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Ga. revenue agency gives state $2.1M in disputed forfeiture funds

Former chief investigator Josh Waites of the revenue department, seen here during an arrest in 2017, orchestrated the revenue department’s practice of seizing and keeping funds in forfeiture cases.
Former chief investigator Josh Waites of the revenue department, seen here during an arrest in 2017, orchestrated the revenue department’s practice of seizing and keeping funds in forfeiture cases.

Following an investigation by The Atlanta Journal-Constitution and Channel 2 Action News, the Department of Revenue has ended the questionable practice of keeping cash and assets seized in criminal investigations and returned $2.1 million to the state treasury.

The news organizations reported in March that the department's Office of Special Investigations spent millions of dollars seized in criminal investigations on engraved firearms, pricey gym equipment, clothing, personal items, even $130 sunglasses. By its own accounting, the office spent $2.9 million of this money over the past four years.

One day after the AJC and Channel 2 reported its findings, the agency quietly returned $2,165,796 to the state treasury, a fact revenue officials only revealed recently when questioned by the AJC and Channel 2.

The payment drains nearly all of the fortune amassed by the department since 2016. All that remains in the account is $5,005 and that will be sent to the treasury in the coming months, department spokeswoman Jessica Simmons said.

“The department will no longer retain or spend state civil asset forfeiture money in the future,” she said.

Critics of the department’s forfeiture practices welcomed the return of the money but told the AJC the Attorney General should recoup the millions already spent as well.

“They still spent a ton of money on things like commemorative badges that have no meaning and trinkets,” said State Rep. Scot Turner, R-Holly Springs, a critic of how the state uses civil forfeiture laws to seize private assets.

“I believe they still owe the taxpayers $3 million, and the Attorney General’s office should go after the people who took it from the taxpayers,” he said.

Georgia Rep. Scot Turner, R-Holly Springs, says the revenue department should return to the state all money that it spent from forfeitures. ALYSSA POINTER / ALYSSA.POINTER@AJC.COM
Georgia Rep. Scot Turner, R-Holly Springs, says the revenue department should return to the state all money that it spent from forfeitures. ALYSSA POINTER / ALYSSA.POINTER@AJC.COM

Revenue Commissioner David Curry declined a request for an interview.

“We’re expecting litigation on this matter,” Simmons said, explaining why Curry was unavailable. “We are following our attorney’s advice.”

Simmons said what to do about the millions already spent is under internal review.

The Attorney General’s Office, at revenue’s request, was researching state law to see if revenue should have been sending the money to the treasury all along, instead of buying a fleet of cars, wireless headphones, commemorative law enforcement badges, gym equipment and a submachine gun with a sound-suppressing barrel. But the AG’s review is no longer being conducted.

“Due to the department’s policy change on state forfeiture funds, it was determined that an opinion was no longer needed,” Simmons said.

According to records from the state Department of Audits and Accounts, revenue took in more than $5.1 million in asset forfeiture funds from 2016 to 2019. Almost half of the funds — $2.4 million — were collected in 2019 alone.

‘A lot of unanswered questions’

The controversial practice of seizing — and keeping — private assets as part of their criminal investigations was orchestrated by former Office of Special Investigations Director Joshua Waites, a former Clayton County Sheriff’s deputy. Records show Waites’ office obtained the funds from criminal investigations, most of them involving alleged illegal use of video gambling machines often found in convenience stores.

Attorney Chris Anulewicz represents businesses whose assets were seized. ‘There’s a lot of questions and a lot of unanswered questions out there,’ he says.
Attorney Chris Anulewicz represents businesses whose assets were seized. ‘There’s a lot of questions and a lot of unanswered questions out there,’ he says.

Atlanta attorney Chris Anulewicz represents some clients who had their property seized as part of a revenue investigation and said the state should be looking deeply into the behavior of Waites and his office.

“I think you need to go back to the beginning,” he said. “What started this? Where did the money come from? How did it get into the hands of who it got to? And did they use it appropriately? There’s a lot of questions and a lot of unanswered questions out there.”

Waites announced his resignation in early March after state Inspector General Deborah Wallace notified the Attorney General's Office that Waites falsely stated in his job application that he had a degree from a college that doesn't exist. He was set to leave on March 13, but revenue fired him two days before that after the AJC and Channel 2 asked the agency questions about its investigations unit's profligate spending.

Appropriations process bypassed

State law allows stores to have video gaming machines, as long as winnings aren’t paid out in cash. The AJC/Channel 2 investigation found Waites’ office would file simultaneous criminal and civil charges against operators, allowing the Department of Revenue to seize their assets, including homes, cars — even the college savings accounts of their children.

A customer plays a coin-operated “amusement” machine inside a convenience store in Pittsburgh neighborhood in 2017. Assets seized from investigations conducted by the state revenue department were used to purchase engraved firearms, pricey gym equipment and other questionable items, the AJC found. HYOSUB SHIN / HSHIN@AJC.COM
A customer plays a coin-operated “amusement” machine inside a convenience store in Pittsburgh neighborhood in 2017. Assets seized from investigations conducted by the state revenue department were used to purchase engraved firearms, pricey gym equipment and other questionable items, the AJC found. HYOSUB SHIN / HSHIN@AJC.COM

Oftentimes, owners of the stores agree to settle the cases, turning over their stores to authorities. The stores are then sold and the money from those sales is divided up among the Georgia Lottery, local district attorney’s offices, local law enforcement agencies and, when it was involved, the Department of Revenue.

Georgia’s code says money seized by the state is “subject to appropriation from the general fund.” In other words, the forfeiture funds should have first been deposited into the general fund and then dispersed by the General Assembly through its annual appropriations process.

Other state agencies, like the GBI, have not kept the money seized as part of criminal investigations. Instead, the GBI turned over its funds to the treasury to fund the state budget.

In the past, Gwinnett County District Attorney Danny Porter has criticized revenue’s spending the funds, contending it was illegal.

“This is a good resolution,” Porter said Sunday. “I’m glad the Department of Revenue realized what to me was an obvious conclusion. It was not proper for them to retain forfeited funds.”

Anulewicz agreed and called on the AG’s office to put it down in writing.

“The Department of Revenue stopped this, which is appropriate, but there needs to be an answer as to whether or not it was allowed in the first place,” he said.

Our reporting

An AJC/Channel 2 Action News investigation reported in March that the Georgia Department of Revenue spent millions of dollars on questionable items with money seized during forfeiture cases. Critics charged the spending bypassed the legislative appropriations process and was likely illegal. Other state agencies turned over forfeiture to the treasury, the news organizations found.