While the talking heads on television declare the recession over, in the meantime, state and local governments face record deficits. Here in Arizona, our state budget deficit represents more than 50% of anticipated 2010 revenues. And while Arizona faces perhaps the largest per-capita budget shortfall in the United States, many other states have a similar funding crisis.
Unfortunately, there are very few politically expedient ways to stem the flow of red ink. Raising taxes is not only politically unpopular, but threatens to further depress state and local economies. Cutting benefits is even less popular.
On the other hand, confiscating the "proceeds of crime" has a near-universal appeal. And using "civil forfeiture" statutes in effect in all 50 states, police have pursued this tactic aggressively.
Civil forfeiture is a legal procedure in which prosecutors can seize your property without accusing you, much less convicting you, of any crime. Most federal civil forfeitures require the government to at least demonstrate probable cause that your property is somehow connected to a crime to confiscate it. But the federal rules don't generally extend to state and local governments. In many states, the government can simply seize your property and wait months before allowing you to contest the forfeiture.
That was the situation facing the U.S. Supreme Court in a case that I wrote about here. I had very low expectations that the court would overturn the Illinois statute that authorizes the civil forfeiture of cars and other property allegedly used in connection with drug offenses. The issue before the court was a matter of fundamental due process: under Illinois law, the state need not schedule a forfeiture hearing for at least six months after the initial seizure. Often, owners of seized property must wait much longer than that for an opportunity to argue that their property wasn't used illegally, or was used without their knowledge or consent.
For that reason, I wasn't in the least surprised that the court didn't overturn the Illinois law at issue. The court did so by relying on a legal technicality that permits it to declare an issue "moot." Here, the court ruled since there was no longer any "case or controversy" between the parties, it had no jurisdiction over the case. Both sides admitted they had resolved their property disputes during the course of the litigation.
So, as matters now stand, the state of Illinois can continue seizing property of innocent owners and depriving them of a hearing for at least six months. Other states that don't already have aggressive civil forfeiture procedures in place are certain to take notice. And, because police will allege that the property seized is connected to "crime," such forfeitures should be politically popular.
How can you avoid becoming a civil forfeiture victim? The most important precaution is to never permit anyone to use your home or vehicle for any purpose that could be construed as being illegal. Another important precaution is to beware of holding large quantities of cash, unless you can demonstrate ironclad proof that it came from a legitimate source.
Probably the best way to avoid civil forfeiture, though, is to relocate liquid assets out of the United States, as fast as you can. Today wouldn't be too soon to begin.
Copyright © 2009 by Mark Nestman
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