Justice Department Suspends Equitable Sharing of Forfeited Assets

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Mar 18, 2021

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Federal asset forfeiture laws have been one of the most controversial weapons in the war against crime that began in the 1980s. The laws allow the government to confiscate proceeds of illegal activity from suspected criminals (including goods purchased with the proceeds of criminal activity), diverting them instead to the law enforcement agencies that seize them. That gives the government an incentive to target suspects who have assets (like cash and SUVs) that government agencies would like to obtain.

In drug cases, any property that is used to “facilitate” a crime can also be forfeited. Broad interpretations of that language have resulted in forfeitures of homes and businesses as well as vehicles.

Federal authorities typically seize property with a total value in excess of one billion dollars each year. Between 1989 and 2010, federal authorities seized more than $12 billion in assets using civil and criminal asset forfeiture laws. Criminal forfeitures are relatively uncontroversial because they are subject to the procedural protections of a criminal prosecution.

Civil asset forfeiture laws have primarily been used in drug cases and, to a lesser extent, cases involving financial fraud. Civil forfeiture is not viewed as punishment so seizing a Mercedes because the driver was smoking a joint in the car while it was parked in his driveway does not require conviction of a crime — or even the filing of a criminal charge.

Before 2000, the burden was on the property owner to prove that cash and other property seized by the government had been legitimately acquired. The law was reformed in 2000 to place the burden on the government to prove that the seized property was probably derived from or used to facilitate criminal activity. Critics have argued that the reforms enacted in 2000 did not go far enough to curtail abuses related to the law’s “equitable sharing” provisions. 

Equitable Sharing

Federal asset forfeiture law allows the federal government to “share” forfeited assets with state law enforcement agencies that seize, or assist in the seizure of, those assets. Federal law allows as much as 80% of the proceeds from forfeited assets to be returned to state and local law enforcement agencies. The Justice Department refers to the practice as “equitable sharing.”

In 2010, the federal government returned about $190 million in seized assets to local law enforcement agencies. While that amount represents a small percentage of the overall value of assets seized by federal and state law enforcement agencies, equitable sharing has been the most controversial aspect of federal asset forfeiture laws.

There is substantial evidence that in times of budget shortfalls, the police rely upon equitable sharing to help fund their departments. States also have asset forfeiture laws, but some of those laws require the proceeds from forfeited property to be treated as general revenues that the state can spend in the same way it spends tax revenues. Some states require forfeiture proceeds to be deposited into a special account, such as an account that is used to fund schools. Other states allow the police to keep a percentage of the seized asset’s value, but are less generous to police departments than the federal equitable sharing law. Studies show that police agencies in states that do not allow the police to keep 80% of seized assets are more likely to pursue asset forfeitures under federal law so that they become the direct beneficiaries of the assets they seize. 

Suspension of Equitable Sharing

Civil liberties groups, libertarian organizations, and conservative think-tanks have all complained that federal asset forfeiture has become an inappropriate profit center for state and local law enforcement agencies. Prominent columnists like George Will argue that seizing homes and businesses in order to fund local police departments is a disproportionate punishment for behavior that never leads to criminal charges.

Harsh criticism from all sides of the political spectrum may explain the Justice Department’s recent decision to suspend the equitable sharing program. The Justice Department is attributing the suspension to budget tightening, an explanation that seems suspicious given that both the federal government and its local law enforcement partners make money from asset forfeitures.

Police departments and law enforcement trade organizations (including the National Sheriff’s Association) seem to be the only groups that are displeased with the Justice Department’s announcement. While they contend that the suspension deprives them of an important law enforcement tool, they will still be able to pursue forfeitures under state law. Suspension of the equitable sharing program will merely deprive them of the ability to sidestep state laws in order to profit from asset forfeitures.

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