,000 were seized by the IRS.
Why? Just like in Carole Hinders’ case, authorities alleged that the Hirsh brothers had committed a “structuring” violation by making repeated cash deposits of less than $10,000.
Two years later, none of them were charged with a crime, nor were they able to contest the seizure in front of a judge because federal prosecutors refused to file a forfeiture motion. They were literally left languishing while their money remained frozen.
Bi-County was able to survive only because long-time, faithful vendors extended credit, but the toll has been demoralizing. “We’re just hanging on as a family here,” Jeff Hirsch said. “We weren’t going to take a settlement, because I was not guilty.” In January 2015, after considerable national media attention, including a front page article in The New York Times and an editorial in The Wall Street Journal, federal prosecutors agreed to return all of the seized funds to the Hirsch brothers.
6. Pennsylvania—In March 2014, police arrested Chris and Markela Sourovelis’ son for selling $40 worth of heroin to an undercover police officer. Soon after the arrest, the Philadelphia Police Department raided their home, SWAT-style with guns drawn, and found small amounts of the drug in their 22-year-old son’s bedroom.
As if it was not shocking enough to learn that their child had a drug problem, the Sourovelises discovered they were now homeless. Their home was being confiscated under civil forfeiture laws, which do not require the property owner to be the one who actually commits the crime.
After a lengthy legal battle, the Philadelphia District Attorney’s Office was finally forced to back down in December 2014—a miracle just in time for the holidays.
7. Texas—Between 2006 and 2008, Tenaha, Texas, established itself as a hotbed for civil forfeiture abuse. Tenaha Police executed dozens of traffic stops in which vast sums of money and property were seized, though no criminal charges were filed against drivers or passengers.
One of the victims of this abuse, Dale Agostini, had set out to buy restaurant equipment with his fiancée, his young child and an employee. Tenaha Police stopped Agostini for allegedly driving on the wrong side of the road, searched his car and discovered a treasure trove totaling $50,000 in cash.
Although Agostini had proof that the money was clean, police arrested him for money laundering, seized his cash and turned his child over to Child Protective Services. Police never charged Agostini and returned his child, but it took months before he got his money back. These deplorable tactics generated millions of dollars for Tenaha and prompted a class-action lawsuit. The city settled in 2012.
8. Virginia—In November 2012, Victor Guzman, a Pentecostal church secretary originally from El Salvador, and his brother-in-law were stopped for speeding near Emporia, Va., on Interstate 95. The Virginia State Trooper did not issue them a ticket, nor did he charge them with a crime.
Instead, the trooper searched Guzman’s vehicle, discovering $28,500 in cash. Guzman explained to the officer that the money came from donations to their church, and did not belong to them. He said that they were carrying the money with the church’s permission in order to purchase a trailer and a parcel of land for their parish, facts later confirmed by church officials.
The trooper paid no attention, stating that their stories were “inconsistent” and that they had “disclaimed ownership of the money.” This was not surprising since they told the trooper that the money belonged to the church and any “inconsistency” (more likely a misunderstanding) was probably due to the fact that Guzman’s brother-in-law spoke no English whatsoever and English was Guzman’s second language.
The trooper seized the cash and left Guzman with a receipt. Guzman’s church eventually got its money back, but only after a lawyer took on the case pro bono and challenged the seizure in court.
9. Wisconsin—In Brown County, Wis., Joel Greer was arrested by the County Drug Task Force, with bail set at $7,500.
As any good mother would, Beverly Greer immediately set to work gathering the funds necessary to free her son. Beverly called the Brown County jail, where Joel was being held, and was explicitly told to bring the bail in cash—even though Wisconsin law allows you to pay for a bond with a cashier’s check, credit card, money order or cash.
A series of visits to ATMs secured the $7,500, and Greer reported to the jail to bring her son home. But rather than accept the cash and release her son on bail, Brown County Police brought in a drug dog, which alerted to trace amounts of illegal drugs on the bills.
Brown County Police then seized the cash and refused to release Joel Greer. To justify this, the police simply ignored the ATM receipts proving she had withdrawn the money from her bank and called the cash “drug money.”
In reality, it was the family’s hard-earned savings and Greer’s disability pay. The Greers didn’t get their money back for four months—and only after an attorney got involved on their behalf. Under Wisconsin law, law enforcement authorities may keep half of any seized amount exceeding $2,000, creating a perverse incentive for local law enforcement authorities to seize first and ask questions later.