Tag: Property law

Ending Shared Theft

I can’t believe I’m going to say this but here goes. Ahem. Cough. Uh, is this thing on?

Hi. Um … here we go …

Eric Holder has done something right.

Attorney General Eric H. Holder Jr. on Friday barred local and state police from using federal law to seize cash, cars and other property without warrants or criminal charges.

Holder’s action represents the most sweeping check on police power to confiscate personal property since the seizures began three decades ago as part of the war on drugs.

Since 2008, thousands of local and state police agencies have made more than 55,000 seizures of cash and property worth $3 billion under a civil asset forfeiture program at the Justice Department called Equitable Sharing.

The program has enabled local and state police to make seizures and then have them “adopted” by federal agencies, which share in the proceeds. It allowed police departments and drug task forces to keep up to 80 percent of the proceeds of adopted seizures, with the rest going to federal agencies.

I’ve talked about civil asset forfeiture many times. This is the vile practice where law enforcement officials seize your money, your car or your bank accounts and … well, basically keep it. You never have to be charged with a crime. They never have to prove the assets came from crime. They just take it, like a highwayman. And they are perfectly free to use those assets for any purpose, including, in one case, a margarita machine.

Some states have trained to “reign this in”. Granted, they haven’t reigned it in by say, abolishing it. But they’ve at least tried to redirect the money from going directly to law enforcement to going to schools or something. The Feds responded with their Equitable Sharing Program, where the police turn the money to the Feds to bypass state laws. The Feds keep a cut and then turn it right back over to the police. That’s the program Holder is suspending.

Now, to be fair, this is a directive. The next AG could reverse it. Hell, Holder could. Let’s not mistake this for, say, Congress passing a law to abolish it. Radley Balko breaks down the decision further, pointing out that federal investigations — such as investigations by the DEA or IRS — will still be able to use this tool. And, in fact, local law enforcement will be able to use Equitable Sharing when they are part of a federal or joint investigation. In fact, Holder’s justice department recently successfully argued before the Supreme Court, in Kaley, that the government could seize your assets before trial to keep you from hiring a good lawyer.

So let’s not dance in the streets just yet. But this is a step in the right direction. The next thing that needs to happen is for Congress to abolish the practice completely. Asset forfeiture may have made sense when we were seizing the 18th century smuggling ships of overseas booze barons. It makes no sense in a modern context. If the Supreme Court won’t abolish it, Congress must and should.

Theft By Any Other Name

This story is simply unbelievable. It’s got it all: incompetent city government, crony capitalism and stealing a marine’s home for an overdue $134 tax bill:

On the day Bennie Coleman lost his house, the day armed U.S. marshals came to his door and ordered him off the property, he slumped in a folding chair across the street and watched the vestiges of his 76 years hauled to the curb.

Movers carted out his easy chair, his clothes, his television. Next came the things that were closest to his heart: his Marine Corps medals and photographs of his dead wife, Martha. The duplex in Northeast Washington that Coleman bought with cash two decades earlier was emptied and shuttered. By sundown, he had nowhere to go.

All because he didn’t pay a $134 property tax bill.

The retired Marine sergeant lost his house on that summer day two years ago through a tax lien sale — an obscure program run by D.C. government that enlists private investors to help the city recover unpaid taxes.

For decades, the District placed liens on properties when homeowners failed to pay their bills, then sold those liens at public auctions to mom-and-pop investors who drew a profit by charging owners interest on top of the tax debt until the money was repaid.

But under the watch of local leaders, the program has morphed into a predatory system of debt collection for well-financed, out-of-town companies that turned $500 delinquencies into $5,000 debts — then foreclosed on homes when families couldn’t pay, a Washington Post investigation found.

As the housing market soared, the investors scooped up liens in every corner of the city, then started charging homeowners thousands in legal fees and other costs that far exceeded their original tax bills, with rates for attorneys reaching $450 an hour.

Here’s the short version: Coleman is a 76-year-old retired Marine who owned his $197,000 home free and clear. He also has been showing signs of dementia and, at one point, forgot to pay a $134 tax bill. His son eventually paid the bill — plus $183 in interest in penalties. But it was too late. The lien had been sold to a private company that demanded $5000 in legal fees. The son couldn’t come up with the money and court foreclosed. The Maryland firm that bought the house sold it for $71,000.

This is not an isolated incident. You really must read the whole thing if you have the time. Private companies now hold liens on thousands of properties and have foreclosed on hundreds, frequently over very small amounts of money (after inflating them to unpayable sums with often undocumented legal fees). Poor neighborhoods, already hurt by the recession, are being devastated by these seizures. And these are not people who bought homes to flip them or bought homes they couldn’t afford. These are people trying to be responsible who have, for various reasons, missed a tax payment. Or in many cases, haven’t but had liens put on their homes by mistake.

One 65-year-old flower shop owner lost his Northwest Washington home of 40 years after a company from Florida paid his back taxes — $1,025 — and then took the house through foreclosure while he was in hospice, dying of cancer. A 95-year-old church choir leader lost her family home to a Maryland investor over a tax debt of $44.79 while she was struggling with Alzheimer’s in a nursing home.

Other cities and states took steps to curb abuses, such as capping the fees, safeguarding houses owned by the elderly or scrapping tax sales altogether and instead collecting the money themselves.

Moreover, there is no supervision. Many of these private companies have already been prosecuted in other states for breaking laws and rigging bids. And the DC tax office has sold nearly 2000 liens by mistake.

A 48-year-old math teacher paid his taxes in 2007, but the tax office took his $1,400 payment and applied it to the wrong house, crediting an entirely different taxpayer.

A 58-year-old bank employee almost lost her house in 2010 because the tax office mistakenly sent bills and notices to a wooded lot across from a strip shopping center in Virginia — 12 times.

A 69-year-old hat designer was given the wrong payoff amount and ended up in court to save her property, owned by her family since 1943.

Those homeowners found out about the mistakes in time to fight. Ninety-five-year-old Daisy Dolsey, living in a nursing home and struggling with Alzheimer’s, wasn’t so lucky: She lost her $300,000 house over a $44.79 tax debt even after she paid her taxes.

This is an appalling scandal. This should be national news and the DC Council should be getting pilloried for refusing to address the issue. And it’s only a microcosm of government farming out duties to private companies — which might be defensible enough in a vacuum — but not holding those companies to any standard of behavior or any limitations on their authority. And for the companies it’s a gold mine — the Post reports that $5 million in suspiciously organized and unsupervised bids bought liens on 2/3 of a million in properties. They then charged the owners thousands in administrative and legal fees and foreclosed on the homes if the homeowners couldn’t cough it up

This is theft, plain and simple. This is government, industry and lawyers conspiring to rob people and not giving a fig what it does to the city.

And while I’m on my horse about property rights and corrupt government, the problem of asset forfeiture is only getting worse:

Leino is one of thousands of Philadelphia residents who each year find themselves facing the seizure of their possessions — cars, cash and real estate — via “civil asset forfeiture,” a legal construct that lets law-enforcement agencies seize property linked to crime and keep the proceeds. In Pennsylvania, civil forfeiture is carried out primarily under state drug laws. The Philadelphia DA brings 300 to 600 real-estate forfeiture cases per year, and thousands of cases against small amounts of cash seized in police stops that sometimes, but not always, result in arrests — together bringing nearly $6 million into its coffers annually.

In a series of reports for City Paper [“The Cash Machine,” Nov. 29, 2012] and ProPublica, this reporter has documented how the Philadelphia DA has made civil forfeiture into a vast, unaudited revenue stream, profiting from an upside-down legal process through which the DA has the power to bleed property owners dry of financial resources and imperil homeowners with minimal or no evidence of criminal wrongdoing.

Long before the forfeiture action against her house would be completed, and without a judge or jury ever seeing her face, Leino would be forced from her house and made homeless along with her three children. She would lose her most precious possessions, and ultimately be deprived of her family’s most valuable asset — all without Leino ever being accused of any crime.

Her husband, Sam, was accused. On Feb. 22, 2010, police officers arrived at the family’s house, at 2729 Orthodox St. in Bridesburg, to arrest Sam on charges of selling prescription pills. The officers would later testify that they observed Sam handing over small objects in exchange for money outside the house. After executing a search warrant, police recovered various painkillers. (Sandra Leino says her husband was partially disabled from a truck accident and took the painkillers himself, legally, for his pain.)

Sandra Leino and her three children were not accused of any crime; nowhere in police reports is there even a hint that any of them had done anything wrong.

That didn’t stop the DA from filing a motion to seize the Leino’s house that May — and then, for reasons that remain unclear, kicking them out of it the same month. (The DA’s Office responded to inquiries with a short statement describing the forfeiture action, but would not explain why Leino and her family were made to leave). Leino, her husband (out on bail awaiting his trial), and their children were forced from their home with nowhere to go. They stayed in a motel for one week.

While the family navigated a homelessness imposed on them by the District Attorney’s Office, the DA asked the city’s Department of Licenses & Inspections to conduct a “clean and seal” operation on the Leinos’ house. City officials arrived at the house shortly after the forfeiture motion had been filed (not granted) and began throwing out the Leinos’ possessions — among them pictures of the Leinos’ children growing up, antiques they had collected together as a hobby and a 5-gallon jar of pennies the family had filled as a way to save money.

The house was foreclosed on by the bank. Leino was convicted of a single felony charge. Oh, and the officers who brought the charges against Mr. Leino? Four of them were found to be part of drug-dealing ring within the Philadelphia police. Nearly 300 of the cases they brought have been dropped.

I highlight these two stories specifically because they involve people who are working class, not the rich folks that defenders of asset forfeiture and foreclosure corruption always insist are the real targets of the laws. Whenever you give government this kind of gangster power, it will be turned on everyone, but especially on those who do not have the resources for lawyers and publicity. These are poor and working class people, mostly minorities. The only crimes they have committed are missing a tax bill or low-level drug dealing (or living with someone who has done those things). And they are being robbed blind to stuff the coffers of police departments in one case and rich speculators in the other.

This is what happens when you don’t respect property rights and when you give the government authority to just take people’s possessions. You won’t see Donald Trump having his home sold to speculators. You won’t see a rich politician kicked out onto the street if her husband is dealing pain pills (according to four corrupt cops). Michael Bloomberg’s stop-and-frisk wasn’t used on Wall Street execs. Our War on Drugs imprisons lots of poor people but sees rich drug users as “having a problem”. Our War on Prostitution thinks Eliot Spitzer should run for comptroller while survival-level sex workers should be imprisoned and raped.

Arbitrary government power is always turned against the powerless. There are some things we need government to do, but that power should always be supervised, constrained, reviewed and never allowed to play to the personal benefit of the rich and powerful. The nation has forgotten this lesson. But thank God for the Wapo, for the IJ and for independent journalists who are determined to make sure that this abuse and criminality does not go unnoticed.

We’ll Take That

I’ve said it before, and I’ll say it again: thank God for the IJ:

Imagine you own a million-dollar piece of property free and clear, but then the federal government and local law enforcement agents announce that they are going to take it from you, not compensate you one dime, and then use the money they get from selling your land to pad their budgets—all this even though you have never so much as been accused of a crime, let alone convicted of one.

That is the nightmare Russ Caswell and his family is now facing in Tewksbury, Mass., where they stand to lose the family-operated motel they have owned for two generations.

Seeking to circumvent state law and cash in on the profits, the Tewksbury Police Department is working with the U.S. Department of Justice to take and sell the Caswells property because a tiny fraction of people who have stayed at the Motel Caswell during the past 20 years have been arrested for crimes. Keep in mind, the Caswells themselves have worked closely with law enforcement officials to prevent and report crime on their property. And the arrests the government complains of represent less than .05 percent of the 125,000 rooms the Caswells have rented over that period of time.

The Institute for Justice — one of those evil Right Wing groups that defense our civil liberties — is now fighting this in the courts.

Asset forfeiture is one of the most vile things out government does. The idea that started it was not completely insane: taking the property of people who did illegal things when the people themselves were not obtainable because they were overseas. It’s ridiculous and offensive to use asset forfeiture when the supposed perpetrator of the crime is standing right there. I don’t care what the Supreme Court says — charging someone’s property with a crime to bypass their Constitutional rights is simply not acceptable. And the federal government has made a bad situation far worse. If local authorities work with the Feds, they get to keep most of the property they seize.

Cops are taking the property of people who have not been charged with a crime and then using it for their own purposes. Can this be described as anything other than plain and simple armed robbery?

I have said before the Supreme Court is only one of the defenders of our liberty. Congress needs to step in and pass laws abolishing or severely restricting asset forfeiture. And if they don’t or won’t because they are pant-shittingly terrified of being seen as weak on crime, the President should issue an executive order suspending the practice. If you need to explain it, just run Russ Caswell in front of the cameras and explain that our government is stealing his hotel.

You can not possibly claim that you uphold the Constitution and support freedom and simultaneously support this bullshit. Citizens are being robbed by their own law enforcement agents. And, as we’ve see with all government abuses, it is only escalating, now extending to people who are bystanders of crime. This gangsterism can not end … it will not end … until we force our government to stop it.

There should not be a politician in this nation who can go another day without being asked if he supports this crap. And there should not be another politician who does support who is not thrown out on his police-state-loving ass. The lesson of the recent SOPA/PIPA fight is that we can make the politicians do the right thing when we want to. Do we want to?

(And while I’m at it: if you ever wish to donate money to a political cause, support the Institute for Justice. They are doing incredible work defending basic property and business rights. I can’t overemphasize their role in this.)

Update: Something to consider: one of the things assert forfeiture is used for is to deprive accused criminals of assets needed to procure legal defense. With no money to hire lawyers, people are reduced to either incompetent defense or plea bargain. Assert forfeiture is poisoning law enforcement in every way imaginable. It has to stop.

A Nation of “Criminals”

The WSJ has been on a tear lately, looking at a variety of issues in law enforcement. Yeah, I know … they’re a Murdoch paper and only care about rich white people.


New York businessman James Lieto was an innocent bystander in a fraud investigation last year. Federal agents seized $392,000 of his cash anyway.

An armored-car firm hired by Mr. Lieto to carry money for his check-cashing company got ensnared in the FBI probe. Agents seized about $19 million—including Mr. Lieto’s money—from vaults belonging to the armored-car firm’s parent company.

He is one among thousands of Americans in recent decades who have had a jarring introduction to the federal system of asset seizure. Some 400 federal statutes—a near-doubling, by one count, since the 1990s—empower the government to take assets from convicted criminals as well as people never charged with a crime.

Last year, forfeiture programs confiscated homes, cars, boats, and cash in more than 15,000 cases. The total take topped $2.5 billion, more than doubling in five years, Justice Department statistics show.

Here is but one example, this one at the local level: a mayor is driving around in an SUV seized in a supposed pimp bust. Supposed because the owner of the SUV has yet to be convicted of anything. This is typical of forfeiture cases, which charge the property with a crime and require the owner to prove his innocence before returning it. And I’ll give you one guess as to what demographics these seizures hit hardest.

There was a time when asset forfeiture laws were justified: that time was the 18th century when authorities would seize smugglers’ ships because the owners of the ships lived in other countries. There is absolutely no reason that this archaic bullshit should still be practiced. But SCOTUS has consistently ruled in favor of this theft, even when an innocent person’s property is used for a crime (Bennis v. Michigan).

The last time our government did anything about this was ten years ago. And it was a Republican — Henry Hyde — who did it. There is zero chance that the “for the little guy” Democrats will, in any way, restrain the government’s power to seize people’s property. Not when they are getting such perverse pleasure out of arresting people and raiding factories because their guitars might have illegal wood in them.

At what point do we stop expecting mercy from our overlords and start demanding that they respect our liberty?