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Prosecutors or Pirates? 

Forfeiture reform forces cops to convict before seizing cash, property for new toys

Edward Zalewski fled his native Poland to escape a communist crackdown on dissent. But in Colorado Springs, he says, he found himself an innocent victim of America's crackdown on drugs.

In 1980, Zalewski moved to Boston, where he worked two simultaneous full-time jobs as a butcher and lived with five other men in a small apartment.

"In eight years, I was able to save $85,000," recalled the 65-year-old Zalewski, who speaks little English, through an interpreter.

Fourteen years ago, Zalewski moved to Colorado Springs and used his savings as a down payment to buy the Santa Fe Inn, a run-down motel at 3920 N. Nevada Ave. Helping him buy it was his son, Janusz, who had joined him in the United States. Zalewski spent the next decade running the motel at a small profit, most of which went into renovating the motel, one room at a time.

It appeared an immigrant's dream come true. But 1998 marked what became a lengthy nightmare as Zalewski almost lost everything he had worked for, due to accusations that he had allowed drug dealers to operate out of his motel.

Zalewski says the charges were untrue, and in fact, the charges against him were eventually dropped. Still, he spent two years and $126,000 in legal fees fighting the attempts by Colorado Springs police and the 4th Judicial District Attorney's Office to take away his motel under the state's civil-forfeiture laws. As in most states, Colorado law allows authorities to declare property a "public nuisance" and seize it, if it is used in connection with a felony and the owner either knew or "should have known" about it -- even if the owner is never convicted of any crime.

Guilty by association

Civil-forfeiture laws are particularly, though not exclusively, intended to target drug crimes. The rationale is that people who deal drugs or allow drug sales to take place should have to surrender property -- ranging from cash and drug paraphernalia to vehicles and houses -- that is either used to sell narcotics or is purchased with the revenues from such sales.

If police arrest a person who's dealing drugs out of a car, for example, they will file a civil-forfeiture case to seize any money the offender was carrying, the offender's car, and other items that could arguably be used to sell drugs, such as guns, cell phones, pagers and scales that could be used to weigh illicit drugs. If someone is dealing drugs out of a house, police may move to take away the house.

In the Pikes Peak region alone, last year police infused their budgets with $350,000 worth of seized property and cash.

But critics, including the Colorado Coalition for Judicial Reform, say that civil-forfeiture laws have made it far too easy for authorities to seize private property. Earlier this spring, they launched a campaign to curb what they claim are widespread abuses of the laws. The effort appeared to succeed last week, when the state Legislature approved House Bill 1404, which would change several aspects of the laws. At press time, the bill was awaiting the signature of Gov. Bill Owens.

The problem with the existing laws, critics say, is that people often lose their property even when the charges against them are dropped or dismissed. A defendant can be acquitted in a criminal case and still lose his property, because the forfeiture case against the defendant is filed as a separate, civil action. Whereas prosecutors in a criminal case must prove "beyond reasonable doubt" that a defendant is guilty, the prosecutor in a civil case needs only to prove "by a preponderance of evidence" that seized property was either contraband or a public nuisance.

Moreover, the prosecutor in a civil-forfeiture case doesn't have to actually prove that the property in question was being used to commit a crime, or was bought with proceeds from criminal activity. Rather, the laws are written in such a way that the courts automatically assume this is the case.

Reform proponents have also raised questions about what happens to the money and property that's seized, because existing laws leave it to the discretion of police and sheriff's departments to decide what to do with the proceeds. In some cases, law-enforcement agencies have spent seized money on frivolities, including pizza parties for themselves, reform proponents have claimed.

Even in the cases where defendants are found guilty of crimes, the majority of those who lose their property are usually small-time drug users and dealers, as opposed to so-called kingpins, notes Christie Donner, a member of the Colorado Coalition for Judicial Reform.

"The war on drugs is principally waged against low-level offenders," Donner said.

Under the reform approved by state lawmakers, the revised law will require that in most cases, a defendant must be found guilty of a crime before a civil-forfeiture case against the defendant can proceed. Moreover, prosecutors in civil cases will have to prove by "clear and convincing evidence" that property is contraband or a nuisance, and they will have to prove a clear connection between the property and criminal activity.

And instead of being funneled directly to the seizing police agencies, half the proceeds from the forfeitures will go to local city councils and boards of commissioners to decide how it will be dispersed. The other half will be used for drug-treatment programs.

Few smoking guns

This year's reform was heavily opposed by police and prosecutors, who argued it could weaken law enforcement. Among the most outspoken opponents was Jeanne Smith, district attorney for the 4th Judicial District, which encompasses El Paso and Teller counties.

Despite allegations about pizza parties and widespread seizures from innocent people elsewhere, a review of the way civil forfeitures have been conducted in the 4th Judicial District reveals few smoking-gun examples of abuse.

Records suggest that in the vast majority of local civil-forfeiture cases, the defendant is also convicted of a crime. In the few cases where criminal charges are dismissed or the defendant is acquitted, the District Attorney's Office has, at least in recent times, also dropped for the most part the civil-forfeiture case. And the proceeds from local forfeitures appear to be spent exclusively for law-enforcement purposes.

Even so, reform proponents and local defense attorneys say civil-forfeiture laws have created an incentive for police and prosecutors to pursue such cases as a "cash cow," at the expense of low-level criminals and, occasionally, innocent people.

"It's a very easy, effortless way for the DA's Office and the Colorado Springs Police Department to make a lot of money," said Mark Hanchey, a lawyer who has represented many local civil-forfeiture defendants.

Edward Zalewski says that in his case, police built a bogus case because they wanted, in the words of one police officer's subsequent testimony, "to get the Santa Fe." He says his troubles began in January 1998, when two frequent clients at the Santa Fe Inn became the targets of investigations by police, who suspected them of dealing drugs from the motel.

Zalewski said he later found out that at least one of the clients had indeed been dealing drugs, but at the time, "I had no idea that's what he was doing."

Prosecutors tell a different story. They say police began investigating allegations of drug distribution at the motel as early as 1995 and officially warned Zalewski in October of that year that he was renting to suspected drug dealers. In the following two and a half years, police repeatedly asked him to stop renting to the suspected dealers, but Zalewski wouldn't cooperate, says Smith, the district attorney.

Meanwhile, police set up video surveillance of the motel and documented a high number of people coming and going to and from rooms rented by the suspected drug dealers. Informants and undercover officers would buy drugs at the motel, and police made several arrests.

According to Smith, it ultimately became clear that the Zalewskis wouldn't help put a stop to the drug dealing. As a result, the District Attorney's Office filed a civil-forfeiture action in May 1998. Smith says the property qualified as a public nuisance in light of the high number of calls for service, complaints from neighbors, and arrests made at the motel.

Meanwhile, an informer told police that Zalewski was in fact getting a cut from the drug deals, Smith says. The District Attorney's Office proceeded to file a separate criminal case against Zalewski in March 1999, charging him with money laundering, being an accessory to crime, and allowing his motel to be used for criminal purposes.

Mission accomplished

But in the criminal case, Zalewski's attorney, veteran local defense lawyer Richard Tegtmeier, would challenge prosecutors' assertions that the motel had an unusual number of calls for service. In fact, Tegtmeier maintained, the Santa Fe Inn had fewer calls for service than other motels in the area, and only occasional arrests were made at the motel.

In addition, Tegtmeier argued that police failed to provide Zalewski with an interpreter during interrogations. The attorney noted that the prosecution's case rested heavily on the testimony of convicted drug dealers who, he said, had received promises of reduced sentences in return for their testimony against Zalewski. One witness, Zalewski maintains, had been coached by prosecutors.

Both the civil and criminal cases dragged on for many months. In the meantime, Zalewski says, he was "repeatedly harassed" by police. At one point, he was arrested and jailed overnight on an immigration "hold," supposedly due to suspicion that he was in the country illegally. Tegtmeier pointed out in court that police knew he was a U.S. citizen.

Zalewski says he tried to show the arresting officer his U.S. passport, but the officer refused to look at it.

A jury eventually acquitted Zalewski of all charges in the criminal case, on Nov. 16, 1999. After the verdict was announced, several jurors and one police officer apologized privately to Zalewski for what he had been through, he says.

The District Attorney's Office still could have proceeded with the civil forfeiture, which was based on separate allegations that Zalewski had failed to stop the drug dealing despite being asked many times to cooperate, Smith says. But by that time, the drug dealing seemed to have finally stopped, and the property was no longer a nuisance, she says. Based on that and the acquittal in the criminal case, the office decided to dismiss the civil-forfeiture case.

In the end, the filing of the civil action accomplished its goal of eliminating the nuisance the motel was causing, Smith maintains.

"The place was unquestionably being used for distribution of narcotics," Smith said. "I don't regret the filing, because I think it stopped the behavior." Although Zalewski wasn't convicted of any crime, he was nonetheless creating a nuisance because he wouldn't cooperate with police in cracking down on the drug dealers, she says.

Smith also notes that in the end, Zalewski got to keep his property.

But Zalewski says his business suffered as word got around that the authorities were trying to shut it down for drug dealing. His health also declined, he says. "My reputation was undermined, and I lost 50 percent of business."

Zalewski sued the city for damages in February 2000, claiming his civil rights had been violated, but he ended up dropping the case. After already spending $126,000 on his own defense, he couldn't afford to pursue it. He'd had enough, he said, and began looking for a buyer for the motel. When it was sold last November, Zalewski moved to Florida, where he now rents out apartments to retirees.

"Just try to think what would have happened to me if I didn't have the means to defend myself," he said. "I would be in jail. I would lose my property."

Asset management

Zalewski's case notwithstanding, most civil forfeitures in the 4th Judicial District appear to be far more straightforward affairs.

The District Attorney's Office estimates it completed a total of about 500 civil forfeitures during 1999 and 2001. A review of records from those years suggests that the vast majority of cases were drug offenses, ranging from simple felony possession of marijuana to multiple counts of selling and possessing cocaine and methamphetamine, with aggravating factors such as past offenses and illegal weapons.

Typically, officers seized cash from offenders, ranging from less than $100 to several thousands of dollars. Other property typically seized included scales, guns, cell phones, pagers, and in many cases, the vehicle driven by an offender at the time of the arrest. In a handful of cases, the homes of offenders have been seized because they were used to manufacture or sell drugs.

Since 1983, assets seized by Colorado Springs police, the El Paso County Sheriff's Office and the Teller County Sheriff's Office have been funneled into a joint account called the Special Investigation Fund (SIF), which is governed by a board that includes the heads of the three agencies and the district attorney.

The SIF conducts monthly public meetings at the El Paso County Sheriff's Office, in which the board votes on what to do with property that's been seized. The board keeps all cash that's been forfeited, and it will sometimes keep computers and other equipment that can be used by police, as well as cars that can be used for undercover work.

Cars that aren't kept, as well as seized homes, are sold off at public auctions. Other items, such as guns, scales and pagers, are usually destroyed.

Last year, the cash and proceeds from sales of assets totaled approximately $350,000, and the SIF's balance at the end of the year was reported at $356,000.

The SIF board also decides what to do with the cash and proceeds. The biggest chunk is distributed to the Metro Vice, Narcotics and Intelligence unit (VNI), a multi-agency task force charged with fighting drugs, prostitution, illegal gambling, liquor offenses and organized crime. The VNI uses the money to buy bulletproof vests, weapons, computers and software, surveillance cameras, laboratory equipment and vehicles. It also spends money to train officers and pay informers, and some money is used for administrative costs and overtime pay for special operations.

In addition to the VNI, money is also used for other special equipment and programs at the El Paso and Teller counties sheriff's offices, the Colorado Springs Police Department and the District Attorney's Office.

A two-for-one deal

Though the overwhelming majority of local civil-forfeiture defendants are also found guilty of crimes, exceptions do occur.

In September 1999, Colorado Springs police arrested and searched Thomas J. Phelan, then 41, in a parking lot at The Citadel mall and found 10 grams of cocaine on him. Police proceeded to seize Phelan's 1997 Dodge Viper, a sports car worth an estimated $65,000, which was parked in the lot.

The District Attorney's Office ultimately dropped the criminal charges against Phelan after a judge ruled that the arrest and search in the parking lot had violated his Fourth Amendment protections against unreasonable search and seizure.

By that time, however, Phelan had already lost his Viper. He never filed a written response to the civil complaint against him, and he never showed up in court for the civil proceedings, so the judge granted a default judgment awarding the authorities his car.

The Special Investigation Fund traded in the Viper for two new Jeep Cherokees, to be used for police undercover work.

Phelan may not be the poster child of an innocent citizen victimized by the law. He is currently incarcerated in the Arapahoe County Jail for failing to appear in court on a drunken-driving charge. The fact remains, however, that the authorities took his car without ever proving that it was being used in connection with a crime.

Proponents of civil-forfeiture reform say that's unfair. Smith, however, disagrees.

Even though Phelan was acquitted in the criminal case, "that doesn't change the fact -- and it is a fact -- that those drugs were found," Smith said. While the evidence wasn't admissible in a criminal case due to the constitutional protections, it would still have been admissible in the civil case, she said. And Phelan had "ample opportunity" to defend himself against the civil charges but chose not to, she pointed out.

Luis Velez, newly named chief of the Colorado Springs Police Department, says he believes Phelan is just one of many criminals who lose their property because they deliberately don't respond to civil-forfeiture cases.

"They're just writing off that cost as part of being in business," Velez said.

Many defendants would rather give up their property than show up for court "because they'd rather not be in a judicial environment," he said.

Indeed, records show that in a large number of the civil-forfeiture cases, defendants lose their property because they don't contest the charges against them. But local defense lawyers maintain the reason is that many defendants don't understand that the civil case is separate from the corresponding criminal case.

"People don't file responses because they don't know what to do," said Tegtmeier, who also represented Phelan in the criminal case. "They think that it's all wrapped up in the same procedure."

Some of the defendants have public defenders assigned to them in the criminal case and assume, mistakenly, that the public defender will also handle the civil case, Tegtmeier said.

Even those who hire private attorneys usually end up losing at least some of their property. Terry Perlet, a local defense lawyer who has represented a number of civil-forfeiture defendants, said he settles "almost all" such cases because they're so difficult to win, due to the low burden of proof that prosecutors must meet.

"It's too big of a risk," Perlet said.

As part of many settlements, a defendant will agree to pay money in order to keep a car or house that's being threatened with forfeiture. The deal benefits prosecutors because they save time in court, and the Special Investigation Fund won't have to spend the time and effort to sell the property.

For the defendants, the benefit of negotiating a settlement is that they don't lose everything.

"If you don't want to negotiate, you get nothing," Perlet said.

Split decisions

Velez, meanwhile, says he's bothered by what he calls a tendency to portray forfeiture defendants as "innocent Americans who are being ground up by government. That's not the case. The people we deal with in these cases are predators on society."

Velez says he's concerned about losing the ability to carry out forfeitures, which he calls "a powerful tool for law enforcement."

Donner and other reformers, however, point out that the reforms will not restrict local authorities from seizing property. Already, the overwhelming majority of local forfeiture cases result in criminal convictions, so the requirement that forfeitures must be tied to convictions won't make a big difference.

Smith and Velez also say they don't have a problem with raising the prosecutor's burden of proof to "clear and convincing" evidence. "I don't think we take cases that don't meet that standard, anyway," Smith said.

And from a purely financial perspective, even if forfeitures were eliminated completely -- which no one is proposing -- it would hardly cripple local law enforcement. The $350,000 seized last year equals only about one-third of 1 percent of the combined current budgets of the Colorado Springs Police Department and the sheriff's offices of El Paso and Teller counties. The amount is also dwarfed by the boost Colorado Springs police are getting thanks to the voter-approved Public Safety Sales Tax, which went into effect Jan. 1 and will raise more than $11 million for the police this year.

"It's got nothing to do with the money, when you get down to it," Velez conceded.

Still, Velez and Smith cite other reasons why they've lobbied against the civil-forfeiture reform.

"The SIF would cease to exist," said Smith. That would be a shame, she says, because the joint decision-making of the SIF board has helped enhance cooperation among local law-enforcement agencies. Many local seizures are carried out by joint regional task forces, such as the Metro Vice, Narcotics and Intelligence unit, and so it makes sense to decide jointly how the money is spent, Smith says.

But if seized assets from a joint operation are to be split up among the different political jurisdictions, the various agencies that participated in the operation might end up fighting over who seized what, Smith fears.

Smith and Velez also said requiring a criminal conviction would improperly bridge civil-forfeiture cases and criminal cases. It's a long-standing legal principle that civil and criminal cases should be considered completely separate, they point out.

Poetic justice

On a more basic level, Smith says it just makes sense to seize the proceeds of criminal activity and use them to fight crime. If forfeiture proceeds go to city councils and county boards of commissioners, those bodies could choose to spend the money on something else.

"We, as a society, think it's a bad thing for people to profit from their criminal actions," Smith said. "I kind of think it's poetic for the criminals to be footing part of the bill for law enforcement, instead of just the taxpayers."

Reform proponents say they recognize forfeitures as a legitimate law-enforcement tool but are merely looking to curb abuses by authorities -- particularly those law-enforcement agencies around the state that haven't been as judicious in their use of the funds.

It's unjust, they say, to seize property from someone who hasn't been convicted of a crime.

"This bill is all about trying to find a balance," Donner said.

They also argue that in the long run, reform will benefit law enforcement. Sheriff Bill Masters of San Miguel County, a Libertarian and one of the few law-enforcement officials who have vocally supported the new law, said channeling forfeiture revenues through the traditional budgeting processes of cities and counties will help restore public confidence in the process. Currently, many people believe that forfeitures are driven by greed on the part of law enforcement, Masters says.

"The public has the perception that we are acting like pirates, that we're going after the big bucks, the booty, and splitting it up and buying a bunch of police toys with it," Masters said. The reform, he said, "brings back integrity to the system."


Spreading Wealth
Drug-bust money extends beyond approved mandates

In 1983, when El Paso County commissioners first established the Special Investigation Fund to manage proceeds from seized property, they restricted how the generated cash could be spent.

Local police agencies could use the cash to buy contraband from suspects in criminal investigations, pay off informers and buy materials, services or property that might "[jeopardize] the integrity of undercover criminal investigations," if otherwise obtained through normal county purchasing procedures.

An agreement signed by El Paso and Teller counties and the City of Colorado Springs also charged the SIF with a few, specific tasks: "to combat certain types of criminal activity such as organized crime, white-collar crime and other sophisticated illegal operations."

However, a review of how SIF money is spent indicates that the fund's scope has grown beyond its original mandate. A number of the SIF's recent expenses do not appear to fit neatly under the categories described in the founding documents.

For instance, the SIF in 2000 agreed to pay $37,000 in annual overtime pay for traffic patrols on Interstate 25. The patrols, manned by Colorado Springs police, are part of a program dubbed the Felony Criminal Apprehension Team, or F-CAT.

F-CAT is explicitly designed to catch people who are transporting illegal drugs, by pulling over motorists who are driving 6 mph or more above the speed limit and obtaining consent to search suspicious vehicles.

The program has led to a number of drug arrests on I-25, which is considered a major regional narcotics pipeline. But the program is also explicitly designed to "impact driving habits and motor safety on I-25 by aggressive enforcement." In its first year, the program generated 538 tickets for traffic offenses which hardly qualify under the approved uses.

In recent years, the SIF has also spent $20,000 annually to fund a local drug court, an alternative sentencing program that is sponsored by the District Attorney's Office and aims to help first-time drug offenders overcome addiction. In 2000, the SIF board budgeted $91,000 from the fund for major upgrades to a local law-enforcement shooting range. And the board has also doled out money to help the local Crime Stoppers program buy equipment for educational programs in schools.

Luis Velez, newly named police chief for Colorado Springs, acknowledged that the function of the SIF "has ever so slightly changed over time." But both he and Jeanne Smith, the 4th Judicial district attorney, say they believe everything that's funded by the SIF matches its original intent.

The I-25 interdiction program can lead to the arrest of "mules," which in turn can lead to the breakup of larger drug rings, Smith says. Drug courts and education programs in schools are attacking the same types of crime through prevention, she says, and the shooting-range improvements will help police train for special operations.

Meanwhile, very little SIF money has gone toward fighting white-collar crime, despite the explicit mandate to combat such crime, Smith concedes. The SIF board decides how to spend its resources based on requests from the law-enforcement agencies, and there just haven't been many requests for funding to fight white-collar crime, she says.

If a law-enforcement agency were to make such a request, "I can't imagine that anybody would be turned down," Smith said.

-- Terje Langeland


How they voted

House Bill 1404, which reforms Colorado's civil-forfeiture laws, was approved by the State Senate last week on a 23 10 vote. The House of Representatives approved the bill earlier on a 51 11 vote. The bill, opposed by cops and prosecutors around the state, raises the burden of proof required in order for the government to seize private property from people who are accused, but not convicted, of committing crimes. It also directs some of the proceeds from such seizures to be spent on drug-abuse treatment. Here's how the 13 lawmakers from El Paso County voted on the bill:

Sen. Mary Ellen Epps NO
Sen. Mark Hillman YES
Sen. Doug Lamborn YES
Sen. Ron May YES
Sen. Andy McElhany YES
Rep. Bill Cadman YES
Rep. Mark Cloer YES
Rep. Doug Dean YES
Rep. Richard Decker YES
Rep. Lynn Hefley YES
Rep. Keith King YES
Rep. Dave Schultheis YES
Rep. Bill Sinclair YES

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