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Federal Agents Make More Use Of Seizure Powers

7 min read

While the federal forfeiture civil case of Stephen Parks of Little Rock and his wife, Anna Harper, recently made headlines, government seizures of money and property aren’t uncommon — and they’re on the rise.

The problem with the seizures, critics say, is that the government is taking property from people who haven’t been charged with a crime.

Law enforcement officials, however, maintain that seizing property and then filing a civil asset forfeiture lawsuit to keep it helps return the property to victims. And by moving the property quickly through a civil procedure rather than waiting for criminal charges, police officials can prevent the property from being sold, damaged or spent.

The forfeitures also are a financial boost to law enforcement agencies, which can receive 80 percent of the proceeds seized from drug cases or when there are no identifiable victims, while the federal government keeps the rest of the money.

For fiscal 2012, which ended on Sept. 30, $1.3 million was received from civil asset forfeiture cases in the U.S. District Courts in Arkansas, a twentyfold increase from fiscal 2011 but less than the $1.7 million recovered in fiscal 2010, according to the U.S. Attorneys’ Annual Statistical Report.

The report showed that civil asset forfeiture cases were on the rise in Arkansas U.S. District Courts. There were 19 civil asset forfeiture cases pending in the Arkansas courts as of Sept. 30, 2012, with six cases completed, compared with 12 pending in the previous year and six completed. And for the fiscal year that ended in September 2010, only eight civil forfeiture cases were pending and 10 cases were closed.

The U.S. Attorney’s Offices in Arkansas are on track to collect more money from civil forfeiture lawsuits in the current fiscal year than in 2012. Conner Eldridge, the U.S. attorney for the Western District, which covers Fayetteville and Hot Springs, said he hired an attorney last year, Ben Wulff, to beef up the asset forfeitures in his district.

“Certainly, our goal is to make the proper and appropriate decisions in civil forfeiture [cases]” in order to seize property that’s being used in furtherance of a crime, Eldridge told Arkansas Business last week.

On July 2, Eldridge’s office filed civil lawsuits to support forfeiture claims on three pieces of real estate in Rogers that their owner, Jim Bolt, purchased for nearly $1 million early this year with money he allegedly fraudulently received. The U.S. Marshals have already taken control of the properties, but Bolt hasn’t been charged with a crime as of Wednesday, nor has he responded to the civil suits. Eldridge declined to say if criminal charges were coming against Bolt, citing the ongoing investigation.

(Also see: FBI Takes Volvo Title, iPads, Cash in Bolt Forfeiture Case)

In June, the U.S. Attorney’s Office for the Eastern District received a judgment allowing it to keep $2.3 million seized from a tractor hauling a car during a 2011 traffic stop. In that case, the driver of the vehicle, Lonnie Banks of Temecula, Calif., told officers the money was linked to the transport of drugs. Neither Banks, nor anyone else, filed a claim to get the money back, and it was awarded to the government. Banks, though, has never been charged with a federal crime.

Scott Bullock, senior attorney at the Institute for Justice of Arlington, Va., said civil asset forfeiture lawsuits by U.S. Attorney’s Offices nationally are on the rise.

“It’s gotten worse” over recent years, said Bullock, whose employer is a public interest law firm. “The fundamental problem with civil forfeiture is … there’s no conviction or oftentimes even an arrest for somebody to lose their property, which we think is fundamentally wrong and is something that is just contrary to principals of a nation that respects private property rights.

“That’s why we’re speaking out against it, and litigating against it,” Bullock said.

(See ‘Pulsating Carotid Artery’ Leads to $50,000 Forfeiture)

Forfeiture Avenues

The government can seize “everything that can be attributable to the proceeds of illegal activity,” Philip Hilder said in an email response to questions from Arkansas Business. Hilder is a Houston defense attorney who was the attorney-in-charge of the Houston office of the U.S. Department of Justice’s Organized Crime Strike Force.

The main avenues for the government to take private property are through civil forfeiture or criminal forfeiture, the latter occurring only after there’s been a criminal conviction, said Bullock. More rare are administrative forfeitures, which allow a federal agency to take property without judicial involvement.

The cases getting the most scrutiny, however, are civil forfeitures.

In Arkansas, civil forfeitures have been used to seize property ranging from homes — as in the case of Little Rock couple Parks and Harper — to more than 15,000 pounds of commercial fireworks, designed to be used for public displays.

Neither Parks, CEO of King Coal LLC., nor Harper, who operates Anna’s Estate Sales, have been charged with any crime. However, the government seized $7.2 million from several bank accounts, five vehicles and three pieces of real estate, according to the lawsuit filed by the U.S. Attorney’s Office for the Eastern District. Assistant U.S. Attorney Cameron McCree said in the lawsuit that the property seized from Parks and Harper was tied to money laundering and wire fraud.

Parks and Harper, through one of their attorneys, Erin Cassinelli of Little Rock, have asked in court documents for a judge to dismiss the case.

“The government’s complaint is deficient on its face because it does not provide any facts, much less facts supporting a reasonable belief that it could prove the property forfeitable at trial,” Cassinelli wrote in her motion to dismiss. That case is pending.

The civil asset forfeiture lawsuits are an attractive tool for law enforcement officials because there is a lower burden of proof in a civil matter than in a criminal proceeding, where the standard for conviction is proof beyond a reasonable doubt, Bullock said.

And law enforcement officers can file a civil case if they don’t have enough evidence to file criminal charges, said Hilder, the Houston defense attorney. Most of the time, he said, criminal charges follow a civil forfeiture lawsuit, though not always.

A civil lawsuit prevents a suspect from spending the money or having the money disappear, he said.

Eldridge said his office tells law enforcement that it won’t draw a line in the sand about what items will be seized and what won’t. “Everything is case by case,” he said.

He said law enforcement officials can call his office to determine if a forfeiture action is appropriate.

Challenging the Law

Eldridge said there are safeguards in place to prevent the government from unjustly seizing property.

“For the civil proceeding, those things often begin with warrants that are passed by a neutral magistrate,” he said. “And that property is not forfeited to the government until a judge says it is.”

In addition, property owners can challenge the action in court, he said.

Bullock acknowledged the property owner’s right to challenge the forfeiture — but most don’t, he said.

“It’s really a situation where the government has very few burdens and the property owner has the burden of proving their innocence,” Bullock said. “And that’s something that’s quite different from the criminal context, when the burden is on the government to show beyond a reasonable doubt.”

Property owners also face the challenge of paying for an attorney to represent them.

“So oftentimes, property owners will throw in the towel,” Bullock said. “And then the government gets something out of it without having to defend their actions in court.”

Supplementing Budgets

Once an order is entered awarding the property to the government, some of the money goes back to the police agencies that were involved in the seizure.

In a Dec. 7 news release, Chris Thyer, the U.S. Attorney for the Eastern District of Arkansas, said that money collected in criminal and civil actions is important to federal prosecutors across the country.

In fiscal 2012, U.S. Attorney’s Offices collected $13.1 billion in criminal and civil actions, more than double the $6.5 billion collected during the previous year.

“During this time of economic recovery, these collections are more important than ever,” Thyer said in the December news release. “The U.S. Attorney’s Office is dedicated to protecting the public and recovering funds for the federal treasury and for victims of federal crime. Those who seek to profit from their illegal activities will be held accountable.”

Bullock said he would like to see the money collected in forfeiture cases placed in a general fund, like most fines, and then elected officials can decide how best to spend it.

“That is one of the most fundamental reforms that the law needs,” Bullock said. “If we’re going to have civil forfeiture, the money should go back to the general revenue account in the state rather than to the people enforcing the law because it gives them a very direct and perverse incentive to take property.”

Eldridge, the U.S. Attorney for the Western District, said he doesn’t see profit as a motive for the forfeiture cases.

“Our job is to make sure these decisions are made for the right reasons,” he said. “If someone has become wealthy because they’re dealing drugs in a community, we want to make sure the community knows that we’re going to take away the fruits of those crimes.”

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