Asset forfeiture has ensnared a lot of innocent people in its net. When they try to fight back, their recourse is limited, if not rigged to fail.
November 25, 2019
By: Bobby Casey, Managing Director GWP
Asset forfeiture is a very real thing. It’s as much a source of government revenue as ticketing, taxes, and licenses.
I keep a watchful eye on this issue because unlike taxes that are relatively predictable, this can and has bitten people out of nowhere.
As the legal landscape continues to shift in this space, so too does the scope of the threat to people and property.
There’s yet another battle at the SCOTUS level to defend the individual against asset forfeiture.
A few things to keep in mind:
1. Civil asset forfeiture is when the owner of property is not accused of a crime, but rather their property is accused of being part of a crime. An example might be, you own a house, and someone conducts a drug deal on your lawn. YOU are not accused of dealing drugs, but your lawn was where the deal went down.
2. Unlike the charges against a person where there is a presumption of innocence and guilt must be proven, the property is presumed guilty until proven innocent.
3. The government’s means far exceeds that of most individuals.
Back in 2000 CAFRA (Civil Asset Forfeiture Reform Act) was passed. Part of that bill addressed the need to compensate those who win in their fight against wrongful seizure of assets: “reasonable attorney fees and other litigation costs”.
So loser pays, basically.
That sounds equitable except for one thing: if it never makes it to court, then there’s no ruling from the court to mandate compensation.
What do I mean? Let’s go back to the lawn example. Your real estate is confiscated by the government for being part of a drug deal. You decide to fight this. The government protracts the fight for two years, as you’re paying an attorney and have no house.
The house itself is falling into disrepair because no one is taking care of it and you can’t be there. You’re still paying the mortgage on it because the title is still in your name.
You’re about to get a summary judgment from the court, most likely in your favor since no other criminal investigations are tied to this seizure, and the prosecution drops the case.
They give you your house back.
Because there was no ruling from a court, and it was dismissed without prejudice, you don’t meet the standard of the law to receive compensation for the legal fees, the disrepair, the mortgage costs you had to pay while you were not allowed to live there, or the costs of finding another place to live.
The point is to make it so expensive to challenge asset forfeiture, that people will just let it go.
This is like the “Never Take a Plea” movement. The government is cracks down on a myriad of victimless offenses, giving people criminal records. Rather than go through the process of fighting the charges, which could take years, they accept a plea. They can’t afford the costs of being incarcerated, or bail, so they take the plea which entails they accept guilt, but get an abbreviated sentence.
The purpose of Never Take a Plea is to stand your ground as the accused and go through the process because the fact is, the government charges so many people it would collapse under its own weight if no one took a plea deal.
These government prosecutors are trying to keep a record of wins, increase the amount of wealth confiscated from the private sector, or both. Under the current system, they are doing exactly that. Either people won’t bother to fight for their property, or they will, and they will pay more than what the property is worth.
The fight is on in defense of not just property but also due process. If a prosecutor can string out a case for years and then dismiss it without consequence then the very protection this law was meant to provide is moot and void.
The case that is spearheading this fight is Miladis Salgado’s case. Her husband was accused of being a drug dealer. Even though the accusation was unfounded, the DEA did find $15,000 in cash and seized it.
She hired a lawyer on contingency with a third of her winnings to be paid if she prevailed. The prosecution dragged out the case for 2 years, and the DEA admitted they had no evidence that Salgado’s husband was involved in any criminal activity, so the charges were dropped just before the judgment.
The courts did order the government to return the money in full, and further stated that they would be responsible for legal fees should they refile the case.
Salgado paid her lawyer $5,000 and then sought compensation for the losses, but the courts ruled against her.
Did Salgado “substantially prevail” even though this never was tried in court?
Is it right to dismiss without prejudice which essentially disqualifies them from seeking attorney’s fees? Per the petition filed by the Institute for Justice:
“In order for an innocent owner to be awarded attorneys’ fees under CAFRA, the government’s case against the money or property cannot be dismissed without prejudice. But the innocent owner cannot prevent the case from being dismissed without prejudice because, in these circuits, their right to be awarded attorneys’ fees has not yet vested.”
The CAFRA in practice is a Cinderella promise. It says you can have X, IF you meet the burden of Y… but it’s rigged so you never meet the burden of Y.
In 2017, it was reported that over a ten-year period the DEA essentially stole $4.15 billion; 80% of which was never tied to a criminal investigation. That’s a lot of theft from just one government agency under the guise of fighting a drug war.
Protect your assets. While there are those fighting the good fight, waiting for the wheels of justice to turn out an fair outcome is a bad bet.
Click here to schedule a consultation or here to become a member of our Insider program where you are eligible for free consultations, deep discounts on corporate and trust services, plus a wealth of information on internationalizing your business, wealth and life.
