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Minnesota Criminal Forfeiture

Fighting Crime While Protecting Property Rights

In America, a person is presumed innocent until proven guilty.  But Minnesota’s asset forfeiture laws turn that principle on its head.  The state’s forfeiture laws say your property is guilty until you prove it innocent. Forfeiture reform would allow legislators to be tough on crime while still respecting property rights because convicted criminals will lose ill-gotten gains, while innocent people will not lose their property at the whim of a policeman and a prosecutor whose budgets benefit from the taking.  Forfeiture laws give law enforcement the wrong incentives and invite abuse.  Police and prosecutors should not be paid on commission.  We need to remove the direct profit incentive that civil forfeiture creates.

A coalition of concerned citizens, other legal organizations and the Minnesota Chapter of the Institute for Justice will work with state legislators to bring much needed reforms to Minnesota’s civil forfeiture laws.

Introduction

In America, a person is presumed innocent until proven guilty. But Minnesota’s asset forfeiture laws turn that principle on its head. The state’s forfeiture laws say your property is guilty until you prove it innocent.

Forfeiture abuse has affected Dave Laase and thousands of other Minnesotans who face the burdensome requirement of filing a civil lawsuit against their property in order to get back their property from the government.

Although Jeanne admitted to violating the law and paid all court-imposed fines for the offense, Minnesota’s current forfeiture laws state her punishment was insufficient. The Minnesota State Supreme Court upheld the county’s forfeiture of the Laases’ $35,000 vehicle. According to the Court, Minnesota’s forfeiture laws allow jointly-owned property to be forfeited even if one spouse had no involvement or knowledge of the crime. In other words, the Court’s opinion in the case means that both spouses are treated as guilty if one is found to be guilty of a crime.1

Forfeiture laws give police and prosecutors the wrong incentives that invite abuse. The problems of bad incentives are now well-known to Minnesotans. In 2009, police officers assigned to the Metro Gang Strike Force (MGSF) were found stopping individuals who had no connection to gang activities and seizing money and other property without any intent to file charges against the property owners. In a report to the Commissioner of Public Safety, a former U.S. Attorney and a retired FBI agent wrote:

Were struck by how many cases had no connection to any gang activity and could not be reconciled with the mission of the Strike Force. The Strike Force’s mission does not support the creation of roving “saturation” details that stop people for traffic violations or seize the funds of an undocumented alien who has committed no other offense. Yet this is what we found, many times over. And the mission of the Strike Force does not authorize officers to take seized items home or purchase these items for their own personal use. But this is what happened, time and again.2

The law must be changed in three ways to provide meaningful reform to Minnesota’s forfeiture law.

1.Remove the profit incentives that entice prosecutors to pursue profit rather than seek the neutral administration of justice;

2.Strengthen the protection of innocent owners after the Minnesota Supreme Court’s Laase decision by giving innocent owners meaningful protection so that they can get their property returned; and

3.Standardize the requirement that a person, charged with a crime, be found guilty of that crime in criminal court as a prerequisite to having his property forfeited in civilToday, that prerequisite exists for property owners charged with crimes such as prostitution, DWI and murder but not crimes related to drugs.

If such reforms are enacted, it will enable Minnesota to fight crime while protecting the property rights of individuals in the state.

Civil forfeiture: Perverse Incentives Encourage Abuse

Under civil forfeiture, the government can take and sell your property without ever charging you with a crime, let alone convicting you of one. Unlike criminal forfeiture, in which the ill-gotten gains of criminal activity may be transferred to the government after an individual is convicted of the crime, police and prosecutors can use civil forfeiture to seize and take away cash, cars, homes or other property without having to convict or even charge the owner with any wrongdoing.

Although its use is widespread throughout the United States, civil forfeiture is not widely recognized or understood. Because civil forfeiture proceedings are against the property, as if the property somehow acted to assist in the commission of a crime, the government can take it despite the innocence of its owner. That is why civil forfeiture cases have unusual names such as Laase v. 2007 Chevrolet Tahoe.

Civil forfeiture was originally adopted in America from British law. It was used in the 19th century as a means for fighting piracy on the high seas and in customs law, where one might never be able to arrest the criminal but could at least take away the ill-gotten gains of criminal activity. But modern civil forfeiture is no longer tied to the practical necessities of enforcing maritime or customs law. Nearly all states and the federal government frequently use civil forfeiture laws. In Minnesota, law enforcement agencies use civil forfeiture not only to take property away from those police officers suspected of wrongdoing but also to supplement their budgets as nearly all of the property, including currency, can be kept by police and prosecutors involved in the forfeiture action.

Three factors work in combination to lead to forfeiture abuse:

1.Profit motive
2.Innocent owner burden
3.Burden shifting in civil court

Profit Motive

When law enforcement agencies grab assets in forfeiture actions, this money may be used for better equipment, nicer offices, newer vehicles trips to law enforcement conventions and, in some states, even police salaries, bonuses or overtime pay. In Minnesota, 90 percent of forfeited property and proceeds are deposited into the accounts of law enforcement, rather than into a general fund of the legislature or a city council. Those special accounts are controlled exclusively by police departments (40-70 percent depending on the crime) and prosecutors’ offices (20-30 percent). Therefore, law enforcement has a direct and significant financial stake in the outcome of forfeiture efforts, which encourages these agencies to seize and forfeit as much property as possible. Moreover, there are no caps on the total amount of property law enforcement can seize from people in their jurisdictions.

Burden of Proof on an Innocent Owner Claimant

Secondly, Minnesota law shifts the burden of proof from the government to the owner to prove that he or she was not involved or did not know about the underlying crime. Having a spouse, child or neighbor drive an owner’s car while intoxicated subjects the third-party owner to the loss of his or her property. In other words, with civil forfeiture, the property of a perfectly innocent wife, mother or neighbor is effectively guilty if the driver is stopped and the vehicle seized.

One such example is that of Kristin Brown from Richfield, Minn. Brown was completely unaware of her son’s plan to go to a party nearby when he was stopped for a DWI in June 2009. In fact, because she met every requirement of the innocent-owner defense, when she finally got to court six months later, the judge issued an order to release her car on the same day.3 During that time period, however, Brown had to rely on taxis, public transportation and other less reliable cars to get to and from work. But the time and cost it took to finally prove her innocence illustrate the problem with this law. Brown, who was never charged with or convicted of a crime herself, had to wait for six months to have her car returned because laws governing forfeiture offer such a strong financial incentive that some prosecutors threaten to or actually hold property until a hearing before a judge so as to better negotiate a settlement with property owners—even third-party innocent owners like Brown.

Recognizing the draconian nature of forfeiture, the Legislature enacted laws in 2004 that were intended to protect property owners who face losing their vehicles for driving offenses committed by someone else.4 In practice, however, these laws have not met the Legislature’s intent. Legal costs, time delays, and the Supreme Court’s decision in the Laase case all but neuter the so-called “innocent owner” defense against forfeiture, particularly jointly-owned property.

Under Minnesota’s innocent-owner laws, a motor vehicle is not subject to forfeiture if its owner can demonstrate by clear and convincing evidence that the owner did not have knowledge that the vehicle would be used in a crime, or the owner took reasonable steps to prevent the vehicle from being used by another person in a crime.5

But these protections are hollowed out by two factors. First, the level of knowledge that the innocent-owner defense must disprove is “constructive knowledge. This is a negligence standard. In other words, a person claiming to be an innocent owner must prove he had no reasonable basis for knowing the person was going to do something illegal. That basis could be from any time in the relationship that the innocent owner had with the suspected offender. Secondly, innocent owners face the significant legal costs and inconvenience of waiting for an initial court hearing before the owner can prove she meets the law’s definition of “innocent owner.” It often turns out that the cost of lawyers to represent an innocent owner exceeds the value of the property seized.

The net effect of these factors is to increase the use of forfeiture by law enforcement agencies by incentivizing forfeiture through making it profitable for the agencies that engage in it) and by making it more expensive and difficult for owners to challenge the action (by shifting the burden of proof to the innocent owner). In total, there are substantial obstacles for an innocent property owner to engage in the forfeiture process to get back his property. And many of the seizures by law enforcement go unchallenged because of these obstacles.

Burden of Proof in Civil Court on Property Owners Accused of a Crime in Criminal Court

Third, in many cases, Minnesota law presumes that seized property is associated with a crime and the owner has the burden of proving it is not. In particular, anything seized in the vicinity of an alleged drug crime is presumed to be associated with it and thus forfeitable. So a property owner must prove that seized cash did not come from drug sales or a seized car was not an instrument in distributing illegal drugs. Owners must in effect prove their properties’ innocence. This is in stark contrast to a criminal proceeding where prosecutors bear the burden of proving the accused is guilty beyond a reasonable doubt.

It is also in contrast to Minnesota’s treatment of forfeiture for other crimes, such as prostitution, fleeing a peace officer, first or second degree DWI and other designated offenses. To forfeit property because of these offenses, the property owner must first be convicted of those crimes in criminal court. Then, the prosecutor must prove that the property is associated with that crime in civil court.

This is closer to the way it should be. Putting the initial requirement on the government to prove guilt is consistent with the Anglo-American tradition of “innocent until proven guilty.” Only after obtaining a criminal conviction should the next question be addressed about whether the property is connected to the crime and, thus, represents ill-gotten gains from criminal activity.

Metro Gang Strike Force

As Americans, to protect vital constitutional rights, we limit law enforcement’s authority all the time. For example, we require police to give Miranda warnings and obtain search warrants. The history of the Metro Gang Strike Force shows that without limits, there is a real risk of law enforcement gone wild.

On the evening of May 20, 2009, law enforcement officers shredded documents at the offices of the MGSF, the multijurisdictional team of police officers charged with reducing gang and drug-related crimes in the Twin Cities’ metropolitan area.6 The shredding was in response to a report released earlier that day by Minnesota’s Legislative Auditor that listed 11 failures in the MGSF’s internal controls, including failure to deposit $400,000 in seized cash, failing to account for 13 vehicles seized between 2005 and 2008, and failing to obtain approvals to send six officers to a conference in Hawaii.7

The shredding prompted Minnesota’s Commissioner of Public Safety to immediately shut down the strike force and authorize a second and more in-depth analysis of the MGSF’s operations by a former U.S. Attorney, Andrew Luger, and a retired FBI agent, John P. Egelhof.8

Exactly 90 days later, Luger and Egelhof issued a 36-page report detailing the MGSF’s scandalous breakdown of controls, professionalism and outright theft. As one observer put it, the “Metro Gang Strike Force was a longtime, revered effective law enforcement tool. Then, lax, if not complicit, oversight as well as some cowboy cops run amok led to its dismantling and a black eye for the local law enforcement community.”9 Specifically, the Luger-Egelhof report found:

  • §Police officers repeatedly took, for their personal use, property obtained during searches, including large screen televisions, laptops, jewelry and other items;
  • Many items, including narcotics, that were seized by the Strike Force were never entered into evidence;
  • MGSF officers stopped individuals who had no connection to gang activities and seized money and property from them;
  • MGSF officers seized funds from individuals regardless of any intent to file charges and without regard to whether the funds could reasonably be connected to illegal activity;
  • Even during searches conducted pursuant to a warrant, MGSF officers seized money, televisions, computers and jewelry that bore no relation to the matter under investigation;
  • In many reviewed files, MGSF seized property but made no attempts to follow up the investigation or bring the matter to the attention of prosecutors; and
  • Some MGSF employees used the term “money police” to describe their focus on financial seizures.

The MGSF scandal is not just a black eye for local law enforcement but a warning to elected officials that such problems can happen in any police department in Minnesota. First and foremost, the abuses by the MGSF are the product of bad forfeiture laws that invite law enforcement and prosecutors to bolster their budgets by seizing property even when the owners are not suspected of committing any crimes. More specifically, the MGSF’s problems are rooted in money. According to the Luger-Egelhof report, the predecessor strike force lost much of its funding in 2003. Some at the MGSF “developed a mentality that forfeiture funds were necessary to make the Strike Force survive.”10 Any police department with similar financial problems could develop similar attitudes and take similar actions.

The perennial state budget problems are the match that can ignite more forfeiture scandals. Police officers and prosecutors understandably desire the resources to protect the public. The threat of reduced funding for law enforcement should not give license to police officers to arbitrarily tax property owners whom they suspect of a crime.

The possibility of more scandals is real. Minnesota’s flawed forfeiture law and its budget shortfalls make the problem of the MGSF replicable in any law enforcement agency. Kristin Brown, Dave Laase and others prove that abuse by law enforcement of forfeiture laws occurs beyond the streets of Minneapolis and Saint Paul. Unless the law is changed and law enforcement budgets are rationalized to match the direct funding from elected officials, the potential for abuse remains in all corners of Minnesota.

To make matters worse, the county prosecutor determined he could not hold MGSF officers accountable for suspected criminal actions.11 Most importantly, however, is that their actions could not have taken place had it not been for state statutes that create an environment that offers up extra revenue for police officers and prosecutors who engage in seizing private property. The problem of forfeiture abuse derives from Minnesota laws that fail to respect property rights and instead allow law enforcement to see others’ property as a funding source for government employees. Bold legislative reforms are needed to address the state’s bad forfeiture laws—reforms that will still allow for the prosecution of criminals while respecting property rights.

Study of Minnesota Forfeiture

The Institute for Justice’s recently-released report, A Stacked Deck, examines the use of civil forfeiture by Minnesota law enforcement agencies.12 While nearly all states engage in civil forfeiture, few publicly report these activities with as much detail as Minnesota. It is the first report to systematically examine that data. The report finds that:

• Law enforcement agencies in Minnesota netted almost $30 million from 2003 to 2010, taking more than 34,000 pieces of property including cash, vehicles and other types of property—the equivalent of one piece of property from every resident of the city of Roseville;
• Forfeiture revenues grew 75 percent from 2003 to 2010, even as crime rates declined, and more law enforcement agencies than ever participated in forfeiture—55 percent in 2010, up from just over a quarter in 2003;
• Forfeiture dollars did not come from large busts: The average value of forfeited property was about $1,000, less than the average annual “venti” latte at Starbucks. Half of the properties forfeited were worth $400 or less, and only 4.2 percent were worth more than $5,000;
• Cash was the most frequently seized—and kept—property, accounting for 51 percent of forfeitures, while only three percent of cash seizures were returned to owners;
• More than 80 percent of seizures resulted in the forfeiture of property to the government, while in just 11 percent of cases, property was returned to the owner; and
• Few forfeitures are reviewed by judges. Data from 2010, after a change in reporting took effect, indicate that 66 percent of forfeitures went unchallenged by owners and courts reviewed only 17 percent of forfeitures.

These data suggest that Minnesota’s forfeiture deck is stacked against property owners. With the small property values involved and the daunting task of bringing a civil lawsuit to win property back, it should be no surprise that few owners challenge forfeitures. And a lack of judicial oversight combined with a strong financial incentive in forfeiture creates a situation ripe for abuse.

To fix the system, Minnesota legislators should remove financial incentives for forfeiture and provide better legal protections for owners caught up in forfeiture proceedings.

Legislative Strategy and Team

The Institute for Justice’s legislative effort is being led by Lee McGrath, the firm’s general counsel for legislation and executive director of the Minnesota Chapter. A key player in Minnesota’s reforms of its eminent domain laws in 2006, McGrath has formed a broad bipartisan coalition with concerned citizens, including Dave Laase and Kristin Brown, as well as officials from the American Civil Liberties Union of Minnesota and others.

The Institute for Justice

The Institute for Justice is an Arlington, VA-based public interest law firm. Through strategic litigation, training, communication, activism and research, IJ advances a rule of law under which individuals can control their destinies as free and responsible members of society. IJ litigates to secure economic liberty, school choice, private property rights, freedom of speech and other vital individual liberties, and to restore constitutional limits on the power of government. In addition, IJ trains law students, lawyers and policy activists in the tactics of public interest litigation. Through these activities, IJ challenges the ideology of the welfare state and illustrates and extends the benefits of freedom to those whose full enjoyment of liberty is denied by government.

The Institute for Justice has litigated property rights cases nationwide, successfully preserving the rights and properties of the politically and financially disenfranchised. Among IJ’s victories are:

  • Utahans for Property Protection—IJ represented a group of Utah citizens that filed a “notice of claim” with the attorney general of Utah, successfully forcing him to take immediate action to secure the return of the funds for forfeitures that should have gone to public education.
  • Van Meter et al. v. Turner et al.—IJ represented a group of Georgia citizens that successfully litigated against the City of Atlanta and Fulton County for failing to meet requirements under state law to report each forfeiture done within their jurisdiction to city and county as part of their budgeting process.
  • Saint Paul Port Authority v. Advance Shoring Company—Ignoring the state of Minnesota’s eminent domain reforms in 2006, one of the best in the nation, the St. Paul Port Authority attempted to take the property of a nearly 50-year-old company for economic development. The company’s owners, employees and unions joined with the Institute for Justice and successfully beat back the Port Authority’s lawless effort by convincing the City Council of its likely defeat in court and the lack of public support for the development agency’s land grab.
  • City of Norwood v. Horney—In a resounding repudiation of the U.S. Supreme Court’s decision in Kelo v. City of New London, the Ohio Supreme Court unanimously ruled on July 26, 2006 that the city of Norwood acted unconstitutionally by taking the homes of IJ’s clients.
  • Kelo v. City of New London—After the infamous U.S. Supreme Court ruling in Kelo v. City of New London that allowed private property to be taken for economic development, 47 states have tightened their restrictions on eminent domain. In 2007, IJ client Susette Kelo’s little pink cottage—the home that became a national symbol of the fight against eminent domain abuse—was moved rather than allowing it to fall to the government’s wrecking ball.

For more information, please contact:
Shira Rawlinson
Assistant Director of Communications
Institute for Justice
901 N. Glebe Road, Suite 900
Arlington, VA 22203
(703) 682-9320 ext. 229
srawlinson@ij.org”>srawlinson@ij.org

[1] Laase v. 2007 Chevrolet Tahoe, 776 NW 2d 431, 435 (Minn. 2009) interpreting the forfeiture statute under the canon of statutory interpretation that the singular includes the plural. Minn .Stat. § 645.08(2) (2008).

[2] Report of the Metro Gang Strike Force Panel, Aug. 20, 2009 at 11, available at http://www.dps.state.mn.us/.

[3] Id.

[4] Minn. Session Laws, Chapter 235, S.F.No. 3880 (2004), available at http://tinyurl.com/y8zwxde.

[5] Minn. Stat. § 169A.63, subd. 7(d).

[6] Report of the Metro Gang Strike Force Panel, Aug. 20, 2009 at 2, available at http://www.dps.state.mn.us/.

[7] Metro Gang Strike Force, Special Report, Office of the Legislative Auditor, State of Minnesota, at 9-19 available at http://tinyurl.com/yccf8kz.

[8] Report of the Metro Gang Strike Force Panel, Aug. 20, 2009 at 2.

[9] Ruben Rosario, A look at a memorable year and some of those who made it so. St. Paul Pioneer Press, Dec. 31, 2009, available at http://tinyurl.com/ybv84al.

[10] Report of the Metro Gang Strike Force Panel, Aug. 20, 2009 at 7.

[11] Hennepin County Attorney’s Office Report on Allegations of Misconduct Involving Metro Gang Strike Force, Michael O. Freeman, Sept. 9, 2010, available at http://tinyurl.com/clu8ez6.

[12] A Stacked Deck, How Minnesota’s Civil Forfeiture Laws put Citizens’ Property at Risk, Dick Carpenter II, Lee McGrath and Angela C. Erickson, February 2013, available at www.ij.org/publications.

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