EVANSVILLE — With fresh legal news threatening to end a practice only Indiana allows, the winning candidate for Vanderburgh County prosecutor in November’s election may have a decision to make.
And the two contenders don’t agree on it.
Since 2008 the prosecutor’s office − first Stan Levco and then Nick Hermann − has contracted with local law firm Kahn, Dees, Donovan & Kahn (KDDK) to collect forfeiture money from the seizure of cash, cars and other property during arrests or searches by law enforcement. Most civil forfeiture actions stem from illegal drug activity.
KDDK gets 25% of the money it collects, plus reimbursement for expenses.
The Courier & Press reported last month that the law firm has been paid almost $453,000 since 2013, according to county auditor records. The auditor’s office isn’t required to keep expenditure claims for more than 10 years, and it hasn’t — so the total compensation to KDDK since 2008 is unknown. The rest of forfeiture collections are distributed to the prosecutor’s office and law enforcement agencies in the Evansville-Vanderburgh County Drug Task Force.
Indiana is the only state in the nation that allows the type of contract KDDK has with the Vanderburgh County Prosecutor’s Office. Critics of the practice point to a 2011 Indiana Court of Appeals ruling stating that a prosecutor “should not have a personal interest in (a) case separate from his professional role as prosecutor.”
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“And that principle translates easily to Indiana’s system of contingency-fee forfeitures — where, by design, the (private) lawyers prosecuting the cases have a systemic incentive to maximize their personal income, not to do justice,” said Sam Gedge, an attorney for Washington, D.C.-area nonprofit public interest law firm The Institute for Justice.
On Wednesday, the Institute for Justice scored a legal victory against the practice in Indiana.
Judge James R. Sweeney II of the U.S. District Court for the Southern District of Indiana ruled the Institute could proceed with a federal class-action lawsuit seeking to declare unconstitutional an Indiana statute that allows criminal prosecutors to outsource forfeiture prosecutions to private attorneys who take a cut of the money.
The choice ahead in Vanderburgh County
The Vanderburgh County Prosecutor’s Office isn’t required to let private lawyers collect and keep 25% of forfeiture money, which would have exceeded $1.8 million in total since 2013. In the only state that allows the practice, The Institute for Justice reports only about half the state’s prosecutor’s offices engage in it.
By combing Indiana court databases and sending public records requests to all 92 counties, the Institute determined a few years ago that at least 39 of the 92 counties were using private contingency-fee attorneys for forfeiture cases. Vanderburgh and Posey counties were among them.
If the nonprofit law firm’s federal class-action lawsuit is not successful, Vanderburgh County’s next prosecutor will have a decision to make: Keep the contract with KDDF, negotiate a different contract with another law firm — or assign civil forfeiture litigation to deputy prosecutors, as do the Marion County Prosecutor’s Office and others around the state.
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The decision wouldn’t be current prosecutor Hermann’s to make. Hermann was defeated in a May 3 Republican nominating contest, so he isn’t on the Nov. 8 general election ballot.
The answer depends on which candidate for prosecutor in November’s election wins, because Republican Diana Moers and Democrat Jon Schaefer disagree.
‘I was shocked when I read that’
“I’d get rid of the contract,” Schaefer, 44, said. “In my view, forfeiture proceeds should go directly to law enforcement, and it should be used to offset the cost of prosecuting crime on the taxpayers’ side. The idea that we’re giving 25% to a local law firm – I was shocked when I read that.”
Schaefer, chief counsel for the Vanderburgh County Public Defender Agency, estimated 80% of the individuals charged with felony offenses locally are represented by public defenders. That’s where most of the forfeiture money is coming from, he said.
Anyone who needs a public defender probably won’t have money to hire an attorney to fight KDDK’s attempts to seize assets that may have been used in the commission of a crime or are traceable as profits from a crime, Schaefer said. The criminal suspect often is in jail at any rate, he said, because typically there is no forfeiture claim unless there’s an accompanying criminal charge.
Default is the usual outcome, said Schaefer, who has worked in the public defender’s agency for nearly 13 years. It means the suspect does not contest the forfeiture proceeding.
“You’ve got a boilerplate document you file to start the forfeiture proceeding,” Schaefer said.
“Obviously, where your (a lawyer’s) work is going to be coming from is when you have a contested forfeiture proceeding — and that’s very rare, so the idea that (private lawyers are) getting 25% of the proceeds for essentially filing a document is ridiculous. That can be done in-house.”
State shows no forfeiture cases were contested
The Indiana Prosecuting Attorneys Council (IPAC) shows in its fiscal year 2021 report to the Indiana General Assembly that no county prosecutor’s offices anywhere in the state reported any contested forfeiture cases in the past year, including Vanderburgh County. Thirty-seven cases were settled, IPAC reports, but that number isn’t broken down by county.
Under Indiana’s forfeiture law, county prosecutors are required to report data on contested forfeiture cases to IPAC, a state judicial branch agency comprised of Indiana’s 91 prosecuting attorneys and their chief deputies and governed by a 10-member board chosen from the state’s prosecutors.
The requirement “applies even if the prosecuting attorney has retained an attorney to bring an action under this chapter,” the statute states.
IPAC appears to have received no data at all on forfeiture cases from the Vanderburgh County Prosecutor’s Office in fiscal year 2021. An IPAC spokesman said the agency did not “have any forfeiture filings from Vanderburgh County in our system.” He later said IPAC was “unable to verify” the prosecutor’s office’s forfeiture data.
Gedge, the Institute for Justice attorney, said IPAC doesn’t appear to have received data on forfeiture cases from the Vanderburgh County Prosecutor’s Office in fiscal year 2022 either. He provided an itemized list of each forfeiture case reported to IPAC that he said the agency gave to him.
The numerical identifier for case numbers originating in Vanderburgh County would begin with ’82,’ according to Indiana Court Rules). But there are no case numbers on the itemized list that begin with 82.
The Courier & Press sent email and text messages to Hermann asking whether there were any contested forfeiture cases in Vanderburgh County in the past year and whether his office had reported its forfeiture action data to IPAC. He did not answer.
Mike DiRienzo, the KDDK attorney and partner who manages civil forfeiture litigation for the firm, also did not answer when asked whether there were no contested forfeiture cases in Vanderburgh County in the past year.
‘It may make more sense to farm it out’
Before graduating from Western Michigan University’s Thomas M. Cooley Law School in 2007, the 40-year-old Moers served as an assistant public defender in Ann Arbor, Michigan. She worked as an attorney in a Wheeling, Illinois, law firm and an assistant state’s attorney in Joliet, Illinois, afterward.
Moers has worked as an attorney in the Indiana Secretary of State’s Office in Indianapolis and executive director of the Indiana Board for Depositories in the State Treasurer’s Office. After a six-month stint in an Indianapolis law firm, she has worked since 2017 as a deputy attorney general and a section chief in the Indiana Attorney General’s Office.
“I think every government office I’ve ever worked in has some sort of outside contract of some kind,” Moers said. “It’s not uncommon for offices to outsource work. If you have a bunch of deputies doing criminal law, it’s not unheard of if you want to outsource the civil stuff because sometimes it’s not like a full-time job and (sometimes) it needs full attention. Sometimes the work will ebb and flow, especially with civil (asset) forfeitures.”
Moers pledged to examine the costs associated with the prosecutor’s office’s practice of using private lawyers and giving them 25% to litigate civil forfeiture matters arising from seizures made by law enforcement.
But she noted that it might be too time-consuming for prosecutors to do the work themselves.
“It might make more sense to farm it out because (first), it doesn’t fit in with the normal practice of (prosecutors) and (second), it may make more sense to farm it out because then you don’t have a full-time employee that you’re also paying benefits to,” Moers said.
Moers also said she might value KDDK’s “institutionalized knowledge.”
“If somebody has a contract for a long time, it could just make more sense that they keep it because they know what’s going on and it’s a well-oiled machine at that point,” she said.
Moers said she is offended by the notion that private lawyers prosecuting civil forfeiture cases are incentivized to maximize their personal income.
“That’s insinuating that somehow they’re finding more civil assets than what they should be,” she said. “Presumably, the judges are making decisions on those, so I don’t see how it would even be possible to try to seize more than you would be legally entitled to.”
Big-money forfeitures in Vanderburgh County are rare
It’s not a question of seizing more than prosecutors and law enforcement are legally entitled to, said the Institute for Justice’s Gedge. The question is what forfeiture is intended to accomplish in the first place.
“When civil forfeiture came to popularity in the late ’70s and ’80s at the federal level, it was billed as this economic weapon to take down drug kingpins and the mob and these incredibly profitable and sophisticated criminal organizations — but now in 2022, we see it often being used to nickel and dime people,” Gedge said.
A 2020 Institute for Justice report found that in the 21 states with available data, Florida’s $4,500 median currency forfeiture was nearly $2,000 higher than the next closest state’s.
“A 2016 reform may help explain this finding. The reform requires law enforcement to pay a $1,000 filing fee and post a $1,500 bond when filing for forfeiture. (If the agency wins, the bond is returned; if it loses, the bond is paid tothe property owner),” the report stated.
“These unique upfront costs make forfeitures under $1,000 unprofitable for law enforcement while also reducing the return on forfeitures over $1,000 and making forfeitures under $2,500 riskier. This likely encourages a focus on higher-value property.”
But Indiana has no such requirement — and a Courier & Press analysis of payments to KDDK provided by the Vanderburgh County Auditor’s Office through 2013 found that the majority of item-by-item forfeitures were under $1,000.
The Courier & Press identified 746 individual billings, in 53% of which KDDK’s 25% cut amounted to $250 or less.
Those did include a handful of cases in which several small individual billings involved the same criminal suspect. In one case in 2013, the firm was paid a total of $270 on separate billings for the seizure of two flat-screen TVs, a mini computer and a video camera from a single suspect.
In another case in the same month, KDDK was paid $3.75 as its 25% on the forfeiture of four used car tires, $62.50 for four truck tires with chrome wheels and $50 for an “amber-colored recliner” — all from the same suspect. Seizures from another suspect netted KDDK $17.50 on a Sony Playstation 3 video game system, $27.50 on an Xbox 360 video game system and $40 on an Xbox Halo special edition game with box.
KDDK’s 25% cut amounted to $1,000 or more on just 14% of the 746 billings the Courier & Press tracked from 2013 through April 2022.
The low value of many seizures demonstrates forfeiture isn’t about going after the El Chapos and Bernie Madoffs ofthe world, Gedge said.
“It gives the lie to the notion that this kind of forfeiture system is a vital law enforcement tool,” he said.
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