Thursday, July 22, 2010

Indiana Civil Forfeiture Law - Where is the Money Going?

It appears that millions of dollars of civil forfeiture funds are being kept by law enforcement agencies, prosecutor's offices, and private attorneys hired by prosecutors, rather than turned over to the State for education as required by Indiana law.

According to records obtained from the Treasurer's Office, Indiana's 92 counties only paid $95,509.72 in civil forfeiture funds into the common school fund for the past two years, an amount that is only slightly more than $1,000 per county.

Indiana's civil forfeiture law works like this: When property or money is seized in connection with certain crimes, often drug related, the prosecutor, or a private attorney hired by the prosecutor, can file a civil action against the property or money acquired. Once it is shown that the property or money was involved in a crime, the court is to make a determination of the law enforcement cost of the action, a figure which can include attorney's fees. Once those costs are paid, the remainder of the forfeiture proceeds are to be paid into the common school fund maintained by the Treasurer of the State of Indiana.

The problem appears that only one county in the State of Indiana - Wayne County - is complying with the law.

Between August 29, 2008 and July 19, 2010, Wayne County made 18 payments into the common school fund, totalling $38,835.56. One other county, Montgomery, made two payments. Three other counties, Putnam, Vigo and Dubois made one payment each in the two year period. Vigo's payment was for only $84.50. Eight-seven counties, including Marion, Allen, Vanderbugh, Lake, and Hamilton, paid not a single dime into the common school fund for that nearly two year period.

Many forfeiture actions are handled by private attorneys hired by county prosecutors. WIBC radio host Greg Garrison's law firm handles many contingency cases for Marion County Prosecutor Carl Brizzi on a 30% contingency contract. Attorney Christopher B. Gambill handles them for the Putnam County Prosecutor's Office pursuant to a 33% contingency fee contract. In a forfeiture judgment in February of 2010 involving $325,612 in cash and a 2007 pickup truck valued at $13,825, Gambill was given $113,145.67 in fees.

It is not entirely clear where all the money is going or where the breakdown in the system is that has left only a trickle of money going into the common school fund. Possibly it could be that prosecutors or their hired private counsel aren't closely analyzing law enforcement costs and are simply assuming that on every forfeiture case law enforcement costs and attorney's fees consume the entire amount of the proceeds seized.

Or perhaps judges aren't properly making the determination as to how much the law enforcement costs. The law simply requires that, once the judge makes an evidentiary finding that the property or money has been used in connection with a crime, that the judge make a "determination" of law enforcement costs with the excess to go to the common school fund. It is not clear whether this "determination" also requires evidence of law enforcement costs. Most likely judges are simply signing off on whatever form has been given to them by the prosecutor or private forfeiture counsel.

There are other possibilities. Rarely do criminal defendants contest forfeiture. Unlike in criminal cases where they can get a public defender and the prosecution has a high burden of proof - beyond a reasonable doubt, those protections are not available in civil proceedings like forfeiture. Most defendants will cut a quick settlement to get their property back or will simply walk away from their property.

The result is there may be many private settlement agreements that escape the purview of the courts. Likewise, there may simply be default judgments or dismissals where the law enforcement agencies and the attorneys keep the money when they find out the defendant isn't going to fight to recover the property seized.

In 2008, a scandal of sorts broke out in Delaware County in which the prosecutor Mark McKinney was accused of entering into "secret" settlement agreements with forfeiture defendants. In addition to his official duties, McKinney and others in his office had a 25% contingency fee contract with the county for forfeiture work. In findings by the Delaware Circuit Court which looked into numerous forfeiture proceedings in that county, the court gave a description of how civil forfeiture actions are handled:

Asset forfeitures occurred, and these did not appear to be seriously contested. Most cases were resolved by default or agreed judgment, or by secret agreement. A contested matter was practically non-existent. Thee cases most probably could have been conducted in a streamlined manner; unfortunately, the results never met the statutory requirements. In most cases, whether there were an agreed or default judgment or secret agreement, the cash usually went to the City of Muncie General Fund, Seizures and Forfeitures Account.... Some cash did go to City of Muncie General Fund Account...; however neither of these accounts were true general fund accounts accessible to the City Common Council; they were false designations whose effect was to deceive the court. The accounts were accessible to the [Drug Task Force]. On a few occasions, forfeited cash went directly to the DTF.
The Delaware Circuit Court's investigation into civil forfeiture in that county uncovered forty-five "Confidential Settlement Agreements" which the court referred to as "secret agreements." It noted that in 40 of these agreements, over $151,000 went to the DTF account, while $63,946.57 was returned to the defendants. There is no mention of any money being paid to common school fund. The court determined that these settlements should not have resulted in McKinney or another attorney being paid since their contractual arrangement required court judgments in order for them to be paid. With regard to the confidential settlements there were no judgments. McKinney has since lost re-election and is facing possible disciplinary action for his handling of forfeiture cases.

The complaints with regard to McKinney were about the "secret agreements" and the conflict of interest in an attorney acting as prosecutor and private forfeiture attorney. In addition, the Republican Mayor accused the Democratic Prosecutor McKinney of paying forfeiture proceeds to the wrong government entities in Delaware County. One has to wonder though, given the scant amount of money going into the common school fund from 91 counties, whether McKinney's handling of civil forfeiture proceeds in Delaware County is the norm rather than an aberration.

Clearly the legislature included the requirement that excess forfeiture funds be paid to the common school fund so as to not turn civil forfeiture into a profit-making venture for prosecutors and law enforcement agencies. It appears though that as many as 91 counties are ignoring the law and getting around that legislative safeguard.


Jon said...

So neither the judges, lawyers or the police are following the law; how is this fixed?

Paul K. Ogden said...

Jon, I think it will get fixed with some publicity. I don't think people knew the big picture of what is going on.

varangianguard said...

But, we are so poor, and our costs, they are so very high.

Downtown Indy said...

That's why we often hear Garrison tiptoe around issues with Brizzi on the Garrison show. Now I understand. I heard him once say they were 'friends and do some business together.' Sounds like a significant chunk of 'business' that could be at risk by being too critical of Brizzi.

Anonymous said...

In Official Opinion 2010-1 issued in May, the Indiana Attorney General clarified that forfeiture actions under civil proceedings related to criminal activities do not accrue to the Common School Fund.

Paul K. Ogden said...

Stanklove, I had already read that opinion and it most certainly does not say "that forfeiture actions under civil proceedings related to criminal activities do not accrue to the Common School Fund." In fact the opinion confirms what the law expressly says - that civil forfeiture proceeds in excess of the cost of law enforcement goes to the common school fund.

The exact question answered in that opinion is whether the fine and forfeiture provision in Article 8, Section 2 of the Indiana Constitution applies to civil forfeiture. The AG, rightfully said, "no." that it only applies to criminal forfeiture and fines.

If it did apply then ALL civil forfeiture proceeds would go to the common school couldn't take out law enforcement costs like you do in civil forfeiture actions.

Marycatherine Barton said...

Thanks for spotlighting the common abuse of Indiana's civil forfeiture laws, OoP.

Mann Law, P.C. said...

Fines from crimes go in to it and clearly the fact that nothing is being paid in from most counties shows an issue. If you look at the state report, the fund looses money each year for administrative expenses. Since under the constitution the money principal cannot be invaded then exactly what is happening. The legislature years ago tried to get the constitution amended to allow the money to go to the general fund but ISTA wanted it all to go to teachers and got the provision defeated. Since the money was not being used counties just decided to keep the money since there was no one cared as it was not taking their money.

NewsGal said...

Where can I get a copy of the suit online? I tried on the IN Courts website but could not find the case.

Could someone please post it for download or provide a link?


Timothy Maguire said...

You made the big time!

Unknown said...

In cases involving fraud in the process of obtaining a loan or extension of credit, the court shall allow the claimant a deduction from the forfeiture to the extent that the loan was repaid. In this case customers should apply to trustworthy companies for no credit check loans online, not to get involved into cases like this. The best solution is to make your own investigation on the lending companies.

Edturlti said...

It seems that these days there are so many loopholes in the law that can be used to avoid paying out money that is owed. It's hard to know who you can trust and where you should go if you need financial assistance. It's important to get reliable no credit check loans online and be sure that you know where your money is going.