ARKANSAS' LEGAL THEFT? POLICE REAP PROFIT OF FORFEITED CASH

Anastasio Ortiz Vega says that when he heard his mother had become ill in
Mexico, he gathered up all his life's savings -- $23,600 he salted away from
long hours pouring concrete slabs.

Vega hit the road that November 1994, traveling from Nashville, Tenn., in a
Dodge pickup, his money wrapped in a sock and stored in a spare tire for
safety. But long before he reached his destination, he was stopped by a West
Memphis police officer.

The officer reported that it looked like there was marijuana residue in the
spare tire and seized the thick wad of cash. Vega was free to go. But the
money stayed.

Welcome to Crittenden County, smack at the high-pressure center of the
nation's flow of drugs and dirty cash.

A nervous gulp, the smell of air freshener or a shaking hand can cause
police in this eastern Arkansas county to hand out consent-to-search forms
which, if signed, allow them to tear apart cars in search of something
illicit.

Many, many times they come up with drugs. Other times they find guns.

But they also find money.

Lots and lots of money.

The seizures in Crittenden County have ended up paying salaries, benefits
and travel for police and prosecutors, not to mention contributing to the
running of a new jail when tax funds dried up.

Last year local and state law enforcement agencies in Crittenden County
raked in $1.36 million in cash. And that's not counting the $3.17 million
tied up by authorities wrangling over what department had the jurisdiction
to seize it.

To the police, it's dirty money. They say they can smell the drugs coming
off the cash, see the marijuana debris flying when they shake the bills.

But some who get stopped say they're caught in an Orwellian nightmare that
gives police the right to take their hard-earned savings, even though
they've committed no crimes.

Similar complaints from throughout the nation prompted the U.S. House of
Representatives to pass a bill last week that would make it harder for
police and federal authorities to confiscate property before they file
criminal charges.

If the bill survives the Senate and becomes law, it'll be too late for many
who've passed through Crittenden County, including Vega.

Back in the Nashville suburb where Vega lives, a general contractor who
hires Vega to build houses says there was no reason for the seizure.

"I assure you that was very hard-earned money," says Robin York, who
estimates Vega often puts in as many as 80 hours working seven days a week.
"We're talking sweat of the brow. He just works like a dog."

The Arkansas Democrat-Gazette had FBI and state background checks conducted
on Vega and found no criminal charges ever filed against him.

In challenging the forfeiture, Vega produced tax and payroll records showing
he was paid more than $54,000 the year the money was confiscated. But
concerned about mounting legal bills, Vega settled his case nearly a year
later. The prosecuting attorney's office kept $7,100; Vega got $16,500 back.

"I tell them what is true, but they just don't listen,'' says Vega, now 46.

There was one final indignity. Before he could get the money, Vega had to
sign a paper agreeing to release the police from any liability.

York still fumes about the treatment of someone he says is the hardest
worker he's ever seen, someone far too busy to traffic drugs.

"It's amazing to me,'' York says. "It's just like a police state, one where
they can't prove you're wrong, but they can keep your money anyway.''

DO YOU BELIEVE IN THE WAR ON DRUGS?

Dan Peruchi says he's one of the innocent.

He says he was headed back home to Texas from Indianapolis, happy with his
purchase of a 1969 Oldsmobile Toronado, when he made the mistake of
traveling through Crittenden County.

He says he made the trip several times a year, always carrying cash to give
him more buying power at the car auctions he frequented.

But on that November 1992 day, a West Memphis police officer pulled him over
just past the Arkansas-Tennessee border for going 10 miles over the speed
limit.

First came the question: Do you believe in the president's war on drugs?

Then came the consent to search form.

And soon the $18,890 that Peruchi had tucked up in the springs of the car's
back seat was gone. The officer who confiscated it said the cash looked like
it had marijuana residue on it.

"I showed him the titles to the cars I had bought and taken back down,''
says Peruchi, now a 42-year-old father of four who lives in a suburb of Fort
Worth. "It wasn't my first trip up there.''

He says he also pointed out the book he carried that listed all the cars
built from 1946 to 1975 and how many parts were made for those cars.

None of it mattered.

No criminal charges were filed from that traffic stop. No evidence of drug
dealing was ever produced. For all anyone knows, Peruchi is just a man who
likes to buy and sell cars. But he lost his money and won't get it back.

A friend of Peruchi's who lived in Indianapolis confirmed that Peruchi had
visited him days before the seizure while on a car-buying trip. Peruchi's
estranged wife also confirmed that he regularly traveled to Indiana to buy
used cars with money saved up from construction jobs. An FBI background
check showed no criminal record for Peruchi.

"They can go out there and do whatever they want to do and whenever they
want to do it,'' says Peruchi, who never challenged the forfeiture. "And
nobody can do anything about it. To me, it's communist.''

But it's all legal under forfeiture laws.

Rooted in English common law, forfeiture first surfaced in America in 1862
when Congress authorized the seizure of the estates of Confederate soldiers.
During Prohibition, from 1919 to 1933, Congress extended forfeitures to
attack bootleggers. In 1970, forfeiture reappeared with the passage of the
Comprehensive Drug Abuse Prevention and Control Act, which targeted the
assets of convicted criminals.

But in 1984, the federal law was changed dramatically to allow federal
authorities to take property without filing criminal charges, let alone
getting convictions.

And there was a bonus: Police got to keep forfeiture proceeds to help
finance their war on drugs.

Arkansas passed its own forfeiture law in 1971, which gave local police
enhanced seizure powers similar to those now used by the federal government.

Nowhere in Arkansas have those forfeiture laws been put to more use than in
Crittenden County, where three law enforcement agencies troll the highways
in search of cars to stop.

There, motorists must travel Interstate 40 under the watchful eyes of the
Arkansas Highway Police, the West Memphis Police Department and the
Crittenden County sheriff's office. In all, $8.23 million and nearly 300
cars have been seized in the county since 1996.

'KILLING THE SNAKE'

Drugs course along I-40, considered by police a major pipeline for
traffickers headed to the East Coast. Police see so much illegal trade that
they've nicknamed the interstate's lanes, calling those headed east the drug
lanes and those headed west, on the route to Mexico, the money lanes.

"That marijuana will fetch $100 a pound at the Mexico border," says Mickey
Thornton, head of the Crittenden County sheriff's narcotics unit. "In
Arkansas, it goes for $700 a pound. In New York, $24,000 a pound. That's a
hell of a return on your investment."

James Hale III, the Crittenden County prosecutor who handles forfeitures,
does what he can to cut into those profits.

"To kill the snake, you take the head off," he says. "The head is the money.
No doubt."

Since 1996, he's pushed 369 forfeitures through his county's courthouse,
more than double the number in any other Arkansas county.

"If I think it's drug money, I don't mind taking it from them," Hale says.
"Not one bit."

Not all searches result in a seizure, and there are safeguards to protect
innocent citizens, Hale says. Police must get permission before they can
search a car, he says.

Hale says he's eager to give money back to those who can show it's
legitimate. He says he's especially sensitive to truck-leasing companies and
is quick to return trucks to those who can document ownership.

But don't count on just any old receipt, paycheck stub or title convincing
Hale that money is clean.

"Anyone with half a lick of sense can gin out records on a computer all day
long,'' Hale says.

And don't expect to get a speedy trial in a seizure case; a forfeiture trial
is civil, not criminal, and civil trials are a lower priority for courts.
Just getting your day in court can take months, if not years.

"The bottom line is most people can show where their money is from,'' Hale
says.

Carmelo Ramirez says that's just what he wanted do.

When a sheriff's deputy found less than a hundredth of an ounce of marijuana
with the $12,500 Ramirez had stashed in the dashboard of his friend's car,
the money and car were seized in March 1995.

Ramirez protested that he earned the money selling Amway products and begged
the deputy for enough for a bus ticket to take him and his girlfriend back
to Milwaukee. But the deputy told Ramirez he'd have to prove he was telling
the truth before he'd get a dime.

Ramirez was never charged with any crime. And he has yet to get any of his
money back -- even though a lawyer furnished receipts showing Ramirez
regularly used cash to buy Amway goods. Now a porter who lives in the Bronx,
Ramirez says that the experience devastated his business, that he gave up on
fighting long ago.

"It was all my money," Ramirez says. "All my money.''

'WAR ON THE CONSTITUTION'

Defense lawyers say cases like that of Darrell Verkeler are the untold
stories of forfeiture laws.

Verkeler saw his legal bills pile up after a Crittenden County sheriff's
deputy found about 4.2 ounces of amphetamines on Verkeler's son, then 29,
and impounded the 18-wheeler the son was driving.

Days later the elder Verkeler got a chilly response when he drove the 100
miles down from Black Rock, in Lawrence County, to tell the deputy he had no
idea his son was using amphetamines without a prescription and to get the
rig back for the family's trucking firm.

"You might as well forget it," Verkeler recalls a sheriff's employee telling
him even after he produced receipts documenting that the truck payments had
come out of his checking account. It took two months and the hiring of a
lawyer before he could drive his truck off the impound lot.

"It wasn't right what happened," says the 55-year-old Verkeler, whose son
ended up with probation for the drug charge.

Defense attorneys agree. They say cases like Verkeler's demonstrate that the
concept of "innocent until proven guilty" has vanished.

"Forfeitures have fueled the war on drugs, and now they have made the war on
drugs into a war on the Constitution,'' says Little Rock defense lawyer John
Wesley Hall Jr.

It's a whole new world -- one where prosecutors don't have to charge people
with crimes to take their cars or cash away. The burden is on the owners to
prove their innocence to get their property back. And if they can't afford
an attorney, the court won't furnish one on their behalf at taxpayer
expense, as is done in criminal trials.

"The result is that many, many innocent people end up having their money
stolen by state and local police,'' says E. E. "Bo" Edwards, a Little Rock
native who is chairman of a task force on forfeiture abuse for the National
Association of Criminal Defense Lawyers.

Prosecutors and police argue that forfeiture strikes drug dealers in the
pocketbook, where it hurts most.

"I'm not going to say it's not abused sometimes,'' says Capt. Sam Williams,
head of the special investigations division for the Little Rock Police
Department. "But by and large, asset forfeiture was meant to take assets
away from drug dealers. And it works."

But while police tout their multikilogram cocaine busts and $3 million cash
seizures, not all the cases bring in millions. Nearly 64 percent of the
seizures in Crittenden County since 1996 involved cash amounts of less than
$500, according to an analysis of court records.

'DON'T ENTER THIS STATE WITH MONEY'

Eliazar Cantu, 44, never got back the $6,000 he had wrapped up in duct tape
and stored under the back seat of his car.

The West Memphis police officer who stopped him in February 1993 reported
that Cantu smelled like marijuana and seized the cash. Cantu says he was
headed to Oklahoma and planned to use the money to pay to breed his mare
back in Fowler, Ind., with a stud with a good pedigree.

Cantu, who also has no criminal record, says he never contested the seizure,
figuring the rules were stacked against him.

"By the time I get a lawyer, it will cost me another $2,000, and then they
will postpone court, and by the time they end it, I will get nothing," Cantu
explains.

Hale scoffs at those like Cantu who don't fight for their money.

"Now, if someone took $19,000 of my money, by God I'd be back," the
prosecutor says.

Those who aren't drug dealers can get their day in court, Hale argues.

But to get that day in court, they must act quickly. The rules allow 30 days
after the receipt of a certified letter from the prosecutor's office to
contest the charges.

That law can be fiercely enforced in Crittenden County.

Hale once pushed for a lawyer's secretary to take a polygraph test when she
claimed she had mailed legal papers protesting a forfeiture on the 30th day.

Bobby Brummett found out just how hard it is to get seized cash back.

Brummett hired an attorney to fight the seizure of $26,575 police found in a
briefcase he had in the trunk of a rental car in February 1997. Brummett
says he didn't know about the seven marijuana cigarettes his friend, Steve
Larson, stored in a shaving kit for their trip from Grand Rapids, Mich., to
Dallas. Brummett says he told the police where to find the briefcase and
explained he planned to use the cash to buy a 1964 Corvette in Dallas. And
Larson said he never told Brummett about the marijuana.

But the West Memphis police officers who stopped Brummett decided the money
was tainted.

When Brummett, now 46, showed up for a trial in Crittenden County Circuit
Court months later, he learned the paperwork hadn't been completed and he
would have to make a return trip.

"They keep tying you up in courts," Brummett says. "And finally I just gave
up on it."

Worried about the legal bills and the cost of another trip to Arkansas,
Brummett agreed to let the prosecuting attorney's office keep half.

"It was pretty much my life's savings they ripped me off of down there,"
Brummett says. "I wish I could put up a big sign that says, 'Don't enter
this state with money.' "

Federal forfeitures are even tougher to challenge.

To seize property under federal law, the government has to show probable
cause, a standard no greater than what is needed to get a search warrant.
But to get the property back, its owner must establish by a "preponderance
of the evidence'' that the property wasn't used in a crime.

The window for contesting a federal forfeiture is smaller: 10 days. Plus the
property's owner needs to put up the lesser of $5,000 or 10 percent of the
seized item's value to file those papers.

Regardless of the differences in federal and state laws, both generate
plenty of money for law enforcement.

Last year, the U.S. Justice Department took in $449 million from
forfeitures, nearly five times the amount it collected in 1986.

"We think it's vital to law enforcement,'' says Robert Sharp, the U.S.
Justice Department's deputy chief for the asset forfeiture laundering
section. "It's one of those tools Congress has approved, and we try to
maximize it to the best we can. It's been very effective so far.''

A TROUBLED HISTORY

Forfeitures might rake in cash, but they haven't done much to promote
cooperation among Crittenden County law enforcement agencies.

In 1993, the county's drug task force became a hotbed of backbiting and
accusations, with the Arkansas State Police investigating possible misuse of
seized property. Eventually, the state police issued a report that
culminated in improved record-keeping but no criminal charges.

"Apparent improper or nonexistent bookkeeping procedures were utilized by
the drug task force,'' says a synopsis from that report. "No forfeiture
property, with exception of vehicles, has been listed on Drug Task Force
inventories or audited as project income. A petty cash fund apparently was
maintained and was unaudited for a lengthy time.''

Public auctions of seized properties also were held without proceeds going
into the proper account, according to the report.

The state police also investigated an allegation that Lt. James Sudbury of
the West Memphis Police Department took $260 in seized food stamps and hired
a criminal informant to buy steaks for a task force barbecue.

Sudbury denied the allegation, but three officers, who were not named in the
report, stated that they had heard partial conversations about the alleged
event.

Donna Kane, a drug task force secretary, who admitted using drugs in the
past, told the investigators that Sudbury gave her a portable stereo and a
purse, along with three seized guns.

And Sudbury told the state police that he took home a seized refrigerator
for a while when his own refrigerator conked out. Sudbury's former wife and
children also reported that Sudbury had given them a radar detector, an
answering machine, a telephone and a $300 fishing rod that allegedly had
been seized.

Sudbury, now a captain with the West Memphis Police Department, says he was
made a target by a disgruntled state trooper who was a member of the task
force and by an ex-wife who wanted to make him look bad for a custody
battle.

"There was no criminal wrongdoing by anybody," Sudbury says.

Kane says she regrets her past drug history and that she returned the items
Sudbury gave her.

Sudbury says he gave the secretary one of the guns for protection while the
officers were away and allowed her to take another gun home for a couple
days to show her child. He couldn't recall the third gun. Sudbury says he
gave the secretary the other items when she asked for them when he was
taking them out to a trash bin.

He says the state police investigation prompted improved bookkeeping and the
elimination of the drug fund's petty cash account. The Police Department no
longer seizes any items other than drugs, money or vehicles, Sudbury says,
because the other items generate too much paperwork and are too difficult to
track.

Thornton, now head of the sheriff's drug task force, also was investigated
that year.

Thornton told the state police he put $33 in a vest pocket during the
execution of a search warrant at a home and forgot to turn the cash in as
evidence. He later told the state investigators that he had found the money
in an envelope in his camera bag.

Thornton also told the state police he gave a seized .38-caliber pistol to
his father. The gun eventually was returned.

"It was all on the up and up," Thornton says now.

'HANDS IN THE TILL'

The same year that state police investigated the task force, it split in
two, with one faction becoming part of the sheriff's office and the other
falling under the West Memphis Police Department.

The state investigation certainly added to tension at the task force,
Sudbury says. But he says the real reason for the split was money.

"The drug task force was extremely successful, and we seized a lot of money,
and there were some politicians who couldn't get their hands on the money,
and the only way they could get their hands on it was to dissolve the task
force,'' Sudbury says.

Even with the task force divided, forfeitures continued to generate big
bucks. Last year the West Memphis Police Department got $505,096 in
forfeiture cash, nearly 17 percent of its operating budget. The Crittenden
County sheriff's office took in $532,829, about 11 percent of its operating
budget. The prosecutor's office got $223,597.

Of that, $172,289 went to salaries in the prosecutor's office, including all
of Hale's annual $32,000 salary. A bookkeeper was paid $46,510.

The forfeiture fund ponied up the $1,961 for Hale's father, James Hale Jr.,
another prosecutor, to attend a conference on gangs held in the resort town
of Jackson Hole, Wyo. Forfeitures also paid for new video-imaging equipment
for presentations to juries.

There will be even more to divvy up once authorities resolve a $3.17 million
case, which has wound its way from a weigh station off I-40, where the money
was seized, to the Arkansas Supreme Court.

The Arkansas Highway Police, which made the seizure one spring night last
year, turned the cash over to federal authorities, in part to keep a greater
share. Under federal procedures, the seizing agency can keep up to 80
percent of the money. Hale has argued the money belongs in the state system,
which limits agencies to $250,000 of a forfeiture and requires any excess to
go to the state.

The Arkansas Supreme Court in March sided with Hale. The money hasn't been
distributed, though, because the highway police are considering an appeal to
the U.S. Supreme Court.

The argument, Hale says, boils down to money and who gets to keep it.

"We've created a monster, and I don't know if we can curtail it or not,''
says Mike Everett, a Democratic senator who represents Crittenden County in
the state Legislature. "Everyone has their hands in the till, and they're
hollering and screaming to stop us from doing anything about it."

No one knows how many other agencies have tried to dodge the state's
$250,000 limit.

For years, state officials failed to monitor forfeitures even though state
law 5-64-505 requires police agencies to file reports with state officials
on how much forfeitures generate. Millions of dollars have flowed to
hundreds of law enforcement agencies throughout Arkansas with almost no
state supervision.

"When you start dealing with money and drugs, everyone knows you have to
have accountability and double accountability," says Bill Hardin, the state
drug director. "I have none now."

Last June, Hardin finally got an assistant, a staff member on loan from the
Arkansas National Guard, to help him round up some of the reports state law
requires prosecutors and police to file on forfeitures.

REFORMS ON HORIZON

Change is around the corner.

Stating that "a lack of uniformity and accountability in forfeiture
procedures across the state has undermined confidence in the system,'' the
Arkansas Legislature this year passed a reform package sponsored by Sen.
Wayne Dowd, D-Texarkana, Sen. Jim Hill, D-Nashville, and Rep. James Luker,
D-Wynne.

The new laws, already signed into law by the governor, will:

Bar transfers of forfeitures to federal court unless authorized by a circuit
court judge.

Mandate that the state get a 20 percent cut of anything over $20,000
generated locally in forfeitures annually. That money would go to the
state's beleaguered Crime Laboratory system, where testing on drug evidence
often lags for six months.

Require new inventories of all items seized and a new disposition report
that shows how courts rule on seized property. Agencies that fail to file
such reports with the state's drug director will be barred from sharing in
any more forfeiture money or state grants.

Force prosecutors to put evidence before a circuit court judge on all
seizures, even if nobody files a protest. The old law allowed prosecutors to
forfeit property administratively if nobody filed papers seeking a day in
court and if the amount was less than $100,000.

However, a companion bill that would have financed the hiring of three new
employees for the state's drug director languished in the last legislative
session.

"We will do the best we can with what we have,'' says Hardin, who had argued
that the new employees were needed to keep up with the new reporting
requirements.

The U.S. Congress, stoked by a series of high profile reports, also is
taking notice.

U.S. Rep. Henry Hyde last week shepherded a reform bill through the House of
Representatives. The bill attracted an unlikely alliance of supporters
including the National Rifle Association, the Trial Lawyer's Association,
the limited-government proponent Cato Institute and the American Civil
Liberties Union.

Hyde's push comes after a series of high-profile controversies, including
reports that New York police confiscated cars of people on the basis of
drunken-driving charges.

Among Hyde's proposals:

Shifting responsibility to the government to show by "clear and convincing
evidence'' that seized property should be forfeited.

Allowing courts to release property back to owners pending final disposition
of a case.

Providing lawyers to those who can't afford them to sue for return of their
seized property.

Permitting people to sue the government for damage to seized property.

Hyde's changes, which now go to the U.S. Senate for consideration, had the
backing of U.S. Rep. John Conyers Jr., a Michigan Democrat, who has said the
government should only have the right to seize property after convictions.

"Frankly, there is suspicion that much of forfeiture is just to enrich the
particular police jurisdiction,'' Conyers says.

But West Memphis Police Chief Robert Paudert says his officers aren't out
for money. Rather, it's drugs his officers want to stop -- the very drugs
suspected of inciting a drive-by shooting earlier this year that lodged
bullets in the head, side and leg of a 3-year-old girl asleep in her
bedroom.

After that shooting, he reclassified two officers assigned to the interstate
to a street interdiction team that patrols city neighborhoods. Paudert
recently put one of the officers back out on the interstate in hopes of
snaring drugs headed to Memphis -- drugs he says eventually trickle back
into West Memphis.

He tells critics of his officers to go visit that injured girl, the one who
now is having to relearn how to use her right arm.

But such a visit probably wouldn't clear up Salvador Cantu's suspicions.
Those were generated by his own experience in Crittenden County, where he
was stopped for careless driving in June 1996. A deputy searched his car and
took $29,000 from him.

Cantu says his family planned to move back to McAllen, Texas, from Calumet,
Ill., and his father had given him the money to take to an uncle in Texas
for safekeeping.

But back at the sheriff's office, the deputy reported marijuana residue fell
off the money during a shake test.

Cantu, now 26, has just one question: If there was marijuana on the money,
how come the Mississippi County sheriff's deputy who stopped him earlier in
the day didn't find any?

The Democrat-Gazette confirmed that Cantu was stopped in Mississippi County
earlier that day. The deputy there counted the money but chose not to seize
it, issuing Cantu a warning for driving without a front license plate.

Cantu got his money back months later but only after providing records that
showed the family sold a house for $88,000 in 1995.

Now, whenever Cantu takes a trip, he makes sure he doesn't go through
Arkansas.

"You can't even drive through that state," says Cantu. "They'll pull you
over for any reason.''