Policy Position

Asset Forfeiture

in Government Regulation

Introduction

Civil asset forfeiture is a legal process that authorizes the confiscation of property suspected of having been used for, or derived from, criminal activity.

In an action for civil asset forfeiture, the property itself is the plaintiff, which means the government does not need to charge the owner with (let alone convict the owner of) a crime. Moreover, because it is a civil rather than a criminal action, the government does not need to prove beyond a reasonable doubt that the property is linked to crime; a “preponderance of the evidence” is sufficient.

Civil asset forfeiture is inherently unjust and a violation of due process. Worse still, it perverts the proper relationship between the police and the public by turning the former into predators and the latter into their prey. Despite these defects, however, after the practice was introduced by the federal government in the 1970s, it was quickly adopted by almost all the states. North Carolina was the only exception.

In North Carolina, property suspected of having been acquired as a result of a crime is subject to forfeiture, but, with very few exceptions, only after the property’s owner has been charged with and convicted of that crime. Also, in North Carolina, forfeiture proceeds may not revert to the agency that seized the assets; instead, they must be used for maintaining public schools. These features of North Carolina law protect the innocent and discourage abuse.

Unfortunately, the federal government’s “equitable sharing” program makes it possible for North Carolina law enforcement agencies to circumvent these protections. Equitable sharing funds are processed under federal law. Therefore, statutory and constitutional protections like the ones in place in North Carolina don’t apply.

Equitable sharing programs authorize a federal agency to “adopt” property referred to it by a state agency, process it under federal law, and return the bulk of the proceeds to the agency that made the seizure. In other cases, state agencies that cooperate with federal agencies in joint operations may receive a share of the proceeds from property seized as part of the operation.

To protect the property rights of the innocent, North Carolina must take steps to prevent, or severely curtail, participation by state agencies in this federal program.

Key Facts

  • Under North Carolina’s criminal forfeiture statutes, property acquired as a result of a crime is subject to forfeiture, but only after the property’s owner has been charged with and convicted of that crime.
  • Under the North Carolina Constitution, law enforcement agencies are not permitted to gain directly from forfeiture proceedings. Instead, all forfeiture proceeds must be used for maintaining the public schools.
  • These features of North Carolina law protect the innocent and discourage abuse. They have earned North Carolina high marks in repeated editions of the Institute for Justice’s “Policing for Profit” report. In 2015, they also earned North Carolina the top score in a report by FreedomWorks titled “Civil Asset Forfeiture: Grading the States.”
  • Between 2007 and 2016, North Carolina law enforcement agencies collected more than $170 million in equitable sharing proceeds. As a result, the Institute for Justice ranks North Carolina among the 10 worst states when it comes to the circumvention of state law using equitable sharing.
  • Since 2014, 25 states and the District of Columbia have reformed their asset forfeiture laws, and the most successful reform measures have included restrictions on equitable sharing in the form of prohibitions on federal adoptions and minimum seizure amounts for joint task force payments.

Recommendations

  1. North Carolina should follow the best practices of other states by placing restrictions on the use of equitable sharing. Either prohibit all federal adoptions or, at a minimum, prohibit all adoptions under the federal Controlled Substances Act, or only permit state and local law enforcement agencies to accept payments for joint task force operations when the value of the forfeited property exceeds a threshold amount, preferably $100,000.

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