Government on the Take
Private property falls victim to forfeiture laws
by John Perna
|Vol. 9, No. 11
May 31, 1993
The Drug Enforcement Administration means business! Big business! As a matter of fact, the DEA and other agencies have made government into a "one-stop shopping" headquarters for almost anything of value. Do you need a car? A boat? An airplane? How about the whole airstrip? A house? A mobile home? A hotel? A motel? An apartment building? A ranch? A store? A laboratory? There is literally no limit to what government has for sale.
The reason for this is simple: According to the Comprehensive Forfeiture Act of 1984 the government may now seize — without a warrant — any property which it suspects has been used, or is intended to be used, to commit a crime. The property may then either be auctioned off, with the money going to the agency making the seizure, or retained by the agency for its own use. Cars, yachts, houses, and other property are made available to individuals who work for the agencies, many of them undercover agents who have to be able to blend in with the millionaire drug kingpins and racketeers they are trying to nab. Since 1989, the federal government has reported receiving more than $2.2 billion in forfeited assets.
It is a misconception that government agencies only seize property from drug dealers and criminals. According to the Comprehensive Forfeiture Act of 1984, the government may seize property without even alleging that a crime has been committed. About 80 percent of all property taken is lost by people who are never even charged with a crime. The allegation that the property was intended to be used in criminal activity is often sufficient.
There are two types of forfeiture: civil and criminal. Criminal forfeiture operates in personam, meaning against the criminal defendant, while civil forfeiture operates in rem, meaning "against the thing." The guilt of a property owner is of no relevance in determining the outcome of a civil forfeiture case. The legal theory behind civil forfeiture cases operates upon the fictional premise that the property itself has committed a crime. These kinds of cases give prosecutors an obvious advantage, since the property has no rights.
If the owner wishes to retrieve his property, he must take the government to court in a civil action, and thus bear the burden of proof. In the case where a crime has not been committed, the owner is required to demonstrate that he had no intent to use the property in a criminal act. In essence, the forfeited property is deemed "guilty" until the owner can prove it is innocent. The government dispenses with the procedural protection that is afforded in criminal matters by calling such a case a "civil" matter.
The seizures can be done without any pre-seizure judicial review and without probable cause. However, by thoroughly searching the property they have seized, law enforcement officials can sometimes find probable cause for the issuance of a warrant. The constitutional protection against "unreasonable searches and seizures" has been cast aside.
In fact, one crime might create two separate cases. One's car, plane, boat, or house may be "under arrest" in a criminal investigation. The owner may also be under arrest, but not necessarily. If someone other than the owner of the property commits the crime, this would still make the property "guilty," and thus subject to seizure from the innocent owner.
Seizure of private property has become so lucrative that competition has become fierce among agencies. In a given case, there may be agents of the DEA, the IRS, and Customs all vying for the seized goods. The defendant becomes the "only bone in a pen full of hungry dogs." Bounties are paid to informers. State and local agencies are cut in. Even the Judicial system can get a cut.
When a group benefits, all of the members of the group benefit. A government agency is no different. The chain reaction in the civil forfeiture scheme causes a "trickle down" of prosperity throughout an agency. Give an individual a way to benefit himself, make it legal, and he will never run out of reasons why it is good and proper.
Prior to the Comprehensive Forfeiture Act of 1984, seizures of property had occurred under a few other statutes. The most prominent of these were RICO (Racketeer Influenced and Corrupt Organization Act), CCE (Continuing Criminal Enterprise), and the Comprehensive Drug Abuse Prevention and Control Act of 1970. These statutes resulted in fewer seizures than the Comprehensive Forfeiture Act for a very good reason: Unlike the earlier legislation, the Comprehensive Forfeiture Act allowed the law enforcement agencies to keep what they seized. As might be expected, seizures increased radically.
In 1971 the U.S. Supreme Court, in the case of United States vs. United States Coin & Currency, stated the obvious by declaring that it is a "fiction that inanimate objects themselves can be guilty of wrongdoing." But that common sense position was soon to be reversed. At almost the same time that this ruling was being prepared, Donovan and Loretta Olsan were in the process of leasing a yacht from the Pearson Yacht Leasing Company in Florida. Thirteen months later the yacht was seized by authorities after they found two marijuana cigarettes on board. Although the Pearson Yacht Leasing Company had not seen the boat during those 13 months, the Supreme Court ruled that the innocence of the owner is no defense to the forfeiture. Incredibly, the yacht itself was deemed guilty of the crime of having two marijuana cigarettes on board, and the yacht company lost the boat.
Police State Tactics
But since enactment of the 1984 Comprehensive Forfeiture Act, such property seizures have become all too common. Here are a few examples:
• In 1985 Miguel Alvarez was charged with possession of cocaine with intent to distribute. His bond was posted by American Bankers Insurance Company in exchange for a mortgage on his home. Then the government seized the Alvarez home after agents found drugs in it. When Alvarez failed to appear for trial, American Bankers Insurance Company forfeited the $50,000 bond. The government received both the money and the house. The innocence of American Bankers Insurance Company in this case was not considered to be relevant. The house was deemed guilty. The collateral was gone.
• Miss Ethel Hylton left New York City, planning to buy a house in a warmer climate. She carded her entire life's savings with her, which she had saved during her 20 years as a hotel housekeeper and a hospital night janitor. Along with a recent insurance settlement of $18,000, she had over $39,000. Upon her arrival in Houston, a DEA agent told Miss Hylton that she was under arrest because a drug dog had scratched at her baggage. Her baggage and purse were searched, and Miss Hylton herself was strip-searched, only to discover that she had no drugs. Nonetheless, the DEA took all but ten dollars of her life savings. Miss Hylton was never charged with a crime.
(If you think that a "mistake" of this magnitude could never happen to you, think again! Dr. Jay Poupko of Toxicology Consultants Inc. in Miami, Florida tested U.S. currency from major cities for over a seven-year period. He found that 96 percent of the bills in his study tested positive for cocaine. Even the "drug contaminated" bills that are seized by government are simply deposited in the bank. One of these could be among those that you withdraw to buy your next plane ticket.)
• In April 1989 sheriff's deputies from Louisiana's Jefferson Davis Parish took $23,000 away from Johnny Sotello, a Mexican-American whose truck had broken down on the highway. They also seized his truck. Sotello was a buyer of heavy equipment and had numerous auctioneer's receipts to prove it, but police suspected another, more sinister explanation for the cash that Sotello was carrying: They had removed a door panel from Sotello's truck and found a space that they said could have been used to hide drugs. No drugs, however, were found. After two years of expensive legal battles, Sotello settled for the return of his truck and half of his money. Police kept $11,500 but never charged Sotello with a crime.
• In 1992, law enforcement officials seized the Carolina Motel in Columbia, South Carolina because prostitutes had used the rooms to have illicit sex. Authorities also evicted the owner, a 68-year-old widow named Janelle Williams, who lived on the premises. Mrs. Williams was never involved or implicated in the illegal activity. She is now living with a relative. Her motel, which has been left vacant and is still in the possession of the state, has been repeatedly vandalized.
• Willie Jones is a nursery man from Nashville, Tennessee. When he has enough capital, he visits Houston to buy shrubs. Out-of-town checks are not popular there, so he brings cash. On one such occasion, after having bought his airline ticket with cash, the ticketing agent reported the transaction to the police as being suspect. What was suspicious? Willie Jones was black, had money, and was on his way to Houston — a known "source" city for drugs. Police pruned Willie Jones of $9,600 even though he was never charged with a crime. He was told that in order to get his money back, he has to post a "bond" of an additional $900.
• Dick Kaster is a fisherman with a story about the "one that got away" like no other fisherman has ever told. Unfortunately, Kaster's story is true. The Iowa Department of Natural Resources charged Kaster with having caught three fish with a gill net, a misdemeanor in Iowa. Their evidence was that these fish had "net marks." Kaster says that most of the fish had "net marks" and that he caught the fish with a rod. But it was the state of Iowa that made the biggest catch of the day. Officers netted Kaster's boat, motor, and trailer. Even though this quarry was worth only about $6,000, the state spent another $100,000 defending the seizure. Kaster spent enough to restock several lakes.
• Before they got into a "dog fight" with the DEA, Bill Munnerlyn and his wife Karon ran an air charter service in Las Vegas, Nevada. They had three prop-driven planes and a Lear Jet. In October 1989 Bill Munnerlyn flew to the Little Rock, Arkansas Airport to pick up a 74-year-old man claiming to be a banker named "Randy Sullivan." Munnerlyn had been told that "Sullivan" would fly back to Las Vegas to inspect the charter service and arrange a line of credit. His well dressed, distinguished looking passenger loaded four boxes on the plane which he said were financial records. But the DEA told Munnerlyn that his passenger had actually been Albert Wright — a convicted drug trafficker. The boxes had contained almost $3 million in cash. The DEA took Munnerlyn's plane, tore it apart, and then offered to sell it back to him. No drugs were ever found and Munnerlyn was never charged with a crime.
• Not even lawyer's fees are exempt from civil seizure. In 1985 Christopher Reckmeyer was indicted for drug importation and distribution. His assets were declared forfeitable under the Comprehensive Forfeiture Act. Even the fee due his lawyer was seized by the government. The lawyers representing Reckmeyer sued for their fee, and a U.S. district court sided with them, forcing the government to release the funds.
The United States Court of Appeals further ruled that the Comprehensive Forfeiture Act of 1984 was unconstitutional because it did not exempt reasonable attorney fees. The United States Supreme Court, however, reversed this lower court decision, ruling that the act was constitutional.
The result of this legal wrangling is that loss of fees by attorney's has become so common that many accused persons are running into difficulty in obtaining legal representation. In short, the Sixth Amendment, which protects a citizen's "right to an attorney," has been compromised under the Comprehensive Forfeiture Act of 1984.
Under the Comprehensive Forfeiture Act of 1984, law enforcement officials now have the power to seize almost any kind of property imaginable. A government designation of any object as "illegal" makes it "contraband." "Contraband" is usually thought of as an item which has no legal use. Items in this category currently include illegal drugs, guns, smuggled goods, liquor, gambling devices, and any other item for which possession is a crime.
The governmental act of defining a thing as "contraband" now sets into motion an entire new engine for the destruction of all sons of property rights. Each article identified as contraband taints ever expanding categories of other property. The category identified as "derivative contraband" includes property used to manufacture, store, or transport contraband. This was the earliest legal expansion away from contraband itself. Originally derivative contraband only included items which were used exclusively for illegal purposes, such as liquor stills or drug laboratories. The term now includes practically everything the contraband touches, such as cars, boats, airplanes, and real estate.
More recently, the category known as "proceeds" has been added to what can be considered seizable. This was originally only the cash that the government found at the same time contraband was seized. But now DEA agents are stationed in major airports for the purpose of seizing any large amounts of cash that any passenger might be carrying. The allegation will, of course, be that such large amounts were "intended to be used" to purchase contraband. The victim of the seizure will naturally be "guilty" of "intent" unless he can prove himself innocent.
The most recent category identified by government as contraband is "derivative proceeds." Included in this grouping is practically anything of value that is not covered by the other designations. Derivative proceeds may include stocks, bank accounts, real estate, art, antiques, or jewels. The theory behind the seizure of such items is that they must have been obtained with the proceeds of the criminal enterprise. By seizing all such proceeds, law enforcement officials can even deny a defendant the means to post bond or hire a lawyer. Such a seizure can result in the total destruction of an individual's assets, removing all means of defense or resistance.
The rippling domino effect of one object "tainting" another is grandiose by itself. When the vague allegations concerning an item's "intended use" are added, it becomes incomprehensible.
The fact that the burden of proof has been placed on the owner demonstrates that the most serious limitation of the government's ability to seize property is its own audacity. With government's audacity seemingly increasing at an exponential rate, the question must now be asked: Does an item of property exist which cannot be confiscated by government?
The confiscation of the property of law-abiding citizens without probable cause and without even proof of intent to commit a crime circumvents the Fourth Amendment to the U.S. Constitution, which is remarkably clear on the subject of seizure:
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
The American judicial system has traditionally been very careful as to what may be legally accepted as proof of "intent." Common sense dictates that it is very difficult to clearly prove anything conclusively about the thoughts of another human being.
Another hallmark of the American judicial system has been the requirement that the "burden of proof" be borne by whoever is making the accusation. This means that the accused is always considered "innocent until proven guilty." Thus, the strict definition of "proof of intent" works to the advantage of the accused.
But the Comprehensive Forfeiture Act treats the forfeiture as a civil matter, and the seized property is treated as though it is already legally owned by the government. The "former owner" is then given the role of "plaintiff" and expected to prove that he has not had any criminal intentions with regard to the property. With the burden of proof shifted from the state to the original owner, the inherent difficulty associated with finding "proof of intent" becomes a kiss of death to the property owner.
The complete disregard of the Fourth Amendment protection against "unreasonable searches and seizures" and the destruction of the requirement for warrants is made much more serious when one understands the protection that was intended by the words "probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the person or things to be seized."
Criteria for a Search
A recognition of what is now being accepted by law enforcement officers as "probable cause" for the initiation of a search would make our Founding Fathers turn over in their graves:
• Some states say that it is suspicious to be among the first people off an airplane, because that shows you are in a hurry. Some states say that it is suspicious to be among the last people off the plane, because that shows you are trying to look unconcerned. Other states say that it is suspicious to be in the middle of the group leaving the plane, because that shows you are trying to lose yourself in the crowd.
• You are in danger of being suspect if you are traveling to or from a drug "source city." It makes little difference that many cities big enough to have airports are now classified as "source cities."
• If a drug dog barks, wags his tail, sits down, or paws when he is near you or your luggage, you will most likely be searched. Little matter that your bag has been in an air-tight luggage compartment with another bag that did indeed hold marijuana, causing your bag to smell like marijuana.
• Agents are trained to spot people who are dressed better than their "class." Folks with jewels, gold chains, pagers, and cellular phones are targets. Being black, Hispanic, or Asian makes them even more suspect.
• Not looking at a policeman as you walk by, or staring at a policeman will both arouse suspicions.
• Walking too rapidly or too slowly may make you prime for a search.
Preserving the balance of power between the states and the federal government has long been an objective of the defenders of the American constitutional system. The principles of "checks and balances" and "diffusion of powers" are easily recognizable as a part of the cement that holds together this fortress of freedom.
Conversely, the centralization of all power is a certain recipe for tyranny. It is not difficult to find persons of all political perspectives who are alarmed about the centralization of power in our own federal government. Much more rarely do we find persons with a clear understanding of a far more frightening global centralization.
The idea that a foreign power has anything at all to do with the making of laws inside the United States might come as a shock to the average U.S. citizen. Even the recognition that one is dealing with a foreign power can be disguised by keeping the government in its familiar form and location and by limiting the numbers of foreign nationals who receive publicity.
One of the goals of the United Nations is the "modification of national legislation" through the promulgation of "model legislation," which the UN refers to as "conventions." UN conventions are offered to the nations of the world to be ratified in the form of treaties.
Empowering the UN
The United States has signed all three UN conventions which have been promulgated under the stated goal of combating narcotics and psychotropic substances. The first of these was the 1961 Single Convention on Narcotic Drugs which obliged signers to confiscate things "intended" to be used in violation of the provisions of the convention.
That first convention was strengthened and clarified in 1971 with the passage of the Convention on Psychotropic Substances.
The most recent of the conventions, the 1988 United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, includes an entire article dealing with the taking of property by government. Article 5 states, in part:
1. Each Party shall adopt such measures as may be necessary to enable confiscation of:
(a) Proceeds derived from offences established in accordance with article 3, paragraph 1, or property the value of which corresponds to that of such proceeds;
(b) Narcotic drugs and psychotropic substance, materials and equipment or other instrumentalities used in or intended for use in any manner in offences established in accordance with article 3, paragraph 1.
2. Each Party shall also adopt such measures as may be necessary to enable its competent authorities to identify, trace, and freeze or seize proceeds, property, instrumentalities or any other things referred to in paragraph I of this article, for the purpose of eventual confiscation.
3. In order to carry out the measure referred to in this article, each Party shall empower its courts or other competent authorities to order that bank, financial or commercial records be made available or be seized.
It is frightening to realize that some of our nation's laws are currently being formulated by foreign powers. Even more frightening are the provisions which could ultimately lead to the enforcement of these laws by "international police." Consider the following provisions from Article 5:
(b) When acting on the request of another Party in accordance with this article, a Party may give special consideration to concluding agreements on:
(i) Contributing the value of such proceeds and property, or funds derived from the sale of such proceeds or property, or a substantial part thereof, to intergovernmental bodies specializing in the fight against illicit traffic in and abuse of narcotic drugs and psychotropic substances;
(ii) Sharing with other Parties, on a regular or case-by-case basis, such proceeds or property, or funds derived from the sale of such proceeds or property, in accordance with its domestic law, administrative procedures or bilateral or multilateral agreements entered into for this purpose.
Some conclusions should be obvious from the wording of these provisions. The phrase "contributing the value of such proceeds and property" introduces the concept of direct international taxation. The reference to "intergovernmental bodies specializing in the fight against illicit traffic" leaves little doubt that an international police force will ultimately be created under the auspices of this treaty.
Although seizures of property had occurred earlier in the U.S. under other statutes (such as the Comprehensive Drug Abuse Prevention and Control Act of 1970), civil forfeiture did not become a "feeding frenzy" until the Comprehensive Forfeiture Act of 1984. Since then the courts have generally found excuses to strengthen the government's position with each new case. It appeared as though the only limit to what could be done was the appetite of those who were benefiting from the flow of booty. But now there are indications that the tide could be turning.
The original text of the Comprehensive Drug Abuse Prevention and Control Act of 1970 included a provision protecting the rights of "innocent owners." This provision, however, had simply been written out of the law by the unchallenged interpretation of another provision in the same law, the "relation back" provision. The "relation back" doctrine provided that "all right, title and interest in the property … shall vest in the United States upon commission of the act giving rise to forfeiture…." This provision had been stretched to the point of doing away with the rights of innocent owners.
In the case of the United States vs. 92 Buena Vista Avenue the government argued that a New Jersey home could be taken away from a law-abiding citizen. Miss Beth Ann Goodwin had bought her home in 1982 with money given to her by her boyfriend, Joseph Anthony Brenna, who lived with her in the house until 1987. In 1989 the government seized the house from Ms. Goodwin, saying that the money Brenna had given to her had been made from the sale of drugs.
The government argued that Beth Ann Goodwin's innocence was not relevant because (in the government's view) she had never actually been the owner. They argued that, under the "relation back" doctrine, the title had already been vested in the United States since the time when the house had been bought with the "tainted" money.
But the Supreme Court disagreed, ruling that the government could not take the house unless Ms. Goodwin was unable to prove that she had no knowledge that the gift had come from drug sales. The burden of proof was still placed upon Ms. Goodwin.
Justices Scalia and Thomas went a step further by asserting that there was no proper basis for concluding that Ms. Goodwin must assume the burden of proof.
Restoring Property Rights
Although the possibilities presented by the above information are alarming indeed, as Americans we are not without hope. Our Constitution precludes the intrusion of the federal government — or international powers — into the affairs of private citizens. Remedies to unconstitutional forfeitures might include requirements that:
• All government seizures be conducted only after a hearing before a neutral and detached judge and jury.
• Seizures be subject to the ultimate conviction of the owner of the forfeited property.
• Persons and agencies responsible bear civil liability for damages to victims of seizures which are made without warrants or without probable cause.
• A crime must have been committed before a seizure may be sustained. This would mean the repudiation of any seizure based merely on the allegation of an intended use. (Actual contraband, for which mere possession is a crime, would not be affected.)
• Forfeiture of property be defined as a part of the punishment, with the requirement that the punishment fit the crime, not the financial portfolio of the accused. This would mean strict adherence to Amendment VIII of the U.S. Constitution, which requires: "Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted." At present it is possible to lose any amount of value over the smallest offense.
• Innocent third parties be fully compensated for any loss.
• Government accept the burden of proof of criminal guilt on the part of the owner.
Although the Supreme Court has demonstrated its lack of inclination toward upholding the Constitution, as Americans we still have the ultimate control of our nation through the ballot box. We must elect true patriots to Congress who will repeal every law destructive to our Republic, including those laws that authorize unconstitutional seizures. In addition, an informed population is one of the best defenses against an encroaching government. An educational campaign could create demand for some effective remedies to unconstitutional government seizures, such as those cited above. The time to start is now!