Many Americans who’ve had their property confiscated by the feds aren’t convicted criminals like ‘Pharma Bro’ Martin Shkreli.
The legendary Wu Tang Clan rap album “Once Upon a Time in Shaolin” may soon be part of the federal government’s forfeiture fund. Earlier this month, a federal judge ordered infamous “Pharma Bro” Martin Shkreli to hand over the one-of-a-kind album, along with a Picasso painting, $5 million in bail he posted, and another rare rap album, Lil Wayne’s “Tha Carter V.” Those assets will only add to the already bulging federal forfeiture coffers. Over the past 30 years, this fund has ballooned 1,600%, from $93.7 million in deposits in 1986 to $1.6 billion last year.
But many of the owners who’ve had their property confiscated by the feds aren’t convicted criminals like Shkreli, they’re innocent people never even charged with a crime, much less convicted of one. A whopping 87% of DOJ forfeiture cases involve civil, not criminal, forfeiture — meaning no conviction is required. Under U.S. Attorney General Jeff Sessions, the Trump administration has doubled-down on this controversial practice.
After Shkreli was convicted for defrauding investors last year, prosecutors used a legal tool called “criminal forfeiture” — which empowers the government to confiscate property after a criminal conviction — to go after the proceeds of his fraud. The logic behind criminal forfeiture is sound: No one wants fraudsters like Shkreli and other convicted criminals to profit from their wrongdoing. But civil forfeiture allows the government to take property from innocent individuals. Although the Obama administration scaled back the controversial practice, Attorney General Sessions has embraced civil forfeiture, restoring the federal “adoption” program that provides a hefty bounty for state law enforcement agencies to seize property in collaboration with the federal government.
Police and prosecutors like civil forfeiture because their departments often get to keep most, if not all, of the forfeiture proceeds. As Pete Connelly, a former city attorney in New Mexico bluntly described it, civil forfeiture is a “gold mine” that lets the government take “little goodies.” Even worse, in adoptive forfeiture cases, agencies can bypass state protections for innocent property owners.
Civil forfeiture can be — quite literally — highway robbery. Musician and entrepreneur Phil Parhamovich found that first-hand, when he was pulled over by the Wyoming Highway Patrol last year and ticketed $25 for improperly wearing his seatbelt. During the traffic stop, troopers found $91,800 in cash. Suspicious, they seized the money but never charged Parhamovich with a serious crime. Parhamovich wanted to use his cash to purchase a legendary Madison, Wisc., music studio where Nirvana and the Smashing Pumpkins had once recorded. In the months after his highway robbery, Wyoming refused to return the money to Parhamovich. In fact, they even held a hearing about his funds before they notified him of the hearing date. The Institute for Justice (IJ) sued the state of Wyoming on Parhamovich’s behalf. Justice was so swift it could have been pulled over for speeding: Mere hours after IJ filed the lawsuit, a Wyoming judge ordered the state to return the money to Parhamovich, which the state flatly refused to do until he sued.
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Parhamovich’s story may have ended well for him, but tragically, there are countless other victims of civil forfeiture who never got their day in court. But the Trump Administration’s aggressive use of civil forfeiture has started to catch the attention of legislators. In a heated exchange in December, Rep. Darrell Issa, R-Calif., slammed FBI Director Christopher Wray for refusing to acknowledge the constitutional problems with civil forfeiture. Hours after the hearing ended, the Justice Department sought to deflect criticism of its aggressive use of civil forfeiture by announcing a new “Director of Asset Forfeiture Accountability” — a quintessential example of assigning the fox to guard the henhouse. But Congress isn’t letting up — in a rare show of overwhelming bipartisanship in September, the House of Representatives voted unanimously to block the Justice Department’s new forfeiture order, and the Senate is considering doing the same.
While Wu Tang Clan fans may have good reason to rejoice at the use of criminal forfeiture to “get the money, dollar dollar bill” from convicted felon Martin Shkreli, Nirvana fans like Phil Parhamovoch are calling civil forfeiture what it is — “stupid and contagious.”
Sheldon Gilbert directs the Institute for Justice’s Center for Judicial Engagement.
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