Forfeiture Endangers American Rights Foundation
is a 501(c)(3) charitable organization. Donations are tax deductible.
20 Sunnyside Suite A-419, Mill Valley, CA 94941 Phone: 415-389-8551 or toll-free 888-FEAR-001

What's new at FEAR
Updated August 2, 2008

At long last, we now have a process for appointing counsel to represent homeowners who can't afford an attorney!

Nearly eight years after CAFRA's right to counsel provisions took effect, Attorney John Balazs and his clients Rollie and Scharlynn Trout blaze the first trail establishing an appointment of counsel process for owners whose primary residence has been seized.

Congress responded to numerous horror stories of abusive forfeiture actions across the nation by enacting our nation’s first and only federal forfeiture reform, the Civil Asset Forfeiture Reform Act of 2000 (CAFRA). One of CAFRA’s key provisions requires courts to appoint counsel to represent owners of seized homes who cannot afford a lawyer – upon request of the forfeiture victim. But sadly, in the eight years since Congress enacted CAFRA only a small handful – out of tens of thousands of forfeiture cases – have received court-appointed counsel now required by law. (For more information, and how we are working to save CAFRA's right to counsel provisions, see FEAR's Gideon Project.)

Congress charged the Legal Services Corporation with the job of providing attorneys for homeowners whose property has been seized and cannot afford a lawyer, and estimated that it would reimburse LSC $5 million for representation of eligible property owners over the 2001-2005 period. However, LSC reported to Congress that LSC received only “one request from court personnel” for representation mandated by CAFRA prior to 2003, plus “several additional requests for cases in Washington DC and California” during the year ending March, 2004. Then, during their 2004-2005 reporting period, “LSC obtained representation for a claimant in California.”¹ And in February 2008, LSC said that appointments for claimants defending their residences “are approaching one a month” – nationwide.

Until now, even on the rare occasion when someone in the courtroom knew to request appointment of counsel, no process existed by which to do so.

On July 29, 2008, United States District Court Judge Garland E. Burrell, Jr. granted pro se Claimants Rollie and Scharlynn Trout's Application for Appointment of Counsel and Order, appointing Sacramento attorney John Balazs to represent the Garden Valley, California couple. Mr. Balazs sought appointment to represent the Trouts pursuant to 18 U.S.C. § 983 (b)(2)(A), which provides that, upon request by an owner who "is financially unable to obtain representation," and whose primary residence has been seized, "the court shall insure that the person is represented by an attorney for the Legal Services Corporation." The Trouts supported the Application with financial affidavits (CJA financial affidavit form here), and attorney Balazs additionally attached a letter from Legal Services Corporation consenting to his appointment under the statute. LSC Vice President and General Counsel Victor Fortuno pointed out that payment for the Trouts' counsel will come from the government's asset forfeiture fund:

"... Payment for counsel is handled through court order at CJA [Criminal Justice Act] rates regardless of the outcome of the case. After the Court issues an order for fees, the U.S. Attorney's office submits that order to the Department of Treasury for payment from the forfeiture fund. ... "

LSC also provided a sample order for appointment of counsel for homeowners (MS Word or Rich Text Format). Upon request of the forfeiture victim CAFRA requires judges to appoint counsel to represent owners of seized homes who cannot afford a lawyer.² Also upon request, CAFRA allows appointment of counsel in civil forfeiture cases that do not involve a primary residence whenever the claimant has appointed counsel in a related criminal case.³

Endnotes:

1. Legal Services Corporation Semiannual Report to the Congress for the Period October 1, 2003 – March 31, 2004, page 11; and LSC Semi-Annual Report to Congress for the Period October 1, 2004 – March 31, 2005, page 17.

2. 18 U.S.C. § 983(b)(2).

3. 18 U.S.C. § 983(b)(1).

Florida court of appeals overturns order for police to return money seized through Bradenton’s “Contraband Forfeiture Agreement,” remands case to allow forfeiture victim to seek alternative avenues for relief.

On June 20, 2008, nearly two years after Bradenton Police seized $10,020 from Delane Johnson, Florida’s Second District Court of Appeal overturned a judge's order that would have required the City’s police to return the money to Mr. Johnson.

Hardly the “complete victory” claimed by Bradenton’s police chief, the appeals court held that Johnson had used an improper legal avenue in seeking relief, and remanded the case back to the trial court with instructions to give Johnson an opportunity to seek further relief by filing an amended pleading.

In preserving Johnson’s continuing case against the City of Bradenton, the court acknowledged: “Although Johnson may have incorrectly sought relief via mandamus, as the trial court correctly recognized, his petition did set forth sufficient facts to demonstrate that he may have a viable claim against the City.”

Mr. Johnson had been in front of his apartment in July, 2006 when officers investigating a neighborhood robbery approached him. Once police discovered the twenty-three year old’s roll of cash, which Johnson told the officers came from his mother’s business, they arrested Johnson for violating a Florida statute that requires persons engaged in a trade or businesses to report receipt of more than $10,000 in currency received in a single business transaction or two related transactions.

Police took Johnson to the county jail, where they presented him with a document titled "Bradenton City Police Department, Bradenton, Florida, Contraband Forfeiture Agreement." The so-called “agreement” stated that "[i]n consideration of the department forgoing its right to file an action under the Florida Contraband Forfeiture Act and to avoid the costs, delay and uncertainty of litigation to all parties," Johnson would surrender the money to the department and release the department from any damages, suits or claims related to the seizure of the property. It further required Johnson to acknowledge that he voluntarily agreed to enter into the agreement without benefit of counsel, waived the right to review of the agreement by a court, mediator or arbitrator, and waived the right to a jury trial.

Johnson signed the agreement surrendering the money to the City. He was never charged with any crime.

Johnson later filed a petition for a writ of mandamus seeking to stop the Bradenton Police Department from entering into forfeiture contracts with arrestees and to require the City to file a civil action for forfeiture of the $10,020. In February 2007 Circuit Judge Peter Dubensky sharply criticized the Bradenton Police Department’s forfeiture agreement policy, finding, among other things, that the contract was invalid for lack of consideration. He ordered the City to either properly pursue a forfeiture proceeding to obtain the money or to return the money to Johnson.

The appeals court reversed Judge Dubensky’s order for police to return the money, ruling that Johnson incorrectly sought relief via mandamus, “a common law remedy to enforce an established legal right.” The appellate court held that, although Johnson set forth legal facts that may warrant relief, he may not “use mandamus to determine whether the City had a right to use forfeiture contracts generally, whether his due process rights were violated, whether the agreement he entered into with the City was valid,” or “whether he had a right to return of the money.”

In remanding the case to the lower court “without prejudice,” the appellate court cleared the way for Johnson to continue this battle for justice and due process. "We are deciding what our options are," said Johnson's attorney, Varinia Van Ness. "We will not stop pursuing this until my client is made whole and his property is returned." One option, Van Ness said, is filing a civil law suit.

Upon the June 2008 appeals court remand for further proceedings in the case Bradenton City police immediately claimed victory. “This is a complete win for the city,” Police Chief Michael Radzilowski said. "The city was denied due process. That was our complaint all along."

Bradenton police Major William Tokajer said BPD has followed Dubensky's order since 2006. “Although our actions have been proven through the courts to be legal in the methods we were using previously, we are still going to review them and utilize the formal forfeiture process while in the review stages of our old process,” he said.

However, in a letter regarding the order signed by Judge Dubensky to the Bradenton Herald published February 21, 2007, attorney Van Ness wrote that Judge Dubensky’s February 9, 2007 ruling regarding the forfeiture agreement contracts “has had little effect, if any, on the manner in which the Bradenton Police Department takes people’s property and twists the law!” Van Ness wrote that Detective Mike Skoumal of the Bradenton Police Department had testified at a deposition, unrelated to the Johnson case, that he used the "contract" to take someone's property during the prior week..

Tokajer had also responded to Judge Dubensky's ruling in 2007 – at that time by continuing to back the forfeiture agreement. He gave no indication as to whether the department would default to the state forfeiture laws any time in the future: "We will review the judge's ruling and consult with our legal counsel to determine which action we will take. ...We suspended the policy last year while it was being reviewed by our attorneys. Minor changes were made and the civil agreement was deemed legal by our counsel," Tokajer said. Those “minor changes” gave victims of Bradenton police piracy policy five days to cancel the agreement, still completely bypassing the court system and even the rudimentary elements of due process.

Bradenton’s Herald-Tribune examined the forfeiture agreement program and “found cases in which police took money from people who were arrested on crimes other than drug charges, or who were not arrested at all. Several people said they did not know what they were signing.”

Police chief Radzilowski said the department has no intention of returning to using the contracts since Judge Dubensky questioned their use in his rebuke in February 2007. Now, he says, Bradenton police use the courts to review forfeiture requests.

As attorney Van Ness said, her client’s case against the police has not ended. Police have not returned Johnson's money. "I disagree with the court's ruling, but I respect it," Van Ness said. "If we have to pursue another course of action, we will."

Forfeiture law CLE project update: FEAR has now begun stage one of the Gideon Project: producing a basic forfeiture lawyer training video (DVD) which will qualify for CLE credit in those states that require CLE. Preproduction work is well underway on the first CLE video, which FEAR hopes to publish in late spring 2008. Our panel of speakers excitedly prepare for the filming portion soon to come. February 2008 update

Special 15% discount for FEAR Brief Bank II & Private Collection subscribers:

Cassella: Asset Forfeiture Law in the U.S.

Asset Forfeiture Law in the United States, by Stefan Cassella,
Deputy Chief, Asset Forfeiture and Money Laundering Section, U.S. Department of Justice,
hardcover, 950 pages + CD-Rom. ISBN-13: 978-1-929446-99-5 / ISBN-10: 1-929446-993

List price: $150. Available at Juris Publishing for $142.50.
FEAR's Brief Bank subscribers receive a 15% discount from the $150 list price!

Asset Forfeiture Law in the United States, collects in one place all of the law on administrative, civil and criminal forfeiture procedure - including the changes made in 2006. This handy one volume treatise serves as resource to anyone needing a comprehensive discussion of any of the recurring and evolving forfeiture issues that arise daily in federal practice.

About the Author: Stefan D. Cassella is one of the federal Government’s leading experts on asset forfeiture law. As a federal prosecutor, he has been litigating asset forfeiture cases since the late 1980's and is now the Deputy Chief of the Justice Department’s Asset Forfeiture and Money Laundering Section. Mr. Cassella was the principal author of much of the federal forfeiture legislation, and contributed to the Civil Asset Forfeiture Reform Act of 2000 (CAFRA), and the applicable sections of the Federal Rules of Civil and Criminal Procedure, and is the author of numerous law review articles on asset forfeiture and money laundering. He teaches asset forfeiture procedure at the Federal National Advocacy Center at the University of South Carolina, and has given numerous presentations on the subject at Cambridge University and other institutions. In the 1980s, Mr. Cassella was Senior Counsel to the U.S. Senate Judiciary Committee. He has a J.D. from Georgetown University and a Bachelor of Science degree in Applied Physics from Cornell University.

FEAR's exciting Continuing Legal Education (CLE) project

The team that produced FEAR's Asset Forfeiture Defense Manual has assembled additional creative minds to develop the first in a series of DVD asset forfeiture law training Continuing Legal Education (CLE) programs.

The federal government spends vast sums of money prosecuting forfeiture cases. Their prosecuting forfeiture attorneys are well trained, yet the forfeiture victim is often forced to defend his case without a lawyer. Judges don’t always know they can (or in some cases must) appoint counsel to defend owners of seized property. Even when they do, there is a shortage of experienced forfeiture counsel willing to accept the court appointments.

One of the key provisions of the federal Civil Asset Forfeiture Act of 2000 (CAFRA), for which FEAR lobbied for eight years, requires courts to appoint counsel to represent owners of seized homes who cannot afford a lawyer, upon request of the forfeiture victim. But what happens if no one at the court tells the victim about his rights under this statute?

Can you imagine trying to defend against summary judgment pro se, when the well trained federal prosecutor argues such things as collateral estoppel, the relation back doctrine, standing, or that the forfeiture is remedial and therefore the Excessive Fines clause does not apply? Forfeiture has a difficult learning curve, even for attorneys. Blunders by well-meaning, but untrained, lawyers handling their first forfeiture cases often cause irreparable damage. Successful litigation requires knowledge of civil and criminal procedure, substantive criminal law, property law, and constitutional law – in addition to forfeiture law.

An Internet search for forfeiture law courses revealed only one CLE course on the subject offered anywhere in the United States (a three-unit "overview" of asset forfeiture law); plus many dozens of extensive forfeiture training courses currently being offered by government agencies exclusively to prosecutors and law enforcement officers.

Without well-trained attorneys, forfeiture victims are helpless to defend themselves. In the seven years since FEAR won the battle for federal legislation requiring courts to appoint counsel to certain classes of victims who cannot afford a lawyer, only a small handful—out of thousands of forfeiture cases—have received court-appointed counsel now required by law. Even in the rare instances where judges appoint counsel to represent owners of seized property, Criminal Justice Act panel attorneys and Federal Public Defenders often don't know how to defend civil forfeiture cases.

FEAR's exciting new DVD program will qualify for CLE credit for lawyers in the 43 states that require continuing legal education, and will vastly increase the number of qualified forfeiture attorneys available nationwide, and assist lawyers handling their first forfeiture cases.

Our anecdotal evidence suggests that many victims entitled to counsel are not being told of that right—even now, seven years after the CAFRA reforms that we successfully lobbied for took effect on August 23, 2000. By now, there should be thousands of cases where counsel was appointed under CAFRA provisions. CAFRA assigned the Legal Services Corporation (LSC), in Washington, D.C., the responsibility of providing counsel to claimants whose homes were seized. LSC admitted that only $4,000 to $5,000 in attorneys fees had actually been paid out under that provision during the first five years after CAFRA took effect! The Congressional Budget Office projected that enforcement of the right to counsel provisions would cost the federal government $1 million per year.

FEAR did not lobby Congress for eight years for forfeiture reform only to have CAFRA's key provisions ignored!
With your help, FEAR's new forfeiture defense CLE program will expand the pool of qualified forfeiture lawyers nationwide.

“The right to be heard would be, in many cases, of little avail if it did not comprehend the right to be heard by counsel. Even the intelligent and educated layman…lacks both the skill and knowledge to adequately prepare his defense, even though he have a perfect one. He requires the guiding hand of counsel at every step in the proceedings against him. ”

– Gideon vs. Wainwright (US Supreme Court, 1963)

Please consider making a charitable donation to help fund FEAR's new forfeiture defense training CLE program. FEAR Foundation is a 501(c)(3) charitable organization. All donations to this project are fully tax-deductible. FEAR's federal tax ID number is 52-1847763.

February 2008 update

Former U.S. Representative Henry J. Hyde (R., Ill.),
died in his sleep at age 83 in the early morning Thursday, November 29, at Rush University Medical Center in Chicago.

We at FEAR will dearly miss this courageous, powerful man who made clear exactly "what is at stake in the issues surrounding civil forfeiture law: no less than the most fundamental rights American citizens have always cherished, but too often taken for granted.”

Henry Hyde retired from Congress in January after spending three decades as a moving force on Capital Hill. Representative Hyde sponsored our nation’s only federal forfeiture law reform, the Civil Asset Forfeiture Reform Act of 2000 (CAFRA). The powerful chairman of the House Judiciary Committee, waged "a war of attrition with the Department of Justice and local law-enforcement authorities" to get CAFRA enacted – the culmination of his seven-year crusade.

Representative Hyde's well-documented 1995 book, Forfeiting Our Property Rights, revealed the “the hoary doctrines of Anglo-American civil asset forfeiture law that have been resurrected like some jurisprudential Frankenstein monster, from the dark recesses of past centuries.” His introductory chapter continues: “In my view, a drug ‘war’ has been perverted too often into a series of frontal attacks on basic American constitutional guarantees – including due process, the presumption of innocence, and…unrelenting government assaults on property rights, fueled by a dangerous and emotional vigilante mentality that sanctions shredding the U.S. Constitution into meaningless confetti.”

Although most known for the Hyde Amendment that banned federal funds for abortions in 1976, former Representative Henry Hyde also introduced another so-called “Hyde Amendment,” enacted in late 1997 as an important safeguard against abusive prosecution. This Hyde Amendment has been hailed as a victory for defendants’ rights, and a timely response to abusive acts of government officials. The House overwhelmingly passed Rep. Hyde’s rider to the final 1997 Department of Justice appropriations bill, now codified as 18 U.S.C. § 3006A. The 1997 Hyde Amendment brought “a measure of sunshine” and “a measure of judicial oversight,” into a courtroom forum “far removed from the catacombs of DOJ’s internal review processes,” where issues of abusive prosecution had “heretofore been confined, and many would say, swept under the rug.”¹

The 1997 Hyde Amendment allows federal courts to award attorneys’ fees and costs to criminal defendants (who were not represented by assigned counsel paid for by the public) "where the court finds that the position of the United States was vexatious, frivolous, or in bad faith, unless the court finds that special circumstances make such an award unjust." Fees and other expenses awarded under this provision must be paid by the offending agency (most likely the U.S. Attorney’s Office) through the established procedures of the Equal Access to Justice Act (EAJA), which provides similar awards against the government in civil suits. Hyde’s original wording followed other EAJA provisions that apply to civil litigants who “substantially prevail,” but cries of “the sky is falling” from the DOJ resulted in the “vexatious, frivolous, or in bad faith” limitations in the final law.²
Click here to read more about the 1997 Hyde Amendment.

Thank-you, Henry Hyde, for your own “willingness to do the difficult things necessary to persuade Congress to act,” as well as for your work with FEAR in awakening America to the reality that “our treasured liberties are at stake,” and the "grave extent to which our constitutional protections have been violated and diminished in recent years."

Drug Money?
Welcome to the world of civil asset forfeiture: enriching the local police at your expense

by Jennifer Abel

Even if you're a law-abiding citizen who's never been convicted of a crime, local police are allowed to confiscate your property and money and keep up to 80 percent of it for themselves, with the legal stipulation that this windfall be spent only on programs likely to result in additional confiscations where the police can keep up to 80 percent of the booty for themselves.

That's addressed to you. And it's no joke.

Continue reading this article at Hartford Advocate.

Congratulations to FEAR president Brenda Grantland for another victory in United States versus One Star Class Sloop Named Flash II. On October 1, 2007, the U.S. District Court of Massachusetts ruled that her client’s sloop Flash II (formerly owned by the late President John F. Kennedy) is not subject to forfeiture at all.

Court rules sailboat formerly owned by President J. F. Kennedy not subject to forfeiture:
Government had no right to sell the sloop, nor does it have any right to pocket proceeds from that sale.

by Judy Osburn

First the government obtained a forfeiture judgment against the Star Class sloop “Flash II” without bothering to notify Dr. Kerry Lane, a successful anesthesiologist and principle owner of the prized sailboat. The Flash II was formerly owned by the young future president J.F. Kennedy when he triumphed by an unprecedented four and a half minute margin in the 1936 Atlantic Coast Championships.

Attorney Brenda Grantland achieved Dr. Lane’s first victory in this case in August 2006, when the First Circuit Court of Appeals vacated the default judgment that had been obtained in Dr. Lane’s absence. The appeals court held that due process requires the government to at least attempt to locate innocent owners with an interest in seized property. The First Circuit remanded

U.S.

v. One Star Class Sloop Sailbot Built in 1930 Named Flash II to the district court in Massachusetts for further proceedings in which Dr. Lane had an opportunity to be heard. In the meantime, however, the government sold the sailboat at auction without a minimum reserve, causing the boat to be sold at only about one tenth of it’s appraised value.

At trial the government conceded that Dr. Lane was totally innocent of any wrongdoing or negligence. Nevertheless, the government argued that Flash II was subject to forfeiture as proceeds traceable to drug money pursuant to 18U.S.C. § 981(a)(1). Boat restorer Ole Anderson had organized the consortium of investors who provided funding to purchase and restore the Flash II. The government attempted to support its theory that drug money could be traced to the Flash II through its cooperating witness, Gary Milo, who had pleaded guilty to trafficking 11,000 pounds of marijuana, for which he received a mere 18 days’ imprisonment due to his cooperation in building a forfeiture case against the Flash II. Milo testified that during the course of his lengthy illegal career he had hired Ole Anderson on a couple of occasions and that he paid him $16,000.

Ms. Grantland argued that the government offered no more than mere suspicion that any of the funds used by Ole Anderson to pay for maintenance of the Flash II included any portion whatsoever of Gary Milo’s $16,000 in tainted currency. If Gary Milo’s drug proceeds became commingled with Ole Anderson’s untainted funds, “whether in a bank account or in a tattered suitcase,” argued Grantland, “the government's burden of showing that money in the account or an item purchased with cash withdrawn therefrom is ‘traceable to’ illegal activity will be difficult, if not impossible, to satisfy.”¹ The forfeiture statute’s term “traceable to” means exactly what it says, Grantland continued in a post-trial memorandum, and the government's theory of forfeitability fades away without a trace once Gary Milo's drug money is transferred to Ole Anderson.

On October 1, 2007, the district court ruled that, although the government’s contention that some of the funds used to refurbish the Flash II are traceable to the drug proceeds of the government’s cooperating witness Gary Milo is “theoretically possible,” the government failed to carry its burden of proof under the Civil Asset Forfeiture Reform Act of 2000 (CAFRA).

Not only was Dr. Lane a completely innocent owner, but no portion whatsoever of the sailboat seized and sold by the government had been subject to forfeiture. “Accordingly,” District Judge William G. Young ruled, “the sloop was not forfeitable. Because the sloop was not forfeitable, the government had no interest in the sloop and therefore no right to dispose of the sloop.”
Click here to continue.

(Pleadings from this case available to FEAR's Brief Bank II subscribers.)

Asset Forfeiture in Drug Cases is Hurting Investment in the Inner Cities

Posted in Chronicle Blog by David Borden

Observations about asset forfeiture and its impact on investing (and consequently economic development) in neighborhoods that are perceived to have illegal drug problems. (Forfeiture is not solely limited to drug cases, but drugs are the mainstay.)

I am in the real estate investment business. Increasingly I find investors staying away from investing in rental properties and neighborhoods perceived to have illegal drug problems. Investors more frequently state police can too easily forfeit their real estate because of one tenant's illegal activity at a rental property, e.g., selling drugs, even when it is unknown to the owner. Consequently investors' fears of forfeiture are depressing property values in certain neighborhoods and cities, driving downward the property tax base needed for tax revenues to support the infrastructure of the community.

Continued at StoptheDrugWar.org/Chronicle Blog

Congratulations to attorney Jody Neal-Post on this important victory in which the Tenth Circuit Court of Appeals joins five other Circuits holding that government may not restrain “substitute assets” prior to a criminal conviction and order of forfeiture! Jody serves as Secretary on FEAR’s Board of Directors, and frequently contributes to FEAR-List Bulletins, as well as FEAR’s Brief Bank II.

10^th Circuit rules “substitute assets” are not subject to pre-trial restraint:
Government may not use lis pendens statute for pre-trial restraint of property that neither comprises the fruits of, nor is connected to, the defendant’s alleged crime.

by Judy Osburn

The indictment accusing Dana Jarvis and twenty other co-defendants of conspiracy to distribute 1000 kilograms of marijuana and related money laundering and continuing criminal enterprise charges also contained a criminal forfeiture allegation stating that, upon conviction of one or more of the offenses, all defendants would be jointly and severally liable for a money judgment of $158.4 million.

The indictment listed bank accounts, several parcels of real property, vehicles, seized currency and a liquor license as “forfeitable property” connected to the defendants’ criminal conduct. The indictment also listed two pieces of real property (purchased by Mr. Jarvis before the alleged conspiracy ever took place) among the “substitute assets” to be forfeited in the event other property connected to, or derived from, the alleged drug crimes could not be located.¹

While 21 U.S.C. § 853(e) allows the United States to seek a restraining order or injunction to preserve the availability of property the government alleges to be subject to criminal forfeiture in the event of a conviction, the section does not explicitly provide for pre-trial restraint of § 853(p) substitute property. Rather than attempting to use the criminal forfeiture statute to seek a federal protective order on Jarvis’ two properties, the United States recorded notices of lis pendens – a common practice to notify potential buyers or lenders about pending litigation contesting title to real property.

The notices of lis pendens included the language, “the property located in Mora County, New Mexico, was criminally indicted in this case and the United States is seeking the forfeiture of all that lot or parcel of land, together with its buildings, appurtenances, improvements, fixtures, attachments, and easements thereon.”

In January 2006 Jarvis moved the district court to release the two Mora County properties, contending that no legal basis existed for the restraint of substitute assets without a conviction and forfeiture order. The United States’ restraint of the two properties (neither of which had any connection to criminal activity) prevented Jarvis from hiring the counsel of his choice and deprived him of his Sixth Amendment right. Therefore, Jarvis argued, a due process hearing was required before the United States could effectively freeze these assets.

The government responded by arguing that “a lis pendens is not a legal restraint, but merely functions as constructive notice to prospective purchasers,” and that even if a lis pendens were a restraint, the United States may restrain substitute assets that have no connection with an alleged crime “in light of the guidance in § 853(o) that the criminal forfeiture statute be liberally construed to effect its objectives.”

The district court bought into the governments’ arguments, concluding that filing a lis pendens does not constitute a restraint of property within the meaning of § 853. Defying the logical consequences of a public notice that title to real property is pending litigation and the owner may be in the process of losing his right to own, sell or borrow against that property, the lower court determined that a lis pendens did not interfere with any legal incidents of property ownership such as “the right of sale” and unrestricted use and enjoyment.

Therefore, the lower court held that a lis pendens “did not constitute a property deprivation triggering due process concerns.” It also rejected Jarvis’ argument that substitute assets, which by nature never had any connection with, nor could be traceable to criminal activity, are not subject to restraint prior to a criminal conviction and order of forfeiture.

Jarvis moved the court to reconsider, pointing out the distinction between forfeitable property under § 853(a), which may be restrained pending criminal trial, and substitute property under § 853(p), for which Congress did not specify pre-trial restraint powers for the government. He further argued that New Mexico law specifically classifies a lis pendens as a restraint, which cannot apply to substitute property until a court has issued an order of forfeiture and the government is unable to satisfy the order with property forfeitable under § 853(a).

After an August 2006 evidentiary hearing, which included testimony by a realtor on the ill-effect of a lis pendens notice on a seller’s practical ability to sell or borrow against his land, the lower court rejected the motion for reconsideration with a single sentence, concluding that Jarvis had not presented any new arguments for release of his funds.

On September 1, 2006, the court appointed Jody Neal-Post as Jarvis’ forfeiture counsel. On interlocutory appeal Ms. Neal-Post raised the argument that government may not use a notice of lis pendens to restrain property in an in personam criminal forfeiture action where the real property itself is not the subject of litigation. Because the issue before the appellate court was “purely legal in nature and the relevant statutory language and case law dictate a certain result,” the appeals panel determined this is one of the unusual cases in which it is proper for the appeals court to decide an issue that had not been presented to the lower court.

After both parties fully briefed and argued this issue to the appeals court, the panel determined that existing case law provided a certainty of proper resolution. The Tenth Circuit concluded in a published opinion, filed August 28, that to be eligible to file a lis pendens notice, “the party recording the notice must assert a present claim to the property’s title or have some other present interest in the subject property.” Circuit Judge Murphy wrote for the panel that a lis pendens notice is intended to preserve property rights in existence at the time litigation commences, but does not create new or additional property rights. Additionally, under New Mexico law, a lis pendens cannot be filed in “anticipation of a money judgment.”

Assets “constituting, or derived from, any proceeds” of the defendant’s criminal action and property “used, or intended to be used” in the commission of facilitation of the defendant’s criminal action “shall” be forfeited upon conviction. By virtue of the statute’s relation-back provision, the United States obtains a vested “right, title, and interest” in such tainted § 853(a) property superior to that of third parties “upon the commissions of the act giving rise to forfeiture.” The government, furthermore, has the ability to seek a protective order to restrain tainted assets prior to trial in order to ensure the availability of the tainted property in the event of the defendant’s conviction.

In contrast, the statute treats the United States’ interest in substitute property – property that neither comprises the fruits of nor is connected to the defendant’s alleged crime–differently than it treats the government’s interest in § 853(a) tainted property. Pursuant to § 853(p), the forfeiture of substitute property cannot occur until after the defendant’s conviction and a determination by the trial court that the defendant’s act or omission resulted in the court’s inability to reach § 853(a) assets. Both the relation-back and protective order provisions of § 853 are silent as to § 853(p) substitute property. Unlike the pre-conviction interest the government may claim in tainted § 853(a) property, § 853(c) thus does not explicitly authorize the United States to claim any pre-conviction right, title, or interest in § 853(p) substitute property.² Furthermore, all but one federal court of appeals to address the issue has determined the legislative silence regarding substitute property in § 853(e) precludes pre-conviction restraint of substitute property.³ The statute, therefore, imposes specific preconditions on the government’s ability to claim title to the defendant’s substitute property, preconditions which can only be satisfied once the defendant has been convicted.⁴

The Tenth Circuit Court of Appeals joins the Second, Third, Fifth, Eighth and Ninth Circuits in holding that substitute assets are not subject to pre-trial restraint. The Fourth Circuit is the only federal court of appeals to conclude that § 853 permits pre-trial restraint of substitute assets.
(Click here to read Endnotes.)

2nd Circuit denies fees for attorneys who recovered money seized from multiple innocent claimants under USA PATRIOT Act

According to this opinion the government may avoid paying attorney fees incurred by an innocent owner simply by seizing property owned by multiple innocent owners.

On August 10, 2007, the Second U.S. Circuit Court of Appeals ruled that CAFRA (Civil Asset Forfeiture Reform Act of 2000) exempts the government from liability for fees when seized currency is subject to “competing claims” of multiple innocent claimants who substantially prevail in a forfeiture case. The appeals panel also held that CAFRA now provides the exclusive means of awarding fees to forfeiture defense attorneys, and therefore fees incurred defending a forfeiture case can no longer be awarded under EAJA (Equal Access to Justice Act). While “mindful” that defense attorneys in U.S. v. $293,316 in United States Currency, 05-6522-cv, invested considerable time in helping nearly eighty innocent claimants recover their money, the panel nonetheless ruled that “under CAFRA those facts cannot justify the imposition of another burden on the public fisc.”

Nearly eighty Pakistanis wished to transfer several thousand dollars from New York to Pakistan and entrusted their funds to three couriers on what they believed would be an overnight flight. The three couriers were also carrying some of their own money when they were apprehended as they were about to board a flight to Pakistan in September 2002, and were subsequently convicted under the bulk cash smuggling provision of the USA PATRIOT Act.

The Pakistanis who had entrusted their funds to the three couriers had violated no law. The appeals court recognized that “that many aliens use couriers to deliver money to friends and relatives because the couriers speak their language, charge no fees, and serve areas remote from the nearest Western Union branch.”

After three years of litigation the government returned the seized funds to the innocent claimants. The US District Court of the Eastern District of New York also concluded that only 50% of the funds owned by the convicted couriers could be forfeited to the government without violating the Excessive Fines Clause of the Eighth Amendment.

Attorneys David B. Smith and John P. Donohue represented many of the innocent claimants as well as two of the three convicted couriers. The two attorneys sought fees in an amount of $157,888 for their work representing claimants during the three years it took to recover the funds. However, the district court denied the attorney fee request because it determined there were "competing claims" to the same property within the meaning of CAFRA’s 28 U.S.C. § 2465(b)(2)(ii). The district judge also denied an alternative award of fees under the Equal Access to Justice Act.

The Second Circuit affirmed, (click here to continue)

DEA threatens 150 Los Angeles landlords with forfeiture and prison

The U.S. Drug Enforcement Administration sent letters warning about 150 Los Angeles landlords that they risk arrest and the loss of their properties if they continue renting to cannabis dispensaries. A July 17 article in the Los Angeles Times, “DEA targets landlords of pot outlets,” details the latest escalation in the federal war against state sanctioned medical marijuana.

Timothy J. Landrum, DEA special agent in charge of the Los Angeles office, sent the two-page letter to landlords last week. These letters “are definitely meant to serve as a notice” said DEA spokeswoman Sarah Pullen. “What might happen as to the continuing investigations, we’ll just have to see.” The letters were sent on the eve of a proposed city ordinance that would regulate and place a cap on the number of cannabis outlets in the City of Los Angeles, which, according to the LA Times, now total more than 400.

The federal government has discouraged such regulation in other cities in the greater Los Angeles area, leaving most cannabis dispensaries to operate without any local regulation or oversight. In 2001 the feds shut down the Los Angeles Cannabis Resource Center in West Hollywood and filed a civil forfeiture complaint against the LACRC building that had been financed in part by the City of West Hollywood. The City lost its hard-fought forfeiture battle when the Ninth Circuit Court of Appeals affirmed a summary judgment forfeiting the City’s $300,000 investment in the LACRC building.

More than 30 cannabis dispensaries soon sprung up in the local vicinity, replacing the former LACRC that had operated in what Los Angeles Sherif Leroy Baca described as “a cooperative partnership” with the Los Angeles Sheriff’s Department. Having been punished for its oversight of the LACRC, the City of West Hollywood declined to involve itself or its law enforcement agencies in regulating the growing number of dispensaries.

As Dale Gieringer of the National Organization for Reform of Marijuana Laws says, the recent DEA crackdown will likely result in widespread evictions and shutdowns, but won’t stop patients’ use of marijuana. Rather, patients who presently rely on the threatened dispensaries will be forced to find cannabis on the illegal market, with all its associated risks.

The DEA’s unwarranted attack on medical marijuana also comes just as Congress is about to vote on a measure to deny federal funding for federal medical marijuana raids, namely the Hinchey-Rohrabacher amendment. In the meantime however, as the DEA letters state: “It is not a defense…that the facility operating on the property is providing ‘medical marijuana’ under California law including the provisions of California Prop. 215. Violation of this law is a felony crime, and carries with it a penalty of up to 20 years in prison” as well as property forfeiture.

There is no legal defense to federal forfeiture laws for landlords who have been put on notice that tenets are violating federal law. As the City of West Hollywood discovered, civil forfeiture laws bypass even the slightest chance of prevailing at trial – civil forfeiture proceedings in which owners cannot claim a lack of knowledge of the federal violations occurring on their property end in summary judgment without recourse to trial by jury.

Riverside County's Press-Enterprise reported on July 19 that building owners in other counties may be targeted next, according to Special Agent Sarah Pullen, of the DEA's Los Angeles office, which oversees Riverside and San Bernardino counties. The DEA is aware of at least 300 marijuana dispensaries in the seven central and Southern California counties that it covers, Pullen said. According to Thom Mrozek, spokesman for the U.S. attorney's office in Los Angeles, the only reason that more marijuana dispensaries have not been shut down is that federal officials don't have the resources to investigate every violation.

Congratulations to attorney Steven Kessler, for this appeals court victory!
Steven frequently contributes pleadings to FEAR's Brief Bank II, where his Brief to the Second Circuit in U.S. v. $660,200 is available along with the Government’s Brief .

Second Circuit orders government to honor settlement agreement.

by Judy Osburn

Assistant U.S. Attorney Tracey Knuckles resigned in the midst of arranging for return of fifty percent of $660,200 in seized currency pursuant to an in-court settlement agreement. At the same time the government suddenly attempted to renege on its settlement agreement, painting a picture of fear with unsubstantiated assertions that claimants intended to use the money to fund terrorism. The government also claimed that AUSA Knuckles had no authority to enter the government into a binding settlement agreement – at least not where the government later cries “terrorism case!”

“Settlement agreements are contracts” stated the Second Circuit Court of Appeals on July 2, 2007, affirming the district court’s order enforcing the settlement agreement in United States v. $660,200. The appellate court agreed with the district court’s finding that Assistant U.S. Attorney Tracey Knuckles and her supervisor (who was transferred on or about the same time that Ms. Knuckles resigned) had actual and apparent authority to enter into the in-court settlement.¹

Arguing that it should be allowed to renege on its settlement agreement, the government had contended that it should not have to comply with the law and rules where it alleges threats to “national security.”² Claimant Sami Khalil’s attorney, Steven Kessler, opened his summary argument to the Second Circuit:

With Old Glory waving behind it, appellant [Government] asserts, in the very first paragraph of its Preliminary Statement, that this is a terrorism case. Appellant uses appropriate catchwords and attempts to paint a picture of fear around appellee and the defendant funds. However, once the arguments begin and the facts of the settlement and the court’s decisions below unfold, appellant’s arguments for reversal of the district court’s orders have little, if anything, to do with terrorism.

Kessler’s client, claimant Sami Khalil, had never been charged with any crime related to the civil forfeiture proceeding. The only charges filed against anyone in relation to the seized currency were for failure to report currency carried while attempting to board a commercial flight to Egypt–not terrorism. ... (Continued)

Congratulations to plaintiff's attorney and FEAR member Joseph P. Kennedy on this important victory!
New Mexico Court of appeals rules that police cannot use federal courts to bypass state forfeiture reforms

by Judy Osburn

In George Albin versus Bakas, Taylor, Danko, Maldandado, Hooper and O’Leary (New Mexico state police and their superiors), Case number 26,134 filed April 26, 2007, the Court of Appeals for the State of New Mexico examined whether state police officers who seize cash under the authority of New Mexico’s Controlled Substances Act are required to comply with the requirements of the state Forfeiture Act, or whether they may instead transfer the cash to the federal government to bring a forfeiture action under federal law, then receive from the federal government a portion of the proceeds.

In a tremendous victory for compelling police agencies to abide by state forfeiture reform laws, the appeals court ruled: "Just because the officers subsequently decided to transfer the cash to the federal government for the purpose of bringing a federal forfeiture action did not entitle them to ignore New Mexico law.” Plaintiff George Albin is represented by Joseph P. Kennedy of the law firm Kennedy & Oliver, P.C., Albequerue. Joseph Kennedy is also amember of FEAR and contributes pleadings to FEAR's Brief Bank II.

Agencies in various states that have passed forfeiture reform legislation often use his type of federal “adoption” of forfeiture cases to avoid the requirements of state reforms. The Albin court held that New Mexico State Police officers seizing currency under state law are subject to the procedures set forth in New Mexico's Forfeiture Act, and in this case, the officers violated that Act. Therefore the court reversed the summary judgment for Defendant state police by the District Court of Santa Fe County, and remanded for further proceedings.

When New Mexico State Senator Duncan Scott (R-Albuquerque) introduced legislation in 1994 to "overhaul New Mexico's criminal asset forfeiture law," he said the major change requires that forfeited funds or property go to the state general fund rather than allow agencies to keep what they seize. The law existing at that time “perverts law enforcement incentives," Scott said. "Police become more interested in chasing Mercedes rather than chasing violent criminals because they get to keep the flashy car. Our Founding Fathers wisely envisioned three separate branches of government, and the existing forfeiture law allows law enforcement agencies to become both the tax collector and legislature for themselves."

New Mexico forfeiture law now requires: 1) a criminal conviction of the owner before property may be forfeited; 2) the value of the property to be forfeited must not unreasonably exceed the financial gain derived from, or loss caused by, the related crime; and 3) that proceeds of forfeited property beyond costs of storage and restitution to victims be deposited in the general fund to be used for drug treatment, education and substance abuse prevention.

However, under federal law police agencies that transfer seized property for “adoption” by federal courts have continued to enjoy up to 80% of the proceeds returned directly to the seizing agencies. The court of appeals held in Albin that procedural requirements of New Mexico’s Forfeiture Act are mandatory, stating:

We acknowledge that the use of “adoptive seizures” is apparently wide-spread and follows a long history of forfeiture collaboration between state and federal agencies. We do not address whether, to what extent, or how an “adoptive seizure” to allow a federal forfeiture to proceed may be accomplished under the Forfeiture Act. Our holding in this case is limited: when property is seized by state police officers for forfeiture, compliance with the Forfeiture Act is required even if the state intends to transfer the property to the federal government to pursue a federal forfeiture action pursuant to an “adoptive seizure.” In this case, Defendants violated the Forfeiture Act.

The case began in during a traffic stop ...(continued)

The Spring 2007 edition of Justice Policy Journal features a 31 page treatise by Jared Shoemaker titled:
Civil Asset Forfeiture: Why Law Enforcement Has Changed its Motto from "To Serve and Protect" to "Show Me the Money"

Abstract:
Despite its failure to achieve its desired objectives, the War on Drugs continues on into a fourth decade with disastrous effects and extensive collateral damage. The current article explores civil asset forfeiture as one motivation that keeps the current drug policy intact. Specifically, it advances the premise that the current state of civil asset forfeiture law creates goal displacement that motivates law enforcement agencies to implement drug enforcement strategies that aggressively pursue civil asset forfeitures as a means of supplementing their budgets rather than as a legitimate tool for decreasing the supply of illicit drugs. The article explores how this goal displacement not only negatively impacts the progress of the War on Drugs, but also how it leads to disregard for individual due process rights, sometimes with tragic and life-altering consequences for innocent individuals. A brief discussion of the necessary reforms to civil asset forfeiture law is included.

Click here to read Civil Asset Forfeiture: Why Law Enforcement Has Changed its Motto from "To Serve and Protect" to "Show Me the Money"
by Jared Shoemaker

The perversion of law enforcement priorities described by Mr. Shoemaker as "goal displacement" was also the subject of an empirical study published thirteen years ago. Sociologists Mitchell Miller (University of Tennessee) and Lance H. Selva (Middle Tennessee State University) received the 1994 Academy of Criminal Justice Sciences Award for their undercover study and critical analysis of asset forfeiture's impact on police procedure. Based on twelve months of covert observation from within narcotics enforcement agencies, Drug Enforcement's Double-Edged Sword: An Assessment of Asset Forfeiture Programs described forfeiture as a "dysfunctional policy" that forces law enforcement agencies to subordinate justice to profit.

The Double-Edged Sword undercover researcher observed agencies abandon investigations of suspects they knew were trafficking large amounts of contraband simply because the case was not profitable. Agents routinely targeted low level dealers rather than big traffickers, who are better able to insulate themselves and their assets from reverse sting operations. The report states: "Efficiency is measured by the amount of money seized rather than impact on drug trafficking."

A reverse sting operation, where the officer becomes the seller who encourages the suspect to commit a crime, "was the preferred strategy of every agency and department with which the researcher was associated because it allowed agents to gauge potential profit prior to investing a great deal of time and effort." More importantly, the narcotics units studied preferred seizing cash intended for purchase of drugs supplied by the police, rather than confiscating drugs already on the street. When asked why a search warrant would not be served on a suspect known to have resale quantities of contraband, one officer responded:

"Because that would just give us a bunch of dope and the hassle of having to book him (the suspect). We've got all the dope we need in the property room, just stick to rounding up cases with big money and stay away from warrants."

In one case an agency instructed the researcher to observe the suspect's daily transactions reselling a large shipment of cocaine so that officers could postpone making the bust until after the majority of the drug shipment was converted to cash. This case was only one of many in which the goal was profit rather than reducing the supply of drugs reaching the street.

Thirteen additional years of policing for profit have now entrenched agencies in a dependency on forfeiture revenue that continues to subordinate the pursuit ot justice to the pursuit of profit.

Microsoft donates Office Ultimate 2007 to FEAR

March 20, 2007: Much thanks to Microsoft's Fritz Sands for donating Microsoft Office Ultimate 2007 to FEAR. We're enjoying the intuitive new features of Access 2007, included in the Office suite, to index and cross-reference FEAR's expanded Brief Bank II & Private Collection. Without this powerful database software, our extensive database of pleadings would be difficult and far more time consuming to update and index.

We also plan to put the PowerPoint 2007 presentation software, also included in the Office suite, to great use in developing presentations for FEAR's Gideon Project to make competent forfeiture attorneys more available to owners of seized property. Thank you, Fritz and Microsoft!

"Contraband Confiscation Agreement" circumstances ruled unconstitutional violation of due process: judge orders Bradenton police to return $10,200 or use court system to file forfeiture proceedings.
Bradenton Police Department continues policy of bypassing court system by coercing victims into signing forfeiture contract waiving right to day in court.

by Judy Osburn

Each year police in Bradenton, Florida side-step judicial oversight provided in Florida's Contraband Confiscation Act by intimidating hundreds of people into signing roadside agreements to give up property such as cash and cars and waive all rights to contest the confiscation in court. "Imagine having to choose between signing over your cash or going to jail," Tampa Bay defense attorney Denis DeVlaming said earlier this year. "That's the situation that these people face. It's a scary proposition."

Twenty-year-old Delane Johnson was not arrested when he consented to a search outside his apartment in July, 2006, and police coerced him into handing over $10,200 and signing Bradenton's Contraband Confiscation Agreement. On February 9, 2007, state Circuit Judge Peter Dubensky rejected the city of Bradenton's motion to dismiss Johnson's legal challenge of the waiver agreement, and ordered police to either return Johnson's cash or file suit for forfeiture against the money in state court. The court determined that the contract signed by Johnson "and the circumstances surrounding the making of the contract fail to comply with even the rudimentary elements of due process."

Though his ruling applies only to Johnson's case, the judge wrote a scathing criticism of Bradenton's waiver agreement policy: "Taken to its logical extreme," Dubensky wrote, the police "could present this agreement to any citizen stopped for any reason and request forfeiture of any item of property" in exchange for signing the document. The judge continued, "It is not remotely conceivable that the citizenry would countenance such a state of affairs."

Bradenton police spokesman stated the his department had not yet decided whether to return Johnson's money to him or file suit for forfeiture. However, the department stands little chance of prevailing in a state forfeiture proceeding, as the statutory deadline for filing a notice of intent to forfeit under Florida law passed last October.

Attorney Varinia Van Ness, co-counsel for Johnson, questioned the impact Dubensky's favorable ruling will have on the police department, stating, "I'm hoping they will no longer use these agreements to take people's property." But if the department continues to go by its policy rather than state laws she may file a motion to reconsider the future of the department's policy. "I would hope they would start obeying the law of the land, so, in the future, this doesn't happen to other people," she said.

Continued: "Judge's ruling regarding these contracts has had little effect, if any, on the manner in which the Bradenton Police Department takes people's property and twists the law!"

U.S. Department of Justice' Federal Money Laundering Cases manual now available on CD

The Department of Justice responded just before last Thanksgiving to FEAR's appeal from the denial of Freedom of Information Act requests for a number of DOJ publications by sending FEAR the most recent edition of DOJ publication Federal Money Laundering Cases, published May 2005. FEAR now has the entireDOJ manual available on CD ROM.

On appeal the DOJ granted our request for this book in full. This bodes well for the rest of our pending FOIA appeals, since the manuals all contain the same kind of information: the DOJ's legal analysis of the applicable law on forfeiture and money laundering.

Federal Money Laundering Cases is 200 pages or more of case digests of the leading cases on money laundering, sorted by subject matter. This is an excellent resource for any criminal defense attorney who handles drug cases or money laundering cases or just about any federal crime that generates money. Forfeiture defense attorneys need it too because many federal forfeiture cases have money laundering law components.

The granting of our FOIA request means that FEAR can legally distribute this book without fear of retaliation from the Justice Department. Because of its size, FEAR will not be adding it to the Brief Bank any time soon. All the proceeds from the sale of this CD-Rom manual will go to support FEAR's much needed but severely underfunded services to forfeiture victims and defense attorneys.

Montana Legislature Introduces Forfeiture Reform Bill by Judy Osburn
In addition to assuring that state courts may only forfeit property from owners who have been convicted of a related crime, this important reform legislation would curtail the perversion of law enforcement priorities caused by the profit motive of agencies keeping seized property.

Montana's HB 775, introduced February 19, would revise Montana state forfeiture laws to require criminal convictions of property owners before property may be forfeited by the state. The bill also would eliminate the profit motive that corrupts priorities of police and prosecutorsby directing proceeds from state forfeitures, as well as local shares from federal forfeitures, into a state fund for public defenders . By providing that all state forfeitures be imposed upon conviction of a criminal offense as part of sentencing, the bill would also eliminate state civil forfeiture proceedings that declare property guilty of crime, regardless of the guilt or innocence of its owner.

The bill would also require sheriffs to immediately return property to innocent lien holders who provide proof of a security interest equal to or greater than the value of the seized property. Proceeds of forfeited property sold at auction would be distributed to innocent owners with a secured interest less than the entire value, with the remaining proceeds to be deposited in the state fund for distribution to public defender offices. HB 775 would also prohibit sale of seized property to an officer or employee of a law enforcement agency.

The revision to Montana forfeiture laws would also create a state civil action similar to suits against law enforcement officers and agencies for civil rights violations similar to the form of action created in federal law by 42 U.S.C. 1983. A public official or employee who illegally seizes, holds, disposes of, or takes any other unlawful action in regard to seized property would be subject to a civil suit by the property owner. Click here for full story.

Louisiana forfeiture trap case reversed on appeal by Brenda Grantland

Louisiana forfeiture defense lawyer Paul Lemke scored a recent victory in the Louisiana state courts in a highway forfeiture trap case. Now that the Louisiana Supreme Court has denied review, the ruling is final.

In State v. $107,156, an officer stopped a car on the interstate highway because it had a temporary tag. When the car's occupants acted nervous, they ran criminal record searches and found out both occupants had felony records. Then the police brought in a drug sniffing dog which alerted to the car. They searched the car and found $107,156 in cash.

The district court forfeited the cash, despite the claimant's evidence of legitimate income, and the lack of evidence of any crime. The court also denied their motion to dismiss for undue delay (and for the government missing a statutory deadline in bringing the case to trial). The appellate court reversed on the merits, holding that the facts as presented by the government did not support forfeiture by a preponderance of the evidence. Judge Stewart concurred in the result, but dissented on the denial of the claimant's motion to dismiss for undue delay, pointing out that the statute set a deadline and the government missed it.

Paul Lemke commented on his victory:

"The state moved for writs to the Louisiana Supreme Sourt and argued that hideous case from the 8th circuit (United States of America v. $124,700 in U.S. Currency, 05-3295 (8th Cir. 2006 ) (Carrying cash while driving a rental car ruled grounds for forfeiture) to apply to this case. The Louisiana Supreme Court denied writs on November 22, 2006 so this is now a final judgment, not a major win by any means but at least Louisiana Appeal courts are looking better."

Congratulations, Paul!

Oregon State Supreme Court upholds forfeiture reform initiative by Judy Osburn

For nearly six years since Oregon voters approved a major forfeiture reform initiative, police pirates who were suddenly cut off from their addiction to keeping seized assets for their own use have been filing legal challenges to the popular voter reform. On November 7, 2000 Oregon voters restricted civil courts from forfeiting assets that are not tied to a criminal conviction of the property owner, and directed proceeds of forfeitures into the state general fund rather than coffers of the seizing agencies and prosecutors.

On October 19, 2006, Oregon’s highest court upheld the voters’ mandate for reform. The Lincoln Interagency Narcotics team had challenged Oregon’s “Measure 3” in 2001, claiming that it violated a constitutional ban prohibiting too many unrelated changes contained in a single measure. A divided Oregon court of appeals struck down the initiative in 2003.

The 4-3 decision by the Oregon Supreme Court reversed the appellate court, and holds that by restricting forfeitures and redirecting the proceeds, Oregon’s reform initiative did not violate the ban on unrelated issues. Justice Michael Gillette wrote for the court: "Not only do the people wish to be assured that forfeitures are reined in, they shall encourage it by removing the carrot which otherwise would tempt the two political branches of government to treat the criminal law as a revenue-raising source.”

The decision effectively nullifies much of a compromise bill passed by the Oregon legislature in 2005, which retained a requirement of a criminal conviction related to the forfeiture, but gave police access to some of the plunder they seize. Portions of that compromise legislation may remain intact, such as a provision expanding Oregon criminal forfeitures, as such forfeitures are essentially part of the sentencing process after a criminal conviction. However, as Geoff Sugerman of Silverton, a political consultant who worked on the 2000 campaign, states: "This case was all about where the money goes."

<>Without the financial incentives that pervert law enforcement priorities, Oregon state asset seizures dropped from 1,526 in the year 2000 to a mere 389 in 2001. However, as FEAR president Brenda Grantland says, “this probably only meant that the police turned property over to the federal government for forfeitures under the Equitable Sharing (a.k.a. ‘Federal Adoption’) program, which allows the seizing state or local police agency to get a kickback of up to 80% of the proceeds of forfeiture."

Over forty new pleadings, motions and briefs, plus for new 2006 Department of Justice manuals uploaded to FEAR's Brief Bank II & Private Collection!

March 14, 2006: FEAR's newly expanded Brief Bank now contains 166 motions, pleadings and briefs, plus six complete Department of Justice manuals on asset forfeiture statutes and policies. The Asset Forfeiture Policy Manual, published in January 2006, is a treasure trove of information. Forfeiture-savvy journalists will have a field day with this! Defense lawyers will love it too. Although the U.S. Supreme Court held in United States v. Caceres, 440 U.S. 741 (1979) that the government's "official policies" are not enforceable in court in suits brought by private parties, the government's policies are valuable to defense lawyers and pro se litigants, enabling them to make intelligent decisions in settlement discussions and other matters. Also, when the forfeiture prosecutor takes an unreasonable stance in court or in negotiations, it certainly helps to quote the official policy manuals of the DOJ!

First Circuit vacates forfeiture of owner's interest in sailing vessel "FLASH II," once owned by the late John F. Kennedy

Congratulations to FEAR President Brenda Grantland, who won an important due process victory in the First Circuit Court of Appeals on August 16, 2006. In U.S. v. One Star Class Sloop Sailboat Built in 1930 Named Flash II, the federal appeals court limited the extent to which the government can seize and forfeit property without endeavoring to find all of the owners and give them actual notice and the opportunity to be heard in the forfeiture case.

When the federal government obtained a judgment of forfeiture against a prized sailboat once owned by the late John F. Kennedy without bothering to notify the vessel owners of the forfeiture proceeding, the U.S. District Court of Massachusetts obliterated the shared ownership interest of Kerry Lane M.D. The forfeiture judgment was obtained from the district court by default judgments against some of the co-owners of the boat, but other co-owners, including Dr Lane, were never served with process.

The judgment was entered by default based on published notice, and without the court inquiring into what efforts, if any, the government took to locate the other co-owners and notify them of the forfeiture proceedings. Therefore Dr. Kerry had not responded in time to obtain an opportunity to show the district court that he was an innocent owner. When he found out about the proceedings being conducted in his absence, he immediately tried to intervene, but the court had already entered default judgment (only 8 days earlier) and didn't want to disturb it “[b]ecause claimant admittedly knew of the seizure and deliberately declined to disclose his interest” prior to the government’s initiation of the forfeiture action. Brenda Grantland appealed the forfeiture of Dr. Lane’s ownership interest in the sailboat.

On Wednesday, August 16, 2006, the First Circuit Court of Appeals vacated the forfeiture order—a mere two weeks after hearing oral arguments. The appellate court held that the district court abused its discretion by denying the Rule 60(b) motion to vacate the default judgment because it had not adequately considered whether the government provided constitutionally sufficient notice of the forfeiture proceedings to Dr. Lane.

In vacating the default judgment against Dr. Lane’s ownership interest, the First Circuit explained that in a case such as this where the government does not know the name of a potential claimant, even though “it need not take heroic measures to identify him, …when the claimant’s identity may be easily ascertained through minimal effort, the government cannot eschew these efforts.” If “the government has easy access to a lead that it knows (or reasonably should know) is potentially fruitful, it has some duty to elicit