Indiana prosecutors will return $42,000 in cash they seized from a California small business, several months after the owners filed a class action lawsuit alleging that law enforcement is exploiting a major FedEx shipping hub in Indianapolis to seize millions of dollars in cash from innocent owners.
The Institute for Justice (I.J.), a public interest law firm, announced last week that prosecutors in Marion County, Indiana, have agreed to return the money to its clients Henry and Minh Cheng, who run a California jewelry wholesaler business. Police seized the cash from a FedEx package en route to them from a client in Virginia. County prosecutors then filed a lawsuit to forfeit their money through a process called civil asset forfeiture, claiming the Chengs' money was connected to a violation of a criminal statute. However, the complaint never stated which statute.
The Chengs' suit says they're not the only victims. According to I.J., the Marion County Prosecutor's Office has sued to forfeit $2.5 million in currency from at least 130 FedEx parcels in transit from one non-Indiana state to another over the past two years through civil asset forfeiture. I.J. alleges that the Marion County Prosecutor's Office then files deficient forfeiture actions against seized cash, which fail to notify owners of what crimes they're suspected of committing. I.J. argues the whole scheme violates a wide range of constitutional rights, including the Fourth, Eighth, 10th, and 14th Amendments.
"I'm ecstatic at the prospect of getting my money back," Henry Cheng said in an I.J. press release, "and this is just the beginning. What happened to my company shouldn't happen to anyone. Indiana should stop trying to steal from law-abiding citizens by seizing property and figuring out later whether there's any basis for keeping it."
Under civil asset forfeiture laws, police and prosecutors can seize property suspected of being connected to criminal activity, even when the owner is not convicted, charged, or even arrested for a crime. Law enforcement groups say civil forfeiture allows them to interdict and disrupt organized crime like drug trafficking by seizing its illicit gains.
However, civil liberties groups like I.J. argue lax safeguards and perverse profit incentives lead police to brand any large amount of cash as drug money, even in cases where no drugs are found and even though traveling with large amounts of cash is legal.
For example, the Justice Department last month ordered the Drug Enforcement Administration (DEA) to suspend most searches of passengers at airports and other mass transit hubs because of a significant risk of constitutional violations and lawsuits. The order followed years of media investigations, government audits, and reports from civil liberties groups that identified abusive cash seizures by DEA airport task forces.
I.J. is currently also litigating a class action lawsuit challenging the DEA's airport forfeiture practices. One of the lead plaintiffs in that suit, Terrence Rolin, a 79-year-old retired railroad engineer, had his life savings of $82,373 seized by the DEA after his daughter tried to take it on a flight out of Pittsburgh with the intent of depositing it in a bank. As in the Chengs' case, after it went public, law enforcement returned Rolin's money.
Most asset forfeiture lawsuits are rendered moot when the government returns the plaintiff's money, but I.J. says it will continue litigating its class action lawsuit to stop Indiana law enforcement from continuing to improperly seize cash.
"Indiana had no basis to forfeit the Chengs' money, and so it's only right that the government has agreed to return it," I.J. attorney Marie Miller said in a press release. "But many other people are affected by the state's practices of taking money simply because it goes through Indiana and failing to identify a crime that would justify the forfeiture. The counterclaims aim to end this abuse of civil forfeiture not just for Henry and Minh, but for everyone."
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