Asset Forfeiture

How the Feds Are Using Civil Asset Forfeiture to Threaten Free Speech

Sex, publishing, and quasi-legal theft collide in the Backpage prosecution.

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Colin Anderson Blend Images/Newscom

Prosecutors are ignoring the Constitution and legal precedent in their zeal to punish the founders and former staff of Backpage, by seizing money and other assets that stem from protected speech and legal activity.

In general, as the Supreme Court held in Fort Wayne Books, Inc. v. Indiana (1989), the Fourth Amendment says that "any and all contraband, instrumentalities, and evidence of crimes may be seized upon probable cause." But this changes "when materials presumptively protected by the First Amendment are involved."

Nonetheless, federal prosecutors are arguing that they're entitled to all money made by Backpage, even proceeds derived from unquestionably legal ads, and that decades worth of earnings made by former Backpage leaders before the website even existed are also tainted.

Since the defendants' arrests in April 2018, prosecutors "have created constant interference with the Defendants' ability to defend this case," states a January 2019 status report filed by their lawyers. "Virtually all of the Defendants' assets have been seized, virtually all of the money in their attorneys' trust accounts designated to fund the defense has been been seized or is effectively frozen," and defense lawyers "may expose themselves to criminal liability if they use those funds to pay fees" from the case.

Last week, the Cato Institute, DKT Liberty Project, and the Reason Foundation (the nonprofit that publishes Reason magazine) filed a brief in support of the defendants on this matter. The groups say they want "to amplify the danger that the government's use of civil forfeiture to seize the assets and proceeds of expressive material poses to free expression."

"The government has shut down a major internet site and confiscated millions of dollars of assets and proceeds not only from that site, but also from defendants' numerous other publishing venues—ventures completely unrelated to the alleged criminality of the site and indisputably protected by the First Amendment," the February 13 amicus brief states.

Backpage founders Michael Lacey and James Larkin, who sold the company in 2015, also published alt-weekly newspapers around the country for more than four decades before selling Village Voice Media (the papers' parent company) in 2012.

"Expressive materials—such as newspapers, books, and their internet analogs—are presumptively protected by the First Amendment," explains the Cato, DKT Liberty, and Reason brief. "And this presumptive protection extends to the assets for producing such materials, as well as the proceeds from their dissemination." That means they can only be confiscated if the government demonstrates in an adversarial court proceeding that the material is not protected speech.

"Unfortunately," they continue, "the government's conduct here is not new. The history of government efforts to suppress and censor disfavored speakers, particularly speakers who offer sexually explicit materials, is long," and it has "involved tactics similar to those employed here, designed to bankrupt speakers by forcing them to litigate on multiple fronts to prove that their speech is protected by the First Amendment."

In this case, much of the asset-producing content in question had nothing to do with sex.

"Lacey accumulated substantial wealth prior to the creation of Backpage," note his lawyers in one motion filed last November. Yet "in its scorched-earth approach to this case, the government has seized all of Mr. Lacey's financial accounts and real estate holdings, including considerable assets unrelated to Backpage."

Even when it comes to proceeds derived from Backpage, the First Amendment comes into play. "There's no doubt, number one, that this is a First Amendment case," said Paul Cambria, an attorney for Lacey, in a November 2018 court hearing. "These are publishing activities. We have had case after case of litigation, both state and federal, indicating that these are First Amendment activities."

Because of these First Amendment issues, this is not a typical case, suggested lawyer Ariel Neuman at that November hearing. "But beyond that, it's not typical in the way that the government has treated the defendants. It is not typical in the way that the government has essentially tried to financially strangle these defendants at every turn," she said.

Newman's client Jed Brunst, former chief financial officer at Backpage, "had an account seized where there was literally maybe 10, 20 dollars that could be traced back to Backpage-derived proceeds," she told the court. "We're talking millions of dollars seized. Our client is unable essentially to fund his life."

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49 responses to “How the Feds Are Using Civil Asset Forfeiture to Threaten Free Speech

  1. Um….feature not bug? I mean, these guys were engaged in the worst- the worst- crime known to humanity: helping people to hook up for money! The government must ruin the lives of a few scapegoats to really send a message of its moral priorities.

    Seriously, the government has always been guilty of coming down hard on people to send a message. But between this and the Silk Road guy, I think it is clear that groups in the DOJ and elsewhere are scared shitless of the power that online marketplaces bring, and are showing it by how hard they are pursuing these scorched earth campaigns.

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  2. So Kamala Harris’ personal cruisade has gone Federal?

    I am sure our next president will be sure to protect their rights when she takes office… So it is all good y’all…

    1. This article, along with various comments posted above and below, rests on the foolish, and also unproven, assumption that there is some sort of a “free-speech right” to publish illegal solicitations on the Internet. Many of us in the progressive movement, as well as our colleagues on the right, are puzzled by this obsession with “free speech,” a category that exists to protect certain forms of utterances, but not others. Solicitation is a criminal act, not a form of protected “speech,” just like the inappropriately deadpan “parody” that we had to deal with here at NYU several years ago. See the documentation of our nation’s leading criminal “satire” case at:

      https://raphaelgolbtrial.wordpress.com/

      1. Bullshit, the article is about unconstitutional asset seizure that goes far beyond the assets associated with the alleged crime. You don’t have a fuckin’ clue what you’re talking about go back to Huffington Post

        1. On the contrary, the article may claim to be “about” the little issue you refer to, but in fact it rests on the faulty premise that materials “presumptively protected by the First Amendment are involved” in this matter.

          Once it is recognized, as it clearly has been by law enforcement authorities, that we are dealing with serious criminality perpetrated under the pretext of “unrelated free speech,” then it makes perfect sense to seize all of the assets of the criminal organization involved. Do the directors of that organization wish to avoid a trial? Then they can plead guilty. Should the people of our great nation, who are the victims of these crimes, have to pay the costs of the legal action necessitated by such sordid acts? Indeed, some of us here at NYU saw very quickly that assets should be seized when we were the victims of criminal “parody.” Instead, nothing was done, and the taxpayers of New York ended up paying over a million dollars to have our good names and reputations defended by the enlightened prosecutors of our state in criminal court. Far from me to imply that the money wasn’t well spent; but the entire matter could have been avoided from the outset, with the more aggressive approach some of us would have liked to see.

          As for your final words, a number of us do write for Huffington Post, and when we do so, we are careful to avoid the foolish “free speech” claims we see being aired in certain venues.

          1. IF you read the article you either have extremely poor comprehension skills or you are intentionally fronting a silly Straw Man argument. The article very clearly expresses that the argument is against taking ALL their money, specifically money earned from legal enterprises that the accused needs for their legal defense and living expenses. It is NOT making the argument that you speciously suggest.

            1. I’m sorry, but there’s nothing specious about my suggestion. Everybody knows where this criminal organization got its money from, and everybody knows that such things cannot be permitted. It is perfectly appropriate to seize, not some, but all of the assets of individuals who seek to subvert the foundations of morality under the pretext of “free speech,” just as it is appropriate to prosecute, to the maximum, those who seek to diminish the reputations of distinguished faculty members here at NYU with harmful “parody” under the pretext of “satire.”

      2. Oh, so many things wrong with your OP Quixote. Yet, you’re right about one thing…You’ve no clue about what the freedoms of the 1st amendment entail. Backpage wasn’t the publisher…much like Reason is not the publisher of your comment. I’m sure they’re thankful for that.

        Solicitation is a crime, but that’s an unfortunate fact that flies in the face of reason. As with so many things prohibition doesn’t work and we need to stop trying it. All it does is drive commerce to the black (or grey) market and make everyone everywhere less safe.

  3. This is another example of the failure of the Trump presidency.

    If you promise to drain the swamp, you fire all US attorneys who are supportive of asset forfeiture and you do not appoint anybody who favors one of the swampiest of swamp practices.

    Trump’s grade on this issue: F

    1. But, Trump is for Eminent Domain & also for propping up Police Depts., so why would he want to stop this?

      1. He also loves forfeiture, iirc.

  4. I wonder if this is a case the Institute for Justice would get involved with.

  5. Now this is a witch hunt.

  6. The groups say they want “to amplify the danger that the government’s use of civil forfeiture to seize the assets and proceeds of expressive material poses to free expression.”

    Good – fuck those guys. Now, if only the judge has any balls. What a bunch of fucking assholes.

  7. “We’re talking millions of dollars seized. Our client is unable essentially to fund his life.”

    Yeah, well, if Richie Rich over here had been paying his fair share then maybe he wouldn’t be in this predicament.

  8. Since the defendants’ arrests in April 2018, prosecutors “have created constant interference with the Defendants’ ability to defend this case,” states a January 2019 status report filed by their lawyers. “Virtually all of the Defendants’ assets have been seized, virtually all of the money in their attorneys’ trust accounts designated to fund the defense has been been seized or is effectively frozen,” and defense lawyers “may expose themselves to criminal liability if they use those funds to pay fees” from the case.

    Isn’t that the point of asset forfeiture? To ensure a guilty verdict or plea bargain by depriving the accused of any means of defending themselves in court?

    1. Which is just one of many reasons I want the War On Drugs to END. We haveaccepted far too many abridgements of our civil rights in the name of ‘Getting the Bad Guys’ in the Drug War.

      1. Most of these abridgments were sold as tools that were only to be used on “kingpins” and such, not Joe Shmo. Can we sue Uncle Sam for false advertising?

        1. Do you want all of your assets seized? Huh, punk? Do ya?

    2. The process is the punishment. Freddie Gray was given a nickel ride by the Baltimore PD, the feds aren’t so cheap.

    3. How is this not a violation of the Sixth Amendment?

  9. The big problem with all this is that we have to try to defend everything with the first amendment. Really, this stuff has more to do with property rights, due process, and privacy than speech or religion.

    Why is the first amendment the only part of the constitution that people even pretend to care about?

    1. Most people can’t count past 1?

  10. Hooray for the US of A soviet style persecution. (Sarc!) 2A is there to protect the 1A. Who will be willing to use it? The government slyly takes us one at a time. This is much like the Mueller team making examples of “Russian Collusion” with no basis in law or morality but on discredited info and lies. I’m not liking where this is all leading

    1. This is a terrible attitude and antithetical to liberty.

    2. Befehl ist Befehl.

  11. Republican bans on birth control products or pamphlets, French postcards, bubbly and plant leaves enforced by chain gangs, “accidental” deaths in custody and asset-forfeiture looting are nationalsocialist traditions. Since the asset-forfeiture panic of 1873 these resorts to force have wrecked the economy in 1907, 1929, 1987 and 2008–to say nothing of the Flash Crashes of 2010 and 2015. Farfetched? Look at recent stock prices in Cyprus. Now, guess when the latest appeal to asset forfeiture against parasite laundering was enacted.

  12. >>>”had an account seized where there was literally maybe 10, 20 dollars that could be traced back to Backpage-derived proceeds,”

    civil forfeiture is a sham worthy of protest-by-arson, but commingling funds is a stupid way to lose your millions to the feds.

    1. Yeah, because they are totally worried about things like “evidence” and “association” in asset forfeiture cases.

      They are doing it entirely to “get” their man.

      And the court is entirely complicit. They are all doing what they do with eyes wide open. When California prosecutors got smacked down for violating these people’s rights, they just came right back with the same set of charges – racking up more costs for people already found innocent. The good people of California were so outraged that they elected the prosecutor in question to the US Senate. So don’t look for this trend to abate any time soon. This is what we want.

      There was no cry of outrage over Operation Choke Point, despite the many levels of unconstitutionality and just general unfairness involved.

      We are getting what we deserve, because we have encouraged this evil behavior.

      1. >>>We are getting what we deserve, because we have encouraged this evil behavior.

        they won’t let me burn things in response.

        1. They would be ecstatic if you burned things in response. Because they could pontificate about right wing extremists being such hate-filled racists *and* confiscate your stuff. Win-win!!

          1. >>> they could pontificate about right wing extremists

            they *could* but they’d be incorrect about me being those guys

  13. More reasons why we should cheer when cops are shot in the face

    1. This is a sick, twisted comment made by someone who doesn’t know that police officers are real human beings doing a necessary job and who can’t all be thrown into one stereotypical box.

      1. 99% of cops give the other 1% a bad name

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  15. Plutocracy. Plain and simple forever. We must fuck it. Look at these people. Mitch McConnell is an elected leader. Are you fucking kidding me? Nancy Pelosi was voted for. Is this real? I’m not saying destroying rich cunts and assholes would keep us a good empire, but jesus h christ. I have absolutely no respect for any of these people.

  16. Plutocracy. Plain and simple forever. We must fuck it. Look at these people. Mitch McConnell is an elected leader. Are you fucking kidding me? Nancy Pelosi was voted for. Is this real? I’m not saying destroying rich cunts and assholes would keep us a good empire, but jesus h christ. I have absolutely no respect for any of these people.

  17. Start working at home with Google! It’s by-far the best job I’ve had. Last Wednesday I got a brand new BMW since getting a check for $6474 this – 4 weeks past. I began this 8-months ago and immediately was bringing home at least $77 per hour. I work through this link, go to tech tab for work detail.
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  18. Civil forfeiture should be allowed ONLY after a conviction for a related crime. PERIOD! Anything else is theft and all the officials involved should be prosecuted for larceny, with resulting jail sentences if convicted.
    James C. Walker, National Motorists Association

  19. Now the SCOTUS should examine the fleecing of parents and families happening in our broken and corrupt “family” courts. Through the denial of fundamental rights under the color of law.

    When our “family” courts are jailing parents (at taxpayer expense) for not paying millionaire attorneys on the claim that these payments are the same thing as child support, we have a very serious problem.

  20. Interesting theory of asset forfeiture. In general, I don’t like the whole “policing for profit” concept, because it’s an engraved invitation for abuse (early and often, like Chicago voting).

    However, since the practice does exist, and is widely used, I can’t help but wonder (in a Dershowitz-style thought experiment) how the Lefties would react if similar theories of asset forfeiture were applied to Planned Parenthood’s assets, based on PP’s (alleged) illegal sales of body parts from aborted fetuses.

  21. Google is now paying $17000 to $22000 per month for working online from home. I have joined this job 2 months ago and i have earned $20544 in my first month from this job. I can say my life is changed-completely for the better! Check it out whaat i do…..

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