Michigan Town Misused Millions in Asset Forfeiture Funds

A U.S. Department of Justice audit has found improprieties in the way Plymouth Township accounted for forfeited cash, cars and other property under a federal “Equitable Sharing” program that lets local police agencies share in the proceeds of property seized in joint investigations.

Plymouth Township received $1.9 million from the program between January 2010 and September 2014. It is not clear what prompted the audit.

The Justice Department has strict rules on how local agencies account for the profits from the sale of forfeited property, and the audit found a number of violations including who controlled the funds, how they were used, and the fact that the proceeds appear to have been earmarked for certain uses before they were received. Some of the township’s share of forfeiture proceeds were used to buy furniture, clothing, truck rentals and other disallowed expenditures.

The township police chief is responsible for filing accounting reports to the DOJ, and told auditors he was not allowed to receive copies of the bank statements associated with the program. Instead, the audit found that the township treasurer and governing body had much of that control and responsibility, which is contrary to the program’s rules.

Township Treasurer Ron Edwards is notorious in the area for his behavior.  He has abused 911 operators before for blocked roads during heavy traffic, and has been accused of assaulting a township clerk before.

In general, the funds from the federal sharing program are to be used for law enforcement, but the audit found thousands of dollars being used for non-law enforcement expenses such as $1,574 for floor mats, $3,272 for conference room chairs, $29,792 for civilian salaries (not uniformed officers) and other general township expenses.

At another time, the township used funds to purchase police vehicles, which was allowed, but failed to reimburse the forfeiture fund when it received $96,506 in manufacturer rebates for the cars. Additionally, the township recorded $21,591 in law enforcement expenses before the money from forfeited seizures was actually in hand.

The township was also cited for filing late reports and not promptly reimbursing the fund for non-law enforcement expenses.

None of this surprises Lee McGrath, Legislative Counsel for the Institute for Justice, a public interest law firm that has been spearheading civil asset forfeiture reform in states around the nation, including Michigan.

“The problems exposed in Plymouth Township reveal that state legislatures just can’t stop with the current round of forfeiture reform. Next year, they should come back and address the core issue which is the corrupting influence of forfeiture proceeds on law enforcement’s behavior,” said McGrath.

The Michigan Legislature recently passed a package of bills that establishes transparency requirements and raises the standard of evidence before property can be forfeited to the government. But the state still allows civil forfeiture; the seizing and transferring of property from citizens to law enforcement.

McGrath says states would be best to adopt the reforms enacted by New Mexico, which has banned forfeiture unless the owner of seized property is actually convicted of a crime. New Mexico also prohibits local law enforcement agencies from using the money from the federal forfeiture sharing program in cases in which the seized property is worth less than $50,000.

Seven states prohibit law enforcement from keeping proceeds from any forfeitures but McGrath says local agencies get around state laws by resorting to the federal Equitable Sharing program. He reports that New Mexico is the only state prohibiting that program in all but the most egregious drug cases.

“When I meet with state legislators, what I say to them is that they abdicated their responsibility when they give local law enforcement this ability to get money in this fashion,” McGrath said. “Law enforcement and members of the executive branch have both the purse and the sword.”

Plymouth Township Treasurer Ron Edwards, Supervisor Shannon Price and Police Chief Thomas Tiderington did not respond to efforts to get them to comment.

They did write a response to the audit, which is included in the report.

“The Plymouth Township Police Department will work closely with the Township’s Treasurer’s Office and the Asset Forfeiture and Money Laundering Section to correct, amend and rectify the concerns identified in the draft report,” they say.