Experts: Prosecutors doing what they want with seized assets
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Bust a suspected drug dealer. Take away his car, jewelry, cash -- anything you think was bought or obtained by selling drugs. Then, keep the cash and sell off the rest.
It's a nice little score for law enforcement agencies, and easy money at a time when their taxpayer-funded budgets are getting the squeeze.
In theory, it sounds good. But in practice, Indiana's laws on asset seizure and forfeiture are so lax -- so ripe for abuse -- that legal experts, judges and even some of those who stand to gain most have become increasingly troubled.
An Indianapolis Star investigation found that in the absence of a clear statute, prosecutors across the state play fast and loose with forfeiture funds -- keeping as much as they want and using the money however they like.
In short, some prosecutors are treating seized money less like a regulated source of revenue and -- the way legal experts see it -- more like a slush fund, creating a dangerous incentive to police for profit.
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The Star's investigation found numerous examples of questionable practices, including:
Prosecutors using liberal definitions of law enforcement costs and thus keeping all of the cash and money derived from seized assets. (State law calls for excess money to be turned over to schools.)
Law enforcement deciding how money is spent, rather than allowing it to go through the normal local government appropriations process, removing another check on policing for profit.
Prosecutors circumventing the regular judicial oversight process and handling forfeiture cases through settlement agreements, without ever entering a courtroom.
Counties assigning the same prosecutor to a forfeiture case who is prosecuting the related criminal case, increasing the potential for extortion or providing leniency to those who agree to give up assets.
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Clark County Prosecutor Steven Stewart told The Star that seizing cash and property from criminal suspects is such an ethical minefield that, despite the potential windfall for law enforcement, he stopped doing it.
Stewart is among a growing chorus that thinks the legislature should intervene and set rules for a system that is described by many as a free-for-all where the policies vary vastly from county to county, prosecutor to prosecutor.
Former Boone County Judge Steve David, who recently took a seat on the Indiana Supreme Court, spotlighted the many questions left unresolved by the state's forfeiture law when he served as hearing officer in a disciplinary case this year involving the Delaware County prosecutor.
David recommended a public reprimand of Mark McKinney -- who inappropriately paid himself to conduct forfeiture cases -- but the Supreme Court has not handed down a final ruling.
"As it stands now, there's so much discretion it's difficult to figure out the right thing to do," Stewart said. "The whole idea is a good one -- take profit away from drug dealers. But sometimes one can become more important than the other; money becomes more important than the criminal disposition in a case. And that's not a good thing."
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How much are they allowed to keep?
State statute allows law enforcement agencies to hold on to a portion of seized funds in order to cover "law enforcement costs" and directs them to turn the rest over to the common school fund, which helps finance school construction -- and ease the taxpayer burden.
But what constitutes law enforcement costs depends on the prosecutor.
In Wayne County, Prosecutor Michael Shipman individually calculates the cost of each law enforcement action that results in seizure. He totals the regular and overtime hours that each officer works, and factors in every expense precisely, down to the number of computer disks -- 60 cents each.
"I think that's a fair and transparent way to do it," he said. "Could I calculate those costs differently and retain more money? Probably."
When Shipman was able to justify only a few hundred dollars in law enforcement expenses on a recent seizure of assets worth $12,000, he turned over a check for more than $11,000 to the state to be sent to the common school fund.
He would have liked to keep more of the $12,000 and use it to perhaps buy bulletproof vests and other equipment for police officers, he said, but he couldn't justify such action based on his interpretation of the state law.
Indianapolis law enforcement officials have a broader -- and more lucrative -- interpretation of law enforcement costs. They argue that the phrase simply means the cost of enforcing the law in Marion County, and thereby justify holding on to every dollar of the nearly $1.6 million the county received from state forfeiture cases in 2009.
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"We don't break it down on a case-by-case basis," said Lawrence Brodeur, chief of Marion County's strategic narcotics prosecution division. "That doesn't make any sense. You could have one case where the officer makes a simple traffic stop, and there could be a quarter-million in cash that we seize. There could be months and months and months on another case, and we catch the guy with a lot of dope but not a lot of cash. Law enforcement, as you know, is more than one case at a time."
Assets forfeited in Marion County flow into a designated law enforcement fund that benefits the Indianapolis Metropolitan Police Department and the Marion County prosecutor's office.
But even Brodeur's definition of law enforcement costs is not as broad as the one endorsed by Putnam County Prosecutor Tim Bookwalter. In 2008, he made a $28,000 donation to fund spay/neuter services at the local Humane Society with forfeiture money. His argument: Stray dogs are a law enforcement problem.
Who holds the purse strings?
Brodeur said that even though Marion County law enforcement officials tend to benefit from all of the forfeiture funds they take in, the money cannot become a slush fund because the City-County Council, not law enforcement, decides how to spend it.
However, that level of oversight does not exist everywhere.
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In Knox County, after council members started trying to keep a closer watch on Sheriff Stephen Luce's spending, Luce simply circumvented them.
"The sheriff at that time felt like it was his money and his slush fund," County Council President Tim Ellerman said. "He was wanting to buy sniper rifles. Down here we don't really need sniper rifles with lasers because very seldom do we have hostage situations. Once we started scrutinizing, then all of the sudden the money stopped coming in."
But not really. A 2007 audit revealed that police had not stopped seizing forfeiture funds. Nor had Luce stopped spending them. He had simply begun funneling the money straight from law enforcement coffers into his creditors' pockets, without ever depositing the money with the county or asking the permission of County Council members.
For example, the 2007 audit found that after a public sale of seized assets, the attorney handling forfeitures for the prosecutor's office had written an $8,000 check -- not to the county, but to Vincennes Ford, to pay for a vehicle. Kurt Webber, an attorney the council hired to sort out the mess, found that Luce had been buying police vehicles on credit, without council authorization, since 2003 and using forfeiture funds to pay them off
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Without financial oversight by the County Council, Webber said, "forfeiture actions become a profit center for the sheriff. There's an incentive to enforce some components of the criminal code -- because that provides additional revenue for his office -- at the expense of other crime victims."
Luce left the Knox County Sheriff's Department during Webber's investigation in order, Luce said, to take a job at the Indiana Sheriffs' Association, where he is executive director.
Luce said he would welcome more clarification from the legislature. He said he did not know when he bought the Ford that the County Council was required by law to sign off on the purchase.
"We need to review a lot of our legislation, especially asset forfeiture, just so that everybody is on the same page," Luce said.
Who oversees the legal action?
Although county council members are expected to oversee the spending of seized funds on one end, a judge is expected to oversee the forfeiture proceedings that generate those funds.
But that level of oversight doesn't always exist, either.
Until 2008, prosecutors in Putnam County could settle forfeiture cases with defendants without ever entering a courtroom. A 2007 audit found the county was distributing forfeited property through "Assignment of Property Agreements" without ever filing a court action.
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In fact, the whole thing could be accomplished on the side of the highway, said attorney Christopher Gambill, who handles forfeiture cases for Putnam and six other counties. A police officer might pull over a driver and find wads of cash stashed in a hiding place inside the car. Depending on what else the officer found inside the car, the driver might or might not be arrested.
Either way, the officer would seize the money and give the driver a choice: Contest the forfeiture in court and force the county to prove the money is connected to criminal activity, or turn over the money right now and be done with it.
Gambill said the second option appealed to drug mules, who were carrying money from a transaction and just wanted to get rid of it and get out. But, he said, "people (in the legal field) started questioning, 'Were they (assignment of property agreements) used to shake down people, take their money and let them go?' "
Putnam County stopped using the agreements in 2008, after the Prosecuting Attorneys Council recommended against it -- but there is still no state law that prevents the practice.
Putting justice up for sale?
Defendants have the right to contest any forfeiture in court. They can bring in evidence that the money or goods were acquired lawfully and can force law enforcement officials to try to prove otherwise.
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But the fact that the forfeiture process is often going on at the same time criminal charges are being brought against the defendant raises, for some legal experts, the specter of coercion -- even extortion.
Forfeiture funds are a vital source of income for strapped law enforcement agencies competing for increasingly scarce federal grants.
When the same prosecutor handles both cases, how do you know that he or she is not offering a good deal to defendants who hand over their money or property without a fight? How do you know the prosecutor is not using the threat of arrest to force an innocent person to turn over his or her assets?
Consider this 2008 case in Hendricks County.
Anthony Hastings was arrested and charged with dealing drugs, a crime for which he was later convicted.
The prosecutor on the case was James Bryan, who also coordinates the United Drug Task Force, which relies on forfeiture funds to survive.
But Bryan had another role in the case: He also oversaw the seizure of more than $100,000 worth of property, cars and cash from the Hastings home.
During that process, he reached an agreement with Hastings and his wife, Lisa, who was never charged, to forfeit their property. But it was one aspect of that agreement that raised eyebrows -- and drew sharp criticism -- from some experts.
It called for Lisa Hastings to pay off the $12,000 loan on her Kia Amanti and turn over the car to the task force.
More troubling, Lisa Hastings told The Star that Bryan told her that if she didn't pay off the loan and turn over the car, he might arrest her, too -- a threat she said carried special weight because if she was arrested, even if later exonerated, she would be fired from her job: an executive position with a six-figure salary.
Bryan told The Star that at no time did he make any such suggestion. He said the couple never challenged the forfeiture, and that everything was handled with Lisa Hastings' attorney present. He also said he could have seized other property -- including a Jaguar -- but that he deferred to what the couple agreed to.
"Under no circumstances, in any fashion, in any way," Bryan said, "was Mrs. Hastings told that if she did not sign over a car or any property, she would be prosecuted."
Legal experts say the Hastings case -- even if the prosecutor did absolutely nothing wrong -- shows how easily the forfeiture process can be exploited, particularly when it is governed by regulations as loose and vague as the Indiana statute.
"This is a powerful story of the problems with those kinds of laws," said University of Chicago Law School Professor Craig Futterman. "It's a conflict of interest: laws that provide incentive to public officials for seizing property, and then their office is going to reap the benefits from it."
The Kia remained with the United Drug Task Force -- and was assigned to Bryan, who used it to drive to and from work.
"For her to pay $12,000 for the car to be in the prosecutor's driveway," Futterman said, "you don't need a legal expert to tell you that's wrong."
The task force auctioned off the Kia last month, about two years after it was seized. (The law permits agencies to hold on to vehicles for a maximum of three years.) Hendricks County Prosecutor Pat Baldwin said the decision to auction the car had nothing to do with questions raised by The Star weeks earlier.
Baldwin also noted that Hendricks County changed its policy earlier this year. Criminal cases are now assigned to a separate prosecutor from the accompanying forfeiture cases.
What kinds of changes can be made?
Other states have laws that aim to protect the forfeiture process against abuse.
In Illinois, prosecutors can't bring forfeiture proceedings until a suspect is convicted and sentenced. That guards against the possibility, or even the appearance, that a prosecutor is trading leniency for money or other seized property.
Wisconsin, like Indiana, sends some of its seized assets to the common school fund. But instead of letting each prosecutor keep as much money as he or she can justify, state law explains exactly how to distribute it: Half the money goes to the school fund and half to the law enforcement agency, which is permitted to spend it on any expenses associated with the forfeiture process.
But are Indiana lawmakers willing to tighten seizure and forfeiture laws?
Sen. Brent Steele, R-Bedford, chairman of the Senate Corrections, Criminal and Civil Matters Committee, says yes -- and changes may be coming as early as the legislative session that starts in January.
"We need to have people testify and get professional opinions," Steele said, "and have an open, serious debate."
Sen. Richard Bray, R-Martinsville, chairman of the Senate Judiciary Committee, agrees it's time for lawmakers to get involved. Among other things, he thinks the formula for calculating law enforcement costs should be set by the legislature, not left up to each individual prosecutor.
Steele met this summer with Senate President Pro Tempore David Long, R-Fort Wayne. It was a meeting prompted by the Delaware County case -- one of the most egregious recent examples of abuse that has came to light: The prosecutor, McKinney, was contracting out forfeiture cases -- to himself -- and keeping a quarter of the forfeited funds.
"Maybe if the law had been more exact, people wouldn't be getting into trouble over the issue," Steele said. "That's what happens when the law isn't complete and exact, and what we've got is not adequate."
and Tim Evans
Nov 7, 2010
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