Last week, The Heritage Foundation, the Institute for Justice, the American Conservative Union, and the Charles Koch Institute co-hosted a panel discussion at the Capitol, highlighting the need for reform of the nation’s civil forfeiture laws.

Civil asset forfeiture is the legal tool that enables law enforcement authorities to seize property or currency they suspect has either been involved in, or is the direct result of, illegal activity. It then effectively becomes the responsibility of the property owner to prove his own innocence in order to get his property back. Standing between that owner and a courtroom is a tortuous administrative process, where the agency that seized the property—and that stands to gain financially from forfeiting it—oftentimes plays prosecutor, judge, and jury, all in one. To make matters worse, owners seldom have legal representation.

At a Senate Judiciary Committee hearing earlier this month, Senator Charles Grassley (R–IA) called that system a “trap for the unwary.” Stories continue to emerge of innocent people losing their cash, cars, businesses, and homes under civil asset forfeiture laws, despite little to no evidence of wrongdoing.

Attendees at Tuesday’s event heard firsthand of the toll that civil forfeiture can take on innocent property owners. Russ Caswell, a native of Tewksbury, Massachusetts, owned Motel Caswell since 1984, taking over the venerable establishment from his father who founded it in 1955. Over three decades, Russ Caswell rented out tens of thousands of rooms to visitors of the Boston suburb.

Unfortunately, some of those renters were ne’er-do-wells. Over the span of a decade, 15 drug-related arrests occurred on the property. Mr. Caswell made arrangements to work with authorities, even offering free lodging as they conducted their investigations, in the hopes of keeping his property drug-free. But in 2009, the Tewksbury Police and the Drug Enforcement Agency informed Caswell that a motion had been filed to seize and forfeit the motel.

Caswell was never arrested or charged with a crime, but he was nonetheless forced to take out $60,000 in loans to cover the legal fees as he fought to keep his property. “They just try to break you,” he said at the panel discussion. Dejected, indebted, and watching his retirement dreams evaporate, he was ready to fold. Fortunately, the Institute for Justice, a public-interest law firm, took his case pro bono, and Caswell prevailed in court.

How did Russ Caswell go from friend of the police to target for forfeiture? He thinks it is all about the money—and the deposition of a Drug Enforcement Administration (DEA) agent seemed to back that up. When testifying about how properties are selected for forfeiture, the agent indicated that the key is that the owner must have at least $50,000 in equity. Under federal law, law enforcement agencies get to keep the proceeds of successful forfeitures, and under the equitable sharing program, a portion (up to 80 percent) can be transferred to state and local agencies that participate in joint operations.

How much did the DEA and the Tewksbury Police stand to gain by forfeiting the motel? Well, Caswell recently sold his property for $2.1 million.

Motel Caswell is a case study in how the perverse profit incentive can distort law enforcement priorities, but it is by no means an isolated incident. As Pat Nolan of the American Conservative Union pointed out, a News Channel 5 investigation documented roadside traffic stops in Tennessee, and found that for every eastbound traffic stop along I-40 targeting drugs entering the state there were 10 westbound traffic stops targeting the drug money as it was leaving.

Equally disturbing, that investigation revealed that arrests are seldom made. Rather, police use the threat of arrest to coax folks to “voluntarily” forfeit their cash, even when the suspects likely are engaged in criminal activity. One troubling encounter revealed nearly half a million dollars in plastic-wrapped bills hidden in the back of a semi-truck. In all likelihood, that really was drug money, but the officers weren’t interested in arresting the drivers, or even questioning them about where the money came from. They got the cash, the drivers signed it over to them, and the cops let them go.

John Malcolm, director of Heritage’s Edwin Meese III Center for Legal and Judicial Studies, pointed out that civil forfeiture laws have noble goals—relieving criminals of their ill-gotten gains and depriving them of the property and cash they need to operate. But, Malcolm noted, the system has become too one-sided. Civil forfeiture has a place in the justice system, but abusive forfeitures against innocent owners like Caswell make clear that reform is needed now.

States are beginning to take hard looks at their forfeiture laws. New Mexico effectively abolished civil asset forfeiture earlier this month. Montana’s legislature just passed a bill along similar lines, which is now awaiting the governor’s signature. Last year, Minnesota and Washington, DC, both passed sweeping reforms.

Senators and Congressman are taking reform at the federal level seriously as well. Senator Grassley has made forfeiture reform one of the top priorities for the Judiciary Committee this year, and Senator Rand Paul (R–KY) and Representative Tim Walberg (R–MI) have introduced the Fifth Amendment Integrity Restoration (FAIR) Act in both houses of Congress.

Darpana Sheth of the Institute for Justice pointed out that civil asset forfeiture has not always been the problem that it is today. Congress and state legislatures introduced the profit incentive to forfeiture that, among other things, has resulted in the exponential surge in its use—and misuse. Now, it is up to Congress and the state legislatures to fix the problem. Fortunately, they seem to be getting the message loud and clear.