Allow Forfeiture Only Under Criminal Forfeiture Statutes

The vast majority of the damage done to our Due Process and property rights by civil forfeiture statutes was achieved by placing a "civil" label on the statutes. Numerous courts have upheld the constitutionality of the statutes, relying on the fiction that the person is not on trial but the property itself. This issue has not been completely disposed of, however, because the Supreme Court has never looked at whether these statutes are in fact criminal punishments in spite of their civil labels.

Unlike criminal forfeiture statutes — which require all the Due Process safeguards of a criminal trial, including proof beyond a reasonable doubt federal civil forfeiture statutes do not even require the minimal burden of proof ordinarily placed upon plaintiffs in civil trials—"a preponderance of the evidence." Instead, at trial they only require the government to show "probable cause" to believe the property was involved in a crime, or proceeds of a crime, then the burden of proof shifts to the property owner, who has to prove by the preponderance of the evidence that the property is not subject to forfeiture.

Under this standard, innocent owners can lose valuable real estate, for example, because a stranger plants marijuana in some remote corner of it, unbeknownst to the owner. With the burden of proof shifting to the property owner, he/she is faced with the dilemma of having to prove a negative. How do you prove you didn't know marijuana was growing on your property, when you have the burden of proof?

If an informant with an extensive criminal record, who is promised by the DEA that he will receive 25 percent of the value of any property forfeited as a result of his testimony (and therefore has an obvious reason to lie), testifies that the owner knew the marijuana was growing there, the property owner is "sunk." The informant could even be the person who planted the marijuana.

Clearly, our American principles of justice require more proof before depriving citizens of their property. The burden of proof should always be on the government, and it should be a higher burden of proof than the civil standard of a preponderance of the evidence.

It is absurd that a major drug trafficker being prosecuted under criminal forfeiture statutes, such as RICO (18 U.S.C. Sec. 1963), or the Continuing Criminal Enterprise statute (21 U.S.C. Sec. 848) — both statutes designed to attack organized crime — has far greater due process safeguards governing the forfeiture ofhis/her property than an innocent parent whose child used the family car to transport a small amount of drugs, allowing it to be seized under 21 U.S.C. Sec. 881. But that's the way the current federal forfeiture laws are written.

We believe the burden of proof should be on the government, and that it should have to prove the owner's guilt — beyond a reasonable doubt — before forfeiting property. To go a step further, we believe civil forfeiture should be abolished, and all forfeitures treated as criminal forfeitures — because forfeiture is in fact criminal punishment, not a civil remedy.

Initially, the Justice Department justified lowering the burden of proof in civil forfeitures by relying on the "legal fiction" that it is the property, not the property owner, that is on trial, and that property does not have rights. However, this premise ignores the fact that people have property rights.

It also assumes that the forfeiture is a civil penalty, rather than a criminal punishment. However, under constitutional principles, the determination of whether a penalty is civil or criminal cannot rely on a legal fiction. Instead, it depends on whether the statute is punitive or remedial, which requires analysis of certain factors:

[The question whether a particular statutorily defined penalty is civil or criminal is a matter of statutory construction.... Our inquiry in this regard has traditionally proceeded on two levels. First, we have set out to determine whether Congress, in establishing the penalizingmech anism, indicated either expressly or implicitly a preference for one label or the other.... Second, where Congress has indicated an intention to establish a civil penalty, we have inquired further whether the statutory scheme was so punitive either in purpose or effect as to negate that intention.... In regard to this latter inquiry, we have noted that "only the clearest proof could suffice to establish the unconstitutionality of a statute on such a ground." — United States v. Ward, 448 U.S. 242, 248-49 (1980), quoting Flemming v. Nestor, 363 U.S. 603 (1960).

Forfeiture is sufficiently punitive in purpose and effect as to negate any "civil" label.

Although certain forfeiture statutes have been labelled "civil forfeitures," that label alone is not enough to override the serious punitive effect of forfeiture, especially when it comes to forfeiture of one's residence, business, or any significant portion of one's worldly possessions.

In U.S. v. Ward, the Supreme Court applied the test in Kennedy v. Mendoza-Martinez, 372, U.S. 144, 168-69 (1963), which applied the following factors to determine whether a particular penalty was so punitive, either in purpose or effect, as to override a legislative intent to enact a civil penalty: [whether the sanction involves an affirmative disability or restraint, whether it has historically been regarded as punishment, whether it comes into play only on a finding of scienter, whether its operation will promote the traditional aims of punishment — retribution and deterrence, whether the behavior to which it applies is already a crime, whether an alternative purpose to which it may rationally be connected is assignable for it, and whether it appears excessive in relation to the alternative purpose assigned.

Punitive Purpose

Clearly the Justice Department in proposing and lobbying for these laws, and Congress in enacting them, had a punitive purpose in mind. The laws were part of an omnibus crime bill. They were nestled in with mandatory minimum sentences and other periods of incarceration as punishment for the same predicate offenses that allowed third parties' property to be forfeited.

Furthermore, forfeiture has continually been widely touted by the Justice Department and law enforcement in general, as "the greatest single weapon in the War Against Drugs." Another favorite catch phrase is that "forfeiture hits drug dealers where it hurts — in the pocket books." A punitive intent is manifested in both of these catch-phrases, which are widely used to influence the public to support the forfeiture laws as a deterrent to crime.

Clearly the law enforcement propagandists would have the public believe that the victims of these laws are all drug dealers, a premise totally belied by the extraordinary reach of these laws and the well-documented willingness of law enforcement to ensnare totally innocent third parties using their over-broad powers.

Punitive Effect

Most people, even of modest means, who have worked hard and saved all their lives to buy a home and a car or two, to amass some savings and investments, or perhaps own a business — when presented with the choice of whether they would rather go to jail for a year or lose most of what they own, would choose going to jail. At least then, when they get out they have something to come home to, and their family wouldn't be reduced to bankruptcy or even homelessness in the meantime.

Whether the Sanction Involves an Affirmative Disability or Restraint

This test turns on whether the penalty takes away a right or entitlement which the owner already has — that is, something beyond merely restraining the person from obtaining something he currently does nothave. Certainly taking away from someone his personal property or real estate is an affirmative disability.
 

Whether it Has Historically Been Regarded as Punishment

Although in rem forfeitures have been regarded as civil in some senses, the U.S. Supreme Court has always recognized that they are not the normal garden variety of civil case, and that they are quasi-criminal at the very least. In United States v. U.S. Coin & Currency, 401 U.S. 715, 718 (1971), the U.S. Supreme Court went so far as to say:

From the relevant constitutional standpoint there is no difference between a man who "forfeits" $8,674 because he has used the money in illegal gambling activities and a man who pays a "criminal fine" of $8,674 as a result of the same course of conduct. In both instances, money liability is predicated upon a finding of the owner's wrongful conduct.

When a forfeiture involves a property owner's sole residence or business, or approaches one's entire estate, it would be hard to not consider that punishment. Historically, it resembles the "forfeiture of estate," a species of criminal forfeiture banned by the early Colonists, and which, unquestionably was considered punishment.

Under English common law, the convicted felon forfeited his chattels to the Crown and his lands escheated to his lord; the convicted traitor forfeited all his property, real and personal, to the Crown. In fact, the term "felony" was defined under English law as "an offense which occasions a total forfeiture of either lands or goods or both." In addition, the convicted traitor or felon's "blood was corrupted" so that nothing could pass by inheritance through his line.—Smith, Prosecution and Defense of Forfeiture Cases, Para. 3.01, p. 3-3 (1986 ed.).

Whether it Comes into Play Only on a Finding of Scienter

Scienter is a Latin term for "guilty knowledge." Under all federal forfeiture statutes, some degree of guilty knowledge is required — this is inherent in the innocent owner defense.

Whether its Operation Will Promote the Traditional Aims of Punishment — Retribution and Deterrence

The seizure and forfeiture of a drug trafficker's residence, automobiles, airplanes and other proceeds of crime certainly sends a stern message to the community that drug trafficking will be met with stiffpunishment. And for many criminal defendants, the loss of a residence they have spent years paying for is more serious punishment than going to jail. However, punishment is not a legitimate goal of a civil penalty. Bell v. Wolfish, 441 U.S. 520, 539 n. 20 (1979). Punishment is supposed to be incurred, under our Constitution, only after a conviction with all the Due Process safeguards guaranteed to criminal defendants by the Constitution.

Whether the Behavior to Which it Applies is Already a Crime

The 1984 amendments to the federal forfeiture laws created civil forfeiture and criminal forfeiture statutes encompassing the exact same behavior, and made them interchangeable at the whim of the prosecutor. (See 21 U.S.C. Sec. 881, allowing "civil forfeitures," and 21 U.S.C. Sec. 853, authorizing "criminal forfeitures" for the same drug offenses.) The same conduct that gives rise to forfeiture is punishable by incarceration, including mandatory minimum sentences, in other sections of the same statute. The difference is that the criminal forfeiture statutes cannot be used to take the property of innocent people.
 

Whether an Alternative Purpose to Which it May Rationally be Connected is Assignable for It, and Whether it Appears Excessive in Relation

In order to be treated as a civil penalty, forfeiture must bear a reasonable relationship to the fostering of a "remedial" goal. Typically, the stated remedial goal of civil forfeiture is to remove the means of committing further offenses.

The government's regulatory objective in usingforfeitures is to prevent criminals from using property to commit a criminal offense. The government achieves this objective in a forfeiture proceeding by seizing and condemning property that criminals used to perpetrate their crime.

Note, "Due Process Implications of Shifting The Burden of Proof In Forfeiture Proceedings Arising Out Of Illegal Drug Transactions," 1984 Duke L. J. 822, 831 (1984).

Forfeiting a homeowner's residence and putting a family on the street is not rationally related to the stated goal of removing the means of committing further offenses. A person has to stay somewhere, whether it is in his own home that he is working to pay for, or in some homeless shelter on the public dole. Either way, the person can as easily possess or store drugs either place. Even a person living on a hot air grate can find some place to store drugs (such as your back yard), if he has a mind to. The prevalence of drugs in shelters for the homeless is widely documented, and proves that rendering someone homeless does not remove the means of committing further offenses.

Forfeiture of a homeowner's residence is a far cry from the "remedial" purpose announced in CaleroToledo v. Pearson Yacht Leasing Co., supra, in which the means of committing further offenses was a ship, leased in the Caribbean, which had been used once, and could be used again, to smuggle drugs into the country. A remedial purpose may be assigned to the forfeiture of large boats or airplanes used by a drug cartel to smuggle quantities of drugs into the country, because, once the boat or plane is removed from the illicit smuggling operation, they may be unable to smuggle in more drugs. However, such forfeitures are the rare exception.

Most forfeiture cases involve family automobiles, family residences, businesses, and cash. Most of it was only tangentially or incidentally connected to a crime, if at all. Forfeiting a family's residence or car because of the wrongdoing of one family member punishes the entire family, including innocent spouses, parents and children.

Civil in rem forfeitures ... should not be used as tools for imposing punitive sanctions for criminal violations because they do not utilize sufficiently protective procedures. Therefore, punishment is not a legitimate governmental interest in civil forfeitures.

Note, "Due Process Implications of Shifting The Burden of Proof In Forfeiture Proceedings Arising Out Of Illegal Drug Transactions," 1984 Duke L. J. 822, 831 (1984).

Call it what you will, if it looks like punishment, smells like punishment and feels like punishment, it IS punishment. It is our position that any punishment imposed under the guise of civil forfeiture is unconstitutional. Civil Forfeiture cannot legally transfer property rights away from the punished property owner.

Require Proportionality Between the Offense and the Forfeiture

In the past few years there has been a huge proliferation of forfeiture statutes, with the scope of the behavior that can give rise to forfeiture seizures ever widening. The trend in a number of states is to enact legislation proposed by federal law enforcement lobbyists, which make property forfeitable for any criminal offense. If this trend continues, soon we will be a nation of homeless people with no property, with the government owning everything, like the former Soviet Union.

Currently federal forfeiture laws do not require proportionality between the offense and the forfeiture. The courts have often held that the Eighth Amendment's Cruel and Unusual Punishment Clause does not apply to civil forfeitures, although they have held it does apply to criminal forfeitures. (Ironic, isn't it — that property owners charged with crime can't be punished by disproportionate forfeitures while innocent people can?)

Forfeiture Endangers American Rights (FEAR) has a number of victim members who have seen the forfeiture laws misapplied to seize extremely valuable
assets for minor offenses and technical violations, with no regard to the proportionality of the offense to the penalty, nor whether there was a legitimate law enforcement purpose behind the seizure.

FEAR founders Kathy and Mark Schrama had their house and two cars seized by New Jersey police when Kathy was arrested for stealing $500 worth of UPS. packages. They eventually got their property back by agreeing to pay a tidy sum to the police, but police vandalism had seriously reduced the value of their house, and had destroyed most of their personal possessions that were stored inside during the months in government custody.

FEAR member Jim Spurlock, owner of an aircraft sales company in Texas, saw two of his customers' airplanes seized by Customs. The first, a Lear Jet, was seized In January 1992 because of a tip from an informant, that the airplane, which was headed for its new home in Brazil, would be carrying a large sum of money.' Customs agents searched the airplane and did not find any money, nor were they able to find any other evidence of wrongdoing that would corroborate
the informant's tip, but Customs seized the plane anyway. Meanwhile, they checked all the paperwork submitted to the Federal Aviation Administration regarding the plane and found a mistake on a form. To describe the owner of the plane, they had checked the box "corporation" instead of "non-citizen corporation." The FAA's standard response to such a mistake is to require the paperwork to be corrected.

As a result of another tip from the same informant, in April 1992, Customs seized another airplane sold by Spurlock, and found another paperwork mistake, again a "technical" mistake, relating to a very obscure FAA regulation.

After detaining the airplanes several months - the Lear jet, seven months, and the other plane, four months, the government agreed to give them back after the customers paid "impoundment fees" — the "fee" for the Lear jet being over $16,000. This is in addition to substantial investments made by Mr. Spurlock's customers in attorneys fees incurred in getting the planes released. Also, the owner of the Lear jet alone had to spend $35,000 in maintenance costs to get the plane in shape for the trip.

Another FEAR member had his $1.5 million yacht seized because his captain had failed to declare some fish he was bringing back to donate to a public aquarium. Our member is a noted philanthropist who over the years has contributed substantial sums, as well as marine specimens to the aquarium, among other philanthropic endeavors. He was not on board his yacht when the seizure occurred. Customs agents had boarded the boat and were looking at the fish in the tank when the customs agent asked the captain "what do you have to declare?" The captain said "nothing," thinking that he did not have to "declare" fish. There was no reason the captain would want to "smuggle" the fish into the country, since they were to be given away to a public charity. The yacht has been detained for several months now, with no word as to when it will be released.

What legitimate law enforcement purpose do these seizures serve? Are they really removing the means to commit another similar offense? If so, what is the government trying to deter in the case of the fish — philanthropy?

Does it make sense to punish a family by rendering them homeless and seizing their means of transportation and all their personal possessions for several months, to punish the mother for stealing $500 worth of United Parcel Service packages?

Technical violations, such as the FAA paperwork "errors," now give the government the power to extort $16,000 from an airplane owner, without even having to go to court, or make any showing that the government had a case that justified forfeiture as a punishment. What purpose does this seizure serve?

Like over-punishing a child for a minor transgression, disproportionate and unfair forfeiture seizures do not deter future violations but only create distrust of, and disrespect for, law enforcement.

Limit the Range of Forfeitable Offenses

All the forfeiture statutes on the books should be re-examined and the range of conduct that gives rise to forfeiture severely limited. Technical paperwork mistakes and failures to declare property, where there is no proof of intent to defraud, should not be the basis for forfeiture seizures. Minor infractions should be removed from the scope of forfeiture triggering offenses so that law enforcement cannot seize property for trivial offenses.

Similarly, the property owner should always be made aware of the requirements of law, violation of which gives rise to forfeiture, and the means to avoid the forfeiture, before property can be seized for failure to comply with such requirements. For example, international travellers should be warned of the customs declaration laws and the applicability of any forfeiture penalties, so that they do not unintentionally violate the law. If they are not forewarned of the penalty of forfeiture, their property should not be subject to seizure.

We believe that the best way to prevent these forfeiture seizures that serve no legitimate law enforcement purpose is to limit forfeiture to proceeds of crime, period. Short of that, for statutes allowing forfeiture of vehicles and real property used to facilitate a criminal offense, specific minimum limits should be imposed on the quantities of drugs involved before forfeiture can occur.

Require Proportionality

In addition, there should be a proportionality requirement inserted into every forfeiture statute, requiring the court to find that the forfeiture is not disproportionate to the offense. This doctrine has had some support in the courts. In dicta, the U.S. Supreme Court has strongly suggested that, even in civil forfeiture cases, at some point disproportionately of the penalty to the offense violates the Constitution. In One 1958 Plymouth Sedan v. Commonwealth of Pennsylvania the Court stated:

In this forfeiture proceeding [the claimant] was subject to the loss of his automobile, which at the time involved had an estimated value of approximately $1,000, a higher amount than the maximum fine in the criminal proceeding. . . . That the forfeiture is clearly a penalty for the criminal offense and can result in even greater punishment than the criminal prosecution has in fact been recognized by the Pennsylvania courts.

In Commonwealth v. One 1959 Chevrolet Impala Coupe, involving a forfeiture in 1962, the Pennsylvania Superior Court in affirming the exercise of discretion to waive a forfeiture following a criminal prosecution, stated:

It seemed to the court below that to make this man pay the sum of $500.00 in fines, together with the costs of the proceeding and the storage cost for the automobile, was sufficient punishment under all the circumstances. To forfeit a 1959 Chevrolet Impala coupe in addition to the above seemed to the court below to be entirely out of proportion to the crime involved. We cannot say that the court below abused its discretion in so acting. 201 Pa. Super. 145, 150, 191 A.2d 717, 719. Plymouth Sedan, 380 U.S. at 699 -

More recently, in United States v. One Parcel of

Property Located at 508 Depot Street, Docket No. 91- 2382SD, May 20, 1992, the Eighth Circuit rejected the claimant's argument that the Eighth Amendment requires proportionality in civil forfeitures, but asked Congress to amend the law to impose a proportionality requirement:

We do not condone drug trafficking or any drug-related activities; nonetheless, we are troubled by the government's view that any property, whether it be a hobo's hovel or the Empire State Building, can be seized by the government because the owner, regardless of his or her past criminal record, engages in a single drug transaction.... In this case it does appear that the government is exacting too high a penalty in relation to the offense committed, but we are limited by the technical legal distinctions regarding in personam and in rem actions, together with the clear court decisions that the Constitution does not require proportionality — at least, not in civil proceedings for the forfeiture of property.

In spite of the fact that the Constitution does not require consideration of the owner's fault, Congress has wisely allowed an owner's innocent lack of knowledge of illegal activity to serve as a defense to forfeiture. 21 U.S.C. §§ 881(a)(4)(C), 881(a)(7) (1988). We sincerely hope that Congress re-examines § 881 and considers injecting some sort of proportionality requirement into the statute, even though the Constitution does not mandate such a result.
 

Restrict Reliance on Informants' Testimony

An investigative report released in early August by Representative John Conyers, Chairman of the House Government Operations Committee, revealed that, in the past two years, the Justice Department alone spent $28.6 million in paying informants for their testimony. Sixty five Justice Department informants were paid more than $100,000 a year, about two dozen made between $100,000 and $250,000, and eight made over $250,000. The highest paid informant made $780,000 in one year. Customs also has the authority, and its own slush fund to purchase the testimony of informants to support forfeiture seizures.

These informants are bought and paid for under provisions in the forfeiture laws that allow the government to pay up to 25 percent of the value of forfeited property to informants whose information is used to forfeit the property.
 

Informants Are Not Average Law-Abiding Citizens

Informants are not normal, hard-working, law-abiding citizens making an honest living. These informants are, for the most part, criminals with extensive records. Although the study does not give statistics on the records of these informants, most of them would make the average, honest, law-abiding citizen skeptical of their veracity. Often informants are selected when they themselves are arrested for drug trafficking and other serious crimes, and offer to "rat on" other people in exchange for getting their own charges reduced or dismissed. They may also be offered 25 percent of the forfeiture "take" in addition to reduced punishment in their own cases.

Because of their criminal propensities and their personal stake in the outcome, paid informants have a strong incentive to lie.

Informants' Word Relied on to Seize Property Despite Indicia of Prevarication

Consider the case of informant Bobby Watts. A CBS "Street Stories" episode, aired July 9, 1992, told how information from Bobby Watts was used, without corroborating evidence, to seize the house of the Cwiklas. Bobby Watts, working off charges from his own bust for marijuana cultivation, told prosecutors that the Cwiklas had stored 300 pounds of marijuana at their residence. Later Watts changed his story to say they had stored 200 pounds, then 100 pounds, then one pound. According to "Street Stories," Watts had a strong motive to lie about the Cwiklas:

Bobby Watts had been busted for running a marijuana operation on his Connecticut farm. He faced 35 years in prison. But the prosecutors made him a deal: turn in other people and we'll see what we can do for you. Watts ended up with a suspended sentence and got to keep his property, while the Cwiklas faced the fight of their lives. —CBS "Street Stories," July 9, 1992, transcript pages 14-20.

There was other evidence that Watts was not telling the truth. Another informant who was asked to corroborate Bobby Watts' allegations failed a lie detector test — the test indicating deception on his part.

Without ever searching the Cwikla's house, or in any other way verifying Bobby Watts' allegations, Assistant U.S. Attorney Leslie Ohta's office seized the Cwikla's house and "...are seeking its forfeiture."

The circumstances surrounding this informant's allegations should create a serious doubt in the minds of most Americans. Still, the government continues to rely on such informants "because they put money in the pot"— in the words of Justice forfeiture chief Cary Copeland.

Often Seizures Rely on Secret Information from Unnamed Informants

Using the "fiction" that the property is the thing on trial, the Justice Department has slowly but surely expanded its war on our property rights so far as to attempt to use hearsay testimony from ANONYMOUS INFORMANTS to show probable cause. The Justice Department began by arguing that, since the burden of proof is probable cause, the government should be allowed to use hearsay to establish probable cause. Their argument is based on the doctrine that hearsay is admissible in a criminal suppression hearing, where the burden of proof is probable cause. (Of course, the government argued the PROPERTY OWNER had no right to use hearsay at all.)

After a few years of getting occasional judges to buy this argument, it became the majority rule that the government can use hearsay to prove probable cause in forfeiture trials.

Then the government began asking courts to let them prove their case — their minimal showing of probable cause — through the hearsay testimony of police officers as to what unnamed informants had told them. With the informant's identity unknown, how can the property owner challenge the veracity of the informant? How can the property owner find out whether the person has a criminal record, or a reason to be biased against him, or whether he is working off criminal charges or being paid 25 percent of the value of property forfeited in exchange for his testimony?

What about the right to confront one's accusers? On this question, predictably, the Justice Department has argued that there is no right to confront one's accusers in a civil forfeiture case.

Property Owners Should Never Have the Burden of Proof Against Informant Testimony

In criminal cases, informants may be useful despite the problems that are inherent with regards to their credibility. In criminal cases, however, the criminal defendant has the right to confront and cross-examine his accusers. Problems with the veracity of informants, resulting from their criminal nature, biases against the people they accuse, deals with the prosecutor for leniency in their own cases in exchange for their testimony, and especially any promises of cash rewards in exchange for their testimony, can be brought out and taken into consideration by the jury in determining what weight to give their testimony.

More importantly, in criminal cases, the government has to prove its case beyond a reasonable doubt. Informants with shaky testimony, long criminal records, and deals with the prosecutor in exchange for their testimony can be disregarded by the jury under the reasonable doubt standard of proof.

However, when the unscrupulous, self-dealing, and financially rewarded informant is used in civil forfeiture, where the burden of proof is on the property owner, anything could happen. The burden of proof being on the property owner, rather than the side presenting the purchased testimony — the jury is in effect asked to give the informant the greater benefit of a doubt than the property owner!

Paid informants should never be given the benefit of a doubt. When it's "my word against his," the property owner should not have to bear the burden of proof against brokered testimony. Clearly, anything an informant says should be taken with a grain of salt — that grain of salt being the "beyond a reasonable doubt" standard of proof.

Informant Testimony Should Require Corroboration

Informant testimony may be a necessary evil in order to convict drug traffickers. However, even with the proper criminal forfeiture procedures and burden of proof, some corroboration must be required for paid informants and informants getting reduced sentences in exchange for their testimony.

Even when informants are not paid or given other consideration for their testimony, allowing one person's word to be enough to justify forfeiting property invites business competitors to ruin their competition by making false claims. This is a practice we are coming to see more and more. This practice is as dangerous to American business as the "McCarthy era" was to free thought.

Hearsay Should be Inadmissible at Trial

No other type of case allows hearsay to be admitted at trial. There is no reason an exception should be created in forfeiture. Hearsay is too flimsy and untrustworthy to be used to deprive citizens of valuable property rights.

Informants Should Never Be Paid for Their Testimony

No other area of jurisprudence allows eyewitnesses to be paid for recounting their version of the facts. Expert witnesses are the only witnesses paid for their testimony. They are paid because of their expertise on a subject outside the realm of knowledge of the jury. They are not paid for testifying to events they allegedly eyewitnessed, but for their professional opinions on subjects on which the jury needs their assistance.

Informants should not have their testimony bought in forfeiture cases. This taints the reliability of the entire process. No money should ever be paid to an informant for his testimony.

Restore Principle of Innocent Until Proven Guilty

Currently civil forfeiture statutes allow the government to seize property, except real estate, without a warrant if: "the seizure is incident to an arrest or a search under a search warrant...or administrative inspection warrant," or if police have probable cause to believe it is subject to forfeiture under a civil or criminal forfeiture statute. 21 U.S.C. Sec. 881(b).

Once seized, the property is impounded by the government until the entire forfeiture case is disposed of, except in the rare cases where the government allows expedited release. Once seized, no one — not even an innocent lienholder who has the right to repossess or foreclose on the property because the owner stopped making payments on the lien — can get the property away from the government before the case is over.

There is nothing to be gained by the pretrial detention of property — it merely deteriorates in value, without being used and enjoyed by anyone, while the government incurs substantial costs in storing, guarding and maintaining the property — a function that the government has been notoriously negligent at performing.

Numerous General Accounting Office reports show property is being wasted to a fraction of its seized value during government detention. A 1983 GAO report, Better Care and Disposal of Seized Cars, Boats, and Planes Should Save Money and Benefit Law Enforcement, 7-15-83 GAO/PLRD-83-94, p. ii, states:

Seized conveyances devalue from aging, lack of care, inadequate storage, and other factors while awaiting forfeiture. They often deteriorate — engines freeze, batteries die, seals shrink and leak oil, boats sink, salt air and water corrode metal surfaces, barnacles accumulate on boat hulls, and windows crack from heat. On occasion, vandals steal or seriously damage conveyances.

Real estate, which normally is expected only to appreciate in value, depreciates in government custody. If the impounded house is vacant, it invites vandalism, especially when vandals know it is recently seized and probably contains owners belongings. The U.S. Marshal Service doesn't guard the property beyond nailing shut the doors, changing the locks, boarding up the windows, and posting No Trespassing signs. Also, the very actions the government takes in "securing" property, such as nailing shut doors and boarding up windows, causes severe property damage.

Because the government is immune from damages, seizing officers can, and often do, have their field day "securing premises" if they have the inclination. We have seen outrageous photographs of the aftermaths of police destruction showing that someone maybe only one or two berserk officers — maliciously destroyed everything in sight, including the kids' toys, while "securing the premises." This has happened in an alarming number of cases.

The end result of the pretrial detention of assets is that a property owner who fights his/her case all the way to trial and wins gets back a broken piece of junk nobody in their right mind would have spent the money fighting for.

Even when the government wins the forfeiture case, they get the same depreciated piece of junk. The truth of the matter is that the U.S. Marshal Service, and local police, have better things to do than guard property seized for forfeiture. Even when that's their job description they don't do it well, because they resent such petty assignments. Most police went to work to be police officers and not parking lot attendants. Give them back their police responsibilities!

No Right to Probable Cause Determination

In most forfeiture cases, the property is seized without a warrant, based on some exception to the warrant requirement where the government is supposed to have probable cause to believe the property is forfeited, but doesn't have to prove it to any court. Lately in a number of cases where property was seized for mysterious reasons, they have taken the position that they don't have to tell what probable cause they have — not to anyone, including the property owner. They then force the property owner through the byzantine process — requiring payment of a cost bond of 10 percent of the value of the property, within 30 days or less of the notice, in order to have any judicial remedies — without having to show that they have a case. Often, they do not.

In most jurisdictions, the aggrieved property owner has no right to a post-seizure probable cause hearing at any time until trial, which may be years after the seizure.

It is impossible to get the property away from the government pending trial even when the government has NO case.

Except in the cases of real estate, where a seizure warrant is required, there is no pre-seizure probable cause determination by an independent magistrate. Even when a seizure warrant is obtained, under Admiralty Rule C(3), seizure warrants can be issued by the clerk without any determination of probable cause by an independent magistrate.

Legalized Extortion

Asset freezes and police seizure and detention of assets prior to trial are now being used as a bullying tactic to force property owners to settle out of court even when the government has no case. When the property owner knows that fighting the case all the way to trial will take several years, due to backlogs in the court system, the detention of the property pending trial is often enough to force property owners to strike a deal with the government, even if the property owner has an airtight case.

Consider the case of the prestigious law firm of Kaye, Sholer, Fierman, Hays and Handler, the firm that defended Lincoln Savings and Loan. When the government sued the firm, it simultaneously froze all the firm's assets. Their bank couldn't honor the checks they had issued, leaving the firm no funds to continue its operation. Their clients began leaving. They couldn't pay their employees. Within a week they were forced to settle — for $41 million — without the government ever having to prove anything.

On June 29,1992, the Orlando Sentinel reported a "forfeiture trap" set up in Volusia County, Florida, on the highway to Disney World. The police would stop motorists for driving too close, faulty tail lights, speeding, and other routine traffic stops, and would seize all their money, or sometimes their cars — with or without any evidence of wrongdoing— then offer to "settle" for half the value of the property. The same settlement offer was made to drug traffickers and innocent tourists alike.
In a growing number of cases, the combined economic forces of a forfeiture seizure no matter how unjustified its impact on a person's business reputation, credit, and cash flow, and the cost of forfeiture litigation, completely destroys the financial welfare of the person or business — even when the government can not prove any wrongdoing by the property owner.

We call this "legalized extortion." It has become rampant in America. State and federal forfeiture squads have learned they can easily increase their dollar "take" overall by seizing more property, with or without a case, then making a standard "settlement" offer to everyone, drug dealer and innocent citizen alike. The more over a barrel the property seizure places the citizen, the quicker they settle. An out-of-town tourist driving to Disney World can't very well afford to fight seizure of his/her car all the way to trial, and is forced to pay the extortionary demand.

This practice is extremely dangerous to our system of justice, and to American property rights in general. Because the law enforcement agency acts as judge, jury and executioner, none of its illegal practices ever see the light of day. No one is policing the police. The police should never be above the law. Yet these laws allow just that.

Stays Pending Appeal

Under the law in roughly half the federal circuits, in order to preserve jurisdiction to appeal a trial court decision in a forfeiture case, the verdict has to be stayed.

The U.S. Supreme Court is currently considering the question of whether obtaining a stay of the trial court verdict is a necessary prerequisite to jurisdiction of the Court of Appeals over the forfeiture case. The Eleventh Circuit found that failure to stay a verdict forfeiting the property did deprive the Court of Appeals of jurisdiction, in Republic National Bank of Miami v. United States, No. 91-767 (cert. granted 2-2492).

The requirement of a stay relies upon a fiction that the property must remain in the jurisdiction of the court, and that selling the property and depositing the proceeds into a trust account pending the outcome of the case does not maintain jurisdiction.

This fiction has no practical value. A rapidly depreciating asset, such as an automobile, airplane or boat, will have lost much of its value by the time the trial verdict is reached. By the time all appeals are exhausted, it is likely to be totally worthless.

It is especially absurd to require a stay of the verdict when the property owner wins at trial and the government wants to appeal. Should the property owner be further deprived of his property for additional periods of time just so the government can continue to fight to forfeit it?

Corrective Amendments

The notion that the government should be able to seize and detain property prior to trial in a forfeiture case is something out of Lewis Carroll's Alice in Wonderland, where the rule is "punishment first, trial later." That principle is alien to our system of justice.

There is no reason vehicles should waste away on police impoundment lots while the parties wait for a trial on the forfeiture case. Impoundment of vehicles makes them deteriorate faster than being routinely used, and also causes substantial storage costs. No one gets any use out of them pending trial.

Innocent owners should not have a pyrrhic victory when they win the forfeiture case and find out the asset has been destroyed pending trial. The property owner should be able to keep his/her property unless and until the government wins the forfeiture case.

The ability to seize property prior to trial also gives the government a stranglehold on the property or business owner. The American economy is dependent on business, and the viability of a business requires a fluid cash flow. When cash flow can be arbitrarily strangled, it is only a matter of time before the business suffocates. Government should not have this power to destroy business and property owners' lives prior to trial.

The obvious solution is to require that the forfeiture verdict proceed any seizure. This will cut down on the government's ability to force an out-of-court settlement in cases where they lack sufficient evidence.

There is also no reason to require a stay of the verdict in the forfeiture case to preserve jurisdiction pending appeal. The court should decide, on a case by case basis, whether the verdict should be stayed, applying the usual standards for obtaining a stay of a verdict, not because of irrelevant "fictions" having no practical utility.

In addition, however, because attorneys' fees in forfeiture cases can sometimes add up to astronomical sums in short periods of time, never to be recouped by the property owner, the property owner should have a right to an early probable cause hearing, to weed out the cases in which the government undertook a forfeiture on weak or unreliable evidence.

Prohibit Freezes that Interfere with the Right to Counsel

The 1984 amendments to the forfeiture laws created a new innovation authorizing forfeiture of attorneys fees. It was supposed to take away the ability of major crime lords to hire expensive legal counsel.

What the drafters of the law apparently didn't think about was that this law could easily be abused by the government to undermine the fabric of the criminal justice system, as well as the property rights of Americans.

Once the law was put in place it was used selectively to prevent retained attorneys from representing certain defendants by seizing all the defendants' assets. Even threatening to seize their assets is enough to prevent most counsel from representing the client. From the start the law has been used selectively, at the whim of the Department of Justice.

The U.S. Supreme Court decided in Caplin & Drysdale, 109 S.Ct. 2646 (1989) that forfeiture of attorneys fees did not deny a criminal defendant the right to counsel because court appointed counsel was always available in criminal cases. We think that is not enough.

If we are presumed innocent until proven guilty, then the government should not be able to take away from us our right to hire defense counsel of our choosing prior to determining we are guilty of some criminal offense. Even if the Supreme Court has ruled otherwise, we disagree, and ask our Congressmen, the last bastion of hope in this "law enforcement" dominated decade, to correct these abuses.

A new question is presented when the government seizes all the assets a property owner has, and thereby denies him/her the ability to retain a lawyer to defend the forfeiture case. There is no right to court appointed counsel in forfeiture cases. In a growing number of cases, the government is seizing so much of a forfeiture victim's assets that they have nothing left to retain a lawyer. As one can imagine, forfeiture victims who represent themselves always lose.

Using these forfeiture statutes and the seizure authority they bestow, the Administration has been able to selectively dictate who has the right to have a fair trial. This is not tolerable under the balance of powers we believe we have in our Constitution, where the Judicial Branch is supposed to be separated from and not controlled by the Administrative Branch.

FEAR

Our basic concept of "JUSTICE" in the courts particularly our notion that a person is innocent until proven guilty —is turned on its head when the government can use an asset freeze or civil forfeiture to prevent a citizen from obtaining a fair trial.

The Supreme Court has not addressed the issue of asset seizures that interfere with the right to counsel in forfeiture proceedings. The rationale in Caplin & Drysdale would not apply in forfeiture cases, because there is currently no right to court appointed counsel in forfeiture cases, when the forfeiture seizure renders someone indigent.

Forfeiture claimants who are indigent should be entitled to a lawyer at the government's expense before they can be deprived of everything they own.

Revamp the Administrative Forfeiture Process

Currently, the forfeiture process starts with a Notice of Forfeiture from the Drug Enforcement Administration (DEA), Federal Bureau of Investigations (FBI), Customs Service, Immigration Naturalization Service (INS), Postal Service, or other seizing agency, which is mailed to the property owner and simultaneously published in a newspaper. There is currently no deadline for agency publishing and sending notice, but it generally occurs three weeks to six months after the seizure, and in some cases as late as three years after the seizure.

Until the notice of forfeiture is sent, there is nothing the property owner can do. The statutes take away the right to file an action in replevin. Even criminal Rule 41, which authorizes motions for return of property, has, in most jurisdictions, been construed as barring any actions for the return of property held for forfeiture. Ironically, a Rule 41 motion applies only to a criminal defendant who has a pending criminal case —it usually is not available to an innocent owner.

Cost Bond

After property owners receive the notice of forfeiture, they have 20 to-30 days to file a Claim and pay a "cost bond" of 10 percent of the value of the property, with a minimum fee of $250 and a maximum fee of $5000, in order to preserve the right to a judicial determination of the forfeiture case. When numerous items of property are seized, the government requires separate cost bonds for each of them, to maximize the cost to the property owner of fighting the case.

If the property owner does not file a claim and pay the cost bond (or apply for a waiver of the bond on the grounds he/she is indigent) within the 20-30 days after notice is sent, he/she loses, by default, all judicial remedies to contest the forfeiture. The forfeiture case is then, irrevocably, lost by default.

In Forma Pauperis

Even when a person is truly indigent, and asks to proceed in forma pauperis, the agency can arbitrarily and capriciously deny the petition, without stating reasons, and without ever having to even prove probable cause to seize the property before a disinterested magistrate. This trick is used in a large and growing volume of cases to take away the property owner's day in court on the forfeiture. Indigent property owners cannot afford to pay counsel to litigate the denial of in forma pauperis treatment, nor do they have the necessary legal knowledge to represent themselves. They generally lose, by default, at step one.

Petitions for Remission or Mitigation

There is one other "alternative," although a useless one. Instead paying the cost bond to obtain judicial remedies, the owner can file a petition for remission or mitigation. The notice of seizure often encourages the property owner to take this path instead of paying the cost bond, and many unwary claimants fall into that trap, waiving all judicial remedies.

Petitions for remission/mitigation are decided by the seizing law enforcement agency, without a hearing, at the sole and unreviewable discretion of the seizing agency which, of course, always decides to keep the property.9

Judicial Process

Property owners who pay the cost bond trigger a 60 period within which the U.S. Attorney must file a forfeiture complaint or give back the property. However, when someone is indigent and files a petition to proceed in forma pauperis instead of paying the cost bond, this deadline — the only deadline imposed upon the government in forfeiture cases other than the five year statute of limitations — does not apply.

Claimants encounter a second set of traps for the inexperienced in U.S. District Court. After being served with a forfeiture complaint the owner has only 10 days to file a "Verified Claim." No other type of civil or criminal proceeding has this requirement. Most people cannot find a competent forfeiture lawyer within 10 days.

Corrective Amendments

The cost bond should be abolished, as should all other administrative hurdles that are conditions precedent to the right to judicial remedies.

The courts have held, at the urging of the Justice Department, that agency decisions on petitions for remission and/or mitigation are unreviewable by a court of law. This renders the administrative "remedy" totally ineffectual in our view.

Petitions for remission or mitigation should either be totally abolished, so that unwary litigants do not make the mistake of choosing such "remedies," or they should be made into useful remedies that shortcut the forfeiture process. To accomplish this, Congress would have to create standards for the granting and denial of petitions for remission/mitigation, and make all agency decisions reviewable.

In federal courts, the deadlines set for property owners to respond in forfeiture proceedings should be the same as in any other case — thirty days after receipt of the complaint. There is no reason for a 10-day deadline to file a "verified claim," and it should be abolished.

Prohibit Frivolous Use of Forfeited Assets

The forfeiture examples described in part III above, dealing with seizure of the Schrama's house, cars and all their personal property for a $500 offense; the seizures ofJim Spurlock's customers' airplanes for technical paperwork mistakes; and the seizure of the $1.5 million yacht for failing to declare fish — all show how far out of hand law enforcement has gotten in its seizure spree.

They also show that the real motive behind most forfeiture seizures is greed. Current laws let law enforcement agencies keep the proceeds they seize and forfeit. This gives them the ability to create for themselves an unlimited budget with no oversight. The statutes also let them take items into government use, which often results in individual officers picking out a particular fancy car for their own use — cars the police department would never be able to justify if they had to buy them through their appropriated budget.

Seizure fever often blinds police to their true responsibilities — solving crimes and catching criminals. Law enforcement forfeiture squads out meeting their forfeiture quotas are more concerned with the value of the asset seized than whether there is a real case justifying forfeiture. They find it easier to make a seizure of one expensive asset, such as a $1.5 million yacht, than to take $1,500 from 1,000 street level drug dealers — that's a lot of work, and dangerous too. Innocent people don't fight back with violence as criminals often do.

The end result of this greed is that, more and more, the attention is turned away from solving murders, rapes, robberies, domestic violence, child abuse, and other serious crimes, or breaking up real drug rings and catching major drug traffickers, while the law enforcement agencies' focus is switched to seizing and forfeiting property from anyone who happens to fall within the ever-widening scope of the forfeiture laws.

Corrective Amendments

There is no reason why law enforcement, of all government agencies, should be exempt from the oversight of Congress over their budgets. There is no reason why they should not meet the same standards for justifying expenditures, nor why they should have property of higher quality than other governmental agencies.

Law enforcement has become hooked on their forfeiture slush fund, which is why so many agents have gone awry into creating their own private slush funds, beautifying their own offices with seized property, driving unnecessarily posh automobiles, and even padding their own pockets. Law enforcement work is not supposed to be glamourous nor to have these "fringe benefits."

Obviously, government oversight over property acquisitions for law enforcement should be just as stringent as over other agencies. Law enforcement should not be permitted end runs around the budget and appropriations process.

It is time to take away law enforcement's unreviewable discretion to profit off seized property. The proceeds of forfeited property should go into the general treasury of the United States. When law enforcement units cannot directly profit off seizures, seizures will immediately become more honest. Much of the abuses we have seen will probably disappear overnight.

Strengthen Protection for Innocent Owners

Under current federal forfeiture laws, innocent ownership is an affirmative defense. Affirmative defenses put the burden of proof on the person asserting it. This means that, even if the burden of proof is changed for forfeiture cases in general, the burden of proof would not change on the issue of the innocence of the owner unless innocent ownership was changed from an affirmative defense to an element the government had to prove as a part of its case.

We have already discussed the problems owners face in having to prove a negative — that they did not know something, or that they did not consent to something — when they bear the burden of proof. Rather than require owners to prove a negative, lack of innocent ownership should be made an element of the government's case, so that the governmenthas to show guilty knowledge and consent in order to deprive property owners of their property.

Relation Back Doctrine

Another serious threat to innocent owners is the "relation back" doctrine, a doctrine added to the federal forfeiture statutes in the 1984 amendments. Under this doctrine, the forfeiture of the property "relates back" to the time ofthe illegal act which gave rise to the forfeiture, vesting title in the United States government as of that date, and cutting off interests subsequently acquired. The committee report to the Comprehensive Crime Control Act of 1984, PL 98-473, states:

The interest of the United States in the property is to vest at that time, and is not necessarily extinguished simply because the defendant subsequently transfers his interest to another.

Although the 1984 amendments also included innocent owner defenses that appeared to provide defenses to innocent owners, there is an open question as to what happens when the innocent owner defense conflicts with the statute's relation back doctrine.

The Justice Department's position, of course, is that the relation back doctrine overrides protections for innocent owners. In the Justice Department brief in United States v. 92 Buena Vista Ave., Rumson, N.J., U.S. Supreme Court, No. 91-781, filed September 10, 1992, the government argues that, once an illegal act occurs on property, title vests in the government at that moment and cannot thereafter be legally transferred to anyone other than the U.S. Government. The "taint" cuts off all rights of all persons to whom the property is transferred, they argue, including innocent good faith purchasers for value with no notice of the illegal act, and innocent lienholders as well.

This argument, which may soon be made the law of the land by the Supreme Court, will totally devastate property values in America. With the forfeiture statutes having five year statutes of limitation (assuming the "taint" doesn't somehow vest title beyond even the statute of limitations), a potential purchaser of property or real estate finance company would have no assurance that the property hadn't been tainted by illegal acts committed by the previous owner, the previous owner's teenage children or grandchildren, or tenants, or guests, or customers, or even those of the owner two or more transactions back.

This doctrine is made all the more dangerous by the fact that law enforcement is already gearing up to enforce their sweeping new powers to condemn wholesale swaths of property without having to pay just compensation. In Colorado, officers have seized three motels in a ghetto area plagued with drug dealing. Commenting on the seizure in the Greater Denver Rocky Mountain News, in late August 1992, Lt. Jerry Frazzini said: "if necessary . . . it'll continue until the city owns the entire east corridor."

This may sound like a way to combat open air drug markets, but the hidden danger is awesome. Often, open air drug markets exist in older, poorer neighborhoods. Property owners in those neighborhoods have no control over the drug trafficking. Police officers who execute sweep style raids can often move the trafficking a block or two away — and within minutes, the dealers are back at work plying their trade in the next block. This power could easily be abused to condemn property to put in a new interstate through a neighborhood, by sweeping drug traffic along a corridor, landbanking the properties under the relation back doctrine, until the entire swath is tainted, then moving in and seizing all of it under the forfeiture laws.

Corrective Amendments

Property owners should be protected from seizure of property used by someone else to facilitate a crime unless the government can show, prior to seizure, that the owner aided and abetted the crime. This will prevent the government from unjustly seizing property and extorting a premium for its release.

The relation back doctrine is an extremely dangerous concept. Why should government even want to take property from subsequent transferees who are wholly innocent of wrongdoing — instead of the criminal who "tainted" the property? This serves no legitimate law enforcement purpose. This doctrine will allow government to make massive land grabs from innocent people. It could be used to condemn entire blocks or even entire towns, and convert them to government ownership. The entire doctrine should be legislatively abolished immediately, before it further undermines property values and further endangers our free society.

Return Responsibility of Detecting and Stopping Crime to Police

In Calero-Toledo v. Pearson Yacht Leasing Company, 416 U.S. 663 (1973), the U.S. Supreme Court held that it was permissible for forfeiture statutes to put the burden of proof on otherwise innocent property owners to show that they were not negligent in allowing their property to be used to smuggle drugs. In that case, the property seized was a yacht leased by a company in the Caribbean, and used to smuggle drugs into the country. The Supreme Court reasoned, with a little help from the Justice Department, that the government should be able to use forfeiture statutes to put some of the burden of stopping crime on private citizens.

At least in the case of large boats, leased in the Caribbean (an area known for drug smuggling), without the lessor giving sufficient scrutiny to the lessee, most citizens wouldn't be too concerned that the leasing company lost its property.

The Pearson Yacht case, however, does not make a good example by which to fashion a law to apply domestically, to garden variety personal property and real estate seizures. Nevertheless law enforcement has expanded the use of this principle to pawn offupon everyday citizens the responsibility of stopping crime, by treating citizens as if they were strictly liable for the "crimes" committed by others using their property.

Take for example a case currently pending in Maryland. Several years ago, a man bought a billiards hall in a ghetto. In the past few years he has tried to clean the place up, as drug dealing has proliferated in the neighborhood, not to mention in his parking lot, and, increasingly, inside his establishment. He went to the local police and asked them for help in getting the drug dealers off his property, because they were ruining his business. He was told there wasn't anything the police could do about it. A few weeks later, they arrested him for "operating a public nuisance" (a felony), took his business license, and threatened to forfeit his business ifhe did not clean up the drug sales on his property.

Another example is the case of Bill Munnerlyn, a pilot and owner of a charter air service in Las Vegas, Nevada. As CBS "Sixty Minutes" explained, Munnerlyn's Lear jet, the cornerstone of his entire business, was seized by DEA when he flew a charter passenger who, unbeknownst to Munnerlyn, was carrying a large amount of money. Munnerlyn had no reason to be wary of this particular passenger, because he was an elderly man who appeared to be what he claimed to be —a banker. As pilot/owner of the charter airline service, he had no right nor duty to search the luggage of his passengers.

The common thread to both cases is that LAW ENFORCEMENT is expecting honest, hard-working citizens to perform the police function of detecting and preventing crime. They are expected to police their customers:

• without guns? What if the culprits have bigger guns and are more willing to use them, such as the drug dealers plaguing the Maryland billiard parlor?
• without the power to arrest?
• without the resources to search and/or guard the premises?
• without immunity for false arrest and invasion of privacy when they try to do the things the police tell them they have to do to avoid having their property seized?

Corrective Amendments

Police officers, when they apply for the job, know that certain risks are inherent in their job description. They are hired to do the job, notwithstanding those risks, and to detect crime, find the culprits, arrest them, and testify against them in court. This is not a job for private citizens — not now, particularly in places like Washington, D.C., and other major cities, where the crime world is a very dangerous thing to oppose.

The government has no right to palm off police responsibilities on private citizens and take their property when they fail to perform satisfactorily. This negligence standard for forfeiture seizures from innocent owners must be abolished.

Prevent Federal Interference with States' Rights

A number of states have enacted statutes giving innocent owners greater protections than the federal forfeiture statutes. Federal authorities are not bound by the state forfeiture laws, however. Local police can make an end run around state forfeiture laws by asking federal agencies, such as the DEA or FBI, INS or Customs, to adopt the forfeiture. They then get to split the proceeds with the "adopting" federal agency.

In most cases, the "adopted" forfeitures would be illegal under state forfeiture law. Federal adoption can also intrude on state constitutional rights. The highest court of New York has recognized more protective state constitutional rights regarding illegal searches and seizures than are recognized by the U.S. Supreme Court, interpreting the federal constitution. However, it is an open question as to whether the federal authorities have to abide by the New York Constitution when seizing property from New York residents.

Corrective Amendments

We believe that any state that makes the effort to enact state forfeiture statutes should not have their forfeiture statutes overridden within the boundaries of their borders, by the federal government's use of "adoption" procedures. We believe this is an unconstitutional intrusion on states' rights.

When a state legislature has passed forfeiture statutes, the federal government should abide by its standards when operating within its boundaries. This goes for DEA and FBI seizures as well as "adoption" cases. Until federal forfeiture laws begin to protect citizens' due process and property rights, citizens should be able to turn to their own states for protection, and their states' will in this regard should be honored inside its own borders.

Abolish Governmental Immunities Under Federal Tort Claims Act

On March 13, 1992, United Press International reported that, in 1989, Jacksonville University Professor Craig Klein's new $24,000 sailboat was boarded by 11 customs agents looking for drugs which were never found. Armed with fire axes, powerdrills and a chain saw, they did $50,000 worth of damages to the boat, going so far as to drill holes in the hull and sails. "They literally chopped the engine up with a fire axe," Professor Klein said. "They left the boat in a sling at the marina. It was just a wreck."

When Professor Klein demanded that customs repair the damages, they told him they were immune from damages — which is true under current law. The Federal Tort Claims Act, 28 U.S.C. Sec. 2680(c) exempts the federal government from liability for "any claim arising in respect of ... the detention of any goods or merchandise by any officer of customs or excise or any other law-enforcement officer."

Damages to Lienholders

In 1983, FEAR members Carl and Mary Shelden of Moraga, California became two of the earliest innocent victims of the forfeiture laws when their former residence, which they had sold in 1979 and owner financed — after exercising the normal scrutiny employed in such real estate transactions — was seized and forfeited. The buyer of the property, who owned a clothing store chain, appeared to be a legitimate businessman. What the Sheldens and the rest of the community didn't know was that he had also been involved in prostitution. When he was convicted, the property was forfeited under RICO. The Sheldens were not given notice nor opportunity to be heard regarding the disposition of the forfeited assets.

When the property was forfeited, its appraised value was $350,000. The Sheldens had a $160,000 second trust lien — by far, the largest interest in the property.

Although the 1983 RICO statute required the government to sell the property as soon as was commercially feasible, and to protect the interests of innocent third parties and promptly pay off lienholders, the U.S. Attorney entered a stipulation with the criminal defendant's lawyer that the criminal's family could live in the property, rent free, while the defendant's appeal was pending. No provision was made in the stipulation to guarantee payment of the Sheldens' mortgage lien, nor did the government, which acquired all right and title to the property by virtue of the forfeiture verdict, assume the mortgage. They were left in limbo. The criminal's lawyer made payments to them, as he could, from the proceeds of the criminal's other properties, but nothing guaranteed it in writing. The Sheldens never consented to extending this mortgage past the change of ownership in the property.

The Sheldens hired lawyer after lawyer and did everything they could think of doing to try to protect their interest. They frequently tried to foreclose on the mortgage, but were rebuffed at every turn by the government.

Two years later, the criminal defendant's conviction was overturned on appeal, and the forfeiture verdicts were remanded to the trial court.

The Sheldens again tried to foreclose, but the criminal defendant had declared bankruptcy the day his conviction was reversed. While they were in the bankruptcy court, trying to defend their interests, they learned the property had been seriously damaged since the forfeiture. They hired an appraiser and found out it had been reduced to a fraction of its former value by waste. A retaining wall the criminal had erected on the hillside property before he was arrested had fallen, while the property was in government custody, and no move was made to correct the damage, nor to inform the Sheldens about it. The erosion resulting to the hillside undermined the foundation of the house, causing it to crack open, throughout the house. In places one can see daylight through the wall. There is a crack in the front facade wide enough to bury a hand up to the top knuckles.

After hearing of the engineer's reports, the bankruptcy court told the Sheldens they could foreclose, since the property was virtually worthless. They did "foreclose," but had to evict the criminal's family, who were still living there. They tried for a while to rent the damaged house, but found it increasingly difficult, and were forced to move back into it, their savings wiped out fighting the government.

In 1988 they hired their 11th lawyer on the case, to file suit to try to recoup the rest of the value of their lien, which the government had destroyed by allowing the property to waste. The suit was filed in U.S. Claims Court, and alleged that since they were innocent lienholders who did everything they could have been expected to do, under the circumstances, the failure of the government to sell the property and promptly pay off their lien — in its entirety — was a "taking" under the Fifth Amendment, entitling them to just compensation.

In January 1990, the U.S. Claims Court ruled in the Shelden's favor, finding there had been a "taking" requiring just compensation. The case was set for trial on the issue of damages in August 1990. One week before trial the Justice Department filed a "motion for reconsideration" — a motion that was required to be filed within 10 days of the order, and thus was seven months late. After reconsidering and sitting on the motion for almost two years, in June 1992, the judge reversed himself and said there was no "taking" and dismissed the suit.

Meanwhile, in 1990, the Sheldens discovered that the federal government still owned the property they had taken possession of and been living in. Through the checking of records in relation to their civil suit, they learned that, in 1989 the criminal defendant plea bargained and got probation and title to two of the forfeited properties. The government quit claim deeded those two of the forfeited properties back to the defendant, but forfeited all other remaining properties, including the property the Sheldens previously held a lien on, had "foreclosed" upon, and were now living in, to the federal government. No effort was made to notify the Sheldens of this.

The government finally gave the Sheldens a quit claim deed to the damaged property in May 1990.

Now, almost 10 years after the saga began, the Sheldens are in the Court of Appeals for the Federal Circuit, appealing the denial of their right to "just compensation" for the taking of their lien. They are living in a house that is too damaged to rent out, because the government allowed it to be destroyed after it had been forfeited — after it should have been sold and the Sheldens' lien paid off. The government should not be immune from such gross negligence and dereliction of their statutory duties to protect innocent lienholders.

Corrective Amendments

The exemption from liability for law enforcement should be stricken from the Federal Tort Claims Act.

The saga of Carl and Mary Shelden show that corrective, retroactive remedies need to be enacted to make reparations for the damages done to innocent lienholders. What happened to the Sheldens, in our view, was a "taking" which should entitle them to just compensation. However, takings cases are long and expensive uphill legal battles. The Sheldens have fought 10 years, with nothing to show for it other than debts. No innocent lienholder should have to fight the government 10 years and beyond for what was rightfully theirs in the first place. Retroactive remedies should be enacted creating a simple process to make whole the innocent lienholders who lost any part of the value of their liens because of inadequate protection of their interests under previous forfeiture statutes.

Conclusion

It is our firm and patriotic belief that the United States Constitution and our basic human rights to Justice assume these things: that a person is innocent until proven guilty, that a person cannot be punished without beingproven guilty beyond a reasonable doubt, that we have a right to confront and cross-examine our accusers, that we should be free from unreasonable searches and seizures of our person and our property, that we have a right to own property which is as important as our right to be free from incarceration, and that the punishment should fit the crime and should follow rather than precede the trial.

We believe that forfeiture is punishment. We believe that applying civil burdens of proof is unconstitutional, and that any person who was not convicted of a crime but nevertheless lost property under those standards should have a new trial. We believe that every time forfeiture statutes allowed innocent lienholders, or anyone who qualified for the Pearson Yacht defense, to lose any portion of their property rights to the government, it was a "taking" which requires just compensation, not just whatever compensation the government decided to give them.

We believe a large number of American citizens have been harmed severely by these unfair laws, and demand reparations. We ask for retroactive remedies for property owners who are found to be innocent under the standards set out above.

It is unfortunate that the government is out of money, but the deficit should not be financed by a lottery tax that hits a few selected people, destroying them financially for the benefit of the rest.

Brenda Grantland, Esq., is the general counsel to Forfeiture Endangers American Rights (FEAR). P.O. Box 7447, Arlington, Va. 22207.

Endnotes
1 Mr. Spurlock has strong evidence that the informant was his business competitor.
2 The Orlando Sentinel reported on August 4, 1992:
Cary Copeland, Justice forfeiture chief, said the snitch payoffs are moneys well spent. He said the law forbids Justice from paying more than 25 percent of a seizure to an informant. That means, he said, that the $30 million in snitch stipends the past two years has netted at least $120 million in forfeited funds during that time.
"We're not paying it to them because we like them," Copeland said. "We're paying them because they put money in the pot."
"Informants Make Out Like Bandits," Orlando Sentinel, page A-1, August 4, 1992.

3 This argument ignores the fact that the criminal suppression hearing is a pretrial hearing, decided by the judge alone, to determine whether evidence was illegally seized and therefore should be suppressed from the jury's consideration at trial. In forfeiture cases, on the other hand, the probable cause hearing is the forfeiture trial itself — that's all the government has to show.

4 See United States v. A Single Family Residence. . . Located at 900 Rio Vista Blvd., Ft. Lauderdale, 803 F.2d 625 (11th Cir. 1986), United States u. One 56-Foot Motor Yacht Named Tahuna, 702 F.2d 1276 (9th Cir. 1983), United States v. One 1974 Porsche 911-S, 682 F.2d 287 (1st Cir. 1982), United States u. U.S. Currency Totalling $87,279, 546 F. Supp 1120 (1982).

5 This argument was raised, for example, by the U.S. Attorney's Office for the District of Columbia in United States v. Funds in Bank Account #62538-631, U.S. District Court for District of Columbia, No. 89-2202-GHR.

6 See 21 C.F.R. Sec. 1316.92.

7 See In Re Newport Savings and Loan Association, 928 F.2d 472 (1st Cir. 1991).

8 See Better Care and Disposal of Seized Cars, Boats, and Planes Should Save Money and Benefit Law Enforcement,
7-15-83 GAO/PLRD-83-94; Statement of Arnold P. Jones
Before the Committee on the Budget, United States Senate, on Customs' Management of Seized and Forfeited Cars,
Boats, and Planes, Statement, 4-3-86; Statement of Gene L.
Dodaro Before the Subcommittee on Federal Spending, Budget and Accounting, United States Senate, Real Prop-
erty Seizure and Disposal Program Improvements Needed,
9-25-87 GAO/T-GGD-87-28; Seized Conveyances: Justice and Customs Correction of Previous Conveyance Manage-
ment Problems, 2-3-88, GAO/GGD-88-30; Statement of Gene
L. Dodaro Before the Subcommittee on Crime, House of Representatives, on Asset Forfeiture Programs: Corrective
Actions Underway But Additional Improvements Needed,
3-4-88, GAO/T-GGD-88-16; Statement of Gene L. Dodaro Before the Subcommittee on Federal Spending, Budget and
Accounting, United States Senate, on Asset Forfeiture Pro-
grams: Progress and Problems, 6-23-88, GAO/GGD-88-41; Statement of Gene L. Dodaro Before the Subcommittee on
Crime, House of Representatives, on Asset Forfeiture: An
Update, 4-24-89, GAO/T-GGD-89-17; Statement of Richard L. Fogel Before the Subcommittee on Oversight, House of
Representatives, Profitability of Customs Forfeiture Program Can Be Enhanced, 10-10-89, GAO/T-GGD-90-1; Asset Forfeiture: Need for Stronger Marshals Service Oversight of Commercial Real Property, 5-91, GAO/GGD-91-82.

9 The only types of property owners who ever win in the administrative forfeiture process are a certain class of commercial lienholders. We have heard rumors about an
agreement made between the Department of Justice and a national organization of lienholders that, in exchange for
certain unknown consideration — probably a promise to
remain silent — the members of the lienholder association would get special treatment from the Department ofJustice
in forfeiture cases. The only corroboration for this rumor we have been able to find is in the Houston Chronicles article by Dianna Hunt, published May 17, 1992.

10 First aired 4-5-92, rerun 8-30-92.

11 People v. Guy F. Scott, 1992 N.Y. Lexis 940, Court of Appeals of New York, decided April 2, 1992.