The state of Indiana has been swept into a controversial legal battle involving its asset forfeiture practices.
A class-action lawsuit has been filed by a California-based jewelry business alleging that law enforcement personnel have been systematically seizing cash from parcels that are routed through a FedEx shipping hub located in Indianapolis. No cause or justification is provided in these cases as to why the seizure is being performed.
The lawsuit is being pushed forward by the owners of a wholesale jewelry business, Henry and Minh Cheng, after authorities seized $42,000 in cash that was sent to them from a client in Virginia.
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The Chengs argue that they have never done any business in the state of Indiana but are now forced to fight in a state court to recover these funds.
The Chengs Turned to the Institute for Justice (IJ) for Help
They have turned to the Institute for Justice (IJ), a non-profit law firm, to get some help on this case as they found that civil forfeiture in Indiana is out of control. According to the IJ, the state racked up over $1 million in proceeds from in-transit parcels that they successfully seized.
Civil forfeiture is a legal process that allows law enforcement agencies to seize assets from individuals or businesses that they suspect are involved in some sort of criminal activity. Unlike criminal forfeiture, civil forfeiture does not require a criminal conviction or even criminal charges to be filed against the property owner.
This practice has been criticized by civil liberties advocates as it often places the burden of proof on the property owner to demonstrate their innocence and reclaim their assets. Hence, it likely violates the 5th Amendment of the United States Constitution.
Henry and Minh, who have been running their jewelry for over 30 years, claim that unjustified asset forfeitures in the state of Indiana have been abused for years. They said that the state exploits the privileged location of this FedEx hub to seize cash that is just passing through this location.
They said that they had never been to the state before the case was brought up or did any business in there. However, they are now forced to defend themselves to recover the cash they are owed.
“The government can’t even identify a crime that would allow them to keep the money that we need to run our business,” said Henry Cheng.
“We were shocked when we found out what was going on in Indianapolis and we want to put a stop to it.”
The Marion County Prosecutor’s Office, the department responsible for approving civil forfeiture actions, has declined to comment on the pending litigation.
In the case of the Chengs, they claimed that the cash “was furnished or was intended to be furnished in exchange for a violation of a criminal statute, or is traceable as proceeds of a violation of a criminal statute, in violation of Indiana law,
Business Owners Claim That Abusive Civil Forfeitures Are Unconstitutional
Business owners like the Chengs are now fearing that their cash or goods could be seized if they opt to ship them across state lines. Although these may be legitimate transactions, authorities appear to be abusing their ability to perform civil forfeitures over weak, fabricated, or entirely false suspicions.
For businesses that operate in sectors with tight profit margins, the loss of a single payment or package could have severe consequences on their financial performance or health.
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The IJ is representing the Chengs and other plaintiffs who have agreed to file a class-action lawsuit against the Marion County Prosecutor’s Office and the State of Indiana. They allege that the scheme is violating their constitutional rights, including the protections provided by the Fourth Amendment, which prevents citizens from being unreasonably searched or seized.
The IJ’s Senior Attorney Sam Gedge stated: “This scheme is one of the most predatory we have seen, and it’s past time to put a stop to it. It’s illegal and unconstitutional for Indiana to forfeit in-transit money whose only connection to Indiana is the happenstance of FedEx’s shipping practices.”
The lawsuit provides insight into how seizures at the Indianapolis FedEx hub typically occur. An Indianapolis Metropolitan Police Department officer flags a package as “suspicious” and presents it to the K-9 unit for inspection. If the dog communicates an alert, the police proceed to obtain a warrant to open it.
If cash is found, even without any contraband, the Marion County Prosecutor’s Office files a civil forfeiture action to keep the money. Critics argue that this process is flawed and prone to abuse. They point out that harmless characteristics, such as having all seams taped – a practice that FedEx actually recommends – are often cited as “suspicious” in the affidavits that accompany these warrants.
The IJ Has Filed Cases Against Multiple Law Enforcement Agencies in the US
The Chengs case against the state of Indiana is one of the most notable recent incidences in the growing public debate against civil forfeitures. The IJ has been challenging these laws across the country for many years and is currently involved in high-profile cases against federal agencies including the Drug Enforcement Administration (DEA), the Transportation Security Administration (TSA), and the Federal Bureau of Investigation (FBI).
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In the case of the FBI, they claim that they have turned to asset forfeiture without specifying the crime committed. Meanwhile, private prosecutors in Indiana have also been accused of bringing up cases with the sole purpose of keeping the proceeds from their seizures to themselves.
The lawsuit has uncovered this abusive practice and is intensifying calls for reform of civil forfeiture laws in Indiana and nationwide. Critics argue that the current system creates perverse incentives for law enforcement agencies to seize property as the proceeds often go directly to their budgets.
Proposed reforms include requiring a criminal conviction before any property can be permanently forfeited, increasing the burden of proof required to perform these actions, directing forfeiture proceeds to a general fund rather than law enforcement budgets, and enhancing due process protections for property owners.