Civil forfeiture is inherently abusive, even when the process “works.”
This case highlights the abuse inherent in the entire federal civil forfeiture process, even when it “works” as designed. First, CBP seizes property from people, sometimes over technical violations of obscure statutes, often without filing any criminal charges. Then, it threatens to forfeit the property administratively—automatically forfeiting the property without a hearing—unless the owner files a claim. Ultimately, CBP keeps the property for up to half a year (or longer) before it has to file any papers in court. Finally, if the government decides not to pursue the case or misses its filing deadline, CBP ignores the statutory requirement that it promptly return the property and holds the property hostage and demands that the property owners waive their rights to sue the CBP over any aspect of the process. Even if property owners do sign this waiver, CBP says it will take 8-10 weeks to return their property.
Thus, even in a “best case scenario,” property owners are deprived of their property for roughly nine months (without even being charged with a crime), and are forced to sign away their rights to interest, damages, and any other legal remedies in order to get back property that the government is legally required to “promptly” return.
Anthonia Nwaorie: Registered Nurse, Grandmother of Seven, and U.S. Citizen
Anthonia Nwaorie is a 59-year-old nurse and grandmother who lives in Katy, Texas, near Houston. She came to the U.S. from Nigeria in 1982 and obtained her license as a registered nurse in 1983. She became a U.S. citizen in 1994. She frequently works as a traveling nurse, visiting hospitals across the United States for a few months at a time. She is the oldest of ten siblings, has six adult children, and seven grandchildren.
Anthonia’s Mission: Provide Health Care for Poor Children and Women in Nigeria
Anthonia has long been concerned about access to medical care in Nigeria, particularly for women and children who are unable to pay for treatment. For the past decade or so, Anthonia has collected unused medical supplies such as bandages and sponges to ship to medical clinics in Nigeria. Since 2014, Anthonia has traveled annually to Imo State, Nigeria and operated a temporary, week-long free medical clinic. She typically hires a few local nurses to assist her at a location she rents, such as an open-air church hall. The focus of her clinic is on providing medical care for women and children.
Anthonia’s dream is to transform this series of temporary medical clinics into a year-round operation with a permanent building and staff. Her clinic would not deny anyone treatment due to their inability to pay, but would charge money to those who could afford to pay for care. Anthonia planned to use most of her savings to build a permanent clinic building on land her father gave her in Imo State. She planned to use the remainder of her savings to pay for a permanent nursing staff and other operating expenses.
Anthonia spent several years saving up money from her income as a nurse, periodically withdrawing as much as $5,000 in cash from her bank account to set aside for her clinic. By October 2017, she had saved over $30,000 in cash for this purpose, and she took it with her on her trip to Nigeria. She received an additional $7,400 from her brother Brendan, who also lives in the United States, to help support their parents and his parents-in-law in their retirement and to rebuild/remodel his childhood home.
Altogether, Anthonia was traveling to Nigeria with $41,377, but was simply unaware that she was technically supposed to file an obscure report saying that she was leaving the country with more than $10,000. She brought the money in cash because she wanted to make sure it was available for her to spend as soon as she arrived, rather than waiting up to several weeks for an international wire transfer to go through.
Confronted and Interrogated While Boarding Her Flight
On October 31, 2017, Anthonia was boarding her international flight at Houston’s George Bush Intercontinental Airport (IAH), when she was suddenly stopped on the jetway and interrogated by CBP officers. They first asked her how long she had been in the country, a question which took her aback given that she has been an American citizen for over 20 years. Then they began asking questions about who she was carrying money for and how much money she had on her. Flustered and surprised by this sudden questioning, Anthonia initially told the officers she had $4,000, which was the amount in her handbag (the rest was in her luggage). The officers asked her to fill out a form reporting the amount of money she had on her. She wrote down $4,000, again thinking that they were asking how much money she had on her person. Anthonia does not remember the officers informing her about the reporting requirement nor does she remember reading any notice about the reporting requirement on the form. After taking the form, the CBP officers searched her luggage and found the remainder of the money, seizing all $41,377. CBP officials never charged Anthonia with any crime, but kept all of her money.
Making matters worse, Anthonia missed her flight because she was detained by CBP. Anthonia had to buy a new ticket to make her trip to Nigeria a week later in order to continue operating her annual week-long free clinic, providing health care to underserved women and children. But because her savings were seized, she has not been able to open a permanent clinic for those in need of affordable medical care.
Obscure Law Requires Filing a Report to Leave the U.S. With Over $10,000
Unbeknownst to Anthonia, she had run afoul of an obscure law that requires filing a report when one is leaving the U.S. with over $10,000 in currency. When entering the U.S., every international traveler is given a Customs Declaration form asking if they are traveling with more than $10,000 in currency. But no such corresponding form or information is given to travelers departing the U.S. Like most travelers, Anthonia was completely unaware of this obscure requirement and did not see any signs or other notices that might have informed her about it.
It is completely legal for Anthonia to leave the U.S. with the $41,377, so long as she reported it to the government. As the CBP website explains: “There is no limit on the amount of money that can be taken out of or brought into the United States.”
The reporting requirement for money taken out of the U.S. is obscure. It is not found in lists of tips for international travelers on government websites, including the CBP’s U.S. Traveler’s Top Ten Travel Tips webpage, the list of “Documents You Will Need” on the CBP’s Before Your Trip webpage, the list of required documents on the State Department’s Traveler’s Checklist webpage, or the TSA’s Top Travel Tips, Travel Checklist or FAQ for travelers.
Only someone specifically looking for information about currency reporting requirements is likely to find out about it. (Even the CBP webpage about this reporting requirement phrases the question in a misleading way: “How much currency / money / monetary instruments can I bring into the U.S.?”) The specific legal obligation is contained in arcane Customs laws and regulations, and in the fine print on the back of the little-known FinCEN Form 105. As that fine print explains: “Travelers carrying currency or other monetary instruments with them shall file FinCEN Form 105 at the time of entry into the United States or at the time of departure from the United States with the Customs officer in charge at any Customs port of entry or departure.”
In other words, Anthonia was not only supposed to somehow know that this obscure requirement exists, but she was also supposed to find the CBP officer in charge at Houston’s George Bush Intercontinental Airport and file a form that she had no reason to know about. According to the CBP’s website, the CBP office for IAH is not in the terminal or even located on airport property; it is about a mile south of the end of the runway, on the ninth floor of a building on the far side of the Sam Houston Tollway. That is a 6.7 mile drive from International Terminal E, where Anthonia’s flight departed from. Expecting an ordinary citizen to know all of this and complete these steps without adequate notice is totally absurd.
Sign This Waiver or We’ll Keep Your Property
More than five months after her money was seized, Anthonia finally received a letter from CBP informing her that the U.S. attorney’s office has declined to pursue civil forfeiture of her money. But CBP says it will only return her money if she signs a “Hold Harmless Release Agreement” that requires her to:
If she doesn’t sign and return this agreement within 30 days of the date of the letter, CBP threatens that “administrative forfeiture proceedings will be initiated.” (Administrative forfeiture is basically a way in which agencies automatically forfeit property without even providing a hearing to the owner.) If Anthonia does sign the letter, CBP says it will take 8-10 weeks to return her money—money that CBP has already held for six months and that it never should have seized in the first place.
This Hold Harmless Release Agreement is not a meaningless waiver of rights. If Anthonia signs this agreement, she will not be able to receive interest on her money for the six months that CBP has held it thus far, nor will she be able to seek compensation for the second airline ticket to Nigeria that she had to buy after missing her flight or for the luggage that CBP destroyed when they sliced it open rather than using the key she had given them for the luggage lock.
The Hold Harmless Release Agreement also imposes new legal liabilities on Anthonia. She has to agree to indemnify the government and make it whole if anyone else sues the government over the seized property. And, if she signed the agreement, and later decided to sue the CBP over anything related to the seizure, she not only might be prevented from doing so by the agreement, but she could be held liable for the government’s attorney fees, costs, and other expenses related to defending against her lawsuit.
Moreover, being required to waive her right to sue the CBP is especially concerning because Anthonia believes the CBP has singled her out for differential treatment and harassment since the day of the seizure, including by subjecting her to a particularly intrusive screening when she returned from Nigeria in December 2017. During that screening, CBP officers ransacked her luggage, completely emptying all of her bags. One officer slit open the bottom of Anthonia’s leather purse to see if there was cash hidden in the lining. (There was not.) CBP simply returned the ruined, now unusable pursue to her without compensation or even an apology. One of the officers told her that, because CBP had previously seized her cash, she would now be singled out for these invasive and humiliating searches of her person and luggage every time she travels internationally.
No American citizen should be treated this way, especially one who has done nothing wrong. Anthonia does not want to be harassed and humiliated every time she travels abroad, nor does she want to have to buy new luggage every time she travels to replace items that CBP has destroyed for no good reason.
The Legal Arguments
IJ is filing a federal class action lawsuit against CBP on behalf of Anthonia and everyone in Anthonia’s position (the members of the class). The class consists of people whose property has been seized by CBP and to whom CBP is legally required to return their property—because the U.S. attorney’s office declined to pursue forfeiture or because the government failed to file its forfeiture complaint in time—but whom CBP nonetheless requires to sign a waiver of constitutional and other rights before it will return their property. This class action lawsuit brings two legal claims on behalf of this class: one statutory and one constitutional.
First, no one should have to sign a waiver of their rights in order to get back property that the government is legally obligated to return. Anthonia has a right to have her property returned immediately because the U.S. attorney’s office declined to pursue civil forfeiture of her money and did not file a forfeiture complaint within the 90-day timeframe specified in the federal Civil Asset Forfeiture Reform Act (CAFRA).
CBP may not impose additional requirements on property owners because the statute and regulations clearly command them to “promptly” return the property. CAFRA states that if the government does not file a forfeiture complaint within 90 days after a property owner files a claim for her property, “the Government shall promptly release the property pursuant to regulations promulgated by the Attorney General, and may not take any further action to effect the civil forfeiture of such property in connection with the underlying offense.” 18 U.S.C. § 983(a)(3)(B) (emphasis added). Those regulations provide that, in these circumstances, “the agency shall promptly notify the person with a right to immediate possession of the property, informing that person to contact the property custodian within a specified period for release of the property.” 28 C.F.R. § 8.13(b).
Second, no one should be forced to surrender their constitutional rights to get back property to which they are legally entitled. Nor should anyone be forced to trade one constitutional right for another. CBP’s behavior is unconstitutional because it does just that. It requires people to surrender some of their rights, including their First Amendment rights to petition the government for redress of grievances, for the “benefit” of restoring their constitutional right to possess their property. By imposing these unconstitutional conditions, CBP is violating the due-process rights of every class member.
The waiver of these constitutional rights is real and meaningful. For example, someone may have important claims against the CBP for other violations of their rights that occurred during the search and seizure of their property, including claims for monetary damages as a result of injuries or damage to their property. In Anthonia’s case, she not only must waive her property rights to the interest that has accrued over the past six months while CBP has held the money, but she also must waive her rights to bring a lawsuit over the cost of her second airline ticket to Nigeria, the damage to her luggage, and to vindicate her right to not be singled out for additional, intrusive screenings.
IJ is asking the federal court to: (1) declare that CBP’s demands that people waive their constitutional rights before it will return their property are unlawful and unconstitutional; (2) issue an injunction preventing the CBP from requiring class members to sign a Hold Harmless Release Agreement or any other waiver as a condition of returning their property; (3) declare that any such agreements signed by class members are void and unenforceable; and (4) order that any property withheld from class members for failure to sign the Hold Harmless Release Agreement be immediately returned.
IJ is also filing two individual claims on behalf of Anthonia. First, IJ seeks the full return of the money seized from Anthonia in an individual claim for return of property based on the government’s failure to timely file its forfeiture complaint in her case or for the government’s violations of due process or imposition of excessive fines. Second, IJ is asking the court to stop CBP from targeting Anthonia for additional, intrusive screening without affording her adequate notice and a meaningful opportunity to be heard, consistent with her due-process rights under the Fifth Amendment.
Little Transparency on CBP’s Use of Civil Forfeiture
Nobody outside the government knows how often CBP demands that property owners sign a Hold Harmless Release Agreement before CBP will return property that it is already required to return under CAFRA. We do know that CBP conducts at least 120,000 seizures per year. Based on data from SEACATS, the CBP’s seizure-tracking database, in the most recent fiscal years for which data is available, CBP conducted at least 125,583 seizures in Fiscal Year (FY) 2016, at least 124,318 seizures in FY 2015, and at least 120,019 seizures in FY 2014.
If just one percent of those seizures are cases in which the U.S. attorney’s office declines to pursue forfeiture or misses its deadline to file a forfeiture complaint, then 1,200 property owners each year are potentially put in the same position as Anthonia.
How big is the problem of CBP’s use of civil forfeiture? Based on a summary report issued at the end of each fiscal year, the Treasury Forfeiture Fund—where CBP and a few other agencies deposit forfeiture proceeds—brought in over $500 million in revenues in FY 2017 and had $4 billion in assets at the end of FY 2017.
Unfortunately, much more detailed information about CBP’s use of civil forfeiture is unavailable because the CBP does not make its database about forfeitures—the Seized Asset and Case Tracking System, or SEACATS—available to the public. In March 2015, IJ filed Freedom of Information Act (FOIA) requests asking for access to the public records in that database, but CBP refused to provide any records. After appealing that denial with the agency, IJ sued the CBP to release these public records in December 2016; the litigation is ongoing.
The Court and the Parties
This is a federal class action lawsuit filed in the U.S. District Court for the Southern District of Texas, which is the federal court for the district where Anthonia’s money was seized.
IJ is representing Anthonia Nwaorie as the lead plaintiff and class representative, as well as the putative class of plaintiffs—All property owners who received a CBP demand to sign a Hold Harmless Release Agreement in order to get back seized property that CBP was already required to return under CAFRA. The defendants in the case are the U.S. government, U.S. Customs and Border Protection (CBP), and CBP Commissioner Kevin K. McAleenan, in his official capacity.
The Litigation Team
About the Institute for Justice
The Institute for Justice is the national law firm for liberty and the nation’s leading advocate for property rights. This case is the latest in IJ’s nationwide initiative to end civil forfeiture. IJ has come to the defense of Americans nationwide to fight civil forfeiture, including the owners of the family-run Motel Caswell in Massachusetts, small business owners across the country whose bank accounts were targeted for civil forfeiture by the IRS, a class of property owners challenging Philadelphia’s civil forfeiture machine, a Burmese Christian band raising money for orphans and refugees, and a musician who had his life savings seized while traveling through Wyoming.
IJ is currently litigating another federal forfeiture class action against the CBP in Texas; in that case, the CBP seized and held a U.S. citizen’s Ford F-250 pickup truck for over two years because he’d forgotten that he’d left five bullets in his center console while crossing the border into Mexico at Eagle Pass, Texas.
For more information on IJ’s national initiative to end civil forfeiture, visit endforfeiture.com.