It took just 90 minutes for retired Marine Stephen Lara to lose his life savings. Years later, however, Lara finally got justice.
A Washoe County judge ruled that Nevada law enforcement cannot use an “equitable sharing” civil forfeiture program to bypass state laws that protect property owners. The decision shuts down what the Nevada Highway Patrol (NHP) argued was a legal loophole that allowed officers to seize property under state law and process it federally—while still receiving an up-to-80% kickback from the proceeds. The court rejected that claim, finding no such loophole exists under Nevada law.
The case arose after what was initially characterized as a routine traffic stop. On February 19, 2021, Lara was making the 1,400-mile drive from Lubbock, Texas to Portola, a small California town near Reno, Nevada, where his teenage daughters lived with his ex-wife. Lara had driven this four-day round trip dozens of times. This time, however, he was pulled over by the Nevada Highway Patrol on I-80 near Sparks, Nevada—about an hour from Reno–ostensibly for following and passing a tanker truck too closely. He wasn’t issued a traffic ticket or warning, arrested, or charged with a crime.
When the officer asked if Lara had any large amounts of cash, he said he did, explaining that he didn’t trust banks. He agreed to let the officer search his vehicle, where they found the money—about $86,900, along with years of ATM withdrawal receipts.
Driving across state lines with a bundle of cash isn’t a crime—a fact that the officer acknowledged at the scene. If you are crossing the U.S. border, there are still no U.S. limits on the amount of money you can carry, but if you’re leaving or entering with more than $10,000 in cash or cash equivalents you must report it to U.S. customs officials. If you don’t report your cash when crossing the border, it can be confiscated by the authorities.
Even though Lara had committed no crime, and the officers, after a thorough search found no contraband, a sergeant from Nevada Highway Patrol arrived on the scene, consulted with the DEA, and ordered that the money be seized.
Under the civil forfeiture law, the government can seize and keep your property if it merely suspects it is connected to a crime. The kicker? Often, the government doesn’t have to offer any proof, nor does the property owner have to be charged with a crime for the government to seize the property. (This differs from criminal forfeiture, where property is generally turned over to the government after a conviction.)
With the help of the Institute for Justice (IJ), a libertarian not-for-profit law firm that fights what it sees as government abuses, Lara got his cash back. But the case didn’t stop there. With IJ still representing him pro bono (for free), he asked a Nevada court to rule that the state’s constitution, which protects property rights, bars the Nevada Highway Patrol from participating in the “equitable sharing” civil forfeiture program run by the feds–something almost all states now do.
The court did just that. In her 19-page ruling, Judge Connie Steinheimer in the Second Judicial District Court of Nevada found that “there is no question that federal law enforcement agencies have full authority to adopt seizures from state law enforcement agencies and then start forfeiture proceedings in federal court—divesting state courts from jurisdiction over the seized item.”
“There is also no question,” Steinheimer wrote, “that federal law enforcement agencies have full authority to then transfer the proceeds recovered from the forfeiture proceedings back to the state law enforcement agency that originally seized the property.” Where the NHP’s position fell down, the court says, is that “this does not necessarily mean that state law enforcement agencies may participate in this process. State law enforcement agencies must be able to point to independent authority permitting them to participate in this process.”
Nevada’s forfeiture laws are more protective of property rights than the federal government. The court noted that Nevada’s civil forfeiture laws are mandatory and leave no room for federal workarounds, ruling that NHP’s participation in the federal program violated state law.
The answer is a process established by the Comprehensive Crime Control Act of 1984, known as “adoption.” When state, local, or tribal law enforcement agencies seize assets—whether cash, cars, or other property—that they suspect might be related to a crime, they can hand it over to the DEA or one of a slew of other federal law enforcement agencies and let the feds handle the legal work of civil forfeiture. If the feds end up keeping the money, they kick back up to 80% to the law enforcement agency that originated the seizure—a process known as “equitable sharing.”
After public scrutiny of civil forfeitures and the incentives created by equitable sharing, in 2015 Obama Attorney General Eric Holder limited the civil forfeiture cases in which the feds could “adopt” a local seizure and then kick back money. However, Holder’s restrictions were reversed in 2017 by then-Trump Attorney General Jeff Sessions. In 2019, federal agencies made $334 million in “adoption” payments to state and local law enforcement. The IJ contends those arrangements incentivize state and local law enforcement to seize property even when there is no real evidence of a crime.
Almost every state has a civil forfeiture program. While the laws differ from state to state, most follow a similar pattern and do not require convincing proof of any commission of crime by the owner—simply a “preponderance of the evidence.” Some states, like Delaware and Rhode Island, merely require probable cause. Only a handful of states, like Arizona, require a criminal conviction.
“This is a groundbreaking decision that closes the door on law enforcement agencies trying to evade their own state laws for profit,” said Ben Field, an IJ attorney. “The court recognized that Nevada’s civil forfeiture laws are clear: state police cannot outsource forfeitures to the federal government to make extra money. This ruling is a big step toward ending the abuse of civil forfeiture nationwide.”
Lara’s case isn’t finished. He continues to seek damages and pursue additional claims under the Nevada Constitution. The state is expected to push back against the ruling, though the Nevada State Police did not respond to a request for comment.
“Law enforcement has no business profiting from civil forfeiture,” said IJ Attorney Brian Morris. “This decision is a wake-up call to other states that have allowed police to skirt their laws by pretending that the federal government’s ‘equitable sharing program’ is a legal loophole. It is not and it’s time to close these loopholes once and for all.”
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