Inside the Philadelphia DA’s side hustle — selling seized homes to speculators and cops

The DA auctions off seized homes to the highest bidder, for cash that went back to the law enforcement agencies. The legal process is known as civil asset forfeiture.

Philadelphia Police Detective Lawrence Greene bought 2931 Waterloo Street, center, in an auction of property seized by the District Attorney. The DA was empowered to take homes connected to alleged drug activity without a guilty verdict. The house is vacant today. (Kimberly Paynter/WHYY)

This story originally appeared on PlanPhilly.

Maleny Vazquez remembers when the police came and took the house across the street. Vazquez has only lived on this block of Waterloo Street for a few years, but in this chaotic section of Kensington, riven by the drug trade, she has gotten used to seeing police empty homes.

“There were lot of guns and a lot of drugs in there,” she recalls. “They took 30 guns out of there.”

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In neighborhoods across Philadelphia, the city sells homes that owe back taxes, or have fallen into foreclosure. But the sales in Vazquez’s neighborhood were different. Here, police seized properties after drug raids. Once they were taken, the district attorney auctioned them off to the highest bidder, for cash that went back to the law enforcement agencies. The legal process is known as civil asset forfeiture.

Vazquez has never heard this term, she just watched as neighbors were taken away in cuffs and their homes sold by the DA –– controversially, with no guilty verdict required. She doesn’t know exactly how many of the two-story rowhomes on her block were forfeited, but she knows it was a lot.

In fact, the number of seized homes on Vazquez’s block was more than anywhere else in Pennsylvania. No other jurisdiction in Pennsylvania took as much property as Philadelphia and no other block in the city saw as many forfeiture petitions as this narrow stretch of two-story rowhomes on Waterloo Street. On Vazquez’s block, the DA attempted to seize nearly one-quarter of the properties between 2011 and 2015 alone.

Norys Hernandez, pictured, nearly lost the rowhouse she and her sister owned after police arrested her nephew on drug dealing charges and seized the house. (Institute for Justice)

The escalation of America’s drug war in the 1980s saw police ramp up the use of asset forfeiture here and on other blocks in the shadow of Kensington’s infamous Gurney Street drug market, near an abandoned rail line that long attracted encampments of opioid users. Abundant evidence of drug activity and a lack of legal representation for indigent clients made securing a forfeiture petition from a judge easy work. A forfeiture petition for one property lists one gram of marijuana, a half gram of cocaine and some over-the-counter pills as justification for taking. In one case recently settled in a $3 million class-action lawsuit, Norys Hernandez nearly lost the rowhouse she and her sister owned after police arrested her nephew on drug dealing charges and seized the house. Another family named in the suit fought to save their house from the grip of law enforcement after their son was arrested for selling $40 worth of drugs outside of it. Of the lawsuit’s four named plaintiffs, three had their houses targeted for seizure after police accused relatives dealing drugs on the property. None of the homeowners were themselves accused of committing a crime.

As families fought to keep homes targeted by the DA, the revenues from the forfeiture sales became a big moneymaker for local law enforcement – netting some $6 million annually in the best years. The proceeds turned into an unregulated budget split between the police and DA. The money made off of the seized homes went to buy wish list items ranging from new submachine guns to custom uniform embroidery. But officials long maintained that these sales weren’t about the cash; they were meant to empower the city to kick out dealers, seal houses and move properties out of the hands of alleged criminals.

Forfeiture was supposed to improve communities. Or so authorities said.

But a PlanPhilly analysis of 1,682 deed records linked to properties auctioned by the Philadelphia District Attorney’s office between 1993 and 2018 uncovered a far more complex legacy.

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The failure of law enforcement to plan for the reuse of these forfeited properties, which often held marginal real estate value, means that many wound up in the hands of absentee landlords or investors who often did not have the resources or motivation to improve the properties. The largest single buyer of forfeited property was a self-described real estate speculator who dabbles in rent-to-own schemes. As many as 325 of these properties appear to be vacant years after their sale and 427 are tax delinquent.

There is also little clear evidence that the program achieved its goal of fighting crime. On drug-ridden blocks such as Waterloo Street, where the DA pursued nearly door-to-door confiscation of real estate, dealing is still rampant. In a few instances, the DA was forced to seize the same property multiple times, retaking homes caught in a loop of absenteeism, neglect and the eventual return of criminal activity. This investigation detected at least one property that ended up back in the hands of the same suspected criminal it was taken from, repurchased through a proxy buyer.

Finally, records showed that members of Philadelphia law enforcement directly benefited from these sales. This investigation detected at least 11 properties that were sold to Philadelphia police officers trying their hands at real estate investment.

“I never really knew it was the DA. It was just auctioned property to me,” said Philadelphia Police Detective Lawrence Greene, who purchased several dilapidated properties in West and North Philadelphia at forfeiture auctions. “I was looking for a side hustle, that was all. I invest. I bought one house for my daughter.”

The full number of sales to police could be much higher. But the Philadelphia Police Department refused to disclose any information about the sale of forfeited property to its officers and a spokesman for the DA said the office had not kept records of who bought auctioned property — or even how many properties were sold.

Critics say these sales to officers demonstrate a conflict of interest and highlight the ethical flaws in a system they say creates a financial incentive for law enforcement to take private property.

“I am genuinely distressed to learn that the DA’s office permitted police officers to acquire forfeited homes of Philadelphians at public auction,” said University of Pennsylvania Law School professor Lou Rulli. “This disturbing revelation underscores one of many serious flaws in civil forfeiture — law enforcement is able to directly benefit from the actions they take to seize private property, often from lawful homeowners who have done no wrong.”

These seizures were notably focused in black and Latino neighborhoods with high rates of poverty. Forty-one percent of all forfeited properties were concentrated in just four ZIP codes in North Philadelphia and Kensington, all with majority black or Latino populations and poverty rates well above the city’s average. For comparison, other large swaths of the Philadelphia, such as Center City, never saw a single property forfeited. Ever.

City Councilwoman Maria Quiñones-Sánchez represents much of the Kensington neighborhood in a council district that saw more properties forfeited than any other. She grew up a short walk from Waterloo Street, and remembers the bad old days of heavy-handed policing and property seizure.

She admits that she too once accepted that these were necessary evils to contain rampant drug dealing. But today she regards these efforts as contributors to homelessness, mass incarceration and housing vacancy in her district.

“We tried to confiscate and arrest our way out of the drug problem,” she said. “Forfeiture is a perfect example of what the city’s strategy was. It was a lot of people reacting to the drug issue, but no one thinking about how to actually stabilize the properties.”

On this block of Waterloo Street in Kensington, the DA attempted to seize nearly one quarter of the properties between 2011 and 2015. (Kimberly Paynter/WHYY)
On this block of Waterloo Street in Kensington, the DA attempted to seize nearly one quarter of the properties between 2011 and 2015. (Kimberly Paynter/WHYY)

Back on Waterloo Street, Vazquez admits that she won’t miss the dealers that used to live across the street, but she doesn’t understand why other properties, like her former neighbor’s house next door, were forfeited. “He lived here for a lot of years,” Vazquez said. “The city said, ‘you move’ and I don’t know where he is now.”

This home embodies many of the failures of the city’s forfeiture program. It is vacant, a board covers the front door and a curtain flutters out of an open second story window. It looks no different than many houses owned by absentee landlords or speculators, but its owner is not the typical investor. The house was purchased at auction in 2014 by Det. Greene for the price of $5,100, about one-sixth of the home’s assessed value.

Since then, the detective-turned-speculator has been cited by the Department of Licenses & Inspections for property maintenance code violations seven times.

“It’s still a vacant property … and they fined me for not having [a vacant property license],” he said. “And someone broke in there and left the door open.”

In recent years, asset forfeiture has fallen out of favor as tales of overzealous prosecutors taking innocent people’s property turned into lawsuits and, eventually, multi-million dollar court settlements. But even as this curtain comes down, places like Kensington will live with the impact of hundreds of properties flipped by law enforcement through asset forfeiture.

“It destabilized the neighborhood,” Quiñones-Sánchez said. “It was painful to watch. I wouldn’t let that happen in [the rest of my district] today.”

Taken by DA, sold to police

As crimewaves surged throughout the 1990s and early 2000s, officials like then-DA Lynne Abraham faced intense pressure from residents, churches and community groups to combat the many vacant homes in the city that were havens for drug dealing and use. In 1994, Abraham was booed out of one public meeting by neighbors who said she had failed to respond aggressively enough to the growing scourge of drug houses.

Law enforcement in Philadelphia listened. Ensuing years would see citywide dragnets, like Operation Safe Streets, that explicitly focused on mass arrests and house-by-house raids that ended with numerous properties being seized and sold off through forfeiture proceedings. In 1994, the office auctioned off just 12 seized properties. By 2003, that figure had jumped to 211.

Beth Grossman is a former assistant DA who administered the DA’s civil asset forfeiture unit for many of these years. She said her office intended to move these seized properties into productive reuse.

“We would identify community groups and we’d give them donated properties for a dollar. The idea was they could use house forfeitures for their own purposes,” Grossman said. “They could use the properties in the fight against drugs, as women’s shelters for moms recovering from substance abuse, or after-school programs.”

But in practice, this seems to have rarely happened. In fact, police officers looking to bank a real estate investment obtained nearly as many of these properties as community groups did.

The DA seized this Spruce Hill house after its owner was hit by a marijuana bust. (Kimberly Paynter/WHYY)

Grossman emphasized that sales to police were “very, very rare” but acknowledges they did occur. Departmental regulations acknowledge that such sales could “create an impression of impropriety,” but, despite this cautionary warning, do not bar the practice.

“Our policy was that as long as the officer had no involvement in the underlying narcotics arrests, they were allowed to come in, off-duty, to do interviews,” said Grossman. “We wouldn’t sell to officers involved in the underlying arrests. And there were no sales to DA employees or anyone related to DAO employees … And every file was checked by me.”

But it is unclear how the provision barring officers involved with arrests from bidding on those same properties would ever be enforced. Greene said he had not worked in any of the police districts where he eventually purchased forfeited properties, but no one officiating the sales ever asked him if he was employed by the Philadelphia Police Department.

In fact, the detective said he was unaware the properties he purchased had been forfeited in the first place. He said he had attended other police auctions and was later sent a mailer from the auction house advertising cheap properties for sale.

Grossman said she personally interviewed and cleared forfeiture purchases for some officers, including Lt. Marvin Burton, who today heads the department’s crime scene unit. But deed records indicate that Burton and his family members amassed a string of forfeited properties in the same district he had worked in, or the adjacent 19th District.

A PPD spokesman refused to make Burton available for comment, but his father, who is also named Marvin Burton, was present at one dilapidated home owned by the family in West Philadelphia. He declined to answer questions.

“That’s our business. Don’t broadcast that,” he told a reporter in response to a question about these purchases before shutting himself in the house.

Buyers motivated by profit

It is true that sales to police appear to be a tiny minority of the properties sold at forfeiture auctions, but Greene does have something in common with many of his fellow buyers: he does not generally renovate or rent properties.

Instead, he buys on spec with the hope of eventually being able to flip at a profit. He said the forfeiture auctions appealed to him simply because they were poorly advertised and attended so prices tended to be lower than other public auctions.

“I was doing the sheriff sales, but that was too competitive,” he said. “They have investors that come in with cash and they shut you out.”

Many of the properties seized by the DA were sold to buyers like Tobias Biddle, a self-described “third-generation real estate speculator,” who has the distinction of having purchased more properties at forfeiture auctions than anyone else.

“I’ve been going for over 20 years to almost every sale,” he said. “As a speculator, basically, I’m always looking for another source for inventory.”

Biddle, who lives in Lafayette Hill, says he doesn’t remember exactly how many properties he bought from the DA, but records indicate that he and various LLCs he is associated with bought at least 36 properties at auction. Like Greene, Biddle learned about the forfeiture sales through direct mailers sent by an auction house, Barry S. Slosberg Auctioneers, that were paid for with revenues generated by the forfeiture program.

Biddle and other interested parties would attend mass open houses often set in the epicenter of Philadelphia’s drug crisis. The forfeited properties were grouped geographically so that buyers could tour several houses in a neighborhood in one day.

“Just because the DA put a sign on the door saying a property was being forfeited, that wouldn’t necessarily deter a lot of people. They would just break right back in,” he said. “Most properties were rougher … But most investors are motivated by the price and the profitability of the acquisition.”

So, Biddle bought auctioned properties on the cheap. Knowing that prospective buyers were unlikely to have much money to spend, Biddle said he often arranged seller financing or rent-to-own agreements for lower-income buyers.

“My wheelhouse is a little bit of everything. I would fix and rent, sometimes fix and sell. But most of the time, I sell as-is and hold financing for the buyer … or offer lease-purchase agreements,” Biddle said.

Between 1993 and 2018, nearly half of the homes seized by the Philadelphia District Attorney's Office were in just four ZIP codes in North Philadelphia and Kensington. Some areas, like Center City, never experienced a single forfeiture. (Kimberly Paynter/WHYY)
Between 1993 and 2018, nearly half of the homes seized by the Philadelphia District Attorney's Office were in just four ZIP codes in North Philadelphia and Kensington. Some areas, like Center City, never experienced a single forfeiture. (Kimberly Paynter/WHYY)

Biddle does not remember the purchase process in the same way that Grossman does. He doesn’t remember ever being asked if he was a police officer or a DA staffer.

He did recall being interviewed to determine if he had a criminal background, but Biddle’s own experiences show these vetting efforts were limited in their efficacy.

Biddle recalled an instance, in 2007, when he purchased a property on the 5700 block of Chester Avenue for $21,000. To his surprise, he found a buyer just a few days later who was willing to pay nearly double that amount. He inked the sale.

At the next forfeiture open house, an incensed DA staffer, who by now knew Biddle on sight from his repeat visits to forfeiture auctions, approached him.

“They said, ‘That guy we took the house from? You just sold that to the guy’s mom,’” Biddle recalled. “They were pissed, but they knew I couldn’t do anything about it.”

Records show that it took the District Attorney’s Office three years to seize the property back, through a second forfeiture action filed against the pair.

Improving a property, let alone an entire community, was not really Biddle’s motivation.

“If someone came to me for one of my properties … and decided to keep it for a long term and it didn’t really improve the neighborhood, I had no control over that. I wouldn’t turn away a profit. For sure, I would sell the property.” he said. “ So I can’t say I’m the greatest investor and that I saw all my properties till the end and that they got renovated. I didn’t.”

But he said he was still shocked that the DA never inquired about what, exactly, he intended to do with all the property he picked up over the years. The Philadelphia Housing Authority, for example, quizzes buyers a year after auctions to see if they’ve improved a given property, and includes a deed restriction that allows auctioned land to be clawed back if it sits idle.

“I do think they did their best to vet people and get it into the right people’s hands, but that’s something else the DA could have done,” Biddle said, of the forfeiture unit.

Jackson Smith, a New York University Ph.D. candidate studying the impacts of real estate forfeiture in Philadelphia, is skeptical about overall benefits any neighborhood could reap from a practice that took homes from people who may have been innocent, or guilty only of small-time drug possession.

“The forfeiture of real property peaked as the subprime mortgage bubble inflated and then plunged the nation into the Great Recession,” Smith said. “This crisis contributed to a significant decline in Black and Latino homeownership in Philadelphia during the 2000s, trends no doubt exacerbated by the dragnet that real property forfeiture became during this period.”

Even the scattering of properties forfeited in wealthier neighborhoods left scars, sometimes creating blight where there once was none.

Andrew Bowers lives on a pristine, tree-lined block in the Spruce Hill neighborhood, a place where homes routinely sell for anywhere from $300,000 to $700,000. But next door to the software engineer’s home is a vacant property – the only one on the street, and one of few in a neighborhood replete with stately Victorian homes.

The building has been rotting for well over a decade. The house’s owner was hit by a marijuana bust in 2004 and, following his arrest, the DA spent years fighting to seize the property. The agency succeeded in auctioning it off via forfeiture sale in 2016, but the new owners have simply squatted on the house.

“It was in poor condition, it had been abandoned for a long time. It would need a total rehab job to make it livable again,” he said. “But it’s been left to rot.”

Andrew Bowers lives next door to a vacant Spruce Hill home that was seized by the DA in 2004 and hasn’t been inhabited or fixed since. (Kimberly Paynter/WHYY)

Taking homes with hopes — no plans

Among the handful of properties transferred to community groups, there were a few notable successes. One of these was on Allegheny Avenue, where, in 2007, the DA deeded a forfeited rowhouse adjacent to the Cornerstone Community Church to church leaders. Abraham even accepted a symbolic jar containing 100 pennies from the leaders of the congregation, representing the $1 sale price the DA had asked for the seized home.

The story of this home would become an exemplar of how the DA wanted its forfeiture program to work — Grossman even mentioned the Cornerstone property during her 2016 campaign for DA. Today, the church still owns the house and maintains it well —  a blight turned into an asset.

But records show that transactions for nonprofit purposes were about as much of an outlier as sales to police officers. A review of deed records identified just 20 properties that appear to have been deeded to churches or community groups.

Not all these sales ended happily. In 2000, two forfeited properties on the 700 block of Russell Street in Kensington were given to Centro Pedro Claver, a neighborhood nonprofit. The group planned to redevelop the properties into affordable housing, but fell onto hard times and ultimately sold the properties without improving them. Years later, the houses have changed hands several more times. Today, they are finally occupied but the nonprofit itself no longer exists.

Former DA officials said the program that sent properties to these groups ended in 2009 for unclear reasons. Grossman said the DA did not keep track of what became of the few properties that were transferred to these groups.

“I couldn’t tell you,” Grossman said. “I certainly hope good things.”

(Kimberly Paynter/WHYY)
(Kimberly Paynter/WHYY)

Quiñones-Sánchez, who got her start at one such neighborhood organization before joining Council in 2008, says that there never was a plan for what to do with the hundreds of properties churned into new ownership. There are no records of a comprehensive strategy or even records indicating that the DA’s office consulted with city planning, community development or land use agencies when they decided which areas to target for seizures or how to find buyers or community organizations to take over the properties.

Maria Gonzalez, President of HACE – one of the largest community development corporations in the Kensington area – said the DA never reached out to established groups like hers.

“I am familiar with the civil asset forfeiture process,” she said. “I have never heard of any steering from the previous DA to groups in HACE’s neighborhoods.”

Lacking collaboration with land use or development agencies and without a plan for how to put the properties back to use, the DA struggled to avoid simply turning homes back over to the open market, where slumlords, speculators or parties with a conflict of interest could easily snap them up. Even the nonprofits were not immune from conflicts.

Centro Pedro Claver was originally known as the “Centro Pedro Claver Anti-Drug Task Force” and consisted of neighborhood drug crusaders who sometimes worked with the District Attorney’s Office to identify alleged drug houses for narcotics raids.

The group’s stated mission was to shut down drug houses and transform properties into badly needed affordable housing for Kensington’s growing Puerto Rican community. But some neighbors questioned their methods, the homes they selected and who eventually benefitted from the seizures.

“Over time, you heard some stuff about individual people crossing the line. They would say ‘Oh, we got a property for someone or other,’ ” Sanchez said. “There would be questions about how [they] had got the properties. They went a little rogue.”

A decade later, the DA took back one of the two properties it had deeded over to this nonprofit all over again as drug activity returned.

Other forfeited properties deeded to nonprofits, selected more for their relationship with the DA than redevelopment experience, fell back into disuse. Without any rules requiring buyers to show evidence of reinvestment like the regulations imposed by other public agencies selling land, communities promised a new and better neighbor found themselves again confronting blight.

One example can be found in West Philadelphia where the DA deeded a property to West Powelton Against Drugs for a nominal sum. Today, it is a vacant lot, maintained by the city. A different property, turned over to a church called the Gate to Heaven Ministry, was recently cited for being structurally unsafe. Another property on Palethorp Street, transferred to the Norris Square Neighborhood Project, was resold to another buyer and today is vacant.

Molly Tack-Hooper, a lawyer at the Pennsylvania ACLU, sees these programs as thin justification for law enforcement taking the extraordinary step of seizing possession of a property involved in a suspected crime.

“The ordinance or state law already allows for the temporary sealing of a nuisance property. If you want to punish criminals by taking proceeds you should do that in the criminal process,” she said. “When government seizes property, we’ve seen that they still sit empty or are forfeited multiple times. I don’t know how to solve poverty or drug crime or low property value, but transferring ownership to the government doesn’t solve any of those problems on its own.”

A law enforcement tool that’s not going away

Most counties in Pennsylvania wholly avoided the kind of mass forfeiture of real estate practiced in Philadelphia and, today, even advocates of this strategy generally acknowledge that it was not given appropriate scrutiny in the past. Rich Long, of the Pennsylvania Association of District Attorneys, said his organization supports limited reforms that were passed by the state legislature last year.

“We recognize the need for more controls and better controls and, now there are additional controls in place in due process, not just for homes but any property,” he said. “But this was a tool that was given to us to curtail drug activity and prevent those who are committing crimes from benefiting financially … since it’s a tool that’s available, we’re going to utilize it.”

These incremental improvements, a landmark city settlement and a recent Supreme Court decision set to chill the practice mean it’s unlikely that mass real estate forfeiture will ever return. The new Philadelphia DA, Larry Krasner, ran for office as a critic of forfeiture. But even his office admits the practice of law enforcement taking and selling homes will never be completely over.

“We have not suspended all forfeiture, but we have aggressively narrowed the size and scope,” said Krasner spokesperson Ben Waxman. “You actually have to be convicted and the property has to be connected to the crime or purchased with proceeds connected to the crime. There could be very small exceptions to this rule, but that’s generally it.”

The office has sold at least one property since Krasner took office and the temptation to use this tool will always remain, along with the city’s ever-present drug trade. Recently, the DA was involved in a major bust of the Alameda drug organization, a joint operation that touched 16 different properties, not far from Waterloo Street. Krasner’s office said he has not yet decided what to do with this new block of drug properties.

Meanwhile, investors, like Biddle, who benefitted the most during the heyday of forfeiture, see a bright future ahead: flipping properties as a new breed of speculation creeps even to impoverished sections of Kensington.

“You see people paying six figures for a little 850 square foot rowhouse,” Biddle said. “The walking dead, the zombies still walking around. But that didn’t deter the values from increasing. You know, the exodus of the 1990s is completely reversed. Everyone wants to be a city dweller now.”

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