Senator Rand Paul (R-KY) and Representative Tim Walberg (R-MI) have introduced into their respective houses of Congress a bill to reform federal asset forfeiture. They named it the “FAIR Act,” short for the “Fifth Amendment Integrity Restoration Act of 2015” (it is S. 255 in the Senate and H.R. 540 in the House, and it is named after the Fifth Amendment since that amendment is the one that says no one can “be deprived of life, liberty, or property, without due process of law”).

Unless this bill gains broad bipartisan support, it has a minuscule chance of being enacted because what it proposes would radically overhaul the federal asset forfeiture provisions that most threaten our civil liberties:

  • Under current law, someone who contests a forfeiture but cannot afford an attorney only has a right to a Court-appointed attorney if they request an attorney and if the property in question is their primary residence. This bill would remove those two conditions. That change would mean that when law enforcement seizes a person’s entire life savings, the person can still have an attorney to defend their property from the police.

  • Under current law, federal law enforcement has a huge incentive to seize assets because the money goes into a special fund (the Department of Justice Assets Forfeiture Fund, the Customs Forfeiture Fund, or the Dept. of the Treasury Forfeiture Fund, depending on which federal agency makes the seizure). From that Forfeiture Fund, the agency can use it for “equitable sharing,” which means sharing some of the proceeds with other federal, State, or local agencies. This bill proposes that the assets that law enforcement seizes go into the General Fund of the Treasury of the United States, so other branches of law enforcement would no longer have an extra incentive to seize assets and enjoy “equitable sharing” of the proceeds.

  • Current law specifies what the Government has to prove to seize assets and what property owner has to prove regarding seized property. This bill raises the bar concerning what the Government has to prove. Here are three examples:

  • For one example, if this bill were enacted, if the Government seized property because it was involved in a crime, the Government would have to prove that the property owner knew the property was involved in a crime (or at least that the owner was willfully blind); under current law, the property owner must prove that they did not know about the criminal use of property. (Under either current law or this bill, if a property owner does learn of a crime being committed with their property, then they still have the responsibility of notifying the police and revoking permission to use their property for a crime.)

  • For a second example, under current law, there are certain requirements for reporting transactions, and evading those reporting requirements is unlawful. But as the law stands, some people who run small, cash-only, but legitimate businesses (such as small restaurants) have had their assets seized just because they make a lot of small cash deposits, and the authorities think that looks suspicious. (Here is one example.) This bill proposes that the Government must prove that people knowingly evaded reporting requirements and that the money was not from a legitimate source.

  • For another example, this bill proposes that if the Secretary of the Treasury does seize assets, within 14 days there must be a court hearing, and the Government must show that there is probable cause that the property seized was involved in evading the reporting requirements for transactions — otherwise, the assets are returned to the owner.

In conclusion, this bill has so many good ideas in it that it barely has a snowball’s chance of becoming law. It is a hopeful sign of bipartisanship that at the moment eight Democrats as well as seven Republicans have signed on as co-sponsors to the House version of the bill, but that is unlikely to be sufficient to pass the bill. Perhaps if enough support gathers for these reforms, these proposals will eventually be enacted in the future.

In the meantime, if you are caught in a case like this, contact us today before any deadlines pass! For more information on this area of our practice, see our Federal Asset Forfeiture page.


Comments are closed.