Tag Archives: Asset forfeiture

States Begin To Examine Civil Asset Forfeiture

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Yesterday Hot Air posted an article about a move in Texas to abolish Civil Asset Forfeiture. I have written about this procedure in the past (here, here, and here). One of the most common examples of Civil Asset Forfeiture occurs when the government accuses a small business owner of making multiple deposits of less than $10,000 in order to avoid federal regulations that track such deposits. The law has been used to take assets away from small business owners with little regard for their Constitutional rights. The assets seized can be sold and the money used to shore up local budgets. Needless to say, there is a lot of temptation there for some local governments. A few states have taken action to limit these forfeitures. Texas is now joining them.

The article reports:

Texas is looking to become the third state in the last year to abolish civil asset forfeiture, and replace it with criminal asset forfeiture. State Senator Konni Burton filed a bill last month which requires a felony conviction before law enforcement can gobble up someone’s property. It’s a major step in Texas’ fight for justice reform which has saved the state $3B (while crime rates are at record lows).

…There’s just one problem…the asset forfeiture laws are being misapplied in cases where people who are not convicted of crimes, end up losing their property because prosecutors and police believe they “may have” been involved in/had knowledge of a crime. A Philadelphia family was forced out of their home because their son was arrested on drug charges, even though it didn’t appear they knew what the 22-year-old was doing. A Texas man had over 53-thousand dollars in cash donations for an orphanage and school seized after he was pulled over in Oklahoma.

The home and money were eventually returned to their rightful owners after the cases got a ton of press. But Right on Crime Deputy Director Derek Cohen points out media attention doesn’t always happen, because the numbers aren’t really sexy (emphasis mine).

Ordinary citizens trying to run a business and live their lives should not have to worry about a government that almost arbitrarily can take their assets. It is good to see Texas moving in the right direction. Hopefully now the federal government will follow suit.

 

Reining In An Out Of Control Government

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Civil asset forfeiture has become a problem in America in recent years. I have written about a number of cases of forfeiture in recent years. Two of these stories are here and here.  Hot Air posted an article today citing what Florida has decided to do about this government abuse of power.

The article at Hot Air reports:

Some great news in asset forfeiture reform is coming out of Florida. S.B. 1044, approved by the legislature earlier in the month, was signed into law today by Gov. Rick Scott.

The big deal with this particular reform is that, in most cases, Florida police will actually have to arrest and charge a person with a crime before attempting to seize and keep their money and property under the state’s asset forfeiture laws. One of the major ways asset forfeiture gets abused is that it is frequently a “civil”, not criminal, process where police and prosecutors are able to take property without even charging somebody with a crime, let alone convicting them. This is how police are, for example, able to snatch cash from cars they’ve pulled over and claim they suspect the money was going to be used for drug trafficking without actually finding any drugs.

The civil asset forfeiture law was put into effect to allow municipalities to sell off the assets of criminals and use the money for municipal purposes. In order to trace drug money, a law was passed that any cash deposit of $10,000 or more had to be documented by the bank involved. This law was abused and used against small businesses that generally made cash deposits of less than $10,000. They were accused of making the small deposits to avoid the law, and their bank accounts were seized. A number of small businesses were forced out of business by these actions. Aside from the fact that that this is simply government overreach, it is also a violation of the Sixth Amendment.

Amendment VI

In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the state and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defense.

Montana and New Mexico have already passed laws to curb the abuse of civil asset forfeiture laws. We need this trend to continue.

When You Turn On The Light, The Cockroaches Scatter

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On May 8th I posted an article about Lyndon McLellan, who owns and operates a local convenience store in Fairmont, North Carolina. Mr. McLellan was the victim of an IRS tactic called civil asset forfeiture, a tactic that allows the IRS to take the assets of a small business owner without charging them with anything. The procedure is unconstitutional, but that hasn’t stopped the IRS. I have posted a few articles on this practice. If you use the search engine on this site, you can find them. Basically, if a business consistently is making bank deposits of less than $10,000, the IRS accuses them of ‘structuring’ to avoid scrutiny (and paperwork) and seizes their assets.

The IRS seized slightly over $100,000 from Mr. McLellan. Mr. McLellan was told that if he went public, the IRS would make things worse for him (how much worse can it get after they have taken all of your money for no reason?). The IRS offered to give him half of his money back. Mr. McLellan went to the press.

The Daily Caller posted a follow-up on this story yesterday.

The Daily Caller reports:

McLellan went to the press anyway. The IRS quickly changed its tune and gave Lyndon McLellan back all $107,702 of his money.

“The government cannot turn Lyndon’s life upside down and then walk away as if nothing happened,” Robert Everett Johnson, a lawyer at the Institute for Justice who represents Lyndon, said in a statement. “Lyndon should not have to pay for the government’s lapse in judgment. And the government certainly should not profit from its misbehavior by keeping the interest that it earned while holding Lyndon’s money. We’ll continue to litigate this case until the government makes Lyndon whole.”

When you turn on the light, the cockroaches scatter.

Private Property Rights Upheld

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On Thursday the Institute for Justice website posted an article about the Motel Caswell, a family-run motel in Tewksbury. The government had attempted to take the motel away from the Caswell family, claiming that the motel facilitated drug crimes.

The article reports:

…But the court found that Mr. Caswell “did not know the guests involved in the drug crimes, did not know of their anticipated criminal behavior at the time they registered as guests, and did not know of the drug crimes while they were occurring.”

“This outrageous forfeiture action should never have been filed in the first place,” said Larry Salzman, an IJ attorney.  “What the government did amounted to little more than a grab for what they saw as quick cash under the guise of civil forfeiture.”

Caswell said, “I couldn’t have fought this fight without the help of the Institute for Justice.  It is hard to believe anything like this goes on in our country, but the government goes after people they think can’t afford to fight.  But with IJ’s help, we put up a heck of a fight and have won.  The public needs to stand up against these abuses of power.”

It is encouraging to see that the Caswells won their case and that there was an organization willing to stand with them to fight government overreach.

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The Danger Of Having More Government Than We Need

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On Friday, George Will posted an article in the Washington Post about some recent events in Tewksbury, Massachusetts. It is a story of excessive big government–not Massachusetts government, but the federal government.

Russ Caswell owns a budget motel his father built in 1955. He is 68, and the motel provides his retirement income. The motel has seen better days, but still hosts tourists, some workers on extended stays and some elderly people who call it home. The 56 rooms rent for $56 a night or $285 a week.

The article reports:

Since 1994, about 30 motel customers have been arrested on drug-dealing charges. Even if those police figures are accurate — the police have a substantial monetary incentive to exaggerate — these 30 episodes involved less than 5/100ths of 1 percent of the 125,000 rooms Caswell has rented over those more than 6,700 days. Yet this is the government’s excuse for impoverishing the Caswells by seizing this property, which is their only significant source of income and all of their retirement security.

The federal government is now planning to seize the property, sell it (expecting to receive about $1.5 million) and give 80 percent of that to the Tewksbury Police Department.

The article reports:

The Caswells have not been charged with, let alone convicted of, a crime. They are being persecuted by two governments eager to profit from what is antiseptically called the “equitable sharing” of the fruits of civil forfeiture, a process of government enrichment that often is indistinguishable from robbery.

The lawsuit is titled United States of America v. 434 Main Street, Tewksbury, Massachusetts. The Caswells are represented by the Institute for Justice (IJ), described in the article as a ‘libertarian public-interest law firm.’ The IJ describes the civil forfeiture proceeding as something that was used against pirates to seize their booty. In this case the federal government is the pirate!

 

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