Appeals court orders return of $60K in seized cash

November 21, 2018

The Indiana Court of Appeals has ordered the return of more than $60,000 in cash seized by an Indianapolis detective who was checking packages at a parcel-shipping company. The same detective’s prior seizure of cash in a similar manner set the precedent in a 2017 case that such searches are unlawful.

The appellate court ordered the return of $60,900 in cash that was seized last year from a package being shipped by Michael Hodges of Illinois to a recipient in California. Indianapolis Metropolitan Police Department Detective Brian Thorla had set the package aside because he suspected drug or money laundering activity. Based on his training, this suspicion was because its shipping costs had been paid in cash, extra tape had been added to a self-sealing box, the box was a new one from the shipping company, and Thorla’s K-9, Hogan, alerted to the presence of an odor of controlled substances on the package.

Thorla obtained a warrant to open the package and search for drugs, money or evidence of drug trafficking or money laundering. He found a parcel containing the cash — vacuum sealed tightly-banded quantities of $20 bills. The state moved to transfer the money to the U.S. government in November 2017, alleging it was confiscated as proceeds of narcotics trafficking and money laundering. The Marion Superior Court agreed and ordered the seized money turned over to the feds.

“Hodges filed an answer objecting to the State’s motion to transfer wherein he argued that the seizure of the $60,990 was unlawful because it exceeded the scope of the search warrant. In support of his objection, Hodges cited Bowman v. State, 81 N.E.3d 1127 (Ind. Ct. App. 2017), modified on denial of rehearing, trans. denied, cert. denied, which involved the same detective and facts similar to his own case,” Judge Rudolph R. Pyle wrote in reversing the trial court.

In the Bowman case, the COA reversed the seizure of $30,000 being shipped in a similar manner by two Illinois men to a man in California.

In Bowman, Pyle wrote, “(W)e explained that the only evidence that this money was obtained through drug trafficking was: (1) the parcels were being shipped to California; (2) they were being sent to the same recipient; (3) they were heavily taped; (4) they were shipped priority overnight; and (5) a K9 unit alerted to the parcels.We further explained the insignificance of this evidence as it related to drug trafficking as follows:

‘We can easily dispense with the first four pieces of evidence. We are confident that a voluminous number of parcels meeting those criteria and having nothing to do with drug trafficking are shipped in this country every day. If all money shipped in heavily taped parcels mailed to California via priority overnight mail could be seized as proceeds of drug trafficking, many last-minute gift recipients at holiday and birthday time would be sorely disappointed (and surprised).’

“…We also explained that the remaining fact that a K9 unit gave positive alerts on both parcels meant only that at some point, someone handling the parcels transferred an odor of controlled substances to them. We further explained that this could have been the parcels’ senders or any number of individuals involved with handling the parcels in transit.”

Hodges testified that he is an NBA agent who owns a company that resells tickets to sporting events, and that the money was meant to purchase World Series tickets that he planned to resell. The COA rejected the state’s argument and the trial court’s finding that the money could be seized simply because the warrant included bulk cash smuggling.

But Pyle noted there is no state statute criminalizing bulk cash smuggling, even though federal law prohibits smuggling of more than $10,000 in cash outside the country. That was not alleged in this case.

“As we explained in Bowman ... where no evidence of unlawful activity was found in the parcel, and there has been no allegation that Hodges has been charged with any state or federal offenses in connection with the parcel, no reasonable person would conclude that the currency discovered in the parcel was the proceeds of bulk cash smuggling, drug trafficking, or money laundering,” the court ruled in Michael Hodges v. State of Indiana, 18A-MI-78.

“The seizure of the currency was therefore unlawful, and the trial court’s order granting the State’s motion to turn the currency over to the United States was erroneous,” Pyle said. “ … We therefore reverse and remand this case with instruction to the trial court to order the return of the currency to Hodges.”


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