Police get to keep any cash they confiscate for any reason good or bad. No qualifications. They get to keep it. For some years, maybe still, Volusia County in Florida funded its law enforcement and enhanced its general fund by stopping southbound Cadillacs and Continentals with elderly occupants because people retiring to come to Florida sometimes cash out and carry their cash with them in their cars to Florida. The Senior Citizens were stopped, their cars searched and the cash confiscated. There wer never any charges and Grandmaand Grandpa were allowed to continue on their way. Sometimes the victims went back with lawyers and got judges to say they were wrongfully targeted, police departments were chastized and no money was returned. The USSC said at one point that it was all legal. The USSC also said that was a legitimate way to fund government, that agencies could keep any confiscated money for their own use.
Not quite.
If the cops seize cash or property for any reason, they first have to give notice to the owner/holder of the property that they intend to keep it. They give the owner/holder 15 days to contest the seizure.
If the owner/holder does not contest it then becomes the property of the State. If the owner/holder does contest then the owner/holder and the State appear before a judge for the sole purpose of deciding whether there is cause for the State to keep the asset. If there is cause, then a hearing will be scheduled to determine the fate of the asset. If the judge rules there is no cause for the State to seize the asset it is returned to the arrestee.
Most of the time when given a choice to contest or relent they'll relent as they will have to prove the asset is theirs. For instance, if they find $100K in your car they will make you prove that it's your money. Whether through sale of an asset, W2 forms from the IRS, etc., anything that shows on paper you had the means to get $100K legally then you keep it.
Most often the bad guy signs it over as they have no chance that they can prove the money was obtained legally.