(CNN) -- Authorities who seized $8,500 and assorted jewelry from a Tennessee man after a traffic stop in east Texas have agreed to return the property after his case drew attention from CNN.

Police in the small East Texas town of Tenaha are accused of unjustly taking valuables from motorists.

Roderick Daniels said police in Tenaha, Texas, took the money in October 2007 after they stopped him for doing 37 mph in a 35-mph zone. He said police threatened him with money-laundering charges and promised not to prosecute if he signed over the cash, which Daniels said was to buy a new car.

Daniels and other motorists who have been stopped by Tenaha police are part of a lawsuit seeking to end what plaintiff's lawyer David Guillory calls a systematic fleecing of drivers passing through the town of about 1,000. On Friday, after Shelby County District Attorney Lynda Russell refused repeated requests to discuss cases like Daniels' with CNN, her office filed papers dropping its claim on his property.

"I just feel blessed," Daniels said. "I am happy everything is going good right now. ... I just want to celebrate."

Texas law allows police to confiscate drug money and other personal property they think is used in the commission of a crime. If no charges are filed or the person is acquitted, the property has to be returned.

Russell issued a statement through her attorneys denying impropriety, and George Bowers, Tenaha's longtime mayor, says his police follow the law. But Guillory, who brought the lawsuit challenging the seizures, called cases like Daniels' "a shakedown" and "a piracy operation."

Guillory said authorities in Tenaha, about 180 miles east of Dallas, seized $3 million from 2006 to 2008. In about 150 cases, virtually all involving African-American or Latino motorists, the seizures were improper, he said.

All defendants in the lawsuit deny wrongdoing. In a written statement, Russell's attorneys said the prosecutor "has used and continues to use prosecutorial discretion ... and is in compliance with Texas law, the Texas constitution and the United States Constitution."

But the attention paid to Tenaha has led to an effort by Texas lawmakers to tighten the state's forfeiture laws.

All About Texas • Police