Lyndon McLellan is one of the thousands Americans whose property was seized through civil forfeiture, which allows law enforcement to seize cash and property without ever charging anyone with any crime.
The Institute for Justice's Initiative to End Policing for Profit
Civil Forfeiture
Civil forfeiture laws allow the government to take cash, cars, homes and other property suspected of being involved in criminal activity. Unlike criminal forfeiture, with civil forfeiture, the property owner doesn’t have to be charged with, let alone convicted of, a crime to permanently lose his property.
Federal Reform
Current federal forfeiture laws create financial incentives for law enforcement to pursue profit over the fair administration of justice, facilitate the circumvention of state laws intended to protect citizens from abuse, encourage the violation of due process and property rights of Americans, and disproportionally impact people of color and those of modest means.
The Fifth Amendment Integrity Restoration (FAIR) Act would enact simple, commonsense but urgently needed changes to federal civil forfeiture law.
- The FAIR Act would curb the profit incentive by prohibiting the Department of Justice from retaining seized assets for its own use. Property forfeited by the DOJ would have to go to the General Fund of the Treasury. That was where forfeited property and funds were sent before the law was changed in 1985. Since the profit incentive was put into the law, forfeiture revenue—and abuses—have skyrocketed.
- The bill would abolish the equitable sharing program for civil forfeiture, which allows local and state law enforcement agencies to circumvent stronger state restrictions by teaming up with federal agencies to pursue forfeitures under more lucrative federal law.
- It would require the government to prove property is subject to forfeiture by “clear and convincing” evidence, instead of a mere “preponderance of the evidence” which is currently required.
- It would restore the principle of “innocent until proven guilty” by shifting the burden from the property owner to the government to prove that the owner had knowledge that his property was used in criminal activity.
- The FAIR Act would provide indigent property owners with appointed counsel in civil forfeiture proceedings.
- It would protect innocent small business owners by codifying the new IRS policy limiting prosecution of “structuring” cases to those involving funds not derived from a legitimate source. Anti-structuring laws were aimed at catching serious criminals who made frequent, small cash transactions to avoid bank reports to the U.S. Treasury Department concerning large cash transactions. Increasingly, those laws have been used to take money from innocent small businesses who deal with a lot of cash.
- The FAIR Act would insert a criminal intent requirement that individuals knowingly“structured” their cash transactions for the purpose of evading currency reporting requirements.
- It would include a hearing requirement to allow individuals and small business owners a prompt opportunity to contest the seizure of their funds for alleged structuring violations.
A coalition of organizations, including the Institute for Justice, support civil forfeiture reform that will effectively address defects in current law and procedures that have becoming serious threats to the rights of property owners.
Reform Resources
Fifth Amendment Integrity Restoration Act of 2014
Background Materials
- Coalition Statement for Forfeiture Reform
- DOJ Policy Change Backgrounder
- Policing for Profit — Federal Government
Congressional Testimony
- Darpana Sheth
Senate Judiciary Committee
April 15, 2015 - Russ Caswell
Senate Judiciary Committee
April 15, 2015 - Robert Everett Johnson
House Ways and Means Committee Subcommittee on Oversight
February 11, 2015 - Jeff Hirsch
House Ways and Means Committee Subcommittee on Oversight
February 11, 2015 - Darpana Sheth
House Judiciary Committee Subcommittee on Crime, Terrorism, Homeland Security, and Investigations
February 11, 2015
Initiative Cases
Eh Wah
While Eh Wah was driving through Oklahoma, the Muskogee County Sheriff’s Department seized more than $53,000 from his car, which included cash donations made to a Thai Orphanage and funds being raised for a nonprofit Christian school by a Burmese Christian rock band. But after IJ got involved, the county returned the seized cash.
Ken Quran
In June 2014, the government seized his entire bank account—more than $150,000. This was money that Ken worked for years to earn, and that he was counting on for his retirement. Thankfully, after IJ filed a petition on his behalf, the IRS agreed to return his entire life savings.
New Mexico Senators Lisa Torraco and Daniel Ivey-Soto
In 2015, the New Mexico legislature voted unanimously to abolish civil forfeiture. But cities across the state are refusing to follow the law. Now Torraco and Ivey-Soto want to compel Albuquerque to end its illegal use of civil forfeiture once and for all.
Jack and Jeana Horner
The Horners fought against civil forfeiture for more than nine months to get their two cars back. They won, and now they are suing to ensure that no one else will ever have to go through the same ordeal.
Randy Sowers
Randy Sowers, a Maryland dairy farmer, had his bank accounts seized by the IRS under civil forfeiture laws.
Charles Clarke
Charles Clarke is a 24-year-old college student, who spent over 5 years to save up $11,000—only to have it seized by law enforcement officials before he was scheduled to board a flight at the Cincinnati/Northern Kentucky airport.
Lyndon McLellan
One year ago, without any warning, agents from the IRS seized Lyndon McLellan’s entire bank account, totalling more than $107,000.
Carole Hinders
The IRS seized nearly $33,000 from Carole Hinders, even though she did nothing wrong.
Hirsch Brothers
The Hirsch brothers run an honest business, and yet the IRS seized their entire bank account and refuses to give it back.
Sourovelis Family
Philadelphia’s forfeiture machine stacks the deck against property owners and leads city officials to police for profit instead of justice. To end these unconscionable and unconstitutional practices, the Institute for Justice and a group of property owners have brought a major, class-action lawsuit in federal court.
Carol Thomas
Even though she was an innocent property owner, Carol Thomas was caught in the legal nightmare of civil forfeiture.
Zaher El-Ali
Zaher El-Ali lost his car to the government because someone else got a DWI with his Chevrolet Silverado.
Russ Caswell
Russ Caswell and his family have owned and operated the Motel Caswell in Tewksbury, Mass., for two generations. But by using civil forfeiture, the U.S. Department of Justice and the Tewksbury Police Department teamed up to try to forfeit and cash in on the Motel Caswell.
Tony Jalali
IJ client Tony Jalali nearly lost his $1.5 million office building in Anaheim, California because he rented a suite to a medical marijuana dispensary that was legal under state law.
Dehko Family
The government shouldn’t use civil forfeiture to take money from people who’ve done nothing wrong. But the IRS seized the Dehko family’s grocery store’s bank account and they had to fight for a year to get it back.
Policing for Profit
In 43 states, law enforcement gets to keep some or all of the cash, cars, homes or other property that they seize.
Report: Policing for Profit
By Dick M. Carpenter II, Ph.D., Lisa Knepper, Angela C. Erickson and Jennifer McDonald, with contributions from Wesley Hottot and Keith Diggs
Civil forfeiture laws pose some of the greatest threats to property rights in the nation today, too often making it easy and lucrative for law enforcement to take and keep property—regardless of the owner’s guilt or innocence. This updated and expanded second edition of Policing for Profit: The Abuse of Civil Asset Forfeiture makes the case for reform, grading the civil forfeiture laws of each state and the federal government, documenting remarkable growth in forfeiture activity across the country, and highlighting a worrisome lack of transparency surrounding forfeiture activity and expenditures from forfeiture funds.
Help us spread the word
It is time to end civil forfeiture.
Forfeiture Research
Seize First, Question Later: The IRS and Civil Forfeiture
Thanks to federal civil forfeiture laws, the Internal Revenue Service has seized millions of dollars from thousands of Americans’ bank accounts without proof of criminal wrongdoing. The IRS claimed the funds were illegally “structured”—deposited or withdrawn in small amounts to evade federal reporting requirements imposed on banks—and simply took the money.
Bad Apples or Bad Laws?: Testing the Incentives of Civil Forfeiture
Critics of civil forfeiture have long argued that allowing law enforcement to take property and pocket the proceeds creates incentives to put profits ahead of justice. This report shows that the incentives in civil forfeiture laws do change behavior, and not in a good way: Civil forfeiture creates a strong temptation for law enforcement to seize property to pad their own budgets.
Arizona’s Profit Incentive in Civil Forfeiture: Dangerous for law enforcement; Dangerous for Arizonans
Arizona law enforcement’s forfeiture revenue grew almost 400 percent from 2000 to 2011, with the largest share of proceeds spent on salaries and benefits.
Rotten Reporting in the Peach State: Civil Forfeiture in Georgia Leaves the Public in the Dark
Georgia law enforcement agencies routinely fail to publicly report their forfeiture activities, despite a state law and a successful lawsuit requiring disclosure.
Forfeiting Justice: How Texas Police and Prosecutors Cash In On Seized Property
From 2001 to 2007, Texas law enforcement’s take from forfeited property tripled—and nearly a quarter was spent on salaries and overtime.
A Stacked Deck: How Minnesota’s Civil Forfeiture Laws Put Citizens’ Property at Risk
From 2003 to 2010, forfeiture revenue in Minnesota jumped 75 percent, even as crime rates declined, and the average value of forfeited property was only $1,000.
Inequitable Justice: How Federal “Equitable Sharing” Encourages Local Police and Prosecutors to Evade State Civil Forfeiture Law for Financial Gain
Federal laws encourage local law enforcement to skirt state property rights protections to cash in on seized property.
What is the difference between Civil and Criminal Forfeiture?
Civil Forfeiture
Civil forfeiture cases are in rem proceedings—meaning that they are technically brought against the property itself rather than its owner. This legal fiction means that police and prosecutors can take and sell your cash, cars, homes or other property without having to convict you or even charge you with any wrongdoing. Fighting back means having to pay for a lawyer yourself or go it alone. And instead of the government having to prove your guilt, under civil forfeiture you must prove your innocence. It is an upside-down world that where the government holds all the cards and has the financial incentive to play them to the hilt.
VS.
Criminal Forfeiture
Criminal forfeiture is when the government takes one’s property following a criminal conviction. Criminal forfeiture cases proceed against the person whose property the government is trying to take. This means that the accused is afforded all of his or her rights under the U.S. Constitution, including the right to have an attorney provided if he or she cannot afford one. At the same time, the government must prove beyond a reasonable doubt that the person whose property they are trying to take is guilty of the underlying offense.
Legislative Efforts
Current Legislation
Fifth Amendment Integrity Restoration Act of 2014 (S.B. 2644)
Civil Asset Forfeiture Reform Act (H.R. 5212)
Model Legislation
Needed Reforms
- Profit Incentive: Because law enforcement agencies often get to keep and use all the civil forfeiture proceeds they take in, agencies have an incentive to seize and forfeit as much property as possible. But police and prosecutors should be pursuing justice, not profits. Both the state and federal governments should amend their civil forfeiture statutes to require that all civil forfeiture proceeds be deposited either into the state’s general treasury or into an account dedicated to education or compensating crime victims.
- Burden of Proof: One of the most frightening aspects of civil forfeiture is that it allows police and prosecutors to take and keep people’s property without ever convicting them of—or even charging them with—a crime. And to keep their property, owners in many states have to prove a negative—namely, that the property was not connected to a crime. This harsh procedural rule causes many innocent owners to give up not because they did anything wrong, but because proving their innocence is too hard. Both the states and federal government should follow the example of Minnesota, which amended its law to require a criminal conviction or its equivalent before the government could forfeit one’s property.
- Equitable Sharing: Some states have enacted civil forfeiture reforms that, for instance, block law enforcement agencies from keeping forfeited property for their own use. But by using a tool called “equitable sharing,” police and prosecutors circumvent those reforms by handing over forfeiture cases to the federal government, which in turn lets police and prosecutors keep up to 80 percent of whatever it forfeits. To prevent these end runs, and to ensure that the federal government respects the states’ wishes, federal law should require the government to distribute equitable sharing proceeds in the same manner as required by state law.
About the Institute for Justice
Founded in 1991, the Institute for Justice is what a civil liberties law firm should be. As the national law firm for liberty, we stick to a clear mission engaging in cutting-edge litigation and advocacy both in the courts of law and in the court of public opinion on behalf of individuals whose most basic rights are denied by the government. Our four pillars of litigation are private property, economic liberty, free speech and school choice. Simply put, we seek a rule of law under which individuals can control their destinies as free and responsible members of society.
The Institute for Justice is a 501(c)(3) organization; donations are tax-deductible.
Forfeiture Initiative Team
Scott Bullock
Scott Bullock joined the Institute for Justice at its founding in 1991 and now serves as a senior attorney. Although he has litigated in all of the Institute's areas, his current work focuses on property rights and economic liberty cases in federal and state courts.
Dan Alban
Dan Alban serves as an attorney with the Institute for Justice. He joined the Institute in September 2010 and litigates cutting-edge constitutional cases protecting free speech, property rights, economic liberty and other individual liberties in both federal and state courts.
Renée Flaherty
Renée Flaherty is an attorney with the Institute for Justice. She joined the Institute in 2013 and litigates cases to secure economic liberty and school choice.
Robert Frommer
Robert Frommer serves as an attorney with the Institute for Justice. He joined the Institute in August 2008 and litigates cases to protect political speech, promote economic liberty, and secure individuals’ rights to private property.
Wesley Hottot
Wesley Hottot joined the Institute’s Washington office (IJ-WA) in 2013 after working in both the Institute’s headquarters office and its Texas office.
Matt Miller
Matt Miller is the executive director of the Institute for Justice Texas office, where he fights to secure property rights, economic liberty, freedom of speech and school choice.
Darpana Sheth
Darpana Sheth is an attorney with the Institute for Justice. She joined the Institute in February 2010 and litigates cases to promote economic liberty, protect political speech, and secure property rights.
Robert Everett Johnson
Robert Everett Johnson is an attorney at the Institute for Justice. He joined the Institute in 2014 and litigates cases protecting private property, economic liberty, and freedom of speech.