Fla. police cash force shows forfeiture's growth
In 2011, Bal Harbour got more than $5 million through its money-laundering investigations
By Curt Anderson
BAL HARBOUR, Fla. — In this upscale seaside village of about 2,500 permanent residents, the main challenges for Bal Harbour's 30-member police force are thefts from its high-end shopping mall, speeders along Florida's famed A1A highway and vehicle break-ins. But the department managed to rake in millions of dollars in forfeited drug proceeds by leading a task force that conducted investigations across the country, many with little or no link to the South Florida town.
In fact, in 2011, Bal Harbour got more than $5 million through its money-laundering investigations from a U.S. Justice Department asset forfeiture sharing program, more than any Florida law enforcement agency that year. The Tri-County Task Force's agents worked out of a trailer in Bal Harbour and included deputies from a nearby county and a contract employee who worked at a federal immigration officer in California.
The money went for salaries, travel and confidential informant payments — some of which have been questioned as improper by Justice Department investigators — as well as a $100,000 police boat and a $225,000 surveillance truck.
While perhaps an extreme example, Bal Harbour's task force highlights the way many law enforcement agencies are using the expanding federal program along with permissive state forfeiture laws to seize cash, property and assets in criminal cases that sometimes didn't even happen in their jurisdictions. Under the federal program, state and local police agencies are rewarded for participating with federal authorities in joint investigations. The locals' contributions can range from providing leads to essentially running the investigation from start to finish.
Often, it's only a suspected link to crime that leads to a civil seizure, which can force people to prove they are innocent to get their cash or property back.
To many legal experts, that's a perversion of a U.S. justice system in which a person is supposed to be presumed innocent, tempting police to focus on cash instead of crime and diverting resources from more urgent safety threats.
"This is a country where we have a Bill of Rights to protect the people from the government," said Tamara Lave, a former public defender who is now a law professor at the University of Miami. "This is a way of giving the government greater power and it's an institutional way of undermining people's rights."
Prosecutors value forfeiture because it can hit criminals where it hurts — in the wallet — and deprives them of the fruits of crime.
"If there was no forfeiture, then it is conceivable that a defendant could serve their time and when he or she gets out, still have access to the funds the criminal enterprise produced," said David S. Weinstein, a former South Florida federal prosecutor now in private practice. "Punishment is about more than putting people in jail."
But, Weinstein added: "The more jaded viewpoint is that it is an easy way for an agency to get cash and property."
The biggest asset forfeiture program is the Justice Department's Equitable Sharing, which Bal Harbour's drug task force used. It has grown from $297.5 million in payouts in 2006 to almost $454 million in 2012, according to Justice Department records.
Separately, untold millions more are seized and kept by law enforcement agencies under state forfeiture laws.
Over the same period the federal payouts have increased, according to the FBI, overall rates of crime have been dropping, although police reported a slight uptick in 2012.
In Bal Harbour, there were 56 total arrests in 2010 and 53 in 2011, according to the Justice Department. Over the two years, 18 involved drug violations.
Drug cartels, money launderers, Mafia organizations and fraud rings are among those in criminal cases whose assets are seized and deposited into this program. Yet sometimes prosecutors use civil forfeiture laws — which have a lower standard of proof than criminal cases — to seize property that may be only loosely connected to potential criminal actions.
In Bal Harbour's case, tipsters were used to set up drug money-laundering pickups by undercover officers in at least 13 locations around the U.S. After the money changed hands, the U.S. Drug Enforcement Administration would arrest the suspects, and Bal Harbour would apply for its cut of the forfeited cash.
Another different kind of example involves the Motel Caswell on Main Street in Tewksbury, Mass. The family-owned business, operated by 69-year-old Russell Caswell, was targeted for seizure by federal prosecutors who contended it was being used to "facilitate" ongoing illegal drug activity. Caswell denied it and was never charged with a crime, but faced losing a business that his father had built in 1955.
A federal judge ruled in January that there was no proof Caswell tolerated drug activity, much less encouraged it. In fact, U.S. Magistrate Judge Judith Gail Dein said in a 59-page decision that Caswell allowed police free reign over the property and he had no responsibility to tackle the drug problem by himself.
"Courts do not expect the common land owner to eradicate a problem which our able law enforcement organizations cannot control," Dein wrote.
One of Caswell's attorneys, Larry Salzman of the Arlington, Va.-based Institute for Justice public interest law firm, said the case illustrates how forfeiture laws have influenced police.
"It's quick cash for the local agency," Salzman said. "There are places that have these task forces that exist simply to seize money."
According to the institute, law enforcement agencies are allowed to keep 100 percent of seized assets in 26 states, with another 16 states allowing them to keep half. Most states require property owners to establish their innocence, with only six _ California, Florida, Colorado, Kansas, Michigan and Oregon — requiring the government to prove guilt.
The federal government must prove a person's connection to crime, but using the lower civil "preponderance of the evidence" standard — in other words, a little more likely than not — rather than the "beyond a reasonable doubt" standard required in criminal cases. Georgia legislation to raise the legal standard and make other reforms failed to pass after fierce resistance from police agencies.
Along Interstate 40 in Tennessee between Nashville and Memphis, task forces were created to catch drug dealers and seize cash using the state's forfeiture laws. Investigators noticed that if they stopped westbound cars they'd be more likely to find drug money, while the eastbound cars were more likely to contain drugs.
It became clear which side was lucrative for investigators, said Tennessee state Rep. Barrett Rich, a former state trooper sponsored a bill this year to give people more rights in forfeiture proceedings.
"It seems the focus in Tennessee has gone from getting the drugs off the street and instead placing an emphasis on the money," said Rich, a Republican.
The problem in Tennessee, Rich said, is that innocent people who had large amounts of cash seized were forced to await the outcome of a forfeiture hearing if they wanted it back. The judge and law enforcement officials meet in private to decide what to do.
According to the Beacon Center of Tennessee, a public policy research group, questionable stops included a Georgia lottery winner who had $20,000 in cash seized and a man helping his mother move with her life savings, from whom $27,500 was taken. It's unclear from the report whether they got their money back.
Back in Bal Harbour, former police chief Thomas Hunker was fired following a Justice Department probe into its drug task force, which has been disbanded in the wake of the controversy. Among the investigation's findings were that more than $263,000 was improperly paid out of forfeiture funds for salaries and an American Express for travel expenses.
The village has been forced to repay $1.2 million to the Justice Department, said interim city manager Jay Smith, and could be on the hook for millions more.
Hunker's attorney, Richard Sharpstein, said the Justice Department probe made numerous false accusations — Justice officials refused comment on the investigation — and that the task force was responsible for more than 200 arrests.
"Chief Hunker served and protected the citizens of this community steadfastly for a decade," Sharpstein said.
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