Civil Forfeiture and Adoption: A Closer Look
One of the departing initiatives taken by retiring US Attorney General Eric Holder was to impose limits on a legal process called “adoption.”
This is a process that allows local, county, or state police agencies to confiscate assets under federal civil forfeiture laws. In effect, the federal government “adopts” the forfeiture and return up to 80% of the proceeds to the agency that originated the seizure.
The federal government calls this processing “equitable sharing.” A better term would be “legalized theft.” It’s almost beyond belief that the federal government would actively encourage police departments to keep most of the money they seize, but they do. Not surprisingly, this inherently corrupt “policing for profit” scheme has led to abuse after abuse.
Civil forfeiture is a procedure that permits police to confiscate property without convicting, or even charging, the owner with any crime.
The cases have names like these:
- United States vs. 867 County Road 227
- United States vs. $124,700 in US Currency
- United States vs. James Daniel Good Real Property
Federal vs. State Laws
Why don’t police seize assets under state law instead?
Usually, it’s because state laws require that seized assets be earmarked for specific purposes, such as education, or deposited in the state treasury.
But in a federal adoption, up to 80% of the value of the seized assets are handed to the seizing agency. Local prosecutors get up to 5% of the net proceeds.
Since adoption began in 1984, the Justice Department has “equitably shared” billions of dollars with seizing agencies, with total “sharing” of more than $400 million per year.
The Legal Theory Behind Civil Asset Forfeiture
The legal theory behind civil forfeiture is that property—not its owner—is guilty of a crime.
And, if the government alleges that your property somehow was involved in or facilitated a crime, you can lose it.
Because civil forfeiture is a civil procedure, none of the protections that would apply to a criminal proceeding are in place.
Your property is presumed guilty.
If you can’t prove that it’s “innocent,” you can lose it.
If you don’t have $20,000 or so to hire an attorney who specializes in civil forfeiture cases, you’re unlikely to ever get it back.
US Attorney General Eric Holder’s Reform: Misinterpretations and Reality
Holder’s action is a welcome start to civil forfeiture reform. But it’s not nearly as big a deal as the media have made it out to be.
And Holder’s successor, Loretta Lynch, a forfeiture lover who boasted about seizing more than $900 million in 2013 alone, could end the restrictions at the stroke of a pen.
For starters, the media got the story wrong.
In an article entitled “Eric Holder’s Good Deed,” The Wall Street Journal wrote that the Justice Department was suspending adoption altogether. The Daily Kos wrote that Holder was ending most types of civil forfeiture. Another article claimed that Holder “was ending the Federal Government’s ‘Equitable Sharing’ program, otherwise known as civil forfeiture.”
Some people took that to mean that Holder had abolished civil forfeiture altogether, and a social media frenzy on Facebook and Twitter began. Forfeiture victims were even asking if they could get their property back.
Unfortunately, Holder didn’t abolish civil forfeiture… not even close.
The text of Holder’s order makes that very clear, although not many reporters or social media users seem to have read it. And even if his successor doesn’t reverse his reforms, they won’t have much impact on civil forfeiture, because adoption is only one of many ways that forfeitures can be processed under federal law.
US Attorney General Eric Holder’s Targeted Reforms: Limiting Civil Forfeiture for Public Safety
What Holder did was to restrict adoption to a specific list of offenses involving “public safety.”
The list includes firearms, ammunition, and child porn. But it no longer includes cash, so the infamous highway shakedowns of motorists for their cash by police in many states can no longer be processed as easily under federal law.
But cash seizures from motorists are only a tiny part of the nationwide civil forfeiture “industry.” And Holder’s order doesn’t affect adoption in seizures by state/federal joint investigations and task forces. Seizures that occur under federal seizure warrants likewise are exempted.
So if a sheriff in Texas really wants that $9,000 you’re carrying in your vehicle, he can confiscate it by getting a federal judge to issue to seizure warrant, or under the authority of a federal/state task force.
The forfeiture defense attorney Brenda Grantland, founder of Forfeiture Endangers American Rights, explains the sordid process in detail.
I suspect that Holder issued the order to burnish his image with civil libertarians before he leaves office. He has a lot to account for, including more prosecutions of government whistleblowers than all other attorney generals that preceded him combined.
The Global Spread of Civil Forfeiture
Civil forfeiture is no longer a uniquely US phenomenon.
The US has spearheaded the cancerous growth of forfeiture laws worldwide. It even has an “international sharing” program for civil forfeiture of property in other countries. During the last 30 years, the federal government shared hundreds of millions of dollars with seizing agencies in other countries.
However, most other countries still don’t have civil forfeiture laws in place. A handful of nations, mostly English speaking, have enacted them, but in a much milder form than the US.
Generally, these laws permit civil forfeiture in cases only in which a criminal conviction isn’t possible because the suspect is deceased, incapacitated, or has fled to avoid prosecution.
Many other countries will enforce US civil forfeiture orders. But only after either a criminal conviction or at least reviewing actual evidence that the property in question actually has a criminal origin.
So, in addition to all the other advantages I’ve written about for international investing, you can add one more. By investing offshore, you make it more difficult for the US government to seize your assets in a civil forfeiture.
Recommended Resources: What You Can Do to Protect Yourself
- Why have an offshore bank account?
- Reasons to use an offshore structure.
- Asset protection strategies (domestic and offshore).
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