Imagine you are a small town grocer whose business is not large enough for an armored car service, so you regularly deposit the day’s cash receipts in a local bank. You’re only insured for thefts up to $10,000, so you make sure to never have more on the premises. One day, without warning, the government swoops in and confiscates all the money in your bank account, accusing you of “structuring” yourlegal deposits to avoid triggering mandatory reporting requirements for cash transactions over $10,000. To top it all off, prosecutors can keep your money without winning a conviction, and you’re required to prove your innocence to get it back.
No, this is not a story from some banana republic kleptocracy. This happened to Terry Dehko and his daughter Sandy Thomas, who run a grocery store in Fraser, Michigan. Incidents like this are becoming more frequent and egregious, and alarm bells are starting to sound around the nation as an increasing number of innocent citizens become collateral damage in the never-ending war on drugs.
Sadly, the results aren’t surprising. Asset forfeitures proceeds line the pockets of federal, state, and local law enforcement agencies—total net assets seized in fiscal year 2012 exceeded $4.2 billion, according to the Department of Justice. A more perverse incentive structure is difficult to imagine. So, more people are beginning to ask: How did we get into this mess?
The Michigan case is noteworthy. Not only did the government seize $35,000 from the bank account of a grocer who had been given a clean bill of health by the IRS, the seizure wasn’t even related to a criminal investigation! There was no drug bust, no child pornography ring, no terrorist cell, no contraband. Terry and his daughter were targeted for inadvertently pushing back against Uncle Sam’s war on financial privacy, an effort that seeks to effectively deputize every banker into an unpaid agent of the tax police.
This is how this story would have ended, had the Institute for Justice not taken the case. IJ lawyers, fresh off a victory defending a Massachusetts motel owner whose property was seized because a guest was caught dealing drugs from his room, have committed substantial resources to defending victims of forfeiture abuse. Yet, as laudable as IJ’s work is, the need for it raises the question: Why do legislators allow this abuse continue?
The laws governing both criminal and civil asset forfeiture are a vague, complex, and self-contradictory morass—exactly the kind of unnavigable swamp that attracts rogue government agencies. Professional Justice Department-approved forfeiture “experts”train state and local officials on precisely how to navigate these laws to maximize their take.
The law allows up to 80 percent of confiscated assets to be converted into cash to fund the organizations that snatched them, including payoffs to informants, generous overtime pay for police, and fancy SWAT team gear to support law enforcement militarization. Perverse incentives are pushing budget-strained agencies to ramp up Stop-and-Snatch operations—and if there aren’t enough criminals around to pay the bills, to go out and manufacture some.
Abuses are rampant. How bad does it get? Florida law enforcement officials were recently caught running large scale, illicit for-profit operations in which police informants offered to sell cocaine to unsuspecting clients, who then had their cash, cars, and homes confiscated without the benefit of convictions (which can be hard to win in entrapment cases). Reform remains elusive as long as politicians from both parties remain fearful of being labeled “soft on crime”—or “soft on drugs,” for that matter—and cowed by the relentless public relations campaign by the law enforcement-forfeiture complex, touting its successes in “taking the profit out of crime.”
So, it is up to us. If we are to have any hope of restoring balance to this assault on due process people need to speak up, name and shame abusers, expose corrupt practices, and take the battle to the courts. And just as importantly, we need to name and shame the politicians who have been complicit in undermining the innocent-until-proven-guilty foundation of our rule of law, starting at the local level. Imagine the good a few angry property owners at a handful of town meetings could do.