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Mr. GEKAS. What did they say you had a right to do?

Mr. JONES. They told me if the money was clean that I would be able to get the money back.

Mr. GEKAS. Did they tell you that you would have had to post bond?

Mr. JONES. No.

Mr. GEKAS. You learned that later when you contacted your attorney?

Mr. JONES. That is correct.

Mr. GEKAS. Mr. Edwards, what was the predicate in the Civil Rights Act on which you founded the action?

Mr. EDWARDS. There were two constitutional bases, first, denial of due process, because the Asset Forfeiture Office had refused to waive the bond requirement and allow us to get into court; and secondarily, that the seizure of the money was without probable cause and violated Mr. Jones' rights under the fourth amendment against unreasonable search and seizure. We won ultimately on both points.

Mr. GEKAS. Is it to be assumed that when you finally did bring an action that, in effect, you had the burden of proof?

Mr. EDWARDS. Oh, yes.

Mr. GEKAS. In all those proceedings under the Civil Rights Act? Mr. EDWARDS. That is correct.

Mr. GEKAS. So that even if this law were adopted you could still avail yourself of the Civil Rights Act if you found other bases, and you would still have the burden of proof there. If this bill had been in place and this were law, would you have resorted to the Civil Rights Act, do you think?

Mr. EDWARDS. No. Because I believe under the provisions of this bill we would not have had the problem of not having $900 to pay the entrance fee to a Federal court and would have retained judicial review of the seizure without having to resort to becoming a plaintiff in a 1983 action.

Mr. GEKAS. Then the burden of proof under this new act would rest in the Government's corner, as it were?

Mr. EDWARDS. That is exactly right.

Mr. GEKAS. I have only one other question having to do with the gentleman whose mother was treated so undignifiably. Did they ever issue an apology to your mother?

Mr. CUTKOMP. No, sir.

Mr. GEKAS. I apologize for them?

Is your mother still living?

Mr. CUTKOMP. Yes.

Mr. GEKAS. Tell her that we have all felt her pain, and I am not quoting anybody on that.

I thank the Chair.

I relinquish the time remaining.

Mr. MOORHEAD [presiding]. All of us that have heard this testimony are appalled that such things can happen here in the United States where people's rights can be trampled so seriously, especially without due process. I think the forfeiture laws can be of benefit. I hope that you do, too.

In cases where there is a crack house being continuously used to sell narcotics, well-known to everybody, there is every reason in the

world that the property should be forfeited if that is what it is being used for. But in some cases, where automobiles are being used to transport illegals back and forth across the border, something has to be done to stop that kind of action. But certainly to reach summary judgment without any evidence in these cases, certainly goes far beyond what was ever intended, I am sure, by the legislators.

Mr. Cutkomp, do you have a comment?

Mr. CUTKOMP. Can't you put something in for absent owners and innocent owner provisions?

Mr. MOORHEAD. Where automobiles are involved, if there is a loan against the properties, normally in the cases I have heard of in California at least, the rights of the mortgage company or the lending company have been protected there, as they should be. But, obviously, if there is an unknowledgeable person that owns the property, that doesn't know anything about the crime being committed, there should be a way

Mr. CUTKOMP. As long as there is a proof provision in it that keeps the table clear.

Mr. MOORHEAD. I agree that should be there.

Mr. Komie, do you think there is a place for asset forfeiture?

Mr. KOMIE. Absolutely, there can be asset forfeiture if the property itself is offending, but the cases we have been telling you about today, the property has been innocent.

Mr. MOORHEAD. I agree your cases are amazing situations where the law has been misused.

Mr. KOMIE. We at the Illinois Bar Association support law enforcement's efforts to eradicate drugs, but that is not what we are talking about. We are talking about a program that was thought to be good on the drawing board, that is turning out to be a disas

ter.

Mr. MOORHEAD. It certainly sounds that way.

I yield back.

Mr. HYDE [presiding]. I want to thank this panel for very compelling testimony. I wish the world could hear it, or at least those people who are interested in justice, which we all ought to be.

I thank you for your contributions. I hope some day we will have a signing ceremony at which all of you can be present.

Mr. KOMIE. We would be honored to attend, I am sure.

Mr. HYDE. Thank you, Mr. Jones. Thank you, Mr. Cutkomp. Thank you, Mr. Komie. Thank you, Mr. Edwards.

Our next panel consists of Stefan D. Cassella, Deputy Chief of the Asset Forfeiture and Money Laundering Section of the Department of Justice; and Jan P. Blanton, Director of the Treasury Executive Office for Asset Forfeiture at the Department of Treasury.

Together these two agencies represent the bulk of civil asset forfeitures at the Federal level. Joining them is James W. McMahon, superintendent of the New York State Police, here representing the International Association of Chiefs of Police.

Perhaps we can start with Mr. Cassella.

Normally we try to limit statements to 5 minutes, but I will, just with the admonition that we have several witnesses, if you could be less prolix than perhaps you would like to be, that is a softer way of saying it, but I don't want to cut anybody off.

STATEMENT OF STEFAN D. CASSELLA, DEPUTY CHIEFS ASSET FORFEITURE AND MONEY LAUNDERING SECTION, CRIMINAL DIVISION, DEPARTMENT OF JUSTICE

Mr. CASSELLA. Good morning, Mr. Chairman.

Five minutes will be fine. I understand that our formal statement will be included in the record.

I would ask that the transmittal of the forfeiture bill that we sent Congress last week and the analysis of it also be included in the record.

Mr. HYDE. Without objection, so ordered. [The information follows:]

[blocks in formation]

Enclosed is a draft bill, the "Forfeiture Act of 1996, " which contains comprehensive legislative proposals to improve the asset forfeiture program. The proposals are designed to strengthen and enhance asset forfeiture, improve procedures to ensure fairness and due process to innocent property owners, and resolve inconsistencies and ambiguities that have developed in forfeiture law.

This proposal is the result of a thorough review of the federal statutes relating to asset forfeiture that has been undertaken by the Department of Justice for the past two years. As you know, forfeiture statutes were enacted by the First Congress and have been an important part of federal law enforcement for over two hundred years. That is no less true today. The forfeiture statutes enacted by Congress since 1970 are an essential aspect of the federal arsenal of law enforcement tools that may be deployed in the war on crime. We have found, however, that the procedures that may have been appropriate historically for the forfeiture of smuggled goods, ships on the high seas, and certain types of contraband may need to be modified when forfeiture is directed toward assets such as residences, businesses and bank accounts.

In formulating our own proposals to revise the forfeiture laws, we have sought to convey a sense of balance. Forfeiture is an essential law enforcement tool that can be made even more effective by enhancing and clarifying the powers of the government while improving procedures to ensure that the rights of innocent parties are fully protected. The bill recognizes the important role that both civil and criminal forfeiture have come

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to play in federal law enforcement and takes into account the procedural and substantive needs of the law enforcement community. Yet it acknowledges the need for procedural reform and adopts many of the changes suggested recently by Members of Congress and the organized bar. In short, the bill would ensure that the enforcement of the forfeiture laws will be tough but fair.

The most significant provisions of the bill include the following: The bill expands the categories of crimes for which forfeiture may be imposed. Most important, the proceeds of all crimes in Title 18 of the United States Code would be subject to forfeiture so that forfeiture would be available as a sanction in white collar crimes such as fraud and public corruption. In addition, the bill includes provisions expanding the category of property forfeitable in connection with alien smuggling and terrorism, and authorizing forfeiture for additional money laundering violations.

The bill also includes several provisions designed to enhance the investigative tools available to law enforcement in forfeiture cases. These provisions are intended to assist the government in meeting the heightened burden of proof requirements set forth elsewhere in the bill by improving the government's ability to gather the evidence needed to build a competent case. Thus, the bill authorizes the use of grand jury material by government attorneys in civil forfeiture investigations, authorizes the issuance of civil investigative demands to gather evidence leading to the filing of a forfeiture complaint, gives government attorneys access to tax and credit report information in the course of forfeiture investigations, and permits the dismissal of claims where the claimant refuses to waive bank secrecy protections in foreign jurisdictions that limit the government's access to relevant documents.

Finally, the bill includes a number of provisions that resolve ambiguities in the present forfeiture statutes. For example, the bill preserves the availability of property for criminal forfeiture by allowing courts to order defendants to repatriate forfeitable property from a foreign jurisdiction, and by authorizing the pretrial restraint of substitute assets in criminal cases.

In addition to strengthening asset forfeiture as a law enforcement tool, the package contains proposals designed to ensure that the rights of innocent property owners are protected and to avoid unduly harsh application of the forfeiture laws. The most important of these provisions involve the burden of proof and the cost bond requirement in the area of civil forfeiture. The bill shifts the burden of proof from the property owner to the government and provides for waiver of the

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