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Maryland police seek federal help to take ill-gotten gains

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Gay Lynn Diffenderffer had no idea that her husband was growing marijuana at their Baltimore County home, her attorney says, until state police investigating his mysterious disappearance discovered about 100 plants in a locked basement.

Two weeks later, investigators found Michael Diffenderffer, 52, dead in his car — an apparent suicide that meant he would never face the drug charges brought against him when the marijuana was found.

But that didn't close the book on his 2011 case.

Federal prosecutors soon sought court permission to seize the Diffenderffers' Colonial-style home in rural Baldwin, near historic Fork United Methodist Church. They alleged that the home, which has an assessed value of $223,000, had been used in the commission of a crime — even though no one had been convicted.

Targeting property is a common practice — federal authorities recovered almost $4.7 billion in criminal, civil and administrative cases in fiscal 2012. Law enforcement officials say it takes the profits out of crime while raising money for local, state and federal agencies.

"The reason we pursue the forfeiture is that we want to eliminate the fruits of criminal activity and deter the criminal activity, and pursuing the proceeds is an excellent way to do that," said Rod J. Rosenstein, the U.S. attorney for Maryland. His office brings such "civil forfeiture" cases only when evidence warrants it, he added.

Critics contend that the practice can hurt innocent people and that the financial incentives can distort police priorities.

Law enforcement agencies can use civil cases to seek assets independently of criminal prosecution, and sometimes the civil cases are successful even when prosecutions are not.

A Baltimore Sun review of 63 recent drug-related cases in Maryland showed that property was forfeited in 30 of them, even though court records showed no conviction.

That broadens the usefulness of the system, according to prosecutors. But in rare instances it can lead to situations such as Gay Lynn Diffenderffer's.

"Your spouse ends his life suddenly and within weeks you receive notice that the house you lived in for many, many years may be taken from you," said her attorney, Gerald Ruter. "It's kind of hard to envision a worse scenario than that."

Diffenderffer fought the government action with Ruter's help so she could keep the house, which has two white rocking chairs on the porch and a view over acres of fields. Property records show that the couple bought the home in 1996.

Michael Diffenderffer left his house on Oct. 5, 2011, after writing a note telling his wife he would be back for dinner. When he didn't return that night, she contacted police.

Two days later, officers came to search the property — and uncovered the growing operation of about 100 plants and 4 pounds of harvested pot.

A judge signed a warrant for Michael Diffenderffer's arrest. But on Oct. 21, 2011, West Virginia state troopers found his body in a 2005 Acura MDX parked at a private hunting club. Authorities in West Virginia would not release the cause of death, but Maryland State Police said two empty pill bottles were found in the car.

The Maryland State Police and the U.S. attorney's office sought court permission in early November to seize the house.

Through her attorney, Gay Lynn Diffenderffer started negotiating with prosecutors. The legal wrangling continued for more than a year. In a deal finalized in January, she agreed to sell other property and pay the government $150,000 in order to keep her home, court records show. In the agreement, she did not acknowledge that the government had grounds to take the house. She declined to comment for this article.

Rosenstein declined to comment on the specifics of the case, but said prosecutors have latitude in deciding how to use their powers to seize property. "Some cases are more sympathetic than others," he added.

Criminal and civil forfeiture is a major source of revenue for federal law enforcement in many states. The law allows authorities to seize assets during a criminal investigation and hold them while prosecuting the case.

Authorities may auction such property for cash. Proceeds are sent to the Justice Department or the Treasury Department.

Local and federal law enforcement agencies in Maryland sent $17.5 million last year to the Justice Department, to be used to pay for forfeiture actions, investigations and to compensate crime victims.

Investigators with the federal Department of Homeland Security are trying to use civil forfeiture to take a $600,000 Rockville house belonging to Diepreye Solomon Peter Alamieyeseigha, a former governor of the oil-rich Nigerian state of Bayelsa. They say the house was purchased with laundered money. They have won the right to seize some of Alamieyeseigha's assets in Massachusetts.

In another major case, the DEA is seeking more than $2 million that it believes is in the bank accounts of a California company that allegedly sold synthetic marijuana to head shops in Maryland.

After reports of civil forfeiture abuses, Congress passed new rules in 2000 that shifted the burden of proof from the property owner to the government and gave people more time to challenge the government action. Under the old system, it took the owner of a Florida house three years to prove that drug dealers had used its dock without his knowledge.

In criminal cases, prosecutors regularly use forfeiture to deny resources to drug organizations and cleave the convicted from their ill-gotten lifestyles.

Baltimore County businessman Rodney Hailey, convicted of defrauding an Environmental Protection Agency program of $9 million for selling credits for biodiesel fuel he was not actually producing, was stripped of a fleet of luxury cars that included a Lamborghini, three Ferraris and two Bentleys.

In civil forfeiture cases, the property itself is listed as the defendant. Anyone whose money is seized can file a claim to get it back and fight through the courts.

In some of the 2012 forfeiture cases that were not linked to a conviction, no one came forward to recover the property. Prosecutors say that about 80 percent of cases are handled administratively, without court cases, meaning that no one made a claim.

But some critics say that people are deterred from filing claims because the process is difficult to navigate and often means finding a lawyer with expertise in forfeiture cases. Other critics focus on the arrangements for sharing proceeds, which they say could lead police to go after money and other assets rather than pursue drugs or other objectives.

The libertarian Institute for Justice argues that the payouts can encourage police to focus on cases that will result in money being forfeited. In a 2010 study, the group concluded that local law enforcement is more likely to seek assistance from federal authorities in states where laws do not allow them to recover money for themselves.

"Our whole point is, people who work in law enforcement — like anyone else — respond to an incentive," said Dick Carpenter, the director of strategic research at the institute.

Police departments may receive up to 80 percent of the money they help federal agencies take. In fiscal 2012, police in Maryland received almost $6 million through federal seizures — with about $1 million going to Baltimore police, $750,000 to Baltimore County police and $650,000 to state police.

Police can also take assets through Maryland courts, but under state law the proceeds are funneled into general accounts, not back to police. The money paid out from the federal program cannot generally be used for salaries but it can pay for equipment.

Baltimore police spokesman Anthony Guglielmi said the additional money is "absolutely vital." Much of it finances officer training and travel costs for wide-ranging investigations, he said. That way, it is "completely reinvested back into the community."

John L. Worrall, a criminology professor at the University of Texas at Dallas, said 60 percent of the law enforcement officials he surveyed described forfeiture proceeds as a "necessary" part of their budgets.

Guglielmi said the Baltimore Police Department's main focus is on gun violence and not cases that lead to big payouts.

Watches, jewelry and cars are seized regularly in Maryland. One traffic stop in 2011 turned up $60,000 in cash stuffed into a teddy bear, Canadian currency and 296 grams of gold, worth about $15,000, according to an affidavit filed in the case.

A review of recent federal forfeiture cases in Maryland showed many in which no charges were filed. In one example, Vincent Williams, 31, said he was in Western Maryland driving back from a car auction when state police pulled him over and said he was speeding. Officers searched his car and confiscated $5,240 Williams had in his pocket.

"The first one who stopped me said, 'We're going to take the money because basically we don't have anything else,'" Williams said.

State police spokeswoman Elena Russo said Williams could not clearly explain where he was going and could not account for the money, giving police cause to perform a search. No charges were filed, and Williams said he did not get a speeding ticket. He hired Robert W. Biddle, a Baltimore lawyer who specializes in forfeiture cases, and got his money back a few months later.

Biddle said he is "very concerned" about police actions in cases such as Williams', even when claimants ultimately prevail.

"No contraband or illegal substances are found in the car," he said, but "substantial amounts of cash are seized from the driver or the passenger."

Russo said state troopers are trained to conduct a proper search and seizure of a vehicle, and that people who carry large amounts of cash and whose explanations police find unsatisfactory are often linked to drug trafficking.

"In a lot of cases," she said, "money that can't be documented, especially large sums of money that can't be documented when asked on a traffic stop ... can lead to the uncovering of a crime that is occurring."

Sometimes, Rosenstein said, there are reasons prosecutors might not bring criminal charges — to protect an informant, for example — but will still seize money, cars and property. Those who try to reclaim property in such cases have no Fifth Amendment right to remain silent, he noted, and some do not come forward to be deposed.

Biddle said it is difficult for most people to understand the process for making a bid to reclaim property. Filing a claim even a day late means the money or property is lost.

"I have seen on a number of occasions people whose money is lawfully obtained lose their money because they misunderstand the form," he said.

But Worrall said the 2000 law has limited abuses in the system. Police can put the money to good use funding drug task forces and other complicated efforts.

"With rare exceptions," the professor said, "they're not buying toys and padding their wallets."

iduncan@baltsun.com

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Civil asset forfeiture process

•Property — car, watch, jewelry, cash or home — is seized during a search.

•The government publishes notice asking owners to come forward.

•If someone makes a claim, their property is given back or a court case is opened.

•The owner makes a settlement with prosecutors or their property is forfeited outright.

By the numbers

$4.7 billion — Value of assets taken by federal agencies in fiscal 2012

$17.5 million — Maryland's contribution to a federal forfeiture fund

$6 million — Value of payouts to Maryland police agencies that helped take assets

48 percent — Civil cases closed in Maryland in 2012 in which government kept property without criminal conviction

Sources: U.S. Department of Justice, Department of the Treasury and Baltimore Sun research

Copyright © 2014, The Baltimore Sun
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