New Data Analysis Shows Revised Department of Justice Forfeiture Policy Would Stop Only a Fraction of Seizures

IJ Client and Attorneys to Tell Congress That Recent Reforms Are a Good Start, but Legislation Is Needed to Protect Americans’ Fundamental Rights

Arlington, Va.—With Congress set to consider comprehensive reforms to the federal government’s civil forfeiture statutes on Wednesday, a new analysis reveals that the Department of Justice’s (DOJ) recently announced policy change curtailing federal civil forfeiture actions would only affect a fraction of seizures. In light of the findings, on Wednesday, two attorneys from the Institute for Justice, Darpana Sheth and Robert Everett Johnson, as well as IJ client Jeff Hirsch, will testify before Congress that further reforms are urgently needed.

In January, Attorney General Eric H. Holder Jr. announced that the DOJ would prohibit federal officials from “adopting” civil forfeitures from local law enforcement agencies. Adopted forfeitures occur when local law enforcement officials request that the DOJ to handle the case in federal court. But this policy change would not end the department’s civil forfeiture program. Indeed, today’s analysis demonstrates that adoption cases are only a small subset of the DOJ’s equitable sharing program.

Researchers at the Institute for Justice reviewed six years of DOJ forfeiture data, from 2008 through 2013, obtained through a Freedom of Information Act request. They found that the vast majority of seizures, including most that occur under the controversial equitable sharing program, would continue after the policy change:

  • Only about a quarter—25.6 percent—of properties seized under equitable sharing were federal “adoptions” of properties seized by state or local law enforcement, the kind of seizures the new policy targets. The rest resulted from joint task forces or joint investigations exempt from the new rules. 
  • Of the nearly $6.8 billion in cash and property seized under equitable sharing from 2008 to 2013, adoptions accounted for just 8.7 percent.
  • Adoptions for equitable sharing also made up a small percentage of overall DOJ seizures—just 10 percent. And as the DOJ acknowledged when announcing the policy shift, adoptive seizures accounted for only three percent of the value all seized properties.

Read the complete analysis here.

“The Attorney General’s policy change was a welcome first step toward addressing the vast injustices perpetuated by the federal civil forfeiture system, but it is clear from the Department of Justice’s own data that much remains to be done,” said Scott Bullock, a senior attorney at the Institute for Justice, the nation’s leading legal advocate against civil forfeiture. “The Justice Department must take further steps to curtail civil forfeiture, and Congress must pass strong reform legislation. Only then will Americans’ property and due process rights be restored.”

In addition to only affecting a small portion of forfeitures, the new policy also does not address the wholly inadequate legal standards in federal civil forfeiture law, most notably that civil forfeiture enables law enforcement to take property without convicting or even charging the owner with a crime. IJ found that 78 percent of properties in the DOJ system were seized for civil forfeiture. Only 22 percent were seized for criminal forfeiture, which requires a conviction.

On Wednesday, the House Committee on the Judiciary Subcommittee on Crime, Terrorism, Homeland Security, and Investigations will host a hearing to discuss the DOJ’s recent reforms, as well as legislative proposals. Also on Wednesday, House Committee on Ways and Means Subcommittee on Oversight will hold a hearing examining the Internal Revenue Service’s use of civil forfeiture.

Hearing Details

Federal Asset Forfeiture: Uses and Reforms
House Committee on the Judiciary Subcommittee on Crime, Terrorism, Homeland Security, and Investigations
Institute for Justice Attorney Darpana Sheth will testify.
Testimony available here (pdf)
Wednesday, February 11 at 10:30 a.m
Room 2141 Rayburn House Office Building

Protecting Small Businesses from IRS Abuse 
House Committee on Ways and Means Subcommittee on Oversight
Institute for Justice Attorney Robert Everett Johnson and client Jeff Hirsch will testify.
Testimony available here and here(pdf)
Wednesday, February 11 at 10:00 a.m.
Room B-318 Rayburn House Office Building

The hearings come a week after the Institute for Justice released “Seize First, Question Later: The IRS and Civil Forfeiture.” The report found that Internal Revenue Service has seized millions of dollars from thousands of Americans’ bank accounts without proof of criminal wrongdoing.

According to IRS data obtained by IJ and detailed in the new report:

  • From 2005 to 2012, the IRS seized more than $242 million for suspected structuring violations in more than 2,500 cases, and annual seizures increased fivefold over those eight years.
  • At least a third of those cases arose from nothing more than a series of cash transactions under $10,000, with no other criminal activity alleged.
  • Four out of five IRS structuring-related forfeitures were civil, not criminal, so the IRS faced a lower evidentiary standard and did not need to secure a conviction to forfeit the cash, and owners had fewer rights in fighting to win it back.
  • IRS data do not indicate how long property owners who get all or some their money back are deprived of their funds, but it is likely a long time: Forfeitures that the IRS won took nearly a year to complete.
  • Nearly half of the money initially seized by the IRS was not ultimately forfeited, raising concerns that the IRS seized more than it could later justify to forfeit the cash.