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SPECTRE OF CIVIL FORFEITURE LOOMS
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The office has increased the number of files it accepts and amount of money it makes, but there are growing concerns about its fairness and transparency
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By SUNNY DHILLON
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Saturday, January 25, 2014 – Print Edition, Page S1


It was Oct. 15, 2007, when the RCMP officer knocked on David Lloydsmith's door.

Mr. Lloydsmith, a former electrician on partial disability living in the Fraser Valley community of Mission, was told the officer was investigating a dropped 911 call. Mr. Lloydsmith lived alone and said he hadn't touched the phone.

The officer asked to come in and search the residence, according to court documents. Mr. Lloydsmith declined several times and finally moved to close the door. The officer then forced his way in and put Mr. Lloydsmith in handcuffs. A second officer arrived within minutes and the Mounties began their search.

They eventually found marijuana plants in the basement. Mr. Lloydsmith was arrested, but released without charges. The initial officer wrote in a report that the offence was "minor" and, with the plants removed from the home, public interest had been met.

Mr. Lloydsmith thought the ordeal was over. But three years later, the province's Civil Forfeiture Office moved to seize the residence. The legal battle continues, despite an earlier ruling that the evidence collected against him was in breach of the Charter. A judge described the search as "warrantless" and "unreasonable."

Mr. Lloydsmith is one of the hundreds of British Columbians who have become caught in the relatively new spectre of civil forfeiture - a process originally intended to fight organized crime that has come to have a much wider reach.

A Globe and Mail investigation spanning several months and more than two dozen interviews has found the Civil Forfeiture Office has rapidly increased the number of files it accepts and the amount of money it brings in, while remaining largely out of the public eye. But as the scale of the forfeitures has grown, so too have concerns about fairness, public interest, and transparency.

Documents obtained through freedom of information show how the office's policy works when it comes to accepting files. The office does not investigate cases itself and instead relies on referrals from law-enforcement agencies.

The documents say the director must assess a file on four grounds before accepting: public interest, strength and adequacy of evidence, fiscal considerations, and interests of justice.

The office does not need criminal charges, or convictions, to move on a property and the penalty - losing one's home, for instance - can seem disproportional to the alleged offence. The burden of proof is lower in civil court than criminal, on a balance of probabilities instead of beyond a reasonable doubt. Evidence that could be seen as unfit for criminal court can be seen as fit for civil court.

Ontario was the first jurisdiction in Canada to introduce civil forfeiture, and eight of 10 provinces have such programs today.

B.C., despite opening three years after Ontario, has taken in more money than Ontario and critics have contended it's operating as an end-run on the justice system.

The office's executive director said 99 per cent of the people the office targets settle on terms favourable to the office. Unlike Ontario, B.C. has a budget target it must meet. And cases that in the past have been conducted as offences under the Motor Vehicle Act, Wildlife Act or Employment Standards Act, for example, are being pursued under the Civil Forfeiture Act.

B.C. Justice Minister Suzanne Anton expressed her support for the system and said the program meets the public interest. The minister also noted many millions of dollars have been handed out to community associations and police as a result of the office's work.

"The public has a very strong interest in seeing that people do not keep ill-gotten gains," she said. "And that's why generally there's public support for this Civil Forfeiture Act."

Civil forfeiture itself is not a new concept. Its roots date back about a millennium, to Europe. Modern civil forfeiture, however, evolved in the United States, where it was brought in to target drug lords but has grown controversial in recent years. Controls have appeared lax and the programs have developed into cash cows.

Ontario was the first Canadian province to introduce civil forfeiture legislation. The Civil Remedies for Illicit Activities Office opened in 2003. In 2009, Ontario's legislation withstood a challenge in the Supreme Court of Canada in a case commonly known as Chatterjee. The court ruled the Ontario legislation did not conflict with the Criminal Code.

Yukon considered such legislation but decided against it in 2010, following a public outcry from people who said it would infringe on their rights. A Yukon government spokeswoman said the territory has no plans to revisit the issue.

B.C.'s Civil Forfeiture Office opened in 2006 under the Liberal government. It was heralded as another tool in the fight against gangs involved in the billion-dollar drug trade. The "bling-bling," as former solicitor-general John Les put it after a 2007 bust, was about to disappear and the province has described itself as a modern-day Robin Hood.

In 2011, B.C. became the first province to introduce a process known as "administrative forfeiture," which makes it easier and quicker to seize property worth less than $75,000. Robert Holmes, then the B.C. Civil Liberties Association's president, decried the move as another attempt to avoid proving cases in court.

Mr. Lloydsmith is sitting at his kitchen table, near a window that overlooks the front steps the RCMP officer once climbed. He has lived in the home for more than two decades. It's assessed at about $250,000.

He knows some people won't sympathize with his plight - he's heard from them. They say he should never have grown marijuana in the first place.

He stresses he is not a bad man, nor a rich one, and indicates he started growing after he had trouble getting prescriptions. Mr. Lloydsmith went on partial disability after breaking his back on the job. The exact number of plants discovered in his basement is under dispute. A police report said it was a few hundred, a fact his lawyer denies.

Mr. Lloydsmith says he will have nowhere to go if he loses his home. "My world is right here," he said.

He said the stress from the case has taken its toll. He's fought depression and lost 35 pounds. It shows - he's wearing an old sweater that's become far too large.

"I don't sleep now. I can't get it out of my mind. It's torture, it's like a nightmare," he said.

In court documents, the office argued Mr. Lloydsmith's property amounts to "proceeds and instrument of unlawful activity" and can be seized.

Bibhas Vaze, Mr. Lloydsmith's lawyer, said it's an affront to democratic rights to suggest the Charter shouldn't apply in this case. He said the house can be accounted for as purchased through legitimate income and Mr. Lloydsmith does not have a criminal record.

He worries about the legal ramifications if Mr. Lloydsmith is to lose.

"Because then, as far as I'm concerned, it will be carte blanche for cops to go into people's homes in violation of the Charter, based on what they could find, whether they have any good information," Mr. Vaze said. "Why even get a warrant then?"

In a sign of the importance of Mr. Lloydsmith's case, the B.C. Civil Liberties Association has decided to intervene. It's back in court in mid-February.

Gian Hong Jang and Yue Wang Jang own a Vancouver janitorial company. In April, 2008, the husband and wife purchased a second property so Ms. Jang's parents would have a place to reside. The Kerr Street home was bought for $720,000 after the couple secured a bank loan, according to court documents.

In September of that year, Ms. Jang's parents moved out of the home. The Jangs decided to rent out the downstairs portion of the property and found tenants online, according to court documents.

The couple said they had no reason to believe anything was amiss, until Vancouver police raided the home in December and found a marijuana grow-op. The Jangs were not charged but, in August, 2009, the Civil Forfeiture Office attempted to seize the property.

The office alleged that it would present evidence that the Jangs' primary property, their own home, was also purchased with marijuana proceeds and it attempted to seize that residence as well.

The Jangs obtained a lawyer but, on the eve of a court date, decided to settle to minimize their losses.

They were allowed to keep their home, but had to give up 50 per cent of the equity in the property they'd been renting out.

David Karp, the Jangs' lawyer, said the case still irks him. He said the janitorial company was legitimate and Mr. Jang "worked his ass off six days a week."

However, he said his clients were wary of further court costs and the uncertainty of trial.

"They essentially flip it on its head," Mr. Karp said of the Civil Forfeiture Office. "You're guilty until you prove you're innocent."

Robert Milligan is a second-generation guide outfitter. He owns and operates Coast Mountain Outfitters, a company based in the northern community of Terrace that specializes in mountain goat hunting, but also offers bear hunting and fishing expeditions. To run his business, Mr. Milligan requires a guide outfitter's certificate.

The Civil Forfeiture Office, however, is attempting to seize that certificate. Mr. Milligan is accused of several offences - from using a snowmobile for the purpose of hunting in a closed area, to using a helicopter to transport hunters who were not physically fit, to using bait to lure a bear more than a decade ago.

The office is also seeking an order that would force Mr. Milligan to turn over his profits.

The case, and the fact that it's being handled through the Civil Forfeiture Act instead of the Wildlife Act, has drawn the ire of the Guide Outfitters Association of B.C. Scott Ellis, the association's executive director, said it plans to intervene in the proceedings.

"I was going to say the punishment doesn't fit the crime, but I'm not even going to say there was a crime committed," Mr. Ellis said.

"It's taking a sledge hammer - which is a quote you can use from me, if you like - to kill a mosquito." Mr. Milligan, in a statement released through his lawyer, said losing the certificate would be "utterly devastating."

Nicholas Weigelt, the lawyer, said the plan had been for Mr. Milligan's children to take over the business. He said losing the certificate would be akin to losing the family farm.

Although he could not say exactly how much the certificate is worth, Mr. Weigelt said those in large and remote territories can sell for millions. Mr. Milligan's certificate offers exclusive access to a large space.

Mr. Weigelt said only one of the office's claims has merit - one of Mr. Milligan's guides did ride his snowmobile into a closed area. But it was unintentional, he said, and the snowmobile only ventured 400 metres into the closed space.

Mr. Weigelt said some of the complaints appear to have been made by competing land users.

"I, like most members of the public, thought the government through the Civil Forfeiture Office went after criminals," Mr. Weigelt said. "Regulatory offences are offences, they're not crimes."

This is not the only time the office has taken an offence that falls under another act and tried to pursue it under the Civil Forfeiture Act.

The office was unsuccessful last year when it attempted to seize a motorcycle owned by Jason Dery, after he was caught speeding on a quiet Vancouver Island road. The office argued the Motor Vehicle Act offence made the Ducati - valued at anywhere between $7,400 and $14,000 - an instrument of unlawful activity. A B.C. Supreme Court judge disagreed and ruled in Mr. Dery's favour. (The judge added that the decision should not be seen as acceptance of Mr. Dery's driving. He had been cited for more than three dozen motor vehicle offences over the previous two decades.)

The office had until recently been pursuing a case against Mumtaz Ladha for an alleged violation of the Employment Standards Act. Ms. Ladha had been charged with human trafficking, though she was ultimately acquitted.

The office would not immediately agree to drop the case after Ms. Ladha was exonerated, but relented about a week later. Casey Leggett, Ms. Ladha's lawyer, said media attention around the potential forfeiture likely didn't hurt her cause.

The different cases highlight the different concerns that have been raised with respect to the office.

Mr. Lloydsmith's case speaks to admissibility of evidence, among other things.

The Jangs are among the many landlords who said they had no idea what their tenant was up to, raising questions about severity of punishment and public interest.

Mr. Milligan's case demonstrates how an offence under a different act can be pursued through the Civil Forfeiture Act.

In 2007, the Civil Forfeiture Office moved on the Hells Angels clubhouse in the Vancouver Island city of Nanaimo. It later went after clubhouses in Vancouver and Kelowna.

However, even these instances, in which the office did what it was essentially created to do, have not been without controversy. Joe Arvay, one of the country's most influential lawyers and a constitutional law expert, announced in October that he would represent the Hells Angels in a constitutional challenge of the Civil Forfeiture Act.

"If it takes the Hells Angels to demonstrate that the government has acted unconstitutionally, well then good for the Hells Angels," he said. "There have been a number of cases ... where you look at what the director has done and you say, 'Really?'"

The constitutional challenge could put those who feel they have been unfairly targeted, or that the process is flawed, in the delicate position of rooting for the Hells Angels to succeed.

Rick Ciarniello, president of the Vancouver chapter of the Hells Angels, said the legislation should trouble everyone, not just the group's members.

"Governments everywhere are now routinely using these 'civil forfeiture' laws as a substitute for the criminal process. Most people seem to just cave when faced with these forfeiture lawsuits. It is just too expensive and stressful to fight back when faced with the resources of the state," he wrote in a statement. "We aren't going to do that and our fight will be for all British Columbians."

The office itself is a black box. Its location is not made public and, unlike Ontario, B.C. does not disclose who works there. The province's information and privacy commissioner is expected to rule in a matter of months on whether the staff list should be made public.

Rob Kroeker, who was the office's first executive director, left the post in October, 2012, for a position with a gaming corporation, according to documents released through freedom of information. He was replaced by Phil Tawtel. Both men had previously worked for the RCMP.

In an August briefing note to Minister Anton, obtained through freedom of information, Mr. Tawtel said revenue derived from forfeiture is used to operate the program (legal and administrative costs) and provide crime-prevention grants to community associations and police. Litigation is the single biggest expense.

Mr. Tawtel said the grants are critical because they generate positive feedback and provide government with a way to identify emerging issues and priority commitments.

The office has issued about $11-million in grants since it opened, and paid about $1.3-million to victims of crime. Grant applications can be found on the Ministry of Justice's website.

Those numbers have been helped by a sharp increase in seizures in recent years.

In its first year, the office brought in about $600,000. In 2010-11, it seized approximately $4.8-million in property. That figure more than doubled the following year, to about $10.8-million.

By the end of fiscal year 2012-13, the office had seized more than $31-million in property since it opened. That total has since reached $41-million, more than Ontario which is at $39-million.

Unlike Ontario, B.C. has an annual budget target it must reach. In the briefing note, Mr. Tawtel wrote the office must "meet an assigned budget target to the government which has increased over the past two years by $1M to its current $3M."

The office has made more than three times that target in fiscal year 2013-14, seizing about $9.5-million in property.

The number of files the office has accepted has also grown, from 69 in 2008, to 240 in 2011, to 418 in 2012. In 2013, the office accepted 467 files.

The complaint most often cited by defendants in civil forfeiture proceedings is that of cost. Legal aid is not available and defendants are put in the position of assessing whether it's better to fight their case in court or to settle to try to minimize the damage.

Blair Suffredine, a lawyer and former Liberal politician who served in the legislature from 2001 to 2005, last year went up against the office in a case involving the seizure of $9,251. The money was found on a property in which marijuana plants had also been discovered.

Mr. Suffredine's client, Bill Pundick, was living on part of the property but was not its owner and maintained the money had been obtained lawfully as part of his decades-old currency collection. The judge ruled in the pensioner's favour and said it was "not a case where wads of tens or twenties or fifties are rolled up and bound by elastic bands."

Mr. Suffredine, who did not play a role in establishing the Civil Forfeiture Office during his time in government, said its conduct in the few cases he's handled amounts to bullying. He said the office tries to stretch out a case and make it so expensive that the defendant has to settle. Going after pensioners was not the plan, he said. "What was intended was to get the guys who are making big money," he said.

In a joint telephone interview with Minister Anton and Mr. Tawtel, the minister portrayed Mr. Tawtel as a gatekeeper who ensures it does not go after cases that are outside the public interest or the interests of justice.

Ms. Anton said the office's target remains organized crime, but any unlawful activity is fair game. When asked if she's worried people who did not receive ill-gotten gains are being swept up in the process, she said no.

Mr. Tawtel said the Civil Forfeiture Act has a number of safeguards, including court oversight. But very few cases make it to trial - the first wasn't completed until 2011. As Mr. Tawtel himself noted, 99 per cent of people settle on terms favourable to his office.

Ms. Anton said she does not believe a settlement rate that high suggests the process is flawed. She said she's very confident in the system.

"Sometimes the cases, often they do settle. And that's because generally the director brings them forward in proper circumstances. In fact, I would argue the director brings them forward always in proper circumstances because that's his job," she said. "The point is not to make money. The point is to deprive people of ill-gotten gains."

She declined to comment on whether the office should take cases in which evidence was collected in breach of the Charter, since such a matter is before the courts.

She declined to comment on whether the Civil Forfeiture Act is being used too broadly for similar reasons.

When asked whether she sees any problem with giving the office a budget target, whether she's worried the quota leads to the pursuit of cases that don't meet high standards, her answer was simple: "Absolutely not."

Although it has had some defeats, the Civil Forfeiture Office has also had some wins, both inside the courtroom and the community.

Sergeant Lindsey Houghton, spokesperson for the Combined Forces Special Enforcement Unit of B.C., the province's anti-gang unit, said his agency will only refer files to the Civil Forfeiture Office if they involve people with direct relationships to guns, gangs, and violence.

He said the office does serve as a deterrent. The unit this week received a vehicle from the office that's been draped in anti-gang messaging. The seized sport utility vehicle will be taken to school to warn young people about the dangers of gang life.

Abbotsford police received a vehicle in a similar manner for a similar purpose in 2011. The department had the Hummer covered with messages that included "Gang life is a dead end" and "Easy money can get you hard time."

The rolling billboards have also grown popular among police departments in the U.S.

The grants the province has handed out as a result of the office's work have helped a wide variety of groups.

In February, 2012, the province announced $5.5-million in crime-prevention grants for programs that included violence-prevention projects at half a dozen Lower Mainland schools and an anti-gang campaign in Kelowna.

About $1-million in grants was announced in March, 2013, with funds earmarked for women and family violence programs and a workshop on sexual exploitation awareness, among other things.

MOSAIC, a non-profit organization that assists immigrants and refugees, last year released a pamphlet to help foreign workers who may be victims of trafficking.

The pamphlets were made possible due to a $42,500 civil forfeiture grant.

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THE UPS AND DOWNS OF CIVIL SEIZURE IN B.C.

November, 2003: Ontario becomes the first province in the country to open its civil forfeiture office.

March 7, 2005: Solicitor-General Rich Coleman announces the B.C. government will begin "hitting back at organized crime" through civil forfeiture legislation. Mr. Coleman says the province needs to go after assets acquired through criminal activity as part of its strategy to enhance public safety.

April 20, 2006: B.C.'s Civil Forfeiture Act comes into force. It had received royal assent in November.

Oct. 15, 2007: Mission resident David Lloydsmith is involved in an altercation with police. An officer who says he was responding to a 911 call forces his way into Mr. Lloydsmith's home. The officer finds marijuana plants and Mr. Lloydsmith is arrested but never charged. The Civil Forfeiture Office attempts to seize the house three years later.

Nov. 9, 2007: Solicitor-General John Les announces the province has seized the Hells Angels clubhouse in Nanaimo.

December, 2008: Vancouver police raid a home that was being rented out and find marijuana plants inside. The homeowners, Gian Hong Jang and Yue Wang Jang, are not charged and maintain they had no idea what their tenants were doing. The Civil Forfeiture Office moves to seize the home, as well as the Jangs' primary property. The couple, who own and work for a janitorial company, eventually settle to try to minimize their losses. They lose half the equity in the home they were renting out.

October, 2010: Yukon's government decides against civil forfeiture legislation following a public outcry. Today eight provinces have introduced such legislation.

February 16, 2011: The first trial under the Civil Forfeiture Act is completed. Sarban Singh Rai, a longshoreman and property developer, loses two of the three homes that had been seized. The judge rules that while Mr. Rai was not involved in the marijuana grow-ops found in the home, he had to suspect something was amiss and chose not to make any inquiries.

May 4, 2011: Solicitor-General Shirley Bond announces B.C. will become the first province in the country to establish "administrative forfeiture." The process makes it easier to seize property worth less than $75,000.

Feb. 9, 2012: The province announces $5.5-million in civil forfeiture proceeds will go to crime-prevention grants, the single biggest announcement of its kind in the office's history. The province seized more than $10.8-million in property in 2011-12, more than double the previous year.

May 16, 2012: The Civil Forfeiture Office files a notice of civil claim against Robert Milligan, owner of Coast Mountain Outfitters. Mr. Milligan is accused of Wildlife Act offence but the Civil Forfeiture Office wants to seize his guide certificate and the proceeds that resulted from it.

Oct. 31, 2012: Rob Kroeker, who has served as the Civil Forfeiture Office's executive director since it opened, leaves for a job with a gaming corporation. He is replaced by Phil Tawtel.

January 2014: B.C. has seized approximately $41-million since its office opened. That's more than Ontario ($39-million) in three fewer years.

Monday, February 03, 2014


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