Is Your Property Safe from Seizure?

Last week, The Wall Street Journal reported how federal agents seized about $19 million during a fraud investigation last year. That sum included $392,000 of cash belonging to New York businessman James Lieto, an innocent bystander who was not involved in the crime.

Mr. Lieto is just one among thousands of Americans who have been victimized by the federal system of “civil asset forfeiture.” This doctrine empowers the U.S. government to seize assets from innocent people never charged with any crime.

Over 400 federal statutes - double the number since the 1990s - have been buried in hundreds of criminal laws adopted by Congress during the last 25 years.

And as the example with Mr. Lieto demonstrates, police use and abuse of civil asset forfeiture today is very much alive in Police State America - and you and your property could be the next victims.

Property confiscation by federal, state and local police is now widespread, aimed not just at suspected pot-growers or even major drug traffickers, but in the majority of cases, at more convenient police targets - average people, many of them minorities, whose only "crime" is ownership of real and personal property.

In 2010, forfeiture programs confiscated condominium units, homes, cars, boats and cash in more than 15,000 cases, worth a combined $2.5 billion - an amount that has doubled in five years, according to the U.S. Justice Department.

How Civil Forfeiture Works...

The legal doctrine underlying forfeiture holds that property implicated in crime can be seized even if its owner is never charged or tried. In 80% of such cases in America, the property owner is never charged.

That is because the civil forfeiture law lets government and police take property that is merely suspected of having been used in orrelated to a crime. This legal standard is known as “probable cause.” Unlike criminal asset forfeiture, however, with civil forfeiture, a property owner need not be found guilty of a crime, or even charged, to permanently lose your cash, car, home or other property

Seizures can be based on mere rumor, gossip, a police hunch, or self-serving statements from disreputable people with an axe to grind like anonymous paid informants, accused criminals begging for leniency, or jailed convicts seeking early release.

The U.S. pays cash rewards up to $100,000 per assignment to informants out of the cash or property seized. Around $15 million is spent annually for this purpose by the U.S. Department of Justice.

Police at all levels of government have an even greater incentive than informants to seize assets - they get a large cut of the cash or they keep the cars and other property they grab. 

Under a 1984 federal law, state and local law enforcement agencies that work with the U.S. agents (i.e. FBI, Customs) on seizures get to keep up to 80% of the proceeds. Last year, under this "equitable-sharing" program, the federal government paid out more than $500 million, up about 75% from a decade ago.

Property Forfeiture is a Threat
to Innocent Americans

Forfeiture's unique police power depends on musty legal theories spawned by the petty tyranny of English monarchs. These ancient laws were refashioned by Congress to strip property from blameless Americans under the guise of fighting the “drug war.” 

Constitutional “due process” guaranteed in other areas of U.S. criminal law is virtually unknown in asset forfeiture cases. 

Procedure is stacked against an innocent owner and in favor of government. The basic presumption of “innocent until proven guilty” is turned on its head. The burden is on the owner who, in order to reclaim the property must prove a negative, showing it was not used in a criminal act.

Under threat of great financial loss, forfeiture law forces property owners to act as police agents and incriminate others. Innocent owners are defenseless unless they prove not only that the alleged illegal activity occurred without their knowledge or consent - but also they did all they reasonably could be expected to do to prevent the proscribed use of the property. 

Consider what this means... Owners who lease apartments, cars or boats risk losing valuable property because of renters' uncontrollable illegal conduct.

In unrelated Minnesota and Connecticut police actions, family homes were seized because a child or grandchild was found to have pot stashed in their room.

The home of an elderly widow in Montgomery, Alabama was confiscated even though she repeatedly reported to local police drug sales in and near her house by her own adult children.

Similarly, the government has been able to claim successfully that one illicit dollar deposited in a bank account along with a million other “clean” dollars taints all the money, subjecting it to forfeiture.

The 2000 Civil Asset Forfeiture Reform Act, or CAFRA, adopted protections for individuals and increased the government's burden of proof. But CAFRA also extended forfeiture powers to additional crimes.

What’s more, CAFRA's safeguards failed to win a broad guarantee that poor people would have access to a lawyer. “It isn't much good to say you have the right to get your property back if you can't afford a lawyer,” said the late Rep. Henry Hyde (R-Ill.), a champion of forfeiture reforms. Unfortunately, after the 9-11 terror attacks many of the CAFRA reforms were weakened by provisions slipped into the 2001 PATRIOT Act with no notice.

It was my privilege to “ghost write” for Rep. Hyde, my good friend, a special Cato Institute report, Forfeiting Our Property Rights: Is Your Property Safe from Seizure that is still available online.

Is Your Property Safe from Seizure?

To this day, most Americans don't realize the U.S. government can take people's homes, land, cars, and money without charging them with a crime - and the reason could be as mundane as violating an outdated law.

As a Pulitzer Prize-winning series exposing forfeiture in the Pittsburgh Press so aptly put it: “The billions of dollars that forfeiture brings into law enforcement agencies is so blinding that it obscures the devastation it causes the innocent.”

One source of defensive measures against civil forfeiture can be found on the website of Forfeiture Endangers American Rights (FEAR), an excellent anti-forfeiture group founded by California attorney, Brenda Grantland. They also provide a list of forfeiture defense attorneys.

But the most effective way to keep your wealth out of harm’s way is to diversify your assets offshore. Stash your gold securities and cash in a safe deposit box in Switzerland or Austria... set up an account at a top private bank overseas... ensure your economic survival by acquiring a second passport... open a brokerage account in Hong Kong.

I’ve been helping people take these simple steps to protect their property for over two decades. It’s the only way I know to truly safeguard your assets from government seizure.

Get started with your own contingency plan here.