In some cases, police seize cars, homes — with no charges filed

In 2009, a Michigan man was pulled over in Putnam County for a minor traffic violation, and police confiscated $17,000. He spent 13 months trying to get his money back.

In 2012, an elderly Indianapolis woman's son was charged with drug crimes, and officials froze her bank account and tried to take her home.

In 2013, a Virginia man who co-signed on a car loan with his son, and was making payments on it, almost lost it to Indianapolis police after his son was caught with drugs in the car.

Asset forfeiture laws crafted to fight organized crime, such as drug cartels and money laundering groups, sometimes snare people facing minor drug possession charges, or no charges at all, an Indianapolis Star review has found. To get back their homes, cars and savings, people are forced to engage in lengthy legal battles.

One Fort Wayne man whose truck was improperly forfeited after a drug investigation in 2008 fought all the way to the Indiana Supreme Court — and won — a victory that took nearly three years to achieve.

Law enforcement officials say misuses of the law are rare, and the seizures are an important tool.

"It's trying to get the drugs off the street and the people that are fighting over those drugs," said Bryan Roach, deputy chief of administration for the Indianapolis Metropolitan Police Department. "If you don't take those assets, these people get out of jail, these people have friends, and it allows that criminal organization to continue. So we see it as a deterrent."

But Attorney General Eric Holder, defense attorneys and legal experts are beginning to question the fairness of a program that allows officers to seize property first, and file charges later. In January, Holder said local agencies would no longer be able to use federal law to seize the assets of people not yet convicted of crimes.

Holder's new policy that limits the federal Equitable Sharing program would eliminate only 3 percent of forfeitures nationwide. It would not affect police departments that seize assets under state laws. But some see his decision as a call for a debate on the subject, suggesting a basic constitutional right is at stake — due process of law.

"No one should lose their property without being convicted of a crime," said Louis Rulli, a law professor from the University of Pennsylvania. "It really puts our whole justice system on its head."

How much money is at stake for local law enforcement agencies is hard to tell, although nationally billions of dollars in cash and property have been seized.

Law enforcement officials say forfeiture money is a small portion of their budgets but is an important source of revenue to train officers and purchase vehicles and equipment. One thing it's not used for, said Marion County Prosecutor Terry Curry, is "creating some sort of slush fund for luxury items."

Still, the absence of statewide data has some concerned. State Sen. Brandt Hershman, R-Buck Creek, is proposing an amendment to state law that would require local police departments and agencies to regularly report seizures and forfeitures.

Like others, Hershman says he supports the idea of asset seizures and forfeitures.

"The question is," he said, "are they working as we intended?"

Assets seized, no charges filed

The Star's review of court documents uncovered controversial property seizures.

Anthony Smelley was driving on I-70 in Putnam County early one morning in January 2009, when a sheriff's deputy noticed he was drifting out of his lane.

Smelley and two passengers said they were driving from Detroit to St. Louis to visit an aunt. But Lt. Dwight Simmons of the Putnam County Sheriff's Department thought their story sounded rehearsed, according to a report. After a K-9 search, officers found about $17,000 in the car — money that Smelley claimed was part of a settlement from a car accident.

Officers also found a marijuana pipe in the purse of one of the passengers. Smelley was never charged. But his money was taken, and a civil forfeiture lawsuit against him followed.

Thirteen months later, a Putnam Circuit Court Judge decided Smelley's money should not have been taken. Proof of a crime did not exist, Special Judge David Bolk ruled.

***

In July 2008, Martin Serrano was stopped by police in Fort Wayne. Officers had received a tip about drug trafficking at Serrano's workplace.

They found cocaine residue in his truck. He eventually pleaded guilty to a misdemeanor possession charge and was sentenced to probation, court records show.

Serrano got his truck back. But not until April 2011, when the state's highest court upheld a Court of Appeals ruling that the vehicle should not have been seized. There was not enough evidence that it was used to commit a crime, the Supreme Court ruled, and the presence of cocaine residue was nothing more than incidental.

"The items they took from him were not the fruits of a criminal enterprise," Serrano's attorney, Don James, told The Star. "They found an immeasurable amount of cocaine on his back carpet. It wasn't even a dusting."

James said police have an "eat-what-you-kill" mentality when it comes to asset seizures.

"The more assets they seize in connection with drug seizures, the more it'll benefit their municipality and their police agency specifically," James said. "When you have that type of mentality, then there's an incentive for law enforcement to maybe step over the line."

Former Chief Justice Randall Shepard, who wrote the Supreme Court ruling in Serrano's case, said criticisms of asset seizure may be legitimate in some places. But instances vary from one jurisdiction to another.

"There are places where it's used more forcefully than most people would think is appropriate," Shepard said.

***

In May 2012, Indiana State Police seized several bank accounts totaling at least $40,000 in connection with a drug dealing arrest, according to court records. Officials also tried to forfeit an elderly woman's house.

The woman who owned the house and at least one of the bank accounts was not charged with a crime. Her son, the one accused, used her house to grow drugs and deposited the proceeds without her knowledge.

The woman's attorney, Joel Hand, managed to save her property by proving she did not know of, or benefit from, her son's illegal activities.

"My client ... would've been out of her home and homeless," Hand said. "To seize someone's home from them that they'd owned outright, that's a pretty big asset that you're seeking to forfeit."

***

In a similar case, an IMPD officer stopped John Moore's son on the city's Southside about two years ago. The son failed to signal before making a turn, according to a police report. Officers found oxycodone, marijuana, a digital scale and methamphetamine inside the car.

Moore, who had co-signed on the car loan, was making the monthly payments. The Virginia man later found himself a defendant in a civil forfeiture lawsuit. His son was sentenced to probation after pleading guilty to a misdemeanor possession charge, court records show.

In an interview with The Star, Moore said he did not know about the drugs in the car. He also wondered whether his son's wrongdoing justified taking a $13,000 car.

"He did wrong. He should go to jail," Moore said. "What does that have to do with the car? I just don't get it."

Indianapolis attorney Todd Ess, who represented Moore and handles a lot of civil forfeiture cases, said such stories are common.

"These people call me and they're in shock," Ess said.

What's unfair, he added, is how long it takes — from several months to a few years — for people to get their property back.

Moore's car was impounded for several months before it was returned. During that time, he kept making the monthly loan payments.

Burden on innocent person is not the intent

Curry, the Marion County prosecutor, points at a picture of a pile of money big enough to fill a bathtub. The cash was found in 2011 inside the panels of a semi's trailer.

"We do this sort of thing," he said.

The money was seized as part of one of the largest drug busts in Indianapolis' history. Local and federal officials seized five tons of marijuana and $4.3 million in drug proceeds. Four men faced criminal charges. The bulk of the forfeited funds went to the Indianapolis Metropolitan Police Department and Metro Drug Task Force, which did most of the investigation.

Although law enforcement officials acknowledge that innocent people can have their property seized as part of a criminal investigation, they say it does not happen in significant numbers and when it does, the property is eventually returned. Curry said of all the forfeiture cases his agency filed over the past four years, only three went to trial. Most were resolved either by agreement, default if no one contests the allegations, or dismissal, in which case the property was returned.

Lt. Don Christ of the Metro Drug Task Force said placing an undue burden on an innocent person is "not law enforcement's intent;" instead, it's to take away the criminals' tools.

Federal officials, for instance, have seized about 1,800 illegal guns within the past seven years in Indiana, according to the U.S. attorney's office. The firearms, which have been destroyed, were valued at $942,000.

"The system isn't perfect," said Josh Minkler, acting U.S. attorney for the Southern District of Indiana. There'll aways be an exception, but I think it's the best system we have."

Minkler has this to say about why law enforcement needs forfeiture funds: Public safety "can't be done on the cheap. It needs to be paid for."

Cyber investigations, for instance, require expensive technology and a higher level of training. Surveillance and wiretap investigations require hundreds of hours of work.

Forfeiture funds help in a variety of ways.

The Metro Drug Task Force, a group made up of officers from Marion and surrounding counties, is almost entirely funded by forfeiture dollars, said Christ.

When victims can be identified, in cases such as fraud, officials say they also use forfeiture funds for restitution.

And the money helps support police departments and prosecutors.

In Marion County, Curry said forfeiture dollars pay for the salary and benefits of three deputy prosecutors and one paralegal, all of whom specialize in forfeiture cases. Forfeitures contribute between 1 and 2 percent of the prosecutor's budget, which averages about $30 million annually.

IMPD and the Metro Drug Task Force received about $11.7 million from state and federal forfeitures from 2010 to 2014. Indiana State Police received about $8.2 million from state and federal forfeitures within the same time period, according to records obtained by The Star.

Local officials say the money they receive doesn't fully cover their costs, but that's difficult to confirm with data.

Curry said that it would be impossible to track the number of employee hours and resources used in any given case.

What's certain, said Shepard, the former Supreme Court justice, is that while debates on asset seizure exist, adequate information doesn't.

Reform could be on the way

Forfeitures done using federal law must be reported to the Department of Justice. Under that Equitable Sharing program, Indiana law enforcement agencies acquired $52.8 million in property and cash from 2002 to 2014, according to DOJ's database. During that same 12-year period, $4.8 billion was forfeited nationally.

The U.S. Department of Justice maintains an online database of asset forfeitures made under federal law. It shows how much each law enforcement agency received through the Equitable Sharing program dating back to 2002.

But data on asset seizures that are not part of that program are not collected statewide. Finding out how much has been seized in Indiana would require individual requests of every police agency.

"It would be useful for some public body to go through the forfeiture cases and really analyze what is occurring, and where and in what amounts," Shepard said. "Best I know, no one's done that. You've got individual stories or incidents, some of which seem very appropriate, and others are not."

Indiana law, for example, allows forfeiture funds to be used to reimburse police agencies for the costs of their investigations. Any remainder is supposed to go to the Common School Fund, which is used to build schools. State law, however, is interpreted differently by each county. Some meticulously account for the cost of each investigation and send any remaining dollars to the Common School Fund.

Many, including Marion County, do not put money into the school fund.

A previous effort to change Indiana's forfeiture law — defining how funds should be divided among law enforcement agencies and prosecutors — failed after former Gov. Mitch Daniels vetoed the bill in 2011.

But in the wake of Holder's policy change, more forfeitures are expected to be handled under state laws, heightening concern.

Sen. Hershman's bill, SB 388, would require law enforcement agencies and prosecutors to submit annual reports to a state agency that would then have to compile data for the state treasurer. The reports would include an itemized list of seized items, as well as their values, and how much is forfeited to each agency.

Curry said the legislation would create more work, although the federal government has required disclosure for years.

SB 388 passed the Senate Judiciary Committee earlier this month and is headed to the Senate floor.

Hershman said while he thinks asset forfeitures have merit, lawmakers may need to tighten restrictions on what can be seized and forfeited.

But without access to data, he said, "we're not able to do our job."

Star researcher Cathy Knapp contributed to this story.

Call Star reporter Kristine Guerra at (317) 444-6209. Follow her on Twitter: @kristine_guerra.

STATE AND FEDERAL FORFEITURES IN NUMBERS

Funds received from 2010 to 2014:

Indiana State Police: $8.2 million

IMPD: $7.1 million

Metro Drug Task Force: $4.6 million

Marion County Sheriff's Department: $227,169

Marion County Prosecutor's Office: $3.1 million

Source: Office of Corporation Counsel, Department of Public Safety and Indiana State Police

ASSETS FORFEITED BY POLICE

-Vehicles

-Illegal guns

-Artwork

-Property

-Boats

-Furniture

-Jewelry and watches

-Clothing

-Computers

-Small electronic items

Source: U.S. Attorney's Office and Indiana State Police