Report Finds Homeland Security Seized $2 Billion From Travelers

Travelers wear masks as they wait at the American Airlines ticket counter at O’Hare International Airport in Chicago on June 16, 2020. (AP Photo/Nam Y. Huh)

WASHINGTON (CN) — The Department of Homeland Security seized over $2 billion from airport travelers in the years leading up to a recent Supreme Court ruling that curbed the authority of state officials to seize property, a non-profit law firm revealed Thursday. 

“There have been a lot of incremental reforms at the state level over the past few years and that’s great. But it just doesn’t go far enough,” Jennifer McDonald, a senior research analyst for the Institute for Justice told Courthouse News. 

In 2019, the nine justices unanimously decided in Timbs v. Indiana to limit the power of state and local agencies to impose financial penalties and seize property, an issue long raised by Justice Clarence Thomas. 

“This system—where police can seize property with limited judicial oversight and retain it for their own use— has led to egregious and well-chronicled abuses,” he wrote in another concurring opinion two years earlier. 

But the Institute for Justice found the federal government has routinely relied on civil forfeiture — allowing DHS agencies to seize property without charging owners with a crime — to commandeer currency from airport travelers 30,574 times from 2000 to 2016. 

The July 30 report calls civil forfeiture a multibillion-dollar industry that puts innocent Americans at risk. The most common reason for the seizures: paperwork. 

The data obtained through a Freedom of Information Act lawsuit showed 50% of airport currency seizures happened when travelers failed to report traveling internationally with $10,000 or more, accounting for 28% of total value seized.

The most common airports include some of the country’s busiest, including Chicago O’Hare where federal agents took nearly $56 million from travelers in 2014, and more recently Washington Dulles, where officials seized over $40 million in 2016.

But travelers represented by the Institute for Justice did not walk into airport security lines aiming to evade reporting requirements, McDonald explained as the author of the report. 

“The clients that we have, people who have committed absolutely no crime, would have been happy to declare their money if they knew that it was a requirement,” she said. 

Terry Rolin, 79, is one such client who never trusted the banks and was carrying his life savings of more than $82,000 through Pittsburgh International Airport when federal agents seized the money, according to a lawsuit filed in Pennsylvania. 

“He was intending to use that money in part to pay for some really important and expensive dental work that he had to put off because all of that cash was seized,” McDonald said. 

In another lawsuit, Rustem Kazazi claims he was traveling with $58,100 in cash when federal agents seized the money from the U.S. citizen who was en route to Newark, New Jersey, on the first leg of a trip to his native Albania. 

“Finding it suspicious that he was traveling with such a large amount of cash, the agents stripped Rustem naked and searched him from head to toe. They found nothing illegal; nor did they arrest Rustem,” the report states, outlining details from a complaint filed in Ohio.

For 43% of the cash taken in airports, the Institute for Justice was unable to determine where the money went because it is either in limbo in the federal agency that seized the currency, or it was transferred to another agency. 

Federal agencies taking cash and using it to self-fund outside of the normal appropriations process should concern Americans, McDonald said.

U.S. Customs and Border Protection responded to Thursday’s report saying travelers are required by law to report the total cash in hand. 

The agency’s spokesperson added that while the most common reason for currency seizures is travelers failing to comply with reporting requirements, the operations are also connected with bulk cash smuggling, counterfeiting, narcotics trafficking and other criminal offenses.

Ironically, the failure to fill out paperwork that McDonald described as an “esoteric requirement,” often leaves travelers facing on average six months of navigating bureaucracy to get their money back, according to the report out Thursday. 

Rarely are individuals who have their property seized by CBP or other DHS agencies then arrested — just one in ten travelers. 

That leaves 91% of seizures to be processed under civil forfeiture procedures, with just 7% landing in a courtroom. Shuffled past administrative turnstiles, 93% of cases see government attorneys rather than a judge determine whether agents had sufficient proof of a connection between property and criminal activity to seize currency. 

With no right to an attorney as required under criminal proceedings, McDonald said most people just cut their losses and walk away. 

“When you go to an international terminal or departure gate, how many of us remember seeing a sign that says we have to declare if we’re traveling with a large amount of cash?” she asked. 

Even if travelers were made aware of the reporting rules, the CBP offices where paperwork is filed are not located inside airports. 

“This isn’t as simple as just filling out a little card and handing it to a customs agent right at your gate or when you clear security,” McDonald said. 

CBP stated that information on currency declaration requirements is clearly displayed inside its field offices, and is also available online.

“CBP officers often grant travelers multiple opportunities to properly declare currency when entering or exiting the country,” the agency’s spokesperson said. 

The agency also noted that the Institute for Justice’s findings cover data as far back as 2000, but the Department of Homeland Security was not founded until 2002, and Customs and Border Protection until 2003. 

In response, McDonald said that CBP refused to disclose which agencies conducted which seizures, making it impossible to delineate. 

“We had to go back and forth with them to make sure we understood everything that we were getting,” she said, adding the government produced the database only after her organization sued for the records first requested in 2015.

That same year, Kentucky Senator Rand Paul introduced the FAIR Act to eliminate equitable sharing, a process by which property seized locally can be handed over to federal officials. 

McDonald said the legislation would go a long way, but is likely to face an uphill battle in the face of staunch opposition from law enforcement interests groups.

Her organization instead is lobbying states to prohibit their agencies from participating in the practice, while also pushing for the federal government to do away with all civil forfeitures.

“Part of the problem with civil forfeiture is that where the money goes and how it is spent is still kind of a black box, federal agents don’t really want to disclose that information,” McDonald said. 

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