Seized Drug Assets Pad Police Budgets
June 16, 2008
First of a four-part series
A Primer on Dirty Money
For an explanation of how drug asset seizures work, read our FAQ.
Every year, about $12 billion in drug profits returns to Mexico from the world's largest narcotics market — the United States. As a tactic in the war on drugs, law enforcement pursues that drug money and is then allowed to keep a portion as an incentive to fight crime.
As a result, the amount of drug dollars flowing into local police budgets is staggering. Justice Department figures show that in the past four years alone, the amount of assets seized by local law enforcement agencies across the nation enrolled in the federal program—the vast majority of it cash—has tripled, from $567 million to $1.6 billion. And that doesn't include tens of millions more the agencies got from state asset forfeiture programs.
In Texas, with its smuggling corridors to Mexico, public safety agencies seized more than $125 million last year.
While drug-related asset forfeitures have expanded police budgets, critics say the flow of money distorts law enforcement — that some cops have become more interested in seizing money than drugs, more interested in working southbound than northbound lanes.
"If a cop stops a car going north with a trunk full of cocaine, that makes great press coverage, makes a great photo. Then they destroy the cocaine," says Jack Fishman, an IRS special agent for 25 years who is now a criminal defense attorney in Atlanta. "If they catch 'em going south with a suitcase full of cash, the police department just paid for its budget for the year."
'We have To Be Prepared'
U.S. Highway 77 follows the coastal bend of South Texas past mesquite thickets, grapefruit stands and vast historic ranches on its way to the Mexican border.
Drug agents say Highway 77 is one of the busiest smuggling corridors in the world. Think of it as a great two-way river — drugs flow north, drug money flows south. For the impoverished cities and counties situated along 77, it is like a river of gold.
On one 15-mile section that runs through Texas' Kleberg County, the southbound lanes have become a "piggy bank," according to the local sheriff. In the past four years, combined seizures have surpassed $7 million.
It starts with a traffic stop.
"Look at this hose. Look on this side. So that tells me somebody has messed with it. I have fingerprints right here," says officer Mike Tamez of the Kingsville Police Department, as he inspects the engine of a gray Ford pickup truck that was headed south. He's looking for clues to where the driver might have hidden drug money.
"Come over and look at [the] air filter housing? Look how clean these are compared to the other parts of the vehicle," he says. After searching for 20 minutes, Tamez and the other officers crawling over the truck don't find anything, and they send the motorists on their way.
There's always tomorrow.
In January, Tamez — a gung-ho former Marine with a buzz cut — stopped a white Land Rover for changing lanes without using a blinker. The driver's story was inconsistent. Then Tamez noticed fresh silicone under the rear deck. A density meter showed something bulky inside. He brought it into the shop to investigate.
"When I pulled the drill bit out there was pieces of money on it, currency. Inside the compartments we discovered 80 bundles of U.S. currency. He disavowed knowledge of everything," Tamez says.
The bundles contained $1 million. According to the law, 80 percent of that will go to the Kingsville Police Department. So that one afternoon's work will boost the department's budget by 25 percent.
"Law enforcement has become a business, and where best to hit these narcotics organizations other than in the pocketbook? That's where it's going to hurt the most. And then to be able to turn around and use those same assets to benefit our department, that's a win-win situation as far as we're concerned," says Kingsville Police Chief Ricardo Torres.
In this sleepy city of 25,000 people, with its enviable low crime rate, police officers drive high-performance Dodge Chargers and use $40,000 digital ticket writers. They'll soon carry military-style assault rifles, and the SWAT team recently acquired sniper rifles.
When asked why the Kingsville Police Department needs sniper rifles, Torres says, "With homeland security, we all hear about where best to hit than ... Middle America. This can be considered that sort of area. We have to be prepared."
'Addicted to Drug Money'Read More...
Well, I always knew there had to be something "Rotten in Denmark"!:O I'm not supprised...
- Texas Case May Spur Drug Money Rule Change
- The Surprising Truth About 'Dirty Money'
- Spending of Drug Money Questioned
|It has been suggested that Disgorgement (law) be merged into this article or section. (Discuss) Proposed since February 2011.|
Asset forfeiture is confiscation, by the State, of assets which are either (a) the alleged proceeds of crime or (b) the alleged instrumentalities of crime, and more recently, alleged terrorism. Instrumentalities of crime are property that was allegedly used to facilitate crime, for example cars allegedly used to transport illegal narcotics. The terminology used in different jurisdictions varies. Some jurisdictions use the term "confiscation" instead of forfeiture. In recent years there has been a growing trend for countries to introduce civil forfeiture and such proceedings may be brought in the USA, Australia, the UK, Ireland, Italy, South Africa, various Canadian Provinces and Antigua.
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Proponents of seizure suggest that it is a necessary tool to prevent drug trafficking or other crimes. "Asset forfeiture is a law enforcement success story" . Statistics indicate that asset forfeiture has failed to prevent methamphetamine drug crime in South Africa . Former United States president George H. W. Bush said, "[Asset forfeiture laws allow [the government] to take the alleged ill-gotten gains of drug kingpins and use them to put more cops on the streets."
 The civil law/criminal law distinction
Most legal systems distinguish between the criminal and the civil, generally using separate courts, different procedures and different evidential rules. The traditional view is that crimes are public wrongs and that the criminal law addresses those who harm society through morally culpable acts in order that punishment may be imposed and potential offenders may thereby be deterred from committing similar offenses. Criminal proceedings are therefore “officially designated ceremonies of guilt designation” and the label “criminal” carries with it a social stigma, which is not imposed on the losing party in a civil action. Because of this stigma and the potential punishment, which may be imposed by a criminal court, legal systems provide procedural protections above those available to a respondent in a civil case. For example, criminal proceedings require a standard of proof. In the civil proceedings against Simon Prophet  no evidence was presented by the state to the courts. The court's decision to deprive Prophet of his home was based solely on affidavits. Generally it is the state that brings criminal proceedings. However, this is not an absolute rule since many jurisdictions also allow private individuals to initiate criminal prosecutions.
The bringing of civil proceedings is, by comparison, primarily the forum for a wronged private individual. Nevertheless this too is not an absolute position, as the state also may sue in the civil courts as a wronged individual, for example, in respect of a contractual dispute with a multinational company. Civil law does not aim to punish, but rather is designed to provide two types of remedy. Firstly, it provides a remedy requiring a return to the way things were, the status quo ante, so as to restore the position of an injured party. Secondly, it provides a remedy to compensate an injured party for harm done to him.
While the traditional view of civil and criminal proceedings might be described as neighboring countries divided by a common border, this dichotomy is not as distinct as that metaphor might suggest. In recent years there has been a growing homogeneity between criminal and civil procedures. Criminal cases now often involve civil, or quasi-civil, procedures and some civil litigation has become quasi-criminal. Indeed it has been said that almost every attribute associated with the criminal law also appears in civil law and visa versa. This “significant disintegration of the wall between criminal and civil proceedings” has occurred on a number of fronts and is due, at least in part, to the fact that multiple strategies are now used to deal with crime. An early example was the use of injunctions to protect victims of domestic violence, even though, to obtain such an injunction, the plaintiff may be alleging the commission of a criminal assault. Rather than the traditional dichotomize perspective therefore, legal proceedings might be better seen as a continuum, with distinctly civil proceedings at one end and clearly criminal proceedings at the other. Between the two ends of the continuum are a range of possibilities, each of which may be more or less criminal or civil.
 The trend towards civil forfeiture
The traditional approach to serious criminality has been arrest, followed by the institution of criminal proceedings with a view to conviction and imprisonment. In recent years, such has been the wealth generated from economic crime and, in particular, from drug-related crime, that a confiscation or forfeiture element has been added to the criminal process in many jurisdictions. The need for a broader response than a solely criminal one was recognized by the US President’s Commission on Organized Crime as long ago as 1986 :
”To be successful, an attack on organized crime in our mainstream economy cannot rely solely on the enforcement of federal criminal laws…The Commission believes that a strategy aimed at the legitimate economic base of organized crime must build upon the recent successes of law enforcement, and must be based upon intervention measures as broad based as the nature of the threat posed by organized crime. A strategy in this area should also rely upon civil and regulatory measures tailored to the specific problems confronted…”
Although pioneered in the USA, there now appears to be a global trend to use stand-alone civil proceedings as a means of recovering the proceeds of crime in the hope that they will be more effective than proceedings that are ancillary to and dependent on a criminal prosecution. Recent examples of jurisdictions that have introduced civil forfeiture legislation include Italy, South Africa, Ireland, the United Kingdom, Fiji, the Canadian Provinces of Ontario, Alberta, Manitoba, Saskatchewan and British Columbia, Australia and its individual States, and Antigua and Barbuda. In addition, the Commonwealth has produced model provisions to serve as a template for jurisdictions that wish to introduce such legislation.
This trend towards civil forfeiture has been prompted by the nature of organized crime. Organized crime heads use their resources to keep themselves distant from the crime that they are controlling and to mask the criminal origin of their assets. For this reason it has become extremely difficult to carry out successful criminal investigations leading to the prosecution and conviction of such individuals, with the result that finances derived from crime are often effectively out of the reach of the law and are available to be used to finance more crime. Such peaceful enjoyment of the proceeds of crime damages public confidence in the rule of law and provides harmful role models. This has led to a recognition that criminal confiscation regimes may be inadequate and ineffective in certain cases.
 Asset forfeiture in the United States
There are two types of forfeiture cases, criminal and civil. Almost all forfeiture cases practiced today are civil. In civil forfeiture cases, the US Government sues the item of property, not the person; the owner is effectively a third party claimant. Once the government establishes probable cause that the property is subject to forfeiture, the owner must prove on a "preponderance of the evidence" that it is not. The owner need not be judged guilty of any crime. In contrast, criminal forfeiture is usually carried out in a sentence following a conviction and is a punitive act against the offender. Since the government can choose the type of case, a civil case is almost always chosen. The costs of such cases is high for the owner, usually totaling around $10,000 and can take up to three years.
The United States Marshals Service is responsible for managing and disposing of properties seized and forfeited by Department of Justice agencies. It currently manages around $1 billion worth of property. The United States Treasury Department is responsible for managing and disposing of properties seized by Treasury agencies. The goal of both programs is to maximize the net return from seized property by selling at auctions and to the private sector and then using the property and proceeds for law enforcement purposes.
A form of asset forfeiture is roadside forfeiture during a vehicle stop. Usually enforcing State policies by Highway police, local law enforcement have built up seized funds and spent them with oversight only from local judges who sometimes benefit from the expenditures of such funds. The presumption is that travelers hiding large amounts of cash are transporting drug money. Often, the vehicle occupants are required to simply sign a waiver that they will leave the State and not return, thus also not attempt to retrieve their funds. Some complain that this is law enforcement action requires more oversight in order to minimize the impact on travelers who are not involved in drug money but who simply wish to avoid further involvement with law enforcement agents and sign the waiver anyway. Sen. John Whitmire, D-Houston, chair of the Senate Criminal Justice Committee is investigating the Tenaha, Texas Police seizures scandal.
 Asset forfeiture in the United Kingdom
In the UK asset forfeiture proceedings are initiated under the Proceeds of Crime Act 2002. These fall into various types. Firstly there are confiscation proceedings, which may follow a criminal conviction. Secondly, there are cash forfeiture proceedings, which take place (in England and Wales) in the Magistrates Court with a right of appeal to the Crown Court, having been brought by either the police or Customs. Thirdly, there are civil recovery proceedings that at the moment are brought by the Assets Recovery Agency "ARA". Under the Serious Crime Act 2007 ARA's functions will be transferred to the Serious Organized Crime Agency and the National Policing Improvement Agency . Neither cash proceedings nor proceedings for a civil recovery order require a prior criminal conviction.
In Scotland, confiscation proceedings are initiated by the procurator fiscal or Lord Advocate through the Sheriff Court or High Court of Justiciary. Cash forfeiture and civil recovery are brought by the Civil Recovery Unit of the Scottish Government in the Sheriff court, with appeals to the Court of Session.
 Asset forfeiture in Ireland
Ireland was one of the first countries to introduce Asset Forefeiture in the form of the Criminal Assets Bureau which initiates civil forfeiture proceedings and the Director of Public Prosecutions who initiates confiscation proceedings. It was set up under the Criminal Assets Bureau Act,1996 by the Irish Government in response to the murder of investigative journalist Veronica Guerin who was actively digging up dirt on the Irish Criminal Underworld.
 Abuses and controversy
The widespread use of such proceedings, which usually involve assertion of in rem jurisdiction, has also brought many complaints about their misuse to deprive innocent persons of their lawful property. Without a requirement to prove that a crime had been committed, much less committed by the party in possession of the property, it has become too easy for law enforcement personnel to seize and prosecutors to forfeit properties worth as much as $20,000 because it will likely cost the person that much in legal fees to recover them. This is because in such cases the courts no longer abide by the old common law rule that the party in possession is to be presumed the lawful owner unless it is proved otherwise. Thus, a person carrying $6,000 in cash to a vehicle auction where the auctioneer will only take cash may be stopped and his cash seized because it is presumed only a drug dealer would have or carry that much cash.
The problem is exacerbated by the laws and rules that allow the agencies seizing the assets to keep the money for their operations, including the funding of salaries and promotions, the purchase of vehicles and equipment, and discretionary spending. In addition, there are often not strict controls on how the assets are liquidated, and law enforcement agents are discovered to have acquired forfeited assets, such as vehicles, boats, and other luxury items, without having paid full market value for them, or even anything at all. There have even been complaints about law enforcement officers seizing cash and other assets under the pretext of forfeiture and then just keeping them without reporting the seizure.
Another potential abuse involves the timing of police seizures. The police cannot auction seized illegal drugs, but using asset forfeiture they can keep or auction lawful goods purchased with money from the sale of illegal drugs. If the police wait to arrest a suspect they believe to be in possession of illegal drugs until after he or she has sold them, they stand to gain more from asset forfeiture than if they effect an immediate arrest while the suspect is still in possession of the illegal drugs. In this way, police forces are perversely discouraged to stop the sale of illegal drugs, so that the value of these drugs may be converted through unlawful sales into property the police can make use of.
The opportunity of forfeiture also gives the police an incentive to exert political influence, in their official capacity and through their unions, against liberalization of drug laws.
In South Africa the Prevention of Organized Crime Act of 1998 is inconsistent with section 25(1) of the South African Bill of Rights. Even before a person has committed a crime, the right of every person to own property is severely derogated by civil forfeiture. According to section 36(1), civil rights may be derogated only to the extent that the derogation is reasonable and justifiable.
 Notable forfeitures
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After the Madoff investment scandal had surfaced, Bernard Madoff was ordered to forfeit $170 billion, although it is believed that he did not have anywhere close to that amount. His wife, Ruth, although not charged, agreed to forfeit about $80 million in assets.
In 2009 Lloyds Bank forfeited $350 million in connection with violations of the International Emergency Economic Powers Act (IEEPA) (falsified outgoing wire transfers to persons on U.S. sanctions lists).
In 2010 Barclays Bank forfeited $298 million in connection with violations of the IEEPA and the Trading with the Enemy Act.
 See also
- Eminent domain
- Forfeiture Endangers American Rights - U.S. anti-forfeiture activist organization
- Operation Protect Our Children
- USA v. $124,700 August 18, 2006 case from the Eighth Circuit Court on civil forfeiture of $124,700
 Further reading
- Levy, Leonard Williams (1996). A License to Steal: The Forfeiture of Property. Chapel Hill: University of North Carolina Press. ISBN 0-8078-2242-6.
- The Looting of America, leaflet published by International Society for Individual Liberty
- Simon Prophet, victim of forfeiture in South Africa
- Introduction to forfeiture laws, by Legal Information Institute, Cornell University
- List of offenses that trigger federal forfeiture More
- Judge David Demers - Search & Seizure Outline
- South Africa's Constitutional Safeguards are in Tatters
- Seized Drug Assets Pad Police Budgets
- Asset forfeiture - Wikipedia, the free encyclopedia
- Seized Drug Assets Pad Police Budgets : NPR
- NPR Media Player