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The Justice Department Didn't Charge Him With a Crime. It's Going to Take $39,000 from Him Anyway.

It's not a crime to travel with lots of cash. But you still might be treated like a criminal.

forfeiturePhotographerlondon / Dreamstime.comIn order to get back any of the money that the New Hampshire State Police took from him, Edward Phipps has agreed to let federal prosecutors keep most of it, even though he has not been charged with any crimes.

The cops took the cash during a traffic stop in 2016. Phipps wasn't even in the car at the time.

The police pulled the driver over for tailgating and for going one whole mile per hour over the speed limit. A search turned up a bag full of $46,000 cash in the trunk. Police then brought in a drug-sniffing dog, which came up empty.

Though they have presented no evidence of any criminal act, police took the money and federal prosecutors declared their intent to force the forfeiture of the funds, so they could keep it. Phipps came forward in July 2017 to indicate that the cash was his, and he said it was obtained legally.

We took note of this case back in March, and it looks like the Justice Department succeeded in getting its way. As part of a settlement, Phipps has agreed to give the Department of Justice $39,000 of the $46,000 seized.

This is was a case of civil asset forfeiture, where law enforcement officials take and keep people's assets that they suspect are connected to criminal activity. Often, they can do this without convicting or even charging any person with a crime. Instead the property itself is accused of being linked to misconduct. The "defendant" in this settlement is the cash itself; the Department of Justice is suing a sack of money.

This weird quirk matters because the burdens of proof in civil courts are often lower than the "beyond a reasonable doubt" required to convict a person. So it's easier for prosecutors to win, and it flips presumption of innocence on its head: Phipps has to hire a lawyer and prove his money isn't connected to criminal activity.

As part of the settlement, Phipps not only agrees to give up everything but $7,000 (which will probably have to go to his legal fees). He agrees never to request that the money to be returned, and he furthermore agrees never to attempt to assert any claim that the government did not have "probable cause" to make him forfeit the money. I'm highlighting that part of the story to show how much lower the legal threshold is to take somebody's stuff and keep it. "Probable cause" is the amount of evidence police need for a search warrant, not nearly enough to convict somebody of a crime. (A note here: Both a Justice Department official and a reader contacted me to point out that the legal threshold for federal civil forfeiture is "a preponderance of the evidence," a more restrictive requirement than "probable cause." This is true, but the settlement uses the term "probable cause" to describe the justification for the seizure and forfeiture, not the stricter legal requirement.)

This wasn't supposed to happen. New Hampshire reformed its civil asset forfeiture laws in 2016 to require a criminal conviction before police or prosecutors could force people to forfeit money or property. Unfortunately, the state's reform did not close a loophole that lets local police partner with the feds in a program called Equitable Sharing. In this system, local police use the federal asset forfeiture program instead of their own and then the Justice Department distributes most of the forfeited money back to local law enforcement.

That's why the Department of Justice is involved here. The state police can't seize Phipps' money on their own. So they went to the feds to arrange the forfeiture, and then the Equitable Sharing program lets the Justice Department funnel the funds right back to local law enforcement. It's not money laundering when it's the government.

This blog post has been updated to clarify federal law on civil forfeiture requirements.

Photo Credit: Photographerlondon / Dreamstime.com

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  • SQRLSY One||

    WHY did Edward Phipps crater to this armed robbery?!?!?

  • Scarecrow Repair & Chippering||

    No shit. What's the good of keeping $7K just to lose $39K and waive all right to complain in the future? If he didn't have a lawyer, he's a damned fool. If he did, that's a malpractice suit.

  • CE||

    And why are the cops searching the trunk for a tailgating stop?

  • Brendan||

    Probably some parallel construction stuff that didn't quite pan out.

  • Hugh Akston||

    Fighting it would have cost him more than he would have got back.

  • sarcasmic||

    I have never once heard of a case of government abuse where the government admitted fault. Police brutality cases always settle with money and no wrongdoing. Same with asset forfeiture.

    You take what they offer, or you get nothing. Because the government can drag it out until your unborn grandchildren are dead of old age.

  • MatthewSlyfield||

    Because the government can drag it out until your unborn great, great grandchildren are dead of old age.

    FTFY

  • Flinch||

    More like racketeering, which is why the DOJ is so pivotal: they are never going to charge itself, as a US vs US case makes a judge cringe.. The DOJs "equitable sharing" program gifts siezed money to local jurisdictions. So this whole thing is a fan dance ending in laundered money at the end of the day as far as I can tell. Leave it to our federal government to take allegedly dubious cash and make sure it gets dirty. I've about had enough of asset forfeiture. In so many cases like this, it ought to be a civil rights suit - the business of the process costing more than the siezed assets yields an obstruction justice. If somebody is not in jail, they have a right engage in commerce and pay their bills or save the money as cash too (if they like losing 3% a year on average via inflation). We have a commerce clause that congress installed to tear down things that impede any kind of commerce. Ask congress to [politely] wake the fuck up and take the tarnish off of law enforcement badges by acting to end this mobsterism - at least in a third world country you could likely slide 5% of your cash to a policeman to make him go away. What a shithole Nixon gave us.

  • Gary Trieste||

    If it concerned me more, I would look very carefully at the NH law prohibiting forfeitures w/o a conviction.
    If it could be properly framed, I believe the money-laundering nature of it could be addressed in court.
    Essentially, if the state prohibited the police from receiving funds from forfeited property, and yet they did so anyway, albeit not directly, I believe perhaps a cause of action could be stated against those state/local police.
    The non-forfeiture law could be claimed as a citizen entitlement, and irrespective of the state's workaround, they could be a defendant who benefited from an action that the state legislature prohibited.

  • Eddy||

    Who could be against equity?

    Who could be against sharing?

  • Anomalous||

    Greedy, heartless libertarians, that's who.

  • Hugh Akston||

    This wasn't supposed to happen. New Hampshire reformed its civil asset forfeiture laws in 2016 to require a criminal conviction before police or prosecutors could force people to forfeit money or property. Unfortunately, the state's reform did not close a loophole that lets local police partner with the feds in a program called Equitable Sharing. In this system, local police use the federal asset forfeiture program instead of their own and then the Justice Department distributes most of the forfeited money back to local law enforcement.

    It's weird how they missed that when they were writing the reform law.

  • Vladilyich||

    OOps! Sorry about that. We only get to keep 90% after all of our hard work!

  • Rossami||

    In fairness, the word in the press back then was that the feds were going to shut down the Equitable Sharing program as part of their own reforms. The Obama administration reneged on that promise but by then, the New Hampshire law was already on the books.

  • Bill Poser||

    The Obama administration didn't renege entirely. They didn't eliminate the program, but they restricted it. Unfortunately, Jeff Sessions is a big fan of civil forfeiture and undid the restrictions that the Obama administration had imposed.

  • Scarecrow Repair & Chippering||

    As for Alt-text suggestions, I may have missed some of your past endeavors ...

    Nothing civil about it

    "Grand theft" already had a definition

    "Extortion" carries the hint that government is a mob

  • darkflame||

    This is a load of horseshit. "Tailgating" and 1 mph over the limit sounds more like the cop was looking for a reason to pull the car over. If that was the case did they know the money was there?

  • Marcus Aurelius||

    Perhaps tinted windows, neon undercarriage lights, and spinny rims? Vanity plates that say 'CASHMNY'? Tho if the feds were involved, I'm sure they knew something up front.

  • Gary Trieste||

    I can't seem to find spinny rims anymore.
    I really like those things.

  • Iheartskeet||

    I hate to meddle in conspiracy theories, but it does seem awfully coincidental.

    I think the guy needs to get Kim Kardashian on this topic right away. I say that without intending any irony or snark. She righted one clear injustice, how about another ?

  • Jerryskids||

    If the money wasn't connected to a crime before, it damn sure is now.

  • Billy Bones||

    I can't make it official, but "Best Comment" award goes to you.

  • sarcasmic||

    "Help, I've run out of sarcastic jokes about how awful civil asset forfeiture is."

    "Guess where these gloves have been..."

  • Earth Skeptic||

    Fuck.

    We need to hope that the cops stay out of banks, where they might find huge piles of "suspicious" cash.

  • Dillinger||

    $46g cash and none of it smelled enough like blow to alert the dog?

  • Sometimes a Great Notion||

    New handler forgot to tug the leash to get the dog to point. Rest assured he has been fired for police misconduct.

  • Enjoy Every Sandwich||

    But...but...I've been told repeatedly that anyone who suggests the government steals from its citizens is a kook.

  • Gary Trieste||

    Govt forfeitures now exceed the amounts that civil burglars steal each year.
    When it comes to stealing money, nothing compares to the govt.

  • Leo Kovalensky II||

    It's not money laundering when it's the government.

    Christ, what assholes.

  • Mickey Rat||

    On what basis does this get transferred to civil court? Unless there is something missing from the article, the only proof the feds have of wrongdoing with regards to the cash, is its existence. Does the government have to prove anything at all?

  • sarcasmic||

    The burden of proof is on the money.

  • Longtobefree||

    Can we get the transcript posted where the prosecutor lays out the mens rea of the money? I would pay a dollar.

  • MatthewSlyfield||

    "On what basis does this get transferred to civil court?"

    It doesn't get transferred to civil court. Civil forfeiture actions are filed in civil court in the first place. The Civil in Civil forfeiture should have been a clue.

    "Does the government have to prove anything at all?"

    No. Civil forfeiture cases are filed against the property being forfeited, not against the owner. The property has no rights.

  • Juice||

    It has the right to a civil trial by jury if it's over $20. IMO, anything that can be sued or prosecuted has a right to due process. You want to be absurd and sue/prosecute an inanimate object, effectively treating it like a person? Then the object has rights like a person. Call it a corporation or something.

  • Rossami||

    That might make sense but that's not the way it works.

    It helps to remember where Civil Asset Forfeiture came from. CAF predates the US by a lot. It was originally an anti-smuggling rule. If you were, for example, smuggling a shipment of rum and were about to get caught, it was not uncommon to dump the incriminating cargo overboard or even to abandon the boat altogether. The police are now stuck with a load of obvious contraband and no one stupid enough to step forward to claim ownership. The police could just take the rum with no controls at all (which seems like a bad idea). Or the courts could impose some minimal due process and paperwork that would allow for the possibility that a legitimate owner might step up and argue that it wasn't smuggling after all.

    In its original, limited context, CAF made some sense. Even today, few would argue if the police confiscated a kilo of heroin left unattended in the street.

    But it only makes sense where a) the contraband nature of the object is self-evident and b) no owner can be found. If it's not obviously contraband, there is no crime and CAF ought not to apply. And if there is an owner, CAF still ought not to apply because you should be prosecuting the owner for the crime. As currently practiced, CAF has been wildly perverted into a blatant and anti-constitutional abuse.

  • Alsø alsø wik||

    And this is to Scalia's everlasting shame. He got most things right, but allowing in rem proceedings when the owner was both easily identifiable, and willing to step forward as such, is a perversion of the 5th.

  • Rossami||

    I'm not sure that evil can be laid at Scalia's door. Well, except that neither he nor any of the rest of the Supreme Court acted to stop it. CAF abuse predates pretty much all of the current crop of Justices.

  • Mickey Rat||

    Way to miss the point by being snotty.

    My question was how does that civil suit get stated when all the government has is"There is large pile of cash here. We wants it!"

  • Johninsd||

    The so called "drug dogs" are trained to SIT and that's ALL they're trained to do. It's a wonder the dog didn't "Alert" - maybe he was mad at his handler that day and didn't feel like obeying the handler's "SIT" command. So what was the justification for the original search - article doesn't say whether the driver consented or what?

  • Leo Kovalensky II||

    Just wait until they train dogs to sniff out money.

  • santamonica811||

    Or maybe the drug dogs are well trained, their handlers are ethical, and since the cash was not associated with drugs, the dogs did exactly what they were supposed to do . . . nothing.

    My god, I'm as upset as everyone else about this case. But surely there are enough people with the integrity to admit that the cops-plus-dogs actually behaved appropriated in re to the dog's sniffing.

    There's so much legit stuff to complain about in this case with 100% justification...why also whine about something that seemed to have actually worked well?

  • Oli||

    This is.. not correct.

  • Rich||

    A turned up a bag full of $46,000 cash in the trunk.

    Come on, Scott. You can curse here.

  • CE||

    No one needs more thank 10,000 in cash, and if they carry less, it's structuring.

  • Juice||

    It's not a crime to travel with lots of cash.

    Apparently it is indeed a de facto crime.

  • Juice||

    The "defendant" in this settlement is the cash itself; the Department of Justice is suing a sack of money.

    And it has fully invoked its right to remain silent.

  • Juice||

    Are these jury "trials"? If not, aren't they a violation of the 7th amendment? Obviously they're going to involve more than $20.

    In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved...

    Since the money is the defendant, it certainly is "in controversy."

  • CE||

    Cases like this make me wish we had a real Justice Department, one that would prosecute crimes like this one perpetrated by government agents.

  • creech||

    No, Justice Dept. has a far more important task. That is, charging campaign staffers with "conspiracy to defraud the United States" by conducting opposition research with another person.

  • Augustine||

    Oh come on, let's be fair. It was charging campaign staffers with "conspiracy to defraud the United States" by conducting opposition research with another person WHILE using opposition, opposition research, to justify investigating the opposition.

  • Truthteller1||

    I have a feeling there is more to the story than reported here.

  • Kelvis||

    First of all, the criminal standard is "reasonable doubt" not "shadow of doubt." More importantly, regardless of the standard, the prosecutor doesn't have the burden of proof in civil forfeiture. It's the person whose property was confiscated who has the burden of proof... they are the plaintiff and essentially must prove that their property was not used in the commission of a crime. The prosecution gets to sit back an watch citizens try to prove the negative.

  • Gary Trieste||

    Well, testimony is evidence.
    A plaintiff/owner comes forward with direct testimony stating that the money is not the product of illegal activity.
    The defendant/govt now has to come forward with evidence that it is the product of illegal activity.
    If the evidence that the plaintiff provides is more than 50% proved (preponderance of evidence standard), then by law he should win the money that he owned in the first place.
    If the govt didn't have enough evidence to charge the guy, what evidence are they gonna come up with?

    If he could show that the govt's case was frivolous, then he should also get back legal fees, court costs, ancillary costs and penalties.

    I don't know if anyone takes it this far, but that is how it is supposed to work.
    (Of course pre-emptive civil forfeiture is bullshit to begin with, but even within that bullshit system, the base rules of jurisprudence are supposed to be in place.)

  • perlchpr||

    There's certainly been a lot of talking about this problem, which means we've used the soap box.

    There was a law passed, which suggests that a fair number of people used the ballot box.

    It went to court and they let them get away with it, so that means that the jury box has also failed to restrain these highwaymen.

    Which means we are left with the cartridge box. And they have brought it upon themselves.

  • Henry Baker||

    So much for the "Live Free or Die" state. Makes me want to kill every fucking pig on the planet.

  • kevinq||

    we must start getting everything we can before juries so jury nullification can correct this crap. spread the word.

  • tlapp||

    Wow, cash, legal tender is now illegal?

  • AlgerHiss||

    The scary thing about stories like this is the average person simply shrugs it off. They have some vague, foggy notion that maybe, just maybe something is awry here, but since it didn't involve them, they go back to watching Blue Bloods and texting on their phone, belching and farting, and thinking driverless cars are really neat.

    Same thing with stories about someone that spent 30 years in prison and suddenly are freed because the person was completely innocent. They haven't the slightest feeling of outrage.

    Your average neighbor/citizen is a meatsack.

  • Longtobefree||

    I can't help but notice that the person in the picture is wearing gloves to avoid leaving fingerprints, carrying drug paraphernalia (plastic baggies, plain envelope for cash), armed, and wearing bling (shiny thing on belt).
    By preponderance of evidence, he is a drug dealer, no?

  • Augustine||

    "This is was a case of civil asset forfeiture, where law enforcement officials take and keep people's assets that they suspect are connected to criminal activity. "

    May we please move past this bullshit canard? They don't have, nor require, any suspicions of any criminal activity. They are simply out fishing for people they can blindly rob, nothing more. Sure, every once in a while they will have an actual criminal, but this system is about the money and they wouldn't be bringing in much if they only shook down criminals.

  • John Rohan||

    So does that mean he gets to write off 39,000 in losses for the year for tax purposes?

    At a minimum, I hope he's not paying income taxes on money that the government already took.

  • AD-RtR/OS!||

    The only thing "granite" about New Hampshire are the mental faculties of its police, and their greed for OPM.

  • ||

    This is nothing new. I was stopped at LAX in 1980 by 3 US Customs agents. They searched me without my permission and found about $21,000. It was taken and not returned. I had a round-trip ticket, value $600, which they discussed taking but were advised to return by someone they called. They claimed to have "probable cause" for the search but refused to explain what it was. They said the p.c. was "confidential". The jury accepted their word. For the jury, proof was not required, only an agent's claim. My legal costs (excluding travel expenses back & forth from Las Vegas to LA) was $10,000. This left me $7,000. in debt.

    Thirty-eight years later I am still bitter. But I did not lose respect for the authorities or the law; I have never suffered from the delusion that they are protectors or moral. I have always considered them thugs.

  • I am the 0.000000013%||

    I think it's OK to throw libertarian principles out the window when dealing with a tailgator.

  • Tionico||

    the charging of a bag of cash as defendant in a legal action is beyond stupid. Since the Constitutin guarantees any defendant must have the right to counsel, to examine witnesses against him, present witnesses and other evndeice in his defense, and since a bag of cash can do none of these, HOW can this process be legal?

    Congress need to grow a pair and make it clear that there can no longer be any legal action brought against anything except a human being. Sheesh, even Mrs Kelo's house was not a party to that action. SHE was. When things like cars, cash, boats, etc, are parties to a legal action justice CANNOT be served. Time this tyranny is extinguished.

  • jcwconsult||

    Civil forfeiture should be allowed ONLY after a conviction for a related crime. PERIOD !

    More money & property is stolen by governments with civil forfeiture than the value of all burglary losses.

    Anything else is governmental larceny. The officials and officers involved should be prosecuted for larceny.

    James C. Walker, National Motorists Association

  • Verbum Vincet||

    Then you merely further incentivize prosecutorial misconduct in pursuit of convictions. The deck is stacked against defendants as it is: dubious arrests, a broken bail-bond system, rubber-stamp grand juries, ubiquitous testilying and routinely overcharging to force "guilty" pleas is SOP. Policing for profit under any guise is immoral and anathema to liberty. The only potential windfall for the "good guys" at the end of the day should be their taxpayer funded salaries and the feeling of satisfaction they get from impartially delivering copious helpings of justice. The government is far too large and steals more than enough from us already! Otherwise, I know your statistics are correct - they should be hammered into the heads of every American until sufficient outrage ends policing for profit, once and for all!

  • Uncle Jay||

    This money will allow some lucky cop to pay for his new Dodge Challenger, and isn't that what America is really all about?

  • woodNfish||

    The government and the fascist Left are the enemies of freedom and prosperity.

  • swampwiz||

    Something tells me that the police do have some true evidence of this man's criminal behavior, and that he was given the chance to have his case dismissed.

  • Ludwig Fischer||

    When I was living in Thailand, I transferred $70,000 to my Thai bank account following ALL reporting requirements. One day I checked my balance and I was short $35,000. I checked with the bank and they referred me to the US Embassy. Turns out the US government had seized the $35,000 for money laundering. Even though, I could prove where the funds came from. They didn't Care.
    So, I withdrew the other $35,000 and added $5,000 from my US account and bought a condo (bad move).
    A few years later, I started working in the US and left the condo vacant. I hired a local lady to clean it and check it every week while I was gone. One day she sends me a message that she can't get in because the locks have been changed. Management wouldn't talk to her. They needed to talk to me in person.
    A couple of months later, I flew back to Thailand and talked to management. They referred my to the US Embassy. Once again, the US government said the property (condo) was being used to launder money. Their reason - I wasn't living in or renting out the property. Therefore it must be being used to store illicit money. They seized the condo. So, they are now into me for $75,000.
    As the charges are brought against the property and not a person, the property has no rights. Legal representation, double jeopardy etc do not apply. So if one fights the charges and wins, the government just refiles the charges and keeps doing it until one runs out of money.
    You can' win.

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