The Supreme Court Curbs Civil Forfeiture Abuse
In February 2019, the Supreme Court unanimously ruled that the Eighth Amendment prohibition against “excessive fines and fees” applies to civil forfeiture cases and other civil, non-criminal proceedings. This decision represents a significant step in civil forfeiture reform. It addresses a critical issue that has been subject to growing scrutiny in recent years.
The case brought before the Court involved police in Indiana seizing a $42,000 vehicle owned by a man named Tyson Timbs. He had driven the vehicle to an undercover drug deal. During oral arguments, Indiana Solicitor General Thomas Fisher unconvincingly claimed that it would not violate the U.S. Constitution if police seized a Bugatti for going five miles an hour over the speed limit.
A Critical Moment in Civil Forfeiture
It’s about time the courts throttle civil forfeiture. Uncle Sam, all 50 states, and thousands of cities use it to boost cash-strapped budgets. Because civil forfeiture isn’t a criminal procedure, the protections a criminal defendant would receive don’t apply. The Supreme Court’s ruling is a critical milestone in civil forfeiture reform. It helps ensure that excessive fines do not go unchecked by law enforcement agencies seeking to pad their budgets.
The legal theory is that your property – not you – is presumed guilty. If you can’t prove it’s innocent, you can lose it. Hence the strange names of civil forfeiture cases such as “United States v. 422 Casks of Wine.” Suffice it to say that if your property is found or simply alleged to have been involved in or facilitated a crime, you could lose it.
The Origins and Expansion of Civil Forfeiture
Civil forfeiture has its roots in English common law, which the US inherited but was only sporadically used until 1984. That year, Congress enacted a law introducing the concept of “adoption.” Under this process, when local or state police seize property, they may turn it over to Uncle Sam for processing under federal law.
Today, almost 90% of the assets are seized by “joint task forces,” with investigations often coordinated in “fusion centers.” These are information hubs in which state, local, and federal law enforcement – and sometimes military and private intelligence agencies – share data to facilitate criminal investigations. Originally intended for use only in terrorism investigations, fusion centers have become a cornerstone of modern civil forfeiture. Calls for civil forfeiture reform have grown as more cases have revealed the abuse of this system, with law enforcement using it to seize assets without a criminal conviction.
Equitable Sharing: A Cash Cow for Law Enforcement
Once a forfeiture is finalized under federal law, the Justice Department rewards state agencies participating in a joint task force or the agency that made the seizure with up to 80% of the proceeds as a kickback. The feds call this “equitable sharing.”
This process bypasses provisions in state law that would otherwise provide a legal barrier against the loss of property without a criminal conviction. It also sidesteps state laws that mandate forfeited assets be used for non-law enforcement purposes, such as education.
But from the standpoint of police budgets, it has been a godsend. According to research conducted by the Institute for Justice:
- In 1986, the Justice Department’s Asset Forfeiture Fund (AFF) took in $93.7 million in revenue from federal forfeitures. By 2014, annual deposits had reached $4.5 billion — a 4,667% increase.
- The Justice and Treasury Departments together took in nearly $29 billion in forfeited assets from 2001 to 2014. During that period, their combined annual revenue grew by 1,000%.
- Between 2000 and 2013, the Justice Department paid state and local agencies $4.7 billion in equitable sharing revenues.
This surge in confiscated funds has spurred the movement for civil forfeiture reform as the practice is increasingly viewed as a means for “policing for profit.”
Policing for Profit: The Incentive to Seize
In most states, police and prosecutors can keep up to 100% of the assets they seize in civil forfeitures without getting the feds involved. This is “policing for profit” in its purest form—and it’s very popular with law enforcement agencies.
Cash is the all-time favorite asset cops love to confiscate. Police consider cash inherently suspicious. They can seize your cash if they believe it’s somehow connected to a crime. That’s easy to demonstrate because up to 96% of circulating cash contains narcotics residues. All police need to do is bring in a drug-sniffing dog to inspect the bills. If the dog behaves in a way that persuades its handler it’s detected the odor of narcotics on cash, police can seize it. Then, in most states, it’s up to you to prove that the money has a legitimate origin.
Efforts to Reform Civil Forfeiture
Fortunately, efforts are underway nationwide to curb civil forfeiture abuse. In the last five years (2014-2019), 33 states and the District of Columbia have reformed their civil forfeiture laws. Three of those states — Nebraska, New Mexico, and North Carolina — have abolished civil forfeiture entirely. In 15 other states, police can’t seize your property unless you’re convicted of a crime. These actions represent a growing trend in civil forfeiture reform, as both state legislatures and the courts take steps to reduce abuse.
As well, the Supreme Court’s Timbs decision will curtail seizures of cash, cars, and homes with a value many times greater than the penalty that would otherwise apply if the owner were convicted of a crime. But the decision only applies to the states, not Uncle Sam. More than 400 federal statutes allowing the federal government to confiscate your property through civil forfeiture still apply.
The Limits of the Timbs Ruling
Thus, the decision doesn’t apply to forfeitures under federal money laundering laws, the PATRIOT Act, or the International Emergency Economic Powers Act. Nor does it affect the abominable practice of federal prosecutors pursuing simultaneous civil forfeiture and criminal proceedings. This is a common tactic when the government seeks to gather evidence against a criminal defendant. Information you disclose to prove you’re an “innocent owner” in a civil forfeiture proceeding can then be used against you in a related criminal proceeding.
How to Protect Your Wealth from Civil Forfeiture
How can you prevent police “forfeiture squads” from confiscating your wealth? One of the survival strategies I learned as a child was to stay away from schoolyard bullies. As an adult, I keep my property away from government bullies by holding a big chunk of it offshore. With the civil forfeiture racket still booming, I can’t think of a better reason for keeping it there. Given the slow pace of civil forfeiture reform at the federal level, protecting your assets with offshore planning is more crucial than ever.
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