CurtisLow
03-30-2008, 07:56 PM
"To Serve and Protect"...and Legally Confiscate Your Wealth
Today's comment is by Mark Nestmann, our Wealth Preservation & Tax Consultant, Privacy Expert and President of The Nestmann Group.
Dear A-Letter Reader,
Since the founding of the American republic, federal and state laws have allowed authorities to confiscate property from individuals who were NOT guilty of a crime, and indeed, are never accused of one. It only needs to be reasonably assumed that the property was involved in a crime. This concept of "guilty property" is known as "civil forfeiture."
Today, the federal government uses civil forfeiture laws to confiscate billions of dollars of property each year. Property allegedly purchased with the proceeds of or "facilitating" criminal offenses committed under nearly 300 separate federal statutes may be forfeited. State and local forfeiture laws rake in billions more in additional revenues.
Civil forfeiture in U.S. law began in 1789, the same year that the Constitution was ratified. In that year, Congress enacted a series of statutes that authorized the confiscation of ships and/or their cargoes for failing to pay customs duties and engaging in piracy. Later these statutes were used to confiscate ships involved in slave trade.
Since then, civil forfeiture laws have expanded to encompass not only ships and their cargoes, but to property connected to hundreds of federal offenses. These laws have been repeatedly upheld by the Supreme Court, which as early as 1827 declared that "guilty property" could be confiscated, even from individuals entirely innocent of any wrongdoing.
Nearly 170 years later, in 1996, the Supreme Court upheld the same principle, when it affirmed a Michigan statute allowing the civil forfeiture of any property involved in a crime, regardless of the owner's culpability, or lack thereof.
Police Keep Confiscated Assets for Themselves
Since 1984, federal civil forfeiture laws have permitted seizing agencies to retain the assets they confiscate. What's more, under the federal "equitable sharing program," state and local police authorities may confiscate assets under federal laws that permit them to retain up to 80% of the seized property's value.
This procedure bypasses state laws that provide a constitutional barrier against the confiscation of property without a criminal conviction. It also masterfully gets around the state laws that require forfeited assets to be used for purposes other than law enforcement, like education.
Direct disbursement of forfeited revenues to law enforcement agencies badly distorts law enforcement priorities. But in 1989, the Supreme Court declared that the government has a legitimate financial interest in maximizing forfeiture to raise revenue.
Play Poker, Lose Your Home
Civil forfeiture laws also provide the government with unique procedural advantages. A seizure or asset freeze is authorized in an ex parte hearing (without the defendant or defendant's lawyer being present) before a judge, magistrate or administrator. Except when real property is involved, the property owners need not be informed of this hearing, and thus may not attend it, much less contest the seizure.
Civil forfeiture can also proceed without an arrest, much less criminal conviction, of the property owner. One study estimates that 80% of civil forfeitures do not result in criminal conviction, while another study estimates that 90% of civil forfeitures are uncontested by the property owners.
Let's say your son and his friends are having a friendly game of poker in your basement, while you're away from home. If that game violates a state or local anti-gambling ordinance, police may be able to "arrest" your house and then confiscate it, even though you knew nothing about the illegal activity.
If your teenager borrows your car and uses it to transport any quantity of illegal drugs -even a single "joint" - it can be confiscated. And since property, not life or limb, is at issue, the government doesn't need to prove its case beyond a reasonable doubt.
Tortured to Turn Over His Assets
Law enforcement agencies nationwide have become increasingly dependent on forfeited assets to supplement their budgets. And they're not hesitant to use extreme measures to get "their" money. In one terrifying incident in 2004, sheriff's deputies in Campbell County, Tennessee tortured a criminal suspect until he agreed to sign a statement agreeing to turn over his assets to the county. They didn't realize that the suspect's wife was secretly recording the incident.
While torture may not be an everyday occurrence in civil forfeiture cases, there are thousands of documented abuses of the procedure. Here's a small sample:
* In 1999, a "forfeiture squad" in El Monte, California, shot and killed a 65-year grandfather in the back as he knelt on the floor at his bedside. Officers then confiscated the man's life savings and dragged his surviving family members to the police station for interrogation in a narcotics-related investigation. Later, the city admitted that neither the victim nor his family had anything to do with drug trafficking.
* In Bradenton, Florida, police have an ongoing policy of coercing individuals who possess cash into signing a "forfeiture contract" waiving their right to contest the seizure. Those who hesitate to sign the contract are threatened with imprisonment.
* In Illinois, a married couple was arrested in 2006 for carrying out a scheme in which they would shake down people coming to the state's attorney's office trying to reclaim property seized during criminal investigations.
* In Arizona, a former Tucson police officer in charge of civil forfeitures was in 2003 charged with depositing US$615,000 in seized cash into his personal account.
Make Money or Fight Crime?
These incidents should come as no surprise. Civil forfeiture creates a conflict of interest in which police must choose between two contradictory strategies. Either they reduce crime or generate revenue. Given the fact that confiscating assets is more lucrative - and safer - than chasing possibly violent criminals, it is not surprising that the revenue generation model is increasingly being followed by law enforcement agencies nationwide.
And this is just the tip of the iceberg. Under the USA PATRIOT Act, civil forfeiture can occur in a secret hearing, in which you have no right to present your side of the story. The government can even offer evidence that would otherwise be inadmissible if a court finds that complying with the Federal Rules of Evidence would jeopardize national security, and deems the evidence "reliable." Thanks to federal judges who seal the records of the pending cases, America knows little about these forfeitures, which in many cases have nothing to do with terrorism.
Even worse, civil forfeitures under the International Emergency Economic Powers Act occur in a secret administrative hearing, with the victim having no opportunity to contest the decision in court. In 2006, the Supreme Court upheld this procedure.
What You Can Do to "Serve and Protect" Your Assets
What can be done? The just course of action would be to abolish civil forfeiture in all of its vile forms. Short of that outcome, banning secret forfeitures and requiring all evidence offered in civil forfeiture proceedings to be subject to the Federal Rules of Evidence would be a good start.
Another crucial reform would be to prohibit seizing agencies from retaining the assets they confiscate. And all seizing agencies should be subject to an annual outside audit to determine exactly what they've done with the funds they've confiscated.
Until then, the best thing you can do is keep your assets as far away from any possible civil forfeiture. A good place to start is by housing part of your wealth offshore. For one thing, offshore investments avoid the U.S. asset tracking network that permits investigators to easily identify a potential defendant's assets. They also make it more difficult to recover, as most countries won't enforce U.S. civil forfeiture laws.
http://www.sovereignsociety.com/offshore2204.html
Today's comment is by Mark Nestmann, our Wealth Preservation & Tax Consultant, Privacy Expert and President of The Nestmann Group.
Dear A-Letter Reader,
Since the founding of the American republic, federal and state laws have allowed authorities to confiscate property from individuals who were NOT guilty of a crime, and indeed, are never accused of one. It only needs to be reasonably assumed that the property was involved in a crime. This concept of "guilty property" is known as "civil forfeiture."
Today, the federal government uses civil forfeiture laws to confiscate billions of dollars of property each year. Property allegedly purchased with the proceeds of or "facilitating" criminal offenses committed under nearly 300 separate federal statutes may be forfeited. State and local forfeiture laws rake in billions more in additional revenues.
Civil forfeiture in U.S. law began in 1789, the same year that the Constitution was ratified. In that year, Congress enacted a series of statutes that authorized the confiscation of ships and/or their cargoes for failing to pay customs duties and engaging in piracy. Later these statutes were used to confiscate ships involved in slave trade.
Since then, civil forfeiture laws have expanded to encompass not only ships and their cargoes, but to property connected to hundreds of federal offenses. These laws have been repeatedly upheld by the Supreme Court, which as early as 1827 declared that "guilty property" could be confiscated, even from individuals entirely innocent of any wrongdoing.
Nearly 170 years later, in 1996, the Supreme Court upheld the same principle, when it affirmed a Michigan statute allowing the civil forfeiture of any property involved in a crime, regardless of the owner's culpability, or lack thereof.
Police Keep Confiscated Assets for Themselves
Since 1984, federal civil forfeiture laws have permitted seizing agencies to retain the assets they confiscate. What's more, under the federal "equitable sharing program," state and local police authorities may confiscate assets under federal laws that permit them to retain up to 80% of the seized property's value.
This procedure bypasses state laws that provide a constitutional barrier against the confiscation of property without a criminal conviction. It also masterfully gets around the state laws that require forfeited assets to be used for purposes other than law enforcement, like education.
Direct disbursement of forfeited revenues to law enforcement agencies badly distorts law enforcement priorities. But in 1989, the Supreme Court declared that the government has a legitimate financial interest in maximizing forfeiture to raise revenue.
Play Poker, Lose Your Home
Civil forfeiture laws also provide the government with unique procedural advantages. A seizure or asset freeze is authorized in an ex parte hearing (without the defendant or defendant's lawyer being present) before a judge, magistrate or administrator. Except when real property is involved, the property owners need not be informed of this hearing, and thus may not attend it, much less contest the seizure.
Civil forfeiture can also proceed without an arrest, much less criminal conviction, of the property owner. One study estimates that 80% of civil forfeitures do not result in criminal conviction, while another study estimates that 90% of civil forfeitures are uncontested by the property owners.
Let's say your son and his friends are having a friendly game of poker in your basement, while you're away from home. If that game violates a state or local anti-gambling ordinance, police may be able to "arrest" your house and then confiscate it, even though you knew nothing about the illegal activity.
If your teenager borrows your car and uses it to transport any quantity of illegal drugs -even a single "joint" - it can be confiscated. And since property, not life or limb, is at issue, the government doesn't need to prove its case beyond a reasonable doubt.
Tortured to Turn Over His Assets
Law enforcement agencies nationwide have become increasingly dependent on forfeited assets to supplement their budgets. And they're not hesitant to use extreme measures to get "their" money. In one terrifying incident in 2004, sheriff's deputies in Campbell County, Tennessee tortured a criminal suspect until he agreed to sign a statement agreeing to turn over his assets to the county. They didn't realize that the suspect's wife was secretly recording the incident.
While torture may not be an everyday occurrence in civil forfeiture cases, there are thousands of documented abuses of the procedure. Here's a small sample:
* In 1999, a "forfeiture squad" in El Monte, California, shot and killed a 65-year grandfather in the back as he knelt on the floor at his bedside. Officers then confiscated the man's life savings and dragged his surviving family members to the police station for interrogation in a narcotics-related investigation. Later, the city admitted that neither the victim nor his family had anything to do with drug trafficking.
* In Bradenton, Florida, police have an ongoing policy of coercing individuals who possess cash into signing a "forfeiture contract" waiving their right to contest the seizure. Those who hesitate to sign the contract are threatened with imprisonment.
* In Illinois, a married couple was arrested in 2006 for carrying out a scheme in which they would shake down people coming to the state's attorney's office trying to reclaim property seized during criminal investigations.
* In Arizona, a former Tucson police officer in charge of civil forfeitures was in 2003 charged with depositing US$615,000 in seized cash into his personal account.
Make Money or Fight Crime?
These incidents should come as no surprise. Civil forfeiture creates a conflict of interest in which police must choose between two contradictory strategies. Either they reduce crime or generate revenue. Given the fact that confiscating assets is more lucrative - and safer - than chasing possibly violent criminals, it is not surprising that the revenue generation model is increasingly being followed by law enforcement agencies nationwide.
And this is just the tip of the iceberg. Under the USA PATRIOT Act, civil forfeiture can occur in a secret hearing, in which you have no right to present your side of the story. The government can even offer evidence that would otherwise be inadmissible if a court finds that complying with the Federal Rules of Evidence would jeopardize national security, and deems the evidence "reliable." Thanks to federal judges who seal the records of the pending cases, America knows little about these forfeitures, which in many cases have nothing to do with terrorism.
Even worse, civil forfeitures under the International Emergency Economic Powers Act occur in a secret administrative hearing, with the victim having no opportunity to contest the decision in court. In 2006, the Supreme Court upheld this procedure.
What You Can Do to "Serve and Protect" Your Assets
What can be done? The just course of action would be to abolish civil forfeiture in all of its vile forms. Short of that outcome, banning secret forfeitures and requiring all evidence offered in civil forfeiture proceedings to be subject to the Federal Rules of Evidence would be a good start.
Another crucial reform would be to prohibit seizing agencies from retaining the assets they confiscate. And all seizing agencies should be subject to an annual outside audit to determine exactly what they've done with the funds they've confiscated.
Until then, the best thing you can do is keep your assets as far away from any possible civil forfeiture. A good place to start is by housing part of your wealth offshore. For one thing, offshore investments avoid the U.S. asset tracking network that permits investigators to easily identify a potential defendant's assets. They also make it more difficult to recover, as most countries won't enforce U.S. civil forfeiture laws.
http://www.sovereignsociety.com/offshore2204.html