(Tim Cushing) Asset forfeiture: drop the charges, keep the property. I guess the person behind Saeki Co., Ltd. should feel appreciative he actually was graced with charges, rather than just had his purchased vehicles seized and spirited away with a mumbled explanation and some dodgy paperwork.
Saeki Co. bought several luxury vehicles from a place called Texas Motors (which, oddly enough, is located in Florida) with the intent to sell them for a significant markup to wealthy Japanese citizens. This is possibly illegal, but not because of any explicit export ban. The only reason it verges on illegal is because resellers like Saeki ever-so-lightly tread on the toes of major manufacturers and their authorized dealers who do the same thing.
The true legality of the situation is undetermined. The feds behind the first seizures of soon-to-be-exported vehicles didn’t seem to have a firm grasp on the matter. They certainly felt it was illegal, and this feeling resulted in plenty of seizures, but these agencies didn’t have any crystal-clear guidance on the matter.
The crackdown was driven largely by agents with the Secret Service and the Department of Homeland Security, who questioned whether these small export companies were violating federal law by using straw buyers — people paid small sums to buy cars — to conceal that the vehicles were being bought by people who had no intention of keeping them and were using cash from other people to make the acquisitions. Federal authorities have argued that using straw buyers is a deceptive practice that potentially deprives American consumers of a chance to buy the luxury cars and limits the ability of automakers to keep tight control over sales to domestic dealers and to foreign countries.
It’s not so much the American public losing a few opportunities to buy a luxury vehicle as it is the other thing: tight control of sales. The American public can’t get many laws written in its favor, but large industries certainly can. This initial thrust led to lots and lots of partnerships with local law enforcement agencies conveniently located near shipping docks. And this led to lots and lots of luxury vehicles ending up in the hands of law enforcement.
Then, the government stopped the crackdown. It claimed to be making an effort to more tightly focus its forfeiture efforts as a result of Eric Holder’s reform initiative. The appearance of being an errand boy for corporate interests certainly didn’t help. Cases were dropped and charges dismissed. But the vehicles remained in the government’s hands.
One person in Saeki Co.’s position spent two years fighting for the return of a seized vehicle and $125,000 in cash. This followed about a dozen similar settlements, most occuring after a legal battle with the agency(ies) holding the vehicles. In other cases, the prevailing parties still have yet to be fully recompensed. And others are still being prosecuted for violating a law the federal government isn’t entirely clear on and has lost an interest in enforcing.
Saeki Co.’s story is the worst of the potential situations. It had eight vehicles worth nearly $900,000 seized at the Long Beach Seaport by customs agents. This happened January 3, 2013. Two months later, customs agents seized another of its vehicles (worth over $100,000) in Seattle. Two-and-a-half years later, the feds have abandoned everything about the case but Saeki’s vehicles. And it simply doesn’t want to talk about the seized property.
Despite the Government’s change in policy, Plaintiff has not received administrative relief from CBP nor any communication from the Government justifying its seizure of Plaintiff’s vehicles.
Other than the fact that it won’t be bringing criminal charges.
In or about early 2014, Assistant United States Attorney David Lazarus advised Plaintiff’s counsel that the federal grand jury investigation undertaken in the Middle District of Florida had concluded without any criminal charge lodged against Plaintiff or any of its agents.
So, no criminal activity but the government still wants to keep the cars — which were seized under a vague “felony interference of a business model” law.
Plaintiff’s vehicles were seized by CBP not because of any wrongdoing by Plaintiff, but because of an ill-conceived program by the Government to support a vehicle export monopoly at the expense of the Constitutional rights of Plaintiff and other vehicle exporters.
As the complaint points out, the government’s unwillingness to respond to the plaintiff is swiftly rendering the vehicles worthless. Overseas purchasers willing to pay above US domestic retail for luxury vehicles are most likely going to want this year’s model, not something that’s been sitting around a government warehouse for almost three years. (And that’s not taking into consideration the possibility the vehicles may have racked up miles as government agents’ “work vehicles” or the occasional “drive it like you seized it” joyride.)
Then there’s the simple fact that a newly-purchased vehicle starts leaking resale value the instant a purchaser drives it off the lot.
Using the generally accepted average vehicle depreciation rate of 20% in the first model year and 15% in subsequent years, the value of Plaintiff’s property has decreased in value by approximately $375,891.00 since their seizure. This measure increases every day that the Government fails to return the seized vehicles to Plaintiff.
Much of the filing details “conversations” with the government about the return of the vehicles, most of which went something like this.
SAEKI CO.: So, there’s no criminal charges? This means we can have our cars back, right?
The lawsuit repeatedly makes claims about Saeki Co. being deprived of due process. Which it has been. But civil asset forfeiture isn’t about due process. These statutes provide — from the very start — a way for the government to bypass the protections due process affords to citizens. The cases themselves indicate that clearly. It’s not the government versus any named individual or company. It’s the government against the seized property itself, which cannot advocate in its own defense and can only be spoken for if the government grants the request.
So, while the company is absolutely right about being deprived of this right, in terms of asset forfeiture, this right simply does not exist. This lawsuit may force a response from the government, but it’s a step it doesn’t consider to be “appropriate” in terms of disputing seizures.
What Saeki does have going for it is the government’s ambivalence towards the “law” it claimed Saeki broke. If nothing else, a judge will be asking the government a few tough questions about how its ongoing non-prosecution has managed to tie up not-guilty vehicles for the better part of three years. Given the racket that asset forfeiture is, that’s about the best that can be hoped for.