Victories Build Momentum to End Civil Forfeiture

Summing up 2014 in the last issue of Liberty & Law, Chip Mellor wrote that “IJ is in the right place at the right time with the right strategy.” Those words are nowhere better demonstrated than in our work challenging civil forfeiture, which has charged into 2015 with a rapid-fire succession of victories.

Victory in Iowa

In January, a federal district court dismissed the civil forfeiture case against Carole Hinders, the Iowa woman who owned and operated Mrs. Lady’s Mexican Café for 37 years. As readers will recall, Carole’s restaurant only accepted cash, and the IRS used civil forfeiture laws to seize her entire bank account because it deemed her frequent cash deposits to be suspicious. She was never charged with a crime, and the government forced her to litigate for the past 18 months to get her money back. But after Carole gave sworn deposition testimony making it clear that she was an innocent business owner, the government asked the court to dismiss its own case and agreed to return all of the nearly $33,000 seized from Carole.

Prosecutors on the Run

in New York Also in January, prosecutors abandoned their case against the Hirsch family on Long Island, N.Y. The IRS had seized almost $447,000—the entire contents of their family business’s bank account—because it deemed the Hirsches’ cash deposits to be suspicious. But the Hirsch family did nothing wrong. The government held the Hirsches’ money for two-and-a-half years without charging them with a crime or giving them a hearing. Then IJ got involved and sued to force the government into court. The government ran from the fight by agreeing to return 100 percent of the money just before its response was due in court, thereby making IJ’s lawsuit moot.

In addition to ending the Iowa and New York cases, the IRS announced that it would curtail similar seizures in the future, stating that it would not pursue forfeitures of bank accounts where the deposited cash was proved to be the lawfully earned income of legitimate businesses. We will continue to monitor the agency to ensure this policy change is carried out.

Reform in the Nation’s Capital

On the legislative front, the Washington, D.C. council voted unanimously in December to reform its civil forfeiture laws. IJ Attorney Darpana Sheth had worked with members of the council for nearly two years to advance reforms that provide property owners with more effective notice when property is seized; require law enforcement to have more evidence of wrongdoing before forfeiting property; and take away law enforcement’s financial incentive in forfeitures by requiring that the proceeds of any forfeitures go to the general fund rather than directly to law enforcement budgets. Short of abolishing civil forfeiture entirely, D.C.’s reform should serve as a model for other cities to follow to strengthen protection for property owners.

U.S. Department of Justice Announces Major Policy Change

As this newsletter goes to print, the U.S. Attorney General has announced an immediate nationwide halt to a major aspect of the Department of Justice’s federal civil forfeiture program. The new policy ends a forfeiture practice known as “adoption” and is the most significant federal forfeiture reform in nearly 15 years. Under that program, state law enforcement agencies can turn seized property over to the federal government for forfeiture. The proceeds of the forfeiture are then paid as a bounty to state and local law enforcement agencies. This practice was particularly attractive to law enforcement in states that limit the use of civil forfeiture, allowing them to forfeit property and reap the proceeds when they would not have been able to under state law.

The reform follows a growing wave of outrage about civil forfeiture, which IJ has been exposing since our pathbreaking 2010 report, Policing for Profit, and in our subsequent cases and studies. Recent coverage by The Washington Post, using data and other input from IJ, revealed that tens of thousands of people never charged with any crime had lost billions of dollars in the past six years as part of a larger program that includes “adoptive seizures.”

The new Justice Department policy contains many loopholes—for instance, state and local law enforcement can still partner with federal agencies and claim forfeiture proceeds they would not be entitled to under state law—but IJ will build on all this momentum and redouble our efforts in the courts and the media to permanently end civil forfeiture.

Scott Bullock is a senior attorney at IJ.