Michigan Now Requires You to Be Guilty Before Losing Your Property — This is How We Got Here

A 2002 Chrysler Sebring. Image via Wikimedia Commons

With a bipartisan press conference featuring Republican and Democratic legislative leaders and the Democratic Attorney General, the 2019 legislative session kicked off with a show of unity. The issue? Civil asset forfeiture.

With a political split between the governor (Democratic) and Legislature (House and Senate both Republican), criminal justice reform was an area of widespread agreement. And, sure enough, after the committee hearings and debate was done, Michigan became among the 15 states to require a criminal conviction for most cases of civil asset forfeiture. The bills were passed nearly unanimously.

Civil forfeiture is the process of transferring assets — typically money, cars or houses — from people to the government. It began, and still mostly operates, as a way to deprive criminals of the proceeds of illegal activity. Think drug lords or mob bosses.

But along the way, some law enforcement agencies realized something: The law does not require you to actually be shown to be a criminal before they can take and keep your stuff. An asset is seized based on probable cause but, regardless of whether charges are ever filed, it is transferred to the government, either through a lower standard of evidence or because its owner doesn’t file a claim to the property.

According to retired Detective Sgt. Theodore Nelson, who taught a program on forfeiture procedure for the Michigan State Police from the late 1980s until the early 2000s, what started as a program for going after major drug dealers has changed.

Over the past few years, around 1,000 people lost their property without even being charged with a crime or after the charges were dropped. The typical value of the assets? A few hundred dollars or in the case of cars, around $2,000.

The Mackinac Center first wrote on this issue in the mid-1990s and published a study from adjunct scholar Dan Kochen in 1998. At the time, it was almost entirely off the radar of politicians and most citizens. That study documented horror stories such as people who lost their homes without being charged, shop owners who had money seized out of the register because dogs sniffed drug residue, and a woman whose art was seized because she used feathers, which she found on the ground, from a bird on the endangered species list.

National groups began getting involved. The Institute for Justice, a libertarian public interest law firm, started raising awareness. The American Civil Liberties Union filed lawsuits as well, and its state branch was instrumental in getting reform in Michigan.

But progress was slow, especially in the Great Lake State. For most of the 2000s, Michigan only expanded the use of law enforcement forfeiture:

• expanding its use for “terrorism-related offenses” (2001),
• streamlining the process for acquiring homes (2003),
• expanding its use for crimes against children (2004),
• expanding its use for working as a construction contractor without a license (2006),
• allowing more ways for forfeiture funds to be distributed (2006),
• expanding its use for identity theft (2010),
• allowing law enforcement to use the funds for almost any purpose (2011),
• expanding it use for cases of animal fighting (2011),
• expanding its use for cases of human trafficking (2014) and,
• allowing it to be used more easily when it comes to nonnative aquatic species (2014).

It’s important to note: Human trafficking, terrorism and other activities listed above are horrible and rightfully considered to be a crime. But there already are and were penalties for them and assets gained from them could already be forfeited. But the new laws typically just used these crimes to further loosen the forfeiture statutes. Each of these bills was passed unanimously or nearly so.

Perhaps it should be no surprise that Michigan then experienced a series of horror stories. As noted in our 2015 report on the issue:

• In 2004, Krista Vaughn was giving her friend and Red Cross co-worker Amanda Odom a ride home from work. She dropped Odom off at a bank in Detroit and then circled the block before picking her up again. While Odom was waiting for Vaughn, an officer with Wayne County Sheriff’s Morality Unit accused her of making eye contact with nearby motorists and solicitation of prostitution. On this suspicion, police issued her a ticket and seized Vaughn’s 2002 Chrysler Sebring. Odom’s ticket was eventually dropped and neither woman was charged with a crime, but police still charged Vaughn $1,400 to get her car back. Vaughn reluctantly paid the fee, because she believed it would be less expensive than trying to fight the case.
• In 2008, more than 40 people had their vehicles seized by law enforcement after attending an event at an art institute in Detroit. The gallery was serving alcohol, allegedly without a proper liquor license, which meant the vehicles unknowingly transported people to a place involving “illegal activity.” The people were never convicted of anything, and charges against them for “loitering” were quickly dropped, but police wanted $1,000 — or their forfeited cars — from each.
• In November 2012, the Cheung family, living just outside Detroit, had $135,000 in a bank account frozen, presumably because it was making routine deposits of slightly less than $10,000, a threshold under federal law. As a result, the Cheungs could not pay their property taxes or the expenses of their restaurant and got into financial trouble. No criminal charges were ever filed.
• In November 2013, Thomas Williams of St. Joseph County said he spent 10 hours in handcuffs while police searched his home and property. They took his car, television, cellphone and the cash he had on hand. As a result, he was stranded at his home for three days. It was a year before charges were filed.
• In 2013, Tarik Dehko and his daughter Sandra George had $35,000 seized by the IRS from funds they used for their grocery store in Fraser. Federal officials never pressed charges and were forced to return the money only after a public outcry.
• In 2014, Dr. Wally Kowalski from Van Buren County had his bank accounts frozen and expensive tools and equipment taken from his home and held for months before being charged with a crime.
• In 2017, Gerald and Royetta Ostipow had their property, including a classic muscle car, seized by Saginaw County police. Law enforcement officials found marijuana on property they owned — but was occupied by their adult son. They lost some of their property anyway, without ever being charged with a crime.

These stories, combined with a newly formed coalition, began turning the tide. In 2015, the free-market Mackinac Center, the state chapter of the liberal ACLU and the National Federation of Independent Business testified with national allies in support of a package of bills. The bills established transparency requirements for every forfeiture taking place in the state and raised the standard of evidence in civil court. In 2013, these bills couldn’t even get a hearing in the Legislature, but after less than two years of work, they passed with the support of Attorney General Bill Schuette and Oakland County Sheriff Mike Bouchard.

In 2016, further reform was achieved when lawmakers repealed a forfeiture bond requirement. Previously, Michigan was one of only five states that required people to pay 10 percent of the value of their assets to begin the proceedings to get them back.

And, in 2019, Michigan passed a package of bills that require a criminal conviction for most cases of civil asset forfeiture. Forfeiture now requires either that a person sign away the rights to property in a criminal court or be found guilty of a crime. (People who don’t claim their property or whose disputed assets are worth more than $50,000 are still processed under the old laws).

This was a long battle — more than two decades for the Mackinac Center — and it could not have been won without help from partners across the political and policy perspective. Several law enforcement officers across the state spoke out in favor of the changes, and the national group Law Enforcement Action Partnership did valuable work on behalf of that community. Grassroots activists did tremendous work pushing the issue, showing up to legislative hearings and promoting local municipal initiatives to prevent the practice.

It may seem strange to some for a “conservative” organization to get involved on this issue. But private property rights and a fair and just rule of law are cornerstones of a free-market economy. While civil asset forfeiture mostly affects “the least of these” (to borrow a Biblical phrase), it was the right thing to do.