In February 2014, 24-year-old Charles Clarke lost his entire life savings—not to identity theft or a bad investment, but to law enforcement officials in the Cincinnati/Northern Kentucky International Airport. 1 After visiting relatives in Cincinnati, Clarke was preparing to board a flight home to Florida. He carried with him $11,000 in cash. Over five years, Clarke had saved this money from financial aid, various jobs, gifts from family, and educational benefits based on his mother’s status as a disabled veteran. His bank had no physical branches in his area, so Clarke kept his money at home. He had taken it with him to Ohio because he and his mother were moving to a new apartment, and he did not want to risk its getting lost in the move.

Just as Clarke was about to board the plane, law enforcement officials seized his money, claiming his checked bag smelled of marijuana. Although Clarke was a recreational smoker at the time, the officers found no drugs or anything else illegal on him or in his carry-on or checked bag. In other words, the officers found no evidence that he was guilty of any crime before seizing his money. In the upside-down world of civil forfeiture, they did not have to.

It has been called “one of the most controversial practices in the American criminal justice system.” 2 But civil forfeiture was, until the 2010s, largely unknown to the public, to pundits and even to elected officials, despite hundreds of millions of dollars in property being seized and forfeited every year across the United States.

Civil forfeiture is a mechanism by which law enforcement agencies can seize and keep property on the mere suspicion that it is connected to a crime. 3 In contrast to criminal forfeiture, where property is taken only after a criminal conviction, civil forfeiture allows law enforcement to take property from innocent people who have never been formally accused of a crime, let alone convicted of one. This evasion of the criminal justice system is based on a legal fiction in which property thought to be connected to an alleged crime is considered “guilty” of having somehow assisted in the commission of that crime. In criminal forfeiture, the government proceeds against a person charged with a crime; in civil forfeiture, the government proceeds against property.

The civil forfeiture process generally includes two distinct actions: seizure and forfeiture. Seizure occurs when law enforcement officials—police officers, sheriff’s deputies, federal agents—confiscate property they suspect is related to criminal activity. Practically anything can be seized by law enforcement—cash, vehicles, airplanes, jewelry, homes, musical instruments, farm implements, home furnishings, electronics and more. Once property has been seized, prosecutors file civil actions against it in order to forfeit, or keep, it. This process that often produces odd-sounding case names like State of Texas v. One 2004 Chevrolet Silverado 4 or United States v. One Solid Gold Object in Form of a Rooster. 5

Because such actions are against property, not people, and because they are civil actions, not criminal, owners caught up in civil forfeiture proceedings lack rights afforded the criminally accused, such as the right to counsel. And under civil forfeiture, the government usually faces a lower evidentiary threshold to forfeit property than it does to convict a person of a crime. Even people who had nothing to do with an alleged crime can lose their property through civil forfeiture unless they can prove their innocence—flipping the American legal tradition of innocent until proven guilty on its head. Most troublingly, civil forfeiture laws in most states and at the federal level give law enforcement agencies a financial stake in forfeitures by awarding them some, if not all, of the proceeds. This financial incentive creates a conflict of interest and encourages the pursuit of property instead of the pursuit of justice.

A Brief History of Forfeiture

The origins of forfeiture laws date back to medieval times, but America’s civil forfeiture laws can be traced to 17th-century English maritime law, which allowed violations to be punished by the seizure and forfeiture of ships and cargo without regard to the guilt or innocence of the owners. 6 Based on this concept, the first U.S. Congress adopted similar forfeiture laws. 7 Although the laws were upheld in early Supreme Court cases, their use was limited to the maritime contexts of admiralty, piracy and customs—circumstances where commencing criminal proceedings was difficult, if not impossible, because property owners were overseas or otherwise outside of U.S. jurisdiction. 8 The 19th century saw some expansion of the forfeiture power during the Civil War, but its use remained comparatively limited. 9

Except for a brief expansion during Prohibition, civil forfeiture was largely moribund in the 20th century—that is, until 1984, when Congress amended the Comprehensive Drug Abuse Prevention and Control Act. Among other things, the 1984 amendments created the Department of Justice’s Assets Forfeiture Fund for depositing forfeiture proceeds for federal agency use. 10 The AFF represented a sea change in the administration of civil forfeiture. For the first time, agencies could obtain a financial benefit from the proceeds of forfeited properties, using funds to do everything from purchase vehicles to pay overtime. Lawmakers in many states followed the federal government’s lead and amended their states’ civil forfeiture laws to give local and state agencies a direct financial stake in the forfeiture process.

In 2000, Congress modestly reformed federal forfeiture law 11 through the Civil Asset Forfeiture Reform Act, 12 but it left unchanged one of the most troublesome elements—law enforcement’s ability to benefit financially from civil forfeiture. Moreover, other amendments to civil forfeiture laws at the federal and state levels have expanded their reach to cover alleged violations beyond drug crimes. Consequently, today’s civil forfeiture laws are far greater in scope than their 18th-century progenitors. And decoupled from the practical necessities that justified their use when enforcing maritime law, they are an increasingly popular and profitable tool for law enforcement agencies. 13

Forfeiture Use Explodes

One of the most basic of economic principles is that incentives matter, 14 and they matter not just to individuals but also to groups. In allowing agencies to keep some or all of what they forfeit, civil forfeiture laws permit, if not encourage, law enforcement to police for profit. And agencies have responded with zeal.

At the federal level, the departments of Justice 15 and the Treasury 16 have seen an astonishing increase in forfeiture activity. In 1986, the year after the Department of Justice’s Assets Forfeiture Fund was established, it took in just $93.7 million in deposits. By 2014, deposits had increased 4,667 percent to $4.5 billion. 17 Much of that increase came during the past decade and a half. From 2001 to 2014, deposits to the DOJ and Treasury forfeiture funds exploded by more than 1,000 percent (see Figure 1). 18 Total deposits across those years approached $29 billion.

Figure 1: Total Annual Deposits to DOJ and Treasury Forfeiture Funds, Fiscal Years 2001-2014

Sources: DOJ Assets Forfeiture Fund Annual Financial Statements; Treasury Forfeiture Fund Accountability Reports.

As a measure of federal forfeiture activity, deposits can sometimes be unstable. In a given year, one or two high-dollar cases may produce unusually large amounts of money—with a portion going back to victims—thereby telling a noisy story of year-to-year activity levels. Net assets, the amount of money federal forfeiture funds retain after paying various obligations, represent a more stable metric. From 2001 to 2014, net assets in the DOJ and Treasury forfeiture funds increased 485 percent. 19 Combined assets topped $1 billion for the first time in 2007 and ballooned to nearly $4.5 billion by 2014 (see Figure 2).

Figure 2: Total DOJ and Treasury Forfeiture Funds Net Assets, Fiscal Years 2001–2014

Sources: DOJ Assets Forfeiture Fund Annual Financial Statements; Treasury Forfeiture Fund Accountability Reports.

Unfortunately, deriving similar totals at the state level is impossible because most states require little to no public reporting of forfeiture activity. However, of the states from which the Institute for Justice was able to obtain usable data, the totals are also significant. 20 In 2012 alone, the latest year for which the most consistent data were available, state and local agencies in 26 states 21 and the District of Columbia took in more than $254 million through forfeiture. 22 Texas led the way, with $46 million, followed closely by Arizona with $43 million. Illinois was third with almost $20 million.

Like the federal government, states have had great success increasing forfeiture revenues under state law in the new millennium. For example, Figure 3 illustrates the growth in forfeiture revenue for 14 states from 2002 to 2013. 23 From the first to the final year presented, total revenue increased 136 percent. 24 Among the states, the two whose revenues were most consistent over the years, and which also tended to represent the greatest revenue shares, were Texas and California. However, Arizona’s revenue grew significantly over the period, eventually eclipsing California’s.

Figure 3: Annual State Forfeiture Revenues, 14 States, 2002–2013

Source: Institute for Justice analysis of civil and criminal forfeiture data from online reports and public records requests.

The Trouble with Civil Forfeiture

Civil forfeiture poses serious risks to property and due process rights. First and foremost among these risks, federal law and most states’ laws permit law enforcement officials to reap financial rewards from civil forfeiture. Defenders of the practice view this as a benefit, as it enables law enforcement to expand crime-fighting activities. 25 But through civil forfeiture, police and prosecutors can self-fund, financing operations entirely beyond the democratic controls embodied by city councils, county commissions and state legislatures.

Just as troubling, giving law enforcement a financial stake in civil forfeiture distorts law enforcement priorities. Allowing law enforcement agencies to reap financial benefits from forfeitures encourages the pursuit of property over the impartial administration of justice. 26

Through civil forfeiture, police and prosecutors can self-fund, financing operations entirely beyond the democratic controls embodied by city councils, county commissions and state legislatures.

Providing a financial incentive is problem enough, but most civil forfeiture laws also make seizing and forfeiting property disconcertingly easy. Civil forfeiture stacks the deck against property owners from the outset: In most jurisdictions and for most types of property, all police need to seize is “probable cause” to believe that the cash, car or other property is connected to a crime that permits civil forfeiture. And once property is seized, the onus is on owners to file a legal claim to get it back.

If they do, they will likely face long and costly litigation in which the government has the upper hand. A 2015 Institute for Justice report, for example, found some civil forfeiture proceedings took a year or more to navigate. 27 And to traverse the complex legal landscape of civil forfeiture, owners will have to find and pay for an attorney. In civil forfeiture cases, unlike criminal prosecutions, there is no right to counsel. For most Americans, retaining a defense lawyer skilled in civil forfeiture litigation is not a familiar task. But going without legal representation is not much of an option: Challenging a seizure often involves filing court documents and paying various fees according to a strict timetable, not to mention at least one court appearance. 28

Illinois offers a particularly egregious example of how civil forfeiture laws discourage people from even trying to get their property back. In Illinois, to challenge a seizure in court, property owners must first pay a bond of $100 or 10 percent of the property’s value, whichever is greater. The only exceptions are for personal property worth more than $150,000 and for real property. If owners challenge and lose, they must pay the full cost of the civil forfeiture proceedings, including the government’s legal costs, and give up the full value of the bond. Even if they win, they lose 10 percent of the bond on top of whatever attorney costs they accrued.

Faced with such daunting hurdles, many owners never make it to court. These owners’ cases are generally decided in the government’s favor by default, resulting in forfeiture of the property. In contrast, when a person is accused of a crime, the government cannot simply win by default. The defendant either takes a plea or the government must prove its case beyond a reasonable doubt. In civil forfeiture cases, some owners give up on their property because they cannot find or afford a lawyer, miss one of the often tight deadlines to file a claim or are otherwise stymied by a confusing legal process. Other owners opt not to fight because they conclude that the costs in time, money and aggravation outweigh the value of their property.

Giving up may often be the rational choice, given the low value frequently at stake. For example, the Institute for Justice was able to obtain property-level forfeiture data for 2012 from 10 states, allowing median property values to be calculated. In those states, the median value of forfeited property ranged from $451 in Minnesota to $2,048 in Utah, 29 not much more than an American’s average annual cell phone bill. 30 It is little wonder, then, that owners of seized property rarely pursue its return. In Minnesota, for instance, law enforcement took 34,000 pieces of property, including vehicles, cash and homes, between 2003 and 2010—the equivalent of one piece of property from every other family in St. Paul, the state capital. Yet over one six-month period, 66 percent of forfeitures went unchallenged by property owners. Overall, from 2003 to 2010, Minnesotans saw the return of their property in just 10 percent of cases. 31

Data from Philadelphia tell a similar story. In 2015, the American Civil Liberties Union of Pennsylvania released an analysis of cash-only forfeiture cases in the City of Brotherly Love. It revealed that between 2011 and 2013 half of the cases involved less than $192. 32 Contrary to proponents’ claims that civil forfeiture is essential to thwarting drug cartels and kingpins, 33 this is hardly the stuff of large criminal enterprises. The relationship between the value of seized property and the likelihood of owners contesting its forfeiture is clear. For property worth less than $200, just 3 percent of owners fight to retrieve their goods, and as the value of seized property increases, so too does the percentage of owners willing to contest. 34

If property owners choose to pursue their property in court, they face a byzantine process in which the government has all the advantages. Specifically, prosecutors often need only meet very low standards of evidence. And if a property owner entirely unconnected to an alleged crime files a claim to prevent her property from being forfeited, she usually must prove her own innocence­—the opposite of what happens in criminal proceedings, where defendants are presumed innocent until proven guilty.This feature of most civil forfeiture laws risks punishing completely innocent people, such as the mother whose car is seized when her child is arrested on a drug crime while driving it.

Because it is easier to forfeit property through civil procedures, it is not surprising that law enforcement prefers civil forfeiture to criminal forfeiture. As Figure 4 indicates, 87 percent of U.S. Department of Justice forfeitures are pursued as civil rather than criminal actions. When the civil cases are further broken down, yet another troubling element is revealed: 88 percent of DOJ civil forfeitures are processed administratively rather than judicially, meaning the cases never see a judge and the property owners never have their day in court. An administrative forfeiture occurs when a property owner opts not to contest a seizure. With no claims on the property, the forfeiture is generally accomplished through a simple paperwork shuffle, with no judicial involvement. It is only when a forfeiture is contested that a judge might review the case, if it is not settled first. Absent judicial review, the sole determination of whether a forfeiture is warranted is made by the seizing agency, which usually stands to gain from the proceeds.

Figure 4: DOJ Forfeitures, Civil vs. Criminal and Judicial vs. Administrative, 1997–2013
All Forfeitures

All Civil Forfeitures

Source: Institute for Justice analysis of DOJ civil and criminal forfeiture data obtained by FOIA.

The same general distinction between civil and criminal forfeitures applies under state law. Unfortunately, however, the majority of states do not keep data on whether forfeitures proceed under the civil or criminal law: Only two states’ forfeiture records distinguish between civil and criminal forfeitures. Activity in those states mirrors that at the federal level: Almost 60 percent of cash forfeited in Oregon and more than two-thirds of that forfeited in Connecticut were forfeited civilly (see Figure 5).

Figure 5: Value of Cash Forfeitures, Civil vs. Criminal, in Connecticut and Oregon
Connecticut: 2009-2013

Oregon: 2010-2011,2013

Source: Institute for Justice analysis of civil and criminal forfeiture data from online reports and public records requests.

Continue Reading: Grading State & Federal Civil Forfeiture Laws

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