For eight years, Michiganders Gerald and Royetta Ostipow have been fighting the seizure and forfeiture of hundreds of thousands of dollars’ worth of their property.
Last month they prevailed when a judge ordered the return of virtually everything that had been taken from them. But the Ostipows’ victory was short-lived, for they soon discovered that the Saginaw County Sheriff’s Office had sold their property years ago, while their forfeiture case was still being actively litigated.
So, it’s back to court for the Ostipows. The couple filed a federal lawsuit in the United States District Court for the Eastern District of Michigan, seeking damages for the wrongful theft of their property.
This case should be a clear call to all Americans that it’s long past time to rein in our nation’s abuse-prone civil forfeiture system.
That system started off with the best of intentions. In the 1970s and 1980s, the federal government and the states began to turn to civil asset forfeiture laws to enable the seizure of property used to facilitate crime, and to target the ill-gotten gains of the worst offenders—drug cartels, kingpins, and money launderers (think Tony Montana).
Over time, however, that narrow focus has been replaced by a broad grant of authority to seize and forfeit property from virtually anyone for a host of alleged crimes.
In federal law alone there are more than 400 statutes that authorize the seizure of property. And, per forfeiture laws at the federal level and in many states—including Michigan—law enforcement agencies get to keep the proceeds of successful forfeitures. This directly incentivizes them to seize property and use forfeiture as a revenue-generating tool.
This incentive structure has distorted the priorities of law enforcement officials in the past, and Gerald and Royetta Ostipow allege in their lawsuit that a lust for forfeiture profits did the same to the Saginaw County sheriffs.
The Nightmare Begins
In April 2008, the Saginaw County sheriff’s deputies executed a search warrant at the Ostipows’ second home, a farmhouse in the neighboring rural Shiawassee County. Why the sheriffs were operating outside their own county is unclear.
They discovered that the Ostipows’ adult son, Steven, who was living there at the time, was growing marijuana. The deputies proceeded to seize every item of personal property in the home and the adjacent outbuildings, regardless of whether that property was owned by Steven or his parents.
They then searched Gerald and Royetta’s primary residence, but found no trace of drugs. A Drug Enforcement Administration agent and a sheriff’s deputy later admitted they had no evidence that the couple was involved in their son’s criminal activity.
Regardless, they set about stripping the home bare. By the end of the operation, Saginaw County sheriffs had taken possession of the second home, Gerald’s farm implements and other tools, furniture, a 1965 Chevrolet Nova, an assortment of firearms and ammunition, and dozens of animal mounts. The Ostipows were never provided with a receipt or detailed inventory of the seized items.
Unbelievably, the Ostipows allege in their lawsuit that off-duty sheriffs routinely returned in the following weeks and simply took more items out of their house. They received no receipt or inventory for these seizures, either.
The Prosecutor Is Not Your Friend
A Saginaw County assistant prosecuting attorney, the late George Best, initiated civil forfeiture proceedings against the Ostipows’ property. According to the Ostipows, Best told them simply to give him a list of the property they wanted to have returned to them. They did so, but Best used this against them, arguing that their handwritten list was not a proper answer to the complaint for forfeiture and that, therefore, they had waived their right to assert an innocent owner’s defense. The trial judge agreed and ordered the Ostipows’ property forfeited by default.
Shortly thereafter, it appears, the Saginaw County sheriff began selling the Ostipows’ property. A certificate of title for the seized ’65 Nova, signed by Sheriff William Federspiel, is dated May 7, 2009, just one month after the trial court denied the Ostipows’ motion for reconsideration.
There was just one problem for the authorities: the Ostipows appealed the judge’s decision, and on Jan. 11, 2011, the Michigan Court of Appeals ruled that Gerald and Royetta had not waived their right to assert an innocent owner defense. That affirmative defense places the burden on the property owner to prove, per Michigan law, that he did not know about, or consent to, the alleged illegal use of his property.
According to the appellate court’s opinion, the Ostipows had presented evidence to that effect, and “because the [Ostipows] filed their answer with affirmative defenses and supporting affidavits before the trial court ruled on [the prosecutor’s] motion for summary disposition, the trial court was required to consider them in deciding” the case.
The prosecutors, the court pointed out, were required to produce admissible evidence rebutting the innocent owner claim, but failed to do so. The prosecutors relied exclusively on police reports that “contain no admissible admissions” that the couple knew what their son was doing. In fact, the reports “contain hearsay statements of all three [Ostipows] that Gerald Ostipow and Royetta Ostipow lacked knowledge of the marijuana-growing operation.”
The case was remanded, and the trial court subsequently ruled that the Ostipows had been willfully blind to their son’s illegal activity, and therefore could be deemed to have been aware of his misconduct.
On appeal, the Michigan Court of Appeals upheld that determination as it applied to Gerald, but reversed the decision as it applied to Royetta. The court held that her interest in the second home was not subject to forfeiture because she was, in fact, an innocent owner.
Not Yet ‘The End’
The inability of prosecutors to tie Royetta Ostipow or the Ostipows’ primary residence to Steven’s marijuana crimes meant that, in the end, most of the property that had been seized was not subject to forfeiture as either an instrumentality or a derivative of any ill-gotten gains.
In August 2016, a final judgment was entered ordering the return of virtually all of the Ostipows’ personal property; only items belonging to Steven, and Gerald’s interest in the second home, were properly forfeited.
It was only then, nearly a decade after the original seizure, that the Ostipows learned the dirty truth that their property had been sold and, per Michigan’s forfeiture laws, all proceeds had been converted into revenue for the Saginaw County Sheriff’s Office.
In fact, Federspiel, the sheriff, bragged about his use of forfeiture funds seized from “drug dealers” to save taxpayers money. The Ostipows are proof that not everyone subjected to a property seizure is a “drug dealer” or a criminal. In fact, The Heritage Foundation maintains a list of many wholly innocent property owners who have lost out to our forfeiture system.
It is alarming enough that police, sheriffs, and prosecutors can financially enrich their agencies through the forcible seizure of property, while property owners are afforded so few due process rights in civil forfeiture cases as compared to the panoply of rights afforded to defendants in criminal cases.
But it is hard to stomach the notion that property can be sold before owners have even availed themselves of their rights under the law. The combination of such a powerful financial incentive with the ability to hide mistakes and sweep abuses under the rug invites corruption.
Last year, Michigan lawmakers adopted a package of reforms meant to provide greater legal protections for property owners and improve transparency and reporting requirements. That is a notable step forward, but much remains to be done, including eliminating the financial incentives in forfeiture law. Several states have taken that bold step in recent years. Hopefully the rest will follow suit in the years to come.