Iowa forfeiture: A 'system of legal thievery'?

COUNCIL BLUFFS, Ia. – Tired of working minimum-wage temporary jobs in his hometown of Chicago, Michael Sanchez-Ratliff took his grandfather's advice and embarked on a cross-country trip last March that he hoped might change his life.

The plan: Hitch a ride with a family friend to California, visit relatives and check out community colleges there.

Sanchez-Ratliff, then 20, did something that in hindsight wasn't the best idea, but isn't illegal. He took with him his entire life savings, including about $14,000 provided by his grandmother and an additional $5,000 he had saved from working.

The much-anticipated trip took an unexpected turn about eight hours in, as flashing lights appeared in the rear-view mirror. A Pottawattamie County sheriff's deputy stopped the vehicle for traveling 5 miles per hour over the speed limit.

An hour later, the deputy seized Sanchez-Ratliff's cash. Despite a clean criminal record and a search that turned up no sign of drugs or other illegal activity, the deputy concluded the money must somehow be linked to a crime.

Sanchez-Ratliff is hardly alone.

• REGISTER INVESTIGATION: Finders, keepers: Investigation of Iowa forfeitures | All the stories

A Des Moines Register investigation into the use of state and federal civil forfeiture laws in Iowa reveals that thousands of people have surrendered their cash or property since 2009. The system is stacked against property owners while raising millions of dollars annually for law enforcement agencies across the state, something critics contend encourages policing for profit over promoting public safety.

The bulk of forfeitures reviewed by the Register resulted from traffic stops, often for minor violations and involving vehicles with out-of-state plates. But cash or property also was seized after police were called or sent to homes or businesses. In a few cases, police seized cash carried by johns caught up in prostitution stings.

Among the Register's findings:

• Law enforcement agencies in all but seven of Iowa's 99 counties have used the state's civil forfeiture law since 2009. They have seized cash or other property 5,265 times. At least 542 more cases have used federal forfeiture laws.

• Many of those property owners — including Sanchez-Ratliff — are sent on their way after surrendering their cash or other property. A sampling of about 600 forfeiture cases from the Iowa counties that seized the most property over the past six years revealed dozens of instances with no record of an arrest or criminal charges.

• Iowa police departments and other law enforcement agencies have seized nearly $43 million over the past six years — money divided among agencies involved in each forfeiture case. Under law, the money is supposed to be used to "enhance" their crime-fighting capabilities.

• Most of the money is used to buy equipment, train officers and fund multiagency task forces. But it also has been spent on tropical fish, scented candles, mulch and other items that appear to have little or no direct link to law enforcement activities.

Local law enforcement agencies generally keep 90 percent of forfeited cash, split among the agencies that seized the property. The rest goes to the state, for use by the Iowa Attorney General's office and the state's public safety departments.

The Institute for Justice, an Arlington, Va., nonprofit public interest law firm that has studied the civil forfeiture system, has rated Iowa's law one of the worst in the nation for protecting innocent people from government forfeiture.

For Sanchez-Ratliff, the traffic stop outside of Council Bluffs set off a chain of events that wrecked his finances and sidetracked his plans for more than a year.

He ultimately lost his Chicago apartment and had to move in with relatives. The eviction damaged his credit, making it impossible for him to obtain a car loan at a reasonable rate. Perhaps the worst part: His financial crisis forced him to put on hold plans to continue his education.

"The entire year after that was just a big struggle and hassle," he recalled during a February interview.

Judge orders return of seized money

Despite the setbacks, Sanchez-Ratliff's experience with Iowa's civil forfeiture system ended better than most people's. He did something few others do: He fought back.

Most property owners — even those never arrested or accused of a crime — choose not to challenge the forfeiture in court because they fear costly, prolonged legal battles. Under Iowa's laws, forfeitures are handled in civil courts, where the owner has no presumption of innocence or right to a state-appointed attorney. It is up to the owner to prove the property should not have been seized, rather than requiring the prosecutor to prove seizure was justified.

Attorney fees can eat up a significant chunk of the money or value of the property seized.

"The government can take your property on mere suspicion and force you into court to prove your innocence to get it back," said Larry Salzman, a former attorney for the Institute for Justice.

After nearly two dozen lawyers turned him down or wanted payment upfront, Sanchez-Ratliff finally found one who agreed to take payment only if they prevailed in court. That happened in November in Pottawattamie County District Court, where Judge Richard Davidson ruled in favor of Sanchez-Ratliff.

The state — which also seized his cellphone and even obtained a search warrant to review his Facebook activity — failed to demonstrate the money was connected to drugs, Davidson concluded.

"The record fails to paint a coherent picture at all, other than the tale of an individual who occasionally discusses using drugs and carrying a lot of cash on a trip without explanation," Davidson wrote. "But the lack of a plausible explanation does not equal criminal activity."

Prosecutors offer part of money back

That's not the end of the story for Sanchez-Ratliff, who wants the state to pay for the financial losses he suffered because of the stop — including more than $7,000 in attorney fees.

"They shouldn't be taking people's property without actually having proof" a crime was committed, said Sanchez-Ratliff, who plans to file a lawsuit next month. "That was my entire life savings they took."

Prosecutors offered to settle the case and return some of his money before court hearings. But Sanchez-Ratliff said he rejected the deal because he did nothing wrong and deserved to keep all of his money.

The Register found many other cases across the state in which prosecutors offered to settle cases and return portions of the money before court hearings.

"If they're not charging people with crimes, how can you describe this in any other way than a system of legal thievery?" asked Des Moines attorney Glen Downey, who is assisting Sanchez-Ratliff with the lawsuit.

Controls announced at federal level

State and federal civil forfeiture laws have been used in Iowa and other states for decades. But law enforcement agencies across the nation have ramped up their use in recent years, generating renewed scrutiny from critics, who say the process is too often abused.

Nationally, federal forfeiture laws were used to seize nearly $4.5 billion in 2014, up from $27 million in 1985. In Iowa, the amount seized using the state's forfeiture law has more than doubled, from about $2 million in 2009 to nearly $5 million last year.

U.S. Attorney General Eric Holder in January announced a new set of controls on federal forfeiture cases. Measures are also pending in the Iowa Legislature that would place similar limitations on the state's statute.

Prosecutors in Iowa need only believe the seized property is more likely than not related to criminal activity, a standard known as a "preponderance of evidence," rather than the much higher "beyond a reasonable doubt" standard required for criminal convictions. It's up to owners of the seized property to prove it did not result from of criminal activity, or that they had no way of knowing it was.

"The cornerstone of our criminal justice system is that you're presumed innocent until proven guilty beyond a reasonable doubt," former Iowa Supreme Court Justice Louis Lavorato said. "What they're doing runs counter to that in my mind."

Forfeiture viewed as vital to fight crime

County attorneys and law enforcement officials, however, insist that such laws are a valuable crime-fighting tool that help them cripple organized criminal enterprises that move huge sums of money across the nation using its interstate highway system. The targets include drug lords and human-trafficking operations.

Corwin Ritchie, executive director of the Iowa County Attorneys Association, said seizures — even without arrests — are legal, justifiable and a powerful way to combat crime. Ritchie contends they are used reasonably in Iowa.

"It's not unheard of that you might seize a huge sum of cash and find no evidence of crime, as such," Ritchie said. "But the way it's packaged, sorted and hidden in a vehicle is certainly indicative of drug-running, and so that's how the case is made. It's a forfeitable asset just because of the manner that it's being transported."

FULL COVERAGE:

Property seized; owners not arrested

What really happened in Cass County?

"Not too many people are going down the highway with $150,000 cash wrapped in 10-grand bundles and hidden in a secret compartment in an automobile," Ritchie said.

Pottawattamie County Sheriff Jefferey Danker agrees that the threat of forfeiture is a strong deterrent to criminal activity, regardless of whether someone is arrested.

Danker, whose deputy initiated the 2014 traffic stop that resulted in the seizure of Ratliff-Sanchez's money, said the system has sufficient safeguards to protect the innocent.

"A judge looks at this and makes a decision as to whether there's enough cause to forfeit the money," he said. "Like anything, there are checks and balances in this whole process, and we're not out just trying to take money from people if it's been saved or earned or whatever."

Critic: Law flawed by 'profit motive'

The Register's detailed review of hundreds of forfeiture cases filed since 2009 in Polk, Pottawattamie, Scott, Black Hawk, Cass and Poweshiek counties — among the most active in their use of the state's forfeiture law— revealed dozens of cases in which no criminal charges were filed.

Some of those no-arrest cases involved forfeitures of less than $500, while others resulted in seizures of more than $100,000, records show.

Critics of Iowa's civil forfeiture law say one of its most serious flaws is the provision that allows law enforcement agencies to keep all or most of the proceeds from assets they seize.

Andrew Kloster, who studies civil forfeitures for The Heritage Foundation, says that provision creates a "profit motive" for law enforcement agencies. The foundation is a conservative public policy think tank based in Washington, D.C.

"If you get to keep the money you seized, that gives you the incentive to seize for the wrong reason," Kloster said. "If your job is informally reliant on how much you bring in, you're going to have an incentive to cut corners and seize as much as you can."

Sometimes, motorists who handed over their cash or other assets during a stop were sent on their way, even though evidence seemed to support an arrest, cases reviewed by the Register showed.

Consider a November 2013 traffic stop when an Iowa State Patrol trooper noted a strong smell of marijuana as he approached the vehicle and said in his report that the driver admitted he had been smoking "a doobie" as he was being pulled over on Interstate 80.

MORE COVERAGE:

When enforcement gets it wrong

Anatomy of forfeiture case outside Council Bluffs

Trooper seizes $12K; sends pot smoker back on the road

A search of the car turned up marijuana and $12,000 in cash, which the driver eventually admitted was to be used to purchase more drugs.

The trooper took the cash, but allowed the driver to get back on the road — with a suggestion he find a hotel room until he could sober up and a warning that he could be charged with operating while intoxicated if stopped again.

AT A GLANCE

West Des Moines Attorney Robert Rehkemper successfully argued that Michael Sanchez-Ratliff's life savings were improperly seized during a traffic stop in Pottawattamie County last year. The attorney argued that law enforcement officers improperly obtained permission to search the vehicle in which he was riding, and illegally obtained evidence, all in violation of his constitutional rights. Here are some of the key arguments Rehkemper made in arguing for the return of Sanchez-Ratliff's money.

Deputy Brian Miller improperly detained the driver and Sanchez-Ratliff without a reasonable suspicion of criminal activity.

Miller never advised Sanchez-Ratliff or the driver that they had the right to decline or withhold consent to search the vehicle.

Miller did not respond to Sanchez-Ratliff's request to place a phone call.

No contraband, drug paraphernalia or other items associated with criminal activity were found..

Neither the driver nor Sanchez-Ratliff was charged with traffic or criminal violations.

ABOUT THIS SERIES:

The Des Moines Register launched its statewide investigation into forfeitures late last year following two prominent Iowa cases that made national headlines: one involving out-of-state gamblers who claim Iowa State Patrol troopers unlawfully seized their $100,020 bankroll following a traffic stop; the other involving a nearly $33,000 seizure from the business bank account of a Spirit Lake restaurant owner accused of intentionally structuring bank deposits under $10,000 to avoid reporting requirements.

The property owners prevailed in both cases but spent tens of thousands of dollars in legal fees in the process.

The Register reviewed forfeiture profit-sharing receipts of all of Iowa's 99 counties and focused its review on six whose law enforcement agencies were among the most active in their use of the state's civil forfeiture law since 2009: Black Hawk, Cass, Polk, Pottawattamie, Poweshiek and Scott. In total, the Register reviewed more than 600 individual forfeiture cases.

FINDERS, KEEPERS

TODAY: Iowa's civil forfeiture law yields millions for law enforcement agencies, but is rated one of the nation's most unfair.

MONDAY: Lack of transparency makes it hard to track where the money goes. Some is spent in questionable ways.

TUESDAY: Some property owners question police procedures for accounting for their seized cash and other assets.

NEXT SUNDAY: Many agree that Iowa's civil forfeiture system is broken. What can be done to fix it?

ABOUT THE AUTHORS:

Jason Clayworth is an investigative reporter at The Des Moines Register who focuses on law enforcement, government spending and open record issues. He is an Iowa native and a graduate of Drake University.

Grant Rodgers is a reporter who has worked for The Des Moines Register since May 2013 and covers Polk County, Iowa and federal courts. He is an Ottumwa native and graduate of Simpson College.