Asset Forfeitures and Seizure | Forfeiture Attorney
Presumed Guilty Until Proven Innocent: What You Didn’t Know About Asset Forfeitures in Texas
Your assets can be seized by the government even if you are not guilty of a criminal offense, or even charged with a crime. Asset forfeitures have become more common at both the national level, the state level, and here locally in Tarrant County. Assets are being seized and forfeited from individuals – even some who are innocent owners. Many attorneys are not familiar with, or comfortable handling, civil asset forfeitures. The reason is although civil asset forfeitures are civil proceedings, their underpinnings are found in Chapter 59 of the Texas Code of Criminal Procedure. Few lawyers or law firms handle both civil and criminal cases. The following guide has been prepared by the lawyers at Varghese Summersett PLLC, a Fort Worth, Texas criminal defense and civil litigation firm. Steve Jumes is nationally-recognized as one of the leading lawyers in the asset forfeiture arena, and has experience handling forfeitures in state and federal courts throughout the country.
Civil Asset Forfeitures: Cause for Concern
The power of the government to seize property becomes concerning once you realize:
- Property can be seized and forfeited regardless of whether its owner has even been charged, much less convicted of, a crime.
- The State does not have to prove its case beyond a reasonable doubt, and instead is only held to the much lower standard of preponderance of evidence.
- The burden is on the accused to establish an “innocent owner” defense.
Asset forfeiture proceedings are civil charges, which are filed separately from any criminal charges and are charged against the property itself, not the person. (This results in case names such as In re One Man’s Rolex Watch Yellow Gold and State v. Silver Chevrolet Pickup.) By filing charges against the property itself, instead of against the property owner, the government essentially deprives the owner of important rights. For example, the claimant will have no Fifth Amendment privileges on the forfeiture case. Also, because these are civil cases filed against the property and not the property owner, the claimant has no right to court-appointed counsel and thus the cost of hiring counsel to defend and retrieve property can be cost-prohibitive, resulting in the state prevailing by default judgment in many of these cases. Furthermore, because it is a civil proceeding, the state only has to prove by a “preponderance of the evidence” that the property has criminal ties. Thus, once the State has established their case by a preponderance of evidence, the property is essentially presumed “guilty until proven innocent.”
Tarrant County law enforcement agencies reported seizing approximately $14.09 million over the last decade (2003-2013). The same audits indicated that Tarrant County retained approximately $4.35 million in forfeiture proceeds in the 2013 fiscal year alone.
Law enforcement began utilizing the doctrine of asset forfeiture more proactively in the 1970s to seize illegally obtained profits from drug cartels and white-collar fraudsters. In recent years, law enforcement agencies have turned to asset forfeitures as a way to increase their revenues. Law enforcement began relying on asset forfeiture more heavily after 1984 when Congress’ passed the Comprehensive Crime Control Act, which essentially allowed the law enforcement agencies responsible for forfeitures to keep the proceeds generated from them. This created a clear profit driven incentive for agencies to increase forfeitures. According to The New Yorker, “Many states, facing fiscal crises, have expanded the reach of their forfeiture statutes, and made it easier for law enforcement to use the revenue however they see fit.” As Steve Westbrook, the executive director of the Sheriff’s Association of Texas stated, “We all know the way things are right now—budgets are tight. It’s definitely a valuable asset to law enforcement, for purchasing equipment and getting things you normally wouldn’t be able to get to fight crime.”
In Texas, law enforcement is permitted to retain as much as 90 percent of the proceeds received from forfeited property.
An Overview of Asset Forfeiture in Texas
In 1989, the Texas Legislature amended the asset forfeiture statute to include an earmarking provision, which allows law enforcement agencies and district attorney’s offices to use the revenue generated through asset forfeitures. See 59.06(c). In Texas, law enforcement is permitted to retain as much as 90 percent of the proceeds received from forfeited property, which arguably incentivizes law enforcement to pursue cases likely to result in some form of asset forfeiture more aggressively. Furthermore, by participating in a federal program referred to as “equitable sharing,” local and state law enforcement agencies can retain up to eighty percent of proceeds gained from forfeited assets if they partner with a federal agency. Via equitable sharing, local and state law enforcement agencies are allowed to assist with such federal efforts even if it results in a circumvention of the protections afforded property owners by that state. “Policing for profit” is not necessarily a misplaced description of what asset forfeiture has become considering that Texas counties reported seizing approximately $37.2 million in 2013 alone. According to asset forfeiture audits conducted by the Attorney General’s Office, Tarrant County law enforcement agencies reported seizing approximately $14.09 million over the last decade (2003-2013). The same audits indicated that Tarrant County retained approximately $4.35 million in forfeiture proceeds in the 2013 fiscal year alone.
There are a plethora of examples of how law enforcement agencies across Texas have put the proceeds from asset forfeitures to questionable uses. For example, in 2008 a District Attorney in west Texas paid for a trip to Hawaii for his entire staff allegedly for “training” and used forfeiture proceeds to pay for all of the travel expenses. A Montgomery County District Attorney’s Office used asset forfeiture proceeds to pay for a party in 2005, complete with beer, liquor, and a margarita machine. In Hunt County there are reports of law enforcement officers receiving personal bonuses funded entirely by the county’s forfeiture proceeds, with some bonuses as much as $26,000 a year. The Tarrant County District Attorney’s Office had a forfeiture balance of $4.3 million, and seized 246 cars, and 440 computers in fiscal year 2013, which amounted to nearly 10 percent of its entire budget. A large portion of the proceeds from the seized property was spent on salaries for employees, with a much smaller amount being donated to several nonprofits benefitting victims or prosecution efforts. Furthermore, in Jim Wells County, a former district attorney was alleged to have used asset forfeiture funds in excess of $4 million to pay for trips to casinos and extra pay. Dallas District Attorney Craig Watkins is reported to have used funds from asset forfeitures to pay over $50,000 to the driver of a vehicle he rear-ended.
What was once a crime fighting and law enforcement tool has since become a profit-making, personal account for some law enforcement officials. Instances of abuse in both the confiscation and spending of asset forfeiture proceeds have increased at alarming rates.” – Texas Senate Committee on Criminal Justice
In Tenaha, a town in East Texas, the district attorney oversaw what was essentially deemed a “highway robbery” asset forfeiture scheme that netted approximately $3 million between 2006 and 2008. The scheme involved the local law enforcement officers pulling over out-of-town drivers on flimsy grounds in order to assess what valuables the driver possessed. Then the officers threatened drivers with sham criminal charges and even state removal of their children if they refused to waive their rights to the property. The $3 million was allegedly used to buy popcorn machines, make donations to a church, and pay bonuses for law enforcement officers who played key roles in orchestrating the scheme. Spurred by the growing awareness of the abuse of the doctrine of civil asset forfeiture, the Texas Senate Committee on Criminal Justice released a report in December 2008 that stated, “What was once a crime fighting and law enforcement tool has since become a profit-making, personal account for some law enforcement officials. Instances of abuse in both the confiscation and spending of asset forfeiture proceeds have increased at alarming rates.”
A generation ago in America, asset forfeiture was limited to wresting ill-gotten gains from violent criminals. Today, it has a distinctive ‘Alice in Wonderland’ flavor, victimizing innocent citizens who’ve done nothing wrong.” Texas Supreme Court Justice Don Willet
The following quote, made by Justice Don Willet of the Texas Supreme Court, conveys a sense of alarm regarding law enforcement’s increasing flagrant misuse of civil asset forfeiture: “A generation ago in America, asset forfeiture was limited to wresting ill-gotten gains from violent criminals. Today, it has a distinctive ‘Alice in Wonderland’ flavor, victimizing innocent citizens who’ve done nothing wrong. To some critics, 21st-century excesses are reminiscent of pre-Revolutionary America, when colonists chafed under the slights and indignities inflicted by King George III and Mother England—among them, ‘writs of assistance’ that empowered government to invade homes and seize suspected contraband. Legal scholars have declared these writs ‘among the key grievances that triggered the American Revolution.’” El-Ali v. State, 428 S.W.3d 824, 827 (Tex. 2014). The Justice further cautioned that, “When agency budgets grow dependent on asset forfeiture, not as an occasional windfall or supplement but as indispensable revenue to fund basic operations, constitutional liberties are unavoidably imperiled.” Id. at 828. Texas law enforcement agencies are arguably becoming increasingly dependent on the proceeds from forfeitures, with forfeiture proceeds comprising approximately forty percent of some agencies budgets.
The Specifics of Asset Forfeiture under Chapter 59
What can be seized in Texas?
Any property that is considered to be “contraband” is subject to seizure. Under Art. 59.01 of Tex. Code of Crim. Pro., “contraband” is defined as property of any nature, including real, personal, tangible, or intangible that is used in the commission of any first or second degree felony, certain third degree felonies, or certain misdemeanors. The contraband must be “used or intended to be used” in the commission of one of the specified offenses. Furthermore, “contraband” also includes the proceeds gained from the commission of certain felonies, misdemeanors, and crimes of violence or property acquired using the proceeds gained from the commission of such offenses. “Contraband” can also include property used to facilitate or intended to be used to facilitate the commission of certain felonies listed in Art. 59.01.
What is considered “contraband” for forfeiture purposes in Texas?
- Property used in the commission of a specific offenses (most felonies, some misdemeanors)
- Property used or intended to be used in the commissions of certain offenses
- Proceeds gained from the commission of an offense
- Property acquired with the proceeds
- Property used to facilitate or intended to be used to facilitate 15.031 (solicitation of a minor), Prostitution, Public Indecency, 43.25, Penal Code, Sexual Performance by a child, 20A.02 trafficking of a person
What specific offenses can lead to forfeiture?
The following is a list of the specific offenses that can lead to forfeiture:
59.01(2) plain language, contraband includes property used in the commission of:
- any first or second degree felony under the Penal Code;
- any felony under Section 15.031(b) – criminal solicitation of a minor;
- 20.05 – Smuggling of a Person;
- 21.11 – Indecency with a Child;
- 38.04 – Evading Arrest;
- Chapter 43 – Public Indecency;
- 20A – Trafficking of Persons;
- 29 Robbery;
- 30 – Burglary or Criminal Trespass;
- 31 – Theft;
- 32 – Fraud;
- 33 – Computer Crimes;
- 33A – Telecommunications Crimes;
- 35 – Insurance Fraud;
- any felony under The Securities Act; and
- a felony intoxication offense if the defendant has been previously convicted three times of an offense.
used or intended to be used in the commission of:
- any felony under Texas Controlled Substances Act;
- any felony under Dangerous Drug Act;
- any felony under Chapter 34, Penal Code; Money Laundering;
- a Class A misdemeanor under Subchapter B, Chapter 365, Health and Safety Code, if the defendant has been previously convicted twice of an offense under that subchapter; (Abandoning Litter);
- Medicaid Fraud;
- a Class B misdemeanor under Chapter 522, Business & Commerce Code; – identity theft by electronic device;
- a Class A misdemeanor under Section 306.051, Business & Commerce Code; -unauthorized sale or receipt of phone records;
- any offense under Section 42.10, Penal Code; – dog fighting;
- any offense under Section 46.06(a)(1) or 46.14, Penal Code; – unlawful transfer of weapons, smuggling firearms;
- any offense under Chapter 71, Penal Code; – organized crime;
- Section 20.05, Penal Code – smuggling of person; and
- Phantom-ware and automated sales suppression devices Section 326.002, Business & Commerce Code.
Seizures Can Be Made With or Without Warrants
Any law enforcement officer may seize property subject to forfeiture under the authority of a search warrant. But officers may also seize property subject to forfeiture without a warrant if:
- the owner, operator, or agent in charge of the property knowingly consents;
- the seizure is incident to a search to which the owner, operator, or agent in charge of the property knowingly consents;
- the property subject to seizure has been the subject of a prior judgment in favor of the state in a forfeiture proceeding; or
- the seizure was incident to a lawful arrest, lawful search, or lawful search incident to arrest. See 59.03(b)(1-4).
When the officer seizes the property, the person in possession of the property at the time of the seizure may assert his or her interest in or right to the seized property. Officers, including the officer who seizes the property, are not permitted to request, require, or in any manner induce any person, including a person who asserts an interest in or right to the property, to execute a document purporting to waive the person’s interest in or rights to the property seized. Attorneys representing the state are also prohibited from requesting, requiring, or in any manner inducing any person, including a person who asserts an interest in or right to the property, to execute a document purporting to waive the person’s interest in or rights to the property seized at any time prior to notice being filed under Art. 59.04(b).
a. “Innocent Owner” Defense
If you are an “innocent owner” of property that has been seized or forfeited as a result of someone else using your property in the commission of an offense, then the affirmative defense known as the “innocent owner” defense may be of assistance to you in recovering your property. The “innocent owner” defense is a safe harbor that allows “innocent owners” of seized or forfeited property to recover the property pending the forfeiture proceeding, on execution of a bond equal to the appraised value of the property. See 59.02. The bond is conditioned on the return of the property to the custody of the state on the day of the forfeiture hearing proceedings and that the interest holder or owner of the property will abide by the decision made in the cause.
The burden of proof for the ”innocent owner” defense is placed on the owner of the property who is seeking to retrieve his or her property. The reverse burden requires the property owners to demonstrate that the property was wrongfully seized. If the owner sustains the burden, the property is held not forfeitable. For example, there have been multiple instances of police officers pulling over out of town drivers or people in rental cars and seizing any large sum of money they possess under the assumption that the money is related to a drug offense, even if the police do not find any evidence of a crime. Then it is up to the owner to appear in court to prove that there is an innocent explanation of why they were in possession of the large sum of cash and that the money was not related to any criminal offense. This reverse burden of proof places a heavier burden on the property owners than on the government.
Art. 59.02(c) states that “an owner or interest holder’s interest in property may not be forfeited under this chapter if the owner or interest holder proves by a preponderance of the evidence that the owner or interest holder acquired and perfected the interest: (1) before or during the act or omission giving rise to forfeiture or, if the property is real property, he acquired an ownership interest, security interest, or lien interest before a lis pendens notice was filed under Art. 59.04(g) of this code and did not know or should not reasonably have known of the act or omission giving rise to the forfeiture or that it was likely to occur at or before the time of acquiring and perfecting the interest or, if the property is real property, at or before the time of acquiring the ownership interest, security interest, or lien interest; or (2) after the act or omission giving rise to the forfeiture, but before the seizure of the property, and only if the owner or interest holder: (A) was, at the time that the interest in the property was acquired, an owner or interest holder for value; and (B) was without reasonable cause to believe that the property was contraband and did not purposefully avoid learning that the property was contraband.
Furthermore, 59.02(h)(1) states that “an owner or interest holder’s interest in property may not be forfeited under this chapter if at the forfeiture hearing the owner or interest holder proves by a preponderance of the evidence that the owner or interest holder was not a party to the offense giving rise to the forfeiture and that the contraband:
(A) was stolen from the owner or interest holder before being used in the commission of the offense giving rise to the forfeiture;
(B) was purchased with:
(i) money stolen from the owner or interest holder; or
(ii) proceeds from the sale of property stolen from the owner or interest holder; or
(C) was used or intended to be used without the effective consent of the owner or interest holder in the commission of the offense giving rise to the forfeiture.
Thus, the “innocent owner” defense is fact specific and the owner must gather the pertinent facts as soon as possible in order to have a better chance of prevailing in court. However, because of the reverse burden of proof and the fact that the value of the property seized is often less than the cost of retaining counsel and mounting an innocent owner defense, most forfeiture proceedings go unchallenged and the government wins by a default judgment.
b. Family Violence Defense
Victims of an act of family violence can assert an affirmative defense to forfeiture under Art. 59.05(c) of property belonging to the spouse of a person whose acts gave rise to the seizure of community property if the victimized spouse was unable to prevent the act giving rise to the seizure of community property because of an act of family violence.
The Urgent Need for Reform
Civil asset forfeiture has indeed become “big business” in Texas, supplementing law enforcement agencies’ budgets and allowing them to “legally” take advantage of and strip innocent citizens of their property without affording them adequate due process. Over the past few years, Texas legislators have considered multiple bills that sought to reform asset forfeitures by limiting what the proceeds could be used for and prohibiting some of the most abusive practices, such as the “roadside waivers” a.k.a “highway robberies” that were carried out by law enforcement officers in Tenaha, Texas. But despite the legislative attempts at reform, civil asset forfeiture still remains largely unchecked within the state of Texas and nationwide. Furthermore, as long as the profit incentive remains tied to asset forfeiture by allowing law enforcement to retain large percentages of what they seize, the problem is likely to continue to proliferate. At least one state, North Carolina, has banned the practice of civil asset forfeiture and now requires a criminal conviction before a person’s property can be seized. If you or a loved one has had assets seized by Texas or federal law enforcement agents, call us at 817-203-2220.