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A new Department of Justice (DOJ) directive from Attorney General Jeff Sessions makes it more important than ever to own cryptocurrency and to do so outside of digital exchanges which function like traditional banks; translation, they will rush to obey law enforcement agencies. The new directive expands the power of civil asset forfeiture for federal agents, allowing them to sidestep laws in the 20 states that currently restrict the practice.
Do Not Carry Unnecessary Cash With You
Civil asset forfeiture allows federal or local law enforcement to confiscate property and wealth from anyone suspected of committing a crime or of being connected to one. The targeted person doesn’t need to be charged or arrested. No crime needs to be proven.
Even in the presence of a crime, the person’s property may have been used without their knowledge. For example, Russ Caswell fought for years to retain ownership of his motel in Massachusetts which was worth $2 million. Federal and local law enforcement claimed the motel was theirs because drug deals had happened without Caswell’s knowledge. He ultimately prevailed but it required backing from the powerful Institute for Justice and an intense media campaign. Success in contesting the seizures is rare.
Because the process is a civil and not a criminal one, there are no due process protections and law enforcement has a free hand. The evidentiary standard reduces to a police officer’s alleged suspicions; for example, cash is always suspected drug money. There is no “innocent
until proven guilty” which means the the burden falls on the victim to prove the cash is not related to drugs. It is possible to contest the seizure in court but the owner has no right of representation and bears the legal cost which can rival or surpass the amount stolen. (Guidelines in a 2000 law, the Civil Asset Forfeiture Reform Act, suggest that a successful claimant can recover some legal fees but most victims are not aware of the possibility. And they need to prevail.)
Law enforcement relies on innocent people giving up. According to a 2016 report from the Heritage Foundation, “A vast majority of federal civil forfeiture cases—88 percent by some estimates—never see the inside of a courtroom.”
The rate of discouraged victims may be considerably higher…for several reasons. Federal thefts generally involve larger amounts than state or local ones and so the victims are more likely to pursue justice. On the state and local level, traffic stop confiscations are popular. A police officer pulls over a driver and, either through inquiry or a search, he discovers a wad of “drug money” which is seized on the spot. How many victims simply drive away? No one knows.
Another reason for a high rate of discouraged victims is that police seem to target those least able to fight back. Examples would be the poor, people with children in the car, immigrants, cars with out-of-state license plates, and minorities. A Reason magazine investigation found that poor people tend to be most victimized. It reported, “Law enforcement in Cook County, which includes Chicago, seized items from residents ranging from a cashier’s check for 34 cents to a 2010 Rolls Royce Ghost with an estimated value of more than $200,000. They also seized Xbox controllers, televisions, nunchucks, 12 cans of peas, a pair of rhinestone cufflinks, and a bayonet.”
A 2016 headline in the Huffington Post offered a more specific example of victims the police probably thought were ‘safe’: “Cops Take $50,000 From Manager Of Christian Band, Are Forced To Admit It Was Total BS.” A Christian rock group from Burma was badly harassed for almost two months by authorities in Oklahoma who wanted to keep $53,000 and a car that had been confiscated on the basis of a drug connection; no drugs were ever found. Huffpo stated,
[T]he fact that police seized the cash and prosecutors considered pursuing the case has once again highlighted the corrupting power of…civil asset forfeiture.” If the $53,000 had been in a privately-held bitcoin wallet, it would have been safe.
The Status of Civil Asset Forfeiture
For centuries, civil asset forfeiture law was used almost exclusively for customs enforcement or in maritime law. In the 1980s, however, the practice became a popular weapon in the war against drugs, especially since law enforcement agencies could keep or split the proceeds of what was seized. The DOJ maintains that the practice deters crime but a 2017 report from the agency’s inspector general disclosed that approximately two-thirds of cases in which cash was grabbed, no investigation, arrest or prosecution occurred. Clearly, the purpose was the cash grab not the deterrence of crime.
In recent years, resistance to civil asset forfeiture has been growing. For example, in 2014, the Washington Post published a series of articles entitled “Stop and Seize.” According to the Post, in 2013, law enforcement stole more from Americans than burglars did. The Post stated, “Last year…the Treasury and Justice departments deposited more than $5 billion into their respective asset forfeiture funds. That same year, the FBI reports that burglary losses topped out at $3.5 billion.”
In 2015, Obama’s Attorney General Eric Holder rolled back the practice…at least slightly on paper. More importantly, states have been slowly tightening laws to restrict civil asset forfeiture, often by requiring people to be charged with or convicted of a crime before their wealth can be plundered. In 2015, however, the Institute for Justice uncovered documents that proved the federal government was trying to counter state efforts. The reform site End Forfeiture stated,
The California District Attorneys Association is circulating a set of email [sic] from officials with the DOJ and Treasury indicating that the federal government would disqualify the state from receiving funds from the federal Equitable Sharing Program if it passes the pending reforms. The documents also reveal that the DOJ has already disqualified New Mexico from participating in the program, following passage of a sweeping civil forfeiture reform bill this spring.
Avoiding State Restrictions on Civil Asset Forfeiture
AG Sessions’ letter announced a change in federal policy that means state and local agencies can bypass state laws that restrain civil asset forfeiture. The letter states, “Under the Attorney General’s Order, federal adoption of all types of assets seized lawfully by state or local law enforcement under their respective state laws is authorized whenever the conduct giving rise to the seizure violates federal law.” In short, local police have the authority to seize property under federal law.
Federal and state law enforcement are motivated to work together because of one program. Equitable Sharing was introduced in 1984 through the Comprehensive Crime Control Act. The program means the proceeds of seized assets are shared between state and federal agencies when they work together; states can receive up to 80% of the plunder; in Illinois, it can be 90%. Law enforcement in states that curtail civil asset forfeiture are motivated to join with the feds because it allows them to sidestep restrictions. The Washington Examiner explained, “Advocates of civil asset forfeiture reform…continue to make steady progress in the states. Alas, a loophole in current law threatens to undermine these victories by letting state and local law enforcement effectively bypass state law when they team up with federal agencies.”
The federal government, despite window-dressing provided by Holder, has always pushed civil asset forfeiture. It is too profitable a scam to be abandoned.
Conclusion: Own Cryptocurrency like Bitcoin
Sessions’ letter rings the dinner bell for federal, state and local thieves. You are the dinner.
Civil asset forfeiture is here to stay. As economic times get tougher, the practice will only accelerate. It is the main method by which law enforcement self-finances without needing the approval of taxpayers or officials on budgets. Many police departments could not sustain themselves without the thievery of civil asset forfeiture.
As a huge fan of cash, I advise you not to carry much more than you immediately need. The only portable wealth you can depend upon keeping is cryptocurrency maintained in a private wallet under a key you control. Avoid “policing for profit,” avoid “theft by cop.” It is about to become much more common.
Will cryptocurrency like bitcoin help sidestep the evils of civil asset forfeiture? Let us know in the comments below.
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The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.