Indiana attorney Paul Ogden of Roberts & Bishop has filed suit against 78 Indiana prosecutors who inappropriately retained millions of dollars in forfeiture money that should have properly gone to an education fund:
The Indianapolis Star reported that the lawsuit unsealed Friday in Marion County Superior Court seeks $17 million that attorneys at Roberts and Bishop estimate should have been paid to the common school fund over the past two years.
State law allows law enforcement agencies to keep a portion of seized funds to cover “law enforcement costs” and give the rest to the common school fund, which helps pay for school construction.
But a recent investigation by the Star found that what constitutes law enforcement costs depends on the prosecutor and that many are keeping all of the assets seized and circumventing regular oversight procedures.
This lawsuit should be successful; Indiana law is clear in directing the majority of forfeiture funds to education. In many cases, prosecutors spent these funds as they pleased, directing it to SWAT teams that they controlled, or disbursing grants to curry political favor with constituents.
Consider how this works. Prosecutors use expansive interpretations of forfeiture laws to directly retain funds for their discretionary use. They then use that money to cultivate social and political capital so that they can retain their office in future elections or run for higher office. Over time, misbehaving prosecutors face few real checks on their behavior, since most of the people who might investigate them are either former prosecutors or people who are heavily invested in the same social and relational networks and who have little incentive to disturb the universe and risk their position.
Here is a response from one of the attorneys named in the suit:
“Number one, this is an action alleging fraud,” said Chris Gambill, forfeiture attorney for Putnam, Owen, Clay, Parke, Vermillion, Vigo and Greene counties. “You have to state specifically what fraud has taken place and what fraudulent acts have occurred. This case is totally devoid of any facts that prove fraud has taken place.”
Something that can and often does happen, Gambill explained, is that the defendant in a case signs over the seized assets as part of a settlement. In that case, Gambill said, prosecutors are within their rights to use any proceeds to purchase public safety items such as police vehicles or equipment for the fire department.
An ordinance is on the books in Putnam County allowing the prosecutor to make such requests.
“This is all public record,” Gambill said. “Putnam County has done its level best to maintain total transparency. These settlements are usually attached to the case records. That’s not a law, it doesn’t have to be done, but it has become a recommended practice.”
Gambill said while he cannot speak for the other 71 counties named in the suit, he is certain that the seven counties he acts as forfeiture attorney for have followed the letter of the law.
“The attorneys who filed the suit sent out requests for forfeiture paperwork going back I don’t know how many years,” Gambill said. “Prosecutor Bookwalter told them they could come into his office at any time, and that he would make those records available. They have never taken the time to actually come over to Putnam County to inspect records, and I would guess that’s something that has probably been repeated all over the state.”
I should note that Paul Ogden did actually send me the records of deposits into the Indiana education fund, which should be pretty conclusive evidence that Putnam County and other counties are in non-compliance with the law.
While Ogden sues Indiana state prosecutors for keeping millions of dollars of forfeiture revenue for themselves, US Attorney Joe Hogsett openly makes a mockery of Indiana law by allowing Indiana law enforcement access to the Department of Justice’s Equitable Sharing program, which allows Indiana law enforcement to have a federal agent initiate the seizure. Since the seizure is conducted federally, the DOJ has the discretion to circumvent state law and send Indiana law enforcement a check directly:
U.S. Attorney Joe Hogsett says $357,000 is in the hands of Indiana State Police as part of an asset forfeiture fund.
The money comes from Gary Crowe, a former southern Indiana businessman convicted of mail fraud.
Hogsett says Crowe stole money from the town of Clarksville as part of a fraud scheme. Some of the money Crowe had to pay back is in the hands of Clarksville town officials.
Hogsett says the State Police can use the check for mostly anything, including paying overtime to officers or buying new equipment.
Consider that. The Indiana State police can use the check for “mostly anything” free of civilian oversight or any other transparency or accountability mechanism. As I noted back in August, the amount of money funneled through Equitable Sharing is substantial:
The problem is greater than the Indianapolis Star reports. Their source only is able to calculate the dollar amount of forfeitures that were processed through state circuit court, but this does not capture the money that is “laundered” through the Department of Justice’s Equitable Sharing program, which is the program responsible for receiving seized property and sending a percentage kickback (usually 80%) back to the state and local law enforcement agency.
Moreover, without a thorough audit of police and prosecutor agencies it is unlikely that we’ll be able to accurately put a number to the total forfeitures that happen in Indiana; many of these are not reported, and prosecutors have made use of techniques like “confidential settlement agreements” to process a lot of forfeiture money as if it were not forfeiture money. This allows them to hide receipts and build their own slush funds. We’ve blogged previously about an Indiana prosecutor, Mark McKinney, who was able to do precisely that.
In 2009, $4.8 million was disbursed back to Indiana Counties from the Department of Justice’s Equitable Sharing program. In 2008, that figure was $4.3 million. This implies that roughly $11.4 million dollars worth of seizures were transferred to the DOJ during 2008-2009, all money that is legally directed to Indiana’s Common School Fund.
Over the last ten years (2000-2009) disbursements from Equitable Sharing to Indiana law enforcement were $26 million, indicating gross receipts of roughly $32.5 million. Indiana school districts should be very, very concerned that so much money meant for their budgets has simply vanished, and it is my thought that they should consider filing a federal lawsuit against the Department of Justice over this program, which is intended to divert funding away from Indiana’s schools to Indiana’s law enforcement.
Odgen’s suit in Indiana is something that I hope will be replicated in other states, though I wish there were some way to extend the lawsuit to end law enforcement access to Equitable Sharing. Missouri, for instance, has a similar forfeiture law that sends forfeiture proceeds to education, something that rarely happens. A lawsuit initiated by a Missouri school district against Missouri law enforcement and the Dept. of Justice has a high probability of success, at least if history serves as a decent guide.
I might also note that in New Mexico, litigation has been successful at ending state law enforcement access to the Equitable Sharing program.