Seized items bring big bucks in auctions
05/15/2014 12:00 AM
05/16/2014 8:02 AM
As he walks through a warehouse filled with items headed for an online auction, AJ Jaber stops to swing a pitching wedge from a shiny set of Callaway golf clubs and then spins a few bicycle wheels.
Jaber, regional director of the online auction company Property Room, then makes a stop at a rack of items, all sent from the Fort Worth Police Department and now moving toward sale. They include dozens of cellphones, laptops, video game systems and tools — part of a treasure chest of goods seized in civil asset forfeitures.
These items will be sold online at propertyroom.com; others seized by Tarrant County will be on sale Saturday at a live auction in Saginaw. The live sale, along with online auctions, brings in more than $500,000 annually to Tarrant County’s budget.
Fort Worth brings in about $18,000 annually from items seized in such forfeiture cases.
Under state law, the bounty can be used to buy equipment and supplies and pay for overtime and training.
In 2013, county auction proceeds were used as surplus to the county budget or went to the district attorney’s office, said Jack Beacham, Tarrant County purchasing manager.
Typically, money that goes to the DA’s office is passed along to its narcotics unit, which usually buys equipment and pays for officer training, said Herschel Tebay, commander of the Tarrant County Narcotics Unit.
“One-third of generated revenue in budget comes from auctions,” Tebay said.
Under state and federal laws, police can seize any items they believe were used in a crime or bought with money from illicit activity, even if a person isn’t charged or ultimately convicted of a crime.
To retrieve their belongings, individuals generally must hire a lawyer and challenge the seizure in a civil proceeding. An analysis by the Star-Telegram found that most items, especially smaller ones, aren’t reclaimed. The items can be sold 75 days after the court case ends.
Because the narcotics unit is part of the county and works throughout the region, it brings in much more than Fort Worth police. Although the county or local police can legally keep the items for official use, most are sold, Tebay said, though cars are sometimes kept for undercover work and “in rare circumstances,” for showing at school drug programs.
Tarrant County’s bounty
Items taken by the Tarrant County Narcotics Unit, the Sheriff’s Department and even the Texas Rangers end up in a nondescript warehouse surrounded by 12-foot walls lined with barbed wire in the central part of the county.
Behind the massive metal gates is the treasure.
Next to a warehouse sit rows of vehicles. A red Ford F-150 pickup with ostrich interior leather and a custom sound kit sits near a luxury Chrysler 300. Not far away are far less impressive vehicles, including a Ford Ranger with a rusting pickup bed and a beat-up Chevrolet SUV with two flat tires.
Inside the warehouse, a small garage houses ATVs and a lawn mower. At the far end of the garage is a set of black leather couches, a 60-inch television and a gaming system.
The back room is loaded, with air compressors, rolling toolboxes and welding equipment lined against a wall. Shelves upon shelves of small power tools, cameras, laptops and miscellaneous items line the other walls.
All the items are marked with either red or green tape, noting whether they are ready for sale. The county photographs and documents those with green tape, and then turns that over to René Bates, who has been the county’s auctioneer since 1996.
Bates, whose firm exclusively conducts government and municipal auctions, offers a wide range of items, including surplus equipment, abandoned property and even the occasional livestock found wandering on the side of the road. The county raised about $187,000 from online auctions last year.
Bates himself never actually takes ownership of the items, as the county provides the listings and buyers pick up their purchases from the Tarrant County Purchasing Department.
The most common items sold are power tools and televisions, with televisions generating the most revenue, said Kristi Hendricks, Tarrant County assets coordinator. Personal electronics are also popular. Information on all electronics is cleaned off to rid the systems of any personal information.
“You never know what you’re going to get on a daily basis,” Hendricks said.
Not everything is sold, however. Seized guns are generally dismantled and destroyed, unless they are considered collector’s items, based on age, type and rarity. They then might be sold to licensed gun dealers, Hendricks said.
Police and military-grade items, such as bulletproof vests, batons and battle gear, are generally broken and disposed of, as are drug paraphernalia, alcohol-related merchandise and pornographic material.
Fort Worth auctions
Lone Star, which has worked with the Police Department since the early 1980s, mostly deals in police surplus and impounded cars, CEO Marilyn Burgess said. The company began with live auctions but has since replaced them with a website that claims more than 90 million monthly hits.
Lone Star Auctioneers generates more than $2.5 million annually in revenue for the city, including sales of forfeited, impounded and surplus items, according to documents obtained through public information requests.
Property Room, based in New York, combines items from Fort Worth with those of more than 2,700 other police departments, returning about $50 million a year to them, CEO PJ Bellomosaid.
Founded in 1999 by a former New York police officer, Property Room has worked with Fort Worth since 2008 and also sells items for liquidators and retailers.
Cellphones, laptops and other items collected in Fort Worth are packed up, tagged with a bar code and then delivered to an area warehouse. There they are combined with containers from other Texas police departments.
When the facility is full, Property Room moves the items to its Los Angeles-area warehouse to be sold — about a three-week process in all.
West Coast warehouse
Property Room’s warehouse is in an industrial district in the appropriately named City of Industry. There, the humming of forklifts and commotion of workers provide a soundtrack for rows upon rows of massive orange metal racks crammed with merchandise. Chain-link fences separate a bay of computers, electronics and musical instruments.
Property Room employs a certified gemologist to authenticate jewelry, gold and silver, and uses multiple third-party sources to authenticate watches, musical instruments, autographed memorabilia and other items before getting sold, said Jaber, Property Room’s regional director.
When items arrive, they are photographed in a miniature photo studio and a description is added. After the mug shot, items are tested and authenticated.
“Even if a police department already wiped a laptop or cellphone, we’ll wipe it again,” Jaber said. “It needs to be up to a high quality to sell an item.”
Although the most popular items sold are personal electronics, bicycles also are common and sometimes sold in bulk.
Bidding on most items starts at $1, and the final selling price often is “up to 80 percent off retail value,” Jaber said.
In a recent auction, a PlayStation 3 gaming system, with a retail value of $299, started at $1 and sold four days later for $113. Similarly, a new iPhone 5 still in the plastic wrap sold for $98 after bidders from New York, Washington and Ohio tried to outdo one another.
Between 1,000 and 5,000 items are shipped to buyers each day, Jaber said.
The auctions allow for a profitable deal on all ends, Jaber said. Bidders get quality items at a fraction of original cost, and police departments receive funding back to their department.
“It’s good for us, and better for them,” he said.