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Commentary

Asset Forfeiture and Perverse Incentives



A Philadelphia couple and two other plaintiffs are suing the district attorney, the police department, and their city government for seizing their homes. Their plight is an instructive—and frightening—example of how bad incentives in law enforcement can wreak havoc on innocent people.

On May 8, Christos Sourovelis took his son to court-appointed rehab following his arrest in March for selling a mere $40 in drugs outside his parents’ home. It was during this trip that Christos received a call from Markela, his wife, stating that the police had returned to their house—with the intent to seize it. Already reeling from taking his son to rehab, he now listened helplessly as his panicked wife tried to keep police from removing her from their home.

What had Christos and Markela done? They had caught the attention of Philadelphia’s Public Nuisance Task Force, a unit that allows city prosecutors to seize homes, cars, cash, and other property they claim are involved in drug or alcohol-related crimes.

The task force in Philadelphia illustrates critical problems with the asset forfeiture programs throughout the country. Yet it’s not surprising that asset seizures have increased significantly over the past several decades. The main reason? A significant portion of the seized assets have gone directly to the confiscating agency’s bottom line.

In Philadelphia, for example, authorities have seized more than $64 million in assets over a ten-year period. Twenty-five million went directly to salaries. Police officers in Hunt Country, Texas, have received bonuses topping $26,000 a year due to asset forfeiture.

The perverse incentives of such programs should be obvious. If an agency’s budget or individual’s pay is directly tied to forfeited assets, then those within the agency will seek out opportunities to seize assets. This also means that problems such as aggressive interrogation tactics and police corruption are more likely.

In some cases, the incentives can be quite large. In Virginia, state police were allowed to keep 80 percent of the $28,000 confiscated from the car of a church secretary. His sin? Only that he was transporting the cash needed to buy property for the church. In Houston, one couple was threatened with jail and the removal of their children if they didn’t turn over cash in their car to the local D.A. They had intended to use the money to buy a car.

These are not isolated incidents. Moreover, the problem has worsened over the years. The Department of Justice’s Asset Forfeiture Fund seized nearly $94 million worth of assets in 1986, its second year of operation. In 2011, it seized approximately $1.8 billion worth. Seizures by state and local law enforcement have experienced similar trends.

Several reforms are badly need to reduce the problem. First, salaries and bonuses of public servants should be disconnected from asset seizures. This measure would remove some of the brazen incentivize for prosecutors and police to engage in questionable tactics.

Second, people facing asset seizures should be given additional legal rights. Those facing forfeiture should have the right to state legal representation. Property seizure should be an option only when the owner is convicted of a crime. Law-abiding property owners shouldn’t have to look over their shoulders, in fear that opportunistic prosecutors or police departments have them in their sights.

As the case of the Sourovelis family illustrates, our asset forfeiture laws are a travesty. They violate civil liberties, undermine private-property rights, and corrupt law enforcement. Their reconsideration is long overdue.


Abigail R. Hall is a Research Fellow at the Independent Institute and an Assistant Professor of Economics at the University of Tampa.






  • MyGovCost.org
  • FDAReview.org
  • OnPower.org
  • elindependent.org