Pubdate: Sun, 20 Aug 2000
Source: Houston Chronicle (TX)
Copyright: 2000 Houston Chronicle
Contact:  Viewpoints Editor, P.O. Box 4260 Houston, Texas 77210-4260
Fax: (713) 220-3575
Website: http://www.chron.com/
Forum: http://www.chron.com/content/hcitalk/index.html
Author: Michael Hedges

GOVERNMENT TO BEAR BURDEN OF PROOF IN SEIZURES

WASHINGTON -- The Red Carpet Inn on Hornwood is not among Houston's landmarks listed in city tour guides, but it has earned an asterisk in recent American judicial history.

In February 1998, federal prosecutors informed the owners of the motel that they intended to confiscate the inn after several drug arrests there, although the owners were not charged with any crime.

The Red Carpet case attracted national attention, and it helped galvanize forces as diverse as the American Civil Liberties Union and the National Rifle Association to work to change the civil asset forfeiture law under which the government acted.

On Wednesday, a new law takes effect that supporters say would level the playing field for property owners dealing with the government in seizure cases. It will require the government to prove in court by a majority of the evidence that property has been used to facilitate a crime or has been bought with illegal gains before it can be taken.

The law change was at least partially inspired by events at the southwest Houston Red Carpet Inn.

"That case probably got more attention than any other single case in the congressional debates over changing the civil asset forfeiture law," said David Smith, a Virginia attorney who is an expert on civil asset forfeiture law.

It joined a roster of high-profile forfeitures that critics said showed how the law was being abused.

For example, in the early 1990s, the government took $506,641 from a Chicago pizzeria owned by Sam and Frank Lombardo after linking a man who drove a truck for them to minor drug sales. The Lombardos were never charged with a crime and, after challenging the government in court, got the money returned -- four years later.

Then there was the case of Delmar Puryear of Kentucky, a disabled retiree who had a 37-acre farm confiscated after police found marijuana growing there, even though a jury found him not guilty in a criminal trial of having any knowledge of the pot. Puryear eventually had to wait a year and pay $12,000 to regain ownership of the farm.

The seizures also bred corruption. An Arkansas prosecutor was sentenced to 11 years in prison after being convicted of extortion for misusing forfeiture laws. And Somerset, N.J., prosecutor Nicholas Bissell Jr. committed suicide in 1997 after being convicted of spending $1.5 million in confiscated money.

For Jason Brice, a part owner of the Red Carpet, being told by federal marshals that his motel was under federal seizure was a shock.

"It was a trauma for me, a very painful time," he said. "I thought I'd lose the whole business." Brice said a friendly federal marshal advised him to post a costly bond to forestall losing the property.

"I was told to do that or I'd lose it completely," he said.

If the government moves to confiscate a property, the new law will require prosecutors to file for a court hearing to be held within 90 days to prove there "is a substantial connection between the property and the crime" in order to keep seized assets.

Before the change, property could be seized on "probable cause" that it was linked to wrongdoing. After that, the owner had to post a sizable bond to keep property from being sold or otherwise disposed of, then go to court to get property returned.

That proved lucrative for the government. By the end of the 1990s, half a billion dollars worth of property -- including cash, cars, boats, planes, buildings where drug transactions took place and restaurants allegedly bought with illicit gains -- was being seized each year.

The law provided powerful incentives for state and local law enforcement to get involved, since those agencies could net 80 percent of the profit from property seized and sold under the law.

Critics on both ends of the political spectrum believed federal authorities had gotten too quick on the trigger in seizing property.

Those spearheading the successful efforts in Washington to change the law had used the Red Carpet case to great effect. It was mentioned on the floor of Congress. It became a staple in advocacy-group handouts.

But some of the nuances of the case were lost in efforts to distill it to its symbolic essence.

Police had been arresting people with drugs in their possession on motel property for some time before federal prosecutors moved to seize the Red Carpet on Feb. 17, 1998.

Federal agents said that in 1996 and 1997 police had been called to the motel more than 30 times.

"With property, you're holding yourself out to the public and the community as responsible," former Houston acting U.S. Attorney James DeAtley said at the time the government acted.

Brice and the co-owners were not charged with a crime. But DeAtley said they had "tacitly approved" of the drug sales by not implementing security measures suggested by police, like raising room rates, adding video cameras to monitor a parking lot and hiring more guards.

It was a classic civil forfeiture case -- in effect, charging the property, not the person.

Attorneys for the owners said threatening to take property because the owners didn't follow police advice on preventing crimes was outrageous.

"The place was stigmatized; perhaps it still is," said Matt Hennessy, attorney for the owners. "I don't think the owners will ever know how much business losses they incurred."

Authorities allowed the motel to stay open. But Hennessy said, "They were in limbo. They had to keep paying the note to the bank, but no one knew who ultimately would own it."

Brice began legal proceedings to get the seizure lifted. In July 1998, the government agreed to drop the forfeiture after the owners agreed to augment security there.

Meanwhile, publicity generated by the case struck a chord in Washington.

Rep. Henry Hyde, R-Ill., who sponsored the law changing forfeiture procedures, highlighted the Red Carpet story in an appeal to Congress to change the law.

When the Washington Post used the Red Carpet case as the opening paragraph of an article about asset forfeiture, it said the motel had been confiscated.

"That is not factually correct," said William Yahner, assistant U.S. attorney who runs Houston's asset forfeiture office. "The hotel was never taken over by the government; it was never seized; the owners were never thrown out."

Yahner said an accurate rendering of the story would be that forfeiture of the property was sought by the government, then the case was resolved by agreement.

Hennessy said the government agreed to deal after "their publicity stunt" backfired in the press.

Whatever the reality, the perception of the government moving to take away the inn from its owners proved politically potent.

Alice Dery, assistant chief of the Justice Department's asset-forfeiture and money-laundering section in Washington, said a few high-profile cases doomed the civil forfeiture law as it was formerly constructed.

"It is unfortunate that a few cases that could have been handled differently gave the public the image that the law was unfair," she said.

She said the civil asset forfeiture law has been an important law enforcement tool for many years.

"When a community is hurting because of a crack house or a drug dealer selling drugs out of his car, if you can shut that down by taking the car or the house, you can have an immediate impact on a community," she said.

Civil and criminal asset forfeiture laws spring from old maritime law that allowed ships used in piracy and other bad deeds to be "arrested."

But it was in 1984, as a fresh surge of illicit drugs coursed through America's system, that new laws were enacted, and prosecutors began using them aggressively.

By the peak year of the program, 1993, just less than $2 billion in property was under seizure by the government. That included almost $900 million in real estate and businesses, more than $700 million in cash, around $60 million in vehicles and $55 million in jewelry, along with various other trinkets.

Seizures will continue after the new law takes effect, Dery said, but prosecutors and police will be a little more hesitant to lower the boom on drug dealers and other criminals.

The Justice Department, the Drug Enforcement Administration and major police groups such as the International Association of Chiefs of Police opposed the original Hyde bill.

Those groups elicited some changes, like a provision that a person did not automatically get property back by proving poverty, and that some seizures could be held as evidence.

Opponents changed the standard by which the government had to prove property should be confiscated from "clear and convincing evidence" in Hyde's original proposal to a preponderance of evidence.

The new law will not change criminal forfeiture laws, which allow the government to confiscate the fruits of crime from those convicted.

The law was signed in April, but the effective date was moved to Aug. 23 to give law enforcement agencies a chance to adjust to the changes.

In the interim, the Justice Department chose not to change its policy on when to seize property. "That has been a simple matter of logistics," Dery said. But she said federal prosecutors are aware that "they need to be very careful with how they proceed" as the law change nears.

Prosecutor Yahner said the Houston U.S. Attorney's office has several civil asset forfeiture cases pending, and that the coming changes to the law wouldn't change how his office does business.

"I've looked at the changes in the law. I'm operating from the standpoint that we are not going to change anything," he said.

Dery and others in the Justice Department have spent the summer training federal prosecutors as well as state and local law enforcement officers on the effect of the new law.

"We're not quite sure how it will play out on Aug. 23," she said.

Brice, ironically, said he backed the need for tough laws against drug dealers such as the asset forfeiture statute. "I think it was a law with good intentions that was put to bad use," he said. "I'm glad the law is changing. For every change that happens, some people have to pay the price."
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