Yesterday the Miami Herald reported that:
Bal Harbour, which leads a task force with the Glades County sheriff’s office, helped seize $56 million in just three years — 2008 to 2011 — “without adequate written policies or procedures, prosecutorial oversight, or audits of undercover bank accounts,” said the DOJ.
The DOJ blasted Bal Harbour for tapping into $709,836 to pay employees salaries and benefits, despite strict federal bans on such practices.
Hunker told The Herald last week that all payments were approved by Treppeda and the village’s lawyers, Richard Weiss and Doug Gonzales.
In addition, DOJ cited findings by Bal Harbour’s independent auditor that revealed dubious expenses, poor record-keeping, and a lack of controls.
Because of the findings, the village is now forced to return $3.1 million — the village’s cut of the seized drug money in fiscal 2011 — $407,969 in additional proceeds, and another $709,836 in money that was not supposed to be spent on salaries and benefits.
Treppeda said the village has only about $2 million left in seized cash.
The investigation comes after years of Bal Harbour showcasing the goods it purchased with forfeiture funds, including $100,000 for a 35-foot boat powered by three Mercury outboards, $108,000 for a mobile-command truck equipped with satellite and flat-screen TVs, and $21,000 for an anti-drug beach bash.
In addition to the federal probe, other questions continue to nag the police about secret bank accounts funded with money from an entirely different pot: thousands paid by drug dealers to undercover cops to launder money and transport drugs.
The Miami Herald’s lawsuit is seeking records of how those monies are used, including credit-card expenses for flights and hotels — and cops fronting cash to snitches.
Village council members indicated they are willing to fight the sanctions, and voted unanimously to hire the law firm of Gelber, Schachter & Greenberg to challenge the Justice Department’s findings.
Treppeda said the village was awaiting receipt of about $9 million in forfeiture funds when the sanctions were announced this week. He said the independent attorneys will be tasked with helping the village get those funds from the government.
The Department of Justice’s objections to the activities of the Bal Harbour Police Department seem to be that 1) funds were managed and spent without proper accountability and 2) that the funds were managed and spent in illegal ways, including the use of forfeiture dollars for salaries (which is directly prohibited by the DOJ’s Equitable Sharing guidelines, with limited exception). The DOJ has not indicated if any forfeitures might have vested from cases where innocent or third-party owners are concerned, although we know that Bal Harbour didn’t care so much about building criminal cases as seizing cash:
However, several experts said the village’s practices raise disturbing questions about cops targeting cash rather than criminals — and operating thousands of miles from Bal Harbour.
In 2010 alone, village cops took part in 23 cases leading to $8.2 million in seizures — all outside of Florida — without law enforcement agents making a single arrest, records show.
“You lose sight of the law enforcement purpose when you’re concentrating on the money,” said Neal Sonnett, a Miami attorney and former president of the National Association of Criminal Defense Lawyers. “The profit purpose is very dangerous.”
This kind of situation has happened before. In his October 2000 Miami Law Review article (“A Discussion on Why the Civil Asset Forfeiture Reform Act Will Not Significantly Reform the Practice of Forfeiture”), Brant Hadaway described similar problems with the South Florida Impact Force:
Perhaps the most egregious example of the effects of such funding is the creation of Multijurisdictional Task Forces (“MJTFs”), mostly under the auspices of federal law, and which rely largely on asset forfeitures to fund their operations. A MJTF called “South Florida Impact” (“Impact”), which operates in cooperation with various South Florida police departments, depends entirely on seizure of laundered money for its operating budget. Impact has to launder drug money itself in order to attract money launderers to its accounts. This technique, which Impact officials call “pickup,” allows Impact to identify money launderers and seize their assets. In a telephone interview, an unidentified Impact official explained that Impact’s ratio of funds laundered to funds seized was one-to-one, a ratio which the official called “the best in the industry.”
It is not just Impact’s reliance on forfeiture as an organization that raises suspicions about its motives; the compensation arrangement with one of its founders appears to have been facially corrupt. Woody Kirk, a retired customs officer and full-time consultant to Impact, originally had a deal by which he received a twenty-five percent commission on all assets he helped seize. While the Justice Department put a stop to Kirk’s commissions, it apparently was unable to prevent him from arranging for kickbacks from his network of informants.
Drug Czar Barry McCaffrey has cited Impact as an effective law enforcement operation, but other law enforcement experts have stated that Impact is an example of what has gone wrong in the pursuit of criminal money. Impact does not appear to be accountable to any elected government body. Available information only indicates that Impact is supervised by a “steering committee of state and local officials,” and that its books are audited by the City of Coral Gables. It is thus not clear whether any political body, such as the governing bodies of Miami-Dade County or Coral Gables, would have the authority to “pull the plug” on Impact. Especially in light of Impact’s broad and amorphous jurisdictional sweep, the circumstances seem to add up to a law enforcement task force that bears greater resemblance to a band of roving “executive privateers” than it does to a law enforcement agency or police department.
More than a decade ago, a South Florida task force got into trouble after authorities said it was laundering as much drug cash as it seized and made no significant arrests. One member was accused of taking kickbacks and commissions from informants — $625,000 his first year.
Hunker, who led that same task force in the years before it ran into trouble, claimed his current problems with the feds stem from politics.
He said he has frequently worked with local DEA offices in New York, New Jersey and Atlanta in big cash seizures, causing trouble with the Miami DEA office.
Brian Mulheren, president of the Bal Harbour Citizens Coalition, questioned why village police were working cases in California and New York.
“The police department is chartered to protect the residents of Bal Harbour,’’ he said. “Our police department needs to operate for the residents.’’
Several residents made it clear they have no appetite for higher property taxes, or for spending more money to retain an independent attorney to fight the feds.
“It would be imprudent for the village to throw good money after bad,’’ said resident Dina Cellini, who also called on the council to fire the chief.
“I urge you to send Chief Hunker on his way,’’ she said.
Others chided the council for attempting to diminish the results of the federal investigation by calling them “allegations’’ and comparing the probe to an Internal Revenue Service audit.
“These are findings,’’ said resident Larry Jaffe. “We all agree we don’t like crime, and we don’t like drugs. But the ends don’t justify the means.’’
Ultimately there are only a few reforms that can satisfy Bal Harbour residents and allow them to reassert civilian and democratic control over their police department:
1. Civil forfeiture must be entirely abolished. Asset forfeiture as punishment for a crime can remain as part of the sentencing process, adjudicated by a judge.
2.All revenues of fines and forfeitures should be delegated to general funds for legislative appropriation. The discretion that comes from placing large “slush” funds at the behest of government agencies destroys the purpose of representative democracy.
3. “Equitable Sharing” or the federal program that incentivizes this corrupt behavior must be entirely abolished. There is no reason why sharing forfeitures is a necessary part of maintaining cooperation between federal and state law enforcement agencies, who should be interested in impartial administration of the law.