Over $42k has been seized from my small business – US is using loophole to make a killing snatching packages at FedEx

A BUSINESSMAN is fighting back after thousands of dollars were seized from his company in a legal loophole that has his lawyers baffled.

Henry Cheng and his wife Minh from California have run their wholesale jewelry business for over 30 years traveling across the country to sell their products to retailers.

The US Sun

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Getty

However, after making a sale in Virginia, they are now locked in a legal battle with the state of Indiana – somewhere they have never visited or done business in.

It is all down to a FedEx hub and an “unconstitutional policing practice,” Attorney Marie Miller for the Institute for Justice (IJ) told The U.S. Sun.

Over $42,000 was seized from Cheng’s business by police in Indiana after it was routed via FedEx’s shipping hub in the state.

It came after Cheng made a sale to a retailer in Virginia that was slow to issue payment, and a few months later the company told Henry and his wife that she could pay in cash, which the couple accepted.

This money was shipped via FedEx and was routed via the Indianapolis FedEx hub where the parcel was seized after a K9 dog alerted officers to it.

“After an officer found the cash in the parcel (and without finding any contraband), the Marion County Prosecutor filed a civil forfeiture action to keep all the money,” the IJ claimed in a press release .

Under Civil Judicial Forfeiture law , cops can seize property without a criminal conviction if it is thought to be involved in a crime .

The seizure is filed against the object, in this case, the cash, rather than against a person and this individual can then fight for their property back through a trial process.

When this happens, the government then has to prove that the property has been linked to a crime.

‘POLICING FOR PROFIT’

However, Miller has slammed the practice saying it is being used as a “form of policing for profit” arguing that “there’s no policing happening at all.”

Her colleague Senior Attorney Sam Gedge called the scheme “one of the most predatory we’ve seen.”

“What is happening in Indiana is really extraordinary in that the police and prosecutors are not alleging any particular crime is connected to the cash that they find passing through the FedEx facility,” Miller said.

“So, in Henry’s case, there is no crime that taints this cash and subjects it to forfeiture.

“No crime has been identified. There just is no crime. The fact that there’s a large amount of money at least to Indiana means that they can just take it and keep it.”

What is Indiana's Civil Forfeiture Law?

The Insitute for Justice describes Indiana's Civil Forefeiture law as follows:

“Civil forfeiture is one of the most serious assaults on private property rights in the nation today.

“Civil forfeiture treats property owners worse than criminals because it empowers police and prosecutors to take your belongings without ever charging you with a crime, much less convicting you of one.

“To make matters worse, law enforcement often gains financially from civil forfeiture.

“Not only do police and prosecutors decide what property to seize, they get to keep the property for their own use or profit from its sale.

“As a result, police and prosecutors have a powerful incentive to seize as much property as they can.”

Source: IJ

There is no burden upon law enforcement to prove it is connected to a crime unless the owners hold them to that in court , and most of the time this does not occur as it is lengthy and expensive.

“Often, it’s just a default judgment where the state keeps the money,” Miller said.

Since 2022 alone, the state of Indiana has made approximately $1 million from this practice and launched proceedings to forfeit over $2.5 million, according to the IJ .

“The government can’t even identify a crime that would allow them to keep the money that we need to run our business,” Cheng told the legal firm.

‘DISTRESSED’

The businessman added that he and his wife were “shocked” to learn about the practice and have teamed with the IJ to fight the law.

“He’s distressed…It’s a significant amount of money for him and his business,” Miller said of her client.

“He’s also just very troubled that this can happen to him or anyone else.”

Last month, the IJ filed a response to the forfeiture complaint on behalf of Cheng’s business while also claiming that the loophole violates the rights of the business and the owners, along with those in similar situations.

Miller hopes the IJ’s efforts will “shut down this abusive practice entirely.”

“The hope is that he’ll get his company’s money back and put an end to this abusive practice of civil forfeiture where innocent people have their money taken from them in violation of their constitutional rights,” Miller said.

In what she called a “major violation of due process,” the attorney and her firm are hoping to get Henry’s cash returned and a precedent set for future civil forfeiture cases to “bring an end to this practice.”

A hearing is scheduled for later this month regarding the IJ’s motion for class certification.

The U.S. Sun contacted Indiana Attorney General Todd Rokita’s office for comment and received the following statement:

“The Attorney General always seeks to see justice being served.

“To that end, officers obtained a search warrant by a court, and the parties were served to demonstrate their lawful interest in the cash seized.

“We expect that the Court will weigh the competing interests and determine whether the cash can be lawfully retained.”

Where does the seized money go?

“A statute specifies how it’s distributed, it goes to a few different locations,” Institute for Justice Attorney Marie Miller said.

“A lot of it goes back into law enforcement so they keep a large portion of it.”

The decision is at the behest of a judge and is usually defaulted to “go back to the state” unless the owners of the property contest the seizure in court, Miller stated.

“It doesn’t make sense for most people to try to fight the forfeiture in court, especially when it’s a court that’s hundreds of miles away from home.

“You know it costs it costs money to defend, and a court action. So oftentimes the money is just lost to the State without any showing that there’s been a crime committed.”