ties with their case in the state court, they turned the matter over to the Drug Enforcement Administration Forfeiture Unit. Since they could not seize and sell the farm by state law, they turned to the callous bureaucracy to take the family farm. After this storm trooper raid on the Accardi farm, the Stouts never received actual notice that their interest in the farm would be forfeited. An ex parte order was entered in the Federal District Court for the Northern District of Illinois authorizing the seizing of the farm and other property on December 9, 1992. The Stouts received no actual notice of this ex parte proceeding. The Stouts did not receive actual service of the complaint of forfeiture of which was subsequently filed on December 14, 1992 under cause number 92 C 7906. The government instead chose to publish notification in the newspaper the U.S.A. Today. The Stouts do not read this newspaper. People like the Stouts are deemed innocent owners under the statutes. They had no idea that any contraband was present on the farm as they were only present on the farm during the winter months when no marijuana was or could be grown. The parcel of property has been in Steve Stout's family and he wishes to have the opportunity to pass it on to his children. To do that he has been forced to retain the services of a Chicago lawyer and contest the ex parte seizure as well as the illegal entry by the police to preserve his and his wife's claim as innocent owners. This has cost him anticipated legal fees of up to $10,000.00 which is a great deal of money for a young family. The property that the Stouts always viewed as a source of solace and relaxation has now become a source of anguish and unforeseen expense.

The lessons to be drawn from the Stout case are notice of the proceedings and the intended forfeiture should be delivered directly to the owner of a property and not published solely in U.S.A. Today. Secondly, the family farm should not be subject to seizure under these circumstances which place an ordinary citizen with little resources against the federal government. A federal judge must have discretion to appoint counsel to contest a forfeiture and Chairman Hyde's Bill provides for appointment of counsel. We support this provision. Finally, for the small amount of marijuana involved in this case, the Stouts have been subjected to several years of court proceedings and a demand from the federal government to pay the federal government money to get their farm back or face the risks of trial. We hope this Bill will be amended to prohibit seizure of family farms for marijuana and leave this matter to the states consistent with their public policy.

MAILING NOTICE TO THE WRONG PERSON

Mr. Milton Bryan was walking through the Detroit Metro Airport. He was approached by the Airport DEA Task Force. Mr. Bryan is a black American. He was forced to produce identification and escorted by DEA Task Force members larger than him to their office more of Chairman Hyde's and encourages its enactment.

GRANDMA'S BANK ACCOUNTS

Michael Hershman, a bona fide druggist without a license, was indicted for his drug business. Simultaneously, the government filed an asset forfeiture case against every asset in the name of Hershman. Michael Hershman's grandmother, Rachel Levine, had a savings account at Columbia Savings and Loan. The government seized the account in 1990. The account represented the lifetime savings of grandma. Fearing she would die, Grandma made Michael Hershman a beneficiary to her account in the event of death. The Drug Enforcement Administration was extremely insensitive to grandma's estate plan. It took grandma three years and attorneys' fees to get the government to release grandma's money forcing her to live on her social security only. Grandma had no remedy or a federal judge to petition in order to release the account before the trial of the forfeiture action. Once again, Chairman Hyde's Bill provides for a release of property. We, the Illinois State Bar Association, support giving federal judges discretion to release property to innocent owners before the trial. Further, we request Congress state in the legislate purpose of the act the need to protect innocent owners from draconian actions of the bureaucracy. Finally, the Bill should be amended to place mandatory time limits for hearing for innocent owners. In no case should the government avoid a hearing for temporary relief for more than ninety days.

LIFETIME EARNINGS SEIZED AND FORFEITED WITHOUT A TRIAL

Mr. Anthony Lombardo has owned a pizzeria which has supported him for several decades. Purportedly, an arrested burglar claimed he was selling stolen property on the back than a half-mile away from his boarding gate. There, they went through his carry-on luggage. They discovered $32,000 in United States currency but found no drugs. The officers insisted on taking the money and giving Mr. Bryan a receipt for his money. He then caught his plane to St. Louis where he was met by officers

who demanded to search his checked baggage. They discovered no drugs and sent him on his way. One would think our kind federal government would send Mr. Bryan notice they intended to forfeit his money. They did sent notice to Mr. Bryan without restriction of delivery to the addressee only. Another person living in the same housing complex signed for the letter and did not give it to Mr. Bryan until too late. Upon receiving the letter several days late. Mr. Bryan post marked a claim and posted a cost bond which was lost by the Asset Forfeiture Unit of the Drug Enforcement Administration. Mr. Bryan though counsel contacted this unit and attempted to replace the missing cost bond with a second cashiers check from his bank. The Asset Forfeiture Unit refused to accept the replacement cost bond or the good faith efforts of Mr. Bryan to contest the forfeiture of his money.

Mr. Bryan filed a motion under Federal Criminal Rules of Procedure 41(e) to return his property. A federal judge had to vacate a decree of forfeiture due to the absence of proper notice. According to the government it should not make any difference who they deliver the notice to if they live in the same neighborhood. The lesson to be learned here is Congress should require notice to be delivered to the owner of the property just like any other civil proceeding or require the post Office to deliver to the addressee (owner), only. Additionally, Congressman Hyde's Bill places the burden of proof on the federal government and not the claimant. Here Mr. Bryan is being forced to prove the innocent nature of his money in federal court with no burden to prove the money is derived from the drug business. The Illinois Bar Association supports this reform steps of the pizza parlor. The Chicago Police Department obtained a search warrant for the crime of receiving stolen property. The police searched the pizzeria and they find flour and pizza but no stolen property. However, Mr. Lombardo kept his savings in a barrel. The police seized $506,000.00 in United States currency in small bills. The police took the money to the Police Station. Since they found no drugs at the pizza parlor, they called for a dog to sniff the drugs. They claim the dog alerted to the presence of drug on currency. They then deposited the money in a national bank. They paid no attention to the scientific research which demonstrates the money supply in the United States is contaminated by the rollers in the Federal Reserve Bank System. On this evidence alone, the Chicago Police justified the seizure of the money. Mr. Lombardo had no criminal record and no history of investigations for drug activities. So Mr. Lombardo comes to court in the Circuit Court of Cook County, Illinois. He filed a motion to return his property to him. The Chicago Police, well aware of the continent fee law enforcement, authorized by 21 U.S.C. 881 called the Drug Enforcement Administration Asset Forfeiture Unit. The United States filed a case in federal court obtaining a warrant for the money although Mr. Lombardo was before a state court judge attempting to obtain his property.

A week later a state court judge ordered the return of the money to Mr. Lombardo. The government obtains an order from a federal judge requiring him to bring the check given to him by the state court to the federal building and handed over to the U.S. Marshall. This was only the beginning of Mr. Lombardo's travail to obtain his property. The federal judge assigned to Mr. Lombardo's case refused to give Mr. Lombardo a hearing on a motion to dismiss for lack of jurisdiction, on a motion to suppress evidence seized, or on a motion to suppress evidence on the grounds the application for the search warrant was a fraud, and granted summary judgment in favor of the government without Mr. Lombardo and the judge ever laying eyes on each other. Mr. Lombardo was never afforded a contested probable cause hearing as the court found the ex parte determination of a magistrate to issue a seizure warrant was sufficient to avoid the requirement of a trial. It is clear Mr. Lombardo got the least amount of due process our government could provide for him. As we said earlier, the founders of our country would be shocked and saddened to learn Mr. Lombardo's property could be seized and forfeited without a trial or a judge ever holding a hearing in open court. The lesson to be learned here is that a person can be stripped of their property without ever having a hearing a federal court. This case was decided solely on the paper filed and not the evidence heard by the court. Chairman Hyde's Bill takes a great step forward in shifting the burden back to the government to prove by clear and convincing evidence the criminality of the property. This will avoid the dire consequences suffered by Mr. Lombardo. The Bill should be attended to prohibit summary judgment and require hearings on motions to suppress evidence illegally seized. Cases like Mr. Lombardo's can only erode the confidence of the American people in the federal courts, their justice department and their police agencies. Therefore, Chairman Hyde, we call upon you to strengthen the procedures to protect the liberties and property ownership of our people.

The Illinois State Bar Association encourages and promotes the enactment of legislation which restores due process and protects the rights of the innocent and the

guilty alike. We stand ready to assist this Committee and its staff in the passage of H.R. 1916. We wish to thank you for the opportunity to appear here today and express our views. Please call upon us to assist you. We also ask that anyone interested in this issue and other legal issues contact us at our Internet address at http:/ lwww.illinoisbar.org. Thank you.

Mr. KOMIE. Thank you for having us. If we may be of any service to the committee, please call on us.

Mr. HYDE. Thank you, and I am sure you will be.

Mr. Frank.

Mr. FRANK. Mr. Chairman, I am delighted that you are taking the lead that you are taking, and as I have told you, I will work as closely as possible with you to get this corrected. This is an embarrassment.

I was pleased in reading the Justice Department's testimony to see acknowledgment from them that serious change is needed, but that is long overdue. I gather we got a bill from them last week, so the hearing may have already had some positive impact.

We have to legislate, and I would hope the administration would put aside the kind of bureaucratic impulses we sometimes get and join this. It is appalling what we hear.

I wanted to note and I was pleased to hear Mr. Edwards say that he was compensated on behalf of Mr. Jones through the provision of the Civil Rights Act that allows for attorneys' fees. I know not all of our colleagues have been as supportive of that reimbursement for attorneys bringing civil rights cases, and I am delighted to see that this is a case where it worked well. It is a maligned provision but a very important one.

A couple of questions because I am interested to hear from the administration.

To Mr. Jones, and to Mr. Edwards, when they were, let me use the technical term, harassing you, did they ever bring forward evidence to suggest that you had engaged in illegal activities other than the dogs sniffing the money?

Was there anything they brought forward of any sort, Mr. Edwards.

Mr. EDWARDS. No, sir. What they knew when they seized the money was that Willie Jones was an African-American who had bought with cash a round-trip ticket to Houston, that drug-source city in Texas, and was flying under his true name. That is how much they knew when they took his money.

Mr. FRANK. Flying under

Mr. EDWARDS. His own name. Not an assumed name, but the same name that was on his driver's license.

Mr. FRANK. For that-that was all they had and all they ever had. At no point did they adduce anything that suggested that there was any wrongdoing of any sort?

Mr. EDWARDS. That is correct. I think that is an accurate and fair statement.

Mr. FRANK. When did this happen?

Mr. EDWARDS. The seizure occurred in late February 1991. The trial was in, as I recall, late 1992, and the court's decision ordering the return of the money was in 1993, roughly, almost 22 years later.

Mr. FRANK. Did you ever get a letter of apology in any Federal official on this?

Mr. JONES. No. None.

Mr. FRANK. That doesn't surprise me, but disappoints me a bit. Mr. Cutkomp, with your mother did they adduce any evidence that there was some complicity on her part at any point? I am not talking about whether she was or wasn't.

Did they have any evidence that suggested that she was?

Mr. CUTKOMP. She was never part of my brother's conspiracy.
Mr. FRANK. Did they claim she was?

Mr. CUTKOMP. No.

Mr. FRANK. Let me ask, particularly the attorneys here, others, is there any other area of American law that you can think of where this kind of reversal of roles takes place, where fitting a profile doesn't simply subject you to the closer investigation? We have cases where if you fit the profile, you get subjected to investigation, but where the burden of proof gets reversed?

Mr. Komie, can you think of any other area?

Mr. KOMIE. I can't think of any, or where people have the legal right to possess the property, which is the money, where they have to now prove that the source of the money is legitimate as opposed to the Government having the burdens.

Mr. EDWARDS. No. I think there is nothing like forfeiture, and that is probably because of the historical basis of forfeiture. In colonial America if we didn't seize the ship that the smuggled goods came in on, the tiny Federal Government would have had no recourse. But the Justice Department has taken those quite irrelevant traditions and spawned modern forfeiture.

Mr. FRANK. I guess it started with the precedent of having to secure the ship you sailed in on, and they have now applied the old saying, and the horse you rode in on.

The last question I had, as I read over the testimony in advance from the Treasury Department, they talked about the need to do this, where we were talking about goods which were themselves pirated, intellectual property abuse, for instance.

Mr. Komie, is this procedure widely used across the board, or is it primarily in people being accused of drug abuses?

Mr. KOMIE. This seems to go on throughout the United States, whether I am working in the Detroit area or any metropolitan area that has an airport or train station. In Florida, they have a interstate highway system and stop buses.

Mr. FRANK. What the Treasury Department said is we need this because we have to protect people who have counterfeited or pirated goods. Have you come across much use of it in that capacity? Mr. KOMIE. No. I have seen one case in Chicago where we had pirated goods, where they swooped down on somebody who was producing unauthorized sweatshirts, T-shirts. But my experience is that law enforcement does not enforce patent trademark and unique copyright items. They spend most of their time running after the crime of the time, which is murder, rape; that is what they primarily occupy themselves with.

Mr. FRANK. Is forfeiture mostly for drug enforcement?

Mr. KOMIE. Yes, but in the case of Mr. Lombardo, it was the stolen property police who picked up the money and then once it got there they realized, here is a bonanza. We can split it up if we take it to the Federal building.

Mr. EDWARDS. I believe there is a second area that has experienced very recent boom that is perhaps not quite as evasive as drug forfeiture, but currency violation forfeiture. I represent a country doctor in Alabama who had put his entire life savings in a bank, amounting to about $2.5 million, and had the interest off that account go to a school in his hometown, a private K through 12 school that was about to close because of financial problems.

About 22 years after he set up this account and after he had benefited the school to the tune of about half a million dollars, he took the money that he had hoarded over a lifetime of practicing medicine, he was almost 70 at the time, he had over $300,000 in the back of his closet and his wife finally persuaded him to take it out. So he put it in the bank to be added to this account he had set up for the school, and the bank president did not file a currency transaction report because the bank president, as he testified in deposition, knew the doctor was almost obsessive about not being known as a rich doc. He didn't want people to know he had that kind of money, this is sort of a throwback kind of doctor. He charges $5 for a routine office visit and drives an 8-year-old car. Mr. FRANK. How many office visits does he happen to get in in a day?

Mr. EDWARDS. A lot. He is a rare creature for 1996.

Anyway, the Government found out that this large amount of currency had been deposited to this account without a CTR being filed, so they seized the entire account, almost $3 million at that time, under section 981, alleging that the entire amount was forfeitable under the currency forfeiture statutes.

A district court in Montgomery last year granted summary judgment in our favor. The doctor has now gotten back with interest all of the money, except the $300,000 cash deposit, and we are now litigating what happens to that money in the eleventh circuit. So it is attraction of the money. Any time there is a forfeiture statute on the books, those law enforcement agencies that deal with whatever the law is are going to look for ways to take the money.

Mr. FRANK. Were they alleging any income tax violations in that case?

Mr. EDWARDS. No. They tried to find some, but couldn't. We ultimately showed that the doctor had overreported his cash income and the IRS had to send him back $20,000-some.

Mr. FRANK. Thank you, Mr. Chairman.

I want to say that you are performing a great service here, Mr. Chairman, and I will do whatever I can to help you in its completion.

Mr. HYDE. Thank you very much.

Mr. Gekas.

Mr. GEKAS. Yes. I thank the Chair.

I wanted to ask Mr. Jones a couple of questions and/or his counsel.

At the point of contact that you had, the first contact in which they confiscated your sum of money, did they inform you that you had a right to reclaim it or that there was a process available for you to go to court to try to get it back, to contest their action; did they inform you of that?

Mr. JONES. They did somewhat inform me of that; right.