By Darpana Sheth
Before the Justices of the U.S. Supreme Court hear oral argument today, Oct. 16, 2013, in Kaley v. United States, they might want to reread “Through the Looking Glass.” In Lewis Carroll’s fictional classic, Alice is befuddled when the White Queen explains that in her realm punishment comes first, the trial next, and a crime, maybe, last of all. To American readers, who cherish the presumption of innocence as a hallmark of their justice system, this is an amusing absurdity. But, as Kaley demonstrates, this absurdity has become reality, with prosecutors and police depriving Americans across the country of their property and livelihood before any crime is proved, or in some cases, even charged.
The culprits are forfeiture laws, which allow authorities to confiscate cash, cars, homes, or other property used for or obtained through criminal activity. While this sounds like a worthy goal, the forfeiture law challenged in Kaley allows the government—before trial—to freeze assets that may be subject to forfeiture if the defendant is convicted at trial. In other words, at a time when individuals are presumed innocent, they are prevented from using their assets not only to pay for counsel or bail, but to pay their rent, mortgage, car payments or other basic living expenses. It is no surprise that the Supreme Court has aptly characterized the pretrial restraint of assets as a “nuclear weapon.”
Making matters worse, prosecutors can freeze assets in secret—without affording defendants any prior notice or even a hearing. The question for the high court is whether the Constitution requires, at a minimum, an opportunity to contest the prosecutor’s use of this nuclear weapon before trial.
The answer to this question matters not just for criminal defendants, like husband and wife Brian and Kerri Kaley, who face criminal forfeiture as an aspect of their punishment if eventually convicted by a jury. It also affects ordinary Americans ensnared in the upside-down world of civil forfeiture, where they are never even charged with a crime.
Consider Terry and Sandy Dehko. For over thirty years, Terry has owned and operated a small grocery store outside of Detroit, which his daughter, Sandy, helps manage. In January, without any warning, federal authorities seized the store’s entire bank account containing more than $35,000, leaving the Dehkos struggling to pay their employees and vendors. The reason? The government does not approve of the way the Dehkos deposit their money.
Like most small business owners who regularly handle cash transactions, the Dehkos routinely deposit less than $10,000 at a time. Not only is it a bad idea to let too much money accumulate onsite, the Dehkos’ insurance policy only covers cash losses up to $10,000.
Making deposits of less than $10,000 is perfectly legal and the Dekhos had a good business reason for doing so. Nevertheless, without any evidence that the money was obtained unlawfully or used for nefarious purposes, federal authorities seized the Dekhos’ money on the grounds that they were illegally “structuring” their deposits to avoid reporting requirements that would kick in if they deposited more than $10,000 at a time.
To this day, the Dehkos have never been charged with any crime, and they are not guilty of any crime. Yet, ten months later, the Dehkos are still waiting for a hearing before a judge to contest the seizure.
Why is the government so adamant about holding on to the Dehkos’ money? For its part, the government argues, as it does in Kaley, that its seize-first-ask-questions-later policy ensures that the assets are preserved for forfeiture. What the government glosses over is its direct financial stake in the forfeited assets. Under federal law, the Justice Department keeps proceeds of forfeited property to pad its budget. That financial incentive has led to an explosion in the amount of property seized by federal law enforcement. Today, the Justice Department’s Assets Forfeiture Fund exceeds $4 billion.
But there is an even more fundamental reason why the government is holding on to the Dehkos’ money: It can. In another twist worthy of Lewis Carroll, under civil forfeiture laws, the Dehkos are considered guilty until they prove themselves innocent.
It is time for the Supreme Court to pull us out of Alice’s Wonderland and back into constitutional reality, where Americans are innocent until proven guilty and no one can be deprived of their property without being convicted of a crime. Kaley gives the Supreme Court an opportunity to clarify that, at the very least, the Constitution requires a meaningful opportunity to be heard before being deprived of property. For the sake of the Kaleys, the Dehkos and countless other victims of forfeiture abuse, it is vital that they do so.
Attorney Darpana Sheth authored a friend-of-the court brief in support of the Kaleys on behalf of the Institute for Justice, a nonprofit public-interest law firm representing the Dehkos.http://www.forbes.com/sites/realspin/2013/10/16/its-time-for-the-supreme-court-to-pull-us-back-into-reality/